The European Investment Bank (EIB) is lending EUR 10 million to Hypo Alpe-Adria and EUR 30 million to Bank Austria d.d., Ljubljana for financing of small- and medium-scale projects in Slovenia. The long-term contracts have been signed in Ljubljana in November 2002 and December 2001 respectively, both contracts have been amended to include the SME finance facility in February and April 2003.

Within this global loan, the two banks will co-finance projects in industry, services and tourism as well as small- and medium-sized investments in the field of environmental protection, energy savings, infrastructure in Slovenia. Final beneficiaries will be small- and medium-sized enterprises (SMEs) and private or public promoters of any size and ownership for energy, environmental protection or infrastructure projects.

The development of SMEs as well as compliance with Community norms (in particular as regards environment) are key elements for Slovenia's successful integration into the EU. Thus, the global loans will enhance EIB's support in favour of the development of the SME sector, which is of particular importance for the growth of the Slovene economy. It will also help to improve international competitiveness of the private sector in the country.

EIB's global loans will allow the banks to increase and diversify its long-term funding sources and, therefore, to step up its financing of projects requiring longer maturities. Furthermore, it will sustain competition among intermediaries in the country, resulting in better service for the final beneficiaries and lower financing costs.

A window under the global loan will be associated with a grant element of the European Commission under the SME Finance Facility. This facility is a special scheme promoted by the European Commission under the PHARE Programme, which aims at supporting term financing for the smaller segment of the SME market in the Accession Countries. Under this partnership the Commission is making available EUR 30 million in the form of grants in combination with EUR 300 million from the EIB in the form of credit lines to different banks in the region.

The EIB, as the European Union's long-term financing arm, has provided EUR 1250 million for projects in Slovenia since 1994. Projects supported relate to priorities in the fields of transport (railways, ports, airport), energy infrastructure (hydropower project), telecommunications and environmental and municipal infrastructure, including a credit line to support small- and medium scale environmental and municipal projects, as well as global loans for the financing of small and medium-size enterprises and small infrastructure in the country.

Generally, in the future Member States of Central Europe (Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary and Slovenia) as well as the Accession Countries Romania and Bulgaria, the EIB has lent nearly EUR 20 billion to projects since 1990. Therefore, EIB is the most important external source of finance for this region.