CEB approves eight new loans totalling €1.1 billion

Reykjavík – At its 57th Joint Meeting in Reykjavík, Iceland, the Council of Europe Development Bank (CEB) approved eight new loans in the amount of €1.1 billion to support resilience and social cohesion across Europe with a focus on refugees and displaced persons and vulnerable households. A €150 million loan to Iceland to finance the government’s emergency and relief response to the ongoing volcanic eruptions reflects the CEB’s commitment to providing timely and effective support to its member states in times of crisis.

“As well as helping our member countries cope with population displacement and manage disaster risk, these loan projects will lead to business and job creation in regions across Europe, better living environments, notably for low earners, and stronger social support and opportunities for youth and vulnerable groups,” CEB Governor Carlo Monticelli said.

CROATIA: A €250 million Programme Loan will support HBOR, the Croatian Bank for Reconstruction and Development, to address the needs of municipalities and businesses, particularly in the country’s less developed regions. The investments will develop and upgrade social infrastructure at the local and regional level, and strengthen job creation, stability and competitive position of micro, small and medium-sized enterprises (MSMEs). In particular, 20 percent of the loan’s MSME component will target enterprises in the economically lagging eastern regions of Croatia, which currently receive less than 10 percent of total commercial bank lending in the country. This is the 10th CEB loan to HBOR, reflecting the long-standing relationship between the two institutions.

HUNGARY: A €200 million Public Sector Financing Facility (PFF) to Hungary will support the country’s Education Infrastructure Development Programme (EIDP), aimed at enhancing the operational efficiency and quality of the state school system. The CEB loan will help finance the upgrades and rehabilitation of infrastructure in 11 schools with outdated or inadequate facilities as well as construction of additional classrooms and ancillary facilities. The investments will provide inclusive infrastructure for children with disabilities and prioritise full accessibility, including accommodations for physical disabilities, hearing, and visual impairments. Adhering to high-energy efficiency standards and contributing to pollution reduction, new construction and modernisation efforts will be fully aligned with the mitigation and adaptation objectives of the Paris Agreement.

ICELAND: A €150 million Public Sector Financing Facility (PFF) to Iceland will support the Government’s comprehensive emergency and relief measures to manage the ongoing volcanic crisis. The project aims to provide immediate assistance to residents of Grindavík, the fishing town on the south coast of the Reykjanes peninsula, which was evacuated on 10 November 2023. The envisaged measures include an evacuation and emergency services, a voluntary home purchase programme by the Government to assist residents who own property in the affected area, and initial recovery efforts over the next two years. In addition to immediate relief, the project will fund preparatory work to mitigate potential impacts on the power plant and multi-utility services on the Reykjanes peninsula, which supply water, district heating and electricity to 33,000 residents and businesses, including Keflavík international airport. Given the exceptional circumstances created by the natural disaster, an initial disbursement of 70 percent of the CEB loan is foreseen to accelerate the government’s response efforts.

LITHUANIA: A €50 million Public Sector Financing Facility (PFF) for the City of Vilnius will support the city’s strategic public investment in improved social infrastructure and resilient, energy-efficient buildings, address the specific needs of vulnerable groups. Rehabilitation and construction projects will focus on education, health and social protection to meet the needs of the growing population. These strategic municipal investments will benefit all residents, especially vulnerable groups, by providing special services and subsidised access. Strengthening the city’s ongoing cooperation with the CEB, this loan will be complemented by the city’s own resources as well as state and EU funds.

POLAND: This additional €115 million loan under the Public Sector Finance Facility (PFF) to the Republic of Poland will support the exceptional budgetary costs of providing humanitarian and emergency assistance to refugees from Ukraine. The initial loan of €450 million, the largest in the CEB’s history so far, was approved in early June 2022, three months after the outbreak of war in Ukraine. While the initial loan focused on alleviating accommodation costs, a significant portion of the additional funds will be allocated to child and family allowances for the 2024 budget year. An estimated 200,000 children are expected to benefit from this assistance, which will be managed by the Polish Development Bank BGK. Nearly 1 million refugees from Ukraine, representing about 25 percent of all displaced persons outside Ukraine, are still residing in Poland, 80 percent of whom are women and children.

ROMANIA: A €153 million loan to AMCCRS Bucharest, the Municipal Administration for the Consolidation of Buildings with Seismic Risk. The CEB loan, the first to AMCCRS, will partially finance the earthquake safety and seismic-risk reduction investment programme in Bucharest, the EU’s most earthquake-prone capital city. The loan will support the consolidation of 17 buildings in Bucharest, including 14 multi-family residential buildings and three public buildings, with seismic and energy efficiency measures, as well as temporary relocation costs for residents. As many of the buildings are classified as historical monuments or located in protected areas, the project will also contribute to the preservation of Romania’s cultural heritage. The project is in line with Romania’s National Seismic Risk Reduction Strategy and the EU-funded National Recovery and Resilience Plan. CEB funds will help bridge the municipality of Bucharest’s financing gap and facilitate access to EU funds for the project.

SLOVAK REPUBLIC: A €30 million Public Sector Financing Facility (PFF) to the Bratislava Water Company (BWC) will co-finance investments to improve drinking water and wastewater infrastructure, thereby addressing social development and inclusion challenges. Replacing aging water and wastewater pipes and addressing system failures will ensure continuity and quality of service, contributing to the long-term financial sustainability and affordability of water and sanitation services. The upgrading of wastewater treatment plants will also help protect sensitive water bodies. The project is expected to benefit about 15 percent of the country’s population, including low-income households, especially those in the northern part of the BWC service area. This is the second direct CEB financing for BWC, following a €50 million programme loan approved in 2018.

SPAIN: A €200 million Public Sector Financing Facility (PFF) will support the Autonomous Community of Andalusia in the provision of quality and equitable social services, particularly for groups at risk of social exclusion. The loan will finance part of the region’s budgetary expenditure on social services for the elderly and people with disabilities. It will also finance small-scale investments to renovate and upgrade social care infrastructure. The project will be implemented by the Social Services and Dependency Agency of Andalusia using its well-developed eligibility procedures, quality indicators and inspection services. This project is the third CEB loan to the borrower, following previous operations totalling €350 million, which have now been fully disbursed.