Communication from the Commission to the Council and the European Parliament - Communication on the future development of the EU Water Initiative and the modalities for the establishment of a Water Facility for ACP countries
Date: 2004-01-26
Institutions: European Commission
Subjects: ACP countries, EU initiative, EU office or agency, European Development Fund, decontamination, drinking water, operation of the Institutions, sustainable development, water management

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 26.1.2004 
COM(2004) 43 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL  
AND THE EUROPEAN PARLIAMENT 

Communication on the future development of the EU Water Initiative and the 
modalities for the establishment of a Water Facility for ACP countries 

EN 

   EN 

 
 
 
TABLE OF CONTENTS 

1. 

2. 

3. 

THE WATER CHALLENGES.................................................................................... 4 

THE EU POLICY BACKGROUND ........................................................................... 6 

TRANSLATING POLICY INTO ACTION: THE EU WATER INITIATIVE.......... 7 

Africa an urgent priority............................................................................................................. 8 

The Caribbean and Pacific ......................................................................................................... 9 

Other regional Components in the EU Water Initiative ............................................................. 9 

The future development of the EU Water Initiative and the Multistakeholder process............. 9 

The financial challenge and the need for innovative mechanisms........................................... 10 

4. 

4.1. 

4.2. 

A WATER FACILITY FOR ACP COUNTRIES ..................................................... 12 

KEY PRINCIPLES .................................................................................................... 12 

ACTIVITIES TO BE FUNDED UNDER THE WATER FACILITY ...................... 13 

Institution building and non investment related TA................................................................. 14 

Support to the investment projects and related TA .................................................................. 15 

5. 

5.1. 

5.2. 

6. 

6.1. 

6.2. 

6.3. 

6.4. 

7. 

MANAGEMENT OF THE ACP-EU WATER FACILITY ...................................... 15 

Institution building and non investment related TA .................................................. 16 

Investment projects and related TA ........................................................................... 16 

MOBILISATION OF THE FUNDS.......................................................................... 19 

Lack of unallocated resources.................................................................................... 20 

Context of the conditional one billion €..................................................................... 20 

Assessment of commitments and disbursements ....................................................... 20 

Proposal on the release of the conditional one billion € ............................................ 21 

CONCLUSION .......................................................................................................... 22 

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ANNEX 1: EDF resources for ACP countries – situation at 31-10-200324............................ 24 

ANNEXES 

ANNEX 2: Draft Proposal for a COUNCIL DECISION concerning the release of the 
conditional amount of € one billion under the ninth European Development Fund for co-
operation with African, Caribbean and Pacific countries ........................................................ 25 

ANNEX 3.1: Note to the Members of the EDF Committee .................................................... 31 

ANNEX 3.2: Draft Proposal for a COMMISSION DECISION amending Commission 
decision N° C(2001)1578/2 of 15-6-2001 on allocations to regional programmes and to intra-
ACP co-operation under the financial protocol of the ACP-EC Partnership Agreement ........ 33 

ANNEX 4: Draft Proposal for a COUNCIL DECISION on the position to be adopted by the 
Community within the ACP-EC Council of Ministers regarding a decision on the use of the 
reserve of the long-term development envelope as well as resources from the Investment 
Facility of the ninth European Development Fund for the establishment of an ACP-EU Water 
Facility...................................................................................................................................... 37 

ANNEX 5: List of Acronyms................................................................................................... 43 

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL  
AND THE EUROPEAN PARLIAMENT 

Communication on the future development of the EU Water Initiative and the 
modalities for the establishment of a Water Facility for ACP countries 

Clean  drinking  water  and  good  sanitation  facilities  are  largely  taken  for  granted  in  the 
European Union. However, much of the developing world is not so fortunate. At the World 
Summit on Sustainable Development (WSSD), the EU launched a Water Initiative designed 
to  contribute  to  the  achievement  of  the  Millennium  Development  Goals  for  drinking  water 
and  sanitation.  The  EU  Water  Initiative  is  designed  to  bring  the  Community  and  Member 
States  together  with  the  civil  society  and  financial  institutions,  as  well  as  the  expertise  and 
investment potential of the EU’s water industry. 

The EU Water Initiative is based on the principle that our objectives for drinking water and 
sanitation,  should  be  achieved  within  the  context  of  an  integrated  approach  to  river  basin 
management. The EU Water Initiative began with a focus on Africa to be achieved through a 
Strategic  Africa/EU  Partnership  on  water  and  sanitation  signed  in  Johannesburg.  Since  the 
WSSD  regional  initiatives  have  been  developed  for  Eastern  Europe,  Caucasus  and  Central 
Asia, the Mediterranean and Latin America. The EU Water Initiative has made considerable 
progress  within  the  first  year.  However,  for  the  EU  Water  Initiative  to  make  a  significant 
contribution  towards  achieving  the  Millenium  Development  Goals  (MDG),  it  is  recognised 
that we need to invest more money over and above the substantial amounts already invested 
annually through the EU development programmes. 

In April 2003, following on the proposal made by President Prodi to EU Heads of States, the 
Commission proposed to increase the amount of Community funding available to support the 
EU Water Initiative in the ACP region by allocating to it the ‘conditional €1 billion’ of the 9th 
European Development Fund. In May 2003 the GAERC took note of ‘the political initiative 
taken by President Prodi in his letter of 3 April 2003 to allocate substantial EDF resources to 
that effect’, and of the “Commission’s Communication on the establishment of a Water Fund, 
which  should  play  the  role  of  a  catalyst  and  be  an  instrument  to  attract  other  sources  of 
financing”.  The  Council  invited  the  Commission  to  propose  specific  modalities  to  be 
discussed by the relevant EU Council bodies and the ACP-EC Council of Ministers.  

The  purpose  of  the  present  Communication  is  to  explain  how  the  EU  Water  Initiative 
will  be  developed  in  the  future  and  propose  the modalities  for  the  establishment  of  an 
ACP-EU  Water  Facility,  to  be  the  object  of  a  co-decision  by  relevant  EU  and  ACP 
bodies. 

1. 

THE WATER CHALLENGES 

Freshwater  is  a  finite  and  precious  resource  essential  for  sustaining  life  and  human 
development,  for  undertaking  economically  productive  activity,  and  for  the  environment. 
Water  is  central  to  sustainable  development  and  solving  water  problems  means  progress 
across all pillars of sustainable development: economic, social and environmental. Also, as a 
regular  supply  of  drinking  water  is  one  of  the  most  basic  humanitarian  needs,  it  becomes  a 
daily factor for survival during a humanitarian crisis. 

4 

 
 
  
 
No strategy for the reduction of poverty can ignore people's vital requirements for water, and 
sustainable  development  policies  must  address  the  need  for  equitable  and  sustainable 
management of water resources in the interests of society as a whole. The global water crisis 
threatens lives, sustainable development and even peace and security.  

There have been a number crucial landmarks in the international debate on water over the last 
years  (The  Hague,  Bonn,  Johannesburg  and  Kyoto  Conferences),  which  have  developed  a 
broad  international  agreement  on  what  needs  to  be  done.  In  recognition  of  the  critical 
importance of water for development, the Millennium Development Goals include a specific 
target on water: to halve, by 2015, the proportion of people without sustainable access to safe 
drinking water. 

The World Summit on Sustainable Development in Johannesburg in 2002 took a particularly 
important  step  with  the  adoption  of  a  new  international  target,  with  strong  EU  support:  to 
halve by 2015 the number of people without access to sanitation, to complement the target on 
access to drinking water. The adoption of a new target to develop integrated water resources 
management  plans  was  also  a  positive  step  forward.  Access  to  water  and  sanitation  is  also 
critical for the achievement of other MDGs, such as the target on infant mortality. Adequate 
supplies  of  clean  water  and  sanitation  could  reduce  cases  of  some  diseases  by  as  much  as 
75%. 

•  People And Water: Improving Access To Water And Sanitation Services 

Inadequate water supplies are both a cause and an effect of poverty. Invariably those without 
adequate  and  affordable  water  supplies  are  the  poorest  in  the  society.  The  effects  of 
inadequate  water  supply  -  disease,  time  and  energy  expended  in  daily  collection,  etc.  - 
exacerbate the poverty trap. Donors, recipient countries and stakeholders must work together 
to  improve  access  to  water  services.  Actions  should  be  designed  to  achieve  the  goal  of 
offering  affordable  water  services  while  ensuring  sector  sustainability.  The  effects  of 
increased  access  and  improved  services  are  thus  cross-sectoral,  and  require  interaction  with 
other sectors: health, education, rural and urban development. Water provision, sanitation 
and health are closely inter-related. One of the primary causes of contamination of water is 
the  inadequate  or  improper  disposal  of  human  (and  animal)  excreta.  This  often  leads  to  a 
cycle of infection and contamination which remains one of the leading causes of illness and 
death in the developing world. A much greater emphasis on sanitation is required in order to 
gain  ground  in  this  often-neglected  area.  This  implies  to  improve  hygienic  behaviour  and 
environmental  sanitation  alongside  water  supply  as  critical  ingredients  of  programmes  to 
promote public health. 

Meeting  the  challenge  of  urbanisation:  Access  to  water  and  sanitation  facilities  in  urban 
settlements is constrained by the inadequacy of the existing systems and managing structures 
to face a growing demand for freshwater and sanitation services. New settlers, often under an 
illegal  status,  are  not  served  at  all  and  considerable  capital  investment  and  innovative 
solutions  are  required  to  meet  their  needs.  A  wise  local  and  national  policy  of  urban 
settlements would consist in regulating and planning the growth of cities in order to optimise 
the resources available and the provision of services such as water and sanitation. 

The challenge in rural areas: It is estimated that girls and women in Africa and Asia walk 
around 6km daily to collect water, diverting them from education and economic activity. The 
poorest  and  most  vulnerable  rural  dwellers  are  particularly  sensitive  to  lack  of  water  of 
acceptable quality. 

5 

 
 
  
 
In most developing countries rural economic growth is critical for overall economic growth. 
Food  production  remains  the  main  activity,  on  which  much  of  the  economic  growth, 
diversification  and  development  relies,  requiring  the  sustainable  management  of  water 
resources,  and  improved  water  use  efficiency  particularly  in  agriculture,  the  largest  user  of 
freshwater. 

•  Integrated water resources management 

Population  growth  and  rapid  urbanisation,  changing  lifestyles  and  economic  development 
have led to increasing pressure on water resources everywhere, but especially in developing 
countries. Without effective action, this situation will get worse: the United Nations estimates 
that two out of three people will be living with water shortages by 2025. 

Water  resource  management  needs  to  be  addressed  at  all  levels,  including  the  natural  river, 
lake  or  groundwater  basin.  Integrated  water  resources  management  with  strong  stakeholder 
participation,  a  pro-poor  emphasis,  and  gender  sensitivity  is  a  key  approach  to  ensure  the 
integration  of  water  services  within  an  overall  water  management  framework.  Integrated 
water  resource  management  also  provides  a  framework  to  promote  peace  and  security  in 
transboundary  water  basins.  As  such  the  EU  also  confirms  its  support  for  initiatives  that 
promote regional co-operation and economic development in transboundary water courses. 

Implementation  must  ensure  a  balance  between  human  water  needs  and  those  of  the 
environment, as the health of ecosystems is key to human health, to sustainable development, 
and  to  poverty  reduction  and  vice-versa.  Improvements  in  efficiency  and  sustainability  of 
water use, and river basin management, should contribute to the goals to halt or reverse the 
current loss of natural resources and biodiversity by 2015. 

With the recent reform of EU water policy and the new Water Framework Directive the EU 
has  one  of  the  most  advanced  water  policies  in  the  world  and  can  provide  significant 
experience and expertise. 

2. 

THE EU POLICY BACKGROUND  

In May 2002 a Council resolution was adopted endorsing the Commission "Communication 
on water management in developing countries" of March 20021, which stressed the need to 
integrate sustainable water management in national and regional development strategies and 
to  support  partner  countries  in  developing  sustainable  solutions.  The  over-arching  policy 
framework  is  ‘Integrated  Water  Resources  Management’  (IWRM),  based  on  a  river  basin 
approach. IWRM, combined with strong public participation, transparency and accountability, 
can  play  a  critical  role.  It  is  particularly  important  for  sustainable  development  and  conflict 
prevention in the case of transboundary waters. 

The Communication and the Council Conclusions identified a number of clear priorities: 

•  Ensure a supply of sufficient, good quality drinking water, adequate sanitation and hygiene 
to every human being, especially the poorest and with a clear focus on the needs of women 
and children, with the general objective of reducing poverty and improving people's health, 
quality of life and livelihood opportunities; 

1 

COM(2002)132 of 12 March 2002, ‘Water Management in Developing Countries Policy And Priorities 
for EU Development Cooperation’. http://register.consilium.eu.int/pdf/fr/02/st08/08958f2.pdf 

6 

 
 
  
 
                                                 
•  Develop sustainable and equitable transboundary water resources management taking into 
account  all  relevant  interests,  integrating  the  competing  needs  of  the  various  users  and 
facilitating South-South co-operation; 

•  Implement  cross-sectoral  coordination  to  ensure  equitable,  sustainable  and  appropriate 
distribution of water between users of different kinds. This requires the mainstreaming of 
water management principles into related policy areas. 

