The European Investment Bank (EIB), the long-term financing institution of the European Union (EU), announces a loan for EUR 100 million (ESP 16 638 million) (1) to Instituto de Crédito Oficial (ICO) for part-financing Aceralia Corporación Siderúrgica S.A.'s investment programme. The term of this loan will be 12 years with a 4-year grace period.

Designed to improve the group's product mix, Aceralia's investment programme for the period 2000-2004 is geared to manufacturing higher-tech goods with enhanced value added tailored to the needs of a constantly changing market. Its other main objectives are to produce new and higher quality steel products intended for more sophisticated uses and to maintain and reconfigure its facilities. The plan also includes introduction of more effective environmental protection measures in line with EU legislation aimed at recycling the by-products of the steel-making process, reducing consumption of raw materials and improving energy efficiency. The investment financed by the EIB will serve to upgrade the Aceralia Group's production plants in Avilés and Gijón (Asturias), Etxebarri and Olaberria (Basque Country) and Lesaka (Navarra).

Until recently controlled by the public sector, the European steel industry has undergone profound changes as a result of globalisation of the market. Privatisation and consolidation of the sector have led to a significant rise in productivity. In a climate of growing competition, the steel industry requires constant investment in modernisation and technological development. Aceralia maintains a clear policy to this effect. With this loan, the EIB is helping the European steel industry to adapt to structural changes in the market, bolstering the sector's potential.

The EIB was created in 1958 by the founding treaty of the European Economic Community, the Treaty of Rome. It was set up to contribute to the integrated and balanced development of the Member States, as well as to their economic and social cohesion, by providing long-term finance for capital investment fulfilling EU objectives. Foremost among these is fostering increased competitiveness of European companies, thereby both strengthening the Union's economic and social fabric and helping to generate stable jobs, one of the EU's priority goals.

Owned by the EU Member States, the EIB raises the resources for its lending operations on the capital markets, where its bond issues are consistently rated AAA.

(1) EUR 1 = ESP 166.386