The European Investment Bank (EIB), the long-term financing institution of the European Union (EU), announces a EUR 300 million (ESP 50 billion) (1) loan to ENDESA for upgrading and expanding its electricity distribution network in Spain.
The schemes financed will include the construction of numerous substations and more than 13 000 km of overhead and underground power lines in a variety of regions. The project forms part of ENDESA's capital spending programme for 2001-2002, aimed at catering for the anticipated increase in demand, improving the network's performance and the reliability of supplies and complying with current environmental and safety regulations. It will assist regional development through investment in Objective 1 and 2 regions under the EU's regional aid programme and is consistent with the guidelines for Community energy policy.
Since the entry into effect of the new regulations for the electricity sector in 1998, the Spanish market has been open to foreign suppliers, giving interested companies access to existing power transmission and distribution networks and fostering competition within the sector.
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. These include endowing the EU with secure energy supplies, and in the previous 5 years (1996-2000) EIB loans in support of projects in the energy sector topped EUR 14 billion (ESP 2.3 billion).
Within certain limits, the EIB 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 =ESP 166.386,0.638700 GBP