Global Eib Loans For Smes

W.U.S. WORLD UNION OF SMALL AND MEDIUM ENTERPRISES under foundation

Project Financing of Small and Medium Enterprises Global South Lending of EIB – European Investment Bank by Dr. Norbert W. Knoll-Dornhoff, Secy.-General (incumbent) Budapest, 12th May 2009

I.

Introduction

1.

The European Investment Bank as International Financial Institution (IFI)

In the five decades from foundation, the European Investment Bank (EIB) has become one of the most powerful International Financial Institutions in the world. Operating on behalf the EU Governments who are the owners, the EIB lends about 45 billion EURO a year for projects helping development and cohesion of the European Union. In the 1960's the EIB started to finance projects in Africa and today about 10% of the EIB's financing is outside Europe, in Countries from China to Brazil. This lending covers a wide spectrum of project investments including energy, water, communication, Industry, Small and Medium Enterprises (SMEs) and financial intermediaries. 2.

Global South Lending

In recent decades, the EIB has become an important player among International Financial Institutions (IFIs) lending to Countries in the Global South. The EIB is increasingly involved in lending operations outside the European Union, in particular in the Private Sector. Of all IFI lending in Latin America from 1979 to 2005, the EIB's Private Sector Support ranked second after the World Bank. It was ranked the fourth largest IFI Private Sector Lender in Asia.

3.

Contents and aims of the Report

This Report contains the following information: 3.1. a) b) c) d) e) f) g)

Contents EIB’s SMEs Investment Support Lending in Asia and Latin America Overlook Financial Instruments offered by EIB Global Loan Facility European Investment Fund – Venture Capital and Guarantees Global Loans and Guarantees for SME within EIB’s South Lending EIB Authorised Financial Institutions for South Lending programmes

3.2 Conclusions and Recommendations for actions a) Conclusions b) Recommendations for actions • • 3.3

WASME Headquarters Permanent Mission WASME to UNIDO ANNEX

„A” - Global Loans for SME 2000 – 2007 under appraisal, approved, signed. “B” - EIB Funding - breakdown by regions and countries “C” - Cotonou Agreement “D” – EIB authorised Financial Institutions

II. 1.

EIB’s SMEs Investment Support Supporting investment by Small and Medium sized Enterprises (SMEs) is a key focus for the EIB’s operational activities.

The EIB Group's range of financing instruments meet the many needs of SMEs. The Group supports SME investment indirectly through credit arrangements with local intermediary banks and financing institutions. Requests for financing under these credit lines should be addressed directly to the financial intermediaries with whom the EIB has concluded such agreements. The most widely available EIB Group facilities to support SMEs are: • • • •

EIB lines of credit for SMEs arranged with local banks EIF venture capital activities EIF SME portfolio guarantees JEREMIE - Joint European Resources for Micro to Medium Enterprises

2. The EIB - a development partner for SMEs outside the European Union a)

The European Investment Bank is the European Union’s long term financing arm. While most of its operations are in the EU, it also contributes to the EU’s development aid and co-operation policies in other regions and countries. The Bank is project-oriented, financing mainly the fixed-asset components of capital investments. Such projects have to be technically sound, financially viable, show an acceptable economic return and comply with environmental protection, procurement regulations and prevailing social legislation and norms. These criteria apply to all projects financed by the Bank, both within and outside the EU.

The EIB has been a development partner, supporting projects in developing and emerging countries, notably in the African, Caribbean and Pacific states (ACPs), for more than 40 years. Over these years, it has acquired an extensive knowledge of the countries in which it works, their investment climate and the reality of operating in them. b) In particular, the Bank supports EU co-operation policies through: • •

a wide range of financial products (loans, equity, guarantees or quasi-equity instruments); financing sound and productive investments mainly in sectors that generate revenues for the products and services provided.

The Bank’s expertise and comparative advantage lie, in particular, in fields such as infrastructure, environment and Small and Medium-sized Enterprises (SMEs), where it seeks to pass to project promoters its technical and economic know-how. Other benefits of EIB operations in developing countries are related to the Bank offering very long maturities at interest rates closely following its borrowing on capital markets or an extended range of flexible risk bearing financial instruments. This offers

particular advantages to borrowers in countries suffering from scarcity of long-term funding on the local capital markets and limited access to international capital markets. c) Poverty reduction Sustained high levels of economic growth are essential for poverty reduction. Meeting basic social needs through grant funding is indispensable to help populations survive. However, economic growth is required to break the vicious circle of poverty. The EIB, being a bank, provides the financial resources required to promote the investments that will generate growth, thereby contributing to sustainable poverty reduction and social improvement. The above is reflected in the various mandates under which the Bank operates in emerging and developing countries: d) African, Caribbean and Pacific states: Private sector development is considered as essential for economic growth. This is a central objective of the Cotonou Partnership Agreement between the EU and the ACP states, and under which the EIB operates in the region. The Cotonou Agreement has established the Investment Facility (IF), a revolving fund aimed at being financially sustainable whilst meeting the development objectives of the Agreement. It is managed and operated by the EIB and is focused on supporting private sector development. “The prime objective of the IF is to further the Cotonou Agreement’s goal of reducing poverty in the ACPs, by contributing to sustained economic growth, private sector development, increased employment and improved access to productive resources. It aims to operate in all sectors and to support investments by private enterprises and commercially run public sector entities, including revenue-generating infrastructure critical for the private sector” (Annex II, Chapter 1, Article 3, par. 1 of the Cotonou Agreement).” e) Asia and Latin America (ALA) In line with the EU Council Decision on the ALA mandate EIB finance is targeted at productive investment that contributes to economic development and growth and supports projects of mutual interest for the recipient countries and the EU. Projects in the ALA regions therefore involve a reciprocal flow of benefits between the EU and one or more beneficiary countries.

III.

Lending in Asia and Latin America

1. EIB lending in Asia and Latin America (ALA) started in 1993 and is governed by mandates from the European Union (EU). Under the current mandate (ALA IV), covering the period the 2007-2013, the EIB is authorised to lend up to EUR 3.8 billion for financing operations supporting the EU co-operation strategies in these regions and complementing other EU development and cooperation programmes and instruments in these regions. The EUR 3.8 billion regional ceiling is broken down into indicative sub-ceilings of EUR 2.8 billion for Latin America and EUR 1.0 billion for Asia. There are no amounts allocated per country. The countries currently eligible for EIB financing under the ALA IV mandate are: 2.

Asia

Brunei, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Vietnam ASEAN Group Bangladesh, China, India, Mongolia, Nepal, Pakistan, South Korea, Sri Lanka, Yemen. 3. Latin America • • •

•

Bolivia, Colombia, Ecuador, Peru, Venezuela - Andean Community Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua - Central American Common Market Argentina, Brazil, Paraguay, Uruguay - MERCOSUR Chile, Mexico, Panama

4. Types of projects The EIB can support viable public and private sector projects in infrastructure, industry, ago-industry, mining and services. Special emphasis is given to projects that contribute to environmental sustainability (including climate change mitigation) and to the security of the EU energy supply. The other core sector of activity will be to support the EU presence in those regions through Foreign Direct Investment, transfer of technology and know-how. EIB loans are project-oriented and linked to the financing of the fixed-asset components of an investment. a) Projects with a total investment above EUR 25 million can be financed either directly to a project promoter or indirectly through a government or financial intermediary. Project promoters are required simply to provide the Bank's Operations Directorate with a detailed description of their capital investment together with the prospective financing arrangements. The total investment of a typical project under the ALA III mandate is above EUR 40 million.

b) For smaller projects the EIB can lend through credit lines to selected financial institutions, which then on-lend the funds mainly to small and medium-sized enterprises (Smells). The financial institutions assess each project, assume the credit risk and set the loan conditions for the final beneficiary according to criteria agreed with the EIB. Interested promoters of such projects should contact the banks and intermediaries directly. c) EIB does not provide grants or subsidies for projects in Asia and Latin America.

IV.

Financial Instruments offered by EIB

1. Financing facilities (overlook) The EIB offers various financial services to support projects, depending on eligibility and project category. 1.1

1.2

1.3

2.

Individual loans Requests for individual loans can be addressed directly to the EIB, without specific formalities, either to its headquarters in Luxembourg, or to one of its external offices (EIB addresses). Credit Lines (so-called EIB Global Loans) Small and medium sized investments are supported via credit lines arranged with national, regional and local banks. Financing requests should be addressed directly to one of the FI. Venture capital Requests for venture capital should be addressed directly to an intermediary. See www.eif.org to obtain the list.

Structured Finance Facility (SFF)

3. Credit Lines (so-called EIB Global Loans) These credit lines are made available to banks, leasing companies or financial institutions, which online the proceeds for small or medium-scale investment projects meeting the Bank's criteria. 3.1

Who can benefit from the proceeds of these credit lines? authorities or Smells. To qualify as an SME, a company must have fewer than 250 employees; an annual turnover not exceeding EUR 50 million; and an annual balance sheet total of up to EUR 43 million.

3.2

For what projects? New capital investment projects worth up to EUR 25 million, undertaken by SMEs or, in the case of small infrastructure projects, by local authorities.

3.3

What type of investment? Corporate investment, especially by small and medium-sized industrial and service companies, investment in advanced technologies, R&D projects, rational use of energy, environmental protection, water supply and sanitation projects, other infrastructure projects, particularly in regional development areas.

3.4

For what amount? A maximum of EUR 12.5 million and up to 50% of the investment costs.

3.5

Loan period, interest rates, repayment, currencies, guarantees, provisions/fees: Determined by the respective EIB partner bank. Maturities typically range between 5 and 12 years. Lending decisions under these schemes remain with the financial intermediaries.

3.6

How to apply? Directly to one of the intermediary banks and financing institutions, which operate on a national, regional or local level.

4.

Conditions of EIB Lending

a) The EIB provides long-term loans, running from approximately 4 to 20 years (possibly more), depending on the economic life of the assets to be financed. As well as fixed interest rates, the Bank can offer revisable fixed and convertible rates, allowing for the change of interest rate formula during the life of the loan at predetermined dates or periods. EIB variable rate loans are usually available at a spread below LIBOR, fixed for the full maturity of the loan at the time of each draw down. b) In addition to its usually advantageous lending rates, the EIB normally charges neither commitment fees nor non-utilisation fees, but fees for a project’s appraisal and required legal services may be applicable in certain cases. The EIB seeks adequate security for its lending, such as that provided by a bank or banking syndicate, a financial institution, or a large diversified parent company with a good credit rating. In certain circumstances, the Bank may also include a risk margin in the financing arrangements. The EIB seeks assurances that no other creditor is in a more favourable position than itself, taking into account the tenor and expected amount of the commitment. The EIB monitors the project’s progress, and may carry out onsite inspection. It may also prepare an end of project evaluation report. c) How long does the loan procedure take approximately from application to disbursement? An EIB appraisal procedure can take any period of time between 6 weeks to 18 months depending on the project scope, the degree of complication of an operation, and the efficiency of the appraisal process on the part of both the EIB and the project promoter.

d) What are the EIB disbursement procedures? An EIB loan facility, once approved by the Board of Directors, can be drawn down in a number of instalments, according to the borrower's requirements. Typically, an EIB facility is available for use over a two to three year period. Disbursements would be usually at short notice, 10 to 15 days following each disbursement request. The maturity, repayment terms and amortisation profile of each draw down instalment can be chosen by the borrower at the time of disbursement, facilitating active treasury management. Decisions on timing and choice of currencies, maturities and interest rate formulae are kept open and decided upon at the time of each disbursement request. As such, an EIB facility resembles an MTN programme without set-up costs. 5. European Investment Fund – Venture Capital and Guarantees Since 1997, the EIB has been deploying throughout the European Union a venture capital facility designed to strengthen the equity base of high-technology SMEs and those with strong growth potential. Operations under this heading encompass financing for: a) venture capital funds, b) security packages for such funds, c) conditional and subordinated loans. They are being mounted in close co-operation with the banking and financial communities in the Member States. On 7 December 2000, the EIB and the European Investment Fund (EIF) signed a Master Agreement strengthening the relations between the two institutions in general and streamlining the type of operations offered by each institution (see EIB Group). An important point of this agreement concerns the transfer of the management of all existing EIB risk capital investments to the EIF. The EIF will be the only point of contact for all venture capital and SME portfolio guarantee transactions within the EIB group. Consult www.eif.org to find the list of intermediaries.

