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EIB boosts liquidity for SMEs in Cyprus

04 April, 2014

The European Investment Bank (EIB) is renewing its cooperation with Cooperative Central Bank (CCB) of Cyprus and has authorised a new EUR 50 million credit line for SMEs. 

This will be the EIB’s first bank-intermediated operation in Cyprus since the financial crisis.

An initial finance agreement for EUR 25 million was signed Thursday, during a public ceremony in Nicosia, in the presence of EIB President Werner Hoyer, Minister of Finance Harris Georgiades, EIB Vice-President Mihai Tănăsescu CCB President Nicolas Hadjiyiannis and CCB General Manager Marios Clerides.
Georgiades said in his statements that cooperation with the EIB is of strategic importance in the effort for the recovery of the Cypriot economy.

The signature of the agreements with the EIB is part of the efforts to deal with the consequences of the financial crisis, covering mainly financing gaps, the Finance Minister of Cyprus said.

He expressed his confidence that the areas of cooperation will expand next year.

In his statements, EIB President Werner Hoyer acknowledged the hardships Cypriot people are going through over the past 12 months and hailed the “rational and sober” way in which the government is addressing issues.

“Now we are much more optimistic when it comes the situation in Cyprus than we could have been one year ago” Hoyer said.

Hadjiyiannis noted in his statements that the agreement was very important, not so much for the financing amount but for the framework it creates and its innovative elements, such as the employment of young people.

EIB Vice President Mihai Tanasescu said from his part that the key focus should be on SMEs, to grow and create more jobs, especially for the youth.

He noted that from the 250 million agreed, 60% went to SMEs, 37% to infrastructure and 3% to industry.
The Vice President also said that the EIB intends to continue lending money to Cyprus in 2014, with the same amount - 250 million – or more, having SMEs and infrastructure, as the main priorities.
Tanasescu said moreover that energy is also key, and the EIB “will be very active participant”.

He said that the energy sector will boom in the years to come, expecting to radically transform the country.

When the EIB President was asked if the bank is interested in financing the LNG terminal the government intends to set up in Vassilikos, on the south-eastern coast of Cyprus, Hoyer said that once the project becomes more concrete “we will probably be a part of the exercise”.

He further expressed his conviction that when the project becomes more detailed, banks “are going to line up in order to finance” it.

Hoyer also said that it is very encouraging that reunification talks in Cyprus continue and noted, in reply to a question, that if the country is unified, EIB will be active in the entire territory of Cyprus.

On financing the reconstruction of the Turkish occupied town of Famagusta, Hoyer said it will be “a very interesting case”, adding that “we will not shy away from responsibilities there”. He noted however that if developed, the city will be a world tourism paradise and “it will be financed by itself”.