The European Investment Bank (EIB), the European Union's long-term financing institution, is lending EUR 5 million (1) to the Messer Gas Dikheila S.A.E. (MGDK), a joint venture between Egyptian and European partners, for the construction of a new air separation plant for the production of industrial gases.

MGDK is an industrial joint venture established in April 1997 to produce and market industrial gases. Main shareholders are the Egyptian Alexandria National Iron and Steel Company (ANSDK), the German Messer Griesheim GmbH, a subsidiary of the Hoechst group, a world leader in industrial gas manufacturing and the International Finance Corporation (IFC), a member of the World Bank group. The project will associate Egyptian knowledge of the market and management expertise with the technical know-how and financial input of a major European producer.

The turnkey plant will be at Dikheila, west of Alexandria, near the ANSDK plant, which has benefited of two EIB loans totalling EUR 115 million. The ANSDK will be a major buyer of MGDK `s products. Upon completion in year 2000, MGDK will produce oxygen, nitrogen and argon, which are principally used in the steel producing industry, as well as in a wide range of other industrial activities. The investment using state-of-the art technology will offer lower production costs, through reduced energy consumption.

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.