Estonian companies to get €249 million in new financing under EIB Group deal

Estonian businesses will get a financing boost of up to €249 million as a result of an agreement between the European Investment Bank (EIB) Group and lender Coop Pank, the institutions announced. Both EIB Group institutions—the European Investment Fund (EIF) and the European Investment Bank—are part of the deal, which provides capital relief and allows Coop Pank to offer new loans to Estonian small and medium-sized enterprises (SMEs) and Mid-Caps for projects that promote gender equality, economic growth and environmental sustainability. The deal is a synthetic securitisation—a financial structure that lets a bank transfer part of the credit risk linked to a portfolio of loans to a protection seller, in this case the EIB Group.

The synthetic securitisation is the first in the Baltics based on a portfolio entirely from one country. While the EIB Group has completed similar transactions to support SME financing across the region, the agreement with Coop Pank is unique for its exclusive focus on Estonian assets. “This milestone agreement with Coop Pank shows how innovative financial instruments can unlock substantial funding for SMEs while advancing gender equality and sustainability goals,” said EIB Vice-President Karl Nehammer. “Together, we are helping Estonian businesses grow and supporting the transition to a greener, more inclusive economy.”

The securitisation is based on a €200 million portfolio of loans and leases. Under the deal, Coop Pank will be able to offer up to €249 million of new loans and leases to SMEs and Mid-Caps until the end of 2028, with at least €49 million earmarked for gender equality and at least €17 million for climate action and environmental sustainability.

“This transaction marks a major milestone for Coop Pank,” said Paavo Truu, Member of the Management Board and CFO of Coop Pank. “It strengthens our ability to support Estonian businesses with innovative financing solutions and reflects our commitment to sustainable growth.”

Under the agreement, the EIF is providing risk protection on two parts of the portfolio: the senior tranche, which amounts to €171 million and is the safest layer, and the mezzanine tranche, which totals €26 million and carries more risk. The senior tranche is guaranteed by both the EIB and EIF, while the mezzanine tranche is guaranteed by the EIB. The remaining junior tranche, which amounts to €3 million and is the riskiest part, is retained with Coop Pank.