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http://www.eib.org. COTONOU AGREEMENT. COTONOU AGREEMENT: EIB’S MISSION. Private sector support Catalyst for local savings and Foreign Direct Investment Through: A new Investment Facility (IF) of EUR 2.2bn for ”risk capital” loans Long-term loans on own resources for EUR 1.7bn

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  1. http://www.eib.org

  2. COTONOU AGREEMENT

  3. COTONOU AGREEMENT: EIB’S MISSION • Private sector support • Catalyst for local savings and Foreign Direct Investment • Through: • A new Investment Facility (IF) of EUR 2.2bn for ”risk capital” loans • Long-term loans on own resources for EUR 1.7bn • All sectors with debt service capacity.

  4. COTONOU AGREEMENT – Types of Project • Public or private borrowers, in productive sectors • Specific project or programme – greenfield, expansion, rehabilitation, feasibility study • Larger projects (Project cost>10m EUR): direct EIB • Smaller projects (Project cost<10m EUR): indirect • Technical, environmental, financial, economic criteria; competitive tendering • EIB financing < 50% of project cost

  5. COTONOU AGREEMENT – Types of Financea) Ordinary Loans • Loans on EIB own resources • Long-term loans (up to 20 years) • Foreign currency (EUR, USD) • First-class security/guarantee required • Standard EIB rate (AAA borrowing+a few bps), fixed or variable basis

  6. COTONOU AGREEMENT – Types of Financeb) Cotonou Facility Loans • Foreign or local currency(availability subject to internal limits) • Guarantees required (ie project risks) • Interest rate a function of risk (eg mark-up or link to variations in sales volume or price) • Long-term (up to 20 years)

  7. COTONOU AGREEMENT – Types of Finance c) Cotonou Facility Equity/Quasi-equity • To support the capital base of a project (eg preference shares, participating loan) • Normally EIB not a direct ordinary share-holder in industrial companies • EIB can be direct investor in financial institutions or investment funds (subject to internal limits)

  8. APPROACHING EIB FOR FINANCELarger projects: telephone/write/fax/e-mail, with outline of project and financing neededSmaller projects: approach local banksFeasibility (or at least pre-feasibility) must already have been completed, financial evaluation and forecastsGovernment “no-objection” will be required

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