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Funding and financial instruments

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Funding and financial instruments

The European Investment Bank, the bank of the European Union, has been supporting EU development policies in Africa, the Caribbean and Pacific (ACP) regions since 1963. The Bank has also been an active development partner of the Overseas Countries and Territories (OCTs) since 1968.

Since 2003, the EIB operates in these regions under the ACP-EC Partnership Agreement and the Overseas Association Decision. Financing under these agreements is provided from the European Development Fund (EDF), which is financed from EU Member States’ budgets; and EIB own resources, which the Bank manages on broadly self-financing basis by borrowing on the capital markets.

Within these frameworks, the EIB is entrusted with the management of the Investment Facility, a revolving fund which meets the financing needs of investment projects in the regions with a broad range of flexible risk-bearing instruments.

The Republic of South Africa: Since its transition to a democratic government in 1994, the EU and the Republic of South Africa concluded the Trade, Cooperation and Development Agreement, in which the European Council has entrusted the EIB with four successive mandates for a total lending volume of EUR 2.4 billion.

ACPs OCTs South Africa
Mandate Framework Cotonou Partnership Agreement Overseas Association Decision Trade, Development and Cooperation Agreement
Concluded on 23/06/2000 27/11/2001; a new EU-OCTs partnership agreement is currently being negotiated 11/10/1999
Duration 20 years Until 31/12/2013 Unspecified
Beneficiaries 74 ACP countries 20 OCT countries Republic of South Africa
Sources of Funding European Development Fund (EDF), i.e. Member States Budget European Development Fund (EDF), i.e. Member States Budget EIB own Resources
EIB own Resources EIB own Resources

The EIB provides medium to long-term funding through a complete range of financial instruments, from senior secured loans to flexible risk-bearing financial instruments such as junior loans, equity, quasi-capital and guarantees. In certain cases, these can also be blended with grant funding such as interest rate subsidies or technical assistance.

Different financial instruments can be combined to support the same project. Their terms are adapted to the nature of each project and to the economic situation of the country or situation in which they are situated.

The EIB operates on market-related terms and conditions while offering flexibility: long maturities; grace periods and innovative products.

Beneficiaries:

  • Small and medium-sized enterprises through lines of credits to financial intermediaries and investments in private equity funds;
  • Private enterprises and commercially run public sector entities established in an eligible country by local or foreign investors;
  • Cross-border infrastructure projects with regional benefits.

The EIB Results Measurement (REM) Framework

The EIB seeks to ensure that, for each of the projects that it finances, its involvement provides added value by offering loan conditions and tenors not available otherwise on the market, and enabling significant contributions to improved social, environmental and governance standards in the implementation of the project. In this context, the Bank has implemented the new Results Measurement Framework to strengthen and effectively measure the results and impacts of its operations. Reporting on results will require appropriate aggregation of indicators for different sectors, as well as for the entire portfolio. To the extent possible, REM will harmonize,  results indicators with other financial institutions and thereby simplify client reporting requirements for co-financed operations.




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