Billions for European SMEs

COLUMN

EFSI increases funding resources in Europe

Writer Jouni Hakala     Photo Susa Junnola

European Fund for Strategic Investment (EFSI) aims to catalyze EUR 75 billion in funding for European SMEs in the upcoming years. Five billion euros will create the basis for fund investment and guarantee programs managed by the European Investment Fund (EIF).

This year’s deployment of EFSI activities launches a new line in EU programs. Funding will be built on the foundation of the European Investment Bank’s (EIB) and the EIF’s existing products, loans, loan portfolios, risk-sharing guarantees, and risk capital funds. However, to reach the EUR 75 billion target, the majority of the funding must come from other investors. In fact, EFSI aims to strengthen collaboration with national promotional investors.

For nearly one year, also Finnish Industry Investment (FII) has worked with the European Commission and EIF in the pan-European planning of EFSI products.

Well-versed in joint investments

As a well-versed investor, the EIF is already a part of the financing system of Finnish risk capital market. The EIF and FII have together invested significant amounts in Finnish funds. The target segments of our fund investments and their goals are very similar.

Our joint investments during this decade have enabled the creation of an investment capacity of over half a billion euros for Finnish fund managers. Our collaboration has been especially important in mobilizing venture capital funds.

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Finland aims to more strongly leverage the EU-funding opportunities.

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Jouni Hakala

It will take a few years to know precisely how much capital will flow from EFSI to European risk capital funds. It may exceed EUR 2-3 billion. So EFSI will increase the EIF’s European funding resources; this is something the Finnish fund managers should take into consideration when thinking about their own funding channels.

FII wants to enhance the collaboration with the EIF through the investment programs managed by EIF. And EFSI further strengthens these opportunities.

Jouni Hakala

Director Jouni Hakala is responsible for FII’s new investment opportunities and public affairs.