NORDIC INVESTMENT BANK DECEMBERMAY 20092008

Winds of change Danish DONG Energy is building the world’s largest offshore wind turbine park

Here comes the sun Solar silicon production takes off in Norway

Financing environmental action NIB sharpens its focus CLEERE and BASE lending facilities in operationin non-member lending letter from the president letter from

Focusing PHOTO: TUOMO MANNINEN

In the last few years, the Nordic Invest- the . The second is CLEERE agreements in place. Such wide geo- ment Bank (NIB) has focused its activi- (the Climate Change, Energy Efficiency graphical coverage has been useful to ties in different ways. This has been and Renewable Energy lending facility), many of NIB’s sponsors and it spreads deemed necessary in order to ensure which is using EUR 1 billion for the the risks in the Bank’s lending portfolio. that our limited human and financial financing of clean energy and energy At the same time, it also by necessity resources are used in the most efficient way. saving. The HELCOM process is taking reduces NIB’s ability to support its partners When revising its strategy in 2006, time to implement and many of the when and if problems emerge. Given its NIB looked for activities in which the environmental projects have long lead financial resources, NIB’s presence in relative strengths of the Bank could best times, so the first facility still has consid- most of the framework countries is very be employed. Hence, we identified erable unspent resources. CLEERE has thin, and NIB is only a marginal player. projects that require long-term financing, been met with high immediate demand, Given its limited human resources, which are cross-border in nature, and in and more than half of the allocated NIB cannot offer expertise in so many which there is a strong link between the resources were spent in the first 10 countries. Taken together, this limits the private and the public sectors. And, of months of its existence. possibility to cooperate with local course, these activities must be of high By better focusing its activities, authorities and it also makes it difficult priority in the member countries. the Bank can increase and utilise its to analyse and follow the development As a result, energy (including energy expertise when it comes to technical of risk. efficiency and clean energy), the envi- solutions and, in particular, when it By concentrating on a limited ronment, transport, logistics and com- comes to designing financial packages number of markets—those most important munications, as well as innovation were suited to the activities mentioned above. for the member countries—the Bank identified as focus sectors for the Bank. This capability has proved increasingly can increase its presence and relevance These are not new areas for NIB as such: important in times of stress in the finan- to the host countries. This enables more most of them have always featured heavily cial markets, when the supply of long- intensive cooperation with the countries in the Bank’s portfolio. This makes it term funding from many traditional and the respective authorities. It will also possible to build on existing experience sources has dried up, and the private make it possible for the Bank to further within NIB. financial sector has a reduced interest develop its expertise in different markets In order to increase our ability to be and ability to provide finance. and thereby deliver greater value to its proactive and to further enhance support In 2009, the Bank also decided to stakeholders. for these activities, two facilities were focus its activities geographically. The established in early 2008. The first is Bank has over the years developed April 2009 BASE (the Baltic Sea Environment framework agreements with many Johnny Åkerholm, President and CEO lending facility), which has allocated countries in different parts of the world. EUR 500 million for the cleaning up of There are currently almost 40 such

2 BULLETIN MAY 09 BULLETIN mAy 2009 4 Solar silicon production takes off in Norway Orkla-owned Elkem solar As has launched Contents a metallurgical plant for smelting solar-grade silicon in kristiansand 8 Steelmaker invests in clean technology Finnish is signifi cantly reducing its environmental impact

10 Loan improves household wastewater the president letter from cleaning and insulation The Fredriksson family has received a NIB-fi nanced environmental loan from a local bank 12 Busiest road in becomes a motorway after fi fty years The fi nal stretch of the -Turku motorway opened in early 2009 14 High-speed trains cut distance and save nature swedish railway operator sJ has ordered 20 new trains 16 NIB sharpens its focus in non-member countries Interview with Head of lending Nils E. Emilsson 18 Loan structure offers benefi ts Interview with Head of Project and structured Finance Joe wright 20 Energy projects fi nanced in the Baltic countries PHOTO: ykkösTIE Oy 22 NIB aims to raise EUR 4 billion in 2009 Interview with Head of Treasury lars Eibeholm 23 NIB in brief

BULLETIN pUBLISHER COvER pHOTO NIB Bulletin is published in English. NOrdIC INVEsTMENT BANk Metallurgical furnace at Elkem solar As, Fabianinkatu 34 Norway. Photo: Tore Jonssen, TEAm P.O. Box 249 Elkem solar As director of Communications FI-00171 Helsinki, Finland Jukka Ahonen, dimitrijs Alehins (editor), Telephone +358 10 618 001 NEW SUBSCRIpTIONS linda Hintze, kyra koponen, Fax +358 10 618 0725 Telephone +358 10 618 001 Joan löfgren, Pamela schönberg Internet www.nib.int or www.nib.int E-mail [email protected] Layout CHANGE OF ADDRESS McCann worldgroup Helsinki Fax +358 10 618 0723 printed by Erweko Painotuote Oy, Helsinki

BULLETIN MAY 09 3 enerGY le rene WAB

Furnace flames: where solar-grade silicon is born.

Solar silicon production takes off in Norway

In late 2008 – early 2009, The Elkem Solar plant is a result of 25 industry and has been working on the Norwegian Orkla-owned years of research and development of a development of silicon for solar cells Elkem Solar AS completed viable metallurgical production process and electronics since the early 1980s. for solar-grade silicon. Although the first solar-grade sili- a new metallurgical plant “Our aim is to industrialise a proc- con line was discontinued due to the for smelting silicon and ess that will result in lower costs and is lack of sufficient demand from the mar- tested its innovative better suited to producing large vol- ket, the company did not stop its re- production line in umes than other, more traditional tech- search and development in this area. Kristiansand, southern nologies in the industry,” says Helge And in 2006, after Orkla had taken Norway. The project has Aasen, Senior Vice President, Business over Elkem and incorporated it into its Unit, at Elkem Solar. group, an investment project worth been partly financed with NOK 2.7 billion (EUR 300 million) a loan from NIB totalling SOLID COmpETENCE was launched to build the new solar EUR 145 million. As one of the world’s leading producers silicon plant in Kristiansand. of silicon metal, Elkem Solar has a centralised R&D environment with SOLAR GRADE mEANS pURE more than 150 scientists and techni- Once the plant is commissioned later in cians employed. The company has built 2009, Elkem Solar aims at producing strong relations with the electronics 6,000 tonnes of solar-grade silicon a

