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EBRD grants credit line to Estonian commercial bank
Small and medium-sized enterprises in Estonia will benefit from a DM 17 million (ECU 8.7 million) credit line financed by the European Bank for Reconstruction and Development (EBRD). Through an agreement signed in London today, the credit line will go to Hansabank Ltd, a commercial bank organised as a joint-stock company incorporated under Estonian law.
Jacques de Larosière, President of the EBRD, said: "This loan will enable Hansabank to increase its medium-term lending, mainly to the private sector and particularly to small and medium-sized enterprises in Estonia. It will be Hansabank's first major financing through the international debt markets".
Hannes Tamjarv, Chairman of Hansabank, commented: "The terms of the DM 17 million loan are advantageous to Hansabank and reflect the EBRD's confidence in our loan policies and procedures. Not only will the credit line provide additional financing for the private sector but it will enable Hansabank to maintain its own pre-eminence as the leading provider of banking services in Estonia".
The Baltic Investment Special Fund will finance half of the credit line and the remainder will be funded from the EBRD's ordinary capital resources. The loan will be used for on-lending to Hansabank's clients, mainly to finance projects up to DM 2.5 million. Of the 25 projects under consideration, Hansabank has already accepted 15 covering industries such as wood processing, hotels, restaurants and port equipment manufacturing.
Hansabank was founded in 1991 and has its head office in Tallinn. The client base comprises: small and medium-sized enterprises with at least 50 employees and a sound financial track record; Estonia's emerging middle class; and an increasing number of wealthy individuals. With 350 employees, three branches in Tallinn, two in Tartu, and one in each of Parnu and Rakvere, Hansabank is Estonia's largest privately owned bank, with approximately 20 per cent of the country's banking assets.
The Baltic Investment Special Fund was established in April 1992 between the EBRD and the Governments of Denmark, Finland, Iceland, Norway and Sweden. It is an open-ended fund to promote private sector development through support for small and medium-sized enterprises in Estonia, Latvia and Lithuania.
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