Covid-19 Response

The COVID-19 pandemic has severely impacted the global economic outlook, with unprecedented damage resulting from the lockdown measures. The European economy is expected to have contracted by more than 8% over the course of 2020. This slowdown in economic activity could have a devastating effect on European insolvencies, and the worst hit European countries are estimated to have experienced an increase in bankruptcies of up to 30% in 2020.

Similar to the nature of the crisis, public policy action at European and national level - including support by the EIB Group - in response to the COVID-19 pandemic has been unprecedented. Already at the onset of the pandemic, the EIB Group reacted rapidly to address the most urgent liquidity needs of European SMEs.

As part of the Group's reaction to the COVID-19 crisis, the EIF has partnered with its mandators (the EIB, the EC, national promotional institutions and EU Member States) to put in place relevant packages to help small businesses tackle the crisis.

Altogether, the COVID-19 crisis has had a strong impact on the EIF's business and the demand for EIF products. For both business lines, debt and equity, demand has sharply increased and - due to the magnitude of the economic shock - a swift response was and remains necessary.

Adapting to the circumstances

Naturally, this crisis has not left the EIF unaffected. We have had to rethink how we do business and how we behave as an organisation.

Initially, the EIF immediately applied business travel restrictions and compulsory teleworking for staff returning from COVID-19 affected areas, eventually moving to full teleworking when the offices closed in March. The EIF offices re-opened in September with strong social distancing and hygiene measures in place to ensure safety and compliance with national guidelines.

While these restrictions have thrown up a number of complications for our everyday work – particularly travel restrictions – business has proceeded largely unimpacted. The decision-making processes in particular have continued with the same regularity, as Board meetings shifted to video-conferencing.

On the contrary, the urgent need to design and deploy crisis-management instruments immediately has meant that, despite the challenges, EIF staff has been delivering high volumes of fit-for-purpose transactions at record speed.

“I’ve had to home school, so my seven-year-old son shares my desk. He does his homework and I make my calls and close my deals. We say we are co-working.”

David Dana


“Doing due diligence has been complicated because a fund is primarily a team of people and there is no better way to get to know someone than over dinner discussing football.”

Matteo Squilloni


Garden Living: “Green makes you feel good”


Espoo, Finland

Financial Intermediary


EIF financing


Financing purpose


Number of employees

6 (+9 part-time)

“Covid-19 hit. We went into lockdown and everything stopped. When Horeca shut down, all our orders to Horeca stopped immediately. But bills had to be paid - for all the stock of products we had bought for the entire season. That’s the point where you urgently need more liquidity.”

Eva Wuite

Founder & Manager

Our COVID-19 response

In response to the worsening economic climate, the EIF, in collaboration with the EIB, the EC, Member States and regions immediately mobilised resources on several fronts:

1. topping-up existing mandates

2. accelerating deployment of newly signed programmes

3. amending the terms of existing mandates

4. and launching new mandates and partnerships

EFSI re-allocations & added flexibility

Using EUR 1bn re-allocated from EFSI under the COSME LGF and InnovFin SMEG programmes, the EIF has been providing guarantees to financial intermediaries, aiming to unlock a total of EUR 8bn in available financing. This included a number of adaptations to both programmes to introduce more flexible terms and make financing more readily available for European businesses. Adaptations were also made to the EaSI and CCS programmes.

Concretely, these adaptations, apart from generating greater volumes of financing, also offered enhanced risk-sharing conditions and greater guarantee coverage for financial intermediaries, as well as improved repayment terms for SMEs. Ultimately, these efforts aim to offer support to working capital and liquidity needs in the short term.

The demand from financial intermediaries has been tremendous, far exceeding the budgetary envelope available, demonstrating the attractiveness of EIF support in times of high uncertainty.

RE-FIT: Recovery Equity Facility

Many companies in the EIF's equity portfolios are facing interruption in their access to equity resources. As a result, giving access to additional capital to a number of our funds should provide them with increased capacity to close investment rounds and continue to support firms in their portfolios.

With this in mind, the EIF and the EC launched specific COVID-19 support measures under the InnovFin Equity (IFE) mandate, including a new "Recovery Equity Facility for Innovative Technology Companies" (RE-FIT) dedicated to mitigating cash-burn effects on portfolio companies and strengthening their capital base in light of potential solvency issues. RE-FIT has dedicated EUR 100m (financed 100% by the EC out of the Horizon 2020 contribution) exclusively for topping-up our commitments in existing funds.

Securitisation support

The EIF supported the EIB in the deployment of EUR 2bn of EFSI resources in response to the COVID-19 outbreak via the asset-backed securities (ABS) purchasing programme. These efforts could generate up to EUR 10bn of new financing for the European economy. This initiative was designed to replicate in a short timeframe the successful deployment over the past few years of EIB EFSI funds via securitisation transactions structured and jointly originated by the EIF and the EIB.

