COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 30.10.1995 
COM(95)5()7 final 
REPORT FROM THE COMMISSION TO THE COUNCIL 
AND THE EUROPEAN PARLIAMENT 
on the implementation of EBB loans for projects of mutual interest 
in countries of Asia and Latin America (ALA) that have concluded 
cooperation agreements with the Community 
(1994-95) 

CONTENTS 
1. Introduction 
2. Legal framework 
3. The Bank's mandate in Asia and Latin America in relation to its activities outside the 
Community 
4. Results of the second year of activity 
5. General comments on operations and assessment of the Bank's action under its 
mandate in Asia and Latin America 
Annex 1: Lists of countries in Asia and Latin America which have concluded 
cooperation agreements with the Community and framework agreements with 
the EIB 
Annex 2: Summary table of decisions taken by the EIB Board of Directors between 
23 February 1993 and 22 February 1995 
.-3-
1. Introduction 
This annual report on the activities of the EIB in a number of Asian and Latin American 
countries has been drawn up in accordance with Council Decision 93/115/EEC of 
15 February 1993 (OJ No L 45 of 23 February 1993). It relates to the second year of 
implementation of the Bank's new mandate and covers the period from 23 February 1994 
to 22 February 1995. The report on the first year was sent to the Council and the 
European Parliament in July 1994 (COM(94) 299 of 8 July 1994). 
As well as giving a factual account of operations during the second year of activity, this 
report assesses experience gained from the beginning. The assessment is more meaningful 
than that made a year ago since it relates to a total commitment (for both years) of 
ECU 500 million (as against ECU 250 million for 1993) in respect of 13 projects (six in 
1993) in ten different countries (four in 1993). 
2. Legal framework 
The legal and institutional framework of the mandate given to the Bank in Asia and Latin 
America is laid down in the following decisions and documents: 
Council Decision of 19 May 1992 calling on the Bank to take action in those 
countries in Asia and Latin America which had concluded cooperation agreements with 
the Community.1 This decision covers a period of three years and provides for an annual 
budget of ECU 250 million. It specifies that the loans will be used for projects of mutual 
interest that satisfy the Bank's usual criteria; 
Council Decision 93/115/EEC of 15 February 1993, granting a Community 
guarantee to operations financed in this connection, 
Decision by the EIB Board of Governors of 22 February 1993 authorizing the 
Bank to undertake these activities to an aggregate amount of ECU 250 million per year 
for a period of three years on condition that the loans granted are frilly guaranteed by the 
Community; 
Contract of guarantee signed by the Community and the EIB on 4 and 
17 November 1993 This document refers to the above texts and stipulates that the 
guarantee will apply for a period of three years ending on 23 February 1996. 
In addition to these texts constituting the legal basis for its mandate, the Bank, in 
accordance with the practice adopted lor other geographical areas, signs with the 
countries where it grants loans a "framework agreement" laying down the legal, tax and 
financial frameworkfor its activities in the country in question. 
Them are thii^ sucb ONimfics(tlértccsœ Asia, seventeen in Ufm Aneiica). Serfittaf Annex I 
3. The Bank's mandate in Asia and Latin America in relation to its activities 
outside the Community 
The mandate given to the Bank in Asia and Latin America is a follow-up to those 
performed in the ACP countries, the Mediterranean countries, and the countries of Central 
and Eastern Europe. It confers on the Bank special responsibility for supporting the 
Community's cooperation policy. Most of the Asian and Latin American countries 
concerned by this new EIB mandate have historical, cultural and economic ties with the 
countries of the European Union. These long-standing ties are reflected in a cooperation 
policy which was established by the Community in 1976 with a number of these countries 
and broadened over the years up to the 1992 and 1993 decisions concerning action by the 
Bank itself. 
The Bank's activities in Asia and Latin America attracted greater interest among the 
countries concerned (the ALA countries and the EU Member States) and among 
European firms and economic operators during the second year of operations. The 
complementary role which the Bank can play in these regions is confirmed by experience. 
The international financial community also continues to view the EIB's action as a useful 
adjunct to its own operations. In two years, the Bank has thus consolidated its position as 
a lender in the Asian and Latin American countries. These points are developed in detail 
in section 5 below. 
4. Results of the second year of activity 
During the second year of activity ending on 22 February 1995, the Bank's Board of 
Directors approved the seven projects listed in the table below totalling ECU 250 million. 
A further ECU 8 million project was approved under the global authorization of 
ECU 20 million granted in the first year. 
A summary table giving more details about project commitments and signings up to the 
end of the second year of activity is set out in Annex 2. 
