BULLETINnordic investment bank december 2001
Green power in the Nordic region
nib celebrated 25 th anniversary Infrastructure improvement in Lithuania letter from the president
nib invests in the environment a new forum of cooperation has the permanent members of the steering group, been established as part of the eu’s representatives of the Russian Federation and Northern dimension, namely the nefco also attended the meeting.
Matias Uusikylä Matias Northern Dimension Environmental Russia’s active participation in the work of the Partnership, ndep. The goals of the ndep is of the utmost importance for the envi- partnership are to coordinate and ronment of the Baltic Sea and Barent Sea streamline the financing of environ- regions. The presence of a Deputy Minister mental investments with cross-bor- from the Russian Finance Ministry at the Stock- der effects, above all in the Baltic Sea holm meeting was a positive sign. The Russians and Barent Sea regions. Through are interested in cooperating on environmental this partnership, international finan- projects in northwest Russia and the Kaliningrad cial institutions, the European Com- region. mission, bilateral donors and transition The ndep will be involved in environmental economies are now taking a joint approach to projects that target sectors such as district heat- important environmental projects. ing, solid waste management, water purification, In March 2001, nib and Sweden, which at that sewage treatment, and air pollution abatement. time held the eu Presidency, initiated a meeting These kinds of projects are often expensive and of heads of international financial institutions, i.e. complicated, as well as time-consuming. The the eib, the EBRD, the World Bank, nib and results of this type of investment only become nefco. Representatives of the European Com- apparent in the longer term, for example, when mission, Sweden, Finland and Belgium also distinct improvements are made in air quality. attended this meeting held in Helsinki and host- The Environmental Partnership aims to acceler- ed by nib. The meeting resolved to establish an ate the implementation of environmental pro- environmental partnership, the ndep. A working jects and facilitate their funding. Given effective group consisting of representatives of the ifi’s coordination, the work of the partnership will and the ec, and chaired by the ebrd and Sweden lead to a distinct reduction of air pollution and was given the task of drafting a structure for the other cross-border effects detrimental to the partnership. The working group’s proposal environment. The ndep will help to bring about received strong support upon its presentation at urgently needed environmental investments the June 2001 eu summit in Gothenburg, Swe- within the transitional economies of the North- den. ern Dimension Area. This applies both to The ndep’s activities are headed by a steering nuclear waste and to other environmental prob- group that decides which projects are to be given lems. priority and coordinates the funding of projects. The initiative leading to the eu Northern The steering group also appoints Dimension came originally from Finnish Prime a lead bank for each individual Minister Paavo Lipponen, in the autumn of ebrd eib nib project. The , the , , 1997. The current environmental partnership the World Bank and the Euro- can be seen as one of the most tangible results of Kerold Klang Kerold pean Commission are perma- that Finnish initiative. In the ndep the Nordic Helsinki nently represented in the steering countries and their neighbouring regions have St. Petersburg Tallinn group. an important channel for financing urgent envi- Stockholm nib , elected to chair the steer- ronmental investments. nib has been actively ing group in its first year, called involved in the ndep cooperation right from the the first meeting in September start. 2001 Riga . At the invitation of the B a l t i c S e a Swedish Ministry of Finance and Kaliningrad the City of Stockholm, the meet-
Vilnius ing took place in the Stockholm City Hall, and was opened by the Swedish Minister of Finance Jón Sigur˛sson Bosse Ringholm. In addition to November 2001
2 bulletin december 2001 HEADQUARTERS
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OTHER OFFICES
