The European Investment Bank is providing a USD 50 million loan (some EUR 54 million) (1) to Cable & Wireless Panama (CWP) S.A. to modernise and extend the fixed and cellular telephony as well as the data transmission services in Panama.

CWP was formed in 1997. It is 49% owned by the Cable & Wireless Group, 49% by the state and 2% by the employees. It has a 20-years licence for operating all telecommunication networks, expiring on 2017. Its monopoly in the provision of fixed telecommunications services will last until 2003, date on which the whole fixed telecommunications sector will be liberalised and competition allowed.

The investment to be completed in 2004 aims at deepening the service quality and improving the overall efficiency. This is the second EIB loan to CWP. A first loan of EUR 50 million was provided in 1998 for the expansion of the network.

The 12-year EIB loan (with 2-years grace period) is guaranteed by Cable & Wireless Plc-UK. Risks of currency non-transfer, expropriation, war and civil disturbance are covered by the European Union (EU) budget guarantee.

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 = 0.909 USD