The European Investment Bank (EIB), the European Union's (EU) long-term financing institution, lent EUR 558 million (1) in 1998 to the African, Caribbean and Pacific (ACP) countries signatories of the Lomé Convention, of which EUR 288 million from the Bank's own resources, raised on the international capital markets, and EUR 270 million from risk capital resources from the European Development Fund (2).

Financing industrial development in the ACP amounted to 43% of total lending, the largest part of which (64%) benefited small and medium sized companies through EIB's global loans to and equity subscriptions (in the name of the EU) in -principally- domestic ACP financial intermediaries. Loans to projects in the energy sector represented 42%, and included some large projects in Barbados, Ethiopia, Madagascar, Namibia and Zambia, as well as a regional project benefiting Mali, Mauritania and Senegal. Water treatment schemes (10%) and communications infrastructure (5%) also received significant financial backing from the Bank.

Lending operations signed from January to September 1998, totalling EUR 274 million, were announced in a Press release dated 1 October 1998, which can be consulted on the EIB's Web Site. Breakdown by country of EIB loans in the ACP during the last quarter of 1998 is as follows:

  • All ACP countries, EUR 20 million from risk capital resources to the bi-lateral development finance institutions of the Member States of the EU (EDFIs) for part-financing equity participations in small and medium-sized enterprises (SMEs).
  • West Africa, EUR 20 million to Banque ouest-africaine de développement (BOAD) for financing in member countries of the West African Economic and Monetary Union (UEMOA), ventures undertaken by private-sector SMEs and viable medium-scale national and regional infrastructural projects.
  • Barbados, EUR 30 million to Barbados Light and Power Company Ltd for upgrading of diesel power generating capacity to meet growing demand and to maintain supply reliability.
  • Côte d'Ivoire, EUR 5.5 million to Aéroport International d'Abidjan (AERIA) for the airport's modernisation and extension.
  • Dominican Republic, EUR 4 million (of which EUR 1 million from risk capital resources) to ADEMI Bank (Banco de Desarrollo ADEMI, S.A.) for medium to long-term investment by SMEs in industry, agro-industry, tourism, transport and related services sectors. The EUR 1 million from risk capital will fund an equity subscription by the Bank, on behalf of the European Community, in the capital of ADEMI Bank.
  • Fiji, EUR 2 million from risk capital resources to Hillview Ltd for the rehabilitation and extension of The Reef Resort hotel near Korotogo, on the Coral Coast, one of Fiji's principal tourist destinations. Situated about 50 minutes from Nadi International Airport, the hotel is well suited to attract long-haul tourists.
  • Ghana, EUR 3 million from risk capital resources to Leasafric Ghana Limited for financing leasing operations in the industrial, mining, transport and tourism sectors. Leasing is an increasingly attractive option to medium-sized companies, to have access to productive assets.
  • Guinea, EUR 500 000 from risk capital resources to Société Guinéenne d'Hôtellerie et d'Investissements for the renewal of the NOVOTEL/Grand hôtel de l'Indépendance in Conakry, complementing previous financing by the Bank for the hotel's privatisation and modernisation.
  • Kenya, EUR 32 million to the Government of Kenya for on-lending to ten commercial banks participating in the Global Private Enterprise scheme. The loan will support small and medium-scale private enterprise investments in the productive sectors - manufacturing, agro--industry, horticulture/floriculture, mining/quarrying and tourism, plus related services.
  • Madagascar, a total of EUR 29 million to the Republic of Madagascar for on-lending to Jiro Sy Rano Malagasy (JIRAMA). EUR 25 million will contribute to the rehabilitation of power stations and extension of the electricity transmission and supply grids in Antananarivo and Antsirabé. A second loan of EUR 4 million will part finance the rehabilitation, modernisation and extension of drinking water supply systems in both cities.
  • Malawi, a total of EUR 10 million from risk capital resources, of which EUR 8.5 million to the Republic of Malawi for on-lending to the four finance institutions participating in a facility to provide loan and equity finance for small and medium sized private enterprise investments in the productive sectors. A further EUR 1.4 million to the Republic of Malawi will part fund, through the Privatisation Commission, equity participations in privatised companies. EUR 100 000 will finance an equity subscription by the Bank, on behalf of the European Community, in an increase of the Investment and Development Bank of Malawi's (Indebank) share capital.
  • Mauritania, EUR 15 million to Société Nationale Industrielle et Minière for the development of an iron ore deposit at Zouérate in northern Mauritania. The project will increase the output of the mine, and improve transport facilities and infrastructure for handling the iron ore, by connecting the mine to the rail transport system currently linking Zouérate to the Nouadhibou ore terminal on the Atlantic coast.
  • Namibia, a total of EUR 65 million, of which EUR 55 million to Namibian Power Corporation Ltd (Nampower) for the construction of second high-voltage transmission line to interconnect the grids of Nampower in Namibia and Eskom in South Africa, essential to meet the foreseen increase in electricity demand in Namibia, notably in the mining sector. A second loan of EUR 10 million to Telecom Namibia Ltd will part finance the modernisation and expansion of the fixed telecommunication network in southern Namibia, in particular for the inter-urban and international transmissions.
  • Saint Vincent and the Grenadines, EUR 4 million to the Government of Saint Vincent and the Grenadines for onlending to St Vincent Electricity Services Ltd. (Vinlec) for the expansion of the Cane Hall diesel power plant through the installation of a new diesel generator set and related investments.
  • Surinam, EUR 4 million to the State Oil Company of Surinam (Staatsolie Maatschappij Suriname N.V.) for the development of the "TA-58 area within the Tambaredjo oil field, including the drilling of additional wells and installing of surface facilities to expand the output of the field, and the construction of a 21 km long oil pipeline from the Tout-Lui-Faut Terminal to the Suralco installations.
  • Uganda, a total of EUR 17 million from risk capital resources, of which EUR 15 million to the Republic of Uganda for on-lending to the eight banks and financial institutions participating in the Private Enterprise facility to provide loan, equity and quasi-equity finance for small and medium sized private enterprise investments in productive sectors and related services. A loan totalling EUR 1.8 million will contribute to fund commercial leasing of plant, equipment and vehicles to small and medium-scale private sector enterprises; part of the loan (EUR 1.2) went to Uganda Leasing Company Ltd (ULC), and the rest to Development Finance Company of Uganda Ltd to part-finance its share in ULC equity. EUR 225 000 to the Republic of Uganda will contribute to financing a feasibility study and business development plan for the establishment of an industrial park on the outskirts of Kampala.
  • Zambia, EUR 15 million from risk capital resources to Barclays Bank of Zambia Ltd, Stanbic Bank Zambia Ltd, Standard Chartered Bank Zambia Ltd for on-lending to small and medium scale private sector companies.

The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects which further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries that have co-operation or association agreements with the Union.

The Fourth Lomé Convention was concluded in 1989 for a period of 10 years and is accompanied by two Financial Protocols, spanning 1991-1995 and 1996-2000. Under the second financial protocol, the total financial aid available amounts to EUR 14.6 billion, of which EUR 12 billion is grant aid from the EU member states, EUR 1 billion is managed by the EIB as risk capital finance, and up to EUR 1.6 billion is in the form of loans from the EIB's own resources.

(1) 1 EUR = 6,55957 FRF, 0.705455 GBP, 166.386 ESP.

(2) The European Development Fund (EDF) is constituted by contributions from EU Member States. The EIB manages under mandate part of the EDF, which it uses primarily for risk capital operations.