The European Investment Bank (EIB), the European Union's long-term financing institution, announces a global loan totalling EUR 30 million(1) for financing industrial modernisation schemes in Lebanon. The borrower is the Republic of Lebanon and the credit facility is to be managed by the country's central bank, the Banque du Liban. The proceeds will be channelled to private ventures through nine Lebanese commercial banks in the form of medium and long-term loans for modernisation of Lebanon's industrial fabric The intermediary banks are: Banque Audi, Banque de Méditerranée, Banque du Liban et d'Outre-Mer, Banque Libano-Française, Banque Saradar, Byblos Bank, Crédit Libanais, Fransabank and Société Générale Libano-Européenne de Banque.

This is the Bank's fourth loan in Lebanon, bringing aggregate EIB financing in this country under the Euro-Mediterranean Partnership mandate to EUR 180 million. That mandate provides for EIB loans of up to EUR 2 310 million in 12 non-member Mediterranean countries. The funds have now been fully committed and the mandate is due to expire in January 2000.

The European Investment Bank (EIB) was set up in 1958 under the EC Treaty as the Community's lending arm to finance investment projects furthering European Union policy objectives. It helps to implement EU development aid policies towards third countries that have concluded cooperation or association agreements with the Union.This loan brings the total amount advanced from the Bank's own resources in Lebanon since 1993 to EUR 523 million. These funds have been used to support rehabilitation of water supply, sewerage and sewage treatment systems, reconstruction of the electricity transmission and distribution network and renovation and extension of the commercial port of Beirut, the international airport and the civil aviation safety centre. A global loan totalling EUR 30 million for renovation of hotels outside Beirut was arranged with the same banking-sector partners in December 1998. In addition, a further EUR 3 million of risk capital were made available from budgetary funds for the benefit of the private sector.EIB global loans are essentially credit lines extended to financial institutions which then onlend the proceeds in lesser amounts to fund small and medium-scale ventures meeting the Bank's criteria. They are an effective combination of the excellent conditions obtained by the EIB on the world capital markets together with the intermediary bank's on-the-spot contacts and familiarity with the local business environment. Some thirty partner banks have been entrusted with managing the EIB's global loans in the non-member Mediterranean countries which have signed cooperation agreements with the European Union.

(1) EUR 1 = GBP 0.647500, FRF 6.55957, LBP 1 605.00.