European Investment Bank in the Agricultural sector in Africa – challenges and opportunities

1. European Investment Bankin the Agricultural sector in Africa – challenges and opportunities Counter Balance: Challenging the European Investment Bank Desislava Stoyanova, Brussels 2nd February 2009 Counter Balance's mission is to make the EIB an open and progressive institution delivering on EU development goals and promoting sustainable development to empower people affected by its work.

2. The EIB as an example for political regulation under neoliberalism Counter Balance members: • Les Amis de la Terre (France)‏ • urgewald ,Weed (Germany)‏ • Campagna per la Reforma de la Banca Mondiale (Italy)‏ • BothENDS (Netherlands)‏ • Breton Woods Project (UK)‏ • Bankwatch Network (Central and Eastern Europe)‏

3. The EIB – Basic facts • Set up in 1958 under the Treaty of Rome • House bank of the EU; independent status • Owned by 27 EU member states • Active in more than 130 countries all over the world • Headquarters – Luxembourg with increasing number of regional offices (5 in ACP; Warsaw and Bucharest in CEE region)‏ • Transport, energy, water, industry, banking, R&D, oil, mining and gas, telecommunication

4. The EIB – Basic facts Other important data: • Subscribed capital – • 164 808 million Euro • Borrowing and floating bonds on capital markets; AAA rating • Approved loans in 2007 – 56 455 million Euro, of which 756 million for ACP countries

6. EIB Activities Outside the Union • External Lending Mandate (2007-2013) - 27.8 billion euro of Community guarantees compared to 20.7 for the period 2000-2006 • In the ACP countries: • Objective: 'reducing and eventually eradicating poverty consistent with the objective of sustainable development and the gradual integration of ACP countries into the world economy’

7. EIB Activities Outside the Union • The Cotonou agreement (2000) governs EIB loans to the 79 African, Caribbean and Pacific (ACP) • - manages the Cotonou Investment Facility (IF), a risk-bearing Instrument established in June 2003. • (2003-2008) for private sector (2.2 bln EDF/EU + 1.7 bln EIB)and 187 mln € EDF/EU interest rates subsidies(2009-2013) 1.1 bn € EDF/EU + 2.0 bn. EIB • and 400 mln. € EDF/EU interest rates subsidies and TA • - EU-Africa Infrastructure Partnership (220-260 mln)‏ • - ACP-EU Water Partnership

8. EIB as the EU policy bank EU consensus on development – call for “synergies” of EIB’s lending ECJ judgement, November 2008 (case C-155/07): - TITLE XX of the EC Treaty, which deals with “DEVELOPMENT COOPERATION” : “1. Community policy in the sphere of development cooperation, which shall be complementary to the policies pursued by the Member States, shall foster: — the sustainable economic and social development of the developing countries, and more particularly the most disadvantaged among them, — the smooth and gradual integration of the developing countries into the world economy, — the campaign against poverty in the developing countries.”

9. The EIB’s lending priorities outside the EU Outside the EU EIB lending is based on EU external cooperation and development policies. Development: Africa, Pacific and Caribbean (ACP); Republic of South Africa Lending under these mandates focuses on: - Private sector development - Infrastructure development - Security of energy supply - Environmental sustainabilityMainly for European companies...

10. EIB in practice: support for the Agricultural sector in Africa

11. Year Country Project In euro Description 2006 Solomon Islands Kolombangara Forestry Project 3,500,000 Rehabilitation of approximately 3 750 hectares of poor quality tropical hardwood plantation and replacement of ageing Equipment 2005 Mauritania Seph-Nouadhibou 2,500,000 Extension of seafood preparation, freezingand packing plant 2005 Madagascar Aqualma III 5,000,000 Expansion of shrimp farm in Mahajamba delta on north-west coast 2004 Borswana Fabulous Flowers 2,000,000 Production and export of roses 2002 Cameroon Plan Bananes 2002-2006 8,000,000 Modernisation and strengthening of the competitiveness of three bananaplantations in western Cameroon 2001 Kenya Kenya Geraniums 4,400,000 Construction of plant-breeding and propagation facilities in Thika, east of Nairobi 2000 Belize Belize Citrus Sector Operation 8,800,000 Finance for replanting of existing citrus Groves 2000 Madagascar Aquamas Aquaculture 7,000,000 Construction of shrimp farm and packing facility at Baly Bay on north-western coast 1999 Madagascar Moramba Aquaculture 1,000,000

12. EIB in practice: support for the Agricultural sector in Africa • Private sector development? – How to develop the African private sector and which private sector in agriculture • Global loans – financing SMEs through financial intermediaries Where does the money go? Which financial institutions needed for supporting family agriculture and rural development • Financing for large infrastructure projects and agriculture? Support for de-financialise agriculture and not export-oriented

13. Can the Bank show initiative? • Can the EIB use other instruments to show true pro-development approach? • Support the development of the local market – infrastructure not export-oriented • Support small companies and cooperatives • Provide lending on concessional terms with a higher grant component- not to support European private sector

14. Counter Balance: Challenging the European Investment Bank Thank you! www.counterbalance-eib.org Email: info@counterbalance-eib.org