EXTERNAL INVESTMENT PLAN
2017 OPERATIONAL REPORT EFSD The European Fund for Sustainable Development AIP Promoting investment in the Africa Neighbourhood and Africa Investment Platform NIP Neighbourhood Investment Platform This report covers the first year of the operation of the European Fund for Sus- tainable Development (EFSD). As such, it merges into one the reports on blended finance operations under the Africa Investment Platform (AIP, formerly the AfIF) and the European Neighbourhood Platform (NIP, formerly the NIF).
It presents the first results of the EFSD, such as approved blending investments, and the first steps towards implementing the EFSD Guarantee.
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© European Union, 2018 CONTENTS
JOINT FOREWORD / INTRODUCTION 4
EIP AND EFSD OBJECTIVES, BLENDING INSTRUMENTS, AND PROGRESS IN 2017
OBJECTIVES 6
INSTRUMENTS 6
PROGRESS IN 2017 8
POLICY CONTEXT
FROM THE AFRICA INVESTMENT FACILITY TO THE AFRICA INVESTMENT PLATFORM 10
FROM THE NEIGHBOURHOOD INVESTMENT FACILITY TO THE NEIGHBOURHOOD INVESTMENT PLATFORM 11
LAUNCH OF THE EFSD GUARANTEE
INVESTMENT AREAS 12
ORGANISATIONAL STRUCTURE 13
EFSD BLENDING IN SUB-SAHARAN AFRICA IN 2017
OVERALL 14
ALLOCATIONS BY SECTOR AND FINANCING TYPE 16
EFSD BLENDING IN THE EU NEIGHBOURHOOD IN 2017
OVERALL 18
ALLOCATIONS BY SECTOR AND FINANCING TYPE 19
ALLOCATIONS BY REGION 20
OVERVIEW OF EFSD PREDECESSOR BLENDING OPERATIONS
AFRICA INVESTMENT FACILITY (AFIF) 22
NEIGHBOURHOOD INVESTMENT FACILITY (NIF) 23
EFSD BLENDING OPERATIONS IN 2017
SUB-SAHARAN AFRICA 24
EU NEIGHBOURHOOD 46
ANNEX 60
ABBREVIATIONS 64 EIP / EFSD OPERATIONAL REPORT 2017 4 FOREWORD Johannes Hahn & Neven Mimica
The Sustainable Development Goals (SDGs) are our common aspiration. To achieve them, we need to mobilise all the different sources of financing available. We realise that public money and grants alone are not enough; we also need to leverage private investment.
In Abidjan in November 2017, the EU held an important summit with the African Union. The Heads of State recognised that creating quality jobs requires stepping up joint efforts to advance economic transformation, an improvement of the investment and business climate as well as unlocking and boosting responsible and sustainable African and European investments.
At the same time, the Eastern Partnership Summit in Brussels welcomed the EU's continued In fact, the Fund is expected to generate eleven support to the Eastern Partnership through a times more investment – €44 billion – than the full and targeted use of the available financial EU's initial €4.1 billion contribution. This money instruments, including efficient mobilisation will help improve ports and roads, expand energy of significant amounts of investment. It also supplies and connect energy suppliers and affirmed that the EU's incentive-based approach consumers, protect the environment, support will continue to benefit those partners most entrepreneur farmers and food companies. It will engaged in reforms. improve quality of life in cities while protecting the nature, and help small businesses, especially A paradigm change is required and the External young people and women, secure the financing Investment Plan (EIP) is the EU’s contribution they need to take off the ground and expand. By to it. The EIP offers a more holistic approach doing so, the EIP will also help address some of to economic and social development by closely the root causes of migration. linking economic policy dialogue, technical assistance and investment. To this end, the This report outlines EIP major achievements, the EIP’s investment arm, the European Fund for Fund's activities in 2017, focusing on blending Sustainable Development (EFSD), combines the – the strategic use of a limited amount of EU existing blending platforms with a new guarantee. grants to leverage financing for investment It will cover part of the investment risks, for both projects. private and public investors in projects with high social and development impact, including in the world's least developed countries and in fragile states. FOREWORD BY HAHN & MIMICA 5
During the first year of the External Investment Plan:
‣‣ The EU contributed €1.3 billion to blended ‣‣ A flexible new guarantee to mitigate finance operations in Africa and the investment risks in difficult environments. European Neighbourhood. This will bring in more than €10.6 billion in much-needed Our success will result in new jobs and investment, funding over 50 projects. opportunities for people in our partner countries, as well as in the EU. With the experience gained, ‣‣ More than 80% of the projects the EU has we can expand the use of modern financial approved in Sub-Saharan Africa are in least instruments in the external chapter of the next developed countries. EU budget.
‣‣ The EU established the Sustainable Business for Africa (SB4A) and the Structural Reform Facility for Eastern Neighbourhood as platforms for structured dialogue on investment climate with the private sector and partner countries. Johannes Hahn Commissioner for Neighbourhood ‣‣ For the Guarantee, five priority areas for and Enlargement Negotiations investment were approved. The entities entrusted to manage EU funds were invited to submit proposals for investment that the EFSD Guarantee would cover. Neven Mimica We expect to sign the first guarantee agreements Commissioner for International in the second half of 2018, after consulting EU Cooperation Member States. and Development
This is a significant moment for the EU’s international cooperation. With the EFSD, we can now step up investments in places and sectors that are not attractive for regular investors.
Partner countries and investors stand to benefit from the EIP's three central innovations:
‣‣ An integrated, three-pillar approach that will help improve the investment climate and business environment in partner countries.
‣‣ A single entry point and one stop shop for submitting proposals for financing investments. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 1 6 EIP AND EFSD OBJECTIVES, BLENDING INSTRUMENTS, AND PROGRESS IN 2017 Objectives and medium-sized enterprises (MSMEs), to contribute more effectively to sustainable The European Union’s External Investment Plan development in partner countries. The EFSD (EIP) supports investments primarily in the EU should: Neighbourhood and in Africa. It has three parts:
‣‣ The European Fund for Sustainable ‣‣ maximise additionality Development (EFSD), which includes ‣‣ address market failures and sub- a financial guarantee and blending optimal investment situations instruments to leverage much more ‣‣ deliver innovative products, and public and private investment in ‣‣ crowd in private sector financing sustainable development.
‣‣ Technical assistance to enable The EFSD should also foster: investors and businesses to develop ‣‣ the creation of decent jobs bankable projects, and support for ‣‣ economic opportunities and regulatory improvements. entrepreneurship ‣‣ green and inclusive growth that furthers ‣‣ Improving business environment gender equality and empowers women and investment climate in partner and young people countries, including through regular ‣‣ the rule of law, good governance, and dialogue with governments, businesses human rights and other stakeholders. ‣‣ equitable access to, and use of, natural resources The EIP is guided by the general objectives of the EU’s external action. It contributes to: Instruments The achievement of the SDGs of the United Nations (UN) 2030 Agenda for The EFSD blended finance operations are Sustainable Development (the ‘2030 composed of two regional investment Agenda’), in particular poverty eradication platforms – the Africa Investment Platform (AIP, former AfIF) and the Neighbourhood The EU’s commitments under the Investment Platform (NIP, former NIF). European Neighbourhood Policy
By supporting such investments, the EFSD aims EFSD Budget to address some of the socio-economic causes of migration. The EFSD, as part of the EIP, should also contribute to the implementation AIP and NIP EFSD of the Paris Agreement on Climate Change (the €2.6 billion Guarantee €1.5 billion Paris Agreement).
The EFSD should also allow investors and Amount expected to be leveraged by 2020 €44 billion private companies, in particular micro, small OBJECTIVES, BLENDING INSTRUMENTS AND PROGRESS 7
What is Blending?
Blending is the use of a limited amount of Blending helps to: public grants or non-grant resources to mobilise financing from partner financial institutions, ‣‣ Do more with less taxpayers’ money, such as international development banks, while saving time and the private sector for projects which will ‣‣ Improve project sustainability, do most to help countries develop. Blending development impact, quality, and projects aim at achieving sustainable growth innovation and reducing poverty. The EU has conducted ‣‣ Support reforms that partner countries blended finance operations around the world pursue since 2007. ‣‣ Improve cooperation between European and non-European donors and financial Blending grant contributions can take different institutions forms to support investment projects: ‣‣ Raise the profile of EU development funding ‣‣ Investment grants – these finance specific project components or a What is the EFSD Guarantee percentage of the total project cost thus supporting or enabling the investment The innovative EFSD Guarantee will be used to ‣‣ Interest rate subsidies – these reduce cover the risks for the following instruments: the cost of the initial investment and overall project by reducing the financing ‣‣ Loans, including local currency loans costs ‣‣ Guarantees ‣‣ Technical assistance – this ensures that ‣‣ Counter-guarantees projects meet high standards of quality, ‣‣ Capital market instruments efficiency and sustainability, both during ‣‣ Any other form of funding or credit project preparation and implementation enhancement, insurance, and equity or ‣‣ Risk capital in the form of equity and quasi-equity participations quasi-equity – this attracts additional The EFSD Guarantee would only cover pre- financing by improving the risk/return agreed specific risks, up to a defined ceiling. It profile of an investment will be provided to portfolios of investment to ‣‣ Guarantees – these unlock financing balance risks by including both fragile and more by transferring risk to third parties with stable countries. Its benefits will be passed on better capacity to absorb them to the end beneficiaries. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 1 8 PROGRESS IN 2017 AT A GLANCE
In 2017, the EU agreed to invest nearly €1.3 billion in 52 blending projects in Africa and the European Neighbourhood under the EIP.
The EU contribution will unlock around €10.6 billion in public and private investment which otherwise may not be possible or would be much smaller.
The main sectors of activity are:
Transport and energy
Environment
Agriculture
Urban development
Improved access to finance for local MSMEs
EFSD target Sub-Saharan EU region Africa Neighbourhood
EU €900 million €400 million contribution Investments progress
€10.6 billion Investment €5.6 billion €5 billion leveraged
24.1% Projects 30 projects 22 projects €44 billion
Neighbourhood Investment Platform Africa Investment Platform EU Member States Countries Countries
Currently, the NIP can be implemented only in the following countries: Morocco, Tunisia, Egypt, Jordan, Palestine*, Lebanon, Armenia, Georgia, Azerbaijan, Ukraine, Moldova; for regional projects, also Belarus is eligible. (*)“This designation shall not be construed as recognition of a State of Palestine and is without prejudice to individual positions of the Member States on this issue.” OBJECTIVES, BLENDING INSTRUMENTS AND PROGRESS 9
Neighbourhood Investment Platform
€10.2M €13.5M 3% €83.6M 3% €49.1M 21% 12%
Breakdown €27M 7% by sector 17% €66.5M
8% €30.7M
29%
€113.4M
Africa Investment Platform
€82.2M €59.8M
9% 6.6%
Breakdown 36.2% €330.2M by sector €437.4M 47.9%
60.3%0.3% €3M
Agriculture Private Sector EU Member States Education Social Energy Transport Environment Water / Sanitation Infrastructure and urban development EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 2 10 POLICY CONTEXT Objectives As part of a new vision for the EU role in international cooperation and development, the EU and its Member States signed the European Consensus on Development in June 2017. It aligns the Union's development policy with the From the Africa Investment Facility 2030 Agenda for Sustainable Development (AfIF) to the Africa Investment and calls for a focus on the economic, social Platform (AIP) and environmental dimensions of sustainable development. It also underlines the links Created in August 2015, the AfIF started between development and other policies, operating in November of that year in order including peace and security, humanitarian to support investment in Africa. AfIF is funded aid, migration, the environment and climate mainly from different programmes under the change. European Development Fund (EDF) but also the EU's Development Cooperation Instrument. The Consensus takes a comprehensive approach to implementation, drawing on the framework Within the EIP, in 2017 the AfIF evolved into agreed through the Addis Ababa Action the AIP. Agenda, combining aid with other resources, sound policies and a strengthened approach to The AIP supports: Policy Coherence for Development. It includes a more coordinated approach by the EU and Infrastructure, including transport, energy its Member States to development, promoting interconnections and renewable energy, joint programming and joint actions. It puts and information and communication emphasis on better-tailored partnerships with technologies a broader range of stakeholders and partner countries. Private sector development, including access to finance for households and In countries neighbouring the EU, the European MSMEs Neighbourhood Instrument (ENI), launched in 2004, supports implementation of EU policy in The environment, including water supply a wide range of interventions to reduce social, and sanitation, and climate change economic and political barriers between the EU adaptation and mitigation and its neighbours. Agriculture
Healthcare and education (social infrastructure)
The final beneficiaries of the AIP are the EU’s partners in Africa, their central, regional and local administrations, public and semi-public institutions. Many beneficiaries are households and micro or small businesses. POLICY CONTEXT 11
From the Neighbourhood Investment Promoting sustainable, inclusive growth Facility (NIF) to the Neighbourhood by boosting SMEs and by supporting the Investment Platform (NIF) social sector and municipal infrastructure
The NIF came into operation in 2008 to enable Risk-sharing arrangements co-funded by the countries in the EU´s Neighbourhood to access NIF have been a particularly effective way to loans to finance critical infrastructure, public involve the private sector, crowding in private services and private sector development, investors who would otherwise consider the in particular SMEs. The NIF is funded under risks too high. the ENI. With its inclusion into the External Investment Plan in 2017, NIF was re-named into the Neighbourhood Investment Platform (NIP). Member States may contribute to the (smaller) NIP Trust Fund.
