The European Investment Bank (EIB), the European Union's long-term financing institution, is lending EUR 3.7 million from risk capital resources for part-financing construction of a complete cotton spinning mill on the outskirts of Bamako.
The borrower, Société de Fils et Tissus Naturels d'Afrique (FITINA) S.A., is a privately owned company incorporated in Mali. In addition to a Mali private investor, its shareholders are textile sector operators in Europe (France) and Africa (Mauritius and Côte d'Ivoire). The project will be co-financed by local commercial banks.
The EIB is also supporting the Mali cotton sector with a EUR 2 million loan, under a pilot programme, to KAFO JIGINEW for onlending through 15 cooperative rural savings and loan associations in Kafo Jiginew's network in southern Mali. The funds are to be used for financing agricultural inputs and equipment for the cotton-producing members of these selected rural savings associations.
Mr J. C. Biancarelli, EIB Director General, commented during signature of the two loans: "the establishment of FITINA in Mali constitutes an important step in the development of the country's industrial fabric and makes for more effective harnessing of Mali's cotton resources, whose quality is internationally recognised. Against the general backdrop of the reform of the cotton sector, which plays a key role in Mali's economy, the project accommodates the Mali Government's objective of increasing the proportion of cotton processed locally in order better to safeguard the sector against price fluctuations on the world markets" and "the KAFO JIGINEW operation will support the efforts of all cotton sector partners to increase producers' control over the provision of necessary services, in particular the supply of agricultural inputs".
The latter operation represents an example of the forms of assistance developed by the EIB to underpin sound microfinance institutions in their strategy of growth and diversification of their portfolio of activities, enabling them to become fully-fledged players in the financial sector.
The EIB was created in 1958 under the Treaty of Rome to finance capital projects furthering major European Union (EU) policy objectives. It also participates in implementing EU co-operation policy towards third countries that have concluded co-operation or association agreements with the Union. The Fourth Lomé Convention was established in 1989 for a duration of 10 years and is accompanied by two Financial Protocols spanning the periods 1991-1995 and 1996-2000. The total financing package available under the second Protocol amounts to EUR 14.6 billion, consisting of EUR 12 billion in grant aid from the EU Member States, EUR 1 billion in risk capital drawn from the European Development Fund (EDF) and managed by the EIB, and up to EUR 1.6 billion in the form of loans from the EIB's own resources.