EIB approves EUR 150 million for trade finance in Cyprus
The European Investment Bank (EIB) has approved a new financing instrument for Cyprus, which will allow the Bank to provide trade finance support for an amount of up to EUR 150 million.
The innovative EIB instrument was announced today in Nicosia in a press conference held by Harris Georgiadis, Minister of Finance, Werner Hoyer EIB President, and Mihai Tanasescu, EIB Vice President responsible for Cyprus, during an official visit to Cyprus.
EIB President Hoyer stated: “By setting up this programme in Cyprus, we have taken an exceptional step to support trade finance in Cyprus. After the positive results of the instrument first implemented in Greece 5 months ago, we rapidly replicated it in Cyprus, to enable international trade by local companies at a time when international banks are retreating. Our presence here today underlines the Bank’s commitment to economic development in Cyprus and our discussions with President Anastasiades aim to strengthen further our cooperation in view of the current economic circumstances. We remain committed to investing in Cyprus, in view of the difficult economic context, and share the Government’s over-arching objective of not only achieving recovery, but also securing long-term economic growth in the country. We are confident that Cyprus can succeed”.
The EIB, which is traditionally involved in providing long-term finance on favourable terms, added this short-term credit support instrument for the first time in Greece in June 2013. The instrument aims to mitigate transaction and systemic risks of foreign banks interested in developing trade flows with Cyprus and favouring an export-led recovery promoted, in particular, by SMEs and mid-caps. The EIB will provide guarantees to the commercial banks for trade financing, which are expected to support a volume of transactions in the order of EUR 300-450 million per year.
In 2012 signatures comprised EUR 130 million for a new production unit at the Vasilikos Power Plant to enhance electricity supply in Cyprus, EUR 68 million for Limassol Sewerage and EUR 200 million for key infrastructure, while in May 2013 the EIB signed a similar loan of EUR 100 million. The projects financed by the EIB in Cyprus during the last 5 years amount to EUR 1.3 billion. Approximately 80% of this amount went to the strategic areas of energy, environment, transport and SMEs. Historically, the Bank contributed to the financing of the vast majority of key infrastructure and energy projects in Cyprus such as roads, water and wastewater treatment plants and electricity production.
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