The NIF’s Strategic Objectives for 2014-2020 are:
Energy security, connectivity and market integration, including Deep and Comprehensive Free Trade Areas (DCFTAs)
Combatting climate change and environmental threats more broadly, and EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 3 12 LAUNCH OF THE EFSD GUARANTEE
Investment areas (MSMEs) Financing", the deadline for submitting PIPs was the end of January 2018. In September 2017, the European Parliament and the Council adopted Regulation (EU) For "Sustainable Agriculture, Rural 2017/1601 establishing the EFSD, the EFSD Entrepreneurs and Agribusiness", "Sustainable Guarantee and the EFSD Guarantee Fund. Cities" and "Digital for Development", the PIPs deadline was the end of March 2018. Defining priority investment areas Presentations at major events In the end of November 2017, the European Commission proposed five investment areas In 2017, the EIP and the EFSD were presented of the EFSD Guarantee (see box below), which at four major events: were approved by the Strategic Board. ‣‣ September / New York The European Commission invited pillar- During the UN General Assembly assessed eligible counterparts (mainly ‣‣ November / Brussels European development financial institutions) to Eastern Partnership Summit send Proposed Investment Programmes (PIPs) ‣‣ November / Abidjan under the five windows. EU-Africa Summit and 6th EU-Africa Business Forum Deadlines ‣‣ December / Paris One Planet Summit For "Sustainable Energy and Connectivity" and "Micro, Small and Medium Sized Enterprises
EFSD Guarantee Investment Window Purpose
to attract investments in renewable energy, energy efficiency and sustainable infrastructure.
to improve MSME’s access to finance. Such businesses are the main employers in Africa and the EU Neighbourhood, and offer important and more sustainable alternatives to the informal economy. to provide better access to finance for smallholders, cooperatives and MSME sized enterprises, agribusiness, allowing to address food security issues. to mobilise investments in sustainable urban development of municipal infrastructure, including urban mobility, water, sanitation, waste management, renewable energy. to promote investments in innovative digital solutions for local needs, financial inclusion and decent job creation. LAUNCH OF THE EFSD GUARANTEE 13
Organisational structure Observers:
The EFSD Strategic Board supports the ‣‣ The European Parliament Commission by giving strategic guidance and ‣‣ Partner countries setting the EFSD's overall investment goals, ‣‣ Regional stakeholders as well as in ensuring an appropriate and diversified geographical and thematic coverage On 28 September, the first Strategic Board of for investment windows. the EFSD met in Brussels and discussed rules of procedure, strategic orientations and proposals The Strategic Board for concrete areas for investment (investment windows). Full members: The NIP and AIP each have an Operational ‣‣ The European Commission (chair) Board. This is composed of representatives of: ‣‣ EU Member States ‣‣ The EIB ‣‣ EU Member States ‣‣ The European External Action Service ‣‣ The European Commission (EEAS) ‣‣ The European External Action Service (EEAS)
Financial institutions participate as observers.
New Partnership Framework - External Investment Plan
European Fund for Sustainable Development (EFSD)
New EFSD Blending facilities Guarantee AIP and NIP €1.5 billion €2.6 billion
MS contributions Other contributions
EFSD Guarantee Blending Value > €0.75 billion* x11 Value > €2.6 billion
Total extra investment through the AIP and NIP at least €44billion * Plus a €0.75 billion contingent liabitliy EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 4 14
EFSD BLENDING IN SUB-SAHARAN AFRICA IN 2017
Overall
Projects Total EU Total approved contribution €5.6 funding 30 €900million billion leveraged
More than 80% of the projects the EU has approved in Sub-Saharan Africa in 2017 are in least developed countries.
Allocations by sector and financing type Of total EU funds: Of the total assistance provided: ‣‣ 47.9% went to transport infrastructure ‣‣ 61% was as investment grants ‣‣ 36.2% to energy ‣‣ 23% as financial instruments (loans, equity ‣‣ 9% to private sector development and guarantees) ‣‣ 6.6% to agriculture ‣‣ 15% as technical assistance ‣‣ 0.3% to urban development ‣‣ 1% as interest rates subsidies
Allocations by region Sub-Saharan Afica scale renewable energy projects. In addition, Number of projects supported: 6 four "ElectriFI country windows" were approved and financed through the 11th EDF National The projects targeting Sub-Saharan Africa Indicative Programmes. A fourth project, are global, financed through the 2014–2020 the Climate Investor One finance facility Thematic Programme 'Global Public Goods aims to contribute to each of the respective and Challenges' or target Africa, Caribbean development, construction, and operational and the Pacific and are financed through 11th phases of project companies’ lifecycles. The EDF Intra-ACP resources for access to finance other two are the EURIZ guarantee facility for enterprises, in particular SMEs. This report for unserved or underserved MSMEs and singles out the estimated amounts for Sub- the Boost Africa platform composed of an Saharan Africa. investment facility targeting the venture segment, a technical assistance pool, and an One of these projects is the EDFI-AgriFI Entrepreneurship Lab. facility aiming to promote investments in the agricultural sector in low and lower-middle West Africa income countries. Another, the Transferability Number of projects supported: 13 and Convertibility Facility, provides for a dedicated instrument to cover the convertibility In West Africa the EU contributed to projects and transferability risks attached to utility mainly in the energy and transport sectors: EFSD BLENDING IN SUB-SAHARAN AFRICA 2017 15
‣‣ In the energy sector, an 880-km electricity expansion of the Port Autonome de Pointe interconnector will be constructed linking Noire (PAPN) in Congo. In addition, the Nigeria, Niger, Benin, and Burkina Faso, and complementary studies for the hydro-power the Ghana-Côte d’Ivoire Interconnection plant Ruzizi IV were financed. will be reinforced. In Mali, the 225 kV interconnector linking Manantali and Eastern and Southern Africa and Bamako will be doubled. Network Indian Ocean reinforcement projects were financed Number of projects supported: 8 in Togo and Senegal. In addition, four energy generation projects, including the In Eastern and Southern Africa the EU construction of a hybrid plant in Niger, as contributed to projects mainly in the energy well as solar plants in Niger, Côte d’Ivoire and transport sectors: and Benin, received financing in 2017. ‣‣ In the transport sector, projects aiming to ‣‣ In the transport sector, road rehabilitation upgrade and rehabilitate sections on major and upgrade was supported in Malawi, corridors such as the Trans Saharan (section Zambia and Madagascar. In addition, the in Mali) and the Dakar-Lagos (sections in rehabilitation and extension of Port Victoria Guinea and Guinea Bissau and well as in in Seychelles was financed. Senegal) corridors have been financed. ‣‣ In the energy sector, the construction of ‣‣ One project has been supported in the the Muzizi hydro-power plant and of a agricultural sector targeting the Ties Sud transmission line between Malawi and region in Senegal. Mozambique were supported. ‣‣ One project was financed in the agricultural Central Africa sector promoting access to finance for Number of projects supported: 3 agriculture enterprises promoting the integration of smallholder farmers into the One of the projects supported in Central Africa value chain in Kenya. targets the construction of a bridge between ‣‣ Another targeted urban development Cameroon and Chad. Another concerns the and Sanitation in the Malagasy capital Antananarivo. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 4 16
Central Africa Sub-Saharan 9% Africa €79.23M 18% €162.32M
Breakdown Eastern and Southern Africa by region and Indian Ocean 36% €333.12M
West Africa 37% €337.91M
Financial instruments 23% €212.52M
Interest rate subsidy Breakdown 1% by support €8.8M
Technical Investment assistance grant 15% 61% €133.55M €557.7M EFSD BLENDING IN SUB-SAHARAN AFRICA 2017 17 EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 5 18 EFSD BLENDING IN THE EU NEIGHBOURHOOD IN 2017
Overall
Projects Total EU Additional approved contribution €5 investment 22 €400million billion leveraged
Geographical allocations Investment leveraged by NIP compared Eastern Neighbourhood €177 million to AIP is higher due to the higher level of Southern Neighbourhood €220 million development of the NIP region.
In the end of 2017, Germany and Estonia each pledged €1 million in cash to the NIP Trust Fund, in order to support a broad range of blended finance investments.
Allocations by sector and financing type Of total EU funds: Of the total assistance provided: ‣‣ 29% went to private sector financing ‣‣ 56% was as investment grants ‣‣ 21% to water and sanitation ‣‣ 22% was as technical assistance ‣‣ 17% to protecting the environment ‣‣ 17% was used as equity ‣‣ 12% to energy ‣‣ 5% was used as guarantees
Allocations by region
Financing long-term investments is a challenge Southern Neighbourhood for many governments in the region because Number of projects supported: 11 a lack of private investors means interest rates are high. Technical expertise to manage Regional programmes projects is often limited, too. The NIP has The Southern Neighbourhood’s two regional offered support to investment and investment programmes focused on the private sector in advisory services for operations funded by response to the economic downturn since the European financial institutions and other public Arab Spring: and private partners, which were unlikely to materialise without NIP support. NIP-funded EBRD Small Business Initiative – the Bank TA improves project implementation and extended this to Lebanon and Palestine*, to builds institutional capacity to manage both address structural weaknesses faced by micro infrastructure and investment projects. and small businesses in the area. EU Trade and Competitiveness Programme Europe (EIB component) – this will help Egypt and Jordan boost growth and create jobs by targeting support to small businesses. EFSD BLENDING IN THE EU NEIGHBOURHOOD IN 2017 19
Bilateral programmes Private sector A broad range of other sectors received support Three region-wide programmes concentrated on a bilateral basis, including: primarily on the private sector of the Eastern Partnership, aiming to boost economic ‣‣ Water and sanitation competitiveness and reform. ‣‣ Energy ‣‣ Agriculture and the environment Two of them – the 2nd Phase of the Deep and ‣‣ Social and educational programmes Comprehensive Free Trade Agreement (DCFTA) Facility with EBRD and the Green for Growth Two examples of projects that showcase the Fund top-up – were continuations of successful versatility of the NIP instrument are: already supported initiatives. Proville 2 in Tunisia – here the EU aims to improve regional equality through public Transport administration reforms and improved housing. Another key sector supported in the Eastern The Université Euro-méditerranéenne de Fès Neighbourhood was transport, with five projects in Morocco – through this project the EU is in three different countries; Armenia, Ukraine targeting gaps in the provision of industrial and and Georgia aim to improve connectivity as engineering education and training. well as road safety. These programmes aim to build new highways, improve the road networks and road safety conditions, as set out in the Eastern Neighbourhood transport agenda of the EU. Number of projects supported: 11 The NIP has sought to promote projects that The EU contributed to projects in sectors crucial encourage all innovative aspects, be that for a region that is still recovering from the war in terms of energy efficient solutions and in Ukraine, economic recession and domestic renewable energy utilisation, smarter transport challenges networks or financing the private sector, particularly MSMEs, which are often drivers of innovation. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 5 20
Equity into funds 17% Technical Assistance €65.62M 22% €88.3M
Guarantees 5% €20.5M Breakdown by support
0.3%
Investment Grant 56% €220.7M
Ukraine Armenia 2% 2% Belarus Tunisia €6.5M €6M 10% 3% €41M €10.2M Regional South Egypt 8% 24% €30.8M €93.3M
Breakdown by country Regional Morocco East 3% Georgia 23% 5% €92.85M €20.8M Jordan 8% 0.3% €30.8M Palestine Moldova 2% Morocco 10% 8.35M 3% €40.75M €13.5M EFSD BLENDING IN THE EU'S NEIGHBOURHOOD IN 2017 21 EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 6 22 OVERVIEW OF EFSD PREDECESSOR BLENDING OPERATIONS
Water / Neighbourhood Investment Facility Sanitation Transport (NIF) 15% 14% €237M €228.4M Between 2008 and 2016, a grand total of 145 Multisector Social 2% 5% projects received final approval for support €27.9M €82.1M of the NIF, the predecessor of NIP. Funding Agriculture Environment came mainly from the EU budget with €1,678 / Private 3% million, enabling a further investment volume Sector Breakdown €45.8M 1% of approximately €15 billion. Additional €84 €10.4M by sector million came as direct contributions from EU 2008-2016 Member States to the NIP Trust Fund managed by the EIB. Private Sector The private and energy sectors received the 27% Energy €438.8M 0.3% 33% bulk of the support – €438 and €526 million, €526.5M respectively. This is in line with the NIF/NIP strategic orientations to improve energy Technical security, combat environmental threats, and Assistance boost SMEs. Over 50% of the funds were 27% provided in the form of investment grants. A €435.4M third of the funding was awarded to regional projects, highlighting the EU’s ambition to Breakdown promote regional solutions, helping with by support regional integration and cooperation. 2008-2016 Equity Investment 4% Grants Funds provided to the NIF Trust Fund €60.5M 54% €858.03M Guarantees Austria €3M Germany 15% 0.3% €246.88M Bulgaria €34M €1M Regional East Czech Republic €2M Regional South 15% 18% €247.51M Estonia €289.64M €3M Finland Armenia €3M 7% €113.69M Greece €1M Azerbaijan France Tunisia Italy €27M 0.01% €1M 7% €3.55M €110.16M Breakdown Luxembourg Georgia €1M by country 5% Poland €86.52M €3M Moldova Morocco Portugal 7% €1M 14% €116.78M €221.35M Romania Ukraine €1M Jordan 3% 0.3% 4% €42.42M Spain Lebanon €3M €55.5M Egypt 0.99% Sweden €14.52M 19% €1M €229.28M OVERVIEW OF EFSD PREDECESSOR BLENDING OPERATIONS 23
Africa Investment Facility (AfIF) Water / From its launch in November 2015 until the end Sanitation 1% of 2016, AfIF contributed over €295 million to €3M 16 projects, leveraging a total investment of over €2.3 billion. Energy 29% €86.5M AfIF provided both investment grants and TA, 77% and 23%, respectively. A substantial part, over €187 million or 64%, funded projects in the transport sector. Almost 30% of the funds Breakdown went to five energy projects, totalling over by sector €85 million, followed by the ICT, water and 2016 sanitation sectors. Transport 64% ICT Geographically, two-thirds of the contributions €187.7M 6% funded projects in West Africa, for almost €225 €17.9M million. Three projects benefitted from the EU contribution of over €27 million or 9% in Eastern and Southern Africa and Indian Ocean. There was one regional project backed by the Central Africa EU with €17.9 million in Central Africa, and 9% 6% of the funds were allocated to a cross-regional €17.9M Cross-regional programme. 9% €25M
Eastern and Southern Africa and Indian Ocean Breakdown 9% by region €27.6M 2016 Technical assistance West 23% Africa €68.6M 76% €224.6M
Breakdown by support 2016
Investment grant 77% €226.5M EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 24 EFSD BLENDING OPERATIONS IN 2017
Sub-Saharan Africa
West Africa
share of renewable energies. It will also Modernisation and contribute to improving the living conditions of reinforcement of the the population by providing energy services of network of SENELEC to a better quality. Thanks to the reduction of the support the development electricity production costs, electricity tariffs of renewable energies and can be maintained at a sustainable level for the access to energy the population and for public finances. Energy - Senegal, West Africa The program includes technical trainings for the Total cost: €52m employees of the Société nationale d'électricité EU contribution: €7m du Sénégal (SENELEC), the national electricity Lead Financial Institution: AFD with €45m company. Lastly, the program contributes to the fight against climate change by allowing a larger share of renewable energies in the The electricity connection rate at the national network. level in Senegal is 60% and coverage rates differ across the country. Electricity is mainly The EU contribution will finance both the TA produced by burning imported petroleum and the investments to maximise the impact products. The Senegalese authorities have on energy access to the least served areas. embarked on a policy of diversification of the electricity mix. It is therefore essential for Senegal to have an electricity network capable Rehabilitation of the Trans of absorbing additional capacity and managing Gambian Road Sénoba-Ziguinchor the growing share of renewables. (phase 2) Transport - Senegal, West Africa The program aims to reinforce power transport and distribution networks with a view to Total cost: €97.60m integrating renewable energy sources and EU contribution: €25.60m increasing densify of the network in underserved Lead Financial Institution: AfDB with €58m areas. It consists of studies, investments, Other investors: EIB with €10m and trainings and project management assistance. Government of Senegal with €4m The project will be implemented throughout the Senegalese territory. In its Transport Sector Policy Letter for 2016- The program will contribute to improving the 2020, the Government of Senegal, aware of competitiveness of the economy by increasing the issues and the importance of the transport the efficiency and reliability of the transmission sector, embarked on a programme to carry out and distribution network and reducing the major (backbone) projects that will promote the country's electricity production costs and development and modernisation of transport dependence, made possible by an increased infrastructure. The main actions undertaken by the Government concern the rehabilitation of EFSD BLENDING OPERATIONS 2017 25 the asphalted and unpaved network as well as the elimination of critical points on the entire Agriculture development network. and food security in the rural areas of the Tiers The rehabilitation of sections of the corridors Sud region in Senegal Madrid-Tanger-Nouakchott-Dakar and Dakar- (Tiers Sud «Beydaare» Lagos, including the National Road 4 between project) Sénoba and Ziguinchor, are in line with this Agriculture - Senegal, West Africa strategy. Total cost: €47.53m The project includes the rehabilitation of 144 EU contribution: €20.53m km of the National Road 4 between Sénoba and Lead Financial Institution: AFD with €27m Ziguinchor (including 15 km of paved roads in Bignona and Ziguinchor); the rehabilitation of 177 km of access roads; the construction The development of agriculture and agro- of a by-pass in Ziguinchor; the construction of industry has been a national priority in Senegal control stations in Mpack at the border between since 2000. Several initiatives to promote the Senegal and Guinea Bissau; the rehabilitation of sector have been launched. In addition, the infrastructure related to health and education; Plan Sénégal Emergent considers agriculture as well as urban infrastructure, support for as the third engine of growth for Senegal, after youth, women and vulnerable people. infrastructure and energy.
