The European Investment Bank (EIB), the European Union's long-term financing institution, is providing a global loan (1) totalling EUR 30 million (2) to the Republic of Lebanon for renovating hotels outside the city of Beirut. The global loan will be managed by the central bank of the country. The funds, targeted at private entrepreneurs, will be channelled through nine Lebanese commercial banks to provide long and medium-term finance for upgrading hotel facilities in Lebanon. The selected banks include: Banque Audi, Banque de la Méditerranée, Banque du Liban et d'Outre-Mer, Banque Libano-Francaise, Banque Saradar, Byblos Bank Crédit Libanais, Fransabank and Société Générale Libano-Européenne de Banque.

This is the fourth EIB loan in Lebanon under the Euro-Mediterranean Partnership mandate, which foresees EIB lending up to EUR 2.310 million in 12 Mediterranean countries between 1997-1999.

The European Investment Bank (EIB) was set up in 1958 under the EC Treaty to provide loan finance for capital investment furthering EU objectives. It participates in the implementation of EU co-operation policies towards third countries that have co-operation or association agreements with the Union. These loans bring EIB financing from own resources since 1993 in Lebanon to EUR 493 million for assisting the reinstatement of the water supply and sewage collection and treatment systems, reconstruction of the transport and distribution electricity grid, and rehabilitation and enlargement of Beirut's commercial port, international airport and civil aviation safety centre. In addition, a further EUR 3 million has been committed from Risk Capital from budgetary resources to support private sector development.

(1) EIB global loans are basically lines of credit made available to financial institutions for on-lending in smaller portions to small and medium-sized investment in line with criteria agreed with the EIB. They combine the EIB's first rate access to world capital markets with the local network and know-how of domestic partner banks. There are about thirty partner banks managing EIB global loans in the Mediterranean third countries which have co-operation agreements with the European Union.

(2) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 31/12/1998, when EUR 1 =1.11675 USD, 0.70 GBP, LBP.