4 BULLETIN MAY 09 enerGY le rene WAB r A s sO lA ONssEN , Elk EM J PHOTO: T OrE year. In solar cells, this amount of sili- Most competitors still use a gas Elkem is now helping implement con is able to produce 650 MW of en- deposition method for purifying sili- the same gas particle filtering in metal- ergy, or an electricity supply for a town con, which is an energy-consuming lurgical plants in China. of 55,000 for a year. and costly process. Solar energy is not the only indus- The metallurgical production proc- TINy SHARE, OpTImISTIC try that uses silicon, but it sets high ess at Elkem Solar is a step up com- OUTLOOK standards for silicon purity. In order to pared to major silicon producers in the It was a bold decision made back in achieve the necessary level of purity, world which use gas phase technology 2006 to start up the industrial produc- the Elkem Solar plant uses new, patent- requiring lot of energy. tion of solar-grade silicon feedstock. ed technology based on Elkem’s long “The energy savings possible in our Today silicon may well have won the traditions in the field of silicon production. production process stem exactly from competition among materials for solar The final product of the plant is a skipping this phase. This helps us save cell production. The solar energy share brick-sized 10-kilo ingot made of puri- energy and cut costs,” says Mr Aasen. of total global electricity production is fied silicon. Solar cell manufacturers Compared to its competitors using only 0.23%. Solar energy is and will melt and crystallise it into ingots. After gas phase technology, Elkem consumes continue for some time to be depend- the ingots are cut into wafers, then about one third of the energy. It also ent on state subsidies to make it finan- dopings and other enrichment are add- keeps its gas emissions to the air at the cially viable for consumers even in the ed to make them capable of converting level of one third compared to other sunniest parts of the world, such as sunlight into electric power, thereby solar-grade silicon producers. Spain or California. becoming solar cells. Elkem Solar’s furnace produces Yet, the solar market seems to be less 600,000 cubic metres of waste gas an affected by the global financial and INNOvATIvE AppROACH hour, but you see no smoke from economic crisis. Elkem Solar is confi- Elkem’s final product contains a low Elkem’s chimney. dent and optimistic about the future. amount of phosphor and boron, widely “There used to be a huge white Its contract with German Q-Cells, the used in the industry for controlling cloud rushing up from the silicon fur- world’s largest solar cell producer, for silicon’s electrical properties. An advantage nace before we introduced a filtering half of Elkem Solar’s production is in of Elkem’s product is that it is ready to use. technology that cleans the hot gases,” force until 2018. It does not need any additional doping. Mr Aasen explains.

BULLETIN MAY 09 5 ADVANTAgE Of SOLAR ENERgY

In comparison with other commercially available energy 30 th AnniVersArY sources, solar allows for relatively reneWABle enerGY reneWABle small–scale electricity production close to the end user. This means that there are substantial savings in transmission costs and grid rent. Solar energy can potentially reduce the need to increase the transmission capacity of the electricity grid. Furthermore, solar installations are more or less maintenance–free for more than 20 years. Solar energy can build a strong niche position as a potential supplier of decentralised electricity production. In areas with plenty of sunshine, for instance in California, solar energy is being used for cooling and air conditioning during the peak hours of sunshine. PHOTO: ElkEM sOlAr As

Elkem solar Technology Park in kristiansand.

In its World Energy Outlook comes down to the module installation The industry is learning to get more published in November 2008, the cost and of course how many sun and more out of silicon. The thickness of International Energy Agency (IEA) ex- hours you have,” says Mr Aasen. the silicon layer used for wafer produc- pects modern renewable technologies to A country like Spain, with its 1,800 tion was 0.2 millimetres three years ago. become the second-largest source of sun hours a year, will clearly reach grid Now it’s 0.16 millimetres. electricity soon after 2010, next to coal. parity much faster than a country like Falling costs, higher fossil fuel prices Norway, with no more than 800 annual ORKLA AND SOLAR ENERGy and strong policy support would help sun hours on average. With roots dating back to 1654 when it eliminate the renewable industry’s reli- “It is a general belief in the industry began as a mining company, Orkla has ance on subsidies and bring emerging that costs will be much lower within developed into a large international technologies into the mainstream. the next three to six years,” Mr Aasen group with stakes in a vast variety of The IEA expects solar energy, along adds. business sectors, such as branded con- with wind, geothermal, tide and wave Cost reduction is one of the prior- sumer goods, aluminium solutions, mate- energy, to grow faster than any other ity areas for Elkem’s R&D. The target is rials, renewable energy and fi nancial in- source worldwide, at an average of 7.2% to reduce the costs of electricity sup- vestments. The group has a turnover annually. The share of non-hydro renew- plied to the consumer by at least 20% of NOK 66 billion (EUR 7.5 billion) ables in total power generation is ex- from the current level by 2010. and 32,000 employees in more than pected to grow from 1% in 2006 to 4% “This will only be possible on the 40 countries. in 2030. basis of further development of indus- In recent years, when it gradually trial know-how. The industry is trans- became clear that solar energy was de- COST REDUCTION A pRIORITy forming itself from a craft industry veloping into an attractive market, Orkla “The competitiveness of solar energy producing small volumes, into a large- allocated a substantial amount of capital depends on how soon we reach so-called scale industry. If the costs are cut as for further investment in this industry. grid parity, that is, when the solar energy planned, the solar industry will become Since 2005, Orkla has had two important price is at the same level as more con- competitive in large geographical areas,” interests in this industry: Elkem Solar and a ventional energy sources. All in all, it Mr Aasen explains. stake in another important solar energy

6 BULLETIN MAY 09 reneWABle enerGY reneWABle

Helge Aasen, senior Vice President and general Manager of Elkem solar

company in Norway, Renewable Energy INDUSTRIAL SILICON Corporation ASA (REC). “These companies were identifi ed Silicon is a semiconductor produced from quartz and coal in a metallurgical as having signifi cant potential for value furnace at a temperature of 2,000 degrees Celsius. Today, thin slices of creation. It is a major investment in a silicon, called wafers, comprise 90% of materials used for the production of high-growth industry. Together with solar cells. Traditionally, the most important customer groups for this metal Orkla’s stake in REC, the Elkem Solar have been the aluminium, chemical and electronics industries. Electronics plant represents a strategically important has been one of Elkem’s priority customer groups. Today, Elkem-produced position in this industry,” says Geir Solli, silicon can be found in processors and other components in about half the Senior Vice President of Finance at Orkla. world’s computers. Speaking about the loan received from NIB for the Elkem Solar investment programme, Mr Solli adds: “The new loan confi rms NIB’s posi- tion as an important lender to our group. Orkla has enjoyed good relations with NIB for many years. Based on its fi nancial strength and long-term perspective, NIB adds value as a reliable, attractive source of long-term fi nancing.”

silicon ingots, 9.5 kilos each,

ready for delivery. PHOTO: ElkEM sOlAr As

BULLETIN MAY 09 7 ies

A seven-year-maturity NIB loan worth EUR 30 million has been granted to hnolo G help fund modernisation of the blast

te C furnaces at Rautaruukki’s biggest steel plant on the Baltic coast in Raahe,

ner northern Finland. The work will help bring the manu- le A

C Steelmaker facturing process up to date with the latest environmental and technical standards demanded by the European Union. invests The blast furnace improvements and new installation in the cast house will also reduce dust emissions by 50% when in clean new filtering and ventilation technology has been installed at the 530-hectare technology plant. ENvIRONmENTAL EFFECT When the upgrade is completed, sintering Rautaruukki, a leading Finnish steel operations at the plant will no longer be producer, is significantly reducing necessary, significantly reducing the plant’s emissions into the atmosphere. its environmental impact with the For NIB, the loan to Rautaruukki help of NIB financing. is directly in accord with the Bank’s key strategy of environmental improvement, as well as promoting competitiveness. From the environmental mandate point of view, the project will result in significant decreases of emissions that affect both the global and local environment. A key environmental benefit of the improvements funded by the loan is a substantial decrease in sulphur and dust emissions from the factory. In addition, the investment will mean a reduction in suspended solids discharged into the Gulf of Bothnia.

