The European Investment Bank (EIB), the European Union's long-term financing institution, announces the provision of grant aid amounting to ESP 2 400 million (ECU 15.8 million) (1), which it is administering at the request of the Spanish Ministry for Economic and Financial Affairs under the European Economic Area (EEA) Financial Mechanism, for the benefit of the Consorcio Urbanístico de la Zona Ferroviaria de Jerez (Jerez Railway Urban Development Consortium) towards urban redevelopment works in that city.

The project for which the aid has been granted consists of elevating 3.6 km of the railway line which at present passes through the centre of Jerez, construction of a second line, changes to the layout of the urban area - including a new street, pedestrian zones and gardens - with a view to integrating two parts of the city which have traditionally been separated by the railway line, and construction of a new bus station, as part of a municipal programme designed to promote the use of public transport. The aim of the project is to improve the urban environment, and thereby revive the eastern part of the city, removing the physical barrier represented by the railway line.

Referring to this project, EIB Vice-President Mr Luis Martí said: "The Bank attaches enormous importance to projects of this kind, intended to improve the urban environment, since they have a very direct impact on the local population and its quality of life. Through the Bank, the European Union facilitates genuine improvements for citizens and becomes more closely involved in their daily lives."

The EIB was set up in 1958 by the Treaty of Rome, which established the European Economic Community, in order to contribute to the integration, balanced development and economic and social cohesion of the Member States by means of long-term financing for capital investment conducive to attainment of the Union's objectives.The EIB is entrusted with administering the funds provided under theFinancial Mechanism established by the EFTA (2) countries which joined the European Economic Area (EEA) in July 1993. That date marked the entry into force of the Agreement to establish a free-trade area between the twelve Member States of the European Union (EU) and six of the EFTA Member States (Austria, Finland, Iceland, Liechtenstein, Norway and Sweden), some of which had applied for membership of the EU. This free-trade area was named the EEA. The Agreement created the Financial Mechanism, which was funded by contributions from the six countries mentioned above in order to support - by means of interest rebates on loans and/or grants - projects relating to environmental protection (including urban rehabilitation), transport, training and education in Greece, Ireland, Portugal and certain parts of Spain. In administering these funds, the EIB brings to bear its experience in the selection and evaluation of projects, submitting proposals for grant aid to be decided upon by the EEA Financial Mechanism Committee and supervising implementation of projects receiving such grant aid. In Spain, the projects for consideration have been put forward by the Ministry for Economic and Financial Affairs. When three of the donor countries (Austria, Finland and Sweden) became full members of the EU in January 1995, the EU took over their financial commitments. Consequently, funds are at present provided by three EFTA Member States (Iceland, Liechtenstein and Norway) and the European Union. The present operation exhausts the grant aid available for Spain under the EEA Financial Mechanism.

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 31/12/1996, when 1 ECU = 0.74 GBP, 164.167 ESP.

(2) EFTA stands for European Free Trade Area