The European Investment Bank (EIB), the European Union's long-term financing institution, is lending EUR 30 million(1) for the construction of a new Finnish-Jordanian manufacturing facility in Aqaba, in the South of Jordan.

The loan, which is part of EIB's continuing efforts in support of the industrial sector in the Middle East, goes to the Kemira Arab Potash Company Ltd (KEMAPCO). This is a joint-venture between the Arab Potash Company Ltd of Jordan, the world's fifth largest potash producer, and the Kemira Agro Oy of Finland, a division of the Kemira Group, Europe's second largest producer of chemical fertilisers. The new manufacturing facility will produce potassium nitrate, a fully water-soluble chemical fertiliser and dicalcium phosphate, an animal feed supplement. Potash, widely used as a fertiliser as well as in a range of other chemical applications, such as water treatment, desulphurisation, and printing, is one of Jordan's major exports and source of foreign exchange.

The plant is expected to start production by the end of 2001. The Kingdom of Jordan has a 52.8% stake in the Arab Potash Company, which has an exclusive concession to exploit the mineral salts of the Dead Sea until 2058.

The investment brings together Jordan's high-quality, competitively priced raw materials, with a skilled workforce, a good location for the growing markets of the Middle and Far East and the technology know-how of Kemira. Kemira Agro, as part of its globalisation strategy, is extending its production activities closer to raw material sources and the growth markets. In addition, some 160 jobs will be created in Jordan.

The EIB funding will contribute to increased value added, by providing long-term loan finance, which is not available locally, and by complementing the other medium-term European finance from development agencies of Denmark and Finland. The expansion of the industrial port of Aqaba, also supported by the EIB with EUR 30 million, will facilitate the project's export shipments.

The European Investment Bank (EIB) was set up in 1958 under the Treaty of Rome to provide loan finance for capital investment furthering European Union objectives. It participates in the implementation of EU co-operation policies towards third countries that have co-operation or association agreements with the Union. In the Mediterranean region, the EIB operates in the context and support of the Euro-Mediterranean Partnership, adopted in Barcelona in 1995, and which complements the EU Member States' own bilateral co-operation policies. Under the Euro-Med Partnership arrangements, the EIB is committed to lend some EUR 2 310 million between 1997 and end 1999 for investment projects in 12 non EU-Member Mediterranean countries. This loan follows a number of other EIB operations in Jordan, making total financing since 1978 in this country exceeding EUR 460 million, to support projects in water supply and waste water treatment, telecommunications, transport, electricity transmission and distribution, agricultural development and industrial projects, including SME's.

(1) The conversion rates used by the EIB: EUR 1 = 0.666300 GBP, 1.07420 USD , 0.765096 JOD.