The European Investment Bank (EIB) has backed Finnish machinery rental group Cramo with €50m (£44m), in a push to incentivise the circular economy model.

Cramo, which provides machinery, tools and modular facilities for construction, will use the funding to improve the performance and environmental  impact of its fleet throughout 2018.

The EIB’s commitment intends to increase sustainability in the construction industry as well as strengthening the circular economy, thanks to Cramo’s “innovative form of consumption”.

EIB vice president Alexander Stubb, with responsibilities for northern Europe operations, said: “The development of a more circular economy in the EU will help to reduce our dependency on imported raw materials.

“It has enormous potential for creating a sustainable and competitive advantage for Europe. That’s why I’m glad that the EU Bank supports business models such as Cramo’s, which lead the way to a greener economy.”

Leif Gustafsson, Cramo’s president and chief executive officer, said: “We are pleased with the financial support from EIB as it gives Cramo Group increased possibilities to strengthen our growth strategy and our ambition to be a shaper of the rental industry.

“With a strong innovation and performance culture and with sustainable solutions we seek to capture the potential in the market and develop solutions that meet the changing needs of our customers.”

European Commission vice president Jyrki Katainen, responsible for jobs, growth, investment and competitiveness, said: “The €50m, made possible by the European Fund for Strategic Investments (EFSI), to modernise and expand Cramo’s fleet of construction machinery is a good example of the Investment Plan for Europe financing growth of European SMEs.

“I encourage other growth-seeking companies with sustainable and circular business models to follow the precedent and seek EFSI financing for their expansion.”