The European Investment Bank (EIB), the EU's long-term financing institution, lends EUR 20m from its own resources for the financing of small to medium-scale projects in the private sector. The projects will be predominantly in the tourism sector and the funds will be channelled through the State Bank of Mauritius (SBM), one of the largest private sector commercial banks in Mauritius. EIB and SBM signed on 28 July a Global Loan contract for EUR 20 million enabling SBM to further deepen the Mauritian financial sector with long-term loans in foreign currency.

EIB supports small and medium sized activities through Global Loans with partner banks, in this case the SBM. Under a Global Loan a partner bank of the EIB receives a credit line to support EIB eligible projects.

The objective of the current operation is to provide long-term investment finance matching the cash flows and payback profiles of investment projects of Mauritian SMEs. Funds would be available for the private sector or commercially run public sector enterprises.

SBM acts independently and applies its own decision-making vis-à-vis the final beneficiaries based on EIB's favourable lending terms.

The current SBM Global Loan is the third operation of the EIB under the Cotonou Agreement after the contribution to the financing of the Telfair Hotel at Bel Ombre and the Mauritius Container Terminal II project.

The present signature brings EIB's loan portfolio in Mauritius to a level of EUR 216m. EIB has notably provided finance for projects in the water, wastewater, power, airport, port and tourism sectors.

Established in 1958 under the Treaty of Rome, the EIB finances capital projects that further European Union (EU) policy objectives. It also participates in the implementation of the EU's cooperation policy towards third countries that have concluded cooperation or association agreements with the Union.

Financing in Africa, the Caribbean and the Pacific (ACP) is now carried out in the framework of the Investment Facility, set up by the ACP-EU Partnership Agreement signed in Cotonou in June 2000. Under the Cotonou Agreement, the total financial aid available for the period 2002-2006 amounts to some EUR 15 billion, consisting of EUR 11.3 billion in grant aid from the EU Member States, EUR 2 billion managed by the EIB under the Investment Facility and up to EUR 1.7 billion in the form of loans from the EIB's own resources. The Investment Facility is a revolving instrument (loan repayments are invested in new operations) aimed at supporting technically, environmentally, financially and economically sound projects in the private or the commercially-run public sectors.