COPENHAGEN Landgreven 4 4 Textile output growing in Estonia 18 Panorama DK-1301 Copenhagen K NIB 25 YEARS 6–15 20 Lithuanian infrastructure undergoing Denmark eu’s constructive changes Telephone +45 33 144 242 6 Northern dimension a natural Telefax +45 33 322 676 forum THEME: ENERGY 22-29 8 Mergers and acquisitions absolute 22 Heavy winds at sea OSLO necessity Dronning Mauds gate 15 26 Finnish investment in bioenergy Strong credit rating and great (at Eksportfinans) 10 public benefit 29 Loan for long-term power N-0119 Oslo investments Norway 11 Focus on the Baltic, Russia and Telephone +47 2201 2201 the environment 30 The Nordic Finance Group Telefax +47 2201 2202 News 13 An evening to remember 32 34 nib in brief REYKJAVÍK 14 NIB projects during 25 years 2001 Kalkofnsvegur 1 35 Interim report January–August 16 International environmental (in the building of Bright future in fibre optic networks Se˛labanki Íslands) cooperation 36 IS-150 Reykjavík Iceland Telephone +354 5 699 996 13 20 30 Telefax +354 5 629 982
STOCKHOLM Västra Trädgårdsgatan 11 B (in the building of AB Svensk Exportkredit) S-111 35 Stockholm Sverige Telephone +46 8 613 8525 Telefax +46 8 205 728 BULLETIN PUBLISHER NIB’s Bulletin is published in Danish, English, NORDIC INVESTMENT BANK Finnish and Swedish. Fabianinkatu 34, Helsinki, Finland P.O. Box 249 SINGAPORE EDITORS FIN-00171 Helsinki Regional Representative Jamima Löfström, Editor-in-chief Telephone: +358 9 18001 Office Linda Hintze, Gunilla Nyman and Telefax: +358 9 1800210 78 Shenton Way # 16-03 Pamela Schönberg Internet: www.nib.int Singapore 079120 E-mail: [email protected] Telephone +65 2276 355 Translation Roger Tanner, Stockholm Telefax +65 2276 455 Graphic design and production CHANGE OF ADDRESSES Journalistgruppen JG AB, Stockholm Telefax: +358 9 612 1417 Printed by Nomini, Helsinki
bulletin december 2001 3 Krenholm in Narva, Estonia, was one of the world’s biggest textile concerns in the 19th century. Today it remains one of Estonia’s foremost industrial export enterprises. NIB and other international banks are now committed to help Krenholm continue to develop. Textile output growing in
AFTER ESTONIA GAINED independence in minimum of 2,000 people and to invest at 1991, Krenholm no longer had access to the least eek 20 million (equalling some eur 1,3 Soviet market. A couple of years later, it was million) over a three-year period. on the brink of collapse. It lacked raw materi- Mauritzon continues, “Today we have al, operating capital and any effective mar- 4,800 employees and technical investments keting. The government decided to privatise of eek 350 million. We have more than the company, and in 1995 it found an inter- honoured our commitments.” ested buyer in Swedish Borås Wäfveri ab. Lars Mauritzon, Borås Wäfveri’s Group Pre- SINCE BORÅS WÄFVERI became principal sident, was appointed chairman of the board owner in early 1995, turnover has more at Krenholm, a position he still holds today. than doubled. It has risen from eek 535 “Krenholm at that time was entirely pro- million to 1,240 million, even though per- duction-oriented,” says Mauritzon, “It had sonnel strength has declined somewhat. been controlled from Moscow, based its The average monthly wage has almost A survivor of WWII, Krenholm is operations on annual production plans and quadrupled and is now slightly higher than today a historic monument as well as had no regard for either quality or logistics.” the regional average. As in many other a beacon of hope for the future. countries, the textile industry is not wage UNDER SWEDISH MANAGEMENT, Kren- leading in Estonia. Krenholm is one of the holm has gone through a fascinating evolu- few companies in Estonia to sign a collec- tion. The mammoth enterprise was initial- tive agreement. Mauritzon describes how ly divided into a parent company and six the company assumes greater social subsidiaries. The subsidiaries were forced responsibilities than the law requires, pro- to, internally as well as externally, operate viding extra days holiday, health centres at on commercial terms. Each subsidiary has every factory and biennial health examina- its own board of directors. Borås Wäfveri tions for every employee. The company acquired a controlling interest of 75 per also allows calls on sick employees; gives cent of the parent company’s share capital presents to employees who marry, have and votes; the Estonian government children or retire; runs summer camps for retained 25 per cent. Today, Borås Wäfveri the employees’ children; and arranges is the sole owner of the company. security for employees’ house mortgages. “The involvement of the Estonian gov- In January 2000, the World Bank, acting ernment was important to us for political through the International Finance Corpo- reasons. This is because Krenholm is locat- ration (ifc), granted a credit of eur 25 mil- ed in what was then one of the politically lion. nib and the Nordic Environment most sensitive regions of Europe, on the Finance Corporation were also involved in Russian border,” says Mauritzon. the transaction. This was the last loan In its agreement with the Estonian govern- granted by nib under the Baltic Investment ment, the company promised to employ a Programme.
