The Vice President of the European Investment Bank (EIB) Mr. Sauli Niinistö and Mr. Inesis Feiferis, Chairman of the Board and President of Mortgage and Land Bank of Latvia, signed in Riga on 6 October a long-term loan of EUR 30 million for financing of small- and medium-scale projects in Latvia.
Within this global loan, Mortgage and Land Bank of Latvia will finance projects in industry, services and tourism as well as small- and medium-sized investments in the field of environmental protection, energy savings, infrastructure (including health and education) in Latvia. Final beneficiaries will be small- and medium-sized enterprises (SMEs) and private or public promoters of any size and ownership for energy, environmental protection or infrastructure projects.
Mr. Sauli Niinistö, the Vice-President of the EIB whose responsibilities include Sweden, Finland and the Baltic States/Northern Dimension, commented on the signature saying that The EIB supports economic development of small and medium enterprises (SMEs) that encourage entrepreneurship, represent important economic drivers and source of job creation in the future Member States. In Latvia, the EIB global loans have become a well-established and successful instrument for long-term funding of projects of SME's. Support to SMEs will have a catalytic effect on further investments in Latvia, including the foreign direct investment. It will also help to improve international competitiveness and contribute to the development of term finance in Latvia, an important element for the further progress of the financial system in the country.
Access to EIB funds for SMEs is generally provided through the network of partner banks being active in the future Member States by means of special credit lines - global loans - that channel EIB financing to viable projects promoted by SMEs.
The EIB, as the European Union's long-term financing arm, has provided EUR 371 million for projects in Latvia since 1994. Projects supported relate to priorities in the fields of transport (railways, ports, airport), energy infrastructure (hydropower project), telecommunications and environmental and municipal infrastructure, including a credit line to support Small- and Medium-Scale environmental and municipal projects, as well as global loans for the financing of small and medium-size enterprises and small infrastructure in the country.
Generally, in the future Member States of Central Europe (Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary and Slovenia) as well as the Accession Countries Romania and Bulgaria, the EIB has lent EUR 21 billion to projects since 1990. Therefore, EIB is the most important external source of finance for Central and Eastern Europe.