The EIB has just signed with Banco Interatlântico and Banco Comercial do Atlântico a finance contract aimed at supporting small and medium-sized enterprises (SMEs) in Cape Verde to the tune of EUR 8 million (around CVE 890 million). The purpose of this credit line is to finance the investment projects of SMEs in the industrial, agro-industrial, tourism and related service sectors, health and education. These funds are being made available in the form of a global loan granted by the EIB - the European Union's long-term financing institution - under the Cotonou Agreement Investment Facility. It is the EIB's second credit line in support of Cape Verde's financial sector.

The loan contract was signed successively by Banco Interatlântico and Banco Comercial do Atlântico. Other eligible intermediary banks may join these two partners at a later stage.

The funds will be allocated on a first come first served basis in a bid to encourage competition between the participating banks. Using a number of intermediaries will increase the chances of the EIB's advantageous financing terms being passed on to the final beneficiaries.

This is the second global loan granted in Cape Verde, the first EUR 5 million operation mounted in June 2003 under Lomé IV having been a resounding success.

The present credit line has a twofold aim: to support Cape Verde's private sector by financing investment projects with long-term euro resources; and to foster the development of the country's financial sector.

The EIB was set up in 1958 by the Treaty of Rome to finance capital investment projects that further the core objectives of the European Union (EU). It also participates in the implementation of the EU's cooperation policy towards third countries that have cooperation or association agreements with the Union. Currently, the Bank's loans in the African, Caribbean and Pacific (ACP) countries are granted under the Investment Facility, set up by the ACP-EU Partnership Agreement signed in Cotonou in June 2000. The total financial package available under the Cotonou Agreement amounts to some EUR 15 billion for 2002-2006, of which EUR 11.3 billion is grant aid from the EU Member States, EUR 2 billion is managed by the EIB under the Investment Facility and a maximum of EUR 1.7 billion is to be granted in the form of loans from the EIB's own resources. The Investment Facility is a revolving fund (the proceeds of loan repayments will be invested in new operations), aimed at supporting technically, environmentally, financially and economically sound projects in the private sector or commercially run part of the public sector.