LENDING OPERATIONS OF NIB
For information regarding NIB’s lending operations, please refer to Note 3 “Segment information—Lending Operations”, Note 12 “Loans outstanding and guarantee commitments” and Note 10 “Expected credit loss” to the Financial Statements included as Exhibit IV to this report on Form 18-K.
OTHER ACTIVITIES
NIB’s Member Countries, the Northern Dimension Environmental Partnership (“NDEP”) and the Northern Dimension Partnership on Transport and Logistics (“NDPTL”), utilize NIB as one of the channels through which technical assistance and capital grants are allocated to projects in the regions adjacent to the Member Countries via trust funds managed by NIB.
NIB participates in NDEP which provides grant funding pooled from the European Union and donor governments including Russia, to co-finance priority environmental projects in the Northern Dimension area, which covers the northwest of Europe from the Arctic and Sub-Arctic areas including the Barents and White Seas to the southern shores of the Baltic Sea. NDEP focuses on nuclear and non-nuclear environmental issues, however, NIB’s NDEP activities are limited solely to the non-nuclear area. The nuclear focus area is fully grant-funded and deals with the hazardous waste generated by the Soviet Northern Fleet. On the non-nuclear side, the purpose of NDEP is to mobilize grant funding from donors to leverage long-term loans from the IFIs for projects that otherwise may not be financially viable. Environmental projects mainly concern improvements in water and wastewater treatment, management of municipal and agricultural solid waste, and energy efficiency – all of which constitute major sources of cross-border pollution. NDEP’s activities are led by a Steering Group, which reviews projects to be recommended to the NDEP Assembly of Contributors (“NDEP Assembly”) for their approval. The projects are brought forward to the Steering Group by the lead Implementing Agencies: European Bank for Reconstruction and Development (“EBRD”), European Investment Bank (“EIB”), NIB, World Bank (“WB”), NEFCO or Kreditanstalt für Wiederaufbau (“KfW”). The partnership has a support fund (herein referred to as the “NDEP Fund”) which collects pledges from donor countries in order to ensure sufficient financing of the projects. The NDEP Fund is administered by EBRD in its capacity as the Fund Manager.
At the end of 2022, the NDEP Fund had EUR 352.9 million at its disposal consisting of contributions from the EU, the Russian Federation and 11 donor governments. EUR 181.7 million of the contributions were earmarked for non-nuclear-related projects. In 2009, Belarus made a contribution to the NDEP Fund by pledging EUR 1.0 million to mobilize investment for wastewater treatment rehabilitation in northern Belarus, which will have a positive impact on the ecology of the Baltic Sea. The 26 NDEP Fund financed environmental projects located in northwest Russia and in Belarus are at various stages of implementation, and have an estimated investment need of EUR 3.3 billion. NIB was the implementing agency for grant funding from NDEP Fund to two projects in Belarus (the “NIB NDEP projects”) which also received financing in the form of a EUR 25 million loan from NIB. Following the Russian invasion of Ukraine which started on February 24, 2022, NIB suspended disbursements of both its loan and the NDEP Fund grant funding with effect as of March 14, 2022. As NIB suspended its loan to the NIB NDEP projects, the projects are no longer eligible to receive NDEP Fund grant funding. NIB is in the process of returning the undisbursed grant funding to the NDEP Fund.
At the end of October 2022, the NDEP Assembly approved the extension of the NDEP Fund until July 31, 2023.
NIB discontinued its activities in the Russian Federation in 2014 following the sanctions imposed as a consequence of the Crimean annexation.
NDPTL was established in 2009 to facilitate cooperation on and implementation of regional transport infrastructure and logistics projects. The NDPTL secretariat is hosted by NIB. A NDPTL support fund was established in late 2012 to issue grants for project preparation, development and implementation and has been operational since 2013. The fund has received contributions from three donor governments and the EU.
On May 30, 2006, NIB signed the European Principles for the Environment, an initiative launched in response to the drive for increased harmonization of environmental principles, practices and standards associated with the financing of projects. These principles aim at establishing a common approach to environmental management associated with the financing of projects. The document is a reference for projects located within the EU, the European Economic Area and the EU candidate countries. Besides NIB, the initiative was adopted by NEFCO, EIB, EBRD and the Council of Europe Development Bank.
The Baltic Sea Action Plan (“BSAP”) was adopted by the Baltic Marine Environment Protection Commission (“Helcom”) member countries in 2007. The aim of the BSAP is to restore the good ecological status of the Baltic marine environment by 2021. To speed up the implementation of the plan, a BSAP Fund was set up in 2009, with grant contributions from Sweden and Finland to be used for technical assistance. NIB and NEFCO are joint managers of the BSAP Fund.
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