Trade-Related Financial Services - European Commission
The ACP Investment Facility, a €3.1 billion79 risk-bearing revolving fund geared to fostering private investment in ACP countries, is financed by EU Member States through the European Development Fund (EDF). The Facility was launched in April 2003 by the ACP and EU partners and is managed by the European Investment Bank (EIB). The Facility, a risk-sharing financial instrument, replaced the former risk-capital funds of the Member States, which were also managed by the EIB. The initial five-year financial protocol governing the first tranche of funds has been replaced by a second financial protocol (covering the period 2008-2013). To date, the EIB is entrusted with the management of the ACP Investment Facility and grants for financing interest rate subsidies worth €400 million (of which up to €40 million can be used to fund project-related technical assistance). In view of the phasing-out of the EU-ACP sugar protocol, up to €100 million can be allocated to assist ACP sugar producers in adapting to changing world market conditions. In addition to the Investment Facility, the EIB can lend up to a further €2 billion from its own resources in ACP countries over the period 2008-2013. Operations carried out under the Bank’s own resources are covered by a specific guarantee from EU Member States.
The Latin America Investment Facility (LAIF) is an innovative financial mechanism from the Development Cooperation Instrument (DCI). The primary objective of LAIF is to finance with a mix of grants and loans, from European and regional development banks as well as contributions from partner countries, key infrastructure projects in transport, energy, social and environmental sectors, as well as to support private sector development in the Latin American region. Particularly by financing transport infrastructure and SME development projects, it contributes also to trade capacity building activities in this region.
The total LAIF program budget for the period 2009-2013 was approved at €125 million, from which €40 million were allocate for 2011. A total project volume of more than €4.3 million has been leveraged until 2012, within the respective facility.
The Central Asia Investment Facility (IFCA) and Asian investment Facility (AIF) are innovative financial tools from the financing instrument for development cooperation (DCI).
Both IFCA and AIF aim at supporting focal priorities for Asia such as economic development or trade and infrastructure investments via support to SMEs. Until now, grants and loans from European Finance Institutions as well as own contributions from the Asia partner countries and co-financing from other sources have been used to leverage about €314 million of total project volume within the IFCA and €177 million in the AIF. The European Commission has reserved an amount of €65 million for the IFCA for the period 2010-2013. The contribution to AIF was until now of €30 million out of the DCI regional envelopes.
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The EU also supports investment projects in the partner states in its neighbourhood. To this end, the EU has created the Neighbourhood Investment Facility (NIF), whose purpose is to use grant resources from the European Commission and additional grants from EU members to leverage loans from European finance institutions as well as own contributions from partner countries.
For the period 2007-2013, the European Commission has allocated €745 million to the NIF together with additional contributions from EU member states which amount to €70 million. These grants leverage a total project volume of more than €18 billion to infrastructure and private sector projects which represent an important element of the trade capacity building activities and investments facilitating trade operations.