The European Investment Bank (EIB), the European Union's long-term financing institution, is providing a global loan of ECU 10 million (1) to Vereinsbank Riga, for financing small environmental, energy saving, infrastructure, industrial and tourism projects in Latvia. Vereinsbank Riga is majority owned by Vereins- und Westbank AG (Bayerische Vereinsbank Group) which is also guaranteeing the loan.
Commenting the loan, EIB Vice-President Wolfgang Roth said: 'The development of a competitive private sector and of adequate infrastructures are vital for the growth of the Latvian economy, lack of suitable financing for investments remains one of the major constraints for the development of these sectors. By making funds available to solid financial intermediaries, the EIB seeks to further growth and employment and help Latvia to prepare for eventual EU membership.'
The global loan to Vereinsbank Riga is EIB's fifth operation in Latvia. Beside a global loan to the Investment Bank of Latvia for financing investments by small and medium scale companies, EIB loans helped upgrade the water and wastewater network in Riga, the Daugava hydro-power plant and Ventspils port.
The EIB was set up in 1958 under the Treaty of Rome to provide loan finance for capital investment furthering European Union policies. While strengthening weaker EU Regions has always been its main goal, the Bank also lends to projects outside the European Union under the EU co-operation policy toward third countries. Owned by the Member States, the EIB raises the bulk of its funds on the capital market where its bond issues are consistently graded `AAA', the best credit rating.
(1) Conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 31/03/1998, when 1 ECU = 1.99 DEM, 0.64 GBP,1.07618 USD, 0.644171 LVLK.