Increased focus on rapidly growing markets
NIB is intensifying its activities in emerging markets, which are of major importance for its member countries and the business sector. Today, the Bank’s loans to non-member countries represent one fifth of the total lending portfolio. To meet these growing needs, NIB has appointed representatives for China, India and Russia.
NIB is intensifying its lending operations in the countries outside its membership area by selectively entering new growth markets. The Bank will focus its activities and have a more active presence on its key markets in China, India and Russia.
“Our goal is to strengthen our focus on these expanding economies. They are key targets for investments from our member countries,” says Nils E. Emilsson, First Vice-President and Head of Lending.
The Bank expects to see a growing demand for long-term financing, particularly in infrastructure development, environmental projects, and capital-intensive industries. In 2007, the Bank focused on investments in manufacturing, telecommunications and energy.
Booming business in China
During recent years, NIB has been particularly active in China, which is the largest single borrower among the Bank’s non-member countries. NIB has cooperated with the People’s Republic of China for over 20 years. NIB stands for experience-the Bank has participated in the financing of over 200 projects in the country. “Within the general and rural development loan programmes, the Bank has participated in financing in different sectors, including environmental and energy efficiency projects, medical services and rural development activities. NIB has been able to provide financing through subprojects, which typically are in the amount of USD 2-10 million,” says Xuemin Shao. He is Chief Representative for China and East Asia, and located in Beijing.
According to Mr Shao, business projects with the greatest potential can be found in Chinese priority sectors, including amongst others environment-friendly technologies, rural development and medical services. Environmental projects suit NIB’s operations very well, since the lending focus for the Bank in this country is on environmental improvements.
“Chinese municipalities are particularly interested in projects for reducing energy consumption and improving energy efficiency. This is done by encouraging technical innovation and introducing renewable energy. There is therefore a demand for Nordic and Baltic technical know-how and innovation in these fields,” Mr Shao explains.
In addition, NIB is now also exploring possibilities to work with China’s private sector.
“There are cultural challenges when first tapping the market; nevertheless, challenges are always coupled with huge opportunities when you know the country better,” Mr Shao adds.
Indian business opportunities
NIB can provide financing in India to public and private sector entities in different priority areas.
“Especially infrastructure projects within the energy sector, such as power generation, transmission and distribution, as well as road development can offer interesting future prospects. Telecommunications is also a potential sector, with about seven million new subscribers each month,” says Dr Sethi.
Dr Sethi is located in New Delhi and is prepared to help NIB’s customers with policies and local practices when doing business in India.
Russian market growing
“Especially the manufacturing industry is growing rapidly in Russia. Among the infrastructure projects, energy and power projects are very important. The country needs energy-saving equipment and technologies,” says Mr Kovtun. Modern technologies, equipment, machinery and innovation are all very high on the agenda and are being addressed by the Government.
On the Russian market, NIB has experience from the telecommunications sector and projects related to environment-friendly technology. NIB has cooperation with several Russian banks, which act as intermediaries for projects within Russian loan programmes.
Facts about NIB in non-member countries
About one fifth, or EUR 2,417 million, of NIB’s loan portfolio totalling EUR 12,291 million was directed to nonmember countries at the end of 2007. In non-member countries, NIB finances projects of mutual interest to the country of the borrower and the member countries. High priority is given to projects involving environmental improvements.
The Bank has loans outstanding in approximately 30 emerging markets in Africa and the Middle East, Asia, Europe and Eurasia, and Latin America.