Tag Archives: Edf

European Water Facility for the ACP countries

European Water Facility for the ACP countries

Outline of the Community (European Union) legislation about European Water Facility for the ACP countries

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > African Caribbean and Pacific states (ACP)

European Water Facility for the ACP countries

Document or Iniciative

Communication of 26 January 2004 from the Commission to the Council and the European Parliament on the future development of the EU Water Initiative and the modalities for the establishment of a Water Facility for ACP countries [COM(2004) 43 final – Not published in the Official Journal].

Summary

A WATER FACILITY FOR ACP COUNTRIES

The Water Facility for African, Caribbean and Pacific (ACP) countries, is intended to serve as a catalyst by supporting development and reform of the relevant sectoral policies and through flexible and innovative methods of financing water supply and sanitation projects and programmes.

Basic principles

The Facility is based on three key principles:

  • Governance: The Water Facility is to concentrate its activities on ACP countries which have a sound national water policy or which are strongly committed to developing one, and on countries that prioritise spending on social sectors. It will help those countries to establish the institutional and regulatory framework necessary to attract additional financial resources;
  • Ownership: The facility is entirely demand-driven. It will be an instrument for supporting and deepening the involvement of ACP actors in the design and implementation of water policies;
  • Innovation and flexibility: In order to achieve maximum impact a creative combination of grants and other sources are envisaged to fund basic infrastructure. The proposed grants could constitute the necessary seed capital to get projects off the ground and be a tool in forging the public-private partnerships needed to increase funding.

Activities funded

The Water Facility will mainly fund two types of activity: improving water management and governance, and cofinancing drinking water and sanitation infrastructure.

The activities relating to improved water management and governance are:

  • institution building and support for reforming the sector;
  • integrated management of water resources at national level and at that of ACP river basins.

For the second category of activities the Water Facility uses flexible and innovative methods to finance water and sanitation projects and programmes for low-income users and socially disadvantaged areas.

Management of the Facility

The organisational structure for the management of the Water Facility has been set up within the European Commission, staffed with EU officials. The officials on this team are responsible for establishing implementing procedures for the facility.

However, in the preparation and implementation of projects to be financed, maximum use should be made of the expertise available outside the Commission, in particular through expert groups and collaboration with the European Investment Bank and other development finance institutes, and, where appropriate, the private sector and non-governmental organisations (NGOs).

The projects are selected on the basis of a call for proposals open to most of the state and non-state actors concerned in the ACP and EU countries. Proposals are selected on the basis of criteria defined by the European Commission in the call for proposals, which must be consistent with the general objectives of sustainable development and the EU’s water management policy in the developing countries and with the integrated river basin water management programmes, and take account of factors such as the implementing capacity of the partners and the maturity of the project.

THE FUTURE OF THE EU WATER INITIATIVE

The Communication also assesses the outlook for the EU Water Initiative launched during the World Summit on Sustainable Development.

It finds that the Initiative has made considerable progress, noting that the drinking water and sanitation objectives will have to be achieved within the framework of integrated management of the river basins.

The Initiative concentrates on Africa, the countries of Eastern Europe, the Caucasus and Central Asia, the Mediterranean and Latin America.

The Commission considers that the progress made is not sufficient to meet the Millennium Development Goals without a significant increase in financing and improved mechanisms to help development aid attract other resources (private sector, development banks); the creation of a European Water Facility will serve both these purposes.

BACKGROUND

The Communication follows up on the EU Water Initiative launched at the World Summit on Sustainable Development in Johannesburg in September 2002. The summit confirmed the objective, set in the context of the Millennium Development Goals, of halving the number of people in the world who do not have access to drinking water or basic sanitation by 2015.

Unsafe water causes more deaths than war does. More than 1 100 million people in the world have no access to drinking water, and 2 400 million do not have access to adequate sanitation. In Africa more than 40 % of the population is without drinking water, and even more lack appropriate sanitation services.

Related Acts

Decision No 7/2005

of the ACP-EC Council of Ministers of 22 November 2005 concerning the use of a second allocation of EUR 250 million from the conditional EUR 1 billion under the ninth EDF to be used for the second instalment of the ACP-EU Water Facility [Official Journal L 48 of 18.2.2006].
The Decision officially authorises allocation of a second tranche of EUR 250 million to the ACP-EU Water Facility.


