Decision No 2/2000 of the ACP-EC Council of Ministers

of 15 December 2000

on granting financial support to an investment financing programme for industrial and business development in the ACP States

(2001/50/EC)

THE ACP-EC COUNCIL OF MINISTERS,

Having regard to the Fourth ACP-EC Convention, as amended by the Agreement signed in Mauritius on 4 November 1995, and extended by Decision No 1/2000 of the ACP-EC Council of Ministers, and in particular Article 282(5) thereof,

Whereas:

(1) The Fourth ACP-EC Convention assigns a key role to the private sector in helping to restructure the ACP economies, especially by creating jobs, boosting earnings and integrating these economies into the global economy.

(2) A substantial amount of funds has been allocated to investment financing in both public and private sectors, through a provision of EUR 1825 million as risk capital operations from the European Development Fund (EDF).

(3) The total volume of risk capital commitments, for the two financial protocols, stands, on 31 July 2000, at EUR 1312 million. EUR 190 million of approved loans pending signature is to be added to that amount. These two amounts represent EUR 1502 million, that is to say 82,3 % of the total resources provided for operations of this type by the Convention and managed by the European Investment Bank (EIB).

(4) The Community, in particular, has adopted a new strategy for private sector development in developing countries, placing emphasis not only on support to macroeconomic reform policies, but also on support to intermediary and microeconomic levels.

(5) The ACP-EC Council of Ministers considers it essential that the current instruments and initiatives funded by the eighth EDF are not hindered by lack of resources, in particular for investment financing. However, if the current rate of commitment is maintained, the amount of resources allocated for risk capital operations under the Fourth ACP Convention runs the risk of being fully utilised before the entry into force of the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000 and before resources under the new Investment Facility become available.

(6) The ACP-EC Council of Ministers took, on 27 July 2000, Decision No 1/2000 on the transitional measures applicable from 2 August 2000 until the entry into force of the ACP-EC Cotonou Agreement. That decision was adopted taking into account the need to ensure continuity of development financial cooperation.

(7) The financial resources available, in particular, for the private sector should be reinforced, in order to prevent exhaustion of resources from interrupting the flow of financing.

(8) Some EUR 300 million could be absorbed by investment operations in the ACP States over the next three years, in addition to the EUR 1825 million already programmed by the EIB. These resources should be mobilised to fund an investment financing programme in support of the private sector for all ACP States.

(9) The risk-capital operations to be financed under this Decision should also be complemented by significant private sector funding and contribute to the enhancement of local management skills. Part of the funds earmarked for risk-capital operations under this Decision should be used to underpin the development of local financial institutions.

(10) The ACP-EC Council of Ministers will decide at a later stage how to use the funds that would return to the financing programme after investments have been repaid by the borrowers,

HAS DECIDED AS FOLLOWS:

Article 1

The following unallocated programmable resources from the eighth EDF and earlier Funds as well as unused funds for interest subsidies and risk capital operations from the sixth and seventh EDFs may be used, up to a maximum of EUR 300 million, to finance risk capital operations in ACP States, divided up as follows:

- a maximum amount of EUR 183 million from the non-allocated eighth EDF programmable resources for these operations,

- a maximum amount of EUR 55 million from the non-allocated sixth EDF resources for risk capital for these operations, and

- a maximum amount of EUR 62 million from the non-utilised seventh EDF resources for interest subsidies for these operations.

These funds shall be additional to the resources allocated for risk capital operations under the eighth EDF and shall be managed by the EIB.

Article 2

The EIB will be invited by the appropriate bodies to manage this financing programme in accordance with the current procedures and financing criteria laid down in the Convention for the use of risk capital operations.

The ACP-EC Council of Ministers will decide at a later stage how to use the funds that would return to the financing programme after investments will have been repaid by the borrowers.

The financing programme will come to an end three months after the entry into force of the ACP-EC Cotonou Agreement. After this period of three months, no decision may be taken by the EIB.

Article 3

The Commission shall be bound to take the measures necessary to implement this Decision.

Article 4

This Decision shall enter into force on the day on which it is adopted.

Done at Brussels, 15 December 2000.

For the ACP-EC Council of Ministers

The President

D. Gillot