Danske Bank and the European Investment Fund (EIF) have entered a partnership to provide loan guarantees aimed at supporting the growth of small and medium-sized enterprises (SMEs) across the Nordic region. The financing is earmarked for projects in sustainability, innovation, and digitalization. The EIF guarantee is backed by the European Commission’s InvestEU initiative.
New financing through guarantee agreement
Danske Bank has signed a guarantee agreement with the European Investment Fund that will provide up to €178 million in new financing to SMEs across the Nordics. In line with the EIF’s mission, the guarantee will improve Nordic SMEs’ access to finance for investments tied 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 objectives, directing funds to companies and projects that promote renewable energy, energy efficiency, and similar initiatives. The remaining two-fifths will target innovation and digitalization, improving access to financing for research- and innovation-driven companies.
The importance of the partnership
“Following our collaboration with SMEs in Finland, this is EIF’s second agreement with Danske Bank, focused on Denmark, Sweden and Norway,” says Merete Clausen, EIF’s Deputy Chief Executive. “This partnership matters because of Danske Bank’s extensive network of Nordic SMEs. EIF’s mission is to improve SMEs’ access to finance. By working with one of the region’s leading financial institutions, we can reach many local businesses with more favourable financing.”
Planned rollout
The new agreement will be rolled out in Denmark, Norway and Sweden before summer, with the first loans expected to be issued in Sweden in the coming days.
Benefits of EIF guarantees
“EIF guarantees deliver multiple benefits. They can make financing cheaper and more accessible for our smaller business customers by reducing our lending risk, which affects both pricing and loan volumes. Moreover, guarantees increase investments in Europe in a flexible and efficient way, strengthening European growth and competitiveness—an outcome Danske Bank is keen to support,” says Christin Tuxen, Head of Direct Banking, Business Customer, Danske Bank.
Previous collaborations and examples
Last year Danske Bank began cooperating with the European Investment Bank (EIB), of which EIF is a member, when Finnish SMEs received €50 million in guarantees to support green investments. That support enabled financing for Finnish technology company Resand. Resand’s solution specializes in recycling foundry sand by cleaning it on site for reuse, significantly reducing the need for virgin sand and lowering environmental impact.
About the European Investment Fund (EIF)
The European Investment Fund (EIF) is part of the EIB Group. EIF supports Europe’s SMEs by improving their access to finance. It designs, promotes and implements equity and debt financing instruments targeted at small and medium-sized enterprises. Through this role, EIF advances EU objectives supporting entrepreneurship, growth, innovation, research and development, green and digital transitions, and employment.
About InvestEU
The InvestEU programme provides the European Union with long-term financing by leveraging significant private and public funds to support a sustainable recovery. It helps mobilize private investments for EU policy priorities such as the European Green Deal and the digital transition. InvestEU brings together existing EU financing instruments under a single framework to make financing investment projects in the EU simpler, more efficient and more flexible. The programme comprises three parts: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that invest in projects using the EU budget guarantee of €26.2 billion. With the InvestEU mandate, EU institutions—led by the European Commission and the EIB Group—aim to mobilize more than €372 billion in public and private investments to finance sustainable investments, innovation and job creation across Europe for 2021–2027.
About Danske Bank
Danske Bank is Denmark’s largest bank, serving personal customers, businesses and large institutional clients. For over 150 years the bank has sought to be a force for growth and development in society. Working alongside the communities it serves, Danske Bank’s advisory services, expertise and financial solutions have helped individuals, families, businesses and organizations realize their ambitions and potential.
With long-term sustainable development as a guiding ambition, Danske Bank continues to work daily to be the best possible bank for the benefit of customers, employees, shareholders and the communities it operates in.