Decision 2004/632/EC

of the ACP-EC Council of Ministers of 6 May 2004 on the use of the reserve of the long-term development envelope as well as resources from the Investment Facility of the ninth European Development Fund for the establishment of an ACP-EU Water Facility [Official Journal L 289 of 10.9.2004].
The Decision officially authorises allocation of a first tranche of EUR 250 million to the ACP-EU Water Facility and provides for the release of a further EUR 250 million.

Council Decision of 26 April 2004 on the position to be adopted by the Community in the ACP-EC Council of Ministers concerning a Decision on the use of the reserve of the long-term development envelope as well as resources from the Investment Facility of the ninth European Development Fund (EDF) for the establishment of an ACP-EU Water Facility [Not published in the Official Journal].
The Council provides that the reserve of the long-term development envelope as well as resources from the Investment Facility of the ninth EDF are to be used for the establishment of the ACP-EU Water Facility.

Council Decision 2004/289/EC of 22 March 2004 concerning the partial release of the conditional amount of EUR 1 billion under the ninth European Development Fund for cooperation with African, Caribbean and Pacific countries in order to establish a Water Facility [Official Journal L 94, 31.03.2004].
In this Decision the Council agrees to establish the Water Facility for ACP countries. In accordance with the provisions of the Financial Protocol to the ACP-EC Partnership Agreement, the Council notes that the level of commitments and disbursements at the end of 2003 in conjunction with forecasts for the period 2004 to 2007 allows the release of EUR 500 million from the ninth EDF out of the budget of EUR 1000 million for the establishment of the Water Facility. The Council approves the release an initial tranche of EUR 250 million. Decisions will be taken later on the remaining sum.

Budgetisation of the European Development Fund

Budgetisation of the European Development Fund

Outline of the Community (European Union) legislation about Budgetisation of the European Development Fund

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > African Caribbean and Pacific states (ACP)

Budgetisation of the European Development Fund

Document or Iniciative

Communication from the Commission to the Council and the European Parliament of 8 October 2003: “Towards the full integration of cooperation with ACP countries in the EU budget” [COM(2003) 590 final – not published in the Official Journal].

Summary

In this communication, the Commission recommends the incorporation into the EU budget of the aid granted to the ACP and OCT countries under the European Development Fund (EDF).

A POLITICALLY DESIRABLE CHANGE

Countering the risks of marginalisation

With the extension of the external relations of the Union, the conclusion of cooperation agreements with numerous other regions and the increase in the amounts earmarked for external aid in the budget, separate financing for the ACP countries is no longer a privilege, rather the opposite.

These cooperation agreements with numerous regions around the world, like the Cotonou Agreement broach a series of subjects of common interest: political dialogue, trade arrangements, democracy objectives, etc. After the integration of the EDF into the budget, all the major geographical programmes will be part of the structure of the budget. From a technical point of view, that will permit increased synergy between the programmes centred around the national/geographical approach and those that pursue thematic objectives.

The cooperation programmes with the ACP countries have created a wealth of experience and good practice that is worthy of application to other programmes pursued in other developing regions. The incorporation of the EDF will facilitate the mutual enrichment of the different programmes.

The incorporation of the EDF into the budget will also facilitate cooperation between the regions of Africa. A similar gain in coherence could be brought about for Caribbean countries in relation to Latin America and for the Pacific group in relation to Asia.

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Towards greater independence

With the budgetisation of the EDF, the financing of EU-ACP cooperation would gain independence from voluntary contributions determined as a result of national viewpoints and would present better prospects for continuity. For Member States, that would signify that financial cooperation with the ACP was genuinely placed at the EU level.

Towards stronger legitimacy

The EDF is currently the only expenditure that is not subject to authorisation by the European Parliament. Incorporating the EDF into the budget would put an end to this anomaly, thereby strengthening the public legitimacy of the EU’s external assistance. Not being part of the budget, cooperation with the ACP countries is clearly excluded from one of the most important political decision-making processes of the Union. The already significant risk that relations with the ACP countries are marginalised in comparison with other economically more advanced regions of the world is exacerbated by their lack of visibility in the political arenas of the Union. Furthermore, the influence of the ACP-EU Joint Parliamentary Assembly will be enhanced through its members in the European Parliament.

Towards greater transparency

A single budget including all external aid expenditures offers the possibility of providing a global picture of the EU’s external assistance and of EU development policy, in terms of both size and geographical distribution. Citizens will have to refer only to a single document in future when they want to know what the EC spends on development policy.

