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EBRD helps set up investment bank in Lithuania
The European Bank for Reconstruction and Development (EBRD) and the Government of Lithuania today signed an agreement to establish the Lithuanian Development Bank (LDB) with an initial share capital of ECU 5 million. The EBRD will make an ECU 1.8 million equity investment in LDB, a stock investment bank which will provide medium and long-term funds to the Lithuanian private sector.
David Hexter, Director of Financial Institutions at the EBRD, said: "The Lithuanian Development Bank will provide a much needed channel for medium-term funds to reach Lithuanian private sector small and medium size enterprises. By boosting commercially viable and profitable local businesses, the LDB will help them modernise and become more competitive, generating additional employment, revenues and export earnings."
LDB's staff will benefit from training in sound, internationally accepted banking principles. Through its demonstration effect to other local commercial banks, it will help introduce state of the art project analysis and risk assessment techniques to the Lithuanian banking sector.
The two founding shareholders of LDB are the Government of Lithuania through the Ministry of Finance, with 64 per cent of the share capital and the EBRD with 36 per cent. Of the ECU 1.8 million from the EBRD, 50 per cent will be financed from the Baltic Investment Special Fund and 50 per cent from the EBRD's ordinary capital resources. The Nordic Investment Bank will provide technical assistance and training.
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