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Transcript of HighNorthS.Fridriksson
NORDIC INVESTMENT BANK
Nordic Investment Bank Financing projects in the Northern Dimension
Stefan Fridriksson
Senior Manager, Lending Department
30 NOVEMBER 2011
PRESENTATION NAME / AUTHOR 1
The High North – Infrastructure and Industrial Development
Voksenåsen 29 November 2011
NORDIC INVESTMENT BANK
Contents
30 NOVEMBER 2011
1. Basic information
2. Mission and mandate
3. Lending focus sectors
4. NIB and the Northern
Dimension
NORDIC INVESTMENT BANK
Basic information
• Founded by the Nordic countries in
1975 (active since 1976)
• The Baltic countries joined in 2005
• Headquarters in Helsinki
• Lending in both member countries
and non-member countries
• Funds acquired on the
international capital markets
• AAA/Aaa credit rating
30 NOVEMBER 2011
NIB Headquarters in Helsinki, Finland. In 2009, NIB Headquarters joined
the WWF Green Office network.
NORDIC INVESTMENT BANK
Ownership structure
NOV-11
Iceland 0.9%
Baa3/BBB-
Norway 21.5%
Aaa/AAA
Sweden 34.6%
Aaa/AAA
Denmark 21.1%
Aaa/AAA
Finland 17.7%
Aaa/AAA
Estonia 0.9%
A1/A-
Latvia 1.3%
Baa3/BB
Lithuania 2.0%
Baa1/BBB
4
Authorised capital
to EUR 6,142m as
of 16 February 2011
NIB's Board of
Governors has decided
to increase the Bank's
authorised capital by
EUR 2 billion. The
capital increase has
been allocated to the
unpaid portion.
The Bank's member countries have subscribed to its authorised capital
in proportion to their gross national income.
NORDIC INVESTMENT BANK
Regional focus NIB actively participates in international and regional cooperation
30 NOVEMBER 2011
• EU Strategy for the Baltic Sea Region
• Northern Dimension Environmental
Partnership (NDEP)
• Northern Dimension Partnership on
Transport and Logistics (NDPTL)
• Eastern Europe Energy Efficiency
and Environment Program
• More cohesion with other policies. Align with
- Council of the Baltic Sea States (CBSS),
- Barents Euro Arctic Council (BEAC),
- Arctic Council (AC)
- Nordic Council of Ministers.
NORDIC INVESTMENT BANK
Mission and mandate
30 NOVEMBER 2011
NORDIC INVESTMENT BANK
Mission and mandate
• NIB promotes sustainable
growth of its member
countries
by providing long-term
complementary financing to
− projects that strengthen
competitiveness
− projects that enhance the
environment
30 NOVEMBER 2011
NORDIC INVESTMENT BANK
Mission and mandate: Focus sectors
• NIB puts particular emphasis on
projects involving investments in
the following sectors
− environment
− energy
− infrastructure
− innovation
• NIB finances
− larger investments by the
corporate sector
or public sector
− smaller projects through
financial intermediaries
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
2007 2008 2009 2010
Focus sector loans agreed, as a share (%) of total loans
Environment
Energy
Transport, logistics and communication
Innovations
Other sectors
30 NOVEMBER 2011
NORDIC INVESTMENT BANK
Strengthening competitiveness
30 NOVEMBER 2011
• Sustainability increases the level of
wealth and prosperity
• All projects considered for financing
undergo a competitive assessment of
• direct effects
- upgrading or expanding a company's
capital base, for example by installing or
replacing production equipment;
• wider direct effects
- improvements in infrastructure, for example
by construction of new highways, railroads
and ports;
• indirect effects
- demonstration effects, for example by
applying global best practice technologies
Metro line in Helsinki.
