Euro­pean In­vest­ment Bank (EIB) to pro­vide soft loans

Bhutan Times - - Front Page - SONAM PEN­JOR

With the sign­ing of the agree­ment be­tween the Royal Gov­ern­ment of Bhutan and the Euro­pean In­vest­ment Bank (EIB), now Bhutan can avail soft loans to fi­nance in var­i­ous projects like hy­dropower, cli­mate change ini­tia­tives and de­vel­op­ment of small and medium en­ter­prises and other sec­tors in the coun­try.

Dur­ing the sign­ing, Min­is­ter of Fi­nance, Ly­onpo Nam­gay Dorji said that Bhutan wel­comed the grow­ing en­gage­ments with the Euro­pean Union (EU) and its in­sti­tu­tions, and said that Bhutan looked for­ward to fruit­ful col­lab­o­ra­tion with the EIB.

While Ly­onpo also stated that this sign­ing cer­e­mony which takes place in less than a year after Bhutan be­came el­i­gi­ble for EIB’s fi­nan­cial ser­vices, demon­strates the se­ri­ous­ness with which Bhutan and EIB in­tent to col­lab­o­rate.

“Bhutan’s re­quire­ment for long term soft credit will grow in the near fu­ture, as we look at build­ing many in­fra­struc­ture projects such as roads, ru­ral elec­tri­fi­ca­tion and hy­dropower plants where grants aid is limited or not avail­able” said the Min­is­ter

“EIB will be a valu­able source of soft loan for Bhutan which can be used to fi­nance th­ese key in­fra­struc­ture projects”, he added.

He fur­ther said that, more im­por­tant than ful­fill­ing our fi­nan­cial needs, Bhutan is happy to be work­ing with a fi­nan­cial in­sti­tu­tion which is guided by strict sets of stan­dards, most no­tably the en­vi­ron­men­tal stan­dards. Bhutan’s grat­i­tude for the gen­er­ous en­hance­ment of EU as­sis­tance to­wards Bhutan, from this year is at a time when some of the tra­di­tional de­vel­op­ment part­ners are phas­ing out is of sig­nif­i­cant the min­ster em­pathized.

Vice Pres­i­dent of the EIB, Mr. Ro­man Es­colano said, this sig­na­ture is the first step to­wards EIB op­er­at­ing in the coun­try with a view to pro­vid­ing support through tar­geted in­vest­ments to the sus­tain­able eco­nomic de­vel­op­ment pol­icy.

The EIB is the EU’s long term fi­nanc­ing in­sti­tu­tion pro­mot­ing Euro­pean ob­jec­tives; Vice Pres­i­dent said that EIB strive to con­trib­ute Euro­pean de­vel­op­ment co­op­er­a­tion poli­cies in Asia and beyond. Since 1993, they have been op­er­at­ing un­der nine EU man­dates re­lated to Asia.

Till now, EIB have pro­vided more than 5.6 bil­lion Euros for projects in Asian coun­tries.

He said that, EIB ac­tion will tar­geted to three ob­jec­tives: for in­stance; so­cial and eco­nomic in­fra­struc­ture, lo­cal pri­vate sec­tor de­vel­op­ment and cli­mate change mit­i­ga­tion and adap­tion.

But th­ese pri­or­i­tized sec­tors in Bhutan would be in line with those of Bhutan that had de­fined by the Gross Na­tional Hap­pi­ness Com­mis­sion in its 11th Five Year Plan, said the vice pres­i­dent.

He fur­ther said that, EIB aim to pass this cost com­pet­i­tive­ness through the king­dom of Bhutan and serve as a bridge to the in­ter­na­tional cap­i­tal mar­ket. Given the align­ment of ob­jec­tives be­tween the king­dom of Bhutan and EIB as well as the large po­ten­tial for sound in­vest­ment in the coun­try, EIB is con­fi­dent that it will be able through its fa­vor­able lend­ing con­di­tion to bring a decision support to the long term de­vel­op­ment of the coun­try.

Mean­while, EIB which is the fi­nan­cial arm of the Euro­pean Union is the largest in­ter­na­tional fi­nan­cial in­sti­tu­tion in the world, and it fi­nances projects in around 150 coun­tries out­side the EU.

While, the agree­ment was signed be­tween Ly­onpo Nam­gay Dorji, Fi­nance Min­is­ter, and Mr. Ro­man Es­colano, Vice Pres­i­dent of the EIB in the cap­i­tal on 4th De­cem­ber, 2014.

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