The European Investment Bank (EIB), the long-term financing institution of the European Union (EU), announces a loan for ESP 32.5 billion (ECU 196 million) (1) in support of five universities in the Autonomous Community of Valencia. The funds will go towards construction, expansion and equipping of a variety of university and polytechnic faculties. The capital investment in question forms part of the multi-annual programme for financing Valencia's public university system over the period 1995-2001. Part of the loan (ESP 2 .5 billion) will attract a 2% interest-rate rebate under the EEA Financial Mechanism (2).

The transformation in production processes and structures in the Valencia region has increased demand for skilled personnel, especially engineers and graduates in economics, business studies, medicine and pharmaceutics. The fresh investment will help the ongoing programme to uprate the capacity of the recipient universities, so helping to train the human capital needed by industry and especially to cater for the latter's R&D requirements in conjunction with the universities and Valencia Polytechnic, in particular, which has strong research links with industry.

The project comprises construction or extension of lecture halls, libraries and administrative buildings, together with the furnishing and fitting-out of laboratories in the Universities of Valencia, Alicante, Castellón, Elche and in Valencia Polytechnic.

The EIB was created in 1958 by the Treaty of Rome, establishing the European Economic Community. Its task is to contribute to the integration, balanced development and economic and social cohesion within EU Member Countries by means of long-term financing for capital investment fulfilling EU objectives.The "Resolution on Growth and Employment" in Europe, adopted by the Amsterdam European Council in June 1997, invited the EIB to finance health, education and urban renewal schemes. Investment in infrastructure of this kind gives a particular boost to job creation, since the sectors involved call for substantial manpower and such projects can be up and running within a relatively short space of time. Following authorisation from its Board of Governors, the EIB has already commenced operations in the educational sector under its Amsterdam Special Action Programme (ASAP).Since Spain's accession to the EU in 1986, the EIB has provided aggregate financing of ESP 346 billion (ECU 2.3 billion) for projects in the Region of Valencia.

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30 September 1997, when ECU 1 = ESP 166.06,  GBP 0.69,  IEP 0.76 and USD 1.113.

(2) The Financial Mechanism was set up by those EFTA Countries which joined the European Economic Area (EEA). In July 1993, an Agreement entered into force to establish a free-trade zone between the 12 Member States of the EU and 6 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 zone was named the EEA. The Agreement also created the Financial Mechanism, which was funded by contributions from the 6 countries mentioned above, in order to support - by means of interest-rate rebates on loans and/or grant aid - projects relating to environmental protection, transport, training and education in Greece, Ireland, Portugal and certain parts of Spain. All the grant aid available for Spain has already been committed.