4 bulletin december 2001 Estonia
Lauri Johnson, nib’s Baltic Regional Manager, describes textile manufacturing as one of Estonia’s most important sectors Average monthly earnings have nearly quadrupled since 1995, when Borås Wäfveri became for employment and exchange earnings. the principal owner. “This is a big sector in the Baltic countries and fits in well with their present stage of development. It was natural for nib, work- Before Borås Wäfveri took over, Kren- ing with the World Bank/ifc, to study the holm’s sales were virtually confined to NARVA TODAY industry when we were approached by cheap raw fabric, some of which was Krenholm’s Swedish owner. We found exported to the usa. Today 90 per cent of Narva, with a population of that Krenholm, with the support given by sales go to the usa and Western Europe. 85,000, is the third largest city its new owner, had made good progress. The company’s products are to be found in in Estonia. More than 95 per cent of the The company was operating at a profit and a growing number of areas – furnishing population is Russian speaking. had the potential to meet new objectives.” fabric, sheets, towelling and bathrobes. In In addition to the Krenholm textile the future, Krenholm will presumably plant, a furniture factory and two THE AIM OF THE INVESTMENT is to make start to build its own trademark. oil-shale-fired power stations are Krenholm more competitive. The goals are the city’s biggest employers. to include a higher proportion of upgraded ESTONIA’S LEADERS are very pleased with products, reduce energy use, streamline the advancements made by Borås Wäfveri. operations to use the plant and infrastruc- President Lennart Meri expressed his grat- ture more efficiently, and improve its capi- itude when he visited in the autumn of tal supply. Reduction of the use of steam 2000. The Mayor of Narva, Imre Liiv, and electrical power will also improve considers Krenholm important, not least Krenholm’s environmental performance. as one of the city’s biggest employers. The Managing Director Meelis Virkebau local taxes paid by its employees support says, “The investment loan from nib has the expansion of education, cultural amen- made it possible to construct a second gar- ities and health care. More than one quar- ment factory for manufacturing more ter of the city’s revenue comes from the upgraded products. Next year, thanks to company and its employees. the credit, we will be able to establish a Imre Liiv says, “Above all, Krenholm is number of energy conservation measures. of great cultural and historical importance. We’ll change the lighting systems in three The pride of Narva, the old city in spinning mills and two weaving plants, and Baroque style, was flattened during the improve heat recovery. All new Western war and the Town Hall is just about all that equipment is leaner than what we had in has been rebuilt. Krenholm survived. It is the old Soviet plant. Thanks to nib we can a monument to the past and a beacon for Economist Andres Küng is the author of more invest for a much longer term than we the future.” than 60 books, primarily on Baltic subjects. could with our short-term cash flow.” Andres Küng He lives in Sweden.
bulletin december 2001 5 Nordic Investment Bank 25 years
Nordiska Investeringsbanken 25 år
25 years of Nordic cooperation When NIB was founded in 1976, its three primary goals were focused on the Nordic region: To increase the level of cooperation in the respective financial communities, improve the infrastructure and contribute to the internationalisation of Nordic companies. NIB’s Chairman of the Board Bo Göran Eriksson opened the 25th anniversary festivities by saying, “We have succeeded far beyond our expectations!” Speakers at the event, held on June 1 at the Finlandia Hall in Helsinki, included both NIB owners and financial experts. They touched on a range of topics that are reviewed on the following pages. Glimpses of the Bank’s history are also presented.
