The European Investment Bank, the financing arm of the European Union, is providing a first ECU 10 million tranche (1) under an ECU 30 million global loan approved for ABN AMRO Bank (Romania) S.A. ABN AMRO will use the funds for financing small and medium-scale projects undertaken by Romanian companies and utilities and by joint ventures and enterprises involving international partners. Investments in energy, telecommunications, industry and tourism schemes are expected to absorb the largest share of this credit line.

In Romania as in other Central an Eastern European countries, the EIB finances large-scale investments with direct loans and smaller projects indirectly through global loans to selected intermediary banks which on-lend to small and medium-size companies and to promoters of smaller infrastructures schemes.

The global loan to ABN AMRO brings total EIB lending in Romania since 1993 to nearly ECU 650 million. Previous EIB financing mainly was for the modernisation and expansion of the gas, telecommunications, metro and road networks, the modernisation of air-traffic control, as well as a large private sector Italian-Romanian joint venture in the wood-processing industry.

Commenting on the loan, EIB Vice President Wolfgang Roth said: "The development of a competitive private sector as well as a solid base of good and efficient infrastructure are vital for the growth of the Romanian economy. The EIB seeks to support small and medium size initiatives and to promote economic growth and employment by providing solid financial intermediaries with long-term funds at competitive terms and by assuming the political risk".

The EIB has advanced some ECU 6.6 billion for investment projects in 11 central and Eastern European countries since 1990. Under mandates covering the years 1998 to 2000, the Bank is to lend ECU 5.5 billion in this region. Part of this is being provided in the form of a Pre-Accession Facility for helping the applicants in the region prepare for EU membership.

(1) On 31 December 1997, 1 ECU = DEM 1.98; USD 1.10; GBP 0.67; ROL 8.86.