FEMIP for the Mediterranean : promoting tourism development.
Date: 2011-10-19
Institutions: European Investment Bank
Subjects: EIB loan, EU financial instrument, Mediterranean third countries, Union for the Mediterranean, tourism

Summary sheet

FEMIP for the Mediterranean
Promoting Tourism Development

The	European	Investment	Bank	(EIB),	an	active	supporter	of	tourism	projects	inside	and	outside	the	EU,	recently	
completed	an	analysis	of	the	tourism	strategies	and	policies	of	the	nine	Mediterranean	partner	countries	1 plus 
Turkey	2.

Due to the region’s natural and cultural 
resources, a desirable climate, and a location 
close to key markets, tourism is an important 
growth sector. The particular potential of 
tourism development has led to the creation 
of facilities and services by governments and 
private sector operators to meet a variety of 
market demands. However, there are large 
differences between the countries: while 
Egypt, Jordan, Turkey, Tunisia and Morocco 
experience substantial tourism develop-
ment, Algeria, Gaza/West Bank, Israel and 
Lebanon are facing lower, or even negative, 
growth rates.

Despite political unrest in some of the Medi-
terranean partner countries, the total annual 
average growth rate in 2006 was 12%, meas-
ured in terms of tourist arrivals, with tourist 
expenditure increasing even faster. Although 
these growth rates are impressive (dou-
ble the world average), the Mediterranean 
partner countries make up only 4.5% of the 
world tourist arrivals. Egypt, Syria, Tunisia 
and Morocco absorb 80% of all tourist arriv-
als and create 81% of tourist expenditures 
in the region.

About FEMIP

The	Facility	for	Euro-Mediterranean	Investment	and	Partnership	
(FEMIP)  brings  together  the  whole  range  of  services  provided 
by	the	European	Investment	Bank	in	the	Mediterranean	partner	
countries. 

Operational	 since	 October	 2002,	 it	 is	 now	 the	 key	 player	 in	 the	
financial	 partnership	 between	 Europe	 and	 the	 Mediterranean,	
providing  almost  EUR  7.3  billion  of  financing  between  October 
2002 and December 2007.

Over	the	period	2007-2013,	FEMIP	has	at	its	disposal	EUR	8.7	bil-
lion to support projects in the nine Mediterranean partner coun-
tries.	These	resources	are	augmented	by	EUR	2	billion	under	the	
Mediterranean	Partnership	Facility	II	and	by	EU	budget	resources	
for	technical	assistance	and	private	equity	activities.

FEMIP	 encourages	 the	 modernisation	 and	 opening-up	 of	 the	
economies of the Mediterranean partner countries. Activities are 
focused	on	two	priority	areas:	development	of	the	private	sector	
and	the	creation	of	an	investment-friendly	environment.

1   Algeria, Egypt, Israel, Gaza/West Bank, Jordan, Lebanon, Morocco, Syria and Tunisia.
2   The study was financed by the FEMIP Trust Fund and is available on the EIB’s website at http://www.eib.org/publications

Facility for Euro-Mediterranean Investment and Partnership • Facility for Euro-Mediterranean Investment and PartnershipF a c i l i t y   f o r   E u r o - M e d i t e r r a n e a n   I n v e s t m e n t   a n d   P a r t n e r s h i p   •   F a c i l i t y   f o r   E u r o - M e d i t e r r a n e a n   I n v e s t m e n t   a n d   P a r t n e r s h i p

Tourist Arrivals  
in Millions  
2006

Annual Average 
Growth %  
2001	to	2006

Tourist  
Expenditures in  
Million	USD,	2006

Annual Average  
Growth %  
2001	to	2006

Tourist  
Arrivals in  
Millions 2010

Annual Average 
Growth %  
2006	to	2010

Algeria

Egypt

Gaza/West	
Bank

Israel

Jordan

Lebanon

Morocco

Syria

Tunisia

Turkey

Total

1.4

9.1

    Na

1.8

3.2

1.1

6.6

8.0 1

6.6

19.8

57.6

11.2

14.8

Na

13.3

6.5

11.7

8.5

24.0

5.4

15.5

12.2

173.000

6.896

Na

1.912 1

2.004 1

Na

6.276

2.332 1

2.193

18.154

39.957

1 Data are from 2005.
Source: WTTC, Mediterranean partner countries’ governments’ forecasts for tourist arrivals in 2010.

