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European Bank approves loans amounting to ECU 187.4 million for two Polish projects
The Board of Directors of the European Bank for Reconstruction and Development today announced two loans for Poland: a loan of US$170 million (ECU 133.4 million equivalent) to Telekomunikacjia Polska Spolka Akcyna (TPSA), a joint stock company wholly-owned by the state; and a loan of US $67 million (ECU 54 million equivalent) to the Republic of Poland to help finance residential construction projects by private and public developers across Poland.
Mario Sarcinelli, Vice President in charge of Development Banking, said: "The Bank is happy to embark on these projects which will improve the quality of telecommunications service in Warsaw, and promote housing construction. Both projects will have the added benefit of supporting business development and creating local employment opportunities."
The loan to TPSA, which is guaranteed by the Republic of Poland, will finance a project to modernise and expand the telecommunications system in Warsaw as well as the northern, western and eastern suburbs. Expansion will be achieved by increasing the capacity of transmission lines and exchanges by approximately 368,500 line units, as well as by connecting about 332,000 new subscribers. This will increase the density of the direct exchange lines in the Warsaw district from 22 per 100 inhabitants (1991) to 35 (1995).
The total cost of the project is estimated at about ECU 343.9 million: the European Bank will provide ECU 133.4 million; ECU 92 million will come from commercial and export credits provided by suppliers of telecommunications equipment; and ECU 118.5 million from TPSA.
The housing project consists of a line of credit to finance residential construction projects by private and public developers. The Polish Ministry of Spatial Economy and Construction and the Polish Bank Rozwoju Budownictwa Mieszkaniowego S.A. will be the executing agencies on behalf of the Government. The objective is to increase the number of housing units and promote a financially sound, market-oriented housing sector.
The total cost of the project is ECU 268.4 million to be financed as follows: European Bank loan, ECU 54 million; World Bank loan, ECU 80.6 million; ECU 26.6 million from the Polish Government; ECU 40.3 million from Polish banks; and ECU 66.9 million from other investors.
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