The European Investment Bank (EIB), the European Union's financing institution, is providing ECU 35 million for gas turbine power plant in Hungary. The loan to Magyar Villamos Müvek Rt. (MVM) will be guaranteed by a consortium of international banks arranged by Bayerische Landesbank, Munich.

The EIB loan will cover about half of the investment cost for a new generation unit which will be installed on the site of a former power plant at Lörinci, 60 km north-east of Budapest. It is the third EIB loan to MVM, and follows previous lending for upgrading the Kelenföld heat and power station in Budapest and for improving the country-wide power transmission network.

Commenting on the loan, EIB Vice-President Wolfgang Roth said: 'The new EIB-financed power plant at Lörinci will help Hungary to meet a level of reliability and security of supply in line with international standards. Hungary must meet these standards to become a full member of the integrated Western European electricity supply system. The EIB is the major lender for power supply infrastructure in the central and eastern European countries. As in the transport and telecommunications sector, the Bank is playing a key role for the development of efficient trans-European energy networks (TENs).''

The present loan brings total EIB financing in Hungary to more than ECU 900 million. Previous EIB loans mainly contributed to the modernisation of the road, telephone and electricity networks, as well as for the air-traffic control system. A number of small and medium-scale industrial, tourism, municipal and environmental ventures were also financed through EIB global loans (credit lines) made available to the Hungarian banking network.

The vast majority of EIB loans regularly go to investments in the EU. Projects in Hungary and the other Central European countries are financed under mandates by the EIB's Board of Governors, i.e. the Finance Ministers of the fifteen EU countries which own the Bank. For the period 1997-99 loans up to ECU 3.5 billion are available for projects in Albania, Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. In addition, the EIB will shortly launch a substantial 'Pre-Accession Facility' to help countries in the region prepare for EU membership.

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, HUF 217.670.