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Leading Estonian bank to receive DM 24 million in EBRD loans
As part of its ongoing strategy to support the Estonian private sector, the European Bank for Reconstruction and Development (EBRD) has signed two separate loans with Hansapank, the largest bank in Estonia. The first loan, a DM 12 million (ECU 6.5 million) credit line, will help Hansapank to increase its medium-term lending to private sector clients operating in Estonia. The second, also of DM 12 million, is a housing finance facility to provide long-term secured loans to buy principal residences in Estonia.
"These loans, the fourth and fifth transactions that the EBRD has arranged with Hansapank, will allow the bank to increase its range of products and develop new markets", said David Hexter, Deputy Vice President of the EBRD. "Targeted at private sector enterprises, the credit line will finance medium-term projects of up to DM 2.5 million in several industry sectors such as energy, agribusiness, chemicals, construction and tourism".
Speaking about the housing finance facility, Mr Hexter added: "Home ownership and access to mortgage finance are hallmarks of a market-oriented economy which allows people to have a stake in the prosperity of their country. This first EBRD housing finance facility will help increase home ownership and enable Hansapank to provide the types of services offered by most international banks".
Demand for housing loans is expected to be more than DM 125 million (ECU 68 million) for 1996 and Hansapank already has nearly 300 housing loans. The housing finance facility will be paid in two tranches.
The EBRD's first loan to Hansapank, signed in October 1994, was a DM 17 million (ECU 9 million) credit line which is fully disbursed. The second transaction, signed in May 1995, was a US$ 10 million (ECU 7.9 million) transitional assistance facility designed to assist Hansapank with its trade finance and treasury operations. In June 1995, Hansapank and the EBRD became investment partners in A/S Eesti Hoiupank (The Estonian Savings Bank).
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