6. Global Loans and Guarantees within EIB’s South Lending 6.1

Break down over all regions

EIB FINANCING Region

Current year (in EUR) 9,774,129,601 0 541,313,307

European Union Article 18 South-East Europe Africa, Caribbean, Mediterranean countries Pacific countries + OCT South Africa 25,000,000 Asia and Latin & 0 Central America Commonwealth 0 of Independent States Total Amount 10,433,947,961 Last update : 15/05/2007

Past 5 years (in EUR) 198,426,374,651 1,054,587,326 6,974,537,829 0 635,000,000 1,994,180,969 85,000,000 218,253,907,761

Source: EIB website: http://www.eib.europa.eu

6.2

Break down over ALA – Countries (Asia-, Latin,- Central,- America)

In the past six (6) years, including the current year 2007, the following ALA Countries received no financing from EIB: a) Asia: Bangladesh, Korea Republic of, Malaysia, Nepal, Singapore, Thailand. c) Latin and Central America: Argentina, Bolivia, Chile, Costa Rica, El Salvador, Guatemala, Macau, Nicaragua, Paraguay, Regional-Latin America, Uruguay, Venezuela, West Indies, Yemen.

The following ALA - Countries received in the last 6 years financing from EIB: Andean Countries Brazil Central America China Colombia Ecuador Honduras India Indonesia Lao, People’s Dem.Rep. Maldives Mexico Pakistan Panama Peru Philippines Sri Lanka Vietnam

EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR

40,000.000,463,000.000,65,590.355,500,000.000,100,000.000,40,000.000,20,000.000,50,000.000,99,539.284,42,119.773,50,000,000,70,000.000,78,603,382,40,812.995,40,000.000,65,591,000,160,000.000,68,000.000,-

Source: EIB, website: http://www.eib.europa.eu/

7. Global Loans and Guarantees for SME Financing – South Lending Summary 2001 – 2008 Subject a) Date of Entry Beneficiary Location Description EIB finance Status Subject b) Date of Entry Beneficiary Location Description EIB finance Status

Global Authorisation for Microfinance 2001 06/08/2001 Microfinance institutions and specialised funds or banks, to be selected. ACP States - Africa, Caribbean, Pacific countries + OCT. Global Authorisation for decisions on small requests – up to 2 M EUR

EUR 15 million, to be committed until July 2004. Approved - 24/07/2001 BNDES Global Loan 14/07/2004 Banco Nacional de Desenvolvimento Econômico e Social (BNDES). Brazil - Asia and Latin & Central America. The proposed line of credit will be targeted to part-finance projects undertaken by private sector companies with EU interests (subsidiaries, joint ventures) USD 50 m (equivalent to approx. EUR 41 m). Approved - 20/07/2004

Subject c) Date of Entry Beneficiary Location Description

EIB finance Status Subject d) Date of Entry Beneficiary Location Description EIB finance Status

BGFIBANK - Support to the Gabonese financial sector 08/09/2004 BGFIBANK Gabon - Africa, Caribbean, Pacific countries + OCT. The loan will serve to strengthen BGFIBANK's quasi-equity with the aim of assisting the development of the group's Gabonese subsidiaries: BGFIBAIL (property and equipment leasing) and FINATRA (individual equipment loans). EUR 6 million. Approved - 14/09/2004 COFIDES Global Guarantee Framework Loan 09/11/2004 Compañia Española de Financiación del Desarrollo, COFIDES, S.A.

ALA Countries - Asia and Latin & Central America. The proposed loan will be targeted to finance small and mediumsized projects undertaken by private companies with EU interests EUR 25 m. Approved - 10/05/2005

Subject e) Date of Entry Beneficiary Location Description

DFCC Global Loan II 29/03/2006

EIB finance Status

Up to EUR 50 million. Signed - 22/12/2006

Subject f) Date of Entry Beneficiary

Access Microfinance Holding 02/05/2006

Location Description

ACP States - Africa, Caribbean, Pacific countries + OCT.

EIB finance Status

Up to EUR 4 million. Under appraisal - 02/05/2006

Ministry of Finance & Planning of the Democratic Socialist Republic of Sri Lanka

Sri Lanka - Asia and Latin & Central America. Financing of investments of small/medium scale by the DFCC in industry, productive infrastructure, tourism, mining, related services and eligible health and climate change mitigation projects.

LFS Financial Systems GmbH. Linienstr. 126 D-10115 Berlin. For the attention of: Dr. Bernd Zattler, Managing Director Equity investment in regional holding company with a total share capital of EUR 20 million incorporated in Germany, and dedicated to the creation and acquisition of commercially sustainable microfinance institutions (MFIs).

Subject g) Date of Entry Beneficiary

Investisseurs & Partenaires 09/05/2006

Location Description

ACP States - Africa, Caribbean, Pacific countries + OCT Equity investment in regional holding company with a total share capital of EUR 16 million incorporated in Mauritius. Up to EUR 3.25 million Under appraisal - 09/05/2006

EIB finance Status Subject h) Date of Entry Beneficiary

Investisseur & Partenaire pour le Développement Mr. Patrice Hoppenot, President of the Board c/o I&P Etudes et Conseils, 3, rue Casteja, 92100 Boulogne Billancourt, France

Rwanda Global Loan II - Private Sector Support 19/10/2006 • •

Banque Rwandaise De Développement (Contact person : Mr. Théogène Turatsinze ; Fax No : 250 – 573569) Banque Commerciale du Rwanda ( Contact Person : Mr. David Kuwana ; Fax No : 250 – 593395)

Location Description

Rwanda - Africa, Caribbean, Pacific countries + OCT.

EIB finance Status

EUR 10 million. Signed - 21/12/2006

Subject i) Date of Entry Beneficiary Location Description

First Bank of Nigeria 06/11/2006 First Bank of Nigeria (FBN) Nigeria - Africa, Caribbean, Pacific countries + OCT.

EIB finance Status

Up to EUR 50 million. Signed - 05/12/2006

Line of Credit for on-lending in the form of medium and long-term financing in Euros and local currency. Financing of Rwandan companies, particularly Small and Medium sized, and micro enterprises.

Despite improvements in the Nigerian economic environment over the last couple of years, local banks continue to experience constraints in their access to long term resources. This operation will give FBN access to a source of stable long-term finance in hard currency, which it needs to implement its ambitious strategies. It will also contribute as a catalyst to increasing the flow of long-term private funding into the banking sector.

Subject j) Date of Entry Beneficiary

Framework guarantee agreement (Central Africa) 06/11/2006 • • •

BGFIBANK SA, Libreville, Gabon Mr Bernard PEDEPRAT, Deputy Managing Director BICIG SA, Libreville, Gabon Mr Jean-Michel PAPIN, Director of Corporate Customers Network Union Gabonaise de Banque SA, Libreville, Gabon Mr François HOFFMANN, Managing Director

Location Description

Regional - Central Africa - Africa, Caribbean, Pacific countries + OCT.

EIB finance

EUR 50 million.

Status

Approved - 21/11/2006

Subject k) Date of Entry Beneficiary

Pacific Islands Financing Facility II (PIFF II) 13/11/2006

Location Description

Regional - Pacific - Africa, Caribbean, Pacific countries + OCT.

EIB finance Status

EUR 25 million Signed - 05/12/2006

Subject l) Date of Entry Beneficiary Location

TVCabo Multimedia 17/11/2006 TVCabo Angola Angola - Africa, Caribbean, Pacific countries + OCT. Luanda

Description

The project concerns the construction of a broadband and bidirectional digital network. EUR 15million. Approved - 06/02/2007

EIB finance Status

Partial guarantee for loans granted by the financial intermediaries to private or public commercial enterprises.

Funds under the proposed facility would initially be made available to Bank South Pacific (BSP) in Papua New Guinea, Bank of the Cook Islands Limited (BCIL) in the Cook Islands, National Development Bank of Palau (NDBP) in the Republic of Palau and Niue Development Bank (NDB) in Niue. Additional intermediaries from other Pacific countries will be able to benefit from the facility at a later stage, subject to satisfactory appraisal and approval by the Management Committee. The objective of this second financing facility in the Pacific region is to provide global loans for onlending to SMEs and micro-sized initiatives as well as technical assistance to in different Pacific countries through selected financial intermediaries.

Subject m) Date of Entry Beneficiary Location Description

Private Enterprise Finance Facility 05/12/2006 Barclays Bank of Kenya Ltd., East African Development Bank, FINA Bank Ltd. Kenya - Africa, Caribbean, Pacific countries + OCT. Credit line providing long-term funds in Shillings and foreign currencies to selected intermediary banks to finance small and medium sized private investment projects.

EIB finance Status

Up to EUR 20 million. Approved - 12/12/2006

Subject n) Date of Entry Beneficiary

I & P Capital Fund II 19/12/2006

Location Description

Regional - Indian Ocean - Africa, Caribbean, Pacific countries + OCT

EIB finance Status

Up to EUR 5 million. Under appraisal - 19/12/2006

Subject o) Date of Entry Beneficiary

PRO-PME II Global Loan 19/12/2006

Location Description

Cameroon - Africa, Caribbean, Pacific countries + OCT.

EIB finance Status

EUR 4 million. Under appraisal - 19/12/2006

I&P Management (Indian Ocean) 6th floor, Harbour Front building, President John Kennedy Street Port-Louis, Mauritius The fund will make equity and quasi-equity investments of EUR 1 million – 5 million in private companies located primarily in Mauritius and Madagascar and possibly the wider Indian Ocean region and East Africa.

PRO-PME Financement S.A. Credit institution specialising in financing of small and very small firms in Cameroon (meso finance). The Bank's loan will finance PRO-PME's loans and leasing operations in favour of the final beneficiaries. The proposed operation complies with the principles and aims of the Investment Facility established under the Cotonou Agreement. It will help to promote Cameroon's private sector, particularly small urban companies, which make a substantial contribution to the country's economic development, and will assist the local financial sector by providing resources tailored to local investment requirements in terms of duration and cost.

Subject p) Date of Entry Beneficiary

MicroCred 19/12/2006

Location Description

Regional - Africa - Africa, Caribbean, Pacific countries + OCT.

EIB finance Status

Up to EUR 3 million from ACP-Investment Facility resources Signed - 02/03/2007

Subject q) Date of Entry Beneficiary

Private Enterprise Finance Facility 08/02/2007

Location Description

Uganda - Africa, Caribbean, Pacific countries + OCT.

EIB finance Status

Up to EUR 30 million. Approved - 08/02/2007

Subject r) Date of Entry Beneficiary

Rural Impulse Microfinance Fund 23/04/2007

Location Description

ACP States - Africa, Caribbean, Pacific countries + OCT.

EIB finance Status

USD 85 million. Under appraisal - 14/05/2007

MicroCred Attn.: Mr Arnaud Ventura, Managing Director & CEO 13 rue Dieumegard 93400 Saint-Ouen France

Equity investment in a regional fund incorporated in France dedicated to the creation and acquisition of commercially sustainable microfinance institutions (MFIs).

Allied Bank International (ABI), Barclays Bank of Uganda (BBU), Crane Bank, Diamond Trust Bank Uganda (DTBU), East African Development Bank (EADB), DFCU Ltd., Nile Bank Credit line providing long-term funds in Shillings and foreign currencies to selected intermediary banks to finance small and medium sized private investment projects; guarantee window for credit risk sharing on selected sub-borrowers. The purpose is to support investment projects for the expansion, diversification, modernisation or start-up of enterprises, through financing loans and leasing transactions with a maturity matching the economic lifetime of assets. The credit line addresses the lack of long-term resources in the Ugandan financial markets.

Incofin M. Loïc De Cannière, Managing Director Sneeuwbeslaan 20, 2610 Wilrijk, Belgium A microfinance fund to be incorporated in Luxembourg with an objective to make debt and/or equity investments in microfinance institutions which provide financial services to the rural poor.

Subject s) Date of Entry Beneficiary

EIB / Capital Investment Line III 15/05/2007

Location Description

Zambia - Africa, Caribbean, Pacific countries + OCT.

EIB finance Status

EUR 40 million Under appraisal - 15/05/2007

African Banking Corporation Zambia Limited Barclays Bank of Zambia Limited Finance Bank Zambia Limited Investrust Bank Limited Stanbic Bank Zambia Limited Standard Chartered Bank Zambia PLC

A credit line to selected commercial banks and leasing companies for medium-term on-lending / leasing to a wide range of small and medium sized enterprises in Zambia.

8. EIB Authorised Financial Institutions for South Lending programmes A list of these Financial Institutions is contained in ANNEX “D” to this Report.