STEELmAKING NOT NECESSARILy DIRTy Rautaruukki supplies metal components and systems to the construction and mechanical engineering industries. Steelmaking is traditionally seen as a dirty and polluting business. But Rauta- ruukki has always seen itself as a company challenging that perception. “We have always tried to operate responsibly and have been investing heavily in clean technology step by step. The NIB loan is allowing us to continue this commitment to the environment,” Rautaruukki’s development director Erkki Pisilä shouts above the din in the plant’s hot rolling area.

8 BULLETIN MAY 09 ies

External recognition of the steel- maker’s environmental commitment has come from a number of quarters. Rauta- hnolo G

ruukki has been ranked among the top te C companies in the Carbon Disclosure

Project (CDP) Nordic assessment. The ner CDP evaluates each year how companies le A

are responding to the challenges of climate C change. The CDP is an independent, not-for-profit organisation that assesses large corporations on the basis of the risks and opportunities they recognise from climate change. In September 2008, Rautaruukki was included in the Dow Jones Sustainability World (DJSI World) index and, for the second year running, in the Dow Jones STOXX Sustainability (DJSI STOXX) index. The indexes include the top compa- nies in their sector that are committed to sustainable environmental development. The company is obviously taking its responsibility to the environment seriously. “We will even be filtering and treating the snow and rain water that fall on the site, to ensure that if it ends up in the sea, it will be clean,” Mr Pisilä adds.

INCREASING REvENUE FROm mORE EFFICIENT RECyCLING wl Ey The Raahe plant is capable of producing 2.5 million tonnes of hot metal per year. The steel manufacturing work means there is inevitably plenty of waste. In one HOTOs: sEAN Cr O

section of the huge Raahe works there P are mountains of slag and other by-products which can be used by other industries, for instance the concrete industry and agricul- ture. Luckily, slag has many commercial uses. After it has been reprocessed to separate any other metals that it may contain, it is granulated for use as fertilis- er, in cement and as a durable road base material. NIB’s loan is set to make the slag granulation process much cleaner by introducing new production techniques that will conform to exacting new EU standards. Although the company recycles what it can, the loan will help reduce the amount of material that is surplus by 25%. This is seen as a win-win situation as it will not only be good for the envi- ronment, but also increase revenue as less material is thrown away.

BULLETIN MAY 09 9 ies

hnolo G Loan improves te C ner household wastewater le A C cleaning and insulation

In a valley on the outskirts of a beautiful residential area, a summer house is being renovated for year-around living. The renovation will make important contributions to the environment by decreasing both nutrient discharges into watercourses and emissions to the air.

Terhi and Leif Fredriksson were born and have lived all their lives in Helsinki. As they near retirement, the idea of moving to their summer house perma- nently is becoming a reality. The house is situated in Salo, a middle-sized city some 100 kilometres northwest of Helsinki. “The house has a special place in my heart,” says Terhi. “My grandparents bought the summer house in the early 1950s and I spent most of my summer holidays here in my childhood and youth.” In those days the surroundings were cultivated land, but over the years, as the city of Salo has grown, the area has been filled with one-family houses, lived in permanently. For Leif, the house and the surround- ings are also very familiar. Since the 1980s, Terhi and Leif and their children have spent their summer holidays and Terhi and leif many weekends from March to October Fredrikssons’ at the house. house in salo.

wastewater is treated on-site.

10 BULLETIN MAY 09 ies

Loan improves hnolo G te C household wastewater ner le A cleaning and insulation C

“This is an idyllic place to live in,” says Terhi and leif Fredriksson. In summer, they will move permanently to their beloved house in salo. kssON dr I WASTEWATER IS CLEANED ON SITE

Back in the 1950s, summer houses were : lEIF Fr E built with neither running water nor indoor toilets. As Terhi and Leif are PHOTO s going to live in the Salo summer house permanently, they decided to enlarge the house and install modern conveniences. The clean water comes from the nitrogen and phosphorus discharge The environmental loan is the result municipal water utility but wastewater originates from untreated wastewater in of cooperation with NIB, which in May is not yet connected to the municipal rural residential areas and agriculture. 2008 granted intermediary loans of discharge treatment system and will not EUR 30 million respectively to two be for another ten years. Finnish legisla- HOUSE INSULATION WILL Finnish banks—Aktia Bank and Sampo tion sets requirements for household BE ImpROvED Bank. NIB’s loans are being onlent in wastewater treatment. According to the “When the work on the enlargement smaller tranches by the intermediary law, all households that are not connected of the house began, the builder suggested banks. Terhi and Leif Fredriksson’s envi- to municipal wastewater treatment that we install modern insulation lami- ronmental loan from Aktia is a good ex- systems must, by 2014, clean their waste- nates around the whole house at the ample of how NIB can contribute to water on site before it drains into the same time,” says Leif. small-scale environmental investments ground and watercourses. Better insulation improves energy that decrease diffuse emissions. That is why the Fredrikssons decided efficiency and thus offers significant Terhi and Leif’s year-long house to install their own wastewater treatment environmental benefits, because of de- renovation project will be finalised in the equipment while renovating and enlarg- creased emissions to the air. beginning of the summer. The deep hole ing their house. In their garden, a four- “Even though this of course increased is filled and the apple trees that have been metre-deep hole was dug to place two the costs, we agreed with the builder— growing in the garden for decades will discharge containers and handling efficient insulation decreases energy use have the peace to grow and provide the cassettes for the wastewater treatment. and is smart from an environmental point Fredrikssons with apples in the autumn. On-site wastewater treatment is an of view,” he adds. After years of driving back and forth efficient way to decrease so-called diffuse between Helsinki and Salo, Terhi and emissions, which are emissions from large NIB LOAN pROvIDES THE FUNDS Leif can also be proud of another envi- areas, or from several emission sources When Terhi and Leif were discussing ronment-friendly fact: less driving means that are hard to identify. The discharge of applying for a loan from Aktia Bank, lower emissions. nitrogen and phosphorous is considered their bank manager suggested that the “It turned out to be ecological to be one of the biggest reasons for the wastewater treatment and the house thinking from start to finish,” Leif says eutrophication of the Baltic Sea. In the insulation could be financed with an with a smile on his face. Baltic Sea area, a significant part of the environmental loan.

