The European Investment Bank (EIB), the Bank of the European Union, and the Kingdom of Bhutan officially acknowledged the ratification of the Country Framework Agreement which allows the EIB to start operations in the country, on January 31.
“The EIB operations in Bhutan will significantly expand the existing EU economic support for the Kingdom of Bhutan especially on climate action, climate resilience and energy efficiency,” stated a press release issued by the EIB.
Foreign secretary in the Royal Government of Bhutan, Ambassador Pema Choden, signed the statement with vice president of the European Investment Bank Christian Kettel Thomsen at the EIB headquarters in Luxembourg.
The European Investment Bank will provide long-term financing, advisory support and blend EU grants for projects to support global climate action, climate resilience, and energy efficiency as well as contribute to long-term sustainability, resilience and competitiveness of Bhutanese economy. Country framework agreements are the key precondition for the start of EIB operations in countries outside the European Union.
EIB vice president Thomsen, who is in charge of EIB operations in Bhutan, said: “Today’s signature opens a new chapter in EU – Bhutan relationships and opens the way for the EIB as the EU bank to start investing in climate, green energy and sustainable social and economic development of Bhutan. The bank will be able to support both the EU and Bhutan’s government policy goals with new investments, valuable technical assistance in project preparation, and our unique ability to blend our own financing with EU grants. With EIB Global, our new development branch, in place we look forward being an integral part of Bhutan’s long-term growth.”
Bhutan’s foreign secretary, Ambassador Pema Choden, said: “The signing and ratification of the Country Framework Agreement between the Royal Government of Bhutan and the European Investment Bank comes at an important time ahead of our LDC graduation. Bhutan and the EU enjoy strong relations and successful cooperation, and we are happy that the EIB will be another avenue through which we can expand our engagement.”
EU Ambassador to India and Bhutan Ugo Astuto said: “The EU is a long-term friend and partner of Bhutan, supporting the country in a number of priority areas including the fight against climate change, environmental protection and sustainable socio-economic development. EIB operations will provide further impetus to our work by bringing in additional financial and technical resources.”
Outside the European Union, the European Investment Bank contributes to economic development in countries that have association or cooperation agreements with the European Commission. EIB Framework Agreements regulate lending activities that the bank is authorized to do in the respective country.
In Asia, the European Investment Bank has so far signed framework agreements with Bangladesh, Cambodia, China, India, Indonesia, Laos, Maldives, Mongolia, Nepal, Pakistan, the Philippines, Sri Lanka, Thailand, Vietnam and Yemen.