The European Investment Bank (EIB), the financing institution of the European Union, is advancing a loan for ECU 34 million (1) to Fonds d'Equipement Communal (FEC) for financing small and medium-scale ventures promoted by local authorities in Morocco.
The proceeds will serve to improve the quality of urban life, mainly through the construction and upgrading of roads. Other sectors, such as water, electricity and urban transport, may also benefit from these funds.
FEC, which has attracted two previous EIB loans for a total amount of ECU 11 million (2), will onlend the proceeds to local authorities. Set up in 1959 to finance local government investment, FEC was converted into a banking institution in 1996, while remaining a public body subject to the dual supervision of the Interior and Finance Ministries. Its transformation has been supported by international lending institutions such as the World Bank, German development cooperation agencies, USAID and the EIB. The EIB loan will complement assistance from these organisations by providing FEC with long-term funds, thereby helping to reduce local authority financing costs and bolstering FEC's role as the main lender to local government in Morocco.
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 EU-Morocco power grid interconnection via the Strait of Gibraltar, high-voltage electricity transmission facilities and power supplies to rural areas, improvements to the trunk and international telephone networks and large-scale water management schemes (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 during 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.
(2) The two previous EIB loans to FEC concerned sewerage schemes in Mediterranean towns and local authority schemes.