The European Investment Bank (EIB), the European Union's long-term financing institution, is lending a total of EUR 55 million (1) to partner banks in the Czech Republic and Hungary which will use the funds for financing a large number of smaller scale projects undertaken by private and public sector promoters:
- the equivalent of EUR 25 million is made available to HypoVereinsbank in Prague in the form of a global loan (credit line) in Czech Koruna and will be used for onlending in the national currency to smaller scale schemes in the Czech Republic.
- a global loan of EUR 30 million to Raiffeisen Bank in Budapest will help finance small and medium-scale projects in the field of environmental protection, energy saving, infrastructure and tourism throughout Hungary.
The Czech Republic and Hungary are among the ten Central European countries(2) which have applied for EU membership and will thus have to comply with the Union's norms and standards in areas such as environmental protection. While the EIB is financing large schemes with direct loans, smaller scale projects are being funded indirectly, by means of so-called global loans channelled through some thirty-five selected partner banks in all ten candidate countries.
Commenting on the loans, EIB Vice-President Wolfgang Roth said: 'The EU's Accession Partnerships with the candidate countries in Central Europe forsee investment support concentrating on compliance with Community norms and the development of a strong small and medium-size company sector (SMEs). In line with the EIB's specific role to assist membership accession, our global loans make available suitable long-term funds to financial intermediaries operating at a national or regional level. Whenever possible and appropriate, we make these long-term funds available not only in foreign but also in local currency. Special attention is also given to environmental protection and energy saving schemes which are typically undertaken by towns, counties and local government associations."
The EIB was set up in 1958 under the Treaty of Rome to lend to projects furthering European Union policies. While strengthening weaker EU regions has always been its main goal, the Bank also lends to projects outside the European Union under the Union's co-operation policy toward third countries. Since 1990 nearly EUR 9 billion were lent to projects in the ten Central European countries which have applied for EU membership. Owned by the Member States, the EIB raises the bulk of its funds on the capital markets worldwide where its bond issues regularly benefit from the Bank's `AAA' credit rating.
(1) 1 euro= 0.666300 GBP, 254.820 HUF, 38.3930 CZK
(2) Bulgaria, The Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia.