CEB approves €976 million in new loans focused on environmentally friendly investments with high social impact

30 September 2022

PARIS – The Council of Europe Development Bank (CEB) today approved eight new loans totalling €976 million to deal with the consequences of natural disasters, improve living conditions in rural and urban areas, help the greening of public services and support micro-, small- and medium-sized enterprises (MSMEs) across Europe.

“The approved loans reflect the many areas in which the Bank actively operates to help its member states achieve the highest social impact,” said CEB Governor Carlo Monticelli. “We are particularly proud that the majority of these loans will finance environmentally conscious investment projects, underscoring the CEB’s commitment to align its lending activities with the Paris Agreement’s goals and to approach climate-related issues through a social lens.”  

Two projects accounting for more than half of the total volume of CEB’s approved loans are dedicated to dealing with the physical and social consequences of natural and ecological disasters, as well as preparedness for future natural catastrophes.

Additional €350 million loan to Cassa Depositi e Prestiti in Italy will support reconstruction efforts in the aftermath of the earthquakes that struck central Italy in 2016 and 2017. The initial CEB loan approved in 2017 has resulted in €32 million in savings for the Italian state budget. Almost 6,000 buildings were reconstructed and more than 14,000 families were able to return to their homes. In this context, the new CEB loan will allow for continued cost-efficient funding for the recovery of affected communities, mostly located in remote and isolated areas.

A €200 million loan to Ilbank – the municipal development and investment bank of Türkiye – aims to strengthen the capacity of communities affected by, or at a high risk of, forest fires to better respond to natural hazards. The loan will help improve municipal capacity to implement projects in disaster risk management and climate adaptation through technical assistance support. It will also contribute to raising awareness on how to prevent fires and mobilise swiftly in case of fires. It is estimated that around 20 million inhabitants would benefit from the CEB loan.

Three projects are dedicated to improving living conditions in urban and rural areas, with a particular focus on environmentally friendly investments.

In Germany, a €100 million loan to Stuttgarter Straßenbahnen (SSB), Stuttgart’s public transport company, aims to expand and upgrade rail-based public transport and contribute to improved living conditions in the region. With increasing energy prices, affordable public transport has become more vital than ever for economically vulnerable users who tend to live in the periphery of large cities due to high rental prices in the city centres, and are thus depend on public transport. SSB’s successful track-record of shifting towards green public transport and the project’s focus on climate change mitigation makes this loan a salient example of CEB’s work on the social-climate nexus.

An additional €16 million loan to Kaunas Bus Company (Kauno Autobusai) in Lithuania will enable continued investments in fleet renewal through the purchase of 64 new buses. This loan complements an initial €21.5 million loan approved in 2020. It aims to improve the quality of public transport services for inhabitants of the Kaunas region by offering greater operational speed, safety and comfort. At the same time, the project will focus on the environmentally friendly fleet, thus reducing average fuel consumption and greenhouse gases emissions.

A €70 million euros loan to the Barcelona City Authority in Spain aims to foster sustainable development, inclusive growth and increased well-being of Barcelona’s 1.6 million residents. It will partially finance Barcelona’s Plan of Action 2022-2024, including investments in social rights, climate emergency and urban planning. The project follows the €100 million loan approved in 2018. In addition to Barcelona’s residents, more than 9 million of tourists who annually visit the city will benefit from upgraded public infrastructure and cleaner environment.

Finally, three projects seek to improve public infrastructure and services, and to support small businesses.

A €100 million loan to the Republic of Lithuania will partially finance the country’s State Investment Programme, with focus on sectors of education, health, culture and sports. The Bank has already approved three loans worth €330 million to finance the Lithuanian State Investment Programme and to support the country’s continued efforts to improve public infrastructure. Direct beneficiaries of the loan will be public and regional entities, as well as municipalities. A large part of the Lithuanian population will benefit from the well-equipped, accessible and modernised public services.

An additional €80 million loan to the City of Malmö in Sweden will partially finance the city’s 2020-2022 budgetary expenditures for the modernisation, renovation and construction of education facilities. The previous CEB loan dedicated to investments in this sector in Malmö amounted to €160 million. All new school facilities are expected to be constructed in line with applicable construction and energy performance standards. The final beneficiaries will be students attending compulsory schools, including foreign-born children and school-age refugees from Ukraine.

In the Czech Republic, CEB’s €60 million loan to Czechoslovak Commercial Bank (Československá obchodní banka CSOB CZ) will provide long-term funding for the revitalisation and modernisation of public infrastructure. The loan will also be used to co-finance projects funded by the European Structural and Investment Funds or the European Union’s Recovery and Resilience Facility. Furthermore, the CEB loan will support MSMEs through working capital financing and investment loans, thus improving competitiveness and employment throughout the Czech Republic. CSOB CZ will prioritise financing of MSMEs in the areas such as the green economy, innovation, research and development.Infographic loans approved September 2022

Set up in 1956, the CEB (Council of Europe Development Bank) has 42 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank's target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (Aa1 with Moody's, outlook stable, AAA with Standard & Poor's, outlook stable, AA+ with Fitch Ratings, outlook positive and AAA* with Scope Ratings, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.