BULLETIN nordic investment bank G december 2004

Theme: The region Letter from the President Financial integration in the Baltic Sea region

Financial sector developments in the The second question to be considered is the Baltic Sea region during the past few supervisory aspect, which is somewhat more Ari Magg years have made clear that banking problematic. The Baltic Sea region, i.e. the and financial markets in the region Nordic and Baltic countries, has de facto have grown out of their traditional, acquired a regional banking system which comes national frames. We are confronted under eight national supervisory authorities. now by a completely new business There may be gaps here which need to be filled landscape, in which the players are through joint action. True, the national super- many-faceted, multinational and visory authorities have developed their coopera- cross-border financial enterprises. tion, but what we lack today is clear frames to The motive forces of the integra- indicate where ultimate responsibility for weak tion process have comprised both banks and bank failures is located within the deregulation of financial activities and great regional system which has evolved. advances in information technology. Cross- Estonian, Latvian and Lithuanian NIB mem- border banks operating in the Nordic area and bership is a positive example of regional integra- the Baltic countries have been formed as a result tion in the financial sector. The widening of of mergers and company acquisitions. A very NIB’s circle of ownership is a milestone in the large part of the Baltic banking sector is in fact unfolding history of regional, intergovernmen- owned, directly or indirectly, by Nordic banks. tal cooperation. The enlargement of NIB is also The process of consolidation has resulted in the an important adjunct to the integration of the establishment of complicated financial enter- Nordic and Baltic commercial banks. prises operating across both territorial and sector- ial boundaries. The Nordic and Baltic banking A with 25 or more member sector is today highly concentrated, and accord- states requires new models of regional partner- ingly its stability depends on a handful of banks. ship within the European framework, especially where the small member states are concerned. Two questions relating to the increasing finan- Greater regional cooperation is needed in order cial integration in the Baltic Sea region deserve to strengthen the position of the Nordic and to be highlighted. Baltic countries in Europe. The financial sector is First there is the growth aspect. Without an important sphere for cooperation of this kind, question, the most important consequences of the effects of which could then make themselves the region’s financial integration are the felt in a wider European context. The importance growth-promoting effects. The role of the of the securities market will increase as time goes financial sector in mobilising resources for prof- on. Integration of the Nordic and Baltic stock itable investments and enabling the general pub- markets is already underway. To secure positive lic to obtain a return on its savings is growing economic development for the Baltic Sea region more and more important. If the Baltic Sea in future, intergovernmental efforts are needed region is to stay at the top of the growth league, commensurate with the profound integration of it has to have a well-functioning financial servic- the region’s private sector. One important task es sector. This is important not least to small for the public sector is to better integrate finan- and medium-sized enterprises and export- cial supervision in the region, matching the struc- oriented enterprises. The financial sector is also ture of the financial sector. crucial for the internationalisation of the region’s business activity, which in turn is the path to sustainable economic growth. There can be no doubt that the development of the finan- cial sector has hastened and facilitated cross- border investments in the region, an important Jón Sigur›sson ingredient in the process of growth. December 2004

2 bulletin G december 2004 19

HEADQUARTERS

Fabianinkatu 34 P.O. Box 249 FI–00171 Telephone +358 9 18 001 Telefax +358 9 1800 210

OTHER OFFICES

COPENHAGEN Grønningen 17 DK–1270 København K THEME: THE BALTIC SEA REGION PP. 4–13 14 Panorama Telephone +45 33 144 242 4 Port of invests heavily 16 New President and CEO Telefax +45 33 322 676 6 YIT’s acquisition of ABB Building Systems 17 Guest writer: Uffe Ellemann-Jensen 9 Schibsted combines media channels OSLO 18 News from the Nordic Finance Group Dronning Mauds gate 15 10 Baltic Sea Fund prizes for 2004 20 News NO–0119 Oslo 12 Ambassadors visit NIB 22 NIB in brief Telephone +47 2201 2201 Changes in the governing bodies of NIB Telefax +47 2201 2202 13 23 Interim report 2004

REYKJAVÍK Kalkofnsvegur 1 14 4 IS–150 Reykjavík Telephone +354 5 699 996 Telefax +354 5 629 982

STOCKHOLM Kungsträdgårdsgatan 10 P.O. Box 1721 SE–111 87 Telephone +46 8 5662 6590 Telefax +46 8 5662 6591

SINGAPORE Regional Representative Office 78 Shenton Way # 16–03 BULLETIN PUBLISHER Singapore 079120 NIB’s Bulletin is published in NORDIC INVESTMENT BANK Telephone +65 6227 6355 Danish, English, Finnish and Swedish. Fabianinkatu 34 Telefax +65 6227 6455 P.O. Box 249 EDITORS FI–00171 Helsinki, Finland Jamima Löfström, Editor-in-chief Telephone +358 9 18 001 Tina Nyberg, Gunilla Nyman, Telefax +358 9 1800 210 Paula Roselius, Pamela Schönberg, Internet www.nib.int Pelagia Wolff E-mail [email protected] Cover photo Layout Lowe & Partners, Helsinki CHANGE OF ADDRESS Kaius Hedenström Printed by Nomini, Helsinki Telefax +358 9 612 1417

bulletin G december 2004 3 Theme: The Baltic Sea region

STIFF COMPETITION AROUND THE BALTIC Port of Tallinn intends to be among the winners

Port of Tallinn has big projects. The port company has established an ambitious investment programme for the coming years. Despite only 600 employees the company constitutes a motor for the Estonian economy.

The company plans to invest a total of more than 340 million euros in its har- bours during the period 2004–2008. Pelagia Wolff “To stay in the competition we need to invest,” says Aare Tammemäe, Chief Financial Officer and Member of the Management Board. Port of Tallinn, whose main competi- tors are in the Eastern Baltic and in the Gulf of Finland, has a total of four har- bours, all of them in the area around Tallinn. In particular, the company invests in developing the Muuga harbour east of Tallinn and the Paldiski South harbour west of the capital, with financing inter alia from NIB. Muuga is the company’s largest cargo harbour and at present an industrial park is being developed there. Port of Tallinn is concentrating on devel- oping new services, i.e. an industrial and logistics park and on generating new cargo stream within container traffic, since the passenger traffic, which generates about one third of the company’s revenue, has stabilised at a level of about six million passengers per year. On the other hand, Tammemäe empha- sises that the number of passengers has shown healthy increase in 2004, despite having been constant during the last few years. An attractive harbour area in the centre of Tallinn, accession to the European union and efforts to build new ships should attract more visitors. Port of Port of Tallinn wants to develop the area around the Old City Harbour in the centre of Tallinn maintains the Old City Harbour Tallinn. The idea is to have commercial real estate development in this area. and most of the land presently owned by

4 bulletin G december 2004 Economic Affairs and Communications, says that a more diversified business is desirable for the state owned company. He

Port of Tallinn believes that increased cooperation with operators responsible for railways, roads and terminals may be profitable in the future. In his view the port company’s role is to look for new business prospects, which are not only related to cargo and passenger traffic, but also to value-adding activities such as production and logistics.

