A loan of EUR 75 million signed by the European Investment Bank (EIB) and the City of Prague will help finance the first phase of a 4km extension of line C of the underground metro toward the north-eastern districts of the Czech capital. In total the EIB's Board has approved EUR 150 million for this project.

The new underground line is an important step for reducing car traffic in Prague by shifting from individual to collective transport. The EIB loan for the metro extension is the second to the City of Prague in less than a year, following EUR 50 million granted in June 1999 for environmental and urban development projects in the city.

The EIB, the European Union's loan financing arm, provided its first loan for projects in the Czech Republic in 1992 and lent over EUR 2.1 billion in the Czech Republic so far, more than in any other Central European country except Poland. More than half was lent to Czech transport schemes, including some EUR 400 million for the modernisation of the major international railway lines in the country.

In addition to transport schemes, the EIB financed in particular the Czech telecommunications fixed network, environment-friendly investments in several coal-fired power stations in northern Bohemia, municipal infrastructure and the reconstruction of infrastructure damaged during the 1997 floods in northern Moravia. Small and medium-scale industrial, and energy and municipal investments are being financed through global loans (credit lines) to commercial banks established in the Czech Republic.

Since 1990, the EIB has lent some EUR 11 billion to projects in twelve Central European countries: Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Romania, Bulgaria, the Former Yugoslav Republic of Macedonia and Albania. Annual lending in the ten Central European candidates for EU accession has averaged some EUR 2 billion between 1997 and 1999. In line with decisions by the EIB's Board of Governors (the fifteen EU Finance Ministers), lending to projects in the region may double to an annual EUR 4 billion during the coming three year period.

1 EUR = 1,95583 DEM; 0,621700 GBP; 36.1030 CZK.