Other Financing Partners

In May 1994, the Governments of the Czech Republic and the United States signed the Programme Agreement designed to finance Czech municipal housing infrastructure. On the Czech side, the state was represented by the Municipal Finance Company (MUFIS), a subsidiary of the National Development Bank created specifically to manage this program. On the US side, the state was represented by the Agency for International Development (USAID).

Financing mechanism was simple. MUFIS borrowed money from US private investors under the Housing Guaranty Loan Program - thus, with a guarantee from the US government to private investors and with a guarantee from the Czech government to its US counterpart. MUFIS then lent money to Czech commercial banks, which offered loans to municipalities. In 1995, MUFIS took first loan of USD 20 million, followed by two other loans in 1997 (USD 14 million) and 1998 (USD 10 million). Originally, four commercial banks participated in this program, but this number eventually increased to eleven banks. By 2000, these banks provided 122 loans to 112 municipalities in total volume exceeding CZK 1.4 bn.

All obligations and liabilities were paid off by MUFIS in January 2012.

The NRB CZ has established relations with Kreditanstalt für Wiederaufbau (KfW), the German promotional and development bank, already in the mid-1990s. The NRB was searching for long-term credit lines, which would enable fostering the development part of the Bank´s activities, mainly municipal infrastructure financing. However, cooperation between the two promotional banks covered also SME financing and specific thematic areas such as green energy.

In 2001, KfW provided a credit line of EUR 15 million (CZK 520 million) for SME financing. The NRB used this credit line to expand its loan program for small enterprises up to 50 employees called KREDIT. Between 2002 and 2004, this program supported small enterprises with 422 loans and 1,470 small loans under CZK 1 million. Total volume of loans and small loans reached CZK 2.25 billion. These figures clearly demonstrate that credit line from KfW was essential for the support of small enterprises as it enabled to increase the program capacity.

In the same year, the NRB cooperated also with Deutsche Ausgleichsbank on supporting clean energy projects under the program Clean Environment Fund. This German promotional bank was created in 1950 and existed until 2003, when it was merged with KfW.

In 2005, the NRB secured from KfW EUR 15 million for municipal infrastructure loan financing. Five years later, the NDB obtained from KfW EUR 30 million for loan financing of renewable energy projects.

Cooperation between the NRB and the Council of Europe Development Bank (CEB) started in June 2005 with the first credit line of EUR 20 million, designed to finance water management infrastructure in the Czech Republic. With the backing of the CEB, the NRB supported municipal investments aimed at purification and protection of surface and ground water. Between 2005 and 2007, the NRB provided 31 loans in total volume of CZK 431 million. This credit line was also used to increase the capacity of our program MUNICIPALITY (OBEC), launched in 2006 and offering preferential loans to municipalities for their public infrastructure investment projects. Between 2006 and 2009, the NRB provided 21 loans totalling CZK 395 million.

In December 2007, the CEB and the NRB signed a loan of EUR 15 million aiming at the creation and preservation of viable jobs. This loan was used to co-finance investments of Czech SMEs outside of Prague in the form of subordinated loans, provided within the framework of the program called PROGRES. This program was financed from European Structural and Investment Funds (Operational Programme Enterprise and Innovation) and resources from the CEB served as national co-financing of this program.

In August 2009, cooperation between the two banks led to the signature of a framework loan agreement. The NRB obtained EUR 50 million to support the construction and modernisation of municipal infrastructure in the areas of water management, transport, cultural and educational amenities, and social services. These resources enabled the NRB to re-open a municipal financing program, now called MUNICIPALITY 2 (OBEC 2). Between 2009 and 2013, the NRB provided 15 loans to municipalities in total volume CZK 598 million.

In October 2015, the CEB offered the NRB a new loan of EUR 20 million targeting development of municipal infrastructure with a specific focus on improving living conditions in urban and rural areas as well as on improving environmental quality and energy efficiency.

In December 2021, the NRB and the CEB signed a framework loan agreement worth EUR 50 million (CZK 1 billion). These resources are going to be used to provide preferential loans to regions, cities, municipalities as well as to the private sector for the construction and modernisation of transport, energy and social infrastructure.

Nordic Investment Bank (NIB) signed with the NRB one loan agreement in December 2005. Resources from this loan enabled the NRB to increase capacity of its loan programs targeting SMEs.