Syria: EIB sets up an innovative EUR 40 million scheme for SMEs The European Investment Bank (EIB), the European Union's financing institution, is providing EUR 40 million for financing capital investment projects of Syrian small and medium sized enterprises (SMEs). This first EIB operation in support of the private sector in Syria was signed today by Mr Philippe de Fontaine Vive, EIB Vice-President, during an official visit in the country.
The operation is being financed under the EIB's new "Facility for Euro-Mediterranean Investment and Partnership (FEMIP), whose primary focus is to foster development of the private sector and its socio-economic environment.
The financing is an innovative and pilot project for EIB and the whole Mediterranean region, for its structure: The EIB loan is made available to the Syrian Arab Republic, through the Ministry of Economy and Foreign Trade, for establishing a SME Fund, which will administer the EIB credit facility and will onlend EIB loan proceeds to SMEs having qualifying projects in the sectors of industry, services, tourism, health and training. The SME Fund Management Unit will be assisted by external Consultancy support, selected and funded by the EIB out of EU budgetary resources available for Technical Assistance under FEMIP.
Commenting on the operation at signature, EIB Vice-President Philippe de Fontaine Vive said: In the last few years, the EIB has become a major partner for funding capital investment in Syria. I am most glad to sign this innovative operation, because I am confident that it will foster market sector reforms by providing a practical opportunity to develop capacity building in modern banking practice, and will stimulate the emerging banking sector reforms that Syria has started to undertake and that meet EU objectives. I greet also the synergies this operation is building up with the institutional support programme for Syria of the European Commission, notably the Syrian European Business Centre. With EU support and joint forces from its private sector operators, the country can best prepare itself for the establishment of a free trade zone in the Mediterranean region by 2010.
With the new Facility for Euro-Mediterranean Investment and Partnership (FEMIP), the EIB has reinforced its cooperation with the Mediterranean Partner Countries (MPC).
Set up following the Barcelona European Council (15 and 16 March 2002) and inaugurated in October 2002, FEMIP's top priority is to promote private sector development (especially SMEs) and support projects helping to establish a propitious climate for private investment (economic infrastructure, health and education schemes). Endowed with EUR 8-10 billion up to end-2006, FEMIP's ultimate 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 August 2003, new operations worth over EUR 1.8 billion were approved under FEMIP, more than 35% of which targeting private sector development.
The EIB has been operating in Syria since 1978, in support of the financial co-operation between the EU and this country. Since 2000 the EIB has provided in the country a total of EUR 340 million concentrating on projects that have a fundamental impact on the economic development of the country, such as electricity, health and transport.