BULLETIN MAY 09 11 elopment de V re Busiest road

strUC tU in Finland infr A a motorway after fifty years

The final stretch of the E18 motorway between Helsinki and Turku in south- western Finland was opened in early kkösTIE Oy y

2009. The section was built in record- : breaking time. PHOTO s

“This last stretch was built in three years,” even though the actual road length is smoothly in spite of the topography,” says Tom Schmidt proudly. He is the just a few kilometres shorter than before. explains Mr Schmidt. Managing Director of the special-purpose The E18 is Finland’s busiest road in company Tieyhtiö Ykköstie Oy. an east-west direction and the most SAFETy pARAmOUNT “All in all, it has taken over 50 years important route for international traffic Improving safety was a key reason to to build the whole motorway from Hel- in the country. upgrade the busy route. The old road sinki to Turku. The first stretch was built The new road section is exceptional was crowded and the scene of several in the late 1960s, and now, finally, we in Finnish terms. Tunnels comprise one- bad accidents. The new road is now have a full-length motorway.” tenth of the road, due both to the to- three times safer than the old one, and it Now that the 51-kilometre stretch of pography and the desire to reduce the is estimated that over the next ten years road is completed, the entire 160-kilo- environmental impact. there will be fifty fewer fatalities and 250 metre route between Helsinki and Turku “The area has deep rock cuttings, fewer injuries. Safety features include is a four-lane dual carriageway. The banks and narrow valleys of fields or interchanges, separate lanes, high animal completed section cuts the driving time woods between high rock ridges. The fences and landscape contouring. between the two cities by half an hour, tunnels enable the motorway to pass

muurla-Lohja The road project was paimio-muurla Approved in 2002, Opened to traffic in 2003. construction in Lohja-Lohjanharju for the section between 2005-2009. Construction started at the beginning of 2004. Muurla and lohja and Open to traffic at the end of 2005. was the largest of its Turku-paimio section built in kind in Finland. 1997.

Helsinki-Lohjanharju section built in the 1960s.

12 BULLETIN MAY 09 In the tunnels, preventive safety is LIFE-CyCLE mODEL mEANS Another important aspect of the crucial. All seven tunnels consist of two EFFICIENT BUILDING life-cycle model is the distribution of risk. separate lanes, with connecting points The motorway stretch was implemented “The main principle is that the risk every 250 metres. Twin tunnels eliminate as a public-private partnership, also is taken by the party best placed to handle elopment the risk of head-on collisions, and facili- known as the life-cycle model. In this it. The service provider, that is Ykköstie, tate rescue work in case of emergency, model, public and private sectors work takes the technical risks and the client, in de V such as fire. together within the framework of a this case Finnra and the Finnish state, re “The tunnels are equipped with long-term agreement. The life-cycle takes the political risks,” states Mr Schmidt. state-of-the-art systems for supervision, model is based on the principle that the traffic control and safety,” says Mr Schmidt. state purchases the construction work, ImpROvED INFRASTRUCTURE

the maintenance and the financing of STRENGTHENS COmpETITIvENESS strUC tU WILDLIFE INFLUENCED pLANNING the road from a private contractor. Kim Krokfors, Senior Manager, Lending, AND BUILDING For this project, the Finnish Road at NIB, says that this is an important The diverse wildlife in the area has to be Administration (Finnra) purchased plan- project for the Bank. He explains: infr A catered for in both the planning and ning, construction and financing from “One of NIB’s focus areas is trans- construction of the new road section. Tieyhtiö Ykköstie Oy. Ykköstie is jointly port and logistics, and the E18 is crucial “The road is sometimes dubbed ‘the owned by Swedish Skanska, British John for the whole of southwestern Finland. wilderness motorway’. The tunnels make Laing and Finnish Lemminkäinen. Improved transport links support the it possible for animals, such as moose, to “The project has not been dependent economic and social development of this roam the area freely. The routes of the on funds from the national budget, a fact region.” rare flying squirrel were taken into that enabled the short building time,” In the long term, its is not just a mat- consideration in the very early planning says Mr Schmidt. ter of the motorway between Helsinki phase. A total of 40 crossings were NIB participated in the funding of and Turku, but a motorway all the way provided for flying squirrels, and in one the road construction project with a to the Russian border. According to location fully-grown trees were planted long-term loan of EUR 77 million to plans, this will be complete by 2015. between the lanes—a sort of an emer- Ykköstie. The loan disbursements started The E18 is part of the trans-European gency landing strip,” notes Mr Schmidt. in late 2005, when the construction transport network known as the “Nordic

The environmental approach to the work began. The total cost of the construc- Triangle” and is one of the EU’s 30 pri- design and building of the road meant tion phase amounted to EUR 300 million. oritised transport corridors. The triangle local inhabitants were also taken into Other financiers include the European links the Nordic capitals of Oslo, Stock- consideration. Investment Bank, Finland Abp, holm and Helsinki with the Russian The tunnels reduce noise and keep Svenska Handelsbanken AB and the border and improves links with Central the landscape intact, both important from Royal Bank of Scotland. Europe. The road network is important an ecological and aesthetic point of view. Ykköstie is also responsible for the for the free movement of people, goods Above the longest tunnel, running for 2.2 service quality and maintenance of the and services, and thus for the economic kilometres, the wilderness was preserved road. Finnra pays a service charge to and social development as a result of the combined efforts of the Ykköstie which is based on the availability of the EU. City of Lohja, local inhabitants and of the road; if, for instance, the road is Ykköstie. Funds for the preservation were closed, the charge decreases. The service raised by organising the Five Tunnel Mar- agreement runs up until 2029—when athon event in October 2008. Finnra will take over the road.

BULLETIN MAY 09 13 elopment de V re

Significant infrastructure development

strUC tU is needed to maintain the competitive High-speed trains advantage of the railway in . CEO Jan Forsberg of the Swedish infr A passenger railway company SJ AB says cut distance and that the biggest challenge is keeping to timetables. “A general rule is that a maximum of 80% of the railway capacity should save nature be in use. This concerns both the rail network and the power supply. On our railways, the capacity reaches 100% The Swedish railway system has great challenges continually. As the railways and the ahead of it. As travelling by train is becoming even power supply are overloaded, even a more popular, both the capacity of the railways small delay is dramatic. A domino effect and the power supply need to be increased. starts, and all trains are delayed,” says Mr Forsberg. J AB s HOTOs: P

