The European Investment Bank (EIB), the European Union's long-term financing institution, is lending EUR 20 million from own resources for the co-financing of airport and traffic control infrastructure in the Republic of Cap Verde.
The loan is earmarked for the construction of a new air traffic control centre on the island of Sal in the context of a larger programme aimed at modernising the air transport infrastructure of the Cape Verde archipelago, which is an essential condition for the development of tourism.
The borrower and operator in this facility is ASA, Empresa Nacional de Aeroporto e Segurança Aérea, the national public services company responsible for managing and developing public airport infrastructure in the archipelago as well as the Sal Oceanic Flight Information Region airspace bordering that of Spain, Portugal and Senegal. The project will notably improve coverage and monitoring of the rapidly expanding air traffic on the air-safety in part of one of the main transatlantic air routes linking Europe to South America.
The loan will provide term financing in line with with the economic life of the project, which does not exist in the local financial market and is in line with ASA's funding requirement as aproriate for a public utility project.
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. Currently, 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. 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. The EIB is at the moment working in close collaboration with the EU Member States and the European Commission to finalise criteria and operational guidelines of the newly created Investment Facility, set up by the New ACP-EU Partnership Agreement, signed in Cotonou in June 2000, which will replace the Lomé Convention. Under the Cotonou agreement the total financial aid available amounts to EUR 15.2 billion for 2002-2006, of which EUR 11.3 billion is grant aid from the EU member states, EUR 2.2 billion is managed by the EIB under the Investment Facility, replacing risk capital finance, and up to EUR 1.7 billion is in the form of loans from the EIB's own resources. The Investment Facility is a revolving facility (loan amortizations will be invested in new operations), aiming at supporting technically, environmentally, financially and economically sound projects in the private or the commercially run public sector. The Republic of South Africa became an associate member of the Lomé Convention in 1997. The Bank has a separate lending mandate from the EU's Member States to provide long term financing for RSA totalling EUR 825 million over the period 2000-2006.
(1) The Bank's own resources are raised on the international capital markets. In addition the EIB manages part of the European Development Fund (EDF), constituted by contributions from EU Member States, under mandate, which it uses primarily for risk capital operations.