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 G december 2001 HEADQUARTERS Fabianinkatu 34 P.O. Box 249 FIN-00171 Helsinki Finland Telephone +358 9 18 001 Telefax +358 9 1800 210 18 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 G 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 G 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.