14 BULLETIN MAY 09 “We need to be reliable in order to ADDED vALUE ATTRACTS be able to compete with airlines and pASSENGERS NIB fINANCINg fOR 20 cars,” Mr Forsberg adds. In order to attract new train travellers, hIgh-SpEED TRAINS Due to the load on the infrastructure, SJ is focusing on providing passengers elopment it is difficult to increase the number of with added value. Old trains have been SJ has ordered 20 new high- departures, but it is possible to make the renewed, both visually and as concerns de V speed trains from Canadian trains longer. SJ assumes that expanded travel comfort. SJ has also put much Bombardier Transportation. NIB re train capacity will increase the market effort into training and the development is contributing to the financing share of train travel. of its personnel with a view to improv- with a loan of EUR 45 million. In Sweden, around 15% of journeys ing the service-orientation among the “One of NIB’s focus areas is over 100 kilometres are travelled by train, staff. strUC tU the financing of infrastructure almost 70% by car, 13% by air and 5% by bus. Other services include improved investments. The development restaurant carriages, conference compart-

of infrastructure is a key factor infr A COmpETITION IS INCREASING ments, office services, such as an Internet for competitiveness,” says Ulf Not only cars, planes and buses are com- connection, as well as quiet compart- Westergård, Senior Manager petitors of SJ. A law on the deregulation ments for those who want to work or of NIB. of passenger train traffic in the country, relax on the train. SJ’s new trains will offer travel- which will come into effect in the be- “Of course, basic things such as safety, lers reduced travel time and ginning of January 2010, will change the punctuality and efficiency need to be in improved comfort. competition significantly. The deregula- place, as well,” says Mr Forsberg. SJ operates passenger rail tion opens the market for any railway services from 350 stations and company and allows any service provider ENvIRONmENT-FRIENDLy WAy is the largest passenger rail- to start trafficking on Swedish railways. OF TRAvELLING way operator in Sweden. SJ’s “On the other hand, for the deregu- These days, when environmental issues market share amounts to some lation and competition to work, we need are on everyone’s minds, the train has a 55% of all passenger train to increase the network and power sup- strong advantage compared to cars and transport in Sweden. ply. If the infrastructure capacity cannot airplanes. SJ only buys renewable elec- absorb the increase in traffic, other ser- tricity from hydroelectric and wind vice providers will not be interested in power sources and the production of entering the market,” says Mr Forsberg. electricity for the trains causes minimal A recent market study on high-speed emissions. rail traffic in Sweden, in which SJ has For example, an average car emits 89 taken an active part, suggests that an kilograms of carbon dioxide into the air expanded high-speed rail network would during a one-way trip from have substantial benefits for the country. to Gothenburg, some 470 kilometres. An Shorter travel times, enhanced possibili- entire SJ train, carrying up to 300 pas- ties to meet environmental targets and sengers, emits 400 grams. The differences other advantages would add up to im- become even more pronounced if you proved competitiveness for Sweden’s compare trains with planes. A single economy. plane emits as much as six tonnes of In Sweden, as well as in many other carbon dioxide on that same route. European countries, demand for high- According to Mr Forsberg, it is a speed train travel is increasing. SJ has force of habit that people go by car or responded to this demand by introduc- by airplane instead of by train. By offer- ing new high-speed trains as well as ing services and possibilities that neither engaging in product and service devel- cars nor aircraft can offer, SJ wants to opment. Fast and comfortable train serv- encourage more people to use the train. ices are vital for many parts of Sweden. High-speed trains make distances shorter and bring communities closer together. Many studies have clearly shown that time is the most important factor when people consider means of travel. The decreased travel time in combination with higher departure frequency is assumed to lead to train travel taking Jan Forsberg, CEO of the market shares away from air and road swedish passenger railway travelling. company sJ AB.

BULLETIN MAY 09 15 ntries oU

er C NIB sharpens its focus mem B in non-member lending non - Head of Lending: The aim is to deepen relations and increase the Bank’s presence. niB in

The main lending activities of NIB are economies, the most prominent ones Does this move reduce the level in its eight member countries—Den- being Brazil, China and India. Howev- of NIB’s activity in non-member mark, Estonia, Finland, Iceland, Latvia, er, all cooperation framework agree- countries? Lithuania, Norway and Sweden. Howev- ments entered into with other coun- “No, in the longer term, the Bank ex- er, since the 1980s, NIB has been financ- tries will remain in force. pects activity to remain at the present ing projects in non-member countries. level, although in the current very diffi- Over the years, this has become a per- cult economic situation with a scarcity manent part of the Bank’s activities, of credit in the Bank’s member coun- comprising approximately one fifth of its tries, there may be a temporary shift lending stock. Recently, NIB has decid- towards financing projects there.” ed to intensify its cooperation with a limited number of non-member coun- Focusing means concentrating on a tries where there is a high degree of limited group of countries. Why is interest on the part of project partici- NIB doing this now when interna- pants and much potential for fulfilling tional financing flows are declining NIB’s mandate. The aim is to deepen and project owners have problems relations and increase the Bank’s pres- in financing their projects? ence in these countries. “By increasing its focus, the Bank will, Nils E. Emilsson, First Vice-President in fact, be better equipped to provide and Head of Lending at NIB, explains the financing for projects that are important background to the decision. to project sponsors and cooperating partners. It should be remembered that Why did NIB want to select focus NIB, as an international financial institu- countries? tion, plays a different role compared to “As an international financial institution, the institutions financing trade. The NIB finds it important to develop close Bank provides financing for projects cooperation not only with its borrowers which fulfil its mandate and are of mu- but also with the authorities of the bor- tual interest to the borrowing countries rowing country in order to lay a strong and the Bank’s member countries.” foundation for a mutually beneficial Nils E. Emilsson, First Vice-President relationship. By focusing its activities on and Head of lending at NIB. What do you mean by an a group of countries, the Bank will be “increased presence” in focus able to secure continuity of operations, countries? deepen its contacts with key counter- “As a relatively small institution, NIB is, apart parts and increase its level of activity.” Does this new focus signal a big from having local representatives in China, change in NIB’s activities outside India and Russia, working from a distance. Which areas will be of primary the member area? By focusing its activities, the Bank will be in interest for NIB in the future? “Actually, the change is not so big. In a position to engage in a more fruitful dia- “The neighbouring area, that is, the recent years, clearly the largest part of logue with local authorities and stakeholders Baltic Sea region including Poland and the lending outside the member region and to foster long-term relations. This can Russia, as well as Ukraine, will continue has already been to the focus countries. also be expected to provide a basis for agree- to be a priority area. In addition, the This reflects the main trend in demand ing on a more elaborate strategy framework, Bank will further develop its coopera- and the opportunities for the Bank to which is already the case in some countries tion with some of the major emerging identify projects that fulfill its mandate.” of operation. ”

