The European Investment Bank (EIB) announces a loan of ECU 300 million (1) for SONATRACH towards a major energy supply scheme in Algeria: construction of the 1 000 km GR2 gasline designed to convey gas from Alrar (in the south-east of the country) to Hassi R'Mel. The project will result in increased export capacity to the European Union (EU) of natural gas tapped from new fields in this region of Algeria and conveyed to the EU via the Maghreb-Europe and Maghreb-Italy (Transmed) gaslines, two large-scale energy infrastructure schemes already financed by the Bank.

Secure gas supplies are of strategic interest to the Union in that they are vital for its economic development. This priority is reflected both within Europe through the importance attached to trans-European gas transmission networks and outside Europe through active implementation of specific measures in the energy sector. It follows that the development of Algerian gas production and of the capacity for transmitting this gas to Europe has been, and remains, one of the focuses of EIB activity in the sector.

The GR2 gasline is being financed in furtherance of the Union's Euro-Mediterranean Partnership policy which aims to consolidate economic ties between countries on both sides of the Mediterranean.

The EIB is owned by the Member States of the European Union. Hence, its principal remit, as the EU's long-term financing institution, is to facilitate capital investment within the Union. Nevertheless, pursuant to the EU's external co-operation policy, it is also empowered to provide funds in non-member countries and is an important source of Community assistance targeted at promoting economic growth in the Mediterranean region. It was against this backdrop that the Union recently unveiled its new Euro-Mediterranean partnership mandate for the period 1997-2000 designed to make up to ECU 2 310 million available in support of projects in the twelve non-member Mediterranean countries signatories to co-operation and/or association agreements with the EU.Indeed, the EIB has already lent some ECU 3 billion in the Mediterranean region since 1992 not only under various bilateral financial protocols but also under the horizontal financial co-operation facility, the entire proceeds of which have been committed towards 42 major infrastructure projects mounted throughout the region.In 1996, aggregate EIB lending both within and outside the Union ran to ECU 23.2 billion, of which operations outside the EU accounted for ECU 2.3 billion.

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30 June 1997, when ECU 1 = GBP 0.68, IEP 0.75, USD 1.13 and DA 189.