Towards greater efficiency and effectiveness

The integration of the EDF into the budget will lead to greater cost effectiveness. The unification of administrative and legal rules, decision-making structures, and commitment and payment procedures will remove a certain amount of duplication which is currently imposed on the different operators and stakeholders. It will help simplify reporting requirements, reduce the administrative burden on beneficiary countries and respond in a more efficient manner to the challenges faced by developing countries. The management principles applicable to the budget will also make the pattern of commitments more regular and help improve the delivery of aid to the ACP.

CONCERNS LINKED TO BUDGETISATION

Will the quality of the partnership with ACP countries be maintained?

Yes. In the Commission’s view, the European Development Fund is a historical, not a substantive element in the privileged relations between the ACP and the EU. The Cotonou Agreement remains the cornerstone of this partnership and will continue to govern EU-ACP relations as in the past.

Commitments to individual ACP countries will continue to be made on the basis of programmes prepared and approved with them. In every country, the government will continue to be closely associated with multiannual indicative programming, the preparation of annual action plans, etc.

Will budgetisation challenge the financial commitment of the EU to the ACP?

This financial commitment must be renewed every five years, either through a new EDF within the framework of the general budget. The instruments currently available in the budgetary framework, and more particularly the decisions on the financial perspectives, offer the same guarantees.

Background

There are currently two main channels of EU assistance to the ACP countries: funds from the EU budget and funds from the EDF. Different administrative rules and decision-making structures apply to these two forms of aid. Funds from the EU budget are administered in accordance with the general Financial Regulation. Funds from the EDF meanwhile are administered according to the rules laid down by the Cotonou Agreement.

The proposal to incorporate the EDF into the budget would mean that the new financial perspectives could include the totality of expenditure for EU-ACP cooperation. This is not a new proposal: the Commission had previously proposed the integration of the EDF in the Community general budget in 1973 and 1979. During the negotiations on the 2007-2013 financial perspectives, the Commission revived the proposal, but it was once again rejected by the European Council (15-16 December 2005). The debate is likely to be reopened when the next financial perspectives are prepared.

Community participation in the initiative to ease the debt burden of highly-indebted poor countries

Community participation in the initiative to ease the debt burden of highly-indebted poor countries

Outline of the Community (European Union) legislation about Community participation in the initiative to ease the debt burden of highly-indebted poor countries

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > Least developed countries (LDC)

Community participation in the initiative to ease the debt burden of highly-indebted poor countries (HIPC)

Document or Iniciative

Commission Communication of 26 October 1999 on Community participation in the debt relief initiative for highly indebted poor countries (HIPC) [COM(99)518 final. Not published in the Official Journal].

Summary

Background

This initiative comes under the framework of the global initiative to help highly indebted poor countries (HIPC) launched by the International Monetary Fund (IMF) and the World Bank in September 1996. It represents a coordinated effort by all the donors, in particular multilateral creditors, and it aims to relieve the debt of the poorest countries. For the first time, a close link has been stressed between poverty alleviation strategies, structural adjustment programs and the debt relief initiative.

At the Cologne G7 summit in July 1999, ministers agreed to an expanded initiative that would provide faster, more comprehensive and broader debt relief. The total cost of the initiative was estimated at around US$ 61 billion at net present value in 2004. This initiative, which was initially to be for a two-year period, has been extended four times (in 1998, 2000, 2002 and 2004).

Eligible countries

The initiative covers the poorest countries that are making concerted efforts to adjust and are committed to fighting poverty. It covers, in particular, those poorest countries which are already receiving supplementary assistance from the World Bank and the IMF, and whose debt burdens are deemed to be unsustainable after all other debt relief measures have been applied. Certain ACP countries are among the countries concerned.

Role of the European Community

As a major partner of developing countries, the Community has a key role to play, especially given the new high total cost of the initiative. The resources granted from the interest accrued on EDF funds, as provided for by Decision 98/453/EC of July 1998 concerning exceptional assistance for the heavily indebted ACP countries, will not be sufficient to cover the financing of the new enhanced initiative.

The Commission has indicated that it is prepared to use funds in the framework of existing European Development Fund (EDF) instruments for the purpose of making a substantial contribution towards alleviating the debt burden of ACP States which are eligible for the HIPC initiative. So far the Community has allocated over EUR 1.6 billion to the initiative, to which it is contributing both as a creditor and as a donor, particularly for the ACP countries. EDF resources are used only for eligible ACP countries. A contribution of EUR 54 million from the budget has been made for the Asian and Latin American countries.