V.

Conclusions and Recommendations for Actions

1. Conclusions 1.1 Not enough Global Loans for SMEs Many of the loans went to large-scale, non-sustainable oil, gas, mining, dam and industrial projects – sectors that may be economically viable for the EIB but mainly benefit subsidiaries of EU companies. Only a small fraction of the EIB budget went to SMEs. EIB Lending Asia TeleCom bySector Trans m 5% p13% Sector (1994 - 2006)

Industr y 14%

Global Loans 16%

Energ y 52%

TeleCom m Industr y Energ y Global Loans Trans p

EIB Lending Asia by Sector (1994 bis 2004) Source: “The development impact of European Investment Bank (EIB) lending operations in the Cotonou and ALA framework.” (Project no.EP/ExPol/B/2004/09/06).

1.2 EIB’s key objectives regarding poverty alleviation and social development not yet reached. Although the EIB is often presented as the “Development Bank of the EU” in practice EIB’s contribution to key objectives regarding poverty alleviation and social development embedded in the EU’s Country Strategy Papers could significantly be increased within the next decade. •

In Latin America and Asia EIB loans have targeted well-established and financially secure sectors or clients, thus tending not to reach out to the poorest (and financially risky) countries or small local companies.

•

In Latin America, more than 90% of EIB loans since 1993 have been given to either subsidiaries of Eubased companies or to big trans-national corporations.

•

In Africa the EIB manages a significant share of EU commission budget money for development co-operation (up to €13.5 billion during last ten years) and this tendency is increasing with the creation of the new EIB’s Cotonou Investment

•

Facility, expected to disburse €2.2 billion of the EU budget between 2003 and 2008. The first few loans disbursed by the Facility went predominantly to the private sector, to large European corporations or large local companies,

•

In Africa, as in Latin America, the preferred targets of EIB loans are within the extractive industries sector. The Chad–Cameroon Oil Pipeline was the project ever funded by the EIB in Africa, with €144 million, representing four percent of the total lending in the ACP region countries.

1.3 Better project information for NGOs and the right to submit applications for SME funding. In cases where EIB is the sole financier, more information during the whole project cycle should be made available to local and international NGOs. In accordance with the key objectives of EIB as the „Development Bank of the EU”, NGOs representing SMEs should have the right to submit funding requests directly to EIB. 1.4 Urgent Backlog: EIB Global Loans for SME in Asian Countries. •

Over last ten years the EIB, acting under the first two mandates given by the EU for the ALA region (Asia and Latin America) has financed nine projects in the water sector (water supply and sanitation, sewerage systems and large dams). This has run to a total of €335 million, of which €240 million was loaned for five water projects in Asia (in China, Madagascar, Laos, Indonesia and the Philippines) and €95 million for the above- mentioned projects in Latin America (Argentina and Paraguay). Although, relative to the energy sector, the water sector in Asia was not heavily funded (only with 14% of the loans between 1994 and 2004), it is important to point out that the EU (via the use of the guarantee on EIB loans) has mainly promoted water privatisation projects in this region. These projects were carried out in the Philippines and Indonesia.

•

Of 19 EIB Global Loans (GL) between 2001 and 2007 ( 6 GL under appraisal, 8 GL approved and 5 GL signed), which have a direct link to Small and Medium Enterprises (SMEs) 16 GL are (or will be) provided for African Countries and Carribean 1 GL are (or will be) provided for Latin Amertican Countries 2 GL are (or will be provided for Asian Countries. EIB GLOBAL LOANS FOR SMEs

AFRICA LATIN AM ASIA

• • •

Of 17 Asian Countries, only in 4 Countries are EIB authorises Financial Institutions (FI) appointed. In the following Asian Countries are Fis appointed by EIB: India, Indonesia, Philippines, Sri Lanka. Of a total budget of approx. 2 billion EUR (last 5 years) for the ALA Countries, only 125 million EUR have been provided for direct SME financing.

2. Recommendations for Actions 2.1 The SMEs Conference may wish The Governing Body WASME may wish a) to discuss the contents of this Report in one of the next sessions of the Steering Committee b) to forward this Report to the W.S.U.’s Member Organisations seeking their comments and possible proposals for amendments, c) to authorise the Permanent Representatives of W.S.U.to submit this Report to EIB European Investment Bank to EIB’s officers in charge of Global South Lending to their consideration, d) to authorise the General Secretary W.S.U. to seek the support of UNIDO in upgrading EIB’s Global South Lending in the ALA Countries. 2.2 The Secretary General W.S.U. The General Secretary with the consent of the Steering Committee W.S.U. shall contact W.S.U. Member Organisations, W.S.U.‘s Representatives, Advisers, Chambers of Commerce, Financial Institutions in the ALA Countries with priority in Bangladesh, Malaysia, Nepal, South Korea, Thailand and Vietnam in order to encourage these organisations to undertake the following actions: a) submit to the General Secretary W.S.U. a Report on the financial needs of SMEs in their Country, b) Nominate Financial Institutions who may be interested in qualifying as a national Financial Institution under the authorisation of EIB, c) Call SMEs in their Countries to submit project proposals to be financed by EIB. Sources: 1. EIB website http://www.eib.europa.eu 2. Investment Bank (EIB) lending operations in the Cotonou and ALA framework” (Project no EP/ExPol/B/2004/09/06), by Jaroslava Colajacomo, CRBM March 2005 available at: http://aa.ecn.cz/img_upload/2a47e698cb07569dfd0ebe077b6aa d99/eib_study12_05_jaro.pdf The study has been used as background for the European Parliament “Report on the impact of the lending activities of the European Community in developing countries (2004/2213(INI))” FINAL A6-0183/2005 9.6.2005 Committee on Development Rapporteur: Gabriele Zimmer available at: http://bankwatch.ecn.cz/newsroom/documents.shtml?x=330478

3. The IF Operational Guidelines were previously confidential but have been disclosed by the EIB to the Parliament on 24 February 2005. 4. EIB: The Social Assessment of Projects in Developing Countries: The Approach of the European Investment Bank, July 2004. 5. Report “The Development Impact of European Investment Bank (EIB) lending operations in the 6. Cotonou and ALA framework” (Project no EP/ExPol/B/2004/09/06) carried out in March 2005.eib

ANNEXES A. Global Loans for SME 2000 – 2007 under appraisal, approved, signed Global Autorisation for Microfinance 2001 Date of 06/08/2001 Entry: Beneficiary: Microfinance institutions and specialised funds or banks, to be selected Location: ACP States - Africa, Caribbean, Pacific countries + OCT. Description: Global Authorisation for decisions on small requests – up to 2 M EUR – for financing in the form of equity, quasi-equity, straight loans or guarantees. Counterparties are selected according to experience, competences and commitment to promote microfinance industry’s viability. Objectives: Help microfinance institutions develop operations and reach commercial and financial self-sustainability, to the benefit of poor clients. Interventions will be coordinated with those of the major international donors and combined where necessary with grants from other sources for institution building measures. Sector: Services. Proposed EIB EUR 15 million, to be committed until July 2004. finance: Total cost: Environment No negative environmental impact to be expected from the use of funds by final al aspects: beneficiaries. Procurement:No procurement issues involved in microfinance operations. Status: Approved - 24/07/2001

BNDES Global Loan Date of Entry: 14/07/2004 Beneficiary: Banco Nacional de Desenvolvimento Econômico e Social (BNDES). Location: Brazil - Asia and Latin & Central America. Description: Objectives: Sector:

The proposed line of credit will be targeted to part-finance projects undertaken by private sector companies with EU interests (subsidiaries, joint ventures) in various sectors of the economy, with a bias towards infrastructure. Provide BNDES with long term ressources in order to support EU investment in Brazil and help diversify its present sources of funding. Global loans. Various sectors of the economy with a bias towards infrastructure.

Proposed EIB USD 50 m (equivalent to approx EUR 41 m). finance: Total cost: Not applicable. Environmental All sub-projects financed under the proposed loan will be required to comply with aspects: the relevant national legal framework, to be acceptable in environmental terms to EIB. Procurement: The procurement of works, goods and services relating to the sub-projects shall follow apppropriate market procedures and comply with applicable national legislation. Status: Approved - 20/07/2004

BGFIBANK - Support to the Gabonese financial sector Date of Entry: 08/09/2004 Beneficiary: Location: Gabon - Africa, Caribbean, Pacific countries + OCT. Description: Objectives: Sector:

Subordinated loan to BGFIBANK for assisting development of the group's Gabonese subsidiaries. The loan will serve to strengthen BGFIBANK's quasi-equity with the aim of assisting the development of the group's Gabonese subsidiaries: BGFIBAIL (property and equipment leasing) and FINATRA (individual equipment loans). Services.

Proposed EIB EUR 6 million. finance: Total cost: Not applicable. Environmental The EIB will verify that BGFIBAIL and FINATRA's lending activity complies aspects: with its customary environmental standards. Procurement: Not applicable. Status: Approved - 14/09/2004

COFIDES Global Guarantee Framework Loan Date of Entry: Beneficiary: Location:

09/11/2004 Compañia Española de Financiación del Desarrollo, COFIDES, S.A. ALA Countries - Asia and Latin & Central America.

Description:

The proposed loan will be targeted to finance small and medium-sized projects undertaken by private companies with EU interests (subsidiaries, joint ventures) in industry, agro-industry, infrastructure, tourism, energy and telecommunications, and related services. To enhance the support the EIB can provide to European companies investing in Latin America and Asia. Global loans. Industry, agro-industry, commercial infrastructure, tourism and related services.

Objectives: Sector: Proposed EIB finance: Total cost: Environmental aspects: Procurement: Status:

EUR 25 m. Not applicable. All projects should comply with the principles and standards set by EU policies, subject to local conditions and law. The environmental impact of each project should also be acceptable to the EIB. EIB procurement guidelines for global loans will be applied. Approved - 10/05/2005

HBTF Global Loan Date of Entry: Beneficiary: Location:

06/06/2005 The Housing Bank for Trade and Finance (HBTF) Jordan - Mediterranean countries.

Description:

Financing of small and medium sized long term projects, primarily of private sector SMEs throughout Jordan. The project will contribute to the development of Jordanian private sector companies, in particular SMEs in industry, services and infrastructure (also including agro-food and tourism) as well as health and education sectors. Global loans. Industry, agro-industry, tourism, health, education, infrastructure and services sectors normally eligible for EIB financing.

Objectives: Sector: Proposed EIB finance: Total cost: Environmental aspects: Procurement: Status:

Around EUR 50 million Not applicable All investments financed from the resources made available by the Bank through global loan operations are required to comply with the relevant national legal framework and be acceptable, in environmental terms, to the Bank in line, as appropriate, with the EU Environmental policy and legislation. The Bank’s standard procurement guidelines to Global Loans will apply. Approved - 19/07/2005

ATLAMED Invest. Date of Entry: Beneficiary:

17/10/2005 ATLAMED S.A. – Moroccan Fund Manager.

Location:

Contact: Mr Bassim Jaï Hokimi Chairman 37, Rue Jalal Eddine Assayouti Casablanca Morocco Fax: +212 22 39 57 10 Morocco - Mediterranean countries.

Description: Objectives:

Sector:

Proposed EIB finance: Total cost: Environmental aspects: Procurement: Status:

Participation in a private equity fund focussing on investments in private companies active in growth sectors of the Moroccan economy. The fund will invest in the equity of local companies to promote their modernisation and expansion. With priority being given to partnerships with international investors, the project is also expected to support FDIs in Morocco and have a pioneering role in the development of the country’s financial sector, as it provides for the development of the country’s private equity industry and for a relatively new type of financing structure (e.g. LBO transactions) in Morocco. Services. The fund is a generalist fund and will be investing in a variety of sectors. It will target sectors in which Morocco has a comparative advantage and a strong growth potential. Up to EUR 9 million, capped at 25% of total fund commitments. Target fund size is MAD 500 million (around EUR 45 million). The fund will only invest in enterprises that comply with environmental standards meeting the EIB’s requirements. N/A. Approved - 27/10/2005

DFCC Global Loan II Date of Entry: Beneficiary: Location: Description: Objectives:

29/03/2006 Ministry of Finance & Planning of the Democratic Socialist Republic of Sri Lanka Sri Lanka - Asia and Latin & Central America. The proceeds of the EIB loan would be channelled through MOF via DFCC to the final beneficiaries meeting the eligibility criteria of mutual interest for financing under the EIB global loan. Financing of investments of small/medium scale by the DFCC in industry, productive infrastructure, tourism, mining, related services and eligible health and climate change mitigation projects.