This road is, by its strategic location, a vital axis The Tiers Sud region (areas of Tambacounda, for the accessibility of the Casamance region. It Kédougou and Kolda) suffers from infrastructure can also play an important role in the collection deficit and soil degradation, and remains and distribution of agricultural products to dependent on irregular rainfall. Farmers have major shopping centres. Other expected results recurrent difficulties in marketing their products of the project are increased traffic flow capacity, because of low productivity levels, insufficient improved security conditions and a significant processing capacity and difficult transport and reduction of the travel times towards The storage conditions. The region, together with Gambia. the eastern part of the country, has the highest malnutrition rates, and it is characterized by The EU contribution will cover transport strong migration pressure, especially towards facilitation measures and activities aimed at Europe. In 2016, the State entrusted the 'Société inclusiveness. de Développement Agricole et Industriel du Sénégal' with the responsibility for the rural development of the Tiers Sud region.
The "Beydaare" project aims to boost structured sectors (rice and banana), as well as sectors in the process of being structured (corn and milk) through investments in agricultural and irrigation infrastructure, rural roads and community equipment. In addition, several community-level actions are foreseen to promote household resilience and nutrition. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 26
The project has three main specific objectives. links a number of economic hubs in West Africa. First, it aims to increase the production and It also connects these hubs to poorer areas, commercialisation of products through the providing them with vital access to important rehabilitation of an irrigated area of 1,186 ha trade routes. in the Anambé basin for rice production; the development of approximately 1,600 ha of The project consists of the rehabilitation of lowlands or irrigable land over the whole region degraded links on the Dakar-Lagos coastal for the production of rice, corn or banana, as corridor between Guinea-Bissau and Guinea well as the improvement of nearly 100 km of (21 km in Guinea-Bissau and 86 km in Guinea) rural feeder roads. Second, it targets boosting to improve the coastal connection between the investments through grants to promote two capital cities of Conakry and Bissau, lower sustainable access to resources and the transport costs and improve traffic conditions. development of agricultural products. Third, Transport facilitation measures, institutional it aims to increase the resilience of the most support and raising awareness in the project vulnerable families through social safety nets area are also included. and communities, as well as actions to mitigate maternal and child malnutrition. The project is coherent with activities at regional level undertaken by the New Partnership for The project targets 20 communes identified Africa's Development. Its general objective as being highly food insecure. More than is to foster trade between the two countries, 30,000 people are expected to benefit from thus promoting the further integration in the the improved agricultural production. The ECOWAS. Long-term benefits of the project will resulting territorial development will concern a also be in the areas of education, health and population of 470,000 people. the fight against poverty.
The EU contribution is crucial in targeting The EU contribution will increase the overall banana producers in the Gambia River Valley, concessionality of the financial package and as well as developing a bio-fortified flour sector, amplify its impacts, financing crucial TA and which requires an industrial approach. The EU three multifunctional platforms for women. will also finance part of the feeder roads and TA.
Construction and asphalting of the road between Boké (Guinea) and Quebo (Guinea-Bissau) Transport - Guinea and Guinea-Bissau, West Africa
Total cost: €114.74m EU contribution: €30.71m Lead Financial Institution: AfDB with €82.54m Other investors: Governments of Guinea and Guinea-Bissau with €1.49m
The Dakar-Lagos Trans-African coastal corridor EFSD BLENDING OPERATIONS 2017 27
In 2015, OMVS initiated Manantali 2, an extensive Doubling of the 225kV programme to rehabilitate and strengthen the interconnector Manantali - energy facilities of SOGEM, in expectation of Bamako / OMVS new hydro-power plants, including the 140 MW Energy - Mali, West Africa Gouina plant in Mali. Manantali 2 consists of the rehabilitation of existing infrastructure, Total cost: €352.16m the reinforcement of the transmission lines EU contribution: €26.66m linked to the Manantali hydroelectric plant Lead Financial Institution: AFD with €80m (Kayes-Tambacounda in Senegal, Kayes-Kiffa Other investors: WB with €120m, SOGEM with in Mauritania, and Manantali-Bamako in Mali), €0.5m, other financiers with €125m and the improvement of the communication and remote control (SCADA) system of the Felou plant. Manantali 2 will be financed in West African countries have some of the phases by various financiers including AFD, the lowest electricity access rates and individual World Bank, and other regional development consumption levels in the world. They also banks. have significant energy resources, including a potential for hydro-power. In this context, the The doubling of the existing 225kV transmission regional integration of power systems is key. line interconnecting Manantali to Bamako and Mali, Mauritania, Senegal and Guinea created the construction of two associated substations the Senegal River Basin Development Authority is a priority of the Manantali 2 programme (OMVS) in 1972 and the Manantali Energy as the line is currently saturated and cannot Management Company (SOGEM) in 1997 to evacuate the energy produced in Gouina. For operate the 200 MW Manantali hydroelectric Mali, which faces a production deficit, high plant and the associated transmission lines. electricity production costs and significant OMVS is to date the main sub-regional electricity needs, it is crucial to have energy organisation in terms of installed power and from own resources produced at a lower cost. developed network. The energy produced by the Manantali and Felou plants (60 MW since The project will secure and increase the 2014) is also the cheapest in the sub-region at transport of electricity to the agglomeration of €6/kWh. Bamako, Mali's economic heart, thus improving the quality of electrical service and stimulating economic growth in the country. Moreover, the project will allow increasing the share of renewable energy (hydraulic and solar) in the electricity mix of Mali, with a reduction of CO2 emissions.
The EU contribution will increase the overall concessionality of the financial package and render a transmission tariff that ensures the bankability of the project. TA for SOGEM will also be provided. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 28
Rehabilitation of the Malian section contribute to the strengthening of economic of the Trans Saharan road integration and regional cooperation between Transport - Mali, West Africa member countries of the Trans-Saharan Road Liaison Committee through the promotion of Total cost: € 542.72m commercial exchanges between Arab Maghreb EU contribution: €70.96m countries and Sub-Saharan countries (Mali, Lead Financial Institution: AfDB with Chad, Niger and Nigeria) and the opening up €155.76m of the hinterland countries. Specifically, the Other investors: Government of Mali with €5m Road Development Program aims to reduce and other financiers with €311m transport costs and times, improve road safety and to improve transit in the agglomerations of Gao, Bourem, Kidal, Abeibara, and Boureissa. Mali has a vast territory; significant distances separate its regional economic centres. The The EU contribution will co-finance, alongside development of transport infrastructure AfDB resources, the rehabilitation of two is therefore key for developing trade, sections: 233 km between Hombori and Gao, reducing production costs, strengthening and 286 km between Bourem and Kidal, for a competitiveness and reaching the rural or total of 519 km. remote areas where poverty is concentrated. This concerns especially the north of the country and particularly the regions of Gao WAPP 330 kV Ghana-Côte and Kidal, which are also affected by security d’Ivoire Interconnection threats and trafficking of goods. Reinforcement Project Energy - Ghana and Côte d’Ivoire, The rehabilitation of the road connecting West Africa Sévaré, Douentza, Gao, Bourem, Kidal and the Algerian border will foster the economic and Total cost: €181.30m social development of these regions by opening EU contribution: €30.70m them up to southern Mali and to Algeria. The Lead Financial Institution: KfW with €49.7m road should also result in safer movements of Other investors: EIB with €81.2m, Government people and goods. of Ghana with €8.4m and Government of Côte d’Ivoire with €11.3m The road is part of the "Trans-Saharan" project and the road network development plan of the West African Economic and Monetary Union As a contribution to the integration of the (UEMOA). national power markets in the ECOWAS region, a high voltage transmission line is to be The project is also cited as one of the constructed between Ghana and Côte d’Ivoire, Government's priorities in the Agreement on as a regional priority project of the West African Peace and Reconciliation in Mali resulting from Power Pool (WAPP). the Algiers process, signed in Bamako in June 2015. The 296 km 330 kV transmission line, with two conductor systems and a capacity of 700 MW, The project responds to the priorities of Mali's will connect the substations Dunkwa II in Ghana National Indicative Programme 2014-2020 and Akoupé-Zeudji in Côte d’Ivoire. It includes (11th EDF), which provided for the development two new substations and grid reinforcement of of the Bourem-Kidal axis as part of the existing transmission lines in both countries, to transport concentration sector. The project will allow the evacuation of power to the national grids. EFSD BLENDING OPERATIONS 2017 29
The projects aims to overcome a gap in the The project consists of the construction of a West African "coastal backbone" power grid, solar power plant with a capacity of 30 MWp to facilitate electricity trading far beyond connected to the existing 90 kV power line in the national borders and to improve the the Northern Region. As one of the first publicly prerequisites for capital expenditure and implemented renewable energy projects in generation capacity (primarily renewable Côte d’Ivoire, the construction of the plant will energy and efficient thermal power plants). be an example for the further development This transmission line will provide an electricity of renewable energy in the country and the supply to the power users in the regions more entire WAPP region. Accompanying technical reliably and at lower cost. measures will support institutional capacity building within the Ministry of Energy as well The EU contribution will be dedicated to the as the Société des Energies de Côte d’Ivoire Ghanaian transmission line, grid reinforcement and other relevant institutions to ensure components and substations. TA will also be sustainability. provided. In the long run, the project will support access to energy through increased generation capacity Sustainable Energy for in the North and thus contribute to poverty Côte d’Ivoire: 30 MWp alleviation and sustainable economic growth Solar Power Plant in the in the country. Some 35,000 households and context of the WAPP up to 175,000 individual beneficiaries could Energy - Côte d’Ivoire, West Africa benefit from the installation of the solar power plant. The additional energy supply does not Total cost: €42m only benefit the population but also the private EU contribution: €10m sector and social institutions, such as hospitals Lead Financial Institution: KfW with €28m and schools that are dependent on reliable and Other investors: Government of Côte d’Ivoire cheap energy. with €4m Accompanying technical measures will support institutional capacity building within key Due to a robust economic growth, Côte d’Ivoire institutions in the energy sector to strengthen is confronted with a high energy demand. effective oversight and implementation of Moreover, the Government intends to further further renewable energy projects in Côte strengthen the country’s role in the ECOWAS d’Ivoire. This in turn will support the long-term and as an electricity exporter in the context of strategy of reaching a share of 16% renewable the West African Power Pool (WAPP). energies in the Ivoirian energy portfolio until 2030. Finally, solar energy also contributes to Energy security and reliability are therefore reducing greenhouse gas emissions, supporting high priorities for the Ivorian Government. The the international community’s endeavour to Government has set the ambitious goal of combat climate change and adapt to its effects. increasing the national production of electricity from current 1,924 MW to 4,000 MW in 2020. The EU contribution will simultaneously support Furthermore, it has pledged in the context of the implementation of the desired capacity COP21 to increase the share of renewable of 30 MWp (or potentially more) while also energy in the energy mix from current 0.1% limiting the indebtedness of the Ivoirian State. to 16% in 2030. Up until now, however, the The EU grant will also support capacity building necessary institutional and technical capacities within key institutions. within key institutions have been low. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 30
Extension and the CEET by reducing technical and commercial rehabilitation of CEET’s losses. The EU contribution will finance network electricity network in the extension investments, thus broadening the Greater Lomé area scope of the project including all the peripheral Energy - Togo, West Africa districts identified through the feasibility study.
