NIB 2002 EngelskFor several years NIB has followed best inter-national practice in dealing with environmental issues. These principles are now specified in the Bank’s environmental

BULLETINnordic investment bank � july 2002

ENVIRONMENTAL PROJECTS

Nordic industryinvests in recycling

2 bulletin � july 2002

SINCE THE BEGINNING of the 1990s,environmental investments have beena priority in NIB’s loan operations fortwo reasons. First, the Nordic coun-tries, the Bank’s owners, accord a highpriority to environmental protectionand sustainable development. Sec-ond, pollution doesn’t respect bor-ders, which gives environmental worka cross-border character, one of thebasic pillars of the Bank’s activities.

Sustainable development encom-passes environmental as well as eco-nomic and social aspects. Accordingto the Brundtland Commission’soriginal definition in the 1987 reportOur Common Future, sustainabledevelopment means providing for

today’s needs without compromising theprospect of future generations meeting theirs.Certainly a broad consensus prevails on this gen-eral definition, but during recent years sustain-able development has become much more thanjust a politically correct phrase. The concept hastaken on a more concrete meaning in planningand decision-making both in society and in theeconomy.

The discussion of sustainable development andenvironmental issues is a commonplace aspect ofNIB activities. All loan applications made to theBank are subject to an environmental assessmentand are classified according to the environmentalimpact of the proposed project. The social conse-quences of the proposed project are also takeninto consideration. Every year NIB declines anumber of loan applications for projects due totheir potential detrimental environmental impacts.

ENVIRONMENTAL INVESTMENTS partly financedby NIB include projects with both direct andindirect positive environmental impacts. Directenvironmental investments include, for example,projects in wastewater treatment, recycling, andflue gas cleaning for industry and power produc-tion. Indirect environmental investments includebiofuelled power plants and wind power, as well

as investments in new, environmentally sound production technology in industry, such as chlo-rine-free bleaching in the pulp and paper industry.

At the end of 2001 NIB had a total of over 1.4billion euro in outstanding loans to environment-related projects. A large number of these loanshave gone to specialised environmental invest-ments in the Nordic countries and in their neigh-bouring areas; many of them have contributed tothe reduction of harmful cross-border emissions.

For several years NIB has followed best inter-national practice in dealing with environmentalissues. These principles are now specified in theBank’s environmental policy, which was renewedand codified during 2001. An important part ofthe Bank’s environmental work is to increase theenvironmental knowledge of its staff and theenvironmental awareness of its loan clients. Wehave done this through, among other things,gathering cooperation partners for seminars inwhich we discuss environmental questions. Thefirst environment seminar for financial interme-diaries was arranged in Iceland in 1997, with themost recent one this spring in Copenhagen forthe Bank’s Danish and Swedish financial inter-mediaries.

IN RECENT YEARS NIB has actively supportedmeasures to improve the environment in theNordic countries’ neighbouring areas. This hasproceeded parallel with extensive environmentalfinancing in the Nordic countries. The growingNordic industry and Nordic agriculture aredeveloping in an increasingly environmentallyfriendly direction. In this issue of the Bulletin weprovide a few examples of how Nordic industrycontributes to the protection of the environmentand to a sustainable development.

Environmental issues are key issues not only atNIB, but also for NIB’s clients, some of which arepresented on the following pages.

Jón Sigur˛sson

July 2002

» Pollutiondoesn’t respectborders. «

Environmental issues are key issues

letter from the president

Mat

ias U

usik

ylä

bulletin � july 2002 3

4 Say it with music

THEME: ENVIRONMENTALPROJECTS 6–13

6 SSAB investment prioritises the environment

9 Global environmental work for Norske Skog

12 Complete recycling of aluminium

14 Panorama: Archipelago

16 Time to take a stand on the Baltics

19 Increased transparency in financialreporting

20 Environmental issues in focus

22 Nordic Finance Group

24 News

26 NIB in brief

27 Annual accounts 2001

28 Annual Report on the web

HEADQUARTERS

Fabianinkatu 34P.O. Box 249FIN-00171 HelsinkiFinlandTelephone: +358 9 18 001Telefax: +358 9 1800 210

OTHER OFFICES

COPENHAGENLandgreven 4DK-1301 Copenhagen KDenmarkTelephone +45 33 144 242Telefax +45 33 322 676

OSLODronning Mauds gate 15(at Eksportfinans)N-0119 OsloNorwayTelephone +47 2201 2201Telefax +47 2201 2202

REYKJAVÍKKalkofnsvegur 1(in the building ofSe˛labanki Íslands)IS-150 ReykjavíkIcelandTelephone +354 5 699 996Telefax +354 5 629 982

STOCKHOLMVästra Trädgårdsgatan 11 B(in the building of AB SvenskExportkredit)S-111 35 StockholmSwedenTelephone +46 8 613 8525Telefax +46 8 205 728

SINGAPORERegional RepresentativeOffice78 Shenton Way # 16-03Singapore 079120Telephone +65 6227 6355Telefax +65 6227 6455

BULLETINNIB’s Bulletin is published in Danish,English, Finnish and Swedish.

EDITORSJamima Löfström, Editor-in-chiefLinda Hintze, Gunilla Nyman, PelagiaPekonen and Pamela Schönberg

Translation Roger Tanner, StockholmJoan Löfgren, Tampere, Abcom ABGraphic design and productionJournalistgruppen JG AB, StockholmPrinted by Nomini, Helsinki

PUBLISHERNORDIC INVESTMENT BANKFabianinkatu 34, Helsinki, FinlandP.O. Box 249 FIN-00171 HelsinkiTelephone: +358 9 18001Telefax: +358 9 1800210Internet: www.nib.intE-mail: [email protected]

CHANGE OF ADDRESSTelefax: +358 9 612 1417

14

12 9

19

Cover photo Ulf Sjöstedt

Cla

es G

rund

sten/

Bild

huse

t

Mat

ti Sa

lmi

Hen

rik

Schü

tt

Knu

t Vad

seth


“IT’S EXCITING, IT’S FUN. These youngmusicians are keen, skilful and construc-tive. ‘Tell me what to do, and I’ll do it’ istheir attitude.”

Orkester Norden Manager ChatarinaMartinsson strikes an upbeat note. She isthe orchestra, the mastermind who makesthings happen. The whole operation israther like a jigsaw, with any number ofmusical institutions round the table. “Theorchestra,” she says, “is a joint Nordic ven-ture from beginning to end”.

Every year, after auditions, about a hun-dred students from the various colleges ofmusic are selected to play in the symphonyorchestra. All of the Nordic countries arerepresented in the orchestra tours andsome youths from the Baltic countries havealso participated.

The colleges of music provide playersand the symphony orchestras provide eminent coaches. The orchestra has alsomanaged to associate itself with big-nameartistic directors such as Esa-Pekka Salonenand Paavo Järvi. Each year a new work is

commissioned from a Nordic composer.The network surrounding the orchestra

is also quite important. It includes, for example, the Lions Club, which providesscholarships.

“Playing in the orchestra has grownmore and more attractive since we startedten years ago,” Martinsson continues.“Applicants’ performing standards are alsorising.”

“WE HOPE WE ARE GIVING the players agood orchestral training. They have thechance of playing with eminent soloistsand conductors, and of being taught by thecream of the big Nordic symphony orches-tras.”

The repertoire has to be able to attractthe best musicians. It is international andvaried, and usually includes a big Romanticwork by way of extra challenge. This year’sprogramme includes Stenhammar, Sibeliusand Shostakovich, plus the premiere per-formance of a new work by Norwegiancomposer John Persen.

Say it with music

Orkester Norden—the Nordic Youth Orchestra—is a joint project to which all the Nordiccountries contribute. One of its basic ideas is to make Nordic music more widely known.This year the orchestra will go on tour in China.

