The European Investment Bank (EIB), is lending ECU 35 million (1) for capital investment to upgrade and rehabilitate the electricity distribution system in Central and Southern West Bank including in the Bethlehem area. The financing agreements were signed today in Brussels during the Bethlehem 2000 Donor Conference, in the presence of PLO President Yasser Arafat, by Mr Mohammed Nashashibi, Finance Minister, and Mr Jean-Louis Biancarelli, EIB Director.

The funds from the EIB, the European Union's long-term financing institution, are made available under the 1997-1999 "Euro-Med Partnership" mandate, to the Palestinian Authority for up to 20 years, to be onlent to the Jerusalem District Electricity Corporation Ltd (JDECO), a private company responsible for electricity supply in East Jerusalem and the Central area of the West Bank.

Costed at ECU 72 million in total, the investments are expected to be completed by end-2001. Their implementation will serve an estimate of 1.4 million Palestinian inhabitants with improved reliability and quality of electricity supply.

Being of great importance to the long-term development of the West Bank, the project has been developed with the support of the World Bank and Italy, in line with the sector policy, established by the Palestinian Energy Authority (PEA), which foresees private participation in energy development. Complementing EIB finance, the World Bank will lend USD 15 million for the physical implementation of the investments, the balance will be provided by Italy, and JDECO's own funds.

The EIB is supporting the investment as part of the Union's support for the peace process and the economic development of the region.

The credit operation is arranged under the Support Agreement signed between the Palestinian Liberation Organisation (PLO) and the European Investment Bank (EIB) by PLO President Yasser Arafat and EIB Vice-President Mrs Ariane Obolensky on 27 October 1995 in Gaza. (Ref. EIB press release dated 27.10.1995).Under this Agreement the EIB, the European's Union financing institution, will seek to lend up to ECU 250 million in the Autonomous Territories of Gaza and the West Bank (GWB) for projects to develop the Territories' economic base and to strengthen economic links with neighbouring countries.

(1) The conversion rates used by the EIB for statistical purposes for the current quarter are those obtaining on 31.03.1998, when ECU 1 = GBP 0.6392, USD 1.0762.