Total cost: €87m EU contribution: €8m North Core / Interconnector Lead Financial Institution: AFD with €30m 330 kV Nigeria, Niger, Other investors: KfW with €10m, WB with Benin, Burkina Faso €32m and PASET with €7m Energy - Burkina Faso, Benin, Niger and Nigeria, West Africa
The production mix and electricity purchases Total cost: €634.68m of the Compagnie Energie Electrique du Togo EU contribution: €30.68m (CEET) are insufficient to meet the growing Lead Financial Institution: AFD with €40m demand, and Togo remains dependent on and AfDB with €213m neighbouring countries for the provision of Other investors: WB with €145m, SONABEL electricity. In addition, the electricity access with €20m and other financiers with €186m rate is low.
The project for the extension and rehabilitation West African countries have significant energy of the electricity network in the Greater Lomé resources, unequally distributed over the area consists of both the rehabilitation of territory. The integration of their electricity the existing network and the extension of the systems allows for the distribution of the network to peripheral areas through 1,800 km energy produced to all the countries in the of low voltage connections. region.
The project is part of the Support Program for Among the priority projects of the WAPP, the the Energy Sector in Togo - Phase 1 (PASET North Core consists of the construction of 1), financed through the 2014-2020 National a 880 km-long, 330 kV transmission line Indicative Programme (11th EDF), which aims connecting Birnin Kébi (Nigeria) to Malanville to promote improved access to modern and (Benin), Niamey (Niger) and Ouagadougou sustainable energy services and to contribute (Burkina Faso), including substations. to the improvement of the institutional framework to facilitate future investments. The objective is to evacuate the energy produced The project will be implemented in parallel with in Nigeria to its neighbouring countries, which a complementary World Bank project. suffer from large production deficits and are unable to meet rising energy demand without The electrification of the peripheral area of increasing imports. Lomé will ensure reliable access to electricity for at least 40,000 households. The provision of The project also includes a rural electrification a modern energy source will have a significant component targeting localities in a 10-km wide effect on the local economy. In addition, the corridor along the interconnector, benefitting reconstruction of the network will promote around 540,000 people. The EU contribution better operations and improve the quality will mainly finance this rural electrification of the service provided. The project will also component. contribute to improving the performances of EFSD BLENDING OPERATIONS 2017 31
DEFISSOL project: Onigbolo power plant will reduce the energy Construction of a 25 production costs in Benin and the country's MWp solar power plant dependence on oil products. At the local and modernisation of the level, the socio-economic benefits in terms information system of of job creation will be significant. In terms of SBEE environmental impact, the project will reduce Energy - Benin, West Africa greenhouse emissions by 23,000 tonnes of CO2-equivalent per year over 25 years. The Total cost: €60.85m modernisation of the information system of EU contribution: €10.35m the SBEE will improve the management and Lead Financial Institution: AFD with €50m the financial sustainability of the company. Other investors: Government of Benin with €0.5m The EU contribution will finance, alongside the loan provided by the AFD, both investment costs and TA with the aim of reducing the energy Benin is highly dependent on the countries of price though a higher concessional element in the sub-region and faces difficulties in meeting the financial package. the increasing demand for power. The national electricity operator, the Société Beninoise d'Energie Electrique (SBEE), suffers from a lack of investment in its networks and shortcomings in its information system.
The Government's strategy, included in the Plan de Redressement durable du sous- secteur de l’Electricité (PRSE), aims to ensure a steady, secure and sustainable electricity supply at a lower cost by strengthening the local production capacity and diversifying the production sources, including through solar energy. The improvement of the performances of SBEE is also a priority objective of the PRSE.
The DEFISSOL project aims to increase Benin's production capacities through the installation of a 25 MWp solar photovoltaic power plant on the Onigbolo site, connected to the grid. It also aims to modernize the SBEE's information system to improve its performance.
Benin is at an early stage of diversifying its energy mix with renewable energy. DEFISSOL is a pilot project that will promote the acquisition of skills, both by the Ministry of Energy and the SBEE, the project owner and future operator of the plant.
With a very competitive production cost, the EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 32
Construction of a hybrid The EU contribution will co-finance, alongside power plant in Agadez AFD resources, all the components of the project, (Niger) thus improving the overall concessionality of Energy - Niger, West Africa the financial package and allowing keeping in check the cost of electricity. Total cost: €34.02m EU contribution: €16.42m Lead Financial Institution: AFD with €16m Construction of a solar Other investors: Government of Niger with power plant in Gorou €1.6m Banda (Niger) Energy - Niger, West Africa Niger has a very low rate of electrification, particularly in rural areas, and a high Total cost: €30.30m dependence on Nigeria. Due to insufficient EU contribution: €5.30m electricity transmission infrastructure, Lead Financial Institution: AFD with €23.5m locations in the north of the country can only be Other investors: Government of Niger with electrified through mini-grids currently running €1.5m on diesel or coal, as it is the case for the cities of Agadez and Arlit. The project consists of the construction of a 20 MWp solar photovoltaic power plant on The Government's strategy aims to ensure a the Gorou Banda plateau, in the suburbs of steady, secure and sustainable supply at a lower Niamey. The power plant will be connected to cost, notably by strengthening local production the national grid at the new 80 MWp thermal capacities and diversifying production sources, power plant of Gorou Banda. The project also particularly through renewable energies. Solar includes a TA component aimed at training energy is one of the Government's priorities. the engineers and technicians of the Société Nigérienne d'Electricité in photovoltaic The project consists of the construction of a technologies to enable them to operate large hybrid power plant in Agadez. It aims to improve solar power plants in the short term. and secure the electricity supply of the city at a lower cost, thus contributing to the economic The project aims to improve and secure rapidly and social development of a strategic area the electricity supply of the Niamey region which currently also represents a centre for the at a lower cost, thus contributing to Niger's transit and settlement of migrants. economic and social development. It will enhance the country's significant renewable The plant will also enhance the country's energy potential by providing a sustainable and significant renewable energy potential by modular solution leading to limiting greenhouse providing a sustainable and modular solution, gas emissions. The power plant represents a leading to a reduction in greenhouse gas pilot project which will allow launching similar emissions. projects in the country.
At the local level, the socio-economic benefits, The project is expected to benefit over 17,000 in terms of jobs in particular, will be significant. people and to reduce emissions by 23,200 The main environmental impact of this project tonnes of CO2-equivalent per year over 25 is the reduction of greenhouse gas emissions years. estimated at 23,800 tonnes of CO2-equivalent per year over 25 years, for an estimated total The EU contribution will cover activities related of around 600,000 tonnes. to both the construction of the power plant and the TA. EFSD BLENDING OPERATIONS 2017 33
Central Africa
of the river at all times and its safety will be Construction of a bridge on the ensured. This will increase the movement of Logone river between Yagoua persons and goods between Cameroon and (Cameroon) and Bongor (Chad) and Chad, foster trade and strengthen socio-cultural ancillary works exchanges between the two countries. More Transport - Cameroun and Chad, Central broadly, the project will contribute to regional Africa integration in the fragile lake Chad region. In addition, economic activities are expected to Total cost: €105.13m develop along the bridge and road. EU contribution: €40.95m Lead Financial Institution: AfDB with €25.55m The EU contribution will co-finance the bridge and ADF with €27.47m and associated socio-economic development. Other investors: Government of Cameroon with €6.39m and Government of Chad with €4.77m Port of Pointe Noire (PAPN) extension and upgrading program Chad and Cameroon share a long border, Energy - Benin, West Africa maintain excellent relations, and trade mostly by land. They have identified strategic axes Total cost: €198.98m of socio-economic development and projects EU contribution: €29.98m to be implemented jointly as part of the sub- Lead Financial Institution: AFD with €70m regional integration process; the development Other investors: Government of Congo with of transport infrastructure is a priority and €99m major projects are being initiated in this area.
The project includes the construction of a bridge PAPN is Congo's only maritime outlet, which over the Logone River between Bongor in Chad plays paramount role in the economic and Yagoua in Cameroon, the construction of a development of the country. For several years connecting road of approximately 14,180 km it has sought not only to best serve the internal on both sides between Yagoua and Bongor, as market, but also to position itself as a natural well as related developments (protection of the gateway to the central region of Africa, which banks of the river, weighing post, border post, would allow it to serve an estimated hinterland etc.). of 50 to 130 million inhabitants in the medium and long term. The project is the first phase of the wider Regional Project Integrating the Road The project consists of the improvement of Network in the Lake Chad Area, which aims the port's infrastructure for the transport to rehabilitate the National Road 2 (Magada- of goods, the construction of a fishing port, Yagoua) and the National Road 1 (Moutourwa- accompanying measures for a sustainable Maroua), including the bypass of Maroua, and exploitation of fisheries, environmental to provide for the maintenance of the road measures, and activities for the improvement from N'djamena to Bongor. of the port's procedures, reducing the time and cost of passage for economic operators. The project will improve transport conditions and reduce travel time and costs. The crossing The project aims to enable the PAPN to EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 34
to the increase in traffic by improving its infrastructure and competitiveness, to ensure Energie des grands lacs is a tripartite energy environmental management in accordance cooperation institution of the ECGLC which with international standards, to provide has, amongst others, a mandate to develop Congo with efficient industrial and artisanal the hydroelectric potential of the Ruzizi River, fishing infrastructure and to support the estimated at around 500 MW. Two plants are implementation of a sustainable management currently being operated on Ruzizi (Ruzizi I, of the country's fisheries resources, essential constructed in 1959, with an installed capacity for the population. of 29.8 MW, and Ruzizi II, commissioned in 1989, with a current installed capacity of 36 MW). The infrastructure component of the project will A third power plant, Ruzizi III, with a planned be mainly financed by PAPN own resources and capacity of 147 MW, is under development a loan from the AFD. The EU contribution will through a public private partnership scheme. finance the improvements of the fishing port, the accompanying measures for a sustainable The Ruzizi IV plant, with a capacity of 287 MW, fisheries' exploitation, environmental measures will fully exploit the hydroelectric potential of and activities for the improvement of the port's the river. The project will further reduce the procedures. energy deficit, facilitate access to electricity at an affordable cost and contribute to the improvement of the economic and social Complementary studies for the development framework in the three ECGLC hydro-power plant Ruzizi IV members. Energy - Burundi, Democratic Republic of Congo and Rwanda, Central Africa The complementary studies for Ruzizi IV plant will include additional feasibility and detailed Total cost: €9.30m design necessary for the construction of the EU contribution: €8.30m hydro-power plant, which was the subject of a Lead Financial Institution: AfDB with €0.25m prefeasibility study in 2008-2009. Other investors: Government of Burundi, The activities will be undertaken in three phases. Democratic Republic of Congo and Rwanda The first phase consists of a feasibility study, with €0.2m and other financiers with €0.55m detailed preliminary design, and preparation of tender documents. A second phase will consist of the study of the institutional framework and Burundi, Democratic Republic of Congo and bankability of the project. The third phase will Rwanda, members of the Economic Community support the implementation of the project. of the Great Lakes Countries (ECGLC), face the consequences of repetitive socio-political conflicts that characterized the sub-region between 1993 and 2000, followed by an economic recovery.
During the conflict period and the years that followed, investment in infrastructure and particularly in energy were insufficient to meet the growing demand. Currently, the need for electricity is pressing and new energy resources need to be developed. EFSD BLENDING OPERATIONS 2017 35
Eastern and Southern Africa Smallholder farmers or their associations will Kenya Agriculture Value Chain benefit indirectly as value chain investments Facility materialise and bring about opportunities Agriculture - Kenya, Eastern and Southern for smallholders to enter into business Africa and Indian Ocean relationships with the private sector.
Total cost: €110m The Facility will complement and benefit from EU contribution: €10m activities under the wider action programme Lead Financial Institution: EIB with €50m funded by the EU Kenya (AgriFI) support to Other investors: private financiers with €50m productive, adapted and market integrated smallholder agriculture. Kenya AgriFI, financed through the 2014-2020 National Indicative The agriculture sector in Africa faces specific Programme (11th EDF) builds on the 10th EDF risks such as volatility of the commodity prices Kenya Rural Development programme and the and lost production due to weather conditions. market integration of the Standards and Market Commercial banks tend to be relatively Access Programme which have shown that risk averse when it comes to longer term limited access to finance, training and market agricultural finance in Africa. As a consequence, integration of the smallholder farmers are the high risk premia charged often result in non- main obstacles for moving out of subsistence affordable interest rates for the private sector. farming. Banks themselves also lack suitable long-term funding for offering longer-term agriculture finance. Moreover, financing in hard currency Construction of Muzizi is in general not the preferred solution for Hydro Power Project Energy - Uganda, Eastern and borrowers active in the local market. Southern Africa and Indian Ocean The Kenya Agriculture Value Chain Facility Total cost: €123.30m consists of a €50 million credit line extended EU contribution: €20.50m by the EIB to commercial banks in Kenya Lead Financial Institution: KfW with €45m with the overarching objective to facilitate Other investors: AFD with €45m and access to finance for agriculture enterprises Government of Uganda with €12.8m promoting integration of smallholder farmers into the value chain. It will enable banks to offer accessible funding in local currency. TA Energy demand in Uganda is rising due to a for capacity building will enhance appraisal, steady economic growth and expanding grid monitoring and evaluation of long-term loans connections to private households, commercial to agriculture value chain projects. Projects and industrial consumers. New generation eligible under the Facility will have to prove capacity needs to be added urgently to the their impact on smallholder integration in the grid over the next decade. Uganda is endowed value chain. with a significant potential for hydropower generation which can represent a cost-efficient The main counterparts are commercial banks and environmentally friendly alternative to with exposure to agriculture and agriculture thermal power both in Uganda and in Eastern value chain projects and willingness to Africa. increase financing for the private sector actors undertaking investment in their value chain. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 36
The project consists of the construction of the 45 MW Muzizi hydropower plant in Great North Road Upgrade Project western Uganda with the aim to improve the Transport - Zambia, Eastern and Southern electricity supply to the growing economy and Africa and Indian Ocean the households. Muzizi will be developed as a run-of-the-river plant with additional peaking Total cost: €435.85m capacity to provide electricity also during daily EU contribution: €73.66m in addition to peak demand. The project includes construction, €1.64m EDF contribution to the feasibility environmental and social mitigation measures, study and detailed design as well as expert services to support the Lead Financial Institution: EIB with €114.43m implementation and monitoring of the project. Other investors: AfDB with €227.10m, Government of Zambia with €18.72m and The population not connected to the grid as part EIB-managed Cotonou Subsidy Envelope with of the project will benefit indirectly since public €0.30m institutions such as schools and health centres will be able to provide improved services. The project will also strengthen the Eastern African The Great North Road is one of the six Power Pool. international trunk roads in Zambia, connecting the centrally located and landlocked country The hydropower plant will produce 250 GWh with neighbouring Tanzania and Zimbabwe. The per year from renewable sources. It will help to road carries significant international cargo and reduce CO2 emissions and Uganda’s reliance bulk commodities. The upgrade of the road is a on fuel wood for energy, which leads to massive key national and regional priority, as confirmed deforestation. Furthermore, the construction of by the Zambian Government and the three the plant will create approximately 250-300 regional economic communities, the COMESA, jobs. the EAC and the SADC.
