The European Investment Bank's (EIB) loans to the African, Caribbean and Pacific (ACP) countries signatories of the Lomé Convention, and to the Republic of South Africa, totalled EUR 491 million (1) in 1999. Of this, EUR 346 million came from the Bank's own resources, raised on the international capital markets, and EUR 145 million from risk capital resources from the European Development Fund (2).
Lending activities in the area in 1999 confirm the trend of an increasing emphasis on private enterprise, representing 40% of total lending. Both large and small companies have benefited from EIB loans. A particular highlight was the large number of ACP-based financial intermediaries drawing on EIB credit lines to finance small and medium-sized investment projects by small companies. These credit lines also contribute to the development of the domestic financial sector, by building up their technical and financial capacities.
The following lending operations were signed during the last quarter of 1999 (3):
- Aruba: EUR 2.5 million (of which EUR 500 000 from risk capital resources) to Aruban Investment Bank NV for medium to long-term investment by SMEs in manufacturing, agro-industry, tourism, transport and related services sectors.
- Cameroon: EUR 15 million (of which EUR 10 million from risk capital resources) has been granted jointly to Banque Internationale pour l'Epargne et le Crédit, Société Commerciale de la Banque - Crédit Lyonnais and Standard Chartered Bank Cameroon for the financing of industry, wood processing, tourism, services and commercial infrastructure. The loan aims to promote private sector investments, including rehabilitation of newly privatised companies, and the development of SMEs.
- Dominica: EUR 10 million to the Government of the Commonwealth of Dominica for on-lending to Dominica Electricity Services Ltd (DOMLEC) for the construction of a new thermal power plant and related transmission lines and substations, in order to cope with growing electricity demand.
- Kenya: a total of EUR 73 million (of which EUR 27 million from risk capital resources). A loan of EUR 41 million went to the Government of Kenya for on-lending to Kenya Power and Lighting Company Ltd (KPLC) to part-finance the transmission lines and sub-station components of the Olkaria II project, a new geothermal power station that will supply electricity to Nairobi. A second loan of EUR 9 million to a private company, Mabati Rolling Mills Ltd, will contribute to finance the installation of new equipment for coating (galvanising) sheet steel at its new plant near Mombassa. A third loan of EUR 23 million to the Government of Kenya to on-lend to ten financial intermediaries for financing small and medium-scale private sector investments in manufacturing, agro-industry, tourism, mining and related services; banks participating in this "Kenya Global Private Enterprise" scheme are: ABN-AMRO, Barclays Bank of Kenya, Crédit Agricole Indosuez, Development Bank of Kenya, East African Development Bank, Industrial Development Bank, Kenya Commercial Bank, National Bank of Kenya, Stanbic Bank Kenya and Standard Chartered Bank Kenya.
- Kiribati: EUR 2 million from risk capital resources to the Development Bank of Kiribati for the financing of small and medium sized enterprises in the manufacturing, agro-industrial, fishing, tourism, transport, productive infrastructure and related service sectors.
- Madagascar: a total of EUR 9 million from risk capital resources. EUR 8 million has been made available to BNI-Crédit Lyonnais, Banque Malgache pour l'Océan Indien, BFV-Société Générale and Union Commercial Bank for the financing of small and medium scale private sector investments in industry, agro-industry, fisheries, mining, transport, tourism and related services. EUR 1 million to Société Aquaculture de la Mahajamba for the construction of brood stock ponds and a shrimp hatchery.
- Mozambique: a total of EUR 17 million (of which EUR 13.5 million from risk capital resources). A loan of EUR 7 million was granted to Maragra Açúcar for the rehabilitation and upgrading of a sugar mill and an irrigated sugar cane plantation in Southern Mozambique. EUR 10 million to seven financial intermediaries for financing small and medium-scale private sector investments in manufacturing, agro-industry, tourism, mining and related services; banks participating in this scheme are: Banco Austral Sarl, Banco Comercial de Moçambique Sarl, Banco Comercial e de Investimento, Banco de Fomento, Banco Internacional de Moçambique, Banco Standard Totta de Moçambique and ulc (Moçambique) Sarl.
- Namibia: EUR 13 million (of which EUR 2.5 million from risk capital resources) to the Government of Namibia to on-lend to the City of Windhoek for basic infrastructure works in the City's water, sewerage, electricity and roads sectors; the major component of the project is a plant to re-cycle wastewater into potable water, the management of which will be contracted to a private sector operator.
- Senegal: EUR 18 million to Société Nationale des Télécommunications du Sénégal (SONATEL) for the development of telephone services in the country, in the context of an overall investment programme covering the period 1998 to 2006. Current investments include the expansion of the access network and the supply of additional switching equipment to provide for connection of 91 000 new subscribers, completion of an optical fibre transmission ring in the south of the country, access to submarine cables, and the development of rural telephony and the mobile telecommunications network.
- South Africa: EUR 135 million for three projects: EUR 40 million to Central Energy Fund (Pty) Ltd to part finance the extension of the Mossel Bay satellite gas field, as well as related condensate import facilities. EUR 45 million to N3 Toll Ro ad Concessions (Pty) Ltd, for the modernisation and upgrading of the N3 road between Heidelberg (Gauteng area) and Cedara (close to Pietermaritzburg in KwaZulu-Natal). EUR 50 million to Development Bank of Southern Africa (DBSA) for financing small and medium-scale infrastructure projects, primarily in the water and sanitation sectors.
- Vanuatu: EUR 5 million from risk capital resources to the Republic of Vanuatu for on-lending to Vanuatu Airports Corporation (VAC). The loan will contribute to the upgrading of Bauerfield Airport near the country's capital Port Vila, to meet International Civil Aviation Organisation (ICAO) standards. The project is part of a programme of airport rehabilitation focussing on those airports that are likely to play a role as international gateways to the country.
- Zimbabwe: EUR 12 million to Zimbabwe Electricity Supply Authority (ZESA) for investment in the central and south-eastern part of the national electricity transmission network, to reinforce it to meet increasing demand and to improve the network's reliability.
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. Financing from the EIB in South Africa (EUR 585 million by end-1999) is provided under a separate bi-lateral agreement. The Republic of South Africa became an associate member of the Lomé Convention in 1997.
(1) The conversion rates used by the EIB for statistical purposes during the current quarter: 1 EUR = 6.55657 FRF, 0.621700 GBP, 1.00460 USD.
(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.
(3) Projects signed from January to September were listed in a press release dated 28 September 1999.