-5 
List of projects approved by the EIB during the second year of activity 
Country Sector Amount 
committed 
(ECU m) Mutual interest 
Latin America 
Brazil sanitation/water 
Chile 
Peru telecommunications 
transport 
Asia 
Indonesia gas transmission 
Pakistan energy 
Philippines transport 
Philippines industry 
{Indonesia)2 (financial sector) 40 considerable improvement of 
the environment 
75 Euro-Chilean project for 
managing a public service 
concession; regional and 
international integration; 
transfer of European 
technology 
27 regional integration; 
providing better access to 
isolated areas 
24 considerable improvement of 
the environment by 
substituting gas for 
petroleum products; transfer 
of European technology 
36 more rational use of energy; 
transfer of European 
technology 
25 regional and international 
integration 
23 Filipino-European joint 
venture; European supplies; 
European guarantor; 
improvement of the 
environment 
(8) (Euro-Indonesian joint 
venture) 
This Indonesian private project was approved under the global authorization sel in place during the 
picvieBsycf (ECU 8 milhon). 
-6-
5. General comments on operations and assessment of the Bank's action under its 
mandate in Asia and Latin America 
5.1 Unlike the first year, which was a start-up period, demand substantially exceeded 
the funds available in the second year. As in the first year of activity, funds up to the 
annual ceiling of ECU 250 million were committed. This is hardly surprising in view of 
the absorption capacity of the two regions concerned, in which the flow of investment is 
high due to strong economic growth. Most of the countries eligible are classed as 
emerging countries. 
5.2 In accordance with the Bank's mandate, projects financed will benefit both the Asian 
and Latin American countries concerned and the European Union. In line with this 
specific concept of mutual interest, operations in the second year continue to satisfy one 
or more of the following criteria: regional integration, improvement of the environment, 
transfer of European technology, joint ventures bringing together European and local 
firms, or the granting of concessions to private enterprises for investing in and running 
public services. The share taken by the private sector is growing gradually, and European 
operators are increasingly turning to the EIB. Three out of the eight projects approved in 
the reporting period were private and were allocated a total of ECU 106 million (42% of 
the annual ceiling), as compared with one project accounting for ECU 46 million in the 
first year. This trend is continuing as regards the projects currently being examined for 
1995; the investments concerned bring European and local interests into direct 
partnership. 
5.3 The average size of operations fell from ECU 46 million3 in the first year to 
ECU 36 million in the second year. An average size of loan of this order of magnitude 
allows adequate geographical distribution of the ECU 250 million annual ceiling and is 
compatible with the Bank's objective of keeping the cost of its operations within 
reasonable limits. 
5.4 A better balance was achieved as regards the sectoral breakdown of operations in 
the second year through lower commitments in the energy sector and greater 
diversification: 
energy transport telecommunications environment industry 
second year 24% 21% 30% 16% 9% 
(first year) (74%) (18%) -- - (8%) 
The average contribution in the first year works out at ECU 46 million if the global authorization of 
ECU 20 million, which is intended rather for small and medium-sized investment projects, is 
disregarded. 
5.5 As far as geographical breakdown is concerned, the Bank has kept up its 
endeavours to maintain wherever possible a fair balance between the two regions 
concerned and between individual countries. The geographical breakdown between the 
two regions thus varied only slightly: 57% for Latin America (54% in the first year) and 
43% for Asia (46% in the first year) (see Annex 2 for details). All the second-year 
operations concerned countries which had not received EIB loans during the previous 
year. Operations focused on a limited number of countries,4 with preference being given 
to those countries for which the type of finance proposed best meets the needs of 
borrowers. Some priority was also given to areas or countries which are strengthening 
their ties with the Community (Mercosur, Chile, ASEAN group, southern Asia, etc.) 
5.6 Fruitful cooperation continued with multilateral and bilateral financial 
institutions. Five out of the eight new operations are being financed jointly with one or 
two multilateral institutions (Asian Development Bank, Inter-American Development 
Bank, World Bank) (see Annex 2). Despite the growing number of projects financed in 
partnership with the private sector, it is desirable to foster cooperation and good relations 
with the multilateral institutions, and such cooperation will therefore be maintained. The 
activities of the Bank and of the other multilateral institutions complement each other at 
project level (public projects and also private projects, in which these bodies are becoming 
increasingly involved). The studies produced by the above institutions furthermore 
constitute a valuable source of general, geographical and sectoral information. 
5.7 Cooperation with the European banking sector. Cooperation has also been 
developed with the European banking sector in the sphere of both guarantees and direct 
joint financing. 
