Annual Report from the Commission to the Council and to the European Parliament on the borrowing and lending activities of the Community in 1997
COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 03. 07. 1998 COM(1998) 409 final ANNUAL REPORT FROM THE COMMISSION TO THE COUNCIL AND TO THE EUROPEAN PARLIAMENT ON THE BORROWING AND LENDING ACTIVITIES OF THE COMMUNITY IN 1997 TABLE OF CONTENTS INTRODUCTION 1. BORROWING AND LENDING ACTIVITIES 1. 1 1. 2 International financial situation Ceilings on Community issues Borrowing trends BORROWING 1. 1. 1 1. 1. 2 1. 1. 3 LENDING WITHIN THE EUROPEAN UNION Investment demand in Europe 1. 2. 1 European Investment Bank (E1B) 1. 2. 2 European Investment Fund (EIF) 1. 2. 3 ECSC 1. 2. 4 New Community Instrument (NCI) 1. 2. 5 Euratom 1. 2. 6 Community medium-term 1. 2. 7 2. LENDING IN THIRD COUNTRIES financing 2. 1 2. 2 2. 3 2. 4 2. 5 ! Balance-of-payments support Credit facility for the CIS OVERVIEW THE COMMUNITY'S MACROFINANCIAL ACTIVITY 2. 2. 1 2. 2. 2 LOANS COVERED BY DECISION 97/256/EC: Central and Eastern European countries, Mediterranean countries, Latin American and Asian countries, and South Africa 2. 3. 1 2. 3. 2 2. 3. 3 2. 3. 4 SIGNATARIES TO THE LOMÉ CONVENTION 2. 4. 1 2. 4. 2 OTHER COMMUNITY INSTRUMENTS 2. 5. 1 2. 5. 2 EIB objectives and priorities Lending activity Risk sharing Cooperation with other institutions Euratom European Bank for Reconstruction and Development (EBRD) Lending trends for each major area EIB risk-capital operations 3. BUDGETARY IMPACT OF LENDING 3. 1 3. 2 INTEREST SUBSIDIES BUDGET GUARANTEES 3. 2. 1 3. 2. 2 Coverage Outstanding guarantees at 31 December 1997 4. STATISTICAL ANNEX 4 5 5 5 5 6 6 6 7 8 10 // // 12 13 13 14 14 14 14 15 15 IS 19 25 25 26 26 26 26 27 27 28 2S 29 31 i LIST OF TABLES 1-1 Capital borrowed on the international markets 1-2 Structure of EÏB lending (loan contracts signed) -Geographical distribution 1-3 EIF activity since its establishment - Breakdown by country 1-4 ECSC loans in 1997 1-5 NCI loans as at 31 December 1997 2-1 Financing outside the Community in 1997 2-2 Breakdown by country and sector of EIB lending in Central and Eastern Europe , 2-3 Breakdown by country and sector of EIB lending in the Mediterranean countries , 2-4 Breakdown by country and sector of EIB lending in Latin America and Asia 2-5 Share of PHARE and IFIs in projects financed by EIB in Central and Eastern Europe 2-6 Share of IFIs in projects financed by EIB in the Mediterranean countries 2-7 Mutual interest of projects signed in 1997 in Latin America and Asia 2-8 EIB loans signed in 1997 in Central and Eastern Europe (CD 97/256/EC) 2-9 EIB loans signed in 1997 in the Mediterranean countries (CD 97/256/EC) 2-10 EIB loans signed in 1997 in Latin America and Asia (CD 97/256/EC) 3-1 Capital outstanding on guaranteed operations (at 31. 12. 1997) 4-1 Trend of borrowing and lending in the Community 4-2 Community borrowings outstanding 4-3 Community borrowings in 1997, by currency 4-4 Lending in the Community in 1996 and 1997, by sector and instrument 4-5 Financing in the Community by the EIB in 1996 and 1997 by economic objective 4-6 Geographical breakdown of lending (signatures) in the Community in 1996 and 1997 4-7 Breakdown of NCI loans, by country at 31. 12. 1997 4-8 Breakdown of NCI loans, by currency: amounts outstanding as at 31. 12. 1997 4-9 Interest subsidies paid out in the Community by the various Community mechanisms 1977-97 4-10 Financial assistance outside the Community in force or under negotiation at 31. 12. 1997. 5 8. 9 ,. 10 ,A\ 13 16 17 18 20. 21 22. 23 24 25 30 32 33 34 34 35 36 37 37 38 39 - J- INTRODUCTION The Council decisions establishing the New Community Instrument (NCI)1 and the 1. lending instruments for research and Euratom activities2 provide for the Commission to inform the Council and Parliament each year of the use made of these instruments. In addition, Parliament, its resolution on improving political monitoring of the Community's borrowing and lending activities,3 called for the activities of the ECSC and the EIB to be included. Decisions 83/200/EEC (NCI III) and 87/182/EEC (NCI IV) stipulate that information must be provided on a six-monthly basis on the rate of utilisation of the authorised ceilings. in These activities for 1997, including the second half of the same year for the NCI, are described in Chapter 1 of this report. Since 1997 the Commission has been required pursuant to a Council Decision4 to 2. inform the Council and Parliament on an annual and a six-monthly basis of the situation regarding EIB loans guaranteed by the Community budget in Central and Eastern Europe, in the Mediterranean countries, in the Latin American and Asian countries and in South Africa. With a view to providing an overview of the EU's external activities, this report also gives a brief summary of macrofinancial assistance given by the Community to third countries, of the EIB's activities in the ACP states and of the EBRD's activities. These activities are described in Chapter 2 of this report. 3. With a view to complying with the information and monitoring requirements imposed by the Council and Parliament regarding utilisation of the Community budget for the Community's borrowing and lending activities, Chapter 3 of this report provides details of the budgetary impact of interest subsidies paid and of the outstanding amount of guarantees granted in connection with the various financial instruments mentioned above. ' 2 3 4 Decision 78/870/EEC (OJ L 298, 25. 10. 1978). Decision 81/19/EEC (OJ L37, 10. 2. 1981). Decision 81/1013/EEC (OJ L 367, 23. 12. 1981). Decision 82/169/EEC (OJ L 78, 24. 3. 1982). Decision 83/200/EEC (OJ L 112, 28. 4. 1983). Decision 87/182/EEC (OJ L 71, 14. 3. 1987). Decision 77/270/Euratom (OJ L 88, 6. 4. 1977). Doc. PE/67134 (OJ C 287, 9. 11. 1981 ). Decision 97/256/EC (OJ L 102, 19. 4. 1997). - 4- 1. BORROWING AND LENDING ACTIVITIES 1. 1 BORROWING 7. 7. J International financial situation The volume of international financing continued to increase substantially in 1997 following the considerable expansion recorded in 1996 and notwithstanding the financial crisis which developed in South-East Asia in July. This sustained activity is generally attributed to the low level of long-term interest rates and inflation, a US economy which remained buoyant and the better outlook for Europe, coupled with positive decisions about the introduction of the euro. These factors favoured bond issues, which increased in the OECD area by 31% following a rise of 56% the previous year. Eurobonds also remained attractive, expanding by 40% in the wake of growth in excess of 64% in 1996. International loans also increased in 1997 (up 26%) after contracting in 1996 (see Table 1-1). The sounder economic environment and the low level of nominal long-term interest rates gave a boost to fixed-rate issues floated at attractive rates and to subscriptions of shares convertible into bonds. 1-1 Capital borrowed on the international markets 1. European Institutions 1990 12,5 1991 16,9 1992 15,7 1993 20,1 1994 15,2 1995 13,2 1996 18,0 ^m 23,7 (ECU billion) of which: 1. 1 ECSC 1. 2 EC(1) 1. 3 Euratom 1. 4 EJB 2, OECD countries (2) (by instrument) 2. 1 Bond issues of which: Eurobonds 2. 2 Loans 3. Bond issues by the European Institutions as a % of OECD 1,1 0,4 - 11,0 1,4 1,7 - 13,7 1,5 1,2 - 13,0 0,9 5,0 - 14,2 0,6 0,3 0,1 14,2 0,4 0,4 _ 12,4 0,3 0,1 -- 17,6 0. 5 0,2 _ 23. 0 283,8 340,1 353,1 534,5 563,0 643,2 833,6 1080,0 180,5 141,4 103,3 240,2 200,5 99,9 257,1 212,7 96,0 410,8 337,0 123,7 360,3 309,7 202,7 357,3 283,9 285,9 558,2 464,5 275,4 733,3 648,2 346,7 6,9 7,0 6,1 4,9 4,2 3,7 3,2 3,2 (1) (2) NCI + balance of payments. Calculations based on yearly average exchange rate of the Ecu. Source: OECD and EU 7. 7. 2 Ceilings on Community issues In order to attain the objectives of the Treaty covering the territory of the Community, the Commission has been empowered to borrow funds on the capital market. These borrowings must finance the construction of, and improvements to, nuclear power stations (current Euratom ceiling of ECU 4 billion) and investment in the Community under the NCI (current ceiling of ECU 6,8 billion) and must, under the ECSC Treaty, promote - 5- productive capacity or conversion projects in the coal and steel industries and, where appropriate, loans for Member States with balance-of-payments difficulties (ceiling of ECU 14 billion). The amounts still available for these borrowing authorisations are indicated in the paragraphs corresponding to each instrument. On the basis of agreements concluded with non-Community countries, the Commission is empowered to borrow in order to finance programmes of financial assistance for the countries of Central and Eastern Europe, for the African, Caribbean and Pacific (ACP) countries and for measures adopted pursuant to the Mediterranean protocols. Within and outside the Union, the European Investment Bank has been closely involved in the financing of common policies and priorities, to the point where its borrowings account for most Community issues. /. 7. 3 Borrowing trends Against a background of very dynamic financial markets, issues by the Community institutions continued to grow in 1997 by 31,7%, following an increase of 36,4% in 1996. This increase is due to issues made both by the EIB and by the ECSC, bringing total issues to ECU 23,7 billion. Overall, the share of Community issues remained unchanged in relation to that of bonds issued in the OECD area. Demand for currency arbitrage declined as monetary convergence gathered pace; as a result, the currencies in which borrowings were effected reflect more closely the volume of loans contracted in the corresponding countries (see breakdown in Table 4-3). The amount of borrowings outstanding as at 31 December 1997 was ECU 120,22 billion, 10% up on 1996. This increase was due entirely to EIB activity; the other Community instruments continued to follow the disengagement guidelines laid down by the Council a few years previously. 