11.2

8.9

Na

8.9

17.1

Na

18.8

23.0

5.1

15.9

13.0

2.7

12.2

Na

2.4

4.7

1.6

10.0

12.6

8.7

33.2

88.1

14.4

7.5

Na

10.7

10.0

14.9

19.4

16.3

7.0

15.0

11.6

Tourist	arrivals	and	tourist	expenditures	in	Mediterranean	partner	countries	plus	Turkey,	2001-2006,	 
and	predicted	arrivals,	2006-2010

Tourism  in  the  Mediterranean  part-
ner countries is often the biggest single 
source of foreign exchange and generates 
the largest private sector activity in the 
economy, especially for Egypt, Morocco, 
Syria and Tunisia. As tourism is an impor-
tant creator of income and employment, 
the governments treat tourism as a prior-
ity economic sector.

The particular potential of tourism devel-
opment has been understood by the 
governments as well as by private sec-
tor operators and investors. The devel-
opment that has already taken place is 
just a beginning and tourism growth can 
be expected to accelerate in the coming 
years. According to governments’ pre-
dictions, the number of tourist arrivals 
should almost double by 2010 and the 
region could achieve 5.5% of the world 
tourist arrivals. However, economic and 
political stability in the region as well as 
further development of tourism facilities 
are prerequisites to achieve this target.

All Mediterranean partner countries have 
product diversification as a key strategy, 
with the aim of increasing competitive-
ness and added value. The objective is 
to develop higher income market seg-
ments and increase tourism employment. 
Another important trend is the combina-
tion of real estate business and tourism, 
a practice fairly well developed in Egypt, 
Morocco, and recently in Algeria. However, 
there are still certain constraints to tour-
ism growth which must be addressed. The 
study has identified seven action areas for 
tourism development:

  Seven Action Areas

1.		Training,	professionalism	and	human	
resource development. Service and 
human  resource  development  are 
key factors for the future tourism but 
require close collaboration between 
the public and private sectors.

2.		Awareness-creation	at	three	levels.  
a) Governments and the political sys-
tem, b) Potential employees/students, 
and c) The general public. Making the 
local public aware of the importance of 
tourism, and of creating a service cul-
ture, is difficult but essential to growth.

3.  Tourism  Services  –  International 
Standards. New tourist zone definitions 
should include guidelines and concepts 
for environmental sustainability prod-
ucts, branding, and the service level to 
be offered in the zone. Overall grading 
and classification systems to interna-
tional norms need to be discussed.

4.  SME Development – Rooting Tourism 
in	the	Local	Economy. There is a risk of 
losing value added if SME development 
is ignored, particularly in connection 
with cultural and natural sites. Value 
chain analysis on the national, regional 
and local levels is a way forward in link-
ing tourism to the local economies.

2

S u m m a r y   s h e e t   •   F E M I P   f o r   t h e   M e d i t e r r a n e a n   P r o m o t i n g   To u r i s m   D e v e l o p m e n t

F a c i l i t y   f o r   E u r o - M e d i t e r r a n e a n   I n v e s t m e n t   a n d   P a r t n e r s h i p   •   F a c i l i t y   f o r   E u r o - M e d i t e r r a n e a n   I n v e s t m e n t   a n d   P a r t n e r s h i p

5.		Marketing,	Promotion	and	R&D	in	
Tourism. Marketing and promotion 
strategies are often weak, with sub-opti-
mal spending of limited funds. Research 
and proper statistics are needed to form 
the basis of marketing activities.

6.		Institutional	structures	optimal	for	
tourism development. Institutional 
systems and structures were identified 
as being the most important issues for 
tourism development, along with peace 
and safety.

7.  Countries with limited growth. For four 
countries, the “peace dividend” would 
include rapid tourism development. 
These countries could learn from the 
experiences of the others and avoid the 
factors restricting tourism development.

Firstly, FEMIP provides long-term loans 
for large-scale projects as well as indirect 
financing for small and medium-sized 
investment projects. In recent years, it has 
provided support to some 100 tourism 
projects across the region, either directly 
or through local financial intermediaries, 
and ranging from small cafés through to 
five star hotels. 

Secondly, FEMIP provides financing in 
the form of private equity to foster pri-
vate sector tourism projects. The impact 
of private equity operations is signifi-
cant, especially as they all involve direct, 
unguaranteed financing for the private 
sector. In 2005, FEMIP took a EUR 5 million 
equity participation in Société Immobilière 
de la Mer, a tourism investment fund set 
in Morocco.