It is in the interest of the Estonian State that the company develops in a positive way. “From the owner’s point of view, the The Muuga harbour, founded in 1986, is the deepest harbour in the Baltic Sea region ultimate goal for Port of Tallinn is to and it will now be enlarged. Port of Tallinn has a total of four harbours. deliver growth in shareholder value,” says Kelder. He points out that Port of Tallinn con- stitutes an important part of the Estonian transport infrastructure and that a well working transport system is a prerequisite for successful integration within the European Union. Kelder adds that Port of Tallinn is important for passenger traffic in the Baltic. The impact of the ports on employment is far from insignificant. Port of Tallinn company has only 600 employees, but if one also takes into account all the opera- tors in the harbours the figure is much higher. Port of Tallinn is a so-called land- lord port which owns the land and main- The Paldiski harbour was a submarine teaching centre during the Soviet time. The tains infrastructure in the harbours. harbour is small, but Port of Tallinn believes it has great potential. The emphasis is Private operators, such as shipping agents placed on ro-ro activity, export of local goods, and transit of liquid bulk and metals. and stevedore and transportation compa- nies are leasing the land and invest in ter- minals and warehouses for example. “In a sense we are a small company. But the company remains fully unexploited. In Russian capacity will simply not be suffi- by being a gateway between and the long term the company wishes to cient at least in the near term. Western Europe and by providing job develop that area in cooperation with the “We want to be the best port serving opportunities and new business we are City of Tallinn and real estate developers. Russian transit traffic.” quite important,” says Aare Tammemäe. I “Our intention is to convert this into a Tammemäe says that by developing a nice place for the citizens of Tallinn and for management system according to the the tourists and to generate new revenue.” ISO-standards for quality- and environ- ment management Port of Tallinn has Oil constitutes the most important product improved its management of security and in cargo traffic via the harbours of Port of environmental risks involved in oil trans- Tallinn. Most of it is transit traffic between ports and in cargo handling in general. Russia and Europe. Tammemäe says that However, in the long term Port of Russian oil production has been increasing Tallinn wants to get away from a revenue by 30–40 million tons per year and most of structure heavily dominated by oil prod- this increase is exported. Although Russia ucts and to diversify its revenues. Alo is at present developing its own harbours, Kelder, Counsellor at the Ministry of

bulletin G december 2004 5 Theme: The Baltic Sea region

ACQUISITION OF BUILDING SYSTEMS MADE YIT INTO A SERVICE ENTERPRISE Even a house can be steered intelligently

Today the Finnish builder YIT Group provides an increasingly wide range of building systems services. In this sector, the company is the biggest in the Nordic countries. YIT’s acquisition of the Swedish-Swiss ABB Building Systems in July 2003 was a sign of the coming change in direction. The Nordic Investment Bank contributed to the financing of the acquisition. YIT Corporation

Building Systems carries out independent business inside the YIT Group.

6 bulletin G december 2004 The deal ensured a large segment of build- growing,” adds Sakari Toikkanen, Exe- ing systems business—worth over one bil- cutive Vice President of Building Systems. lion euros—for YIT in the Nordic coun- Small enterprises can, for instance, do tries. There are also prospects for growth all the electrical work for a single-family in the Baltic countries and in Russia, where house. separate subsidiaries have been set up. “We don’t compete in the same field as “In line with the Group’s strategy, our small enterprises. We aim at large con- target for annual growth is on average tracts together with YIT Construction 5–10 per cent,” says Juhani Pitkäkoski, Services whenever possible.” President of Building Systems. However, Pitkäkoski stresses that Company acquisitions will also contin- Building Systems is not the piping and ue. The splintered sector has plenty of electricity department of YIT’s business enterprises that will be offered for sale in segment Construction Services. Building future. Systems carries out independent business “We have a large product slate—prop- inside the Group. erty maintenance, piping, electricity, air- “If we didn’t master or develop our serv- conditioning and security technology. At ice concept, we wouldn’t be able to do this this stage, not all operations are sufficient- business inside the Group either.” ly strongly represented in the various Sakari Toikkanen has a clear view on countries. In this sense, too, we’ll keep the issue of building quality: “Each time we must start from the assumption that the work is finished in one go. As far as profitability is concerned, we couldn’t even afford to have work done three times.”

“Acquisition of Building Systems was mainly in keeping with two of YIT’s strategic outlines: increasing building sys- tems business in Scandinavia, and focusing Sakari Toikkanen has an unconditional the Group’s operations on service busi- opinion about the issue of building ness,” Juhani Pitkäkoski explains. quality: work must be done well and in The building systems services provided one go. by the subsidiaries of Building Systems in the Baltic Sea region accounted for 43 per cent of the YIT Group’s total turnover of ue even when the major mergers have 1.5 billion euros during the first six been completed. months of the year 2004. “It should actually be part of daily opera- Within the sector, upkeep, maintenance tions,” Sakari Toikkanen adds. and renovation account for about 60 per cent of business, while the remaining 40 The sector employs over 12,000 people per cent comes from new building. in the Group. This is 56 per cent of the At present Building Systems has nine total personnel strength. subsidiaries, and the most demanding part “The most striking feature is that we of integration will be over by Christmas operate in as many as 350 locations. On 2004. Building Systems has a market share the map it looks as if someone had been of roughly 10 per cent in the various coun- shooting with a shotgun. Building systems tries. services are produced very locally, and we “At the mental level, integration will can never be very far from the customer,” naturally continue. It’s a long process Juhani Pitkäkoski analyses the nature of when new people from different cultures the business. come to work in one and the same compa- Because work is done in so many loca- “We operate in 350 locations, which ny,” Pitkäkoski says. tions, it is important to keep the organisa- means that we are close to the customer,” It goes without saying that internal tion structure light and the management says Juhani Pitkäkoski. streamlining of the enterprise will contin- system simple. L

bulletin G december 2004 7 Theme: The Baltic Sea region

Acquisition of Building Systems trig- gered a major change in the YIT Group’s corporate structure. In September 2003, the Group was divided into four business segments: Building Systems, Construction Services, Services for Industry, and Data Network Services.