Håk

an R

öjde

r

JOINT NORDIC PROJECTThe Nordic Youth Orchestra—Orkester Norden—is a joint project involving several Nordicmusic circles. It is backed by theCouncil for Music Organisationsin Norway, the Confederation ofNorden Associations (FNF),Jeunesses Musicales and theNordic Council of Conserva-tories, with the Swedish ConcertInstitute (Rikskonserter) as pro-ducer. The orchestra receivesfunding support from NIB, itsmain sponsor, the Nordic Counciland Nomus (the Nordic MusicCommittee).

Orkester Norden has the triplepurpose of bringing youngmusicians to the attention of thepublic, furthering their develop-ment and making Nordic musicmore widely known.


Last year’s tour went to England andScotland, where the orchestra receivedmedia coverage and good reviews. Thisyear’s destination is China, with four per-formances in two weeks during July.

There will also be concerts nearer home,including Malmö and Copenhagen. TheNordic Council’s 50th anniversary celebra-tions in Helsinki this October will includea concert by the orchestra, to be telecastlive in all the Nordic countries.

Trumpeter Nikolaj Viltoft from Denmarkand violinist Cecilia Johansson from Swedenboth played in the orchestra last year and willtake part in this year’s tour of China.

“ORKESTER NORDEN HAS meant a lot formy development,” says 24-year-old Viltoft,who is taking the orchestral performancediploma programme at the Royal DanishAcademy of Music. “To be a good orches-tral player you need a lot of practice. Inaddition, I get hints on technique and Ikeep improving my interpretation of thedifferent works.”

Cecilia Johansson, 23, who is studying atthe Norwegian State Academy of Music inOslo, has also found the youth orchestra asupremely rewarding experience. “It’s agruelling time,” she says, “with so manyrehearsals and concerts in such a shortspace of time, but as an orchestral player Iwouldn’t miss this for anything. I’m look-ing forward to China, and I appreciate thecontacts the orchestra gives me with othermusicians.”

MARTINSSON, who heads the work of theorchestra, has worked with the big Swedishorchestras and knows what it takes to makethings click and people tick. There is nomistaking about her dedication. Talkingabout the orchestra, the qualities of itsmusicians and the professional trainingthey receive, she waxes almost lyrical.

She has no doubt about Orkester Nordenstrengthening the bonds between the Nordic countries. “The players meet youngpeople from other Nordic countries anddiscover similarities and differences while

Cecilia Johansson, 23, a student at theNorwegian State Academy of Music inOslo, is playing in Orkester Norden for the second year running.

24-year-old Nikolaj Viltoft is studying atthe Royal Danish Academy of Music fora diploma in orchestral performance.

Håk

an R

öjde

r

making music together. They learn a lotabout their Nordic neighbours.”

INVOLVEMENT IN the orchestra helps tofoster international understanding, as wellas putting the Nordic area on the map ofthe musical world.

As Martinsson says: “Who knows, per-haps the audience would like to hear moreSibelius. It’s fun, representing the Nordicarea with an orchestra of this calibre.” �


theme: ENVIRONMENTAL PROJECTS

SSAB investment prioritises the environment

“A major success for the environment.” These were the words of

Dan Geidemark, manager of Swedish Steel’s (SSAB) coke plant in

Luleå, when describing the major environmental investment made

last year. The new treatment system is estimated to have reduced

dust emissions from the production of coke by four-fifths.

SSAB’S SUBSIDIARY in Luleå, Sweden,SSAB Tunnplåt AB, has been confrontedwith major environmental challenges sincethe company was formed in 1988. Theblast furnace that produces pig iron fromiron ore, the steelworks that process pigiron into finished steel and the coke plantthat produces coke for the blast furnace areall examples of production and processeswith environmental impacts.

The company has been working inten-sively on continual environmental im-provements, primarily focusing on reduc-ing emissions during processing, but alsoon increased recycling. During the pastyear, its environmental work has above allconcerned reducing dust emissions fromthe company’s coke plant.

One million tonnes of coal is shippedannually to SSAB in Luleå. In the cokeplant battery containing 54 enormousovens, coal is transformed into coke byexposure to high temperatures. Finishedcoke is then pushed out of the ovens forfurther transport to the blast furnace.

IN 2000, the company decided on an envi-ronmental investment to reduce substan-tially the emissions that arise when coke ispushed out of the ovens. SSAB invested ina new machine for collecting coke fromthese ovens: a hood that sucks up dust par-ticles, and a dust filter system.

The investment also makes it possible toreuse most of the emissions recovered dur-ing coking. Financing was set up through along-term loan from the Nordic Invest-ment Bank.

The new facility has been in operationsince January this year. According to thecontinuous measurements that are taken, itis apparent that the company is now fulfill-ing the emissions requirements of thecompany’s environmental permit by a goodmargin. “We have achieved a major im-provement, primarily in the working envi-ronment,” says Geidemark. “Most of theparticles from previous emissions settledon the plant.”

HANS OLSSON, environmental manager ofthe facilities in Luleå, says: “The applicablelimit for the new suction system is ten mil-ligrams of dust per cubic metre, but theemissions are now less than five milligramsper cubic metre. This means that the com-pany has reduced its dust emissions fromthe coke plant by more than 80 per centcompared with last year.

“The coke plant’s ovens are old and willbe renovated in the next 12 months. Webelieve that these measures will lead to areduction of 90 per cent of the dust”.

SSAB’s environmental work is regulatedby an environmental policy with tangibleguidelines and measurable goals. The envi-

THIS IS SSAB TUNNPLÅT

SSAB Tunnplåt AB, part of SSABSwedish Steel, has a turnover ofmore than 8 billion Swedish kronorand 4,400 employees in Sweden inBorlänge, Luleå, Finspång andRonneby. It has subsidiaries in Finland, Denmark and severalother European countries. SSABTunnplåt is the Nordic region’sbiggest manufacturer of steel sheetand a European market leader inthe development and manufactureof high-strength steels. The com-pany’s coke plant, blast furnaceand steelworks are in Luleå. Steelfrom the steelworks is delivered byrail to Borlänge, the location of thecompany’s facilities for rolling andcoating steel sheet.

The SSAB group is a major andcontinuous supplier of steel toDenmark, Finland and Norway.


ronmental policy dictates that all operationsare to be run in a manner that conservesresources and through the efficient use ofraw materials, energy and other naturalresources. The consumption of resourcesand energy, in addition to local environmen-tal impact, is decreasing. Seen from an inter-national perspective, these are at low levels.

THE COMPANY HAS also drawn up envi-ronmental declarations that provide infor-

mation on the environmental impact of themanufacture of steel products. In addition,SSAB is now working on the introductionof the international environmental man-agement system, ISO 14001. The Luleåfacilities should be certified by this autumn.

According to environmental managerHans Olsson, the company has done mostof what can be done in order to reduceemissions from its processes. Doing some-thing about the noise levels that affected

Lars

Vak

sjöLa

rs V

aksjö

Top: The suction hood is formed like a big box. Above: Before the treatment system hadbeen installed, large quantities of dust were spread when finished coke was pushed out.

SEK 150 MILLION FORENVIRONMENTALINVESTMENTS

The Nordic Investment Bank hasissued a loan of 150 millionSwedish kronor for environmentalinvestments at SSAB’s coke plantin Luleå. The loan has a term ofseven years, a fact that is appreci-ated by Göran Fritzell, GeneralManager of SSAB Finance. “Sincethis is a matter involving major,very long-term investments, it isvital that we secure financing for aslong as possible,” he says. “It isdifficult to obtain long-term loanswith good terms on the traditionalmarket. That’s the Nordic Invest-ment Bank’s strength, to be able toprovide such loans. Otherwise ouralternative would have been ashort-term loan with lessfavourable terms.”

