Beijing Capital International Airport will obtain a large loan of 500 million euros from the European Investment Bank for its extension project. It is learned that this loan is the largest the bank ever provides in China.

This 500 million euro (4.96 billion RMB) loan will be used to ensure that the extension project of the Beijing Capital International Airport can be completed before the 2008 Olympics.

The loan is a long-term, low-interest one, with a repayment term of 25 years. It indicates that the EU hopes to further strengthen the economic and trade relation with China.

Yesterday, sources from the Capital Airport said that agreement on the loan will be signed during the Sino-Europe Economic Summit to be held on Sept. 5th.

China Securities analyst Li Lei said that under the pressure of extension and merger, the Capital Airport needs financing overseas via banks. Domestic banks also support the airport; however, under the anticipation of RMB appreciation, it is better for debtor to absorb foreign loans.

Once the RMB appreciates, the Capital Airport will benefit from the RMB to euro exchange rate. Therefore, the Capital Airport did not choose a domestic bank.

(Chinanews.cn August 30, 2005)