Technical features and automation have increased very rapidly in building systems services in the last few years. Yet, new technologies are just at the verge of their breakthrough. “Automation aims at the intelligent steering of buildings. Among other things, this cuts energy costs and improves secu- rity. On the other hand, buildings cannot become too technical; the steering of dif- ferent systems must remain easy,” Sakari Toikkanen underlines. He admits that it’s a difficult equation to solve. “We don’t ourselves develop, for in- stance, new IT systems or design new pieces of piping. We put together tech- nology acquired from various sources.” Building Systems also strives to enhance the efficiency of its operations by means of various technological solutions. “For instance, service personnel can handle more maintenance assignments per day when they use the steering solu- tions in their hand-held terminals.”

According to Pitkäkoski, in Finland building systems is a sector that needs to recruit workforce from abroad to meet its future demand for labour. This situation is not seen as a menace but as a natural development in circumstances where young people are not very interested in working as a plumber or as an electrician. “On the other hand, technological advancements will also enhance the attractiveness of the sector as a field of study,” Juhani Pitkäkoski predicts. I

8 bulletin G december 2004 Schibsted believes Schibsted in diversity

Schibsted of Norway is a family enterprise that grew into a media group quoted on the stock exchange. The company, which operates in ten countries, wants to combine various media channels but underlines the importance of locally Schibsted’s head office is located in Oslo, where the company’s adapted content and editorial freedom. shares have been quoted on the stock exchange since 1992.

“Our experience is signed a contract for a loan that was part- that individual news- ly used for Schibsted’s acquisition of OPERATIONS AROUND papers and magazines the Swedish Blocket. se, THE ENTIRE BALTIC reach the best results which runs a Web if they can maintain site for advertising. RIM and develop their On previous occa- • Schibsted has operations around unique character- sions, too, NIB has the entire Baltic rim and in some istics,” says Jan granted loans for other countries as well. Scandi- Hedenstad, Schib- Schibsted’s expansion. navia is the company’s principal sted’s Vice President, The company in- market. Information. tends to continue grow- • The company owns Scandinavia’s He does not believe ing. Growth will proba- two biggest daily newspapers: that the presence of big bly take place both Verdens Gang in Norway and players in the media field organically and through Aftonbladet in Sweden. Schib- leads to uniformity and company acquisitions. Oper- sted is also behind Aftenposten one-sidedness. ations in new countries may in Norway and Svenska Dag- “Editorial independence, become topical. Today, the bladet in Sweden. credibility and quality are the guiding princi- company is active in countries around the • Schibsted has a majority holding ples for our media in all channels.” Baltic and also publishes the free paper 20 in Metronome Film & Television, Schibsted runs newspapers and publishing minutes in Switzerland, France and Spain. which operates today in Norway, houses and has activities in the sectors of TV, Hedenstad says that the free paper’s goal is Denmark, Finland and Sweden. films, multimedia and mobile telephones. to attract young people who would not oth- • Picture agency Scanpix and The group sees that its strength lies in this erwise read any paper at all. Schibsted Mobile, which provides wide range of knowledge in the media field, Schibsted also has experience of another mobile services, operate in both and in its willingness to combine various trend in the media world: the tabloid format. the Nordic and Baltic countries. channels and to try new things. Hedenstad points out that many people erro- • Schibsted is the biggest owner of Schibsted has invested heavily in the neously believe that adoption of the tabloid Eesti Meedia Group, ’s Internet. Hedenstad says that the Web is format has something to do with the quality largest media group, which pub- particularly well suited to be a news channel, of the content. However, the transition from lishes, among other things, the while the printed newspapers have other broadsheet to tabloid means adapting the newspaper Postimees. qualities. These two channels complement format to the needs of modern readers who • Schibsted also has a holding in each other. In Norway, Schibsted’s Verdens lack time and want to read their papers on Norway’s TV2 and in the Estonian Gang is the biggest newspaper in both print- the train and on the bus. TV channel Kanal 2. ed form and on-line. In Sweden, Aftonbladet “There has never been any contradiction has the same position. between being serious and easily reached,” In summer 2004, NIB and Schibsted Hedenstad concludes. I

bulletin G december 2004 9 Theme: The Baltic Sea region

Recognition for environmental work at the grassroots level

Environmental education for children and young people, and Jonas Edsvik work for the environment in the eastern parts of the Baltic Sea received recognition as the Baltic Sea Fund awarded its environmental prizes for 2004. The prize-winners were two organisations that work at the grassroots level, and two indi- viduals who play an important role in questions concerning protection of the Baltic Sea.

Of the total prize sum of 22,500 euros, a grant of 10,000 euros was awarded to the Regional Children’s Centre for Environmental and Biological Education and Tourism. The Centre, which was founded as early as 1951, engages in environmental education for children and young people, as well as for teachers. Activities include courses and excursions, and among the results achieved are campaigns about problems associated with oil transports in the Baltic Sea. Felix Karmazinov of the St. Petersburg water utility Vodokanal said that 2004 was the Thousands of people are involved in the first year that the city of St. Petersburg had adopted a programme for the planning of activities every year. The prize money will water supply and wastewater. be used, among other things, to acquire new computer equipment for the Centre. transport modes affect the environment in released into the river Neva untreated. The the Baltic Sea. In addition, the office dis- city’s first treatment plant began operations Another organisation that was acknowl- tributes brochures, and organises cam- in 1979, and today some 80 per cent of all edged for its work on the grassroots level paigns and exhibitions. wastewater is treated. Despite this, 800,000 was Agenda 21 in Åland, which was grant- Apart from these organisations, two indi- cubic metres of untreated wastewater still ed a prize of 2,500 euros. The Agenda 21 viduals received awards of 5,000 euros each. flows into the water system every day. The information office, which has been in exis- Felix Karmazinov, General Director at St. southwest wastewater treatment plant is tence since 1995, strives to increase aware- Petersburg water utility Vodokanal, was estimated to be ready in July 2005, when it ness of the environment in Åland and recognised for his contribution to the con- will treat 300,000 cubic metres of waste- wants to anchor global environmental struction of the southwest wastewater treat- water per day. issues in people’s everyday lives. For ment plant in the city. Twenty-five years instance, the office gives information on ago all wastewater from St. Petersburg— Director Roustam Sagitov, who in 1995 how waste management and selection of 3.5 million cubic metres per day—was founded the non-governmental organisa-

