The European Investment Bank marked the 50th anniversary of the Republic of Cyprus and its 30 years of activity in the country with a public ceremony celebrating the signature of a total of EUR 180 million for urban environment.
The finance contracts were signed today in a public ceremony at the Ministry of Finance in Nicosia by Mr. Christos Patsalides, Permanent Secretary of the Ministry of Finance, Mr. Plutarchos Sakellaris, EIB Vice-President and Mrs. Eleni Mavrou, Mayor of Nicosia.
EIB Vice-President, Plutarchos Sakellaris, whose responsibilities include EIB’s lending activities in Cyprus, stated today: “It is a great pleasure for me to hold this celebrating and commemorating signature ceremony. The two loan agreements I am signing here today are in support of urban environment, which is of particular importance under the current crisis. As markets alone are unable to provide sufficient and appropriately priced finance for sustainable growth, we at the EIB address this market gap by increasing the volume of loans in this sector, broadening the scope of our financing, and adding new products in our toolkit for more added-value. At the same time, the EIF, our 66% subsidiary, provides specialised support for the private sector, especially smaller companies. I am happy because earlier today I signed the first JEREMIE agreement in Cyprus with the Bank of Cyprus for a total of EUR 20 million for the benefit of small and even micro companies. With today’s signatures, the EIB group marks this anniversary day with our two future priority areas in Cyprus: sustainable growth infrastructure and private sector support to empower business creativity.”
The EIB financing for urban environment is as follows:
EUR 140 million loan to the Ministry of Finance for the financing of waste-water projects in 57 agglomerations outside bigger cities. This is the first instalment of EUR 140 million of an overall credit line of EUR 290 million made available for this project. The works include sewer networks, pumping stations and treatment facilities across Cyprus, including the construction of 8 waste water treatment plants.
This large-scale project has an overall investment cost of EUR 800 million. It is co-financed by the EIB and EU Cohesion Funds, while substantial subsidies are made available by the Cypriot budgetary resources.
This is a priority project for Cyprus, as it will help connect a large number of residents in small communities to central sewer systems and bring adequate wastewater treatment to protect the country’s scarce water resources and important marine environment. Moreover, it is foreseen to re-use the treated wastewater and thus contribute to sustainable water management on an island that is prone to draughts triggered by climate change. Lastly, these investments will make Cyprus fully compliant with one of the major environmental EU Directives.
EUR 40 million loan to the Ministry of Finance and the Municipality of Nicosia for urban infrastructure in the Cypriot capital. The EIB financing is part of an aggregate investment of EUR 140 million in the Walled City and adjacent traditional areas.
Nicosia Municipality has already identified a preliminary list of 18 schemes comprising transport, urban renewal, public buildings, sports facilities, urban open spaces and cultural heritage.
These investments, earmarked in Nicosia’s 2010-2012 Municipal Development Plan, consist of a large number of projects which together will foster urban renewal and regeneration. The improvements in Nicosia’s urban environment will revitalise the historic centre, especially those areas close to or adjacent to the Green Line, and will contribute to the creation of a sustainable community.
In addition to the EIB funds, the investment plant will receive grants from the EU and a substantial contribution from the Government’s budgetary resources.
About the EIB
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pean Investment Bank was created by the Treaty of Rome in 1958 as the long-term lending bank of the European Union. The Bank’s remit 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.
Cyprus: the EIB activity
This is the 30th year anniversary of the EIB activity in Cyprus. In this period total financing amounted to EUR 1.9 billion. EIB’s first loans were for electricity production at Dhekelia and water development and Nicosia sewerage. EIB’s operations gained volume after 1996, when the country started accession negotiations with the EU. In the 12 years that have passed, total EIB financing in Cyprus amounted to more that EUR 1.5 billion, of which almost half was after the country’s accession in 2004. In the five-year period 2005-2009, the EIB provided a total of EUR 612m for key projects in all productive sectors in Cyprus. The lending provided in Cyprus in the last years also fits in the broader measures announced by the EIB in December 2007 under the European Economic Recovery Package. In particular the EIB has offered support for the SME sector through an enhanced partnership with major Cypriot banks via an extension of credit lines to support productive investment in employment and growth by smaller enterprises. The Bank has also been active in support of economic infrastructure notably in the energy sector including a EUR 200 million loan earlier this year to the Electricity Authority of Cyprus for reinforcing and extending the electricity transmission and distribution networks throughout Cyprus, and the Orites project, the first windpower operator in Cyprus, which led Euromoney to award the “Lender of the Year” title to the EIB. EUR 32 million financed projects, in synergy with Cohesion and Structural Funds. The Bank works closely with the Cypriot authorities and the European Commission with respect to the programming and implementation of projects supported by the Structural and Cohesion Funds in Cyprus, in order to maximise the impact of its action.