Communication from the Commission to the Council - EDF Performance Review and Proposal for the Release of the Remaining Conditional Balances of the 9th European Development Fund
Date: 2005-02-17
Institutions: European Commission
Subjects: European Development Fund, budget estimate, financial management, financial year, implementation of the budget

COMMISSION OF THE EUROPEAN COMMUNITIES 

Corrigendum 
to COM(2005) 51 final 17.2.2005 
concerning 11 languages EN FR DE DA EL ES FI IT NL PT SV 
page 30 or 31, point 9 

Brussels, 19.5.2005 
COM(2005) 51 final/2 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL 

EDF Performance Review and Proposal for the Release of the Remaining Conditional Balances 
of the 9th European Development Fund 

Proposal for a 
COUNCIL DECISION 

concerning the mobilisation of a second allocation of EUR 250 million from the conditional EUR 
1 billion under the 9th EDF to be used for the second instalment of the ACP-EU Water Facility 

Proposal for a 
COUNCIL DECISION 

concerning the release and use of EUR 18 million from the conditional EUR 1 billion under the 
9th EDF to be used to cover the financing of the National Indicative Programme of Timor Leste 
during the period 2006-2007 

Proposal for a 
COUNCIL DECISION 

concerning the release and use of the remaining EUR 482 million of the conditional EUR 1 
billion under the 9th European Development Fund for cooperation with African, Caribbean and 
Pacific countries 

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 
of resources from the Investment Facility of the ninth European Development Fund for the 
financing of the EU Energy Initiative, for the contributions to the International Commodity Risk 
Management Financing Facility, the adaptation to the new EU feed and food sanitary and phyto 
sanitary rules, the strengthening of the African Union and a contribution to the Education for 
All Fast Track Initiative  

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 long-term development envelope as well as resources from 
the Investment Facility of the ninth European Development Fund for the second allocation of the 
ACP-EU Water Facility 

(presented by the Commission) 

{SEC(2005) 242} 

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL 

EDF Performance Review and Proposal for the Release of the Remaining Conditional 
Balances of the 9th European Development Fund 

INTRODUCTION 

For the initial period of five years under the ACP-EC Partnership Agreement, commencing 1 
March 2000 and covering the period from ratification until the end of 2007, the Community’s 
financial assistance to the African Caribbean and Pacific countries (ACP) comprises an initial 
amount  of  €13.5billion  from  the  9th  European  Development  Fund  (EDF).  Of  this  total, 
€1billion shall be released on the basis of a performance review that shall assess the degree of 
realisation of commitments and disbursements1. 

The  present  Communication  confirms  that  the  reforms  set  in  motion  by  the  Commission  in 
2000 resulted in improved performance over recent years measured in terms of the degree of 
realisation of commitments and disbursements2, and that this positive trend has been further 
strengthened  by  the  mid-term  review  process  conducted  in  2004.  It  concludes  that  the  9th 
EDF, including the balances transferred from the previous EDFs, will be entirely committed 
by  the  end  of  2007  without  even  allowing  the  Community  to  fully  comply  with  its 
international  commitments  and 
initiatives.  The 
Communication will therefore recommend the adoption of the three attached draft decisions 
(i) on the release of the 2nd instalment of €250million of the Water Facility, (ii) on the release 
of  a  further  €18million  for  funding  of  the  national  indicative  programme  of  Timor  Leste  as 
soon  as  it  becomes  full  member  of  the  ACP  Group  in  2005  and  (iii)  on  the  release  of  the 
€482million conditional balances, and of the two complementary draft decisions regarding the 
transfer of the released funds to the regional cooperation and integration instrument to allow 
for the intra-ACP funding of the 2nd instalment of the Water Facility and the intra-ACP use of 
part of the €482 million conditional balances. 

international 

to  new 

respond 

to 

1. 

EDF FINANCIAL PERFORMANCE 

The  performance  of  the  EDF  in  2003  has  been  the  best  ever.  The  high  level  of  the 
commitments  can  be  partially  explained  by  the  fact  that  2003  was  the  first  year  of  the 
implementation  of  the  9th  EDF.  However,  the  level  of  disbursements  was  also  significantly 
higher  than  it  had  ever  been.  This  positive  evolution  in  disbursements  was  not  only  due  to 
non-recurrent  “one-shot”  operations,  but  was  already  noticed  in  previous  years  and  is  being 
confirmed  by  the  provisional  figures  for  2004  (see  Annex  1  for  more  details).  These 
encouraging  results  are  achieved  despite  the  fact  that,  in  a  number  of  ACP  countries, 

1 

2 

ACP-EC  Partnership Agreement,  signed  in Cotonou on  23  June  2000, Financial  Protocol,  Annex  I,  7 
and  the  EU  Declaration  on  the  Financial  Protocol  (Declaration  XVIII)  attached  to  the  ACP-EC 
Partnership Agreement. The Internal Agreement (OJ L 317, 15.12.2000) specifies that this performance 
review shall be undertaken by the Council in 2004 on the basis of a proposal from the Commission. 
Commission  Staff  Working  Paper  SEC(2005)242  makes  a  more  qualitative  assessment  of  these 
reforms,  further  illustrating  the  structural  nature  of  the  improved  performance,  both  quantitatively  as 
well as qualitatively.  

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cooperation was hampered by political uncertainty or crises and/or the after-effects of natural 
disasters. 

EDF commitments and payments (1990-2003)
(gross amounts - nominal values)

€
0
0
0

5.000.000

4.000.000

3.000.000

2.000.000

1.000.000

0

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004 
(forecast)

DECISIONS 

953.250

1.432.600 2.236.450 1.843.040 2.688.670 1.874.270 1.538.110

784.350

2.606.340 2.958.050 4.006.880 1.920.570 2.114.500 4.127.000 3.185.000

PAYMENTS  1.256.630 1.191.300 1.984.090 1.443.240 1.859.930 1.758.070 1.508.780 1.382.260 1.595.440 1.352.290 1.640.390 2.124.490 1.902.490 2.431.000 2.565.000

Taking into consideration the additional commitments expected with high probability before 
the end of 2004 and the decommitments on ongoing programmes, which averaged +/- €330 
million over the last five years, the gross level of yearly commitments required to absorb the 
unallocated  balances  of  the  consolidated  9th  EDF  is  approximately  €3  445  million  over  the 
years 2005-2007. This compares to an average gross commitment level of €3 656 million over 
the last two years (2003-04). 

2. 

THE 2004 MID-TERM REVIEW 

During 2004 mid-term reviews (MTRs) have been undertaken in all ACP countries for which 
a  Country  Strategy  Paper  (CSP),  the  basis  of  the  EDF  programming  exercise,  has  been 
signed3. The Cotonou Agreement explicitly provides that these mid-term reviews may lead to 
a change of the strategy (change in the CSP focal sectors), and/or to a revision in the country 
allocation (upwards or downwards or between the programmable resources and the indicative 
resources for unforeseen needs). 

To  decide  on  the  possible  adjustment  of  the  country  allocations,  two  main  criteria, 
complemented by ‘special considerations’, were used: 

•  Assessment  of  the  country’s  financial  performance  in  implementing  Community 
aid;  the  indicators  used  were  the  average  commitment,  contracting  and 
disbursement rates over previous years and the theoretical years required to absorb 
remaining balances; 

•  Assessment of the country’s performance in the focal sectors (and macroeconomic 

support where appropriate); 

3 

For nine countries  the  CSP  had not  been  signed  at  the  start  of  the  exercise:  Côte  d’Ivoire,  Equatorial 
Guinea, Guinea, Haiti, Liberia, Somalia, Sudan, Togo and Zimbabwe. Five small Pacific countries were 
not reviewed because they became new parties to the Cotonou Agreement and only recently started to 
benefit from EDF funds: Marshall Islands, Micronesia, Nauru, Niue and Palau.  

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•  Special  considerations:  assessment  of  country’s  progress  in  institutional  reforms 
and  poverty  reduction  as  well  as  specific  circumstances  affecting  the  country’s 
needs,  vulnerability  and  performance  since  the  start  of  the  CSP  programming 
process; 
the 
implementation  capacity  at  the  country  level  (e.g.  the  status  of  the  devolution 
process, temporary staffing problems in the Delegation and/or NAO office), etc. 

included  post-conflict  situations, 

factors 

related 

these 

to 

The MTR exercise was conducted with a view to achieving global financial equilibrium4. The 
financial  proposals  which  have  been  submitted  to  the  EDF  Committee  in  fall  2004  and  on 
which final Commission Decisions are foreseen in December can be indicatively summarised 
as follows: 

•  For 17 countries no change in envelopes is proposed. 

•  For 13 countries a transfer between the envelope of programmable funds and the 
envelope for unforeseen needs) is proposed, leaving the amount of total resources 
unchanged; in most cases this has been a transfer from the underutilised envelope 
for  unforeseen  needs 
the  envelope  for  programmable  funds  which, 
consolidated, increase by €226million (of which 62% in favour of least developed 
countries. 

to 

•  For 17 countries, a net increase in allocations is proposed (in many instances, this 
includes a transfer between envelopes); the net increase amounts to €766million (a 
€989million increase in the envelopes for programmable funds, partly offset by a 
€223million  decrease  in  the  envelopes  for  unforeseen  needs),  of  which  97%  in 
favour of least developed countries. 

•  For 15 countries, a net decrease in the total allocation is proposed (two of which 
involve a cut in the A envelope); the net decrease amounts to €432million (with a 
net increase of programmable funds of only €33million) of which 84% concerns 
least developed countries. 

Consolidated  this  means  a  net  increase  of 17.6%  in  programmable  funds,  or  €1  248million, 
overwhelmingly (91%) going to least developed countries with a high absorption capacity and 
satisfactory economic and political performance. These transfers from overestimated, unused, 
allocations  for  unforeseen  needs  and  from  poorly  performing  countries  will  further  sharpen 
the focus on poverty and increase the global absorption capacity of the 9th EDF, reinforcing 
the positive commitment and disbursement trend. 

3. 

FORECASTS 2004-2007 

The  most  recent  forecasts  for  commitments  and  payments  under  the  EDF  were  prepared  in 
parallel  with  the  performance  review  and  communicated  to  the  Council  in  October  20045. 

4 

5 

Financial  equilibrium  is  reached  by  taking  into  account  adjustments  made  in  the  envelopes  for  those 
countries  for  which  the  amount  of  the  9th  EDF  was  not  notified  or  notified  late,  i.e.  the  242,6  M€ 
resulting from Decision C(2003)2471 regarding Haiti, Liberia and Togo, plus a further net decrease of 
96,8 M€ approved by the EDF Committee in September 2004 for countries for which the CSP has not 
been signed yet. 
COM (2004)763, 19.11.2004. 

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They  are  based  on  the  consolidation  of  the  implementation  pipeline  of  each  national  and 
regional  indicative  programme  and  intra-ACP  intervention,  carefully  screened  in  September 
and October on the basis of the data produced by the Delegations’ and Headquarters’ services. 
In line with the forecasts adopted by the Council in November 2003, they confirm that the 9th 
EDF, including the balances of all previous EDFs and the first instalment of €250million of 
the Water Facility, financed out of the conditional one billion, will be fully committed by the 
end of 2007, the period covered by the 9th EDF (for details, see table in Annex 2). The 2006 
end-of-term  review  will  allow  correction  of  existing  forecasts  and  a  final  reallocation  of 
funds, further increasing the prospect that, by the end of 2007, all the remaining balances will 
be committed. 

