Finnvera authorised to provide more financing for Finnish enterprises

The extra authorisation of EUR 60 million granted to Finnvera will be used for guarantees to cover loans taken by enterprises and for domestic loans that include no interest subsidy. With this extra authorisation, the domestic financing provided by Finnvera will exceed one billion euros this year. Finnvera’s role is to share risks with other financiers. A prerequisite for financing is always that the business is deemed to be profitable.

Each year the Ministry of Employment and the Economy confirms the maximum amount of loans and guarantees that Finnvera can grant without an interest subsidy. For 2008, the limit has now been raised by EUR 60 million.
In domestic financing, Finnvera is prepared especially to meet financing needs in areas affected by abrupt structural change. At present, there are 14 such areas where an important company is reducing or winding up its operations. Finnvera strives to provide financing for all projects that are considered to be profitable.
Last summer, the State already improved Finnvera’s possibilities to take risks in areas affected by abrupt structural change. The State compensates for a higher percentage of any losses that Finnvera may incur in these areas.
Finnvera also works as Finland’s official export credit agency (ECA). For about a year now, the unrest prevailing on the international financial market has been reflected in the number of applications for export credit guarantees received by Finnvera. In contrast, the number of applications in domestic financing has increased during the past few months.
On 30 June 2008, Finnvera’s total outstanding commitments amounted to EUR 6.7 billion in export financing and EUR 2.6 billion in domestic financing
Finnvera acquires the funds needed for loans to enterprises from the market, mainly by issuing bonds guaranteed by the State of Finland. The State grants an interest subsidy for some of the loans given by Finnvera and pays about half of the losses incurred by Finnvera in domestic financing. Otherwise, Finnvera’s operations must be financially self-sustainable; i.e. in the long run the proceeds from operations must cover the expenses and Finnvera’ share of credit losses.

Additional information:
Pauli Heikkilä, Managing Director, tel. +358 20 460 7321
Veijo Ojala, Executive Vice President, tel. +358 20 460 7405 or +358 400 672 401
Leena Jaakkola, Senior Vice President, Communications and Marketing, tel. +358 40 352 9332
Finnvera plc is a specialised financing company owned by the State of Finland. It provides its clients with loans, guarantees, venture capital investments and export credit guarantees. Finnvera has official Export Credit Agency (ECA) status.