The European Investment Bank (EIB), the long-term financing arm of the European Union (EU), announces a EUR 150 million (ESP 25 billion) (1) loan to Nueva Generadora del Sur SA for constructing a combined-cycle power plant in the province of Cádiz.
Owned by Unión Fenosa Generación SA (75%) and CEPSA (25%), Nueva Generadora del Sur SA was set up in 1999 with the purpose of designing, building and operating a combined-cycle power plant in San Roque (Cádiz), an energy-deficient area close to major gas and power transmission lines. This natural gas-fired plant will comprise two units with a capacity of 365 MW each. The power generated will supply mainland Spain's electricity grid while the steam produced will replace that currently generated by four more-polluting oil-fired boilers for the nearby CEPSA refinery.
The new plant's technical qualities will make it one of the most efficient and environmentally friendly in the Spanish power sector. As the project is located in an Objective 1 region under the EU's regional aid programme, this EIB loan will assist regional development and is consistent with the guidelines for Community energy and environmental policy.
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 promoting regional development, endowing the EU with secure energy supplies and safeguarding the environment. In the previous five years (1996-2000), EIB credit facilities in support of projects contributing to development of the Union's less favoured regions amounted to EUR 61 billion (ESP 10.1 billion), while loans in the energy sector topped EUR 14 billion (ESP 2.3 billion) and financing for environmental schemes totalled EUR 26 billion (ESP 4.3 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) EUR 1 = ESP 166.386, 0.638700 GBP