The Bank’s new eastern frontier
- Nov 11, 2010
Prosperity, stability and security inside the EU require the same ingredients on our borders. That is why the European Union aims to keep strengthening privileged relationships with 16 of its closest neighbours. The EU’s eastern frontier has kept moving over the years, as new members successively joined the Union. Hence, while the EIB has been very active in southern Mediterranean neighbours for decades, its activity in the east has evolved as the EU’s borders have shifted.
Whilst some countries are relatively well known - the EIB has been financing projects in Russia since 2001 – others remain largely undiscovered. This is about to change. Armed with a 3.7 billion euro mandate with a community guarantee until 2013, the Bank now also lends in Ukraine, Moldova, Armenia and Georgia, to support projects of significant interest to the EU in transport, energy, telecommunications and environmental infrastructure. In these countries, the bank can also finance projects benefiting SME’s in all sectors since 2009. The EIB has also signed framework agreements even further east, towards central Asia, with Kazakhstan and Tajikistan and is still in discussion with Turkmenistan, Kirghizstan and Uzbekistan.
Cleaning up the Baltic sea by treating wastewater in St Petersburg
The Baltic sea is in danger. Pollution has caused an explosion of algae which is killing all forms of biological life and has already formed a dead zone larger than the size of Denmark. The international community, starting with all coastal countries, is coordinating efforts to fight this environmental disaster. This is why the EIB has lent 62.5 million euros to help the city of St Petersburg treat its wastewater: building of a high tech wastewater treatment plant, two incinerators for sludge and a massive collector. Today 91% of the wastewater is treated and even disinfected before being dumped into the sea.
Rehabilitating the Yerevan metro line in Armenia
The EIB has also lent 5 million euros to Armenia to help its capital city of Yerevan to rehabilitate its metro line. The EIB worked in close cooperation with the EBRD, who also lent 5 million euros and the European Commission who complemented the lending with a 5 million euro grant. With this combined money, the city is currently installing new water pumps everywhere as the metro line is facing a major water ingress problem. It is also replacing parts of the old tracks and electrical system, the traction system of all trains and will soon purchase a new maintenance trolley. The project will therefore improve passengers’ safety and comfort in a very concrete way. Encouraging people to take the metro also helps reduce car emissions and therefore protects the environment.
Refurbishing Moldova’s international airport
One of the poorest countries in Europe, Moldova became an EU neighbour with Romania’s accession to the Union in 2007. This has put the country’s main international airport of Chisinau under severe strain, especially since passenger traffic had already been increasing significantly over the previous years. A modernised airport is key for the country’s international cooperation and competitiveness. This is why the EIB in collaboration with the EBRD (European Bank for Reconstruction and Development) lent 20 million euros to help rehabilitate the main runway, taxiways and aprons, as well as airport lighting and technical equipment.
Supporting Georgia’s electricity strategy
Georgia has embarked on an ambitious strategy to privatise over 80 new sites for hydropower development. However, in order to attract private investors, it first needs to strengthen its electricity transmission network and its export capacity, in other words, the interconnections with neighbouring countries. This is why the EIB has lent 80 million euros to help Georgia build high voltage lines within the country, a power converter station close to the Turkish border and an interconnection with the Turkish electricity grid. It was the Bank’s first ever loan in the Southern Caucasus. The EIB worked closely with the EBRD, the KfW (Kreditanstalt für Wiederaufbau) and the European Commission who also supported this flagship project, with loans and/or grants. The project will improve the quality and security of Georgia’s energy supply and encourage electricity trading across the Black Sea region, notably from renewable sources, including new hydropower plants.