During a visit to Moscow, Philippe Maystadt, President of Luxembourg-based European Investment Bank (EIB), and Aleksey Kudrin, Deputy Prime Minister and Finance Minister of the Russian Federation signed a framework agreement to govern EIB lending to projects in the Russian Federation.

At their Summit Meeting in Stockholm in March 2001, the EU Heads of States and Government had mandated the EIB to participate in the financing of environmental investments located in North-western Russia with an amount of up to € 100 million. The decision to extend its lending to projects in Russia was taken in the context of the EU Northern Dimension Action Plan and focuses on environmental projects.

Commenting on the agreement, EIB-President Maystadt said: 'The Framework Agreement provides the basis for the cooperation between Russia and the European Investment Bank, the house-bank of the European Union. It deals with issues such as the Bank's legal status in Russia, the treatment of projects that may benefit from EIB's financing, as well as issues of currency convertibility and transferability. Its signature will allow the EIB to proceed with the implementation of the Mandate it was given by the EU Member States last year and to advance with specific investment projects. Work on specific projects has been going on for some time now and two loans, one in St Petersburg and one in Kaliningrad, have already been approved by the Bank's Board of Governors. They concern investments in the water and wastewater sector. Their implementation, in cooperation with other international financing institutions and bilateral donors active in the region as well as the European Commission, will help improve considerably the Baltic Sea environment.'

The European Investment Bank (EIB), established in 1958 under the Treaty of Rome setting up the European Community, is the European Union's bank for financing capital investment projects that further European integration. While strengthening economically weak regions in the European Union has always been its main goal, the Bank also finances projects in support of other EU policies.

In some 150 countries outside the Union, EIB loans help implement EU development and cooperation policy.

Of € 36.8 billion lent in 2001, € 5.6 billion thus went to projects outside the EU. About half of this amount went to projects in the ten Central European countries which have applied for EU-membership: Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Slovenia, Romania and Bulgaria.

EIB lends to specific projects in the public and private sectors and ensures the economic justification and environmental compliance of each project as well as its technical and financial viability. In agreement with the competent authorities of each country, the EIB is giving priority to transport and telecommunications, energy production and distribution, industry, environmental protection as well as health and education.

The EIB borrows on the capital markets the funds needed for its lending. Its bonds are regularly rated "AAA" by the leading rating agencies. As it works on a non-profit basis the EIB can pass on to project promoters the excellent conditions it obtains on the markets.