The  EU  policy  framework  on  water  and  development  highlights  that  achieving  results  will 
require progress in many different areas. Good governance, political and sectoral reforms are 
necessary. Awareness raising, institutional strengthening and capacity building activities, and 
expanding the knowledge base are essential to support planning and decision-making, while 
ensuring participation of all stakeholders and ownership of policies and strategies. 

Partnerships  between  public,  private  and  civil  society  actors  have  to  be  promoted,  ensuring 
that those partnerships remain equitable and transparent, allow free and reversible choices on 
water services management, safeguard consumers' and investors' interests and maintain high 
standards of environmental protection. The European Community is taking a neutral stance on 
the  ownership  of  public  utilities  as  confirmed  by  the  Commission  Communication  on  the 
reform  of  state-owned  enterprises  in  developing  countries,  with  focus  on  public  utilities2. 
Pricing  of  water  services  should  ensure  financial  sustainability,  although  meeting  the  basic 
needs  of  poor  and  vulnerable  groups  requires  the  design  of  appropriate  tariff  structures  and 
collection systems.  

This  policy  framework  demonstrates  that  there  is  a  coherent  approach,  further  consolidated 
through practice, which provides guidance at EU level on how to support partner countries in 
developing solutions to ensure sustainable and equitable access to water and sanitation. 

3. 

TRANSLATING POLICY INTO ACTION: THE EU WATER INITIATIVE 

Building  on  this  Council  resolution  on  water  management,  an  EU  Water  Initiative  was 
launched  at  the  World  Summit  for  Sustainable  Development  (WSSD),  as  a  catalyst  and  a 
foundation on which future action can be built to meet the water and sanitation MDG's. 

The key elements of the Initiative are to: 

•  Reinforce  political  commitment  to  action  and  raise  the  profile  of  water  and  sanitation 

issues in the context of poverty reduction efforts; 

•  Promote better water governance arrangements. This includes encouraging the public and 
private  sectors  and  local  stakeholders  to  work  together  better.  It  also  includes  efforts  to 
strengthen  institutional  capacity  at  the  regional,  national  and  local  levels,  by  providing 
expertise  and  promoting  good  practice,  improved  partnerships  for  sharing  technology, 
information, research and knowledge and awareness raising; 

•  Improve  co-ordination  and  co-operation  in  the  way  that  water-related  interventions  are 
developed and implemented. This includes a shift away from stand-alone projects towards 
sector  wide  approaches.  It  also  includes  establishing  multi-stakeholder  processes  to 

2 

COM(2003) 326 final and Council conclusions 

7 

 
 
  
 
                                                 
reinforce  partnerships  for  action  and  promoting  south-south  collaboration  and  co-
operation; 

•  Encourage regional and sub-regional co-operation on water management issues, using the 
integrated water resources management approach. As part of the Initiative, the EU will be 
supporting  the  development  of  IWRM  and  water  efficiency  plans  by  2005,  including  the 
adoption of policy, planning and management processes on a river-basin scale; 

•  Catalyse  additional  funding,  through  the  development  of  new,  flexible  and  innovative 
funding mechanisms to attract new partners, and through supporting the establishment of 
the enabling environment for increased investment. 

To  take  forward  these  elements,  the  partners  of  the  EU  Water  Initiative  have  undertaken  to 
prepare  a  co-ordinated  action  programme  with  a  long  term  financial  strategy;  this  process 
includes  to  develop  an  overview  of  the  situation  in  different  countries  and  regions  with  an 
analysis of the biggest gaps and financial needs; and to establish a monitoring and reporting 
mechanism to measure progress in implementation and to steer further action. 

There  is  a  general  recognition  of  the  necessity  to  move  quickly  towards  designing  and 
implementing programmes that are visible and that deliver results. In line with a commitment 
to  a  partnership  approach  and  recognising  the  importance  of  strong  local  ownership  for  the 
success  of  interventions  undertaken,  the  first  priority  was  to  start  negotiations  with 
governments, the private sector and civil society in developing countries and regions that have 
expressed an interest in the EU initiative. In order to take the initiative forward, this process 
has  been  undertaken  with  the  active  involvement  of  EU  Member  States  and  the  European 
Commission, the European Investment Bank, the private sector and civil society. Over the last 
12  months  significant  progress  has  been  made  in  developing  the  EU  Water  Initiative  and  a 
short summary of progress in different regions is given below.  

Africa an urgent priority 

The  European  Union  has  identified  Africa  as  being  an  urgent  priority  with  regard  to  the 
delivery  of  the  MDGs.  It  is  for  this  reason  that  at  the  same  time  as  the  water  initiative  was 
launched  in  Johannesburg  at  the  WSSD  -  a  new  EU  -  African  strategic  partnership  on 
water  affairs  and  sanitation  was  signed  by  the  Presidents  of  the  Commission  and  the  EU 
Council and the Presidents of Nigeria and South Africa. 

Following  on  from  the  signing  of  the  ‘strategic  partnership’,  two  multistakeholder  working 
groups were set up. The first group lead on the European side by Denmark, is addressing the 
provision of water and sanitation. The second group, lead on the European side by France is 
dealing  with  the  issue  of  integrated  water  resources  management  at  national  and 
transboundary  levels.  These  groups  include  all  relevant  stakeholders  and  they  have  already 
finalised  their  assessments  and  developed  detailed  position  papers.  On  the  Africa  side,  the 
African Ministerial Council on Water (AMCOW) and its technical advisory committee is the 
principal  counterpart,  in  close  collaboration  with  NEPAD.  There  have  been  extensive 
technical exchanges between the European and African partners, through detailed discussion 
during  the  Water  Week  in  August  in  Stockholm,  at  AMCOW  meetings  in  Ouagadougou  in 
October,  and  during  the  Panafrican  Water  Conference  in  Addis  Ababa  in  December  2003, 
with a view to develop a Strategy and Work Programme as a basis for the implementation of 
the Africa-EU Partnership on water affairs and sanitation in 2004-05. This commitment was 

8 

 
 
  
 
highlighted  in  a  joint  Africa-EU  Declaration  on  the  implementation  of  this  Partnership, 
adopted in Addis Ababa. 

The Caribbean and Pacific 

The  Commission,  working  together  with  the  Member  States,  partner  countries  and  other 
stakeholders, and building on existing projects and programmes, has started to also assess the 
challenges  for  drinking  water  and  sanitation  in  the  Caribbean  and  Pacific  regions,  with  the 
objective to promote the establishment of multistakeholder advisory fora for these regions as 
well. This work will benefit from the launch in 2004 of an intra-ACP ‘Programme on water 
governance in ACP countries’. 

Other regional Components in the EU Water Initiative 

For  the  countries  of  Eastern  Europe,  Caucasus  and  Central  Asia  (EECCA),  an  EU-EECCA 
Strategic  Partnership  on  Water  for  Sustainable  Development  was  also  finalised  during  the 
WSSD in Johannesburg. The modus operandi for taking the initiative forward is the same as 
for the African component namely; a multi-stakeholder working group was set up, led on the 
EU side by Denmark. This group has worked intensively with its EECCA partners and is now 
at the stage of identifying priority building blocks. 

With regard to the Mediterranean region, a working group lead by Greece is in the process of 
finalising  the  design  for  this  regional  component.  Spain  and  Portugal  in  close  co-operation 
with Mexico are developing a Latin American component. Expansion to other regions (Asia) 
needs to be explored, considering the importance of water management in these regions (high 
water stress and extreme events). 

In  addition  to  these  regional  components,  the  EU  Water  Initiative  also  includes  a  major 
assessment  of  financial  requirements  piloted  by  the  United  Kingdom  as  well  as  a  working 
group  led  by  the  Commission  on  the  research  contribution  to  addressing  problems  of  water 
management.  Finally,  a  multi-stakeholder  subgroup  has  recently  been  set  up  to  address  the 
issue of monitoring. 

The future development of the EU Water Initiative and the Multistakeholder process 

In terms of structures, co-ordination and networking the EU Water Initiative has made good 
progress over the last 12 months. However, it is clear that the current arrangements are ad-hoc 
and that we need to develop a more comprehensive, systematic and transparent approach. It is 
also essential that we define very clearly the relationship between the EU Water Initiative, and 
the other organisations, programmes and actors working in this area. 

The involvement in the EU Water Initiative of all the relevant actors both on the EU side and 
on the side of the partner countries, brings an energy and dynamism to the process as well as 
facilitating the development of a coherent and streamlined approach to the use of resources. 
However,  this  process  cannot  in  any  way  put  in  question  the  existing  decision  making 
processes  established  between  the  EU  institutions.  A  multistakeholder  forum  (MSF)  should 
have  an  advisory  role  providing  input  to  the  Commission,  to  the  Member  States  and  to  the 
wider constituencies of all the participants in the process. A possible structure of the MSF and 
its  relationship  to  the  other  institutions,  organisations  etc  is  set  out  in  Fig  1.  The  final 
arrangements will need to be agreed in discussion with the relevant partners. 

9 

 
 
  
 
Fig. 1 - EU Water Initiative
The Multistakeholder Process and its Relationship with EU 
Institutions and other Actors

Expert 
group
Member
States

IFIs

Stakeholder
Groups

NGOs

Private
Sector

G
E
N
E
R
A
L

A
D
V
I
S
O
R
Y

F
O
R
U
M

Multistakeholder
Regional Advisory Fora

AFRICA

CARIBBEAN

PACIFIC

EECCA

MED

Lat. AMERICA

OTHER REGIONS

ACP-EU
WATER
FACILITY

COUNCIL

Expert Advisory Groups

COMMISSION

FINANCE

RESEARCH

MONITORING

In  general  terms,  the  regional  fora,  to  be  narrowly  linked  with  the  multistakeholder  forum, 
would develop a common vision of the way that water resources can be managed in the most 
effective and appropriate way in each region and in each river basin, to meet the MDG and 
WSSD targets. The regional fora would be aimed at harnessing support under the EUWI, and 
would  identify  priority  areas  for  action,  facilitate  exchange  and  sharing  of  knowledge  and 
good  practice,  facilitate  joint  or  coordinated  action  among  stakeholders,  but  also  more 
effective  burden  sharing  among  the  different  partners.  The  Commission  or  other  partners 
would  chair/co-chair  the  regional  fora  in  which  a  wide  range  of  stakeholders  should  be 
represented. Thematic/horizontal groups should support knowledge sharing within and across 
regions. The European inputs to the different regional fora would be helped and coordinated 
by the General Multistakeholder Forum. It is foreseen that the Commission would chair the 
multistakeholder forum and that the Commission or other partners would chair/co-chair expert 
groups.  The  general  multistakeholder  forum  would  be  responsible  for  ensuring  that  the 
different  regional  fora  and  expert  groups  develop  their  work  in  a  consistent  manner.  The 
expectation is that the outputs  from the regional fora and expert groups would be taken into 
account  by  the  Commission,  Member  States,  recipient  countries,  MFIs,  IFIs,  private  sector 
and  other  actors  when  developing  their  policies  and  programmes  and  when  making  their 
policy  and  investment  decisions.  The  Commission  would  provide  the  general  leadership  for 
the whole multi-stakeholder process. 

The financial challenge and the need for innovative mechanisms 

The  EU  is  already  the  largest  provider  of  funding  for  water-related  development  aid  and 
scientific  cooperation.  In  addition  to  interventions  carried  out  in  the  context  of  country  and 
regional  programmes,  water-related  activities  are  also  carried  out  in  the  framework  of 

10 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
humanitarian aid, NGO co-financing, micro-projects and decentralised co-operation as well as 
within research programmes.  

In  Johannesburg,  recalling  its  commitments  made  at  the  international  Financing  for 
Development Conference in March 2002, the EU has indicated its readiness to increase and 
deliver  resources,  in  response  to  countries  prioritising  water  and  sanitation  in  national 
sustainable development and poverty reduction strategies. The EU should make use of the full 
range  of  financial  mechanisms  already  available  for  water  projects  and  seek  to  locate  gaps, 
taking action to address these. 

The  need  is  recognised  for  a  significant  increase  in  funding  for  water  and  sanitation  to 
achieve the targets, as well as better mechanisms to use development aid to leverage other 
institutions,  users’  contributions, 
resources 
remittances, etc).  

