The European Investment Bank, is donating EUR 1 000 000(1) as an emergency grant for urgent reconstruction in Turkey, recently hit by a devastating earthquake. The funds will be made available for a specific humanitarian project to be identified by the Turkish authorities as proposed by Sir Brian Unwin, EIB's President, in a letter to President Demirel.
In recent years the European Investment Bank has provided immediate humanitarian grant aid to countries or regions severely hit by disasters such as the East-German regions, Poland and the Czech Republic in September 1997, Honduras and Nicaragua in 1998, and Kosovo in May this year. In addition, the Bank seeks to help finance reconstruction through its more regular lending activity. Over the past years, the EIB has continued to strengthen its operational expertise and contacts in Turkey, which will serve as a basis for developing fast track lending in the region hit by the earthquake.
EIB lending in Turkey
Since the inception of its lending activities in Turkey in 1965, the Bank has provided finance totalling EUR 1 303 million. Following an interruption in the 1980s, the European Investment Bank resumed lending in Turkey in 1994. Between 1994 and 1999 the Bank has provided some EUR 557 million. Of the latter total, EUR 545million was loans from the Bank's own resources and EUR 12 million was risk capital managed by the Bank for the EU budget. In the period 1994-1999, EIB lending by sectors in Turkey was: Water management (44%), Energy (31%), Communications (14%), Industry and services (11%).
Among the projects financed in Turkey are: the wastewater and effluent treatment systems in Adana, Diyarbakir, Izmit and Tarsus; the modernisation of the telephone network; the gas transmission and supply networks; the desulphurisation equipment at the Yeniköy power station on the Aegean coast and the construction of more environment-friendly power and heating plants.
The EIB is one of the major providers of funds for economic development in the Mediterranean. The Bank is also playing a growing role in the three front-line States which are suffering most from the conflict in the Federal Republic of Yugoslavia: Albania, Bosnia and Herzegovina and FYROM. In addition, over the recent months, the EIB has taken an active role in the international community's response to the Kosovo crisis. It has established a specific "Balkan task-force" to identify in the region priority infrastructure projects which the Bank could quickly help to finance.
The European Investment Bank (EIB), established in 1958 under the Treaty of Rome setting up the European Community, is the European Union's long-term financing institution supporting capital investment projects that further European integration. While strengthening economically weak regions in the European Union (EU) has always been its main objective, the Bank also finances projects in support of other EU policies. In some 120 countries outside the Community the EIB is participating in the implementation of the EU's development and co-operation policy. In 1998, the EIB provided loans totalling some EUR 29.5 billion, of which EUR 4.4 billion for projects outside the EU. The Bank borrows on the capital markets the funds for its lending. Its bonds have regularly been rated "AAA" by the leading rating agencies. As the EIB works on a non-profit basis it can pass on to project promoters the excellent conditions it obtains on the markets. The EIB normally finances up to 50 percent of project cost; on average it provides one third of the funding and co-finances investments with other institutions.
(1) 1 Euro = 0.6666300 GBP, 1.95583 DEM, 6.55957 FRF, 1.07420 USD, 434.931 TRL.