# EUR-Lex - 52012PC0113 - EN

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# 52012PC0113

**Proposal for a COUNCIL DECISION on the position to be taken by the European Union 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) /* COM/2012/0113 final - 2012/0052 (NLE) */**

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EXPLANATORY MEMORANDUM

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[1],
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.

2012/0052 (NLE)

Proposal for a

COUNCIL DECISION

on the position to be taken by the
European Union 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)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 209 (2) in
conjunction with Article 218 (9) thereof,

Having regard to the Partnership Agreement
between the members of the African, Caribbean and Pacific Group of States of the
one part, and the European Community and its Member States of the other part, signed
in Cotonou on 23 June 2000[2]
(hereinafter referred to as 'the ACP-EC Partnership Agreement'),

Having regard to the proposal from the
Commission,

Whereas:

(1)       Article 100 of the
Partnership Agreement lays down that Annexes Ia, Ib, II, III, IV and VI of the
Agreement may be revised, reviewed and/or amended by the ACP-EU Council of
Ministers on the basis of a recommendation from the ACP-EU Development Finance
Cooperation Committee.

(2)       A mid-term evaluation on
the use of the Investment Facility and of EIB own resources in the ACP region was
conducted in accordance with article 6b of Chapter 1 of Annex II to the ACP-EC
Partnership Agreement. One of the recommendations presented in the evaluation was
to secure supplementary grant resources for technical assistance.

(3)       Taking into account the
results of the mid-term evaluation, the purpose of the proposed revision of
Annex II to the ACP-EC Partnership Agreement 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.

HAS ADOPTED THIS DECISION:

Article 1

The position to be taken by the European
Union within the ACP-EU Council of Ministers regarding the revision of Annex II
to the ACP-EC Partnership Agreement shall be based on the draft Decision of the
ACP‑EU Council of Ministers attached hereto.

Article 2

After its adoption, the Decision of the
ACP-EU Council of Ministers shall be published in the Official Journal of
the European Union.

Done at Brussels, 19.3.2012

For
the Council

The
President

ANNEX

Draft

DECISION
OF 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)

THE ACP-EU COUNCIL OF MINISTERS,

Having regard to the Partnership Agreement
between the members of the African, Caribbean and Pacific Group of States of
the one part, and the European Community and its Member States, of the other
part, signed in Cotonou on 23 June 2000[3]
as amended in Luxembourg on 25 June 2005[4]
and in Ouagadougou on 22 June 2010[5]
(the ‘ACP-EC Partnership Agreement’), and in particular Article 100 thereof,

Whereas:

(1)
A mid-term evaluation on the use of the
Investment Facility and of EIB own resources in the ACP region was conducted in
accordance with Article 6b of Chapter 1 of Annex II to the ACP-EC Partnership Agreement.
One of the recommendations presented in the evaluation was to secure
supplementary grant resources for technical assistance.

(2)
Taking into account the results of the mid-term
evaluation, the purpose of the proposed revision of Annex II to the ACP-EC Partnership
Agreement 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.

HAS DECIDED AS FOLLOWS:

Article 1

Chapter 1 of Annex II to the ACP-EC
Partnership Agreement is amended as follows:

1. In Article 1, paragraph 3 is replaced by
the following:

'Interest subsidies may be capitalised or
may be used in the form of grants. The amount of the interest rate subsidy,
calculated in terms of its value at the times of disbursement of the loan,
shall be charged against the interest subsidy allocation specified in Annex Ib,
paragraph 2(c), and paid directly to the Bank. Up to 15% of this
allocation for interest rate subsidies may also be used to support project
related technical assistance in ACP countries.'

2. In Article 2, paragraph 9 is replaced by
the following:

'Interest subsidies may be capitalised or
may be used in the form of grants. Up to 15% of the budget for interest rate
subsidies may be used to support project related technical assistance in ACP
countries.'

Article 2

This Decision shall enter into force on the
day of its adoption.

Done at [...], [...]

For
the ACP-EU Council of Ministers

The
President

[1]               OJ
L 317, 15.12.2000, p. 3. Agreement as amended by the Agreement signed in
Luxembourg on 25 June 2005 (OJ L 287, 28.10.2005, p. 4) and by the Agreement
signed in Ouagadougou on 22 June 2010 (OJ L 287, 4.11.2010, p. 3).

[2]               OJ
L 317, 15.12.2000, p. 3. Agreement as amended by the Agreement signed in
Luxembourg on 25 June 2005 (OJ L 287, 28.10.2005, p. 4) and by the Agreement
signed in Ouagadougou on 22 June 2010 (OJ L 287, 4.11.2010, p. 3).

[3]               OJ L 317, 15.12.2000, p. 3. Agreement as rectified by
OJ L 385, 29.12.2004, p. 88.

[4]               OJ L 209, 11.8.2005, p. 27.

[5]               OJ L 287,
4.11.2010, p. 3.