The  only  option  for  the  Community  to  respond  to  its  international  obligations  towards  the 
ACP  and  to  some  unmet  obligations  resulting  directly  from  the  Cotonou  Agreement  is 
therefore through the release of the balances of the conditional one billion. 

4. 

PROPOSALS FOR THE USE OF THE CONDITIONAL BALANCES 

Based on the conclusions of the Communication from the Commission to the Council and the 
European  Parliament  on  the  future  development  of  the  EU  Water  Facility  and  on  a 
preliminary  EDF  performance  review,  the  Council  agreed  on  22  March  2004  to  consider 
earmarking  an  amount  of  €500million  out  of  the  conditional  €1billion  in  support  of  an 
European water initiative for the ACP Countries6. The Council further agreed that half of this 
amount could be released immediately and that by March 2005 a decision would be taken on 
the  mobilisation  of  a  second  instalment  of  €250million  and  on  the  use  of  the  remaining 
€500million in the light of the outcome of the mid-term review of the country strategy papers 
conducted  in  2004  and  of  a  more  detailed  EDF  performance  review.  The  joint  ACP-EC 
Council of Ministers, meeting in Gaborone on 06 May 2004, endorsed this approach7. 

The 2004 mid-term reviews led to a reallocation of resources between ACP countries based 
on performance, without requiring additional funding. The end-of-term review will focus even 
more  on  the  absorption  capacity  of  the  beneficiary  countries  and  no  additional  funding  of 
national indicative programmes is expected to be required on top of the funds liberated from 
the  envelopes  for  unforeseen  needs  or  from  programmable  envelopes  of  poorly  performing 
countries. Similarly, the Investment Facility is slightly behind schedule and will not require 
additional funding. 

It  is  therefore  proposed  that  a  higher-than-proportional  share  of  the  conditional  balances  be 
used to respond to some of the unmet international ACP-EC commitments. 

4.1.  Water Facility 

The  implementation  modalities  of  the  Water  Facility  have  been  carefully  prepared  in  close 
consultation with the member States. As a result, a financing proposal for €247 million was 
submitted  to  the  EDF  Committee  and  received  a  favourable  opinion  at  its  November  2004 
meeting.  A  call  for  proposals  has  been  launched  under  a  suspensive  clause  after  a  very 

6 
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Council Decision 2004/289, 22.03.2004. 
Decision 1/2004 of the ACP-EC Council of Ministers of 6 May 2004 on the use of the reserve of the 
long-term development envelope as well as resources from the Investment Facility of the 9th EDF for 
the establishment of an ACP-EU Water Facility. 

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positive discussion at the EDF Committee meeting of October8. The interest gathered from all 
stakeholders  in  various  international  fora  increases  the  likelihood  of  a  very  positive 
preliminary  response  to  this  call,  which  will  be  confirmed  in  early  2005  on  receipt  of  the 
preliminary  proposals.  It  is  expected  that  fundable  project  proposals  for  an  amount  well 
exceeding the amount of the call will be submitted, entirely justifying the immediate release 
of the second instalment of the Water Facility. Such an early release would allow for an early 
launching, still in 2005, of the second call for proposals, building on the experience and the 
lessons learned from the first one.  

Two  draft  decisions  for  adoption  by  the  Council  are  therefore  attached,  one  proposing  the 
release  of  a  further  €250million  from  the  conditional  9th  EDF  resources,  and  another 
regarding  the  transfer  of  the  released  funds  to  the  regional  cooperation  and  integration 
instrument in order to allow the financing of the second instalment of the Water Facility from 
the intra-ACP envelope.  

4.2. 

Residual conditional balances 

For the remaining €500 million of the conditional billion, the Commission made a very strict 
and  prioritised  selection  of  proposals  on  the  basis  of  the  obligations  resulting  from  the 
Cotonou  Agreement  and  of  the  ACP-EC  commitments  that  have  not  yet  been  met 
internationally, taking into account the principles of urgency and poverty focus, concentration 
of aid and absorption capacity. A proposal by the ACP group for the creation of an ACP-EC 
Disaster Facility to assist ACP countries in disaster prevention/disaster preparedness and post-
crisis  management  has  not  been  included  as  the  existing  instruments  already  allow  the 
Commission to address these issues. However, the ACP Secretariat and the Commission have 
undertaken steps to examine how to further enhance the existing response mechanisms and to 
examine  any  complementary  measures  to  strengthen  ACP-EC  co-operation  and  intra-ACP 
solidarity in case of natural disasters. 

Obligations resulting from the Cotonou Agreement 

1. CDE-CTA 

Under  the 9th  EDF, €90 million and €70 million have been reserved out of the envelope in 
support of long-term development for the financing of the budget of, respectively, the Centre 
for  the  Development  of  Enterprise  (CDE)  and  of  the  Centre  for  the  Development  of 
Agriculture  (CTA).  These  amounts  were deemed to  cover the  budgetary needs  of these two 
joint ACP-EC institutions for the five-year period of the first financial protocol (2000-2005). 
As the absorption capacity of both institutions is satisfactory and there were no balances from 
previous  EDFs,  both  institutions  will  run  out  of  funding  by  the  end  of  2005.  Under  the 
existing implementation modalities of the CDE and the CTA the annual budgetary needs are 
estimated  at  respectively  €18  million  and  €14  million.  It  is  therefore  proposed  to  earmark 
€64 million  out  of  the  long  term  development  envelope  released  from  the  remaining 
conditional  resources  to  cover  their  functioning  during  2006-2007,  in  compliance  with 
Annexes I and III to the Cotonou Agreement. 

8 

€3  million  have  already  been  committed  in  the  framework  of  the  intra-ACP  technical  cooperation 
facility for information, communication and evaluation purposes. 

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2. Timor Leste 

In  2003,  the  joint  ACP-EU  Council  approved  the  accession  of  Timor  Leste  to  the  Cotonou 
Agreement9. While the initial development needs of Timor Leste were taken care of under the 
EC  budget,  there  is  no  provision  for  further  funding  beyond  2005,  when  Timor  Leste  is 
expected  to  ratify  the  Cotonou  Agreement,  as  this  would  be  incompatible  with  the  existing 
ALA  regulation,  which  does  not  allow  ALA  funding  in  favour  of  ACP  Group  member 
countries.  Based  on  Articles  62(2)  and  94(1)  of  the  Cotonou  Agreement,  the  Commission 
therefore proposed to top up the 9th EDF with €18 million, which corresponds to the pro rata 
amount  which  would  have  been  earmarked  for  Timor  Leste,  if  the  normal  aid  allocation 
criteria for the 9th EDF had been applied. 

There was no unanimity among member States for this proposal and the Council “expressed 
willingness to consider positively the use of the  ‘Conditional Billion’” to meet the needs of 
Timor Leste, considering, on the basis of the elements referred to above, that at present there 
are no unearmarked funds available under the 9th EDF10. It is therefore proposed to earmark 
€18million out of the long term development envelope released from the conditional balances 
to cover the national indicative programme of Timor Leste during the period 2006-07. 

International commitments 

1. Energy Facility 

At present, over 80% of the population in Sub-Saharan Africa have limited access to modern 
forms  of  energy.  The  social  and  economic  development  of  poor  communities  is  limited  or 
even  deadlocked  by  the  present  unsustainable  use  of  wood  and  other  form  of  biomass  for 
energy purposes. Recognising the importance of improving energy access for the poor, the EU 
launched  the  EU  Energy  Initiative  for  poverty  eradication  and  sustainable  development 
(EUEI) at the World Summit on Sustainable Development (WSSD) in Johannesburg in 2002. 
The objective of the EUEI is to contribute to the achievement of the Millennium Development 
Goals (MDGs) through the provision of adequate, sustainable, environmentally-sound energy 
services to the poor. 

In this connection, the Commission has recently adopted a proposal to set up a €250 million 
Energy  Facility  in  the  ACP  region11.  The  modalities  for  the  establishment  of  this  Energy 
Facility will follow the model of the Water Facility and it will also be prepared with the active 
involvement of member States and other stakeholders. In its conclusions, the Communication 
to the Council and to the European Parliament suggests that this new initiative be funded from 
the remaining balances of the conditional billion. 

Considering  the  high  expectations  generated  by  the  launch  of  the  EU  Energy  Initiative,  the 
crucial  contribution  of  energy  to  the  achievement  of  the  MDGs,  and  the  critical  importance 
for  the  poor  of  access  to  cost-effective  and  environmentally  sound  energy  services,  it  is 
therefore  suggested  to  finance  the  proposed  ACP/EU  Energy  Facility  with  an  indicative 

9 
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11 

Decision 1/2003 of the joint ACP-EU Council of Ministers of 16 May 2003. 
Council  document  13890/04  of  04  November  2004  on  the  Outcome  of  Proceedings  of  the  ACP 
Working Party of 26 October 2004. 
COM(2004)711  of  28  October  2004  on  the  future  development  of  the  EU  Energy  Initiative  and  the 
modalities for the establishment of an Energy Facility for ACP countries. 

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amount of up to €250million from the conditional balances and to transfer the totality of this 
amount to the intra-ACP envelope for this purpose. 

2. Commodity risk management 

Further  to  the  recent  dramatic  falls  in  the  price  of  internationally  traded  agricultural 
commodities and the dependence of a very large number  of  poor  people on the competitive 
production  of  those  commodities  for  employment  and  income,  the  international  community 
has  called  for  special  attention  to  be  paid  to  this  problem,  including  in  the  context  of  the 
multilateral  trade  negotiations  and  of  the  negotiation  of  economic  partnership  agreements 
between the EU and the ACP regions. In response to this challenge, the Council adopted in 
April  2004  an  EU  Action  Plan  prepared  by  the  Commission,  which  includes  a  proposal  to 
facilitate producer access to commodity risk insurance and trade finance12. 

The  purpose  of  the  present  initiative  is  to  complement  the  World  Bank  technical  assistance 
and the foreseen Commission capacity building programme in this area13 with an international 
financing  facility  to  support  ACP  countries  accessing  market-based  instruments  for 
commodity risk management through the temporary co-financing of their premiums. This will 
contribute  to  reduced  vulnerability  of  the  ACP  beneficiary  countries  to  commodity  shocks 
(price  fluctuations  as  well  as  natural  disasters)  and  to  a  development  of  commodity  risk 
instruments for further uptake. A joint EU-ACP Committee on agricultural commodities will 
oversee the design and the implementation modalities of the programme. 

It  is  proposed  to  earmark  an  indicative  amount  of  up  to  €25million  from  the  remaining 
balance  of  the  conditional  billion  to  contribute  to  the  international  commodity  risk 
management  financing  facility  as  explicitly  provided  for  in  Article  68.5  of  the  Cotonou 
Agreement, and to transfer the amount to the intra-ACP envelope for this purpose. 

3. Sanitary and phyto-sanitary measures 

At the EU level, a new regulation on “Official Feed & Food Controls” will enter into force in 
January  200614.  This  new  regulation  will  require  third  countries  to  provide  detailed 
information about the general structure and management of their feed and food sanitary and 
phyto-sanitary control systems and to provide sufficient guarantees that products destined for 
the  EU  market  meet  EU  safety  standards.  To  maintain  their  access  to  the  EU  markets  and 
cope with these new regulations, the ACP countries will have to make significant investments. 