(private,  development  banks, 

financial 

In particular, the work done under both the Finance working group of the EU Water Initiative 
and by the World Panel on financing water infrastructure (Camdessus Panel) has shown that 
the present level of funding is not sufficient for meeting the investment needs to comply with 
these goals, and that new innovative and flexible funding mechanisms are urgently required to 
use  the  maximum  leverage  effect  of  ODA  and  attract  more  resources  from  a  large  range  of 
sources (public and private, local and international). 

The Camdessus Panel report ‘Financing water for all’ stresses that “the flow of funds has to 
roughly  double,  with  the  increase  to  come  from  all  sources”.  555  million  €  are  allocated  to 
water  under  the  9th  EDF  in  the  CSPs  of  14  ACP  countries.  An  additional  Facility  of  one 
billion €, to be used with a high leverage factor would lead to a substantial increase of funding 
for the sector, which would allow to reinforce the existing programmes and expand support to 
a  larger  number  of  ACP  countries  among  those  who  have  not  yet  prioritised  water  in  their 
CSPs. The following allocations are made for future water-related activities in other regions: 
EECCA – 38 Mio €, Asia – 35 Mio €, Latin America – 95.6 Mio €, The Mediterranean – 315 
Mio €. 

The  EU  Water  Initiative  has  made  significant  progress  since  the  WSSD  meeting  in 
Johannesburg.  The  reinforced  coordination  which  has  been  developed  so  far,  between 
Member States and with partner countries, and the multistakeholder process involving all the 
relevant actors, will facilitate a more coherent, integrated and cost effective approach to the 
planning  and  delivery  of  water  related  programmes.  However,  improvements  in  the  process 
will not be enough. In order to make a significant contribution towards achieving the drinking 
water and sanitation targets we have to increase the financial resources appreciably. In order 
to target our efforts in the most effective way, it is necessary to identify priorities. Therefore, 
the  Commission  is  proposing  that  the  first  step  should  be  the  allocation  of  significant 
additional  funds  for  addressing  the  water  challenge  in  the  ACP  countries.  The  rest  of  the 
present  communication  is  devoted  to  the  proposal  for  the  creation  of  the  ACP-EU  Water 
Facility. 

11 

 
 
  
 
4. 

A WATER FACILITY FOR ACP COUNTRIES 

4.1. 

KEY PRINCIPLES 

•  Governance 

The Facility should be directed towards achievement of the WSSD and MDG targets and 
should  concentrate  its  activities  in  those  ACP  countries,  which  have  a  sound  national  water 
policy or which are strongly committed to develop it, based on good governance principles, 
and where there is prioritization of spending towards social sectors (taking into account rural 
and  peri-urban  economics),  and  definition  of  the  relevant  indicators  as  part  of  the  Poverty 
Reduction Strategy process (PRSP). The Water Facility will assist countries to establish their 
institutional and regulatory framework in order to attract additional financial resources. 

•  Ownership 

The  concept  of  ownership  is  central  to  the  approach  of  the  Water  Facility  since  it  is  fully 
demand driven 

–  At ACP level : thematic priorities are derived from the EU-Africa partnership – which has 
been formally endorsed under the EU-Africa Dialogue - and the Facility intends to build 
bridges  and  foster  dialogue  with  African  institutions  either  of  global  nature  like  NEPAD 
and AU or of sectoral character like the AMCOW and African Water Facility. During the 
Panafrican Water Conference in Addis Ababa in December 2003, AMCOW has released a 
resolution to support the proposed ACP-EU Water Facility. The proposed Facility is also in 
line with the objectives of the G8 Actions Plans on Water and on Africa. Similar processes 
are being developed in the Caribbean and Pacific regions. 

–  At country level: where actions for support result from the on-going PRSP process and are 
coherent  with  national  policies  and  commitments.  It  has  been  recognised  that  there  is  a 
need to incorporate the water, sanitation and hygiene dimension in PRSPs and, following 
the mid-term reviews, in NIPs and RIPs. 

•  Innovation and Flexibility 

A maximum leverage effect should be obtained with 

–  a creative combination of grants and other sources to fund basic infrastructure 

–  grants providing seed capital to prepare projects and develop the enabling environment for 

investment 

–  new partnerships between communities, NGOs, public and private sectors. 

–  information  and  support  to  local  and  European  water  service  providers,  interested  in 

investing in the sector. 

The main role of the Facility is to be a catalyst (promoting initiatives, providing information, 
being a clearing-house, building research and management capacity in ACP countries) on the 
one  hand  and  an  instrument  which  can  provide  the  missing  link  in  financing  sustainable 
projects and activities on the other hand. There exist many plans and proposals in the area of 

12 

 
 
  
 
clean water and sanitation, but, as indicated in the Camdessus-report, the majority cannot be 
realised because of the inflexibility of existing instruments.  

The flow of private capital to the water sector has been limited, particularly for Africa. Grants 
alone  cannot  solve  the  problems  and  a  major  challenge  remains  how  to  make  the  private 
sector to participate more actively. Commercial loans are often too expensive to raise finance 
to the water sector. This is largely because of the range of risks that are perceived to exist and 
the  uncertainty  on  gaining  an  adequate  return  on  investment.  Therefore,  depending  on  the 
activities under consideration, a combination of different financing layers such as grants, soft 
loans,  loan  guarantees,  revolving  funds,  micro-credit  financing  for  small-scale  actions,  etc, 
may  be  needed  to  address  financing  gaps.  The  proposed  Facility  should  allow  to  give  a 
flexible answer to a variety of situations. 

This mobilization of adequate levels of resources should include: 

–  optimal  co-financing  with  various  sources  of  funding  (local/international,  private/public) 
taking  into  account  their  respective  strengths  and  weaknesses.  Co-financing  would  be 
offered to authorities in ACP countries, acting jointly with EIB, other EU public financial 
institutions  and  Member  States’  development  agencies, 
involving  as  appropriate 
private/public operators from these countries or from the EU. In this context, in particular 
for  grass  roots  projects,  EU  civil  society  organizations,  decentralized  authorities  and 
emigrant groups can play an important role 

–   consideration  of  new  financial  instruments  guaranteeing  and  leveraging  the  mobilization 
of funds from a wide range of sources, taking into account the principles of transparency, 
accountability, and appropriateness for the specific socio-economic contexts. 

There are various existing initiatives to finance country-specific and multi-country advice and 
related  activities  for  the  development  of  Public  Private  Partnerships.  In  principle,  the 
proposed  ACP-EU  Water  Facility  should  not  compete  with  these  existing  initiatives,  and 
should  not  be  directed  to  finance  those  private  sector  developments  which  provide  a 
reasonable return on investment. The Facility would primarily provide grant funding, which, 
by  nature,  has  a  higher  leverage  than  lending  and  would  be  additional  to  other  EU  and 
international  financial  instruments.  Access  to  the  co-financing  of  the  Facility  could  be 
extended  to  other  International  Financial  Institutions  (IFIs),  in  particular  the  African 
Development Bank (AfDB) and the World Bank Group (including International Financial Co-
operation and Multilateral Investment Guarantee Agency). 

4.2. 

ACTIVITIES TO BE FUNDED UNDER THE WATER FACILITY 

Two main types of activities can be distinguished3: 

•  Institution building and non investment related TA 

•  Investment projects and related TA 

Financially, the investment part will by far be the largest activity under the Water Facility. 

3 

The  proposed  Facility  does  not  cover  water  and  sanitation  activities  undertaken  in  the  context  of 
humanitarian  aid,  response  to  conflict  or  natural  disaster,  while  it  provides  a  sound  basis  for  LRRD 
strategies in this sector 

13 

 
 
  
 
                                                 
Institution building and non investment related TA 

Promotion activities 

The  establishment  of  the  WF  needs  to  get  a  widespread  dissemination  and  the  participating 
ACP  countries  and  organisms  need  to  be  aware  of  its  existence  and  the  way  to  access  the 
funding facilities. These promotion activities can be in the form of a newsletter, creation of a 
logo, brochures, a website, participation to and organisation of workshops/seminars. 

The promotion can also be done on a wider scale, i.e. promoting the Water Initiative itself and 
ensuring  that  water,  sanitation  and  integrated  water  resources  management  get  sufficient 
attention in the PRSPs and CSPs. 

NGOs can play an important role in the promotion exercise. 

Institution building and support to the sector reform 

Priority will be given to support for countries that are well advanced in their sectoral policy 
reforms.  The  Water  Facility  will  assist  partner  countries  in  the  elaboration  of  good, 
sustainable  projects  designed  around  the  principle  of  maximum  cost  recovery.  This  does 
however not exclude that the WF can assist other countries to reform the water and sanitation 
sector, strengthen their institutions and build up capacity in the sector to create the enabling 
environment  for  investments,  as  well  as  capacity  for  operation  and  maintenance  to  improve 
sustainability.  The  WF  can  give  assistance  to  these  countries  through  TA,  NGO-support  as 
well as support cooperation between ACP and EU public institutions. 

Under this activity, there is the possibility to join existing funds and initiatives from IFIs and 
MS,  like  for  example  the  Public  Private  Infrastructure  Advisory  Facility  (PPIAF)  and  the 
Global Partnership on Output Based Aid (GPOBA). 

Integrated water resources management 

This activity concentrates on supporting the development of integrated management of water 
resources  with  a  focus  on  the  national  and  river  basin  levels  in  ACP  countries.  For 
transboundary  basins  (which  concerns  the  African  Continent),  as  a  starting  point,  the 
identification  of  priority  activities  in  selected  basins  is  carried  out  under  the  leadership  of 
AMCOW, supported by the working group on IWRM of the Water Initiative. The outline of a 
work  programme  has  been  agreed  during  the  Panafrican  Water  Conference  in  December 
2003,  from  which  a  detailed  Strategy  and  Work  Programme  for  2004-05  is  being  jointly 
prepared. 

Support  activities  may  address  the  preparation  of  IWRM  plans,  improvement  of  data 
collection  and  dissemination  in  river  basins,  water  quality  monitoring,  and  assistance  to 
regional organisations (such as ECOWAS, SADC), existing river basin initiatives, support to 
related  research  capacity  building  and  use  of  EU-ACP  research  cooperation  and  involve  
collaboration with existing mechanisms like the Global Water Partnership (GWP) 

Monitoring and evaluation 

Regular monitoring and evaluation of projects financed by the Water Facility will be carried 
out. This includes also the evaluation and attendance of Steering Committees of the funds and 
facilities  the  Water  Facility  might  join.  It  could  also  include  support  to  ACP  countries  to 

14 

 
 
  
 
improve their monitoring capacity, in the framework of international processes established to 
monitor the water and sanitation sector and the achievement of the MDGs. 

Support to the investment projects and related TA 

It is mainly here that the facility will use flexible and where possible innovative methods to 
finance water and sanitation projects and programmes. Priority will be given to countries that 
have a well-developed sector programme or that are in the process of getting one. Ideally all 
programmes  should  fit  within  a  sector  wide  approach  (SWAP),  driven  by  the  recipient 
country. 

Co-financing  of  the  public  sector  investment  programme  with  MS,  EDFIs  and  IFIs  will 
represent a substantial part of this activity. Most projects will be funded with a mix of grants 
and loans. The financial and economic analysis and social consideration will determine how 
much the subsidy level should be to make the project sustainable. The grants under the WF 
will be primarily used to co-finance projects and programmes targeted to providing access to 
water  and  sanitation  for  the  low-income  customers  and  socially  disadvantaged  areas  (peri-
urban  areas,  small  towns  and  villages).  The  public  sector  is  not  only  limited  to  the  central 
government  but  also  to  sub-sovereign  bodies,  like  local  governments,  municipalities,  water 
authorities. 

To stimulate the private sector investments, the Water Facility can contribute to Public Private 
Partnerships (PPP) or Private Sector Participation (PSP) initiatives, both at international and 
local  level  through  the  development  of  new  financial  tools.  There  are  numerous  innovative 
ways  to  leverage  private  and  commercial  funding  and  the  Commission  is  presently  in 
discussion  with  Member  States,  (EIB),  European  Development  Finance  Institutions  (EDFI) 
and  International  Finance  Institutions  (IFI)  on  how  to  achieve  the  best  results.  Some 
possibilities  that  have  come  out  of  the  discussions  are:  support  to  the  EIB’s  Investment 
Facility  for  high  risk  projects  and  to  the  EDFIs  through  co-financing,  risk  (currency 
exchange4, political) guarantee funds, transaction advice, preparatory studies. 

There are also a number of existing funds in the investment sector to which the Water Facility 
could contribute. Some of them are: GuarantCo, the Emerging Africa Infrastructure Fund and 
the  African  Water  Facility  (AWF).  Due  to  similarities  with  the  Water  Facility,  the  African 
Water  Facility  deserves  special  attention  and  support.  It  has  recently  been  created  by  the 
African  Ministerial  Council  of  Water  (AMCOW)  and  will  be  hosted  by  the  African 
Development Bank. 

5. 

