Intensified focus on ACP private sector at EIB annual visit
Luxembourg, 11 July 2014/ ACP: ACP countries reaffirmed the role of the private sector as the engine of growth at the annual gathering of African, Caribbean and Pacific Ambassadors hosted by the European Investment Bank, where special focus was given to microfinance and Small and Medium Enterprises (SMEs) in ACP countries.
ACP Secretary General H.E Alhaji Muhammad Mumuni said recent developments show a renewed commitment in ACP states to expanding the sector. The ACP Group recently adopted a Strategic Framework for Private Sector Development in April 2014, and shortly after in June, the Council of Ministers approved a Joint ACP-EU Cooperation Framework for the sector under the 11th European Development Fund.
“The time is now ripe for private sector development… Now more than ever, the ACP Group knows exactly where it wants to go in terms of private sector support,” the Secretary General told the meeting, which included EIB President Mr Werner Hoyer who opened the event, as well as representatives from the European Commission, ACP missions in Brussels, and some establishments financed through EIB.
Vice President Mr Pim Van Ballecom highlighted key areas of notable action by the bank in ACP countries, including infrastructure investment in energy, water, transport and telecommunications; support for local entrepreneurs and smaller projects through partnerships with local banks; and climate action – that is, support for investments that cut harmful emissions while boosting resilience to climate change. Nearly two thirds of the EIB’s overall portfolio goes to the private sector.
Presentations by the Lake Turkana Wind Power and Family Bank in Kenya, as well as Microcred in Côte d’Ivoire, showcased success stories for projects financed through loans from EIB.
Chair of the ACP Committee of Ambassadors, H.E Dr Diodorus Kamala welcomed the progress, and urged the bank to continue exploring more flexible access to financing.
“We must not be afraid of innovation and to test new approaches. In 2013, the EIB set up its first SME guarantee system in ACP countries and granted its first medium-capitalisation loan to an ACP enterprise… We also appreciate the 500 million euros provided as additional resources for the Investment Facility to support risky projects with a high social impact. The Committee of Ambassadors will closely monitor the implementation of this instrument between 2014 and 2020,” said Dr Kamala.
He further proposed four areas for EIB support to ACP private sector: long term and affordable project finance, as lending is dominated by commercial banks which provide short term and expensive finance; investment in SMEs and fueling growth of Private Equity and Venture Capital through the Investment Fund where EIB owns more than 60%; support for local financial institutions so they can expand their lending to SMEs; and support for private sector foundations through skills development, programme financing, and intermediate financing.
He called for private sector support under the 11th European Development Fund (EDF) to be carried out in such a way to guarantee lasting impact and measurable results in ACP countries.
EDF 11 (for the period 2014-2020) allocates €1.1 billion the Investment Facility managed by EIB; and €2.5 billion to EIB for loans with reduced interest rates.
(Photo: Delegates at the 2014 annual visit of ACP Ambassadors to the European Investment Bank headquarters in Luxembourg/ Courtesy of EIB)
– ACP Press