The European Investment Bank (EIB), the European Union's long-term financing institution, is lending ECU 30 million (1) to the Electricity Authority of Cyprus (EAC) for expanding and upgrading the electricity transmission system in the Republic of Cyprus. The finance is made available under the 1997-1999 "Euro-Med Partnership" mandate.

The project will be carried out by EAC, a utility company under the supervision of the Ministry of Commerce, Industry and Tourism. It forms part of a large-scale capital investment programme established in 1994, to develop electricity supply in Cyprus.

Scheduled for completion by end-2002, the project will substantially increase the capacity of the high-voltage transmission grid so as to meet present and future demand. This is the EIB's second financing operation in Cyprus under the "Euro-Med Partnership". The first was an ECU 30 million loan in 1997 for construction of wastewater collection and treatment facilities in Pafos.

European Investment Bank (EIB), the European Union's long-term financing institution, plays a central role in the European Union's technical and development policy towards third countries in the Mediterranean region. In Cyprus this relationship is now formalised under a Co-operation Agreement with the EU to strengthen economic and trade relations, that forms part of the new Euro-Mediterranean Partnership and complements the EU Member States' own bilateral co-operation policies.Under the Partnership arrangements, the EIB is committed to lend up to ECU 2 310 million between 1997 and 2000 for investment projects in 12 non-member countries in the Mediterranean region which have co-operation and/or association agreements with the Union. The EIB is implementing this mandate (Euro-Med) in Cyprus under a Framework Agreement signed in 1997.The Bank also set up an additional ECU 3.5 billion pre-accession lending facility for the countries in Central and Eastern Europe(CEEC) and Cyprus, which have concluded Accession Partnership Agreements with the EU. Lending will be aimed at projects in all the ten CEECs and Cyprus to integrate these countries with the EU and facilitate the adoption of the "acquis communautaire". A particular emphasis will be given to environmental protection, as well as communications infrastructure (including TENs), industrial competitiveness and regional development.

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 31/03/1998: 0.58 CYP, 40.97 BEF, 6.65 FRF, 0.64 GBP.