The European Investment Bank (EIB), the European Union's long-term financing institution, is lending ECU 10 million (1) for the construction of the last section -60 km. long- of the highway linking the town and port of Alexandria with the towns of Ismailia, Port Said and the Sinaï region, along the north-eastern coast of Egypt. Works include a ring road around Alexandria and an extension eastwards, as well as the construction of a bridge over a branch of the Nile. The investment attracts a 2% interest subsidy from the EU budget. An environmental impact study for the project was also financed by the European Commission.

The project, which is being carried out under the authority of the Central Development Organisation, an agency of the Ministry of Housing, Utilities and Urban Communities, will help reducing transit time, lower travel operating costs, reduce accidents and improve the possibilities for a more balanced development of the area through which it passes. Road transport is the dominant mode of transport in the country; it is estimated that about 75% of all freight and two-thirds of all passenger traffic are carried by road. The project forms part of the Egyptian authorities program to equip the country with an efficient and well maintained road network suited to modern traffic. The Northern Coastal Highway will be toll-free, a decision taken by the authorities to encourage the utilisation of the road by the resident population and boost the development of new activities along the coast.

The road is part of a transport corridor which will link the Mediterranean countries from Morocco to Israel, Gaza/West Bank and other neighbouring countries.

EIB is owned by the EU Member States. It is active mainly in the EU, but also provides funds in countries outside within the framework of the Union's external co-operation policies. The Bank is a major source of EU financial support for economic development in the region, where it has advanced more than ECU 3.5 billion since 1992 in 12 countries in the southern and eastern rims of the Mediterranean.Since 1992, the EIB has provided ECU 672 million in Egypt, both under the Fourth EU-Egypt Financial Protocol (1992-1996) and the "Horizontal Facility". The Protocol provided for Egypt ECU 310 million in EIB loans and ECU 16 million on risk capital financing.

(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, EGP 3.72780.