Photo: City of Helsinki (Finland)
NORDIC INVESTMENT BANK
Lending focus sectors
30 NOVEMBER 2011
NORDIC INVESTMENT BANK
Focus sector: Environment
• Economic growth and a healthy
environment go hand in hand
• NIB has one of the most explicit
environmental mandates
among the large IFIs
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
2005 2006 2007 2008 2009 2010
Environmental loans outstanding as a share of total loans,
EUR million
Other loans Environmental loans
30 NOVEMBER 2011
NORDIC INVESTMENT BANK
Focus sector: Transport, logistics
and communications
30 NOVEMBER 2011
• Effective transport, logistics and
communications are essential for ensuring
competitiveness
• In early 2011, NIB adopted a lending Strategy
for transport, logistics and communications to
ensure mandate compliance
• Many projects also have significant
environmental benefits
Project examples: Road constructions, railways, airports,
broadband and mobile phone networks
Photo: SJ AB (Sweden)
NORDIC INVESTMENT BANK
NIB and Life Cycle Model PPP
13
• E 75/A 1, Gdańsk-Nowe Marzy, PL, 90 km, EUR 675 mio.
• E 75/A 1, Nowe Marzy-Torun, PL
• E18, Turku-Helsinki, FIN, 65 km, 25 y, EUR 700 mio.
• E 18, Helsinki-Lahti, FIN, 70 km, 15 y, EUR 100 mio.
• Arlanda Express Train, S, 40 y, EUR 500 mio.
• Norwegian PPP projects, EUR 830 mio.
- E 39 Orkdalsvegen, Klett-Bårdshaug, 30 km, 27 y, EUR 190 mio.
- E-39 Lyngdal-Flekkefjord, 38 km, 27 y, EUR 180 mio,
- E 18 Kristiansand-Grimstad, 38 km new road, 28 y, EUR 460 mio.
• Oslo Toll System, N, 17 y, EUR 1,500 mio.
• Pulkova airport
NORDIC INVESTMENT BANK
Norwegian road projects – PPP
Financed by NIB
30 NOVEMBER 2011
PRESENTATION NAME / AUTHOR 14
NORDIC INVESTMENT BANK 30 NOVEMBER 2011
PRESENTATION NAME / AUTHOR 15
2006
• Agder OPS Finansselskap AS (NOK 800 m.)
• E 18 Grimstad- Kristiansand
• 38 km new road
• NIB loan EUR 40 million
2004
• Allfarveg (EUR 180 million)
• E39 Lyngdal-Flekkefjord
• 17,5 km.
• NIB loan EUR 40 million
2003
• Orknadalsvegen AS (NOK 1,431 bn.)
• E 39 Orkdalsvegen, Klett – Bårdshaug OPS
• NIB loan EUR 40 million
Norwegian road projects – PPP
Financed by NIB
NORDIC INVESTMENT BANK
Loan case: Gardermoen Intl. Norway
30 NOVEMBER 2011
• Norwegian Avinor AS
• Terminal 2 expansion
A loan totalling NOK 1,500 million in 2011
20 year maturity
To help the airport maintain a competitive role in
international aviation and ensure an efficient and
reliable transport system for domestic and
international travel in one of NIB's member
country
NORDIC INVESTMENT BANK
Focus sector: Energy
30 NOVEMBER 2011
• The energy sector's main focus is on
energy efficiency, integrated energy
networks and sustainable and sufficient
generation capacity.
• In April 2010, NIB adopted an Energy
Strategy to increase proactivity and to
ensure mandate compliance. NIB-
financed projects are also in line with the
European* objectives in this sector.
Project examples: Transmission lines, improved district heating, renewable energy projects, energy efficiency projects in buildings *EU and EEA
Photo: Eidsiva Energi AS (Norway)
NORDIC INVESTMENT BANK
NIB- loans in the High North
18
• Rajakiiri – 19 mEUR (2010)
Wind park
• SSAB –100 mEUR (2010)
Investments for improved environment and energy
efficiency in Borlänge och Oxelösund
• Outokumpu– 30 mEUR (2001)
Financing of investments in the chrome mine in Kemi
NORDIC INVESTMENT BANK
Focus sector: Innovation
30 NOVEMBER 2011
• Lending to activities related to
innovation processes
• R & D projects
• Lending via financial
intermediaries
Photo: Novozymes (Denmark)
NORDIC INVESTMENT BANK
Loans on market terms
30 NOVEMBER 2011
• Various currencies used
• Long maturities: 5–25 years
• Co-financing: up to 50% of project costs
• Grace period, up to 5 years
NORDIC INVESTMENT BANK
NIB and The Northern Dimension
NDEP and NDPTL
30 NOVEMBER 2011
PRESENTATION NAME / AUTHOR 21
NORDIC INVESTMENT BANK
22
NIB and the Northern Dimension
NDEP – Northern Dimension Environmental Partnership • Established in 2001.
