-1-June 2006

EU InfrastructureTrust Fund

The EU - Africa Partnership on Infrastructure

and the Trust Fund

Antonio Garcia FragioHead of Division

Transport, Energy, Water, ICT and urban development

Directorate General DevelopmentEuropean Commission

Addis Abeba19 June 2006

Outline

1. The Partnership and the ICA

2. Shared objectives and strategy

3. How will it work – Africa

4. How it will work - EU

5. Examples of what it will finance – Transport and ICT

6. Examples of what it will finance – Water and Energy

7. What are its financial instruments

8. What are the next steps

1 The Partnership and ICA

• European response to the AU-NEPAD Infrastructure Plan

• A concept for interconnecting Africa – country with country, region with region & Africa with the rest of the world

• A Partnership that works at three levels – continental, regional and country – using the principle of subsidiarity

• Infrastructure : transport, energy, water & ICT - regulatory frameworks & facilitation for service delivery

• Coordination with ICA paramount. EU membership of ICA will facilitate coordination

2 Shared objectives and strategy

Shared Objectives• Stimulate sustainable economic growth• Promoting competitive trade• Fostering regional integration• Contributing effectively to poverty reduction and Africa’s MDGs

Strategy: two complementary themes• Support programmes that facilitate interconnectivity continental

& regional level• Support programmes coherent with national poverty reduction

and infrastructure sector strategies

3 How will it work - Africa

• AU-NEPAD ensures African ownership at all levels – through the RECs provides policy guidance & ensures overall integrity

• AU-NEPAD with its continental-wide political mandate will facilitate dialogue at REC level and between RECs

• AU-NEPAD with RECs will monitor & update i-Action Plan

• RECs reach consensus on regional priorities with their Member countries, facilitate implementation of REC regional projects, regional & international protocols etc. linking to Economic Partnership Agreements (EPAs)

• African countries - project owners - align national & regional priorities, enforce regional & international agreements – key to sustainability

4 How will it work - EU

• European Commission (HQ and Delegations)-Leadership of EU-side of Partnership, coordinate with MS, etc.

• European Investment Bank- Co-financier of projects- Administration of Trust Fund

• European Member States- Endorsement of overall programme - Co-financiers of TF and NIPs/RIPs

• EU MS Development Bank, EDFIs- Promoters and co-financiers of projects

5 Examples of what it will finance – Transport and ICT

Transport• Priority to Trans-African corridors and regional networks• Maritime ports although airports not excluded• Facilitation programmes aimed at improving the free movement

of goods and people along regional and continental corridors

ICT• Support to regulatory reform

- establish and consolidate national and regional ICT strategies- establish independent regulatory authorities

• Investment in broadband infrastructure• Non-commercial e-applications:

- e-government- telemedicine

6 Examples of what it will finance - energy and water

Electricity Interconnection• Connecting energy surplus areas to deficit areas• Capacity building to Power Pools, continental energy bodies,

regulatory institutions, etc.Power Generation

Water• Transboundary river basin management• Flood preparedness programmes• Knowledge and monitoring of water resources for better water

management

7 What are its financial instruments

• EU-Africa Trust Fund – open to all EU Member States- co-financing EIB, EDFIs, AfDB

• Regional and National Indicative Programmes- focus on facilitation linked to trade and EPAs- support to regional networks

• Intra-ACP resources- part to the Trust Fund- part for grant-to-grant financing (capacity building, regional initiatives and facilitation programmes; support to African roads and water sectors)- start-up grant to leverage additional financing form others, for networks or part thereof that qualify as Trans-African

EU Infrastructure Trust Fund for Africa

• MoU signed between Commission and EIB in February 2006

• Trust Fund will be a financial instrument of Infrastructure Partnership, covering investments in continental networks

• Commission will make a contribution of €60m to cover the period 2006-2007. Financing proposal will be ready in October ‘06

• EIB will mobilise up to € 260 million in loans for the same period

Operational principles of the Trust Fund

• Coherence and complementarity with country and regional programmes

• African ownership: AU and Regional Economic Communities involvement in AU-NEPAD Action Plan

• Increase in funding and flexible methods of financing through the blending of grants and loans

• Close coordination with non-EU development institutions working in Africa

Infrastructure Trust Fund

• Participation in Trust Fund open to EU Member States as donors; EU development agencies and financial institutions as financiers

• African partners associated with the Fund

• Priorities for financing: trans-African networks for transport, energy, water and ICT

• Projects in support of AU-NEPAD priorities

Infrastructure Trust Fund

• Use grant funds to leverage loan funds through interest rate subsidies

• Trust Fund will also finance grants for feasibility studies and capacity building

• Modalities for the implementation of the Trust Fund are been finalised. AU/NEPAD will participate at the Steering Committee of the Trust Fund

• Objective: Fund established by summer 2006. First batch of projects approved by end 2006