The EIB is lending, in cooperation with intermediary banks, EUR 250 million for the modernisation and expansion of the Wacker chemical plants in Nünchritz/Saxony and EUR 30.5 million for an IONITY AG battery production plant in Kamenz/Saxony.

The Wacker chemical project involves the expansion of manufacturing capacity for silicone products. The finance agreement was signed on Thursday 12 September 2002 by EIB Vice-President Wolfgang Roth and the Financial Director of the Wacker Group, Dr. Joachim Rauhut.

This investment aims to upgrade the plant's technology and production capacity to world standards and lay the basis for production of internationally competitive, leading-edge speciality products. It will clearly help to secure the existing 625 jobs at the Nünchritz plant, as well as creating around 240 new jobs, thereby enhancing the area's economic stability. Wacker is a global chemical company, employing over 17 500 people, 70% of whom are based in Germany.

The chemical sector is a major pillar of manufacturing industry in eastern Germany, accounting for 15% of the region's total production and providing directly or indirectly one in every three jobs. Since the early 1990s, employment in the sector has declined by 48%. With a workforce of more than 1400 at its production sites in Nünchritz und Freiberg, Wacker is Saxony's largest employer in the chemical sector.

The loan of EUR 30.5 million to IONITY AG concerns the construction and operation of a manufacturing facility for rechargeable lithium ion polymer batteries, mainly for the cellular handset and Smart Card markets. IONITY AG is a young, dynamic company located in Kamenz, near the Polish and Czech borders.

The loan will be made available to the company through Landesbank Sachsen.

The region of Kamenz is an area with high structural unemployment. Like the other new German Länder, the State of Saxony is therefore making efforts to attract value and employment-creating industries, although this is becoming increasingly difficult in the light of the international economic downturn. The new battery plant will generate approximately 130 jobs. Up to now, the market for these types of batteries has been dominated by far-eastern manufacturers.

By supporting these two projects, the European Investment Bank is furthering its objective of contributing to the development of areas grappling with structural difficulties, strengthening the competitiveness of companies and fostering small and medium-sized enterprises.

Based in Luxembourg, the European Investment Bank is the European Union's financing institution, mandated to underpin the Union's policy objectives. The Bank finances infrastructure expansion and modernisation, as well as the capital investment of European companies with a view to sharpening their international competitive edge and reinforcing their capacity for innovation. Aggregate EIB lending ran to some EUR 37 billion in 2001, with Germany attracting around EUR 6 billion, half of which absorbed by eastern Germany

To date, the EIB has provided Saxony with investment credits totalling around EUR 3 billion, 57% of which was earmarked for industrial facilities (Advanced Micro Devices/Dresden, Infineon Technologies/Dresden, Semiconductor 300/Dresden, Volkswagen AG/Zwickau and Chemnitz, Enso paper mill), 18% for energy projects (Leipzig gas supply, East Saxony gas supply, Dresden combined heat and power station, Leipzig power network), 11% for expansion of the telecommunications network and 7% or approximately EUR 200 million for construction and upgrading of hospitals.

Furthermore, in the past 6 years alone, the EIB has extended global loans amounting to EUR 806 million to partner banks in Saxony, notably Sächsische Aufbaubank and Landesbank Sachsen. These use the proceeds for financing investments of less than EUR 25 million undertaken by local authorities and SMEs.

The EIB has set up a support programme for reconstruction of the areas damaged by flooding in Germany, Austria, Slovakia, the Czech Republic and Hungary.

An initial emergency framework loan totalling EUR 1 billion is currently being put into place for urgent action in the stricken areas. Once the extent of the damage has been pinpointed more accurately, a more comprehensive follow-up programme of up to EUR 4 billion will be brought forward. For outstanding EIB-financed projects impaired by the floods, loan terms and conditions can be adapted to the provisions of the support programme.

Loans for investment in the flood areas could cover on an exceptional basis up to 100% of external funding requirements. Moreover, these loans will be made available at highly favourable interest rates and with particularly long repayment periods of up to 30 years in some cases. The Bank will assist the reconstruction projects of public and private investors, and especially those of SMEs.