|
EBRD loan agreement helps St Petersburg to improve the city's investment climate and its financial position
The European Bank for Reconstruction and Development (EBRD) and the city of St Petersburg today signed the second tranche of a US$ 100 million (ECU 88.2 million equivalent) framework loan agreement. This loan will enable St Petersburg to reduce the cost of servicing its short-term debt, allowing a greater emphasis on investment in infrastructure and basic municipal services.
"The EBRD continues to consider St Petersburg as a creditworthy guarantor and a trustworthy borrower. With the help of this loan, St Petersburg can further improve its financial position," said Istvan Ipper, Deputy Director of the EBRD’s Russia Team. "By improving the city’s financial disclosure and reporting practices, the agreement contributes substantially to the transition in St Petersburg."
Proceeds of the loan will be used to re-finance the city’s high interest-bearing, short-term local debt, lowering the interest burden and allowing St Petersburg to prepare and implement longer-term investment objectives. These include better basic services and infrastructure, which will in turn encourage foreign investment in the city. The loan is provided in several tranches, the first of which, US$ 30 million (ECU 26.46 million), was provided by the EBRD in August. Today’s tranche totals US$ 15 million (ECU 12.88 million).
This agreement is an integral part of the EBRD’s long-term commitment to the city. For more than three years, the Bank has helped St Petersburg to reform its municipal services, budgeting and financial controls, and to establish a coherent and prioritised investment and borrowing programme. The Bank worked closely with the city authorities in undertaking the demanding reforms required by the Creditworthiness Enhancement Programme, which has led to an improvement in their financial management practices. Today’s loan continues this collaboration.
|
