The European Investment Bank (EIB), the European Union's long-term financing institution, is lending EUR 22m from risk capital resources (1) for partfinaning the part of Gabon in the SAT 3/WASC/SAFE fibre-optic sub-marine telephone cable. The Bank's borrower will be the Republic of Gabon who will sign an on-lending agreement with l'office des Postes et Télécommunications de la République gabonaise (OPTG), which is being privatised and will be the final beneficiary of the loan.

The SAT 3/WASC/SAFE cable is owned and operated by a consortium of telecom operating companies other African countries in addition of Gabon. The approximately 14.5 billion Francs CFA (2) will be used i) to part-finance Gabon's part in the infrastructure and connections of the project on Gano's soil to Portugal, South Africa and Malaisia and ii) obtain user's rights for Gabon Telecom of the submarine cable.

The part of in the Gabon in the SAT 3/WASC/SAFE will bring telephone line capacity up to date with domestic market requirements and allow selling on switching capacity to certain neighbouring countries.

Gabon is one of the oldest EIB partners in Africa, the first operation dating to 1968. Since then the EIB has lent some EUR 82 million to projects in Gabon in agriculture, aerial security, SME and the larger industrial sector. The continuation of the country's privatisation policy is likely to open more opportunities for financing Gabon's projects under the new Investment Facility under the Cotonou agreement.

Under Cotounou agreement, the EIB will provide Long-Term capital investment for ACP projects of EUR 3.9 billion between 2002 and 2006, specially targeted at the private sector; notably small and medium sized enterprises and foreign direct investment. EUR 1.7 billion will be lent from the EIB's own resources, and a new Investment Facility, funded by EU Member States, will provide EUR 2.2 billion mainly in the form of various risk sharing instruments, replacing the aforementioned risk-capital resources.

The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects, which further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries that have co-operation or association agreements with the Union. The Fourth Lomé Convention was concluded in 1989 for a duration of 10 years and is accompanied by two Financial Protocols spanning the periods 1991-1995 and 1996-2000 and up to the present. The total financial package available under the second Protocol amounts to EUR 15.3 billion, consisting of EUR 12 billion in grant aid from EU Member States, EUR 370m for interest subsidies, EUR 1.3 billion in risk capital from the European Development Fund (EDF) and managed by the EIB, and up to EUR 1.7 billion in the form of loans from the EIB's own resources.

(1) The EIB manages under mandate part of the European Development Fund (EDF), constituted by contributions from EU Member States, which it uses primarily for risk capital operations. The Bank's own resources are raised on the international capital markets.

(2) On 31 December 2000, 1 Euro = 656 Franc CFA