In the past five years, SSAB hasinvested in major environmentaland processing improvements toits blast furnace and steelworks inLuleå. The coke plant investmenthas led to reduced emissions whilethe investment in a new blast fur-nace has indirectly resulted in envi-ronmental benefits due to the moreefficient use of resources.

residential areas nearby has also been a prioritised issue. In future, measures willfocus primarily on reducing emissionsfrom dumps and depots. �



Håk

an S

andb

ring

/Pre

ssens

Bild


NORSKE SKOG WAS ESTABLISHED in 1989through the merger of several Norwegianpaper mills. At that time, environmentalissues centred mainly on water dischargesand air emissions. The concessions that theNorwegian state granted were conditionedon such strict discharge and emission stan-dards that Norske Skog had to rebuild all itsmills. “It was a big leap forward and a goodexample of how one can solve local prob-lems,” says Norske Skog’s environmentalcoordinator, Rune Andersen.

During the 1990s, in step with the expan-sion of Norske Skog, work on the environ-ment started to take on an increasinglyglobal character. Discharges to water con-tinued to decrease. The focus has shiftedmore and more to problems concerningforestry and climatic effects.

In 2000 Norske Skog acquired the NewZealand company Fletcher ChallengePaper, which had mills in New Zealand,Australia, Malaysia, Brazil, Chile and Can-ada. As a result, the group reformulated itsenvironmental policy. “Against this back-ground of expansion, it was obvious to tryto think along new lines,” Andersen com-ments.

He explains the fact that forestry began tobe seen as an important issue by pointing tothe increased interest in sustainable devel-opment. A forest is not just trees that growand are harvested, but is also a place for hik-ing and hunting.

Sustainability is safeguarded through acertification system. “On the global levelthere is the FSC (Forest Stewardship Coun-cil) certification system. But in Norway we

Norske Skog’s environmental strategy emphasises factors relating

to forestry and effects on climate. A key concept in this context is

sustainable development.

» Whereas the emphasis in environmental work

today lies in forestry and climatic effects, the use ofchemicals can be expected

to be an important issue in the future. «

Global environmentalwork for Norske Skog

The wood-processing group Norske Skog is the world’s second-largest producer of publication paper, with production in fifteen countries.

�

Knu

t Vad

seth


have many small forest owners and it isthereby such a specific situation that theFSC system isn’t appropriate,” he explains.

The Norwegian certification system iscalled “Living Forest”. It was developed atthe end of the 1990s in cooperation amongthe paper industry, forest owners, stateauthorities and certain environmental or-ganisations.

The work to reconcile these two systemscontinues today.

IN NORSKE SKOG’S environmental policyit is stated that firms shall prioritise foreststhat are certified.

Does this apply also if it is more expensive?“Yes, we have paid a bit more for certified

timber,” Rune Andersen answers. “But to-day it is no longer a relevant issue in Nor-way, since all the timber we buy comes fromcertified forests.”

The criteria for certification are de-scribed in greater detail in Norske Skog’senvironmental report for 2001. The crite-ria include, among other things, measuresto conserve and restore a forest’s biologicaldiversity; safeguard the health and vitalityof its ecosystem; develop its economicresources; and promote the forest’s socialfunctions.

In order to ensure that the forestry ismanaged in a serious way, inspectors fromNorske Skog travel around and check theforests that supply timber to all of the


Norske Skog’s international expansion has occurred rapidly. The mills shown here arelocated in Norway, top, Tasmania, above left, and Italy, above right.

�

Nor

ske S

kog

FACTS ABOUT NORSKE SKOG

The wood-processing groupNorske Skog is the world’s second-largest producer of publicationpaper. In 1990 the group’s millswere located exclusively within Nor-way’s borders. Today Norske Skogproduces paper in fifteen countrieson five continents. “We see our-selves as the most global companyin the branch,” states Jarle Lang-fjaeran, who is responsible forNorske Skog’s investor relations.

Growth has occurred throughacquisitions. The latest, andlargest, was the acquisition of theNew Zealand company FletcherChallenge Paper in 2000. It was thelargest acquisition yet made by aNorwegian company.

NIB has had longstanding, goodcooperation with Norske Skog andits Norwegian merger partners.Since the end of the 1970s theBank has paid out twelve loans, thelatest of which provides financingfor a recycled fibre plant at thepaper mill in Skogn, Norway. Theplant has the capacity to process170 000 tonnes of waste paperannually, which is 70 per cent ofthe volume of recyclable paper inNorway.


group’s mills on five continents. “Our poli-cy is to have the same standard everywhere.Implementing it, however, will take time,above all for the mills outside Europe,”Andersen adds.

Environmental work involves taking re-sponsibility for what is produced. In NorskeSkog’s case it is mainly a question of paperfor weekly and daily newspapers.

IN THE BEGINNING OF the 1990s the Nor-wegian Ministry of the Environment andNorske Skog introduced a unique form of cooperation to start up the collection ofwaste paper. A working group with repre-sentatives from state authorities, NorskeSkog, Norske Avisers Landsforbund, Uke-

pressen’s information office, and Kom-munenes Sentralforbund decided to build anew plant for this purpose.

One such plant was built in connectionwith Norske Skog’s mill in Skogn and startedoperating in September 2000. It is the onlyrecycled fibre plant in Norway and is par-tially financed with loans from the NordicInvestment Bank.

Andersen notes that: “In Norway oneplant is sufficient. If there were more, wewould be forced to import waste paper.”

He points out that environmental work isan important part of sustainable develop-ment, including economic, environmentaland social dimensions. “Whereas the em-phasis in environmental work today lies in

Nor

ske S

kog

Norske Skog’s recycled fibre plant in Skogn is partially financed by a loan from NIB.

forestry and climatic effects, the use ofchemicals can be expected to be an impor-tant issue in the future. Social aspects canalso be expected to get increasing atten-tion. Already now we see that companieshave begun to replace the environmentalreport with a sustainable developmentreport.” �


THE ALTEAMS OY COMPANY was foundedwhen three foundries within the Kuusa-koski Group merged at the beginning ofthe year. The structural changes within thecompany continued in the spring, whenAlteams acquired its Swedish competitor,Stilexo Industri AB. The Nordic Invest-ment Bank participated in the financing ofthe acquisition.

Alteams is an example of a Finnish SMEthat has become an industry leader throughspecialisation. “Recycling raw materials andreusing them proves Kuusakoski’s expertise.This is a business model that we hope willbecome more common,” says Asko Heilala,NIB’s Deputy Regional Manager.

Alteams is now one of the Nordic region’slargest manufacturers of cast aluminiumcomponents.

“A lot has happened in the past sixmonths,” says Panu Routila, Alteams’ Man-aging Director.

The objective of the acquisition was tostrengthen Alteams’ position in Scandi-navia and also in Asia, since Stilexo owns afactory in China. “In order to compete inAsia, products must be manufactured there,”he adds.

“Stilexo’s factory in Jönköping is a daycloser to mainland European markets thanFinland is,” continues Routila.

It is in the best interests of Panu Routilaand the owners to make Alteams a moreinternational company. Alteams has 600

employees and is aiming for a turnover ofsome 100 million euros.

Routila is realistic about mergers andacquisitions: “They’re easy to make, but areal challenge to implement.” He says amerger is successful only if it is based oncommon sense and the will to realise agood industrial strategy.

THROUGH ACTION, one can succeed inadapting various corporate cultures to eachother. “During a takeover, it is importantto avoid speaking abstractly about unitingcorporate cultures and instead start solvingtangible issues immediately. If you succeedwith this, integration will also succeed,”Routila says.

Alteams’ industrial strategy is to produceprocessed, cast-aluminium componentsand pursue customer-oriented partner-ships. “In future, customer service will takeplace at one location. Before, customerswere sometimes forced to be in contactwith several levels and two or three differ-ent people,” says Routila.

Alteams obtains its raw material, recycledaluminium, from the Kuusakoski-ownedHeinola smelting plant in seven-kilogramcast aluminium blocks. Aluminium has always been particularly important toKuusakoski, because the Group has beenable to process the metal in its own foundries.