MANAGEMENT OF THE ACP-EU WATER FACILITY 

In order to allow an adequate reaction to rapidly growing needs and expectations, a pragmatic 
and  flexible  identification-appraisal-decision  and  implementation  procedure  needs  to  be 
devised. 

The  management  will  have  to  reflect  the  overall  political  approach  underpinning  the  Water 
Facility.  In  the  first  place,  ownership  of  the  ACP  partners  and  their  right  of  initiative  is 
crucial  in  the  process.  Secondly,  the  implementation  procedure  should    adhere  to  the 
overriding  objective  to  contribute  to  the  realisation  of  the  MDG’s,  and  in  particular  to 

4 

Refer also to the Devaluation Liquidity Backstopping Facility of the Camdessus Report 

15 

 
 
  
 
                                                 
promote  the  access  of  the  poor  to  water  and  sanitation.  This  requires,  thirdly,  that  an 
optimum  use  is  made  of  grant  funding  and  a  maximum  leverage  effect  is  aimed  at.  This 
implies that the grant element of the project should be limited to financing needs that can not 
be covered by non-grant funding (European Investment Bank (EIB), European Development 
Finance  Institutions  (EDFIs),  International  Finance  Institutions  (IFIs),  commercial  loans, 
private investment, local public resources). 

Moreover, in the preparation and implementation of  projects  to  be  financed  from  the  Water 
Facility, maximum use will be made of the expertise available outside the Commission. These 
are available in particular through expert groups (both EU and ACP), collaboration with EIB 
and  other  development  finance  institutes,  and  where  appropriate  private  sector  and  NGOs. 
This  reliance  on  outside  expertise  should  never  compromise  the  role  and  responsibilities  of 
the Commission. 

The  Commission  will  consult  and  liaise  with  the  multi-stakeholder  advisory  group(s) 
established in the context of the EU Water Initiative on the overall priorities for the use of the 
Water Facility and any other issues of a policy and strategic nature. 

The Water Facility will be used to co-finance investment projects and related technical  co-
operation as well as institution building and other non-project technical assistance operations 
in view of the necessary improvement of sector strategies, regulations and institutions in the 
water  sector,  integrated  river  basis  management,  promotion  activities,  monitoring  and 
evaluation, etc. 

5.1. 

Institution building and non investment related TA 

Part of the facility will be put aside for this type of TA. Activities will be programmed in the 
context of the  water initiative, focussing on priority measures  for  its implementation. These 
measures include activities to define the adequate sector policies and regulatory framework, 
institution building programmes, support to sector reform, integrated river basin management, 
promotion activities and monitoring and evaluation. The programme will be prepared by the 
Commission  in  close  co-operation  with  the  ACP  partners,  in  the  context  of  the  New 
Partnership for African Development (NEPAD), the AU, the African Ministerial Council on 
Water (AMCOW), regional economic organisations, as well as similar organisations for the 
Carribean and Pacific, and discussed with the MS in the context of the Water Initiative. 

A  financing  proposal  covering  the  overall  TA  programme  will  be  approved  by  the  EDF 
Committee and implemented, using for each operation the most suitable ACP implementing 
authority  (e.g.  African  Development  Bank,  Inter-American  Development  Bank,  NGOs). 
Implementation will be supervised by the devolved EC delegation. 

Finally,  it  should  not  be  excluded  to  join,  with  resources  from  the  EU/ACP  Water  Facility, 
existing facilities or funds, like the African Water Facility, the Emerging Africa Infrastructure 
Fund, etc. 

5.2. 

Investment projects and related TA 

It  is  envisaged  to  implement  the  Water  Facility  through  the  selection  of  projects  or  wider 
programmes,  rather  than  through  an  elaborate  programming  exercise.  Selected  projects  and 
programmes  will  have  to  be  proposed  by  a  public  authority  of  one  of  the  ACP  states 
(promotor) and be coherent with national sector policies and/or wider river basin management 
schemes where they exist. 

16 

 
 
  
 
Based on the general principles outlined in this Communication, the envisaged procedure can 
be described as follows: 

(1) 

The Commission will launch one or several call(s) for proposals that – inter alia will. 

(a) 

Identify the different type of interventions that can be financed. 

(b) 

Define the eligibility criteria. 

(c) 

Define  the  selection  criteria.  Among  the  criteria  five  major  elements  will  be 
taken into account: 

• 

• 

• 

• 

• 

Realisation  of  the  WSSD  and  MDGs  targets  and  EU  Water 
management  in  Developing  Countries  Policy  (access  to  water, 
basic    sanitation  and  hygiene  by  the  poor)  including  social, 
economic and environmental impact. 

Coherence  with  sector  policy  and  with  integrated  river  basin 
management schemes. 

Maximum effect of grant financing with a view to a maximum 
return  (i.e.  poverty  alleviation)  on  the  grant  funding  made 
available. 

Implementing capacity of the partners. 

Maturity of the intervention. 

(d) 

The  EDF  Committee  will  be  consulted  on  the  call  for  proposal  before  its 
launch. 

(2) 

Public  authorities  of  one  (or  more  in  case  of  regional  activities)  of  the  ACP  states 
(“promotor”)  may  introduce  proposals.  This  includes  authorities  at  local,  municipal, 
regional,  national,  cross  border  level.  National  Authorising  Officer  will  be  informed 
but need not give a formal approval. 

– 

Each  project  proposal  would  ideally  include  a  European  partner.  This 
could  be  the  EIB  and/or  a  European  Development  Finance  Institute,  a 
private  company,  an  NGO  or  a  local  authority  (for  community  based 
and  decentralised  projects).  However,  this  would  not  exclude  projects 
with  a  regional  or  local  partner  having  a  well  proven  capacity  for 
project  definition  and  implementation.  The  partner  must  commit 
himself to assist the promoter to develop the project and to co-finance 
its  realisation.  The  project  proposal  will  include  a  description  of  the 
envisaged  project  and  its  results  as  well  as  the  outline  of  a  financial 
plan.  It  will  demonstrate  the  need  for  a  grant  contribution  in  order  to 
realise  the  projects  poverty  alleviation  objectives.  The  financial  plan 
will  distinguish  between  cost  of  project  preparation  and  actual 
implementation. 

– 

A project, already fully prepared and ready for implementation can also 
be  submitted  for  co-financing.  In  this  case  the  first  phase  (project 
preparation) can be omitted. 

17 

 
 
  
 
– 

A  project  proposal  could  be  submitted  by  the  promoter  without  the 
partner(s)  having  been  identified,  in  which  case  the  Water  Facility 
could  act  both  as  clearing  house  but  also  finance  the  cost  of  the 
transactional activities required to realise the project. 

(3) 

The proposals received following the call are analysed in order to build up a pipeline 
of projects. 

The  analysis  will  be  carried  out  by  a  group  of  independent  experts  submitting  the 
results of their analysis to the Commission. The analysis will focus on the technical 
merits and the social (such as job creation) and environmental impact as well as on 
the  proposed  financing  arrangements  and  will  include  an  assessment  of  the  size  of 
the  grant  financing  that  would  appear  justified  for  final  project  preparation  and/or 
actual realisation of the project. In principle both project preparation and realisation 
will have to be co-financed by the National Authority responsible and/or the partner. 

In  principle  three  types  of  projects  could  be  identified  in this  process.  There  are  in 
order of priority: 

(a) 

(b) 

(c) 

Projects  ready  for  immediate  implementation  where  the  Water 
facility would co-finance the implementation and possibly some of the 
management and supervision costs. 

Design and build projects where the Water Facility could co-finance, 
both  the  project  preparation  and  design  as  well  as  the  actual 
implementation. In a first phase only a decision on the co-financing of 
project preparation TA is taken. 

Transactional TA where there is a need to assist the promoter in 
determining the optimal technical, financial and organisational set up 
of the project as well as in finding appropriate partners for 
implementation. Once this phase is completed and promoter and 
partner have agreed on a project concept, a proposal for co-financing 
can be introduced (a or b). 

The Commission will on the basis of the  assessment from the independent experts, 
negotiate with the implementing partners the proposed project and its financial plan 
in  order  to  maximise  the  social  and  environmental  impact.  On  that  basis  a  co-
operation  arrangement  can  be  concluded  with  the  partners,  setting  out  the 
arrangements  and  responsibilities  for  implementation  as  well  as  the  necessary 
financing  agreement  for  the  co-financing  of  the  preparatory  phase  and,  where 
appropriate, an agreement in principle to explore in a second phase the possibility of 
co-financing  the  realisation.  The  financing  agreement  will  also  include  the  normal 
conditions  for  the  Commission’s  financial  support  .  Project  preparation  and 
implementation will be the responsibility of the relevant National Sovereign or Sub-
sovereign Authority and the partner promotor. The Commission commitment to co-
finance the realisation will be made subject to a successful completion of the project 
preparation. 

Following the normal procedures, the EDF Committee will be asked for an opinion 
on  each  financing  proposal  for  a  group  of  investment  projects,  after  successful 
conclusion of the co-financing negotiations. 

18 

 
 
  
 
The Commission will conclude financing agreements with the implementing partners 
(national/local authority and financial institution/NGO). These agreements can refer 
to the agreed co-operation arrangements and include the conditions for the payment 
of the Community funding. The co-financing agreement will furthermore define the 
requirements  for  Commission  monitoring  and  audit  of  the  operations  as  well  as 
applicable  procurement  procedures  for  realising  the  project.  These  procedures  will 
always  have  to  respect  the  principles  of  open  tendering,  equal  access  and  cost 
effectiveness. 

The payment of EC funding will be based on key milestones defined in the financing 
agreement. When appropriate, funding of “Output Based Aid”5 can be envisaged. A 
final  payment  will  be  released  only  at  the  successful  completion  of  the  project 
following the normal conditions. 

(4) 

Special  arrangements  will  be  developed  for  the  co-financing  of  smaller  community 
based projects. In the first place the call for proposals will have to include appropriate 
conditions  for  this  type  of  projects.  Co-financing  criteria  and  financing  agreements 
will have to be adapted to the nature of the partners concerned. Where applicable, job 
creation will be encouraged  through labour intensive methods. In the  case  of  Africa, 
management  of  this  type  of  projects  can  be  envisaged  in  the  context  of  the  African 
Water  Facility  recently  created  by  AMCOW  and  managed  by  the  African 
Development Bank. 

Organisational arrangements 

The  organisational  structure  for  the  management  of  the  Water  Facility  will  be  based  within 
the Commission, staffed with officials and with the possibility to attract outside expertise. The 
officials in the team will be responsible, in close co-operation with their colleagues in the EC 
Delegations, for the negotiation of the co-financing deals and the finalisation of the financing 
proposals. 

At this stage the intention is that the management of the WF will be done through the use of 
existing human resources in the concerned services. 

A  small  percentage  of  the  Water  Facility  will  be  used  to  contribute  to  the  financing  of 
administrative  expenditures  for  the  management  of  the  ACP/EU  Water  Facility,  including 
inter-alia:  recruitment  of  external  experts  and promotion  activities,  organisation  of  seminars 
and work-shops, monitoring and evaluation, etc. 

6. 

MOBILISATION OF THE FUNDS 

The only possibility to finance the Water Facility under the EDF is to release the conditional 
billion under the 9th EDF. Resources available under the 6th, 7th, 8th and 9th EDF have almost 
completely  been  allocated  to  countries,  regions,  intra-ACP  co-operation  and  the  Investment 
Facility. The state of implementation of EDF-resources in 2003 and forecasts for the period 
2004 - 2007 show that available resources will indeed be committed until the end of 2007. A 
replenishment of the Water Facility can be foreseen from 2008 onwards under the successor 
of the 9th EDF, i.e. the Community Budget - in case budgetisation of the EDF. 

5 

Disbursement of public funding is tied to the services or outputs actually delivered. 

19 

 
 
  
 
                                                 
6.1. 

Lack of unallocated resources 

Even though relatively important amounts are available for co-operation with ACP-countries, 
these  resources  are  not  freely  available  for  just  any  purpose.  Prior  to  commitments  (and 
financing  decisions),  EDF-resources  are  earmarked  in  so-called  allocations,  which  are  firm 
pledges (amounts fixed in the Cotonou Agreement, or by notification from the Community to 
beneficiaries, or by decision of the ACP-EC Council of Ministers). As annex 1 shows, most of 
the resources of the 6th to the 9th EDF (a total amount of € 44,9 billion) have been allocated. 
Only € 199 million are currently still available in reserves for new allocations (see in annex 1 
column  “allocations-total”,  row  “reserves  for  long-term  development”).  We  expect  in  the 
future further decommitments from horizontal instruments that will replenish the reserves in 
the order of €150 million. Proposals are in the making for the use of these funds, such as the 
setting-up of a peace-support facility (€ 125 million from unallocated resources and a similar 
amount  by  shaving  off  country  allocations),  the  financing  of  deconcentration  (devolution  of 
responsibilities  to  Commission  delegations,  €  90  million)  and  extra  resources  for 
regional/intra-ACP co-operation. 

