The European Investment Bank, the European Union's financing institution, this week concluded long-term loans of nearly £ 1.2 billion for a wide range of projects in the United Kingdom including modernisation of the railway network and Thameslink 2000 enhancement project, extension of the Greater Manchester Metrolink, expansion of a mobile telephone system, a North Sea condensate gas field, a motor industry investment, and water supply and treatment schemes.
The loan contracts were signed on the occasion of a visit to London and Manchester by EIB President and Chairman, Sir Brian Unwin, heading a delegation of senior Bank staff for meetings with Government Ministers, including the Chancellor of the Exchequer, who is an EIB Governor, and members of the UK business and financial community.
Sir Brian Unwin said: "EIB lending in the UK this year will amount to over £ 2.5 billion - the highest annual total ever - and make a significant contribution to sound investment in key sectors, such as communications, energy, environmental protection and industry, particularly small and medium-sized enterprises (SME). In the future, in response to the request of EU Heads of State and Government at the Amsterdam and Luxembourg Summits, we shall be seeking to extend our financing to projects in the areas of health, education and urban renovation, especially in support of public/private partnerships, and also the provision of venture capital to SMEs in the high technology field".
UK projects financed by the EIB during the week included:
- £ 600 million (ECU 870 million) to Railtrack for modernisation and upgrading of the UK rail network and the Thameslink 2000. The finance will support investment in some 800 schemes on 32 000 track-km of railway infrastructure in Railtrack's overall 1997-2000 investment programme. Modernisation and expansion of the cross-London Thameslink 2000 will help develop the rail and commuter services in the South-East of the UK and provide for additional routes from Peterborough, Cambridge and Kings Lynn, north of London, to Bognor Regis, Ashford, Eastbourne and Guildford on the south coast, covering 870 route-km and serving 166 stations.
- £ 240 million (ECU 348 million) to Orange Personal Communications Services of Bristol for investment to extend its mobile telephony system using the GSM 1800 MHz standard to increase further the extent and quality of the company's coverage of the UK population. The capacity of the network will also be increased to cater for substantial subscriber growth with a total of 6,000 base stations planned to be in service by early 1999.
- £ 200 million (ECU 297 million) to the Rover Group through BMW for its capital investment programme.
- Up to US$ 150 million (£ 90 million/ECU 135 million) for the development of the Erskine condensate gas field in the UK sector of the North Sea being carried out by Texaco North Sea UK Co. The Erskine field is located 160 miles east of Aberdeen with estimated recoverable reserves of more than 330 billion cubic feet of natural gas and over 75 million barrels of condensate.
- £ 40 million (ECU 58 million) to Essex and Suffolk Water plc for implementation of a number of schemes to improve water supply infrastructure, to ensure the quality of drinking water supply and distribution in Essex and Suffolk.
- £ 10.3 million to the Greater Manchester Passenger Transport Authority (GMPTA) for a 4 mile extension of Greater Manchester Metrolink light railway. The project is carried out under an innovative public-private partnership being between GMPTA and ALTRAM Manchester Ltd which has been given the concession for the project.
The EIB was set up in 1958 to finance for capital investment furthering EU policy objectives, in particular: regional development; trans-European networks in transport, telecoms and energy; industrial competitiveness and integration; SMEs; environmental protection; and energy security. It also operates outside the EU within the framework of the EU's external co-operation policy. Owned by the Member States, the EIB raises its funds on capital markets (AAA bond issuer). The President of the EIB, Sir Brian Unwin, assumed office in 1993 and is the first British President of the institution.The EIB lent ECU 23.2 billion for capital investment in 1996, of which £ 2 billion (ECU 2.4 billion) supported projects in the UK. The Bank expects to lend over £ 2.5 billion in the UK this year. UK projects supported so far in 1997 included production and distribution of European films, renewal and expansion of a passenger long-haul air fleet, the construction of a fast rail-link between Heathrow airport and the centre of London, major road and motorway improvements, drinking water supply and waste water treatment schemes, industry projects ranging from expansion of canned food manufacture, to a plant for producing glass components for TV sets, optical fibre production capacity and development of tyre manufacturing, as well as arrangements for supporting small and medium sized enterprises through UK banks.
The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30 September 1997, when ECU 1 = GBP 0.69, IEP 0.76, USD 1.113.