As a first of its kind, in the Baltic states the EIF issued a guarantee to Luminor AS, to support new lending to companies based in Latvia, Lithuania and Estonia. This facility is meant to help mitigate the impact of COVID-19 on the local economies and represents a "capital deduction" synthetic securitisation where both the senior and the mezzanine tranches have been protected by the EIF. The guarantee structure can support at least EUR 657m of additional loans and leases to SMEs and mid-caps in all three Baltic countries.

The EIF also signed the first ever synthetic securitisation for capital relief purposes in Romania, guaranteeing mezzanine and senior tranches of a EUR 255m portfolio of Romanian SMEs, originated by Deutsche Leasing Romania. This will release regulatory capital and is expected to provide advantageous financing of more than EUR 400m to SMEs in the country, as part of the response to the COVID-19 crisis.

Thanks to an EIF securitisation agreement with ING, EUR 795m were committed in the Netherlands to support SMEs affected by COVID-19. This constitutes one of largest EIF securitisation transactions done to date, generating up to EUR 1.16bn in new loans to SMEs.

Also in the context of the COVID-19 relief measures, in November, the EIF signed its first synthetic securitisation for capital relief purposes in Slovakia. The transaction originated by Slovenská Sporiteľňa and supported by EFSI resources is expected to provide advantageous financing of close to EUR 250m to SMEs in Slovakia and will encourage the development of securitisation in the country.

Adjusting structural funds

At the same time, in relation to the European Structural and Investment Funds (ESIF) and regional mandates, the EU regulatory framework was amended to provide additional flexibility to respond to the current unprecedented situation.

The more flexible measures include the provision of working capital support on a stand-alone basis and without a new or updated business plan, the extension of support to undertakings in difficulty and the possibility of re-financing.

The EIF has been pursuing the implementation of these COVID-19 flexibility measures across seven ESIF mandates (EAFRD Portugal, EAFRD Romania, AGRI Italy Platform, ESIF Silesia, SMEi Italy, EAFRD Greece, and Competitiveness Romania) and the corresponding 25 Operational Agreements.

Batak Grill: Covid delivery services


Zagreb, Croatia

Financial Intermediary


EIF financing

InnovFin SMEG COVID-19 measures; EFSI

Financing purpose


Number of employees


“Things were going very well but the pandemic forced us to rethink our business model. We decided to initiate a digitalisation revamp, set up a website and took the restaurant into the digital space...The funding helped us to implement all these changes and boost our online presence.”

Isabella Paver

Finance Director

German Corona Matching Facility

In Germany, the EIF teamed up with KfW and KfW Capital to launch the new Corona Matching Facility (CMF), as part of the German Federal Government’s EUR 2bn assistance package for start-ups and small enterprises.

The CMF, a limited-term financing measure to bridge liquidity requirements during the COVID-19 crisis, supports VC funds targeting start-ups and young growth enterprises located in Germany and having a sustainable business model. The aim is to enable such companies to continue their growth despite the current period of hardship related to the COVID-19 crisis.

Managing part of this facility on behalf of the CMF, the EIF has been leveraging its existing partnerships in the market to ensure rapid deployment, committing EUR 328m in 14 funds to date.

Reinforcements in Ireland

In Ireland, the EIF boosted its existing counter-guarantee agreement with the Strategic Banking Corporation of Ireland (SBCI). The initial counter-guarantee agreement, dating from June 2019, was thus increased from EUR 192m to EUR 512m, to be allocated between five sub-intermediaries, with a possible sixth to be added soon, as part of a package of response measures to the COVID-19 outbreak.

Pan-European Guarantee Fund (EGF): sustained support

In the context of the COVID-19 pandemic, the EIB Group was asked to enhance its operations significantly in support of EU-based companies affected by the crisis. In response, the Pan-European Guarantee Fund (EGF) was established with contributions from the EIB Group and 21 EU Member States amounting to EUR 24.5bn.

The EGF provides guarantees to free up capital for national promotional banks, local banks and other financial intermediaries in order to make more financing available for SMEs, mid-caps and corporates.

In total, the EGF is expected to invest up to EUR 25bn in equity, debt fund and guarantee instruments for the benefit of SMEs and mid-caps, of which around half through the EIF. Deployment will begin in early 2021 and will continue through to the end of the year, constituting a significant surge in the EIF’s activity and support for European businesses and the European economy. (see also Looking Ahead chapter)


Recovery efforts will also be boosted by the entry into force of the new EU budgetary period and in particular the InvestEU programme, which is designed to replace the multitude of existing financial instruments. With a guarantee capacity of around EUR 26bn, InvestEU is expected to generate EUR 372bn worth of support for European businesses, including in key sectors of strategic importance in the economy.

(see also Looking Ahead chapter)

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