ACP and EIB celebrate 50 years of partnership
Luxembourg, 9 July, 2013/ ACP: Marking five decades of doing business in the African, Caribbean and Pacific (ACP) regions, the European Investment Bank (EIB) hosted the ACP Committee of Ambassadors at its headquarters in Luxembourg to review successes, as well as areas for improvement in financing investment projects in the ACP.
Opening the discussions, EIB’s Secretary General Mr Alfonso Querejeta said the milestone anniversary was “worthy of celebration”, highlighting a total lending of more than EUR 16 billion to date. This funded over 1300 projects in 92 countries, including the ACP and the EU’s Overseas Countries and Territories (OCTs).
Last year alone, the bank signed EUR 644 million for loans in ACP countries, mostly for projects in the financial and energy sectors, climate change mitigation, infrastructure and transport development. Lending to the ACP and OCTs makes up 10 per cent of the EIB’s activities, equal to EUR 7-8 billion annually.
The EIB’s ACP Investment Facility was highlighted as a means for private sector growth, lending more than EUR 3 billion for 205 projects since its creation 10 years ago. This year, the EU agreed to make available an additional 500 million for the facility.
“The growth of ACP countries will continue to require private sector involvement… Small and medium size businesses (SMEs) are an essential focus of private sector activities. The Bank has at its disposal a wide range of instruments to support SMEs [and] many of these instruments can be tailored to address gaps in other regions of the world, including the ACP,” said Mr Querejeta.
However, the Chair of the ACP Committee of Ambassadors H.E Samuel Outlule of Botswana underlined areas for improvement in order for ACP citizens to make better use of the funds.
“The needs of SMEs continue to be enormous and there is a dearth of trade finance targeting SMEs – this needs to be significantly enhanced to bring about economic transformation. The EIB is in a unique position to use its resources to leverage additional resources from other parties,” he told the meeting.
Ambassador Outlule stressed the high cost of accessing EIB funds and noted the use of blending loans and grants to lower the cost for ACP states. He called for a stronger EIB presence on the ground in ACP regions, for example in the Pacific, where funds have been especially slow to be disbursed. He also urged the use of local intermediaries, and a “smarter” working relationship between the EIB and the ACP Secretariat in order to take advantage of the funds available and improve business opportunities for the EIB and local entrepreneurs.
“We should reflect on the governance of the investment facility – especially the ACP’s near absent role despite being major stakeholder,” he added.
ACP Secretary General H.E Mr Alhaji Muhammad Mumuni echoed the need to review the amount of lending provided to the 79 members of the ACP Group. A recent study estimated the financing gap for infrastructure and trade finance in Sub Saharan Africa alone as more than EUR 250 billion each year.
“Clearly, we have to identify and mobilise more resources if we are to realise the growth and development that we have targeted for the ACP Group. An ACP Bank or other suitable financial entity will be an essential requirement for mobilising and allocating those additional resources,” stated the Secretary General.
The EIB and the ACP Secretariat agreed to work more closely to address the issues raised. The bank confirmed that its cooperation with ACP countries is set to increase in the future.
The EIB finances investment projects in the ACP and OCT regions under the ACP-EC Partnership Agreement (Cotonou Accord) and the Overseas Association Decision. Financing is provided from the European Development Fund, EU member states’ budgets and EIB own resources. See www.eib.org
– ACP Press