OeEB strengthens businesses affected by COVID-19 and increases investments in Africa and Least Developed Countries

The economic crisis triggered by COVID-19 hits developing and emerging countries particularly hard. While cash flows and investments from industrialized countries are declining, development banks like OeEB are playing an even more important role in providing the capital urgently needed to overcome the crisis.

"It has been very important to us to react quickly and flexibly to the liquidity needs of our customers caused by COVID-19 – e.g. by providing bridge financing to customers with a fundamentally healthy business model," says Sabine Gaber, Member of OeEB's Executive Board. "In December 2020, we also participated with EUR 30 million in a joint initiative of the Association of European Development Banks," adds Board Member Michael Wancata. "The EUR 280 million initiative strengthens financial institutions and companies in developing countries and thus ensures ongoing investments and the preservation of jobs." Providing finance for micro, small and medium-sized enterprises is a central focus of OeEB.

Significantly more investments in Africa and Least Developed Countries

Despite the pandemic, OeEB was able to further expand its business in Africa and the poorest countries in the world (Least Developed Countries), as provided for in the bank's strategy. "In order to avoid procyclical effects, we have provided EUR 92 million in loans for investments in Africa and a further EUR 64 million for projects in Least Developed Countries. That is significantly more than in the previous year," explains Sabine Gaber. In addition, the first two projects of the "African-Austrian SME Investment Facility", which OeEB implements on behalf of the Austrian Ministry of Finance, were signed in 2020: The Austrian AMABO GmbH produces roof tiles from pressed sand and recycled plastic in Cameroon. In Nigeria, the construction of the infrastructure for an industrial park is being financed with a mezzanine loan to the Austrian ESME GmbH.

Climate-friendly investments remain strong

"Developing countries are disproportionately affected by climate change. Heat, droughts and water shortages are hampering economic development and the way out of poverty. In 2020 alone, OeEB provided around EUR 80.5 million for climate-related projects, for example in the field of renewable energy. Most recently, OeEB customers reported around 1.5 million tons of CO2 emissions savings," reports Michael Wancata. For several years, OeEB has been Austria's largest provider of climate finance in developing countries.

Results at a glance

In the past financial year, OeEB generated a net profit of EUR 4.7 million (2019: EUR 5.8 million), the operating result was EUR 6.4 million (2019: EUR 8.4 million). With new business of around EUR 302 million (investment finance and equity participations), the total portfolio amounted to EUR 1.44 billion at the end of the year. In addition, OeEB provided around EUR 0.45 million from its own funds for measures to enhance the developmental effects of its projects.