The European Investment Bank (EIB), the European Union's (EU) long-term financing institution, lends ECU 45 million to PT. Kekar Thames Airindo, a company promoted and managed by Thames Water Overseas Ltd., for upgrading and extending the water supply transmission and distribution system in eastern Jakarta, Indonesia. The EIB loan represents some 21% of the total costs of the project to be developed over the next five years and is mainly aimed at improving the water distribution systems. The project will increase the supply of potable water to 70 percent of the area's population up from the present 52 percent. Along with an improvement in the quality of water and a decrease of water-borne diseases, the investment will also reduce losses due to leakage and soil subsidence caused by over-pumping from private wells.

EIB finance in support of water supply infrastructure in Jakarta totals ECU 100 million. In December 1997, the Bank provided a first ECU 55 million loan for water supply in western Jakarta. Both loans are assisting an Indonesian top priority project with substantial economic, environmental and social benefits and are provided in the context of the European Union's aid and co-operation policy. In Asia and Latin America (ALA), the EIB may lend up to ECU 900 million during 1997-99 to support technology-transfer capital investment projects or projects implemented by joint-ventures between EU and ALA companies. The EIB can also help projects that foster closer relations between Asia, Latin America and Europe (e.g. telecom and transport), improve the environment, or further regional integration.

The EIB was set up in 1958 under the Treaty of Rome to provide loan finance for capital investment furthering European Union (EU) policy objectives, in particular, regional development, European infrastructure, energy, industry and environment. Outside the Union, the EIB contributes to European development co-operation policy in accordance with the terms and conditions laid down in the various agreements linking the Union to some 130 countries in Central and Eastern Europe, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America.

The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 31/03/1998, when 1 ECU = 10.164 IDR, 1.06 USD.