Denmark’s export credit agency will be absorbed into a new investment fund under plans drawn up by the Danish government to stimulate research, investment and sustainability by local businesses.

The new Danish Investment Fund (Danmarks Investeringsfond) will be formed by the merger of EKF Danmarks Eksportkredit, the Danish Growth Fund (Vaekstfonden) and the Danish Green Investment Fund.

The plans, announced by the government on September 10, are one of five initiatives aimed at boosting the competitiveness and productivity of Danish businesses. The government will seek political agreement to pass new laws required to establish the fund.

EKF says the proposed structure will be “of particular benefit” to small and medium enterprises (SMEs) because it will provide a single entry point into requests for government assistance.

“We are positive about the proposal to consolidate the state’s financing efforts for the Danish business sector under Danmarks Investeringsfond,” EKF’s CEO, Peder Lundquist, says in a statement.

“The fund will build on strong, existing competencies in EKF, Vaekstfonden and the Danish Green Investment Fund and will be able to provide Danish companies with even more effective and manageable financing from the early start-up and further out into the world. This creates a better basis for the prosperity which Denmark is relying on.”

Until the new arrangements are in place, EKF clients can expect “business as usual”, he adds.

A fact sheet published by the industry ministry, which is driving the changes, suggests the government wants the fund to commence operations in 2022.

“With a wider range of products and a larger portfolio,” the ministry says, the fund “will be able to create better opportunities to mobilise risk capital from pension companies and other institutional investors and support an increase in capacity in the export financing market in collaboration with Danish and foreign banks to strengthen Danish exports”.

“An export and internationalisation effort under the Danish Investment Fund will ensure export efforts for both small and large Danish companies,” the fact sheet says, adding that it will have a focus on “green technologies” in which it says the country already has a comparative advantage.

A spokesperson for the ministry did not respond to additional questions from GTR. How the new organisation will be led and whether the EKF name will remain has not been disclosed.

The Danish Export Association, which represents the interests of exporters, says it is “very positive” about the proposals, describing them as “interesting and innovative”. “If constructed the right way, it can have a positive impact on Danish exports,” says Halldor Halldorsson, the group’s head of branding and relations.

“Over the next few weeks, we will make sure that our point of view is taken into consideration before the political negotiations go to the final stage,” Halldorsson tells GTR.

“On behalf of the Danish exporters, both the SMEs and larger companies, we will ensure that the new setup is transparent and easy to use. The investment fund must be able to support all Danish companies, from startups to large-scale exporters. The products must fit the demand and the fund should be agile and have a high degree of adaptability.”

EKF issued guarantees worth DKK23bn (US$3.6bn) last year, according to its annual report, and generated a surplus of DKK746mn.

Last year Belgium’s export credit agency, Credendo, announced plans to merge its two specialised trade credit insurance entities into one company.