16 BULLETIN MAY 09 p NDEp treatment inSt.p and Felixkarmazinov(Vodokanal). Heikki Cantell,NilsE.Emilsson(both NIB) the emission of greenhouse gases,the emissionofgreenhouse but it newable forcontrolling energyiscrucial and promoting renewable energy. Re- energy launched apolicyonconserving ence onfossilfuels, thegovernment has duction. usage ofnon-conventional energypro- hastaken action toincreaseernment the by theuseoffossilfuel, theIndiangov- ronment causedbothlocallyandglobally account thenegative effectsontheenvi- such ascoal, oilandgas. Also takinginto increasingly dependentonfossilfuels becoming has resulted inthecountry India’s growing energyconsumption In order todecrease India’s depend- romoting renewable energyinIndia grantforwastewater in Indiaisgreat. Itisestimated thatwind this share by 2012. capacity. The government planstodouble for 5%ofIndia’s generation electricity ofthecountry.parts population, over 70%live intherural ofthecountry.parts Of the 1.2billion to thevast populationliving intherural energy sectorinIndiaisgettingelectricity founded in1987. ing financialpublic sectorcompany Agency Ltd. (IREDA). Itisanon-bank- Indian Renewable EnergyDevelopment tation ofthispolicywas given tothe India’s energyindependence. also plays role animportant insafeguarding Agency issettosupporttheeffort. from NIBtotheIndianRenewableEnergyDevelopment to reduce itsincreasing fossilfueldependency. Aloan ispromotingThe Indiangovernment renewable energy collection tunnel,collection inoperationsince Wastewater Plant. Treatment and therehabilitation oftheNorthern Petersburg’s sewage collectiontunnel econd channel of St. ofas building the within theNDEP. The project includes implementing agencyforthisproject Vodokanal St. Petersburg. NIBisan by NIBandtheRussianwater utility wasagreement signedinmid-April Programme in St. Petersburg, Russia. of DischargesUntreated Wastewater lion forco-financingtheNeva Closure provided totallingEUR24mil- agrant tal Fund(NDEP Fund)has Partnership DimensionEnvironmenThe Northern - The potentialforrenewable energy At present, renewable energyaccounts One ofthechallengeswithin The responsibility fortheimplemen- The first channel ofthesewageThe first The non-refundable assistance etersburg sectors inIndia.sectors biomass andsmall-scalehydropower ble energyprojects inthewindpower, forrenewa-Nordic andBalticcountries nology andequipmentsuppliesfrom the transfer ofadvanced environmental tech- March 2009isaimedatfinancingthe signed between IREDA andNIBin IBRD andnow alsoNIB. al government, the World Bank, ADB, own fundingsources includethenation- such assugar, paperandtextiles. IREDA’s vation andefficiencywithinindustries has financedprojects forenergyconser- energy inthepower grid. there potentialtousesolar isagreat could produce 86,880MW. Inaddition, power, biomassandwaste energyalone and the World Bank. Federation, theEBRD, theEIB, NIB the European Commission, theRussian andresourcescombines theexpertise of in Northwest Russia. The partnership of urgentenvironmental investments thefinancing to coordinate andsupport of itswastewater. the citywillbeable totreat upto98% channel isinuse, asexpectedin2012, 87% ofalldischarges. Oncethesecond the city’s wastewater treatment level to and theBalticSea. This hasimproved from being dischargedtotheriver Neva per day ofuntreated effluents metres cubic autumn 2008, hasprevented 90,000 A USD 50 million loan agreement A USD50millionloanagreement thepasteightyears,During IREDA The NDEPisacooperative effort

BULLETIN MAY 09 17 niB in non-memBer CoUntries ntries Brazilian Embratel ANNINEN oU

er C receives A/B loan Having Brazil as one of its key non-member countries PHOTO: T UOMO M mem B and telecommunications as a focus sector, NIB provides a new value-added loan to Brazilian Embratel. non - The Bank has provided a USD 200 “Our transactions with NIB are million A/B loan to the Brazilian fixed- a good example of such long-term niB in line telecom operator Empresa Brasileira relationships. We closed a transaction de Telecomunicações S.A. (Embratel). a few years ago which helped a lot in Maria Angélica Oliveira Luqueze, structuring this new one,” says Ms Head of Financing and Insurance at Oliveira Luqueze. Embratel, says that an A/B loan suits The financing will be used for Embratel’s needs, since the loan struc- Embratel’s expansion of its wireless ture will benefit the borrower, as it gets broadband and telecommunications access to a large financial package. infrastructure in Brazil, using state- director Joe wright The B lenders benefit from sharing of-the-art telecom network technology the advantages of NIB’s status as an supplied by Nokia Siemens Networks. international financial institution. “The expansion of Embratel’s in- What are the most important The A loan totalling USD 50 frastructure will not only improve the characteristics of an A/B loan? million has been granted by NIB with efficiency and coverage of the existing “Under an A/B loan structure, NIB a 5-year tenor. The B loan has been network but also bring new technolo- is the lender of record for both the underwritten for the amount of USD gy solutions to customers,” explains A and the B loan, keeping the A loan 150 million with a 5-year tenor by the Ms Oliveira Luqueze. for its own account and syndicating commercial banks Société Générale, Embratel owns the largest telecom- the B loan amongst commercial Santander, Nordea, Natixis, Calyon munications network in Brazil, com- banks. The A/B loan product is and BBVA. prising fibreoptics, submarine cables offered in emerging markets, where Tarja Kylänpää, Senior Director, and satellites. Being at the forefront of NIB enjoys international financial Head of Asia, Latin America, Africa and introducing new technologies to the institution status. The loan structure the Middle East at NIB, explains: national market, the company offers offers several benefits to the borrower “Brazil is one of the Bank’s key non- complete telecommunications solutions and the participating commercial member countries, and telecommunica- for the entire market in the country. banks. The most important character- tions is an essential sector for our opera- For Nordic telecom equipment istic from NIB’s perspective is that it tions. Both contribute to fulfilling our manufacturers, Embratel is strategically permits us to offer larger value financings mandate of enhancing competitiveness. important as a customer for R&D and in pursuit of our lending mandate by A combination of multilateral and com- other product development. By taking mobilising commercial bank lending mercial bank participation in the A/B part in the financing, NIB is strength- alongside our own.” loan arrangement will benefit the ening the Nordic suppliers’ interna- customer.” tional competitiveness. What are the customer’s benefits? Long-term relationships in a “There are three main benefits for frequently changing business environ- the borrower: (i) the A/B loan makes ment are crucial for Embratel. it possible to provide the borrower with a larger value of financing than NIB could provide working alone; (ii) commercial banks are often willing to provide the borrower longer loan maturities under the A/B loan struc- ture than they would otherwise; (iii) through the A/B loan the borrower is often able to diversify its sources of borrowing, for instance, receive loans from banks, including NIB member country banks, that they might not have done business with before.”

18 BULLETIN MAY 09 lendinG prodUCts

Joe Wright, Director, Head of project Loan structure and Structured Finance, explains what opportunities NIB’s new lending product, A/B loans, offers offers benefits the Bank’s customers and partners.

