Explanatory Memorandum to COM(2012)113 - EU position within the ACP-EU Council of Ministers regarding the revision of terms and conditions of investment financing (Chapter 1 of Annex II to the ACP-EC Partnership Agreement)

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dossier COM(2012)113 - EU position within the ACP-EU Council of Ministers regarding the revision of terms and conditions of investment financing ...
source COM(2012)113 EN
date 19-03-2012
The Partnership Agreement between the members of the African, Caribbean and Pacific (ACP) Group of States, of the one part and the European Union and its Member States, of the other part, signed in Cotonou on 23 June 2000 i, provides that the ACP Investment Facility is comprised of resources managed as a revolving fund and of grants in the form of the financing of interest rate subsidies. It also provides that up to 10% of the latter envelope may be used to support project related technical assistance in ACP countries (Annex II to the ACP-EC Partnership Agreement, Chapter 1, Articles 1(3) and 2(9)).

Project related technical assistance helps partner countries and investors to better prepare and supervise their investment projects, to improve the quality and the impact of investments, and to strenghthen the management capacities of local partners in the medium and long term.

As foreseen in article 6b of Chapter 1 of Annex II to the ACP-EC Partnership Agreement, a mid-term evaluation of the Investment Facility was conducted in 2010 as an independent assessment, covering the period 2003-2009. For the sake of completeness, European Investment Bank (EIB) operations under own resources were also included. The evaluation concluded that the use of technical assistance was an important component of the added value of EIB operations in general and of the Investment Facility in particular, contributing to strenghthening the management practices of the financial intermediaries. However it also noted that the current envelope for technical assistance was too limited and recommended developing mechanisms for securing supplementary grant resources for technical assistance combined with other instruments managed by the European Investment Bank, such as loans and equity investments. This recommendation was endorsed by the European Commission and the European Investment Bank. The proposal intends therefore to allow the European Investment Bank operations, under both the Investment Facility and the EIB own resources, to continue benefiting from project related technical assistance during the current Financial Protocol (10th European Development Fund) and beyond.

In accordance with Article 100 of the Cotonou Agreement, Annex II may be revised by a decision of the ACP-EU Council of Ministers.

The objective of the proposed Decision is to increase from 10% to 15% the part of the envelope for interest rate subsidies which can be used for projects related technical assistance, as defined in articles 1(3) and 2(9) of Chapter 1 of Annex II to the ACP-EC Partnership Agreement. It is recalled that this percentage represents a ceiling.

The Commission proposes that the Council adopts the attached Decision.