The European Investment Bank is providing a USD 50 million loan (some EUR 57 million) to the People's Republic of China (PRC) for the construction of a toll expressway and ancillary roads between Nanning, the capital of Guangxi Zhuang Autonomous Region (GZAR) in China, and the Vietnamese border.

The project will contribute to Asia's regional integration and development. China's road network ranks amongst the sparsest in the world. GZAR with a population of some 48 million is the fifth poorest region in China and the lack of transport infrastructure is one of the factors limiting economic development. Relieving traffic congestion and bottlenecks will bring immediate reductions in vehicle operating costs, travel times and traffic accidents. The trip length Nanning-Vietnamese border will be reduced from 260 km to 210 km and travel time from six to three hours. The toll expressway will have a positive impact on road safety, which is very poor in the area. The local fatality rate is estimated at 46 deaths per 10,000 vehicles per year, this is about 10 times the average in the European Union (EU).

The project consists of the construction of a 179 km long toll expressway and 49 km of link roads to county towns, together with all auxiliary facilities and equipment for operation and maintenance; the construction of some 100 km of service and access roads; the rehabilitation and upgrading of some 500 km of rural roads to improve or give access to poor areas; and the project management, control and training services.

Completion of works is planned for mid-2005. The technical standards adopted should ensure an adequate level of service to road users for at least 20 years. Temporary employment is estimated at 35,000 person-years of skilled and unskilled labour. Some 300 new permanent jobs will be generated in the toll stations and road maintenance and administration services. The EIB's 20-years loan includes a 5-year grace period and benefits from the (EU) budgetary guarantee.

The loan is provided in the context of the EU co-operation policy with third countries. In Asia and Latin America, the EIB may lend up to EUR 2.48 billion during 2000-2006 for: investment projects implemented by subsidiaries or joint ventures of EU companies; 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, environment and human capital. Outside the EU, the Bank contributes to the EU development co-operation policy with some 130 countries in Central and Eastern Europe, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America.

In 2000, the EIB provided loans totalling some EUR 36 billion. The Bank borrows on the capital markets the funds for its lending. EIB bonds have regularly been rated "AAA" by the leading rating agencies. The EIB 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.