10 bulletin G december 2004 tion Baltic Fund for Nature (BFN), was awarded a prize for his environmental efforts in the Russian areas of the Baltic Director Vladimir Gurov Sea region. The organisation aims to and teacher Niyole enhance awareness of the environment in Samoshko of the northwestern Russia, for instance, by Kaliningrad Regional developing environmental education. Children’s Centre for BFN also supports research projects that Environmental and protect biodiversity, and promotes both Biological Education ecological tourism and environment- and Tourism were friendly agriculture. happy for the NIB’s President and CEO Jón Sigur›s- recognition that the son, a member of the Fund’s delegation, Centre’s work received presented the prize-winners at a ceremony from the Baltic Sea arranged in Mariehamn on 15 May. Fund. Commercial “A saying that we have in Iceland Counsellor Anders expresses the idea that unites all prize- Wiklöf on the left. winners this year: ‘The sea is half my homeland’.” I

BALTIC SEA FUND 15 YEARS The Baltic Sea Fund or, more offi- cially, the Åland Foundation for the Under Roustam Sagitov’s Future of the Baltic Sea, was found- direction, the BFN has ed on 13 March 1989 to promote become an influential research and other activities benefit- non-governmental ing the Baltic Sea environment. organisation. It coor- Besides distributing prizes and dinates environmental grants, the Fund disseminates infor- cooperation in the mation about the Baltic Sea environ- Russian ment to roughly 85 million people and is an active participant who live around the sea. The activi- in international cooperation ties also include the arrangement of projects. seminars on the environment; the theme of the 2004 seminar, held in Stockholm, was ‘Transports in the Baltic Sea’. The initiative to set up the Fund was taken by Commercial Counsel- lor Anders Wiklöf, whose private “People in Åland live in donation of three million Finnish the middle of the Baltic marks (about 500,000 euros) made and know how badly up the base of the Fund. At present, the sea is faring,” said the Fund capital stands at about Gunda Åbonde- 700,000 euros. During its existence, Wickström, project the Fund has distributed approxi- manager at the Agenda mately forty prizes, altogether 21 office (right), who almost 445,000 euros, to nearly 50 together with the office prize winners. The Fund gets contri- coordinators Åsa Hägg butions from both private individuals (left) and Maria Stenroos and enterprises. (centre) accepted the prize of 2,500 euros.

bulletin G december 2004 11 Theme: The Baltic Sea region

Staff seminar on the Baltic countries Gunilla Nyman

Active preparations for Baltic Matti Maasikas, Ambassador of Estonia. membership have been progressing in NIB throughout the autumn. In September the Estonian, Latvian and Lithuanian ambassadors in Helsinki gave presentations of their countries to NIB personnel, centring on reforms and the go-ahead spirit, the EU and NATO, the historical

v European roots of the three Valdis Krastin,s, Ambassador of . countries and the period of Soviet dominion.

Matti Maasikas, Estonia’s Ambassador, stressed the importance of swift and com- prehensive reforms for Estonian develop- ment since the restoration of indepen- dence at the beginning of the 1990s. The currency reform in 1992 paved the way for a stable currency. In connection with that reform, a currency board system was estab- Audrius Bru-zga, Ambassador of .

12 bulletin G december 2004 lished, fixing the exchange rate of the Estonian kroon against the German mark and later against the Euro. Ambassador Maasikas went on to say that low income taxation, with a universal flat rate of 26 per New structures in NIB cent, has encouraged enterprise and activi- ty in Estonian society. The liberalisation of foreign trade has also impacted favourably From the beginning of 2005 NIB will have eight instead on the economy. The Ambassador said of five members when Estonia, Latvia and Lithuania that Estonia’s pursuit of EU and NATO membership spurred the process of become members of the Bank on equal terms with the change. All three Baltic countries became EU and NATO members in 2004. five Nordic member countries. While the expansion Latvian Ambassador Valdis Krastin,sv described Latvia’s EU membership as involves changes in the governing bodies of NIB, the marking a return to Europe. He was also fundamental characteristics of the Bank’s financial referring to the “supreme achievement” of NATO membership, which was power- structure will be preserved. fully supported by the Latvian people. The thing now, he said, is to seize the opportu- nities presented by EU funding for With the membership of the Baltic the exception of matters that fall restructuring the country’s industry. The countries, NIB will have an entirely within the authority of the Board of Soviet epoch left a legacy of huge factories, new body, the Board of Governors, Governors, all the powers in the many of which produced goods for military which will decide upon questions Bank are vested in the Board of purposes and are no longer relevant. relating to the general framework Directors. The Board of Directors “We badly need more investments to for the Bank’s operations. The appoints the President, who is develop our industrial production,” Board of Governors will essentially responsible for the day-to-day opera- Krastin,sv said. have the powers previously vested in tions of the Bank. The Board may According to Krastin,sv it is desirable that the Nordic Council of Ministers. delegate its powers to the President. NIB becomes involved in both the private The Board of Governors will be The Control Committee, which and local government sectors, where there responsible for, among other things, oversees NIB’s operations and is is heavy pressure for investment. The con- matters concerning NIB’s member- responsible for the audit of the centration of Latvian business activity in ship agreement, statutes and autho- Bank’s accounts, will continue to and around , the capital, is a challenge rised capital. In addition, the Board comprise ten members, although the in itself. of Governors approves the annual appointment process will be chang- Lithuanian Ambassador Audrius Bru-zga report of the Board of Directors ed. The Nordic Council and the said that Lithuania is committed to devel- and the audited financial statements parliaments of Estonia, Latvia and oping its infrastructure with a view to stim- of the Bank. Each member country Lithuania will appoint one member ulating the country’s economy. Lithuania’s will select a member of its respec- from each country respectively. In location between West and East, he tive government to the Board of addition, the Board of Governors observed, today constitutes an advantage. Governors and the chairmanship will appoint two members; the “The time is ripe to think about geog- will rotate among the countries. Chairman and the Deputy Chair- raphy as a golden opportunity, not a di- Decisions of the Board of Governors man of the Committee. saster.” will be made unanimously. The Baltic countries’ total share He hoped that Baltic and Nordic coop- The Board of Directors of the of NIB will amount to 3.4 per cent. eration would help to sustain the prosper- Bank will have fewer members than The authorised capital stock of NIB ity of the Baltic Sea region. before. Each member country will will increase from 4,000 million “The enlarged NIB,” he said, “will cer- appoint only one Director to the euros to 4,142 million euros. In tainly be instrumental in achieving this Board, which will consequently addition, the Baltic countries will goal.” I comprise eight Directors instead of contribute approximately 42 million the previous ten. The Board mem- euros to the Bank’s reserves. I bers will each have one vote. With

bulletin G december 2004 13 Panorama

14 bulletin G december 2004 PEARLS IN THE ARCHIPELAGO

The pictures on this spread and on the cover were taken by photographer Kaius Hedenström, who lives and works in Helsinki, Finland, but prefers to spend his leisure out at sea, revelling in the beauty of the Sea of Archipelago. Hedenström also addresses issues relat- ing to the built environment and everyday architecture in the archipelago and in the countryside. “My job is opening people’s eyes,” he says. “We mustn’t go building ugly houses and wrecking the archipelago’s uniqueness.”

