European Investment Bank stops loans to Syria

Published August 29th, 2011 - 05:44 GMT
Syrian president
Syrian president

Non-official data published recently by the Syrian media revealed that the European Union has stopped all loans from the European Investment Bank to Syria, valued at hundreds of millions of euros. Statistics revealed that most of the loans were earmarked for development projects or the support of development and modernization of infrastructure and transport, including financing  part of a European civilian aircraft deal to modernize the Syrian fleet.

The European Investment Bank was contributing to the financing of two projects for health care and water with a value of 185 million euros in addition to other health care projects reaching a total value of 260 million euros. The projects aim to build and equip 8 new hospitals. The loan value of the Syrian Afaq water 2020 project is about 55 million euros. More than 370,000 people in 200 different villages would benefit from the project. It also aims to strengthen environmental sustainability by decreasing the amount of sewage deposits flowing into the Mediterranean Sea.

Among the loans is a 150 million euro loan to develop the municipal administration of Syrian municipalities, a 200 million euro loan to build a natural gas-based power plant of 750 MW near the city of Deir ez-Zor on the Euphrates River in Eastern Syria, and a loan to build a power plant in Deir Ali near Damascus.

There was also a 600 million euro loan to finance the purchase of half the value of airplanes (probably Airbus), which Arabian Syrian Airlines was planning to buy. The European Investment Bank loans provided approximately 50% of the investment costs of the project, at a 7.5% interest rate.

The Syrian Oil Ministry dismissed U.S. and western sanctions imposed on the oil and gas sectors, considering them to be old and their effect limited.

The most prominent option for Syria is to resort to trade crude oil with oil derivatives with one of the countries that are still on good terms with Syria. A second option is to enter an agreement with one of the foreign refineries which will refine the Syrian crude oil into oil derivatives and get paid for the process. (Source: www.yallafinance.com)

 


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