NORTHERN DIMENSION A NATURAL FORUM FOR NIB
nib can look back on a highly successful 25 Nordic countries had a common interest outside the Nordic area. Lipponen specifi- years, said Prime Minister of Finland to stabilise our economies and promote cally mentioned the Baltic Investment Paavo Lipponen at the Bank’s anniversary business cooperation across national Programme, inaugurated in 1992, and its celebration. He also described the vital boundaries. nib acquired the task of pro- developmental importance in the Baltic role of the Bank in the future, as an essen- viding long-term capital and supporting Sea region. tial player in ensuring a successful environ- the integration of Nordic business enter- mental partnership throughout the eu. prise. Today, twenty-five years later, we can AS REGARDS THE future of nib, he named The establishment of the Nordic Invest- see that the Bank has amply fulfilled expec- a number of priorities, “Today it’s natural ment Bank in 1976 took place against the tations.” for businesses to regard the Nordic area as background of the oil crisis, in a business a home market. In this area, nib has sup- environment where capital and the money THE WORLD HAS changed more rapidly plemented other financing, especially for market was regulated, and long-term capi- than anyone could have foreseen. While long-term projects of national economic tal was in short supply. Nordic integration was occurring, the importance. sme’s are often the mainspring Lipponen said, “It was clear that the focus of interest had shifted to markets of the economy; this is a growth area where
6 bulletin december 2001 Matias Uusikylä Matias
During NIB’s first quar- ter-century, the Nordic area has become a home market for busi- ness enterprise. In his jubilee address, Finnish Prime Minister Paavo Lipponen foresaw the Baltic Sea region as the next focal point. The photo shows him (second from the right) chatting with, from left, Ewald Nowotny, Vice President of the Euro- pean Investment Bank, Bo Göran Eriksson, Chairman of the NIB Board of Directors, and NIB’s President and CEO Jón Sigur˛sson.
nib can provide desirable added-value.” lake. While this development creates con- sion is actually working. Lipponen described the role of technolo- siderable potential for growth, it also poses He urged the Bank to continue to adapt gical development for nib’s future. challenges. to changing circumstances when necessary. “Intellectual capital and knowledge- “The action plan for the Northern “Nordic cooperation has been a central based industry are destined to eventually Dimension attaches great importance to form of international partnership for take over the role traditional industry has measures of environmental improvement almost fifty years for Finland. This co- played. This applies to initiatives in the it in the candidate countries and also in operation is distinguished by preparedness sector as well as to areas such as genetic northwest Russia. The Environmental and political determination to adapt to new research and biotechnology. These are Partnership now being prepared is of piv- conditions.” both fields that can be significant to nib’s otal importance, and nib will undoubtedly Lipponen believed nib is in a good start- future role as a financier,” said Lipponen. have an important role to play in this area.” ing position, saying, “nib has a sound Lipponen also stressed the importance of Lipponen named the southwestern waste- financial position, strong political support, the Baltic Sea region. He said eu expansion water treatment plant in St. Petersburg as a well-established customer base and a will virtually transform the Baltic Sea to a particular proof that the Northern Dimen- highly competent personnel.”
