The European Investment Bank (EIB), the European Union's long-term financing institution, is providing ECU 85 million(1) to the Office National des Chemins de Fer (ONCF) for schemes to rehabilitate and increase the capacity of the main lines of Morocco's railway network.

The project, which is a priority under the ONCF's investment programme for 1996-2000, will meet short-term rail traffic requirements. It involves four sections, on the Marrakesh-Casablanca and Rabat-Fez-Oujda trunk lines and on the branch line serving the Khourigba and Oued Zem phosphate mines; it is planned to dual the electrified track over a distance of 82 km between Kenitra and Sidi Kacem and to upgrade catenaries and level crossings. When the project comes into operation in 2001, the capacity of the line will be increased from around 45 trains a day to at least 80 trains a day, and the maximum speed from 90 to 160 km/h.

This scheme will enable the ONCF, which was set up to operate the national rail network in 1963, to cope more effectively with the changes in Morocco's overland transport market resulting from deregulation since 1993.

This loan is the first to be granted in Morocco under the new "Euro-Mediterranean Partnership" mandate, which authorises the Bank to commit ECU 2 310 million between 1997 and 1999 in favour of projects promoted in twelve non-EU Mediterranean countries.

Since 1991, the EIB has advanced ECU 600 million for projects of key importance for the Moroccan economy, such as the EU-Morocco power grid interconnection via the Strait of Gibraltar, high-voltage electricity transmission facilities and power supplies to rural areas, improvements to the trunk and international telephone networks and large-scale water management schemes (sewerage systems in several coastal towns, irrigation of farmland in the Doukkala Plain, etc.); the EIB has also contributed towards funding SMEs in the productive and cooperative sectors through global loans to Morocco's Caisse Nationale de Crédit Agricole and 18 commercial banks, intended particularly to pave the way for joint ventures between Moroccan and European operators.

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30/6/1997, when ECU 1 = 0.68 GBP, 6.64 FRF, 1.13 USD, 0.75 IEP, 10.8625 MAD.