The European Investment Bank (EIB), the European Union long-term financing institution, is providing EURO 5 million (PTE 1 billion) to Banco Portugues de Investimento (BPI). This finance will support up to EURO 10 million (PTE 2 billion) for venture capital investment in innovative small and medium-sized enterprises (SMEs) with strong growth potential.

EIB finance to BPI group is provided in the form of a 10-year bullet loan to fund 50% of BPI's investment in SMEs in the form of equity participation or convertible loans. Equity and quasi-equity for eligible SMEs will be channelled through BPI Partecipaçoes, BPI Private Equity, Inter-RISC and other Open Venture Capital Funds. The EIB's loan is the first tranche of a total foreseen EURO 10 million facility for BPI.

This is the first operation in Portugal under the special window for SMEs in the framework of the Amsterdam Special Action Plan -ASAP- proposed by EIB to support employment creation in the Union through investment in labour intensive sectors and SMEs with strong growth potential. In response to the Amsterdam European Council's Resolution on Growth and Employment (June 1997), the EIB's Board of Governors approved the extension of the Bank's operations to include health and education. Together with urban renewal, environment protection and SMEs, these are priority sectors for strengthening the EU's economic and social cohesion and for the creation of stable jobs. Under ASAP, 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 other venture capital funds.

Sir Brian Unwin, EIB President and Chairman of the Board, said in Lisbon: "The EIB will be supporting a second wave of investments in Portugal, following our earlier financing of large-scale projects aimed at updating the transport, telecommunication, energy and other productive infrastructure. Such financing has enabled the country to develop fast and to integrate its economy with that of the other Member states of the Union. Coupled with sound economic and monetary policy, Portugal has now become one of the founding countries of the EU's monetary union.

"We will continue to finance infrastructure and large-scale investment, but I also think we should increase our support for the transition towards higher value-added industries and services, and help expand and enrich skills and qualifications. This is why we are now looking at investment in human capital and in the development of innovative, technology-oriented small firms with strong growth potential. By expanding the availability of risk capital (equity and quasi equity) and highly qualified labour, Portugal's competitiveness will be strengthened and a larger portion of its citizens will share the social benefits. I believe this is one of the great merits of democracy and European integration."

Conversion rates of the ECU on 31/3/1998: 203.473 PTE, 0.64 GBP.