How Small Businesses Get Financial Support in EU

Belarus Private Sector Support and Minsk Wastewater Treatment Plant Reconstruction. First ever EIB support for Belarus – development of water infrastructure and private sector. [Minsk, Belarus] 20/11/2018 Photo: EIB
Belarus Private Sector Support and Minsk Wastewater Treatment Plant Reconstruction. First ever EIB support for Belarus – development of water infrastructure and private sector. [Minsk, Belarus] 20/11/2018 Photo: EIB
The EU bank is providing EUR 84m to Minsk Vodokanal to finance the rehabilitation and modernisation of the capital city’s central wastewater treatment plant.

Around 200 small and medium-sized enterprises (SMEs) will benefit from two loans provided to Belagroprombank (EUR 50m) and Belarusbank (EUR 25m).

The Republic of Belarus and the European Investment Bank (EIB) are starting a new era of cooperation by signing the first ever loans provided by the EU bank in this country.

The loans, for a total amount of nearly EUR 160m, target sectors and projects that both the European Union and the Republic of Belarus consider essential in order to foster investments in the areas of social and economic infrastructure, private sector development, and climate action.

A first loan of EUR 84m will finance the upgrading of wastewater services serving close to 2 million citizens in the Belarus’ capital Minsk.

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The EIB funds will back the installation of new pre-treatment facilities, new aeration tanks for biological treatment, ultraviolet disinfection of the treated effluent and modern sludge treatment. The investments will have positive impacts on energy efficiency, environment and people’s daily life.

This project will be co-financed with the European Bank for Reconstruction and Development (EBRD) and will also benefit from a grant of EUR 1m from the multi-donor funding instrument the Eastern Partnership Technical Assistance Trust Fund (EPTATF).

The EIB loans to small businesses, intermediated through Belagroprombank (BAPB) and Belarusbank (BBK), will facilitate investment projects and help to meet the working capital needs of private sector companies in Belarus.

This will contribute to the strengthening of the private sector and economic diversification that is particularly important in Belarus, where large state-owned enterprises still dominate the national economy.

The EU bank is joining forces with BBK and BAPB, two banks that have a profound knowledge of the Belarusian market and have substantial plans to expand their lending to smaller businesses.

It is estimated that some 200 SMEs will benefit from this financing, which should help to sustain over 2,500 jobs. These loans are being provided in the framework of the EU4Business initiative targeted at smaller businesses in the Eastern Partnership countries.

EU4Business is an EU initiative that helps SMEs in the six countries of the Eastern Partnership (Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine) to finance their development and boost economic growth.

The Eastern Partnership was established in 2009 as a joint initiative of the EU, its Member States and six European Partners – Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine. It is a key pillar of the EU’s Neighbourhood Policy.

The EIB is particularly active in the multilateral dimension of the partnership, providing key investments in priority sectors such as transport, energy – including energy efficiency – climate action, access to finance for SMEs and innovation.

By the end of 2017, EIB lending in the Eastern Partnership had reached a total of EUR 8 billion, financing some 90 investment projects and providing credit lines to support SMEs in the region.

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Rakesh Raman