The European Investment Bank (EIB), the European Union's long-term financing institution, is lending ECU 131 million for water, motorway and electricity projects in Lebanon. The loans are being advanced under a Framework Agreement signed by EIB Vice-President Ariane Obolensky and the Lebanese Government, in Beirut today. The funds are being made available under the Bank's new mandate within the framework of the European Mediterranean (Euro-Med) Partnership which foresees the EIB lending up to ECU 2.310 million in 12 Mediterranean countries between 1997-1999. The three finance contracts, also signed by EIB Vice-President Obolensky in Beirut, cover:

  • A loan of ECU 100 million to finance the construction of a wastewater treatment plant, the rehabilitation and expansion of the sewerage system and the construction of a stormwater drainage network for the greater Tripoli area, the second largest urban area in Lebanon. The project, which resulted from a feasibility study financed under the METAP programme (2), is expected to produce extensive economic, environmental and social benefits, as it will substantially reduce health hazards and pollution in the Mediterranean, and protect groundwater resources. It will be carried out by the Lebanese Council for Development and Reconstruction on behalf of the Ministry of Hydraulic and Electric Resources. This loan benefits from a 3% interest rate subsidy from the European Union's budget under the MEDA Regulation.
  • ECU 20 million for the rehabilitation and extension of the coastal motorway linking Beirut with Tripoli and other towns of northern Lebanon. The Beirut-Tripoli route, currently the most heavily used in Lebanon, forms part of a programme to develop the Lebanese motorway network. It will be carried out by the Conseil Exécutif des Grands Projets (CEGP).
  • ECU 11 million for the construction and equipping of a national electricity control centre and a telecommunications network in Beirut, as part of a programme to modernise electricity transmission in Lebanon. The project, which will be implemented by Electricité du Liban (EDL), will increase the technical management capability of the national high-voltage electricity transmission network and will enable EDL to meet future demand.

The European Investment Bank (EIB) was set up in 1958 under the EC Treaty to provide loan finance for capital investment furthering EU objectives. It participates in the implementation of EU co-operation policies towards third countries that have co-operation or association agreements with the Union.The loans signed follow a number of other loans committed by the EIB from its own resources, bringing total financing since 1993 in Lebanon to ECU 453 million for assisting the reinstatement of the water supply and sewage collection and treatment systems, reconstruction of the transport and distribution electricity grid, and rehabilitation and enlargement of Beirut's commercial port, international airport and civil aviation safety centre. In addition, a further ECU 3 million has been committed from Risk Capital from budgetary resources to support private sector development.

(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, 1760.65 LBP.

(2) The "Mediterranean Environment Technical Assistance Program" -METAP- was launched in 1990 with the aim to assist, at a national and regional level, countries with a Mediterranean coastline to find solutions to common environmental problems by developing policy options and mobilising grant resources. The programme is co-managed by the EIB and the World Bank, in partnership with the European Commission and UNDP. A regional office for METAP has recently been established in Cairo. Working in collaboration with country authorities, it will -inter alia- help to prepare future investment projects which will improve the environment throughout the Mediterranean region, for eventual financing by the EIB and the World Bank.