The European Investment Bank's (EIB), the long-term financing institution of the European Union (EU), has approved loans amounting to EUR 13.2 million for the restructuring of Belize's citrus industry. The project consists of three inter-related components:
- An EUR 5 million line of credit, from risk capital resources (1), to the Development Finance Corporation (DFC) for on-lending to small growers for the replanting of an estimated 1 416 ha of old groves.
- EUR 3.2 million, from risk capital resources, to part-finance the equity stake by the Citrus Growers Association (CGA) in "Del Oro Belize", the processing industry.
- EUR 5 million, from the Bank's own resources (2), to the Commonwealth Development Corporation (CDC) for new investments to develop the two processing plants CDC has recently purchased, with the approval of the Belize government.
The citrus industry represents a significant part of Belize's national output and exports, and provides livelihood to a large number of small farmers. The project will have positive effects on the balance of payments and consolidate employment for some 1500 people. It will also generate substantial indirect benefits in other sectors of the economy. The project includes significant environmental improvements, particularly in the design of the processing factories.
The Citrus Growers Association (CGA) represents the approximately 1000 citrus growers in Belize, of whom some 85 % are classified as small growers, with plantations of just a few hectares. CGA's principal role is to license and register citrus producers and to represent their views to the government and to the juice producers. Growers will participate in the development of their sector, through the rehabilitation of their plantations, partly financed by the credit line approved to DFC, and by taking an equity stake in the citrus processing industry through CGA, largely financed by the EIB.
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.
- At present, the Bank's financing in Africa, the Caribbean and the Pacific (ACP) is carried out under the provisions of the Fourth Lomé Convention, which 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. Lomé IV Convention is due to expire end-2000.
The EIB is currently working in close collaboration with the EU's Member States and the European Commission, in defining the criteria for management and operation of the newly created Investment Facility, set up by the New ACP-EU Partnership Agreement, recently signed in Cotonou, that will replace the Lomé Convention.
(1) The EIB manages under mandate part of the European Development Fund (EDF), which it uses primarily for risk capital operations. The EDF is constituted by contributions from EU Member States.
(2) The EIB's own resources are raised on the international capital markets.