The European Investment Bank, Vice President Wolfgang Roth visits today Prague for firming up the Bank's flood relief support in Czech Republic.
In a series of meetings with members of the Czech Government, Mr Roth is discussing further steps for ensuring fast implementation of the Bank's support programme to affected areas in the country. Extensive consultations are held with Dr. Petra Buzková, Minister of Education, Mr Jaroslav Palas, Minister of Agriculture, Mr Jirí Rusnok, Minister of Industry, Mr Milan Simonovsky, Minister of Transport and Communication, Mr Bohuslav Sobotka, Minister of Finance, as well as Mr Igor Nemec, Mayor of Prague.
As the European Union's (EU) financing institution, the European Investment Bank (EIB), has launched a Central European Flood Relief Programme, for financing flood relief in Austria, the Czech Republic, Germany, Slovakia and Hungary. This programme will be implemented in close co-ordination with the EU Commission.
A total amount of EUR 5 billion is under consideration for the Flood Relief Programme. A first Emergency Framework Loan of EUR 1 billion is currently put in place for immediate measures (1) in the affected regions.
Once the damage and the needs are more precisely identified, a broader follow-up programme will be presented. In addition, ongoing investments, which benefit from EIB loans and have been affected by the floods may also benefit from adjustments in their terms and conditions in line with those applicable to the Flood Relief Programme.
EIB's special support terms for loans directed to specific projects and action benefiting immediately the flood stricken areas could cover, on an exceptional basis, up to 100% of external funding requirements whilst having very fine interest rates, as well as particularly long repayment periods of up to 30 years. The Bank has offered to help the reconstruction projects of private and public entities in those sectors in which it is traditionally active.
The European Investment Bank (EIB), established in 1958 under the Treaty of Rome setting up the European Community, is the European Union's long-term financing institution supporting capital investment projects that further European integration. While strengthening economically weak regions in the European Union (EU) has always been its main objective, the Bank also finances projects in support of other EU policies. In some 120 countries outside the Union the EIB is participating in the implementation of the EU's development and co-operation policy. In 2001, the EIB provided loans totalling EUR 36.8 billion. The Bank borrows on the capital markets the funds for its lending. Its bonds have regularly been rated "AAA" by the leading rating agencies. As the EIB works on a non-profit basis it can pass on to project promoters the excellent conditions it obtains on the markets. The EIB normally finances up to 50 percent of project cost; on average it provides one third of the funding and co-finances investments with other institutions. In recent years the European Investment Bank has provided immediate special credit support, as well as humanitarian grant aid to countries or regions severely hit by disasters, such as the East-German regions, Poland and the Czech Republic in September 1997, Honduras and Nicaragua in 1998, Greece, Kosovo and Turkey in 1999 and in the Republic of Mozambique in 2000, Romania in 2000 and Hungary in 2001. EIB lending for flood reconstruction in recent years has totalled EUR 1 billion.
(1) EIB Vice President Wolfgang Roth informed the Governments concerned of the EIB special flood support programme in a letter to the Heads of the Governments of countries concerned on 18 August 2002.