EIB outside Europe: Africa and the Middle East Flavia Palanza Director Facility for Euro-Mediterranean Investment and Partnership 4 October 2013
1. The European Investment Bank: The EU Bank 2. EIB Operations in Africa and the Middle East 04/12/2013 2
The European Investment Bank, the EU Bank European Union s long-term lending bank set up in 1958 by the Treaty of Rome. Shareholders: 28 EU Member States Within the European Union Convergence Small and medium-sized enterprises (SMEs) and mid-cap enterprises Environmental sustainability Knowledge Economy Trans-European Networks (TENs) Sustainable, competitive and secure energy Outside the European Union Private sector development Infrastructure development Security of energy supply Environmental sustainability FDI Support to transition 04/12/2013 3
EIB operations outside EU: an overview EIB supports investment projects in the 28 EU Member States and 150 non-member countries throughout the world. 04/12/2013 4
Maximum lending authorised per non-eu region 2007-2013* EUR million EXTERNAL LENDING MANDATE with EU GUARANTEE - CEILINGS 29,484 Pre-Accession countries 9,048 Neighbourhood and Partnership countries 13,548 (i) Mediterranean 9,700 (ii) Eastern Europe, Southern Caucasus and Russia 3,848 Asia and Latin America (ALA) 3,952 (i) Latin America 2,912 (ii) Asia 1,040 Republic of South Africa 936 Climate change mandate 2,000 COTONOU MANDATE (2008-2013 Second Financial Protocol) ACP countries 5,137 * Similar amounts are expected for 2014-2020 04/12/2013 5
1. The European Investment Bank: the EU Bank 2. EIB Operations in Africa and the Middle East 04/12/2013 6
EIB operations in Africa and the Middle East: products LOANS Senior Subordinated Global loans (intermediated) QUASI EQUITY Participating Conditional Convertible loans Direct Indirect EQUITY GUARANTEES ----------------------------------------------------------------------------------------------- GRANT FINANCE FOR TECHNICAL ASSISTANCE identification/preparation/implementation 04/12/2013 7
EIB priority sectors in Africa and the Middle East Local private sector development Banking and financial sector Large industrial companies Small and medium size entreprises Microfinance institutions Economic and social infrastructure Energy Transport Water and Sanitation Telecommunications Urban Development Health, Education Climate change mitigation 04/12/2013 8
Results for 2002-2012 in Northern Africa and Middle East: Over EUR 14.2bn EUR m Energy Transport Telecommunica tions Industry Environment Human capital Credit lines Private equity Urban Development Tunisia 3,132m Israel 792m Syria 1,059m Morocco 3,590m Algeria 636m Gaza/West Bank 60m Egypt 3,562m Lebanon 744m Regional 193m Jordan 449m (October 2002 to December 2012) 04/12/2013 9
EIB lending in Africa 2003-2012 Total signatures of +/- EUR 6.1 bn 64% of the portfolio relates to private sector operations 14% 4% 1% 5% 8% 2% 3% 2% 22% 22% 49% 8% 46% 45% 41% 12% 32% 4% 4% 13% 23% 8% 45% 3% 16% 7% 2% 1% 11% 18% 53% 24% 25% 11% 13% 5% West Africa and Sahel Caribbean Central and Eastern Africa Pacific Southern Africa and Indian Ocean Regional Africa and ACP States Energy Water, sewerage Transports Telecommunications Financial services Credit lines Industry Agriculture, fisheries, forestry Services, incl. tourism 04/12/2013 The way forward until 2020: EUR 1 to 1.2 billion for 25 to 30 projects per year 10
Project examples from the Northern Africa: Transport and telecommunications This sector is one of the main beneficiaries of EIB loans with financing of almost EUR 2.4 billion In 2012 Routes Rurales IV Project (Amount: EUR 100m) finance the final phase of Morocco's second National Rural Roads Programme (PNRR-2) Which aim to make nearly 3 million rural dwellers less isolated ensuring that 80% of the rural population have access to the road network compared to 54% before the project was launched. Autoroute El Jadida-Safi Project (Amount: EUR 240m) to Financing the new motorway between El Jadida and Safi, a key link in Morocco s motorway network 04/12/2013 11
Energy and Water Centrale Solaire de Ouarzazate Project to support solar energy generation (Amount: EUR 100m) The project is part of the Moroccan Solar Plan. It will generate the energy required to power a city of 250 000 inhabitants in its first phase alone Aim to promote the production and use of renewable energy in the country as well as creating jobs Project: Programme National Assainissement (Amount: EUR 20m) To improve the wastewater collection and treatment rates of small and medium-sized municipalities 80% rate of connection to the sanitation network in urban areas and a 60% wastewater treatment rate by 2020 04/12/2013 12
