The European Investment Bank (EIB), the European Union's (EU) long-term financing institution, is lending ECU 70 million to Mercedes-Benz do Brasil S.A for a new automobile manufacturing plant located in the state of Minas Gerais, Brazil.
The loan is provided in the context of the European Union's co-operation policy with Latin American countries that have concluded co-operation agreements with the EU. In Asia and Latin America (ALA), the EIB may lend up to ECU 900 million during 1997-99 to support capital investment projects of mutual interest, in particular projects implemented by joint-ventures between EU and ALA companies. For private sector projects, the security required by the EIB is limited essentially to covering the non-sovereign risks involved in the financing. The EIB can also support projects implemented by the public sector if these projects foster closer relations between Asia, Latin America and Europe (e.g. telecom and transport), result in environmental improvements, or foster regional integration. The EIB started its operations in ALA in 1993 and has contributed to finance 32 projects in 16 countries.
The EIB was set up in 1958 under the Treaty of Rome to provide loan finance for capital investment furthering EU policy objectives, in particular, regional development, European infrastructure, energy, industry and environment. Outside the Union, the EIB contributes to European development co-operation policy in accordance with the terms and conditions laid down in the various agreements linking the Union to some 130 countries in Central and Eastern Europe, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America.
The conversion rate used by the EIB for statistical purposes is ECU 1 = USD 1.08, BRL 1,27.