Alteams manufactures many types of alu-minium components and cast-aluminium

Complete recycling of aluminiumRecycling of aluminium is so efficient in Finland that

aluminium from an old NMT base station can be used

when building a new 3G network.

Alteams’ Managing Director, Panu Routila

(right), says that 2002 hasbeen an eventful year.

To the left, Financial Director Matti Tirkkonen.

Mat

ti Sa

lmi

TO ASIA VIA SWEDEN



products for telecommunications compa-nies, the automotive and electrical indus-tries, and to medical equipment companies.Production must be as flexible as possibleand it must be easy to switch from one product to the next.

ALTEAMS’ ALUMINIUM COMPONENTS canbe found in mobile telephones and basestations. Recycled aluminium can comefrom old NMT base stations and then beused in new 3G networks and, in future, in4G networks, making recycling complete.

“The volumes in the telecommunicationsindustry have fallen slightly. On the otherhand, a lot of things are happening thereand change happens quickly ,” says Routila.

The automatic production processes at amodern aluminium foundry are reminis-cent of a high-tech company.

ALUMINIUM IS A UNIQUE MATERIAL inthat it is difficult to replace with anothertype of metal or plastic. “The most impor-tant property of aluminium is its mould-ability. By using construction joints, manywork phases can be skipped during assem-bly,” says Routila.

Other good properties of aluminium areits strength and its conductivity for heatand electricity. Nowadays, it is also import-ant that aluminium is recycled as much aspossible. “Customers value recycled alu-minium. This is something that they canuse when marketing, just like we do,” hesays. �

Alteams is one of the Nordic region’s largest manufacturers of cast-aluminium components. Recycled aluminium is used in production.

Mat

ti Sa

lmi

KUUSAKOSKI GROWINGFOR GLOBAL MARKETS

Alteams Oy’s parent company,Kuusakoski Group, is a metal recycling company with operationsaround the world. The companyoffers recycling services andprocesses scrap metal into rawmaterials for industry. Each year,the company reduces global wasteby 120,000 tonnes. Last year, theKuusakoski Group had a turnoverof 443.4 million euros and had1,700 employees.

Kuusakoski’s Vice President ofCorporate Planning, Esko Mustonen,is pleased with the new Alteamscompany. “We succeeded in struc-turing the old foundry group’s oper-ations,” he says. “Alteams now hasnew potential for fulfilling customerneeds even better.”

Kuusakoski also carried out otheracquisitions within recycling in thebeginning of the year. A recyclingcompany these days must be of acertain size in order to functionglobally.

“This has long been a family-business type of operation. Indus-trialisation, consolidation and in-creased volumes arose late in theindustry,” says Mustonen, describ-ing developments in the recyclingsector.

On the other hand, a small, localrecycling facility can also be prof-itable.

EU directives now place greaterdemands on international electron-ics companies, which must increas-ingly set up recycling systems.Kuusakoski must also observethese regulations as a supplier ofrecycling products and services.



The archipelago is a unique environment that, apart from the regions of the Nordic countries, exists in only a few places in the world. Thesepictures are taken in Stockholm’s archipelago by photographer ClaesGrundsten. Over the years, he has published some fifteen nature books.

UNIQUE ENVIRONMENT

panorama


“THE ROLE OF PUBLIC INSTITUTIONS haschanged in a crucial way—and therefore sohave the conditions for NIB’s activities,”says Bo Göran Eriksson, outgoing Chair-man of the Bank.

The chairmanship of NIB is held on arotating basis among the Bank’s five ownercountries. As a Finnish representative onthe NIB Board, Bo Göran Eriksson filledthe position from 2000 to 2002 and is nowturning it over to his fellow board member,Sven Hegelund, from Sweden.

During Eriksson’s chairmanship anextensive evaluation of the aims and thedirection of the Bank was carried out.

As a result, the focus of the Bank hasincreasingly shifted to the areas neigh-

bouring the Nordic countries. It is nolonger so much a question of whether topromote prosperity in the Nordic coun-tries; instead interest is directed to a muchgreater extent towards northwest Russia,the Baltic states and Poland, and perhaps inthe longer term also Belarus and Ukraine.

Eriksson comments on the shift: “From aNordic perspective it is important to draw

these countries into the spiral of prosper-ity, as well as from a political and demo-cratic point of view.”

The change in course is important—Eriksson compares making such a changein a bank governed by five countries tosteering an ocean liner.

He goes on to say: “Finland’s chairman-ship in Nordic cooperation during theprocess of change was positive. The NIBefforts are close to what is expressed inthe action plan for the Northern Dimen-sion. Prime Minister Paavo Lipponen hasbeen personally deeply committed to thework.”

One project is the southwest wastewatertreatment plant in St. Petersburg. It can beexpected to have a significant positiveeffect on the discharge of nitrogen in theBaltic Sea and has met with great interestalso from the Swedish Prime Minister,Göran Persson.

THE PECHENGA NICKEL SMELTING worksin the Murmansk region has also been afocus for NIB activities.

Eriksson says: “It’s important that in both these projects NIB has also in-volved other international financial institu-tions, including the European InvestmentBank (EIB) and the European Bank for Reconstruction and Development(EBRD).”

BO GÖRAN ERIKSSON, NIB’S DEPARTING CHAIRMAN OF THE BOARD:

Time to take a stand on the Baltic Last year’s anniversary marked an important juncture for the Nordic

Investment Bank. The shortage of capital that was prevalent when

the Bank was established 25 years ago no longer exists. National

borders no longer constitute a major barrier to capital mobility.

» The way of thinking has changed. The barriers betweencountries are no longer seen as so large. There is consider-ably greater understanding and confidence in each other. «

interview

�


“NIB is, relatively speaking, not a majorplayer. But our activities have a catalyticeffect, and we have good conditions inwhich to create cooperation. If we canintroduce creative ideas and serve as anexample, then the benefit can be consider-ably larger than that which is measured instrictly economic investments.”

NIB continues to be a cornerstone ofNordic cooperation and the ideologicalties to the Nordic countries are still strong.“The Bank often sees evidence of the factthat this is the way the politicians want it,”Eriksson explains.

NONETHELESS THE CONDITIONS FOR

Nordic cooperation have changed radical-ly during the past ten years. Eriksson says:“A tremendously powerful integration ofthe economy has occurred. There is a cer-tain paradox in the fact that this is to such agreat extent the effect of events occurringoutside the Nordic countries. WhenEFTA was formed, Nordic trade took off.And with the EU, integration took a sub-stantial step forward. ”

“Along with these developments, the wayof thinking has changed. The barriersbetween countries are no longer seen as solarge. There is considerably greater under-standing and confidence in each other.”

What significance do cultural differenceshave?

countries

“Having 30 years experience in interna-tional cooperation, I think of course thatattitudes and opinions are often culturallybased. Cultural differences can in certainsituations create difficult barriers.”

In the ten-member NIB Board, however,cultural identity is not a big problem. “Insuch a small circle one begins to see eachother as individuals. On the other hand,one should have a clear understanding thatthe representatives in an internationalorganisation to a certain extent representtheir governments. This is understoodimplicitly.”

During Bo Göran Eriksson’s chairmanship the emphasis in NIB’s activities has shifted to anincreasing extent to the countries east of the Baltic Sea. “To improve their conditions forcreating a welfare state—that is a priority task for the Bank today,” he says.

Kim

mo R

äisä

nen

“Questions about the overall direction ofthe Bank cannot be decided by individualcountries. There must be a fundamentalconsensus about them and in order to suc-ceed in creating a consensus, the tacticmust be to engage the politicians as muchas possible,” Eriksson explains.

A key explanation for NIB’s success is itsAAA rating, which allows the Bank to bor-row money on terms that far surpass thosepossible for the Bank’s own borrowers,both individual developing and transitionalcountries as well as companies.

Nowadays NIB also grants loans for


municipal investments, such as for electri-cal production networks. Intermediary is akey word—lending goes via banks to smallenterprises.

Another essential point of departure isNIB’s healthy capital adequacy. Erikssonpoints out that: “Perhaps the demand forsolvency has even been too high. Ourefforts have therefore been to increase thevolume of loans, taking a somewhat greaterrisk. We cannot simply let money pile up.”

In relation to NIB’s large volumes andcomplex projects, its staff of approximately140 people is modest. Eriksson commentson staff size: “If we enter into more compli-cated relationships, for example in Russia,we need to be open to a certain expansion ofthe Bank’s personnel.”

What have you been most satisfied with inyour period as chairman?

“That the Bank has actively sought newpaths and that the change in direction haswon a response in the Board and amongthe owners.”

A question to be decided as soon as possi-ble is NIB’s relationship to the Baltic coun-tries. The conservative group in the NordicCouncil, among others, has proposed thatthe Baltic countries be granted member-ship in the council.

“An even more natural question, in fact,concerns Baltic membership in NIB. We

are going to come up against this issuesoon, at the latest when the Baltic coun-tries become members of the EU and theEIB, which could occur as early as 2004,”Eriksson points out.

“This brings to the fore in a dramatic waythe question: What is the Nordic region?Should our starting point be the traditionalnotion of what is Nordic, or is it geo-graphic? Do we view the Balts as relatives ornot?”

This also raises the question of language.Which language should be used in theBank if more countries are involved?

Eriksson replies: “It is also a question thatwill surely arise. The question is such thatit should attract interest at the highestpolitical levels in the Nordic countries. Ona purely technical level, such a broadeningof the Bank’s basis shouldn’t present a bigproblem. The Baltic states are so small andshouldn’t change the financial structure ofthe Bank appreciably. So this is essentially apolitical question.

“My ‘legacy’ as board chairman could beto present a challenge: to deal with theseissues in a serious way. Unless the initiativeis taken relatively soon, while the processtowards Baltic membership in the EU isstill ongoing, then perhaps a window forthe Nordic countries will be closed,” Eriks-son concludes. �

Alongside his responsibilitiesin trade and finance, Bo Göran Eriksson is alsointerested in culture. “I am always reading four orfive books in parallel,” heexplains. The books he wasreading at the time of thisinterview included NormanMailer’s book on Lee HarveyOswald and a book aboutSuursaari, an island in theGulf of Finland.

�

» Perhaps the demand for solvency has even been too high. «

Kim

mo R

äisä

nen

BO GÖRAN ERIKSSONTRADE POLICY PRO

Bo Göran Eriksson is a lawyer and adeputy circuit judge, but during morethan 30 years of professional experi-ence he has been involved foremostin trade policy assignments.

He studied the subject of Euro-pean integration as early as1966–67 at the European Institutein Amsterdam. The theme has sub-sequently followed him throughouthis career, for example in the tradedepartments of the Finnish Ministryfor Foreign Affairs and at EFTA.

As Director General of the tradedepartment of the Finnish Ministryof Trade and Industry, Eriksson’sareas of responsibility include:European integration, competitionpolicy and consumer affairs, as wellas tourism and export promotion.

Among Eriksson’s many interna-tional positions, it is worth notinghis membership from 1992 to 1994in the Finnish delegation in thenegotiations leading up to thecountry’s accession to the EU.Eriksson is also involved in a variety of ways on the nationallevel, including as chairman of the Finnish tourist board.

A task he has prioritised duringthe past year concerns a new strat-egy for the tourist board.

“New technology is changing theindustry rapidly. The era of travelbrochures will soon be over—theirrole will instead be taken over bycall centres and the Internet.

“Search engines on the Internetdon’t function well today for theaverage consumer who is search-ing for information on travel desti-nations and routes. There is a largeneed for a uniform European sys-tem for the whole travel sector,”Eriksson says.

The issue is now being consid-ered at the highest European level,by Erkki Liikanen, EU Commis-sioner for Enterprise and Infor-mation Society—at Eriksson’s initiative.


THE REQUIREMENTS concerning financialreporting by companies have been tight-ened, which has meant that many compa-nies are considering adopting newaccounting standards. However, the adop-tion of new accounting standards is anextensive process that requires muchpreparation by each company. It is there-fore important to start early.

NIB has complied with InternationalAccounting Standards (IAS) since 1994.NIB is also the first bank in the Nordicregion to apply IAS 39 to the financial year2001. IAS 39 entails new principles for thetreatment of financial instruments includ-ing mor extensive use of fair values.

THE IAS PROJECT at NIB has been a pio-neering venture, involving not only theBank’s accounting department, but also thefinance department, the risk managementand IT departments and the Bank’s man-agement committee. The project has beena joint project for the entire Bank and has

posed many challenges. Marja Tikka, anAuthorised Public Accountant from Ernst& Young, has participated as an externalexpert in the work of the Bank’s IAS proj-ect team.

Stina Kontro, head of the accountingdepartment at NIB, feels that the projecthas been interesting and rewarding, butalso demanding. “The new standard hasrequired new accounting practice for NIB.The problem lies in the fact that there is noestablished practice in this area,’’ she says.“Being one of the first companies to pre-sent financial statements in accordancewith IAS, including IAS 39, has presented aunique challenge and our solutions will beinteresting to others preparing to make thetransition.”

In accordance with an EU decision, alllisted companies in Europe are to apply IASby 2005, in some cases by 2007. The aim isto increase the transparency of the compa-nies’ financial information and to simplifycomparability. IAS financial statements

Increased transparency in financial reporting

Hen

rik

Schü

tt

The transition to the new accounting standard has been a major project since spring 2000,involving the entire Bank. Pictured seated from the left are Stina Kontro, Marja Tikka, JonetaDanielsson and Bo Heide-Ottosen. Standing are Torben Nielsen (left) and Kaare Andersen.

will provide readers with a clearer pictureof a company’s profitability and risks. Allfinancial reports, including interimreports, are to be prepared in accordancewith IAS.

THE APPLICATION of IAS 39 primarily entailsa different treatment of derivative contracts,which are measured at fair value. IAS 39permits hedge accounting. For NIB, thismeans that the effects on the profit and lossaccount are minimised. According toKontro, the application of IAS 39 has hadonly minor effects on the figures reportedby NIB. However, the built-in volatility offinancial instruments is now shown moreclearly than previously.

Joneta Danielsson, of the Bank’s account-ing department, says: “IAS also enhancesthe value of the notes to the financial state-ments. We have chosen to report valueadjustments due to IAS 39 as separateitems even in the financial statements. Thenew financial statements reflect more thanbefore the current situation, whereas thefigures in the previous accounts stated his-torical values.’’

ONE OF THE KEY PEOPLE in the projectteam is Marja Tikka, one of the foremostNordic experts on IAS. “The IAS projectat NIB has been a success, largely thanks tothe careful preparations begun in time,’’she says. “Companies need to understandthat the transition to a new accountingstandard involves a lot of work. At the sametime, a major project like this benefits theentire organisation since it leads to increasedunderstanding of the other functions.’’

Torben Nielsen and Kaare Andersen atthe Bank’s finance department agree withTikka. “The finance department sees howthe transactions made are reflected in thefinancial statements. And the accountingdepartment adopts a completely newapproach involving accounting and report-ing at fair value.’’ �


A PROJECT THAT HAS NOT been subject toan evaluation of environmental hazards canbe costly to both borrower and lender. Dur-ing the seminar, Max L. Jepsen, from aDanish law firm, and NIB’s senior environ-mental analyst, Roland Randefelt, pre-sented examples of environmental hazardsin lending operations.

For example, when a firm purchases a site,it is important that it investigates what wasdone on the site earlier. If a leaky oil tankhad contaminated the soil, the purchasermay be forced to take on the responsibilityof decontamination. The bill can amount toseveral hundred thousand Danish kronorand the bank runs the risk of a loan loss.

Because of this liability, it is in the best interests of the bank and the borrower to investigate the history of the site beforethe loan is approved and agreements en-tered into.