The EU funding will contribute to a timely The project consists of the rehabilitation, completion of works and help reduce widening, and marginal alignment of about 372 pressure for increasing tariffs due to currency km of the road from Mpika to Nakonde in North- devaluation, and will therefore contribute Eastern Zambia at the border with Tanzania. It affordability of energy for all consumers, in also includes the rehabilitation of about 50 km particular low income households. of feeder roads and complementary initiatives in the project area, as well as TA. Initial project preparation was undertaken by the three regional communities with EU funds from the 10th EDF.
The project is part of the joint Tripartite Aid for Trade initiative which aims to improve the regional transport infrastructure with a view to supporting economic and social development programs along road corridors.
The project aims at fostering regional integration by expanding intra-Africa trade and strengthening growth, reducing the time EFSD BLENDING OPERATIONS 2017 37 and cost of transport along the corridor. This The M1 road links the major cities in Malawi is in line with the joint Africa-EU strategy and carries significant local traffic, servicing aiming at boosting sustainable and inclusive key district administrative and trading centres. development and growth and continental The economic development of the country integration. Furthermore, the project intends depends on a reliable and safe M1 corridor for to contribute to transforming Zambia from trade, food security and essential services such a land-locked to a land-linked country. The as healthcare. project will help diversify the economy and unlock the country’s economic potential, and The project is therefore of high priority for thus make growth more resilient and inclusive, the Government as part of the Malawi Growth in line with the overall targets of the Seventh and Development Strategy. The need for National Development Plan and the National rehabilitation and improvement arises from Long Term Vision 2030. Moreover, thanks to increased levels of traffic, high presence of the project, the road will be more resilient to pedestrian and bicycle traffic and because climate change and safer for road users and the overall condition of the road pavement is local communities living in the vicinity. either nearing or has reached the end of its serviceable life. The EU contribution will co-finance, alongside the EIB loan, civil works and services relating to Rehabilitation and improvement of the almost the upgrade of the road from Mpika to Chinsali. 1,145 km will be undertaken in phases. The It will also improve the level of concessionality project covers the first phase and it aims to of the blending package. rehabilitate 215 km of priority sections of the road, which are in poor or very poor condition.
Malawi M1 Road Rehabilitation The main outcomes will be increased mobility Transport - Malawi, Eastern and Southern and safety, savings in vehicles operating costs Africa and Indian Ocean and travel time, reduced road accidents, access to trade and economic activities, and improved Total budget: €163.16m access to health, education facilities and other EU contribution: €44.16m essential services. Lead Financial Institution: EIB with €40m Other investors: WB with €59m and The rehabilitation of the M1 road is also Government of Malawi with €20m important for the EU efforts to improve rural roads to allow smallholder farmers access wider markets. This will strengthen food The M1 road is an important link in the North security and links to agro-processors, which in South Corridor network of COMESA. It is the turn contributes to sustainable agriculture and backbone of the Malawi road network. The road income growth among the predominantly poor facilitates regional trade with Mozambique in rural population. the South and further beyond to the countries of the SADC. Malawi is a landlocked country, The EU contribution will co-finance, alongside and roads remain the most accessible mode of the EIB loan, civil works and thus increase the transport for both freight and passenger traffic. concessionality of the financial package. They provide long distance transportation of import goods from and to Dar es Salaam. Through Malawi, the M1 offers the shortest import/export route to Dar es Salaam for Zambia’s agriculturally important Eastern Province. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 38
Mozambique-Malawi Malawi will import power from Mozambique Interconnector and provide consumers with reliable access to Energy - Mozambique and Malawi, electricity supply. Eastern and Southern Africa and Indian Ocean The EU contribution will finance a share of the investment costs on the Malawian side. Total cost: €88.35m EU contribution: €20.40m Lead Financial Institution: KfW with €20m Port Victoria Rehabilitation Other investors: WB IDA with €47.95m and Extension Transport - Republic of Seychelles, Eastern and Southern Africa and Malawi is suffering from a serious electricity Indian Ocean deficit. The electricity supply cannot meet the estimated demand and a load-shedding Total cost: €36.90m program is ongoing. By contrast, the Tete EU contribution: €5.40m province of Mozambique is considered as Lead Financial Institution: EIB with €15m the potential “power house” of the Southern Other investors: AFD with €16.50m Africa Power Pool (SAPP) because of its vast generation resources. In 2013, the governments of Mozambique and Malawi signed a power Seychelles is classified as a high-income country interconnection agreement that provides for since 2015. Despite this, the Government has the construction of an interconnector in two agreed in 2014 with the IMF an Extended Fund phases to be implemented subsequently. Facility aimed at reducing high debt levels whereby it agrees annually with the IMF on The Mozambique-Malawi Interconnector which projects will be in the debt ceiling. Thus, represents the first phase and it comprises the the country's additional debt capacity is limited. construction of a 218 km-long high voltage Seychelles is also highly exposed to most of transmission line between Matambo (in the the vulnerabilities inherent to Small Islands Tete Province in Mozambique) and Phombeya Development States and heavily dependent on (in the Balaka District in Malawi) which will imports of oil, food and raw materials. connect the electricity grids of Malawi and the Mozambique. The interconnector could The port of Victoria is the only significantly be extended in a second phase, thereby sized port serving Seychelles and is situated in connecting the northern and the central grid of the capital Mahé, where 90% of the population Mozambique via Malawi. lives and where most of the tourist facilities are. It is therefore critical to the economic life of By way of the interconnector, Malawi (member the country, particularly given its dependence of the SAPP) will be connected to the SAPP grid on imports. The port is in urgent need of quay for the first time and will be in the position to reconstructions and capacity expansion. It was trade power with Mozambique, and other SAPP built in 1970 to handle light commerce and its countries in the medium to long term. operations have grown significantly afterwards.
The project aims to contribute to the The project consists of the rehabilitation and integration of the regional electricity market in expansion of one facility within the port known the SAPP region so that the electricity deficits as the Commercial Port. Works will include the and surpluses in the SAPP countries can be construction of a new quay offset from the balanced through power trading on the network. existing quay, demolition as necessary EFSD BLENDING OPERATIONS 2017 39
existing quay, extension of the port yard area National Road 6 in the North from the port of and dredging to accommodate the current Antsiranana (Diego Suarez) to Ambanja and the generation of shipping. The project will be National Road 13 in the South from the port implemented by the Seychelles Port Authority. of Taolagnaro (Fort Dauphin) to Ambovombe. The main outputs of the project will be the By increasing the port's capacity and efficiency, upgrade of approximately 348 km of national the expansion is expected to have a substantial roads, time and vehicle operating cost savings, impact on the port's competitiveness. The reduction in casualties and increased access to project will align the port with sustainable infrastructure for users. The feasibility studies transport objectives, reducing gas emissions and the designs were financed by the EU. and increasing safety and security of the port’s facilities. The project will also pave the way for The proposed upgraded roads will improve future private sector involvement, by providing transport connections in the northern and an adequate and efficient infrastructure. At southern parts of the country, in particular the national level, this initiative will impact to the ports, which will help to improve the the Seychelles’ economy supporting the business environment and hence economic diversification of its activities, employment development. Modernisation of the network creation and sustainable growth. will raise the mobility of people and support the transportation of goods, thereby unlocking The EU contribution will finance part of the civil growth potential in the areas and ultimately works and engineering services to contribute to raising living standards. rehabilitation and extension works of the port. The project complements two important 11th EDF projects in rural development (AFAFI-Nord Madagascar Road Network and AFAFI-South) which aim at developing Modernisation agricultural value chains. In addition, the EU is Transport - Madagascar, Eastern and Southern funding through the 11th EDF an institutional Africa and Indian Ocean support programme on the road and transport sector aiming to ensure the sustainability of the Total cost: €236.54m sector and thus the project after its conclusion. EU contribution: €116m in addition to €0.99m There is therefore the potential for the project EDF contribution to the feasibility study and to leverage policy reforms and reinforce the EU detailed design policy dialogue in the road sector. Lead Financial Institution: EIB with €114.73m Other investors: Government of Madagascar The EU contribution will mainly cover road with €4.82m upgrading works and services for construction supervision, thus increasing the concessionality of the financial package. The lack and obsolescence of basic infrastructure is a major impediment to the development of Madagascar. The political crisis between 2009 and 2013 contributed to this situation. At the end of 2013, only 10% of the entire road network was in good condition.
The project consists of the upgrade of two sections of national roads, namely the EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 40
of the equipment, while an institutional support Urban development and sanitation component will strengthen all the project's in priority neighbourhoods stakeholders, especially the municipalities. of Antananarivo - Phase III ("Lalankely III") The EU contribution will finance the project Infrastructure and urban development - management component, essential for Madagascar, Eastern and Southern Africa and the implementation of the project, and Indian Ocean the community management components aimed at improving the sustainability of the Total cost: €26.37m infrastructure. EU contribution: €3m Lead Financial Institution: AFD with €19m Other investors: Government of Madagascar ElectriFI country windows with €4.37m Energy - Benin, Côte d’Ivoire, Nigeria, West Africa, and Zambia, Eastern and Southern Africa and With about 2.5 million inhabitants, the Indian Ocean Antananarivo agglomeration has been experiencing one of the fastest population Total cost: €285m growth in Africa. Almost all new urban dwellers EU contribution: €85m are poor, and as neighbourhoods become Lead Financial Institution: FMO denser, living and health conditions deteriorate Other investors: EDFIs, IFIs and other private due to a chronic lack of infrastructure. There financiers with €200m is just one fire hydrant for 6,000 inhabitants in the outlying areas of the capital, and in the rainy season some neighbourhoods become The Electrification Financing Initiative (ElectriFI) inaccessible. The improvement of the living elaborated by the industry and development spaces through the construction of alleyways financiers, is a flexible tool for enabling access and staircases is a rapid operational response to modern, affordable and sustainable energy in line with the historical heritage of the city. services and/or improving access to safe, reliable, affordable and sustainable energy. It The Lalankely III project ("lalankely" means benefits populations living principally in rural, "alley" in Malagasy) is the third phase of a underserved areas as well as areas affected by programme, of which the first two phases have unreliable power supply. been implemented since 2012 in 20 districts in the agglomeration, benefitting 600,000 A major barrier to investment in this sector is inhabitants. Lalankely III is expected to improve the lack of seed, mid- and long-term capital the living conditions of 950,000 inhabitants of matching business cycles. In immature market 220 neighbourhoods in 26 districts. conditions, this is aggravated by the reluctance of commercial banks to provide suitable The project will target the construction of paved lending conditions that respond to the needs lanes equipped with drains for the evacuation of investors and by the existing capacity of rainwater and used water, roadways limitations in terms of structuring and bringing to connect neighbourhoods to the rest of projects to financial close. the agglomeration, sewerage and sanitary facilities, public lightening, and public and A support scheme that bridges the gap is sports facilities. A community management therefore necessary to stimulate the private component aims to ensure routine maintenance sector, mobilise financiers, including the local EFSD BLENDING OPERATIONS 2017 41 banking sector, and have a catalytic impact on economic growth. ElectriFI can play this role EDFI-AgriFI in Sub-Saharan and make support available to get investments Africa to successful implementation and scaling up. Agriculture - Sub-Saharan Africa ElectriFI provides investment support from (as part of a global facility) early stages. Appropriate financing will be made available at the stage of pipeline boosting, Total cost: €75.50m pipeline enhancement, project implementation, EU contribution: €29.25m project scaling up to bridge financial gap Lead Financial Institution: FMO with €15m and secure equity and senior debt (through Co-financing institution: EDFIs, other DFIs and subordinated debt). IFIs and other private financiers with €31.25m
The project mainly targets the private sector. Investments must be done in a financially Approximately 500 million smallholder farmers sustainable way. The involvement of partners in the world support the livelihoods of as many from local private sector and Civil Society as 2 billion people. Most of these smallholder Organisations will be instrumental to enhancing farmers live in Sub-Saharan Africa, where more effectiveness and ownership of the actions. than 90% of the farmers are smallholders who have relatively limited resources, but represent ElectriFI will support renewable energy a critical part of local food systems. investments, with a focus on rural electrification, with budgets between €0.5 million and €10 They face significant difficulties and barriers million. This amount will never be more than in access to finance, which has a negative 50% of the total investment cost. impact on production and income. Financing of private sector enterprises in the agricultural Project proposals can be submitted to the sector in those countries has proven to be ElectriFI team in Brussels directly or through the very challenging during the last decades; ElectriFI website (www.electrifi.eu). In addition smallholders’ finance is facing a very significant to the available global funding, in 2017, the funding gap. ElectrFI country windows for Benin, Nigeria, Zambia and Côte d’Ivoire were approved. The European Development Finance Institutions (EDFIs) aim to promote investments in the The EU contribution can support projects agricultural sector in low and lower-middle in various forms: early stage financing for income countries through the blended finance TA, subordinated or junior debt, equity and facility EDFI-AgriFI. The objectives are to guarantees. This can be done in both hard and increase the value-added, production and local currency. incomes of smallholder farmers by providing financing on commercially-oriented terms to private sector enterprises that involve smallholder farmers.
