The European Investment Bank, the European Union's long-term financing arm, is lending £40 million (EUR 65 million)(1) to Sovereign Finance Plc. The finance in the form of an EIB global loan (basically a line of credit) goes to Alliance and Leicester Group Treasury plc for on-lending to Sovereign Finance Plc, a subsidiary of Alliance & Leicester plc.
Sovereign will make the loan available through finance contracts to small and medium-sized UK businesses who primarily operate in industry, tourism and services. The finance will also be available for energy and environmental protection investment schemes. The EIB loan to Sovereign Finance Plc is to be used to help fund ventures aimed at increasing productivity and competitiveness of small and medium sized enterprises (SMEs) based throughout the UK, in particular those in assisted areas.
The European Investment Bank, the European Union's long-term lending institution, finances capital investment furthering EU integration, in particular: regional development; trans-European networks in transport, telecoms and energy; industrial competitiveness and integration; SMEs; environmental protection; and energy security. It also operates outside the EU within the framework of the EU's co-operation external policy. Owned by the Member States, the EIB raises its funds on capital markets (AAA issuer). In 1999, the EIB lent some EUR 30 billion, of which EUR 3.3 billion (some £2.2 billion) in the UK.
(1) EUR 1 = 0.613400 GBP.