5.8 In the second year, framework agreements establishing the general legal bases for 
carrying out projects in both the public and the private sector were concluded between the 
EIB and seven more countries (Argentina, Brazil, Chile, Pakistan, Peru, the Philippines 
and Paraguay). A full list of framework agreements signed up to the end of the second 
year is given in Annex 1. 
Operations were approved in the first two years in ten out of the thirty countries theoretically 
citgibk (sec Aancx 2). Mexico is a special case: a project was identified and finance approved by 
the Board of Directors, but approval was withdrawn following Mexico's decision not to go ahead 
8-
ASIA AND LATIN AMERICA 
1. List of countries which have concluded 
a cooperation agreement with the European Community Annex 1 
ASIA LATIN AMERICA 
ASEAN group (Brunei, Indonesia, 
Malaysia, Philippines, Singapore, Thailand) 
Bangladesh 
China 
India 
Macao 
Pakistan 
Sri Lanka 
Mongolia Andean group (Bolivia, Colombia, 
Ecuador, Peru, Venezuela) 
Central American countries 
(Costa Rica, Guatemala, Honduras, 
Nicaragua, Panama, Salvador) 
Argentina 
Brazil 
Chile 
Mexico 
Paraguay 
Uruguay 
2. List of countries which have concluded 
a framework agreement with the EIB 
(situation at 22 February 19955) 
ASIA LATIN AMERICA 
India 17/25 November 1993 
Pakistan 25/28 February 1994 
Philippines 15 September 1994 
Thailand 10/17 January 1994 Argentina 
Brazil 
Chile 
Costa Rica 
Paraguay 
Peru 3 October 1994 
19 December 1994 
7 October 1994 
30 November 1993 
19 September 1994 
2 October 1994 
Between 23 February and 31 May 1995, further framework agreements were signed with Colombia, 
Mexico and Uruguay. Agreements are being negotiated with China, Panama and Indonesia. 
ANNEX 2 
SUMMARY TABLE OF DECISIONS TAKEN BY THE EIB BOARD OF DIRECTORS BETWEEN 23 FEBRUARY 1993 AND 22 FEBRUARY 1995 
Country 
Costa Rica 
Argentina 
Argentina 
Chile 
Peru 
Brazil 
TOTAL 
LATIN AMERICA 
India 
Thailand 
ALA 
Pakistan 
Philippines 
Philippines 
Indonesia 
TOTAL ASIA 
TOTAL 
GRAND TOTAL Project title 
ICE Costa Rica 
Mercosur highway 
BAN (Buenos Aires Norte) 
natural gas 
CTC (Compafiia de 
Teléfonos de Chile) 
Pan American Highway 
CESAN 
Powergrid 
Erawan gas pipeline 
Global authorization 
KESC 
Davao airport 
DUCC cement 
Gas transmission (Sumatra) Sector 
Energy (public) 
Transport (public) 
Distribution of natural 
gas (private) 
Telecommunications 
(private) 
Transport (public) 
Sanitation (public) 
Energy (public) 
Natural gas 
transmission (public) 
Industry in the private 
sector 
Energy (public) 
Transport (public) 
Industry (private) 
Gas transmission 
(public) Amount committed (ECU million) 
(approved by the Board of Directors) 
2/93 - 2/94 2/94 - 2/95 
44 
45 
46 
135 (54%) 
55 
40 
20 
115(46%) 
250 (100%) 75 
27 
40 
142 (57%) 
36 
25 
23 
24 
108 (43%) 
250 (100%) 
500 Amount signed 
(ECU million) 
44 
46 
75 
165(52%) 
55 
40 
36 
23 
154(48%) 
319 (64%) 
319 Remarks 
Joint financing with the Inter-American Development Bank (IDB) 
Joint financing with the IDB 
Private project - public service concession 
Private project - public service concession 
Joint financing with the IDB 
Joint financing with the World Bank 
Joint financing with the World Bank 
Joint financing with the World Bank and the Asian Development Bank 
(AsDB) 
Used in 1994 for a project in the private financial sector in Indonesia 
(ECU 8 million). The available balance is to be used in 1995 for a 
private project in Pakistan 
Joint financing with the AsDB 
Joint financing with the AsDB 
Private project - industrial joint venture 
Joint financing with the AsDB 
EIB loan for the project: ECU 46 million, of which 24 million allocated 
under the 1994 budget and 22 million under 1995 

ISSN 0254-1475 
COM(95) 507 final 
DOCUMENTS 
EN 01 11 
Catalogue number : CB-CO-95-546-EN-C 
ISBN 92-77-94858-2 
Office for Official Publications of the European Communities 
L-2985 Luxembourg