- EIB signs guarantee with the Swedish Export Credit Corporation (SEK) to support companies in making new investments and help them recover from the COVID-19 pandemic.
- The guarantee under the European Guarantee Fund (EGF) will make available new lending worth €817 million to Swedish businesses dealing with COVID-related restrictions.
- The estimated effect on the economy is calculated to be over €1.1 billion.
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,” says 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.
EIB Vice-President Thomas Östros stated: “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.”
Background information:
In 2020, the EIB 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.
The Swedish Export Credit Corporation (SEK) is a state-owned company that finances Swedish exporters, their suppliers and international buyers. Since 1962, SEK has offered loans that have enabled hundreds of Swedish companies to grow by increasing production, making acquisitions, increasing the number of employees and selling products and services to clients across the globe. With lending in 60 countries, SEK has long-standing experience of international funding and is a natural business partner in export financing.