Sector: Proposed EIB finance: Total cost: Environmental aspects: Procurement: Status:

Global loans. Industry, productive infrastructure, tourism, mining, related services, health and environment. Up to EUR 50 million. Not applicable. The borrower will be requested to ensure that the final beneficiaries comply with local legislation and EIB rules and guidelines. Investments financed under the global loan will comply with national legislation and EIB procurement guidelines. Signed - 22/12/2006

Tutunska Banka AD Global Loan Date of Entry: Beneficiary: Location:

27/04/2006 Tutunska Banka AD Former Yugoslav Republic of Macedonia - South-East Europe.

Description:

Credit line for financing of limited scale projects of small and medium enterprises and local infrastructure projects of local authorities. Make available access to long-term funds at affordable interest rates to sectors of economy with least availability of financing – small and medium size enterprises and local authorities. Global loans.

Objectives: Sector: Proposed EIB finance: Total cost: Environmental aspects: Procurement: Status:

EUR 20 million. Not Applicable. The financial intermediaries will be requested to ensure compliance of the subprojects with relevant national and EU environmental laws, as appropriate. The financial intermediaries will be requested to ensure compliance of the subprojects with EU directives, in particular for the award of public sector contracts, as may be appropriate. Signed - 23/11/2006

HAA Serbia and Montenegro Global Loan Date of Entry: Beneficiary: Location: Description: Objectives: Sector:

27/04/2006 Hypo Alpe-Adria-Bank AD Beograd and Hypo Alpe-Adria-Bank AD Podgorica Serbia and Montenegro - South-East Europe. Credit line for financing of limited scale projects of small and medium-sized enterprises and local infrastructure projects of local authorities. Make available access to long-term funds at affordable interest rates to sectors of economy with least availability of financing – small and medium size enterprises and local authorities. Global loans.

Proposed EIB finance: Total cost: Environmental aspects: Procurement: Status:

EUR 50 million. Not applicable. The financial intermediaries will be requested to ensure compliance of the sub-projects with relevant national and EU environmental laws, as appropriate. The financial intermediaries will be requested to ensure compliance of the sub-projects with EU directives, in particular for the award of public sector contracts, as may be appropriate. Signed - 07/12/2006

Access Microfinance Holding Date of Entry: Beneficiary:

Location: Description: Objectives: Sector: Proposed EIB finance: Total cost: Environmental aspects: Procurement: Status:

02/05/2006 LFS Financial Systems GmbH Linienstr. 126 D-10115 Berlin For the attention of: Dr. Bernd Zattler, Managing Director ACP States - Africa, Caribbean, Pacific countries + OCT. Equity investment in regional holding company with a total share capital of EUR 20 million incorporated in Germany, and dedicated to the creation and acquisition of commercially sustainable microfinance institutions (MFIs). Achieving a social return through the deployment of equity or convertible debt to new or existing MFIs in developing countries as well as a commercially acceptable return in the microfinance area. Services. Financial Sector Up to EUR 4 million. Not Applicable. Investee companies to meet minimum environmental standards to be specified and monitored by the Manager of the holding company. Not Applicable. Under appraisal - 02/05/2006

Investisseurs & Partenaires Date of Entry: Beneficiary:

Location:

09/05/2006 Investisseur & Partenaire pour le Développement Mr. Patrice Hoppenot, President of the Board c/o I&P Etudes et Conseils 3, rue Casteja 92100 Boulogne Billancourt France ACP States - Africa, Caribbean, Pacific countries + OCT.

Description: Objectives:

Sector: Proposed EIB finance: Total cost: Environmental aspects: Procurement: Status:

Equity investment in regional holding company with a total share capital of EUR 16 million incorporated in Mauritius. The company’s investment objective is to achieve a commercially acceptable return in the lower-end of a small and medium-enterprise segment and in microfinance institutions by means of equity and debt instruments. Services. All sectors (except sectors normally excluded on ethical grounds) Up to EUR 3.25 million Not applicable Investee companies to meet minimum environmental standards to be specified and monitored by the Manager of the holding company. Not applicable Under appraisal - 09/05/2006

China Climate Change Framework Loan Date of Entry: Beneficiary: Location:

31/07/2006 Government of China China - Asia and Latin & Central America.

Description:

The operation would be a large-scale multi-investment scheme under which the Bank could support several individual projects that contribute to the avoidance or reduction of greenhouse gas emissions by the use of renewable energy sources, energy efficiency enhancements, or the capture and use or storage of greenhouse gases, some schemes with the possibility to generate carbon credits. The overall purpose of the operation is to improve the global environment by supporting projects that help to mitigate climate change. It would support materially the EU-China Partnership on Climate Change, which encompasses the China-EU Action Plan on Energy Efficiency and Renewable Energies and the China-EU Action Plan on Clean Coal. Global loans. Targeting projects in the energy sector.

Objectives:

Sector: Proposed EIB finance: Total cost: Environmental aspects:

Procurement: Status:

EUR 500 million Over EUR 1,000 million. The operation is aimed at improving the global environment. It could support projects with the potential to generate carbon credits. The schemes to be selected for funding shall comply with relevant EU environmental standards, subject to prevailing conditions, as well as the social safeguards of the Bank. If located in the EU the project schemes would most likely fall under either Annexes I or II of the EIA directive (97/11/EC), which would require, respectively, a mandatory EIA or allow the competent authorities to determine the EIA requirements. The procurement procedures for the schemes to be financed by the EIB loan shall be in compliance with the EIB Guide to Procurement. Under appraisal - 31/07/2006

Rwanda Global Loan II - Private Sector Support Date of Entry: Beneficiary:

Location: Description: Objectives: Sector:

Proposed EIB finance: Total cost: Environmental aspects: Procurement:

Status:

19/10/2006 • Banque Rwandaise De Développement (Contact person : Mr. Théogène Turatsinze ; Fax No : 250 – 573569) • Banque Commerciale du Rwanda ( Contact Person : Mr. David Kuwana ; Fax No : 250 – 593395) Rwanda - Africa, Caribbean, Pacific countries + OCT. Line of Credit for on-lending in the form of medium and long-term financing in Euros and local currency. Financing of Rwandan companies, particularly Small and Medium sized, and micro enterprises. Global loans. Sectors eligible under the Cotonou Agreement, including, agribusiness, manufacturing, transport, construction, energy, health and education, and services amongst others. EUR 10 million. Not applicable. Investors in Rwanda are required to respect the national legislation on the matter. The selected banks do recognise that environmental risks have to be part of the standard risk assessment procedures. The financial intermediaries will ensure that equipment, works and services to be financed will be procured at the most advantageous prices, having regard to quality and efficiency, and that an open international bidding procedure will be followed where appropriate. Signed - 21/12/2006

Rwanda Global Loan II - Private Sector Support Date of Entry: Beneficiary:

Location: Description: Objectives: Sector:

Proposed EIB finance:

19/10/2006 • Banque Rwandaise De Développement (Contact person : Mr. Théogène Turatsinze ; Fax No : 250 – 573569) • Banque Commerciale du Rwanda ( Contact Person : Mr. David Kuwana ; Fax No : 250 – 593395) Rwanda - Africa, Caribbean, Pacific countries + OCT. Line of Credit for on-lending in the form of medium and long-term financing in Euros and local currency. Financing of Rwandan companies, particularly Small and Medium sized, and micro enterprises. Global loans. Sectors eligible under the Cotonou Agreement, including, agribusiness, manufacturing, transport, construction, energy, health and education, and services amongst others. EUR 10 million.

Total cost: Environmental aspects: Procurement:

Status:

Not applicable. Investors in Rwanda are required to respect the national legislation on the matter. The selected banks do recognise that environmental risks have to be part of the standard risk assessment procedures. The financial intermediaries will ensure that equipment, works and services to be financed will be procured at the most advantageous prices, having regard to quality and efficiency, and that an open international bidding procedure will be followed where appropriate. Signed - 21/12/2006

Rwanda Global Loan II - Private Sector Support Date of Entry: Beneficiary:

Location: Description: Objectives: Sector:

Proposed EIB finance: Total cost: Environmental aspects: Procurement:

Status:

19/10/2006 • Banque Rwandaise De Développement (Contact person : Mr. Théogène Turatsinze ; Fax No : 250 – 573569) • Banque Commerciale du Rwanda ( Contact Person : Mr. David Kuwana ; Fax No : 250 – 593395) Rwanda - Africa, Caribbean, Pacific countries + OCT. Line of Credit for on-lending in the form of medium and long-term financing in Euros and local currency. Financing of Rwandan companies, particularly Small and Medium sized, and micro enterprises. Global loans. Sectors eligible under the Cotonou Agreement, including, agribusiness, manufacturing, transport, construction, energy, health and education, and services amongst others. EUR 10 million. Not applicable. Investors in Rwanda are required to respect the national legislation on the matter. The selected banks do recognise that environmental risks have to be part of the standard risk assessment procedures. The financial intermediaries will ensure that equipment, works and services to be financed will be procured at the most advantageous prices, having regard to quality and efficiency, and that an open international bidding procedure will be followed where appropriate. Signed - 21/12/2006

First Bank of Nigeria Date of Entry: Beneficiary: Location:

06/11/2006 First Bank of Nigeria (FBN) Nigeria - Africa, Caribbean, Pacific countries + OCT.

Description:

This project involves a loan to FBN of up to EUR 50 million. It aims at supporting the development of FBN, in particular with regard to (i) the implementation of its retail strategy, (ii) the reinforcement of its position in the corporate banking market and potentially (iii) the development of regional synergies. FBN, thanks to its unique position, is going to be a leading actor in

Objectives:

Sector: Proposed EIB finance: Total cost: Environmental aspects:

Procurement:

Status:

financial deepening and economic integration in West-Africa. Despite improvements in the Nigerian economic environment over the last couple of years, local banks continue to experience constraints in their access to long term resources. This operation will give FBN access to a source of stable long-term finance in hard currency, which it needs to implement its ambitious strategies. It will also contribute as a catalyst to increasing the flow of long-term private funding into the banking sector. Services. Financial Intermediation Up to EUR 50 million. Not applicable. Investors in Nigeria are required to respect the national legislation on the matter. FBN recognises that environmental risks have to be part of the standard risk assessment procedures and have to be adequately and appropriately addressed. It verifies in its appraisal of projects that companies have received the necessary licenses and performed an EIA when required. FBN will ensure that equipment, works and services to be financed under this operation will be procured at the most advantageous prices, having regard to quality and efficiency, and that an open international bidding procedure will be followed where appropriate. Signed - 05/12/2006

Framework guarantee agreement (Central Africa) Date of Entry: Beneficiary:

Location: Description: Objectives:

Sector:

Proposed EIB

06/11/2006 • BGFIBANK SA, Libreville, Gabon Mr Bernard PEDEPRAT, Deputy Managing Director • BICIG SA, Libreville, Gabon Mr Jean-Michel PAPIN, Director of Corporate Customers Network • Union Gabonaise de Banque SA, Libreville, Gabon Mr François HOFFMANN, Managing Director Regional - Central Africa - Africa, Caribbean, Pacific countries + OCT. Partial guarantee for loans granted by the financial intermediaries to private or public commercial enterprises. The proposed operation will enable the financial intermediaries to finance the major projects to be implemented in the coming years in various Central African countries with their own resources while complying with the prudential ratios of the Central African Banking Commission (especially concerning risk coverage and risk sharing). It will thus contribute to developing the region's financial sector and private sector. Global loans. The EIB will provide the financial intermediaries with surety for loans or guarantees granted to private or public commercial enterprises undertaking long and medium-term projects in the industrial, productive infrastructure and services sectors. EUR 50 million.

finance: Total cost: Environmental aspects: Procurement: Status:

Not applicable. The EIB will assist the financial intermediaries in the area of environmental impact assessment in order to ensure that projects supported comply with the EIB’s standards. The financial intermediaries will undertake to ensure that the EIB’s competitive tendering criteria are observed. Approved - 21/11/2006

