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

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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

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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

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1. The European Investment Bank: the EU Bank

2. EIB Operations in Africa and the Middle East

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EIB operations in Africa and the Middle East: products

LOANS

Senior

Subordinated

Global loans (intermediated)

QUASI EQUITY

Participating

Conditional

Convertible loans

EQUITY

Direct

Indirect

GUARANTEES

-----------------------------------------------------------------------------------------------

GRANT FINANCE FOR TECHNICAL ASSISTANCE

identification/preparation/implementation

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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

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Morocco

3,590m

Tunisia 3,132m

Egypt 3,562m

Syria 1,059m

Lebanon 744m

Jordan 449m

Gaza/West Bank 60m

Israel

792m

Regional 193m

Algeria 636m

EUR m

Energy

Transport

Telecommunica

tions

Industry

Environment

Human capital

Credit lines

Private equity

Urban

Development

Results for 2002-2012 in Northern Africa and Middle East:

Over EUR 14.2bn

(October 2002 to December 2012)

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EIB lending in Africa 2003-2012

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64% of the portfolio relates to

private sector operations Total signatures of +/- EUR 6.1 bn

The way forward until 2020: EUR 1 to 1.2 billion for 25 to 30 projects per year

West Africa and Sahel Caribbean Central and EasternAfrica

Pacific Southern Africa andIndian Ocean

Regional Africa andACP States

24%

11%

45%

25%

13%

4%

8%

18%

4%

23%

12%

11%

5%

16%

2%

32%

13%

8%

3% 1%

53%

22% 49%

22%

46%

7%

41%

14% 5%

45%

2% 1%

2%

4% 8% 3%

Energy Water, sewerage Transports Telecommunications Financial services Credit lines Industry Agriculture, fisheries, forestry Services, incl. tourism

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Project examples from the Northern Africa: Transport and

telecommunications

In 2012

This sector is one of the main beneficiaries of EIB loans with financing of

almost EUR 2.4 billion

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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

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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

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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

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.

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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.

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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

pharmaceutical sectors, media and IT sectors, broadband connections etc…

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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

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