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EBRD issues new strategy for Lithuania
As part of a new strategy published today on its website, www.ebrd.com, the EBRD will concentrate its future activities in Lithuania in sectors such as energy, rail, municipal infrastructure and financial services that can best promote growth and help the country's accession into the European Union.
The strategy acknowledges that Lithuania has made substantial reforms in its continuing embrace of a market economy, including price and trade liberalisation, enterprise privatisation and financial sector reform.
The EBRD will help Lithuania prepare for EU accession by investing in more infrastructure and environmental projects, supporting large-scale enterprises, continuing to support the development of the financial sector, and continuing to help develop small and medium-sized businesses. The Bank aims to attract additional foreign investment, which is critical to ensure future dynamic growth.
In particular, the EBRD will try to attract more private-sector investment to support the restructuring of the country's infrastructure, including the energy sector. To this end the Bank is presently working with the Ministry of Economy to help reform Lithuania's concessions law to bring it into line with best international practice and EC requirements. The Bank will continue to support the rail sector, where late last year it provided $54 million to Lietuvos Gelezinkeliai, the state rail company, to help finance the rehabilitation of 155 kilometres of track.
The EBRD will also work to develop municipalities across Lithuania. In mid-2001, a second €14.7 million loan to the city of Kaunas helped support a water and waste-water programme, bringing clean drinking water to the local people. The Bank will invest in other municipal projects across the country - such as urban transport and district heating - wherever possible without requiring sovereign guarantees, so as to avoid constraining the central budget. At the same time, the Bank will look at new ways to finance municipalities through local banks.
In the financial sector, the EBRD will focus on non-bank financial institutions, including those handling pensions, insurance and mortgage finance. The EBRD will continue to work with local banks and other institutions to strengthen the countries' small and medium-sized enterprises, important for both economic stability and regional development.
The strategy also highlights the Bank's commitment to the agribusiness sector. A €2 million loan from the Bank through its Grain Receipts Programme to Šiauliu Bankas is helping the sixth-largest bank in Lithuania extend loans to the agricultural sector. The Bank will aim to extend similar loans to farmers across Lithuania through local banks under this Programme.
The EBRD is aware of the challenges of the region, and by working with the local authorities, the Bank revises its country strategies every two years with the aim of making the fullest impact on the countries as they develop towards a market economy. To date the EBRD has invested €419 million in 30 projects in Lithuania.
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