bulletin december 2001 7 Nordic Investment Bank 25 years
Nordiska Investeringsbanken 25 år
DISCUSSION ON THE FUTURE OF THE FINANCIAL SECTOR
Mergers and acquisitions absolute necessity Never before has consolidation in the financial sector been so rapid the personnel wonder how the change will affect their jobs. There is an as it is today. Judging by the discussion at the jubilee seminar on enormous need to communicate with cross-border consolidation in the Northern European financial sector, customers and personnel. The new leadership should be selected this development can be expected to continue. immediately. Bosses should be chosen according to merit, not office politics. THE SEMINAR OPENED with speeches by itself as a niche bank, thus risking becom- Complete all unpleasant tasks such as Michael A. Carpenter, head of Citibank’s ing marginalised, or acquire other compa- cutting jobs as quickly as possible. Global Relationship Bank, and Thorleif nies to build a leading position in the big The differences between the merging Krarup, President and ceo of Nordea. markets. Citibank opted for the latter companies’ corporate cultures must be Both banks have been involved in extensive course, and has now endured four major respected. mergers in the past few years. take-overs in three years, a very exacting Companies merge for many reasons, but process. in today’s capital market there are no other “Those takeovers involved difficulties I options. The market is global. wouldn’t wish on my worst enemy. We As Carpenter put it, “If you aren’t in were forced to redesign our product com- Matias Uusikylä Matias globally, you’re out.” pletely,” Carpenter commented. This does not mean that everything in Further consolidation is unavoidable in the finance market has to be viewed in a Carpenter’s opinion. Consolidation is global perspective. For example, retail good for the customers, because it reduces banking, insurance and smaller companies costs. frequently operate in a geographically defined context. But the appropriate focal THE TROUBLE WITH MERGERS and take- point for a financial analysis varies from overs, as Carpenter saw it, is that they case to case. often occur without having been thor- Carpenter said, “The distribution of oughly considered from a strategic point of financial services is becoming an increas- view and do not add any value for share- ingly important issue. There is a definite holders. for customer control. Hopefully, the out- Carpenter’s recipe for successful integra- come of the battle will be a situation where tion: banks, insurance agents and brokers are Everyone in the organisations must not competing for the same customers.” be convinced of the strategic logic of Carpenter described how Citibank had the integration. Michael A. Carpenter, Head of Citibank’s reached a point in 1997 where it had to Good communication is vital. Fifteen Global Relationship Bank: “Communication choose between stagnating and positioning minutes after a takeover is announced, is essential for a successful merger.”
8 bulletin december 2001 Thorleif Krarup noted that his own bank, always regarded as a production factor, but adapting the legal structures to the com- Nordea, is the result of many mergers. today it’s an integral part of customer con- mercial ones. If they can’t be adapted, There were several reasons for the latest tact. The development of online services is banking activities will not be able to be merger, which has given the bank a pres- essential, but it’s expensive and not suitable optimised. Krarup noted, in particular, the ence in northern and northeast Europe. for smaller players.” rules preventing the transmission of cus- Krarup explained, “Further organic tomer data between different countries growth was not possible. The bank needed KRARUP MAINTAINED that Nordea’s it represent one obstacle overcome. a broader base in order to develop more experience provides a definite advantage in In the discussion that followed, Björn advanced electronic services. There were the Nordic area. “We’re also more cus- Wahlroos, President and ceo of Finnish synergies to be harvested. The Nordic tomer-focused than our competitors, and Sampo, also emphasised the importance of area is regarded as one region by Europe, much more so than competitors in other putting business logic first and of doing so which makes it important for us to estab- parts of Europe.” in a long-term perspective. lish ourselves in the market as a Nordic Krarup’s suggestions for making a merg- “It’s strategy that counts, not geography.” bank.” er succeed: It can be good business logic for a Nordic The mergers have left Nordea with a Present a clear vision and strategy. bank to start an operation in North Ger- customer base of approximately 10 million Install the new leadership quickly. many, even if this is outside the existing customers, making the organisation the Seek rapid profits: Act, ensure results and Nordic framework. twenty-second largest bank in Europe. communicate. Wahlroos believed the financial sector is Krarup said, “This may not sound Take cultural differences seriously and in the first stages of mergers and consolida- impressive, but it’s important to be one of manage them with a flexible management tions, but it is important to develop elec- the top 25. It forces the analysts to watch structure. tronic banking services. our progress and include our shares in The mergers of recent years have taught “it investments don’t need to cost as their portfolios.” Nordea that cross-border mergers raise much as people have said at this seminar,” many new issues. Banks, which by tradition Walhroos said. “You can do quite a lot on NORDEA IS ALSO INTERESTING because have had a relatively straightforward struc- fim 10 million.” of its nearly 2.5 million on-line customers. ture, have been forced to find a more so- “IT development is an important motive phisticated way of working. BJØRN SKOGSTAD-AAMO, Director Gen- force in our sector,” said Krarup. “It wasn’t Experience has shown the importance of eral of Kredittilsynet (The Banking, Insur- ance and Securities Commission of Nor- way), was sceptical of the benefit of big mergers. ”To be successful, you have to create rela- Matias Uusikylä Matias Uusikylä Matias tionships with customers on local levels. This is especially important in Norway, where we have a long tradition of treating everyone equally,” he said. In a panel discussion on the theme of ‘small is beautiful,’ Krarup declared it self- evident that one has to act locally. How- ever, this does not alter the necessity of being globally active. Both approaches are needed.