Resources  available  for  new  allocations  are  therefore  insufficient  to  finance  the  Water 
Facility. 

6.2. 

Context of the conditional one billion € 

The  ninth  European  Development  Fund  (EDF)  for  ACP-countries  has  three  components: 
grants under the long-term development envelope (€ 10 billion), grants under the envelope for 
regional  co-operation  and  integration  (€  1,3  billion)  and  the  Investment  Facility  (€  2,2 
billion)6. Of the total amount of € 13,5 billion, EU Member States have decided to keep € 1 
billion  in  reserve  until  an  evaluation  of  the  degree  of  realisation  of  commitments  and 
disbursements of EDF-resources. This overall performance review is foreseen for 20047. The 
conditional  billion  is  reflected  in  the  EDF-accounts  as  a  proportional  reduction  of  the  three 
envelopes.  Amounts  effectively  available  from  the  entry  into  force  of  the  9th  EDF  are 
therefore € 9,259 billion for long-term development, € 1,204 billion for regional co-operation 
and € 2,037 billion for the Investment facility. 

Taking into consideration that the 9th EDF only entered into force on April 1st 2003, its state 
of  implementation  is  still  relatively  low.  It  is  however  specified  in  the  9th  EDF  financial 
protocol  that  9th  EDF  resources,  together  with  balances  remaining  from  previous  EDF,  will 
cover the period up to end 2007. The performance review should therefore focus not only on 
the degree of realisation of commitments and disbursements but also refer to the needs for the 
period up to end 2007.  

6.3. 

Assessment of commitments and disbursements 

At the beginning of the year 2003, the total amount of the 6th, 7th and 8th EDF was €32.389 
billion.  Out  of  this  amount,  €29.6  billion  had  been  committed,  leaving  an  amount  of  €2.75 
billion available for new commitments. Together with fresh 9th EDF resources - €12.5 billion 
available since April 2003 – the total amount available for new commitments for the period 

6 
7 

ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000, Annex I, Financial Protocol.  
In accordance with Declaration XVIII annexed to the Final Act of the Cotonou Agreement and with the 
Internal Agreement Between Representatives of the Governments of the Member States, meeting within 
the Council, on the financing and administration of Community Aid under the Financial Protocol to the 
ACP-EU Partnership Agreement, Article 2(2). 

20 

 
 
  
 
                                                 
2003-2007  was  thus  €15.25  billion.  Since  the  entry  into  force  of  the  Cotonou  Agreement, 
uncommitted resources under the old EDFs have been transferred to the 9th EDF (so far €2.24 
billion), but most of these resources remain allocated to the same countries and regions (and 
intra-ACP co-operation) as  under the old EDFs. As indicated above, only € 199 million are 
still available under reserves. 

During  negotiations  prior  to  the  conclusion  of  the  Internal  Agreement  between  Member 
States - where the amount of the 9th EDF was fixed - the Commission announced its intention 
to reach a level of implementation (commitments and disbursements) in the order of €3 billion 
per year. The Commission confirms this objective for the period 2003-2007 and considers its 
realisation  to  be  feasible.  The  following  table  shows  the  forecasts  of  commitments  and 
disbursements under the 6th, 7th, 8th and 9th EDF, based on the Commission Communication 
“European  Development  Fund  –  Estimates  of  decisions,  payments  and  contributions  to  be 
paid by Member States for 2003 and 2004” (COM/2003/720)8. 

Table 1: Implementation of EDF-resources 

2003

2004

2005

2006

2007

Resources:
- EDF 6,7,8
- EDF 9
- Total

Cumulation

32,389
12,500
44,889

Commitments
To be committed

29,639
15,250

3,146
12,104

3,219
8,885

4,276
4,609

2,605
2,004

2,408
-0,404

21,327
23,562

Payments
To be paid
The table shows that according to current forecasts, 9th EDF-resources for ACP-countries will 
be  fully  absorbed9  during  the  period  2003-2007.  Forecasts  for  2003  are  confirmed  by  real 
execution  data  for  2003,  which  indicate  a  level  of  commitments  of  €  3.7  billion  and  of 
payments of € 2.4 billion.10 

2,826
15,821

2,458
21,105

2,458
18,647

3,146
12,675

2,998
9,677

6.4. 

Proposal on the release of the conditional one billion € 

On  the  basis  of  the  above  analysis  and  in  accordance  with  Article  2.2  of  the  Internal 
Agreement for the 9th EDF, the Commission proposes that the conditional billion be released. 
In  respect  of  the  provisions  of  the  9th  EDF  Financial  Protocol  as  well  as  Article  2.1  of  the 
Internal  Agreement,  the  conditional  billion  should  be  spread  proportionally  over  the  three 
envelopes  (€741  million  to  long-term  development,  €96  million  to  regional  co-operation, 
€163 million to the Investment Facility). 

8 

9 

10 

Data  on  commitments  and  disbursements  in  the  communication  COM/2003/720  refer  to  the  global 
EDF,  including  resources  for  ACP  countries,  Overseas  Countries  and  Territories  and  Implementation 
costs. Resources for ACP countries represent 98.3% of total EDF-resources. Forecasts for commitments 
and disbursements for ACP countries are obtained by applying a factor 0.983 on the amounts mentioned 
in the communication. 
Commitments  in  the  table  are  gross  commitments,  excluding  decommitments.  This  explains  the 
negative “uncommitted” amount in 2007.  
Preliminary data at 5-1-2004. EDF accounts for 2003 are closed at the end of January 2004. Updated 
information including annex 1 attached to this communication can be made available after the closure 
of the accounts. 

21 

 
 
  
 
                                                 
By its nature, the proposed Water Facility must be a horizontal instrument and should thus be 
financed  from  intra-ACP  co-operation,  which  is  part  of  the  envelope  for  regional  co-
operation. In order to create the €1 billion Water Facility, the following steps are necessary: 

•  After  a  positive  decision  of  the  EU-Council  on  the  release  of  the  conditional  billion, 
consultation of the group of ACP countries on the principle of using these resources for the 
Water Facility. 

•  In accordance with article 12 of Annex IV to the Cotonou Agreement, the Community can 
earmark the extra €96 million from the envelope for regional co-operation to intra-ACP co-
operation  and  notify  accordingly  the  ACP-Council  of  Ministers.  This  implies  a 
Commission  decision  after  consultation  of  EU  Member  States  through  the  EDF-
Committee.  Such  a  decision  will  exhaust  the  regional  co-operation  envelope  and  thus 
create the legal basis for the next step. 

•  On  the  basis  of  paragraph  8  of  the  Financial  Protocol  (Annex  1  to  the  Cotonou 
Agreement), the ACP-EC  Council  of Ministers can decide to transfer the extra resources 
from  the  long-term  development  envelope  (€741  million)  and  the  Investment  Facility 
(€163  million)  to  the  envelope  for  regional  co-operation  and  to  use  these  resources  for 
intra-ACP  co-operation.  This  implies  the  following  steps:  (i)  Commission  proposal  on  a 
draft decision to be taken by the ACP-EU Council of Ministers, (ii) adoption by the EU-
Council,  (iii)  adoption  by  the  ACP-EU  Council  of  Ministers.  This  decision  should  also 
contain  a  formal  financing  request  for  the  Water  Facility,  which  is  a  prerogative  of  the 
ACP  Council  of  Ministers  in  accordance  with  article  13(2)  of  annex  IV  to  the  Cotonou 
Agreement. 

•  Once  the  above  steps  are  agreed,  the  Commission  will  present  a  financing  proposal  with 
detailed  implementation  modalities  to  the  EDF-Committee  and  take  a  financing  decision 
for the creation of the Water Facility. It can act as implementing body in accordance with 
Article 14(2) of Annex IV to the Cotonou Agreement. 

7. 

CONCLUSION 

Based  on  the  justifications  given  in  this  Communication,  and  in  order  to  support  the  future 
development  of  the  EU  Water  Initiative  in  ACP  countries,  the  Commission  asks  the  EU 
Council to endorse its recommendations and to agree on: 

–  the  release  of  the  conditional  1  billion  €  of  the  9th  EDF,  by  adopting  the  draft  decision 

outlined in Annex 2. 

–  the  position  to  be  taken  by  the  Community  in  the  ACP/EU  Council  of  Ministers  on  the 
creation of an ACP-EU Water Facility, by an agreement of principle11 to the draft decision 
outlined in Annex 4. 

11 

The draft decision in Annex 4 can only be taken after the Commission decision described in Annex 3, 
which is to follow the EU-Council decision on the conditional billion in Annex 2 

22 

 
 
  
 
                                                 
ANNEXES 

ANNEXES 3.1, 3.2 and 4 are enclosed for information purposes. They do not prejudge the 
draft decisions which will be presented formally by the Commission after the Council 
decision concerning the release of the conditional amount of €1 billion (Annex 2). 

Annex 1: 

EDF resources for ACP countries – situation at 31-10-2003 

Draft Proposal for a Council decision concerning the release of the conditional 
Annex 2: 
amount  of  €1  billion  under  the  ninth  European  Development  Fund  for  cooperation  with 
African, Caribbean and Pacific countries. 

Annex 3.1:  Note to the Members of the EDF Committee on the increase of the intra-ACP 
allocation for a contribution to the ACP-EU Water Facility. 

Annex 3.2:  Draft Proposal for a Commission decision amending Commission Decision N° 
C(2001)1578/2  of  15-6-2001  on  allocations  to  regional  programmes  and  to  intra-ACP  co-
operation under the financial protocol of the ACP-EC Partnership Agreement. 

Draft  Proposal  for  a  Council  decision  on  the  position  to  be  adopoted  by  the 
Annex 4: 
Community within the ACP/EU Council of Ministers regarding a decision on the use of the 
reserve  of  the  long-term  development  envelope  as  well  as  resources  from  the  Investment 
Facility on the ninth European Development Fund for the establishment of an ACP-EU Water 
Facility. 

Annex 5: 

List of acronyms 

23 

 
 
  
 
Annex 1: EDF resources for ACP countries – situation at 31-10-2003 

I. OLD EDFs (6th, 7th and 8th)

Allocations

Commitments

Assigned funds

Payments

Situation on 
1st April 2003

Transfers since 
1st April 2003

Total

(contracts)

National Indicative Programmes 
Regional cooperation 
Structural Adjustment Facility 
Interest-rate subsidies
Risk capital
Emergency aid
Aid for refugees
Stabex
Sysmin
Transfer from previous EDF 
Utilisation of interest income
Heavily indebted poor countries
9th EDF national transitional measures
9th EDF regional transitional measures
9th EDF Intra-ACP transitional measures
General reserve

13.858.170.273,72 -1.136.481.577,10 12.721.688.696,62 12.721.688.696,62 10.340.580.761,27
2.802.239.622,92
3.486.469.717,22
2.592.250.970,06
2.763.869.118,23
408.193.096,00
469.472.429,59
2.376.763.469,61
2.720.000.000,00
722.436.250,88
724.205.767,46
279.040.637,76
299.486.977,43
3.795.124.168,87
3.807.290.020,87
582.804.601,45
710.433.588,32
394.565.632,75
433.838.591,56
17.705.376,00
38.150.000,00
1.100.000.000,00
1.100.000.000,00
358.165.510,87
807.209.000,00
8.500.000,00
0,00
60.000.000,00
60.000.000,00
0,00
0,00

3.486.469.717,22
2.763.869.118,23
411.633.096,00
2.503.822.575,61
724.205.767,46
299.486.977,43
3.807.290.020,87
710.433.588,32
429.838.591,56
38.150.000,00
1.100.000.000,00
807.209.000,00
8.500.000,00
60.000.000,00
0,00

3.874.058.711,50
2.807.386.344,58
469.472.429,59
2.720.000.000,00
724.213.164,32
301.052.831,43
3.808.593.430,63
728.693.853,32
521.016.280,05
38.150.000,00
1.225.000.000,00
1.200.000.000,00
25.000.000,00
60.000.000,00
28.396.984,55

-387.588.994,28
-43.517.226,35
0,00
0,00
-7.396,86
-1.565.854,00
-1.303.409,76
-18.260.265,00
-87.177.688,49
0,00
-125.000.000,00
-392.791.000,00
-16.500.000,00
0,00
-28.396.984,55

8.946.782.357,73
2.361.749.920,11
2.486.820.489,15
330.867.773,51
1.908.533.426,00
714.585.666,03
231.105.277,09
3.604.142.634,87
523.295.149,32
367.651.085,74
13.432.375,40
1.100.000.000,00
171.033.690,56
0,00
60.000.000,00
0,00

Total 32.389.204.303,69 -2.238.590.396,39 30.150.613.907,30 29.872.597.149,32 25.829.870.098,44 22.819.999.845,51

