EUR 416 million loans for tranport and SMEs in Greece

The European Investment Bank (EIB), the European Union's long-term financing institution, is providing EUR 416 million (1) in support of investment in transport, including sections of trans-European motorways and the small and medium sized companies in Greece.

EUR 200 million goes to ATTIKO METRO S.A. as a further financial support for the extension of the Athens Metro network. The EIB is financing the design and construction of the two new underground lines (Lines 2 & 3 of 18.7 km in total) linking Eastern and Western Athens via the city centre, including also 21 stations and rolling stock. Being constructed by an international consortium, including Greek, French, German and US companies, the Athens Metro is supported jointly by the Structural Funds and the EIB, as it meets the European Union's objective to assist urban renewal and environmental protection. Total EIB financing for the Athens metro since 1994 now totals EUR 835 million. The project will make a significant contribution to improvement of the quality of life in Athens, by alleviating traffic congestion and providing a cleaner and quicker alternative to cars and buses.

EUR 150 million to the Hellenic Republic is for the construction of 10 motorway sections along the central part of the Egnatia trunk road (Egnatia). Egnatia is the major West-East link road between Italy (port of Brindisi), Western Greece (port of Igoumenitsa), the Balkan countries and Turkey (Alexandroupolis-Kipi border crossing). The Hellenic Authorities as well as the EIB regard Egnatia as of exceptional importance. In addition to the direct economic benefits in terms of savings in journey time and fewer road accidents, upgrading of the Egnatia motorway is of vital importance for the development and the opening-up of international communications in the region and Greece as a whole. The project is included on the Trans-European Networks (TEN) priority investments list, as being one of Greece's major trunk roads which, together with PATHE, approved by the Essen European Council. It is therefore supported jointly by the Union structural funds (ERDF and the Cohesion Fund) through the successive Community Support Frameworks and the EIB.

EUR 56 million is being advanced to the Hellenic Republic, for the construction of Athens-Thessaloniki-Evzoni (PATHE) motorway. The funds are for upgrading to a four-lane toll motorway, the Pelasgia-Gyrtoni section of the existing road axis. Being the main trunk road connecting Greece with the European Union and, through the country's Northern Borders to the Balkan area, the PATHE motorway is supported jointly by the successive Community Support Frameworks (ERDF and the Cohesion Fund) and the EIB. This is also a key transport project for Greece, included in the priority list of Trans-European Network projects (TENs).

An EUR 10 million global loan facility is made available to the Greek banking network of Hellenic Bank Ltd. of Cyprus. The EIB funds will be on-lent, according to the Bank's financing criteria, by Hellenic Bank to small and medium-sized enterprises (SMEs) in Greece, undertaking investments in the industry, tourism and services sectors. Private sector investment schemes in environmental protection and energy saving are also eligible. The global loan facility will thus combine the EIB's low cost funding with the local network and know-how of the Hellenic Bank to offer SMEs in Greece attractively priced long and medium term funds.

Mr. Massimo Ponzellini, EIB Vice-President responsible for operations in Greece, after the ending of the mandate of Mr. P. Gennimatas in June 2000 stated: "I am most happy that my first visit to Greece is linked with the signature of EUR 416 million in lending agreements in support of key investments in the country. We see this as a clear demonstration of our support for Greece on its journey towards the EMU."

The European Investment Bank (EIB) was set up in 1958 under the Treaty of Rome to provide loan finance for capital investment furthering European Union objectives. It participates in the implementation of EU policies towards third countries that have co-operation or association agreements with the Union. In 1999, the EIB provided loans totalling some EUR 32 billion, of which EUR 1 436 million for projects in Greece. The Bank borrows on the capital markets the funds for its lending. Its bonds have regularly been rated "AAA" by the leading rating agencies. As the EIB works on a non-profit basis it can pass on to project promoters the excellent conditions it obtains on the markets. The EIB normally finances up to 50 percent of project cost; on average it provides one third of the funding and co-finances investments with other institutions.

(1) EUR 1 = 0.87650 USD,0.596700 GBP