The funds are being advanced for 25 years, with a 5-year grace period.

The EIB operation will supplement financial assistance from the Structural Funds scheduled for the period 2000-2006. More particularly, it will support the regional component of the ROP, with the balance of funds being drawn from Community, national and private resources.

The loan agreement was signed in Rome by EIB Vice-President Massimo Ponzellini and the President of the Region of Basilicata, Filippo Bubbico.

The operation, which marks ever closer cooperation between the Commission and the EIB in the sphere of regional development policy, represents the Banks maiden contribution towards financing a Regions entire investment programme within the context of the Community Support Framework for 2000-2006.

EIB Vice-President Massimo Ponzellini commented : "this loan constitutes a pilot operation for all of Europes Objective 1 regions as well as recognition of the creditworthiness of the Region of Basilicata and its outstanding commitment to implementation of the Structural Funds".

In the EIBs view, opening of this line of credit will speed up commitments by the region, with a consequent multiplier effect allowing it to compete for the performance premium provided for in Community regulations.

The EIB operation, prepared in cooperation with the Ministry of the Economys Development and Cohesion Policy Department, has received explicit recognition by the European Commission which has expressed the wish for continuation of this essential action in favour of Objective 1 regions.

The investment programme encompasses infrastructural works (water management, forestry, environmental monitoring measures, promotion of renewable energy sources), support for cultural resources (restoration of the artistic and architectural heritage), harnessing human capital, developing local economic systems, urban renewal works and upgrading of transport networks.

Basilicata, with its 607 000 inhabitants (1% of the national total), is one of Italys seven Objective 1 regions, lagging behind on the development front. Per capita income amounts to 71% of the national average. Over the past ten years, economic growth in the region has significantly exceeded the Italian average (2.1% as against 1.2%).

The EIB, the European Unions long-term financing institution, funds capital investment promoting European integration in fields such as : regional development, trans-European transport, telecommunications and energy networks, industrial competitiveness and integration, SMEs, environmental protection and secure energy supplies. The EIB also operates outside the EU within the framework of the Communitys aid and cooperation policy. The EIB, owned by the Member States, raises its resources on the capital markets (issuer with "AAA" rating). In 2000, the EIB provided financing worth around EUR 36 billion, of which EUR 5.6 billion in Italy.