II. 9th EDF

Allocations

Commitments

Assigned funds

Payments

National allocations
CDE, CTA & JPA
Reserves for long term development 

sub-total long-term development

Situation on 
1st April 2003
8.523.200.000,00
164.000.000,00
384.950.000,00
9.072.150.000,00

Total

Transfers since 
1st April 2003
1.665.826.118,09 10.189.026.118,09
64.899.000,00
199.877.284,02
1.381.652.402,11 10.453.802.402,11

-99.101.000,00
-185.072.715,98

593.339.844,93
0,00
0,00
593.339.844,93

Intra-ACP cooperation
Other Regional cooperation
Reserve for regional cooperation

subtotal regional cooperation

300.000.000,00
643.000.000,00
261.000.000,00
1.204.000.000,00

853.487.978,64
264.450.015,64
-261.000.000,00
856.937.994,28

1.153.487.978,64
907.450.015,64
0,00
2.060.937.994,28

89.595.156,00
23.884.000,00
0,00
113.479.156,00

(contracts)

24.778.947,81
0,00
0,00
24.778.947,81

71.750,00
3.607.536,70
0,00
3.679.286,70

4.575.164,87
0,00
0,00
4.575.164,87

0,00
455.570,73
0,00
455.570,73

Total 10.276.150.000,00

2.238.590.396,39 12.514.740.396,39

706.819.000,93

28.458.234,51

5.030.735,60

PM : Funds managed by the EIB
- interest rate subsidies
- Investment Facility

186.850.000,00
2.037.000.000,00

Total 9th EDF

12.500.000.000,00

III. CONSOLIDATED SITUATION

Allocations

Commitments

Assigned funds

Payments

National allocations
CDE, CTA and JPA
Reserves for long term development 

Regional cooperation
Reserve for regional cooperation
Interest rate subsidies (EDF 6 to 8)
Risk capital (EDF 6 to 8)
Structural adjustment facility
Emergency aid
Aid for refugees
Stabex
Sysmin
Transfers from EDF 1 to 5
HIPC (EDF 7 and 8)
Utilisation of interest income
General reserve

Situation on 
1st April 2003
23.581.370.273,72
164.000.000,00
384.950.000,00

Transfers since 
1st April 2003
136.553.540,99 23.717.923.814,71 14.122.237.541,55 10.723.525.219,95
0,00
-99.101.000,00
0,00
-185.072.715,98

64.899.000,00
199.877.284,02

(contracts)

0,00
0,00

Total

9.122.391.213,16
0,00
0,00

4.902.058.711,50

713.849.000,00

5.615.907.711,50

3.668.448.873,22

2.865.918.909,62

2.422.205.490,84

261.000.000,00
469.472.429,59
2.720.000.000,00
2.807.386.344,58
724.213.164,32
301.052.831,43
3.808.593.430,63
728.693.853,32
521.016.280,05
1.225.000.000,00
38.150.000,00
28.396.984,55

-261.000.000,00
0,00
0,00
-43.517.226,35
-7.396,86
-1.565.854,00
-1.303.409,76
-18.260.265,00
-87.177.688,49
-125.000.000,00
0,00
-28.396.984,55

0,00
469.472.429,59
2.720.000.000,00
2.763.869.118,23
724.205.767,46
299.486.977,43
3.807.290.020,87
710.433.588,32
433.838.591,56
1.100.000.000,00
38.150.000,00
0,00

0,00
411.633.096,00
2.503.822.575,61
2.763.869.118,23
724.205.767,46
299.486.977,43
3.807.290.020,87
710.433.588,32
429.838.591,56
1.100.000.000,00
38.150.000,00
0,00

0,00
408.193.096,00
2.376.763.469,61
2.592.250.970,06
722.436.250,88
279.040.637,76
3.795.124.168,87
582.804.601,45
394.565.632,75
1.100.000.000,00
17.705.376,00
0,00

0,00
330.867.773,51
1.908.533.426,00
2.486.820.489,15
714.585.666,03
231.105.277,09
3.604.142.634,87
523.295.149,32
367.651.085,74
1.100.000.000,00
13.432.375,40
0,00

Total 42.665.354.303,69

0,00 42.665.354.303,69 30.579.416.150,25 25.858.328.332,95 22.825.030.581,11

PM : Funds managed by the EIB
- interest rate subsidies
- Investment Facility

186.850.000,00
2.037.000.000,00

24 

 
 
  
 
 
ANNEX 2 

Draft Proposal for a  

COUNCIL DECISION 

Brussels, 

COM (2004)  

concerning the release of the conditional amount of € one billion under the ninth 
European Development Fund for co-operation with African, Caribbean and Pacific 
countries 

25 

 
 
  
 
EXPLANATORY MEMORANDUM 

1. 

Introduction 

The Financial Protocol attached as Annex 1 to the ACP-EC Partnership Agreement, signed in 
Cotonou on 23 June 2000, establishes in its paragraph 2 a ninth EDF for African, Caribbean 
and  Pacific  countries  of  a  total  amount  of  up  to  €  13.5  billion.  As  specified  in  the  EU 
Declaration on the Financial Protocol - Declaration XVIII under the Final Act of the ACP-EC 
Partnership Agreement – within the overall amount of € 13.5 billion, only € 12.5 billion were 
made  available  upon  the  entry  into  force  of  the  Financial  Protocol  (April  1st  2003).  The 
remaining € 1 billion is to be released on the basis of a performance review of the EDF by 
assessing  the  degree  of  realisation  of  commitments  and  disbursements.  This  performance 
review  is  to  be  undertaken  in  2004,  on  the  basis  of  a  proposal  from  the  Commission,  in 
accordance with Declaration XVIII attached to the ACP-EC Partnership Agreement as well as 
Article  1(2)  of  the  Internal  Agreement  between  Representatives  of  the  Governments  of  the 
Member States on the Financing and Administration of Community Aid under the Financial 
Protocol to the ACP-EC Partnership Agreement. 

The Commission proposes that the conditional amount of € 1 billion be released and used for 
the establishment of an ACP-EU Water Facility. 

2. 

Assessment of commitments and disbursements 

At the beginning of the year 2003, the total amount of the 6th, 7th and 8th EDF was €32.389 
billion.  Out  of  this  amount,  €29.6  billion  had  been  committed,  leaving  an  amount  of  €2.75 
billion available for new commitments. Together with fresh 9th EDF resources - €12.5 billion 
available since April 2003 – the total amount available for new commitments for the period 
2003-2007  was  thus  €15.25  billion.  Since  the  entry  into  force  of  the  Cotonou  Agreement, 
uncommitted resources under the old EDFs have been transferred to the 9th EDF (so far €2.24 
billion), but most of these resources remain allocated to the same countries and regions (and 
intra-ACP co-operation) as under the old EDFs. Only € 199 million are still available under 
reserves. 

During negotiations prior to the conclusion of the Internal Agreement between Member States 
-  where  the  amount  of  the  9th  EDF  was  fixed  -  the  Commission  announced  its  intention  to 
reach a level  of implementation between  €3-3,5 billion per year. The Commission confirms 
this  objective  for  the  period  2003-2007  and  considers  its  realisation  to  be  feasible.  The 
following table shows the forecasts of commitments and disbursements under the 6th, 7th, 8th 
and  9th  EDF,  based  on  the  Commission  Communication  “European  Development  Fund  – 
Estimates of decisions, payments and contributions to be paid by Member States for 2003 and 
2004” (COM/2003/720 of 21-11-2003)12. 

12 

Data  on  commitments  and  disbursements  in  the  communication  COM/2003/720  refer  to  the  global 
EDF,  including  resources  for  ACP  countries,  Overseas  Countries  and  Territories  and  Implementation 
costs. Resources for ACP countries represent 98.3% of total EDF-resources. Forecasts for commitments 
and disbursements for ACP countries are obtained by applying a factor 0.983 on the amounts mentioned 
in the communication. 

26 

 
 
  
 
                                                 
Table 1: Implementation of EDF-resources (amounts in billions of Euros) 

2003

2004

2005

2006

2007

Resources:
- EDF 6,7,8
- EDF 9
- Total

Cumulation

32,389
12,500
44,889

Commitments
To be committed

29,639
15,250

3,146
12,104

3,219
8,885

4,276
4,609

2,605
2,004

2,408
-0,404

21,327
23,562

Payments
To be paid
The table shows that according to current forecasts, 9th EDF-resources for ACP-countries will 
be  fully  absorbed13  during  the  period  2003-2007.  Forecasts  for  2003  are  confirmed  by  real 
execution  data  for  2003,  which  indicate  a  level  of  commitments  of  €  3.7  billion  and  of 
payments of € 2.4 billion.14 

2,826
15,821

2,458
21,105

2,458
18,647

3,146
12,675

2,998
9,677

3. 

Proposal on the release of the conditional billion 

On  the  basis  of  the  above  analysis  and  in  accordance  with  Article  2.2  of  the  Internal 
Agreement for the 9th EDF, the Commission proposes that the conditional billion be released 
and used for the creation of the ACP-EU Water Facility. In respect of the provisions of the 9th 
EDF Financial Protocol as well as Article 2 of the Internal Agreement, the conditional billion 
should  be  spread  proportionally  over  the  three  envelopes  (€741  million  to  long-term 
development, €96 million to regional co-operation, €163 million to the Investment Facility). 

By its nature, the proposed Water Facility must be a horizontal instrument and should thus be 
financed  from  intra-ACP  co-operation,  which  is  part  of  the  envelope  for  regional  co-
operation. In order to create the €1 billion Water Facility, the following steps are necessary: 

•  After  a  positive  decision  of  the  EU-Council  on  the  release  of  the  conditional  billion, 
consultation of the group of ACP countries on the principle of using these resources for the 
Water Facility. 

•  In accordance with article 12 of Annex IV to the Cotonou Agreement, the Community can 
earmark the extra €96 million from the envelope for regional co-operation to intra-ACP co-
operation  and  notify  accordingly  the  ACP-Council  of  Ministers.  This  implies  a 
Commission  decision  after  consultation  of  EU  Member  States  through  the  EDF-
Committee.  Such  a  decision  will  exhaust  the  regional  co-operation  envelope  and  thus 
create the legal basis for the next step. 

•  On  the  basis  of  paragraph  8  of  the  Financial  Protocol  (Annex  1  to  the  Cotonou 
Agreement), the ACP-EC Council of Ministers can decide to transfer the extra resources 
from  the  long-term  development  envelope  (€741  million)  and  the  Investment  Facility 
(€163  million)  to  the  envelope  for  regional  co-operation  and  to  use  these  resources  for 
intra-ACP  co-operation.  This  implies  the  following  steps:  (i)  Commission  proposal  on  a 

13 

14 

Commitments  in  the  table  are  gross  commitments,  excluding  decommitments.  This  explains  the 
negative “uncommitted” amount in 2007.  
See footnote 10. 

27 

 
 
  
 
                                                 
draft decision to be taken by the ACP-EU Council of Ministers, (ii) adoption by the EU-
Council,  (iii)  adoption  by  the  ACP-EU  Council  of  Ministers.  This  decision  should  also 
contain  a  formal  financing  request  for  the  Water  Facility,  which  is  a  prerogative  of  the 
ACP  Council  of  Ministers  in  accordance  with  article  13(2)  of  annex  IV  to  the  Cotonou 
Agreement. 

•  Once  the  above  steps  are  agreed,  the  Commission  will  present  a  financing  proposal  with 
detailed  implementation  modalities  to  the  EDF-Committee  and  take  a  financing  decision 
for the creation of the Water Facility. It can act as implementing body in accordance with 
Article 14(2) of Annex IV to the Cotonou Agreement. 

28 

 
 
  
 
Proposal for a  

COUNCIL DECISION 

concerning the release of the conditional amount of € one billion under the ninth 
European Development Fund for co-operation with African, Caribbean and Pacific 
countries 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 310 in conjunction with the second subparagraph of Article 300(2) thereof, 

Having regard to the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000. 

Having regard to the Internal Agreement on the financing and administration of Community 
Aid  under  the  Financial  Protocol  to  the  ACP-EC  Partnership  Agreement,  signed  on  18 
September 2000, and in particular Article 2 (2) thereof, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

In accordance with Paragraph 1 of the Financial Protocol to the ACP-EC Partnership 
Agreement  the  period  covered  by  the  Financial  Protocol  is  a  five-year  period 
commencing 1 March 2000. Paragraph 5 of the Financial Protocol however specifies 
that its overall amount, supplemented by the transferred balances from previous EDFs, 
will cover the period of 2000-2007. 

