THE EUROPEAN Investment Bank (EIB) is ready to invest a record €300 million in Cyprus in the current year, some 50 per cent more than in 2009, EIB Vice-President Plutarchos Sakellaris said yesterday.
Sakellaris said that following discussions with Finance Minister Charilaos Stavrakis, the EIB will seek to build on last year’s record investment of €202 million, not only in the form of cheap lending to banks but also through the direct financing of infrastructure projects such as the municipality sewage systems.
Referring to the 37 per cent increase in the EIB’s total loans in 2009 – a record €79 billion, compared to €58 billion in 2008 – Sakellaris said: “In 2009 we reached an unprecedented lending volume, as far as our general activity is concerned, as well as our financing in Cyprus. Our lending in Cyprus in 2009 was double than the average annual total over the last four years. It was also pioneering in opening up new lending possibilities.”
Speaking at a press conference on the EIB’s 2009 results held at the Finance Ministry, Sakellaris pointed out that as well as a total of €138 million in matching funds offered to small and medium-sized enterprises (SMEs) in Cyprus via the island’s three biggest banks – Bank of Cyprus, Marfin Popular Bank and Hellenic Bank – the EIB had also directly funded the Orites wind farm near Paphos to the tune of €64 million, covering the project’s design, construction and operation.
The foundation stone for the Orites wind farm, the island’s first significant renewable energy project, was laid in early October last year. The project includes 41 wind turbines designed to produce 82MW of electricity, and forms part of the Cyprus government’s commitment to the EU to increase energy production from renewable sources to 13 per cent by 2020.
Sakellaris said that “financing the Orites project was one of the innovative transactions that led the magazine Euromoney to award the EIB the title of ‘Lender of the Year’”.
The EIB’s €138 million financing for SMEs – matched by the three local banks, and therefore totalling €276 million in offered loans – was made available last July to support the real economy and help counteract the impact of the crisis, through investments in the fields of industry, tourism, services, knowledge economy, energy and environmental protection in Cyprus.
The total EIB financing covered by the three agreements signed in July came to €228 million – matched to provide a maximum loan-fund of €456 – but this was available to the three banks’ SME customers in both Greece and Cyprus.
Sakellaris said that although the banks had not yet provided full details of loans extended to SMEs in Cyprus, he believed that most of the available financing had been lent on after being drawn down by the banks. He added that a procedure was in place from the outset to monitor the three banks’ compliance with their commitment to match the EIB funds in the form of low interest loans.
Continuing its focus on supporting SMEs, the EIB signed a €50 million agreement yesterday with the Co-operative Central Bank, which will result in a further €100 million being made available in the form of cheap long-term loans. The agreement was signed by Sakellaris and Co-op Central bank General Manager Erotokritos Chlorakiotis, in the presence of Finance Minister Charilaos Stavrakis.
