The European Investment Bank (EIB), the European Union's long-term financing institution, has signed new finance agreements totalling EUR 235 million (1) for the financing of investments in education and information technology.

The agreements have been signed in Nicosia by Mr M. Kyprianou, Finance Minister and Mr G. Genuardi, EIB Vice-President.

The funds are provided under the Bank's current EUR 8.5 billion pre-accession lending facility, which runs up to the year 2003. Pre-accession facility lending is aimed at projects that will support the integration of Acceding and Accession countries with the EU. A particular emphasis is being given to environmental protection, as well as communications infrastructure, industrial competitiveness and regional development. Cyprus has so far received EUR 580 million under this facility.

EUR 200 million loan for primary and secondary education, including IT component.

The EIB loan is made available to the Republic of Cyprus for the Cypriot Ministry of Education and Culture.

The project consists of the construction of 46 schools, the extension/modernisation of several other buildings (including 200 special classrooms/laboratories), as well as the installation of information and communication technologies (ICT) equipment in schools, for more than 130 000 pupils. It enhances education at the Primary (including preschool) and Secondary levels. Additionally it fosters the development and use of ICT (Information & Communications Technology) networks, catering in this way to the needs of students enrolling in higher education and the University of Cyprus. It contributes to diffusion of knowledge to meet the needs of society, culture, civilisation, and economy both in Cyprus and the region.

This is a follow up to previous EIB operations in Cyprus in the human capital sector, including the University and new hospital of Nicosia.

EUR 35 million loan for upgrading of public IT services

The EIB loan - representing the first tranche of an overall approved financing of EUR 70 million in favour of the project - is made available to the Republic of Cyprus for the Cypriot Ministry of Finance, Department of Information Technology Services (DITS).

This project is mainly driven by the priorities set in the Partnership Agreement concluded between Cyprus and the EU in 2000 and revised in 2002. It concerns investments in IT systems in various Cypriot Government Departments, encompassing investments in physical networks and hardware with the development of specialized software systems.

The enhancement of the Public Administration's IT systems is a major target for the Cypriot Government, as it is considered essential for ensuring a successful integration of Cyprus into the EU. The project is therefore also in line with the EU's e-Government initiatives for Acceding and Accession countries.

In addition, the Bank will allocate grant funds for a total amount of EUR 530 000 under the Mediterranean Environmental Technical Assistance Programme (METAP). Since its establishment in 1990, the Bank put up more than EUR 15 million in the form of grants for technical assistance and preparation of environmental protection projects, in addition to financing environmental protection projects. Under METAP III, established in 1996, EUR 7.8 million have been allocated to 46 activities, of which 26 already completed, 17 ongoing and 3 identified.

The two METAP allocations to be made in Cyprus will be in favour of the following operations:

EUR 350 000 grant for the update of the Nicosia Sewerage Master Plan, including a feasibility study and an Environmental Impact Assessment (EIA)

Financed through a METAP grant, the study supports the development of a technically & environmentally sound mid- and long-term wastewater collection and treatment concept. It includes the preparation of a Master Plan for Greater Nicosia as well as an environmental impact assessment.

The study will be pursued in parallel with the project implementation of Nicosia Sewerage Project-Phase I, that the EIB is also considering for possible co-financing. Apart from defining a bankable project for future EIB-lending, the study may prove catalytic for attracting grant funding from other international aid agencies and donors.

EUR 180 000 grant for the Update of Limassol Sewerage Master Plan, including a feasibility study and an Environmental Impact Assessment (EIA)

Financed through a METAP grant, the study will provide a long-term sewerage development concept for up to 200,000 inhabitants of Greater Limassol. As the works under the Limassol Sewerage II project, also financed by EIB are nearing completion, the feasibility study and the EIA will be the basis for further investments to be carried out under a future project.

The EIB is a lead player in implementing the European Union's priority objectives.

The EIB is a major player in EUAcceding and Accession countries countries and in EU partner states in the Mediterranean region. EIB finance in Cyprus is provided under the pre-accession facility. Since the beginning of EIB operations in Cyprus, including these loans, a total of some EUR 1 billion has so far been advanced by the EIB to support projects in water supply and waste water treatment, industry, energy, transport infrastructure, and human capital.

In 2002, the Bank has also created the Facility for Euro Mediterranean Investment and Partnership (FEMIP) to support modernisation of the economies of the Mediterranean Partner Countries. In 11 months FEMIP has already provided more than EUR 1.65 billion in new loans, with the volume set to reach EUR 1.8 billion in 2003.