Lending activity

New loans approved by the Board of Directors reached close to EUR 2.3 billion whereas agreed loans reached EUR 1.8 billion. An improved liquidity situation among the Bank's customers was reflected in lower-than-planned disbursements, totalling EUR 1.3 billion.

The Bank has identified four sectors in particular that contribute to the fulfilment of the Bank's mandate: environment; energy; transport, logistics and communications; and innovation. Lending continued to be focused on these sectors in 2010. If unallocated loan amounts to financial intermediaries are excluded, the share of lending to these sectors accounted for 82% of loans agreed and 83% of loans disbursed.

The Bank also continued lending to projects in the manufacturing and service sectors as well as providing financing through financial intermediaries.

In 2010 the global recession receded, although the effects of it were still clearly visible in the economies of the Bank's member countries. The number of work-out cases in the Bank's portfolio decreased even if some new cases did arise during the year. Loan losses were moderate but the accumulated amount of impaired loans increased somewhat as of 31 December 2010.

The amount of loans outstanding stayed at the same level compared to year-end 2009, mainly due to an exceptionally high volume of prepayments, and totalled EUR 13,771 million by 31 December 2010. The amount of guarantees outstanding was EUR 8 million.

BASE and CLEERE

Lending continued under the two special lending facilities targeting priority areas. The Climate Change, Energy Efficiency and Renewable Energy Facility (CLEERE) was increased in 2010 to EUR 2 billion, following the rapid allocation of the first billion in 2008–2009. New loans were made under the facility, which targets climate change mitigation and adaptation, primarily in the energy sector but also in industry and transport. At the end of 2010, EUR 1,655 million had already been allocated under the facility.

Lending under the EUR 500 million Baltic Sea Environment Financing Facility (BASE) which was established to support the implementation of HELCOM's Baltic Sea Action Plan, continued at a more moderate pace.

Loans under this facility supplement financing through national budgets and EU structural and cohesion funds, in order to finance measures that help to restore the ecological health of the Baltic Sea. At the end of 2010, EUR 140 million had been allocated under the facility. Loans under both facilities are made in the ordinary course of business in accordance with the Bank's lending policies.

NIB continued to participate in international and regional cooperation. The implementation of the EU Strategy for the Baltic Sea Region started, providing a new framework for cooperation. Setting out priority areas and identifying flagship projects, the strategy stimulates cooperation and concerted action in the fields of the environment, energy and transport. NIB is committed to supporting the implementation of the strategy and is cooperating closely with EIB in this respect.

The Bank continued to play an active role in the Northern Dimension Environmental Partnership (NDEP) with new loans being developed for investments in wastewater treatment in Russia and also in Belarus, the latter country having been accepted as a new area of NDEP activity. The aim of the NDEP partnership is to coordinate and streamline the financing of environmental projects with cross-border effects in the Baltic Sea region, the Barents region and Northwest Russia, with projects benefitting from grants by the NDEP support fund.

New Northern Dimension Partnership on Transport and Logistics

In 2010, the process of setting up the new Northern Dimension Partnership on Transport and Logistics took significant steps forward. The purpose of the partnership is to facilitate cooperation on and implementation of regional transport infrastructure and logistics projects. The goal is an effective flow of goods and people in the northern European region.

NIB has actively participated in the preparation of the new partnership and will host the secretariat of the NDPTL, which will commence its operational activities in 2011.

The implementation of various public-private partnership (PPP) projects with financing from NIB continued, with a number of new projects under development. New loans agreed related to both transport infrastructure and hospital services. PPPs can provide an effective mechanism for harnessing private sector competence and funding capacity in support of infrastructure and utility investments.

The Bank also engages in projects with a project-financing structure, in which the revenues generated by the operation of the project form the basis for the repayment of the loan.