The European Investment Bank (EIB) is lending a total of EUR 700 million for key investments in Estonia, targeting social and economic infrastructure, human capital development and energy. The two finance contracts were signed today in Tallinn by EIB Vice-President Eva Srejber.
Ms Srejber stated: “Estonia is one of our shareholders and we are very glad that we are able to provide the full advantage of our financial strength in these challenging economic times. The lending provided in Estonia today fits in with the broader measures announced by the EIB last December under the European Economic Recovery Package in the ‘convergence' regions of the European Union. The funds will not only bolster the competitiveness of the Estonian economy but will also strengthen the effective use of the EU grant funds allocated to the country. We are building on the excellent cooperation with the Estonian authorities and joining forces with the European Commission. In this way we will be able to support a large number of projects which, in view of their relatively small size, might not have direct access to EIB financing. Our multipartite cooperation maximises the efficiency and impact of our action. I truly hope that today marks the continuation of fruitful and rewarding cooperation between Estonia and the EIB to support sustainable growth, prosperity and Estonia’s progressive integration into the European economy”.
A EUR 550 million loan to the Republic of Estonia is for priority investments co-financed with EU funds over the period 2007-2013. The operation is structured as a Framework Loan and will be used by the Estonian State for investments in priority areas identified in the National Strategic Reference Framework, through the co-financing of three Operational Programmes for the Development of Human Resources, for the Living Environment and for the Promotion of Cohesion. The EIB Framework Loan will also provide financial support for one Cohesion Fund project from the 2004-2006 programming period and a number of small scale non-co-financed road schemes.
A EUR 150 million loan to Eesti Energia will help to finance a three-year investment programme aimed at modernising and extending power transmission and distribution networks throughout Estonia. Financing of investment in electricity networks will make a substantial contribution to the common EU objective of diversification and security of internal supplies and further enhance Eesti Energia’s role on the Baltic electricity market. For energy efficiency in Estonia the EIB has already provided a EUR 80 million loan to Eesti Energia to support the rehabilitation and extension of power transmission back in 2004. The EIB attaches particular importance to this cooperation to ensure a reliable energy supply for Estonia’s citizens and the Baltic region as a whole.
Background information:
After the sharp deterioration of the situation on the financial markets and the deepening of the economic crisis during autumn 2008, the European Investment Bank Group, which supports EU policies, increased lending in 2008.
Total EIB lending rose by 21% in 2008 to EUR 57 billion, compared to EUR 48 billion in 2007. Loan signatures rose sharply towards the end of the year, reflecting the EIB's swift response to help underpin economic recovery at the request of the European Union's Member States. Between October 2008 and February 2009, the EIB increased its loan signatures to EUR 31 billion, an increase of 38% compared to the same period in 2007/2008.
To finance its activities, the EIB raised an aggregate EUR 60 billion on international capital markets through 247 bond issues in 22 currencies, including four currencies in synthetic format. Outstanding loans at end-2008 totalled EUR 350 billion.
In Estonia, since November 2008 total lending, including today’s signatures, amounts to EUR 772 million. Hence, since it started operations in Estonia in 1993, the EIB has provided loans for around EUR 527 million, which with today’s signatures come to a total of EUR 1.2 billion.