While the economic fall-out of the pandemic turned out to be less severe than initially anticipated, the consequences for the European economy were nevertheless dramatic, on the back of the worst economic contraction since World War II. Temporary national schemes were successful in preventing massive worker layoffs and widespread insolvency waves, but the risk of insolvencies remains very real, as some countries and sectors experienced a sharp increase in the number of corporate bankruptcies, with SMEs particularly exposed.

This has necessitated continued support for SME financing to ensure a sustainable economic recovery. The financing situation of EU SMEs remains precarious, with one in three European SMEs reporting access to finance to be a very important problem. On top of that, there is the backdrop of intense global competition to consider as well.

With this in mind, the EIF has tackled the pandemic head-on, most notably as part of the EIB Group’s EGF initiative, absorbing risk in the form of guarantees and equity investments across the continent in order to make financing more readily available for European businesses.

The new normal

With the pandemic constituting an ongoing challenge throughout the year, EIF staff successfully adapted to the new normal, turning over a record-breaking year in terms of volumes while working mostly from a distance.

From the outset, management introduced a series of measures to facilitate the smooth functioning of the EIF, and support staff in achieving this year’s ambitious goals.

Ensuring flexibility has been key. This has notably included the review of teleworking guidelines to allow staff to continue to benefit from flexible working arrangements throughout this difficult year, as well as enhancing our training portfolio in order to better assist staff and managers when working remotely.

Staff numbers have also been boosted, on-boarding an unprecedented number of newcomers: A total of 92 new arrivals and 26 internal mobility changes brought total staff numbers close to 600 by year-end.

In parallel, the EIF was awarded the demanding EDGE¹ Certification at Assess level, recognising our collective commitment to realise gender equality from top to bottom. Promoting diversity, gender equality and inclusion in the broader sense has been high on our agenda when it comes to managing human resources, and we intend to focus even more heavily on ensuring as diverse a workforce as possible going forward.

Finally, there has been a renewed focus on health and wellbeing, through the EIB Group-wide psycho-social risk assessment.

1. EDGE (Economic Dividends for Gender Equality) is the only global assessment methodology and business certification standard for gender equality.

“The EDGE experts guided us throughout the different stages and it was interesting to discover how EIF policies and practices compare to what is being done on gender by the ‘best in class’. Whilst, on the one hand, it was reassuring to learn that we have strong HR processes, there are areas for improvement, which we will focus on before the next EDGE assessment in 2023.”

Jane Heyes-Sutra


European Guarantee Fund

In response to the economic downturn triggered by the pandemic, during the second half of 2020, the EIB Group launched the EGF. This complements other public actions undertaken at EU and national levels in support of the European economy and most importantly, SMEs struggling with liquidity and access to finance. It also bridged the gap in European-level financial support between the financial instruments of the previous budgetary period and InvestEU that is due to become operational in 2022.

The objective of the EGF was to ensure that companies in participating Member States have sufficient liquidity available to weather the crisis, and are able to continue their growth and development in the medium to long-term. Drawing on commitments from 22 EU Member States, this is the first instance of mutualisation of risk at this scale at European level for support programmes to the real economy.

The EGF has been the main driver of the EIF’s activity in 2021. The first transactions were signed in February, as soon as the instrument became operational, and accelerated from March onwards, with a total of €26.2bn committed by year-end. It has delivered huge volumes of relief financing within a single year in the form of both equity and guarantee instruments, including a dedicated SME securitisation programme. This incredibly rapid deployment represents 132% of our target and will make available more than €115bn for European businesses in these difficult times.

There is no doubt that the EGF has proven to be a powerful instrument offering more targeted, better-suited solutions by providing SMEs the liquidity needed to cope with the economic shock caused by the pandemic and continue to pursue their innovation and growth plans.

A total of 592 applications were received for equity transactions, guarantees and securitisation, confirming the strong demand in the market for this instrument, with the highest interest coming from Italy, Spain, France, Portugal and Greece. An indicative selection of the 295 transactions is listed below.

The main thrust of our EGF activity unsurprisingly came through guarantee transactions:

In Italy, the strong market demand for loan guarantees prompted a substantial increase in the existing capped counter-guarantee volumes provided by the EIF to Cassa Depositi e Prestiti (CDP). This resulted in a maximum portfolio volume standing at €10bn, enabling around €15bn of financing to SMEs. This historic deal is aiming to support around 76,000 SMEs. The facility is implemented by Fondo di Garanzia (FdG), the well-established National Guarantee Fund for SMEs, acting as sub-intermediary, that will make the support available to the whole national banking system.

In Greece, the EIB and the EIF partnered with the National Bank of Greece (NBG) to unlock more than €1bn for Greek businesses impacted by COVID-19. This is a joint EIB Group engagement to support SMEs, mid-caps and, for the first time, large corporates. The EIB and the EIF will be guaranteeing business financing provided by NBG to enable companies of all sizes to access resources at advantageous terms to better withstand crisis challenges and invest for the future.

