SmartCap began preparations for the establishment of a new public investment fund, the GreenFund, which aims to invest in businesses that create green technologies in order to solve environmental issues and achieve a climate-neutral and circular economy. The new investment fund, which also contributes to the development of the Estonian capital market and thus more broadly the local business environment, is a part of the European recovery plan.
“One of the main pillars of the recovery plan for Europe is the implementation of the green transition, including investing in innovative companies that develop and promote green technologies of the future,” said Sille Pettai, a member of the management board of Estonian national venture capital fund manager SmartCap. “A part of the recovery and resilience plan is a national green technology investment program being prepared by SmartCap, which aims to provide the long-term investments needed for the green transition.”
According to Pettai, SmartCap will soon commence market analysis and consultations with the capital market and green tech ecosystem participants to find out the needs and expectations regarding state financing through a specialized green technology investment fund, the so-called GreenFund.
“The primary focus of the state investment fund are venture capital funds investing in green companies – already today there are several initiatives on the market to establish such private funds,” added Sille Pettai. “In parallel, GreenFund financing solutions also include direct investments in innovative green technology companies to provide them with access to funding in a situation where the willingness and ability of the private sector to invest in green technologies are limited. On the other hand, it will also take time to launch new private funds and thus for capital to reach businesses.”
In 2022-2026, it is planned to provide equity investments in the amount of 100 million euros through the SmartCap GreenFund within the framework of the recovery and resilience plan, to which the contribution of private funds is to be added.
In developing the investment policy of the fund SmartCap follows the general conditions of the recovery and resilience plan for Europe to support the achievement of the environmental and climate goals of the European Green Deal.
It is expected that the basic principles of the investment policy of the GreenFund and detailed conditions of financing are to be approved nationally by the beginning of the new year.
SmartCap is a small fund manager registered with the Financial Supervisory Authority, and since 2017, SmartCap has been operating as a subsidiary of Foundation KredEx. The fund assets managed by SmartCap are invested in venture capital funds which, together with private investors, place capital into research and technology-intensive early-stage small and medium-sized companies with large international growth potential, mainly located in Estonia.
________ Sille Pettai
Member of the management board of SmartCap