Latvia and Nordic Investment Bank agree 500-million-euro loan

Latvia has taken out a 10-year, 500-million-euro loan with the Nordic Investment Bank (NIB) in its latest move to provide funds to help it come through the coronavirus crisis and maintain economic activity, reported the NIB and the Latvian Finance Ministry April 9.

Dubbed a "Covid-19 mitigation loan" the cash will finance additional government expenditures, mitigating the impact of the coronavirus Covid-19 pandemic.

There will be support measures for employees, rescheduled tax measures and reduction of rent plus the possibility of further economic stimulus measures such as capital injections, extra measures for the most affected business sectors, and potentially additional support for small and medium-sized enterprises in the form of working capital or guarantee mechanisms.

The funds can also be used to provide protective equipment and anti-infectious agents, medical equipment, disposable personal protective equipment, medicinal products, single-use materials, non-invasive ventilators, and remunerations for medical persons performing all necessary prevention and treatment measures related to the spread of Covid-19.

“The Latvian Government is working on a fiscal stimulus package and developing financial instruments to support business sectors with the largest and immediate needs. We have already done much, but the work to contain the virus and measures to cope with consequences continues, therefore additional financing is needed and will be required. We are determined to invest fund purposely and closely monitor that at the end it brings expected results, including the necessary support to businesses and people,” said Minister of Finance, Jānis Reirs.

As the international financial institution of the Nordic and Baltic countries, NIB finances projects that improve the productivity and benefit the environment of the region. The bank also has a stabilising role during economic crisis.

“The loan from NIB will finance the required support measures to the business activities in affected sectors in the forms of loans, capital injections or payment reliefs,” said Henrik Normann, President & CEO of NIB.

The NIB has already signed similar loans with the Estonia and Lithuania. 

The NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries.

As previously reported by LSM, Latvia has in recent weeks also made several successful visits to the international financial markets to raise funds.

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