In  accordance  with  article  2(2)  of  the  Internal  Agreement,  as  well  as  the  EU 
Declaration on the Financial Protocol, attached as Declaration XVIII to the ACP-EC 
Partnership Agreement, out of the total amount of € 13.5 billion of the ninth European 
Development Fund (EDF) for African, Caribbean and Pacific Countries (ACP), only € 
12.5  billion  were  released  upon  the  entry  into  force  of  the  Financial  Protocol  to  the 
ACP-EC  Partnership  Agreement  on  April  1st  2003.  This  amount  is  broken  down  in 
three  envelopes:  €  9,259  billion  for  long-term  development,  €  1,204  billion  for 
regional co-operation and integration and € 2,037 billion for the Investment facility. 

In  accordance  with  Article  2(2)  of  the  Internal  Agreement  an  amount  of  €  1  billion 
may be released only following a performance review undertaken by the EU Council 
in 2004, on the basis of a proposal from the Commission. Paragraph 7 of the Financial 
Protocol to the ACP-EC Partnership Agreement as well as Declaration XVIII specify 
that  this  performance  review  shall  be  an  assessment  of  the  degree  of  realisation  of 
commitments and disbursements. 

The  level  of  commitments  and  disbursements  at  the  end  of  the  year  2003  in 
conjunction  with  forecasts  for  the  period  2004-2007  presented  by  the  European 
Commission  indicate  that  ninth  EDF-resources  for  ACP-countries  can  be  fully 
committed. 

29 

 
 
  
 
(5) 

On  19  May  2003  the  EU  Council  acknowledged  the  need  to  mobilise  a  significant 
amount  of  resources  for  water  and  sanitation  and  asked  the  Commission  to  draw  up 
practical  proposals  for  discussion  within  the  EU  and  the  ACP-EC  Council  of 
Ministers. 

HAS DECIDED AS FOLLOWS:  

Article 1 

The  amount  of  €  1  billion  referred  to  in  Article  2(2)  of  the  Internal  Agreement  shall  be 
released and be distributed as follows: 

(1) 

(2) 

(3) 

€  741  million  to  the  envelope  for  support  for  long-term  development,  referred  to  in 
Article  2(1)(a)  of  the  Internal  Agreement  as  well  as  Paragraph3(a)  of  the  Financial 
Protocol, bringing this envelope to a total amount of € 10 billion. 

€  96  million  to  the  envelope  for  regional  co-operation  and  integration,  referred  to  in 
Article  2(1)(b)  of  the  Internal  Agreement  as  well  as  Paragraph3(b)  of  the  Financial 
Protocol, bringing this envelope to a total amount of € 1.3 billion. 

€ 163 million to the Investment Facility, referred to in Article 2(1)(c) of the Internal 
Agreement as well as Paragraph 3(c) of the Financial Protocol, bringing this envelope 
to a total amount of € 2.2 billion. 

The Council invites the Commission to prepare the necessary proposals for the creation of an 
ACP-EU Water Facility of € 1 billion under the ninth EDF. 

Article 2 

This decision shall be communicated to the ACP Council of Ministers. 

Article 3 

Article 4 

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

Done at Brussels,  

For the Council 
The President 

30 

 
 
  
 
 
 
ANNEX 3.1 

EUROPEAN COMMISSION 

DG DEVELOPMENT 

The Director General 

Brussels,  

A1*2(04) D/ 

Note to the Members of the EDF Committee  

Subject:  Use  of  the  EDF  for  new  initiatives  -  Increase  of  the  9th  EDF  intra-ACP 
allocation for a contribution to the ACP-EU Water Facility 

Introduction: 

The  methodology  defining  allocations  for  regional  co-operation  under  the  ACP-EC 
Partnership  Agreement  was  discussed  during  the  meeting  of  November  2000  and  further  in 
April  and  May  2001.  Since  then,  in  accordance  with  the  methodology  adopted,  the 
Commission  has  notified  allocations  to  programming  regions  for  a  total  amount  of  €  700 
million. It has also notified an amount of € 300 million for intra-ACP co-operation to the ACP 
Council of Ministers. 

In June 2002, the EDF Committee agreed to a Commission proposal to increase the allocation 
for intra-ACP co-operation by € 60 million, from the reserves of the 6th and 7th EDF, in order 
to finance a contribution to the Global Fund to Fight HIV/Aids and Malaria. 

In  November  2002,  the  Commission  informed  the  EDF  Committee  of  its  intentions  to  use 
funds  from  the  EDF  for  new  initiatives.  As  a  first  step,  after  consultation  of  the  EDF-
Committee, the Commission decided in May 2003 to use the reserve of the 9th EDF envelope 
for regional co-operation for a second increase of the intra-ACP allocation by € 204 million, 
for  initiatives  in  the  health  sector  and  for  capacity  building.  Furthermore,  the  ACP-EC 
Council of Ministers decided in May 2003 to transfer € 335 million from the reserve under the 
9th  EDF  long-term  development  envelope  to  the  intra-ACP  allocation,  for  a  debt  reduction 
initiative.  As  a  third  step,  the  Commission  now  proposes  to  further  increase  the  intra-ACP 
allocation by € 96 million from the reserve of the 9th EDF envelope for regional co-operation 
and integration. (This reserve was replenished with the same amount by a decision of the EU-
Council on the release of the conditional billion under the 9th EDF.) 

Proposal: 

The European Community plays an active role in the EU Water Initiative launched during the 
WSSD.  This  initiative  has  the  objective  to  make  substantial  contributions  to  poverty 
reduction, the main objective of both the ACP-EC Partnership Agreement signed in Cotonou 
on 23 June 2000 and the Community Development Policy. The focus is on the achievement of 
the  Millennium  Development  Goals  and  targets  fixed  at  the  World  Summit  on  Sustainable 
Development (WSSD) on access to safe water and basic sanitation for the poor. 

31 

 
 
  
 
 
 
The  EDF  being  the  major  source  of  funding  of  Community  Aid  to  ACP  countries,  (any 
further)  contributions  to  new  initiatives  for  the  benefit  of  ACP  countries  should  come  from 
the  9th  EDF  
the  EDF.  The  amount  earmarked  for 
is too limited to cover all initiatives. The 9th EDF reserves should therefore be mobilised. 

intra-ACP  co-operation  under 

The Commission proposes to the EDF Committee to ensure support from the Community to 
the Water Initiative by transferring the funds remaining under the 9th EDF reserve for regional 
co-operation (€96 million) to the allocation for intra-ACP co-operation and to use these funds 
for  the  establishment  of  an  ACP-EU  Water  Facility.  The  objective  of  this  Facility  is  to 
significantly increase funding to achieve the targets on access to water and sanitation for the 
poor  in  ACP  countries,  and  to  use  development  aid  as  a  catalyst  to  leverage  additional 
financial resources. The proposed increase of the allocation for intra-ACP cooperation by €96 
million will lead to full absorption of the envelope for regional co-operation and integration. 

In parallel, a further increase of the intra-ACP allocation will be necessary to cover the needs 
for the proposed ACP-EU Water Facility. This can only be done by mobilising resources from 
the  reserves  from  the  long-term  development  envelope  and  resources  from  the  Investment 
Facility, which have also been replenished by the EU-Council decision on the release of the 
conditional billion under the 9th EDF. For this purpose, a decision by the ACP-EC Council of 
Ministers is under preparation in parallel, on the transfer of €741 million from the reserve of 
the 9th EDF long-term development envelope and €163 million from the 9th EDF Investment 
Facility, to the allocation for intra-ACP co-operation, to be used for the establishment of an 
ACP-EU Water Facility. This will lead to a total amount of €1 billion for the Water Facility. 
A  detailed  financing  proposal  will  be  prepared  and  submitted  for  opinion  to  the  EDF 
Committee, in accordance with the provisions of the Internal Agreement. 

Subject  to  a  positive  opinion  from  the  EDF  Committee,  the  Commission  will  take  a  formal 
decision  on  the  increase  of  the  intra-ACP  allocation  by  €  96  million  and  notify  this 
supplementary amount to the ACP Council of Ministers. 

32 

 
 
  
 
ANNEX 3.2 

Draft Proposal for a 

COMMISSION DECISION 

of[…] 

amending Commission decision N° C(2001)1578/2 of 15-6-2001 on allocations to regional 
programmes and to intra-ACP co-operation under the financial protocol of the ACP-EC 
Partnership Agreement 

MEMORANDUM TO THE COMMISSION 

The European Community plays an active role in the EU Water Initiative launched during the 
World  Summit  on  Sustainable  Development  (WSSD).  This  initiative  has  the  objective  to 
make substantial contributions to poverty reduction, the main objective of both the ACP-EC 
Partnership Agreement signed in Cotonou on 23 June 2000 and the Community Development 
Policy. 

In accordance with the Cotonou Agreement and the Internal Agreement between EU Member 
States,  the  Commission’s  services  have  proposed  to  the  EDF  Committee  to  ensure  support 
from  the  Community  to  the  Water  Initiative  by  transferring  the  unallocated  resources 
remaining under the 9th EDF reserve for regional co-operation (€96 million) to the allocation 
for  intra-ACP  co-operation  and  to  use  these  funds  for  a  contribution  to  an  ACP-EU  Water 
Facility.  The  EDF  Committee  has  expressed  a  positive  opinion  on  this  proposal  at  its  ... 
meeting in ... 2004. 

By  decision  C(2001)1578/2  of  15  June  2001,  the  Commission  determined  allocations  to 
regional programmes and to intra-ACP co-operation under the financial protocol of the ACP-
EC  Partnership  Agreement.  Under  this  decision  €  700  million  were  reserved  for  indicative 
resource  allocations  to  regions  and  €  300  million  for  intra-ACP  co-operation.  €204  million 
were kept as a general reserve15. 

By decision C(2002)2567 of 11 July 2002, the Commission decided to increase the allocation 
for intra-ACP co-operation under the ACP-EC Partnership Agreement by € 60 million, which 
originated  from  the  general  reserves  of  the  sixth  and  seventh  EDF.  This  supplementary 
allocation  allowed  for  a  financing  decision  on  the  contribution  from  the  EDF  to  the  Global 
Fund to Fight HIV/Aids and Malaria. 

By decision C(2003)1508 of 12 May 2003 the Commission decided a second increase of the 
allocation for intra-ACP co-operation by €204 million, from the unallocated resources under 
the 9th EDF reserve for regional co-operation and integration, allowing for a contribution to 
new initiatives in the health sector and for capacity building. 

15 

The  9th  EDF  Financial  Protocol  foresees  an  amount  of  €1.300  million  for  regional  co-operation. 
However,  taking  into  consideration  that  €1  billion  of  the  total  amount  of  the  9th  EDF  (€13,5  billion) 
were conditioned by a performance review in 2004, the real amount available for regional co-operation 
was  only  €1.204  million.  The  real  reserve  was  therefore  €204  million  and  not  €300  million  as 
mentioned in the respective Commission decision. 

33 

 
 
  
 
                                                 
By decision N° 2/2003 of 16 May 2003 the ACP-EC Council of Ministers decided to transfer 
€  335  million  from  the  unallocated  resources  under  the  reserve  of  the  9th  EDF  long-term 
development envelope to the intra-ACP allocation, allowing for a new contribution to the debt 
reduction initiative in favour of Highly Indebted Poor Countries. 

The  attached  draft  decision  proposes  a  fourth  increase  of  the  allocation  for  intra-ACP 
cooperation  by  €96  million,  from  the  unallocated  resources  under  the  9th  EDF  reserve  for 
regional co-operation and integration. (This reserve was replenished with the same amount by 
a decision of the EU-Council on the release of the conditional billion under the 9th EDF.) It 
will lead to full absorption of the envelope for regional co-operation.  

Under these circumstances, the ACP-EC Council of Ministers can take appropriate measures 
in accordance with paragraph 8 of the 9th EDF Financial Protocol, which can be applied when 
funds  provided  for  in  any  of  the  instruments  of  the  Cotonou  Agreement  are  exhausted.  A 
proposal has been prepared in parallel for a decision by the ACP-EC Council of Ministers on 
the transfer of €741 million from the reserve of the 9th EDF long-term development envelope 
and  €163  million  from  the  9th  EDF  Investment  Facility,  to  the  allocation  for  intra-ACP  co-
operation, to be used for the establishment of an ACP-EU Water Facility. 

The  Commission  is  asked  to  adopt  the  enclosed  decision  on  the  increase  of  the  intra-ACP 
allocation by €96 million. 

34 

 
 
  
 
Draft 

COMMISSION DECISION 

of[…] 

amending Commission decision N° C(2001)1578/2 of 15-6-2001 on allocations to regional 
programmes and to intra-ACP co-operation under the financial protocol of the ACP-EC 
Partnership Agreement 

THE COMMISSION OF THE EUROPEAN COMMUNITIES, 

Having regard to the Treaty establishing the European Community, 

Having regard to the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000, 

Having regard to the Internal Agreement on the financing and administration of Community 
Aid  under  the  Financial  Protocol  to  the  ACP-EC  Partnership  Agreement,  signed  on  18 
September 2000, and in particular Article 16 thereof, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

By decision C(2002)2567 of 11 July 2002, the Commission adopted an increase of €60 
million  of  the  allocation  for  intra-ACP  co-operation  under  the  ACP-EC  Partnership 
Agreement, from unallocated resources from the 6th and 7th EDF. 