Pacific Islands Financing Facility II (PIFF II) Date of 13/11/2006 Entry: Beneficiary Not applicable. : Location: Regional - Pacific - Africa, Caribbean, Pacific countries + OCT. DescriptionThe objective of this second financing facility in the Pacific region is to provide global : loans for onlending to SMEs and micro-sized initiatives as well as technical assistance to in different Pacific countries through selected financial intermediaries. Objectives: Funds under the proposed facility would initially be made available to Bank South Pacific (BSP) in Papua New Guinea, Bank of the Cook Islands Limited (BCIL) in the Cook Islands, National Development Bank of Palau (NDBP) in the Republic of Palau and Niue Development Bank (NDB) in Niue. Additional intermediaries from other Pacific countries will be able to benefit from the facility at a later stage, subject to satisfactory appraisal and approval by the Management Committee. Sector: Services. Industry, agro-industry, tourism, transport, telcommunications, social housing, services. Proposed EIB EUR 25 million finance: Total cost: Not applicable Environme The intermediaries will provide the EIB with a summary on environmental impacts of ntal the projects to be financed and on proposed mitigating action. They will make further aspects: investigations if the Bank so requests to ensure that projects to be financed comply with the environmental standards that satisfy the Bank’s requirements. Guidelines on the Bank’s environmental requirements will be provided to the banks as part of the loan negotiation process. Procureme The financial intermediaries will ensure that equipment, works and services to be nt: financed will be procured at the most advantageous price, having regard to quality and efficiency, and that an open international bidding procedure will be followed where appropriate. Status Signed - 05/12/2006

TVCabo Multimedia Date of

17/11/2006

Entry: Beneficiar TVCabo Angola y: Location: Angola - Africa, Caribbean, Pacific countries + OCT. Luanda Descriptio The project concerns the construction of a broadband and bi-directional digital n: network. Objectives Provision of multimedia services for individual homes and corporate markets. : Sector: Telecommunications. Proposed EIB EUR 15million. finance: Total cost: EUR 31million. Environme There will be minimal environmental impacts with the project development, and ntal correct mitigation measures are planned. The project is considered environmentally aspects: acceptable without reservation. Procureme In this private sector operation, the purchase of technical equipment was made on nt: international markets. The majority of suppliers have a good reputation, which is considered satisfactory by the Bank. Status: Approved - 06/02/2007

HAA Group Bosnia Global Loan Date of Entry: Beneficiary: Location: Description: Objectives: Sector:

05/12/2006 Hypo Alpe-Adria-Bank d.d., Hypo Alpe-Adria-Bank a.d., Hypo AlpeAdria-Leasing d.o.o. Bosnia and Herzegovina - South-East Europe. Credit line for financing of limited scale projects of small and medium enterprises and local infrastructure projects of local authorities. Make available access to long-term funds at affordable interest rates to sectors of economy with least availability of financing – small and medium size enterprises and local authorities. Global loans.

Proposed EIB finance: EUR 105 million. Total cost: Not applicable. Environmental aspects: The financial intermediaries will be requested to ensure compliance of the sub-projects with relevant national and EU environmental laws, as appropriate. Procurement: The financial intermediaries will be requested to ensure compliance of the sub-projects with EU directives, in particular for the award of public sector contracts, as may be appropriate. Status: Signed - 19/02/2007

SME Reconstruction Facility Date of Entry: Beneficiary:

05/12/2006 Banque du Liban

Location:

Lebanon - Mediterranean countries.

Description:

The proposed facility consists of an Apex Global Loan open to Lebanese Banks selected by EIB and aimed at co-financing private sectors investments in support of SMEs affected by the recent conflict. Lebanese SMEs have been seriously affected by the recent conflict and need access to tailored credit facilities; (longer maturities and grace periods - lower interest rates). The proposed financing will provide a sustainable means of support for the backbone of private sector business in the country. Global loans. Multi-sector.

Objectives:

Sector: Proposed EIB finance: Total cost: Environmental aspects:

Procurement: Status:

EUR 100 million. Estimated at least at EUR 200 million. All investments financed from the resources made available by the Bank through global loan operations are required to comply with the relevant national legal framework and be acceptable, in environmental terms, to the Bank in line, as appropriate, with the EU Environmental policy and legislation. The Bank’s standard procurement guidelines to Global loans will apply. Approved - 12/12/2006

Private Enterprise Finance Facility Date of Entry: Beneficiary: Location: Description:

05/12/2006 Barclays Bank of Kenya Ltd., East African Development Bank, FINA Bank Ltd. Kenya - Africa, Caribbean, Pacific countries + OCT.

Credit line providing long-term funds in Shillings and foreign currencies to selected intermediary banks to finance small and medium sized private investment projects. Objectives: The purpose is to support investment projects for the expansion, diversification, modernisation or start-up of enterprises, through financing loans and leasing transactions with a maturity matching the economic lifetime of assets. The credit line addresses the lack of longterm resources in the Kenyan financial markets. Sector: Global loans. Agro-industry, fishing, mining and quarrying, food processing, manufacturing, tourism or services related to these sectors, or healthcare and education Proposed EIB finance: Up to EUR 20 million. Total cost: Not applicable. Environmental aspects: The intermediaries will assess environmental risks and mitigating measures as part of their regular project appraisal and will ensure compliance of projects to be financed with Kenyan environmental standards controlled by the competent authority (NEMA). Procurement: Assets to be financed will be procured on a competitive basis taking into account relevant market practice as well as the nature and size of the goods considered. Status: Approved - 12/12/2006

I & P Capital Fund II Date of Entry: Beneficiary:

Location: Description: Objectives: Sector: Proposed EIB finance: Total cost: Environmental aspects: Procurement: Status:

19/12/2006 I&P Management (Indian Ocean) 6th floor, Harbour Front building, President John Kennedy Street Port-Louis, Mauritius Regional - Indian Ocean - Africa, Caribbean, Pacific countries + OCT. The fund will make equity and quasi-equity investments of EUR 1 million – 5 million in private companies located primarily in Mauritius and Madagascar and possibly the wider Indian Ocean region and East Africa. Contributing to the development of the private sector in the targeted regions and producing a commercial return to investors. Services. The fund will make investments across a range of sectors. Up to EUR 5 million. Up to EUR 30 million. Investee companies to meet the Bank’s environmental standards Compliance to be monitored by the fund manager. Not applicable. Under appraisal - 19/12/2006

PRO-PME II Global Loan Date of Entry: Beneficiary: Location: Description: Objectives:

Sector: Proposed EIB finance: Total cost: Environmental aspects:

19/12/2006 PRO-PME Financement S.A. Credit institution specialising in financing of small and very small firms in Cameroon (meso finance). Cameroon - Africa, Caribbean, Pacific countries + OCT. The Bank's loan will finance PRO-PME's loans and leasing operations in favour of the final beneficiaries. The proposed operation complies with the principles and aims of the Investment Facility established under the Cotonou Agreement. It will help to promote Cameroon's private sector, particularly small urban companies, which make a substantial contribution to the country's economic development, and will assist the local financial sector by providing resources tailored to local investment requirements in terms of duration and cost. Global loans. Financial sector and local private-sector SMEs. EUR 4 million. Not applicable. PRO-PME will ensure that all the necessary permits and authorisations issued by the various competent authorities are obtained for the projects

Procurement: Status:

financed. Application of national environmental regulations by the borrower will be systematically required. If necessary, additional investigations will be required to ensure that the projects comply with the Bank's environmental standards. PRO-PME will ensure that its customers' selection of supplies and services includes, if appropriate, the competitive tendering necessary to guarantee the sound economics of each project. Under appraisal - 19/12/2006

MicroCred Date of Entry: Beneficiary:

19/12/2006 MicroCred Attn.: Mr Arnaud Ventura, Managing Director & CEO 13 rue Dieumegard 93400 Saint-Ouen France Regional - Africa - Africa, Caribbean, Pacific countries + OCT.

Location: Description: Objectives: Sector: Proposed EIB finance: Total cost: Environmental aspects: Procurement: Status:

Equity investment in a regional fund incorporated in France dedicated to the creation and acquisition of commercially sustainable microfinance institutions (MFIs). Achieving a commercially acceptable return in the microfinance area and a social return through the deployment of equity or convertible debt to new or existing MFIs in developing countries. Services. Financial sector Up to EUR 3 million from ACP-Investment Facility resources Not applicable. Investee companies to meet the Bank’s environmental standards to be monitored by the Fund Manager. Not applicable. Signed - 02/03/2007

Private Enterprise Finance Facility Date of Entry: Beneficiary: Location: Description:

Objectives:

08/02/2007 Allied Bank International (ABI), Barclays Bank of Uganda (BBU), Crane Bank, Diamond Trust Bank Uganda (DTBU), East African Development Bank (EADB), DFCU Ltd., Nile Bank Uganda - Africa, Caribbean, Pacific countries + OCT. Credit line providing long-term funds in Shillings and foreign currencies to selected intermediary banks to finance small and medium sized private investment projects; guarantee window for credit risk sharing on selected sub-borrowers. The purpose is to support investment projects for the expansion, diversification, modernisation or start-up of enterprises, through financing loans and leasing transactions with a maturity matching the economic lifetime of assets. The credit line addresses the lack of long-term resources

Sector:

Proposed EIB finance: Total cost: Environmental aspects: Procurement: Status:

in the Ugandan financial markets. Global loans. Agro-industry, fishing, mining and quarrying, construction, food processing, manufacturing, tourism (or services related to these sectors), healthcare and education. Up to EUR 30 million. Not applicable. The intermediaries will assess environmental risks and mitigating measures as part of their regular project appraisal and will ensure compliance of projects to be financed with Ugandan environmental standards controlled by the competent authority (NEMA). Assets to be financed will be procured on a competitive basis taking into account relevant market practice as well as the nature and size of the goods considered. Approved - 08/02/2007

STEG GAZ II Date of Entry: Beneficiary: Location:

23/02/2007 Société Tunisienne de l’Électricité et du Gaz (STEG) Tunisia - Mediterranean countries.

Description:

L’investissement envisagé vise essentiellement le programme 2007-2011 de la STEG pour le développement du gaz naturel en Tunisie avec un volet distribution publique pour le raccordement de 340 000 nouveaux clients résidentiels et un volet expansion du réseau de transport. Le projet s’inscrit dans le cadre du 11ème Plan National (2007-2011). Il s’intègre dans le programme prioritaire du gouvernement tunisien visant à augmenter de façon significative la pénétration du gaz dans les secteurs industriels et résidentiels afin de réduire les importations de produits pétroliers (GPL, fuel lourd et gasoil) et de préserver l’environnement. Des mesures d’encouragement au raccordement au réseau gaz ont été mises en place avec un objectif de 500 000 ménages raccordés à l’horizon 2009. Par sa contribution au développement de l’approvisionnement énergétique du pays, notamment du secteur privé, le projet est en ligne avec les objectifs fixés dans le cadre de la Facilité FEMIP de la Banque. Energy. Gaz

Objectives:

Sector: Proposed EIB finance: Total cost: Environmental aspects:

Procurement: Status:

60 millions d’EUR. Environ 133 millions d’EUR L’évaluation des incidences du projet sur l’environnement est requise selon la législation tunisienne (décret 91-362, largement inspiré de la Directive européenne 97/11). Les études d’impact, les mesures d’atténuation et leur approbation par l’Agence Nationale pour l’Environnement seront soumises à la Banque. Les dossiers d’appel d’offres des différentes composantes du projet feront l’objet d’une concurrence internationale avec publication au JOCE. Approved - 26/03/2007

The Building Block Equity Fund Date of Entry: Beneficiary: Location: Description: Objectives: Sector: Proposed EIB finance: Total cost: Environmental aspects: Procurement: Status:

13/03/2007 Bader, a Lebanese entrepreneurial network. Lebanon - Mediterranean countries. Fund to be based in Beirut. Participation in the setting up of a private equity fund focused on Small and Medium-sized Enterprises (SMEs) in Lebanon. The project will improve the financing of SMEs in Lebanon. SMEs are seen as a key factor for the reconstruction and improvement of the competitiveness of Lebanon’s economy. Services. Lebanese technology, services or innovative traditional companies. Up to the lower of EUR 5 million or 25% of fund size. Up to USD 22 million (EUR 17 million) fund size. The fund will only invest in companies that comply with the environmental standards required by the EIB. Not applicable. Under appraisal - 13/03/2007

SONEB Alimentation en Eau Urbaine Date of Entry: Beneficiary: Location:

21/03/2007 Société Nationale des Eaux du Bénin (SONEB) Benin - Africa, Caribbean, Pacific countries + OCT.

