The delegation of the Andean Community headed by Mr. Fabián Alarcón, President of Ecuador and of the Andean Presidential Council, and formed by the Ministers of Foreign Affairs of Ecuador, Bolivia, Colombia and Venezuela, Peru's Vice Minister of Foreign Affairs and Ecuador's Minister for Foreign Trade and President of the Andean Commission, met Sir Brian Unwin, EIB President, and Mr. Luis Marti, EIB vice-president with special responsibilities for Latin America.

During the visit, the EIB, the European Union's long-term financing institution, and the Republic of Ecuador concluded the Framework Agreement under which the Bank may start lending for capital investment in Ecuador in the context of European Union's co-operation policy with third countries.

Speaking at the signature ceremony, Sir Brian said, "All five Andean Nations are now our associates. If we Europeans have learned something, it is that increased integration and union brings strength and prosperity". He then commented, "Ecuador has made important efforts to foster its development and I am confident that it will have a bright economic future together with the other members of the Andean Community."

A global loan contract of ECU 40 million (1) of EIB to the Corporación Andina de Fomento (CAF) was signed by vice-president Marti and Mr. Enrique García, President of CAF, the Andean Community development corporation. The funds will support medium sized investment projects bearing a European interest in the five countries of the Andean Community.

"The mission of both CAF and EIB is to foster regional integration through good use of financial resources provided for investment", said vice-president Marti. "I see many possibilities for industry, since European firms are now very active in the Andean countries", he added.

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. 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, Ecuador, El Salvador, Honduras, Mexico, Panama, Paraguay, Peru, Uruguay and Venezuela. Following an invitation from the European Council of Ministers, the EIB's Board of Governors authorised lending up to ECU 750 million, 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), and for environment improvement in Argentina (ECU 76 million) and Paraguay (ECU 17 million), and for industry in Mexico (ECU 50 million). On 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 on June 1997.

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30 September 1997, when ECU 1 = GBP 0.69, IEP 0.76, USD 1.113, ECS 4619.29, COP 1396.47,PEN 2.93377, VEB 55.682.