The European Investment Bank (EIB) is lending EUR 10 million (1) to support the Community Development Project, for upgrading small-scale infrastructures in Gaza and West Bank, such as roads, water schemes and community buildings.

The funds from the EIB, the European Union's long-term financing institution, are made available to the Palestinian Authority (PA), acting through the Ministry of Finance, under the 1997-1999"Euro-Med Partnership" mandate.

The investment will be implemented by the Ministry of Local Government, in conjunction with the Palestinian Economic Council for Development and Reconstruction (PEDCAR), the Agency responsible for managing international donor aid, in particular for infrastructure projects.

The rehabilitation of small community and village infrastructures will substantially improve the socio-economic living conditions of the Palestinian population, and stimulate the economy. The EIB is funding the project in cooperation with a number of international and regional donors, including the World Bank and OPEC.

The European Investment Bank (EIB), the European Union's long-term financing institution, operates in the Autonomous Territories of Gaza and the West Bank (GWB) in the framework of a Support Agreement, signed between the Palestinian Liberation Organisation (PLO) and the European Investment Bank (EIB) by President Yasser Arafat and EIB Vice-President, Ms Ariane Obolensky on 27 October 1995 in Gaza.Under the present Euro-Mediterranean Partnership Agreement, the EIB is committed to lend up to ECU 2 310 million during the period 1997-1999 for investment projects in 12 Mediterranean countries. In addition, EIB is able to offer interest subsidies for environmental projects and Risk Capital in the form of equity or quasi-equity, both funded from the EU Budget. In GWB the EIB has financed projects in tourism and industrial development, through financial support to large scale investments, as well as global loans to the banking sector operating in the area for on-lending to small and medium sized enterprises investing in medium to long term productive projects. Economic and public infrastructures have also largely benefited from EIB funding. Support for the environment has in recent years become a major area of EIB activity in Gaza and West Bank, as well as in the Mediterranean region.The EIB is also co-manager of the "Mediterranean Environmental Technical Assistance Programme" (METAP), which was launched in 1990 to assist Mediterranean countries to find solutions, at a national or regional level, to common environmental problems by developing policy options and mobilising grant resources. METAP opened a Regional Office in Cairo in 1997.

(1) Conversion rates: EUR 1 = GBP 0.666300, USD 1.07420.