The bank's board of directors approved the loan during its meeting in Vilnius. EIB President Werner Hoyer took part in the meeting.
"The European Investment Bank is our long-time partner that has helped Lithuania implement major infrastructure projects and more efficiently use EU structural support. With the bank's help, we will now be enhancing our country's energy independence," Finance Minister Rimantas Šadžius said in a press release.
Following the bank's approval of the 87-million-dollar loan to Klaipėdos Nafta, the government is to provide the company with a guarantee of the same amount, Rosvaldas Gorbačiovas, the finance minister's spokesman, confirmed to BNS on Tuesday.
Klaipėdos Nafta's management board decided last Friday to sign an 87-million-euro loan agreement with the EIB. The loan of up to 20 years will be disbursed on condition that it is backed with a state guarantee.
Nordea Bank Finland has already loaned Klaipėdos Nafta 120 million litas (EUR 34.8m).
The state-controlled company plans to use its own funds, money paid by gas consumers and borrowed funds to finance the LNG terminal project, which is planned to be completed by December 2014.
Saving 20 million euros
The chief executive officer of Klaipėdos Nafta says that the terms of the European Investment Bank's long-term loan will allow the company to save around 20 million euros.
"We now have the opportunity to borrow funds, 300 million litas (EUR 87m), from the European Investment Bank, which is largely sufficient for this project. Once the time comes to pay the money to contractors, we will use these funds, which are very cheap. A successful deal with the EIB will allow us save around 20 million euros for the project (by borrowing cheaper than from commercial banks).This is the cheapest possible borrowing," Klaipedos Nafta CEO Rokas Masiulis told BNS.
Masiulis said that they expect to sign an agreement with the EIB in the near future.
He said that Klaipėdos Nafta will use the money to finance the construction of a jetty for the LNG terminal and a gas pipeline linking the facility to the country's grid. Under the company's contracts with Latvia's BMGS and Germany's PPS Pipeline Systems, the value of these projects totals 209 million litas (EUR 60.6m).
The CEO said that the company does not rule out borrowing funds from commercial banks at a later stage.
"We are planning to announce a tender, but we will now sit down and think all the situation with the EIB loan over before taking our final decision," he said.
