The European Investment Bank, the European Union's long-term financing institution, lent over ECU 200 million in 1997 to support investment for the development of industry and the private sector in Mediterranean Partner countries. This financing underlines the Bank's commitment to support the Euro-Mediterranean Partnership that sets the framework for the European Union's economic and financial co-operation with other countries in the region. The Euro-Med Partnership places a particular emphasis on measures to encourage the liberalisation and privatisation of economies and in helping the private sector to restructure and expand in preparation for the gradual establishment of a free trade zone with EU Members by the year 2010.

The 1997 breakdown of EIB industry and private sector financing in the region:

  • Egypt, a total ECU 52.5 million, including - ECU 30 million to the Egyptian Cement Company, a European-Egyptian joint-venture for the construction of a cement plant; ECU 20 million (of which ECU 4 million as risk capital) to Lecico Egypt Company, a European-Egyptian joint-venture, for the construction a sanitary ware plant and modernisation of a tile manufacturing factory; and ECU 2.5 million risk capital as a subscription to Egypt's first venture capital fund - EgyCap Venture Capital Fund - set up to finance equity or quasi-equity investment by small and medium-sized enterprises (SMEs) in the productive and service sectors.
  • Turkey, an ECU 50 million facility to the Turkish government for on lending to three intermediary banks - Türkiye Halk Bankasi, Türkiye Sinai Kalkinma Bankasi and Sinai Yatirim ve Kredi Bankasi - for the granting of medium and long-term sub-loans to SMEs in the areas of industry, agro-industry, services and tourism.
  • Jordan, ECU 40 million (of which ECU 10 million as risk capital) to the Industrial Development Bank of Jordan (IDB) for supporting investment carried out by SMEs. ECU 5 million of the risk capital is in the form of equity participation by the EIB to strengthen IDB's capital base.
  • Cyprus, ECU 25 million to the Cyprus Development Bank for medium to long-term financing for projects undertaken by SMEs.
  • Gaza/West Bank, ECU 15 million (of which ECU 1 million risk capital) to the Palestine Industrial Estate Development Management Co. (PIECO) for the development of a large industrial estate, with fully serviced factory units on the border with Israel. PIECO is a wholly owned subsidiary of the Palestinian Development and Investment Ltd. (PADICO), a consortium of prominent Palestinian business and banking interests. This is the first major investment operation by the private sector in Gaza/West Bank and is being co-financed with support from the IFC (International Finance Corporation) and other development agencies.
  • Tunisia, ECU 15 million from risk capital resources to the Tunisia Government for channelling primarily through the intermediary institutions TUNNINVEST Group, IMB, COTIF, SODIS, SODINO, SIDCO and CGI for strengthening the equity base of enterprises being privatised and prepared for subsequent public quotation on Tunisia's stock exchange.
  • Malta, ECU 3 million from risk capital resources to the Valetta Investment Bank to finance equity acquisitions in Maltese SMEs.

The EIB was established in 1958 to provide long-term finance for capital investment projects which further EU policy objectives. Owned by the 15 EU Member States, it raises the bulk of its resources on capital markets. The EIB plays a central role in the European Union's technical and development policy towards third countries in the Mediterranean region. In most of these countries the EIB operates under Co-operation agreements negotiated with the EU to strengthen economic and trade relations as part of the new Euro-Mediterranean Partnership, complementing bilateral aid from the EU Member States.Under the Euro-Med Partnership arrangements, the EIB is committed to lend ECU 2 310 million between 1997 and end-1999 for investment projects in the region. The EIB also deploys risk capital funds drawn from the EU's budgetary resources, enabling the Bank to advance finance that can be specially tailored to the performance of the project being supported, as well as consolidating the capital base of the project sponsor.

The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30 September 1997, when ECU 1 = TND 1.24, CYP 0.58236, MTL 0.43563, JOD 0.78888, EGP 3.72780, GBP 0.69, IEP 0.76 and USD 1.113.