The European Investment Bank, the European Union's financing arm, is providing ECU 300 million (1) for rebuilding infrastructure damaged in the summer floods in the Oder and Vistula basins of Southern and South-western Poland:
- ECU 225 million will go to the Republic of Poland for financing the Government's programme to rebuild roads and municipal infrastructure, as well as flood protection infrastructure;
- ECU 75 million to the Polish national railway company PKP will help finance the reconstruction of railway infrastructure damaged by the floods, mainly tracks, viaducts and embankments, as well as the electrical and telecommunications networks and signalling equipment.
Given the exceptional nature of the damages, the Bank's loan will be granted for a very long term (25 years) and may be used both for emergency work already underway or reconstruction and improvements due to start over the next 24 months.
Commenting on the loans, EIB Vice President Wolfgang Roth said: 'Rehabilitation of infrastructure damaged during last Summer's floods is a top priority for the resumption of economic activity in this region which is located at the cross-roads between the European Union and several future EU members in Central and Eastern Europe. The EIB acted swiftly and is providing an important contribution to reconstruction. But beyond this, we intend to expand further the scope of our activities in Poland where we are already lending more than in any other country in the region. We also hope to be able offer loans in zloty for Polish projects in the near future. These are some of the aspects of a framework agreement I signed today with Deputy Prime Minister and Minister of Finance, Professor Balcerowicz, and which will govern our relations with Poland as the country heads for EU membership.'
The loans bring total EIB lending in Poland since 1990 to nearly ECU 1 750 million. Previous EIB loans mainly went to finance the modernisation and expansion of the gas, telecommunications, railway and motorway networks, the modernisation of Warsaw airport, a new sewage plant in Warsaw, as well a re-forestation scheme. The EIB is also assisting the development of industry and the private sector, including small and medium-size enterprises through its global loans (credit lines) to a dozen Polish and EU banks in Poland.
The EIB has advanced nearly ECU 6 billion for investment projects in 11 central and Eastern European countries since 1990. Under a mandate covering the years 1997 to 2000, the Bank is lending ECU 3.5 billion in this region. In addition to this, the EIB, at the request of the Council of Ministers, will also create a substantial pre-accession lending facility to support preparation of EU membership.
(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, USD 1.113, PLN 3.82762.