1. 2 LENDING WITHIN THE EUROPEAN UNION 1. 2. 1 Investment demand in Europe After the downturn in activity recorded in 1996, the efforts made to improve the fundamentals by all the Member States began to bear fruit. The Community's real GDP is estimated to have grown by 2,7% in 1997, as against 1,8% the previous year. Economic activity was underpinned by an upturn in real investment of 4,5%, as opposed to 3% in 1996. The total value of fixed investments at current prices in the EU thus amounted to some ECU 1 300 billion. Total employment also began to rise again, with a concomitant downturn in unemployment (from 10,9% to 10,7% of the labour force). The financial crisis in Asia, which hit European exports, has only had a limited impact on economic activity in the Community. Concern about European claims on the region, which surfaced when stock market prices slumped by 15% in October/November, was short-lived as prices have since shown an increasing trend. 1. 2. 2 European Investment Bank (EIB) In 1997, in a macroeconomic climate more favourable to growth, the EIB granted loans in the European Union to the tune of ECU 23 billion, 10% up on 1996. The funding contributed to investment estimated at 4,7% of gross fixed capital formation (GFCF) in the Union. Loans were signed in all fifteen Member States of the Union. Loans in the three new Member States once again increased significantly (15%). In reply to the Amsterdam European Council's resolution of June 1997 (cf. OJC 10, 15. 1. 98), the EIB and its Management Committee drew up the Amsterdam special action programme (ASAP), which comprises a series of innovations, in particular acceptance of risk by the EIB for innovative SMEs with high growth potential. The programme is designed to channel some of the Bank's funding to investments which are labour-intensive, such as health projects or urban renewal schemes, or future-oriented, such as educational and environmental projects and trans-European networks. It aims to increase the foreseeable volume of funding granted to these sectors by some ECU 10 billion over the period 1997-2000. As at 31 December, contracts totalling ECU 880 million had already been signed, of which 730 million for projects in the education and healthcare sectors and 150 million for the special window for SMEs. As regards the Bank's normal activities, assistance towards regional development amounted to ECU 14,6 billion, or 67% of financing, and was heavily concentrated in areas qualifying for support under the Structural Funds. The "cohesion" countries (Portugal. Spain, Greece, Ireland) mobilised ECU 4 billion. Since the reform of the Funds in 1989, loans for regional development have totalled 100 billion, helping to finance investment estimated at some 300 billion. Financing for communications infrastructures increased by 35%, to ECU 8,8 billion as against 6,5 billion in 1996. Financing for the transport sector totalled 6,9 billion (railways, motorways, air transport and major one-off public works, in particular the Grand Belt and Ôresund fixed links). Lending for telecommunications networks, in particular mobile telephones, remained high (ECU 1,9 billion). in for trans-European networks Financing and transport, energy In the last five years, the EIB has made a total of telecommunications continued. ECU 42 billion available for the establishment of trans-European networks and their extension to neighbouring countries. At the end of 1997 lending to nine of the fourteen priority trans-European networks in the transport sector amounted to 6,9 billion. Signed projects for six out of ten priority trans-European networks in the energy sector totalled 2 billion. transfers - 7- 1-2 Structure of E IB lending (loan contracts signed) -Geographical distribution Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Austria Portugal Finland Sweden United Kingdom Other (Article 18) 1994 ECU million % 615 850 2408 535 3 012 2477 291 3100 5 400 90 1 110 60 15 2455 261 3,1 4,3 12,1 2,7 15,1 12,4 1,5 15,6 0,0 2,0 0,4 5,6 0,3 0,1 12,3 1,3 1995 ECU million % 665 825 3,1 3,9 2 715 12,7 2,5 525 2 818 13,2 2 207 10,3 1,5 16,0 0,4 1,5 1,1 5,8 0,8 1,3 2 244 10,5 2,4 327 3435 79 319 242 1232 179 273 519 1996 ECU million % 657 688 3022 721 2553 2 509 189 4121 0 766 490 1294 302 846 2 386 402 2,8 3,0 13,0 3,1 11,0 10,8 0,8 17,7 0,0 3,3 2,1 5,6 1,3 3,6 10,3 1,7 1997 ECU million 1 140 737 3518 730 2 716 2 721 207 • 3 517 96 398 555 1350 401 925 3 765 184 % 4,4 2,8 13,4 2,8 10,4 10,4 0,8 13,4 0,4 1,5 2,1 5,2 1. 5 3,5 14,4 0,7 Community total 17682 88,7 18604 86,9 20946 90,1 22 958 87,6 Non-Community total 2246 11,3 2 806 13,1 2 294 9,9 3 244 12,4 TOTAL LOANS SIGNED 19 928 100,0 21410 100,0 23240 100,0 26202 100,0 Financing for environmental protection projects was up by 23% on 1996. These loans, which totalled ECU 7,2 billion, were earmarked primarily for water and waste management projects (3,1 billion) and urban renewal schemes (2,4 billion). Financing for energy objectives was, to a very large extent (1,6 billion out of a total of ECU 2,6 billion), channelled towards promoting efficient use of energy, both in the transport and distribution of electricity and heat and in the industrial sector. The year 1997 was also marked by a pronounced pick-up in loans for industrial projects and SMEs (ECU 4,6 billion), 2,5 billion of which went to individual projects to boost the international competitiveness of Community industry. Global loans allowed funding to be provided to about 13 000 SMEs, two thirds of which were located in assisted regions (see Table 4-5). 1. 2. 3 European Investment Fund (EIF) A) EIF's private/public partnership activities. The EIF is an international institution which operates in a private/public partnership with three groups of shareholders: the EIB, the European Commission and 76 financial institutions from all the Member States of the European Union. It operates under market conditions in cooperation with banks and other financial institutions. It is not a credit institution but guarantees loans made among other things as part of the trans-European Networks (TEN) programme and for financing SMEs. The TENS programme consists of infrastructure projects of European interest in the transport, energy and telecommunications sectors. The EIF may give guarantees to financial intermediaries to cover loans to SMEs in all sectors without restriction. It has also been authorised to become involved in equity participations in risk-capital companies since 1996. In 1997, three years after the EIF was set up, there was a marked upturn in the volume of contracts signed (50%) and the Fund acquired its first equity participations. B) EIF guarantee activities In 1997 the EIF gave guarantees for an amount of ECU 769 million to TENs and SME projects, bringing the overall volume of operations signed since it was set up in June 1994 to 2,3 billion. A breakdown of this total by country is given in the following table. 1-3 EIF activity since its establishment - Breakdown by country E CU m illion I [ G u a r a n t e es p a r t i c i p a t i o ns Equi ty 60 2 98 142 128 331 66 4 99 4 35 59 204 30 9 4 00 2 32 2 300 ( 1) 2 3 6 3 12 26 B e l g i um D a n m a rk G e r m a ny G r e e ce S p a in F r a n ce I r e l a nd Italy L u x e m b u rg N e t h e r l a n ds A u s t r ia P o r t u g al F i n l a nd S w e d en UK O u t s i de EU T o t al (1) C o u n t ry in w h i ch the f u nd is b a s e d. "Growth and environment " programme The sectoral breakdown of contracts is as follows: 24,7% for TENs transport projects, energy for TENs 22,3% for TENs projects, telecommunications projects (total for TENs projects: 67%) and 33% for SMEs. 20% outside Although the EIF operates mainly within the Union, the operations Community are not ruled out. In 1997 two operations were signed in Eastern Europe: the SPP gas pipeline project in Slovakia a major and telecommunications project in Hungary. Since the launch in 1996 at Parliament's initiative of a pilot project known as the "Growth and environment" programme, the EIF has signed agreements with financial partners in all the Member States. Under this arrangement, the EIF provides partial cover for bank loans granted to SMEs investing in projects of potential benefit to the environment. The cost of guaranteeing the loans taken out by the SMEs is borne by the Community budget. In 1997 this mechanism accounted for about 84% of all guarantees concluded with SMEs. C) Equity participations At the end of 1997 the Fund's commitments from its own resources amounted to ECU 26 million. The total amount of the individual funds in which the EIF has acquired participations was 413 million as at 31 December 1997. At the European Summit of Heads of State and Government devoted to employment, which was held in Luxembourg on 20-21 November 1997, the EIB and EIF signed an agreement -9 to establish a European Technology Facility (ETF) to fund SMEs with strong growth potential in the high-tech sector. In this connection, the EIF received a mandate from the EIB to manage on its behalf an amount of ECU 125 million drawn from its reserves in order to support investments in a risk capital pool intended for SMEs using state-of-the-art technology. By the end of 1997 an amount of 6,49 million had been committed for that purpose. 1. 2. 4 ECSC As part of the arrangements for the ECSC s borrowing and lending activities decided on by the Commission in June 1994 (OJ C 175, 28 June 1994) ahead of the expiry of the ECSC Treaty on 23 July 2002, the payment of new loans within the Community increased sharply in relation to the previous year (see Table 4-6). This increase was due to the fact that 1997, and in particular the first half of the year, was the last period during which ECSC loans could be concluded, except in certain exceptional cases. The guidelines approved by the Commission in 1994 concerning the arrangements for the ECSC's borrowing and lending activities in the run-up to 2002 had the effect of mobilising potential borrowers and giving a (final) boost to this activity. It is no longer possible to obtain long-term loans, i. e. loans falling due after 2002, except for certain large infrastructure projects of Community interest for which state guarantees can be obtained. 