The European Investment Bank (EIB) is providing a EUR 20 million global loan to Bancpost S.A. to finance indirectly investment projects of small and medium-sized enterprises and municipalities in Romania.

The loan will serve to co-finance small and medium-sized municipal projects in the fields of energy and energy conservation, environmental protection, health infrastructure, education, urban renewal and social housing. Tourism and services as well as projects fostering the establishment of a knowledge-based society will also be funded by the loan.

EIB funds will help Bancpost, which has an in-depth knowledge of the local market and a large network of branches in Romania, to finance projects undertaken by small and medium-sized enterprises and municipalities, whose access to funding is still limited.

EIB global loans have been developed as a successful tool for providing long-term funding for smaller projects undertaken usually by SMEs and municipalities. Since 1990, the EIB has provided global loans to partner banks in Romania totalling EUR 220 million. This global loan is the first one granted to Bancpost S.A. and it will increase the number of EIB partner banks in Romania to seven.

Part of the loan is intended to support municipal projects. Under these operations Romanian municipalities are expected to benefit from the Municipal Finance Facility. This scheme is subsidised by EU grants under the Phare Programme. The grant support for municipalities can amount to up to 5% of the total loan in order to promote municipal investment relating mainly to the building, upgrading or refurbishing of small-scale municipal infrastructure.

The EIB, the European Union's financing institution, provides funding for sound investments that foster balanced regional development and the economic and social cohesion of the Member States as well as of the Acceding Counties (Romania and Bulgaria). Since 1990 the EIB has lent a total of EUR 4.4 billion in Romania.

Global loans are special credit lines to selected partner banks operating in the individual countries. This facility is used by the EIB to finance projects by municipalities and in the SME sector involving a total investment of more than EUR 40 000 and less than EUR 25 million. EIB partner banks such as Bancpost S.A. then on-lend the EIB funds under their own management, at their own risk and subject to their own terms.