The European Investment Bank (EIB) is lending EUR 185 million (1) for works in Turkey to improve living-conditions in Eskisehir, in Mid-Anatolia, and for private sector, with special emphasis in the regions devastated by the earthquakes in 1999, as part of the rehabilitation and reconstruction works. The EIB funds are provided as follows:
EUR 110 million goes to the Greater Eskisehir Municipality (EBB) for the construction of a new light rail system (LRT) and the rehabilitation of amenities in conjunction with the river Porsuk that runs through the city. A part of these funds will be channelled through the Eskisehir Water and Sewerage Administration (ESKI), for the rehabilitation and extension of water supply, wastewater and stormwater infrastructure.
The project increases the quality of life in the greater metropolitan Eskisehir, a rapidly expanding city with a current population of around 650,000. While the transport component is the first LRT project to be financed by EIB in Turkey, the Bank has already financed seven water projects with similar environmental scope as the water component in Eskisehir since 1995.
EUR 75 million is for the replacement, reconstruction and rehabilitation of industrial installations affected by the earthquake in Turkey in August 1999, and its aftershocks. This is the second and last EIB loan forming part of a larger facility of up to EUR 150 million approved in 2000. It goes to the Republic of Turkey, which will onlend the funds to three major Turkish Banks: Industrial Development Bank of Turkey (TSKB), Industrial Investment Bank (SYB) and Vakifbank.
The EIB's support is part of a larger framework, the "Turkish Earthquake Rehabilitation and Reconstruction Assistance" (TERRA). The facility provides for a total of EUR 600 million in the form of loans to be engaged over a three-year period running up to end of 2002.
The EIB is a lead player in implementing the European Union's priority objectives. In 2000, EIB financing for projects supporting European Union policy objectives totalled EUR 36 billion (up 13% on 1999). EUR 30.6 billion went to projects within the EU Member States and close to EUR 3 billion to those in the Accession Countries, while lending in other countries ran to over EUR 2.4 billion. To fund these activities, the EIB borrowed EUR 29 billion on the world's capital markets. Since 1995, the EIB has contributed some EUR 800 million towards projects of key importance for the Turkish economy. EIB finance for infrastructure went mainly for environmental projects and the earthquake reconstruction effort. Among the projects financed in Turkey are: the wastewater and effluent treatment systems in Adana, Diyarbakir, Izmit, Mersin and Tarsus; the desulphurisation equipment at the Yeniköy power station on the Aegean coast and the construction of more environment-friendly power and heating plants.
The EIB has also promoted SMEs through global loans to local commercial banks.
(1) EUR 1 = TRL 1,067,000 at 30.06.2001