The global loans of EUR 50 million to Raiffeisen Bank Polska S.A. and Raiffeisen-Leasing Polska S.A. serve to finance mainly small- and medium-scale projects in the field of environmental protection, energy savings, infrastructure (incl. health and education), industry, creative and cultural industries, services or tourism in Poland. Final beneficiaries are, typically, SMEs, and private or public promoters of any size and ownership for energy, environment and infrastructure projects.

Global loans are credit lines to financial intermediaries (partner banks) who use such funds for on-lending to final beneficiaries and for purposes as agreed on with EIB, at their own risk, but resulting in improved lending conditions and better service for the final beneficiaries as well as lower financing costs.

Poland's Accession Partnership with the EU specifically foresees investment support concentrating, amongst other things, on compliance with EU norms (in particular as regards environment) and development of SMEs.

At the signing of the loans EIB Vice President, W. Roth, said: The global loans will serve many purposes at once. They will enhance the Bank's support in favour of the SME sector, have a catalytic effect on further foreign direct investments into Poland, improve the international competitiveness and integration of the country's industry, help to provide environmental protection and reduction of pollution, promote the rational use of energy and diversification of energy resources, and improve infrastructure. At the same time, they will contribute to the development of term finance in Poland which is crucial for financing of investment and catching up economically.

Raiffeisen is the largest financier of SMEs in Austria. Herbert Stepic, Deputy Chairman of RZB, said Raiffeisen is committed to further strengthening its eastern European subsidiaries to help support the continuing development of this sector. SMEs are the backbone of any economy driven by local entrepreneurs, and that is why they are so important for economic growth, Mr Stepic added.

Mr. Stepic considers appropriate long-term financing essential to further develop SME and municipal lending in Poland through locally established financial institutions. The Bank's proposed global loans will allow Raiffeisen Bank Polska and Raiffeisen-Leasing Polska to increase and diversify their long-term funding sources in the context of a closer cooperation between the Bank and RZB Group also in Poland.

Since 1990 the EIB has lent over 5.5 billion EUR to projects in Poland, more than in any other EU candidate country. Over 1 billion went to Trans-European road and rail networks (TENs), with emphasis on upgrading major international road and railway axes. Telecommunications, gas and larger industry schemes also attracted substantial loans from the EIB. Small and medium-scale industrial investments as well as smaller energy or infrastructure projects are being furthered through credit lines (global loans) to commercial banks established in Poland. The EIB also helped rebuild infrastructure damaged during the 1997 Odra and 2001 Vistula floods.

Since 1990, the EIB has lent over EUR 17 billion to projects in the ten Central European EU accession countries and is the region's most important foreign source of finance.

The EIB has lent EUR 115 million to units of the RZB Group in Hungary and Poland so far. An additional amount of EUR 145 million (including the current EUR 50 million) will be lent in the near future to RZB Group units in the Czech Republic, Hungary, Poland, Bulgaria and Croatia.

In the last years, EIB has undertaken efforts to better establish the global loan product in Poland. Global loans now represent 15% of EIB total lending to Poland of over EUR 5.5 billion. While this is above the accession countries' average of 13%, it is substantially below the EU average, reflecting the still more difficult operating environment and the lower development of term lending to SMEs and small municipalities in comparison with the EU.

RZB is the central institution of the Raiffeisen Banking Group, the second largest banking group in Austria. RZB considers Central and Eastern Europe as its home market and runs a network of 12 subsidiary banks and three representative offices with more than 550 banking outlets in 13 countries of the region. Global Finance has awarded RZB "Best Bank in Central and Eastern Europe and Central Asia" for the second consecutive year.

In Poland, RZB was already in 1991 the second international bank to start operations in the country. Raiffeisen Bank Polska ranks with total assets of EUR 1.7 billion (as of 30 June) number 11 in the Polish market. The bank runs 50 branches and employs a staff of 1,300. One of the strengths of Raiffeisen Bank is its service to SMEs: by creating specially designed products the bank gained substantial recognition in the market and was given several awards.

Raiffeisen-Leasing Polska is a subsidiary of Raiffeisen Leasing International and Raiffeisen Bank Polska. It was founded in 1998 and is already the fifth largest leasing company in Poland which underlines its strong growth.