The European Investment Bank (EIB), the European Union's long-term financing institution, has advanced a loan for 393 million euro (66 billion pesetas) (1) to ENDESA S.A. towards financing upgrading and expansion of the power grid in areas supplied by companies in the ENDESA Group.

The project comprises preparatory studies, design, installation and commissioning of power transformers, overhead lines and underground cables, boosting transformer capacity by around 11 000 MVA and adding a further 17 000 km of cable to the network. Forming part of ENDESA's ongoing investment programme in power transmission and supply facilities, the project will serve to increase existing power distribution capacity by around 5% and to cope with anticipated growth in demand. The regions benefiting from the planned investment are those supplied by Sevillana de Electricidad (Andalusia and Badajoz), FECSA y ENHER (Catalonia), UNELCO (Canary Islands), Eléctricas Reunidas de Zaragoza (Aragón), GESA (Balearic Islands) and Electra de Viesgo (Cantabria, Asturias, Galicia).

The EIB was founded in 1958 under the Treaty of Rome, which created the European Economic Community, with the aim of fostering enhanced integration, balanced development and economic and social cohesion in the Member States by providing long-term financing for capital investment furthering attainment of European Union objectives.The 1995 White Paper "An energy policy for the European Community" set out the three chief objectives of the EU's energy policy: security of supply, rational use and management of energy and respect for the environment. Over the past 5 years (1994-1998), EIB lending in support of projects in the energy sector ran to more than 15 billion euro (2.5 billion pesetas).Owned by the EU Member States, the EIB raises the resources for its lending operations on the capital markets, where its bond issues are consistently rated AAA.

(1) EUR 1 = 166.386 ESP, 0.705455 GBP.