The European Investment Bank (EIB), the long-term investment arm of the European Union, is assigning EUR 25 million to small and medium size investment projects promoted by EU companies, through their subsidiaries or joint ventures, in Latin America and Asia.

The project will be implemented in association with COFIDES (Compania Española de Financiación del Desarrollo), which will play two roles: Firstly, it will act as an agent for the EIB, identifying and appraising each project. Secondly, it will provide a commercial risks guarantee for each individual loan granted by the EIB, thus bearing the credit risk. The EIB will finance up to 50% of each project cost directly, to a maximum of 3 million euros.

The structure of this loan is highly innovative, to the extent that the EIB will remain the lender in each individual loan. In traditional global loans used by the EIB to finance such small and medium size projects, credit lines are made available to financial intermediaries, who then grant individual loans to their customers, under EIB's supervision.

This framework loan is geared towards the promotion of direct EU investment in the fields of industry, agro-industry, tourism and commercial infrastructure, as well as services relating to these sectors. The loan is expected to foster the creation of employment and develop export activity in the Latin American and Asian regions.

The loan was signed on July 18th 2005 in Madrid, by Mrs Remedios Romeo, President of COFIDES and by Mrs Isabel Martín Castellá, Vice President of the EIB.

This is the EIB's fourth operation with COFIDES, but the first for Latin America and Asia. The previous three took place in the ACP - Africa, Caribbean & Pacific - regions.

The loan is provided in the context of the EU co-operation policy with third countries. In Asia and Latin America (ALA), the EIB may lend up to EUR 2.48 billion during 2000-2006 to support capital investment projects implemented by subsidiaries of EU companies or joint-ventures between EU and ALA firms, or investment that results in environmental improvements or fosters regional integration.

The EIB was set up in 1958 to finance investment furthering EU integration. It lends for regional development, infrastructure, energy, industry and environment. Outside the EU, the Bank contributes to the European development co-operation policy in some 130 countries in Central and Eastern Europe, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America.