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EBRD and Komerční banka sign €10 million credit line
European Commission provides additional support for SMM financing
The EBRD is extending a €10 million credit line to Komerční banka (KB) to
support small and medium-sized municipalities (SMMs), their utility companies
and municipal service companies in the Czech Republic. The loan comes under
the Municipal Framework Facility funded jointly by the EBRD and the European
Commission (EC) and is complemented by up to €1.9 million in financial and
technical support from the EC.
The Facility will help KB provide smaller long term financing for municipal
infrastructure, local transport, heating, social housing, urban redevelopment,
health, education and recreation. The development of SMMs is a focus for the
EBRD. KB, with 359 branches and 35 Medium Enterprises and Municipalities
Business Centres, plays a leading role financing them in the Czech Republic.
Using the experience of its parent company, Société Générale, KB helps small
and medium-sized municipalities cope with the investment needs related to
environmental improvements in achieving EU standards. The loan will help KB
improve the accessibility of long term financing for smaller municipalities
and facilitate cooperation during preparatory stages of projects.
André Léger, Executive Director for Marketing at Komerční banka, said the
credit line is an important boost for the bank’s lending operations. Based on
this funding, the bank is currently preparing a new credit offer which should
be launched during the second half of 2006.
François Lecavalier, EBRD Director for the Czech Republic, said providing
support and long term financing to small municipalities will contribute to an
improvement in citizen’s quality of life through upgraded municipal
infrastructure and improved, energy efficient services. The agreement with KB
will contribute to the further development and funding of this key sector, he
added.
The EU/EBRD Municipal Finance Facility is a joint initiative by the EBRD and
the European Commission to stimulate commercial bank lending to small and
medium-sized municipalities in the new EU countries plus Bulgaria and Romania.
The €175 million facility aims to address the shortage of long term finance
available to small cities and towns. The EC, through the PHARE Programme (http://europa.eu.int/comm/enlargement),
is also providing financial and technical cooperation funds to help
municipalities to prepare viable projects. A portion of the funds will help KB
to implement the programme and contribute to staff training.
Acting Head of the Representation of the European Commission to the Czech
Republic, Kateřina Thompson, said that the new facility exemplifies the
European Union’s commitment to small municipalities. The EU will continue to
support small municipalities during the necessary adjustments as the new
member countries develop.
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