NEFCO and the Belarusian government have signed a framework agreement acknowledging NEFCO’s status as an international financial institution in Belarus. The signing of the agreement, which took place at EBRD’s headquarters in London, will pave the way for a substantial increase of NEFCO’s lending operations in the country, not least within the municipal sector.
NEFCO has financed environmental projects in Belarus since 2007. However, these operations have been rather limited due to the lacking framework agreement, which has prevented NEFCO from financing ventures such as municipal energy efficiency and wastewater treatment projects. NEFCO has so far only approved EUR 9.3 million for the financing of 12 private sector projects in Belarus.
“We currently have 20 projects in the pipeline in Belarus, and many of them can now proceed to implementation thanks to the new framework agreement, which opens up new possibilities for innovative environmental financing,” says NEFCO’s Managing Director Magnus Rystedt.
The upcoming projects will mainly be rolled out in the energy, industrial and banking sectors. Most of the projects will include technological measures to reduce energy consumption and the emissions of carbon dioxide and other climate gases. The framework agreement will also enable NEFCO to co-finance a range of environmental projects with the Northern Dimension Environment Partnership (NDEP) in the country. NDEP is currently preparing investments to upgrade the wastewater treatment plants in Brest, Grodno and Vitebsk in close co-operation with EBRD and the Nordic Investment Bank.
“We hope that this agreement will inspire Belarusian municipalities and municipal enterprises to invest in energy efficient technologies by utilising the loans that we can provide for such investments,” says Senior Investment Manager Ulf Bojö, who is in charge of NEFCO’s lending operations in Belarus.
The Belarusian loans currently account for 3.9 per cent of funds disbursed by NEFCO’s two main financial instruments, namely the Investment Fund and the Nordic Environment Development Fund. Last year NEFCO’s Board of Directors approved five projects for Belarus. The bulk of these investments relate to energy efficiency improvements in the private sector.