The last guarantee transaction signed in 2021 was under the EGF, with Glennmont Asset Management, for a guarantee amount of €105m. Glennmont focuses exclusively on investments in clean energy infrastructure, such as wind farms, solar parks and biomass power stations, mainly in Spain, Portugal, Italy, France and Germany. Thanks to the EGF, SMEs and small mid-caps can finance their renewable energy investments that are outside the risk appetite of commercial banks.

In Spain, the EIF also joined forces with Kobus Partners to facilitate access to finance to SMEs and small mid-caps active in the renewable energies sector in Europe with a special focus on Iberia. The guarantee of up to €140m will be exclusively dedicated to finance a portfolio of investments in renewable energies such as photovoltaic and other clean technologies that are outside the risk appetite of commercial banks.

In Lithuania, the EIF concluded guarantee agreements with five Lithuanian financial intermediaries in late 2021, making available up to €414m in new financing for businesses dealing with the economic fallout of the COVID-19 pandemic. Thanks to capped and uncapped guarantees with Faktoro, Finora Kreditas, PayRay Bank, Orion Leasing and SEB Bankas, Lithuanian SMEs will be able to access financing with new, more advantageous conditions. Alongside earlier EGF transactions with INVEGA, SME Bank and Mano Bankas, the guarantees will make available a total of more than €670m worth of financing for Lithuanian SMEs.

Further north, a multi-country agreement signed with Nordea provided the bank with €910m in guarantee capacity, enabling €1.3bn worth of new financing for small businesses in Denmark, Sweden and Finland on more favourable terms. These efforts were further boosted by a separate EIB Group EFSIbacked securitisation agreement with Nordea later in the year, which will guarantee a portfolio of €1.8bn worth of loans to SMEs in Finland and Sweden.

In Croatia, EGF guarantees to the Croatian Bank for Reconstruction and Development (HBOR) are expected to unlock €50m for faster recovery of Croatian SMEs and small mid-caps on more favourable terms, including reduced interest rates or lower collateral requirements. The loans will be available to SMEs and small mid-caps operating in some of the hardest hit sectors of the Croatian economy, including tourism and manufacturing.

Elsewhere, a guarantee agreement with Unicredit Group will provide up to €1bn in financing to small businesses across Bulgaria, Slovakia, Slovenia and Croatia to accelerate the economic recovery. These loans and other financial products will also be characterised by better terms,such as reduced interest rates, longer grace periods, lower collateral requirements or extended maturities.

The EGF has also reached remote areas: two guarantee agreements with Norrlandsfonden unlocked fresh funding for SMEs in northern Sweden looking to grow their way out of the crisis, making available up to €35m in new lending at more favourable lending conditions for small companies in the five northern regions of Sweden.

In the Benelux region, the EIF and the Flemish promotional organisation PMV signed a guarantee backed by the EGF that will lower the interest rates on PMV’s ‘corona loans’ awarded in 2021 to Belgian SMEs. This concerns a portfolio of €110m in loans, expected to benefit close to 800 Belgian SMEs and entrepreneurs in total. And in Luxembourg, an EGF uncapped guarantee agreement with BGL BNP Paribas will generate a loan portfolio of up to €35m for around 100 SMEs in the Grand Duchy.

But the EGF also meant lots of equity transactions ensuring that innovative start-ups get the support they need despite the crisis and are able to pursue their growth trajectory.

In 2019, the EIF committed €15m into FeelsGood Social Impact Fund I, a Croatian impact fund. The team has been actively fundraising for almost three years and has faced an adverse fundraising environment with a very challenging year in 2020 (outbreak of the COVID-19 global pandemic and two earthquakes). An additional commitment of €6m from the EGF into the fund has offered fresh support to this pioneering project for the regional ecosystem, allowing the fund to successfully close at €30m in June and already add four investments to their portfolio by the end of the year.

We invested €36.5m of EGF resources into Wellington Partners Life Sciences VI, in addition to LfA GFF and RCR resources, bringing the total amount to €60m. The fund focuses on early- to growth-stage investments in life sciences companies primarily in Germany, the wider DACH region and also the rest of Europe. It specifically targets disruptive, innovative technologies addressing unmet medical needs and attractive markets. Our investment in the fund aims to bridge the funding gap between the market and scientific innovation in the life sciences sector of German academia, which continues to provide a strong source of untapped technologies.

Melior Equity Partners II, a lower mid-market fund focusing on investments in Ireland, received an EGF commitment of €30m in addition to the original €30m already allocated. The fund will be investing in lower mid-market companies, including in corporate carve-outs or in family-run businesses, which need help in succession planning and efficiency and business model improvements.