NIB ARRANGED the environmental seminarin Copenhagen for its Danish and Swedishintermediaries in order to present its envi-ronmental policy and discuss environmen-tal issues related to lending operations.Financial intermediaries are local banks andregional institutions that onlend funds fromNIB. The Bank has been working withenvironmental issues within the frameworkof certain given principles for several yearsnow. They are now compiled in an environ-mental policy, an official docu-ment thatregulates NIB’s lending operations in termsof the environment.

“This is the first time that NIB hasarranged this kind of seminar for its Danishand Swedish partners in the banking sec-tor,” says Per Klaumann, NIB’s RegionalManager for Denmark. “To us, it is impor-tant to tell the financial institutions wework with that we recognise the importance

Environmental issues in focusThorough environmental assessment of investment projects is in the

best interests of borrowers and lenders. Careful screening of environ-

mental consequences saves money and reduces the risk of loan

losses, according to an environmental seminar arranged by NIB in

Copenhagen last spring.

10 PER CENT TO INTERMEDIARIES

Of NIB’s lending in Denmark in2001, around ten per cent wasdirected to financial intermediaries,compared with seven per cent forthe Bank as a whole. Lending tofinancial intermediaries in Denmarkhas increased steadily since themid-90s, and at the close of 2001,outstanding loans totalled some120 million euros.


of environmental issues. In addition, wehad an opportunity to present our envi-ronmental policy. Few regional bankshave an environmental policy that is asdetailed as NIB’s, so we would be happyto see them use our policy ideas.”

ROSKILDE BANK IS ONE of the biggestfinancial intermediaries that NIB collabor-ates with in Denmark. Until now, NIB’sloans to Roskilde Bank have primarilybeen used for environmental projects.

“For example, within the framework ofNIB’s loans, we have financed projectswithin waste collection and managementin the municipality of Roskilde and sur-rounding areas, and some projects haveinvolved wind power,” explains creditmanager Knud Nielsen. “The environ-ment is becoming an increasingly impor-tant aspect of the projects we finance.”

NIB ENCOURAGES its intermediaries totake environmental aspects into consid-eration in all projects, and especially inthose projects financed with NIB funds.This is also one of the items in NIB’senvironmental policy. �

In addition to contributions by Max L.Jepsen and Roland Randefelt, a speech wasgiven by Nils Thorsen from Ernst & Youngon how companies’ environmental tasks canbe substantiated by environmental due dili-gence. Charlotte Thy from the Danish EPAspoke about environmental accounting andElse Nyvang Andersen from LD (Lønmod-tagernes Dyrtidsfond) spoke about environ-mental aspects as a factor when makinginvestment decisions.

Pam

ela

Schö

nber

g

Roskilde Bank is one of the intermediaries that NIB collaborates with in Denmark.From left: Henrik Michaelsen, Deputy Regional Manager at NIB, Knud Nielsen, CreditManager at Roskilde Bank, and Per Klaumann, Regional Manager for Denmark at NIB.

CORNERSTONES OF NIB’S ENVIRONMENTAL POLICY

Environmental aspects are assessed inevery loan applicationAll investment projects involve environ-mental risks and responsibilities, and theevaluation of these environmental aspectsis a vital part of the processing of every single project that NIB examines for possible financing. According to the Bank’senvironmental procedures, environmentalaspects shall be evaluated prior to eachindividual credit decision.

Environmental investments prioritised NIB actively promotes investments thatdirectly or indirectly reduce harmful emis-sions or other environmental hazards. For project evaluation purposes, specialimportance is given to positive environ-mental impact. NIB gives priority to envi-ronmental investments reducing cross-border pollution in the Nordic area and itsneighbouring regions.

Environmental legislation and inter-national agreements are appliedAll projects financed by NIB must complywith the project country’s environmentallegislation and relevant applicable inter-national conventions and standards re-lating to the environment, and must haveobtained all necessary environmental permits. NIB does not participate in thefinancing of projects that are likely to be in conflict with such rules and standardsor which otherwise fail to satisfy NIB’s criteria of environmental acceptability. If necessary, NIB may demand an environmental impact assessment of aproject in cases where national regulatoryprovisions may be inadequate.

Financial intermediaries are encouragedto pay attention to environmentalaspectsWhen lending to financial intermediaries,NIB encourages them to assess the environmental impact and risks of theprojects they finance in general and underNIB’s credit lines in particular.

The environmental policy comprises nineitems and can be seen in its entirety onNIB’s website: http://www.nib.int/en/1_envir3.html


the nordic finance group

NDF HAS DECIDED TO participate in theMekong Enterprise Fund (MEF) withheadquarters in Ho Chi Minh City in Vietnam. MEF is an investment fund whichwill operate in three Southeast Asian coun-tries: Laos, Cambodia and Vietnam. Thesecountries attach great importance to theprivate sector for economic and socialdevelopment. A weak financial sector con-strains positive development, mainly affect-ing small and medium-sized enterprises.MEF will therefore focus on financial sup-port to this part of the economy.

The Asian Development Bank (ADB) ini-tiated the Mekong Enterprise Fund. NDF’sparticipation amounts to 4 million US dol-lars. Since the Finnish development financeinstitution Finnfund also contributes to thefinancing of MEF, there will be a significantNordic presence in the Fund.

The main instrument of MEF is equityinvestment in small and medium-sized

enterprises in the Mekong region. Invest-ment will be directed towards enterprisesoperating in labour-intensive sectors. TheFund will also focus on enterprises intro-ducing new technology and skills for amore efficient use of raw materials.

MEF will generate employment forunskilled people who often belong to thepoorest strata of the population. The objec-tive is to create an economic and social safety net for employees and their families.In poor countries like Laos, Cambodia andVietnam, small and medium-sized enter-prises close to markets and raw materialsources are often the only employmentopportunities for economically and sociallyless favoured men and women.

MEF will also contribute to regionaldevelopment in the three countries andpromote enterprises in areas where pov-erty is most frequent. The Fund is expectedto be in operation for 10 years. �

NDF in South East Asian investment fundFinancial support to small and medium-sized enterprises from the

Mekong Enterprise Fund will generate employment for the poor.

Investments will be made in labour-intensive enterprises, and pro-

mote new technology and skills.

Jesp

er A

nder

sen The Mekong Enterprise Fund

shall provide financing forenterprises in the Mekongregion. The Mekong River isan important traffic route forproducers in the region.

The Nordic Development Fund(NDF) can provide financial sup-port for private-sector activities indeveloping countries withoutgovernment guarantee. NDF’sfinancing is oriented towardsdirect investments with specialfocus on infrastructure, creditlines and participation in venturecapital funds. www.ndf.fi


NEFCO’S REVOLVING credit frame forcleaner production, called “Cleaner Pro-duction”, offers advantageous finance termsfor projects in the Baltic region and north-west Russia. The credit frame totals 50 mil-lion Danish kronor and individual creditsrange between 50,000 and 200,000 euros.

Credits are granted for investments thatlead to economic and environmental sav-ings, so that savings equal the cost of theinvestment within three years. The loansare repayable within, at most, four years.So far NEFCO has approved about thirtyindustrial projects devised in partnershipwith business undertakings and localCleaner Production centres, most of themin Lithuania.

NEFCO has initiated a training pro-gramme for consultants and project devel-opers to boost interest in cleaner produc-tion in Estonia and Latvia too. The aim isto devise and develop projects for CleanerProduction. The programme was carriedout in the spring of 2002 together withNorwegian and Finnish environmentalauthorities, and comprises three sections,one for each of the Baltic countries. Eachsection takes three days.

Interest in the programme has been high,and thirty or more consultants are takingpart. The Norwegian consulting firm thatheads the training programme has devel-oped a model for devising project businessplans. The idea is for the participants todevelop a concrete project proposal in theform of a detailed business plan. Vital com-

ponents of the business plan include infor-mation about the positive environmentaleffects of the investment, information con-cerning other economies entailed by theproject and a simple profit calculation.

