The European Investment Bank (EIB), the European Union's financing institution, will contribute EUR 250 million to the international community's reconstruction efforts following the earthquakes east of Algiers on 21, 27 and 28 May 2003.

This measure was announced during the visit of EIB Vice-President Mr Philippe de Fontaine Vive to Algiers on 12 June 2003. In particular, he declared, my presence in Algiers is a sign of EU solidarity towards the victims of the most violent earthquake in Algeria for 20 years. The EIB has already advanced EUR 45 million for financing the reconstruction of infrastructure in Algiers damaged by the severe flooding of November 2001. As the Union's financing arm, the EIB is committed not only to providing aid for rapid alleviation of the suffering of tens of thousands of victims, but also to ensuring that it is used effectively. It is for this reason that I have come to Algiers to discuss with the most senior Algerian authorities the deployment of this aid, which will focus primarily on rebuilding social infrastructure and economic activity in the afflicted areas. Moreover, I am pleased to announce that this European solidarity also involves the European Commission and several of our Member States, including France and Italy.

The EIB funds will be earmarked first and foremost for the reconstruction of urban infrastructure (water supply and treatment, electricity, gas, public transport), as well as the rehabilitation of social amenities (hospitals, community clinics, schools, public buildings) in the towns of Boumerdès, Reghaia Zemmouri, Roubia and certain districts of Algiers. The Bank's loans will also underpin investment to prevent lasting disruption of economic activity in the damaged areas through the rebuilding of universities, research centres and businesses, especially SMEs located in the earthquake-stricken zones. The Bank's very long-term loans (up to 30 years) will be complemented by Commission-financed and EIB-managed technical assistance funds aimed at assessing the degree of risk and ensuring the application of the relevant seismic standards to the repair works financed under this operation.

This EIB operation is to be carried out under the Bank's new Facility for Euro-Mediterranean Investment and Partnership (FEMIP), established following the Barcelona European Council on 15 and 16 March 2002. Launched in October 2002 and endowed with EUR 8 to 10 billion up to 2006, FEMIP's goal is to help the Mediterranean Partner Countries (MPC) meet the challenges of economic and social modernisation and enhance regional integration in the run-up to the creation of a Euro-Mediterranean free-trade area (planned for 2010). Between October 2002 and May 2003, new operations worth over EUR 1.5 billion were approved under FEMIP, 35% of which targeting private-sector development.

The EIB's lending programme to assist areas hit by the May 2003 earthquake follows the EUR 45 million provided for reconstruction after the disastrous flooding of 10 November 2001 (urgent rehabilitation of the Frais Vallon urban road, construction of a rainwater drainage channel serving western Algiers, temporary repair followed by permanent strengthening of the Mustapha Jetty in the port of Algiers; urgent rebuilding of 5 bridges on the RN 11 and CW 101 roads).

The EIB has been operating in Algeria as an element of the financial cooperation between the EU and this country since 1978. Its loans, totalling over EUR 1.9 billion, are concentrated on projects that have a fundamental impact on the economic development of the country, such as water supply and treatment schemes, irrigation, the East-West road and motorway network, industrial pollution abatement, urban roads and the port of Greater Algiers. Moreover, the EIB has supported the development of oil and gas resources and energy transport under international agreements linking Algeria and the EU Member Countries. In November 2002, the EIB financed Algeria's first private-sector cement plant in M'Sila. This project, clearly reflecting FEMIP's objectives, is the fruit of a South-South partnership between Egyptian and Algerian companies, ensuring technology transfer and reducing Algeria's dependence on hard currencies (see EIB Press Release: Reference: 2002-110 of 25 November 2002).

This new operation ties in with ongoing EIB solidarity towards EU partner countries stricken by serious natural disasters: the Bank set up a dedicated facility for reconstruction in Turkey after the autumn 1999 earthquake and advanced loans following flooding in Poland, the Czech Republic, Hungary and Romania.