Links: digital future


Zagreb, Croatia

Financial Intermediary

Unicredit Group

EIF financing

InnovFin SMEG COVID-19 measures; EFSI

Financing purpose


Number of employees


“With further development of virtual reality and augmented reality, the ability of customers to experience products without touching them will cause a dramatic shift in the market place”

Vlatko Skarica

Managing director

An additional €30m was invested into Ysios BioFund III, a VC fund based in Spain targeting early-stage life sciences companies in the EU. This investment was supported in part by the EGF and in part through the Sustainable Development Umbrella Fund (SDUF) – Health compartment.

€50m was invested into ACP Credit, the first and sole selective loan fund in the Central and Eastern Europe (CEE) region, where demand for these type of solutions is acute and unmet. The fund will provide senior loans to lower mid-market companies and/or asset-light industries that find it difficult to access growth financing in a market heavily reliant on traditional bank lending. The EIF was instrumental in helping ACP reach a first closing and start investing.

And we invested €15m in Karma Ventures II, one of the leading VC teams in the Baltics, based in Estonia and focusing on tech-heavy and deep-tech companies with a hands-on, ‘company builder’ approach to investments. The EIF’s backing provided strong support in difficult fundraising times and a difficult market particularly weighed down by the crisis.

“In financial terms, COVID-19 was a liquidity crisis and GPs were instrumental in monitoring or solving it by closing the financial gap their investee companies were suffering. On top of that, they gave them access to HR, fiscal or legal advice. Put together this was like a lifeline for many. Increasing our commitments to these GPs meant that they could reach out even further.”

Rémi Berteloot


Other COVID-19 measures

Alongside the EGF, the EIF has introduced, in collaboration with its partners, various amendments to existing instruments in order to make financing more readily available for SMEs across Europe to deal with the challenges they have been facing in the economic climate created by the COVID-19 pandemic. In total, 729 transactions benefited from COVID-19 measures introduced in the context of 11 mandates.

This has included adaptations made to EC mandates in 2020 like the European Fund for Strategic Investments (EFSI), InnovFin SME Guarantee (SMEG) and InnovFin Equity, COSME Loan Guarantee Facility (LGF), Employment and Social Innovation programme (EaSI) and the Cultural and Creative Sectors Guarantee Facility (CCS GF), in order to offer better support to the markets.

Various regional and national mandates have also been modified or designed to offer COVID-19 relief, such as the SME Initiative in Italy, a European Agricultural Fund for Rural Development (EAFRD) mandate in Portugal, the Irish Future Growth Loan Scheme and Joint European Resources for Micro to Medium Enterprises (JEREMIE) reflows in Bulgaria.

To help small businesses tackle the short-term financial shocks linked to the COVID-19 crisis, the EIF and the Bulgarian government devised a tailormade guarantee instrument using reflows from JEREMIE operations. The Documentary Finance Facility provided a liquidity lifeline of short-term lending from six banks including documentary credit (letters of credit, letters of guarantee and factoring) to help hard-hit small enterprises navigate through supply chain disruptions.

More than 2,500 Bulgarian firms were able to obtain €330m of quick liquidity in just nine months in 2021.

The Irish Future Growth Loan Scheme is progressing successfully and its deployment is continuing at a rapid pace. In June 2021, the Strategic Banking Corporation of Ireland (SBCI) requested an increase of the guarantee cover to €640m, allowing for the deployment of a total portfolio of €800m worth of new loans. By end-September 2021, absorption levels had already reached 90%, translating into more than 3,000 Irish businesses supported.

On the equity side, a number of measures were implemented such as the €100m Recovery Equity Facility for Innovative Technology companies (RE-FIT) designed to alleviate the impact of COVID-19 on the venture capital market, mitigating the cash-burn effects on companies. RE-FIT is financed under InnovFin Equity and is dedicated to topping-up commitments in our existing funds.

Beyond InnovFin Equity and the EGF measures, another notable initiative is the Corona Matching Facility (CMF), launched in 2020 in collaboration with KfW and KfW Capital, as part of the German Federal Government’s €2bn assistance package for start-ups and small enterprises. Throughout 2021, the EIF has been leveraging its existing partnerships in the market to ensure rapid deployment, committing a total of €368m to 17 General Partners for co-investments alongside 25 VC funds. The instrument’s rapid deployment is also reflected in the speed with which the funds have channelled these resources into 78 German businesses, with a total of 80% of commitments (or €296m) already absorbed by the market by the end of the year.

Gigglebug: Nordic playfulness


Helsinki, Finland

Financial Intermediary


EIF financing


Financing purpose

growth; product development

Number of employees


“I think the market is increasingly focused on developmental needs and the unique tastes that are typical to each age group and audience segment. But, within the audiovisual sector, animation is a technique that allows stories to travel effectively across borders. Visual comedy has no borders.”

Anttu Harlin

Co-founder and CEO

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