EU Bank Opens Doors In Ukraine

KIEV, Ukraine -- The European Investment Bank (EIB), a financing institution of the European Union, has launched operations in Ukraine, saying that it has 500 million euros earmarked for investment into Ukrainian and Russian markets.

European Investment Bank (EIB) President Philippe Maystadt addresses a news conference in Brussels

While preparations for the opening started last year, the bank was officially launched on Feb. 7, when Ukraine’s parliament ratified a June 2005 framework agreement.

Constantin Synadino, head of the Estonia, Latvia, Lithuania, Russia and Ukraine division of the EIB, said his bank will provide financing for government projects in the environmental protection, transportation, energy and telecommunications sectors.

The EIB plans to cooperate and co-finance projects in such sectors in connection with the European Bank for Reconstruction and Development, and with other international financial institutions active in Ukraine.

In addition to the EBRD, the EIB joins two other Western lending institutions that have been active in Ukraine since the 1990s. They include the World Bank and the International Finance Corporation, the private sector financing arm of the World Bank. These financial institutions have invested $7.5 billion in more than 100 projects in Ukraine since 1991.

The EBRD and IFC fund private sector enterprises; the EIB and the World Bank finance state projects.

Synadino said the EIB is already eyeing roadway development projects in Ukraine. Funding projects in this sector in cooperation with the EBRD could be approved within months, he added.

Ukraine’s state roadway administration, Ukravtodor, announced Feb. 21 that it planned to raise 100 million euros from the EBRD to finish reconstruction of the Chop-Kyiv highway, which stretches from the Hungarian-Slovak border to the capital. An EBRD official told the Post that his bank has financed two Ukravtodor Chop-Kyiv highway projects, granting 175 million euros in financing to them since 2000.

The EIB has operated in Russia since July 2004 financing three environmental protection projects in St. Petersburg region valued at 85 million euros.

Synadino said the EIB is also eager to finance projects in Moldova and Belarus, adding that the EU Commission has not yet approved work in these countries.

The EIB was set up in 1958 under the Treaty of Rome, which established the European Union, then known as the European Community. The EIB has since grown into an international financing institution active in dozens of countries worldwide.

Source: Kyiv Post