acp investment facility - european parliament · 2013. 3. 20. · european investment bank 14...

1 European Investment Bank

ACP Investment Facility Presentation by H. Rüttgers,

HoD Portfolio Management & Policy, ACPIF Department, EIB

to the

ACP-EU Joint Parliamentary Assembly

Committee on Economic Development, Finance and Trade

Brussels, 21.03.2013


EIB lending in ACPs & OCTs

Sources of funding:

- European Development Fund (EDF)

- EIB Own Resources

ACPs: the oldest mandate entrusted to the EIB (1963)

Since 2003: “Cotonou Partnership Agreement”

Builds on 50 years of experience

OCTs: since 1968

Since 2001: “Overseas Association Decision”

EIB’s role focuses on Financial Cooperation:

managing the Investment Facility & lending from its own resources


Sources of funding

European Union

►Loans* ►Interest rate

►Equity ►Technical assistance

►Guarantees

Intra-ACP and inter-

regional cooperation

Revolving fund

Total capital endowment under

9th and 10th EDFs

ACPs EUR 3 137m · ACPs EUR 400m

OCTs EUR 48.5m · OCTs EUR 1.5m

* Senior, junior, subordinated and intermediated loans, as w ell as quasi-equity operations.

European Investment Bank

European Development Fund

(EU Member States’ budgetary funds)

Own resources►Grants Investment Facility

National and regional

indicative programmes

►Senior loans

Subsidies

ACPs up to EUR 2 000m

Amounts available under the 10th EDF 2008-2013

OCTs up to EUR 30m


Economic growth

Poverty reduction

&

Millennium Development Goals

Private sector

development, through

Foreign Direct Investors,

Local private sector

Financial sector

Commercially viable public entities

The objectives The means

Use of a wide range of

risk-bearing instruments

Value added of the IF

The constraints

• Ensure the long-term

sustainability of the IF

through risk pricing

• Mitigate the risk of MS as

guarantors vs.

developmental objective

Lending under the IF and OR


STRATEGIC FOCUS

Microfinance SMEs Transport Water Energy

- mainly through intermediaries - - public & private sector -

Infrastructure Financial sector

Telecoms

ACROSS SECTORS

CLIMATE ACTION IS A KEY PRIORITY

Other Sectors are also eligible but will remain

marginal in the EIB portfolio


EIB lending in the ACPs & OCTs

- instruments -


The Investment Facility


Own resources

European

Investment

Bank

9

EIB Own Resources

Senior debt denominated in EUR and widely traded currencies

• Funds borrowed on the capital markets

providing

• 1st class guarantee or prime-quality security

usually required (unless sovereign risk)

•Mainly Public sector investments: sovereign/sub-sovereign

borrowers


Own Resources versus Investment Facility

EIB own resources:

Public sector investments: sovereign/sub-sovereign borrowers

Private sector projects covered by a third party guarantee

IF resources:

Private sector investments requiring risk-bearing instruments

e.g.: conditional loans/ subordinated loans/guarantees/equity

OR & IF resources complement each other

European

Investment

Bank

11

Range of Available Financial Instruments in the ACPs

Investment Facility EIB Own resources

Senior debt

Junior/subordinated debt

Intermediated loans

Quasi-equity

Equity

Guarantees

Currencies

- widely traded

- local

Only widely traded

currencies

Interest rate subsidies

Project related TA

European

Investment

Bank

12

Other

Instruments


Interest Rate Subsidies

Available to increase concessionality for:

Infrastructure projects in Least Developed Countries, post-

conflict and post-natural disaster countries, HIPC countries

projects with substantial and clearly demonstrable

environmental or social benefits

restructuring operations in the framework of privatisations

General rule applied :

- Interest rate subsidy: maximum 3 %

- Final rate of loan: cannot be less than 50% of the reference rate

- In the case of HIPC countries, the interest rate may be reduced by such

amount as required to comply with the level arising from the HIPC initiative


Technical assistance

Up to EUR 60 m (ACPs) and 0.15 m (OCTs)

over the 2008-2013 period

to provide

- enhancing project quality and success rate

- increasing the efficiency of EIB’s investment activities

- complementing other EIB products

Strategic initiatives Project-related

Capacity building, covering the whole project cycle:

microfinance undertakings

infrastructure projects

focus on project preparation & implementation


Innovative forms of blending

Leverage additional public and private resources for EU development

policy objectives (financial leverage)

Increase aid effectiveness:

Grant element can improve the quality and sustainability of

projects and speeds up processes (non-financial leverage)

Careful use of loans can assist in increasing financial

discipline and ownership compared to exclusively grant receipts

Promote cooperation and coordination between aid actors (donors

and finance institutions)

EU

resources

Finance

Institutions

resources

other

resources


Overview of 2012 operations

European

Investment

Bank

17

•

EIB and the Cotonou Agreement • 9 years down the road (31/12/2012)

• Total net signatures of EUR 5.5 bn

EUR 3 052m under the IF (EUR 355m in 2012)

EUR 2 477m under EIB own resources

( EUR 289m in 2012)

• Two thirds of the portfolio relate to private sector

operations

• More than one third of total investments

went to African infrastructure

• Close to 80 % of the portfolio relate to Africa


IF v. OR overall figures

in EUR m

Year

Investment

Facility (IF)

Own Resources

(OR)

N° projects Total

2009 414.1 413.2 29 827.3

2010 369.1 597.8 25 966.8

2011 203.9 386.6 26 590.5

2012 354.8 282.0 23 636.8*

* A further EUR 100 m was signed for two projects in the Republic of

South Africa, bringing total lending for the 2012 year to EUR 736.8m

acp investment facility - european parliament · 2013. 3. 20. · european investment bank 14...

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