Nordic Investment Bank
EU SBSR, June 2010
Northern Europe's International Financial Institution
 Nordic and Baltic countries as
owners
 Started activities in 1976
 Baltic countries joined in 2005
 AAA/Aaa credit rating
 Lending in member countries
and emerging markets
Iceland
Norway
 Headquarted in Helsinki
Finland
Sweden
Denmark
Estonia
Latvia
Lithuania
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Strengthening competitiveness
Projects in the following sectors
and areas of economy:
 Environmental investments
 Energy
 Transport, logistics and
communication
 R&D and innovation
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Enhancing the environment
 Significant business potential in
the environmental sector.
 The environment is a global
concern.
 All projects considered for
financing undergo assessment
of potential environmental
impact.
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Key figures in EUR million
Loans outstanding and guarantees
Highlights 2009
• Strong demand for NIB
loans
15 000
12 000
6 000
Member
countries
3 000
• Profit grows to EUR 178
million due to positive
valuation on treasury
portfolios
5
Non-member
countries
9 000
0
2005
2006
2007
2008
2009
Core earnings and net interest income
• Loans outstanding up
5% to EUR 13.8 billion
250
• 70% of disbursements
are in priority sectors:
the environment, energy,
transport and innovation
100
200
Core earnings
150
Net interest
income
50
0
2004
2005
2006
2007
2008
2009
Long-term financing
 Co-financing normally up to 50% of the total project cost
 Close cooperation with other international financial institutions as well as
commercial banks, export credit institutions and development assistance
organisations
 Long-term lending instruments:
• Sovereign loans or against state guarantees (15-25 years)
• Subsovereign loans directly to municipalities (10-20 years)
• Corporate loans (5-15 years)
• Limited recourse financing including PPP-financing (5-15 years)
• SME financing through financial intermediaries (5-12 years)
• Grace period up to 5 years
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NIB's strategy correlates
with the EU SBSR
EU STRATEGY for the BALTIC SEA REGION
A "PROSPEROUS"
BSR
- competitiveness
AN "ACCESSIBLE
AND ATTRACTIVE"
BSR
-transport, logistics
- energy
NIB
"CLEERE"
2000
MEUR
INNOVATION
AN
"ENVIRONMENTALLY
SUSTAINABLE "
BSR
NIB
"BASE"
500
MEUR
TRANSLOG &
COMMUNICATIONS
COMPETETIVENESS
NDEP
ENVIRONMENT
ENVIRONMENT
NIB STRATEGY
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- maritime safety
- cross-border
crime
- HELCOM BSAP
- climate change
NDPTL
ENERGY
A "SAFE AND
SECURE "
BSR
NIB disbursed loans in the Baltic Sea Region 2007-2009 (million EUR)
Disbursed
Denmark
Estonia
Finland
Latvia
Lithuania
Poland
Sweden
8
2007
90
54
272
36
6
76
783
2008
315
90
415
107
15
62
588
2009
235
83
510
111
67
96
287
Iceland
Norway
139
339
226
336
Russia
TOTAL
142
1938
114
1933
121
1846
From Strategy to Projects
In order for investments to emerge as a result of the EU
SBSR there is a need for:
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
Priority setting ► Political support (regulatory
framework, legislative action, concessions,
permitting, tariff setting etc)

Resource allocation

Clear project ownership and active participation by
owners (public and/or private sector)
Bankable projects
Loans
 A loan = Distributing the capital cost over time


