Belarus: First ever EIB support – development of water infrastructure and private sector

• The EU bank is providing EUR 84m to Minsk Vodokanal to finance the rehabilitation and modernisation of the capital city’s central wastewater treatment plant
• Around 200 small and medium-sized companies will benefit from two loans provided to Belagroprombank (EUR 50m) and Belarusbank (EUR 25m)

The Republic of Belarus and the European Investment Bank (EIB) are starting a new era of cooperation by signing the first ever loans provided by the EU bank in this country. The loans, for a total amount of nearly EUR 160m, target sectors and projects that both the European Union and the Republic of Belarus consider essential in order to foster investments in the areas of social and economic infrastructure, private sector development and climate action.

A first loan of EUR 84m will finance the upgrading of wastewater services serving close to 2 million citizens in the Belarus’ capital Minsk. The EIB funds will back the installation of new pre-treatment facilities, new aeration tanks for biological treatment, ultraviolet disinfection of the treated effluent and modern sludge treatment. The investments will have positive impacts on energy efficiency, environment and people’s daily life.  This project will be co-financed with the European Bank for Reconstruction and Development (EBRD) and will also benefit from a grant of EUR 1m from the multi-donor funding instrument the Eastern Partnership Technical Assistance Trust Fund (EPTATF).

The EIB loans to small businesses, intermediated through Belagroprombank (BAPB) and Belarusbank (BBK), will facilitate investment projects and help to meet the working capital needs of private sector companies in Belarus. This will contribute to the strengthening of the private sector and economic diversification that is particularly important in Belarus, where large state-owned enterprises still dominate the national economy. The EU bank is joining forces with BBK and BAPB, two banks that have a profound knowledge of the Belarusian market and have substantial plans to expand their lending to smaller businesses. It is estimated that some 200 SMEs will benefit from this financing, which should help to sustain over 2,500 jobs. These loans are being provided in the framework of the EU4Business initiative targeted at smaller businesses in the Eastern Partnership countries.

The loan signatures took place on the occasion of the first visit of EIB Vice-President Alexander Stubb to Belarus since the entry into force of the Framework Agreement between the Republic of Belarus and EIB in August 2017.

EIB Vice-President Alexander Stubb commented: “Today is a significant day for the European Union and the Republic of Belarus: we are welcoming Belarus to the family of Eastern Partnership countries receiving support from the EU bank. Our operations are contributing to the country’s economic development, deepening the cooperation with the European Union and improving the living conditions of Belarusian citizens. The projects signed are good examples of this: they help to improve the environment and strengthen the competitiveness of the private sector companies that are the engine of sustainable growth and job creation.”

Head of EU Delegation in Belarus Andrea Wiktorin stated: "Today's event is a significant development in the relations between the EU and Belarus. The EU has not only increased the overall amount of assistance, but also widened the spectrum of available instruments for joint cooperation. This concerns both policy action and sound investments into sustainable infrastructure and private sector development. Belarus will as of now benefit from European Investment Bank lending for the benefit of its citizens and the environment."

Prime Minister of Belarus Sergei Rumas said: "Belarus is counting on the implementation of landmark projects with the European Investment Bank. I am confident that 2019 will be extremely fruitful for cooperation between Belarus and the European Investment Bank and that the necessary foundations will be laid for establishing trusting partnerships. For my part, I wish to assure you that Belarus is always open for constructive dialogue with the European Investment Bank. I hope that in the future we will see many iconic and ambitious projects".

Background information:

As the world’s largest multilateral borrower and lender by volume, the EIB provides finance and expertise for sound and sustainable investment projects that contribute to furthering EU policy objectives. More than 90% of EIB activity is focused on Europe but it also supports the EU's external and development policies.

The EIB finances projects in Belarus on the basis of the EU External Lending Mandate. This provides the EIB with a guarantee covered by the EU budget for projects of significant interest to the EU and its Eastern Neighbours in the areas of social and economic infrastructure, local private sector development and climate action.

The Eastern Partnership Technical Assistance Trust Fund (EPTATF) is a multi-donor and multi-sector funding instrument for specific technical support in the Eastern Partnership countries: Armenia, Azerbaijan, Belarus (since August 2017), Georgia, Moldova and Ukraine. It provides these countries with know-how and resources to improve capacity in project preparation and implementation, which facilitates the mobilisation of financing for EIB-supported investments. EPTATF provides high added value because better project preparation increases the bankability of projects and it is expected to improve the development impact of investments in the beneficiary countries.

EU4Business is an EU initiative that helps SMEs in the six countries of the Eastern Partnership (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) to finance their development and boost economic growth. EU4Business support is delivered by the EIB together with other organisations outside the EU. All EU activities that support SMEs in the Eastern Partnership countries are part of EU4Business. Information about activities in Belarus are available under EU4Business Initiative and EU Projects in Belarus informs about projects supported by the EU in the country in general.

The Eastern Partnership was established in 2009 as a joint initiative of the EU, its Member States and six European Partners – Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. It is a key pillar of the EU’s Neighbourhood Policy. The EIB is particularly active in the multilateral dimension of the partnership, providing key investments in priority sectors such as transport, energy – including energy efficiency – climate action, access to finance for SMEs and innovation. By the end of 2017, EIB lending in the Eastern Partnership had reached a total of EUR 8 billion, financing some 90 investment projects and providing credit lines to support SMEs in the region.