The European Investment Bank (EIB), the European Union's financing institution, is providing DKK 318 million (EUR 43 million) to part-finance the construction of a municipal waste incineration plant in Esbjerg, Denmark. The EIB loan has been granted to KommuneKredit, Denmark's prime lending institution to the public sector. KommuneKredit is also the beneficiary of an EIB Global Loan of DKK 1 billion (EUR 134.5 million), which should assist small and medium-sized public investments in Denmark in the sectors of health, education, ICT, energy, environment and urban development.

KommuneKredit (established in 1899) is an important source of funding for Danish local and regional public authorities. The DKK 1 billion EIB Global Loan will be the sixth transaction with KommuneKredit in this field and is in accordance with the EIB's Innovation Initiative i2i.

In the case of the waste incineration plant, a company called L90 will be the final beneficiary of the EIB loan. L90 is a not-for-profit single-purpose entity, formed and owned by public municipalities in the Jutland region in Western Denmark.

The waste incineration plant will be built at Måde, an industrial zone on the outskirts of Esbjerg on the west coast of Denmark. The plant will treat and dispose of the residual municipal waste of 35 municipalities in Jutland and will also co-generate heat and power. The heat generated will be used for the communal district heating system in Esbjerg, and the electricity output will be sold to the regional supply grid. The technology used meets the most stringent environmental standards. The plant should be fully operational in 2003.

The project will enable the municipalities concerned to fully comply with EU and national legislation that bans the land filling' of untreated municipal waste. In addition, it will allow the efficient recovery of energy from the combustion of waste by producing steam and electricity. This will contribute to reducing regional consumption of primary energy for heat and power generation, and thereby to a reduction in related pollutants and CO2 emissions. The project's economic interest is thus linked to its contribution to improved waste management and to the rational use of energy.

The operation ties in with EIB activity in favour of protecting the environment, an objective for which some EUR 9.2 billion was advanced in 2002.

EIB Vice-President Michael Tutty said: KommuneKredit has a well-established relationship with the EIB through six global loans and several intermediated loans for municipal projects in Denmark. Concerning the construction of the waste incineration plant, the EIB has great confidence that this project will make a significant contribution to environmental protection and improvement, one of the EIB's key lending objectives.

Mr Søren Høgenhaven, Managing Director and Chief Executive of KommuneKredit said: With the support of the European Investment Bank, KommuneKredit is able to assist L90 to built and operate this important waste incineration plant that will allow for an efficient recovery of energy and also reduce landfill sites. This combined production of heat and electricity is a fine example of improved waste management in compliance with EU legislation.

The European Investment Bank finances capital investments furthering EU integration, in particular: regional development, trans-European networks in transport, telecoms and energy, industrial competitiveness and integration, small and medium sized enterprises, environmental protection, energy security, and health and education projects. It also operates outside the EU within the framework of the EU's co-operation external policy. Owned by the EU Member States, the EIB raises its funds on capital markets (AAA issuer). In 2002, the EIB lent some EUR 39.6 billion, of which EUR 1 billion in Denmark.