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Project helps modernise Baltic freight handling

FASCINATING PROJECT NEWS

EBRD investment turns Lithuania’s Klaipeda port into Baltic transhipment hub

15 April 2014 – London, UK and Vilnius, Lithuania – The European Bank for Reconstruction and Development (EBRD) has announced that a €32.5 million loan from the EBRD to Klaipedos Smelte, the company operating the container terminal at Klaipeda port in Lithuania, has helped modernise its freight handling capacities and upgrade the whole Baltics region as a transit hub.  This is another project success story for EBRD in Lithuania.  Klaipedos Smelte used the investment to purchase several container cranes, upgrade container handling equipment and extend the existing terminal area, important steps towards enhancing the region’s importance for global trade.

140415-pmwj22-lithuania-IMAGEMerchant shipping is the fuel that keeps our globalised economies running: about 90 per cent of international trade and many of our daily commodities are carried by freight vessels. Usually, consumers are unaware of the goods’ route to market but it can make a big difference – both to the price they pay and the environment.

Before reaching businesses and consumers in the Baltic states, their cargo often makes an extra stop in Hamburg, Rotterdam or Antwerp. One of the key reasons for this is the old infrastructure of many Baltic ports. Smaller feeder vessels therefore need to transport containers from larger ships in western European hubs to these destinations further afield.

Klaipeda is the most northerly deep-water and ice-free port on the eastern coast of the Baltic Sea. “The city’s strategic location close to the eastern hinterland and its good rail and road connections position it ideally as a transit hub for goods imported and exported from the Baltic states to western Europe, the Americas and south-east Asia,” said Rimantas Juška, Director General of Klaipedos Smelte.

Container shipping and proper support facilities are highly important for competitive ports, as they allow the freight to be moved easily and quickly on to roads and railways. In Lithuania the container market has boomed in recent years: it grew by 29.9 per cent per year on average between 2000 and 2013 – a trend which has also been noticed elsewhere in the region.

The EBRD’s investment supported a private business in developing a more productive port infrastructure, explained Sue Barrett, its Director for Transport. “This, in turn, will foster more efficient shipping trade, which will result in lower costs for businesses and consumers and ultimately lead to higher economic growth,” she said.

Following its expansion, Klaipedos Smelte’s container terminal is expected to attract triple the amount of freight in the short term and a six-fold increase in the long run.  MSC, one of the world’s largest shipping lines, is planning to use the port as a hub for its transhipment business in the Baltic states.

More direct shipping and container routes are also better for the environment. Goods are moved more efficiently, the traffic is faster and fewer trucks are needed on the road. These advantages are expected to reduce shipping-related CO2 emissions by approximately 50,000 tonnes a year, which is equivalent to taking more than 10,000 passenger cars off the road.

Klaipedos Smelte’s new container cranes have already become a landmark in the city and are visible to shipping crews, train conductors and truck drivers heading for the new terminal from far away. The highest, one of three ship-to-shore cranes, measures 115 metres and surpasses Lithuania’s tallest residential building by several metres.

“The upgrade of Klaipeda’s container port facilities will attract significant economies of scale and offer new opportunities to businesses in the Baltic states,” said Matti Hyyrynen, the Head of EBRD’s Vilnius office. “The establishment of a new transhipment hub will also foster deeper economic integration across the Baltic region.”

The European Bank for Reconstruction and Development (EBRD), established in 1991 to nurture the private sector in central and Eastern Europe and ex-soviet countries, uses investment to help build market economies and democracies. The EBRD is the largest single investor in the region and mobilizes significant foreign direct investment beyond its own financing. Owned by 61 countries and two intergovernmental institutions, the EBRD provides programme and project financing for banks, governments, industries and businesses.  The EBRD has supported more than 3,500 projects in more than 30 countries to date.  For more information about the bank, visit http://www.ebrd.com/index.htm.  More about EBRD projects at http://www.ebrd.com/pages/project.shtml.

For more information about EBRD projects in Lithuania, go to http://www.ebrd.com/pages/country/lithuania.shtml

Based on story by EBRD author Volker Ahlemeyer