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Debt service must be covered with local resources
Operating revenues and/or budgetary funds
Access to borrowing depends on:
Creditworthiness
and/or
Project quality (profitability = capacity to
generate money for debt service)
Bankable projects
Security
 Guarantees
Sovereign, Regional, Local authorities
Project owners
 Mortgages
 Control
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and or pledges of property
over payment streams
Bankable projects
-What is needed ?
In order to lend banks need:
 Willing and able borrowers
•
•
Willing = Prepared to take loans at prevailing interest rates to
finance part of their investments
Able = Creditworthy enough to be able to service the loan/s
and with the other part of the financing secured – banks never
(should) provide loans for a 100 % of the project cost
 Good quality (feasible) projects
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•
Financiers are focused on all aspects of project feasibility
Economic
Financial
Technical
Institutional
Environmental
•
Adequate studies are necessary – the BSAP Fund can help for
Baltic Sea projects
EU SBSR Priority Areas of
immediate interest to IFIs
Priority areas which are likely to include investment components:
1. To reduce nutrient inputs to the sea to acceptable levels
3. To reduce the use and impact of hazardous substances
4. To become a model region for clean shipping
5. To mitigate and adapt to climate change
7. To exploit the full potential of the region in research and innovation
10. To improve the access to and the efficiency and security of the
energy markets
11. To improve internal and external transport links
14. To reinforce protection from major emergencies at the sea and on
land
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Baltic Sea Environment lending facility (BASE)
 The facility, alongside national budgets and EU funds, is aimed at
assisting in the implementation of the Baltic Sea Action Plan
 Allocation of EUR 500 million for financing projects with a positive
effect of the Baltic Sea
 NIB's facility will provide valuable input to projects that mobilise loan
financing
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Projects
Sparbanken Finn, Sweden (EUR 15 million)
 On-lending for small-scale environmental investments in Sweden.
Reduction of diffuse emissions to both air and water in the southern parts of
Sweden.
AS Tallinna Vesi, Estonia (EUR 20 million )
 Maintenance and extension of the water supply and sewage networks.
UAB Vilniaus vandenys, Lithuania (EUR 10.3 million)
 Construction of a sludge treatment facility at a wastewater treatment plant in
Vilnius
Vodokanal of St. Petersburg, Russia (EUR 25 million)
 Construction of a pumping station in a sewage collection tunnel as well as
the partial upgrading of the Northern Wastewater Treatment Plant in St.
Petersburg.
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The Climate Change, Energy Efficiency and Renewable
Energy (CLEERE)
 Facility supports actions for combating and adapting to climate
change
 In 2008-2009 years, the initially allocated EUR 1 billion was fully
deployed, and, in spring 2010, the facility was extended by another
EUR 1 billion
Under the CLEERE facility, NIB finances projects:
 in renewable energy
 in energy efficiency
 using cleaner production technologies that reduce greenhouse gas
emissions in industries
 dealing with the adaptation of power networks and infrastructure to
climate change, such as extreme weather conditions
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Projects
Kemijoki Oy, Finland (EUR 25 million)
 Upgrading and refurbishment of hydropower plants
E.ON Sverige AB, Sweden (EUR 100 million)
 Financing of the Rødsand II wind farm (200 MW) south of the island
of Lolland in Denmark
Latvenergo A/S, Latvia (EUR 50 million)
 Modernization of hydropower plants on the Daugava river, energy
efficiency investments in transmission and distribution networks
Republic of Lithuania (EUR 100 million)
 Public sector efficiency project and housing renovation programme.
Energa SA, Poland (EUR 50 million)
 Modernization and construction of low- and medium-voltage
electricity networks, including a component of high-voltage lines
aimed at connecting renewable energy sources, primarily wind
farms
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The Baltic sea action plan (BSAP) Fund
 NIB & NEFCO took the initiative to set up a targeted technical
assistance fund
 NIB and NEFCO are jointly acting as fund managers
 The BSAP Fund has EUR 10, 6 million available
 The financing is provided as grants
 In addition to NIB and NEFCO, applications can also me made
through other international and national finance institutions, which are
active in relation to the BSAP
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Eligible purposes:
 Project Implementation
• Support to project owners for improved efficiency and quality in the project
implementation, and for disseminating experience
 Institutional Support
- Training and support related to project development, preparation and implementation
 Demonstration purposes
- Purchase of equipment for demonstration purposes
 Project Development and Preparation
-In particular with a view to making projects "bankable"
Eligible Recipients
Public or private entities in need of technical assistance and investment grants for
implementing the BSAP goals
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Project pipeline under preparation
• Business plan development for poultry farms
• Preparation of manual for biogas projects
• Test project for phosphorus removal
• Improvement of small and medium-sized WWTPs
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The project cycle
PUBLIC SUPPORT,
DONORS
PREPARATION
IDENTIFI
CATION
PROJECT OWNERS
IMPLEMENTATION
Concrete
projects
LENDERS,
OPERATION
SUPERVISION
EVALUATION
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FINANCIAL
INVESTORS
Thank you !
Nordic Investment Bank
Lending Department
Vilius Girkontas
Fabianinkatu 34, Helsinki
+358 10 618 0240
www.nib.int
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