Financial Statement 2002

Growth of investments in energy and the environment-steep upturn in the Baltic Sea region and Nordic area

The Nordic Investment Bank (NIB) had a successful year in 2002. The annual profit, at EUR 142 million, was 8.3 per cent up on the figure for 2001 (EUR 131 million). Net interest income amounted to EUR 150 million, compared with EUR 147 million in 2001. Total assets at year-end amounted to EUR 15,900 million. The Board of Directors proposes that a dividend of EUR 40.3 million be paid for 2002 to the Bank’s owners, the Nordic countries.

New lending, at EUR 1,648 million, was on the same high level as the previous year’s EUR 1,661 million, and loans agreed during the year totalled EUR 1,807 million. The low level of investments notwithstanding, loan disbursements in the Nordic area rose by 7.5 per cent from EUR 1,179 million to EUR 1,268 million.

New borrowing rose to EUR 3,320 million, as against EUR 2,099 million for the previous year. NIB’s outstanding borrowings at year-end totalled EUR 13,150 million. During 2002 the Bank successfully floated its biggest-ever bond issue, for USD 1,000 million, under its American MTN borrowing programme. These bonds were subscribed mainly by investors in the USA and Asia, with particular interest being shown by investors who had not invested in NIB bonds previously.

The credit quality of the Bank’s lending portfolio and of its investment portfolios was maintained on a solid and steady level. Provisions for anticipated loan losses amounted to EUR 2.0 million for Nordic loans and EUR 1.7 million for international loans.

Since 1994 the Bank’s annual accounts have been drawn up in accordance with the International Accounting Standards (IAS).

During the year NIB participated in financing of 76 major investment projects and credit programmes in the Nordic countries. A large proportion of these loans related to cross-border company acquisitions and new company establishments. Financing of environmentally friendly energy investments showed substantial growth for the second year running. Loans were disbursed for energy projects in all the Nordic countries. Lending to the Baltic countries increased heavily during the year, above all as regards financing of infrastructure investments in the energy and transport sectors. At present NIB has loans outstanding in 35 countries outside the Nordic area.

Environmental project finance
Environmental projects have high priority in the Bank’s operations. At year-end NIB’s environmental project exposure totalled EUR 1,861 million. A large proportion of these loans relates to specific environmental projects in the Nordic countries and the neighbouring regions.

In June 2002 the Nordic Council of Ministers approved an increase in the lending ceiling of the Bank’s Environmental Investment Loan facility for the neighbouring areas (MIL) from EUR 100 million to EUR 300 million with special guarantees, with effect from 1 January 2003.

One of the most important projects under the MIL facility is the modernisation of the Pechenga Nickel smelting plant in the Kola Peninsula. This project is expected to lead to a considerable reduction of sulphur dioxide emissions in the northernmost parts of Norway, Sweden and Finland, as well as Russia.

NIB held the chairmanship of the Steering Group of the Northern Dimension Environmental Partnership (NDEP) for the Partnership’s first year of activity, ending in mid-2002. The NDEP is a forum to coordinate and streamline the financing of environmental investments, above all in the Baltic Sea and Barents regions. The NDEP Support Fund, created to solicit grant funds, was activated during the year when a pledging conference at the beginning of July raised sufficient grant funds (EUR 122.5 million at the time of writing) for work relating to both environmental and nuclear waste problems. The funds can be used to finance NDEP projects in combination with long-term loans from the international financial institutions and local funding.

The Steering Group for NDEP has chosen 12 prioritised projects in Russia, with six nominated for implementation under NIB’s leadership. These projects are located in Kaliningrad, St. Petersburg, Novgorod, Leningrad Oblast and Murmansk. They include completion of the Southwestern Wastewater Treatment Plant in St. Petersburg, a project with cross-border environmental implications for the whole of the Baltic Sea. NIB is the lead bank for this project and has granted a loan of EUR 45 million towards the total estimated cost of EUR 200 million.

NIB’s Annual Report 2002 is available here. (PDF)

Key figures

(in EUR million)	2002	2001
Net interest income	150	147
Profit	142	131
Loans disbursed	1,648	1,661
Loans agreed	1,807	1,795
Loans outstanding	10,110	10,067
New debt issues	3,320	2,099
Debts evidenced by certificates	13,150	12,298
Net liquidity	2,947	2,641
Total assets	15,948	15,024
Equity/assets ratio (%)	9.7	9.6
Number of employees	144	137