The European Investment Bank (EIB) has signed a guarantee agreement with the Swedish Export Credit Corporation (SEK) to provide new financing of €817 million euros (Skr 8.3 billion) to Swedish companies. The aim is to support mid-sized and large companies in making new investments and help them recover from the COVID-19 pandemic. The guarantee forms part of the European Guarantee Fund’s guarantee programme.

A €350 million EIB guarantee supported under the European Guarantee Fund will back 75% of a new lending portfolio of €467 million. In addition, SEK is committing to match the EGF’s guarantee amount in further new lending to Swedish companies. Thus, a total of €817 million will become available in new financing. Through further investments by the targeted companies, the total effect on the Swedish economy is calculated to be over €1.1 billion.

The new financing will improve companies’ borrowing opportunities and provide them with much needed support amid the challenges they face due to the pandemic.

“This agreement gives us additional capacity to finance companies and strengthen their international competitiveness. Both exporters and their subcontractors can now receive financing from SEK that is guaranteed by the EIB.”

Magnus Montan, CEO of SEK

For companies, this means that SEK will provide additional financing on competitive terms, with pricing that enables the companies to close the investment gap caused by the pandemic. The EIB’s risk-sharing guarantee under the European Guarantee Fund will increase SEK’s risk-taking capacity and reduce the cost of financing for companies benefiting from the EGF guarantee programme.

“Although Swedish companies have withstood the impact of the pandemic quite well, financing is still needed for them to grow their way out of the crisis. Therefore, we are glad that we can cooperate with SEK to make sure that Swedish companies can benefit from this pan-European measure.”

Thomas Östros, EIB Vice-President

About the European Investment Bank

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. In 2020, the Bank made available in excess of €2 billion for Swedish projects. The EIB borrows money on the capital markets and lends it to projects that support EU objectives, with about 90% of all loans being accorded within the EU.

The European Guarantee Fund (EGF) was set up by the EIB Group with contributions from Sweden and other EU Member States to shield companies suffering from the COVID-19 crisis. Using nearly €25 billion in guarantees, the EGF enables the EIB and the EIF to quickly make loans, guarantees, asset-backed securities, equity and other financial instruments available to mostly small and medium-sized enterprises. The EGF is part of the European Union’s recovery package aiming to provide a total of €540 billion to boost those parts of the EU economy that have been hit the worst.