In addition to Michael A. Carpenter, Thorleif Krarup and Björn Wahlroos, the panel included Halldor J. Kristjansson, Managing Director of Nordea’s President and CEO Thorleif Krarup: Sampo’s President and CEO Björn Wahlroos: Landsbanki Íslands and Björn Skogstad-Aamo, “IT knowledge and customer focus places “Business logic is crucial. It’s the strategy that Kredittilsynet. nib’s President and ceo Nordic banks ahead of the competition.” matters, not the geography.” Jón Sigur˛sson, chaired the panel.
bulletin december 2001 9 Nordic Investment Bank 25 years
Nordiska Investeringsbanken 25 år
JÓN SIGUR˘SSON REVIEWED 25 SUCCESSFUL YEARS
Strong credit rating, favourable credit terms, great public benefit
“NORDIC INTEGRATION will continue. NIB won the top The Nordic countries have an important credit rating, AAA, from the leading role to play in eu enlargement. The Baltic
Matias Uusikylä Matias credit rating agen- Sea region in the broad sense is already one cies in 1982. In an of Europe’s main growth centres. If the overview of the Nordic countries want to participate fully Bank’s activities, in these exciting developments, they have a NIB’s President useful common resource at their disposal and CEO Jón in the Nordic Investment Bank.” Sigur˛sson said the This is how Jón Sigur˛sson, President rating is especially and ceo, summed up his jubilee overview of important during the Bank’s activities. downturns. nib began with a simple business philoso- phy: Promotion of Nordic growth opportu- nities via long-term cross-border invest- NIB’S PROFITABILITY IS GOOD. The annual The Bank has environmental procedures ments. A common Nordic financial institu- real return on equity between 1996 and requiring environmental assessment of all tion would raise capital with long-term 2000 averaged 8.5 per cent, which is 5.3 per credit applications. nib does not participate maturities and at favourable prices. cent higher than the average non-risk euro in financing of projects that do not meet “These have proved to be the right ideas. rate for the same period. A surplus of eur international environmental standards. The Bank has followed the internationalisa- 130 million was posted for 2000, and a divi- As part of its environmental profile, nib tion of Nordic industry. Today we are fi- dend of eur 39 million will be paid for 2001. has developed close cooperation with the nancing projects of mutual interest to the Jón Sigur˛sson said, “In fact, nib is the Nordic environmental authorities and Nordic area, as well as to 33 borrower coun- only international financial institution pay- other international financial institutions. tries in other areas,” said Jón Sigur˛sson. ing a regular dividend to its owners.” The Bank’s Nordic lending statistics show REGARDING THE CREDIT FACILITY for en- THE NORDIC INVESTMENT BANK has the share of manufacturing industry to be rel- vironmental investments in the neighbour- grown to an impressive size in the past 25 atively stable, accounting for roughly half of ing regions, Jón Sigur˛sson said this is now years. At the end of 2000, its assets totalled all disbursements. The relative share of the fully subscribed. The facility needs to be eur 13.9 billion and its loan portfolio eur energy sector is diminishing. For the past five increased substantially to enable nib to con- 9.3 billion. years it has been about 13 per cent of loans tinue playing an active role in the Northern In addition to the lending facility made disbursed, but the absolute amounts remain Dimension Environmental Partnership, possible by the Bank’s authorised capital, high. Growing shares are noted for commu- ndep. (More about the ndep on pages 2 and nib has had special loan facilities at its dis- nications, retail trade and services. 16.) posal for Project Investment Loans (pil) nib’s latest decade has been dominated by He said nib already has a leading role in outside the Nordic area, for Baltic projects environmental investments in the Nordic financing the first big environmental pro- and for Environmental Investment Loans area and the neighbouring regions. jects in northwest Russia, St. Petersburg and (mil) in the neighbouring regions. Total Jón Sigur˛sson said this initiative has the Kola Peninsula, and that there is still lending capacity now stands at eur 13.5 bil- required patience and long preparation much to accomplish in these areas. lion, of which 70 per cent has been utilised. times, but is now starting to bear fruit. nib’s strong capital base and good perfor-
