The European Investment Bank (EIB) is providing further global loans (credit lines) totalling EUR 90 million(1) to partner banks operating in the Czech Republic, Slovakia and Hungary. The banks will use the long-term funds for financing small and medium-scale projects in the fields of industry, services, tourism, infrastructure, environmental protection and energy saving.
- Ceskoslovenská Obchodní Banka, a.s., Prague, a member of the KBC Bank & Insurance Group, is receiving a global loan of EUR 50 million for financing smaller-scale projects in the Czech Republic and in Slovakia , while
- HypoVereinsbank Hungaria Rt. is receiving EUR 40 million for lending to similar smaller-scale schemes in Hungary.
Commenting on the new global loans, EIB Vice-President Wolfgang Roth said: 'In line with the EIB's specific role to assist the ten Central European candidates for EU membership, our global loans bring suitable long-term funds to selected banks experienced in financing SMEs and smaller infrastructure schemes. We are an active borrower in the local currencies of Central Europe, in particular in the Czech and Hungarian markets. Whenever possible and appropriate, we offer credits in local currency, eliminating the foreign exchange risk for clients. The EIB thus also helps broaden and internationalise the capital markets in these countries".
The Accession Partnership Agreements between the candidates countries and the EU foresee financial support to help these countries develop their small and medium-scale enterprises (SMEs) and comply with EU environmental standards. In Central Europe, as in the EU, the EIB finances large projects with direct loans and smaller schemes by means of global loans, through a network of some forty intermediary banks. These two global loans bring total EIB lending to SMEs and small infrastructure projects in Central Europe since 1990 to EUR 1.4 billion (12 percent of total lending). In the EU, about one third of EIB lending is provided in the form of global loans. The Bank intends to further widen this cooperation with the banking sector in Central Europe.
The EIB was set up in 1958 under the Treaty of Rome to lend to projects 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 Union's co-operation policy toward third countries. Since 1990, more than EUR 11 billion were lent to projects in the ten Central European countries which have applied for EU membership. Owned by the Member States, the EIB raises the bulk of its funds on the capital markets worldwide where its bond issues regularly benefit from the Bank's 'AAA' credit rating.
(1) 1 euro = 0.613400 GBP; 35.5850 CZK; 256.810 HUF.