Article 12 of the Cotonou Agreement on the coherence of Community policies provides that, 
in such cases and at the request of the ACP, consultations should be held so that account may 
be taken of their concerns about the impact of these measures.A preliminary impact study of 
the new regulation, conducted under the supervision of an inter-service group on SPS-related 
issues for developing countries, concluded that the ACP may need up to €300 million to help 
them strengthen their basic capacity to match the new EU requirements. With the support of 

12 

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14 

COM(2004)89 of 12 February 2004 on Agricultural Commodity Chains, Dependence and Poverty – a 
proposal for an EU Action Plan. See also COM(2004)87 of 12 February 2004 on a Proposal for an EU-
Africa Partnership in support of cotton sector development. 
COM(2004)208 of 29 March 2004 on the use of the reserve of the long-term development envelope of 
the  9th  EDF  already  foresees  €45  million  in  support  of  the  ACP-EU  Action  Plan  on  Agricultural 
Commodities. 
EU  882/2004  regulation,  complementing  the  existing  EU  General  Food  Law  Regulation  (EU 
178/2002). 

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the  Secretary  General  of  the  ACP,  a  more  detailed  impact  study  has  been  launched,  but  an 
initial envelope of €30 to 40 million would make it possible to tackle the most burning issues, 
pending the next programming exercise.  

It is therefore proposed to put aside an indicative amount of €30 million from the remaining 
balance  of  the  conditional  billion  to  contribute  to  the  initial  phase  of  a  capacity-building 
programme to help the ACP adapt to the new EU SPS rules and to transfer the entire amount 
to the intra-ACP envelope for this purpose. 

4. African Union 

Considering  the  increasing  importance  of  the  African  Union  (AU),  in  peace-keeping  and 
conflict prevention, as well as in promoting regional integration and good governance, and the 
positive  reception  by  the  Council  of  the  Communication  on  an  enhanced  EU-Africa 
dialogue15,  it  seems  appropriate  to  move  towards  a  more  strategic  support  to  the  AU 
institutions and to reserve an additional amount for a pan-African support programme within 
the framework of the “Vision and Mission of the African Union and Strategic Plan for 2004-
2007” adopted by the summit of the African Heads of State and Government in Addis Ababa 
in  July  2004.  This  programme  will,  among  others,  aim  at  increasing  the  effectiveness  and 
operational  capacity  of  the  AU  institutions,  at  enhancing  civil  society  participation  in  these 
institutions and at strengthening their involvement in pan-African problems.  

To  contribute  to  a  pan-African  support  programme,  it  is  proposed  to  earmark  an  indicative 
amount  of  up  to  €50  million  from  the  remaining  balance  of  the  conditional  billion,  and  to 
transfer the amount to the intra-ACP envelope for this purpose. 

5. The Education for All Fast-Track Initiative (FTI) 

The  Education  for  All  Fast-Track  Initiative  (FTI)  is  a  global  partnership,  launched  in  mid-
2002  to  help  low-income  countries  reach  the  education  Millennium  Development  Goal  of 
giving all children a complete primary education by 2015. It is one of the first instruments that 
makes  operational  the  Monterrey  consensus  on  effective  partnerships  between  donors  and 
developing  countries  to  make  official  development  assistance  more  effective.  The  FTI 
primarily  relies  on  existing  funding  mechanisms  in  partner  countries.  However,  the  FTI 
Partnership  also  created  two  new  facilities:  an  FTI  Catalytic  Fund  which  helps,  on  a 
temporary basis, countries that cannot mobilise enough domestic resources to establish a track 
record,  so  as  to  help  them  leverage  additional  long-term  support,  and  a  facility  for  FTI 
programme  preparation  to  help  countries  with  insufficient  internal  capacity  prepare  an 
education sector plan. 

As  it  proved  impossible  to  provide  support  to  the  FTI  in  a  systematic  way  via  the  2004 
national  mid-term  review  exercise,  it  is  proposed  to  contribute  an  indicative  amount  of 
€63million to the Fast-Track Initiative from the remaining balances of the conditional billion, 
and to transfer the amount to the intra-ACP envelope for this purpose. 

15 

COM(2003)316 of 23 June 2003 on the EU-Africa Dialogue and the GAERC Conclusions of 21 July 
2003. 

EN 

9 

   EN 

 
                                                 
Conclusion 

Three  additional  draft  decisions  for  adoption  by  the  Council  are  attached,  proposing  the 
release of the remaining conditional balances of the 9th EDF resources for a total amount of € 
500million. One decision proposes the release of €18million to be allocated to the financial 
envelope  for  long-term  development,  in  order  to  meet  the  obligations  resulting  from  the 
Cotonou Agreement for Timor Leste. The two remaining decisions propose on the one hand 
the release of the balance of €482million for complementary support to the CDE and the CTA 
until  the  end  of  2007,  for  the  launch  of  the  new  EU  Energy  Facility,  to  contribute  to  the 
Commodity Risk Management Fund, to set up the first phase of a comprehensive sanitary and 
phyto-sanitary capacity-building support programme in the ACP in order to respond to the EU 
new  feed  and  food  regulations,  and  to  assist  the  African  Union  in  setting  up  a  pan-African 
support programme to the African Union and the Education for All Fast Track Initiative and 
on  the  other  hand  to  transfer  the  released  funds  up  to  an  amount  of  €416  million  to  the 
regional  cooperation  and  integration  instrument  in  order  to  allow  the  financing  of  those 
activities from the intra-ACP envelope except the support to the CDE and the CTA which is 
funded out of the long term development envelope.  

EN 

10 

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EDF financial performance 

ANNEX 1 

The  performance  of  the  EDF  in  2003  has  been  the  best  ever.  The  high  level  of  the 
commitments (€4 127 million) can be partially explained by the fact that 2003 was the first 
year of the implementation of the 9th EDF. However, it is important to note that the level of 
disbursements was also much higher than ever before. This positive evolution was not only 
due  to  non-recurrent,  one-shot  operations,  but  was  already  noticed  in  previous  years  and  is 
being  confirmed  by  the  provisional  figures  for  2004.  These  encouraging  results  have  been 
achieved despite the fact that, in a number of ACP countries, cooperation was hampered by 
political uncertainty or crises and/or the after-effects of natural disasters. 

EDF commitments and payments (1990-2003)
(gross amounts - nominal values)

€
0
0
0

5.000.000

4.000.000

3.000.000

2.000.000

1.000.000

0

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004 
(forecast)

DECISIONS 

953.250

1.432.600 2.236.450 1.843.040 2.688.670 1.874.270 1.538.110

784.350

2.606.340 2.958.050 4.006.880 1.920.570 2.114.500 4.127.000 3.185.000

PAYMENTS  1.256.630 1.191.300 1.984.090 1.443.240 1.859.930 1.758.070 1.508.780 1.382.260 1.595.440 1.352.290 1.640.390 2.124.490 1.902.490 2.431.000 2.565.000

1.1 Commitments 

In 2003, the Commission committed an amount of €3 761 million. In addition, the EIB, which 
manages  in  an  entirely  autonomous  way  the  funds  of  the  9th  EDF  for  the  new  Investment 
Facility, committed €366 million. This brings total commitments in 2003 to €4 127 million. In 
the past, only one year recorded a figure of the same order of magnitude, namely 2000 with 
total commitments of €4 007 million (of which roughly € 1 000 million for debt reduction). 

The level of the EDF commitments has traditionally shown a cyclical pattern, with high levels 
of  commitments  in  the  first  years,  followed  by  a  levelling  off.  The  historic  level  of 
commitments  in  2003,  even  after  deduction  of  the  special  contributions  to  the  HIPC  debt 
reduction initiative and the Global Health Fund for the fight against AIDS, Tuberculosis and 
Malaria, could therefore partially be explained by the fact that it was the beginning of a new 
commitment cycle, following the entry into force of the Cotonou agreement. 

Based  on  the  figures  available  at  mid-October  2004  and  the  pipeline  of  projects  and 
programmes subject to appraisal, the level of regular commitments will initially fall back in 
2004, only to pick up again in 2005 and then decrease gradually from 200616 onwards. 

16 

COM(2004)763  of  19  November  2004  on  the  European  Development  Fund  (EDF),  Estimate  of 
decisions, payments and contributions to be paid by the member States for 2004 and 2005 and forecast 
of decisions and payments for the period 2006 to 2009. After the forecasts were finalized, it appeared 
that the EDF Committee may delay the approval of some large budget support, road and rehabilitation 

EN 

11 

   EN 

 
 
 
                                                 
This dip in the 2004 figure may be explained to a certain extent as a repercussion of the huge 
effort  made  in  2003,  shifting  attention  from  programming  to  implementation  issues,  but  it 
may also be a reflection of the major staff redeployment resulting from the final stage of the 
devolution exercise17. 

The  programming  pipeline,  assessed  in  a  series  of  regional  seminars  in  early  2004,  re-
examined  during  the  mid-term  review  process  and  permanently  updated  until  the  end  of 
October 2004 by EuropeAid, in consultation with the Delegations, confirms that the level of 
commitments will pick up again sharply in 2005. 

Based on the most recent figures, the EIB had also to review downwards its 2004 forecasts for 
the implementation of the Investment Facility (down to €335million from an initial estimate 
of €500million), but maintains its initial forecasts for 2005, based on the existing portfolio of 
contacts. 

EDF Commitments 

2000 

2001 

2002 

2003 

2004 

2005 

in million € 

TOTAL managed by COM 

4 007 

1 921 

2 115 

3 761 

2 850 

3 500 

of which 

A. Special operations 

- STABEX 

- HIPC 

- Global Health Fund GFATM 

- Peace Facility 

- Water facility 

Subtotal 

373 

1 029 

60 

460 

170 

250 

3 

1 402 

60 

630 

253 

247 

247 

B. Regular commitments 

2 605 

1 921 

2 055 

3 131 

2 597 

3 253 

TOTAL managed by EIB (1) 

366 

335 

555 

GRAND TOTAL COM + EIB 

4 007 

1 921 

2 115 

4 127 

3 185 

4 055 

programmes beyond 2004 due to political and economic governance issues. Total commitments in 2004 
may  therefore  be  overestimated  by  up  to  €250  million.  This  uncertainty  can  be  explained  by  the 
seasonal factor which still survives in a lesser form despite the various reforms initiated in recent years, 
whereby  a  large  stock  of  commitments  are  being  prepared  in  the  first  half  of  the  year,  “waiting”  for 
decision after summer break, with a high volume of commitment decisions taken in the last quarter of 
the year (the commitment rate at the end of August 2004 was over 45% of the year objective, against on 
average of less than 25% in the previous years). Small delays in the decision making process may then 
result in a commitment being carried over to the next year. 
ACP  related  implementation  support  staff  in  EuropeAid  decreased  with  one  third  in  2004;  this  was 
more  than  compensated  by  a  reinforcement  of  the  Delegations  in  the  context  of  devolution  but  the 
exceptionally high staff turnover rate during this transitional period affected the normal implementation 
of the project cycle. 

12 

   EN 

17 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                                                         
(1) 9th EDF instruments managed by the EIB (Investment facility and interest subsidies). 

