The European Investment Bank (EIB), the European Union's long-term financing institution, has granted Metropolitano de Tenerife S.A. a EUR 138 million loan for financing Tenerife's new light metro system. This is the first urban project on the island to be funded by the EIB.
Promoted by the Tenerife Island Council, this project forms part of the Special Territorial Plan for the metropolitan area of Tenerife and will connect the urban centres of Santa Cruz and La Laguna. The EIB loan is earmarked for construction of 16.7 km of track comprising a line from Santa Cruz to Los Rodeos and a spur to La Cuesta. The project also includes the purchase of 33 tramcars with a capacity of up to 200 passengers each.
The new light metro will significantly improve the public transport service in the Santa Cruz/La Laguna metropolitan area, which has a population of some 326 000 making around 487 000 journeys per day in various types of vehicle. Using this new public means of transport will serve to reduce the number of trips made in private cars, thereby lowering the risk of accidents, improving journey times, cutting noise and environmental pollution and generally enhancing the quality of life of the local population.
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 EU objectives.
Specifically, the EIB supports viable projects promoting: development of the Union's less favoured regions; construction of trans-European transport, telecoms and energy networks; the international competitiveness and integration of Europe's industry, especially SMEs; environmental protection and improvement; security of the Union's energy supply; and health and education. Within certain limits, the EIB also provides financing outside the Union in support of the EU'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.