The facility will allow development finance institutions and other commercial investors to step in with debt financing at lower risk premiums, which reduces the overall cost for private sector and smallholder farmers. The lower cost of financing will support the increase EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 42
of yields at affordable rates, thereby increasing convertibility risks, which represent a significant farmers' income. That and compliance with barrier to finance energy projects. environmental and social standards will support sustainable supply chains that create The facility aims to leverage sufficient financing additional employment, improve food security for the development of renewable energy and enhance sound environmental and social capacities (solar, wind, hydro, geothermal) with practices. a view to contribute to reducing greenhouse gas emissions. By strengthening the energy The EU contribution will support commercial generation infrastructure and decreasing the models and mobilise investments to increase frequency of power cuts, the project will foster opportunities for smallholder farmers, providing business activity and job creation, contributing financing to projects that would otherwise not to addressing poverty and causes of migration. be financed. In addition, the provision of health care and education will improve.
Transferability and This facility would allow the constitution Convertibility Facility (T&C of a dedicated instrument for an amount Facility) corresponding to 6 to 12 months of debt service Energy - Sub-Saharan Africa (as that would cover specifically the convertibility part of a global facility) and transferability risks attached to renewable energy projects in the SE4ALL countries. The Total cost: €289.34m new instrument allows decreasing the risk EU contribution: €20.17m perception of foreign investors. Lead Financial Institution: PROPARCO with €236.25m The EU contribution will catalyse projects that Co-financing institution: other private will contribute to the promotion of renewable financiers with €32.92m energy solutions to meet the growing energy demand while mitigating the environmental and climatic constraints. To meet growing energy demand in developing countries and increase access to electricity, investment into renewable energy capacity is essential. It requires massive inflows of capital from foreign investors and participation of the private sector. Developing countries’ macroeconomic situation often makes it difficult to attract sufficient financing. Economic difficulties can also influence the level of foreign exchange reserves, leading to restrictions on convertibility of local currencies.
Under such circumstances, the sustainability of renewable energy Independent Power Producers (IPP) is considerably hampered, as they typically charge their revenues in local currency while debt payments are denominated in hard currency. As such, these companies are particularly exposed to transferability and EFSD BLENDING OPERATIONS 2017 43
Climate Investor One (CIO) expects to deliver a significant development Energy - Sub-Saharan Africa and environmental impact, producing an expected 1,133 MW of additional capacity that Total cost: €270.70m will reach some 7 million people. In delivering EU contribution: €30.70m these projects, CIO will avoid greenhouse Lead Financial Institution: FMO with €12.61m gas emissions by ca. 1.8 million tonnes CO2- Co-financing institution: USAID and the Dutch equivalent per year and will result in the Government with €17.28m, other Financial employment of around 34,000 people. Its Institutions with €95.35m and other private innovative financial structure will also help financiers with €114.76m to prove a cross-sector potential, inspiring new approaches to financing in infrastructure sectors. In recent years finance for renewable energy projects has remained a challenge. Projects The EU will provide capital in the Development either tend to fail or face significant delays Fund and Construction Equity Fund to in development and construction due to respectively provide TA during the early stages burdensome and time consuming negotiations of the development phase and equity financing and insufficient expertise. As renewable energy through the construction phase. projects involve important capital expenditures, the cost of debt at the construction level also often has a disproportionate effect on their EURIZ financial viability. Private sector - Sub-Saharan Africa (as part of a project targeting ACP Climate Investor One (CIO), winner of the 2015 countries) Global Innovation Lab for Climate Finance, aims to address those challenges. CIO is a blended Total cost: €664.36m finance facility mandated with delivering EU contribution: €21.16m sustainable energy at affordable prices in Lead Financial Institution: AFD with €120.8m emerging markets through its contribution Co-financing institution: SIDA with €24m and to each of the respective development, other private financiers with €498.4m construction, and operational phases of an underlying project company’s lifecycle. CIO combines a Development Fund, a Construction MSMEs play a major role in the sustainable Equity Fund and a Refinancing Fund into one development process in developing countries. innovative "capital recycling" facility targeting However, access to financial services for wind, solar and run-hydro projects. As an MSMEs in emerging markets remains severely innovative first-of-its-kind facility, CIO seeks constrained due to the high level of risk to mobilize blended finance provided by donors perceived by the banking sector. More than 85% and the commercial sector with its additional of MSMEs in developing countries do not have recycling feature to maximise impact and access to finance and are therefore unserved or reduce risk in markets where development is underserved. Whereas banks are still the main needed and climate change solutions can have source of formal funding, very few MSMEs a significant and sustainable effect. actually have access to bank credit and mainly short-term debt financing options are offered. CIO will develop and operate ca. 20 renewable Therefore, there is a significant need for more energy projects, investing in medium-size specialised and adequate investments vehicles, projects of between 25MW and 75MW. It responding to MSMEs’ effective financial needs. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 44
In order to address these constraints, this educated, there is an overwhelming potential project is designed to give MSMEs easier access for economic growth and development. So to financing from financial institutions, as well far, however, development has not kept the as to help financial institutions to partially pace with growth. Youth unemployment cover their risk and thereby develop their loans remains a huge concern alongside vulnerable for MSMEs. employment. Entrepreneurship plays a crucial role in net job creation, inclusive and green EURIZ is a guarantee facility which consists of economic growth and poverty reduction. two parts. The first part targets all MSMEs in fragile states characterised by lack of financing As Sub Saharan Africa grows more connected, for all sectors and no guarantees. The second its entrepreneurs have an unprecedented part covers non-fragile countries, focussing opportunity to produce innovative web-based on the financially underserved MSMEs (green, applications and dynamic new business agricultural, women-owned, youth). EURIZ models. There is an urgent need to support the will provide guarantees (mainly portfolio nascent African entrepreneurial ecosystem by guarantees) to cover loans issued by partner creating new businesses, shaping innovation, financial institutions to MSMEs and counter- providing growth capital for startups to rise guarantees to the local guarantee funds which and become regional and global champions, cover loans issued by the financial institutions accelerating structural changes in the to the MSMEs. Additionally, EURIZ will provide economy and contributing to productivity and TA to reinforce the capabilities of financial competitiveness. institutions, guarantee funds and MSMEs. Boost Africa is a partnership between the AfDB The EU contribution allows to increase the scale and the EIB, open to other investors, to enable of the project and to engage in innovative and and enhance entrepreneurship and innovation higher risk transactions. Not only it will finance across Africa in a commercially viable way, and MSMEs that would not have been financed incorporating a blending mechanism with the otherwise, but through the TA component it will EU. Boost Africa will promote job creation and also encourage other financial institutions to contribute to the EU and international response do so. to the migration challenge by tackling its root causes.
Boost Africa This initiative will use an integrated approach Private sector - Sub-Saharan Africa via investment in target funds, a TA Pool, and an Entrepreneurship Lab (ELab). The investment Total cost: €181.05m will span the whole venture segment (e.g. EU contribution: €61.05m seed funds, incubator’s accelerators’ follow- Lead Financial Institution: EIB with €60m and on funds, business angels funds, equity-crowd AfDB with €60m platforms, social innovation funds and venture capital funds) to support the creation and growth of start-ups and innovative SMEs with Economies in Sub Saharan Africa are among high-growth and job creation potential. the fastest growing in the world with a very high share of young population. Moreover, Africa’s youth is increasingly educated. Therefore, as the workforce becomes larger and better EFSD BLENDING OPERATIONS 2017 45
Boost Africa will support intermediaries who can generate or identify high quality, creative and innovative final beneficiaries. It is sector agnostic. However, preference will go to sectors that can leverage on innovation and have the potential to deliver superior economic impact such as the ICT, health, climate mitigation, education, financial services, agribusiness and manufacturing sectors. There will be particular emphasis on intermediaries that focus on youth and women as final beneficiaries.
The EU contribution to Boost Africa will be in the form of a junior tranche to enable the EIB, the AfDB and other financiers to widen their investment scope to projects that are usually not targeted by their standard financial instruments. The EU will also contribute to the TA Pool providing capacity building of first time fund managers and entrepreneurs. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 46 EFSD BLENDING OPERATIONS IN 2017
EU Neighbourhood
Southern Neighbourhood alignment and separating car traffic at critical intersections; as well as improved comfort for passenger. This tramway line will ultimately Rehabilitation of have a total length of 13.8 km and the capacity Alexandria’s RamI Tram to carry more than 200,000 passengers per Transport – Egypt day.
Total cost: €363.3m The project will support Alexandria’s sustainable EU contribution: €8.3m urban development, improve citizens’ everyday Lead financial institution: AFD €100m lives and economic performance by saving Other Investors: EIB €137.7m time and money. It will stimulate greater use Egyptian state €117.3m of public transport and promote Alexandria’s feel as a modern and dynamic Mediterranean city. These results align fully with the NIP The population of Egypt’s second largest specific objectives of promoting sustainable city has almost doubled in the last 40 years, development in local infrastructure and energy reaching 5 million inhabitants. With little public efficiency in the transport sector, as well as the investment, the city has suffered a degradation general policy objectives of aid to environment in public facilities. Combined with a poorly and gender equality. structured urban development plan, this has led to high levels of congestion and poor quality of public transport. FAYOUM Wastewater The RamI tramway is the oldest in Africa. It Expansion Programme connects Alexandria’s city centre with its north- Water/Sanitation – Egypt east residential district. The rehabilitation will lead to a simplified route, segregated traffic, Total cost: €456.488m modernised wagons and stations, and better EU contribution: €38.08m intermodality. The Government has pursued Lead Financial Institution: EBRD with €358.4m this priority through two initiatives: (i) a 2032 Other Investors: Public financing with €60m strategic urban plan for Alexandria and (ii) a study focused on urban mobility launched by the AFD. Some of the challenges to boosting investment in Egypt include strains on liquidity and fiscal The AFD has agreed to provide a loan to Egypt deficit. To address this, the Government has in order to proceed with the rehabilitation of launched a series of initiatives, including the the tramway, backed by a TA grant from the National Rural Sanitation Programme (NRSP), EU that will support project management, which aims to increase investment in the area communication, intermodality studies and of sanitation in regions deprived of sanitation actions on gender equality. The works envisaged infrastructure. The sector is a challenging one include an extension to the south-west and a for the country because of the previous lack better connection with other transport modes; of political commitment and management doubling commercial speed by simplifying the policies. Nonetheless, there have been new EFSD BLENDING OPERATIONS 2017 47 developments in the sector and the will to the Neighbourhood. By providing and improving restructure and produce the necessary reforms environmental services and environmental in order to improve water and sanitation infrastructure, the project will substantially services. Egypt developed its National Rural contribute to the EU Action Plan for Egypt. Sanitation Strategy through an EU funded initiative, the TA component of the ongoing Water Budget Support programme. Moreover, Kitchener Drain the water and sanitation component is an Water/Sanitation – Egypt objective of the EU Single Support Framework for Egypt (2014-16). Total cost: €482.278m EU contribution: €46.978m The EBRD, the EIB, and the EU work together in Lead Financial Institution: EIB with €213.9m, order to assist in the operationalisation of the EBRD with€ 175.6m NRSP by financing the top priority pilot project: Other Investors: public investment with 45.8m The Fayoum Wastewater Expansion. Fayoum is a Governorate to the southwest of Cairo with limited wastewater treatment capacities The Kitchener Drain is one of the longest (only around 45% of its population covered agricultural drains in Egypt but it is also one by centralised sanitation coverage); huge of the most severely polluted. The drain flows quantities of wastewater end up in the nearby through three governorates with a population lake Qarun causing significant environmental of approximately 6 million people and harm. The investment programme aims to discharges into the Mediterranean. Untreated increase wastewater treatment capacity and or insufficiently treated wastewater directly improve operational systems and practices, as discharged into the main drain and its network well as reduce the levels of pollution in Lake of secondary and tertiary drains constitutes a Qarun and subsequently improve living and significant source of pollution. public health standards for the local population. Following the Barcelona Convention to protect Through this initiative, the EBRD and the EIB the Mediterranean Sea against pollution, will provide loans to the Fayoum Company for Egypt launched a National Action Plan (NAP) in Water and Wastewater, which will manage 2015 aiming to providing universal access to the construction of two new wastewater sanitation in rural areas. The NAP identified a treatment plants, the expansion and upgrade number of environmental “hot spots” that were of 15 existing wastewater treatment plants; in dire need of investment. The Kitchener Drain and the expansion of the sewage network in is one of them. the area and the installation of new pumping stations. The EU grant will partially support The project is the first phase of a larger the three main actions listed above, while the investment programme aiming at the TA component will strengthen the institutional depollution of the Kitchener Drain through capacity to implement the project and increase investments in: (i) wastewater & sanitation; awareness and community ownership. (ii) solid waste; and (iii) drain infrastructure rehabilitation. It is the first of its kind in Egypt The programme supports Egypt’s development to adopt an “integrated” approach to tackle and investment priorities. It also complies with several sources of pollution at once to achieve the EU legislation on water and sanitation. maximum impact and synergies. The EIB and It fits with the EU assistance priority sectors the EBRD supported by the EU funding aim to in Egypt: poverty alleviation, local socio- improve surface and ground water quality, as economic development and social protection, well as soil quality. The project will also improve improvement of quality of life and environment, public health, employment and general living as well as improving water and sanitation in conditions. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 48
As-Samra Wastewater otherwise attract interest from commercial Treatment Plant (WTTP) banks due to the Water Authority’s weak Expansion BOT financial profile. The project feeds into EU policy Water/Sanitation – Jordan objectives as described in the Single Support Framework from EU to Jordan, including the Total cost: €170.604m increased access to improved basic services EU contribution: €30.804m such as water and wastewater management. Lead Financial Institution: EBRD with €56.7m The project is a part of the EU response to the Other Investors: public investment with €30m, refugee situation in Jordan. private investment with €53.1m
Euro-Mediterranean Jordan has been highly affected by the refugee University in Fes (UEMF) crisis resulting from the Syrian civil war. The Education – Morocco majority of the refugees reside in Jordanian cities and not in refugee camps, which puts a Total cost: €147.566 strain on municipal infrastructure and service EU contribution: €13.566m delivery. The wastewater treatment sector has Lead Financial Institution: EIB with €70m been particularly afflicted. It had been already Other Investors: public investment with facing a series of technical and financial €29.1m, private investment with €34.9m difficulties, such as general demographic growth. The arrival and hosting of refugees has dramatically aggravated this situation. Morocco is a lower middle-income country with a GDP per capita of $3,000 (8,180 in PPP According to the World Bank, Jordan is the terms) and a population of 36 million. Thanks fourth driest country in the world. The As- to prudent macro-economic policy and political Samra WWTP serves the cities of Amman and stability, Morocco has witnessed relatively Zarqa and over 4.4 million people; it will soon strong and sustained growth over the last reach its maximum capacity. Moreover, there decade. are concerns about the quality of water and related environmental and health hazards. The UEMF has been operational since 2012. An urgent action would strengthen Jordan’s Launched in 2008 during the ministerial capacity to address the challenges and help meeting of the countries of the Union for create the conditions for delivering an essential public good. the Mediterranean, it aspires to create an educational framework of intercultural dialogue The As-Samra project financed by the EBRD and and cooperation between the north and south blended with an EU investment grant will aim of the Mediterranean. The country’s capacity to to address these problems by enhancing the accommodate students is limited, while, at the capacity of the WWTP by an additional 100,000 same time, the number of registered students m3/day to allow the two municipalities to cope in universities is growing. In parallel, many with the substantially increased wastewater young people seek quality education abroad. load. It will also increase energy production Hence, there is a need for better access to on-site thanks to the use of bio-solids and quality higher education in Morocco, especially electricity generation from water flows. in areas such as industry and engineering that are targets of the national economic strategy; The EU contribution and EBRD’s involvement the Government plans to educate 25,000 are crucial to the project, which could not engineer graduates per year by 2020. EFSD BLENDING OPERATIONS 2017 49
The EIB is providing loan-finance to the UEMF a growing demand for energy. The need for in order to construct an ecologically friendly efficient energy consumption and affordable campus at Fès with high-level education and reliable energy production is evident. programmes and research. The project will also contribute to mitigating climate change, The government has prepared the National thanks to its design, which puts great emphasis Energy Efficiency Action Plan, which aims to on energy efficiency and the use of renewable reduce the country’s electricity consumption energy. The EU grant alongside the EIB loan will by 5% until 2020. The Government aims finance the construction of the campus and the to produce 10% of energy from renewable purchase of the necessary equipment. sources by the same date.
