Investment Plan for Europe: EIF and Altum sign agreement to benefit innovative businesses in Latvia
14 October 2016
The European Investment Fund (EIF) and JSC Development Finance Institution Altum (Altum) have signed an InnovFin SMEG agreement to enhance access to finance to innovative small and medium-sized enterprises (SMEs) and small mid-caps in Latvia.
This transaction benefits from the support of the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe. The EU’s support for innovative Latvian companies under this transaction is expected to generate a portfolio up to EUR 30 million of guarantees on loans and leases.
The new agreement will allow Altum to provide guarantees at reduced rates to SMEs and small mid-caps over the next two years.
EIF’s counter-guarantee is provided under the “EU InnovFin finance for Innovators” initiative with the financial backing under Horizon 2020, the EU Framework Programme for Research and Innovation. The deal would not have been possible so soon without the backing of the Investment Plan.
Commenting on the signature, European Commission Vice-President Valdis Dombrovskis said:
“I welcome the signature of the agreement between the European Fund for Strategic Investments (EFSI) and Latvia's national development institution, Altum. This is a step forward in making finance more accessible for innovative projects in Latvia's small and medium-sized enterprises. It is also a sign that the EFSI is improving the geographic distribution of its supported projects. I hope that the distribution can be further enhanced also for larger strategic investment projects. We must make sure that all economic actors and all countries, large and small, benefit from the investment offensive the Commission has recently proposed to expand.”
EIF Chief Executive, Pier Luigi Gilibert:
“Altum benefits already from a strong experience in providing specialized services to SMEs and small mid-caps in Latvia. I am therefore convinced that the agreement signed between EIF and Altum will allow for a higher number of Latvian innovative companies to benefit from financing solutions at favourable terms. I am pleased to see that EFSI is further extending its action in Latvia with this new InnovFin transaction.”
Reinis Bērziņš, Altum Chairman of the Board:
“We are glad to announce the conclusion of the agreement with the European Investment Fund on the funding of the guarantee financial instrument within the InnovFin programme. This is the first project of Altum to be funded by the European Fund for Strategic Investments. Currently Altum is working on opening another similar project in the near future. Thanks to the funding of the InnovFin programme, Altum will be able to provide more loan guarantees on better terms, thus increasing the range and volume of the financial instruments channelled by Altum. Our estimate is that within next two year, these guarantees will support at least 100 companies.”
This transaction with Altum reflects the EU's commitment to rapidly launch concrete initiatives under the EFSI, accelerating lending and guaranteeing transactions capable of boosting jobs and growth in the EU.