The European Investment Bank is financing the expansion and improvement of Ventspils Port in Latvia with and EUR 8 million loan to the Ventspils Free Port Authority (VFPA). The financing arrangement was signed by EIB President, Sir Brian Unwin and VFPA Chief Executive, Imants Sarmulis, in Riga today.

The loan will go for infrastructure upgrading works, in particular for extension and strengthening of quays and dredging to deepen the Port's river channel. As well as allowing for better capacity utilisation and the accommodation of larger vessels, the investment will also support the development of a new privately promoted multi-purpose terminal and facilitate diversification of the Port's through put.

The Ventspils Port is Latvia's largest sea-port and the biggest in the Baltic States. Total cost of the new investment is EUR 34 million, and will strengthen the Port's services as a major transit point for cargo traffic with Russia and other East European States. Latvia is a major player in the development of trade between the former-Soviet Union region and the West, and transiting exports and imports accounts for an important share of Latvia's GDP.

In 1997, the EIB advanced EUR 20 million for similar works, including deepening the sea access. This new loan brings to over EUR 140 million total EIB financing in Latvia since 1994, when the Bank started lending in the country. Projects so far financed in Latvia by the EIB include upgrading and rehabilitation of water and waste-water systems in the Riga area, global loans for financing small and medium sized projects arranged with the Investment Bank of Latvia and the Vereinsbank Riga, the Daugava hydropower plants, and upgrading of the main East-West railway line.

The EIB is the European Union's long-term financing arm, and its activities in Latvia are carried out within the Accession Partnership Agreement with the EU. As the European Union's long-term financing arm, the EIB supports investment in Central and Eastern Europe that strengthens the economies and infrastructure links, to prepare countries in the region for future membership of the Union.

The EIB was set up in 1958 under the Treaty of Rome to lend to projects furthering European Union policies. While strengthening weaker EU regions has always been its main goal, the Bank also lends to projects outside the European Union under the Union's co-operation policy toward third countries. Since 1990 some EUR 9 billion were lent to projects in the ten Central European countries which have applied for EU membership. Owned by the Member States, the EIB raises the bulk of its funds on the capital markets worldwide where its bond issues regularly benefit from the Bank's `AAA' credit rating.

1 EUR: 0.647500, GBP, 0.617700 LVL.