The European Investment Bank is providing a USD 18 million (some EUR 19 million) (1) loan to Servicios de Aguas de Misiones S.A. (SAMSA). for water supply and sewerage in the Province of Misiones (Argentina).
The investment aims at improving water supply and sewerage services to a population of 245.000 living in the Province's capital Posadas and in the nearby town of Garupá. Environmental benefits should arise in particular for surface and underground waters, particularly as a consequence of the improved sewerage system.
The estimated total cost of the project is USD 63 million, which correspond to the first five-year investment program. The World Bank will provide part of the financing. SAMSA has a 30-year concession given on the basis of an international call for tenders. It was incorporated in 1999 and belongs (90%) to the Spanish group Dragados. Dragados' subsidiary Urbaser S.A. will provide the management services.
Caja de Madrid guarantees the 15-year EIB loan (4 years grace period). Risks of currency non-transfer, expropriation, war and civil disturbance are covered by the European Union (EU) budget guarantee.
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 = 0.95 USD, 0.64 GBP