The EIB, the European Union's long-term financing institution, and the Republic of Venezuela concluded the Framework Agreement under which the Bank may start lending for capital investment in Venezuela in the context of European Union's co-operation policy with third countries. The Framework Agreement was signed by Mr. Fridolin Weber Krebs, Director General for lending outside the EU, and Mr. Luis Raul Matos Azócar, Venezuela's Minister of Finance.

The EIB finances capital investment in non-member countries which have concluded co-operation agreements with the European Union. In Latin America the Bank has so far concluded framework agreements with Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, El Salvador, Honduras, Mexico, Panama, Paraguay, Peru and Uruguay. Following an invitation from the European Council of Ministers, the EIB's Board of Governors authorised lending up to ECU 750 million(1), over a period of three years (1993-1996), for projects of mutual interest located in thirty Latin American and Asian (ALA) countries. Under this authorisation the EIB has already financed projects for electricity development in Costa Rica (ECU 44 million), for natural gas distribution in Argentina (ECU 46 million), for telecommunications in Chile (ECU 75 million), for road transport in Argentina (ECU 45 million) and Peru (ECU 27 million), for environment improvement in Argentina (ECU 76 million) and Paraguay (ECU 17 million), and for industry in Mexico (ECU 50 million). In February 1997 EIB's Board of Governors approved a new lending facility for projects in ALA countries of ECU 275 million to be used by the end of June 1997. Additionally, a new lending facility of ECU 900 million for projects in ALA countries to be financed during 1997-1999 was approved by the Board of Governors in June 1997.

The EIB was set up in 1958 under the Treaty of Rome to provide loan finance for capital investment furthering European Union policy objectives, in particular, regional development, European infrastructure, energy, industry and environment. Outside the Union, the EIB contributes to European development co-operation policy in accordance with the terms and conditions laid down in the various agreements linking the Union to some 130 countries in Central and Eastern Europe, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America.

(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, USD 1.13, 556.783 VEB.