The European Investment Bank (EIB), the European Union's long-term credit institution, is providing an ECU 45 million loan (1) to the City of Krakow for a 10.8 km fast tram line between Krakow's central railway station and the city's southern residential area. Investments mainly comprise new tracks and upgrading of existing tracks, fifteen new low-floor tramcars and a traffic control and passenger information system. The EIB loan is for 20 years with a five-year grace period.

The EIB loan is provided in close association with funding from the European Bank for Reconstruction and Development (EBRD). The project, which has also benefited from the EU's PHARE Programme, will improve the quality of transport services through better comfort, reduction of travel time and reliability; and will reduce noise and air pollution. It is therefore in line with the priorities and medium term objectives set out in the Accession Partnership Agreement, between the EU and Poland.

The loan to the City of Krakow brings total EIB lending in Poland since 1990 to nearly ECU 2.2 billion. Previous EIB financing mainly went to the modernisation and expansion of gas, telecommunications, railway and motorway networks, of Warsaw airport, to municipal investments in Katowice, a car engine plant in Silesia, as well as to a countrywide reforestation scheme. The EIB is also assisting the development of small and medium-size enterprises through its global loans (credit lines) to a number of Polish and EU banks in Poland. Finally, the EIB is helping to repair various infrastructure damaged during the 1997 floods in Southern Poland.

Since it started lending in Central and Eastern Europe in 1990, the EIB has provided some 8 billion ECU for projects in the region, and more specifically in Poland (2.2 billion), the Czech Republic (1.8 billion), Hungary (1.2 billion), Romania (1 052 million), Slovakia (715 million), Bulgaria (506 million), Slovenia (325 million), Lithuania (148 million), Estonia (88 million), Albania (68 million) and Latvia (61 million).

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30 September 1998, when ECU 1 = GBP 0.69, IEP 0.79, USD 1.17159, PLN 4.19135.