CEB Approves €1.3 Billion in Loans Across Europe for Social Sector Investments

CEB Approves €1.3 Billion in Loans Across Europe for Social Sector Investments

(IN BRIEF) The Council of Europe Development Bank (CEB) has approved 11 new loans totaling €1.3 billion across various countries and sectors. These loans aim to address critical social issues such as microfinance, healthcare, education, and post-disaster reconstruction. Among the projects approved are loans to support economically vulnerable women-led businesses in Bosnia and Herzegovina, fund the construction of healthcare facilities in Finland, improve drinking water access in France, enhance education infrastructure in Germany and Iceland, support micro-enterprises in Poland, provide finance to rural businesses in Serbia, contribute to social infrastructure in Slovakia, improve healthcare services in Spain, aid post-earthquake recovery efforts in Turkey, and bolster Ukraine’s compensation mechanism for destroyed residential housing. These initiatives align with the CEB’s Strategic Framework 2023-2027 and demonstrate its commitment to addressing pressing social challenges across Europe.

(PRESS RELEASE) PARIS, 26-Mar-2024 — /EuropaWire/ — The Council of Europe Development Bank (CEB) approved 11 new loans across as many countries and a variety of sectors amounting to €1.3 billion.

“The loans approved today finance a variety of social sector investments in microfinance, healthcare, education and post-disaster reconstruction,” said CEB Governor Carlo Monticelli. “In line with the CEB’s Strategic Framework 2023-2027, which sets the Bank’s engagement in Ukraine to focus on social sectors and serving vulnerable groups, we also approved our first loan to the country for this year, addressing targeted and urgent housing needs.”

BOSNIA AND HERZEGOVINA: A €3 million loan to Mikra Microcredits will support economically vulnerable women and women-led micro-businesses in rural areas. Women face significant challenges in terms of asset ownership and credit access, with an estimated financing gap for women-owned businesses in the country exceeding 60%. The CEB loan will help Mikra address gender disparities in the labour market and access to finance, with focus on the smallest microloan segment. The loan will be backed by a credit risk guarantee from the CEB’s Social Dividend Account (SDA).

FINLAND: A €150 million loan to Laakso Joint Hospital will finance the first phase of the programme to construct and renovate healthcare facilities, particularly focusing on creating a state-of-the-art hospital for the Helsinki metropolitan area. Laakso Joint Hospital will streamline psychiatric patient treatment and create a hub of expertise in psychiatry as well as centralise somatic care by providing support for rehabilitation and offering palliative and terminal care. The investment will enhance healthcare services for approximately 1.7 million inhabitants of the greater Helsinki region, upgrade medical technology, generate 2,000 jobs and prioritise environmental sustainability through resource efficiency and renewable energy utilisation.

FRANCE: A €140 million loan to Syndicat des Eaux d’Ile-de-France (SEDIF) will finance investments to enhance drinking water access for 550000 users in the Île-de-France region by reducing losses, maintaining distribution efficiency and preserving water resources. As a powerful lever for territorial solidarity, SEDIF is pooling resources and investment in the public water service across all its member municipalities. Most of the works will be carried out in the socio-economically vulnerable departments of Seine-Saint-Denis, Val-de-Marne and Val d’Oise. Ensuring better management of dwindling water resources is also crucial for climate change adaptation. The drinking water distributed by SEDIF comes from the Seine, Oise and Marne rivers, whose flow rates is expected to decrease by 30% by 2050.

GERMANY: €100 million loan to the City of Nuremberg will part-finance the second phase of an ambitious investment programme to improve education and childcare infrastructure in a bid to address social inclusion challenges. With over half of its 541,000 residents with a migrant background, including 11, 000 persons – mostly women and children – who fled Ukraine following Russia’s aggression, Nuremberg’s population is very diverse. The investment programme will support more than 35 sub-projects, benefitting vulnerable households reliant on public education, day-care and integration services. In addition to having high social impact, the sub-projects will adhere to the latest energy efficiency standards and incorporate renewable energy sources, contributing to Nuremberg’s climate neutrality goal by 2040. The loan is part of a long-term strategic partnership between CEB and Nuremberg to foster inclusive social development and resilience.

ICELAND: A €100 million loan to the City of Reykjavík will help redefine learning spaces in accordance with modern teaching methodologies and improve the quality, safety and health conditions of educational infrastructure. To effectively assess socio-economic vulnerability at the school level, the Reykjavík Department of Education and Youth has developed an innovative “Learning Opportunity Index” (LOI). The compulsory schools with the highest LOI ranking and a high share of socio-economically disadvantaged students will be prioritised for CEB funding. A total of 22,483 children will benefit from improved access to education and more conducive learning environment, including children from migrant families, Ukrainian refugees, and children from 200 recently internally-displaced families from the volcano-affected town of Grindavík.

