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EBRD and EU join Dexia in supporting Slovak municipalities
Finance for improvements in water, road and heating systems
The development of local and regional economies remains one of the key
challenges for the new EU member states in central and eastern Europe. The
EBRD is encouraging this process through an agreement with Dexia banka
Slovensko a.s. which will support long-term lending to small and medium
municipalities and their municipal companies for infrastructure projects. The
agreement is supported by funding from the EU PHARE programme.
Long-term loans with a maturity of up to 15 years will be extended in amounts
of SKK6 million (€150,000) to SKK200 million (€5 million). The EBRD will take
35 per cent of the risk of each loan up to a total of €8 million equivalent,
supporting new lending by Dexia to municipalities of over €22 million.
The agreement is the first signing in the Slovak Republic under the EU/EBRD
Municipal Finance Facility, launched in April this year. Dexia banka will
extend loans for the construction, up-grading or refurbishment of municipal
infrastructure in water supply, waste-water treatment and sewerage
infrastructure, solid waste, district heating systems, public roads, public
parking and traffic management, public transport infrastructure and equipment
for improved administration.
Alex Auboeck, EBRD Director for the Slovak Republic, said the facility will
provide necessary finance to small municipalities for important infrastructure
development.
The European Commission, through the PHARE Programme, is providing support for
the programme to encourage long-term financing for infrastructure projects. As
part of the programme, the European Union´s support will allow Dexia banka and
the EBRD to provide grant-funded technical assistance to municipalities for
project development and implementation.
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