The European Investment Bank (EIB), the European Union's long-term financing institution, is providing a EUR 33 million loan from own resources (1) for financing air traffic control equipment for West and Central Africa and Madagascar. This loan is a first loan under a facility approved by its Board of directors in a total amount of EUR 66 million. The project will contribute to improve air traffic safety between Africa and Europe and Africa and the Indian Ocean airspace along standards defined by the International Civil Aviation Organisation (ICAO). It will upgrade technology in use for African air traffic control by a transition from a ground-based to a satellite-based system, which is compatible with the ICAO's new air navigation plan.
The borrower is the « Agence pour la sécurité de la navigation aérienne en Afrique et à Madagascar » (ASECNA). ASECNA is an international organisation grouping 14 West and Central African nations, Madagascar and France for the air traffic control in that part of Africa as well incoming, outgoing and cross continent air traffic. It is an outstanding example of EU-ACP and inter ACP cooperation for a public utility (air traffic control).
The loan will provide term financing and allows for an enhanced upgrading of African air safety infrastructure to ensure, in line with customer demand and IATA regulation, the reliability of growing air traffic, a key factor in the economic development of the African continent.
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.