9 Apr 2020

NIB’s first responses to Covid-19 pandemic

By Henrik Normann, President & CEO of NIB

When we published our results for 2019, we expected that 2020 would be business as usual: that the Bank would continue to promote sustainable growth, driven by the increasing demand for public and private investments in sustainable development. We were expecting to disburse slightly over EUR 3 billion this year.

However, due to the outbreak of the corona pandemic, we have revised our plans significantly. It is obvious that, in addition to serious health consequences around the world, the COVID-19 pandemic will cause a sharp decline in economic activity and threaten growth and employment. This also affects the Nordic and Baltic countries.

So, what steps has NIB taken thus far?
We have activated our contingency plan in order to protect our staff and to ensure business continuity. This guarantees that NIB will be able to continue to make payments and settlements also in crisis situations. As part of these measures, the Bank has been split up and is working from different locations. Most of our staff are working from home.

Nordic-Baltic countries call on NIB
In late March, the Nordic-Baltic Ministers, who are Governors of NIB, invited the Bank to take swift action to help alleviate the effects from the coronavirus crisis. As an immediate response, we will substantially increase our lending. Our loans will be made available to member countries and sustainable businesses that are facing short-term liquidity problems due to the crisis. We stand ready to extend loans to financial intermediaries for on-lending to small and medium-sized companies as well as to provide direct financing to larger businesses.

As part of these measures, we have signed a EUR 750 million loan with the Republic of Estonia on 27 March. On 3 April, the Bank signed a EUR 400 million with the Republic of Lithuania. A third loan was signed with the Republic of Latvia for EUR 500 million on 8 April.

NIB issues Response Bonds
In order to fund this increased activity, NIB has issued its first, EUR 1 billion NIB Response Bond, and a second SEK 4 billion Response Bond. The proceeds of the bonds will finance projects that alleviate the social and economic consequences of the COVID-19 pandemic in our member countries.

NIB's mission is twofold: to finance projects that improve productivity and benefit the environment in its member countries. We will continue to do that. It is of utmost importance that long-term challenges, such as climate change, will not be forgotten in this crisis.

As was pointed out by the Ministers of our owner countries, we also have a supportive role in economic crises. We are a well-functioning funding tool, and our financial position is strong. We will implement the lending increase in the context of the Bank’s risk management framework, sound banking practices and our triple-A rating (AAA/Aaa).

NIB publishes Q1 interim report
On 9 April, we published the Bank’s Q1 interim management statement, which you can read here.