bulletin G december 2004 15 New President and CEO

Johnny Åkerholm NIB’s new President and CEO

In September the Board of Directors of the Nordic Investment Bank appointed Johnny Åkerholm, Finland, the Bank’s new President and Chief Executive Marjo Koivumäki Officer. He takes up his position on 1 April 2005 at the Bank’s headquarters in Helsinki. Mr Åkerholm has been appoint- ed for a term of five years, as provided in the Bank’s Statutes. He succeeds Icelander Jón Sigur›sson, who has been NIB’s President and CEO since April 1994. Born in 1948, Johnny Åkerholm holds a licentiate in political science and a master in economic sciences. He has been Secretary-General of the European Bank for Reconstruction and Development, EBRD, in London since 2003. Between 1995 and 2003 he was Under-Secretary of State for Economic Affairs at the Finnish Ministry of Finance. Between 1982 and 1995 he held a variety of senior appoint- ments with the Bank of Finland, ending as head of its Economics Department and, prior to that, heading its Central Bank Policy Department. Other appointments held by Johnny Åkerholm have included the chairmanship of the EU Economic and Financial Com- mittee and of the Nordic-Baltic Monetary and Financial Committee. Referring to Johnny Åkerholm’s long experience of international appointments, Bolli Thór Bollason, Chairman of the Johnny Åkerholm succeeds as President and CEO of NIB as from 1 April 2005. Board of Directors, predicts that his knowledge of international financial insti- tutions will help to strengthen the Bank’s future development, e.g. in the light of the NIB PRESIDENTS accession of the three Baltic countries to Bert Lindström June 1976–June 1986 NIB membership. I Jannik Lindbæk June 1986–December 1993 Jan Callerström January–March 1994 (Acting President) Jón Sigur›sson April 1994–March 2005 Johnny Åkerholm April 2005–

16 bulletin G december 2004 Guest writer

democracy as well as free and undistorted markets. These basic principles must The future of the always be in the back of our minds when we chose closeness over divide and friend- ship over animosity. They can never be taken for granted. We have learned that Baltic Sea region the hard way in this region. The Baltic Sea region must continue to ensure that we meet the needs of the pres- By Uffe Ellemann-Jensen ent without compromising the prospects Chairman of Baltic Development Forum of the future. However, to match this challenge each task accomplished must be History plays an important role in the exists only on a very small scale within followed by new goals and new visions. Baltic Sea region. The region’s past sym- forest products, telecom products, oil & Baltic Development Forum will in 2005 bolises coherence and friendship as well as gas and health care. prepare a joint Baltic Sea Initiative that division and downright enmity. This his- This is not good enough. Unfortunate- unlocks the benefits of regional coopera- toric legacy is the foundation for coopera- ly, it could have something to do with the tion and sets specific goals for what tion in the Baltic Sea area today and in the quality of the business environment. Our regional cooperation aims to achieve in future. key strengths are our strong physical infra- the new era the Baltic Sea region has One very critical factor for the Baltic structure, our skilled labour force, rela- entered. A Baltic Sea Initiative could Sea region is the significant differences tively low levels of corruption and eventually become the basis for discus- among the countries of the Baltic Sea. demanding regulations, a strong science sions and possible endorsement at Baltic Our economic performance, performance system and companies competing on inno- Development Forum’s 2005 Summit in drivers, company practices as well as our vation and uniqueness. However, we have Stockholm. business environments and the strength of a hard time in reducing bureaucracy, low- our democratic institutions remain rather ering government subsidies and cutting heterogeneous because of our history. taxes that curb incentives and prevent us However, in order to move ahead and from rewarding innovation and hard work. capitalise on the momentum created by If we fail to mobilise coordinated the successful enlargement of the regional action on these essential short- About the author: European Union, a new regional initiative comings, the challenges that our differ- Uffe Ellemann-Jensen (b. 1941) was Minister is needed. ences pose might just be too high for any- for Foreign Affairs of Denmark 1982–1993. According to the “State of the Region one to solve in the future. This could force He was President of the European Liberals 2004” launched at the Baltic Develop- companies currently located in the Baltic (ELDR) 1995–2000 and co-founded the ment Forum summit in in Sea area to downgrade their involvement Council of the Baltic Sea States in 1992 as September, the Baltic Sea region has in in the region in order to gain stronger well as the international network organisation recent years outperformed several foothold in other parts of the world. Baltic Development Forum in 1998. European regions on key performance Estonia, Latvia and Lithuania’s mem- measures such as prosperity growth, bership of the NIB is an example of a bold labour productivity growth, and scientific and far-sighted decision that can further innovation. push development and economic integra- Over the last decade, the Baltic Sea tion in our region. In order to maintain region has outperformed the EU-15 and regional cooperation and improve our EU-25 in terms of real GDP growth. innovative capabilities and economic Nevertheless, the region’s growth has not growth, the region must continue to set been strong enough to level differences new and ambitious goals for regional across the cities, sub-regions and coun- cooperation in the new era that the Baltic tries of the Baltic Sea area. Sea region has entered. Moreover, the sub-regions around the Nevertheless, in addition to ensuring Baltic Sea differ significantly in their clus- economic growth and pushing for ter specialisation. Some overlap exists reforms, we must uphold demands for between the regions of the Baltic and the freedom and democracy. Nordic countries and between the Baltic Failure to side with the democratic countries and . However, cluster forces will cast doubt on our overall com- specialisation across the entire region mitment to freedom and worldwide