As  can  be  seen  from  the  table  on  the  financial  situation  under  point  1.4,  the  Intra-ACP 
reserves  have  seen  the  highest  increase  relative  to  the  initial  allocation,  due  to  pressing 
international  commitments  and  the  rapid  disbursement  mechanisms  often  attached  to  these 
initiatives. The table below shows that the high commitment level of intra-ACP funds can be 
partially explained by their use for the funding of special initiatives in 2003 and 2004 (HIPC 
debt reduction, Peace Facility, Global Health Fund), but the present pipeline of programmes 
under instruction confirms that most of the balances will be committed by the end of 2005. 

By  the  end  of  2005,  the  first  instalment  of  the  Water  initiative,  decided  by  the  Council  in 
April 2004, is also expected to be fully committed. Opting for extensive consultation with the 
member states and interested non-State actors, the commitments were slightly delayed, but an 
international call for proposals has now been launched. This will allow solid information on 
the amounts and location of eligible projects to be obtained by February 200518. 

Intra-ACP allocations and commitments 

in million € 

Allocation 
(*) 

Committed 
2004 (**) 

Share 

Forecasts 
2005 

Cumul. 
share 

1.  Social sectors 

342,333 

230,000 

67,19% 

105,000 

97,86% 

- health sector 

- education sector 

 - primary education 

229,000 

1,000 

- higher education and research 

1,000 

50,000 

55,000 

20,000 

35,000 

2.  Methodological support and capacity building 

163,900 

50,000 

30,51% 

95,150 

88,56% 

- trade and regional integration 

- research capacity - sustainable development 

- renewable energy 

- migration 

50,000 

0,000 

0,000 

0,000 

12,350 

50,700 

7,100 

25,000 

3.  Natural resources 

366,840 

12,340 

3,36% 

327,835 

92,73% 

- pesticides, epizooties, SPS 

- water facility 

- multilateral environmental agreements 

- fisheries 

5,000 

3,000 

3,000 

0,000 

7,500 

247,000 

30,000 

31,500 

18 

At  the  386th  EDF  Committee  of  25  October  2004,  the  member  States  have  congratulated  the 
Commission for this inclusive approach; proposals for an amount exceeding € 500 million are expected 
by February 2005. 

EN 

13 

   EN 

 
 
 
 
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                                 
- feasibility studies and research 

1,340 

11,835 

4.  Private sector support + ICT 

138,050 

61,095 

44,26% 

76,955  100,00% 

- private sector support - competitiveness 

- agricultural commodities - cotton 

- ICT 

5.  Peace building 

6.  Miscellaneous 

- ACP secretariat  

- technical cooperation facility 

- strategic partnership UN 

- culture 

- other ACP support, training, information activities 

60,650 

0,000 

0,445 

3,955 

45,000 

28,000 

285,000 

275,000 

96,49% 

10,000  100,00% 

100,413 

48,084 

47,89% 

47,329 

95,02% 

21,800 

19,000 

0,000 

0,000 

7,284 

9,000 

10,000 

10,000 

7,000 

11,329 

7.  Debt reduction (HIPC) 

460,000 

460,000  100,00% 

0,000  100,00% 

TOTAL 

1 856,536 

1 136,519 

61,22% 

662,269 

96,89% 

(*) Includes €170million approved by the Council and to be endorsed by the ACP before the end of 2004 - COM(2004)208. 

(**) Of which €759,2 million was committed in 2003 

1.2 Disbursements 

The  Commission  disbursed  €2 427  million  in  2003.  This  amount  includes  some  special 
operations  such  as  the  transfer  of  €191  million  to  a  special  account  for  Sudan  under  the 
Stabex  instrument,  a  further  contribution  to  HIPC  of  €209  million  and  the  contribution  of 
€170 million to the Global Fund against Aids, Tuberculosis and Malaria, the latter two being 
funded  from  the  intra-ACP  reserves19.  The  EIB  disbursed  €4  million  under  the  Investment 
Facility, which brought total disbursements for both institutions to €2 431 million. 

While the level of disbursements in 2003 is a record for the EDF (14 % higher than the level 
of  expenditure  reached  in  2001,  which  had  been  the  highest  in  the  history  of  the  EDF),  the 
forecasts  for  2004  and  2005  are  even  higher,  again  based  on  a  prudent  assessment  of  the 
ongoing projects and programmes and new projects in the pipeline20. 

Even when factoring in the impact of some €270 million of payments carried over from 2003 
due  to  treasury  constraints,  the  underlying  regular  payments  are  on  the  increase.  By  mid-

19 

20 

The STABEX funds are not a payment in the strict accounting sense. However, it is included in order to 
be  coherent  with  past  presentations.  This  transfer  should  in  principle  be  one  of  the  last  made  on  this 
instrument. 
COM(2004)763  of  19  November  2004.  In  2004  for  the  first  time  effective  disbursements  closely 
followed  the  disbursement  forecasts  made  by  the  Commission  –  see  COM(2004)647  of  08  October 
2004 on a Proposal fixing the financial contribution to the EDF (third instalment for 2004) -, leading to 
treasury problems for member States that had not budgeted the forecasted amounts. 

EN 

14 

   EN 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
                                                 
October, payments by the Commission reached €1 812 million (including €117 million paid 
but not yet validated in the accounting system), 73% of the annual objective and significantly 
higher than at the same period in 2003 and 2002. In combination with improved contracting, 
this confirms the structural nature of the improved disbursement performance. 

As result of the lower-than-expected commitments under the Investment Facility, the payment 
forecasts for EIB-managed funds also had to be revised downwards, from €168 million in the 
May 2004 forecasts to €90million. 

EDF Payments 

2000 

2001 

2002 

2003 

2004 

2005 

in million € 

TOTAL managed by COM 

1 640 

2 124 

1 902 

2 427 

2 475 

2 760 

of which 

A. Special operations 

- STABEX 

- HIPC 

- Global Health Fund GFATM 

- Peace Facility 

- Water Facility 

Subtotal 

82 

356 

353 

350 

2 

180 

191 

209 

170 

100 

200 

22 

61 

57 

439 

703 

182 

570 

122 

318 

B. Regular payments 

1 202 

1 421 

1 721 

1 857 

2 353 

2 442 

TOTAL managed by EIB (1) 

4 

90 

235 

GRAND TOTAL COM + EIB 

1 640 

2 124 

1 902 

2 431 

2 565 

2 995 

(1) 9th EDF instruments managed by the EIB (Investment facility and interest subsidies). 

1.3 The RAL (“Reste à Liquider”) 

The global stock of outstanding (unpaid) commitments has grown considerably from €8 385 
million at the start of 2003 to €9 410 million (+12%) at the end of that year. This is due to the 
very  high  level  of  commitments  in  2003  following  the  entry  into  force  of  the  Cotonou 
Agreement  and  the  beginning  of  the  new  commitment  cycle  (9th  EDF).  However,  thanks  to 
the high level of disbursements, the coefficient that expresses the number of years necessary 
to absorb the RAL was reduced from 4.41 (end 2002) to 3.88 (end 2003). This positive trend 
started in 2000 when, at its worst, the period needed to absorb the RAL was over five years. 

The lower gross commitment rate in 2004, combined with a normal level of decommitments 
on  older  programmes  and  a  further  increase  in  disbursements,  will  lead to  a  stabilization  or 
even a slight decrease of the RAL in absolute terms by the end of 2004, and a further decrease 
in the number of years required to absorb it. 

EN 

15 

   EN 

 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Although  the  higher  commitment  rate  in  2005  may  lead  to  a  slight  absolute  increase  of  the 
RAL  in  2005,  the  RAL  will  be  stabilizing  at  the  2004  level  by  the  end  of  2007,  with  a 
significant decrease in  2007,  compensating for the temporary  increase in  2005.  Considering 
the increased disbursement rate, the RAL absorption rate will fall below 3.5 years. 

1.4 Financial situation at the end of 2004 

The state of implementation of EDF-resources for ACP countries is shown in the table below. 

Since  the  entry  into  force  of  the  Cotonou  Agreement,  a  total  amount  of  €2  607million  was 
transferred from the old EDFs to the 9th EDF21. Most of these resources were transferred to 
national  indicative  programmes,  but  in  relative  terms  the  intra-ACP  co-operation  registered 
the highest increase. 

With  the  partial  release  of  some  of  the  conditional  billion  for  the  launch  of  the  EU  Water 
Facility,  the  total  amount  of  funding  available  under  the  consolidated  9th  EDF  to  date  is 
€15 367 million22. 

Available EDF resources for the ACP 

Initial 

Changes

Allocations

Commitments 

Unallocated 

allocation

since 

as % 

balances

31 March 03

01 April 03

30-sept-04

30-sept-04 

31 Aug 04

9th EDF 

1. Long term development 

9 072 150,000   

10 369 136,300

3 050 342,532 

29,42% 

7 318 793,769

- NIPs 

8 523 200,000

1 663 109,463

10 186 309,463

3 012 464,532 

29,57% 

7 173 844,931

- CDE-CTA-JAA (*) 

164 000,000

-99 101,000

64 899,000

37 878,000 

58,36% 

27 021,000

- reserve 

384 950,000

-267 022,163

117 927,838

0,000 

0,00% 

117 927,838

2. Regional cooperation 

1 204 000,000   

2 773 679,752

1 319 629,084 

47,58% 

1 454 050,668

- intra-ACP (**) 

300 000,000

1 556 536,248

1 856 536,248

1 059 122,656 

57,05% 

797 413,592

- regional cooperation  

643 000,000

274 143,505

917 143,505

260 506,428 

28,40% 

656 637,076

- reserve  

261 000,000

-261 000,000

0,000

0,000   

0,000

Sub-total COM managed funds 

10 276 150,000   

13 142 816,053

4 369 971,616 

33,25% 

8 772 844,437

3. EIB managed funds 

- Investment Facility 

- interest rate subsidies  

2 037 000,000

186 850,000

0,000

0,000

2 037 000,000   

186 850,000   

Sub-total EIB managed funds 

2 223 850,000   

2 223 850,000

485 000,000 

21,81% 

1 738 850,000

Sub-total available EDF 

12 500 000,000

2 866 666,053

15 366 666,053

4 854 971,616 

31,59% 

10 511 694,437

- additional instalment 

Total 9th EDF 

1 000 000,000

-250 000,000

750 000,000

0,000   

750 000,000

13 500 000,000

5 483 332,106

16 116 666,053

4 854 971,616   

11 261 694,437

6th, 7th and 8th EDF (***) 

32 389 204,304

-2 607 910,427

29 781 293,877

29 717 936,821 

99,79% 

63 357,056

(*) CDE - Centre for the Development of Enterprise; CTA - Centre for the Development of Agriculture; JPA - Joint Parliamentary Assembly. 

(**) This figure anticipates the reallocation proposal COM(2004)208 approved by Council, for which ACP endorsement is expected in December. 

(***) The difference between the transfer from the previous EDFs and the changes to the 9th EDF is interest on non-transferred STABEX funds. 

21 

22 

The negative transfer for the CDE and the CTA reflect the need for transitional measures under the 8th 
EDF in order to ensure the continuity of their activities prior to the delayed ratification of the Cotonou 
Agreement. 
To  this  amount  should  be  added 105  M€ of  special  assistance  to  the  Democratic  Republic  of  Congo, 
Council Decision of 21 July 2003. 

