EIB and the northern dimension

One of the aims of the Northern Dimension is to emphasise the importance of Northern Europe and its advantages for EU development in the long term. The aim also includes supporting the enlargement of the EU and its co-operation with Russia.

The EIB has, up to now, no mandate to operate in Russia. However the Bank follows with interest the prospects of selected projects in the environmental sector of great benefit for the Baltic Sea (i.e. St Petersburg Waste Water), and in the energy sector (i.e. the Nordic Gas Grid). For specific projects, where there is an additional EU interest and where adequate securities may be obtained (Member States or prime banks), the possibility exists for the EIB to engage itself in financing operations, given the unanimous support of its Board of Governors (i.e.

EU Finance Ministers) under Art. 18 of the Bank's Statute. In its decision of 1 December 1999 the Council of the European Union expressed its readiness to investigate, sometime in 2002-2003, the possibility of extending the Community guarantee to the European Investment Bank to cover, among other possible countries, Russia, once the necessary conditions in these countries are met, in particular in relation to the presence of a stable working market economy in

accordance with the IMF programmes, which will, in turn, make EIB lending in these countries under the usual sound economic and financial conditions feasible. Should these circumstances be met and the Council suggest including Russia into the future set of mandates, the Bank is prepared to examine this possibility and the conditions attached to it with its governing boards.

Whereas the definition of the policies and instruments required for the implementation of Northern Dimension pertain to the European Council, the EU Commission and Members States, at the operational level the EIB has developed its own plan of action:

• by maintaining closer contacts with the national authorities involved and the EU institutions in order to maximise the synergies between its financing, the EU programmes and the action of international financial institutions (EBRD, World Bank, NIB) and local banks,

• by channelling its loans to projects where EIB financing is the most appropriate because of its very long maturity, size, currencies and interest rates,

• by providing promoters with the added value resulting from the technical and financial expertise it has acquired over 40 years of activity,

• by supporting the reinforcement of basic infrastructures in Baltic countries and Poland as well as their process of transformation towards market economies.

A key factor in the EIB's action has been the consideration that the creation and modernisation of the infrastructure needed for better communications between Northern Europe, the rest of the Union and the applicant Central and Eastern European countries were a precondition for a sound and sustainable economic development of the Union as a whole. For this reason by far the most important EIB financing has been concentrated on:

• Nordic Triangle: on a total of 2.4 billion € granted to infrastructure projects included in the Nordic Triangle, the Oresund link between Copenhagen and Malmö was by its size (1.2 billion €) one of the largest loans ever provided by the EIB. The action in favour of Nordic Triangle projects was completed by the loans granted to the E 4 and E 6 motorways connecting Stockholm and Helsingborg and Malmö with the Norwegian border. Still in the road sector, the EIB participated in Finland in the financing of different sections of the East West E 18 motorway and the North South E 12 motorway,

linking respectively the southern road axis of Finland with Russian borders and providing faster and safe access to the European network, and the Finnish Northern regions.

• The main projects financed in the rail sector were, in Sweden the modernisation of the rail line between Malmö and Göteborg, and, in Finland the financing of different sections along the corridor Turku – Russian border with the overall aim of improving the EU’s access to St. Petersburg through Finland.

• TENs: financing provided to TENs projects under the EIB TEN window amounted to 2.8 billion €, with again a large scale financing to the Great Belt Link (1.9 billion €) and a number of loans covering airports (Copenhagen, Helsinki), ports (Göteborg, Arhus), power networks, roads and railways.

The Nordic triangle and TENs projects absorbed around 40% of the EIB lending to Nordic and Baltic States.

In line with the priorities set out in the Accession Partnership Agreements signed between the European Union and the Pre-Accession Countries, including Estonia, Latvia, Lithuania and Poland, further EIB support will be directed towards the upgrading of the countries basic infrastructure. Particular attention will be paid to the investments in the environment and transport, energy, telecommunications and health and education infrastructure. Support to SMEs and small infrastructure will be channelled through global loans.

The Bank is paying special attention to the development of the communications links between the countries concerned and the Member States. One of the priorities will be support to TEN Corridors, including further upgrading of the Via Baltica route (TEN Corridor 1) between Helsinki and Warsaw. The Bank is also following with interest the Baltic Ring energy sector initiatives, with particular emphasis on interconnection links and rationalisation of energy produc-tion/distribution.

The EIB is strongly committed to facilitating Pre-Accession Countries' further integration into the EU. The financial envelopes in place would allow the Bank to further expand and deepen its current activity in the candidate countries and allow the future Members to benefit from the valuable experience the Bank has gained from previous enlargements.

The Bank, based on its recent experience from operations in Estonia,

Latvia, Lithuania, Poland and in the other countries in the region, as well as from its active involvement in previous enlargements of the EU, expects to be a valuable partner for the Pre-Accession Countries both during the present pre-accession phase and after membership.

Of great importance in the EU’s overall pre-accession strategy towards Pre-Accession Countries is maximising complementarity and synergies between the various EU instruments. In connection with this, the Bank will seek to combine EU grant finance sources such as PHARE and ISPA. Co-financing possibilities with other international financial institutions, particularly the Nordic Investment Bank (NIB) and the Nordic Environment Finance Corporation (NEFCO), which are both active in the region, but also with bilateral sources of finance, will continue to be explored, as appropriate.

The examples of EIB financing in the Northern countries mentioned and more precisely in the northern parts of these countries, underline the Bank’s commitment to support regional development, which is its main task. The EIB must, in co-operation with the national and regional authorities, seek to stop up gradually its activities in these sparsely populated regions in support of projects that will encourage economic development.

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