In 2016, NIB agreed a record amount of loans improving the competitiveness of its Nordic–Baltic member countries.
NIB uses a five-grade scale to measure the expected potential impact its financed projects have on the competitiveness of its member countries.
The ratings are based on a conceptual framework that considers both short- and long-term indicators. They measure direct effects at a project owner level, and also those impacting the region on a broader scale through potential wider and indirect effects on business clusters, sectors and the rest of the economy.
The largest share of lending was extended to municipal infrastructure, such as schools, modern healthcare facilities, water networks and wastewater systems. These investments mostly take place in fast-growing cities where urbanisation is creating new business opportunities. Demographic pressure is also placing new demands on urban infrastructure and services.
An example of this is a loan agreed with the largest and fastest-growing city in the Nordic countries, Stockholm in Sweden. Here, NIB is financing an expansion of the Henriksdal underground wastewater treatment plant and the construction of a 15-kilometre sewer tunnel.
The projects will double the capacity of the Henriksdal facility and significantly increase the efficiency of the city’s wastewater system. This is deemed necessary as the city’s population is increasing by about 2.5% annually.
In addition to municipal infrastructure, NIB also financed several regionally important projects in 2016. In Estonia, NIB agreed a loan with Tallinn Airport to upgrade its infrastructure. The upgrade will increase the safety and efficiency of airport operations and improve the connectivity of the region.
NIB also extended a loan from its Arctic Facility to finance Statnet’s new power transmission line in Norway from Ofoten in Nordland County to Balsfjord in Troms County. The investment will significantly increase the transmission capacity required for security of supply reasons and allow for more production of renewable energy over the coming years.
NIB supports technical progress and innovation in member countries by financing R&D activities.
According to NIB’s updated strategy of reaching out to mid-cap companies, NIB signed a loan with the Icelandic company Össur, a technology leader in bracing and support solutions, compression therapy and prosthetics products. Össur is an R&D-intensive company, and its investments create high value-added jobs and contribute to skills development in Iceland.
In 2016, NIB significantly increased lending to financial intermediaries in order to facilitate lending to smaller businesses. One of these loan programmes is a new risk-sharing loan facility launched by NIB and the Finnish non-life insurer Garantia Insurance Company Ltd. Garantia is authorised to select eligible borrowers and perform the credit analysis and risk rating in accordance with principles agreed between it and NIB.
Channelling financing through intermediaries will continue to be an important way for NIB to support the growth of smaller companies, which account for most of the jobs and value created in NIB’s member countries.