The EBRD is extending the long-term secured loan to Nelss to finance the replacement of the existing saw machinery by a new modern line to increase productivity and eliminate bottlenecks in the manufacturing process, the bank said.
The EBRD intends to syndicate $1 million to a local bank. The project's total cost amounts to $11.6 million.
It is one of the first cases of direct EBRD financing to a Latvian industrial enterprise.
Owned by local entrepreneurs, SIA Nelss was established in 1993 and is currently the biggest sawmill in Latvia selling sawn timber, mainly to the UK market. Most of the sawn timber is produced at its own sawmill in the Airzkraukle region and part of it is purchased from other local sawmills and further processed by Nelss.
The company also sells building materials through its retail outlets in Latvia.
Latvia possesses 2.8 million hectares of forest stands, representing 44.3 percent of the country's total land area. Approximately 8.7 percent of total forest area is protected. Overall, the forest stock is considered to be under-utilized and the sustainable annual cut could be increased from 7.8 to 10.5 million cubic meters.