All projects which NIB considers for financing are subject to an objective analysis. NIB attaches great importance to ensuring that the projects it finances are both technically and economically sound and that they are implemented efficiently. The borrower should be able to show economic stability, with a satisfactory level of solvency and profit. NIB analyses all projects from an environmental perspective and refrains from financing projects that are environmentally questionable. The analysis is made by NIB's Credit and Analysis Department, which is independent from the Bank's Lending Department.
For its analysis of a project, NIB needs certain information from the company and/or project sponsors concerned. The scope of the material required depends on the type of project.
NIB usually requires the following kinds of background material for analysing a project:
• Company information: information on owners, board and management, as well as annual reports
• Project plan, including investment proposal
• Financial projections
• Information on other investments, instalment plan for current loans, information on planned loans
• Environmental information
• The same material as mentioned above (unlisted companies), if it has not already been made publicly available
• Project sponsor information
• Project memorandum; detailed project description
• Financial projections
• Environmental impact assessment (EIA)
• Market information; independent consultancy report
• All legal information concerning the project
NIB analyses the country risk regarding potential new programme countries. Reviews of existing programme countries are produced on a regular basis. The country risk analysis focuses on the general and political environment, economic policy, foreign trade and foreign debt, as well as the business environment and financial sector environment.
NIB analyses and assigns risk classifications to all banks acting as intermediaries. The analysis is based on financial data and key figures, together with a qualitative assessment.
NIB analyses all corporate counterparties. The analysis comprises a quantitative and a qualitative assessment relying on recognised methods of financial analysis, own estimates and projections, sensitivity checks as well as peer-group comparisons. It also includes an assessment of non-quantifiable elements, such as industry characteristics, market position, management, institutional conditions, regulatory framework and corporate governance.
For project and structured financing transactions, as well as otherwise when a project finance analysis approach is deemed to be required, an extensive project risk assessment and risk classification is conducted. The analysis comprises both a quantitative and a qualitative assessment of the project. The quantitative assessment is based on the financial projections for the project, focusing on the project's ability to service the debt. This includes business modelling and identifying risk drivers. The borrower's own estimates and projections and sensitivity analysis are usually required. The qualitative assessment includes market, technical, and institutional aspects of the proposed project. Furthermore, country risk is considered to the extent that business conditions in the country—such as legal, regulatory, or tax frameworks—may adversely impact the project.
NIB conducts an internal environmental review of all loan applications.
A loan to Lidl Suomi Ky will finance the construction of a new warehouse in Järvenpää and investments in new Lidl stores in Finland.
16 Jun 2017
On 18 July, the EU High-Level Expert Group on Sustainable Finance will arrange a public hearing on the its interim report. Stakeholders are encouraged to provide feedback to the European Commission and the Group on ways to establish a more sustainable financial system.
14 Jun 2017
The flow of deals in the Bank’s lending continued to be at a high level, with a total of EUR 610 million in loans agreed and EUR 781 million in loans disbursed, in the first four months of the year.
13 Jun 2017