bulletin G december 2004 17 News from the Nordic Finance Group

Nordic Environmental Development Fund continues

The Nordic Environmental Development Harro Pitkänen, Managing Director of with the decision concerning the fund’s Fund, NMF, a fund for soft financing of Nordic Environment Finance Corporation, future, finance will be available for projects environmental projects in the neighbour- NEFCO. in Russia, Ukraine and Belarus, whereas ing regions to the Nordic area, will contin- NMF, established in 1996, is managed projects in the Baltic countries will no ue to operate. Its previous programme by NEFCO, with NIB participating in the longer qualify. The new guidelines also period expired at the end of 2003, but in evaluation of projects for which finance has mean changed conditions for the granting August 2004 the Nordic Environment been requested. NMF is intended for of financing. For example, the greater part Ministers agreed in favour of a continua- financing on soft conditions, i.e. more of NMF’s inputs in future will be based on tion. The Nordic countries are to put up a favourable terms than those of the market, revolving financing mechanisms. total of 14.25 million Danish kroner (about and the fund grants various kinds of sup- NEFCO’s Managing Director Harro 1.9 million euros) annually for the period port and advantageous loans for environ- Pitkänen is pleased to see NMF continu- 2005–2007. Funding will also be provided mental projects. In the years ahead, the ing. The fund, as he sees it, broadens by the Nordic Council of Ministers. annual contributions of the Nordic coun- NEFCO’s activities by making possible With the greater part of NMF’s capital tries to the fund will be halved in relation project finance of a kind which could not already used, the decision was necessary in to their annual contributions between 2001 be considered within the scope of order for its activities to continue. and 2003, partly with reference to new NEFCO’s core operation. “Only a small part of the fund’s activities geographic constraints. Under the new “This is a valuable dimension to has comprised lending and thus the operating NMF guidelines approved by NEFCO’s activities.” I resources are gradually consumed,” says the Environment Ministers in connection Matias Uusikylä

Joachim Claesson Morten Vagnø Anna Kiiskinen Sirpa Korhonen Torben Nielsen Anders Holmén Jensen

worked for Jyske Bank where he was res- Torben Nielsen (DK) has been appointed NEW APPOINTMENTS ponsible for corporate customers. He works Chief Financial Officer and Treasurer. His Joachim Claesson (SE) has been appoint- at NIB’s office in . areas of responsibility are funding, liquidity ed Deputy Regional Manager for region and portfolio management. Nielsen has also Africa and Middle East, and region Latin Anna Kiiskinen (FI) has been temporarily been appointed a member of NIB’s America. He has previously worked at employed as a lawyer in the General Management Committee. Norddeutche Landesbank in Stockholm and Counsel’s Office. at SEB and . Nordic Finance Group Sirpa Korhonen (FI) has been appointed Morten Vagnø Jensen (DK) has been Financial Analyst in NIB’s Treasury depart- Anders Holmén (FI) has been given a appointed Deputy Regional Manager for ment. Korhonen joins NIB from Nordea Bank permanent position as Investment Officer at region Denmark. Prior to joining NIB he where she worked with corporate analysis. NEFCO.

18 bulletin G december 2004 New partner countries for NDF

During 2004 Nordic Development Fund has signed cooperation

agreements with Cambodia, Leena Saavalainen Kenya and Rwanda. These are three of the world’s poorest countries, with per capita gross national incomes of 210, 290 and 185 euros respectively.

The recent history of Cambodia and Rwanda has been one of war, genocide and conflicts. Maintenance of peace and stabil- ity, therefore, is at the heart of their national strategies for sustainable develop- ment. As recently as the 1970s, Kenya was being compared with South Korea in terms of socio-economic development. Following a change of regime in 2002, after almost two decades of misrule under the Moi regime, with corruption, viola- tions of human rights, deepening poverty and plundering of its natural resources, Kenya has regained the confidence of the donor community and with it a chance of recovery. Cambodia is one of NDF’s new partner countries. NDF has identified the first cooperation projects in the three countries’ energy, transport and water sectors. Initially, NDF financing is expected to total 43 million ply by importing power from Vietnam and the port town Mombasa via Nairobi to the euros. Reliable energy supplies, as well as by extending the distribution network to Ugandan border. The project is also good transport and water supply infra- the poorest groups of the population. expected to benefit adjacent countries structure, are major prerequisites of eco- In Kenya too, NDF will be financing an dependent on transit through Kenya. nomic growth and social development, energy project, but this time in association In Rwanda NDF and the World Bank new income-generating activities and, with the World Bank. The NDF funding are planning to finance two projects in accordingly, the reduction of poverty. will serve to upgrade the power distribu- cooperation: one in the energy sector and In Cambodia, NDF and the Asian tion network, above all in parts of Nairobi one in the urban water sector. Both sectors Development Bank will participate in the where the power distribution system is are in desperate need of extensive support financing of a power transmission line substandard or non-existent. NDF is also after decades of neglect and underinvest- from Vietnam to Phnom Penh, the to join the World Bank in financing ment and following the devastation which Cambodian capital. Most of Cambodia’s improvements to a 35-kilometre stretch of accompanied the 1994 genocide. I energy infrastructure was destroyed under road, as part of the Northern Corridor the Khmer Rouge era, and the need for Transport Improvement project. The investments is obvious. The NDF-funded project aims at improving the infrastruc- project is designed to improve power sup- ture of the transport route running from