1-4 ECSC loans in 1997 Article 54 Article 56 Article 95 Housing Total (ECU thousand) Belgium Danmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Austria Portugal United Kingdom Non-EU - - 49 508 - - - - 4 048 68 682 - 71 851 122 442 - - 20 078 - 44 606 - 2 898 22 090 - 33 610 6 746 - 3 562 - 73 211 - - - - - - - - - - - - - - - 369 3 8 205 31 1 589 1 894 19 1 809 27 204 897 - 2 863 - 20 447 3 102 318 31 4 487 23 985 19 39 467 75 455 204 76 310 122 442 76 074 0 Total 316 530 206 800 0 17911 541 241 Accordingly, ECSC loans in 1997 were almost double the figure for 1996. Demand for loans was particularly strong as regards the consumption of ECSC products (Art. 54), especially in Portugal, Austria, Luxembourg and Germany. Conversion of declining coal/steel areas (Art. 56) has also made rapid progress, particularly in Belgium, Germany and Austria. -10- 1. 2. 5 New Community Instrument (NCI) A) Overall view As regards the NCI, no new lending operations have been undertaken since 1991. Repayments have continued and, in some countries, loans have been repaid virtually in full. The degree of utilisation of loan ceilings is given in Table 1-5. 1-5 NCI loans as at 31 December 1997 Reconstr. Reconstr. (ECU million) Financial agreements NCI I ITALY GREECE NCI II NCI III NCI IV TOTAL Global loans (1) Productive sector (1) Infrastructure Energy Total contracts signed, net (2) EIB loans (own resources) 5,4 538,5 446,7 990,5 406,8 2 138,0 668,8 3 213. 5 10,6 598,7 80,0 279. 4 465. 3 300,8 258. 3 15. 9 1 961. 9 1 005. 8 598,7 351,6 80,0 997,5 2 861. 5 668,8 6 197. 1 351. 6 Authorised ceilings 1 000,0 1 000,0 80,0 1 000. 0 3 000. 0 750,0 6 830,0 Balance 9,5 49,7 0,0 2,5 138,5 81,2 281,3 (1) (2) Industry and agriculture. Contracts signed less cancellations. NCI IV is of interest because of its special features, such as the options of converting loans into risk capital, using loans to finance the purchase of intangible assets, deferring interest payments, etc. B) Six-monthly rate of utilisation of the NCI Council Decisions 83/200/EEC (Article 6) and 87/182/EEC (Article 8) on the financing of the NCI require the Commission to draw up a six-monthly report on the rate of utilisation of the tranches of NCI III and IV. Given that the ceilings have been practically exhausted (up to 96%), the six-monthly development in question does not alter the consolidated situation described in Table 1-5. However, the amount outstanding of loans issued for that purpose varies every six months in the light of debt repayments and the exchange rate of the currencies borrowed. The situation for the six-month period from 1 July to 31 December 1997 is set out in Table 4-8. 1. 2. 6 Euratom In recent years no financing applications for nuclear projects within the Community have been made under the remaining ECU 1,1 billion Euratom ceiling. However, a number of projects outside the Community are currently being examined (see point 2. 5. 1). 11- 1. 2. 7 Community medium-term financing No financing applications were made last year under the facility providing medium-term financial assistance for Member States' balances of payments. Taking account of amounts disbursed in the past to Greece (1 billion - first tranche of the 1991 ECU 2,2 billion loan) and to Italy, (4 billion - first two tranches of the 1993 ECU 8 billion loan) and repayments made in 1997, the total amount of loans outstanding under this facility was 4 billion at 31 December 1997. The available margin to be financed by Community loans on capital markets therefore amounted to 10 billion. 12- 2. LENDING IN THIRD COUNTRIES 2. 1 OVERVIEW Financial support to third countries that have concluded cooperation agreements with the Community takes a variety of forms depending on the geographical areas concerned and the objectives pursued. State-to-State loans are used when the Community wishes to help place the macroeconomic fundamentals of these countries on a sounder footing; individual loans are used where the aim is to develop infrastructure and carry out major improvement projects; global loans to local banks are used to develop the productive network of SMEs and stimulate the market economy. In addition, the EIB has also devised financial instruments other than traditional loans in the African, Caribbean and Pacific countries and in the Mediterranean countries, in particular equity participations in SMEs with development potential. These instruments are laid down in Council regulations or decisions spelling out the implementing arrangements applicable to each geographical area concerned. The mandates vested in the EIB as regards Central and Eastern European countries (CEECs), Mediterranean countries, Latin American and Asian countries, and South Africa were renewed on 14 April 1997 by Decision 97/256/EC, which approved the amounts of the new mandates for a three-year period. The amounts are: ECU 3 520 million for the CEECs, 2 310 million for the Mediterranean countries, 900 million for Latin American and Asian countries and 375 million for South Africa. The same decision set up new guarantee arrangements with a view to ensuring that the EIB shoulders a greater share of the risks associated with cooperation with third countries. In line with the arrangements for operations within the Union, the EIB will henceforth bear the financial and economic risks associated with projects covered by individual, non-sovereign guarantees, while the Community budget will cover the political risk. 2-1 Financing outside the Community in 1997 (ECU million) E I B Balance-of- payments support (1) EC and EDF budget resources (2) Own resources Total ACP-OCT Mediterranean basin CEEC CIS Latin America, Asia South Africa Total - - 95 100 - - 195 19 36 - - - - 55 41 1 086 1 486 - 378 199 3 190 (3) 60 1 122 1 581 100 378 199 3 440 (1) (2) (3) Disbursements. Granted and administered by the EIB out of the budgetary resoun or the European Development Fund (EDF). Loans signed, of which ECU 2 562,5 million were signed under C Decision 97/256/EC (cf. Tables 2-2 to 2-4) :es of the EC ouncil - 13 2. 2 THE COMMUNITY'S MACROFINANCIAL ACTIVITY 2. 2. 1 Balance-of-payments support Macrofinancial assistance in the form of loans is, by its very nature, exceptional and forms part of the efforts of the international community to provide, in conjunction with the Bretton Woods institutions, balance-of-payments support to certain countries grappling with transitional difficulties. In the case of the Community, such assistance focuses on the neighbouring regions, such as Central and Eastern Europe, the new European states of the former USSR and the countries of the southern Mediterranean. Disbursements for this purpose are contingent on the beneficiary countries achieving predetermined targets. In these circumstances, the number of operations effected each year is limited, and valid comparisons cannot be made for the assistance given from one year to the next. In 1997 the Council decided to provide macrofinancial assistance in the form of loans to Bulgaria (ECU 250 million) and to the Former Yugoslav Republic of Macedonia (FYROM) (40 million). It also decided to grant extraordinary aid to Armenia and Georgia for a total amount of 170 million. to ECU 195 million. As regards disbursements, aid paid out Disbursements corresponding to loans approved ECU 170 million, of which 70 million was allocated to Romania and 100 million to Ukraine. In addition, under new loans approved in 1997, 25 million was disbursed to FYROM. in previous years amounted in 1997 amounted to 2. 2. 2 Credit facility for the CIS No new disbursements were made in 1997 under the Council Decision of December 1991 relating to the commercial credit facility of ECU 1 250 million in favour of the new independent states of the former USSR (CIS). In addition, the drawdown period for this credit facility has now terminated and, accordingly, no new disbursements will be made. Most of the disbursements have already been repaid, with the exception of the late payments owed by Armenia, Georgia and Tadzhikistan and totalling 234 million inclusive of principal and interest. 2. 3 LOANS COVERED BY DECISION 97/256/EC: Central and Eastern European countries, Mediterranean countries, Latin American and Asian countries, and South Africa Section 2. 3 constitutes the report to be submitted to the European Parliament and the Council in accordance with Articles 2 and 3 of the above-mentioned Council Decision, i. e. it comprises the six-monthly report for the second half of 1997 and the annual report for 1997. Additionally, the report also covers the last year of the EIB activities in South Africa under Council Decision 95/207/EC of 1 June 1995 (OJ L 131 of 15 June 1995). 14- 2. 3. 