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EBRD takes equity stake in Investment Bank of Latvia
The Investment Bank of Latvia (LIB) today signed an equity agreement for DEM 5.4 million (ECU 2.8 million) with the European Bank for Reconstruction and Development. Set up in 1992 under the auspices of the Baltic Investment Programme, the LIB seeks to promote Latvia's economic development by mobilising hard currency resources to lend to the local private sector.
Jacques de Larosière, President of the EBRD, commented: "This is an important project with long-term benefits because it will help the LIB to serve its principal objective of supporting the growth of small and medium-sized private sector enterprises. At the same time, LIB will be able to help the EBRD identify opportunities for co-financing projects which are too large for LIB to finance on its own."
Uldis Osis, the Latvian Minister of Finance and Chairman of the LIB, added: "EBRD's investment in LIB will have many knock-on effects: corporate clients will be offered the first investment banking services in the country; we will see more hard currency foreign investments in productive fixed assets in Latvia; and local staff will be trained in the application of sound banking principles. We also expect new job opportunities to be created."
The LIB will focus investments mainly on export-oriented private sector projects and on those sectors most advantageous to the Latvian economy, such as wood processing, the food and agri-business, tourism, building materials, clothing and textiles and transportation services.
50 per cent of EBRD's investment will be financed by the Baltic Investment Special Fund under the Baltic Investment Programme, while the remainder will be financed from the EBRD's ordinary capital resources.
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