European Investment Bank (EIB) was in Tallinn
this week to finalize an 8.6 billion kroon (550 million euros) loan to the
The money will be used to add to the government's resources in order to obtain larger 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 competitive lending terms due to its affiliation with the EU and ability to borrow from capital markets at favorable interest rates.
Minister of Agriculture Helir-Valdor Seeder said that this loan will most likely not be the last for Estonia, but that Estonia's loan burden is low compared to those of most EU nations. This in turn, he said, makes lenders more willing to lend money to Estonia.
According to Seeder, the loans are earmarked for creating conditions to overcome the current economic crisis.
"At this point maximum use of EU funds is extremely important. The state needs to make investments also in tough times into large projects that are likely to create hundreds of jobs," Seeder told reporters.
According to plans,Estonia will use approximately one third of the amount for road building and repair projects as co-financing for EU aid.
Estonia last borrowed money in 2002.