The European Investment Bank is providing a USD 50 million loan to MetroGas S.A. for a gas transmission pipeline and a gas distribution grid. MetroGas S.A. is a gas distribution company owned 38% by British Gas International, a wholly owned subsidiary of British Gas, and 32% indirectly by Repsol.
A main component of the project concerns the construction of a gas transmission pipeline from the gas off-take to the concession area to partly replace the existing transmission capacity and to overcome transport constraints. A second component is to renovate and extend by some 2200 km the existing gas distribution grid.
The new transmission pipeline will improve safety, reduce maintenance costs and increase security of supply. Extensions to the distribution network are targeted in particular to the lower income residential consumers and are expected to reduce energy costs for some 50 000 customers. The upgrading of existing assets will also reduce gas losses and operating costs.
The loan is provided in the context of the EU co-operation policy with third countries. In Asia and Latin America (ALA), the EIB may lend up to EUR 2.48 billion during 2000-2006 to support capital investment projects implemented by subsidiaries of EU companies or joint-ventures between EU and ALA firms, or investment that results in environmental improvements or fosters regional integration.
The EIB was set up in 1958 to finance investment furthering EU integration. It lends for regional development, infrastructure, energy, industry and environment. Outside the EU, the Bank contributes to the European development co-operation policy in some 130 countries in Central and Eastern Europe, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America.
In 1999, the EIB provided loans totalling some EUR 32 billion, of which EUR 4 billion for projects outside the EU. The Bank borrows on the capital markets the funds for its lending. Its bonds have regularly been rated "AAA" by the leading rating agencies. The EIB works on a non-profit basis and can pass on to project promoters the excellent conditions it obtains on the markets. The EIB may finance up to 50 percent of project cost. On average it provides one third of the funding and co-finances investments with other institutions.
(1) 1 EUR = 0.963707 ARS; 0.971400 USD.