CEB loan to support environmental protection and improve living conditions in Iceland

19 June 2017

PARIS – The Council of Europe Development Bank (CEB) is providing a € 10 million loan to Municipality Credit Iceland (MCI) in order to co-finance investment projects undertaken by Icelandic municipalities and municipal companies.

The loan provided by the CEB will help to improve living conditions in urban and rural areas through the modernisation of public infrastructure whilst also supporting environmental protection action. 

More specifically, CEB funds will contribute to a programme addressing the priorities set by the Icelandic government within the framework of “Iceland 2020 – Government Policy statement for the Economy and the Community”, including the improvement of social public infrastructure and the supply of long-term financing to municipalities as a means of boosting economic growth and employment.  

Through its “environmental protection” component, the CEB-funded programme will also contribute to the implementation of Iceland’s “National Energy Efficiency Action Plan 2014-2020”, which is part of the country’s ambitious policy striving for carbon neutrality. The programme will finance municipal investments such as energy production and distribution facilities aimed at lowering greenhouse gas emissions and increasing energy efficiency. Overall, it is expected to have a considerable environmental impact and contribute to Iceland’s efforts to achieve the renewable energy and climate change 2020 targets set in its national strategies. 

This is not the first time that the CEB joins forces with MCI to support social development projects in Iceland, which is a founding member of the Bank. This loan follows two previous loans granted to MCI in 2006 and 2008, and successfully implemented, totalling € 50 million. 

“The financing of social investments for the modernisation of public infrastructure and of energy efficiency and environmental protection projects are central to the CEB’s lending activity and among the priorities of the Bank’s Development Plan 2017-2019,” said the Governor of the CEB, Rolf Wenzel. “Working with regional authorities and municipalities in addition to central governments allows us to meet the social needs of our member countries in the best possible way. We are happy that the CEB and MCI are renewing their excellent, long-standing cooperation with the financing of this high social added value project,” he concluded.

Set up in 1956, the CEB (Council of Europe Development Bank) has 41 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, AA+ with Standard & Poor's, outlook stable and AA+ with Fitch 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.