The European Investment Bank (EIB), the European Union's long-term financing institution, announces a EUR 91 million loan to Canal de Isabel II to finance construction of wastewater treatment facilities in the Madrid Region as well as the rehabilitation of a water reservoir below the Plaza de Castilla, in the north of the city.

The contract for the first instalment (EUR 66 million) was signed in Madrid by EIB Vice-President Isabel Martín Castellá and Mr Pedro Calvo, Chairman of Canal de Isabel II and Head of the Community of Madrid's Environmental Department.

Canal de Isabel II is the Community of Madrid's company responsible for managing the water cycle in the region. The project comprises the construction of 73 new wastewater treatment plants, the expansion and rehabilitation of 2 existing plants, and the building of 172 km of sewage collectors and 10 pumping stations. These works form part of Madrid's Regional Sanitation Plan, whose aim is to treat 100% of the local municipalities' wastewater by 2003. The project also includes rehabilitation of the underground water reservoir below Madrid's Plaza de Castilla.

By mounting this operation, Madrid - which, with over 5 million inhabitants is one Spain's most densely populated regions and a major economic centre - is implementing the EU's wastewater treatment directives two years ahead of time. The planned investment in wastewater treatment facilities will improve the quality of the region's sources of drinking water, safeguarding environmental resources and enhancing the local population's quality of life.

Since Spain joined the European Union in 1986, the EIB has financed projects worth more than EUR 5 300 million in the Madrid Region, notable recent examples being the construction of a new metro line in the south of the city and the expansion of the Madrid Metro and Barajas Airport.

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.

In 2001, the EIB signed loans in Spain totalling EUR 4 559 million, including some EUR 1 000 million for environmental and quality of life improvement projects.