EUR 20 million loan to City of Tallinn

City of Tallinn and Nordic Investment Bank signed EUR 20 million loan agreement

Representatives of the City of Tallinn and the Nordic Investment Bank (NIB) signed a loan agreement on 7 May 2003 in Tallinn’s City Hall. The loan amounts to EUR 20 million, or EEK 300 million, and is intended for the implementation of a planned investment programme for, among other things, education, a social housing programme, the development of municipal services and activities for youth and sport, as well as road building. The City is planning to invest a total of EEK 860 million this year.

The loan is NIB’s first direct loan without state guarantees to a municipality in the Baltic countries. It has a maturity of 5 years with a grace period of one year. The credit rating of the City of Tallinn for its long-term foreign debt was recently upgraded to A3 by Moody’s.

The loan agreement was signed by Mr Ahti Kallaste, Financial Director, City of Tallinn and Mr Erkki Karmila, Executive Vice President, NIB.

NIB has financed more than 60 municipal projects in the Baltic countries through credit lines with the Ministries of Finance and in cooperation with local intermediaries. Under its environmental credit line with Estonia NIB is cooperating with the Environmental Investment Centre for the financing of prioritised municipal environmental projects.

NIB has been active in the Baltic countries since 1991 and has financed more than 300 private and public sector projects. NIB’s outstanding loan commitments to Estonia amount to appr. EUR 250 million.

NIB and the Republic of Estonia have signed a framework agreement in 1994. The agreement is ratified by the Estonian parliament.