The European Investment Bank (EIB), the European Union's financing institution, is advancing FRF 140 million (ECU 21 million)(1) to Société de Transports de Véhicules Automobiles (STVA) S.A., a member of the SNCF group. This loan, arranged through NATEXIS Banque, is to be used to purchase 475 vehicle-transporter railway wagons.

This investment will enable STVA to reconfigure its fleet of railway wagons to cater for transport in France and other parts of Europe of newly-manufactured smaller multi-purpose vehicles (MPVs), one of the fastest-growing segments of the European car market, between the various constructors' production centres and the dealer network throughout Europe. Using the railways for long-distance freight transport offers significant environmental benefits, particularly in the areas of safety, energy consumption and atmospheric pollution.

STVA leads the European market in the transport of new vehicles by rail and road. It operates a customised fleet of some 4 000 railway wagons and 480 transporter lorries. In 1997, STVA carried 1.9 million vehicles, equivalent to 14% of new vehicle registrations in Europe.

This EIB operation with STVA falls within the context of the Bank's support for upgrading transport systems in Europe, especially the railway network. Indeed, between 1993 and 1998, ECU 9.2 billion was made available for railway projects forming part of trans-European networks (TENs) within the European Union, including nearly ECU 5 billion for priority TENs. The EIB has also provided funds for acquisition or renewal of rolling stock by European railway operators (in Denmark, Spain, Greece, Ireland, Portugal and the United Kingdom).This new operation also underpins EIB support for Europe's motor vehicle industry and for co-operation between European manufacturers, particularly in the field of MPVs. To this end, the Bank has financed the SEVELNORD plant (a subsidiary of the PSA and FIAT groups) in Valenciennes-Hordain and the Autoeuropa Automoveis Lda plant (a Ford/VW joint venture) in Palmela, Portugal.Ever since it was created in 1958 under the Treaty of Rome, the EIB's mission has been to contribute, through its long-term lending, to attainment of the European Union's objectives, in particular balanced development, economic and social cohesion and support for growth and employment. Loans for economically viable projects have been granted for investment in communications networks, the energy sector, environmental protection, urban renewal, industrial modernisation and the service sector as well as health and education. In 1997, aggregate EIB lending reached ECU 26.2 billion, of which ECU 3.2 billion went to operations outside the European Union.

(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 = FRF 6.58, GBP 0.69, IEP 0.79, USD 1.17159.