CEB approves nine new loans to finance social investments totalling almost €900 million
17 March 2023
PARIS - The Council of Europe Development Bank (CEB) approved today nine new loans totalling €885 million. Four of these will finance urban, rural and regional development with investments as varied as irrigation in Greece; tackling climate change risks in Italy; supporting municipal investment programme in Lithuania; or creating dynamic new neighbourhoods in Finland.
“Improving access to finance for small businesses and supporting microfinance represent close to a third of the total volume of loans we have approved today,” Governor Carlo Monticelli commented. “We are providing much needed support to our member states in uncertain economic times, which put a strain on the most vulnerable across Europe, undermining social cohesion.”
Finland: A €50 million loan to the City of Kuopio will provide continued support to the implementation of the City’s strategy by co-financing its investment budget over the period 2022-2024. Building on two previous loans, the new operation will allow the City to continue addressing early education as its top priority by building five day-care centres and completing a new school for 280 pupils. The City will also pursue a project development for a new area of Kuopio, designed to create synergies across education, research and business activities during work and leisure time.
Greece:An €80 million loan to Greece will support rural development in the Amari Valley, one of the most disadvantaged parts of Crete, by improving the irrigation system. The project will also improve the water management capacity in the agricultural plain of Messara, a key agricultural asset for Crete, yet one of the areas under significant water stress. Achieving these objectives will require the construction of the Platy dam and reservoir, the Messara transmission line, the Amari irrigation networks and pumping stations. The project will enhance the living standards of rural populations in central Southern Crete and is expected to benefit about 26,000 small farmers. The project is also expected to contribute to fighting ageing and depopulation trends stemming from difficult living conditions and the lack of employment opportunities which are causing young people to emigrate towards larger urban centres.
Italy: A €50 million loan to the Municipality of Genoa will support its efforts to become a sustainable and resilient city, better prepared to address growing demographic and climate-related risks. The investments will target the prevention and management of hydrogeological hazards; urban regeneration initiatives; as well as repurposing of municipal buildings, in particular schools. The loan is expected to cover up to 25% of Genoa’s investment financial needs for the period 2023-2025 and will complement the resources made available from the European Union’s Recovery and Resilience Facility. This new loan builds on the CEB’s successful partnership with the Municipality of Genoa through an earlier €50 million loan operation.
Lithuania: A €35 million loan to the Vilnius City Municipality will provide continued support for the implementation of the City Investment Programme. The loan will fund a number of investments, ranging from sports and cultural facilities to schools and healthcare infrastructure. These are all aimed at enabling the transformation of Vilnius into an innovative city by strengthening its traditions and culture while promoting continued progress and development. The CEB has so far approved €70 million in loans to the city since 2017.
Republic of Moldova: A €20 million loan to the Republic of Moldova will provide decent and affordable housing to vulnerable and low-income populations. The loan will support participating municipalities in the form of on-lending, on-granting and implementation assistance for the repurposing of existing buildings into social housing for around 1 600 beneficiaries as well as elderly homes and student residences for around 730 persons. A special feature of the project are the energy efficiency and clean energy measures. CEB approved a €1 million Green Social Investment Fund grant to fund these energy efficiency measures.
Netherlands: A €150 million loan will continue to partially finance Coöperatieve Rabobank Social Impact Loans scheme over the 2023-2026 period. Social Impact Loans target social enterprises operating in the health, social care and education sectors – typically, general and dental care practitioners, mental health and addiction centres, agencies providing social integration for disabled people, as well as elementary schools and special needs schools. The CEB loan funds will be used for construction or reconstruction of facilities, purchase of equipment and working capital needs. Two earlier CEB’s loans to Coöperatieve Rabobank in the total amount of €250 million reached about 2.7 million patients/students through 175 social impact loans granted.
Poland: A €200 million programme loan to Europejski Fundusz Leasingowy (EFL), a leading Polish leasing company, will help create and preserve jobs by co-financing, through leases, eligible MSME investments throughout the country. The CEB’s long-standing cooperation with the borrower has brought added value in terms of improving the social content and “greening” of operations. In an effort to address climate change, EFL will limit financing of vehicles to 50% of the total loan allocation and shall not use the proceeds from the CEB loan to finance older vehicles. EFL will also channel at least 25% of CEB financing to MSMEs operating in regions with unemployment rates above the national average.
Serbia: A €200 million loan to the Republic of Serbia to finance the “BIO4 Campus”, a state-of-the-art institution for education, science, technology and entrepreneurship. The loan will partially cover expenditures related to the construction of seven buildings, hosting 15 different scientific institutes and a dedicated space for private companies. The goal of the project is to provide best-in-class facilities and equipment for students, young researchers, graduates as well as established professionals, fostering education and enabling growth in scientific potential. The project is also expected to bolster healthcare, from early diagnostic and prevention to improved treatment capacities and therapies. This project underpins the CEB’s support to the Republic of Serbia’s efforts to invest in its human capital, science and technological development, reversing emigration and “brain-drain”, with over €230 million in CEB loans approved already for upgrades in education and the construction of student accommodation facilities.
Spain: A €100 million loan to Nuevo MicroBank, CaixaBank’s social bank for microcredit lending, aims to support job creation and enhance social cohesion in Spain by facilitating access to financial resources for small businesses, microbusinesses and individuals with limited or no access to the traditional banking system. Access to credit is one of the main obstacles to growth faced by Spanish MSMEs, especially small companies which rely on bank financing but do not have access to guarantees or assets to be pledged as collateral. Microcredit institutions therefore play an important role in the creation and expansion of new businesses. Building on a successful, long-standing cooperation since 2008, the CEB has already approved seven loans in the aggregate amount of €480 million in favour of MicroBank.
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 (Aaa 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.