EIB loan for reconstruction of Barcelona's Gran Teatro del Liceo
The European Investment Bank (EIB), the long-term financing institution of the European Union (EU), announces a loan to Instituto de Crédito Oficial (ICO) to set up an ESP 3 billion (ECU 18 million)(1) venture capital fund, intended for financing innovative projects undertaken by small and medium-sized enterprises (SMEs).
The finance contract was signed this morning in Madrid by ICO President, Fernando Becker, and EIB Vice-President, Luis Martí, who emphasised on this occasion that "the EIB is diversifying and increasing the flexibility of its financing instruments targeting SMEs, in line with the wishes of the Amsterdam European Council. Spanish companies now have a welcome opportunity to make as extensive use of the instruments available as SMEs in other Member States.
The "EURO-ICO Fund", the first of its kind to be supported by the EIB in Spain, is to be endowed with ESP 3 billion, contributed on a 50:50 basis by the EIB and ICO, both institutions sharing the risks attaching to investments made by the Fund. The latter will be managed by AXIS Participaciones Empresariales S.A., a company set up by ICO in 1986 to manage venture capital funds, and is designed to finance the capital base of SMEs in industry and services which are developing or applying innovative products or production processes or promoting new activities in expanding sectors, and which offer good prospects for growth and job creation in the EU. Eligible schemes may be located in both Spain and other EU countries. AXIS will be responsible for selecting the ventures financed.
The EIB and ICO also signed two other finance contracts this morning:
- a Global Loan (2) to ICO for ESP 20 billion (ECU 119 million) intended for financing small and medium-scale private and public-sector projects meeting the following EU policy objectives: enhanced competitiveness, more efficient use of energy - mainly involving investment in CHP and wind power schemes - environmental protection, improved infrastructure and investment in health, education and urban development;
- a loan for ESP 8.5 billion (ECU 51 million) for financing reconstruction of Barcelona's Gran Teatro del Liceo, destroyed by a fire in January 1994. Spain's foremost opera house, the Liceo is a symbolic building for the City of Barcelona and one of the country's most important artistic centres. The original façade on Las Ramblas and the auditorium will be faithfully rebuilt, while the project also provides for enlargement of the rest of the building and improvements to its facilities (air conditioning, acoustics, fire protection, etc.).
The EIB loan will complement funding in the form of insurance payments, private donations and contributions from the public bodies making up the Consorcio del Gran Teatro del Liceo, the promoter of the building's restoration.
Both the "EURO-ICO Fund" and support for restoration of the Liceo are concrete initiatives under the Amsterdam Special Action Programme (ASAP), devised to direct a substantial proportion of EIB financing to projects in labour-intensive economic sectors, thereby boosting employment. Since the approval of ASAP by its Board of Governors, the EIB has given the go-ahead to 44 operations in newly eligible sectors (see below) in 14 Member States, for a total amount of ECU 2 363 million (some ESP 390 billion).
The EIB was created in 1958 by the founding treaty of the European Economic Community, the Treaty of Rome. It was set up to contribute to the integrated and balanced development of the Member States, as well as to their economic and social cohesion, by providing long-term finance for capital investment fulfilling EU objectives.In response to the Amsterdam Resolution on Growth and Employment (June 1997), the EIB's Board of Governors approved extension of the Bank's field of operations to include health, education, urban renewal and environmental protection, pinpointed as priority sectors which both strengthen the EU's economic and social cohesion and contribute to the creation of stable jobs. At the same time, the EIB is developing new financing instruments aimed at high technology and growth-oriented small and medium-sized enterprises (SMEs). These include the European Technology Facility, managed by the European Investment Fund, and venture capital funds set up jointly with EU Member States' financial institutions, such as the one launched in Spain today.
(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 31/3/1998, when 1 ECU =168.616 ESP, 0.64 GBP.
(2) First devised by the EIB in 1968, global loans are essentially lines of credit opened with banks and other national, regional and local financial intermediaries, which deploy the proceeds in the form of sub-loans targeted in favour of small and medium-scale investment schemes meeting the EIB's eligibility criteria.