The Kenyan Government and the European Investment Bank - EIB - signed an agreement today paving the way for the opening of an EIB Regional Representation for East and & Central Africa, to be based in Nairobi, Kenya. This is one of three regional representations in sub-Saharan Africa to bring the EIB closer to its customers and reinforce its operations in the field. The other Regional Representaions will be in Dakar, Senegal, for Western Africa, and Pretoria, South Africa, for the Southern Africa region and Indian Ocean.
The Hon. Chirau Ali Mwakwere, Minister for Foreign Affairs and EIB's Mr. Martin Curwen, Director for operations in ACP countries, signed a host country agreement whereby Kenya facilitates the setting up of the Representation, for the benefit of the whole region.
The EIB has been operating in Africa, under successive EU conventions, for some 40 years, managed from Luxembourg. In recent years this task has grown in importance, with the focus of support going to the private sector in Africa and to the improvement of utilities - energy, water, communications - through the reform of state agencies into commercially managed or privatised enterprises.
In the last five years alone the Bank has provided loans and risk capital totalling EUR 650m for investment in the countries that will be within the operating sphere of the Nairobi-based Regional Representation (1) . EUR 250m was provided to the local banking sector to finance Small and Medium-sized Enterprises, small private sector initiatives and micro-finance (the main beneficiary countries being Cameroon, Ethiopia Kenya, Tanzania, Uganda). Amongst other projects, the Bank has signed EUR 25m for power network improvements in Ethiopia, EUR 8m went to modernisation in the banana sector in Cameroon, EUR 12 million to investment in Cameroon railways, whereas EUR 144 million went to the Chad-Cameroon oil export development project. In Kenya, the EIB co-financed EUR 21 million in the Magadi Soda Pure Ash project and in Rwanda the Kigali airport improvement was financed for some EUR 11 million. In Tanzania the Bank provided EUR 35 million for the Dar- es- Salam water supply project and EUR 55m for the Songo-Songo gas development. In Uganda the MTN telecoms project received loans totalling EUR 11 million. In Gabon the EIB participated for EUR 22 million in the connection of Gabon's telecom's company with the SAT3 long distance submarine around Africa and the upgrading of the long distance telecommunications services in Gabon itself as well as with EUR 12m for manganese production.
Under the Cotonou Partnership Agreement between the European Union and the African,Caribbean and Pacific - ACP - countries the EIB is is mandated to channel up to EUR 3.9 billion in long-term finance to ACP projects, as part of a strategy to encourage private sector investment and to build up supporting infrastructure. Complementing EU grant aid, the Bank aims to promote sustainable development and integration of the ACP countries into the world economy.
Out of this amount of EUR 3.9 bn , EUR 2.2 bn comes from the Investment Facility, a revolving fund (for loans and risk capital) set up under the Cotonou Agreement, resourced by the Member States and managed by the EIB. Up to a further EUR 1.7bn may be lent by the Bank from its own resources.
The Nairobi-based Regional Representation is intended to increase the effectiveness of EIB activities and to reinforce its identity with the ACP countries in East and Central Africa. As EIB President Philippe Maystadt said at the launch of the Investment Facility: it recognises the fact that the exercise of EIB's mandate of being the EU's development bank, requires permanent presence in the main regions of Africa.
EIB's Nairobi-based Regional Representation will be fully operational by the end first quarter 2005. It will be at the service of the business community in East & Central Africa, and the Horn of Africa. Potential investors will have a point of contact and advice on European Investment Bank operations and financing availability within the region. Mr. Carmelo Cocuzza will head up the Nairobi office.
Mr. Carmelo Cocuzza has been active in development finance for the past 10 years. He has been involved in EIB operations in the Central African region, especially Cameroon and Gabon, and he headed the Bank's participation in the Chad-Cameroon oil export development project, which was co-financed with the World Bank. Prior to being nominated to head the Nairobi Representation, Mr. Cocuzza was responsible for Bank operations in ASEAN countries, in particular in the Philippines and Indonesia. Before joining the EIB he was a financial analyst with the African Development Bank.
The EIB Regional Representations will complement the existing EU presence in the regions of the European Commission Delegations and the offices or antennae of private sector instruments set up under the Cotonou Agreement: the CDE Centre for the Development of Entreprise which i.a. supports the Pro€invest programme.
The Regional Representations will also seek to increase synergies in the field with the the EIB's partners in the European development financing institutions group, the EDFI, the World Bank group and other and peer institutions.
The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects that 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 Investment Facility, set up by the ACP-EU Partnership Agreement, signed in Cotonou in June 2000. 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 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 (re-flows 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.
(1) Burundi, Cameroon, Central African Republic, Chad, Congo, the Democratic Republic of Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Kenya, Rwanda, Sao Tomé and Principe, Somalia, Sudan, Tanzania and Uganda.