EN 

16 

   EN 

 
 
  
 
 
 
  
 
 
 
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                                 
The  total  amount  available  for  commitments  for  the  last  quarter  of  2004  and  the  three 
following years is, excluding the balances of the conditional billion, €10 512 million net, of 
which  €8  773  million  is  for  grants  managed  by  the  Commission,  with  the  balance  being 
managed by the EIB. Taking into consideration the commitments pending and the additional 
commitments expected with a high probability in the last quarter of 2004, by the end of the 
year  only  €9  345  million  or,  on  average,  €3  115  million  per  year  will  remain  uncommitted 
over  the  remaining  period  for  committing  the  9th  EDF.  Considering  the  decommitments  on 
ongoing  programmes,  which  averaged  +/-  €320-340  million  over  the  last  five  years23,  the 
gross  level  of  yearly  commitments  required  to  absorb  the  unallocated  balances  of  the 
consolidated 9th EDF is approximately €3 445 million, of which indicatively €2 945 million 
concerning Commission-managed funds and €550 million for EIB-managed funds. 

In  relative  terms,  most  commitments  have  been  made  so  far  in  the  intra-ACP  reserves, 
reflecting the flexibility of the EDF to  respond to new  international  initiatives.  In  2005, the 
biggest effort is expected for the national indicative programmes as a result of the mid-term-
reviews of country strategy papers and from the regional indicative programmes, where 2004 
was primarily used in various regions to prepare detailed feasibility studies. 

The  long-term  development  reserves  are  primarily  earmarked  to  cover  the  financial  gap  in 
implementation  costs  in  2006-2007  resulting  from  devolution24;  as  the  prime  objective  of 
devolution  has  been  to  improve  performance  in  the  delivery  of  Community  assistance,  the 
Commission  received  a  mandate  from  the  Council  to  negotiate  a  revision  of  the  Cotonou 
Agreement  in  order  to  allow  the  funding  of  these  additional  devolution  expenses  out  of  the 
EDF25. 

23 

24 
25 

With a peak of €365million in 2003, resulting from the continued effort to reduce the abnormal RAL 
(i.e. RAL which stayed unchanged on specific projects or programmes for several years). 
C(2003)1181 of 02 April 2003 on Financing of deconcentration in the ACP zone 2006/2007. 
Under the long term development instrument, there also remained an unallocated reserve of 242,6 M€ 
constituted  from  reduced  unnotified  national  indicative  programmes  for  countries  under  article  96  - 
Commission  Decision  C(2003)2471.  However,  this  amount  is  being  mobilised  to  equilibrate  the 
national  midterm  review  process  and  therefore  is  not  included  in  the  long  term  development  reserves 
but under the NIP line. 

EN 

17 

   EN 

 
                                                 
ANNEX 2 

Forecast of commitments and payments under the 9th EDF 

Years 2006-2009 

2003* 

2004e 

2005e 

2006f 

2007f 

2008f 

2009f  2003-‘07 

Million € 

Commitments 
available funds 

on 

of which 

- on previous EDFs 

- decommitments 

- 9th EDF, net** 

4.127 

3.185 

4.055 

3 500 

2 750 

- 

- 

17.617 

574 

365 

340 

340 

320 

320 

3.188 

2.865 

3.735 

3.180 

2.430 

574 

1.685 

15.358 

Payments 

2.431 

2.565 

2.995 

3 400 

3 100 

2 900 

2 650 

(*):  the  2003  commitment  figure  includes  €574  million  from  previous  EDFs,  committed 
before  01  April  2004  (at  which  moment  all  balances,  €2  608  million  to  date,  have  been 
transferred to the 9th EDF) 

(**):  the  difference  of  8.7  M€  from  the  table  on  available  EDF  resources  under  point  1.4 
represents not yet allocated accrued interest on non-transferred STABEX funds 

(e) : estimate, based on a detailed screening of the EDF project pipeline 

(f) : forecast 

EN 

18 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EXPLANATORY MEMORANDUM 

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 9th EDF for African, Caribbean and 
Pacific  countries  of  a  total  amount  of  up  to  EUR  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  EUR  13.5  billion,  only  EUR  12.5 
billion were made available upon the entry into force of the Financial Protocol (1 April 2003). 
The  remaining  EUR  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 2(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. 

On 22 March 2004 the Council agreed on the establishment of an ‘EU Water Facility for ACP 
countries,  to  consider  an  amount  of  EUR  500  million  out  of  the  conditional  EUR  1  billion 
referred to in Article 2(2) of the Internal Agreement for this Water Facility and to release a 
first  allocation  of  EUR  250  million.  This  decision  was  taken  on  the  basis  that  the  level  of 
commitments and disbursements at the end of the year 2003, in conjunction with forecasts for 
the period 2004 to 2007 presented by the Commission, indicated that ninth EDF resources for 
ACP  countries  could  be  fully  committed,  and  a  first  tranche  of  the  conditional  billion  be 
released on the basis of the performance to date. 

In  the  light  of  the  outcome  of  the  mid-term  reviews  of  the  country  strategies  and  of  the 
Council’s performance review of the EDF, the Council has to decide by March 2005 on the 
mobilisation of a second instalment of EUR 250 million for the Water Facility and on the use 
of the remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2(2) 
on the Internal Agreement for purposes to be agreed. 

EN 

19 

   EN 

 
Proposal for a 

COUNCIL DECISION 

concerning the mobilisation of a second allocation of EUR 250 million from the 
conditional EUR 1 billion under the 9th EDF to be used for the second instalment of the 
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 ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000, 

Having regard to the Internal Agreement between the Representatives of the Governments of 
the Member States, meeting within the Council, on measures to be taken and procedures to be 
followed for the implementation of the ACP-EC Partnership Agreement26, 

Having regard to the Internal Agreement between the 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, signed 
on 18 September 2000, and in particular Article 2(2) thereof (Internal Agreement)27, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

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 EUR 13.5 billion of the ninth EDF 
for ACP countries, only EUR 12.5 billion were released upon the entry into force of 
the Financial Protocol on 1 April 2003. 

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

On  22  March  2004  the  Council  agreed  on  the  establishment  of  a  Water  Facility  for 
ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 
1 billion referred to in Article 2(2) of the Internal Agreement, for this Water Facility, 

26 OJ L 317, 15.12.2000. 
27 OJ L 317, 15.12.2000. 

EN 

20 

   EN 

 
                                                 
(4) 

(5) 

and  to  release  a  first  allocation  of  EUR 250  million.  This  decision  was  taken  on  the 
basis that the level of commitments and disbursements at the end of the year 2003 in 
conjunction with forecasts for the period 2004 to 2007 presented by the Commission 
indicating that ninth EDF resources for ACP countries could be fully committed. 

This first allocation of EUR 250 million was released and was distributed as follows in 
accordance with Article 2(1) and 2(2) of the Internal Agreement: EUR 185 million to 
the envelope for support for long-term development; EUR 24 million to the envelope 
for  regional  cooperation  and  integration  and  EUR  41  million  to  the  Investment 
Facility. 

By the same decision the Council decided that in the light of the outcome of the mid-
term reviews of the country strategies and of the Council’s performance review of the 
EDF by the end of 2004, the Council would decide by March 2005 on the mobilisation 
of a second allocation of EUR 250 million and on the use of the remaining EUR 500 
million  of  the  conditional  EUR  1  billion  referred  to  in  Article  2(2)  of  the  Internal 
Agreement for purposes to be agreed.  

HAS DECIDED AS FOLLOWS: 

Article 1 

In  the  light  of  the  outcome  of  the  mid-term  reviews  of  the  country  strategies  and  of  the 
Council’s performance review of the EDF, the Council agrees on the mobilisation of a second 
allocation of EUR 250 million for the Water Facility for ACP countries. 

Article 2 

The second allocation of EUR 250 million shall be released and be distributed as follows: 

(1) 

(2) 

(3) 

EUR 185 million to the envelope for support for long-term development, referred to in 
Article 2(1)(a) of the Internal Agreement as well as in paragraph 3(a) of the Financial 
Protocol; 

EUR 24 million to the envelope for regional cooperation and integration, referred to in 
Article 2(1)(b) of the Internal Agreement as well as in paragraph 3(b) of the Financial 
Protocol; 

EUR 41 million to the Investment Facility, referred to in Article 2(1)(c) of the Internal 
Agreement as well as in paragraph 3(c) of the Financial Protocol. 

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

Article 3 

EN 

21 

   EN 

 
Article 4 

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

Done at Brussels,  

For the Council 
The President 

EN 

22 

   EN 

 
 
 
 
 
EXPLANATORY MEMORANDUM 

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 9th EDF for African, Caribbean and 
Pacific  countries  of  a  total  amount  of  up  to  EUR  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  EUR  13.5  billion,  only  EUR  12.5 
billion were made available upon the entry into force of the Financial Protocol (1 April 2003). 
The  remaining  EUR  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 2(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. 

On 22 March 2004 the Council agreed to the establishment of an ‘EU Water Facility’ for ACP 
countries,  to  consider  an  amount  of  EUR  500  million  out  of  the  conditional  EUR  1  billion 
referred to in Article 2(2) of the Internal Agreement for this Water Facility and to release a 
first  allocation  of  EUR  250  million.  This  decision  was  taken  on  the  basis  that  the  level  of 
commitments and disbursements at the end of the year 2003 in conjunction with forecasts for 
the period 2004 to 2007 presented by the Commission indicated that ninth EDF resources for 
ACP  countries  could  be  fully  committed,  and  a  first  tranche  of  the  conditional  billion  be 
released on the basis of the performance to date. 

In  the  light  of  the  outcome  of  the  mid-term  reviews  of  the  country  strategies  and  of  the 
Council’s performance review of the EDF, the Council has to decide by March 2005 on the 
mobilisation of a second instalment of EUR 250 million for the Water Facility and on the use 
of the remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2(2) 
of the Internal Agreement for purposes to be agreed. 

In  2003  the  joint  ACP-EU  Council  approved  the  accession  of  Timor  Leste  to  the  ACP-EC 
Partnership  Agreement.  While  the  initial  development  needs  of  Timor  Leste  were  covered 
under the EC budget, further funding beyond 2005 when Timor Leste is expected to ratify the 
Cotonou  Agreement  is  not  foreseen,  as  this  would  be  incompatible  with  the  existing  ALA 
Regulation which does not allow ALA funding in favour of ACP Group member countries. 

Based  on  Articles  62(2)  and  94(1)  of  the  Cotonou  Agreement,  the  Commission  therefore 
proposed to top up the 9th EDF by an amount of EUR 18 million, which corresponds to the 
pro  rata  amount  which  would  have  been  earmarked  for  Timor  Leste  had  the  normal  aid 
allocation criteria for the 9th EDF been applied. 

In discussion in the ACP Group in the Council of Ministers, there was no unanimity among 
Member States for this proposal and the Council “expressed willingness to consider positively 
the use of the conditional billion to meet the needs of Timor Leste, considering that at present 
there are no unearmarked funds available under the 9th EDF”28. 

28 

Council Document 13890/04 of 4 November 2004 on the Outcome of Proceedings of the ACP Working 
Party of 26 October 2004. 

EN 

23 

   EN 

 
                                                 
It is therefore proposed to release EUR 18 million from the conditional EUR 1 billion under 
the 9th EDF and to earmark the long-term development envelope to cover the financing of the 
National Indicative Programme of Timor Leste for the period 2006-2007. 