1 EIB objectives and priorities The Bank assists those Central and Eastern European countries whose long-term goal is to prepare themselves for EU membership by helping them to create the economic framework to qualify5, and also provides assistance to Albania. The EIB gives priority to upgrading, modernising and developing the transport, telecommunications and energy sectors, with particular emphasis on Trans-European Networks (TENs) on the basis of the road and rail corridors defined by the Pan-European Conference of Transport Ministers as development priorities for the medium term. Environmental issues related to EIB projects are given priority in the framework of the gradual adaptation of the legislation of the countries concerned with that of the EU. The Bank also supports SMEs and other industrial initiatives, in particular when involving EU partners either directly or through its global loan instrument. In the Mediterranean region, in addition to the continued commitment of funds still available under the 1992-96 bilateral Financial Protocols with certain countries in the region, the Bank's lending since 1997 has taken place mainly within the framework of the Euro-Mediterranean Partnership, in support of the economic development of the countries concerned. Bank lending supports individual investment projects and, through the global loan mechanism, smaller projects and SMEs, while at the same time strengthening the financial sector in the various countries. Under the terms of the Euro-Mediterranean Partnership, EIB own resources lending is complemented by interest subsidies (for loans in the environmental sector) and risk capital from EU budgetary sources, managed by the Bank. In Latin America and Asia, the Bank finances projects which are of mutual interest to the countries concerned and the European Union - cofinancing with EU promoters, transfer of technology, cooperation in the fields of energy and environmental protection. Details of the mutual interest of the projects concerned are included in Table 2-7. In South Africa, the Bank's objective is to assist the transition to democratic rule initiated by South Africa and contribute to the successful completion of the country's reconstruction and development programme. 2. 3. 2 Lending activity During the reference period the Bank signed 22 loan contracts in Central and Eastern Europe for an aggregate amount of ECU 1 466 million (not including a final loan contract, signed in March 1997 under a previous lending authorisation, for 20 million). In addition to its activity pursuant to the Council Decision, the Bank has set up a substantial Pre- Accession Facility for lending from its own resources without budgetary guarantee to help those countries which have applied for EU membership. -15 Loans in Poland, Hungary, the Czech Republic and the Slovak Republic accounted for more than 80% of EIB lending in the region. The Bank also signed loans pursuant to the Council Decision in all of the other CEEC, except Albania (see Table 2-2). • Bank activity continues to support the economic development of the countries concerned, principally by financing strategic infrastructure. One-third of the total financing, ECU 502 million, was allocated to transport infrastructure projects, including the upgrading of the Czech section of the Berlin-Vienna rail corridor, TEN roads development in the Slovak Republic, the modernisation of the airports of Sofia and Tallinn, together with a major emergency programme to repair flood damage to railway infrastructure in Poland. • Loans in support of telecommunications projects in five countries accounted for ECU 357 million, or one-quarter of overall activity. The projects included mobile telephone (GSM) investments in Lithuania, the Slovak Republic and Slovenia. • Loans in the energy sector totalled ECU 70 million and were allocated to power station development in Hungary and the rehabilitation of a district heating system in the city of Bucharest. • Support for industry, at ECU 112 million, included global loans for smaller projects in Poland and Estonia and support for a fibreboard plant in Romania. • Support for general infrastructure accounted for ECU 425 million, including substantial assistance for emergency flood damage reconstruction in Poland and the Czech Republic. 2-2 Breakdown by country and sector of EIB lending in Central and Eastern Europe Country No. of loans Total loan signatures (ECUm) Transport Telecoms Energy Industry General infrastructure Bulgaria Czech Rep. Estonia Hungary Latvia Lithuania Poland Romania Slovak Rep. Slovenia 1 4 2 1 1 1 4 3 4 1 60 540 20 35 20 7 355 122 262 45 60 240 10 20 75 97 100 7 40 165 45 10 55 47 35 35 200 225 Total 22 1466 (100%) 502 (34,2%) 357 (24,4%) 70 (4,8%) 112 (7,6%) 425 (29%) The loans signed in the Mediterranean region show a good spread over nine countries. During the reference period, the Bank signed loans for an aggregate amount of 16 ECU 934 million pursuant to the Council Decision in all of the Mediterranean countries except Malta6, Israel and Syria (see Table 2-3). • Transport infrastructure one-third (ECU 300 million) of overall lending, including the renewal of Egypt Air's fleet, marine port infrastructure in Jordan, road infrastructure in Lebanon and Tunisia, and railway infrastructure in Morocco and Tunisia. investments accounted almost for • More than 28% of total financing (ECU 265 million) was allocated to water and sewerage investments in Lebanon, Morocco, Turkey, Tunisia and Cyprus. • A large gasline project in Algeria accounted for more than 23% of overall lending which, together with support for an electricity control centre in Lebanon, brought support lending (ECU 229 million). to almost one-quarter of overall the energy sector for • 15% of total financing (ECU 140 million) was allocated to individual industrial projects, involving some joint ventures with EU investors including, for example, a cement plant in Egypt; to assisting SMEs in Jordan and Turkey through the global loan mechanism; and to an industrial estate in Gaza-West Bank. 2-3 Breakdown by country and sector of EIB lending in the Mediterranean countries Country No. of loans Total loan signatures (ECUm) Transport Energy Environment, Water and Sewerage Industry, other, mixed Algeria Cyprus Egypt Jordan Lebanon Morocco Tunisia Turkey Gaza-West Bank Total 1 1 3 2 3 2 3 2 1 218 30 121 60 131 135 130 95 14 218 11 75 30 20 85 90 30 100 50 40 45 46 30 50 14 18 934 (100%) 300 (32,1%) 229 (24,5%) 265 (28,4%) 140 (15%) During the reference period, the Bank signed 6 loans in Latin America and Asia for an aggregate amount of ECU 214,5 million, including two loans totalling 52 million signed in the framework of the interim mandate 1996-97 (see Table 2-4). Loans were signed in Indonesia, the Philippines, Brazil and Peru, together with one project of regional interest (Andean Pact). Loans were signed in Malta within the framework of the Fourth Financial Protocol 17 Lending was in support of economic infrastructure (water supply, airport infrastructure, communications), energy, an industrial project (cement), together with support for small and medium-sized projects through a global loan. 2-4 Breakdown by country and sector of LIB lending in Latin America and Asia Country No. of loans Total loan signatures (ECUm) Transport Telecoms Energy 55 377 32,5 50 407 25 12 50 Industry, other, mixed 55 32,5 40 Indonesia Philippines Brazil Peru Regional Total 1 2 1 1 1 6 214,5 (100%) 25 (11,7%) 50 (23,3%) 12 (5,6%) 127,5 (59,4%) Tables 2-8 to 2-10 at the end of section 2. 3 give more details of the loan contracts signed in the above regions under Council Decision 97/256/EC. In 1997, the Bank signed loan contracts in South Africa for an aggregate amount of ECU 199 million, thus attaining the ceiling of 300 million granted under the first mandate (Council Decision 95/207/EC). Loans for a total amount of 104 million were allocated to water and sewerage investments and a loan of 45 million financed the cost of exploiting adjacent gas deposits and the installation of associated compression facilities of Mossgas. A global loan of 50 million was also granted for the financing of small or medium-scale investments. During the reference period the Bank did not sign any finance contracts in South Africa pursuant to Council Decision 97/256/EC. 2. 3. 3 Risk sharing* During the reference period, risk sharing in respect of EIB lending pursuant to Council Decision 97/256/EC reached an overall total of ECU 639,5 million9, or 8,8% of the overall lending ceiling and 24,5% of lending to date under the new guarantee scheme. Including one loan signed in the framework of the interim mandate but covered by the guarantee arrangements laid down in Council Decision 97/256/EC. Council Decision 97/256/EC of 14 April 1997 invites the Bank "to aim to cover the commercial risk on 25% of its lending under this decision from non-sovereign guarantees to be expanded upon whenever possible insofar as the market permits on an individual mandate basis". Taking account of an amount of ECU 122 million of lending in Latin America and Asia under the interim mandate, which amount is also covered by the guarantee arrangements laid down in the Council Decision. - 18 Details per region are as follows: - In Central and Eastern Europe, risk sharing in respect of EIB lending reached an overall total of ECU 444 million, or 12,6% of the lending ceiling for those countries and 30,3% of lending to date. - In accordance with the programming procedures inherent in the Euro-Med Partnership, all but two projects have been signed with governments or public bodies. It is thus not surprising to note that, during the reference period, risk sharing in respect of EIB lending in the Mediterranean countries reached an overall total of ECU 46 million, or 2% of the lending ceiling for those countries and 4,9% of lending to date. - As stated in the last report on EIB operations in Latin America and Asia (COM( 1998)1 ), the new guarantee system defined by Council Decision 97/256/EC applies also to the interim mandate for lending in this region in respect of loans approved by the Bank but not signed by the date of entry into force of the Decision. This concerns loans totalling ECU 122 million. Of this total, loans amounting to 52 million were signed during the reference period, of which a loan of 12 million was in respect of a risk sharing project. During the reference period, risk sharing in respect of EIB lending in Latin America and Asia (taking account of the amount of ECU 12 million mentioned above) reached an overall total of ECU 149,5 million, or 14,6% of the lending ceiling for those countries and 69,7% of lending to date in the region under the new guarantee scheme. The regional tables at the end of section 2. 