The new site will offer the students education of The AFD has launched the SUNREF project high standard and will allow access, through a in order to address a number of obstacles in scholarship system, to high-achieving students meeting these goals, create a more viable of modest income. It will have an international market for green investments, stimulate staff respecting gender and ethnicity balance economic growth through gains in industrial and will promote scientific research and and energy productivity, invest in sustainable academic quality. On a regional level, the new solutions, and reduce environmental and social campus will positively affect the Fes-Meknes externalities. region. The EU grant together with the EIB loan for With the help of an EU grant and TA, it aims 25 years will soften the project’s financing to increase Palestine’s capacity in the area conditions, especially at the beginning of the of energy consumption and production. The operating period when the repayment of loan Bank will invest a total of €25 million in principal starts. As the cost of scholarships is small and medium size Green Investments, borne by the UEMF, the EU grant will enable the complemented with a €5 million EU grant university to reduce the level of indebtedness that will help lower risk and encourage more and seek the intended level of scholarships. enterprises and individuals to access such The project is in line with the EU’s objectives finance. The EU provides a further €3 million of for support to the region, which identifies TA to help enterprises and households identify education as a priority area and develop green investment opportunities, . while ensuring that the banks are able to evaluate investment risks and identify the Sustainable Use of Natural most relevant proposals. Resources and Energy Finance (SUNREF) This project is a part of the European Energy-Palestine Joint Strategy in support of Palestine. It is implemented through partner banks that will Total cost: €42.45m channel the investment to beneficiaries under EU contribution: €8.35m market rules. In parallel, they will have access Lead Financial Institution: AFD with €25.08m to consultants. As a result, only the most Other Investors: public financing with €9.02m efficient projects would be financed.
Palestine has an economy of roughly $12 billion GDP; it is mainly service oriented, highly dependent on Israel, and experiences a combination of growing working age population, high unemployment, political instability and EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 50
Proville 2 enabling economic and social integration of Social Sector – Tunisia the inhabitants.
Total cost: €235.69m Proville 2 is a sound companion of the Tunisian EU contribution: €30.69m public sector reforms. It complies with the Lead Financial Institution: AFD with €78m EU policy in the region on good governance, Other Investors: EIB with €77m, public environmental sustainability and gender financing of €50m equality. The EU adds value by improving the quality of the investments and engaging citizens including women and youth. Tunisia has been rapidly urbanising, with more than 67% of its population living in cities and a major part of economic activity concentrating Programme to Restart in the metro areas. As social disparities among Modernisation Investment regions have grown, local authorities struggle in Agriculture (PRIMEA) to respond to the many challenges posed by Agriculture – Tunisia this new environment. The central Government has been making an effort to enhance the Total cost: €300.776m decentralisation of the country in response EU contribution: €10.3m to regional discrepancies, but a number of Lead Financial Institution: AFD with €62m challenges obstruct this task, including the Other Investors: public financing with €32.4m, need for structural reforms and increasing the private financing with €196m influence of the municipalities.
The events of the Arab Spring led to the adoption Restrained investment into farming in Tunisia of a programme targeting the rehabilitation meant stagnating productivity, low rates of and integration of residential areas, financed return and decreasing competitiveness. The and managed by the Tunisian state. The Proville agriculture businesses suffers as farmers face 1, funded by EIB and the EU, supported these difficulties in accessing capital, either self- efforts with success. In order to consolidate financing, subsidies or loans. To address this, the results and continue, the Government the Tunisian Government launched a new Code has launched the second rehabilitation and for Investment, which in the agriculture sector integration programme, which will also receive translates into higher subsidies (increasing the European aid. rate of grants from 15% to 30%). However, the financing needs outstrip the possibilities of Proville 2 aims to improve living conditions of public expenditure. Tunisian citizens in the areas most affected by regional inequalities. A loan by AFD, blended The existing funding facility for agriculture in with an EU grant and a loan by the EIB, will Tunisia, implemented by the Investment Agency co-finance basic infrastructure, public facilities and Regional Commissions for Agricultural and equipment. Moreover, TA will improve Development, is facing limitations due to the quality through technical studies that will economic, financial and institutional reasons, reinforce the technical expert teams, capacity while the banking sector perceives the sector building for the local administrations and as risky. Moreover, agricultural consulting impact studies that will help consolidate the services are limited in Tunisia and, therefore, results. The program strives to reinforce an farmers lack information about investment integrated dimension of urban development, opportunities and innovative instruments that could help them prosper. EFSD BLENDING OPERATIONS 2017 51
The Tunisia-EU Action Plan stresses the sector. In the West Bank and Gaza the situation importance of agriculture. PRIMEA will is still worse, with high levels of unemployment complement existing programmes such as and a quarter of the population living in poverty. the ENPARD, which also supports agricultural The incentives for investment are not high, and rural development in Tunisia. Moreover, but there exists a nascent entrepreneurship Tunisia’s 2016-2020 Development Plan ecosystem. includes among its priorities the development of green economy. The project launched by the EBRD targets SME activity in the afflicted areas and builds on the The AFD provides a substantial loan, combined premise that the knowhow and financing are with TA that aims to complement the public crucial elements for SME growth. This project expenditure, as well as improve the efficiency of will mainly aim at enhancing competitiveness the grant facility, modernise farming activities and productivity of SMEs in many sectors. through a technical and economic assistance, Local consultants with the help of international and implement structural reforms that will aid advisers will provide business advice and in the sustainability of the investments. The EU industrial expertise, while IFIs or local banks will grant covers TA in the form of modernisation assist in preparing companies for investment. of farms and agricultural businesses through the implementation of a structured national The EU contribution, which accounts for the consulting service. This is based on the pilot major part of project financing, comes via already launched by the Government and two complementary activities: the provision will aim to create a pool of 500 consultants of advisory services to SMEs and the that will assist some 3,000 farmers and 110 reimbursements of a share of the total costs farming businesses each year. of said services. The project’s regional nature and focus on private sector development is consistent with the EU’s strategic objective Extending the EBRD’s Small to promote smart, sustainable and inclusive Business Initiative to Lebanon, the growth, in particular through support for SMEs. West Bank and Gaza Private Sector – Regional
Total cost: €6.4m EU contribution: €5.2m Lead Financial Institution: EBRD Other Investors: private financing with €1.2m
Many years of political instability, unresolved conflict and continued restrictions on movement, access and trade in Lebanon and Palestine have adversely affected their private sectors, dominated by MSMEs. They face numerous challenges such as limited access to finance, poor corporate governance and lack of quality advisory services.
Several recent initiatives launched in Lebanon have failed to capture the needs of the SME EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 52
EU Trade and Competitiveness enhancing regional integration and climate Programme in Egypt and Jordan - change mitigation. It aims to provide wider EIB component access to finance for SMEs and enable local Private Sector – Regional banks to take more risk, build the capacity of banks, beneficiaries and authorities and improve Total cost: €265.6m competitiveness in the sectors crucial for the EU contribution: €25.6m economy. The EU contribution will support the Lead Financial Institution: EIB with €120m risk sharing and the expert support facilities Other Investors: private investment with through the combination of a grant, guarantee €120m and TA. The programme is consistent with the EU priorities for the region.
Egypt and Jordan are two middle-income countries in the MENA region that have faced Eastern Neighbourhood adverse economic conditions in recent years. SMEs form the backbone of their economies by representing the largest proportion of North-South Corridor – section Yerevan to Bavnt employment generation and a huge chunk of Transport - Armenia GDP. Nevertheless, access to finance for SMEs has been problematic due to internal and Total cost: €0,5824m external adversities, such as the lack of formal EU contribution: €0,5824m registration of smaller enterprises and the lack Lead Financial Institution: EIB of private capital and access to land.
The framework for EU trade relations with Armenia is a landlocked country seeking to Jordan and Egypt is outlined in their respective improve transport and cross-border commerce. Association Agreements, which provide for Its communication and external trade goes a Free Trade Area. The EU offered to start along the north-south axis, as the eastern and negotiations for a DCFTA with Egypt in 2013 western borders, with Azerbaijan and Turkey, and with Jordan in 2015. remain closed. The main corridors of the country and border crossings are in poor state. The programme designed by the EIB is This and the lack of institutional and regulatory oriented towards the financing of value harmonisation results in high transport costs chains and vertical and horizontal business and expensive infrastructure development and linkages. Baseline trade in both countries is maintenance, limiting economic development concentrated in the agriculture-food sector, in the region. followed by manufacturing. The EIB-led project component will provide targeted financial and The EC Country Strategy Paper 2007-2013 technical support to SMEs through a structured for Armenia and the National Indicative programme including a long-term loan for Programme 2011-2013 (NIP) identify value chains, a risk participation instrument economic development, poverty reduction and to provide credit risk protection from loans social cohesion, as well as the strengthening granted by financial intermediaries, as well as of private sector led growth as priority areas an Expert Support Facility. for EU assistance to Armenia. Moreover, it advocates enhanced efforts in the field The programme aligns fully with the EU policy of regional cooperation. Improvement in objectives of boosting economic growth, movement of persons and goods is fully in supporting private sector development, EFSD BLENDING OPERATIONS 2017 53 in line with these three EC regional objectives. The EU assistance will co-fund the works The project carried out by EIB is part of an and supplies for the water and wastewater overall programme to upgrading the North – infrastructure in rural areas, including the South Road Corridor in Armenia, to improve rehabilitation and establishment of communal some tranches of the 145 km of the corridor, infrastructure, backing up the loan provided running from Yerevan to Bavra at the border by the KfW. It is a further development of a with Georgia, Armenia’s shortest access to the program successfully implemented during seaports linked to Europe. the last 12 years in Batumi and surrounding urban areas and supported by Germany and The EU investment will support the construction the EU. The EU TA contribution co-finances of a new highway to convert the existing two- the design and implementation and the lane single carriageway to a four-lane dual comprehensive assistance linked to public carriageway, including works and supplies, awareness, participation of the target groups, general structures, electrical and mechanical hygiene campaigns, monitoring quality and installations, and safety and environmental strengthening of the local self-government. measures. In addition, TA will cover the supervision of the construction works, as The project contributes to reducing pollution well as those related to studies, design and of surface- and groundwater in the region, as preparation. well as pollution of the Black See. It addresses adaptation to climate change, threats to the The project will enhance road capacity, improve environment, and promotes the principle of alignment and conditions on the corridor, save integrated water resources management in time, cut operating cost and lower the risk accordance with the EU Water Framework of accidents. Good transport infrastructure Directive. In total, some 215,000 people will also attracts foreign investments, accelerates benefit from a new water monitoring and transit traffic and promotes general economic evaluation system and ca. 50,000 (including activities and regional integration 19,000 in rural areas) will receive improved water and wastewater services.
