EUR 45 mio for environmental protection in Lebanon

The European Investment Bank (EIB), the European Union's financing institution, has granted a EUR 45 million loan for the upgrading and extension of the sewerage infrastructure in the coastal towns of Saida and Sour (1) in southern Lebanon.

The funds earmarked for financing this high-priority environmental project, which is due to be operating at the end of 2007, will be deployed by the Council for Development and Reconstruction (CDR)(2) , acting for and on behalf of the Republic of Lebanon.

The loan contract was signed by Mr Philippe de Fontaine Vive, Vice-President of the EIB, responsible in particular for the Facility for Euro-Mediterranean Investment and Partnership (FEMIP), an EU-mandated scheme implemented by the EIB in the Mediterranean Partner Countries (MPCs). At the signing ceremony, he stressed the importance that the EIB attaches to this loan for a number of reasons: it is a vital environmental project which will have a positive impact on the environment for southern Lebanon and for countries with access to the Mediterranean, and typifies the kind of environmental initiative supported by FEMIP in furtherance of the objectives set by the Johannesburg World Water Summit.

This loan, granted from the FEMIP window, will serve to finance investment in water supply (mainly leak detection programmes), waste water collection and treatment (upgrading and extension of the wastewater collection systems and construction of treatment plants) and stormwater drainage systems (construction of pipes and conduits).

The project will thereby help to improve the quality of life of over 300 000 inhabitants in these two historic towns and accordingly forms an integral part of the cultural heritage programme financed by the World Bank and Agence Française de Développement (AFD) in Sour. The Japanese Bank for International Cooperation (JBIC) will co-finance this project alongside the EIB and the CDR.

The European Investment Bank (EIB) grants loans in the Mediterranean Partner Countries under FEMIP (the Facility for Euro-Mediterranean Investment and Partnership). Through this facility, the Bank is especially committed to fostering the private sector and financing infrastructure that will underpin socio-economic development. To this end, FEMIP is providing financing of EUR 2 billion a year in the form of loans but also - and this is the qualitative aspect of the facility - new lending instruments and techniques specifically intended to promote development of the private sector.

FEMIP was set up following the conclusions of the Barcelona European Council (15-16 March 2002) and the Valencia Euro-Mediterranean Conference (22-23 April 2002). In accordance with a decision of the Brussels European Council in December 2003, it was reinforced by the addition of new elements aimed primarily at promoting development of the private sector:

• The creation of a Special FEMIP Envelope by which the EIB will finance private-sector projects with a high risk profile and the creation of a Trust Fund;
• diversification of the range of financial products, particularly by seeking ways of providing funds in local currencies;
• strengthening of the dialogue with the MPCs by organising annual meetings of the Committee of Experts in order to carry out preparatory work and of a FEMIP Ministerial Committee bringing together the Finance Ministers of the European countries and the Mediterranean countries.
• establishing local representative offices in the Mashreq region - where the Cairo office was opened in June 2003 - and also in the Maghreb region during 2004.

The Mediterranean Partner Countries are closely involved in the implementation of FEMIP: the Ministerial Committee will play an enhanced role, being set to become the Mediterranean Ecofin Council; its annual meeting is prepared by a high-level group of experts which comes together twice a year (this year, in Marseille in February and in Amsterdam in October). The EIB will also be strengthening its local presence by opening two new offices, one in Rabat and the other in Tunis, in addition to the Cairo office inaugurated in September 2003.

FEMIP's goal is to help the Mediterranean Partner Countries meet the challenges of economic and social modernisation and enhanced regional integration, with a view to the creation of a free trade area (scheduled for 2010) between the EU and the MPCs.