PRAGUE – The European Investment Bank will step up borrowing in East European currencies this year to foster growth of capital markets in new EU member states and future candidates, a senior official told Reuters earlier this week. David Clark, the EIB’s head of funding in non-eurozone European states and Africa, said the AAA-rated borrower would raise its issuance in currencies of the region’s mostly post-communist states to the equivalent of 1.5-1.6 billion euros. «This is a small proportion of our overall funding of 47 billion euros for the year, but it is very important because the EIB’s main mandate now is to finance development in the acceding countries,» he told Reuters while attending a business conference. The European Union’s arm for long-term financing has become an active borrower and crucially a key lender to finance road construction and other infrastructure projects in the region. Last year the bank, which is owned by EU member states, issued its first bond in Slovak crowns. In total, it raised the equivalent of 1.3 billion euros in the region’s four main markets, the Czech Republic, Hungary, Poland and Slovakia, which are all among the 10 states joining the EU this May. This year, the bank is planning to branch out at least to Slovenia, another country about to join the EU. Clark said the EIB would probably kick off with a straight coupon international bond issue in Slovenian tolar. «Slovenia is a very obvious candidate for issuance this year. Croatia is a good possibility. As far as Bulgaria and Romania are concerned, we will have to see,» he said. A former Yugoslav republic, Croatia may become a formal EU candidate this summer and hopes to join the rich Western bloc after Bulgaria and Romania, which are eying entry in 2007. So far this year, the EIB has issued the equivalent of more than 500 million euros, tapping markets in EU newcomers Hungary, Poland and, for the first time, Malta, where it launched a domestic bond. It also did its debut international issue linked to the Turkish lira. Turkey is another EU hopeful, but its membership talks have not started yet and it is not seen joining any time soon. «I do not think we will reach quite the same rate of growth (in issuance) as last year, when the 2003 volume was more than 100 percent greater than in 2002,» said Clark. «But I think there is a good chance of doing between 1.5 billion and 1.6 billion euros this year.» He said the EIB was looking to launch a 10-year domestic bond this year in Poland. «We are currently looking at developing as many markets as we can in the accession countries, in the pre-accession countries and also in the Mediterranean area.» «In terms of workload at the moment, I think Morocco is where we put most effort into and we are keen to do something,» said Clark.