This will be the EIB’s first bank-intermediated operation in Cyprus since the financial crisis hit.

An initial finance agreement for €25m was signed during a ceremony in Nicosia, in the presence of EIB president Werner Hoyer, Finance Minister Harris Georgiades, EIB vice-president Mihai Tanasescu, CCB chairman Nicolas Hadjiyiannis and CCB CEO Marios Clerides.

The agreement with the EIB is part of efforts to deal with the consequences of the financial crisis, Finance Minister Harris Georgiades said. Georgiades added he was confident that cooperation with the EIB would expand next year.

In turn, EIB chief Hoyer said he was aware that last year’s Eurogroup decisions have taken a toll on the Cypriot people, and praised the “rational and sober” way in which the government is addressing issues. “We are now far more optimistic when it comes to the situation in Cyprus than we could have been a year ago,” Hoyer said.

Asked whether the EIB would be interested in financing a mooted natural gas liquefaction terminal on the island, Hoyer said that once the project became more concrete “we will probably be a part of the exercise.” He went on to predict that once more details emerge on the LNG venture, banks would “line up to finance it.”

The EIB’s support to Cyprus in 2013 came to €250m. EIB vice president Mihai Tanasescu said of this €250m, 60% went to SMEs, 37% to infrastructure and 3% to industry. He said also that the EIB intends to continue lending money to Cyprus in 2014, with the same amount – €250m – or more.

The CCB’s Hadjiyiannis noted that the agreement is significant not so much for the amount but rather for its innovative elements, such as the employment of young people.

The cooperative movement has received €1.5bn state support from Cyprus’ €10bn bailout programme, rendering the state the exclusive owner of the co-ops at 99%. The CCB has meanwhile been seeking sources for funding from third parties to boost its liquidity. Nonperforming loans in the co-ops reached €6.34bn in January 2014 or 47.47% of total loans.

Source: Cyprus Mail