bulletin G december 2004 19 News

Loan to Brazil New loan

biggest supplier of the raw material called programme alumina. Alumina is extracted from bauxite, of Börje Lundvall which northern Brazil has rich deposits. for Vietnam Alumina is a white crystalline powder and the raw material for aluminium, a metal During NIB President Jón Sigur›s- used, for example, in the construction and son’s visit to Hanoi in September, he motor industries and for consumer goods. and Vietnam’s Deputy Minister of Alunorte’s principal owners are the Finance, Dr Le Thi Bang Tam, signed Brazilian mining and metallurgy company an agreement for a general loan pro- Companhia Vale do Rio Doce (CVRD) and gramme of 30 million US dollars. Norsk Hydro. Norsk Hydro is one of Sigur›sson also met Deputy Prime Norway’s biggest companies, specialising Minister Vu Khoan to discuss poten- The Alunorte alumina refinery is enlarging in oil and energy and in aluminium pro- tial future NIB financing in sectors its facility in the north of Brazil, raising the duction. where Nordic technology may be of number of production lines from three to Harald Martinsen, Norsk Hydro’s Brazil interest. Sectors such as energy, five. Managing Director, comments: infrastructure, telecommunications, “We are very pleased to have both NIB food industry and shipbuilding were and DnB NOR financing this project. discussed. NIB has granted a loan of 30 million US Alunorte is a very important strategic During the summer of 2004 NIB dollars to Alumina do Norte do Brasil. investment for Hydro. The factory today is and the Ministry of Finance in Work is in progress on the addition of two the main supplier of alumina to our exten- Vietnam agreed a 15 million US dol- more production lines to Alunorte’s plant sive aluminium business in Norway, lar loan for the Vietnam National Coal in northern Brazil. This enlargement will and other countries.” Corporation, Vinacoal. The company raise the company’s annual output capac- NIB is financing the Alunorte factory needs financing to modernise its ity by 1.8 million tonnes to 4.2 million. The enlargement together with KfW, DnB NOR coalmining and boost its output project, scheduled for completion in mid- Bank, ING BHF-BANK and West LB. I capacity. Equipment from Nordic 2006, will make Alunorte the world’s suppliers will be used in connection with the company’s investments. Earlier in 2004 NIB and the Ministry of Finance agreed loans for the company to roll extremely thin and the energy sector and a cement fac- Steel manufacturer fine strip products for razor blades, etc. tory in Vietnam. A loan programme In Hagfors, the production equipment will for small and medium-sized enter- gets loan be upgraded and modified in order to prises was also agreed upon. I boost efficiency and prepare the facility NIB has disbursed two loans to the for an increase in production. Austrian listed steel group Böhler-Udde- Böhler-Uddeholm is a world-leading holm AG for the financing of an investment producer of toll steel, which is its most aimed at expanding production capacity important product. The company also in Sweden. A loan of 10 million euros was produces band steel, welded consum- Copenhagen granted for the group’s subsidiary Böhler- ables and forged products. Uddeholm Precision Strip AB in Munkfors, The Böhler-Uddeholm AG group, with and a loan of 15 million euros for Udde- headquarters in Vienna, was established relocation holm Tooling AB in Hagfors. in 1991 through a merger of Austrian Since 2003, the group has been imple- Böhler and Uddeholm. The latter is one NIB’s Copenhagen office moved into menting a comprehensive investment of the oldest Swedish companies and has new premises on 1 December. The programme at its Swedish plants. A new produced steel in the Värmland province new address is Grønningen 17, 1270 cold rolling mill will be installed at Munk- for more than 300 years. The group has København K, Denmark. The phone fors. The new rolling facility will enable 11,500 employees. I number remains +45 33 144 242. I

20 bulletin G december 2004 Wastewater processing in Turkey

A new wastewater pre-treatment plant has been completed in Kadiköy, a part of

Istanbul. An outfall pipeline more than two The pre-treatment plant Jorgen Ilsoe kilometres long and with a diameter of is right on the coast, about two metres carries the processed where the Bosphorus water to the sea. The plant processes enters the Sea of wastewater from a large area on the Asian Marmora. Under side of the Bosphorus. construction in this “Previously the water went untreated picture, it was into the Bosphorus,” says Jorgen Ilsoe, completed in 2004. NIB’s Vice President and Regional Manager for Africa and the Middle East. In 1999 NIB granted a loan of 7.7 million process wastewater from about 2.2 mil- NIB loans to Turkey go primarily to the euros for the project, which the Istanbul lion people in the first stage up to 2010, state, for on-lending to individual projects. Water and Sewerage Administration, ISKI, but then to be able to receive wastewater Ilsoe says that more Turkish public was in charge of. Nordic equipment was from 3 million inhabitants, allowing for infrastructure projects are in preparation used for the construction works. population growth in the area. with a view to possible NIB finance. The aim has been to create a facility Ilsoe describes Turkey as an important “We see very good prospects of further which will blend with its surroundings. NIB customer. Since the first Turkish loan NIB financing in Turkey,” he says. I This, Ilsoe maintains, has been amply was agreed in the mid-1980s, NIB has achieved. The plan is for the facility to financed about 20 projects in the country.

Torben Nielsen new CFO and Treasurer

take up a position as Executive Commit- year, but they are interesting as long as tee Member with the Depfa Group, head- there is investor demand for them and quartered in Dublin. Heide-Ottosen is in they fit in with NIB’s funding needs. With

Matias Uusikylä charge of the Treasury department at this kind of global transactions NIB can Depfa, which is a company that provides reach more investors in different regions. financial services to public sector cus- NIB also achieves a price reference to tomers the world over. other multilateral financial institutions.” Nielsen, who joined NIB in 1997, says that the main task of NIB’s Treasury NIB’s debt instruments have sold well in department is to provide the necessary Asia. Why? funding for the Bank’s lending to different “Asian, and particularly Japanese, invest- “NIB has the highest possible credit rat- projects. ors have been the Bank’s most important ing thanks to the good quality of its loan As a new feature in its funding strategy, investor group over the years. They have portfolio, coupled with high solvency and NIB has carried out a global issue in the appreciated NIB’s combination of a high liquidity,” says Torben Nielsen. amount of 1 billion US dollars during each creditworthiness and a funding strategy He took over as Chief Financial Officer of the past three years. providing investors with different types of and Treasurer this autumn, at the same instruments.” I time becoming a member of the NIB Will NIB continue with these global Management Committee. transactions? Nielsen succeeds Bo Heide-Ottosen, “NIB cannot guarantee that large and liq- who left NIB at the end of September to uid transactions will be carried out every

bulletin G december 2004 21 NIB in brief

This is NIB

The Nordic Investment Bank (NIB) the highest possible credit rating, Directors and Control Committee. The finances private and public projects that AAA/Aaa, with the leading rating agencies Bank’s operations are controlled by an have high priority with the Bank’s member Standard & Poor’s and Moody’s. agreement between the member countries, countries and the borrowers. NIB finances NIB is a multilateral financial institu- as well as the statutes connected with this projects both within and outside the mem- tion owned by eight member countries: agreement. ber countries. Denmark, Estonia, Finland, Iceland, Lat- NIB has its headquarters in Helsinki NIB offers its clients long-term loans via, Lithuania, Norway and Sweden. The and offices in Copenhagen, Oslo, Reyk- and guarantees on competitive market Bank operates in accordance with com- javik, Stockholm and Singapore. As of 31 terms. NIB acquires the funds to finance mercially sound banking principles. The August 2004, the Bank had 152 employ- its lending by borrowing on the interna- member countries appoint representatives ees. I tional capital markets. NIB’s bonds enjoy to the Board of Governors, Board of

