EUROPEAN INVESTMENT BANK

Promoting European objectives

EIB Financing in the Baltic Sea Region

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The European Investment Bank (EIB)

Long-term finance promoting European objectives European Union’s long-term lending bank set up in 1958 by the Treaty of Rome.

Shareholders: 27 EU Member States 2009 key figures: European Union: Partner countries: Total lending: EUR 70.5 bn EUR 8.6 bn EUR 79.4 bn Borrowings: EUR 79.4 bn Subscribed capital EUR 232.4bn

(at 31/12/2009)

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The European Investment Bank (EIB) European Priority Objectives

Within the Union:

Cohesion and convergence (“regional development”) Small and medium-sized enterprises (SMEs) Environmental sustainability Promoting a competitive knowledge economy; education, RDI Trans-European Networks (TENs) Sustainable, competitive and secure energy

EIB in support to EU2020 objectives

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EIB Lending in the Baltic Sea Region in 2007-2009

(EUR m) Signatures Member States

Denmark Estonia Finland Germany (1) Latvia Lithuania Poland Sweden

EFTA 2007

209 613 110 35 20 2,281 713

2008

379 87 710 480 860 10 2,837 1,311

2009

422 842 1,145 52 285 1,169 4,784 1,135 Iceland Norway

EASTERN

Russia 146 170 133

Total 4,127 6,675

1)Schleswig-Holstein, Hamburg, Mecklenburg-Vorpommern

European Investment Bank 10,136

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EIB Lending in Baltic Sea Region Member States

EIB lending covers all six priority objectives Signatures

EUR 6,675 m

in 2008 and

EUR 10,136 m

in 2009 EIB borrowers are: (i) Public sector entities: Sovereign Member States, municipalities and other sub-sovereign public entities (ii) Private sector entities: leading corporates in all countries requiring financing for their capex and R&D investments (iii) Financial institutions as Intermediaries for EIB’s Loan for SMEs and Mid Cap Loans In Finland, Sweden, Denmark and Germany, a large proportion of EIB lending is in favour of private sector (knowledge economy and RDI) In Estonia, Latvia, Lithuania and Poland, main emphasis is on (i) the public sector through loans to meet the national co-financing requirements for the implementation of the EU Funds supported project and (ii) major capital expenditure projects to enhance Cohesion and convergence

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The European Investment Bank (EIB)

Long-term Finance Promoting European Objectives   

EU Funds Co-Financing Latvia (EUR 750 m, 2008/9) EU Funds Co-Financing Lithuania (EUR 1132 m, 2009) EU Funds Co-Financing Estonia (EUR 550 m, 2009)

Co-financing of national contributions to the implementation of three Operational Programmes 2007-2013 with EU funds. Aims at sustainable development of economic competitiveness and the promotion of social and regional cohesion.

The priority projects are particularly in the sectors of transport infrastructure, RDI, environment and urban development.

EIB makes a significant contribution to finance the implementation of the Operational Programmes in the three Baltic states European Investment Bank

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EIB Lending in the EU’s Eastern Neighbours

The EIB finances projects in Ukraine, Moldova, Armenia, Azerbaijan, Georgia and Russia on the basis of an

EU mandate of EUR 3.7 billion

for the period 2007-2013* EIB has signed and approved financing operations totalling over EUR 1.3 billion for major investment projects in the region in the past three years. Sectors supported: transport, telecoms, energy and environment

Eastern Partners Facility

of EU interest -the EIB has set up a new facility for Ukraine, Moldova, Belarus, Georgia, Armenia, Azerbaijan and Russia of up to an amount of EUR 1.5 billion, with a ceiling of EUR 500 million for projects financed in Russia. The facility enables the EIB to provide loans and/or guarantees that, sector-wise, go beyond the scope of the Mandate. This should help support EU investment in the region, notably by European corporates, as well as facilitate equity investments in infrastructure funds Projects financed in Russia under the Mandate: St. Petersburg Vodokanal III: Neva Direct Discharges Closure Programme in St. Petersburg, EUR 18 m Modernisation of Nevinnomyssk GRES power plant in Southern Russia, EUR 250 m Rollout of third-generation UMTS-based mobile broadband services, EUR 115 m * Operations in Belarus are subject to joint EU Parliament/Council decision. Azerbaijan will also be eligible for EIB financing following the signature of the framework agreement with the Bank

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The European Investment Bank (EIB)

Long-term Finance Promoting European Objectives

Available EIB products/instruments Investment Loans

, suitable for large individual projects

Framework Loans

, suitable for multi-scheme projects, of which Structural Programme Loans in co-funding with EU Structural Funds

Global Loans/Credit Lines

, lending to financial intermediaries who on-lend to smaller projects, suitable for instance for SMEs

Technical Assistance and Financial Engineering

;

JASPERS

, support for new Member States to help them prepare large projects applications to the Structural Funds;

JEREMIE

, promoting SME access to finance projects via holding funds;

JESSICA

, promoting urban development projects;

JASMINE

, support to Micro-Finance Institutions in Europe

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Value-added of EIB financing

EIB financing:

Long-term senior investment loans Financing for up to 50% of project cost (minimum project cost for a direct EIB loan approximately EUR 25 million, i.e. minimum loan EUR 12.5 million) Long maturity matching economic life of project assets EIB financing offers financial value-added Sector expertise Catalytic effect on participation of other financing partners 9

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EIB Project Cycle European Investment Bank

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EIB Participation to EU Strategy for the Baltic Sea Region

Close co-operation with European Commission at the design and preparation phase EIB presence in the implementation of the Strategy in close co-operation with other IFIs (notably NIB & EBRD) and organisations in the macro region EIB operates in the macro region – extensive network Two regional offices Warsaw Helsinki JASPERS, JEREMIE and JESSICA presence in the region 11

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The BSS Trust Fund Idea

EIB is willing to explore the potential for a

BSS Trust Fund

The Trust Fund could develop TA activities in the Baltic Sea Region countries with special focus on the

Flagship Projects

the EUSBSR of The Trust Fund would reinforce and complement JASPERS which mainly serves the preparation phase of projects related to Structural Funds project applications The Trust Fund would focus on 1)

Preparation

of investment projects which are of importance for the EUSBSR without falling under the remit of JASPERS (e.g., because not drawing on grants from EU Structural Funds) 2) Technical support to the

implementation

of investment projects, whether prepared by JASPERS or not 12

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The Establishment of the BSS Trust Fund

The Trust Fund could be established in association with the EIB It could draw on contributions from (i) multilateral contributors, e.g., the Commission, (ii) bilateral contributors, such as EU Member States and their development agencies, (iii) other countries and their institutions and (iv) IFIs active in the BSR The details of the Trust Fund would have to be worked out with the participating Member States and the Commission; they should be based upon cost recovery principles compatible with EIB’s policy in relation to Trust Funds The Trust Fund would be available for TA only, and not for investment co-financing, loan guarantee cost financing, interest rate subsidy or risk capital operations As the Fund Manager EIB could provide its own EIB technical and financial expertise, but could also provide assistance through hiring external consultants 13

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For more information…

http://www.eib.org/ Jaani Pietikäinen EIB Helsinki Office Tel: (+358) 10 618 0830 [email protected]

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