EIB fi­nances oil re­serves ter­mi­nal at Vasi­liko

Financial Mirror (Cyprus) - - FRONT PAGE -

A 35 mln euro deal was signed be­tween Cyprus Or­gan­i­sa­tion for Stor­age and Man­age­ment of Oil Stocks (KODAP) and the Euro­pean In­vest­ment Bank to con­struct a ter­mi­nal to hold strate­gic oil re­serves at the Vasi­liko.

The agree­ment reached be­tween KODAP and EIB has es­sen­tially se­cured Cyprus’ first fund­ing of Strate­gic Gov­ern­men­tal In­fra­struc­tures in the field of en­ergy.

En­ergy Min­is­ter Ge­orge Lakkotrypis said the new ter­mi­nal (total cost EUR 53m) “will serve as a strate­gic oil re­serves de­pot, in ac­cor­dance with the rel­e­vant Euro­pean Di­rec­tive, which im­poses the obli­ga­tion on mem­ber states to main­tain min­i­mum stocks of crude oil and/or petroleum prod­ucts”.

He said the project is important for Cyprus as it will ac­com­mo­date repa­tri­a­tion of the coun­try’s re­serves be­ing held abroad, “thus se­cur­ing a strate­gic ad­van­tage in case of an en­ergy cri­sis, it also min­imises the cost of stor­ing our na­tional re­serves”.

The min­is­ter said KODAP’s pres­ence at Vasi­liko sets a solid foun­da­tion for mov­ing for­ward with new en­ergy in­fras­truc­ture planned in the area, in­clud­ing fa­cil­i­ties for the im­port, stor­age and man­age­ment of liq­uid fu­els, LNG, asphalt, lu­bri­cants and re­lated prod­ucts.

The project is sched­uled to be com­pleted by 2020 and is fi­nanced by the “Con­nect­ing Europe Fa­cil­ity” to the tune of EUR 101 mil­lion, while a total of around EUR 250 to EUR 300 mil­lion is es­ti­mated to be re­quired for the en­tire in­fras­truc­ture of im­port­ing LNG to Cyprus.

“We are cur­rently in dis­cus­sions with the EIB re­gard­ing the Bank’s in­volve­ment in its fi­nanc­ing,” said the min­is­ter.

Mean­while the EIB pre­sented its 2017 EIB Group Sur­vey on In­vest­ment and In­vest­ment Fi­nance.

Speak­ing at the pre­sen­ta­tion in Ni­cosia Fi­nance Min­is­ter Harris Ge­or­giades said the EIB plans to fi­nance small and medium-sized busi­nesses, through lo­cal banks, based on gov­ern­ment guar­an­tees. The sur­vey said un­cer­tainty, en­ergy costs, reg­u­la­tion, skills and ac­cess to fi­nance are the ma­jor im­ped­i­ments for fu­ture in­vest­ments in Cyprus.

Around nine in ten firms in Cyprus consider un­cer­tainty about the fu­ture (90%) and en­ergy costs (89%) as ob­sta­cles to in­vest­ment activities.

It also showed that in­vest­ment ac­tiv­ity re­cov­ered in Cyprus dur­ing 2017, but in­vest­ment lev­els were still be­low the pre-cri­sis lev­els.

The high­est pro­por­tion of firms ex­pect­ing to in­crease their in­vest­ment in the cur­rent fi­nan­cial year is in ser­vices. pro­gramme backed by the EIB in part­ner­ship with lead­ing banks in Cyprus.

The new EUR 30 mil­lion tranche was signed be­tween EIB and RCB Bank un­der the Cyprus Banks Loans for SME and Mid-caps V.

Cypriot com­pa­nies can now ben­e­fit from longer term loans and favourable rates.

The new fa­cil­ity fol­lows the suc­cess­ful al­lo­ca­tion of EUR 60m un­der the Cyprus Banks Loans for SMEs and Mid-caps III and IV by RCB.

RCB chair­man Panayi­o­tis Loizides said the re­mains com­mit­ted to help­ing Cypriot busi­nesses.

“We are pleased to ex­tend our co­op­er­a­tion with the EIB, which al­lows us to pro­vide at­trac­tive fi­nanc­ing to Cypriot SMEs and Mid-caps, which fa­cil­i­tates their in­vest­ment plans and growth.

RCB Bank has sub­stan­tially in­creased lend­ing to Cypriot busi­nesses and re­mains fully com­mit­ted to fur­ther deep­en­ing its con­tribut­ing role in the Cyprus econ­omy”.

New in­vest­ment by Cypriot com­pa­nies is cru­cial to har­ness new busi­ness op­por­tu­ni­ties, create jobs and en­able firms to build on proven suc­cess, said EIB Vice Pres­i­dent Jonathan Tay­lor.

The ini­tia­tive is part of a EUR 1 bil­lion pro­gramme by the EIB, which pro­vides low cost fund­ing to Cyprus banks which in turn pass on this fi­nan­cial ben­e­fit to el­i­gi­ble lo­cal SMEs and Mid-caps. So far EUR 750 mil­lion has been signed with fi­nan­cial in­ter­me­di­aries.

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