Philippe de Fontaine Vive, EIB Vice-President in charge of the Facility for Euro-Mediterranean Investment and Partnership (FEMIP), is in Israel for a two day visit and signs EUR 275 million of loans for environmental projects and for SME investments.
Following the Government of Israel's ratification, on 7 December, of the EIB-Israel Framework Agreement, the European Union's long-term bank for project finance has resumed its operations in Israel after 11 years.
On 27 and 28 December, Philippe de Fontaine Vive, EIB Vice-President responsible for economic and financial support to the Euro-Mediterranean region, signed two loan contracts, highlighting the EIB's commitment to financing pollution abatement and supporting Small and Medium sized Enterprises (SMEs). The first loan agreement of EUR 200 million was signed with the Ministry of Finance and will finance protection of the environment through municipal wastewater schemes. The second loan of EUR 75 million was signed with Bank Hapoalim and will underpin capital investment projects of private sector Small and Medium sized Enterprises.
Vice-President de Fontaine Vive met with Mr. Shimon Peres, Vice Prime Minister with responsibility for development of the Negev and Galilee, Mrs. Tzipi Livni, Acting Prime Minister and Minister of Foreign Affairs, Mr. Avraham Hirschson, Minister of Finance, Mr. Benyamin Ben-Eliezer, Minister of National Infrastructure, and Mr. Shaul Mofaz, Minister of Transport.
Vice-President de Fontaine Vive also met with key members of the financial community, notably Professor Stanley Fischer, Governor of the Bank of Israel, and Mr Moshe Terri Chairman of the Israel Securities Authority as well as with leading industrialists.
Mr. de Fontaine Vive stated that: FEMIP will further develop its activities in Israel with a focus on key infrastructure projects, in particular those involving regional cooperation.
EUR 200 million Environmental Programme Loan
EIB's Environmental Programme Loan will be used for the construction of new wastewater treatment plants, wastewater re-cycling projects and related schemes. Beneficiaries will be municipalities or municipal companies, with a focus on smaller urban and rural centres, from a few thousand to about 200.000 equivalent populations. In total, EIB loan will benefit some 400 projects with a focus on investments in areas populated by low income groups. The wastewater reuse component will make up to 200 million cubic meters per year.
Financing of the investments falls within the EIB's objective to help protect and improve the overall environment and quality of life in the Mediterranean region. The treated wastewater quality will equal or exceed EU requirements set out in the Urban Wastewater Treatment Directive. The investments are examples of environmental projects supported by FEMIP in furtherance of the objectives set by the Johannesburg World Water Summit.
The project promoter is the Sewage Infrastructure Development Administration (Ministry of National Infrastructure).
EUR 75 million Financing Facility for SMEs
EIB's 10 year financing facility will support Hapoalim Bank in providing attractive term lending products for Israeli SMEs in industry, services, tourism, agro-food, health and education. The loan is in line with one of the key priorities of FEMIP, which aims at strengthening SMEs in the Mediterranean Partner Countries. At signature Mr. de Fontaine Vive commented: The financing facility we just signed underscores one of FEMIP's top priorities to support capital investment projects of SMEs in the Mediterranean Neighbourhood Countries; in this respect, I am happy to establish this contact with a key partner in the local banking sector like Hapoalim, Israel's largest bank.
The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects that further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries that have co-operation or association agreements with the Union.
The Facility for Euro-Mediterranean Investment and Partnership (FEMIP) was launched four years ago to strengthen a financial cooperation between the European Union and its Mediterranean neighbours that goes back more than thirty years and was intensified in the 1990s to support the Barcelona Process. The Facility aims to help the Mediterranean partner countries meet the challenges of economic and social modernisation and enhanced regional integration within the Wider Europe-Neighbourhood framework.
FEMIP gives priority to financing private sector ventures, with the dual aim of liberalising the economies of the Mediterranean partner countries and developing their potential in the run-up to the creation of a free trade area between those countries and the EU in 2010. It focuses on foreign direct investment and local private sector initiatives as well as social-sector projects, particularly in the fields of health, education and environmental protection, which are fundamental to achieving social stability and encouraging productive investment.
FEMIP operations are managed by the EIB, which deploys three types of product: loans, investment capital (equity and quasi-equity) and technical assistance. In 2005, FEMIP lent a total of EUR 2.2 billion in the Mediterranean partner countries.