How to invest in the EU? Slovakia is a model for other countries
The European Investment Bank's Fi-compass identifies Slovak Investment Holding as an exemplary model in the European Union for implementing financial instruments
Bratislava, April 25, 2023 - Slovakia is a good example of how financial instruments can be used effectively to invest in growth and development in the European Union as stated by fi-compass, a platform of the European Commission (EC) and the European Investment Bank (EIB), which advises on financing within the EU. It identified Slovak Investment Holding (SIH) as a prime example of the effective implementation of financial instruments. In April, it published a comprehensive case study and a series of videos with examples of projects and investments supported in Slovakia about the success of SIH, 100% state-owned joint stock company.
The study, entitled "Slovak Investment Holding - Multisector Financial Instruments in Slovakia", describes in a cross-sectional manner the establishment and activities of SIH, which manages and invests more than €1 billion of European Structural and Investment Funds. According to the report, the establishment of SIH as a centralised holding fund has enabled the building of a comprehensive national support system with a long-term strategic vision for investment.
"SIH has introduced a wide range of types of financial instruments in six different sectors of the Slovak economy, providing a powerful implementation tool for the managing authorities and the Ministry of Finance," the document reads. It also highlights the development of expertise in the selection, state aid, implementation, monitoring and reporting of financial instruments.
SIH was established in 2014, and its main objective is to develop the financial ecosystem in the country. It supports strategic public and private investments in infrastructure, energy efficiency, waste management, cultural and creative industries, social economy and small and medium enterprises. Between 2014 and 2022, it has supported more than 8,100 projects, including several innovative start-ups, the PPP project of Bratislava's D4R7 bypass, the modernisation of railways, as well as projects to help marginalised and socially disadvantaged groups, the reconstruction of the First Slovak Literary Gymnasium in Revúca, the renovation of the iconic Grӧssling Spa in Bratislava, and more.
Among other things, the study also positively evaluates the rapid response during the pandemic. "SIH contributed effectively to addressing the negative economic consequences of the COVID-19 pandemic. Both the capital and guarantee instruments were successfully implemented in a very short time, which was crucial at this time”.
Other examples of good practice in the implementation of financial instruments also include the creation of a new venture capital fund, known as the Venture to Future Fund (VFF), which has successfully attracted investment from public and private investors, including the European Investment Bank (EIB).
"Slovakia has traditionally lacked a significant number of venture capital investors focused on technology start-ups. The emergence of SIH as a direct equity investor has proved to be a catalyst for further co-investment from the private sector, contributing to the development of the equity ecosystem in the country".
The European Investment Bank, through fi-compass, has also recognised Slovak Investment Holding in the past. In 2019, SIH won the prestigious pan-European fi-compass SHOWCASE competition with an equity financing facility for innovative Slovak companies, which were able to grow and expand thanks to the investment from SIH. This year, SIH was among the top 10 projects from across the EU with its projects for the reconstruction of the gymnasium in Revúca and the Grӧssling Spa.
fi-compass is a platform for advisory services on financial instruments within the European Union. The European Commission provides the service in cooperation with the European Investment Bank. The aim of fi-compass is to support EU governing bodies and other stakeholders by providing practical know-how and education on financial instruments. The support includes information guides, publications with case studies, training seminars and videos.
Slovak Investment Holding
SIH is a 100 % state-owned joint stock company. Its primary mission is to support strategic public and private investments in Slovakia in the areas of infrastructure, energy efficiency, waste management, cultural and creative industries, social economy and small and medium-sized enterprises. It draws its funding from the European Structural and Investment Funds. SIH finances projects exclusively in a repayable form, i.e. through financial instruments and not through grants.