A New Credit Line for Municipal Infrastructure
Šiaulių bankas, a partner for small and medium-sized business, since now will be able to develop its other strategic trend, i.e. collaboration with municipalities and financing of regional projects, more intensively. With a long-term credit line granted by the ”KfW Bankengruppe” (further the KfW), Šiaulių bankas will support the implementation of municipal projects as well as those of the private and public entities that are important to the regions.
According to the loan agreement Šiaulių bankas has been granted a credit line in the amount of EUR 10 million (LTL 34,5 million) by the KfW. It is partially refinanced by the Council of Europe Development Bank (CEB). Together with this credit Šiaulių bankas receives a grant from the EU, which will enable the Bank’s further granting of the long-term loans to the small municipal infrastructure projects in more favourable conditions.
“We are happy to see how the circle of our partners keeps expanding, - stated Donatas Savickas, Head of the Finance and Credit Division of Šiaulių bankas. – This credit line will assure the more active participation of Šiaulių bankas improving the quality of life in the communities of the particular regions and encouraging the social development of the whole Lithuania.”
The funds of this loan are allocated for long-term investments. While granting the funding the priority will be given to the projects that are to be implemented in the regions. Up to 100% of the costs of the investment project are eligible for financing, however, according to this programme the project may claim for not more than EUR 5 million. The maturity of the loans granted to the municipal infrastructure is up to twenty-five years. The enterprises wishing to receive a loan under this credit line, even today are able to submit the projects to Šiaulių bankas.
Municipalities and other companies with the help of this loan will be able to renovate and purchase buildings, to develop the infrastructure of roads and streets, to modernize institutions and to update the technical base of the enterprises delivering utilities. Moreover, it is possible to purchase pieces of equipment as well as intangible assets (such as patents and licences) applying these funds. The credit line granted to the Bank also could be used to finance environmental projects, waste disposal and for other infrastructure projects. It will be possible to cover many other expenses related to the management of the local government functions from these funds. This alternative funding is especially important to the mature infrastructure plans, which have not received support from the EU structural funds. What is more, this loan could be combined with other sources of funding.
“We are therefore glad that we found with Šiaulių bankas a reliable and trustworthy partner. The Bank with its wide branch network all over the country and its good relationships to municipalities is an excellent Partner to extent the range of the EU Municipal Finance Facility in Lithuania. We trust that in future especially utility companies of small municipalities and of municipalities in less-developed regions will find better access to long-term finance,” – says Stephan Leudesdorff , Head of Global Loans of the KfW.
Šiaulių bankas stands for sustainable business and actively participates in solving problems occurring in the municipalities of the country. Šiaulių bankas has a quite big experience financing the programmes related to the modernization of block-of-flats and energy saving, various contractual agreements, especially big attention paying to the development of small and medium-sized business. Only during 2004-2006 together with Lithuanian Environmental Investment Fund more than 25 such infrastructure projects have been financed in the total amount of LTL 20 million. At the moment 60 municipalities of Lithuania and enterprises subordinate to them are using the services of our bank. Šiaulių bankas expects to use the credit line provided by the German financial organization ”KfW Bankengruppe” in full.
It is already 8th credit line provided by international financial organizations to Šiaulių bankas. Earlier Šiaulių bankas has signed credit line agreements with the European Bank for Reconstruction and Development, Nordic Investment Bank (NIB) and with the Council of Europe Development Bank (CEB).
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