3 (Tables 2-8 to 2-10) identify the loans for which lending is covered by non-sovereign guarantees as stipulated in Council Decision 97/256/EC. 2. 3. 4 Cooperation with other institutions The Bank's activities in the countries of Central and Eastern Europe are conducted within the framework of the EU programme, in particular by financing investment aimed at integrating the infrastructure of the countries concerned with that of the EU and by assisting SMEs, and also provide assistance to Albania. Whenever possible, cofinancing is established with other institutions, in particular to meet the above objectives. The Bank's activities thus form part of a concerted approach that is being pursued in close cooperation with the Commission and, as appropriate, with the international financial institutions (IFI) working in the region. The Bank cooperates closely with the PHARE Programme, with which it has developed a close and fruitful relationship, much appreciated by the beneficiary countries. This relationship is being reinforced in the context of the onset of the accession process. In addition to frequent PHARE assistance during the pre-investment phase to ensure that the necessary studies and technical assistance are implemented in support of EIB projects, the Bank also cooperates with PHARE in cofinancing infrastructure projects, to which up to 25% of PHARE resources may be allocated. During the reference period, the Bank and PHARE cofinanced a rail project in the Czech Republic and PHARE is considering -19 cofinancing an airport project in Bulgaria and has reallocated funds for the flood damage reconstruction programme in Poland. Cooperation between the Bank and other international financial institutions will continue to be close and systematic, as appropriate, although their lending activity in the region is declining, in line with their graduation policy and market developments. During the reference period, the EBRD has contributed to a rail project in the Czech Republic and an airport project in Estonia, while the World Bank (IBRD) has approved a contribution to the flood damage reconstruction programme in Poland. The contributions of PHARE and the other IFIs to projects financed by the EIB are shown in the table below (figures in ECU million). 2-5 Share of PHARE and IFIs in projects financed by EIB in Central and Eastern Europe Country EIB PHARE EBRD IBRD TOTAL Bulgaria Czech Rep Estonia Poland Total 60 75 10 300 445 10-1510 50 0 65'2 125 -130 0 50M 8,5 0 58,5 0 0 0 18513 185 70 - 75 175 18,5 550 813,5-818,5 In the Mediterranean region the Bank also cooperates with other international financial institutions and investors/donors whenever possible. In many of the operations concluded in 1997, the Bank either cofinanced directly with other multilateral/bilateral institutions or international investors, or played a key role in catalysing additional financial resources. For example, the global loans in Jordan and the project in Gaza-West Bank are being implemented in tandem with conditional global loans from risk capital resources, under the MEDA Regulation; the latter project is being cofinanced with the International Finance Corporation (IFC). The project in Cyprus is cofinanced with the Social Development Fund of the Council of Europe; the project in the energy sector in Lebanon is being cofinanced with the IBRD while the transport project is being cofinanced with the Saudi Fund. Table 2-6 gives details of cofinancing in projects financed by the EIB (figures in ECU million). 10 il 12 13 Definitive amount to be decided by PHARE. USD 53,6 million. Funds reallocated from other PHARE projects. A contribution of USD 200 million to the flood reconstruction effort in Poland. 20- 2-6 Share of IFIs in projects financed by EIB in the Mediterranean countries Country EIB IBRD IFC Other14 Total Cyprus Lebanon Morocco Gaza-West Bank Total 30 31 131 14 206 0 8,2 5 0 13,2 0 0 0 7,6 7,6 40,7 31,2 45 12 70,7 70,4 181 33,6 128,9 355,7 In addition, cooperation has been active with other institutions which contributed to other investments promoted by the Bank during the same period : • Morocco : ONCF Modernisation Project (railway) - with IBRD, BAD15, CFD16 ; • Tunisia • Turkey • Egypt : SNCFT II Project (railway)- with IBRD, CFD ; : ADANA Wastewater Project - with German cooperation ; : ECC Grey Cement Project - with IFC and European (BelgjaivSwiss) cofinanciers ; LECICO Ceramics Project - cofinanced with Finnish Group ; • Lebanon : The Tripoli Wastewater Project is being cofinanced also with IBRD, as part of a Sectoral Investment Programme. Cooperation with multilateral and bilateral financial institutions in Latin America and Asia continues to be good. The airports project in the Philippines was appraised jointly with the Asian Development Bank, which also contributed to its financing and will participate in the monitoring of its execution and of the sector's financial and institutional development. The energy project in the Philippines was cofinanced with Kreditanstalt fîir Wiederaufbau (KFW) and Commonwealth Development Corporation (CDC), among others. The Bank is increasingly centring its operations on private projects involving European companies as partners in joint ventures or shareholders. As mentioned in section 2. 3. 1, the Bank finances projects which are of mutual interest to the countries in Latin America and Asia and to the Community (see table below). 14 15 16 EIB risk capital, states, public bodies or other financial sources, including own funds of borrower/prom oter. Banque Africaine de Développement. Caisse Française de Développement. -21 2-7 Mutual interest of projects signed in 1997 in Latin America and Asia Country Project Mutual interest Indonesia WATER SUPPLY JAKARTA WEST Philippines SECOND AIRPORTS BATANGAS POWER -B LAFARGE ARCOS CEMENT TELEFONICA DEL PERU Brazil Peru Regional The borrower is a joint venture between French and Indonesian private-sector interests. In addition, the project involves the transfer of European technology in the field of water supply operation and management and substantial environmental benefits. The project guarantee will be provided by a European-led syndicate of commercial banks. The project's mutual interest is based on the required development of these airports, particularly Puerto Princesa, as part of the country's contribution to an important regional development plan (the East ASEAN Growth Area - EAGA). The project will also effectively increase the capacity of Manila International Airport for international flights. Support to the EAGA, of which the project is a good example, is particularly encouraged in the Cooperation Agreement between the EU and the ASEAN countries. The borrower is a 100% subsidiary of a British/Philippine joint venture. In addition, the gas field which is likely to provide future fuel for the plant is a joint development of Shell and Occidental Petroleum, while the turnkey contract for the plant has been won by a major European group. In a wider context, the project will promote the aims of the EU-ASEAN Cooperation Agreement, which includes particular reference to cooperation in the fields of energy and improvement of the environment. The borrower is a joint venture between French and Brazilian private-sector interests. The project will strengthen the promoter's position in a leading emerging market. Development of telecommunications in Peru will bring important economic benefits. The provision of sufficient modern telecommunications services is recognised as a major element for economic development. telecommunications The Peruvian borrower is a subsidiary of a Spanish company. The the completion of Peru's telecommunications development programme gives additional benefits, in terms of transfer of technology to Peru and increased activity for European telecoms. The projects financed will be of mutual interest and thus support closer DE cooperation between the EU and the Andean Group, in private ventures in involvement of an efficient European enterprise in CORPORACION ANDDMA FOMENTO Global Loan eligible sectors. The EIB and the Commission activities in South Africa complement each other. For example, the Commission provides assistance for water supply programmes whereas the EIB grants loans for water and wastewater treatment and purification; the Commission assists in guarantee programmes for small and medium-sized enterprises financed through the commercial sector, whereas the EIB finances loans through the commercial banks and SMEs through the Industrial Development Corporation. The EIB maintains close contact with the World Bank and with national organisations operating in South Africa, among others the Société de Promotion et de Participation pour la Coopération Economique (PROPARCO) in France and the Commonwealth Development Corporation in the United Kingdom. 