Norway: Nordic businesses to get €190 million green-investment boost as EIB Group and Norwegian DNB Bank ASA team up in first-of-its-kind deal for region

This article is published in association with European Investment Bank.

• EIB Group and DNB to provide NOK 2.2 billion (€190 million) in financing for Nordic businesses through Norway’s first-ever green securitisation
• Funds will primarily support leasing of zero emission vehicles as well as other clean-transport technologies, helping businesses go green
• Backed by InvestEU programme, operation underscores EIB Group’s commitment to climate action and sustainable economic growth

The European Investment Bank (EIB) Group and Norwegian DNB Bank ASA are joining forces in a groundbreaking financing initiative, marking 50 years since the EIB’s first investment in Norway.

This collaboration will provide up to NOK 2.2 billion (€190 million) for a range of businesses in Norway, Sweden, Denmark and Finland to switch to greener technologies. The financing for small and medium-sized enterprises (SMEs) and mid-capitalisation companies (Mid-Caps) in the four Nordic countries stems from the region’s first green synthetic securitisation targeting 100 % climate-friendly investments.

The funds will mainly support the leasing of zero emission vehicles as well as other clean-transport technologies in sectors such as construction. This will help companies significantly reduce their carbon-dioxide emissions and bolster the European Union’s goal to become climate neutral by 2050.

This initiative, backed by the European Commission’s InvestEU programme, involves credit protection provided by the EIB Group and enables increased access to favourable financing terms for climate-related projects, unlocking capital that would otherwise be unavailable for such investments.

“Our partnership with DNB will bolster investment and accelerate the green transition in the Nordics,” said EIB Vice-President Thomas Östros. “This initiative demonstrates how innovative financing can spur both economic growth and climate action.”

The operation also reinforces the broader objectives of the EU Capital Markets Union, providing a model for sustainable financing that can be replicated across the region. It comes as Norway implements the European Securitisation Regulation into national legislation.

“We are proud to announce this landmark transaction with the EIB Group under the InvestEU programme,” said Group Executive Vice President of Corporate Banking Norway Rasmus Figenschou. ”This collaboration demonstrates our commitment to advancing sustainable financing solutions and supporting the green transition. By mobilizing funds dedicated to environmentally impactful projects, we’re not only driving growth but also ensuring that we’re building a resilient, low-carbon economy.”   

Beyond providing vital financing, the transaction highlights the power of collaboration between public and private institutions. The European Investment Fund (EIF), as part of the EIB Group, is playing a key role in structuring the synthetic securitisation, helping to unlock capital for green projects while reducing the financial risk for DNB.

“We are happy to support DNB in its efforts to accelerate the financing of environmentally sustainable projects and driving the green transition,” said EIF Chief Executive Marjut Falkstedt. “This transaction represents our first securitisation in Norway and our first green securitisation in the region, where we note an increased interest in risk sharing transactions.”

Background information

Green synthetic securitisation

This landmark operation is the first green securitisation in Norway and DNB’s first synthetic securitisation. It also represents the first collaboration of its kind between DNB and the EIB Group. The transaction is made possible through a Significant Risk Transfer, designed in line with criteria for Simple, Transparent and Standardised securitisations, whereby the EIB Group provides credit protection on a NOK 17.6 billion (€1.5 billion) portfolio of SME and small Mid-Cap loans held by DNB. This structure frees up capital for DNB, enabling the bank to extend more loans specifically for climate-friendly projects.

Both the EIB and the EIF are involved in this operation. The EIF provides credit risk protection to DNB on the mezzanine tranche of NOK 1.1 billion, which is then counter-guaranteed by the EIB. This structure ensures that the EIB Group assumes the mezzanine tranche risk of the referenced portfolio. Key features of the transaction include synthetic excess spread, a replenishment period, as well as a pro-rata amortisation of both the senior and mezzanine tranches, subject to performance triggers.

This form of green financing offers businesses a cost-effective solution for funding climate-related projects, supporting both sustainability and growth in the Nordic region.

European Investment Bank Group

The EIB finances sound investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion and support a just and swift transition to climate neutrality.

The EIB Group signed a total of €88 billion in new financing for over 900 projects in 2023. These commitments are expected to mobilise around €320 billion in investment, supporting 400,000 companies and 5.4 million jobs.

All projects financed by the EIB Group are in line with the Paris Climate Accord. The EIB Group does not fund investments in fossil fuels. It is on track to deliver on a commitment to support €1 trillion in climate and environmental sustainability investment in the decade to 2030, as pledged in the EIB Group’s Climate Bank Roadmap. Over half of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation, adaptation, and a healthier environment.

InvestEU

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable economy. It helps generate additional investments in line with EU policy priorities, such as the European Green Deal, the digital transition and support for small and medium-sized enterprises. InvestEU brings all EU financial instruments together under one roof, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub, and the InvestEU Portal. The InvestEU Fund is implemented through financial partners who invest in projects using the EU budget guarantee of €26.2 billion. This guarantee increases their risk-bearing capacity, thus mobilising at least €372 billion in additional investment.

DNB Bank ASA

DNB is Norway’s largest financial services group and one of the largest in the Nordic region in terms of market capitalisation. The Group offers a full range of Finanancial services, including loans, savings, advisory services, insurance and pension products for retail and corporate customers.