The European Investment Bank (EIB), the European Union's long-term financing institution, is making available a global loan of ECU 25 million (1) to the Cyprus Development Bank (CDB) for the long term financing of projects by small and medium sized enterprises (SMEs) in the industrial, agro-industrial, tourism and service sectors.

This loan is the fourth such line of credit to CDB, following the successful implementation of three previous global loans in 1991, 1994 and 1996 of 15 million ECU, 12 million ECU and 25 million ECU, respectively. The most recent loan in 1996 was rapidly utilised within four months, responding to a strong investment demand in the services and tourism sectors in Cyprus; it supported 34 projects, involving capital investment totalling some ECU 93 million.

Established with the aim of fostering economic development by promoting long-term lending and providing other services to the private sector, CDB is the main development finance company in Cyprus. Commenting on this loan, EIB's Vice-president Mr. Gennimatas said: "The success of EIB global loans to CDB reflects the efforts being made by Cypriot enterprises to expand and modernise their activities and to restructure in order to improve their competitive position in preparation for a closer relationship with the European Union".

The European Investment Bank (EIB) is the European Union's long-term financing institution. Established in 1958 by the Treaty of Rome, it finances capital investment projects which further EU policy objectives. It also participates in the implementation of EU co-operation policies towards third countries that have co-operation or association agreements with the Union.EIB lending outside the EU in 1996 amounted to ECU 2.3 billion, out of a total of ECU 23.2 billion. The Bank lends in some 120 countries having association or co-operation agreements with the EU: African, Caribbean and Pacific (ACP) countries signatories of the Lomé IV Convention; Mediterranean, Central and Eastern European, Asian and Latin American countries.EIB finance in Cyprus has been provided in the framework of the Fourth EU-Cyprus Financial Protocol, which came into effect in 1996 and is now fully utilised; in the next three years financing will be provided under the new forthcoming "Euro-Mediterranean lending facility" (1997-1999), designed to support investment in the area.

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 31/121/1996 , when ECU 1 = 309.502 GRD , 1.95 DEM , 0.74 GBP , 6.56 FRF , 1.25 USD.