The European Investment Bank (EIB) has signed new loan agreements totalling some EUR 335 million for the financing of investments in Finland.
These include a EUR 200 million loan to the Sonera Group, the first within the telecommunications sector in Finland, and a EUR 100 million credit line to Municipality Finance for the financing of smaller public sector infrastructure investments as well as a EUR 33 million tranche of a previously agreed loan to the Republic of Finland for railway investments.
EUR 200 million loan to Sonera
In connection with its Board of Directors' meeting in Helsinki, the EIB and the Sonera Group signed a EUR 200 million loan agreement to finance extension and upgrading of the fixed and mobile telecommunications networks throughout Finland up to the end of year 2000.
Around one third of the investment programme is directed towards regional development areas. Sonera is the sole provider of local fixed voice services telephony in northern Finland and most of the eastern parts of the country. The investments by Sonera aim at providing advanced telecommunications services and development towards third generation mobile telecommunications systems. The project enhances the competitiveness and efficiency of the Finnish and European telecom sectors.
The EIB loan to Sonera is the first within the telecommunications field in Finland. During the last five years, the EIB has extended some EUR 10 billion for the financing of telecommunications investments within the EU.
The Republic of Finland the largest borrower
The Republic of Finland and the EIB on Thursday signed the second and last FIM 200 (EUR 33) million tranche of a previously agreed FIM 550 (EUR 92) million loan for the modernisation of six sections of the railway network.
The public transport sector has dominated EIB lending in Finland. So far loans totalling FIM 3.5 billion have been extended to the Republic of Finland for the upgrading of the rail network (track renewal and electrification) and FIM 2.7 billion for road investments.
The most recent road loan is a FIM 600 (EUR 100) million loan for the construction of the Paimio-Muurla section of the E18 motorway.
EUR 100 million loan to Municipality Finance
A new loan facility was signed during the week concerning a EUR 100 million loan to Municipality Finance for small and medium-sized public sector investments within energy and communications infrastructure as well as health and education.
The EIB is increasingly participating in the financing of small and medium scale municipal investments. Through Municipality Finance (Kuntarahoitus Oyj), loans totalling FIM 560 million (EUR 94 million) have been channelled to infrastructure investments by some 50 municipalities with individual loan amounts varying from less than EUR 1 million to EUR 5 million.
The range of investments is wide: from energy, road and port projects to investments in school buildings, high tech-laboratories and the Rovaniemi Santa Park.
The EIB Board of Directors visited Imatra Steel and Metsä-Botnia
In addition to ordinary meeting proceedings in Helsinki on May 27, the EIB Board visited EIB financed projects - the Imatra Steel mill and the Metsä-Botnia Joutseno pulp plant. The Nokia Chairman and President, Mr Jorma Ollila, gave a presentation on the Nokia Group and the CapMan Capital Management President, Mr Ari Tolppanen, informed the Board on venture capital activities in Finland.
A one-day visit to Tallinn will take place on May 28, including a project visit, the Tallinn Airport, signature ceremonies of a new loan and a meeting with representatives of the business and political community.
The EIB Board of Directors has sole power to take decisions in respect of loans, guarantees and borrowings. The Board of Directors consists of 25 Directors and 13 Alternates, of whom 24 and 12 respectively are nominated by the Member States; the European Commission nominates one Director and one Alternate. Finland has nominated Ms Inga-Maria Gröhn, Director at the Ministry of Finance, to the EIB Board of Directors.
EIB loan portfolio in Finland: EUR 1.9 billion
During Finland's 4.5 years of EU-membership, the EIB has extended loans totalling EUR 1.9 billion for infrastructure and industrial investments, investments within the health and education sectors as well as venture capital financing. In 1998, loans totalling EUR 551 million went to finance investments by the Republic of Finland, Fingrid, the Civil Aviation Administration, Metsä-Serla, Municipality Finance and CapMan Capital Management.
The AAA-rated EIB, the European Union's house bank, extends long-term financing for investments both within and outside the EU.