Tourism continues to offer the Mediterra-
nean partner countries substantial opportu-
nities for economic and social development. 
However, while most countries have a 
number of tourism strengths, most coun-
tries also have a number of weaknesses 
which are limiting their ability to take 
advantage of these opportunities. What 
stands out from the findings is that over-
coming these weaknesses will not mean 
major capital investment programmes. A 
reallocation of existing resources should 
be sufficient and, where new investment 
is required, it will be modest and shared 
between the public and private sectors. 
Solutions to many of the problems already 
exist within the region, and co-operation 
and collaboration between the Mediter-
ranean partner countries would be to the  
benefit of all.

FEMIP’s support for the tourism 
sector

FEMIP supports tourism through a range 
of	financial	and	non-financial	products	
to meet the needs of viable projects across 
the region.

Thirdly, FEMIP assists promoters by pro-
viding technical assistance during differ-
ent stages of the project cycle, such as 
project identification, preparation and 
implementation. Technical assistance 
operations are funded by the FEMIP Sup-
port Fund, which utilises non-repayable 

aid granted by the European Commission 
in support of FEMIP investment activities.

Finally, FEMIP encourages a better under-
standing of the economic issues in the 
Mediterranean by funding upstream stud-
ies under the FEMIP Trust Fund.

A Trust Fund for the Mediterranean

The	FEMIP	Trust	Fund	was	created	in	2004,	following	a	decision	by	the	
EIB and a number of donor countries to establish a fund dedicated to 
the Mediterranean partner countries.

The  purpose  of  the  FEMIP Trust  Fund  is  to  direct  resources  to  opera-
tions	in	certain	priority	sectors	in	order	to	foster	private	sector	devel-
opment	 in	 the	 region.	 To	 attain	 this	 objective,	 two	 windows	 were	
defined:	upstream	technical	assistance	and	support	for	private	equity.

By	December	2007,	15	Member	States	and	the	European	Commission	
(EC) had contributed with EUR 34.5m. The FEMIP Trust Fund has been 
instrumental  in  financing  upstream  studies  with  a  broad  strategic 
view on economic and financial issues in the region.

S u m m a r y   s h e e t   •   F E M I P   f o r   t h e   M e d i t e r r a n e a n   P r o m o t i n g   To u r i s m   D e v e l o p m e n t

3

Summary sheet  •  FEMIP for the Mediterranean Promoting Tourism Development

Contacting FEMIP

Direct loans (with an investment cost of over EUR 25 mil-
lion) and private equity financing can be requested directly 
from the EIB. Applications for the financing of smaller-scale 
projects should be addressed directly to the financial insti-
tutions or commercial banks to which the EIB has granted 
credit lines. A list of the partner institutions in Mediterra-
nean countries and other information on lending can be 
found on the Bank’s website (www.eib.org/femip).

FEMIP products

Operational contacts:

•	

Long-term	 direct	 loans	 for	 large-scale	 pro-
jects (costing more than EUR 25 million)

•	 Credit	 lines	 to	 intermediary	 banks,	 which	
on-lend	 the	 funds	 to	 finance	 investment	
un	dertaken	 by	 small	 and	 medium-sized	
en terprises or local authorities

•	 Credit	lines	to	microfinance	institutions

•	 Private	equity	(direct	equity	or	quasi-equity	
investments	 in	 unlisted	 companies,	 private	
equity	funds	and	co-investments	with	local	
intermediaries)

•	

Technical	assistance	to	strengthen	the	capa- 
city	 of	 Mediterranean	 partner	 countries	
and  promoters  and  to  finance  upstream 
studies  and  activities  focusing  on  private 
sector development

Claudio Cortese 
Director, Mediterranean (FEMIP) Department
3  (+352) 43 79 - 86836
5  (+352) 43 79 - 66898
U  c.cortese@eib.org

Campbell Thomson 
Tourism Adviser, Competitiveness and Innovation  
Department
3  (+352) 43 79 - 88544
5  (+352) 43 79 - 68827
U  c.thomson@eib.org

European Investment Bank
100, boulevard Konrad Adenauer
L-2950 Luxembourg
3  (+352) 43 79 – 1
5  (+352) 43 77 04 
www.eib.org/femip  –  U info@eib.org

©  E IB – 02/2008 – QH-30-08-260-EN - C – EIB Graphic Wor ksho p

Facility for Euro-Mediterranean Investment and Partnership