By  decision  C(2003)1508  of  12  May  2003,  the  Commission  adopted  an  increase  of 
€204 million of the allocation for intra-ACP co-operation from unallocated resources 
under the 9th EDF reserve for regional co-operation and integration. 

By decision N° 2/2003 of 16 May 2003 the ACP-EC Council of Ministers decided to 
transfer €335 million from unallocated resources under the 9th EDF reserve for long-
term development to intra-ACP co-operation. 

The Internal Agreement between Representatives of the Governments of the Member 
States, meeting within the Council, on the financing and administration of Community 
Aid under the Financial Protocol to the ACP-EC Partnership Agreement mandates the 
Commission to establish the indicative grant allocations to regions on the basis of the 
criteria defined in the ACP-EC Partnership Agreement. In accordance with Article 16 
of the Internal Agreement, the EDF Committee has been consulted on an increase of 
€96 million of the allocation for intra-ACP co-operation from the reserve for regional 
co-operation and integration under the 9th EDF. 

HAS ADOPTED THIS DECISION:  

Article 1 

The first sentence of Article 2 of Decision N° C(2001)1578/2 is replaced by the following: 

“€660 million are reserved for intra-ACP co-operation, of which €600 million are taken from 
the 9th EDF and €60 million from unallocated resources of the 6th and 7th EDF.” 

35 

 
 
  
 
Article 2 

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

Done at Brussels,[…] 

For the Commission 

[…] 

Member of the Commission 

36 

 
 
  
 
ANNEX 4 

Draft Proposal for a 

COUNCIL DECISION 

on the position to be adopted by the Community within the ACP-EC Council of 
Ministers regarding a decision on the use of the reserve of the long-term development 
envelope as well as resources from the Investment Facility of the ninth European 
Development Fund for the establishment of an ACP-EU Water Facility 

(presented by the Commission) 

MEMORANDUM TO THE COMMISSION 

The European Community plays an active role in the EU Water Initiative launched during the 
World  Summit  on  Sustainable  Development  (WSSD).  This  initiative  has  the  objective  to 
make substantial contributions to poverty reduction, the main objective of both the ACP-EC 
Partnership Agreement signed in Cotonou on 23 June 2000 and the Community Development 
Policy. 

In accordance with the Cotonou Agreement and the Internal Agreement between EU Member 
States,  the  Commission’s  services  have  proposed  to  the  EDF  Committee  to  ensure  support 
from  the  Community  to  the  Water  Initiative  by  transferring  the  unallocated  resources 
remaining under the 9th EDF reserve for regional co-operation (€96 million) to the allocation 
for  intra-ACP  co-operation  and  to  use  these  funds  as  a  contribution  to  an  ACP-EU  Water 
Facility.  The  EDF  Committee  has  expressed  a  positive  opinion  on  this  proposal  at  its  ... 
meeting on ...2004. 

This proposal leads to full absorption of the envelope for regional co-operation. Under these 
circumstances,  the  ACP-EC  Council  of  Ministers  can  take  appropriate  measures  in 
accordance with paragraph 8 of the 9th EDF Financial Protocol, which can be applied when 
funds provided for in any of the instruments of the Cotonou Agreement are exhausted. 

Against  this  background,  the  Commission  proposes  that  the  Council  adopt  the  enclosed 
decision on the transfer of €741 million from the unallocated resources under the reserve of 
the 9th EDF long-term development envelope and €163 million from the 9th EDF Investment 
Facility, to the allocation for intra-ACP co-operation, to be used for the establishment of an 
ACP-EU  Water  Facility.  Together  with  the  above  mentioned  increase  of  €96  million  of  the 
intra-ACP allocation, this will lead to a total amount of €1 billion for the Water Facility. 

A proposal for a Council decision on the position to be adopted by the Community within the 
ACP-EC Council of Ministers regarding the use of unallocated resources under the reserve of 
the  9th  EDF  long-term  development  envelope  as  well  as  resources  from  the  9th  EDF 
Investment Facility is attached to this memorandum. The Commission is asked to adopt this 
proposal for a Council Decision, in order to allow the above activities to be implemented. 

37 

 
 
  
 
Proposal for a 

COUNCIL DECISION 

on the position to be adopted by the Community within the ACP-EC Council of 
Ministers regarding a decision on the use of the reserve of the long-term development 
envelope as well as resources from the Investment Facility of the ninth European 
Development Fund for the establishment of an ACP-EU Water Facility 

(presented by the Commission)

38 

 
 
  
 
EXPLANATORY MEMORANDUM 

The European Community plays an active role in the EU Water Initiative launched during the 
World  Summit  on  Sustainable  Development  (WSSD).  This  initiative  has  the  objective  to 
make substantial contributions to poverty reduction, the main objective of both the ACP-EC 
Partnership Agreement signed in Cotonou on 23 June 2000 and the Community Development 
Policy. 

The  EDF  being  the  major  source  of  funding  of  Community  Aid  to  ACP  countries,  (any 
further)  contributions  to  new  initiatives  for  the  benefit  of  ACP  countries  should  come  from 
the  9th  EDF  
the  EDF.  The  amount  earmarked  for 
is too limited to cover all initiatives. The 9th EDF reserves should therefore be mobilised. 

intra-ACP  co-operation  under 

In accordance with the Cotonou Agreement and the Internal Agreement between EU Member 
States,  the  Commission’s  services  have  proposed  to  the  EDF  Committee  to  ensure  support 
from  the  Community  to  the  Water  Initiative  by  transferring  the  unallocated  resources 
remaining under the 9th EDF reserve for regional co-operation (€96 million) to the allocation 
for  intra-ACP  co-operation  and  to  use  these  funds  for  a  contribution  to  an  ACP-EU  Water 
Facility. The EDF Committee has expressed a positive opinion on this proposal at its meeting 
on 2004. 

This proposal leads to full absorption of the envelope for regional co-operation. Under these 
circumstances,  the  ACP-EC  Council  of  Ministers  can  take  appropriate  measures  in 
accordance with paragraph 8 of the 9th EDF Financial Protocol, which can be applied when 
funds provided for in any of the instruments of the Cotonou Agreement are exhausted. 

Against  this  background,  the  Commission  proposes  that  the  Council  adopt  the  enclosed 
decision  on  the  position  to  be  adopted  by  the  Community  within  the  ACP-EC  Council  of 
Ministers  regarding  the  transfer  of  €741  million  from  the  reserve  (unallocated  resources)  of 
the  9th  EDF  long-term  development  envelope  as  well  as  €163  million  from  the  9th  EDF 
Investment  Facility,  to  the  allocation  for  intra-ACP  co-operation,  to  be  used  for  the 
establishment of an ACP-EU Water Facility. 

39 

 
 
  
 
Proposal for a 

COUNCIL DECISION 

on the position to be adopted by the Community within the ACP-EC Council of 
Ministers regarding a decision on the use of the reserve of the long-term development 
envelope as well as resources from the Investment Facility of the ninth European 
Development Fund for the establishment of an ACP-EU Water Facility 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
310 in conjunction with the second subparagraph of Article 300(2) thereof, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

At  its  2509th  session  on  19  May  2003  the  EU  Council  acknowledged  the  need  to 
mobilise  a  significant  amount  of  resources  for  water  and  sanitation  and  asked  the 
Commission to draw up practical proposals for discussion within the EU and the ACP-
EC Council of Ministers. 

Article 15 of the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000 
establishes  an  ACP-EC  Council  of  Ministers  with  powers  to  take  decisions  in 
accordance  with  the  Agreement  and  Paragraph  8  of  Annex  I  to  that  Agreement 
(Financial  Protocol)  allows  the  ACP-EC  Council  of  Ministers  to  take  appropriate 
measures  if  funds  provided  for  in  any  of  the  instruments  of  the  Agreement  are 
exhausted.  

Funds  from  the  9th  EDF  envelope  for  regional  co-operation  and  integration  are 
exhausted. The Community's position within the ACP-EC Council of Ministers should 
therefore  be  established  with  a  view  to  its  adopting  a  decision  on  the  Community's 
contribution  to  the  establishment  of  an  ACP-EU  Water  Facility,  from  the  reserve  of 
the  long-term  development  envelope  and  from  the  Investment  Facility  of  the  ninth 
EDF. 

HAS DECIDED AS FOLLOWS: 

Article 1  

The Community shall take the following position within the ACP-EC Council of Ministers on 
the use of the reserve of the 9th EDF long-term development envelope and resources from the 
Investment Facility for the establishment of an ACP-EU Water Facility, based on the attached 
draft decision of the ACP-EC Council of Ministers. 

Done at Brussels, […] 

For the Council 
The President 

[…]

40 

 
 
  
 
ANNEX 

Draft 

DECISION OF THE ACP-EC COUNCIL OF MINISTERS 

on the use of the reserve of the long-term development envelope as well as resources 
from the Investment Facility of the ninth European Development Fund for the 
establishment of an ACP-EU Water Facility 

THE ACP-EC COUNCIL OF MINISTERS, 

Having  regard  to  the  ACP-EC  Partnership  Agreement  signed  in  Cotonou  on  23  June  2000, 
and in particular Paragraph 8 of its Annex I, 

Whereas: 

(1) 

(2) 

The  European  Commission  notified  to  the  ACP  Council  of  Ministers  the  increase  of 
the 9th EDF intra-ACP allocation by (cid:31)96 million and proposed that these resources be 
used for a contribution to an ACP-EU Water Facility. 

To ensure support for the implementation of the EU Water Initiative in ACP countries, 
it is appropriate to allocate further supplementary resources to intra-ACP co-operation 
for a total amount of (cid:31)904 million. However, the envelope for regional co-operation 
and  integration  as  defined  in  Paragraph  3(b)  of  annex  I  (Financial  Protocol)  to  the 
ACP-EC Partnership Agreement is exhausted. The necessary resources must therefore 
be  transferred  from  unallocated  resources  of  the  9th  EDF  long  term  development 
envelope and from the Investment Facility, referred to in Paragraph 3(b) and (c) of the 
Financial Protocol. 

(3) 

Article 15 of the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000 
establishes  an  ACP-EC  Council  of  Ministers  with  powers  to  take  decisions  in 
accordance with the Agreement. 

HAS DECIDED AS FOLLOWS: 

Article 1 – Establishment of an ACP-EU Water Facility 

An amount of €904 million, consisting of €741 million from the reserve of the 9th EDF long-
term development envelope and €163 million from the 9th EDF Investment Facility, shall be 
transferred  to  the  intra-ACP  allocation  under  the  envelope  for  regional  co-operation  and 
integration, and used for the establishment of an ACP-EU Water Facility. 

41 

 
 
  
 
Article 2 

In  accordance  with  Article  13(2)  of  Annex  IV  to  the  ACP-EC  Partnership  Agreement,  the 
ACP Council of Ministers requests the Commission to finance support for the ACP-EU Water 
Facility from intra-ACP co-operation for a total amount of €1 billion. 

Done at  

For the ACP-EC Council of Ministers 

The President 

42 

 
 
  
 
ANNEX 5 

LIST OF ACRONYMS 

ACP 

Africa Caribbean Pacific 

AfDB 

African Development Bank 

AMCOW  African Ministerial Council on Water 

AU 

African Union 

AWF 

African Water Facility 

CSP 

Country Strategy Paper 

EC 

European Commission 

ECOWAS  Economic Community of West African States 

EDF 

European Development Fund 

EDFI 

European Development Finance Institutions 

EECCA 

Eastern Europe Caucasus and Central Asia 

EIB 

EU 

European Investment Bank 

European Union 

GAERC 

General Affairs and External Relations Council 

GPOBA 

Global Partnership on Output Based Aid 

GWP 

Global Water Partnership 

IFI 

International Finance Institutions 

IWRM 

Integrated Water Resources Management 

MDG 

Millenium Development Goals 

MFI 

Multilateral Finance Institutions 

MSF 

Multistakeholder Forum 

NEPAD 

New Partnership for African Development 

NGO 

Non Governmental Organisation 

NIP 

National Indicative Programme 

ODA 

Official Development Assistance 

PPIAF 

Public Private Infrastructure Advisory Facility 

PPP 

Public Private Partnership 

PRSP 

Poverty Reduction Strategy Paper 

43 

 
 
  
 
PSP 

Private Sector Participation 

RIP 

Regional Indicative Programme 

SADC 

Southern Africa Development Community 

SWAP 

Sector Wide Approach 

TA 

WF 

Technical Assistance 

Water Facility 

WSSD 

World Summit on Sustainable Development 

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