EIF and Deutsche Leasing unlock €1.1bn for SME green investment

The European Investment Fund (EIF), part of the European Investment Bank (EIB) Group, and Deutsche Sparkassen Leasing AG & Co. KG (Deutsche Leasing) have signed two new guarantee agreements aimed at increasing access to finance for sustainable investment by small and medium-sized enterprises (SMEs) across 14 European countries.

The agreements, backed by the EU’s InvestEU programme, will enable up to €1.1 billion in new financing for green investments by SMEs and small mid-cap companies operating within Deutsche Leasing’s European network. The guarantees are expected to support the sustainable transformation of more than 4,600 businesses.

The agreements were formally signed at Deutsche Leasing’s headquarters in Bad Homburg by Kai Ostermann, chief executive of Deutsche Leasing, and Nicola Beer, vice-president of the EIB.

Under the arrangements, the EIF will provide up to €800 million in guarantees to Deutsche Leasing. The package comprises one uncapped and one capped guarantee under the InvestEU Sustainability Product – Climate Change Mitigation, with maximum guarantee amounts of €200 million and €600 million respectively, both at a guarantee rate of up to 70%. The capped guarantee includes a 5% cap rate.

The guarantees will allow Deutsche Leasing to expand its portfolio of sustainable asset finance and offer more favourable financing terms to customers by sharing risk with the EIF. The funding will be directed towards investments in cleaner technologies, energy efficiency and other climate-related projects.

“Across Europe, small and medium sized companies are at the heart of the green transition, but they often face the highest barriers when it comes to financing new, cleaner technologies,” said Nicola Beer.

“With these new InvestEU Sustainability Portfolio backed EIF guarantees for Deutsche Leasing, we are joining forces with the Sparkassen Finanzgruppe to unlock up to €1.1 billion of sustainable investments across 14 countries, helping thousands of SMEs modernise their equipment and cut energy bills to strengthen their competitiveness and accelerating Europe’s path to climate neutrality.”

Kai Ostermann said: “For decades, we have been supporting our medium-sized clients in financing innovation and transformation.

“Targeted support is a vital lever, particularly for SMEs, to make transformation projects economically viable and to realise sustainable and innovative investments.

“Alongside the ongoing integration of EIB global loans for SMEs, the guarantee agreements concluded with the EIF round off our portfolio for sustainable transformation financing. These agreements create additional incentives for companies seeking to make their business activities climate-friendly and future-proof. In this way, together with the SME sector, we are successfully implementing sustainable transformation – in Germany as well as in Europe.”

The supported financing is expected to cover leasing and loan contracts of up to €8.25 million, tailored to the needs of SMEs and small mid-cap companies. The cooperation will extend across Deutsche Leasing’s European network, covering key industrial markets within the EU.