• Cooperation on concrete environmental projects in Russia and Belarus.
• Also nuclear safety projects in Russia.
• IFIs (loans) and donors (grants) combined in each project.
• Support fund EUR 275 million (125 million for environmental, 150 for
nuclear safety projects).
NDPTL - Northern Dimension Partnership for Transport and
Logistics • New initiative , established in 2010.
• Regional cooperation on policy and projects.
• Linked to EU transport policy via Northern Axis and Motorways of the
Seas.
• Linked to sub-regional cooperation projects such as Barents Corridor.
• Aim to remove bottlenecks and to take a pan-regional perspective on
transport corridors – project list under preparation.
• NIB hosts the NDPTL secretariat.
NORDIC INVESTMENT BANK
Cleaning the Baltic Sea (NDEP)
• Vodokanal St. Petersburg, Russia (2005)
• EUR 45 million
• NIB tailor-made the project's financial structure and acted as lead bank.
• Implemented under the umbrella of the Northern Dimension Environmental Partnership.
- loan to Vodokanal St. Petersburg EUR 45 million, launched in 2005
- Substantially reduced the effluent of untreated wastewater discharged in the Gulf of Finland. St. Petersburg now treats 85% of its wastewater
Southwest Wastewater Treatment Plant in St. Petersburg
30 NOVEMBER 2011
NORDIC INVESTMENT BANK
NDPTL – A list of projects in the
waiting and development
30 NOVEMBER 2011
24
NORDIC INVESTMENT BANK
Role of the IFIs in NDPTL
25
Expertice in financing projects
Play a key role when selecting projects for implementation within the
Partnership.
Collaboration with the NIB, EIB, World Bank and EBRD along with
the National Financing Institutions (NFIs) so as to get their views of
the projects early on.
NORDIC INVESTMENT BANK
• The Baltic Sea Region, North Atlantic and Barents Sea
Region have high potential to benefit from an effective
implementation of the Partnerships.
• The results of the NDEP has already demonstrated valuable
results.
• Can the same approach be applied for transport and
logistics projects?
• Enhance the interest of private investors into transport and
logistics investments.
26
The potential of the Northern Dimension
NORDIC INVESTMENT BANK
• Secure that interests of the partner countries on public level
remains committed and focussed.
• Areas where the communality of interests is strong but where
actions taken only nationally, too often in an uncoordinated
way, fail to internalize the regional perspective and potential.
• Visible in the transport sector but also the environment and
energy sectors where huge, inter-regional challenges have
been demonstrated.
27
The potential of the Northern Dimension
NORDIC INVESTMENT BANK
Loans
A loan = Distributing the capital cost over time
Borrowed money is expensive (cost of funds +
risk premium)
Debt service must be covered with the borrower's own
resources
Operating revenues and/or budgetary funds
Access to borrowing depends on:
Creditworthiness
and/or
Project quality (profitability = capacity to
generate money for debt service)
Bankable projects
NORDIC INVESTMENT BANK
Bankable projects -What is needed ?
In order to lend banks need:
• Willing and able borrowers
• Willing = Prepared to take loans at prevailing interest
rates to finance part of their investments
• Able = Creditworthy enough to be able to service the
loan/s and with the other part of the financing secured –
banks never (should) provide loans for a 100 % of the
project cost
29
NORDIC INVESTMENT BANK
Bankable projects -What is needed ?
In order to lend banks need:
• Good quality (feasible) projects
• Financiers are focused on all aspects of project feasibility Economic Financial Technical Institutional Environmental
30
NORDIC INVESTMENT BANK
Nordic Investment Bank For further information:
30 NOVEMBER 2011
Stefan Fridriksson
Senior Manager, Lending
Head Quarters
Fabianinkatu 34
P.o. box 249
FI-00171 helsinki
Finland
telephone +358 10 618 001
Fax +358 10 618 0725
internet
http://www.nib.int
http://annual.nib.int