Description:

Le projet porte sur la réalisation d’infrastructures visant à renforcer le système d’alimentation en eau potable de Cotonou et ses agglomérations péri-urbaines situées dans les communes d’Abomey Calavi et de Seme Kpodji, dans le sud de la République du Bénin. En matière d’assainissement, le projet contribuera à la construction de 3500 ouvrages d’assainissement autonome dans les quartiers les plus défavorisés de l’agglomération de Cotonou. L’objectif du projet est d’accroître le taux d’accès à l’eau potable dans l’agglomération de Cotonou, de 56% en 2006 à 66% en 2011, permettant ainsi à plus de 220 000 personnes de bénéficier directement du projet. Les ouvrages d’assainissement autonome concerneront 30 000 habitants. Water, sewerage, solid waste. Hydraulique urbaine. 13 millions d’EUR. 26 millions d’EUR. Dans le cadre de la demande de subvention à la Facilité pour l’Eau, le projet a fait l’objet d’une étude préparatoire qui a évalué les impacts sur l’environnement des travaux envisagés et proposé des mesures d’atténuation. Néanmoins, une EIE devra être réalisée conformément à la législation béninoise qui précise que les projets d’importance majeure, dont les projets ayant un impact sur les ressources naturelles

Objectives:

Sector: Proposed EIB finance: Total cost: Environmental aspects:

Procurement:

Status:

en eau, sont soumis à une EIE. Cette dernière devra être approuvée par l’Agence béninoise d’Environnement avant le démarrage des travaux. Les procédures d’appel d’offre retenues pour le projet seront celles de la Banque, chef de file des bailleurs, conformément aux dispositions de la Facilité ACP-EU pour l’Eau. Les travaux les plus importants feront l’objet d’appels d’offres internationaux, avec publication au JOCE. Les autres travaux seront soumis à une concurrence nationale, selon la taille des marchés. Approved - 09/05/2007

Pafos Sewerage II Date of Entry: Beneficiary: Location: Description: Objectives: Sector:

21/03/2007 Pafos Sewerage Board Mr. E. Malekides General Manager Cyprus - European Union. Greater Pafos The project consists of Phase II (2007-2012) of Greater Pafos sewerage and drainage system’s and treatment plant’s expansion. The project will contribute to the compliance of the Pafos Sewerage Board with the requirements of EC Directive 91/271 on Urban Wastewater Treatment (as amended by Directive 98/15/EC) by 2012. Water, sewerage, solid waste.

Proposed EIB finance: EUR 40 million. Total cost: EUR 108 million. Environmental aspects: An Environmental Impact Assessment, in form and substance fully compliant with national Law, of project components has been undertaken. The Environmental Service of the Ministry of Agriculture, Natural Resources and Environment has confirmed that the project will not have any significant negative effect on Nature Conversation Sites (Natura 2000). Procurement: The Promoter meets obligations regarding public notice and EU Journal publication of tenders notices, whenever applicable. Status: Under appraisal - 21/03/2007

Telefónica del Perú II Date of Entry: Beneficiary: Location:

02/04/2007 Telefónica del Perú S.A.A. Peru - Asia and Latin & Central America.

Description:

Objectives:

Sector:

The project concerns the purchase and installation of equipment for the provision of Telephony, Broadband Internet, Data Transmission, Cable Communications, Satellite Pay-TV and VSAT services in the main populated centres and in some rural areas of Peru. Contributing to i) improving overall business productivity in Peru, ii) support a European Company with a strategic presence in Latin America and iii) allow the transfer of European economic and technological knowledge. Telecommunications.

Proposed EIB finance: Up to EUR 60 million. Total cost: To be confirmed. Environmental aspects: If the project were located within Europe, it would not fall under Annexes I and II of EU Directive 97/11/EC (concerning Environmental Impact Assessment requirements) and would be subject only to national legislation. The applicable legislation in Peru and its respect by the promoter will be checked during appraisal. Procurement: The promoter is a private company providing its services in liberalised markets. During appraisal EIB will assess whether the procurement procedures it followed were fair, transparent, economically/technically effective and in line with EIB procurement guidelines. Status: Under appraisal - 02/04/2007

Programme Eau Senegal Date of Entry: Beneficiary: Location: Description:

02/04/2007 SONES (Société Nationale des Eaux du Sénégal) – Société de patrimoine concessionnaire du service public d’eau potable dans 66 centres urbains au Sénégal Senegal - Africa, Caribbean, Pacific countries + OCT.

Sector:

Financement de la première phase du Programme d'Eau Potable et Assainissement pour le Millénaire (PEPAM) qui a pour objectif d'améliorer la desserte en eau potable des populations des centres de l'intérieur, et des quartiers périphériques de Dakar. Le PEPAM fait suite au Projet Sectoriel Eau (PSE) et au Projet Eau Long terme (PELT), au financement desquels a participé la Banque. Le PEPAM vise à atteindre les objectifs du millénaire pour le Développement fixés par les nations unis à l’horizon 2015. La première phase du PEPAM 2006-2011 a pour objectifs d’augmenter le taux de branchement domiciliaire à l’eau potable, d’améliorer la qualité des eaux distribuées, de renforcer la politique de branchements sociaux et de renforcer la réforme institutionnelle de l’hydraulique urbaine initiée en 1996. Water, sewerage, solid waste.

Proposed EIB finance: Total cost:

15 millions d’EUR. 59 millions d’EUR.

Objectives:

Environmental aspects:

Procurement:

Status:

Les projets précédents soutenus par un grand nombre de bailleurs de fonds internationaux ont permis au promoteur d’établir des procédures d’évaluation de l’impact sur l’environnement en accord avec la pratique internationale et acquérir de l’expérience dans ce domaine. Le projet prévoit la création d’une équipe de suivi environnemental et social au sein de l’unité de gestion du projet. Les travaux prévus dans le cadre du projet concernent des infrastructures assez simples qui posent peu de problèmes environnementaux et ayant une flexibilité dans le choix de leur emplacement afin de minimiser d’éventuels effets négatifs. De manière générale, les services de la Banque veilleront à ce que la directive 97/11/CE sur les EIE soit reflétée dans les procédures mises en œuvre par le promoteur. Il conviendra aussi de suivre l’impact du projet sur des zones de protection de la nature éventuelles. L’exploitation des eaux souterraines par forages fera l’objet d’une attention particulière pour éviter un risque de surexploitation. Le promoteur ne pourra engager les concours des bailleurs pour des travaux qui requièrent une EIE sans avoir préalablement soumis l’EIE dûment approuvée par les autorités compétentes aux bailleurs de fonds. Il est prévu de suivre une approche programme afin d'atteindre les objectifs de la Déclaration de Paris concernant l'harmonisation des procédures entres bailleurs de fonds, y compris pour les appels d'offres. Conformément aux procédures de la Facilité ACP-UE pour l'Eau, les bailleurs de fonds, y inclus la BEI, suivront les procédures du chef de file des bailleurs, dans le cas présent l'Agence française de Développement. Ces procédures sont en accord avec les dispositions du guide pour la passation des marchés de la Banque. Pour tout appel d’offres international, un avis général sur les travaux inclus dans le projet sera publié dans le JOUE ainsi que pour un petit nombre de marchés pour les travaux les plus importants. Approved - 09/05/2007

Rural Impulse Microfinance Fund Date of Entry: Beneficiary:

Location: Description: Objectives:

23/04/2007 Incofin M. Loïc De Cannière, Managing Director Sneeuwbeslaan 20, 2610 Wilrijk Belgium ACP States - Africa, Caribbean, Pacific countries + OCT. A microfinance fund to be incorporated in Luxembourg with an objective to make debt and/or equity investments in microfinance institutions which provide financial services to the rural poor. The fund’s key objective is to provide local currency financing to rural microfinance institutions operating in developing countries and to ensure the capital preservation and a reasonable return for the shareholders. The first closing will include BIO, FMO, IFC, Incofin and KBC Private Equity.

Sector:

Services. Microfinance sector. Proposed EIB finance: Up to EUR 3 million (USD 3.5 million). Total cost: Up to EUR 30 million (USD 36 million). Environmental aspects: Investee companies to meet minimum environmental standards to be specified and monitored by the Manager of the holding company. Procurement: Not applicable. Status: Under appraisal - 23/04/2007

Fauji Cement Project Date of Entry: Beneficiary:

03/05/2007 Fauji Cement Company Ltd (FCCL) belongs to the Fauji Foundation Group. FCCL is a long-time leader in the cement-manufacturing industry. Fauji Group is a conglomerate of several industrial and commercial projects in various sectors, including energy, gas supply, fertilizer, cement and chemicals. Location: Pakistan - Asia and Latin & Central America. The plant, based in Jhang Bahtar, Attock district, is located in the Province of Punjab. Description: The project concerns the construction and operation of a new production line on an existing site. The capacity of some 2 million tons per annum is dedicated to supply the domestic market and export to Afghanistan. Objectives: The local production of cement will valorise domestic raw materials (limestone and clay) , and contribute directly to the industrial development and the economic diversification of a particularly poor rural region. An increase in cement production capacity should assist Pakistan to maintain a low level of cement prices, which in turn should facilitate critical infrastructure development, the ongoing reconstruction after the October 2005 earthquake and sustained export to Afghanistan. Furthermore, the less developed North West Frontier province of Pakistan is likely to benefit the most in terms of availability of cement for developing the physical infrastructure and in turn improving livelihoods and employment opportunities in the province. As such the project is consistent with the EU strategy targeting poverty alleviation and infrastructure development in Pakistan. Sector: Industry. Manufacturing Proposed EIB finance: USD 85 million. Total cost: Project cost is estimated at about USD 232 million. Environmental aspects: An EIA is being performed by an independent consultant. The plant is designed with state-of-the art cement production technology, which will reduce both energy consumption and atmospheric emissions levels, in line with usual international standards. Procurement: The promoter utilises procurement procedures, which are usual in the industry (international enquiry followed by price negociation) and normally in the best interest of the project. EU procurement Directives are not applicable. Status: Under appraisal - 14/05/2007

Capmezzanine Maroc Date of Entry: Beneficiary: Location:

10/05/2007 Accès Capital Atlantique S.A., une filiale de la Caisse de Dépôt et de Gestion marocaine. Morocco - Mediterranean countries.

Description:

L’opération consiste en une prise de participation par la Banque, sur les ressources budgétaires de l’Union européenne (capitaux à risques gérés par la Banque en vertu du règlement MEDA II) dans un fonds d’investissement nouvellement créé. Objectives: Le fonds aura pour objet d'investir en fonds propres et quasi-fonds propres (financements mezzanines) dans des petites et moyennes entreprises domiciliées et exerçant leur activité au Maroc. Le fonds investira dans entreprises opérant dans tous les secteurs d’activité à l’exception de l’immobilier, de l’agriculture, des matières premières, de la défense et des autres secteurs traditionnellement exclus par la BEI. Sector: Services. Intermédiation financière et fonds d’investissement. Proposed EIB finance: Le montant de l’investissement de la Banque n’excèdera pas l’équivalent en dirhams marocains (MAD) de 6 M EUR ou, si ce montant est inférieur, 25% du capital du fonds. Total cost: Le fonds aura un capital minimum de 250 M MAD au premier closing (environ 22,5 M EUR). L’objectif des promoteurs est de parvenir au second closing à un capital de 500 M MAD (45 M EUR). Environmental aspects: N/A Procurement: N/A Status: Under appraisal - 10/05/2007

UPI Banka d.d Credit Line Date of Entry: 15/05/2007 Beneficiary: UPI Banka d.d., Sarajevo Location: Bosnia and Herzegovina - South-East Europe. Description: Objectives: Sector:

Credit line for financing of limited scale projects of small and medium-sized enterprises and local infrastructure projects of local authorities. Make available access to long-term funds at affordable interest rates to sectors of economy with least availability of financing – small and medium size enterprises and local authorities. Global loans.

Proposed EIB EUR 25 million. finance: Total cost: Not applicable Environmental The financial intermediary will be requested to ensure compliance of the subaspects: projects with relevant national and EU environmental laws, as appropriate.

