The European Investment Bank (EIB), the European Union's long-term financing institution, is lending EUR 30 million to Raiffeisen Bank Bosnia Herzegovina and to Raiffeisen. Leasing. The funds will be used to provide long-term financing for small and medium-sized enterprises (SMEs) and infrastructure investments in Bosnia and Herzegovina.
The EIB global loan (line of credit) to the two subsidiaries of the Raiffeisen Zentral Bank Austria aims at tackling the scarcity of funds for investment needed to sustain development and economic growth in the country. With the funds stemming from the EIB, up to 50% of the eligible project cost may be financed. The term for infrastructure projects is 15 years; loans for SMEs may go up to 12 years.
Raiffeisen Bank Bosnia Herzegovina will be able to respond to the long-term needs of small and medium scale businesses that represent an important source of job creation, and of local authorities, particularly of municipalities, which contribute to raising the living standards of the populations concerned through investments in urban infrastructure. Raiffeisen Leasing will be in the position to support, in particular, industrial SMEs contributing as well to develop leasing operations in the local financial market. . Both financial institutions will be passing on to their clients the long-term benefits offered by the EIB.
Up to April 2005 the EIB has signed loan contracts totalling EUR 185 million for projects located in Bosnia and Herzegovina. Four projects have been supported: roads, railways, electricity and a cement factory. Towards the future the EIB aims at underpinning transport infrastructure, SMEs, urban infrastructure and health.
The EIB was set up in 1958 under the Treaty of Rome to provide loan finance for capital investment furthering European Union policy objectives, in particular regional development, Trans-European Networks of transport, telecommunications and energy, research, development and innovation, environment improvement and protection, health and education. Outside the Union, the EIB contributes to European development co-operation policy in accordance with the terms and conditions laid down in the various agreements linking the Union to some 130 countries in Central, South and Eastern Europe, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America.