NIB Nordic Investment Bank

Eligibility criteria

Eligibility criteria

In compliance with NIB's mission, all projects financed by the Bank should improve competitiveness and/or the environment, the two pillars of NIB's mission. Furthermore, outside the membership area, projects financed by NIB should be of mutual interest to the country of the borrower and the member countries.

Improving the competitiveness

NIB finances projects that raise the efficiency of products and services offered by the Bank's customers. Hence, the first question when evaluating any potential project is to what extent the project contributes to improving efficiency or productivity.

NIB distinguishes between internal factors - those businesses can directly influence - and the external factors, those which exist in the company's business environment. The effects of a company's investments are often higher for the society or the economy than for the company.

Internal factors:

  • Upgrades of physical capital such as equipment or human capital in the form of skills 
  • Business process innovation: improving business practices or strategies 
  • Product innovation 
  • Improved access to suppliers.

External factors: 

  • Improvements in infrastructure, including roads as well as telecommunications and energy networks 
  • Improvements in health and education facilities 
  • Increased competitive pressures 
  • Demonstration effects or leakages: showing the way for other companies or simply involving a spill-over of knowledge or technology 
  • Strengthening cluster or agglomeration effects, for example, through better communications or research and development.

To assess the potential impact on competitiveness of projects, the Bank looks at the relative improvement in the company's performance compared to a no-project situation. The relative impact on the company or on the business sector is compared to similar projects in similar sectors. To properly gauge the expected benefits of the project, NIB also assesses the implementation risk, the risk that the project's full potential will not be realised.

Improving the environment

The environment is another pillar of the Bank's mission. It means that NIB provides loans and guarantees for projects that prevent and treat pollution. When the Bank evaluates the environmental impact of a project, it considers the following questions: 

  • Does the project show a net benefit for the environment? The Bank carries out a before and after comparison of the project's expected effects on the environment. 
  • Does the project fit into NIB's environmental focus areas? These include cleaner production and resource management; environmental technology; emission reductions; and renewable energy. 
  • Does the project include research and development that leads to environmental benefits? 
  • Does the project enhance public transport and transport solutions so they benefit the environment? 
  • Does the project raise industry standards by applying an innovative solution?  

To achieve a positive environmental impact rating the project must be in compliance with NIB's Sustainability Policy and Guidelines as well as relevant national legislation. A direct positive environmental net impact requires a quantitative assessment.

Defining and limiting the scope or boundaries for the analysis constitutes the first step in assessing the fulfilment of the Bank's mission. Every project is assessed against:

  • The peer group performance
  • Best available improvement
  • Absolute positive environmental impact.

The environmental impact is measured on a six-degree scale, including a negative rating. Similarly to the assessment of competitiveness impact, the environmental assessment covers both the potential impact as well as the implementation risk of the project.

Information and background material

To assess mission fulfilment the Bank needs to understand the client's rationale for, and basic assumptions behind, the investment decision and the context of the investment.

For instance, in a larger energy generation project such as a wind farm, most of the information related to environmental issues is available in the environmental impact assessment and feasibility studies. For public transport projects that increase capacity in trains, the information should relate to quantitative environmental benefits of transferring passengers from road to rail. To assess both the environmental impacts and the impact on competitiveness, the basic information would consist of traffic volume forecasts combined with performance data on trains.

Links
Risk Management Policies (403 KB)
Sustainability policy and guidelines (443 KB)
General guidelines for procurement (157 KB)
Compliance & anti-corruption 
Agreed loans
Analysis
Annual Report, Lending

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