The European Investment Bank (EIB), the European Union's long-term financing institution, is providing EUR 15 million(1) in an equity capital arrangement with Raffaello Jersey Limited Partnership to support growing Italian private enterprises.

This will be the first operation in Italy under the special programme set up following the 1997 European Council of Amsterdam (ASAP) that will involve an international investment company dedicated to Italian small and medium-sized enterprises (SMEs), and the first venture capital fund sponsored by Euromobiliare Corporate Finance. Co-sponsor of the Raffaello initiative will be Folio Investments.

Euromobiliare, part of the Credito Emiliano banking group, is one of the first merchant banks to be established in Italy with a specific focus on corporate finance in favour of SMEs. Final beneficiaries will be SMEs with experienced management, strong market positions and good potential for job-creation. Investments are expected to be in Italy, although other EU countries will also be considered.

This is the second EIB facility arranged for venture capital in Italy, and underlines the Bank's strong commitment to this new business segment for the development of SMEs in Italy.

The Italian venture capital market is experiencing a period of growing interest on the part of both fund managers and investors. The initiative will support the sector in the development phase. The presence of a competitive private equity market is an important factor in the growth of SMEs and the creation of employment opportunities.

The EIB finances capital investment furthering EU integration, in particular: regional development; trans-European networks in transport, telecoms and energy; industrial competitiveness and integration; SMEs; environmental protection; and energy security. Outside the EU, the EIB operates within the framework of the EU's co-operation external policy. Owned by the Member States, the EIB raises its funds on capital markets at fine rates (AAA issuer).ASAP, aimed at favouring job-creation, includes a special window to provide risk capital for high-growth SMEs; new lending for education, health and urban renewal; and expansion of financing for trans-European networks and other infrastructure schemes. Following its recent Board of Governors meeting, the EIB has decided to double its funding for the European Technology Fund (ETF) managed by the European Investment Fund (EIF) from EUR 125 to 250 million, to double the reserve established to cover the risk associated with these venture capital operations (from EUR 500 million to 1 billion) and, in principle, to allocate to this reserve in due course an additional amount of EUR 1 billion for the years 2000-2003.

(1) 1 EUR: 1 936,27 ITL, 0.666300 GBP.