Nordea Bank : introduces green corporate loans at reduced rates with the European Investment Fund

Small and medium-sized companies (SMEs ) in Finland and Sweden are now offered green loans at reduced interest rates thanks to a collaboration between Nordea and the European Investment Fund (EIF).

The new loans will only be granted to finance investments that meet strict sustainability criteria. In scope are for example solar and wind power plants, providers of clean transportation and companies within pollution prevention.

The corporate lending initiative falls within the European Union's Investment Plan, which promotes sustainable, long-term economic growth in Europe. Nordea has made an unique agreement and commitment with EIF on stimulating green lending to support sustainability and economic growth.

The favourable offering has been made possible by an agreement, in which Nordea has purchased an EUR 1.8bn credit risk insurance from the EIF. As part of the agreement Nordea has committed itself to issue green corporate loans of up to EUR 400m at lower rates without the credit risk protection from the EIF.

This is the second agreement made between Nordea and the EIF during 2021. Back in March, Nordea made an agreement with the EIF to support SMEs in Sweden, Finland and Denmark with attractive lending terms to manage temporary COVID-19 circumstances or to accelerate their growth.

Motivating customers to shift to green loans

"We are proud to take part in the implementation of the European initiative and help SMEs in their sustainability transformation with attractive green loans and advice - ultimately achieving lasting reductions of CO2 emissions," says Peter Dalmalm, Head of Nordea Business Banking in Sweden.

Nordea will use the agreement to approach and motivate customers with traditional loans on green investments and projects to take the opportunity to convert these into green loans instead. At the same time, Nordea has committed itself, as part of the agreement, to issuing new green corporate loans with lower-than-usual rates.

"The agreement with the EIF will support us in meeting also our own sustainability targets. At the same time, we further improve our abilities in meeting a growing interest in sustainable finance among SMEs with an attractive package," says Aleksi Lehtonen, Head of Nordea Business Banking in Finland

Nordea is committed to reaching net-zero emissions by 2050 and to reduce CO2 emissions from its lending portfolio by 40-50 per cent by 2030.

Boosting the economy in difficult times

Alain Godard, Chief Executive, the European Investment Fund finds the timing of the agreement optimal:

"The EIB Group is very pleased to have successfully completed its first securitisation transaction with Nordea to provide green financing to SMEs and mid-caps. This transaction is boosting the supply of finance in the real economy during these difficult times and promoting an economic recovery based on a sustainable green transformation.