The European Investment Bank (EIB), the European Union's long-term financing institution, announces a loan for EUR 85 million (ESP 14.14 billion)(1) to Ferrocarriles de Vía Estrecha (FEVE) for modernising its railway infrastructure and renewing its rolling stock. The contract for the first instalment of EUR 49 million has already been signed.
The State company FEVE is Spain's second largest railway operator. Its network mainly runs along the country's northern coast in the regions of Galicia, Asturias, Cantabria and the Basque Country, providing an important service to commuters to the cities of Oviedo, Gijón, Santander and Bilbao and playing a major role in freight transport. FEVE has launched an investment programme for the period 2000-2010 aimed at upgrading its network and rolling stock. This comprises a wide variety of measures such as the purchase of rolling stock, dualling and electrification of lines and installation of new signalling and communications systems.
The EIB's loan is earmarked for the first stage of this programme, which focuses on modernisation of existing infrastructure and acquisition of rolling stock. Such investment will help to maintain and improve regional freight transport services, thereby encouraging greater use of this means of public transport as an alternative to road.
The EIB was founded in 1958 under the Treaty of Rome, which created the European Economic Community, with the aim of fostering enhanced integration, balanced development and economic and social cohesion in the Member States by providing long-term financing for capital investment furthering attainment of EU objectives. It supports viable projects: fostering development of the EU's less favoured regions; targeting construction of trans-European transport, telecoms and energy networks; bolstering the international competitiveness and integration of European industry, particularly SMEs; safeguarding and improving the environment; endowing the EU with secure energy supplies; and promoting health and education facilities. Within certain limits, it also extends financing outside the Union in pursuit of the latter's policy of cooperation with third countries.
Owned by the EU Member States, the EIB funds its lending operations through borrowings raised on the capital markets, where its bond issues systematically enjoy the top AAA rating.
(1) 1 EUR = 166.386 ESP ; 0.62410 GBP