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Estonia: CEB and Ministry of Finance sign €200 million loan agreement to mitigate COVID-19 impact
10 June 2020
PARIS - The Council of Europe Development Bank (CEB) and Estonia’s Ministry of Finance have signed a €200 million loan agreement to support the government’s efforts to mitigate the negative effects of the COVID-19 crisis.
The agreement focuses on support measures for local authorities as well as for micro-, small and medium-sized enterprises (MSMEs). A part of the loan is dedicated to financing COVID-19 thematic research and development.
Specifically, the financing will help local authorities to cover the costs associated with COVID-19 prevention and mitigation measures and ensure the continuity of essential public services.
In addition, the funds will support grant and working capital programmes implemented by the state-owned Foundation Enterprise Estonia and the Rural Development Foundation for the benefit of Estonian MSMEs impacted by the crisis.
Looking ahead, the loan provided by the CEB will also finance key investments in local infrastructure, such as local road improvements and the extension of high-speed internet access to rural areas.
Minister of Finance Martin Helme said: “It is critical that we continue to support businesses and employees through the crisis and boost the economy now that the worst seems to be over, so it can quickly recover. Careful management of Estonia’s finances over many years means that our debt burden is the lowest among the countries of the European Union, giving us the capacity to borrow to meet COVID-19 related expenses. This loan agreement is an important step in ensuring that we have sufficient funds available to give the economy the boost it will need to return to sustainable growth as we exit the crisis.”
The Governor of the CEB, Rolf Wenzel, said: “We are pleased to be able to support Estonia in its efforts to mitigate COVID-19 damage and stimulate the economy, and help it on the path to recovery from the current crisis. The CEB has so far approved close to €3 billion for measures taken in response to the COVID-19 pandemic and is committed to further contributing to recovery by supporting inclusive and sustainable investments in CEB member countries.”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 (AA+ with Fitch Ratings, outlook positive, AAA with Standard & Poor's, outlook stable and Aa1 with Moody's, 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.