The European Investment Bank (EIB), the European Union's long-term financing institution, is making available a global loan (1) of EUR 25 million (2) to the Bank of Valletta (BOV) for the long term financing of projects by small and medium sized enterprises (SMEs) in infrastructure, energy, environment and international competitiveness. This is the first EIB loan in Malta under the pre-accession facility (3) concluded in 1998 and allowing for a total lending of up to EUR 8.5 billion to ten Central and Eastern European countries and three Mediterranean Candidate Countries for EU accession until 31.01.2003.
Established in 1974 and having its origins in the Anglo-Maltese Bank in 1809, the Bank of Valletta is a full range commercial bank, playing a leading role in financing SMEs. BOV is also active in urban renewal and re-development projects, involving both private and public promoters.
The Maltese economic tissue is mainly composed of SMEs. The global loan aims at serving existing private sector and small and medium sized public infrastructure needs for term financing, and contributes to the availability of domestic long-term lending facilities. It further underlines the continuing commitment of the EIB to supporting worthwhile investment projects, via reliable local banking partners, in the productive sectors of the Maltese economy to assist with the country's accession process.
The EIB is a leading institution 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 Candidate 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. The EIB is a major player in EU Candidate Countries and in EU partner states in the Mediterranean region. EIB finance in Malta is provided under the EUR 6 425 million "Euro-Mediterranean lending Mandate" running between 2000 and 2006 for investment projects in 12 non-member countries in the Mediterranean and the "pre-accession facility".
(1) Global loans are available to partner lending institutions, which then on-lend the EIB funds in smaller portions according to the EIB's financing criteria. The funds are targeted primarily towards SMEs in tourism, industry and related services as well as environmental-protection and energy-saving investment schemes, and small to medium -sized infrastructure investments of Local Authorities. The global loans combine the EIB's first rate access to world capital markets, where it raises most of the funds for its lending activity, with the local network and know-how of domestic partner banks.
(2) The conversion rates used by the EIB: EUR 1 = 0.647500 GBP, 0.406300 MTL.
(3) Pre-accession facility lending is aimed at projects that will support the integration of Candidate Countries with the EU. A particular emphasis is being given to environmental protection, as well as communications infrastructure, industrial competitiveness and regional development.