The European Investment Bank provides a EUR 200 million loan to the Electricity Authority of Cyprus for reinforcing and extending the electricity transmission and distribution networks throughout Cyprus.
The finance documentation was signed today at the EIB headquarters in Luxembourg by Mr Plutarchos Sakellaris, EIB Vice-President and Mr George Pistentis EAC Vice Chairman.
EIB Vice-President, Plutarchos Sakellaris, whose responsibilities include EIB's lending activities in Cyprus as well as energy issues, stated today: "I am delighted to sign our fifth loan with the Electricity Authority of Cyprus. Through our long-lasting and good cooperation we were able to provide significant support to the electricity generation and transport in Cyprus. This loan will cater for growth and enhanced efficiency of the energy sector of Cyprus. This is of particular importance as the country's electricity network is not interconnected and has no other indigenous energy resources".
The project consists of a four-year investment programme (2010-2013) aimed at meeting growing demand while reducing also transmission and distribution losses.
The EIB has supported a number of energy projects in Cyprus, mostly in cooperation with the Electricity Authority of Cyprus. This includes loans totaling EUR 200 million for the Vassilikos electricity power plant, one of the largest investments undertaken in Cyprus and the Bank's support for the previous upgrading of the electricity transmission and distribution network, for a total of EUR 130 million. A further EUR 30 million has gone for a new internal combustion engine power plant at the Dekeleia power station in the district of Larnaca in Cyprus. Initially powered with heavy fuel oil, the plant can be retrofitted to natural gas, once this becomes available on Cyprus. Electricity demand in Cyprus is rising and the Bank stands ready to consider future investments including the introduction of natural gas sources to support diversification of supply and long term needs.
Note to editors:
About the EIB
What is the EIB?
The European Investment Bank was created by the Treaty of Rome in 1958 as the long-term lending bank of the European Union. The task of the Bank is to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States. The EIB raises substantial volumes of funds on the capital markets which it lends on favorable terms to projects furthering EU policy objectives. The EIB continuously adapts its activity to developments in EU policies.
The EIB:
- enjoys its own legal personality and financial autonomy within the EU
- operates following strict banking practice and in close collaboration with the wider banking community, both when borrowing on the capital markets and when financing capital projects
Who are the shareholders?
The EIB's capital is owned by the 27 member countries of the EU including Cyprus.
What types of project does it finance?
There are six financing priorities, which are laid down by the shareholders and EU mainly in the following sectors:
- convergence and cohesion, involving the poorest regions of the EU
- small and medium-sized enterprises
- energy
- research, development and innovation
- infrastructure
- environmental protection
Key figures: the EIB in 2009
Total financing operations: EUR 79 billion (+37%, compared with 58 billion in 2008) of which:
- EU countries: EUR 71 billion
- Accession countries: EUR 4.3 billion
- Neighbourhood and specific Mandates: EUR 3.7 billion
Cyprus: the EIB activity
EIB lending in Cyprus started in 1981. It gained volume after 1996, when the country started accession negotiations with the EU. In the 12 years that have passed, total EIB financing in Cyprus amounted to more that EUR 1.5 billion, of which almost half was after the country's accession in 2004. In the five-year period 2005-2009, the European Investment Bank provided a total of EUR 612m for key projects in all productive sectors in Cyprus. The lending provided in Cyprus in the last years also fits in the broader measures announced by the EIB in December 2007 under the European Economic Recovery Package. In particular the EIB has offered support for the SME sector through an enhanced partnership with major Cypriot banks via an extension of credit lines to support productive investment in employment and growth by smaller enterprises. The Bank has also been active in support of economic infrastructure notably in the environmental area where EIB has supported water treatment projects by large municipalities and in the energy sector including the Orites project, the first windpower operator in Cyprus, which led Euromoney to award the "Lender of the Year" title to the EIB. EUR 32 million was for projects, in synergy with Cohesion and Structural Funds. The Bank works closely with the Cypriot authorities and the European Commission with respect to the programming and implementation of projects supported by the Structural and Cohesion Funds in Cyprus, in order to maximise the impact of its action.
Total raised by issuing bonds on the international markets in 2009: EUR 79.4 billion EUR 59.5 billion in 2008) via 262 transactions (247 in 2008).