Procurement: The financial intermediary will be requested to ensure compliance of the subprojects with EU directives, in particular for the award of public sector contracts, as may be appropriate. Status: Under appraisal - 15/05/2007

EIB / Capital Investment Line III Date of Entry: Beneficiary:

Location: Description: Objectives: Sector:

Proposed EIB finance: Total cost: Environmental aspects: Procurement: Status:

15/05/2007 African Banking Corporation Zambia Limited Barclays Bank of Zambia Limited Finance Bank Zambia Limited Investrust Bank Limited Stanbic Bank Zambia Limited Standard Chartered Bank Zambia PLC Zambia - Africa, Caribbean, Pacific countries + OCT. A credit line to selected commercial banks and leasing companies for medium-term on-lending / leasing to a wide range of small and medium sized enterprises in Zambia. To promote the private sector in all sectors eligible under the Cotonou Agreement. Global loans. The private sector, in particular industry; agro-industry; commercial agriculture, tourism, mining, energy, water and sewerage, transport and telecommunications, services linked to these sectors. EUR 40 million Not applicable All beneficiaries to satisfy EIB environmental requirements. Environmental summary fiches to be supplied for all allocations. Standard EIB procurement procedures for credit lines will be applied. Under appraisal - 15/05/2007

B. EIB Funding - breakdown by regions and countries EIB FINANCING Region European Union Article 18

Current year (in EUR) 9,774,129,601

Past 5 years (in EUR) 198,426,374,651

0

1,054,587,326

South-East Europe

541,313,307

6,974,537,829

Mediterranean countries Africa, Caribbean, Pacific countries + OCT

0

6,672,257,956

93,505,053

2,411,969,030

25,000,000 0

635,000,000 1,994,180,969

0

85,000,000

10,433,947,961 Last update : 15/05/2007

218,253,907,761

South Africa Asia and Latin & Central America Commonwealth of Independent States

Total Amount

Breakdown by country List of loans Country

Current year (in EUR)

Past 5 years (in EUR)

ALA Countries Andean Countries

0 0

0 40,000,000

Argentina Bangladesh Bolivia Brazil Brunei Darussalam

0 0 0 0 0

0 0 0 463,924,180 0

Central America

0

65,590,355

Chile China Colombia Costa Rica Ecuador El Salvador Guatemala Honduras India Indonesia

0 0 0 0 0 0 0 0 0 0

0 500,000,000 100,000,000 0 40,000,000 0 0 20,000,000 50,000,000 99,539,284

Korea, Republic of

0

0

Lao People's Dem. 0 Rep. Macau 0 Malaysia 0 Maldives 0 Mexico 0 Mongolia 0 Nepal 0 Nicaragua 0 Pakistan 0 Panama 0 Paraguay 0 Peru 0 Philippines 0 Regional - Latin 0 America Singapore 0 Sri Lanka 0 Thailand 0 Uruguay 0 Venezuela 0 Vietnam 0 West Indies 0 Yemen 0 Last update : 15/05/2007

42,119,773 0 0 50,000,000 70,000,000 0 0 0 78,603,382 40,812,995 0 40,000,000 65,591,000 0 0 160,000,000 0 0 0 68,000,000 0 0

Breakdown by country List of loans Country ACP States ACP States and OCT

0 0

Past 5 years (in EUR) 201,466,000 0

Africa Angola Anguilla Antigua and Barbuda

3,000,000 0 0 0

139,249,950 0 0 0

0 0 0

0 0 9,750,000

Aruba Bahamas Barbados

Current year (in EUR)

Belize Benin Bonaire (Neth. Antilles)

0 0 0

3,737,000 0 0

Botswana British Antarctic Territory

0 0

14,500,000 0

British Indian Ocean Territory

0

0

0 0 0 0 45,000,000 0

33,250,000 0 113,499,999 33,000,000 53,000,000 0

Central Africa Central African Rep.

0 0

20,300,000 0

Chad Comoros Congo Congo (Dem. Rep.)

0 0 0 0

2,000,000 0 13,000,000 0

CuraĂp.) Curaçao (Neth. Antilles) Djibouti Dominica Dominican Republic

0 0

0 0

0 0 0

0 0 107,230,000

East Africa Equatorial Guinea

0 0

31,800,000 0

Eritrea Ethiopia Falkland Islands

0 0 0

0 116,500,000 0

Fiji French Polynesia

0 0

35,500,000 0

French South/Antarc Territory

0

0

Burkina Faso Burundi Cameroon Cape Verde Caribbean Cayman Islands

Gabon Gambia Ghana Grenada Guinea Guinea-Bissau Guyana Haiti Indian Ocean Ivory Coast Jamaica Kenya Kiribati Lesotho Liberia Madagascar Malawi Mali Mauritania Mauritius Mayotte Montserrat Mozambique Namibia Netherlands Antilles

7,000,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

32,000,000 0 140,500,000 5,000,000 12,000,000 0 0 0 2,000,000 0 35,000,000 103,659,140 0 0 0 18,000,000 300 0 53,000,000 87,200,000 0 0 200,800,000 4,000,000 0

New Caledonia Niger Nigeria OCT Pacific Papua New Guinea

0 0 0 0 2,000,000 0

0 13,000,000 223,966,941 0 22,400,000 0

Pitcairn Rwanda Saba (Neth. Antilles)

0 7,000,000 0

0 3,000,000 0

Saint Kitts and Nevis

0

0

Saint Lucia Samoa São Tomé e Principe Senegal Seychelles Sierra Leone

0 0 0

0 4,350,000 0

0 0 0

25,000,000 0 0

Solomon Islands

0

3,500,000

Somalia South Sandwich Islands

0 0

0 0

Southern Africa

0

10,500,000

St Vincent & Grenad.

0

8,300,000

St. Eustatius (Neth. Antilles) St. Helena St. Maarten (Neth. Antilles) St. Pierre and Miquelon Sudan Suriname Swaziland Tanzania Togo Tonga Trinidad & Tobago

0

0

0 0

0 0

0

0

0 0 0 0 0 0 0

0 0 44,750,000 35,000,000 0 0 33,000,000

Turks & Caicos Islands

0

0

Tuvalu Uganda Vanuatu Virgin Islands (British)

0 0 0 0

1,000,000 62,000,000 0 0

Wallis and Futuna Islands West Africa Zambia Zimbabwe

0

0

0 29,505,053 0 Last update : 15/05/2007

83,860,000 217,100,000 0

C. COTONOU AGREEMENT

•

Presentation

•

Composition

•

List of ACP Countries

•

Beginning of ACP-EU cooperation

•

Regime of Association and the Yaoundé Conventions

•

The Lome Conventions

•

From Lome I to Lome IV

•

Review of Lome IV

•

The Cotonou Agreement

•

Economic Partnership Agreements (EPA)

•

Innovations of the Cotonou Agreement

•

Government - civil society Partnership

•

ACP Summit

•

Objectives

•

Important Dates

PRESENTATION

The African, Caribbean and Pacific Group of States (ACP) is an organisation created by the Georgetown Agreement in 1975. It is composed of African, Caribbean and Pacific States signatories to the Georgetown Agreement or the Partnership Agreement between the ACP and the European Union, officially called the "ACP-EC Partnership Agreement" or the "Cotonou Agreement". Objectives

The ACP Group´s main objectives are : • sustainable development of its Member-States and their gradual integration into the global economy, which entails making poverty reduction a matter of priority and establishing a new, fairer, and more equitable world order ; • coordination of the activities of the ACP Group in the framework of the implementation of ACP-EC Partnership Agreements; • consolidation of unity and solidarity among ACP States, as well as understanding among their peoples ; • establishment and consolidation of peace and stability in a free and democratic society. Composition

The ACP Group consists of 79 Member-States, all of them, save Cuba, signatories to the Cotonou Agreement which binds them to the European Union: 48 countries from SubSaharan Africa, 16 from the Caribbean and 15 from the Pacific. List of ACP Countries

Angola - Antigua and Barbuda - Belize - Cape Verde - Comoros - Bahamas - Barbados - Benin - Botswana - Burkina Faso - Burundi - Cameroon - Central African Republic - Chad - Congo (Brazzaville) - Congo (Kinshasa) - Cook Islands - Cte d'Ivoire - Cuba - Djibouti - Dominica -

Dominican Republic - Eritrea - Ethiopia - Fiji - Gabon - Gambia - Ghana - Grenada - Republic of Guinea - Guinea-Bissau - Equatorial Guinea - Guyana - Haiti - Jamaica - Kenya - Kiribati Lesotho - Liberia - Madagascar - Malawi - Mali - Marshall Islands - Mauritania - Mauritius Micronesia - Mozambique - Namibia - Nauru - Niger - Nigeria - Niue - Palau - Papua New Guinea - Rwanda - St. Kitts and Nevis - St. Lucia - St. Vincent and the Grenadines - Solomon Islands - Samoa - Sao Tome and Principe - Senegal - Seychelles - Sierra Leone - Somalia South Africa - Sudan - Suriname - Swaziland - Tanzania - Timor Leste - Togo - Tonga Trinidad and Tobago - Tuvalu - Uganda - Vanuatu - Zambia - Zimbabwe Overview

The Group was originally created with the aim of coordinating cooperation between its members and the European Union. Its main objective was to negotiate and implement, together, cooperation agreements with the European Community. Over the years, the Group extended its range of activities. Since then, cooperation among its members has gone beyond development cooperation with the European Union and covers a variety of fields spanning trade, economics, politics and culture, in diverse international fora such as the World Trade Organisation (WTO). Beginning of ACP-EU cooperation

Cooperation between the European Union and the ACP Group began in 1975 with the First Lome Convention but the origin of this type of partnership dates back to the birth of Europe itself as an organised regional entity. In fact, as soon as the Treaty of Rome was signed in 1957, it created an avenue for cooperation with the Overseas Countries and Territories (OCTs) of the six signatory countries: Germany, Belgium, France, Italy, Luxembourg and Holland, i.e. essentially West and Central African countries with ties to France. Regime of Association and the Yaoundé Conventions

A "Regime of Association" was devised in 1957 and endowed with resources from the first European Development Fund (EDF). In 1963 and 1969 18 African States and their six European counterparts signed the First and Second Yaoundé Conventions, supported by resources from the 2nd and 3rd EDF respectively. The agreements were geared mainly towards financial, technical and trade cooperation, primarily in the sectors of economic and social infrastructure. The United Kingdom´s accession to the European Community in 1973 paved the way for the extension of the Europe-Africa cooperation to the Commonwealth countries, whether African, Caribbean, or Pacific. Later on, Spain´s accession would also have an impact on the membership of the ACP Group. The Georgetown Agreement, the Group´s fundamental charter, which was signed in 1975 at the time the First Lome Convention came into force, laid down the rules for cooperation between the countries of three continents, the main link being shared aid from the European Community. The Lome Conventions

With the signature of the first Lome Convention in 1975, the number of signatory countries rose to 46 on the ACP side and 9 on the European side. Lome II was signed by 58 ACP States in 1980 and Lome III by 65 ACP countries and 10 European States in 1985. These three Conventions, each spanning a five-year period, were accompanied by the 4th, 5th and 6th EDFs. These were implemented until 1990, year in which Lome IV was signed, during the negotiation of which events occurred that would rock Central and Eastern Europe as symbolized by the fall of the Berlin Wall. ACP-EU cooperation has been able to keep the lid on non-politicization. The most notable achievement of ACP-EU cooperation is that it introduced a new type of relationship between rich and poor countries based on solidarity and partnership, an independent involvement in political arrangements which can boost bilateral relations.

