Danske Bank and European Investment Fund (EIF) has entered into a partnership regarding loan guarantees to support the growth of small and medium-sized enterprises throughout the Nordic region.
The funding is earmarked for projects in the categories of sustainability and innovation and digitalization.
The EIF guarantee is supported by The European Commission InvestEU initiative.
New financing through guarantee agreements
Danske Bank has signed a guarantee agreement with the European Investment Fund (EIF) which will provide up to €178 million in new financing to SMEs across the Nordic region.
In line with the EIF's mission, the guarantee will provide Nordic SMEs with better access to finance for investments related to the green transition and digital technologies. The EIF guarantee is supported by the European Commission under its InvestEU programme.
Focus on sustainability and innovation
Three-fifths of the guarantee will be allocated to support sustainability goals, with funds allocated to: assigned to company or projects that promote, for example, renewable energy and energy efficiency.
The remaining two-fifths will focus on innovation and digitalization, facilitating access to financing for research and innovation-driven companies.
The importance of collaboration
– Following our collaboration with SMEs in Finland, this is EIF’s second agreement with Danske Bank, with a focus on Denmark, Sweden and Norway, says EIF Deputy Chief Executive, Merete Clausen. – This collaboration is important for us also thanks to the broad network of Nordic SMEs that Danske Bank has. The EIF's mission is to improve access to finance for small and medium-sized business, by collaborating with one of the most important financial institutions in the Nordic region, we can reach many local companies with more advantageous financing.
Planned rollout
The new agreement will be rolled out in Denmark, Norway and Sweden before the summer, with the first loans expected to be issued in Sweden in the coming days.
Benefits of EIF guarantees
“The EIF guarantees offer many benefits. Firstly, they can make financing cheaper and more accessible to our smaller corporate customers by reducing our lending risk, which affects the price and size of the loans we can offer. Furthermore, the guarantees increase investment in Europe in a very flexible and efficient way, strengthening European growth and competitiveness – something that is crucial for us at Danske Bank to support,” says Christin Tuxen, Head of Direct Banking, Business Customer, Danske Bank.
Previous collaborations and examples
Danske Bank began its collaboration with European Investment Bank (EIB), of which the EIF is a part, last year, when SMEs in Finland received guarantees worth €50 million to support green investments. This has enabled, among other things, the financing of the Finnish technology company TravelResand's solution specializes in the recycling of foundry sand and cleans sand on site, enabling reuse and significantly reducing the need for virgin sand – minimizing environmental impact.
Background information about the EIF
European Investment Fund (EIF): The EIF is part of EIB Group. It supports Europe's small and medium-sized enterprises by improving their access to finance. The EIF designs, promotes and implements equity and debt financing instruments targeting SMEs. In this role, the EIF promotes EU objectives in support of entrepreneurship, growth, innovation, research and development, green and digital transitions and employment.
Background information on InvestEU
The InvestEU Programme provides the European Union with crucial long-term financing by leveraging significant private and public funds to support a sustainable recovery. It also helps to mobilise private investment for EU policy priorities, such as the European Green Deal and the digital transition. The InvestEU Programme brings together under one roof the many EU financial instruments currently available to support investment in the European Union, making financing investment projects in Europe simpler, more efficient and more flexible. The Programme consists of three parts: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners investing in projects with an EU budget guarantee of €26.2 billion. With the InvestEU mandate, the EU institutions – led by the European Commission and the EIB Group – aim to mobilise more than €372 billion in public and private investment to finance sustainable investment, innovation and job creation across Europe over the period 2021-2027.
Background information about Danske Bank
Danske Bank is Denmark's largest bank. The bank serves personal customers, companies and large institutional customers. For over 150 years, Danske Bank has strived to be a driving force for growth and development in society. We have developed side by side with the societies we are part of, and our advisory services, expertise and financial solutions have helped individuals, families, companies and organizations realize their ambitions and potential.
With long-term sustainable development as our ambition, we continue to work daily to become the best possible bank, for the benefit of our customers, employees, shareholders and the communities we are a part of.
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