Multi-million euro loan not the last for Estonia

  • 2009-05-27
  • By TBT staff

The 550 million euro loan is the first since 2002 for Estonia

TALLINN- TheEuropean Investment Bank (EIB) was in Tallinn this week to finalize an 8.6 billion kroon (550 million euros) loan to theEstonian government. 

The money will be used to add to the government's resources in order to obtainlarger EU funding. Such funding, which is for numerous projects throughout Estonia,requires a financial commitment from the government.

The EIB explained to The Baltic Times that it offers very competitivelending terms due to its affiliation with the EU and ability to borrow fromcapital markets at favorable interest rates.

Minister of AgricultureHelir-Valdor Seeder said that this loan will most likely not be the last for Estonia, but that Estonia's loan burden is low compared tothose of most EU nations. This in turn, he said, makes lenders more willing tolend money to Estonia.

According toSeeder, the loans are earmarked for creating conditions to overcome the currenteconomic crisis.

"At this pointmaximum use of EU funds is extremely important. The state needs to makeinvestments also in tough times into large projects that are likely to createhundreds of jobs," Seeder told reporters.

According to plans,Estonia will use approximately one third of the amountfor road building and repair projects as co-financing for EU aid.

Estonia last borrowed money in 2002.