POLAND: A €250 million loan to Pekao Leasing will support Polish micro, small & medium enterprises (MSMEs) to foster job creation, financial inclusion and economic resilience. The COVID-19 pandemic, Ukraine conflict, energy crisis, inflation and high interest rates have hindered MSMEs’ growth in Poland. In this respect, leasing plays an important role in encouraging local entrepreneurial activity, contributing to the resilience of the Polish economy. Aligning with the CEB’s social mandate, Pekao Leasing has committed to directing at least 35% of loan proceeds to MSMEs in regions with above-average unemployment rates, while also earmarking 20% of funds for women-owned businesses. To align with the environmental objectives of the Paris Agreement, vehicle financing will not exceed 50% of the loan, and approximately 15% will be dedicated to financing “green assets”. Since 2015, the CEB has supported Pekao Leasing through five facilities totalling €600 million.

SERBIA: A €6 million loan to 3Bank Joint Stock Company Novi Sad will help support rural businesses and farmers in remote areas while addressing microfinance gaps in Serbia. A new borrower for the CEB, 3Bank, is dedicated to providing finance and advisory services to those who are overlooked or financially excluded by traditional banks. The loan targets smallholder farmers, underbanked microentrepreneurs, solo female entrepreneurs, start-ups, and small traders. The CEB’s financing fills critical gaps in Serbia’s microfinance sector, vital for business growth, job creation and inclusive development. By tackling issues like emigration and brain-drain stemming from limited self-employment opportunities and lower living standards, the CEB’s loan provides significant social value. To support the borrower’s credit profile, guarantee coverage will be provided from the CEB’s Social Dividend Account (SDA).

SLOVAK REPUBLIC: A €40 million loan to Trnava Self-governing Region will contribute to co-financing vital social infrastructure investments in healthcare, education, social care, and mobility safety. Aligned with the Region’s priorities, the CEB provides long-term financing for local social investments and contributes to projects co-financed with the EU funds. Beneficiaries include 56,000 inhabitants, with particular focus on vulnerable groups such as those requiring social care, women, secondary school students, and patients with difficult medical conditions or high degree of autism. Expected benefits encompass improved conditions in social and healthcare facilities and their enhanced accessibility and attractiveness to the local communities. Reflecting CEB’s ongoing commitment to regional development and social well-being, the loan marks the fourth direct CEB financing to the Region since 2015.

SPAIN: A €140 million loan to the Autonomous Community of Castilla y León will help improve the health infrastructure, aiming to deliver high-quality and accessible healthcare services, particularly to marginalised groups. The CEB loan will fund construction, refurbishment, and equipment of healthcare facilities in a region characterised by an older population and heightened health concerns due to its industrial past. With a total investment cost of €323 million, co-financed by EIB, the project facilitates access to medical services, especially for elderly individuals facing mobility challenges and living in remote areas. This project builds upon a previous loan facility approved in 2015, which already financed the construction or refurbishment of 20 primary healthcare centres and five specialised hospitals.

TÜRKIYE: A €250 million additional loan amount to Türkiye will aid the post-earthquake health sector recovery, particularly in the eleven south-eastern provinces affected by the February 2023 earthquakes. With estimated recovery needs totalling over €6 billion, the region faces significant challenges while, at the same time, hosting 1.7 million refugees mostly from Syria. In all, 12 seismic resistant steel-structure emergency hospitals in the hardest-hit provinces will be completed. Each hospital will deliver between 40,000 to 60,000 consultations per year and have at least one psychological support unit to help the population deal with the trauma. Three hospitals – of which one fully specialised in gynaecology and paediatrics – are already functional, serving more than half a million people in the Hatay Province. In light of the post-earthquake emergency context, the CEB’s loan will cover up to 90% of the total project cost.

UKRAINE: A €100 million loan will bolster Ukraine’s compensation mechanism for destroyed residential housing, established by the Government in 2023. The Russian Federation’s military aggression inflicted significant human, social, and economic damage, with approximately 10% of the country’s housing stock, or nearly 550,000 units, destroyed. The CEB loan will support a targeted assistance mechanism whereby final beneficiaries, including combatants, disabled individuals and large families, will receive compensation in the form of housing certificates to purchase existing residential assets. The government compensation programme was conceived with support from the Council of Europe, which continues to assist the authorities in an effort to ensure sustainability and equitability of the mechanism. Given the dramatic circumstances that Ukraine and its people are facing, the CEB’s loan will cover 100% of the eligible costs of the project so as to facilitate rapid use of funds.

The Council of Europe Development Bank (CEB) is a multilateral development bank, whose unique mission is to promote social cohesion in its 43 member states across Europe. The CEB finances investment in social sectors, including education, health and affordable housing, with a focus on the needs of vulnerable people. Borrowers include governments, local and regional authorities, public and private banks, non-profit organisations and others. As a multilateral bank with an excellent credit rating, the CEB funds itself on the international capital markets. It approves projects according to strict social, environmental and governance criteria, and provides technical assistance. In addition, the CEB receives funds from donors to complement its activities.

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SOURCE: CEB