- EIB Group provides Estonian lender Coop Pank with capital relief that will unlock up to €249 million in loans to businesses.
- New financing to be offered to Estonian companies for initiatives that advance gender equality and environmental protection.
- Deal marks first synthetic securitisation for Coop Pank.
A range of Estonian businesses will get a financing boost totalling up to €249 million as a result of an agreement between the European Investment Bank (EIB) Group and lender Coop Pank. Both EIB Group institutions — the European Investment Fund (EIF) and the European Investment Bank — are part of the deal, which provides capital relief and enables new lending by Coop Pank 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 allows a bank to transfer part of the credit risk linked to a portfolio of loans to a protection seller, in this case the EIB Group. This risk transfer, done through guarantees, reduces capital requirements and frees up capacity for Coop Pank to lend more to Estonian businesses.
“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 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 transaction strengthens the local banking sector, injects new funding into the Estonian economy and supports projects that matter for society – from gender equality to climate action,” said EIF Chief Executive Marjut Falkstedt. “It is a great example of how the EIF and the EIB can leverage innovative structures to deliver impact.”
The securitisation is based on €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, commented. "It strengthens our ability to support Estonian businesses with innovative financing solutions and reflects our commitment to sustainable growth. Together with the EIB and EIF, we are creating opportunities that will help companies thrive and communities prosper across Estonia.”
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 by 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, retained with Coop Pank. Key features of the transaction include synthetic excess spread, a two-and-a-half-year revolving period and pro-rata amortisation of the senior and the mezzanine tranches, subject to performance triggers.
Background information
The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. Built around eight core priorities, we finance investments that contribute to EU policy objectives by bolstering climate action and the environment, digitalisation and technological innovation, security and defence, cohesion, agriculture and bioeconomy, social infrastructure, the capital markets union, and a stronger Europe in a more peaceful and prosperous world.
The EIB Group, which also includes the European Investment Fund (EIF), signed nearly €89 billion in new financing for over 900 high-impact projects in 2024, boosting Europe’s competitiveness and security. In 2024, Estonia received €498 million in financing from the EIB Group, fuelling business innovation and green growth.
Coop Pank, based on Estonian capital, is one of the five universal banks operating in Estonia. The number of clients using Coop Pank for their daily banking has reached 224,000. Coop Pank aims to put the synergy generated by the interaction of retail business and banking to good use and to bring everyday banking services closer to people’s homes. The bank’s strategic owner is Coop Eesti, a domestic retail chain with a network of 320 stores across the country.