EN 

24 

   EN 

 
Proposal for a 

COUNCIL DECISION 

concerning the release and use of EUR 18 million from the conditional EUR 1 billion 
under the 9th EDF to be used to cover the financing of the National Indicative 
Programme of Timor Leste during the period 2006-2007 

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  Article  1  of  the  Internal  Agreement  between  the  Representatives  of  the 
Governments of the Member States, meeting within the Council, on measures to be taken and 
procedures to be followed for the implementation of the ACP-EC Partnership Agreement, 

Having regard to the Internal Agreement between the 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, signed 
on 18 September 2000, and in particular Articles 2(2) and 1(5) thereof, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

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 EUR 13.5 billion of the ninth EDF 
for ACP countries, only EUR 12.5 billion were released upon the entry into force of 
the Financial Protocol on 1 April 2003. 

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

On  22  March  2004  the  Council  agreed  to  the  establishment  of  a  Water  Facility  for 
ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 
1  billion  referred  to  in  Article  2(2)  of  the  Internal  Agreement,  for  this  water  facility 
and  to  release  a  first  allocation  of  EUR  250  million.  This  decision  was  taken  on  the 
basis  of  the  level  of  commitments  and  disbursements  at  the  end  of  the  year  2003  in 
conjunction with forecasts for the period 2004 to 2007 presented by the Commission 
indicating that ninth EDF resources for ACP countries could be fully committed. 

EN 

25 

   EN 

 
(4) 

(5) 

(6) 

(7) 

(8) 

In the same decision the Council decided that, in the light of the outcome of the mid-
term reviews of the country strategies and of the Council’s performance review of the 
EDF by the end of 2004, the Council would decide by March 2005 on the mobilisation 
of a second allocation of EUR 250 million for the Water Facility and on the use of the 
remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2(2) 
of the Internal Agreement for purposes to be agreed.  

By Decision N°1/2003 of the ACP-EC Council of Ministers of 16 May 2003, Timor 
Leste  became  signatory  to  the  ACP-EC  Partnership  Agreement.  This  Decision 
stipulated that Timor-Leste would not have immediate access to the resources of the 
9th  European  Development  Fund  (EDF)  but  would  only  benefit,  as  a  temporary 
special arrangement from funds earmarked for regional cooperation. The Decision did 
not take into account the fact that, after ratification of the Cotonou Agreement, Timor 
Leste will no longer qualify for the development assistance which has been provided 
for  until  now  under  Council  Regulation  443/92  (the  ALA  Regulation).  While  the 
development  needs  shall  be  covered  by  the  ALA  funds  until  2005,  further  funding 
under  ALA  funds  would  not  be  possible  once  Timor-Leste  has  ratified  the  ACP-EC 
Partnership Agreement in the course of 2005. 

Based  on  Articles  62(2)  and  94(1)  of  the  ACP-EC  Partnership  Agreement,  the 
Commission proposed29 to top up the 9th European Development Fund for an amount 
of  €18  million,  which  corresponds  to  the  pro  rata  amount  which  would  have  been 
earmarked for Timor Leste had the normal aid allocation criteria for the 9th EDF been 
applied. 

In discussion in the Council of Ministers, it seems that there was no unanimity among 
Member  States  for  this  proposal  and  the  Council  “expressed  willingness  to  consider 
positively  the  use  of  the  conditional  billion  to  meet  the  needs  of  Timor  Leste, 
considering  that  at  present  there  are  no  unearmarked  funds  available  under  the  9th 
EDF”30. 

It  is  therefore  proposed  to  release  €18  million  from  the  conditional  EUR  1  billion 
under  the  9th EDF and to  earmark the  long-term development envelope to cover the 
financing of the National Indicative Programme of Timor Leste for the period 2006-
2007. 

HAS DECIDED AS FOLLOWS: 

Article 1 

In  the  light  of  the  outcome  of  the  mid-term  reviews  of  the  country  strategies  and  of  the 
Council’s  performance  review  of  the  EDF,  the  Council  agrees  on  the  release  of  EUR  18 
million from the conditional EUR 1 billion under the 9th EDF to cover the financing of the 
National Indicative Programme of Timor Leste for the period 2006-2007. 

29 

30 

COM(2004)  610  of  27  September  2004:  Proposal  for  a  Council  Decision  adjusting  the  financial 
resources of the 9th European Development Fund further to the accession of the Democratic Republic 
of Timor-Leste to the ACP-EC Partnership Agreement. 
Council Document 13890/04 of 4 November 2004 on the Outcome of Proceedings of the ACP Working 
Party of 26 October 2004. 

EN 

26 

   EN 

 
                                                 
Article 2 

The  allocation  of  EUR  18  million  shall  be  released  and  be  earmarked  to  the  envelope  for 
support for long-term development, referred to in Article 2(1)(a) of the Internal Agreement as 
well as in paragraph 3(a) of the Financial Protocol. 

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 

EN 

27 

   EN 

 
 
 
 
 
EXPLANATORY MEMORANDUM 

The Financial Protocol attached as Annex 1 to the ACP-EC Partnership Agreement, signed in 
Cotonou  on  23  June  2000,  states  in  paragraph  2  that  the  Community’s  financial  assistance 
from the 9th EDF for African, Caribbean and Pacific countries shall comprise a total amount 
of  up  to  EUR  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  EUR  13.5  billion,  only  EUR  12.5  billion  were  made  available  upon  the 
entry into force of the Financial Protocol on1 April 2003. The remaining EUR 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 2(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. 

On  22  March  2004  the  Council  agreed  on  the  establishment  of  an  ‘EU  Water  Facility’  for 
ACP  countries,  to  consider  an  amount  of  EUR  500  million  out  of  the  conditional  EUR  1 
billion  referred  to  in  Article  2(2)  of  the  Internal  Agreement  for  this  water  facility  and  to 
release  a  first  allocation  of  EUR  250  million.  This  decision  was  taken  on  the  basis  that  the 
level of commitments and disbursements at the end of 2003, in conjunction with forecasts for 
the period 2004 to 2007 presented by the Commission, indicated that 9th EDF resources for 
ACP  countries  could  be  fully  committed,  and  that  a  first  tranche  of  the  conditional  EUR  1 
billion could be released on the basis of the performance to date. 

In  the  light  of  the  outcome  of  the  mid-term  reviews  of  the  country  strategies  and  of  the 
Council’s performance review of the EDF, the Council has to decide by March 2005 on the 
mobilisation of a second instalment of EUR 250 million for the Water Facility and on the use 
of the remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2(2) 
of the Internal Agreement for purposes to be agreed. 

For the EUR 482 million out of the conditional EUR 1 billion, the selection of proposals has 
been made on the basis of the obligations resulting from the ACP-EC Partnership Agreement 
and on the basis of the so far unmet joint ACP-EC commitments on the international scene, 
taking  into  account  the  principles  of  urgency  and  poverty  focus,  concentration  of  aid  and 
absorption capacity. 

It is therefore proposed to release the EUR 482 million and to allocate them on the basis of 
the  obligations  resulting  from  the  ACP-EC  Partnership  Agreement  and  for  contributions  to 
international initiatives and commitments. 

EN 

28 

   EN 

 
Proposal for a 

COUNCIL DECISION 

concerning the release and use of the remaining EUR 482 million of the conditional EUR 
1 billion under the 9th European Development Fund for cooperation 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  Article  1  of  the  Internal  Agreement  between  the  representatives  of  the 
governments of the Member States, meeting within the Council, on measures to be taken and 
procedures to be followed for the implementation of the ACP-EC Partnership Agreement, 

Having regard to the Internal Agreement between the 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, signed 
on 18 September 2000, and in particular Article 2(2) thereof (Internal Agreement) 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

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 EUR 13.5 billion of the ninth EDF 
for ACP countries, only EUR 12.5 billion were released upon the entry into force of 
the Financial Protocol on 1 April 2003. 

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

On  22  March  2004  the  Council  agreed  on  the  establishment  of  a  Water  Facility  for 
ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 
1  billion  referred  to  in  Article  2(2)  of  the  Internal  Agreement,  for  this  water  facility 
and  to  release  a  first  allocation  of  EUR  250  million.  This  decision  was  taken  on  the 
basis that the level of commitments and disbursements at the end of the year 2003 in 
conjunction with forecasts for the period 2004 to 2007 presented by the Commission 
indicating that ninth EDF resources for ACP countries could be fully committed. 

EN 

29 

   EN 

 
(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

By the same decision the Council decided that, in the light of the outcome of the mid-
term reviews of the country strategies and of its own performance review of the EDF 
by the end of 2004, the Council would decide by March 2005 on the mobilisation of a 
second  allocation  of  EUR  250  million  for  the  Water  Facility  and  on  the  use  of  the 
remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2(2) 
of the Internal Agreement for purposes to be agreed.  

The  9th  EDF,  including  the  balances  transferred  from  the  previous  EDFs,  will  be 
entirely  committed  by  the  end  of  2007  without  allowing  the  Community  to  fully 
comply  with  its  international  commitments  and  to  respond  to  new  international 
initiatives. 

A selection of proposals has been made for the total amount of EUR 482 million on 
the basis of the obligations resulting from the ACP-EC Partnership Agreement and on 
the basis of the so far unmet joint ACP-EC commitments on the international scene, 
taking into account the principles of urgency and poverty focus, concentration of aid 
and absorption capacity. 

Under  the  existing  implementation  modalities  of  the  Centre  for  the  Development  of 
the  Enterprise  (CDE)  and  the  Centre  for  the  Development  of  Agriculture  (CTA)  the 
annual  budgetary  needs  are  estimated  at  respectively  EUR  18  million  and  EUR  14 
million.  It  is  therefore  proposed  to  earmark  EUR  64  million  out  of  the  long-term 
development envelope released from the remaining conditional billion in resources to 
cover the functioning of the CDE and CTA during the years 2006-2007, in compliance 
with Annexes I and III to the ACP-EC Partnership Agreement. 

The  Communication  from  the  Commission  to  the  Council  and  European  Parliament 
COM  (2004)  711  of  28  October  2004  on  the  future  development  of  the  EU  Energy 
Initiative  and  the  modalities  for  the  establishment  of  an  Energy  Facility  for  ACP 
countries proposed to mobilise EUR 250 million for this initiative. In its conclusions 
the Communication suggests that this new initiative be financed through the remaining 
balances of the conditional billion. Considering the high expectations generated by the 
launch  of  the  EU  Energy  Initiative,  the  crucial  contribution  of  energy  to  the 
achievement of the MDGs, and the critical importance for the poor of access to cost-
effective and environmentally sound energy services, it is therefore suggested that the 
proposed ACP/EU Energy Facility be financed with an indicative amount of EUR 250 
million from the conditional balances and that the totality of this amount be transferred 
to the intra-ACP envelope for this purpose. 

The  Council  adopted  in  April  2004  an  EU  Action  Plan  on  agricultural  commodities 
prepared by the Commission, which includes a proposal to facilitate producer access 
to  commodity  risk  insurance  and  trade  finance.31  The  purpose  of  the  Commission 
contribution to this initiative is to complement the World Bank technical assistance in 
this  area  for  the  establishment  of  an  international  financing  facility  to  support  ACP 
countries  accessing  market-based  instruments  for  commodity  risk  management 
through the temporary co-financing of their premiums. This will contribute to reducing 
the  vulnerability  of  the  ACP  beneficiary  countries  to  commodity  shocks  and  to  the 

31 

COM(2004)  89  of  12  February  2004  on  Agricultural  Commodity  Chains,  Dependance  and  Poverty-a 
proposal for an EU Action Plan. 

