The European Investment Bank (EIB), the European Union's long-term financing institution, is lending ECU 75 million (1) for capital investment on upgrading and rehabilitating Morocco's high-voltage electricity transmission system.

The loan is being advanced to Morocco's Office National de l'Electricité (ONE), a utility set up in 1963 to engage in electricity generation, transmission and supply. It will finance capital expenditure embracing around fifty sub-projects phased over the period 1997-1999. These involve around 1 000 kilometres of overhead high-voltage lines and 500 kilometres of medium-voltage lines, expansion of the capacity of 8 existing sub-stations to 225kV, transformers with a combined capacity of 150 MVA, 500 kilometres of optical fibre cable and civil engineering works. The project encompasses several structures in the region to the south east of Casablanca and in heavy power-load centres throughout the country. It will add about 10% to the existing high-voltage lines and 3% to low-voltage lines and transformer capacity.

The various project components will help to meet the growing demand for electricity in Morocco, improve quality of power supply and reduce network losses.

This loan, which is being granted under the "Euro-Mediterranean Partnership" mandate, is the EIB's fourth to ONE since 1989. The Bank has contributed a total of ECU 170 million towards rural electrification in Morocco, extension of its electricity network and interconnection of the Moroccan and Spanish power grids.

The EIB is a lead player in implementing the European Union's "Euro-Mediterranean Partnership" and its priority objectives. In this context, a new mandate has been set in place for the period 1997-2000 to provide up to ECU 2 310 million of funding for projects in the 12 non-EU Mediterranean countries that have signed cooperation and/or association agreements with the EU.Since 1991, the EIB has contributed over ECU 600 million towards projects of key importance for the Moroccan economy, such as the above-mentioned electricity schemes, improvements to the trunk and international telephone networks and large-scale water management projects (sewerage systems in several coastal towns, irrigation of farmland in the Doukkala Plain, etc); the EIB has also promoted small and medium-sized enterprises in the productive and cooperative sectors through global loans to Morocco's Caisse Nationale de Crédit Agricole and 18 commercial banks, intended particularly to pave the way for Moroccan/European joint ventures.

(1) The conversion rates used by the EIB for statistical purposes for the current quarter are those obtaining on 31.03.1998, when ECU 1 = GBP 0.6392, IEP 0.7900, USD 1.0762 and MAD 10.6894.