Role of the Community as a creditor

The Community mainly supports development through non-refundable grants. It is therefore only a small multilateral creditor. According to the most recent estimates, it accounts for only about 2% of the total cost of the HIPC initiative. As a creditor, the cost of the Community contribution so far has been estimated as EUR 680 million. The resources granted are allocated mainly out of EDF interest and intra-ACP reserves.

Role of the Community as a donor

Over and above the Community’s contribution as a creditor, it is participating in the initiative as a donor. Unallocated resources from the 8th EDF and previous EDFs have been the main source of funds for the EU’s contribution as a donor. As a donor, the Community has so far allocated EUR 934 million to the HIPP Trust Fund managed by the World Bank.

Additional participation

As a key partner of the developing countries, the Commission considers that the Community should make an additional contribution. In 2001 the Council approved an additional contribution of EUR 60 million, which will enable early repayment in full of the special loans to the least developed ACP countries eligible for the HIPP initiative.

European Development Fund

European Development Fund

Outline of the Community (European Union) legislation about European Development Fund

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > African Caribbean and Pacific states (ACP)

European Development Fund (EDF)

Even though a heading has been reserved for the Fund in the Community budget since 1993 following a request by the European Parliament, the EDF does not yet come under the Community’s general budget. It is funded by the Member States, is subject to its own financial rules and is managed by a specific committee. The aid granted to ACP States and OCTs will continue to be funded by the EDF, at least for the period 2008-2013.

Each EDF is concluded for a period of around five years. Since the conclusion of the first partnership convention in 1964, the EDF cycles have generally followed the partnership agreement/convention cycles.

  • First EDF: 1959-1964
  • Second EDF: 1964-1970 (Yaoundé I Convention)
  • Third EDF: 1970-1975 (Yaoundé II Convention)
  • Fourth EDF: 1975-1980 (Lomé I Convention)
  • Fifth EDF: 1980-1985 (Lomé II Convention)
  • Sixth EDF: 1985-1990 (Lomé III Convention)
  • Seventh EDF: 1990-1995 (Lomé IV Convention)
  • Eighth EDF: 1995-2000 (Lomé IV Convention and the revised Lomé IV)
  • Ninth EDF: 2000-2007 (Cotonou Agreement)
  • Tenth EDF: 2008-2013 (Revised Cotonou Agreement)

The EDF consists of several instruments, including grants, risk capital and loans to the private sector. The Stabex and Sysmin instruments designed to help the agricultural and mining sectors were abolished by the new partnership agreement signed in Cotonou in June 2000. This agreement also streamlined the EDF and introduced a system of rolling programming, making for greater flexibility and giving the ACP States greater responsibility.

The ninth EDF has been allocated 13.5 billion for the period 2000-2007. In addition, the unexpended balances from previous EDFs total 9.9 billion.

ACP-EC Council of Ministers Decision No 6/2005of 22 November 2005 commits 482 million of the conditional 1 billion to the ninth European Development Fund. This amount is allocated as follows: 352 million to support long-term development, 48 million for regional cooperation and integration and 82 million for the investment facility. Furthermore, a second instalment of 250 million for the ACP-EU Water Facility was established by ACP-EC Council of Ministers Decision No 7/2005 .

The development aid provided by the EDF forms part of a broader European framework. Within the European Union, the funds of the Community’s general budget may be used for certain types of aid. Moreover, in addition to managing part of the EDF’s resources (loans and risk capital), the European Investment Bank (EIB) will contribute a total of 1.7 billion from own resources for the period covered by the ninth EDF.

The tenth EDF covers the period from 2008 to 2013 and provides an overall budget of EUR 22 682 million. Of this amount, EUR 21 966 million is allocated to the ACP countries, EUR 286 million to the OCT and EUR 430 million to the Commission as support expenditure for programming and implementation of the EDF. The amount for the ACP countries is divided accordingly: EUR 17 766 million to the national and regional indicative programmes, EUR 2 700 million to intra-ACP and intra-regional cooperation and EUR 1 500 million to Investment Facilities. An increased share of the budget is devoted to regional programmes, thereby emphasising the importance of regional economic integration as the basic framework for national and local development. An innovation in the tenth EDF is the creation of “incentive amounts” for each country.

The Member States have their own bilateral agreements and implement their own initiatives with developing countries that are not financed by the EDF or any other Community funds.