EIB plans EUR 50-billion ‘pool of euro debt’

Date: 28/01/1999

By Tim Jones

THE European Investment Bank is planning to double its borrowing in the new single currency in a bid to nurture the four-week-old market for tradable euro-denominated debt.

In its annual report published next week, the EIB will unveil a programme to create a €50-billion “pool of euro debt” through old-for-new exchanges of bonds, redenomination of existing securities and new issues.

The EIB is the world's biggest non-governmental issuer of euro debt, and has close to €20 billion in various instruments outstanding in the market. In 1999, it plans to raise around €30 billion on the world's capital markets - the same amount as last year.

The bank, which is the EU's agency for long-term capital investment, requires the funds to match lending to infrastructural projects within the Union and beyond.

EIB lending increased significantly last year, up from €25 billion in 1997 to €30 billion. More than €8 billion was handed over to Trans-European Networks (TENs) - a web of 24 transport, energy and communications projects - of which €3 billion went to telecommunications schemes.

When he unveils the EIB's annual report next Thursday (4 February), President Sir Brian Unwin will also hail the success of the bank's job-creation programme, which was agreed at the Amsterdam summit in June 1997.

This mandates the EIB to concentrate spending on job-creating small companies as well as education, health and urban renewal projects. The bank has spent €600 million over the past 15 months on job-creating investment for small and medium-sized enterprises, €3 billion on education and health, and €2.5 billion on the environment and urban renewal.