How do commercial banks benefit concerned about foreign currency transfer sistent with our goals that it worked out from lending under NIB’s umbrella? and conversion risks, and about using their that way.” “The commercial banks that participate own capital efficiently, in today’s environ- in the B loan share in NIB’s status as an ment. There has also been fresh interest in What is the role of your unit, international financial institution. In looking at ways for IFIs and commercial Project and Structured Finance, in particular this means protection from banks to collaborate, and the A/B loan the Bank’s lending operations? currency convertibility and transfer risks. structure is a well-proven way to do so.” “The project and structured finance The commercial banks also take comfort team is an expert resource that works from working alongside NIB given the Is it only a coincidence that both with transaction teams to deliver loan Bank’s high standards of due diligence NIB’s first and second A/B loans financings that involve more complex and credit risk appraisal.” are provided to Brazilian telecom risks or financial structures. The team operators? plays a key role in risk identification and NIB started providing A/B loans “NIB’s first A/B loan transaction was mitigation, due diligence, loan structur- last year. What was the reason? concluded with Oi (Telemar Norte ing, and transaction negotiation. The “2008 was a year of very high demand Leste), Brazil in July 2008. This was a team members work across regions in for NIB’s loans, and a year when the Bank USD 100 million A loan plus a USD partnership with the business origination focused on aligning its lending with the 150 million B loan, which was under- teams. Most of the transactions that we competitiveness and environment mandate. written by BNP Paribas and Banco work on are in the energy, infrastructure Both of these factors made it important to Bilbao Vizcaya Argentaria. And in February and environment sectors. We are a team develop mechanisms to offer larger value 2009, we concluded our second A/B of six bankers and an assistant.” financing and mobilise private sector loans loan transaction–with Embratel. alongside our own. Phone operators in Brazil are making What is your professional The implementation of the first A/B enormous investments in rolling-out background? loan in 2008 also marked the culmina- modern networks, making a Brazil a key “I am an economist by training, and I tion of more than a year’s preparatory growth market for Nordic equipment have worked on infrastructure project work, in which NIB collaborated closely makers such a Nokia Siemens Networks financing for 13 years. Before joining with the International Finance Corpora- and Ericsson. The A/B loan is well suited NIB a little over two years ago I worked tion and the European Bank for Recon- to this market given the magnitude of for the World Bank Group, located in struction and Development to ensure the investments required. Washington DC and then in Delhi.” that we offer an A/B loan product of an NIB’s plan is to roll out its A/B loan equally high quality. product in the three largest non-member Have you experienced any changes The timing was good as it turned countries where we have large private in your life after moving to Finland? out, because the banking crisis and the sector lending operations: Brazil, Russia “My wife, Mari, and I had our first child economic recession have made the A/B and India. So, we didn’t plan at the out- shortly after moving here–life changes loan structure even more relevant. For set to target Brazilian telecom operators don’t get much bigger than that!” one thing commercial banks are more for the first transactions, but it was con-

BULLETIN MAY 09 19 ener GY r J. Ol AFssON rd U HOTO: sI gU P New energy for Tartu A peat- and biomass-fired power plant built in Estonia’s second-largest city, Tartu, will help reduce the local economy’s dependence on imported natural gas.

Finnish-Estonian Fortum Tartu AS re- to the plant. CHP plants improve the mand, Fortum Tartu has signed contracts ceived a NIB loan for building a new efficiency of heat production by up to 89%. with peat harvesting sites close to the combined heat and power plant back in “The CHP plant in Tartu is the first city. Wood chips for the new boilers are 2007. The company supplies of Tartu, a of its kind in Estonia. It is an important supplied from producers throughout the city of 100,000 inhabitants. The network step for us at Fortum Tartu, the city of country. covers 85% of Tartu’s households, and Tartu and a milestone in the modernisa- Apart from generating income for produces electricity for export to neigh- tion of Estonia’s energy production,” says contractors, the production and transpor- bouring Latvia. Most of the plant’s old Madis Nommik, Fortum Tartu’s Financial tation of the fuel are creating up to 200 boilers used to be heated with gas, but Manager. new jobs in Estonia, where unemploy- have now been replaced with modern The new plant will cut down on the ment is on the rise in common with units working on peat and wood chips. use of imported gas from 171 GWh in many other countries in . The output capacity of the new facility heat and power output to 20 GWh per The benefits that Tartu households totals 52 MW of heat and 25 MW of year. This is an important reduction for gain from modern heat production are electricity. an economy greatly dependent on the obvious: heating prices in Tartu are 24% CHP plants have become increasingly import of gas from Russia. The Estonian lower than in other areas, where heat common throughout Europe. The tech- economy would benefit from improving production is based on gas. nology is based on consuming less fuel the balance of its current account, “Our heat prices are among the lowest for energy production. This is possible spending less on imported fuel and in Estonia. Local fuel allows us to reduce thanks to the simultaneous production increasing energy exports. the reliance on the costly import of gas of heat and electricity, as well as by min- The annual production of heat and from Russia and it also guarantees a steady imising energy loss during delivery to electricity from peat and wood chips supply,” says Margo Külaots, Chairman of consumers by using heat generated close will total 600 GWh. To secure this de- Fortum Tartu’s management board.

20 BULLETIN MAY 09 ener GY Lighting up vilnius greenfield areas INklAI

A loan agreement with NIB has brought EUR 15 million rsTOMIEJI T to Lithuanian Rytu Skirstomieji Tinklai (RST) for financing the company’s investment programme earmarked for upgrading the power distribution grid in and around

Lithuania’s capital, vilnius. PHOTO: rITU skI

The investment programme includes structure has been available until recently,” the most obvious newbies on the con- the construction and reconstruction of says Mr Stukas. sumer list. transformer substations and distribution RST’s investment has facilitated Areas further afield also receive due points as well as the development of a energy supply to new, large industrial attention and their share of modernisa- network management system. This will consumers. If the area develops as ex- tion. About 1,000 power users in Pan- enable the company to control the main pected, the new substation will soon see evezys County in central Lithuania are equipment of the network by remote the demand for its load capacity increasing now being serviced through a renewed control. by several thousand households. 10 kV distribution point. The moderni- A 110/10 kV transformer substation sation has improved the quality of power and a distribution point have been recently NOT ONLy GREENFIELD transmission to a logistics centre of one built in the vicinity of Vilnius. Although Vilnius’s newly developed or of the country’s major retail operators. “This is a completely new type of greenfield areas are a high priority for Established in 2001 upon the re- distribution equipment. The transformer RST, the historical centre of the city also organisation of a national power utility, substation uses state-of-the-art tools for needs a reliable power supply. RST is a public electricity company controlling and transferring the data kit “Several new hotels are built in the supplying and distributing electrical and is equipped with modern security city every year. The central department energy in Lithuania. The company systems,” explains Vidmantas Stukas, head store has recently been expanded. More currently services the eastern half of the of the RST Network Development companies want their facades lit up. country, including the capital area with Department. One of the bridges over the river Neris its population of 1.7 million. “The city is expected to expand in in central Vilnius has recently lit up,” a greenfield area, where very little infra- comments Mr Stukas, mentioning only

