The European Investment Bank (EIB) is lending EUR 37 million for small-scale regional infrastructure schemes supported by EU Structural Funds in the sectors of transport as well as culture and social care.

Most of the schemes included in the regional investment programme supported by the Bank concern the upgrading and rehabilitation of the regional road network, which, as in other Czech Regions, has been rapidly deteriorating in recent years as a result of prolonged lack of maintenance and rapidly increasing traffic. The project will provide funds to address those problems most urgently in need of rehabilitation, thus improving mobility conditions in the most densely populated area of the county. The region itself forms part of a wider industrial area, comprising also the bordering regions of Slovakia and Poland.

The EIB loan will also serve to increase the capacity of the terminal of the Ostrava Moanov airport, adding 5 000 m² of space after completion. Being one of the most important Czech regional airports, the works will facilitate the accommodation of the growing levels of traffic, expected to double by 2015 to approx. 500 000 passengers per year.

The cultural and social elements of the project include the conversion of the Fulnek Monastery into a cultural centre, the adaptation of the former boy's school in Frenštát pod Radhoštěm into a museum and the construction of a social care institute for youth in Przno that will serve some 200 people.

Mr. Ivan Pilip, the EIB Vice-President responsible for the Bank's operations in the Czech Republic, stated: With the loan we are signing today the Bank is confirming the importance it gives to direct lending to the regions of the new Member States. The Region of Moravia-Silesia is both the most populated and the most peripheral of the 14 Czech Regions created in 2001. At this time of conversion away from its traditional economy founded on heavy industry, it faces the second highest rate of unemployment in the country. The Bank's support for the integrated programmes of EU Structural Funds will help to strengthen its competitiveness, particularly through enhanced transport infrastructure coupled with the implementation of the cultural and social elements of this project.

Since 1990 the EIB, as the European Union's long-term financing institution, has provided approximately EUR 5.5 billion for projects furthering European integration in the Czech Republic. Since the start of its operations in the new Member States and Acceding Countries - Bulgaria and Romania - the EIB has provided more than EUR 28 billion for investment projects in these countries. As such, the EIB is the most significant external source of financing in this region.

The Bank has been consistently awarded a first class (AAA) credit rating by the leading rating agencies. This enables the EIB to mobilise large volumes of funds at advantageous terms. The Bank on-lends these resources on a non-profit basis to its clients. This makes it possible to provide medium and long-term loans up to 20 or more years at attractive interest rates, with appropriate grace periods on repayment of principal.