EIB in € 55 mln loans for Ni­cosia water sup­ply, anti-flood­ing project in Lar­naca

Financial Mirror (Cyprus) - - FRONT PAGE -

Jonathan Tay­lor, Vice Pres­i­dent of the Euro­pean In­vest­ment Bank (EIB) and Fi­nance Min­is­ter Har­ris Ge­or­giades, as well as Agri­cul­ture and Nat­u­ral Re­sources Min­is­ter Ni­cos Kouyialis signed a pair loan agree­ments worth 55 mln eu­ros for projects that will im­prove Ni­cosia’s drink­ing water sup­ply and ex­tends anti-flood­ing in­fra­struc­ture.

The EIB signed a EUR 40 mln fi­nance con­tract to im­prove drink­ing water sup­plies to the greater Ni­cosia re­gion, along with an ad­di­tional EUR 15 mln of fi­nanc­ing for anti-flood­ing in­fra­struc­ture in­vest­ments in Lar­naca.

“The Euro­pean In­vest­ment Bank is strongly en­gaged in Cyprus and I can as­sure you that we are de­ter­mined to con­tinue to be so in the fu­ture. The EU bank re­mains firmly com­mit­ted to sup­port­ing the Cypriot econ­omy and we have clearly shown this by our ac­tions dur­ing the cri­sis and again to­day with fi­nanc­ing for two key in­fra­struc­ture projects,” said Jonathan Tay­lor.

The water pipe­line will bring water from the de­sali­na­tion plant to the greater Ni­cosia re­gion.

It will help to im­prove the se­cu­rity of sup­ply, and qual­ity of, drink­ing water for the greater Ni­cosia re­gion, while also rep­re­sent­ing an im­por­tant com­po­nent of cli­mate change adap­ta­tion. The west­ern Me­sao­ria re­gion suffers from ex­tended droughts and over­ex­ploita­tion of ground­wa­ter sources, so this project can help limit fur­ther re­duc­tion of these re­sources, while at the same time in­creas­ing the re­li­a­bil­ity of the drink­ing water sup­ply sys­tem. The project will also con­trib­ute to the govern­ment’s com­pli­ance with EU leg­is­la­tion, par­tic­u­larly the Drink­ing Water Di­rec­tive and Water Frame­work Di­rec­tive.

The sec­ond loan, for an amount of EUR 15 mln, is go­ing to the Lar­naca Sew­er­age Board (LSB) for the con­struc­tion of two anti-flood­ing rain water pump­ing sta­tions. In re­cent years the town has suf­fered from fre­quent flood­ing, dam­ag­ing cru­cial in­fra­struc­ture and threat­en­ing peo­ple’s homes and busi­nesses. The con­struc­tion of the anti-flood­ing scheme aims to pre­vent sim­i­lar events from hap­pen­ing again and thereby puts Lar­naca on a more cli­mate-re­silient path for its fu­ture. Build­ing re­silience to cli­mate change im­pacts is one of the key pil­lars of the EIB’s cli­mate strat­egy, which EIB share­hold­ers adopted last year just be­fore the Paris cli­mate con­fer­ence.

The EIB and LSB have an ex­ist­ing EUR 75 mln op­er­a­tion to cover the Phase B II net­work ex­pan­sion and waste­water treat­ment plant ca­pac­ity in­crease. This loan will now rise to EUR 90 mln, in or­der to cover the cost of the two pump sta­tions.

“The EU bank’s con­tin­ued en­gage­ment in Cyprus is re­ally a sign of con­fi­dence in the coun­try’s econ­omy and at the same time shows that there are ex­cel­lent and vi­able in­vest­ment projects com­ing out of Cyprus. We re­main ac­tive and com­mit­ted to sup­port­ing eco­nomic growth and the cre­ation of new jobs,” Tay­lor added.

Vasi­likos

In the last five years, the EIB has in­vested some EUR 1.3 bln in new, pri­or­ity in­vest­ments in Cyprus, in­clud­ing pub­lic sec­tor projects in ar­eas such as trans­port, en­ergy, ed­u­ca­tion, waste treat­ment and water sup­ply.

It has also pro­vided con­sid­er­able sup­port to the pri­vate sec­tor through its co­op­er­a­tion with ten lo­cal banks to pro­vide long-term and af­ford­able fi­nanc­ing to SMEs and MidCaps, which are the back­bone of Cyprus’s econ­omy, rep­re­sent­ing over 95% of lo­cal com­pa­nies and 80% of em­ploy­ment. In 2015, the EIB main­tained its high level of ac­tiv­ity, pro­vid­ing a to­tal of EUR 215 mln to the Cypriot econ­omy, rep­re­sent­ing 1.5% of an­nual GDP, the high­est per­cent­age of all EIB share­hold­ers.

The EIB as the Euro­pean Union’s long term lend­ing in­sti­tu­tion has been ac­tive in Cyprus for ex­actly 35 years, even be­fore Cyprus joined the EU, said Tay­lor. “Dur­ing these years we have sup­ported more than 50 projects through loans of more than EUR 2.7 bln.”

“A ques­tion on every­body’s mind is why so far Cyprus has not ben­e­fited from the Euro­pean Fund for Strate­gic In­vest­ment and what more could be done to en­sure that Cyprus could ob­tain the max­i­mum ben­e­fit pos­si­ble.”

“Let me start by ex­press­ing once again our com­mit­ment in sup­port­ing the right in­vest­ments in the coun­try which could ben­e­fit from EFSI.

“At the same time, I would also like to make a point that one of the rea­sons why we have not yet signed an EFSI deal in Cyprus is that, with the sup­port of the govern­ment, we have been very suc­cess­ful in sup­port­ing vi­able small and medium sized busi­nesses, through the EIB’s Scheme for SMEs and MidCaps; an in­stru­ment, which is not EFSI.

“Since 2014, EIB signed 350 mil­lion euro with ten lo­cal banks and through our lo­cal part­ners, some 150 en­ter­prises have re­ceived more than 150 mln eu­ros for their in­vest­ments. Vi­able en­ter­prises which pro­mote el­i­gi­ble in­vest­ments are ben­e­fit­ing from in­ter­est rate of as low as 2.60% and tenors which reach 12 years, while be­fore the im­ple­men­ta­tion of this Scheme in­ter­est rates were well above these rates.

“We are happy to hear that the govern­ment con­sid­ers this a suc­cess­ful in­stru­ment which has helped to re­duce in­ter­est rates and in­crease loan tenors for the whole bank­ing sec­tor.

“So when we are look­ing into fi­nanc­ing un­der EFSI in Cyprus, we should not for­get that the EIB has an en­tire tool­box of fi­nan­cial in­stru­ment that are al­ready work­ing very well in Cyprus.

“What more could be done for Cyprus to ben­e­fit from EFSI? EIB is ac­tively look­ing for ma­ture projects that are el­i­gi­ble for fi­nanc­ing un­der EFSI. Any vi­able en­ter­prise with ma­ture in­vest­ments, el­i­gi­ble for EIB fi­nanc­ing, could con­tact us and we would be happy to hear from them and dis­cuss EIB fi­nanc­ing, un­der EFSI or oth­er­wise.

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