The European Investment Bank (EIB), the European Union's long-term lending institution, is providing a global loan (1) of EUR 20 million (2) to the government of the FYR of Macedonia, for Small and Medium-sized investments by private sector companies and Municipalities. At present, the funds will be channelled through Stopanska Banka a.d. Skopje and Komercijalna Banca a.d. Skopje, which cover together more than half of the domestic lending market. More banks may be added in due course.
This first EIB loan for the private sector in FYROM, represents a diversification of the Banks operations in terms of sector and client involvement in FYROM, where the EIB has been mainly supporting the transportation sector with a total of EUR 130 million for two priority road schemes. The loan is utilising the residual balance available under the EUR 150 million EU-FYROM Financial Protocol of December 1997, which expires end of June 2001.
The global loan aims at serving existing private sector and small public infrastructure financing needs, and by associating the two largest private banks of the country, contributes to the availability of long-term lending facilities domestically. It further underlines the continuing commitment of the EIB to supporting worthwhile investment projects, via reliable local banking partners, in the productive sectors of the FYROM economy to assist with the long-term development of the country.
The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects which further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries.
In South-East Europe, the EIB operates under the Mandate for Central and Eastern Europe agreed by the Council of Ministers for 2000 to 2007, which provides for EIB lending of up to EUR 8.7 billion, which complements the EU, as well as EU Member States' own bilateral co-operation policies.
To underline its commitment to future post-war reconstruction in the Balkan area, the EIB played an active role in the preparation phase of the reconstruction investment programme, in cooperation with the European Commission and the other multilateral financing institutions. The list of potential infrastructure projects which was published in the Study on Basic Infrastructure Investment in South-Eastern Europe comprises a total of 85 projects totalling EUR 4 billion. Of this total 35 projects are Quick-Start totalling EUR 1.1 billion, in which the EIB has a lead role in 14, totalling EUR 720 million, ie 65% of the total. 50 projects are "Near-Start", totalling some EUR 3 billion, of which EIB has a lead role in 18, amounting to some EUR 1 billion, ie 33% of the total Near-Start package.
(1) Global loans are available to partner lending institutions, which then on-lend the EIB funds in smaller portions according to the EIB's financing criteria. The funds are targeted primarily towards SMEs in tourism, industry and related services as well as environmental-protection and energy-saving investment schemes, and small to medium -sized infrastructure investments of Local Authorities. The global loans combine the EIB's first rate access to world capital markets, where it raises most of the funds for its lending activity, with the local network and know-how of domestic partner banks.
(2) EUR 1= USD 0.924800.