French PM unveils environmental, energy saving plan

PARIS, Oct 5 (Reuters) Prime Minister Dominique de Villepin unveiled a ''national pact for the environment'', offering French households and firms ten billion euros of cheap loans to finance energy saving projects.

Villepin said the money would be available from January, 2007 and drawn from tax-free savings accounts at banks.

He also promised measures to encourage the use of low-emission fuels and said coal would be taxed.

''This pact will draw together all the players. Citizens, companies, local organisations, the state. It will allow everyone to play a role in protecting the environment,'' Mr Villepin said during a regular monthly news conference.

Mr Villepin also announced the creation of new nature parks, including two windswept archipelagos near Antarctica, which are French territories and home to large penguin colonies.

The prime minister's ecology drive comes just seven months before presidential elections and underlines how mainstream parties are eager not to let the Greens party have a monopoly on environmental issues.

His announcement also comes at a time when his own approval ratings are rising in the opinion polls, reaching 32 per cent in September from 26 per cent in June, fuelling speculation that he has not abandoned his presidential ambitions.

Mr Villepin's pact included pledges to increase the number of petrol stations around France offering low-emission, ethanol-based E85 fuel at its pumps as part of a move to ease France's dependency on fossil fuels.

Some 100 million euros would be given for further research into the development of hybrid motors.

The ten billion euros for energy-saving programmes will come from so-called Codevi accounts, which pay 2.75 per cent a year interest and are currently capped at 4,600 euros per person.

To raise the extra funds, Villepin said this ceiling would be lifted to 6,000 euros from January one.

''The aim is to mobilise the savings of French people to help the environment,'' Mr Villepin said.

REUTERS BDP KP0855