§ Mr. Fallonasked the Chancellor of the Exchequer if he will report on the outcome of the recent meeting of the European Investment Bank's board of' directors with respect to a possible European Investment Bank loan to Eurotunnel.
§ Mr. BrookeThe EIB's Board of Directors agreed on Tuesday 12 May to lend Eurotunnel the equivalent of £1 billion or 10 billion French francs for the Channel tunnel. The text of the EIB's press notice, issued on Wednesday 13 May, is as follows:
At its meeting yesterday, the Board of Directors of the European Investment Bank agreed to lend Eurotunnel the equivalent of a total £1 billion-FF 10 billion (approximately 1.4 billion ECUs) for the Channel tunnel. This decision has been taken in the light of the EIB's independent review of the technical, economic. and financial viability of the project. The EIB regards the Channel tunnel as a project of exceptional importance to the development of the Community's transport network, and a stimulus to the European economy.
EIB funding will be made available, through co-financing arrangements, in association with a syndicate of international banks led by National Westminster, Credit Lyonnais, Banque Nationale de Paris, Midland and Banque Indosuez. The EIB's loans will be secured by guarantees provided by the participating banks until the successful completion of the project and thereafter by a charge on the project assets and revenues. No Government funds or guarantees are involved.
The EIB loans will primarily be at fixed interest rates and for a range of maturities of up to 25 years. They will be phased over the project's six-year construction period (1988–1993). The terms will reflect prevailing market conditions.
The conclusion of contractual arrangements for the loans between the EIB and Eurotunnel will be subject to passage of the necessary legislation, the finalisation of arrangements with the railways, and successful completion of bank syndication and the forthcoming equity issues.