The European Investment Bank (EIB), the European Union's long-term financing institution, is lending EUR 30 million (1) to the Arab Republic of Egypt, acting through the Ministry of Housing, Utilities and Urban Communities (MHUC), for upgrading and extending water and sewerage services in Western Alexandria. The financing agreements were signed today in Cairo by H. E. Dr Mohammed Ibrahim SOLIMAN, Minister, and Mrs Ariane OBOLENSKY, EIB Vice-President.
The project consists of the design and construction of a comprehensive wastewater collection system and a biological wastewater treatment plant in the western part of Alexandria. Due for completion in 2003, the project will serve a population of 750 000. The future reutilisation of treated effluent and sewerage sludge is currently reviewed under a study being financed through EIB's Mediterranean Environmental Technical Assistance Program (METAP)(2). Using METAP funds the EIB has helped to prepare a number of studies for projects of benefit to the environment in Egypt.
The EIB is supporting the investment because of its environmental benefits for the 2.5 million inhabitants of Alexandria, second largest city in Egypt, as well as for the wider Mediterranean region. The project will treat sewage flowing into Lake Maryout, a highly valuable wetlands area and reduce discharges into the Mediterranean sea.
The investment is financed under the Euro-Med Partnership Mandate (1997-2000) and would benefit from an interest subsidy of 3% funded from the European Community's budget, reflecting its environmental benefits.
This is EIB's seventh loan in Egypt under the Euro-Med Mandate. It brings EIB financing under this Mandate to EUR 291 million, and total EIB financing committed in Egypt in the last four years to more than EUR 800 million, of which over EUR 600 million has already been disbursed. Supporting economic and financial links between Egypt and the European Union in this period, the EIB has become one of the major financing partners for the Egyptian economy.
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. In the Mediterranean region, the EIB operates under the new Euro-Mediterranean Partnership, which complements the EU Member States' own bilateral co-operation policies. Under the Partnership arrangements, the EIB is committed to lend up to EUR 2 310 million between 1997 and 2000 for investment projects in 12 non EU-Member Mediterranean countries. Total EIB financing since 1978 in Egypt amounts to some EUR 1.5 billion. Particular emphasis is being given to supporting industrial development, through financing large scale industrial schemes, as well as global loans to the Egyptian banking sector for on-lending to small and medium sized enterprises investing in medium to long term productive projects. Economic and public infrastructures have largely benefited from EIB funding.
(1) Conversion rates: EUR 1 = 0.666300 GBP, 4.01325 EGP, 1.16675 USD .
(2) METAP, launched in 1990 to assist halting and reversing the environmental degradation of the Mediterranean Basin, has brought together four key donors: the European Investment Bank, the World Bank, the European Commission (EC) and the United Nations Development Programme (UNDP). Its objectives are to assist, at national and regional level, the countries with a Mediterranean coastline, to find solutions to common environmental problems by developing policy options and mobilising grant resources to strengthen or build environmental institutions, as well as design and prepare environmental projects.