Loan to help revitalise Latvian SmE sector NIB’s loan programme totalling EUR strong potential for improving the coun- Inesis Feiferis, Chairman of Hipoteku 100 million to the Latvian state-owned try’s export competitiveness,” says Johnny banka’s Board, adds that the financing Latvijas Hipoteku un zemes banka Åkerholm, NIB President and CEO. should go to innovative enterprises. “It (Mortgage and Land Bank of Latvia, Latvia’s Minister of Finance, Einars will enhance their productivity and the Hipoteku banka) will provide the Latvian Repše, emphasises the importance of the quality of their output,” says Mr Feiferis. government with a tool to raise the new loan programme for the country in Hipoteku banka is a development competitiveness of the country’s small the current economic situation: “This and retail bank, used by the government and medium-sized enterprises (SMEs). loan provides a significant support for as a tool for implementing development “This financing is aimed at revitalis- Latvian businesspeople who in these projects aimed at promoting SMEs. ing the Latvian SME sector, which is the circumstances are able to develop pro- Hipoteku banka was granted loans from backbone of the Latvian economy. Small duction, keeping existing jobs and creat- NIB for similar projects in 2000, 2002, businesses have been hardest hit by the ing new ones as well as finding markets, 2003 and 2006. recession in Latvia, but they also have thus stimulating the national economy.”

BULLETIN MAY 09 21 ANNINEN tre AsUrY PHOTO: T UOMO M

NIB aims to raise EUR 4 billion in 2009

lars Eibeholm, Head of Treasury

“Timing, pricing and duration are the of NIB’s peers need to issue 15 to 20 positively, the order book was fully keywords for NIB’s funding activities in benchmark transactions per year, NIB subscribed and, in spite of the volatile 2009,” says Lars Eibeholm, Head of only needs one or two. times, the bond was a success,” says Treasury and CFO of NIB. “This fact allows us to make quick Mr Eibeholm. In early April, NIB launched its moves when we see an opening in the “We have strong support from our inaugural 5-year EUR-denominated market—or, if necessary, wait. Our main member countries and our biggest owner benchmark transaction of EUR 1 billion, markets will of course be where the countries have strong economies despite which represents the largest offering investors are: the US, the euro area and the current economic situation,” NIB has made thus far in its main Asia,” Mr Eibeholm continues. Mr Eibeholm points out. lending currency. Iceland and the Baltic countries have “Through this transaction, we are yEAR 2008 FULL OF CHALLENGES been affected by the economic turmoil achieving our goal of diversifying our The year 2008 was tough for the financial more than the other owners of the Bank. funding base and the deal was supported market. The crisis, which escalated in These economies are relatively small, and by many new investors,” states Mr Eibeholm. October, triggered turmoil in the markets. Mr Eibeholm does not believe the NIB’s targets for 2009 are to fulfil the Developments in the financial markets difficulties in these countries will affect funding plan of some EUR 4 billion at increased funding costs in general, also the attractiveness of NIB’s bonds. the best achievable price subject to an for NIB and other supranationals towards “We will continue to grant loans and appropriate maturity and a well-diversi- the end of the year. NIB, though, make commitments in order to support fied investor base. managed to maintain its good access to the competitiveness of the member “It is a matter of timing to get the the funding markets and debt issuance countries. I believe NIB will continue to right pricing,” Mr Eibeholm explains, amounted to a record high EUR 4,681 see good demand from global investors, and adds: “NIB has a small and efficient million in 2008. who are looking at NIB as a strong funding team and we are able to respond “In November, NIB re-opened the AAA-rated issuer,” concludes quickly to funding proposals from both USD benchmark market by issuing a Mr Eibeholm. investors and arrangers.” 3-year benchmark bond of USD 1 billion. Another strength of NIB is its The bond was the first on the market relatively small funding plan. While some since October. Investors responded

22 BULLETIN MAY 09 rief in B IJ s Al EHIN : dIMIT r PHOTO s

dr Atstupens shows the new hospital block.

AppOINTmENTS AT NIB

Credit and Analysis Department

Eliisa Kaloinen (FI) has been appoin- ted Senior Economist in the Mandate Unit. She joins NIB from Askar Capital on Iceland. Hospital upgrade Joakim Widström (SE) has joined NIB as Senior Project Analyst. He has previously worked for Svenska Handels- in eastern Latvia banken in Stockholm and Moscow. Tiina Schildt (FI) has been employed Ludza, a small town 270 kilometres east of Latvia’s as Bank Analyst in the Country and capital Riga, has opened a new block of its hospital. Bank Analysis Unit. She joins NIB after The new facility is equipped with the most modern working for HSH Nordbank Finland. surgical and intensive care equipment in the whole Other Departments eastern part of the country. Timo Nyman (FI) has joined NIB as Senior In 2006, the hospital was one of four renewed in order to restart the construc- Manager at the Work-out Unit in the Lending local medical institutions in Latvia that tion. The construction work was com- Department. He previously worked for HSH received NIB loans earmarked for pleted in summer 2008. This coincided Real Estate AG. modernisation and the purchase of new with the years of high inflation in the Nina Berggren Monsen (NO) has been ap- medical equipment. The loan to Ludza Latvian economy that hit the construction pointed Communications Specialist at the totalled EUR 5.7 million. industry hard. Communications Unit. She previously worked On an area of more than 4,000 “It was very unfortunate. The costs for Norfund. square metres, almost twice as big as the jumped vigorously during 2007 and in old Ludza hospital, the new block houses early 2008. The NIB loan was a sort of a the admissions, operating theatre, the warranty that the project wouldn’t stop. INTERNAL AppOINTmENTS maternity ward and intensive care. It has But we were short of funding and had to Lending Department also added 55 new patient beds to the raise additional funding from the Ludza previous 85. municipality,” explains Dr Atstupens. Vilius girkontas (LT) has been appointed “Now we in Ludza have much The municipality is the owner of the Senior Manager for lending operations more state-of-the-art medical equipment hospital. Close to 90% of the hospital’s primarily in the Baltic countries. compared to any other hospital in east- revenues come from the governmental Tiina Kuusela (FI) and Tony Mäkynen (FI) ern Latvia. The conditions for both the Health Insurance Agency, while the have been appointed Senior Managers at patients and the doctors have improved a remaining part is being covered from the Client & Country Management Unit. great deal,” says Dr Juris Atstupens, patient payments. This situation is typical chairman of the hospital’s board. for the Latvian health care system. Other Departments The implementation of the project The Ludza hospital, founded in 1838, Kai Arte (FI) has been appointed Senior was not without its challenges. Con- services an area with a population of Credit Portfolio Analyst for Risk Management. struction started 25 years ago, but was 33,000. The hospital employs more than halted due to a lack of financing. Four 270 staff, including doctors, nurses and Eva Nickull (FI) has been appointed years ago, the entire block design was other personnel. HR Specialist at the HR Unit.

BULLETIN MAY 09 23 Want to know more about NIB? vISIT OUR WEBSITE WWW.NIB.INT

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