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EBRD grants credit line to Latvian bank
Small and medium-sized enterprises in Latvia will benefit from a US$ 10 million (ECU 8.7 million) credit line from the European Bank for Reconstruction and Development (EBRD). Through an agreement signed in London today, the credit line will go to Latvijas Zemes Banka (LZB), a commercial bank organised as a joint-stock company incorporated under Latvian law.
At the signing, George Krivicky, Director of the Baltics and Belarus Country Team at the EBRD, said: "This is the EBRD's first debt transaction with a privately-owned Latvian commercial bank. This loan will enable LZB to increase its medium-term lending, mainly to the private sector and particularly to small and medium-sized enterprises in Latvia".
Andris Ruselis, Chairman of LZB, commented: "Not only will the credit line provide additional medium-term lending to the private sector but it will enable LZB to fulfil its objective of becoming a leading universal bank in Latvia".
The Baltic Investment Special Fund will finance 35 per cent of the loan and the remainder will be funded by the EBRD's ordinary capital resources. The credit line will be used for on-lending to LZB's clients for financing individual projects up to US$ 1.5 million. Of the projects under consideration, a number have already been approved by LZB and cover industries such as sawmills, wood processing, hotels, restaurants and food processing.
Founded in 1989 and subsequently privatised, LZB is the seventh-largest bank in Latvia. With 160 employees, within its head office and main branch in Riga and its eight other branches throughout Latvia, LZB is currently focusing its products towards medium-sized enterprises. LZB's roots are agricultural, but over the past five years it has set its sights on becoming a full service universal bank with a diversified client portfolio.
The Baltic Investment Special Fund was established in April 1992 by the EBRD at the request of the governments of Denmark, Finland, Iceland, Norway and Sweden, as part of the Baltic Investment Programme. Its purpose is to assist in the promotion of private sector development through support for small and medium-sized enterprises in Estonia, Latvia and Lithuania.
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