The European Investment Bank (EIB) is providing a loan of EUR 100 million to finance investment planned under the Regional Operational Programme (ROP) of the Region of Sardinia.

The loan - the first tranche of an overall package of EUR 200 million - is being granted at a variable rate and will run for 15 years.

The EIB's operation will complement the financial support from the Structural Funds envisaged for the period 2000-2006. In particular, it will finance the regional component of the ROP, for which the rest of the funding will come from EU, national and private sources.

The investment programme encompasses infrastructural works (water management, afforestation, environmental monitoring measures, promotion of renewable energy) and incentives for private-sector projects aimed at rationalising productive activity and creating new businesses.

This financing follows similar operations in support of the investment programmes promoted by the Regions of Basilicata, Campania and Puglia. Falling within the Community Support Framework, it represents a further development of the linkages between the activities of the European Investment Bank and the Structural Funds in Italy's Mezzogiorno.

The agreement was signed by EIB Vice-President Gerlando Genuardi and by Italo Masala, President of the Sardinia Region. The Ministry for the Economy's Department for Development Policies and Cohesion was closely involved with the EIB in setting up the loan.

This loan arrangement, commented Mr Genuardi, is one that we have developed for the first time in our country and will now serve as the benchmark for cooperation between the European Commission and EIB in all the Objective 1 regions and, following recent initial experiences, for operations in the future Member States of the Union. A point to stress is that Italy is the country that best articulates the relationship between the EIB, the Structural Funds and national finances. The credit for this must go to the Department for Development Policies and Cohesion, which over recent years has been supportive of the Bank's efforts in the Mezzogiorno.

This is the EIB's first direct loan in Sardinia, he added, and I am delighted that it is being advanced in support of an initative promoting regional development, which is the Bank's priority institutional mission. We stand ready of course to continue our backing for the island's economy in future years.

The EIB, the European Union's long-term financing institution, funds investment furthering European integration in such fields as: regional development; Trans-European Networks for transport, telecommunications, energy; industrial competitiveness; small and medium-sized enterprises; protection of the environment; security of energy supply.The EIB also operates outside the EU, within the context of the EU's development aid and co-operation policy. Owned by the Member States, the Bank raises its funds on the capital markets, where it ranks as a AAA-rated issuer.