The intention is for this information tobe used in decision-making by the projectenterprise management and by NEFCO.As a direct result of the training pro-gramme, NEFCO expects to receive tenor so credit applications for financinginvestments that will contribute towardscleaner production and thus help to reduceemissions in the Baltic Sea region. �

Training and loans combined for cleaner production

NEFCO wants to interest Baltic and Russian businesses in cleaner pro-

duction by making them better informed. A training programme has

been initiated to evolve business plans for environment-friendly projects.

Vale

ras K

ildisa

s

Baltic businesses have an opportunity to invest in cleaner production through NEFCO’snew credit frame. By renewing its ventilation system, the Kauno Baldai furniture factory inKaunas, Lithuania, has reduced both its energy consumption and its atmospheric emis-sions of dust and carbon dioxide.

The Nordic EnvironmentFinance Corporation (NEFCO)finances environmental projectsin Central and Eastern Europe.Both private-sector and municipalprojects qualify. NEFCO workswith equity investments andloans. www.nefco.org


news

A contract for the completion ofthe southwestern wastewatertreatment plant in St. Petersburgwas signed in May by SWTP Con-struction Oy, owned by the con-struction companies NCC, Skans-ka and YIT, and the Russian pro-ject enterprise Nordvod. The sign-ing marks a big step forward forthe project. Nordvod is owned bythe three construction companies,Vodokanal (the city’s water com-pany) and NEFCO.

Construction work is planned tostart this autumn and is sched-uled for completion in 2005. Theplant will process wastewaterfrom almost a million residents. At present unprocessed sewageis discharged straight into the Gulfof Finland. The project is a front-runner within the Northern Dimen-sion Environmental Partnership(NDEP). �

The Lithuanian state-owned HUDF(Housing and Urban DevelopmentFoundation) has been selected for the2002 Swedish Baltic Sea WaterAward, in recognition of its environ-mental conservation initiatives in theBaltic Sea and Lithuania. The HUDF’stask is to secure the financing andimplementation of municipal infra-structure projects in Lithuania. Proj-ects in which it has participated haveconcerned, for example, wastewaterpurification and energy efficiency.

Through these projects the HUDF hashelped to develop a financial structurefor municipal environmental andenergy projects. Through creditframes to the HUDF, NIB has helpedto finance, among other things, energy efficiency projects involvingthe renovation of more than one hundred schools (see Bulletin December 2001). The award will bepresented to the HUDF during theannual World Water Week in Stock-holm this August. �

Support for women

Award for Lithuanian HUDF

NIB’s NDEP working group. Seated, from left: Oddvar Sten Rønsen, Heidi Syrjänen, Martin Relander,Christer Björklund. Standing: Roland Randefelt and Tord Holmström.

Major step forward for St. Petersburgwastewater treatment project

Cla

es G

rund

sten/

Bild

huse

t

Hen

rik

Schü

tt

The award will bepresented to theHUDF during the

annual WorldWater Week in

Stockholm.

New credit facilities have enabled NIB once againto support women entrepreneurs in Estonia andLithuania. NIB has granted an Estonian bank andtwo Lithuanian banks credit facilities of up to 1million euros to finance SME projects promotingwomen’s enterprise.

The credit frames are being cofinanced with theCouncil of Europe Development Bank (CEB). In theautumn there are plans to investigate the need fora new credit frame in Latvia. The credits to Lithuaniaform part of a wider programme of cooperation initiated by the Finnish Ministry for Foreign Affairsto encourage entrepreneurial activity amongwomen. The Finnish Ministry for Foreign Affairs isalso contributing technical assistance which NIBand the CEB are channelling to banks and entre-preneurs taking part in the programme.

The new credit frames are a continuation of thecredit programmes granted to Sampo Pank, for-merly Optiva Bank; Sampo Bankas, the formerLithuanian Development Bank; and the LatvianHansabanka, in the autumn of 1999. The earliercredit programmes stemmed from a project ideaintroduced by NIB at the “Women and Democra-cy” conference in Reykjavik that year. Those pro-grammes, which attracted widespread attentionand were already fully subscribed in 2000,involved a total of 44 projects in Estonia, Latviaand Lithuania. The credits went to undertakingsin dental care, dispensary activities, furnituremanufacturing, ceramics production and educa-tion, among other sectors. �


Seija Hallavo (FIN) has been appointedDeputy Vice President and will continue asHead of the Bank’s IT Department.

Nomaan ul Haque (UK) has joined the ITDepartment as Project Manager and willbe mainly concerned with the Bank’s inter-nal IT systems development.

Sigur˛ur Ingólfsson (IS) has beenappointed Manager, International Lendingin the International Department, Centraland Eastern Europe Region, within theNDEP project organisation. He comesfrom NIB’s Risk Management Department.

Markus Rosenström (FIN) has joined theIT Department as Technology Manager. Hecomes from Modirum Oy.

Johan Wallin (FIN) has been appointed todeputise for the Head of the AppraisalDepartment, Oddvar Sten Rønsen (N),while the latter heads the Bank’s NDEPproject organisation.

In the Bank’s Treasury Department, JónThorsteinsson (IS) and Patrik Wainio(FIN) have been promoted to Senior Portfolio Managers, and Magnús ThórÁgústsson (IS) to Senior Financial Analyst.

NORDIC FINANCE GROUPFri˛rik Andersen (IS) has taken over asManager, Project Administration, inNEFCO’s Project Administration Unit. Hecomes most recently from the Icelandiccompany Össur.

Karl-Johan Lehtinen (FIN) has joinedNEFCO as Senior Manager, EnvironmentalAffairs. He was previously employed byFinska Miljöforskargruppen.

Elisabet Paulig-Tönnes (FIN) has been ap-pointed Senior Manager, Project Administra-tion, in NEFCO’s Project Administration Unit.

Arnthor Thordarson (IS) has taken overas Regional Manager for Africa, with theNDF. His previous career has includedappointments with Landsbanki Íslandsand with the EBRD in London.

Anneli Holmberg (FIN) has joined Nopefas Regional Manager specialising in Ice-landic and Danish enterprises. She haspreviously worked for Ericsson in Finland.

NEW APPOINTMENTS

Fri˛rik Andersen

Nomaan ul Haque

MarkusRosenström

Karl-JohanLehtinen

ArnthorThordarson

AnneliHolmberg

The Japanese capital market has beenNIB’s most important source of fundingduring the early months of 2002, account-ing for more than 50 per cent of total bor-rowing. In Japan NIB has, besides Japan-ese yen denominated issues, also floatedpublic issues on the retail-targeted Uri-dashi markets, which were very activeduring the first four months of the year.NIB debt issues on this market totalled174 million Australian dollars, 104 millionUS dollars and 105 million euros.

Other major debt issues comprised 1billion Hong Kong dollars, correspondingto roughly 150 million euros, and 5 billionTaiwanese dollars, corresponding toabout 165 million euros.

During the first four months of the yearthe Bank borrowed funds equallingapproximately 1,2 billion euros on theinternational capital markets. This is about40 per cent of the Bank’s total borrowingprogramme for the year. �

BORROWING

Strong demand in Japan

Gerry Johansson/BildhusetIn Japan NIB has floated

public issues on the Uridashi markets.


The Nordic Investment Bank (NIB) fi-nances private and public projects whichhave high priority for the Nordic countriesand the borrowers. NIB finances projectsboth within and outside the Nordic coun-tries.

NIB is a multilateral financial institutionowned by the five Nordic countries. TheBank operates in accordance with commer-cially sound banking principles. The mem-

ber countries appoint representatives to theBank’s Board of Directors and to its Con-trol Committee.

The Bank’s operations are controlled byan agreement between the Nordic coun-tries as well as the Statutes connected withthis agreement.

