The European Investment Bank (EIB), the European Union's long-term financing institution, is lending ECU 40 million (1) for restructuring and rehabilitating the drinking water distribution network in the greater Amman area.

The loan, which is part of EIB's continuing efforts in support of the water sector in Jordan (2), is made available to the Government of Jordan, to be on-lent to the Water Authority of Jordan (WAJ), for improving the availability and quality of the water supply in the greater Amman area, where some 40% of Jordan's population lives and which suffers from severe water shortages and rationing. In addition to the physical investments, the project incorporates a privatisation element by which service delivery in the Greater Amman area will be provided by an internationally experienced operator under a performance-based management contract.

The project, whose design has been part-financed by an EIB METAP (3) grant, is costed at ECU 140 million. It is being financed in close cooperation between the EIB, the World Bank, Germany and Italy. Given the project's positive environmental effects, the EIB loan is expected to benefit from a 3% interest subsidy from the European Union budget, foreseen under the Euro-Med Partnership arrangements.

The European Investment Bank (EIB) was set up in 1958 under the Treaty of Rome to provide loan finance for capital investment furthering European Union objectives. It participates in the implementation of EU co-operation policies towards third countries that have co-operation or association agreements with the Union. In the Mediterranean region, the EIB operates in the context and support of the Euro-Mediterranean Partnership, adopted in Barcelona in 1995, and which complements the EU Member States' own bilateral co-operation policies.Under the Euro-Med Partnership arrangements, the EIB is committed to lend some ECU 2 310 million between 1997 and 1999 for investment projects in 12 non EU-Member Mediterranean countries. In 1997 some ECU 1 billion was committed by the Bank in support of a broad range of investments in the Mediterranean Region.This loan follows a number of other EIB operations in Jordan, making total financing since 1978 in this country exceed ECU 400 million, to support projects in water supply and waste water treatment, telecommunications, transport, electricity transmission and distribution, agricultural development and SMEs' industry projects.

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 31 March 1998, when ECU 1 = 0.64 GBP, 1.076 USD ,0;760390 JOD.

(2) WAJ has benefited from 8 EIB loans amounting to ECU 61.5 million since 1984.

(3) The "Mediterranean Environmental Technical Assistance Program" (METAP) was launched in 1990 to address the sea's very specific environmental problems. METAP is designed to assist countries with a Mediterranean coastline to find solutions, at a national and regional level, to common environmental problems by developing policy options and mobilising grant resources. The programme is co-managed by the EIB and the World Bank, in partnership with the European Commission and the UNDP.