The European Investment Bank (EIB), the European Union's long-term financing institution, has advanced a loan for 2 250 million pesetas (ECU 13 million) (1), to Instituto Balear de Saneamiento (IBASAN), towards funding the second phase in the Balearic Islands' Wastewater Treatment Plan. Approved in 1992, this Plan has already attracted ESP 9 billion in finance from the EIB, for development of the First Phase (1992-1995).

The Plan provides for investment in modernising and expanding the sewerage networks and wastewater treatment plants on the islands. The objective is to boost system capacity so as to cope with the growth in demand forecast by the year 2005, comply with Community legislation (2) on urban wastewater treatment and increase the proportion of recycled water, a very important aspect on some islands where water is a scarce resource. To this end, the aim of the Plan is to recycle more than 80% of wastewater produced which, after treatment, will be used mainly for irrigating agricultural areas and watering golf courses.

Investment under the Plan as a whole will help to combat environmental pollution, particularly in coastal areas, thereby enhancing the Balearic Islands' attractions as a tourist destination. With more than 8 million people visiting the islands each year, the tourism sector is fundamental to the Balearics' economy.

Since Spain's accession to the European Union in 1986, the EIB has provided project financing in the Balearic Islands amounting to more than ESP 100 billion (over ECU 600 million). Projects funded most recently include, in particular, the region's urban renewal programme, the new terminal at Palma airport and improvements to the regional road network.

The EIB was founded in 1958 under the Treaty of Rome, which created the European Economic Community, with the aim of fostering integration, balanced development and economic and social cohesion in the Member States by providing long-term financing for capital investment furthering attainment of European Union objectives. Protection of the environment has long been one of the EIB's main priorities. The Bank finances projects specifically targeted towards environmental protection and, in addition to this, evaluates the environmental repercussions of all projects financed, ensuring that the corresponding investment complies with Community and national legislation on the environment.

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30/9/1998., when ECU 1 =0.69 GBP, 0.79 IEP, 1.17159 USD, 166.728 ESP.

(2) European Union Directive 91/271/EEC.