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2020.04.06 15:11

Lithuania borrows €1.5bn to stimulate economy

BNS2020.04.06 15:11

Lithuania is borrowing 1.5 billion euros from international financial institutions and using the money to ensure the liquidity of the state treasury.

The European Investment Bank (EIB) will extend a loan of 700 million euros, while the Nordic Investment Bank (NIB) and the Council of Europe Development Bank (CEB) will lend 400 million euros each.

Read more: Lithuania seeks Nordic loan to deal with economic fallout

“I have signed loan agreements, worth a total of 1.5 billion euros, with international financial institutions under attractive terms and conditions,” Finance Minister Vilius Šapoka said in a press release.

The Finance Ministry and the EIB signed the 700 million euros loan agreement on Monday. The final term of the loan and its interest rate will depend on the situation in the capital markets.

Back in June 2019, Lithuania and the CEB signed a 100-million-euro loan agreement, which was followed by another deal of the same value signed in March 2020. The loans extended under these agreements will now be increased by 400 million euros.

Read more: Lithuania doubles business support to €1bn

Meanwhile the 400-million-euro loan agreement with the NIB was signed on Friday. The 10-year loan carries a floating interest rate.

In mid-March, the Lithuanian government adopted a package of measures to stimulate the economy and mitigate the economic fallout of the coronavirus, which gives the government a mandate to borrow extra 5 billion euros in order to ensure the liquidity of the state treasury.

The parliament, Seimas, raised the government's net borrowing limit on March 17.