The European Investment Bank (EIB), the European Union's long-term lending institution, is providing a EUR 450 million(1) facility to the Turkish Government to support priority rehabilitation and reconstruction works in the regions devastated by the recent earthquakes in Turkey. EIB Vice President Mr Panagiotis Gennimatas is signing the facility's first loan tranche of EUR 150 million, in Ankara today.

The EIB's EUR 450 million is for the reconstruction project established by the Turkish Government, costed at a total of EUR 1 478 million. The EIB is participating in funding the project, in cooperation with other multilateral financing institutions, including World Bank and Council of Europe Development Bank.

The EIB's support is part of a larger framework, the "Turkish Earthquake Rehabilitation and Reconstruction Assistance" (TERRA), approved by the EIB for the provinces of Kocaeli (Izmit), Sakarya (Adapazan), Yalova, and Bolu. The facility provides for a total of EUR 600 million in the form of loans to be engaged over a three-year period. The EIB's first tranche will be used mainly in restoring housing and all essential economic and social infrastructure, including environment, transport, energy, health and education. It has a particular focus on rehabilitating small businesses. The implementation of the works will be carried out by the Project Implementation Unit (PIU), established within the Prime Minister's Office. PIU is responsible for procurement, implementation, monitoring and controlling financial flows of reconstruction projects.

The EIB is a lead player in implementing the European Union's "Euro-Mediterranean Partnership" and its priority objectives. To this end, the Bank has been entrusted with a mandate for the period 1997-2000 to provide up to EUR 2.3 billion of funding for projects in the 12 non-EU Mediterranean countries which have signed cooperation and/or association agreements with the EU. This mandate has been renewed with 6.4 billion for the period 2000-2006.Turkey is eligible to apply for EIB financing from this facility. Since 1995, the EIB has contributed more than EUR 500 million towards projects of key importance for the Turkish economy. The EIB has also promoted SMEs through global loans to local commercial banks.

(1) Conversion rates: EUR 1 = 0.621700 GBP, 1.00460 USD, 544.641 TRL.