Minister of Economic Affairs Lintilä: Government’s decisions in mid-term policy review to boost investments and renewal of industry will support Finland after the pandemic
“The decisions we have taken in the mid-term policy review session to support the renewal of industry, domestic ownership and investments, as well as research, development and innovation activities will help Finland rise from the coronavirus crisis,” says Minister of Economic Affairs Mika Lintilä.
Subsidy for electrification of industry encourages carbon-neutral production
In its mid-term policy review, the Government decided on a broad-based strategy for the renewal of industry, which emphasises the importance of industrial production for Finland.
Promoting industrial investments and securing the cost competitiveness of industry are supported by industrial low-carbon roadmaps and a subsidy for electrification.
“We decided to introduce a subsidy for electrification for energy-intensive companies, which will create a stronger incentive for carbon-neutral production and for the electrification of energy-intensive companies. This subsidy will also take cost competitiveness into account,” Lintilä says.
Half of the subsidy must be used for projects that reduce emissions, increase the share of renewable energy or improve energy efficiency during the subsidy period. Next year, EUR 87 million will be reserved for the subsidy and the amount will increase to EUR 122 million in 2025. Aid intensity will be 25% and the maximum amount of subsidy will be EUR 150 million.
Investment permit procedures to be eased
Developing the permit procedure based on the one-stop shop principle will facilitate industrial investments. This will also be supported by the digitalisation of the process. The aim is to reduce the time spent processing a permit to less than one year without compromising the quality of the process.
In order to promote large and strategically significant investments in Finland, a fast track will be created to be used if and when decided by the Ministerial Committee on Economic Policy.
RDI investments to support a rise in industrial productivity and value added
The Government Programme’s objective of increasing the research, development and innovation expenditure to 4% of GDP by 2030 will be supported by a new parliamentary working group.
“I look forward to hearing the working group's options on how to raise the RDI funding,” Lintilä says.
“We will also identify the key research needs of the renewing industry and present them to the relevant EU and other international RDI programmes,” he adds.
Finnvera’s credit instruments and loans to entrepreneurs to support the investment capacity of SMEs
“It is important that the funding opportunities of Finnish industry, in terms of amount and price, are internationally competitive and that companies here are able to use different funding channels, both domestic and international,” says Minister Lintilä.
Based on the decisions of the mid-term policy review, the use of financial products (e.g. direct credit for export operations) for SMEs for export purposes will be developed and stepped up. Finnvera will also introduce direct buyer credits for the smallest export businesses. The aim is to improve the financing potential of small export businesses and thereby bolster the exports of Finnish companies. The financing is designed for export businesses where Finnvera's contribution would not exceed EUR 20 million.
Due to a faster pace in change in ownership, Finnvera's cap of EUR 100,000 for loans to entrepreneurs will be augmented in order to introduce more effective financial resources.
The volume of growth loans will be increased to at least double the current magnitude. The growth loan, a.k.a. junior loan, strengthens the credit rating of companies from the perspective of bank funding when a company needs credit financing, for example for business growth, investments or business deals.
“These decisions also play an important role in the companies’ recovery from the pandemic, Lintilä says.
New co-investment fund to support domestic ownership
During its mid-term policy review, the Government decided to explore the establishment of a co-investment fund, including different options and conditions for operating it. The fund would invest alongside groups of business angels during their investment rounds.
“Earlier in April, we announced a domestic ownership programme which includes a wide range of measures to support domestic ownership. This co-investment fund is one clear measure to support domestic ownership,” the Minister says.
Antti Siika-aho, Special Adviser to the Minister of Economic Affairs, tel. +358 50 575 4118