10 bulletin december 2001 mance already earned in 1982 a top credit rating, aaa, from the leading rat- ing agencies Moody’s and Standard &
Poor’s. The Bank has kept the rating Uusikylä Matias ever since. According to Jón Sigur˛sson the great flexibility of nib’s funding and its policy of always searching for the best possibil- ities in the global capital market, has fre- quently led the Bank to enter new mar- kets for its borrowing, such as Asia and Central and Eastern Europe.
TO STRENGTHEN ITS financial guide- lines and risk management methods, nib has established an independent risk management department and an autonomous back-office unit. Uniform quantitative risk grading and portfolio analysis of all the Bank’s credit expo- sures have been introduced for lending and financial portfolios. Jón Sigur˛sson said that capital mar- Suvi-Anne Siimes, Minister at the Finnish Ministry of Finance said, “As Chairman of the kets are undergoing a period of trans- Nordic Council of Ministers of Economy, I can assure you that the Nordic Investment Bank formation. He said the liberalisation can count on continued strong political support from its owners.” and deregulation affected by factors such as technological changes are in the process of forming a broad, deep OWNERS AGREE common European capital market. “This can have the effect of reducing nib’s added-value to some Nordic nib enterprises and, most importantly, can will focus on the affect the very largest ones. However, there will continue to be gaps in capital Baltic countries, Russia supply for long-term projects of national importance and for sme’s.” and the environment BY VIRTUE OF NIB’S aaa credit rating, the Bank’s role of supplementing the THE MAIN FOCUS OF ATTENTION should effects, nib should aim to supplement Nordic commercial banks is particu- be on the Baltic countries and Eastern other credit sources. This can be achieved, larly important during cyclical down- Europe said the Nordic finance ministers, for example, by granting loan facilities to turns. commenting as representatives of nib’s local banks for sme finance. “The operational base of Nordic lend- owners on the role and future tasks of the Cooperation is also a key to current envi- ing activities plays an important part in Bank. They agree that much work needs to ronmental initiatives in the Baltic coun- the Bank’s strong financial position. Our be done to benefit the environment. tries and Russia through the eu’s North- aim is to maintain a judicious balance Norwegian Minister of Finance Karl ern Dimension. between Nordic lending and the Bank’s Eirik Schjøtt-Pedersen noted that the de- “Considering the magnitude of the tasks growing international activities.” finition of “Nordic interest” has gradually that lie ahead of us in this area, we should expanded over the years. Although this welcome the international institutions that change helped create new fields of activity are also cooperating with the European for nib, it has resulted in that the Bank has Commission,” said Schjøtt-Pedersen. more competition. According to him, the Nordic countries To counteract unwanted competitive have an important role to play in the deve-
bulletin december 2001 11 Nordic Investment Bank 25 years
Nordiska Investeringsbanken 25 år
Swedish Minister of Finance Bosse Ring- holm called nib “Perhaps the most impor- tant and most concrete result of economic and financial cooperation between the Nordic countries in recent decades.”
