The European Investment Bank signed four loans in Serbia this week benefiting projects in the fields of small and medium-sized enterprises (SMEs), as well as energy and infrastructure for an aggregate amount of EUR 139.50 million.
This is the second series of loans which further reinforces EIB operations in the country, under the framework agreement signed last May between the EIB and the Republic of Serbia. On that occasion a first EUR 250 million global loan for SMEs was signed by Dario Scannapieco, Vice-President of the EIB with responsibility for operations in Italy, Malta and the Western Balkans, Bozidar Djelic, Deputy Prime Minister of the Republic of Serbia and Finance Minister Diana Dragutinovic. EIB support aims at combating the financial crisis and bringing the country closer to the European Union with a pipeline of financing of EUR 1.4 bn over the 2009-2010 period.
Finance contracts for EUR 50 million and EUR 40 million respectively were signed with EFG bank and leasing and with Unicredit Leasing Srbija. These loans aim at financing SMEs projects, small and medium-sized infrastructure projects promoted by local authorities as well as industrial investments in the fields of the knowledge economy, energy, environmental protection, health and education. The EIB will finance up to 100% of the total project cost for SMEs (with a maximum of EUR 12.5 million per project) and up to 50% for other project types. A minimum of 70% of the loan will be allocated to SMEs lending.
The EIB also signed an operation for an amount of EUR 24.50 million with EMS, the Serbian independent high voltage grid and transmission system operator. The project, with a total cost of EUR 49.6 million, consists of the construction or rehabilitation of six power substation schemes, with a voltage of 220 or 400 kV. Five short voltage lines with a total length of 45 kilometres will be built to link the substations to the grid.
Moreover a loan between the EIB and the Republic of Serbia benefiting the municipal infrastructure sector was signed for an amount of EUR 25 million. This operation represents the second part of a EUR 75 million financing, of which the first part of EUR 50 million was signed in December 2008. The project concerns investment schemes in several sectors, mainly transport, local and regional road ways, education, cultural and historical heritage as well as the rehabilitation of public buildings throughout Serbian territory.
Note to editors:
EIB activity in Serbia
Serbia has been the main beneficiary of EIB funding in the Western Balkans since 2001, with a total amount of financing of EUR 1,770 up to date (including the EUR 140m signed in these last few days).
Last May, a first loan of EUR 250m for small and medium-sized enterprises (SMEs) and priority projects in the country, via the National Bank of Serbia, was signed.
In 2008, three separate projects were signed: EUR 50m for regional and local infrastructure, EUR 70m for four clinical centres located in Belgrade, Kragujevac, Nis and Novi Sad and EUR 50m for lease financing for SMEs.
The projects being appraised in 2009 mostly concern investments in road and rail, improvement of local infrastructure and environment, research and development, school modernisation, energy transmission, upgrade of judiciary facilities and support for SMEs. All these projects may possibly benefit from EIB financing of over EUR 1.4bn.
About the EIB
What is the EIB?
The European Investment Bank was created by the Treaty of Rome in 1958 as the long-term lending bank of the European Union. The task of the Bank is to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States. The EIB raises substantial volumes of funds on the capital markets which it lends on favourable terms to projects furthering EU policy objectives. The EIB continuously adapts its activity to developments in EU policies. The EIB:
- enjoys its own legal personality and financial autonomy within the EU
- operates in keeping with strict banking practice and in close collaboration with the wider banking community, both when borrowing on the capital markets and when financing capital projects.
Who are the shareholders?
The EIB's capital is owned by the 27 member countries of the EU. France, Germany, Italy and the United Kingdom each have 16.2%, followed by Spain, with just over 9%.
What types of project does it finance?
There are six financing priorities, which are laid down by the shareholders and EU mainly in the following sectors:
1. convergence and cohesion, involving the poorest regions of the EU;
2. small and medium-sized enterprises;
4. research, development and innovation;
6. environmental protection.
Key figures: the EIB in 2008
Total financing operations: 57.6bn (+21%, compared with 47.8bn in 2007) of which:
- EU countries: 51.5bn
- Accession countries: 3.4bn
- Non-EU countries: 2.7bn
Total stock of financing operations as at 31 December 2008: 355bn (+ 9.2%, compared with 324.8bn in 2007)
Total raised by issuing bonds on the international markets in 2008: 59.5bn (+ 9%, compared with 54.7bn in 2007), raised via 247 issues in 18 currencies
Total stock of funds raised as at 31 December 2008: 253bn (246bn in 2007)