Earlier today the European Investment Bank (“EIB”) agreed to provide a USD 10 million line of credit to the Dominica Agricultural, Industrial and Development Bank (“AID Bank”) to ensure continued availability of public and private sector finance during the financial crisis. The European Investment Bank’s line of credit will promote growth, employment, competitiveness and economic diversification on the island of Dominica. Projects in the manufacturing, industrial, agricultural, infrastructure, energy, health, education and tourism sectors will benefit from easier access to finance.
The package is mainly geared to support small and medium sized enterprises as part of the European Investment Bank’s priority focus on private sector development.
Renewable energy and energy efficiency projects will benefit from a dedicated USD 1.3 million component and will further benefit from an interest rate subsidy to facilitate investment in these sectors.
“The European Investment Bank recognises the importance of assisting local commercial and development banks throughout the Caribbean so that they can continue lending during these difficult financial conditions. We have worked closely with Dominica’s development bank for almost 30 years and look forward to seeing the widespread benefits of this programme in helping SME’s across the island. The dedicated assistance for renewable energy and energy efficiency projects recognises the specific challenges faced by small island states.” said Plutarchos Sakellaris, European Investment Bank Vice President responsible for Africa, the Caribbean and Pacific lending operations.
The Chairman of the Dominica Agricultural Industrial and Development Bank, Mr. Ambrose M.J. Sylvester, in applauding the EIB’s timely financial intervention, said that “This line of credit is extremely important to both the AID Bank and the Government of the Commonwealth of Dominica at this time of challenges resulting from the global financial crisis and will greatly support the Government of Dominica’s efforts towards job creation, foreign exchange earnings and growth and expansion of the local economy by making available financing on affordable terms to viable projects in the sectors which have been targeted”.
The European Investment Bank operates in the Caribbean under the Cotonou Agreement. This line of credit is the first EIB project to materialise under the Caribbean Joint Action Plan that the European Investment Bank signed with the Caribbean Development Bank, Finance for Development (“FMO”), the International Finance Corporation and PROPARCO on May 19, 2010 in the Bahamas.
Notes for Editors:
European Investment Bank
- The European Investment Bank is the European Union’s long-term financing institution. In the Caribbean, the European Investment Bank lends to 27 countries and territories with the support of its Martinique Regional Office.
- While the majority of its lending is focused on the EU, the Bank also helps to implement the EU’s cooperation and development policies outside the EU, acting under specific mandates.
- Since the start of operations in the Caribbean, the European Investment Bank has supported economic activity in the region with loans and equity investment worth over EUR 1.3 billion (USD 1.6 bn). The EIB’s total active portfolio of investments and loans in the Caribbean under the Cotonou Agreement as well as previous Lomé Conventions currently stands at EUR 294m, which represents 11% of the Bank’s overall ACP portfolio.
- The European Investment Bank has, over the last 30 years, financed projects in Dominica for EUR 20 m (USD 25 m), mainly in support of SMEs through lines of credit to AID Bank and in support of energy projects via DOMLEC. The current line of credit more than doubles the European Investment Bank’s lending to AID Bank and represents an increase by almost 50% of its lending portfolio on the island.
- The Dominica Agricultural Industrial and Development Bank, is the only development bank on the island of Dominica. It commenced operations in 1971, 39 years ago, and is mandated to promote and influence the economic development of Dominica by providing financing to viable projects in the productive and service sectors of the Commonwealth of Dominica.
- The AID Bank has a diversified portfolio including loans for both economic and social activities and obtains funding from regional and international agencies such as the Caribbean Development Bank and the European Investment Bank.
- The projects funded from previous lines of credit from the European Investment Bank include several tourism accommodation facilities, a telecommunications operation, and a major tourism attraction.
- For the financial year ended June 2010, the AID Bank approved loans totalling XCD $41.9 m (EUR 12.38 m or US$15.52), the highest level of approvals recorded in any one year in the history of the institution.