Slovak Investment Holding invested 1.3 billion euros in 10 years and supported hundreds of companies

SIH is celebrating 10 years of supporting Slovak business and investment. Through financial instruments, SIH gave a helping hand to thousands of companies during the pandemic, helped green projects, innovations and social entrepreneurship.

Bratislava, May 20, 2024 – In May 2024, the state company Slovak Investment Holding (SIH) commemorates its tenth anniversary. Over the past decade, SIH has established itself as a key manager of returnable Eurofunds in Slovakia. Thanks to financial instruments, which include loans, guarantees and capital or quasi-capital investments, SIH supported hundreds of companies, startups and public projects in the amount of 1.3 billion euros.

SIH's direct investments went to 36 promising companies in the amount of 356.6 million euros. Through favorable bank loans, SIH supported more than 14,000 companies, which thus obtained funds worth almost 2.2 billion euros. Another 208 companies received EUR 198.6 million in investments from funds in which SIH invested.

Direct investments and investments through financial intermediares

The aim of SIH is to support the growth and competitiveness of small and medium-sized enterprises, the development of infrastructure, social economy, energy efficiency, waste management and cultural and creative industries. Funds for the implementation of investments are drawn primarily from European Union Funds. It finances projects exclusively in a returnable form, i.e. using financial instruments, not grants. During 10 years, he implemented them through the model of three funds, National Development Fund I., National Development Fund II., National Development Fund III., and through Slovak Asset Management, which is the manager of the Venture to Future Fund.

SIH provides financial instruments in two ways. The first is indirectly through commercial banks and investment funds that support a large number of smaller projects. The second method is direct, which is used for larger investments in the field of infrastructure, innovative companies or energy renovation of buildings.

Originally, SIH had half a billion euros under its management. In March 2020, three weeks after the confirmation of the pandemic in Slovakia, SIH promptly responded to the unprecedented situation and prepared guarantee instruments, thanks to which banks could provide preferential bridging loans to companies operating in Slovakia. The goal was to help businesses deal with financial difficulties caused by the pandemic and maintain jobs despite the crisis. There was enormous interest in the programs from entrepreneurs. The biggest program was the so-called SIH anti-corona guarantee, which was later renamed to SIH anti-crisis guarantee in connection with the energy crisis and conflict in Ukraine. It brought companies loans with reduced interest. As part of this program alone, businesses borrowed 1.78 billion euros, and thus the volume of reinvested funds more than doubled by the end of 2023.

Green economy, municipalities and startups

SIH also emphasizes key areas such as the green economy, innovation and social entrepreneurship. He supported dozens of projects focused on renewable resources, efficient waste management, social services and affordable housing.

 

"Financial instruments in areas where we support a relatively small number of projects in relatively higher volumes are economically efficient to implement directly. We use this investment model, for example, to support projects in the field of infrastructure, innovative businesses and to support the energy efficiency of buildings. In this way, for example, we supported the D4/R7 highway construction project, a loan for ŽSR for a diagnostic vehicle project, or several highly innovative Slovak companies whose names or products resonate far beyond the borders of Slovakia," said Peter Frőhlich, CEO and Chairman of the Board of Slovak Investment Holding. Among the successful investments that SIH has already exited are investments in the e-commerce platform (fitness e-shop) GymBeam and the energy company Enstra, in which SIH achieved a valuation of 2.4 million euros.

Through the investment funds for the support of startups in which SIH invested, 90 startups operating in various sectors were capitalized in the amount of more than 60 million. EUR, an additional 11 million was added to these resources. euros of private capital.

 

Efficiency and return

Money that will be returned from investments and loans, the so-called re-flows, are reused to support other projects. Repayable financial instruments mean that after fulfilling pre-agreed conditions, the recipient of the support must return these funds, for example in the form of loan installments or by the withdrawal of the state from the investment in the company. This system makes it possible to support several projects from one package of money, as the returned resources can be reinvested.

Slovak Investment Holding played an important role in drawing up European funds. In the program period 2014 - 2020, Slovakia invested up to 11% of its allocation through financial instruments, which was above the EU average.

The high efficiency of the use of returnable financial instruments compared to traditional grants is also indicated by the increased interest of private investors. "This means that every euro of public resources allocated for investment can attract additional private financial resources, and in this way multiply the total volume of investment for the final beneficiaries. In 10 years, SIH redistributed almost 1.8 billion euros from European structural and investment funds, which, thanks to the leverage effect, attracted additional private resources and created an investment portfolio worth more than 3 billion euros," added Peter Frőhlich.

 

Public sector support

Slovak Investment Holding also supports several financially sustainable projects in the field of culture. Investing in the renovation of the Grössling Spa in Bratislava and the transformation of the former First Slovak Literary Gymnasium in Revúca into a modern museum and cultural and educational hub Litterra.

It is also actively involved in supporting the social economy. An example is the supported enterprises Dosupný Domov and Dosupný najám, which enable housing for disadvantaged groups of the population who would otherwise not have the opportunity to obtain housing under commercial market conditions.

SIH is also an important investment partner of local governments, for example in the area of ​​reducing energy consumption in the operation of public buildings, reconstruction of roads and bridges or modernization of schools.