The European Investment Bank's (EIB) loans in Asia and Latin America over the period 1993 to mid- 1998 amount to over ECU 1230 million, of which ECU 540 million for 13 projects in Asia and over ECU 690 million for 17 projects in Latin America.

The EIB, the European Union's (EU) long-term financing institution, started its operations in Asia and Latin America under a mandate from the EU approved by the Bank's Board of Governors to lend up to ECU 750 million between 1993 and 1995. Another mandate was approved in December 1996 to lend up to ECU 275 million for the period ending end-June 1997. A third mandate foresees the Bank lending up to ECU 900 million during the period 1997 to 1999. So far, these funds were utilised to finance investment in 19 countries, signatories to co-operation agreements with the European Union.

The EIB may lend to support technology-transfer capital investment projects or projects implemented by joint ventures between EU and ALA companies. For private sector projects, the security required by the EIB is limited essentially to covering the non-sovereign risks involved in the financing. The EIB can also support projects implemented by the public sector if these projects foster closer relations between Asia, Latin America and Europe (e.g. telecom and transport), result in environmental improvements, or foster regional integration.

Some 37% of the total went to energy projects, 24% to communications (telecom and transport), 19% to water management and other environment improvement and protection investment, 16% to industry and 3% to medium-sized enterprises.

In all sectors European companies have developed projects, in some occasions jointly with local and other partners. Among these:

  • in environment improvement and protection: Suez Lyonnaise des Eaux for investment to upgrade and extend the water supply in West Jakarta, and in the city of Cordoba (Argentina) jointly with Aguas de Barcelona; in northern Buenos Aires Suez Lyonnaise des Eaux, Générale des Eaux, Aguas de Barcelona and Anglian Water promoted investment for waste water collection and treatment facilities; Thames Water upgraded and improved the water supply transmission and distribution in East Jakarta;
  • in the industry sector: Pirelli expanded capacity to produce optical fibre and optical fibre cable in Brazil, Saint Gobain built a new flat glass factory in Mexico, Lafarge set up a new cement plant in Brazil and F.L. Smidth of Denmark participated to the extension of a cement plant in the Philippines;
  • in the energy sector: British Gas for the Batangas Power Plant Project in the Philippines and Gas Natural Ban S.A. for the natural gas distribution in northern Buenos Aires and;
  • in the communications sector: British Cable & Wireless for the extension of the Panamanian telecommunications system and Telefonica of Spain for both Chile's and Peru's telecommunication modernisation.

The EIB was set up in 1958 under the Treaty of Rome to provide loan finance for capital investment furthering 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 30/6/1998: 1 ECU = 1.09314 ARS, 497.571 CLP, 9.79552 MXN, 3.20596 PEN, 45.2455 PHP, 16.042.6 IDR, 1.09590 USD.