From Africa Recovery, Vol.14#3 (October 2000), Briefs page

EU fund for private enterprise in ACP states

The European Union and the Africa, Caribbean and Pacific (ACP) nations announced in mid-September the inauguration of a 2.2 bn euros ($2.04 bn) investment fund to strengthen private sector activities in ACP countries and attract greater foreign direct investment (FDI). The investment facility will operate as a revolving loan fund, providing both concessional and commercial-rate loans and loan guarantees. Unlike similar bilateral programmes, the facility will not require ACP businesses to have a European partner; nor will the fund restrict its lending only to the private sector. Public sector projects intended to strengthen private enterprise, such as telecommunications and other infrastructure, also will be eligible. EU officials say they hope to leverage as many as 8 euros in new FDI for every euro provided through the scheme.

The investment facility was established under the Cotonou accord, a trade and development cooperation agreement between the EU and the ACP member states, signed earlier this year to replace the Lomé IV pact, which had expired (see Africa Recovery, July 2000). The facility is part of an EU development assistance package expected to be worth 13.5 bn euros over the first five years of the Cotonou pact. The fund is still a year or two away from making its first loans, however, because it must first be ratified by all the parliaments of the EU and ACP member states. The European Investment Bank will administer the programme.

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