Fredrik Sandberg, Scanpix Sandberg, Fredrik As he saw it, one important explanation for nib’s success is the Bank’s capacity to continuously adapt its activities to chang- ing requirements. Ringholm was convinced the speed of change will remain high. Regarding the neighbouring areas, Ring- holm mentioned Poland, “After consider- ing the situation, nib can grant loans to the Baltic countries as part of its regular lend- ing. A similar change should be considered for lending to Poland, which does not involve any special risk.” Ringholm pointed to nib’s considerable knowledge of Russia and the Baltic Sea region. “An understanding of conditions in Russia is especially important in view of Swedish Minister of Finance Bosse Ringholm said about the eib’s lack of lending experience in that NIB: “Perhaps the most important, most concrete result country.” Commenting on nib’s resource utilisa- of economic and financial cooperation between the tion, Ringholm said, “The Bank has Nordic countries in recent decades.” accomplished its tasks with a relatively small work force, but it is clear that some of the tasks that lie ahead, such as the lopment of the Baltic region’s financial sys- bouring areas to develop activities in these preparation of complicated environmental tem and anti-pollution investments in the sectors. projects or the further development of spe- nickel plants of the Kola Peninsula. “The Northern Dimension Environ- cific sectorial competence, will require “Modernisation of these facilities would mental Partnership may require a heavy additional expertise. Therefore, a certain mean a great deal for regional environ- investment from nib in the coming years, increase in spending can be acceptable.” ment.” He said Norway gives the project but it’s important for us to start dealing high priority. with the many environmental problems SUVI-ANNE SIIMES, Minister at the which have gone unnoticed for so many Finnish Ministry of Finance, noted in her PERMANENT SECRETARY Michael Dith- years.” concluding remarks that Nordic coopera- mer, representing the Danish Minister of Icelandic Minister of Finance Geir tion in the business sector has experienced Economy, Marianne Jelved, described how Haarde said that nib has adapted very suc- an upswing since the late 1990s. nib and the European Investment Bank are cessfully to changing conditions in the last “This applies to the traditional manufac- working together. few years in terms of market liberalisation, turing industry, banking, finance and “Cooperation between the two banks has free movement of capital, globalisation, telecommunication. This development is a developed fruitfully as regards, for exam- European integration, the fall of the Berlin source of strength for Nordic growth ple, cofinancing projects.” Wall and the new configuration of national potential.” According to Dithmer, nib should pri- states in the Baltic region and Eastern Like her fellow-ministers, Suvi-Anne oritise its activities in the Baltic and the Europe. Siimes supported a concerted, coordinated Barent regions. He’d like to see the Bank “Nordic involvement, partly through effort to support eu candidate countries in include this priority as part of its daily busi- nib, has clearly contributed to the build-up the Baltic region as well as Russia. Siimes ness in the next few years. of a competitive business sector in these said it is essential that ndep, as part of the The environment and energy should be countries.” Northern dimension, is successful. another focal area. In Dithmer’s view, nib He noted that the Bank’s activities are should now deploy its expertise on the quite important for loan activities in Ice- environment and energy. nib should also land, accounting for roughly 10 per cent of use its good relations with the neigh- the country’s international borrowing.
12 bulletin december 2001 Matias Uusikylä Matias
President and CEO Jón Sigur˛sson and master of ceremonies Ann-Kristin Schevelew welcome NIB guests. An evening to remember TO ROUND OFF NIB’S BIG DAY on 1st June, staff members, customers and associ- ates gathered at the Helsinki Stock Matias Uusikylä Matias Exchange for a musical evening. Uusikylä Matias ‘Unlimited Entertainment’ was the theme of the evening, with music by top- flight performers from several Nordic countries. Bass baritone Kristinn Sig- mundsson and pianist Jónas Ingimundar- son from Iceland, accordionist Maria Kalaniemi from Finland and, from Sweden, the Hej Kalle Orchestra with soloists Kalle Moreus and Viktoria Tolstoy all performed. Ann-Kristin Schevelew was master of cer- emonies. Guests also enjoyed a buffet and Icelandic bass baritone Kristinn dancing to music by the Eije Oscarsson Sigmundsson opened the evening’s Quintet. musical programme.