The European Investment Bank, the European Union's long-term financing institution is lending I£ 50 million (ECU 63 million) to Bank of Ireland to support investment projects promoted by small and medium-sized enterprises, as well as smaller-scale schemes in the fields of the environment, energy, infrastructure, urban renewal, and education and health.

Commenting on the loan Vice President Gennimatas said: "Supporting the activities of the small and medium-sized enterprises is a European Union priority as SMEs are a key to job creation. The finance is targeted at investment to enhance productivity and competitiveness of SMEs and thus will encourage economic growth in the Union. This loan reinforces our relationship with the Bank of Ireland and strengthens the network of support we are providing indirectly for small-scale projects in Ireland. It will also be used to operate the second interest rate subsidy scheme under the EU Programme for Peace and Reconciliation in the Border Counties and Northern Ireland."

BOI will use the finance, in the form of a global loan (line of credit) to support SME ventures in industry, tourism and services with a particular emphasis on improving competitiveness, as well as for smaller-scale schemes to protect the environment and for energy and infrastructure works throughout Ireland and elsewhere in the European Union. The loan is part of an EIB programme to make more medium to long-term finance available through arrangements with the banking sector for projects by SMEs in the European Union. The environment, energy and infrastructure schemes will also contribute to economic development.

The global loan also covers projects in the education and health sectors, which are new areas for the EIB and form part of the Bank's Amsterdam Special Action Programme. The Programme has been set up following the June 1997 Amsterdam European Council's resolution on growth and employment which calls on the EIB to step up lending for investment to encourage job creation.

Over the last five years the EIB has lent of I£ 880 million of capital investment in Ireland.

The European Investment Bank, the European Union's long-term lending institution, finances capital investment furthering EU integration, in particular: regional development; trans-European networks in transport, telecoms and energy; industrial competitiveness and integration; SMEs; environmental protection; and energy security. It also operates outside the EU within the framework of the EU's co-operation external policy. Owned by the Member States, the EIB raises its funds on capital markets (AAA issuer). In 1997, the EIB lent over ECU 26 billion and borrowed ECU 23 billion on capital markets.The EU Peace and Reconciliation programme includes a 3% interest rate subsidy for the first five years of a loan to an SME in the Border Counties. The loans may extend beyond five years at normal market rates.