The European Investment Bank (EIB), the European Union's (EU) long-term financing institution, is lending ECU 65 million (1) for electricity and telecommunications projects in Namibia, approved under the provisions of the Lomé Convention.

An ECU 55 million loan to Nampower will help finance the construction of a second high voltage transmission line to interconnect the grids of Nampower in Namibia and Eskom in South Africa. Works being financed include a 735 km line in Namibia that will increase the power supply interconnection between both countries, essential to meet further increases in electricity demand in Namibia, notably in the mining sector.

The interconnector, the largest infrastructure project presently being carried out in Namibia, is particularly appropriate after the setting up in 1995 of the Southern African Power Pool. It is also a good example of the benefits of cooperation between lending institutions participating in the project's finance plan, both bilateral, the Swedish International Development Agency and the Agence Française de Développement, and multilateral, the African Development Bank and the EIB.

ECU 10 million goes to Telecom Namibia for the expansion and modernisation of the fixed telecommunication network, in particular for the inter-urban and international transmissions. The project provides for the installation of 1 790 km of optical fibre cable connecting Windhoek with the Southern and SouthWestern regions of the country, and reinforcing links with the Republic of South Africa. An EIB loan to Telecom Namibia in 1995 financed a similar project in the Western, Central and Northern regions. The present project is therefore a further step in the transition to a fully digital and high-grade nation-wide network.

The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects which further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries that have co-operation or association agreements with the Union.The Fourth Lomé Convention was concluded in 1989 for a period of 10 years and is accompanied by two Financial Protocols, spanning 1991-1995 and 1996-2000. Loans approved under this Convention are financed either from resources that the Bank raises on the international capital markets (own resources) or from risk capital resources from the European Development Fund (2).Under Lomé IV second protocol, the total financial aid available amounts to ECU 14.6 billion, of which ECU 12 billion is grant aid from the EU member states, ECU 1 billion is managed by the EIB as risk capital finance, and up to ECU 1.6 billion is in the form of loans from the EIB's own resources.

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 31.09.98 when 1 ECU = 6.58 FRF, 0.69 GBP, 1.17159 USD, 6.43291 NAD.

(2) The European Development Fund (EDF) is constituted by contributions from EU Member States. The EIB manages under mandate part of the EDF, which it uses primarily for risk capital operations.