EIB finances oil reserves terminal at Vasiliko
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.