Banks, Estonia, EU – Baltic States, Financial Services, Funds

International Internet Magazine. Baltic States news & analytics Thursday, 04.06.2020, 13:43

Estonia to use EUR 215 mln borrowed from EIB to co-finance EU-backed projects

BC, Tallinn, 01.04.2019.Print version
The Estonian Ministry of Finance is to use 215 million euros borrowed from the European Investment Bank (EIB) in 2016 to co-finance projects carried out with the support from the European Union, reported LETA/BNS.

The instruments are invested in areas that contribute to sustainable economic growth and help improve people's quality of life in Estonia, such as road construction, purchasing a pollution response vessel and aircraft as well as improving support services for children with disabilities, spokespeople for the Ministry of Finance said. 

For instance, the Estonian Road Administration is to use the EU instruments and funds borrowed from the EIB to construct overtaking lanes on the Poltsamaa-Tartu section of the Tallinn-Tartu road and build the Kernu bypass on the Tallinn-Parnu road.

The funds will also be used to purchase a pollution response patrol vessel and aircraft for the Police and Border Guard Board and to finance a project by the Foundation of Haapsalu and Laanemaa Museums aimed at turning the Haapsalu castle into an activity museum. Developing and providing support services for children with disabilities as well as facilitating reconciliation of work and family life will also be financed.

The interest rate paid from the loan is zero if the three-month Euribor remains at -0,273% or lower and the deadline for repayment is July 2030. 

In December 2014, the Estonian Minister of Finance signed a framework agreement with EIB for a loan of altogether 600 million euros earmarked for co-financing EU-backed projects for 2014-2020. Pursuant to the agreement, Estonia borrowed 200 million euros in 2014 and 400 million euros in 2016.

Currently, the share borrowed in 2016 is about to be used to co-finance the aforementioned projects, which are supported from the European Structural Funds and the Common Agricultural Policy as part of the 2014-2020 budgetary period.

The European Investment Bank is the European Union's nonprofit long-term lending institution. As a "policy-driven bank" whose shareholders are the member states of the EU, the EIB uses its financing operations to bring about European integration and social cohesion. EIB has so far granted loans to both the Estonian public as well as the private sector in the total amount of over two billion euros. The loans granted by EIB to the Estonian government earmarked for co-financing EU-backed projects totaled 550 million euros from 2007 to 2013.

Search site