NIB offers its clients long-term loans andguarantees on competitive market terms.NIB acquires the funds to finance its lend-

ing by borrowing on the international cap-ital markets. NIB’s bonds enjoy the highestpossible credit rating, AAA/Aaa, with theleading rating agencies Standard & Poor’sand Moody’s.

NIB has its headquarters in Helsinki andoffices in Copenhagen, Oslo, Reykjavik,Stockholm and Singapore. The Bank hasapproximately 140 employees, recruitedfrom all the five Nordic countries. �

NIB’S FINANCING POSSIBILITIESNIB finances investment projects and proj-ect export which are of mutual interest forthe Nordic countries, and for the borrower.High priority is given to investments thatimprove economic cooperation in theNordic countries. Loans and guarantees aregranted to finance investments that assureenergy supply, improve infrastructure orsupport research and development. Highpriority is also given to projects whichimprove the environment in the Nordiccountries and their neighbouring areas.NIB participates in the financing of foreigninvestments which provide employment inthe Nordic countries. NIB finances variousinternational projects in emerging marketsas well as within the OECD area. The Bankgrants loans to projects that support eco-nomic development in the Nordic coun-tries’ neighbouring areas as well as toinvestments of mutual interest for theNordic countries and the borrowing coun-try in various parts of the world.

In addition to loans, NIB also issues guar-antees for projects that meet the Bank’sconditions.

NORDIC LOANSINVESTMENT LOANS

NIB offers medium- and long-term invest-ment loans with maturities of five to fifteenyears. The loans are granted in various cur-rencies at fixed or floating market-based

interest rates, for up to half of the project’stotal cost.NIB finances projects in: • the manufacturing sector, including

investments in facilities and machinery • infrastructure, including transportation,

telecommunications, energy, water sup-ply, sewerage and waste management

• environmental improvement, both in theprivate and the public sectors

• research and development • cross-border investments, such as merg-

ers and corporate acquisitions • foreign investments in the Nordic coun-

tries.

REGIONAL LOANS

Regional loans are granted to national andregional credit institutions for the furtherdevelopment of business in priority regions.

INTERNATIONAL LOANSThe core of NIB’s international lendingoperations consists of project investmentloans. These are long-term loans—up to 20years—for projects in emerging markets inAsia, the Middle East, Central and EasternEurope, Latin America and Africa.

Project investment loans are usually grant-ed on a sovereign basis but may also begranted without a government guarantee,particularly to private-sector infrastructureinvestments. The loans are granted for up tohalf of the project’s total cost. Project invest-

ment loans can be utilised to finance all typesof project costs, including local costs. Theloans are granted at market-based interestrates in a currency preferred by the cus-tomer. Project investment loans have beengranted for projects in more than 40 coun-tries. NIB can also provide loans to Nordiccompanies’ investments, including joint ven-tures and corporate acquisitions, within theOECD area and in the Baltic countries.

THE NEIGHBOURING AREASNIB gives priority to the financing of publicand private infrastructure and industrialinvestments in the areas neighbouring theNordic region. Further, NIB participates inthe financing of projects in the Baltic coun-tries through investment loans to companiesinvesting in the Baltic countries.

NIB is authorised to grant special envi-ronmental investment loans to public andprivate sector environmental projects in theneighbouring areas to the Nordic region,i.e. to Poland, the Kaliningrad area, Esto-nia, Latvia, Lithuania and northwest Russia(St. Petersburg, the Leningrad area, theKarelian Republic and the Barents region).The projects are to help in reducing envi-ronmental degradation, and thereby also inreducing cross-border pollution. The envi-ronmental investment loans are granted onthe basis of commercial banking terms togovernments, governmental authorities,institutions and companies. �

nib in brief

This is NIB


The Nordic Investment Bank (NIB) had asuccessful year in 2001. Net interest incomerose to EUR 147 million, from EUR 143million in 2000. The annual profit amountedto EUR 131 million, compared with EUR130 million in 2000.

New lending increased sharply, amount-ing to EUR 1,661 million, against 1,101 in2000. Loans outstanding at year-end roseto EUR 10,067 million. The Bank’s bor-rowing in capital markets during the yearequalled EUR 2,099 million. NIB bondsoutstanding at year-end totalled EUR12,298 million. Total assets at year-endamounted to EUR 15,024 million. TheBoard of Directors proposes that a divi-dend of EUR 39 million be paid for 2001to the Bank’s owners, the Nordic countries.This is the same amount as for 2000.

THE BANK’S ANNUAL ACCOUNTS aredrawn up in accordance with the Interna-tional Accounting Standards (IAS). Asfrom 2001 a new standard, IAS 39, appliesto the treatment of financial instruments.

The credit quality of the Bank’s lendingportfolio and of its investment portfolioscontinued to be considered very good onthe whole, despite the cyclical downturn.In 2001 the Bank experienced a loss ofEUR 3.1 million in respect of one transac-

tion, for which a loss provision had alreadybeen made in the accounts of year 2000.Provisions for anticipated loan losses in theamount of EUR 0.4 million were madeduring 2001.

During the year the Bank’s ownersapproved a change in the Bank’s statutes,proposed by the Board of Directors,increasing its ordinary lending capacityfrom EUR 10 billion to slightly more thanEUR 12 billion.

DURING THE YEAR NIB participated infinancing of over 60 major investmentprojects and credit programmes in theNordic countries. A large proportion ofthe loans related to cross-border companyacquisitions and new company establish-ments. The manufacturing industryremains the largest sector where the Bank’sNordic lending is concerned. In the energysector, loans were granted for investmentsin power production, distribution networks,district heating and biofuel facilities.

As regards NIB’s international lending,there was continuing strong demand fornew loans to the telecommunications sec-tor. The transport sector also grew inimportance. At present NIB has loans out-standing in more than 30 countries outsidethe Nordic area. �

annual accounts 2001

Growth of new lending

NIB’S KEY FIGURES (in EUR million) 2001 2000

Net interest income 147 143

Profit 131 130

Loans disbursed 1,661 1,101

New loan agreements 1,795 1,026

New debt issues 2,099 1,865

Loans outstanding 10,067 9,288

Debts evidenced by certificates 12,298 11,326

Net liquidity 2,641 2,913

Total assets 15,024 13,850

Number of employees 137 129

THE YEAR 2001 IN BRIEF

– good, stable results,profit EUR 131 million,net interest incomeEUR 147 million

– dividend to NIB’s owners for2001 EUR 39 million

– new lending increased stronglyto EUR 1,661 million

– high quality of loan portfoliosustained

– ordinary lending capacityincreased from EUR 10,000 million to slightly over EUR 12,000 million

– increased lending to invest-ments in the energy sector in all the Nordic countries

– focus on environmental invest-ment loans in the areas neigh-bouring the Nordic countries

– Northern Dimension Environ-mental Partnership establishedtogether with the EuropeanCommission and internationalfinancial institutions

Annual Report available on the webFor the first time, NIB is presenting its Annual Report elec-tronically on the Internet. The content of the printed ver-sion and the web version are identical.

On the Annual Report website, the search functionmakes it easy for you to find what you are looking for.There are also internal links and links to NIB’s home page.

Notes to the Profit and Loss Account and the BalanceSheet are easy to find. By clicking on the number of thenote, the note text will appear in a separate box.

All tables can be downloaded in Excel via the link calledDownload as Excel sheet.

Just like the printed Annual Report, there are web

versions in two languages: Swedish and English. Theselinks are at the top of the page, and when switchingbetween languages, you will arrive at the exact same sec-tion where you were before.

You will find the link Print this chapter on each page foryour convenience. In order to print a PDF version of theentire Annual Report, choose the link NIB Annual Report2001 (pdf).

ANNUAL REPORT http://annual.nib.intNIB’S HOMEPAGE http://www.nib.int

Documents

NIB 2002 EngelskFor several years NIB has followed best inter-national practice in dealing with environmental issues. These principles are now specified in the Bank’s environmental