An international syndicate of European and Japanese banks (1) has agreed to guarantee the European Investment Bank (EIB) loan of ECU 45 million (2) to MOBITEL d.d., a Slovenian telecommunications company set up in 1991. The EIB, the European Union's financing institution, has provided the loan for part-financing a new GSM network comprising a switching centre and several base stations, microwave radio links and associated equipment and buildings.

Commenting on the guarantee agreement signed, Mr. Walter Cernoia, EIB Director for Central and Eastern Europe, said: 'This is the first example of a large EIB loan for a project in Slovenia being guaranteed by commercial, instead of Government guarantees. It follows similar arrangements recently applied to our financing in Hungary, the Czech Republic and Slovakia, as well as for global loans in Poland. The EIB is increasingly using such schemes as the Central and Eastern European economies and financial and banking systems develop.'

Expanding the Slovene telecommunications services is crucial for economic development in the country and its integration into the European Union. The EIB, as the major provider of funds for transport and energy infrastructure in the central European countries, is also playing a key role for developing efficient telecommunications networks (TENs) in the region, including links with the networks of the European Union.

Previous EIB financing in Slovenia mostly concerned the modernisation of the road and railway networks. The Bank finances projects in Slovenia under mandates by its Board of Governors, i.e. the fifteen EU Ministers of Finance representing the Bank's shareholders. Last year the EIB provided loans totalling ECU 1.5 billion. This was covered by the ECU 3.5 billion mandate for 1997-99 in 11 countries: Albania, Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. The annual lending volume could double in 1998 and 1999, following the launch of an additional ECU 3.5 billion Pre-Accession Facility to help the countries in the region and Cyprus prepare for EU membership over the next two years.

(1) The Sumitomo Bank, Bankgesellschaft Berlin AG, Creditanstalt AG, Deutsche Bank, Dresdner Bank, Kredietbank NV, Skandinaviska Enskilda Banken.

(2) On 31 December 1997, 1 ECU = DEM 1.98; USD 1.10; GBP 0.67; SIT 186.81.