The EIB loan serves for a significant upgrading and increase of the production capacity of an existing paper mill at Neusiedler SCP a.s. in the city of Ruzomberok. SCP is the largest paper producer and is one of the largest companies in Slovakia. It is the country's eight largest exporter.
SCP is 50% owned by ECO-Invest, a Slovakian group of investors, and 50% by Austrian based Neusiedler. Neusiedler forms part of the Anglo American plc group via its Mondi subsidiaries.
The investment will give the paper mill a long-term competitive edge on the growing CEEC and Western European copy paper markets. The investment will add value to an abundant local resource (timber) and contribute to increase Slovakia's exports. The forest-based industry is an important industrial sub-sector in Slovakia, representing about 11 % of total manufacturing industry output and employing some 63,000 employees.
The project will have significant direct and indirect employment effects. It will stabilize about 2800 jobs at the existing plant, and it will contribute to keep existing employment in wood procurement and handling. This is of particular importance given the high unemployment rate of about 18% in Slovakia.
The entire project and in particular the reconstruction of the pulp line and the new boiler, involving modern technology, will also bring significant environmental improvements in terms of atmospheric and liquid emissions.
The EIB's participation in the project is crucial to provide long-term funding to a company recently acquired by a strategic investor. It is in line with its objective of supporting FDI operations as they act as a catalyst for economic development. The investment is another evidence of growing FDI flows to Slovakia.
The European Investment Bank, the financing arm of the European Union, finances projects which help implement EU policy in the present and future EU countries as well as in a number of developing nations around the world. In 2002, the Bank granted loans totalling EUR 39.6 billion, of which 3.6 billion in the future Member States. The EIB is re-financing its lending by issuing bonds on the international capital markets. Due to its 'AAA' credit rating it is able to raise funds at the keenest terms. Being a non-profit institution, the Bank passes on these terms to public and private project promoters as well as partner banks. Since 1990 the EIB has lent some EUR 20 billion in Central- Eastern Europe and has become the region's most important external source of finance. Lending in Slovakia amounted to EUR 1.8 billion.