Luxembourg, 19-11-2015 — /EuropaWire/ — The ACP Investment Facility, which has approved €5.7 billion worth of development projects over the last decade, adds value to the European Union’s development efforts and fits in well with its policy objectives, according to a new report from the European Court of Auditors. The auditors looked at investment deals signed between 2011 and 2014 in Kenya, Tanzania, Uganda, Nigeria, Cameroon, Malawi, Mauritius and Haiti.
Set up in 2003, the ACP Investment Facility obtains its capital from the European Development Fund and is managed by the European Investment Bank. It provides medium- to long-term financing and aims to deliver sustainable economic, social and environmental benefits. The Facility offers funding on market-based terms to help ensure than it does not crowd out local financing institutions. The primary focus is on the support of private- and commercially-run public entities. Projects have to ensure high environmental and social standards.
The auditors found that the Facility adds value to EU development cooperation with ACP countries. At the end of 2014, credit lines represented 28 % of the Facility’s portfolio, compared with 14 % at the end of 2010. The increased share reflects the ongoing importance of the long-term financing offered by the Facility, say the auditors. The Facility also had a positive catalytic effect in that it attracted additional funding.
“Recent changes to the Facility offer enormous potential to tie in even better with other EU development activity by focusing on projects which generate impact and reduce poverty”, said Klaus-Heiner Lehne, the Member of the Court of Auditors responsible for the report.
The Facility supports infrastructure projects in electricity supply and generation, telecommunications, water and sewerage, as well as transport, health and education. It is participating in the financing of the €600M Lake Turkana Wind Power Plant project, one of the largest single private investments ever made in Kenya and the largest wind farm in sub-Saharan Africa. Financing from the Facility amounts to €150M. The Facility also invested €5M in a microfinance fund, targeting microfinance institutions and small producers active in fair trade throughout Africa. Total capital raised was €22M. Without support from the Facility, say the auditors, this project would most probably not have taken place.
The auditors did, however, note that the contractual obligation to inform end beneficiaries about EIB/Investment Facility funding is not always followed and technical assistance does not always target small- and medium-sized enterprises. They made recommendations in their report on how to address these issues.
The purpose of this press release is to give the main messages of the special report adopted by the European Court of Auditors. The full report is on www.eca.europa.eu
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SOURCE: European Court of Auditors