Project examples from Sub-Saharan Africa: Credit Lines and Agriculture Private Enterprise Finance Facility II (Amount: EUR 20m) The Private Enterprise Finance Facility II programme will provide new finance for Kenyan companies seeking long-term loans and will reduce the risk of interest rate fluctuations. Small companies, a crucial segment essential for growth in Kenya, will be able to make use of three-year loans through this facility. Kenyan small businesses have benefited from more than EUR155m of European Investment Bank funding since 1991 this has played a crucial role in promoting long-term lending to private sector companies in the country. New Forests Company Forestry Project (Amount: EUR 9.3m) The objective of the project in Uganda is to plant fast growing trees for harvesting and sale as poles and round log. The project will generate environmental and social benefits In particular, it will create large employment opportunities and its extensive community development programme will help alleviate poverty in the surrounding rural areas. 04/12/2013 13
Urban Infrastructure and Industry Shelter Afrique (Amount: EUR 15m) Shelter Afrique is the only pan-african development finance institution that exclusively promotes the development of the housing and real estate sector in Africa. Shelter Afrique will provide EIB backed loans to local developers engaged in the construction of eligible affordable housing estates - including the provision of related community infrastructure and services such as clean water, sanitation, power and roads, as well as site clearance and preparation. It is expected that projects will be developed in a number of sub-saharan countries, starting with Kenya and Rwanda and that schemes will be integrated into relevant national and local urban development plans. Derba MIDROC Cement Factory (Amount: EUR 33m) Derba MIDROC Cement Plc, Ethiopia s biggest cement factory will produce 8,000 tons a day and reduce the need for landlocked Ethiopia to import building materials essential for continued growth of construction, housing and infrastructure in the country. Supported by EUR 33m in long-term funding provided by the EIB, the Derba plant is expected to provide employment for 500 people and new transport, delivery and retail jobs for more than 10,000. 04/12/2013 14
Unlocking investment opportunities The opportunities equation: Potential large market (total population over 380 million for MENA, 1 bn for Sub-Saharan Africa) + large infrastructure needs + competitive advantages in sectors : Renewable energy: Highest world rates of sunlight duration of more than 3,500 hours per year; progressive awareness by governments on potential. Study carried out by the EIB shows that pipeline of RE project in the MENA amounts to 10.3 GW for 90 projects. EIB financed flagship project CSP Plant in Morocco (Ouarzazate). Transport sector: key transport interconnections still missing. EIB working on the development of key logistics platform in the region with connection to the hinterland. Health, education and urban development: large demand for projects in the social sectors. Heritage and tourism: Economic performance of tourism in MENA region has been surprising, given the security risks, natural disasters, oil price rises and economic uncertainties in the region. Potential for growth is evident. EIB is deploying Medinas 2030 initiative for sustainable and integrated rehabilitation of historic city centers. Niche markets: opportunities in mobile banking sector, agri-business, health and 04/12/2013 pharmaceutical sectors, media and IT sectors, broadband connections etc 15
Useful links EIB website: www.eib.org Annual reports: http://www.eib.org/infocentre/publications/all/femip-2012-annual-report.htm http://www.eib.org/infocentre/publications/all/femip-10years.htm http://www.eib.org/infocentre/publications/all/investment-facility-annual-report-2012.htm http://www.eib.org/infocentre/publications/all/10-years-acp-investment-facility.htm Projects pipeline: http://www.eib.org/projects/pipeline/index.htm Products: http://www.eib.org/products/index.htm 04/12/2013 16