22- 2-8 EIB loans signed in 1997 in Central and Eastern Europe (CD 97/256/EC) COUNTRY PROJECT DESCRIPTION LOAN AMOUNT (ECUm) RISK SHARING Hungary MVMLORINQ POWI3lI5LANT Bulgaria Czech Rep. Estonia Latvia Lithuania Poland Romania SOFIA AIRPORT Modernisation and upgrading of Sofia Airport 60 RAIL CORRIDOR BERUN- VENNA-B SPTTE1HXMVIUNICATJON n-A D5 MOTORWAY PRAHA- NURNBERG FLOODDAMAGE RECONDUCTION TALUNNAIRPORT UNION BANK OF ESTONIA Global I juon the telecommunications Upgrading of the Czech section of the Berlin- Prague-Vienna railway line Modernisation of network Construction of the section Plzen-Rozvadov of the D5 Prague-Niirnberg Motorway Emergency programme for reconstruction and infrastructure following flood damage restoration of basic Upgrading of Tallinn International Airport For financing small and medium-scale environmental, energy saving, infrastructure, industrial and tourism projects, and SMF projects in general Construction and operation of a gasoil-fired open-cycle combustion turbine to supply peak load power and increase Hungary's secondary reserve capacity VENTSP1LSPORT Improving port reconstruction, strengthening of quays channel access, TE1. ECOMMUNICATION n Development of second phase of mobile (GSM) telecommunications network 7 VERBNSBANK POLSKA Global Loan FLOODDAMAGE REOONSTRUCnON-A FLOODDAMAGE RECONSTRUCTION-B KATOWICE MUNICIPAL lNFRASTRUCrUI<E THECOMMUNICATIONS BUCHAREST DISTRICT HEATING REHABIUTATION MTJFFRQDUCTIONPLANT restoration of basic For financing small and medium-scale environmental, energy saving, infrastructure, industrial and tourism projects, and SME projects in general Emergency programme for reconstruction and infrastructure following flood damage Emergency programme for reconstruction and infrastructure following Hood damage Improvements to the urban infrastructure (roads, sewage and municipal landfill) of Katowice restoration of railway the and modernisation Expansion of Romanian telecommunications network Rehabilitation of district heating transmission and distribution facilities Construction density fibreboards (MDF) and special resins plant facility in the city of Sebes a medium of Slovak Rep. EUROPEAN ROADS II GIJOBIEL TTiLECOMMUNICATIONS II EUROPEAN ROADS III of Construction of 18 km of trunk roads (D2/D61) from Bratislava to the Austrian and Hungarian border Development telecommunications network Modernisation telecommunications network Construction of a new by-pass extension of the D61 motorway around the centre of Bratislava a mobile Slovakian (GSM) the of Slovenia Total MOBITELGSM Construction of the first GSM network in Slovenia 45 23 75 100 165 200 10 10 35 20 35 225 75 20 40 35 47 25 65 100 72 No No Yes No No No Yes Yes No Yes Yes No No No No No Yes No Yes Yes No Yes 60 540 20 35 20 7 355 122 262 45 1466 2-9 EIB loans signed in 1997 in the Mediterranean countries (CD 97/256/EC) COUNTRY PROJECT DESCRIPTION LOAN AMOUNT (ECUm) RKK SHARING Algeria Cyprus Egypt Jordan SONATRACH GR2 - B Construction of a gas pipeline between Alrar and Hassi R'Mel 218 PAFOS SEWERAGE Construction of a sewage collection and treatment system and a stormwater drainage system EGYPT AIR ECC GREY CEMENT LECICO CERAMICS a plant Modernisation of the Egyptair fleet Construction of for production of grey cement Construction of a new plant sanitary ware production modernisation of existing manufacturing factory an of the for and tile INDUSTRIAL DEVELOPMENT BANK VI Global Loan AQABA PORT For financing small and medium-sized enterprises in the productive sectors of the Jordanian economy Construction of two-berth industrial jetty and purchase of container handling equipment 30 75 30 16 30 30 218 30 121 60 131 100 Lebanon TRIPOLI WASTEWATER Morocco AUTOROUTE COTIERE DU NORD CENTRE NATIONAL DE CONTROLE ELECTRIQUE ONCF MODERNISATION ONEP EAU POTABLE II Tunisia SNCFTII ASSAINISSEMENT DU LAC SUD DE TUNIS VOIRIES PRIORITAIRES ADANA WASTEWATER TURKEY Global Loan Turkey Gaza-West Bank Total Upgrading of storm and wastewater drainage, construction of a sewage treatment plant for the Greater Tripoli area the Renovation Northern coastal motorway between Beirut and Tripoli Construction of the national electricity control centre in Beirut extension of and increase Rehabilitation and the capacity of sections of the main axes of the Moroccan railway network Drinking water communities in Morocco for urban supplies in Rehabilitation of the Tunis-Sfax-Gabes railway line Dredging and backfill of the "Lac Sud de Tunis" Improvement of the road networks of Greater Tunis and other major cities sewer network and Extension of construction of two wastewater treatment plants in Adana (South-East of Turkey) For financing small and medium-scale enterprises 20 11 85 50 25 40 65 45 50 GAZA INDUSTRIAL ESTATE Development of an industrial estate in the Gaza Strip 14 -24 135 130 95 14 934 No No No Yes Yes No No No No No No No No No No No No No 2-10 EIB loans signed in 1997 in Latin America and Asia (CD 97/256/EC) COUNTRY PROJECT DESCRIPTION LOAN AMOUNT (ECUnt) RISK SHARING Indonesia Philippines Brazil Peru Regional Total WATER SUPPLY JAKARTA WEST Upgrading and extension of the water supply transmission and distribution system 55 SECOND AIRPORTS BATANGAS POWER - B17 Upgrading, improving and extension of two airports in the Southern part of the Philippines Construction of a combined cycle power plant 25 12 LAFARGE ARCOS CEMENT Construction of a cement plant in the State of Minas Gerais 32,5 TELEFONICA DEL PERU Modernisation and extension of Peruvian telecommunications network the 50 CORPORACION ANDINA DE FOMENTO Global Loan17 For financing medium-sized projects in the five member countries of the Andean Pact 40 Yes No Yes Yes Yes No 55 37 32,5 50 40 214,5 2. 4 SIGNATORIES TO THE LOME CONVENTION 2. 4. 1 Lending trends for each major area Given the economic situation of these countries, Community aid is of crucial importance. In Africa, for instance, EDF aid amounts on average to ECU 1 100 million a year. If horizontal aid (food aid, NGOs, rain forests, democracies, etc. ) is also taken into account, together with humanitarian aid and bilateral aid from the Member States, the figure rises to about USD 7 800 million, i. e. between six and seven times more than the aid provided by the other major Western powers. The second protocol to Lomé IV, signed in 1995 and concerning the period 1995-99, brought Community aid to ECU 14 625 million, comprising 11 967 million in grants, 1 000 million in aid for risk-capital transactions and 1 658 million in loans from the EIB's own resources. Delays in implementing the new protocol meant that it was not possible to deploy these resources fully. 17 Signed within the framework of the interim mandate but covered by the guarantee arrangements laid down in Council Decision 97/256/EC. 25 In the African, Caribbean and Pacific countries and the Overseas Countries and Territories (OCT), EIB activity in 1997 was limited to committing the funds available under the first protocol to Lomé IV, i. e. ECU 60 million, of which 19 million in the form of risk capital. Loans were allocated mainly to the energy sector and to the financing of SMEs via global loans. Loans to the tune of 18 million went to the productive sector in 1997, of which 16 million in the form of global loans to benefit small and medium-sized is investments. ECU 2 072 million, of which ECU 812 million in the form of risk capital. loans signed under the first protocol total amount of The 2. 4. 2 EIB risk-capital operations In addition to its lending activities, the EIB identifies opportunities for, and monitors, risk-capital operations via specialist public or private companies operating locally. In 1997 most of these operations were carried out in East Africa (ECU 10 million) via accredited financial intermediaries; a few operations of this kind were also effected in the Caribbean (ECU 4 million) and in the Pacific area (ECU 2 million). 2. 5 OTHER COMMUNITY INSTRUMENTS 2. 5. 1 Euratom The Council decision of 21 March 1994 made Euratom loans available to the countries of Eastern Europe and to the CIS countries with a view to improving the safety and efficiency of their nuclear power stations. The amount of assistance available is some ECU 1. 1 billion, taking into account the current ceiling fixed by the Council. Several projects are being appraised in Ukraine, Bulgaria and Russia but, given the political and technical complexity of projects of this type, no decision to provide funds was taken in 1997. 2. 5. 2 European Bank for Reconstruction and Development (EBRD) The Community and the EIB are both shareholders and close partners of the EBRD: they each hold 3% of the Bank's capital and work in close cooperation so as to ensure that operations are mutually complementary. According to the EBRD's annual report for 1997, the Board approved 143 new projects in the CEECs and the states of the former USSR, for a total amount of ECU 4 016 million (against 119 projects for a total amount of 2 855 million in 1996). Funds actually committed during the year totalled 2 315 million, as against 2 188 million in 1996. Equity holdings as a proportion of the Bank's entire activities amounted to 436 million, or about 19% of all new operations. -26 3. BUDGETARY IMPACT OF LENDING The Community's general budget is affected by lending activities where loans are accompanied by interest subsidies and/or budget guarantees. 3. 1 INTEREST SUBSIDIES Interest subsidies were granted by the Community in the following fields (see Table 4-9): a) b) c) industrial conversion of coal and steel areas (Article 56 of the ECSC Treaty); reconstruction in the disaster-hit areas of Italy, Greece and Portugal (Autonomous Region of Madeira); the "SME facility" adopted at the Copenhagen Summit. No industrial loans at reduced rates for investment projects designed to promote consumption of Community steel (Article 54, second paragraph) have been made since 1992. With regard to conversion loans in coal and steel areas (Article 56), interest subsidies amounted to only ECU 1,8 million in 1997, as against 36,8 million in 1996 and 11,5 million in 1995. The Council Decision on reconstruction following the Madeira cyclone in 1993 lays down that interest subsidies on EIB loans are to be paid by the Commission direct to the Autonomous Region of Madeira and no longer via the EIB, as had been the case for the earthquakes in Greece and Italy. The Copenhagen European Council in 1993 increased by ECU 3 billion the temporary facility agreed in Edinburgh for major infrastructure projects. Of that amount, ECU 1 billion is earmarked for measures to strengthen the competitiveness of small and medium-sized enterprises in Europe and is combined with interest subsidies linked to job creation. The subsidy amounts to ECU 3 000 per additional job created (equivalent on average to a 2% interest-rate reduction over a five-year period). The Council Decision of 19 April 1994 allowed the EIB to sign global lending agreements for that purpose with financial intermediaries in all Member States. The allocation of loans ended on 15 December 1995, the entire budget of ECU 1 billion having been used up. By the end of 1997, payment of interest-rate subsidies for the envisaged ECU 1 billion loan commitments had been finalised. An amount of ECU 93 million in subsidies was disbursed by that time, with more than 4 300 firms benefiting. The reported total job creation amounted to more than 50 000 jobs (for breakdown by country, see graph below). 