European lenders are unlocking a significant new financing channel for Estonia’s business sector. Under a pact between the EIB Group and local lender Coop Pank, up to €249 million in fresh loans and leases will be made available to Estonian SMEs and mid-sized companies by 2028, with a strong focus on gender equality and climate-related projects. The deal uses a synthetic securitisation structure — the first of its kind for Coop Pank and the first in the Baltics based solely on one country’s loan portfolio — allowing the bank to transfer part of its credit risk to the EIB and EIF and free up lending capacity. Backed by a €200 million portfolio, the arrangement earmarks at least €49 million for gender-equality initiatives and €17 million for climate and environmental action, positioning Coop Pank as a key conduit for EU-backed impact financing in Estonia’s real economy.
The deal uses a synthetic securitisation structure that allows Coop Pank to transfer part of the credit risk from an existing €200 million loan and leasing portfolio to the European Investment Bank (EIB) and the European Investment Fund (EIF). By reducing capital requirements, the arrangement enables the bank to increase lending capacity without expanding its balance sheet.
“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.”
Under the agreement, Coop Pank can issue new loans and leases until the end of 2028, with specific allocations tied to EU policy priorities. At least €49 million of the financing is earmarked for projects that advance gender equality, while a minimum of €17 million is reserved 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.”
The transaction marks Coop Pank’s first synthetic securitisation and is also the first such structure in the Baltics to be based entirely on a single-country loan portfolio. Risk protection is provided by the EIF and the EIB across the senior and mezzanine tranches, while the riskiest junior tranche remains on Coop Pank’s books.
For Estonia, the agreement adds to a growing use of EU-backed financial instruments to channel funding to the real economy, particularly at a time when banks across Europe face tighter capital and regulatory constraints. In 2024 alone, the EIB Group provided €498 million in financing to Estonia, largely targeting innovation and green growth.
Coop Pank, one of Estonia’s five universal banks, serves more than 220,000 customers and is majority-owned by domestic retail group Coop Eesti, which operates a nationwide store network.
Click here to read more VC news.
Read the orginal article: https://arcticstartup.com/estonian-companies-to-get-e249m-under-eib-group-pact-with-coop-pank/
