The European Investment Fund hopes the guarantees will unlock €1bn of investments to support the digital and green transition.
The European Investment Fund (EIF) is providing support for SMEs in seven central and eastern European countries by providing two guarantees worth some €370m to commercial bank Unicredit, which has a strong presence in the region.
The guarantees are expected to enable Unicredit to provide up to 2,500 small businesses and small mid-cap companies with loans on more favourable terms and “mobilise investment of around €1bn into the real economy”, according to the EIF, which is part of the European Investment Bank (EIB) group.
The resulting lending could cover innovation, digitalisation, creativity, culture, education, social investments and sustainability, but will primarily target the green and digital transition. As part of its green strategy, Unicredit will also provide loans to housing associations and individuals to make renewable energy and energy efficiency investments in residential buildings, and support the development of sustainable mobility.
The agreement is supported by InvestEU, the European Union’s long-term funding programme, which aims to facilitate sustainable investment and job creation in the bloc. It has a target of mobilising more than €372bn of investments that support EU policy priorities by 2027. Europe’s 23 million SMEs are a vital component of that drive, accounting for 99% of all businesses and three-quarters of all jobs in the EU, according to the EIF.
Andrea Orcel, Unicredit’s chief executive said that, over the last ten years, the Milan-based bank’s work with the EIB group had enabled easier access to financing for more than 12,000 SMEs in central and eastern Europe.
“Providing sustainable finance to fuel social investments and innovation is a critical aspect of our pledge to improve the social aspect of environmental, social and governance in any way we can,” he said.
By supporting access by European SMEs to finance and venture capital, the EIF has played an important role in the development of the impact investment sector. In 2023, the fund, in tandem with InvestEU, has already been highly active, striking several agreements to support SMEs with sustainability objectives.
In May, the fund said it would provide a €170m guarantee to Finnvera Plc, the Finnish export credit agency, to finance some €280m of investment by small companies in Finland. It also said it was granting a €200m guarantee to Spanish bank BBVA to enable it to offer more financing opportunities to startups. EIF agreements signed earlier this year include a €30m commitment to the European Climate Debt Solutions Fund (EUCLIDES) to invest in innovative climate solutions providers across Europe, and one with Banco BPI (BPI) to provide guarantees for up to €155 million in loans for Portuguese SMEs.