27- Job creation: forecasts and outturn (As at 20. 8. 1997) ^ forecast m outturn 14 OOMT 12 00 B DK D EL E F IRL I L NL A P FIN S UK Interest subsidies are also provided in connection with EIB loans outside the Community (see Table 4-10). 3. 2 BUDGET GUARANTEES 3. 2. 1 Coverage All the outstanding borrowing contracted by the Community to finance loans managed by the Commission (Euratom, NCI, balance of payments) is guaranteed by the general budget. In this connection, the Community budget was involved in an ECU 195 million "balance-of-payments loan" to FYROM, Romania and Ukraine in 1997. EIB loans from own resources granted to third countries under the Community's policy of providing financial assistance for development are covered by a guarantee agreement. The guarantees are provided by Member States for loans in ACP countries and the OCT and by the Community for Mediterranean countries, Central and Eastern European countries, countries in Latin America and Asia with which the European Union has concluded cooperation agreements, and South Africa. These mandates fall into two distinct phases (referred to below as old mandates and new mandates), depending on the extent of coverage provided by the Community budget. A) Old mandates: a) EIB loans to Mediterranean countries: These loans are covered by a global Community guarantee in respect of 75% of the amount of loans signed. At the end of 1997 outstanding loans totalled ECU 3 248 million, of which 212 million was accounted for by loans in Spain, Greece and Portugal (pre-accession) and 3 036 million by loans in non-member Mediterranean countries. b) EIB loans to the CEECs: Loans signed are covered in full by the Community guarantee. At 31 December 1996 the EIB had advanced ECU 4 628 million to these countries out of a total allocation of ECU 4,7 billion under the CEEC agreements. The total amount of loans outstanding at the end of 1997 was 1 889 million. 2 8- c) EIB loans to third countries in Latin America and Asia: Loans granted to those countries with which the Community has concluded cooperation agreements are guaranteed in full by the Community budget. The total amount agreed on was ECU 1 025 million. As at the end of 1997 loans signed stood at 810 million and the amount of the guarantee outstanding was 385 million. d) EIB loans to South Africa: The Community has provided its guarantee for loans granted by the EIB in South Africa up to a maximum amount of ECU 300 million. These loans are guaranteed in full by the Community budget. As at 31 December 1997 the EIB had advanced the full amount of 300 million and the amount of the guarantee outstanding was 100 million (see Table 3-1). B) New mandates18: On 14 April 1997, the Council, acting on a proposal from the Commission and after Parliament had given its opinion, decided to renew the Community's guarantee to the EIB in respect of the loans granted to projects outside the Community. The total ceiling for credits opened is equivalent to ECU 7 105 million. The guarantee was limited to 70% of the total amount of credits opened, plus all related sums19. In addition, the EIB has been asked to aim to cover the commercial risk on 25% of its loans with non-sovereign guarantees. In that instance, the budget guarantee covers only political risks, namely the risks associated with the non-transfer of foreign currencies, expropriation, armed conflict and civil unrest. The total amount of credits opened as at 31 December 1997 was ECU 2 615 million, but the amount outstanding on the same date was only 144 million, of which 114 million was for the Mediterranean countries and 30 million for the CEECs. 3. 2. 2 Outstanding guarantees at 31 December 1997 At the end of 1997 outstanding guarantees under the Community budget, details of which are given in Table 3-1, stood at ECU 12,2 billion, more than 63% of which was for countries outside the Community. Compared with 1996, total outstanding guarantees were up by ECU 295 million. However, the proportion of commitments to non-Community countries has increased steadily from 37,5%» in 1992 to 63% at present. The annual risk covered by the general budget, which concerns the repayment of the debt (principal and interest), stood at ECU 3 095 million in 1997, of which 1 666 million related to third countries. 18 19 Council Decision (97/256/EC) of 14 April 1997 granting a Community guarantee to the European Investment Bank against losses under loans for projects outside the Community (Central and Eastern European countries, Mediterranean countries, Latin American and Asian countries, and South Africa). The arrangements governing the guarantee are set out in the contract of guarantee signed between the Community and the EIB on 25 and 29 July 1997. -29 At 31 December 1997, amounts paid out by the Community and not yet repaid by defaulting debtors stood at ECU 309 million, of which 75 million is owed by some of the republics of the former Yugoslavia and 234 million by Tajikistan, Armenia and Georgia. All provisional drawings on the Commission's cash resources in respect of the guarantee have been settled from the budget up to 1994 and, since its establishment by Council Regulation (EC) No 2728/94 of 31 October 1994, by the Guarantee Fund. 3-Î Capital outstanding on guaranteed operations (at 31. 12. 1997) |" Operation Member States A. Medium-term financial support 1. Greece 2. Italy B. Guaranteed loans 3. Euratom (3) 4. NCI 5. EIB Mediterranean (E, EL, P) Non-Community countries A. Macrofinancial assistance 1. Hungary 2. Former USSR (4) 3. Czech Republic 4. Slovak Republic 5. Bulgaria 6. Romania 7. Estonia 8. Latvia 9. Lithuania 10. Israel (5) 11. Algeria 12. Moldova 13. Ukraine 14. Belarus 15. FYROM 16. Georgie/Armenia B. Guaranteed loans 17. Mediterranean 18. CEECS 19. Latin America, Asia 20. South Africa GRAND TOTAL (ECU million) Authorised ceiling Amount outstanding at 31. 12. 1996(1) Amount outstanding at 31. 12. 1997(2) 26 330 14 000 4 000 6 830 1 500 24 117 4 625 180 1 250 250 125 650 580 40 80 100 160 600 60 285 55 40 170 19 492 8 672 8 220 1925 675 50 447 5 564 __ — - ^^ 500 3 479 572 748 265 6 312 2 679 180 144 250 125 400 510 20 40 75 160 500 60 185 30 - - 3 634 2 092 1 306 204 32 500 3 448 118 219 212 7 674 2 121 100 216 123 62 260 580 15 40 75 - 250 60 285 30 25 - 5 553 3 150 1 919 385 100 11876 12 171 ( i) bxcnange rate as at 31. 12. 1996. (2) Exchange rate as at 31. 12. 1997. (3) Extension of Euratom loans to certain tr (4) The amount outstanding of ECU 216 mi lird countries (Co llion corresponds uncil Decision of to amounts in pr 21. 3. 1994). ncipal owed and not paid by 31. 12. 1997. (5) Loan repaid in full by 31. 12. 1997. -30 4. STATISTICAL ANNEX 31- 4-1 Trend of borrowing and lending in the Community 1966 1967 1968 1969 1990 1991 1992 1963 1994 1996 1996 1997 (ECU million; ECU rate at year-eno) I. Borrowing ECSC 1517 1487 880 913 1086 1446 1474 906 644 306 288 474 Balance Of paymtntS (1 862 860 - 3 50 1696 1206 4989 246 410 156 195 Euratom NCI 4 8 8 8 5 3 93 4 9. 541 611 945 522 76 49 - - 70 66. - - Total Commission 3405 3811 1918 1435 1512 3190 2683 5877 1008 862 453 686 6786 5593 7666 9034 10996 13672 12974 14224 14148 12395 17553 23026 10194 9404 9584 10469 12508 16862 15657 20101 15156 13257 18006 23695 BB(2) Total EC II. Lending ECSC 1069 969 908 700 993 1382 1486 918 674 403 280 541 Balance of payments (1 862 860 - 350 1695 1209 4969 245 410 155 195 Euratom NCI 443 314 49 393 425 357 78 24 36 9 30 Total Commission 2767 2568 1265 778 1367 3116 2704 5917 968 813 436 736 BB(3) Total EC 6678 6967 8844 11507 12605 14438 16066 17724 17682 18604 20946 22958 9445 9535 10109 12285 13972 17554 18770 23641 18650 19417 21381 23694 Note: The cffferenoes between total borrowing and lendngbytteCamissionareclueto fa refinancing purposes and to changes in the balanoe of loans not assigned by the end of the year. The differences between borrowing and lending by the BB are clue to the fact that BBIendngcperaticjns are financed both from borrowings and from the Bank's own resources. (1) Mechanism for providing financial support for Member States, financial assistance fa non-member countries and food aid (2) (3) fathefomerUSSR Total resources raised. Loans signed out of own resources, noaccount being taken of the g^ararteesprc>/ided b y te a of operations financed out of NCI resources. - 3 2- 4-2 Community borrowings outstanding. Community borrowings outstanding (at year-end) (1) (ECU million) ECSC BB(2) Euratom NCI Sub-total borrowings borrowing Balance-of-pay. Total 6178 16 570 1272 1747 25 767 6 539 20749 1680 3 269 32 237 7119 25007 1892 4432 38450 7 034 26 736 2 013 4 960 40 743 6761 30271 2168 5 202 44 402 591 4610 4932 3236 1890 26 358 36 847 43 382 43 979 46292 6689 31957 2 500 5 229 46 375 2 997 49 372 6 825 36 928 2164 5 514 51431 2459 53 890 6 738 42 330 1945 5122 56135 2 075 58210 6673 48459 1687 4 542 61361 (3) 2 045 63406 7139 58 893 1563 3 817 71412 3 516 74 928 7 327 67 784 1338 3 326 79775 7 331 78 661 1018 2 202 89212 4026 5204 7697 83 801 94 416 100267 6 548 83 673 5 966 87 079 4677 96 649 3637 110 394 779 720 572 118 1570 92 570 1113 94 878 8 032 102 910 748 102 646 0 000 109 312 218 114 367 5 853 120220 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 (1) The conversion rates used were those obtaining on 31 December of each year. As the majority of borrowings are denominated in national currency, the difference between two year-ends reflects, on the one hand, changes in the valuation of the existing stock and, on the other, the net volume of borrowings during the year. Original amount of borrowings, plus or minus repayments of the principal, cancellations, annulments and exchange-rate adjustments. As from 1989 including short term. As from 1990 including financial assistance for non-member countries. (2) (3) 33- 4-3 Community borrowings in 1997, by currency EIB ECSC NCI payments(1) Balance of Total Borrowing ECU BEF DKK DEM GRD ESP FRF IEP ITL LUF NL6 ATS PTE FIM SEK GBP Sub-total CHF JPY USD ZAR Sub-total TOTAL 1 300 (2) 134 3 437 161 2 599 2 590 58 5 044 99 17 1 092 45 189 2 875 19 639 566 541 2211 68 3 387 23 026 - 19 127 3 23 23 75 4 123 77 474 - 195 -. - 195. 