NIB’S FINANCING POSSIBILITIES years. The loans are granted in various ticularly to infrastructure investments. currencies at fixed or floating market- The loans are granted for up to half of the NIB finances investment projects and based interest rates, for up to half of the project’s total cost. Project investment project export, which are of mutual inter- project’s total cost. loans can be utilised to finance all types of est for the member countries and for the project costs, including local costs. The borrower. High priority is given to invest- NIB finances projects in: loans are granted at market-based interest ments that improve economic cooperation • the manufacturing sector, including rates in a currency preferred by the cus- between the member countries. Loans and investments in facilities and machinery, tomer. Project investment loans have been guarantees are granted to finance invest- • infrastructure, including transportation, granted for projects in about 40 countries. ments that secure energy supplies, telecommunications, energy, water sup- In the member countries’ neighbouring improve infrastructure or support research ply, sewerage and waste management, areas, NIB grants loans to projects that and development. High priority is also • environmental improvement, in both support economic development and to given to projects that improve the envi- the private and public sectors, investments that improve the environ- ronment in the member countries and • research and development, ment. The Bank has a special loan facility their neighbouring areas. • cross-border investments, such as cor- for environment-related projects in the NIB participates in the financing of for- porate acquisitions, member countries’ neighbouring areas. eign direct investments that provide • foreign direct investments in the mem- Projects should promote the reduction of employment in the member countries. ber countries. environmental hazards and thus also cross- NIB finances various international pro- border pollution. The environmental jects in emerging markets, as well as with- Regional loans are granted to national investment loans are granted on banking in the OECD area. The Bank grants loans credit institutions for the further develop- terms to governments, governmental to projects that support economic devel- ment of business in priority regions. authorities, institutions and companies. opment in the member countries’ neigh- NIB can also provide investment loans bouring areas, as well as to investments of to projects and companies’ investments, mutual interest for the member countries SPECIAL LOAN FACILITIES including joint ventures and corporate and the borrowing country in various parts For lending outside the member countries, acquisitions, within the OECD area. I of the world. In addition to loans, NIB the Bank maintains a set of special loan provides guarantees for projects that meet facilities. The core of NIB’s lending ope- the Bank’s conditions. rations outside the member countries con- Projects evaluated by the Bank for possi- sists of project investment loans. These are ble financing are subject to analyses of eco- long-term loans—up to 20 years—for nomic sustainability and environmental projects in emerging markets in Asia, the consequences. Further, increasing empha- Middle East, Central and Eastern Europe, sis is attached to social consequences. Latin America, and Africa. Project invest- ment loans are usually granted to govern- ORDINARY LOANS ments or with a government guarantee. NIB offers medium- and long-term Loans are also granted to the private sec- investment loans with maturities of 5 to 15 tor without a government guarantee, par-

22 bulletin G december 2004 Interim Report, January–August 2004

Increased profits

NIB shows good results for the first eight tions sectors. Among its loans, NIB has granted a loan for investments in a new months of the year. Profits for the period financed investments for the expansion of sewerage system in Reykjavik. Within the rose to EUR 111 million, which was an Tunisia’s mobile telephone network, as framework of the so-called Ladoga pro- 11% increase compared with the corre- well as for improvement in Rumania’s gramme, loans were granted to several sponding period last year. Net interest state-owned power network. projects, e.g. projects within the pulp and income rose to EUR 109 million (corre- New loan agreements entered into by paper industry. NIB launched the pro- sponding period in 2003: EUR 102 the Bank during the period amounted to gramme at the end of the year 2003 within million). EUR 1,031 million (1,029), while loans the Northern Dimension Environmental NIB’s total assets amounted to EUR disbursed amounted to EUR 779 million Partnership (NDEP). In July, NIB 16.9 billion, compared with EUR 16.7 bil- (910). NIB’s clients made considerable assumed the chairmanship of the Steering lion at year-end 2003. During the period prepayments during the period under Group for NDEP. under review, the Bank paid its owners, review. This was the case for NIB’s lend- the Nordic countries, EUR 41.3 million in ing both within and outside the Nordic During the period, NIB carried out 13 dividends out of profits for year 2003. countries. borrowing transactions in 6 different cur- The Bank’s Project Investment Loan rencies, in an amount corresponding to The energy sector was the largest recip- facility (PIL) was increased from EUR EUR 1,545 million (2,759). Call options ient of Nordic loans during the period 3,300 million to EUR 4,000 million on on a total of EUR 630 million previously under review. Among other investments, 1 July 2004. The increase provides greater issued bonds were not exercised, thus NIB financed investments in hydro- and possibilities for the Bank to grant loans to bringing the total borrowing during the geothermal power stations in Iceland, in a countries that are not members of NIB. period to EUR 2,175 million. bio-fuelled power station in Austria, as NIB places a great deal of importance on The quality of the Bank’s loan portfolios well as investments in environment- financing of environmental projects. and of its financial counterparties remains friendly energy production in Norway and During the period, the Bank granted nine at a high level. Reversals of previously Sweden. In Finland and Denmark, the new environmental loans, totalling EUR made provisions for possible loan losses Bank financed improvements of the elec- 145 million. Of total loans disbursed dur- were larger than new provisions made dur- trical transmission networks. ing the period, almost 15% were environ- ing the period. The net effect was a posi- International lending continues to be mental loans. One of the Bank’s loans was tive contribution to the Bank’s profit of dominated by loans for infrastructure granted for investments that will result in EUR 3.3 million. I investments, particularly within the ener- reduced emissions of pollutants into water gy, transportation, and telecommunica- and air at a Swedish pulp factory. NIB also

Key figures (in EUR million) Jan.–Aug. 2004 Jan.–Aug. 2003 Jan.–Dec. 2003 Net interest income 109 102 155 Profit 111 100 151 Loans disbursed 779 910 1,841 New loan agreements 1,031 1,029 1,859 New debt issues 1,545 2,759 3,258 Profit/average equity (%) 9.9 9.5 9.5

31 Aug. 2004 31 Aug. 2003 31 Dec. 2003 Loans outstanding 10,472 10,323 10,522 Total assets 16,908 17,303 16,666 Net liquidity 3,189 3,802 2,744

Number of employees 152 147 147

bulletin G december 2004 23 FINANCING SUCCESS

The Nordic Investment Bank (NIB) offers long-term loans and guarantees on competitive market terms for both private and public sector projects.

Lending covers a wide spectrum, including infrastructure investments, research and development, and cross-border company acquisitions and start-ups. Loans are provided for projects in manufacturing industry, energy and metal extraction, construction, trade and services, transport and communication.

NIB was originally formed by the five Nordic countries and in 2 005 will acquire three new owners with the accession of Estonia, Latvia and Lithuania. NIB has clients both in and outside the member countries. The Bank now has operations in about 40 countries.

Fabianinkatu 34, P.O. Box 249, FI–00171 Helsinki, Finland. Telephone +358 9 18 001, [email protected], www.nib.int