Proposal for a COUNCIL DECISION on the position to be taken by the European Union within the ACP-EU Council of Ministers regarding the revision of terms and conditions of investment financing (Chapter 1 of Annex II to the ACP-EC Partnership Agreement)
Date: 2012-03-19
Institutions: European Commission
Subjects: ACP-EU Convention, EIB loan, interest, revision of an agreement, technical cooperation

EUROPEAN COMMISSION 

Brussels, 19.3.2012  
COM(2012) 113 final 

2012/0052 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken by the European Union within the ACP-EU Council of 
Ministers regarding the revision of terms and conditions of investment financing 
(Chapter 1 of Annex II to the ACP-EC Partnership Agreement) 

 
 
  
 
EXPLANATORY MEMORANDUM 

The  Partnership  Agreement  between  the  members  of  the  African,  Caribbean  and  Pacific 
(ACP) Group of States, of the one part and the European Union and its Member States, of the 
other part, signed in Cotonou on 23 June 20001, provides that the ACP Investment Facility is 
comprised  of  resources  managed  as  a  revolving  fund  and  of  grants  in  the  form  of  the 
financing of interest rate subsidies. It also provides that up to 10% of the latter envelope may 
be used to support project related technical assistance in ACP countries (Annex II to the ACP-
EC Partnership Agreement, Chapter 1, Articles 1(3) and 2(9)).  

Project related technical assistance helps partner countries and investors to better prepare and 
supervise their investment projects, to improve the quality and the impact of investments, and 
to strenghthen the management capacities of local partners in the medium and long term.  

As foreseen in article 6b of Chapter 1 of Annex II to the ACP-EC Partnership Agreement, a 
mid-term  evaluation  of  the  Investment  Facility  was  conducted  in  2010  as  an  independent 
assessment,  covering  the  period  2003-2009.  For  the  sake  of  completeness,  European 
Investment  Bank  (EIB)  operations  under  own  resources  were  also  included.  The  evaluation 
concluded that the use of technical assistance was an important component of the added value 
of  EIB  operations  in  general  and  of  the  Investment  Facility  in  particular,  contributing  to 
strenghthening  the  management  practices  of  the  financial  intermediaries.  However  it  also 
noted  that  the  current  envelope  for  technical  assistance  was  too  limited  and  recommended 
developing  mechanisms  for  securing  supplementary  grant  resources  for  technical  assistance 
combined with other instruments managed by the European Investment Bank, such as loans 
and  equity  investments.  This  recommendation  was  endorsed  by  the  European  Commission 
and  the  European  Investment  Bank.  The  proposal  intends  therefore  to  allow  the  European 
Investment Bank operations, under both the Investment Facility and the EIB own resources, to 
continue  benefiting  from  project  related  technical  assistance  during  the  current  Financial 
Protocol (10th European Development Fund) and beyond. 

In  accordance  with  Article  100  of  the  Cotonou  Agreement,  Annex  II  may  be  revised  by  a 
decision of the ACP-EU Council of Ministers. 

The  objective  of  the  proposed  Decision  is  to  increase  from  10%  to  15%  the  part  of  the 
envelope for interest rate subsidies which can be used for projects related technical assistance, 
as  defined  in  articles  1(3)  and  2(9)  of  Chapter  1  of  Annex  II  to  the  ACP-EC  Partnership 
Agreement. It is recalled that this percentage represents a ceiling. 

The Commission proposes that the Council adopts the attached Decision. 

1 

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

EN 

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2012/0052 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken by the European Union within the ACP-EU Council of 
Ministers regarding the revision of terms and conditions of investment financing 
(Chapter 1 of Annex II to the ACP-EC Partnership Agreement) 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to the Partnership Agreement between the members of the African, Caribbean 
and  Pacific  Group  of  States  of  the  one  part,  and  the  European  Community  and  its  Member 
States  of  the  other  part,  signed  in  Cotonou  on  23  June  20002  (hereinafter  referred  to  as  'the 
ACP-EC Partnership Agreement'), 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

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

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

Taking  into  account  the  results  of  the  mid-term  evaluation,  the  purpose  of  the 
proposed  revision  of  Annex  II  to  the  ACP-EC  Partnership  Agreement  is  to  increase 
from 10% to 15% the part of the envelope for interest rate subsidies which can be used 
for projects related technical assistance, as defined in articles 1(3) and 2(9) of Chapter 
1 of Annex II to the ACP-EC Partnership Agreement. 

2 

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

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HAS ADOPTED THIS DECISION: 

Article 1 

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

Article 2 

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

Done at Brussels, 19.3.2012 

For the Council 
The President

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ANNEX  

Draft 

DECISION OF THE ACP-EU COUNCIL OF MINISTERS 

regarding the revision of terms and conditions of investment financing (Chapter 1 of 
Annex II to the ACP-EC Partnership Agreement) 

THE ACP-EU COUNCIL OF MINISTERS, 

Having regard to the Partnership Agreement between the members of the African, Caribbean 
and  Pacific  Group  of  States  of  the  one  part,  and  the  European  Community  and  its  Member 
States, of the other part, signed in Cotonou on 23 June 20003 as amended in Luxembourg on 
25 June 20054 and in Ouagadougou on 22 June 20105 (the ‘ACP-EC Partnership Agreement’), 
and in particular Article 100 thereof, 

Whereas: 

(1) 

(2) 

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

Taking  into  account  the  results  of  the  mid-term  evaluation,  the  purpose  of  the 
proposed revision of Annex II to the ACP-EC Partnership Agreement is to increase 
from  10%  to  15%  the  part  of  the  envelope  for  interest  rate  subsidies  which  can  be 
used for projects related technical assistance, as defined in articles 1(3) and 2(9) of 
Chapter 1 of Annex II to the ACP-EC Partnership Agreement. 

HAS DECIDED AS FOLLOWS: 

Article 1 

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

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

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

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

3 
4 
5 

OJ L 317, 15.12.2000, p. 3. Agreement as rectified by OJ L 385, 29.12.2004, p. 88. 
OJ L 209, 11.8.2005, p. 27. 
OJ L 287, 4.11.2010, p. 3. 

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

Article 2 

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

Done at […], […] 

For the ACP-EU Council of Ministers 

The President 

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