Finnvera's Executive Vice President Jussi Haarasilta, CEO of Finnish Export Credit Ltd Pia Peltoniemi and EIB Vice-President Thomas Östros.

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Amidst an uncertain economic outlook, Finnish mid-sized companies are set to receive a significant boost thanks to a new partnership between Finnvera Plc and the European Investment Bank (EIB). The collaboration aims to promote employment, growth, and a clean transition for medium-sized enterprises, ensuring they have the support needed to navigate challenging economic conditions.

The EIB has committed to providing a €200 million guarantee to Finnvera, Finland’s national promotional bank and official export credit agency. This guarantee will enable Finnvera to extend up to €400 million in new loans to Finnish mid-caps, which are companies with between 250 and 3,000 employees. This initiative will facilitate approximately €560 million in real economic investments.

"This partnership is pivotal for the Finnish economy," stated Jussi Haarasilta, Executive Vice President of Finnvera. "With the EIB sharing the risk, we can better support growth and pass the benefits directly to Finnish companies. The Linked Risk-Sharing Programme (LRS) allows us to not only support domestic projects but also finance export initiatives within the EU, aligning with our strategic goals to boost exports."

The programme is designed to tackle financial barriers exacerbated by inflation, high interest rates, limited external growth opportunities, and unpredictable energy supplies. By sharing these risks, the EIB and Finnvera aim to make financing more accessible and affordable, offering lower interest rates and reduced collateral requirements for eligible companies.

Thomas Östros, Vice-President of the EIB, expressed his enthusiasm for the collaboration: "We are pleased to work with Finnvera to support Finnish mid-caps by providing guarantees for long-term loans. Together, we will support projects that align with the EIB’s mission to boost jobs and growth and to support climate change mitigation. With Finnvera's extensive network, we can ensure that half of the unlocked finance will benefit cohesion areas in Finland."

This agreement marks the first instance of the EIB providing a direct loan-by-loan guarantee in Finland, reflecting a strategic move to bolster the Finnish mid-cap sector. The guaranteed loans will be disbursed through Finnvera’s networks, ensuring wide-reaching impact.

Finnvera, leveraging its experience with EIB and EIF guarantee solutions, will use this new agreement to complement existing financing markets and address the evolving needs of Finnish businesses. Wille Rydman, Finland’s Minister of Economic Affairs, emphasized the government’s support: "The guarantee agreement with the EIB is part of our broader strategy to put Finland back on the path to growth. Cooperation with European partners like the EIB strengthens the financial position and operating conditions of Finnish businesses, benefiting all Finns."

The initiative builds on Finnvera's history of supporting SME financing through guarantees and loans, reinforcing its mission to support Finnish exports and the domestic economy. As of March 2024, Finnvera’s balance sheet totaled €14.3 billion, with significant domestic loan and guarantee activities.

The EIB, as the long-term lending arm of the EU, continues to finance projects that contribute to EU policy objectives. In 2023, the EIB Group committed nearly €1 billion to new projects in Finland, supporting a wide range of sectors from R&D to energy efficiency and education infrastructure.

This partnership between Finnvera and the EIB exemplifies a concerted effort to foster sustainable growth and resilience in Finland’s mid-cap sector, setting the stage for long-term economic stability and prosperity.

HT

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