The European Investment Bank (EIB), the European Union's long-term financing institution, is providing ECU 30 million (1) for financing small environmental, energy saving, infrastructure, industrial and tourism projects in the Czech Republic.
The EIB signed contracts with
- Bank Austria Creditanstalt Czech Republic a.s.,
- Vereinsbank CR a.s., and
- Commerzbank Pobocka Praha,
for the provision of global loans (credit lines) of ECU 10 million each.
The funds will be on lent for financing smaller-scale infrastructure, energy saving, environmental protection and tourism schemes in the public and private sector.
EIB global loans to solid banks in the Central European countries bring together the favourable lending conditions of a non-profit institution with AAA access to the capital markets, and the contacts and local knowledge of the intermediary banks. The EIB has successfully operated such schemes in the EU countries since nearly 40 years.
Commenting the cooperation with the three Prague-based banks, EIB Vice-President Wolfgang Roth said: 'The development of a competitive private sector and of adequate infrastructures, including many high-priority energy and environmental protection schemes, is vital for the transformation and growth of the Czech economy. Lack of suitable financing, notably long-term credits, for such investment remains one of the major constraints. By making funds available to efficient financial intermediaries, the EIB seeks to encourage growth and employment and help the Czech Republic to prepare for EU membership.'
The global loans signed bring total EIB lending for projects in the Czech Republic to ECU 1.8 billion. The largest schemes financed were the modernisation of the main railway lines, the extension of the motorway network, upgrading of secondary roads, the telecommunications network, environment-friendly investments in the coal-fired power-stations and the reconstruction of infrastructure damaged during last year's floods in northern Moravia.
The EIB was set up in 1958 under the Treaty of Rome to provide loan finance for capital investment furthering European Union policies. While strengthening weaker EU Regions has always been its main goal, the Bank also lends to projects outside the European Union under the EU co-operation policy toward third countries. During 1998-99, loans totalling ECU 5.5 billion will be channelled to projects in the ten Central European countries preparing for EU membership. Owned by the fifteen Member States, the EIB raises the bulk of its funds on the capital markets where its bond issues are consistently graded `AAA', the best credit rating.
(1) Conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30/03/1998, when 1 ECU = 1.99 DEM, 0.64 GBP,1.07618 USD,36.3339 CZK.