The European Investment Fund (EIF) has chosen Swedbank to manage the Funded Risk Sharing Instrument established to provide loans for Latvian SMEs within the framework of the JEREMIE initiative.
JEREMIE (Joint European Resources for Micro to Medium Enterprises) is the joint initiative launched by the European Commission and the European Investment Bank group that enables EU Member States and Regions to put money from the structural funds and national resources into holding funds that can improve access to finance for SMEs.
Swedbank will receive up to €22m from the Latvian JEREMIE Holding Fund and will contribute to the implementation of the instrument providing the same amount from their own resources.
The Funded Risk Sharing Instrument will allow selected banks (Swedbank and SEB banka) to provide combined total of up to €104m of investment and working capital loans for the growth and expansion of micro, small and medium size companies across the country, primarily in manufacturing sector.
This decision concludes the selection stage for financial intermediaries called to manage allocations from the Latvian JEREMIE Holding Fund.
The four financial intermediaries include:
– BaltCap Management Latvia, which will manage a risk capital fund with a target size of EUR 30m.
– Imprimatur Capital Baltics, which will manage seed and start-up capital funds with total capital of €20.4m
– SEB banka, which has been chosen to manage a FRS instrument with a total available funds of €60m.
– Swedbank, which will manage an FRS instrument with total available funds of €44m.
The transactions between the EIF and the above mentioned institutions are currently in the negotiation stage and contracts are expected to be closed during the first quarter 2010, enabling the intermediaries to start lending to and investing in SMEs.