The European Investment Bank is providing a USD 50 million (some EUR 58 million) (1) loan to Pluspetrol Energy S.A. to expand its gas-fired power plant in Tucumán (Argentina) and to convert it into a combined cycle plant.

The renewed facility will produce three times as much and will provide consumers with least cost electricity. New combined-cycle power plants are significantly more efficient than the existing steam generators. The use of natural gas as fuel combined with modern technology will lower pollution from the plant. 

Pluspetrol Energy S.A. is part owned (45%) by REPSOL of Spain, through its Argentinean subsidiary ASTRA S.A., and part (55%) by Argentine shareholders through Pluspetrol Resources Corporation, a private oil and gas company created in 1977.

A consortium of banks guarantees the 7-year EIB loan.

The loan is provided in the context of the EU co-operation policy with third countries. In Asia and Latin America (ALA), the EIB may lend up to EUR 2.48 billion during 2000-2006 to support capital investment projects implemented by subsidiaries of EU companies or joint-ventures between EU and ALA firms, or investment that results in environmental improvements or fosters regional integration.

The EIB was set up in 1958 to finance investment furthering EU integration. It lends for regional development, infrastructure, energy, industry and environment. Outside the EU, the Bank contributes to the European development co-operation policy in some 130 countries in Central and Eastern Europe, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America.

In 1999, the EIB provided loans totalling some EUR 32 billion, of which EUR 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. The EIB works on a non-profit basis and can pass on to project promoters the excellent conditions it obtains on the markets. The EIB may finance 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 EUR = 0.8908 USD; 0.6137 GBP