The Lome conventions granted non-reciprocal trade preferences to ACP countries. They included many more innovations than the Yaoundé Conventions. For example, agricultural sectoral programmes first appeared in the Lome Conventions. In addition, a compensatory mechanism was created under Stabex to offset losses in export earnings due to price fluctuations. From Lome I to Lome IV

Improvements were added from one convention to the next without causing any major disruptions. Lome II saw the appearance of Sysmin, a mechanism similar to Stabex, but for mining products. The negotiation of that convention, signed in 1984, in the middle of a decade characterised by a quest for viability and efficiency, was marked by the calling into question of the effectiveness of aid. Emphasis was placed on food self-sufficiency for ACP countries. The expression "political dialogue", or policy dialogue, made its appearance in Lome III, but political dialogue would only really be introduced in Lome IV. Negotiated during the turmoil of 1989, that Convention enshrined respect for Human Rights as a fundamental clause. In the meantime, the structural adjustment established by the Bretton Woods Institutions had been supported by Europe and was therefore taken on board in Lome IV. The major innovation of that Agreement still remains its duration. Signed for a 10-year period, it included two 5-year Financial Protocols and the 7th and 8th EDFs. Lome IV was signed by 68 ACP countries and 12 EU Member-States. The negotiation of the second financial protocol led to more changes than had been anticipated. The European public displayed a certain lack of interest in cooperation at the end of the Cold War. The clause on respect for Human Rights and democratic principles was by then an essential aspect of cooperation, and measures for the suspension of aid made their appearance. Review of Lome IV

Lome IV bis, which was signed in 1995, saw the number of signatory countries move to 70 for the ACP and 15 on the EU side, and distinguished itself by the importance accorded to decentralised cooperation and the role of civil society. Twenty years of Europe-ACP cooperation and the consolidation of solidarity among ACP countries had forged a cohesive bond which made the breaking up of the ACP bloc or any weakening of the ACP entity quite unthinkable. The Cotonou Agreement

Negotiation of the Cotonou Agreement was fraught with obstacles and took place in the midst of a period of global orthodoxy. The benefits and opportunities of the liberal economic system are undeniable but the constraints and lack of insight inherent in some economic policies imposed in different places have been counter-productive and resulted in the failure of the World Trade Organisation´s Ministerial Conference in Seattle, which enabled all involved to become more aware and to include a social agenda in economic adjustments. It is in the wake of this transformation that the Cotonou Agreement was signed by 77 ACP countries on 13 June 2000. Cuba, candidate to the Agreement was, unfortunately, unable to sign it. Nonetheless, the ACP Group decided to include Cuba, in the hope that the problems which prevented its accession to the ACP-EU partnership would be resolved in the near future. The last country to become a member of the ACP Group was Timor Leste. It is affiliated with the Pacific region. It became an ACP Member-State in 2003, shortly after its independence. The Cotonou Agreement, by its very existence, represents a significant success for the ACP Group. It was forged from the Group´s determination to maintain its solidarity - a solidarity which certainly convinced the ACP States´ European partners. In addition, the Agreement, despite not meeting all the ACP demands, took on board their fundamental concerns. First of all by its duration - twenty years- sufficient time to enable ACP Member-States to get onto the road to development and, especially, to become smoothly integrated into the global market. Indeed, the Agreement envisages the removal of non-reciprocal trade preferences

granted ACP countries, but only after a long transition period. In fact, Economic Partnership Agreements (EPA) will be negotiated between the European Union and ACP countries between September 2002 and the end of 2007, following which they will come into force. Economic Partnership Agreements (EPA)

The ACP-EU Economic Partnership Agreements (EPA) are supposed to be special trade agreements which, like the Cotonou Agreement that spawned them, aim mainly to ensure the development of ACP countries and their gradual integration into the global economy. They must be compatible with the rules of the World Trade Organisation. In addition to the gradual nature of any trade liberalisation among ACP countries, the EPAs must fulfill a second criterion, i.e. asymmetry, which means that they must take account of the difference in the levels of social and economic development between the European Union and ACP countries. At the same time, the European Union will assist ACP countries and businesses to implement the necessary structural and macro-economic reforms, by building their capacities so as to enable them to better cope with the challenges of competition and globalization. This transitional phase of ACP-EU trade cooperation from 2000-2007 required the approval of the WTO, which was hard-won. In November 2001, the determination of the ACP countries, bolstered by the unstinting support of the European Union at the 4th WTO Ministerial Conference, enabled them to claim a decisive victory, perhaps for their future: they obtained a WTO waiver for the trade chapter of the Cotonou Agreement. On that occasion, the ACP Group stood out as one of the emerging Groups from the developing world. It was firm but realistic, opting resolutely for free trade while remaining determined to protect its vital interests. Innovations of the Cotonou Agreement

Apart from its relatively long duration (20 years instead of 5 years as for Lome I, II and III, and 10 for Lome IV), the main innovations of the Cotonou Agreement derive from the fact that it incorporates civil society and the private sector as new actors on the political level. They will, therefore, no longer be mere beneficiaries of cooperation, but feature among the managers, insofar as permitted by the prerogatives of governments, which are solely responsible for determining the main development policies for their countries. The major options within the Cotonou Agreement were not imposed on the ACP but constitute a deliberate choice and are part of the ongoing development of the Group´s member-countries, be it the choice of economic liberalisation or a stronger affirmation of political dialogue. This involves the democratization of ACP countries and the involvement of new actors in the implementation of cooperation. Almost all ACP member-countries had already undergone a political renewal prior to the signing of the Cotonou Agreement, and although some countries are still experiencing problems like civil war, they are increasingly few in number. The rise in democracy is seen particularly in the progressive development of the ACP-EU Joint Parliamentary Assembly, organ of cooperation between the European Parliament and parliaments of ACP countries, into a true Joint Parliamentary Assembly of democratically-elected parliamentarians, in keeping with the spirit and letter of the Cotonou Agreement. Government - civil society Partnership

The serious economic crisis at the end of the 80s and 90s which saw civil society in ACP countries playing an increasingly active role in the fight against poverty, gave rise, inter alia, to dialogue between social actors and governments. Governments felt the need to harness the dynamism of all sectors of the society primarily with a view to reducing and ultimately eradicating poverty. As a result, as soon as the Cotonou Agreement was signed, the ACP Group took steps to encourage the organisation and strengthening of civil society and the ACP private sector. An ACP Civil Society Forum and a Private Sector Forum were set up by the ACP Group. These sectors now serve as mechanisms for implementing cooperation.

Twenty-five years of cooperation have demonstrated that, albeit enabling developing countries to survive, aid cannot create development. Trade, by contrast, is a determining factor of development. The Cotonou Agreement promotes the strengthening of real economic partnership through new trade agreements, among other things. The Group has been making tremendous efforts to attract foreign investment and has been trying, therefore, to establish a favourable legal, economic and political environment to achieve that objective. ACP Summits

Changes on the world scene at the end of the 80s, which saw the end of ideological bipolarisation, the economic problems of that era, and other factors prompted ACP Heads of State and Government to meet, for the first time, in Libreville, Gabon, in November 1997. At that 1st Summit, they laid down the guidelines for strengthening the Group by assigning more specific roles to the ACP organs and deciding to reform the General Secretariat by transforming it from a mere organ of support to the political bodies into an executive institution. The Group also decided to extend consultations among its member-countries to various fora such as the United Nations Organisation. The 2nd ACP Summit, held in Santo Domingo, Dominican Republic, in November 1999, gave even more precise directives for intra-ACP cooperation and broadening the scope of the Group which, while maintaining its privileged partnership with the European Union, needed to develop a dialogue with other blocs and make its voice heard in the new economic and geopolitical context. The affirmation of the ACP Group´s presence at the Ministerial Conferences of the World Trade Organisation, for example, (Doha, November 2001, and Cancun, September 2003) is the logical consequence of the Summit directives and their subsequent implementation. The 3rd Summit of ACP Heads of State and Government held in Nadi, Fidji, in July 2002, established guidelines in view of the negotiation of future ACP-EU Economic Partnership Agreements, with a view to positioning the ACP Group in the current economic and geopolitical context. OBJECTIVES

The objectives of the ACP Group, as defined by the Georgetown Agreement, are to : • Promote a new, fairer and more equitable world order ; ; • Promote and strengthen solidarity among ACP States, and understanding between ACP peoples and governments ; • Contribute to the development of important and close economic, social and cultural relations among developing countries and develop cooperation among ACP States in the areas of Trade, Science and Technology, Industry, Transport, Education, Training and Research, Information and Communication, the Environment, Demography and Human Resources ; • Contribute to the promotion of regional, inter-regional, and effective intra-ACP cooperation among ACP States, generally among developing countries, and strengthen the regional organisations of which they are members ; • Define common positions of ACP States vis-à-vis the EEC in areas covered by the Lome Convention and on relevant issues debated in international fora, which may influence the implementation of the Lome Convention ; • Ensure achievement of the objectives of the Lome Convention ; and • Coordinate the activities of ACP States in the framework of the application of the Lome Convention. IMPORTANT DATES

1957 Signing of the Treaty of Rome which established the European Community, and contains a

section on cooperation with Overseas Countries and Territories (OCTs). Creation of the "Regime of Association" with resources from the 1st European Development Fund (EDF). 1963 Signing of the 1st Yaoundé Convention by 18 African States and 6 European countries, supported by resources from the 2nd EDF. That Agreement, like the 2nd Yaoundé Convention, was designed mainly for financial, technical and trade cooperation primarily in the sectors of economic and social infrastructure. 1969 Signing of the 2nd Yaoundé Convention supported by the 3rd EDF. 1973 Accession of the United Kingdom to the European Community opens the way for the extension of Europe-Africa cooperation to Commonwealth countries in Africa, the Caribbean and the Pacific. 1975 Signing of the Georgetown Agreement - the founding Charter of the Group. It defines the rules governing cooperation among the countries of the 3 continents whose main link was the sharing of aid from the European Community. Entry into force of the Lome Convention - signed by 46 ACP countries and 9 European States - which marks the beginning of cooperation between Europe and the ACP Group. The Convention grants non-reciprocal trade preferences to ACP countries and establishes Stabex: compensatory mechanism for loss of export earnings due to price fluctuations. It is coupled with the 4th EDF. 1980 Signing of the 2nd Lome Convention by 58 ACP countries (coupled with the 5th EDF). Appearance of Sysmin : mechanism similar to Stabex, created for mining products. 1985 Signing of the 3 rd Lome Convention by 65 ACP countries and 10 European States, (6th EDF). Emphasis is placed on food self sufficiency in ACP countries. 1990 Signing of the 4th Lome Convention which introduces a political dimension to cooperation. 1995 Signing of the 4th Lome Convention bis by 70 ACP countries and 15 European countries. The Convention emphasizes the importance of decentralised cooperation and the role of civil society. November 1997 1st ACP Summit in Libreville, Gabon, to consider how to strengthen the Group. November 1999 2nd ACP Summit in Santo Domingo, Dominican Republic, with the theme: "On the road to the 3rd millennium". 23 June 2000 Signing of the Cotonou Agreement by 77 ACP countries, which provides for the abolition of non-reciprocal trade preferences after a transition period of ACP-EU trade cooperation. During that time, from September 2002 to the end of 2007, Economic Partnership Agreements (EPAs) will be negotiated between the European Union and ACP States. November 2001 The ACP States obtain a waiver from the rules of the World Trade Organisation (WTO) on the trade chapter of the Cotonou Agreement at the 4th WTO Ministerial Conference. July 2002 3rd ACP Summit in Nadi, Fiji, with the theme: "ACP Solidarity in a globalized world". The

Summit defined guidelines for the Group in view of the negotiations for the Economic Partnership Agreements (EPA). September 2002 Start of negotiations for Economic Partnership Agreements (EPA) in Brussels. June 2003 1st meeting of ACP Ministers of Culture October 2003 Start of EPA negotiations with the regions of West and Central Africa. February 2004 Start of EPA negotiations with the regions of East and Southern Africa Source: ACP Secretariat Website

“D” EIB authorised Financial Institutions ALA - Countries Asia and Latin America Central America BANCO CENTROAMERICANO DE INTEGRACION ECONOMICA-BCIE Apartado Postal 772

Tegucigalpa, M.D.C.

Honduras Carlos WATSON, Jefe

Brazil Banco Itaú BBA S.A. Avenida Paulista 37, 18° andar CEP 01311-902 Saõ Paulo Brazil Maria Estela FERRAZ DE CAMPOS, Financiamento de Projetos Brazil UNIBANCO - União de Bancos Brasileiros S.A. Av. Eusébio Matoso, 891 - 9th Floor, Pinheiros CEP 05423-901 São Paulo Brazil Marcelo FANGANIELLO, Funding Manager - Capital Markets Unit

India Rabo India Finance Forbes Building, 2nd Floor Charanjit Rai Marg, Fort, Mumbai 400 001 India Ashutosh Maheshvari, Executive Director Financial Sector Group

Indonesia Rabobank International Indonesia Plaza 89, 9th Floor Jl. H.R. Rasuna Said, Kav. X-7/6 Jakarta 12940 Indonesia Sani Effendy, Vice President Corporate Finance Andean Pact CORPORACION ANDINA DE FOMENTO-CAF Av. Luis Roche Torre CAF, Altamira P.O. Box: Altamira 69011 Caracas Fernando INFANTE, Director Financiamiento Multilateral y de Banca Comercial

Philippines ABN AMRO 18/F LKG Tower 6801 Ayala Avenue, 1286 Makati City Philippines Filomeno G. Yaptinchay, Vice President, Financial Markets Philippines Development Bank of the Philippines

Sen. Gil. J. Puyat Avenue, Corner Makati Avenue Manila Philippines Ignacio C. Serrano, Senior Assistant Vice President, Fund Sourcing

Sri Lanka The Socialist Republic of Sri Lanka Ministry of Policy Development and Implementation The Secretariat (3rd Floor), PO Box 277 Source: Website EIB

Offices of the W.S.U. General Secretary H-1026 Budapest, Garas utca 22, Tel: +36 (1) 315 10 59 mailto: [email protected]