EBRD invests in Lithuanian port’s future as major hub
The EBRD is supporting the transformation of Klaipeda into a major regional transhipment hub and helping to reduce shipping-related carbon emissions by financing investment to increase the Lithuanian port’s container handling capacity.
The EBRD is lending €32.5 million to Klaipedos Smelte, part of Terminal Investment Limited – of the world’s largest and most geographically diverse container terminal operators – to help finance the purchase of container cranes, handling equipment and expansion of the existing terminal at Klaipeda. Skandinaviska Enskilda Banken AB (SEB) is lending also €32.5 million to support this project.
Klaipeda is the most northerly deep-water and ice-free port on the eastern coast of the Baltic Sea. It is Lithuania’s biggest transport hub, connecting sea, road and rail routes.
Currently, most cargo arriving in Baltic ports is brought by feeder vessels transporting containers from larger ships using hubs such as Bremerhaven, Rotterdam, Antwerp and Hamburg. Increasing Klaipeda’s container handling capacity will enable mainline vessels to call at the port directly and allow the port itself to become a major transhipment point for the Baltic region, Russia, Belarus and Ukraine.
Reducing Klaipeda’s reliance on feeder ships will reduce transportation costs through economies of scale, enabling regional trade to expand further. The more efficient movement of cargo is expected to lead to CO2 savings of some 50,000 tons a year.
Sue Barrett, EBRD’s Transport Director, said: “With this investment, the EBRD will help turn Klaipeda into a Baltic transhipment hub. The improved quality and scope of port services resulting from the project will boost trade in Lithuania and neighbouring countries and lead to lower costs for consumers. A modern and efficient container terminal will also help improve the competitiveness of the Lithuanian export industry.”
Rimantas Juska, CEO at Klaipedos Smelte, said: “The development of our terminal as a regional hub will create around 200 new working places within our company, which will give a significant boost to the whole seaport of Klaipeda. Moreover, the favourable geographical location of Klaipeda combined with excellent rail and road connections to CIS countries will facilitate development of new logistical opportunities, like delivery of containers by block trains and adding value at bonded warehouses. Direct calls of deepsea containerships to Klaipeda will eventually bring the entire setup of logistics services in the region to another level.”
For Terminal Investment Limited the involvement of EBRD in this project was of a primordial importance to act as a catalyst to mobilise also the necessary commercial banks. Tom Van Eynde stated: “Commercial banks are getting nowadays so much risk averse that the existence of institutions like the EBRD is a blessing for these kind of heavy infrastructure investments.”
Since 1991and including this loan to Klaipedos Smelte EBRD has signed 80 operations in Lithuania with a cumulative business volume of over €640 million. With this signing the Bank’s Lithuanian portfolio reaches €247 million.