474 - 195 1495 19 134 3 564 161 2 602 2 613 58 5 067 174 17 4 1 215 45 189 2 952 20 308 566 541 2211 68 3 387 23 695 (1) (2) Balance of payments and financial assistance for non-member countries Issued in euros. (ECU million) 1996 % 3,6 0,1 0,5 29,7 0,5 11,5 3,7 0,6 24,7 0,6 0,5 - 2,0 0,2 1. 1 12,3 91,5 0,9 3,2 4,2 0,2 8,5 100,0 1997 % 6,3 0,1 0,6 15,0 0,7 11,0 11,0 0,2 21,4 0,7 0,1 0,0 5,1 0,2 0,8 12,5 85,7 2,4 2,3 9,3 0,3 14,3 100. 0 4-4 Lending in the Community in 1996 and 1997, by sector and instrument ECSC EIB(1) Total % of total (ECU million) Productive sector of which: allocations from global loans 1996 1997 1996 1997 1996 1997 1996 1997 248 400 4 477 5 672 4 725 6 072 23,5 27,1 178 207 2 630 2 545 2 808 2 752 14,0 12,3 Infrastructure of which: allocations from global loans 20 60 10 388 14 085 10 408 14 145 51,8 63,2 1 535 2 326 1 535 2 326 7. 6 10,4 Energy of which: allocations from global loans 12 81 4 945 2 090 4 957 2171 24,7 9,7 279 206 279 206 1. 4 0,9 TOTAL (1) 280 541 19 810 21 847 20 090 22 388 100,0 100,0 Financing granted (indh /idual loans and allocations from global loans). 34 4-5 Financing in the Community by the EIB in 1996 and 1997 by economic objective 1. Regional development 13 805 100,0 14 646 100,0 1996 ECU million 1997 ECU million % % 1. 1 By country Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Austria Portugal Finland Sweden United Kingdom 1. 2 By major sector Energy Communications Environment and various infrastructures Industry, services, agriculture 236 397 2 297 730 2 352 1 615 108 2 853 0 17 254 1288 10 317 1 331 4 076 4 640 1 826 3 263 1. 7 2,9 16,6 5,3 17,0 11,7 0,8 20,7 0,0 0,1 1,8 9,3 0,1 2,3 9,6 29,5 33,6 13,2 23,6 440 269 1 852 752 1 873 1692 72 2 595 0 16 157 1 352 331 506 2 741 996 6 338 3 037 4 273 3,0 1. 8 12,6 5,1 12,8 11,6 0,5 17,7 0,0 0,1 1. 1 9. 2 2,3 3,5 18,7 6,8 43,3 20,7 29,2 2. Communications infrastructure 6 506 100,0 8 758 100,0 2. 1 Transport 2. 2 Telecommunications 4 500 2 006 69. 2 30,8 6 879 1 879 78,5 21,5 3. Environmental protection and improvement 5 875 100,0 7 208 100,0 3. 1 Environment 3. 2 Town planning 4. Energy 4. 1 Indigenous resources 4. 2 Import diversification 4. 3 Efficient use of energy 5. Industrial competitiveness 4 209 1 666 71,6 28,4 4 826 2 382 67,0 33,0 4 031 100,0 2 597 100,0 547 2011 1 473 3 776 13,6 49,9 36,5 - Number 11 034 558 482 1 557 4 556. , 2 486 21,5 18,6 60,0 - Number 12 772 of which: small and medium-sized enterprises 2 594 N. B. As some financing serves a number of purpo ses, the amounts shown i jnder the different headings cannot be aggregated. -35 4-6 Geographical breakdown of lending (signatures) in the Community in 1996 and 1997 (ECU milli on) 1997 Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Austria Portugal Finland Sweden United Kingdom Art. 18 (1) Total 1996 Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Austria Portugal Finland Sweden United Kingdom Art. 18(1) Total ECSC EIB Euratom NCI Balance of payments Amount % 20 - 102 - 5 24 - 40 76 - 76 122 - - 76 - 541 1 140 737 3 518 730 2 716 2 721 207 3 517 96 398 555 1 350 401 925 3 765 184 22 958 _ _ _ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 160 737 3 620 730 2 721 2 745 207 3 557 172 398 631 1472 401 925 3 841 184 4,9 3,1 15,4 3,1 11,6 11,7 0,9 15,1 0,7 1. 7 2,7 6,3 1. 7 3,9 16,3 0,8 23 499 100,0 ECSC EIB Euratom NCI Balance of payments Amount % 7 - 33 - 33 13 - 91 35 - 1 - - - 51 - 263 658 688 3 022 721 2 553 2 509 189 4 121 - 766 490 1 294 302 847 2 386 403 20 946 _ _ _ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 665 688 3 054 721 2 585 2 523 189 4 212 35 766 491 1294 302 847 2 437 403 21 210 3,1 3,2 14,4 3. 4 12,2 11. 9 0. 9 19. 9 0,2 3. 6 2,3 6,1 1,4 4,0 11,5 1. 9 100,0 (1) Community projects that cannot be located in a particular Member State ( telecommunication cables and satellites, North Sea Oil). eg- 36 4-7 Breakdown of NCI loans, by country at 31. 12. 1997 Country BB*gum Denmark Greece Spain France Ireland Italy NuthBftaiKfe Portugal UK Total NCM Nad Nam Narv NCI Total % Fteccnstr. (BXIrrOon) 66,8 - - - 70,0 239,0 479,9 - 100,6 114,9 - 125,0 116,6 - 303,0 111,2 69,2 938,7 23,6 63,2 - 118,2 72,3 68,4 - 80,0 - - - - - 23,6 533,5 306,1 187,4 1206,0 424,0 473,4 1228,5 285,7 598,7 3066,3 - - 3,2 29,9 134,9 67,1 109,3 9,9 95,8 - - 3,2 39,8 407,1 0,4 8,6 4,9 3,0 19,5 6,8 49,5 0,1 0,6 6. 6 990,5 997,5 2 861,6 668,8 678,7 6 197,1 100,0 M B: Loans signed have been converted into "borrowing equivalents". ThelccreinthevariciuscurTierae^ working day of the quarter preceding the signing of the contract. 4-8 Breakdown of NCI loans, by currency: amounts outstanding as at 31. 12. 1997 Currency (million) Equivalent in ECU million (1) ECU BEF DEM ESP FRF ITL LUF NLG GBP CAD CHF JPY USD Total 70,0 - 10,0 - - - - 176,8 11,5 - 75,0 - - 70. 0 - 5,1 - - - - 79,4 17,2 - 46,7 - - 218,4 (1) Exchange rate a! 5 at 31. 12. 1997. 37- Interest subsidies paid out in the Community by the various Community 4-9 mechanisms 1977-97 Non-discounted systems (1) Discounted systems (2) (ECU million) ECSCArt. 54 ECSCArt. 56 (convers. ) (restruct. ) Employment in Portugal Disaster reconstr. Year EMS ERDF SME facility 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 d) (2) (3) 1,3 9,8 10,4 25,7 7,6 10,5 4,0 6,2 3,6 5,9 2,4 3,0 2,6 1,3 1,0 2,7 16,5 8,0 33,4 6,3 19,3 7,1 34,0 74,9 33,1 35,6 38,6 42,5 40,6 48,6 106,0 114,3 51,1 11,5 36,8 1,8 _ - - - - 4,0 3,9 _ 3,0 14,4 24,4 28,4 28,6 28,6 27,8 26,6 23,1 20,1 17,2 12,3 9,3 6,1 - 4,3 (3) 4,0 - - 200,0 197,0 193,2 209,8 200,0 - - - - - - - - - - -. 12,1 65,5 2,8 25,3 Interest subsidies spread over time and charged to the funds set aside for this purpose in the annual budgets. Interest subsidies paid by the Commission after discounting to a present value, and charged to the budget as a single sum in the initial year. As from 1996, including the interest subsidy paid direct by the Commission, to the Autonomous Region of Madeira (Council Decision 95/250/EC of 29 June 1995). 38 4-10 Financial assistance outside the Community in force or under negotiation at 31. 12. 1997 Operations from BB resources Operati budget ons from resources Balance of payments assistance (4) (ECU million) Agreement End of period Celling d) Second Financial Protocol Fourth Lome Convention Council Decision Council Decision (7) Euro-Mediterranean partnership (7) Special financial cooperation not yet in force Fourth Financial Protocol Fourth Financial Protocol Council Decision (7) 2000 2000 2000 2000 2000 1998 1998 2000 1693 1658 35 375 3140 2310 750 30 50 3520 Financial protocol 2000 150 Council Decision Council Decision (7) UBhwIity 1997 2000 2000 275 900 3500 ACPStates-OCr ACP OCT South Africa Mediterranean countries^) Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Malta, Morocco, Syria, Tunisia, Turkey, Gaza and Wast Bank Turkey Malta Cyprus CEECs Albania Bulgaria Czech Republic Estonia Hungary Latvia Lithuania Poland Romania Slovakia Slovenia FYROM CIS; Mongolia Former USSR Moldova Georgia, Armenia Ukraine Belarus Latin American and Asian countries Pre-Accession facility (lb) Risk capital operations Non-repayable aid Ceiling (2) 1030 1000 30 (3) 12102 11967(5) 135(5) 204 200(9) 3460(8) 3425(10) 600 600(11) 2 2 13 22 4952(12) 2005 650 250 40 180 80 100 580 125 40 1820 1250(15) 60 170 285 55 20(13) 2224(14) 2796(14) (1) Loans attracting interest subsidies from the European Development Fund in the cas from the general budget of the European Conrrriunitiesinthecaseofenviraimental amounts fa the interest subsidies are charged to non-repayable aid. « of projects in the ACP States and the ( projects in certain Mediterranean counb XT and ies. The neccessary (2) Granted and managed by the EB. (3) Granted and managed by the Commissioi. (4) Cumulated amounts since 1990. These operations are granted and managed by th (5) (6) Irduding amounts intended fa interest subsidies on BB loans. The amounts available under the previous financial protocols may be used at the Sc earmarked a residual amounts. B Commission. •ime time, viiether that involves all of the sums (7) Part of the rnultiannual overall mandate approved on 14 April 1997. (8) Main items of the financial association agreed at Cannes (1995). (9) I n d k ^ i v e a r m j r t c r a r p ^ t o t h e r K x w^ (10) Financial reference period 1996-99: Regulation (EC) No 1488/96 (including amount s reserved fa risk-capital transactions and interest subsidies fa EIB funding of environmental projects. (11) Algeria (12) Indicative programme 1996-99; main items of the financial allocation agreed at Can (13) Reserved fa interest subsidies fa loans granted by the EIB to infrastructure projed country is also eligible fa aid from the financial allocation agreed at Cannes (1995) nes(1995). s of interest both to the Community and FYROM. This (14) Financial reference period 1996-99. (15) Commercial credits. (16) Fa applicants fa EU membership:Hungary, Poland, Slovak Republic, Czech Repii blic, Bulgaria, Romania, Estonia, Latvia, Lithuania, Sovenia and Cyprus. -39 ISSN 0254-1475 COM(98) 409 final DOCUMENTS EN. 09 10 01 Catalogue number : CB-C0-98-422-EN-C ISBN 92-78-37569-1 Office for Official Publications of the European Communities L-2985 Luxembourg <H>