EN 

30 

   EN 

 
                                                 
development  of  commodity  risk  instruments  for  further  uptake.  It  is  proposed  to 
earmark an indicative amount of up to EUR 25 million from the remaining balance of 
the conditional billion to contribute to the international commodity risk management 
financing facility in line with Article 68.5 of the ACP-EC Partnership Agreement and 
to transfer the entire amount to the intra-ACP envelope for this purpose. 

(10)  Regulation  (EC)  N°882/2004  of  the  European  Parliament  and  of  the  Council  of  29 
April 2004 on official controls performed to ensure the verification of compliance with 
feed  and  food  law,  animal  health  and  animal  welfare  rules32,  entering  into  force  in 
2006,  requires  third  countries  to  provide  detailed  information  about  the  general 
structure  and  management  of  their  feed  and  food  sanitary  and  phyto-sanitary  control 
systems and to provide sufficient guarantees that products destined for the EU market 
meet EU safety standards. To maintain their access to the EU markets and cope with 
these new regulations, the ACP countries will have to make major investments. Article 
12  of  the  ACP-EC  Partnership  Agreement  on  coherence  of  Community  policies 
foresees that, in such cases and at the request of the ACP, consultations be held so that 
account  may  be  taken  of  their  concerns  as  to  the  impact  of  these  measures.  It  is 
therefore  proposed  to  put  aside  an  indicative  amount  of  €30  million  from  the 
remaining  balance  of  the  conditional  billion  to  contribute  to  the  initial  phase  of  a 
capacity building programme to help the ACP adapt to the new EU sanitary and phyto-
sanitary  rules  and  to  transfer  the  entire  amount  to  the  intra-ACP  envelope  for  this 
purpose. 

(11)  Considering the increasing importance of the African Union (AU) in peacekeeping and 
conflict prevention as well as in promoting regional integration and good governance, 
and the positive reception by the Council of the Communication on an enhanced EU-
Africa dialogue33, it seems appropriate to move towards a more strategic support to the 
AU  institutions  and  to  reserve  an  additional  amount  for  a  pan-African  support 
programme  within  the  framework  of  the  “Vision  and  Mission  of  the  African  Union 
and Strategic Plan for  2004-2007”  adopted by the  summit  of  the  Heads  of  State  and 
Government  in  Addis  Ababa  in  July  2004.  To  contribute  to  a  pan-African  support 
programme, it is proposed to earmark an indicative amount of up to EUR 50 million 
from the remaining balance of the conditional billion, and to transfer the amount to the 
intra-ACP envelope for this purpose. 

(12)  The Education for All Fast Track Initiative (FTI) is a global partnership, launched in 
mid-2002 to help low-income countries reach the education Millennium Development 
Goals of giving all children a complete primary education by 2015. It is one of the first 
instruments that make operational the Monterrey consensus on  effective partnerships 
between  donors  and  developing  countries  to  increase  the  effectiveness  of  official 
development assistance.  The  FTI  primarily relies  on  existing funding  mechanisms  in 
partner countries. As it proved impossible to provide support to the FTI in a systematic 
way  through  the  2004  national  mid-term  review  exercise,  it  is  proposed  that  an 
indicative amount of EUR 63 million be contributed to the Fast Track Initiative from 

32 

33 

This  regulation  complements  Regulation  (EC)  N°  178/2002  of  the  European  Parliament  and  of  the 
Council  of  28  January  2002  laying  down  the  general  principles  and  requirements  of  food  law, 
establishing the European Food Safety Authority and laying down procedures in matters of food safety. 
COM(2003) 316 of 23 June 2003 on the EU-Africa Dialogue and the GAERC Conclusions of 21 July 
2003. 

EN 

31 

   EN 

 
                                                 
the remaining balances of the conditional billion and that the amount be transferred to 
the intra-ACP for this purpose. 

HAS DECIDED AS FOLLOWS: 

Article 1 

In  the  light  of  the  outcome  of  the  mid-term  reviews  of  the  country  strategies  and  of  the 
Council’s  performance  review  of  the  EDF,  the  Council  agrees  to  the  release  and  use  of  the 
EUR  482  million  of  the  conditional  EUR  1  billion  under  the  ninth  European  Development 
Fund for cooperation with African, Caribbean and Pacific countries. 

Article 2 

The allocation of EUR 482 million shall be released and be distributed as follows: 

1. 

2. 

3. 

EUR 352 million to the envelope for support for long-term development, referred to 
in Article 2(1)(a) of the internal Agreement as well as paragraph 3(a) of the Financial 
Protocol; 

EUR 48 million to the envelope for regional cooperation and integration, referred to 
in  Article  2(1)(b)  of  the  Internal  Agreement  as  well  as  paragraph  3(b)  of  the 
Financial Protocol; 

EUR  82  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; 

Article 3 

EUR  64  million  from  the  envelope  for  support  for  long-term  development,  referred  to  in 
Article  2(1)(a)(ii)(iii)  of  the  Internal  Agreement  as  well  as  paragraph  3(a)(i)(ii)  of  the 
Financial  Protocol  will  be  allocated  for  the  financing  of  the  budget  of  the  Centre  for  the 
Development  of  Enterprise  (CDE)  and  of  the  Technical  Centre  for  Agriculture  and  Rural 
Cooperation (CTA). 

The  remaining  EUR  418  million  EUR  will  contribute  to  the  financing  of  the  following 
actions:  

Article 4 

(a) 

Up to EUR 250 million to the EU Energy Initiative; 

(b) 

(c) 

Up  to  EUR  25  million  for  the  contribution  to  the  International 
Commodity  Risk  Management  Financing  Facility  in  favour  of  the 
ACP countries; 

An  indicative  amount  of  30  million  to  assist  the  ACP  countries  in 
adapting to the new EU sanitary and phyto-sanitary rules; 

EN 

32 

   EN 

 
(d) 

(e) 

Up  to  EUR  50  million  to  strengthen  the  African  Union  in  the 
implementation of its pan-African mandate 

An  indicative  amount  of  EUR  63  million  as  a  contribution  to  the 
Education for All Fast Track Initiative. 

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

Article 5 

Article 6 

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

Done at Brussels,  

For the Council 
The President 

EN 

33 

   EN 

 
 
 
 
 
EXPLANATORY MEMORANDUM 

The Financial Protocol attached as Annex 1 to the ACP-EC Partnership Agreement, signed in 
Cotonou  on  23  June  2000,  states  in  paragraph  2  that  the  Community’s  financial  assistance 
from the 9th EDF for African, Caribbean and Pacific countries shall comprise 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  on  1  April  2003.  According  to  the  Internal  Agreement,  the 
remaining  €  1  billion  is  to  be  released  and  distributed  to  the  envelopes  for  long  term 
development, regional cooperation and integration and for the Investment Facility 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  2(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. 

On  22  March  2004  the  Council  agreed  on  the  establishment  of  an  ‘EU  Water  Facility’  for 
ACP  countries,  to  consider  an  amount  of  EUR  500  million  out  of  the  conditional  EUR  1 
billion  referred  to  in  Article  2(2)  of  the  Internal  Agreement  for  this  water  facility  and  to 
release  a  first  allocation  of  EUR  250  million.  This  decision  was  taken  on  the  basis  that  the 
level of commitments and disbursements at the end of 2003, in conjunction with forecasts for 
the period 2004 to 2007 presented by the Commission, indicated that 9th EDF resources for 
ACP countries could be fully committed, and that a first allocation of the conditional EUR 1 
billion could be released on the basis of the performance to date. 

In  the  light  of  the  outcome  of  the  mid-term  reviews  of  the  country  strategies  and  of  the 
Council’s performance review of the EDF, the Council has to decide by March 2005 on the 
mobilisation of a second instalment of EUR 250 million for the Water Facility and on the use 
of the remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2(2) 
of the Internal Agreement for purposes to be agreed. 

For EUR 482 million out of the conditional EUR 1 billion, the selection of proposals has been 
made on the basis of the obligations resulting from the ACP-EC Partnership Agreement and 
on the basis of the so far unmet joint ACP-EC commitments on the international scene, taking 
into account the principles of urgency and poverty focus, concentration of aid and absorption 
capacity. 

Against  this  background,  the  Commission  proposes  that  the  Council  approves  the  enclosed 
decision  on  the  position  to  be  adopted  by  the  Community  within  the  ACP-EC  Council  of 
Ministers  regarding  the  transfer  of  EUR  288  million  from  the  reserve  of  the  9th  EDF  long-
term development envelope as well as EUR 82 million from the 9th EDF Investment Facility, 
to the allocation for intra-ACP co-operation, to be used for the financing of these initiatives. 
Together with the increase of EUR 48 million of the allocation for regional cooperation and 
integration, this will lead to a total amount of EUR 418 million. 

EN 

34 

   EN 

 
EUR  64  million  from  the  envelope  for  support  for  long-term  development,  referred  to  in 
Article 2(1)(ii)(iii) of the Internal Agreement as well as paragraph 3(a)(i)(ii) of the Financial 
Protocol will  be  allocated for the financing of the budget  of the Centre  for  Development of 
Enterprise (CDE) and of the Technical Centre for Agriculture and Rural Cooperation (CTA).  

EN 

35 

   EN 

 
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 of resources from the Investment Facility of the ninth European 
Development Fund for the financing of the EU Energy Initiative, for the contributions to 
the International Commodity Risk Management Financing Facility, the adaptation to 
the new EU feed and food sanitary and phyto sanitary rules, the strengthening of the 
African Union and a contribution to the Education for All Fast Track Initiative  

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 Commission34, 

Whereas: 

(1) 

(2) 

(3) 

In  accordance  with  Article  2(2)  of  the  Internal  Agreement  an  amount  of  EUR  1 
billion may be released and distributed to the envelopes for long term development, 
regional  cooperation  and  integration  and  the  Investment  Facility  only  following  a 
performance  review  undertaken  by  the  Council  in  2004,  on  the  basis  of  a  proposal 
from the Commission. Paragraphs 7 of the Financial Protocol and Declaration XVIII 
specify  that  this  performance  review  shall  be  an  assessment  of  the  degree  of 
realisation of commitments and disbursements. 

On 22 March 2004 the Council agreed on the establishment of a Water Facility for 
ACP  countries,  to  consider  an  amount  of  EUR  500  million  out  of  the  conditional 
EUR  1  billion  referred  to  in  Article  2(2)  of  the  Internal  Agreement,  for  this  Water 
Facility, and to release a first allocation of EUR 250 million. This decision was taken 
on the basis that the level of commitments and disbursements at the end of the year 
2003  in  conjunction  with  forecasts  for  the  period  2004  to  2007  presented  by  the 
Commission  indicating  that  ninth  EDF  resources  for  ACP  countries  could  be  fully 
committed. 

By the same decision the Council decided that in the light of the outcome of the mid-
term reviews of the country strategies and of its performance review of the EDF by 
the end of 2004, the Council would decide by March 2005 on the mobilisation of a 
second allocation of EUR 250 million for the ACP-EU Water Facility and on the use 
of the remaining EUR 500 million for purposes to be agreed. 

34 

OJ C , , p. . 

EN 

36 

   EN 

 
                                                 
(4) 

(5) 

(6) 

(7) 

A selection of proposals has been made for the total amount of EUR 482 million on 
the  basis  of  the  obligations  resulting  from  the  ACP-EC  Partnership  Agreement  and 
on the basis of so far unmet joint ACP-EC commitments on the international scene, 
taking into account the principles of urgency and poverty focus, concentration of aid 
and absorption capacity.  

From the latter amount, EUR 64 million from the envelope for support for long-term 
development  will  be  allocated  for  the  financing  of  the  budget  of  the  Centre  for 
Development  of  Enterprise  (CDE)  and  of  the  Technical  Centre  for  Agriculture  and 
Rural  Cooperation  (CTA),  referred  to  in  Article  2(1)(a)(ii)(iii)  of  the  Internal 
Agreement as well as paragraph 3(a)(i)(ii) of the Financial Protocol. The balance of 
EUR  418  million  will  be  earmarked  for  the  intra-ACP  financing  of  the  EU  Energy 
Initiative,  an  International  Commodity  Risk  Management  Financing  Facility,  the 
ACP adaptation to the new EU feed and food sanitary and phyto sanitary rules, the 
strengthening of the African Union and a contribution to the Education for All Fast 
Track Initiative. 

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 
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  cooperation  and  integration  are 
exhausted.  The  Community’s  position  within  the  ACP-EC  Council  of  Ministers 
should  therefore  be  established  with  a  view  to  it  adopting  a  decision  on  the 
Community’s  contribution  to  the  financing  of  the  EU  Energy  Initiative,  an 
International Commodity Risk Management Financing Facility, the ACP adaptation 
to the new EU feed and food sanitary and phyto sanitary rules, the strengthening of 
the African Union and a contribution to the Education for All Fast Track Initiative, 
from  the  reserve  of  the  long-term  development  envelope  and  from  the  Investment 
Facility of the ninth EDF. 

HAS DECIDED AS FOLLOWS: 

Sole Article 

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 for the financing of the EU Energy Initiative, for the contributions 
to  the  International  Commodity  Risk  Management  Financing  Facility,  the  adaptation  to  the 
new  EU  feed  and  food  sanitary  and  phyto  sanitary  rules,  the  strengthening  of  the  African 
Union and a contribution to the Education for All Fast Track Initiative, based on the attached 
draft decision of the ACP-EC Council of Ministers. 

Done at Brussels,  

EN 

For the Council 
The President 

37 

   EN 

 
 
 
 
 
DRAFT 

DECISION OF THE ACP-EC COUNCIL OF MINISTERS 

on the use of the reserve of the long-term development envelope as well as of resources 
from the Investment Facility of the ninth European Development Fund for the financing 
of the EU Energy Initiative, for the contributions to the International Commodity Risk 
Management Financing Facility, the adaptation to the new EU feed and food sanitary 
and phyto sanitary rules, the strengthening of the African Union and a contribution to 
the Education for All Fast Track Initiative 

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) 

At its 2527st Session on 22 March 2004, the EU Council of Ministers agreed on the 
establishment of a Water Facility for ACP countries and agreed to consider an amount 
of  EUR  500  million  out  of  the  conditional  EUR  1billion  under  the  9th  EDF  for  this 
Water  facility.  It  also  agreed  to  release  immediately  a  first  allocation  of  EUR  250 
million from the conditional EUR 1 billion and to decide at the latest by March 2005 
on the mobilisation of a second instalment of EUR 250 million and on the use of the 
remaining EUR 500 million of the conditional EUR 1 billion for purposes to be agreed 
in the light of the outcome of the mid-term reviews of the country strategies and of the 
Council’s performance review of the EDF by the end of 2004. 

To ensure support of the financing of the EU Energy Initiative, for the contributions to 
the  International  Commodity  Risk  Management  Financing  Facility,  the  adaptation  to 
the  new  EU  feed  and  food  sanitary  and  phyto  sanitary  rules,  the  strengthen  of  the 
African  Union  and  a  contribution  to  the  Education  for  All  Fast  Track  Initiative,  it  is 
appropriate to allocate resources to intra-ACP cooperation for a total amount EUR 418 
million that can be made available from the resources released by the EU Council of 
Ministers. However, the envelope for regional cooperation and integration as defined 
in Paragraph 3(b) of Annex I 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. 

EN 

38 

   EN 

 
HAS DECIDED AS FOLLOWS: 

Article 1 

An amount of EUR 370 million, consisting of EUR 288 million from the reserve of the 9th 
EDF  long-term  development  envelope  and  EUR  82  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. 
Together  with  an  amount  of  EUR  48  million  already  available  under  the  intra-ACP  co-
operation, a total amount of EUR 418 million will thus be available for the financing of the 
EU Energy Initiative, for the contributions to the International Commodity Risk Management 
Financing  Facility,  the  adaptation  to  the  new  EU  feed  and  food  sanitary  and  phyto  sanitary 
rules, the strengthening of the African Union and a contribution to the Education for All Fast 
Track Initiative. 

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  from  intra  ACP  cooperation 
support for the programmes and the indicative amounts referred to in Article 1. 

Done at Brussels,  

For the ACP-EU Council of Ministers 
The President 

EN 

39 

   EN 

 
 
 
 
 
EXPLANATORY MEMORANDUM 

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). According 
to  the  Internal  Agreement,  the  remaining  €  1  billion  is  to  be  released  and  distributed  to  the 
envelopes  for  long  term  development,  regional  cooperation  and  integration  and  for  the 
Investment Facility 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 2(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. 

On 22 March 2004 the Council agreed on the establishment of an ‘EU Water Facility for ACP 
countries,  to  consider  an  amount  of  EUR  500  million  out  of  the  conditional  EUR  1  billion 
referred to in Article 2(2) of the Internal Agreement for this Water Facility and to release a 
first  allocation  of  EUR  250  million.  This  decision  was  taken  on  the  basis  that  the  level  of 
commitments and disbursements at the end of the year 2003 in conjunction with forecasts for 
the period 2004 to 2007 presented by the Commission indicated that ninth EDF resources for 
ACP  countries  could  be  fully  committed,  and  a  first  tranche  of  the  conditional  billion  be 
released on the basis of the performance to date. 

In  the  light  of  the  outcome  of  the  mid-term  reviews  of  the  country  strategies  and  of  the 
Council’s performance review of the EDF, the Council has to decide by March 2005 on the 
mobilisation of a second instalment of EUR 250 million for the Water Facility and on the use 
of the remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2(2) 
on the Internal Agreement for purposes to be agreed. 

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  €185  million  from  the  reserve  (unallocated  resources)  of 
the  9th  EDF  long-term  development  envelope  as  well  as  €41  million  from  the  9th  EDF 
Investment  Facility,  to  the  allocation  for  intra-ACP  co-operation,  to  be  used  for  the  second 
allocation of the ACP-EU Water Facility. Together with the above-mentioned increase of €24 
million  of  the  intra  ACP  allocation,  this  will  lead  to  a  total  amount  of  €250  million  for  the 
second allocation to the Water Facility. 

EN 

40 

   EN 

 
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 long-term development envelope as well 
as resources from the Investment Facility of the ninth European Development Fund for 
the second allocation of the 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 Commission35, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

In accordance with Article 2(2) of the Internal Agreement an amount of EUR 1 billion 
may be released and distributed to the envelopes for long term development, regional 
cooperation and integration and the Investment Facility only following a performance 
review  undertaken  by  the  Council  in  2004,  on  the  basis  of  a  proposal  from  the 
Commission.  Paragraphs  7  of  the  Financial  Protocol  as  well  as  Declaration  XVIII 
specify that this performance review shall be an assessment of the degree of realisation 
of commitments and disbursements. 

On  22  March  2004  the  Council  agreed  on  the  establishment  of  a  Water  Facility  for 
ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 
1 billion referred to in Article 2(2) of the Internal Agreement, for this Water Facility, 
and  to  release  a  first  allocation  of  EUR  250  million.  This  decision  was  taken  on  the 
basis that the level of commitments and disbursements at the end of the year 2003 in 
conjunction with forecasts for the period 2004 to 2007 presented by the Commission 
indicating that ninth EDF resources for ACP countries could be fully committed 

This first allocation of EUR 250 million was released and was distributed as follows in 
accordance with Article 2(1) and 2(2) of the Internal Agreement: EUR 185 million to 
the envelope for support for long-term development; EUR 24 million to the envelope 
for  regional  cooperation  and  integration  and  EUR  41  million  to  the  Investment 
Facility. 

On the same decision the Council decided that in the light of the outcome of the mid-
term reviews of the country strategies and of the Council’s performance review of the 
EDF by the end of 2004, the Council would decide by March 2005 on the mobilisation 
of a second allocation of EUR 250 million for the ACP-EU Water Facility. 

35 

OJ C , , p. . 

EN 

41 

   EN 

 
                                                 
(5) 

(6) 

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 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  cooperation  and  integration  are 
exhausted. The Community’s position within the ACP-EC Council of Ministers should 
therefore  be  established  with  a  view  to  it  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:  

Sole Article 

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  second  allocation  of  the  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 

EN 

42 

   EN 

 
 
 
 
 
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 second 
allocation of the 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) 

At its 2527st Session on 22 March 2004, the EU Council of Ministers agreed on the 
establishment of a Water Facility for ACP countries and agreed to consider an amount 
of EUR 500 million out of the conditional EUR 1 billion under the 9th EDF for this 
Water  facility.  It  also  agreed  to  release  immediately  a  first  allocation  of  EUR  250 
million from the conditional EUR 1 billion and to decide at the latest by March 2005 
on the mobilisation of a second instalment of EUR 250 million and on the use of the 
remaining  EUR  500  million  of  the  conditional  EUR  1  billion,  in  the  light  of  the 
outcome  of  the  mid-term  reviews  of  the  country  strategies  and  of  the  Council’s 
performance review of the EDF by the end of 2004. The second allocation of EUR 250 
million is distributed as follows over the envelopes referred to in paragraph 3 of the 
9th  EDF  Financial  Protocol:  EUR  185  million  to  the  envelope  for  support  for  long-
term  development,  EUR  24  million  to  the  envelope  for  regional  cooperation  and 
integration and EUR 41 million to the Investment Facility. 

To  ensure  support  for  the  implementation  of  the  EU  Water  Initiative  for  ACP 
countries, it is appropriate to allocate resources to intra-ACP co-operation for a total 
amount  EUR  250  million  that  can  be  made  available  from  the  resources  released  by 
the  EU  Council  of  Ministers.  However,  the  envelope  for  regional  co-operation  and 
integration  as  defined  in  Paragraph  3(b)  of  Annex  I  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.  

EN 

43 

   EN 

 
HAS DECIDED AS FOLLOWS:  

Article 1 

An amount of EUR 226 million, consisting of EUR 185 million from the reserve of the 9th 
EDF  long-term  development  envelope  and  EUR  41  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. 
Together  with  an  amount  of  EUR  24  million  already  available  under  the  intra-ACP  co-
operation, a total amount of EUR 250 million will thus be available for the second instalment 
of the ACP-EU Water Facility. 

Article 2 

In  accordance  with  Article  13(2)  of  Annex  IV  to  the  ACP-EC  Partnership  Agreement,  the 
ACP Council of Ministers request the Commission to finance support for the ACP-EU Water 
Facility from intra ACP cooperation for the amounts referred to in Article 1. 

Done at Brussels,  

For the ACP-EU Council of Ministers 
The President 

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