Water Supply and Sanitation in Rural and Semi Urban Communities of Adjara Environment – Georgia
Total cost: €59.86m EU contribution: €7.36m Lead Financial Institution: KfW with €43m Other Investors: public financing with €9.5m
Water supply and wastewater disposal in semi urban and rural areas of Adjara in Georgia still relies heavily on the much-neglected infrastructure dating back to the Soviet times. Many semi-urban and rural areas and their households have no access even to that infrastructure, and the public service providers have insufficient equipment, skills and funds to maintain and run the systems. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 54
Georgia Transport implement actions that increase road safety. Connectivity (GTC) – Phase Transport – Georgia The project will favour regional integration, a high priority of the Eastern Partnership Transport Total cost: €1137.236m Network Regulation. In line with the NIP strategic EU contribution: €6.136m objectives, it helps to establish better and Lead Financial Institution: EIB with €500m more sustainable transport interconnections Other Investors: ADB, WB, JICA with €631.1m between the EU and EU neighbouring countries and between the EU neighbouring countries themselves. The project is focusing on the Georgia aspires to become a regional transport- investments on the extended core TEN-T transit hub. The Government of Georgia has network, which is in line with EU priorities in embarked on a programme to upgrade the the cooperation with the Eastern partnership major roads of the country. Its road sector countries. It will also help develop local still faces a number of challenges, namely: infrastructure, thus promoting socio-economic enhancing the capacity of the road network cohesion and sustainable development. Finally, in response to increasing transport demand; it will reinforce institutions, good governance, the development of a coordinated road safety and public administration. strategy and a plan of actions; and improving the poor conditions of non-international roads. The project aims to substantially enhance Moldova-Romania Interconnection Georgia’s global connectivity and local mobility – Phase I through targeted interventions on selected Transport – Moldova priority primary and secondary roads. Total cost: €270.75m The main objectives could be summarised as: EU contribution: €40.75m improve quality of the roads network, resulting Lead Financial Institution: EIB with €80m in travel condition improvement, lowering travel Other Investors: EBRD with €80m, WB with times and reducing vehicles operating and €70m maintenance costs; improve road safety on the national roads network; increase institutional capacity for both project preparation and Moldova produces 20% of its electricity needs implementation, including for safety measures. and depends on imports from Ukraine and Transnistria for the rest. Its electricity grid EU’s TA will assist Georgia with further feasibility operates synchronously with the Ukrainian and design studies, including environment electricity system, although it also borders and social assessments; better road safety of Romania, which belongs to the ENTSO-E priority blackspots; and external expertise to network in Western Europe (Moldova does support the management of all EIB’s projects not). Ukraine is preparing its synchronisation - either located directly on the extended Trans- with ENTSO-E. The Government of Moldova European Transport Network in Georgia or on aims to establish power interconnection points roads connected to it, including sub-projects. with Romania and integrate its power system to other European power systems through Low levels of road safety in EU neighbouring Romania. countries are an issue of direct concern for the EU. The project is in line with the proposed The interconnection financed by the EBRD action of the EU Neighbourhood Transport Plan together with the EIB and the WB includes to help neighbouring countries develop and the construction of a back-to-back substation EFSD BLENDING OPERATIONS 2017 55
for synchronisation of electricity systems; a stabilisation reserve. The existing access road 400kV transmission line to connect the back- to the Enguri plant, constructed 40 years ago, to-back substation; and the extension of the is in poor condition. substations of Chisinau and Vulcanesti to cope with additional capacity. It also includes The loan financed by the EBRD covers the assistance to the Project Implementation Unit fourth stage of rehabilitation works of the of state-owned Moldelectrica, which runs the Enguri plant, including the works on the roads power transmission system in Moldova and will connecting Abkhazia and Georgia, in order to operate the project. The EU contribution is in increase the plant’s functionality and reliability. the form of an investment grant for building Furthermore, it introduces a partnership the new substation. between public and private hydropower operators for a better coordination in the river The project responds to the NIP Strategic basin, sharing hydro-meteorological data and Orientations 2014-2020 promoting projects best international practices in climate resilient contributing significantly to the energy security hydropower management. of the EU and its Neighbourhood, as well as projects directly contributing to meeting The grant shall finance the rehabilitation of the the requirements and the objectives of the road, the purchase of hydro-meteorological Energy Community Treaty, which Moldova equipment, and pay for an independent joined in 2010. It complies with the European engineer to oversee implementation of project Commission’s Energy 2020 priority of works. The works include the rehabilitation of Strengthening the External Dimension of the the headrace tunnel, a penstock, the Enguri EU Energy Market via the action Integrating switchyard, the Vardnili II spillway gates, Enguri Energy Markets and Regulatory Frameworks river diversion weir and access road together with our Neighbours. with the development and implementation of a sedimentation management plan. Ultimately, the project will help increase Moldova’s energy security through diversification The NIP TA grant is essential to mitigate the and competition among suppliers, reducing the project implementation risks, and to ensure the cost of electricity and making progress in its compliance of the project with both the EBRD European integration via synchronisation with and the EU rules and standards, including but the ENTSO-E system. not limited to the environmental and social policy and the procurement policies and rules.
Enguri Hydro Plant The Enguri plant provides jobs for those living on Rehabilitation Project: both sides of the administrative boundary line Climate Resilience Upgrade with Abkhazia, offering potential for economic Water/Sanitation – Georgia cooperation. The project will contribute to Georgia’s economic recovery by increasing Total cost: €35.35m electricity generation, greater self-sufficiency EU contribution: €7.35m in renewable energy, cross-border trade. It may Lead Financial Institution: EBRD with €28m also contribute to regional economic stability, confidence building and conflict resolution.
The Enguri Hydro Power Plant supplies around 40% of the electricity used in Georgia. The plants is a key part of the Caucasus energy system thanks to its role as network EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 56
Intelligent Transportation System on national Ukraine Transport Connectivity – roads, the construction of a missing section Phase I of northern by-pass of Ternopil city, as well as Transport – Ukraine the re-construction and electrification of two railway sections in Yagodin and Zahony. Total cost: €2.65m EU contribution: €2.14m Lead Financial Institution: EIB with €0.5m Ukraine Urban Road Safety Transport – Ukraine
The Ukrainian economy generates far more Total cost: €176.82m transport movements and volumes relative to EU contribution: €4.42m its GDP than many other countries in Europe Lead Financial Institution: EIB with €75m due to the large role of agriculture and heavy Other Investors: EBRD with €75m industry, and long distances to carry freight to neighbouring countries (EU Member States, Russia) and further away (Caucasus, Central Each year around 4,500 persons die and Asia). 32,000 are injured on Ukrainian roads, 44% of whom are vulnerable users (pedestrians, Connectivity is a key EU priority; it stimulates cyclists). There is an urgent need to invest trade and investment and brings people closer in the improvement of urban road safety together. The 2014 EU-Ukraine Association infrastructure. At the same time, road Agreement envisages further cooperation on management will be transferred to the local transport. authorities and regional administrations, which generally do not have sufficient funding The project reflects a key priority set out in or technical staff to undertake road safety the NIF Strategic Orientations to establish investments effectively. better and more sustainable transport interconnections. The project is focusing on Road safety is one of the EU priorities of the the investments on the extended core TEN-T cooperation with the Eastern Partnership network, which is in line with EU priorities in countries, and the EU help neighbouring the cooperation with the Eastern partnership countries to develop and implement actions countries. Investing in key infrastructure will in this area. The urban road safety project will facilitate the movement of people, goods, strengthen institutions and good governance, services, capital and information in order to in particular public administration, establish promote inclusive and sustainable economic an effective road accident data system and growth and social development. Rail network promote road safety awareness and education modernization and electrification are in line in the cities. The project will complement other with the Government’s National Transport ongoing road safety initiatives at national level, Strategy and National Target Program on and provide better facilities for pedestrians and Railway Reform 2010-2019. cyclists, and better access to public transport.
In a resource-constrained environment, Ukraine The EIB framework loan supports infrastructure favoured large-scale new build and road and IT investments in Dnipro, Kharkiv, Kyiv, rehabilitation projects. The EU contribution Lviv and Odessa such as: small public under the 1st phase of the project will facilitate transport related infrastructure improvements; the development of a series of small-scale improvement of the most dangerous accident transport projects that address transport blackspots; intersection improvements; street bottlenecks. This includes the development of renovations; safe cycle and pedestrian networks; EFSD BLENDING OPERATIONS 2017 57 route action plans; area wide programmes (e.g. Eastern Neighbourhood, thus contributing to reduced speed in residential areas or school economic growth and employment zones); and IT traffic management systems. The interventions applied in five participating cities will provide lessons for other Ukrainian Green for Growth Fund cities too. (Top-Up) Environment – Regional
Total cost: €53.2m EU DCFTA Facility, Phase 2 EU contribution: €10.2m Private Sector – Regional Lead Financial Institution: KfW with €33m Other Investors: public financing with €10m Total cost: €751.9m EU contribution: €38.9m Lead Financial Institution: EBRD with €713m Eastern Neighbourhood faces the dual challenge of energy efficiency and generating renewable energy. The region depends on The Association Agreements with the European fossil fuels, generates moderate amounts of Union, including the DCFTAs, are substantially renewable energy and has little infrastructure changing the business environment landscape and equipment compared to the EU. As in Georgia, Moldova and Ukraine. These demand for energy grows, the region also faces agreements are set to enhance cross-border increasing dependency on energy imports. economic activities with benefits to consumers, businesses and public sector. The Green for Growth Fund (GGF) is a public- private partnership, established in 2009, that First approved in 2015, the DFCTA Facility provides refinancing to financial institutions originally included three phases. The second to enhance their participation in the energy and third phases have since become one, efficiency and renewable energy sectors and organised in four windows: facilitating DCFTA makes direct investments in the Eastern related investment through enhanced SME and Southern Neighbourhood. The GGF will access to financing, short and medium term help the region meet its targets for cleaner trade financing access for businesses, providing energy, reduce dependence on imported business advice for SMEs, and boosting policy sources, support energy savings, and improve dialogue. The EBRD will provide credit lines to competitiveness and household costs. local banks for blending with an EU grant, in order to increase the number of investments With this in mind, the EU granted the KfW that enable SMEs to respond to challenges an extra investment of €8 million as a first and opportunities created by the DCFTA and loss cushion. It is combined with a TA Facility increase the availability of long term funding which will support the GGF in reducing energy by increasing incentives for local financial consumption and CO2 emissions through intermediaries. capacity building and awareness raising.
The programme supports EU policies in the The GGF follows the policy objectives of the region as well as the respective DCFTAs. It is in NIP and the European Neighbourhood Policy line with the NIP Strategic Priorities of promoting of which energy, in particular energy efficiency, smart, sustainable and inclusive growth, and and climate are a key pillar. Moreover, it has reinforces the objective of improving energy an excellent track record in combining funding efficiency and demand management, promoting and on-the-ground support to foster a shift in the use of renewable energy. The EU adds value awareness and generate high impact in the by supporting the SMEs and trade sector of the sectors concerned. EIP / EFSD OPERATIONAL REPORT 2017 - CHAPTER 7 58
EFSE Local Currency countries, where support of local currency Private Sector – Regional lending is of crucial importance
Total cost: €53.175m EU contribution: €43.75m Road Safety Improvement Lead Financial Institution: KfW with €9m Transport – Armenia
Total cost: €23.173m SMEs and private households of Armenia, EU contribution: €5.413m Azerbaijan, Belarus, Georgia, Moldova and Lead Financial Institution: EIB with €17.76m Ukraine have a growing need for financial products in local currencies, but these are frequently not available in the Eastern As a landlocked country situated in the southern Partnership countries. After a series of Caucasus with an economy highly depending devaluations, national governments in the on transport, Armenia needs a quality road Caucasus have adopted policies to strengthen network. Communication and external trade local currency lending. This financing is is one-sided since borders with Turkey and important on a macro level as local banks and Azerbaijan have been closed since the early multilateral financial institutions shy away 1990s. The main corridors of the country from local currency exposure; likewise, local remain in poor conditions. Together with severe households and micro-enterprises face the risk continental climate, this increases the cost of of borrowing in foreign currency while earning transportation, infrastructure development and mostly in the local currency. maintenance.
The project conceived and led by the KfW aims The EIB together with MOTCIT (merger of to help generate income and employment. The the Ministry of Transport with the Ministry of European Fund for Southeast Europe is with Communication) have designed a project that around €1 billion, the world’s largest MSME aims to improve transport network of Armenia, fund, and offers long-term funding instruments particularly through road safety measures and to qualified partner lending institutions. These capacity development for relevant authorities in turn can better serve the financing needs of and stakeholders. The five project components micro and small enterprises and low-income will target road safety works and infrastructure private households. The EC as a donor provides improvements with the objective to reduce the the first loss cover on the new L Shares, which rate of accidents, injury and death associated provide local currency lending, and the C Shares with road transport. used for investments. The project is consistent with NIP strategic The EU adds value by helping to sustain orientations of improving transport employment and create jobs. People can interconnections between EU and neighbouring generate income while working in home countries and within the neighbourhood itself, countries, and young people can implement as well as contributing to local infrastructure their own business ideas. The fund has an development. The EU grant will help the project excellent track record and fits in perfectly come to life and help reduce transport related with the NIP priorities in the region, such as economic costs on the national economy, economic development, market opportunities, estimated at ca. 4% of GDP in the region. It jobs and growth. will also help Armenia improve road safety planning and standards, building upon former The project is in line with EU priorities in the EU initiatives on road safety such as the cooperation with the Eastern Partnership TRACECA programme. EFSD BLENDING OPERATIONS 2017 59
E5P Expansion to other Eastern Partnership countries: Belarus Environment – Belarus
Total cost: €113.23m EU contribution: €10.2m Lead Financial Institution: EBRD with €82m
The E5P is a multi-donor fund managed by the EBRD, which was set up in 2010 with an overall objective to unlock energy efficiency and environment-related investments in Eastern Partnership countries. The fund is active in Ukraine, Armenia, Georgia and Moldova and it will be expanding to Belarus. EU support is crucial in promoting energy efficiency and environmental sustainability due to Belarus’ energy dependency and limited access to investment financing and the need for structural reforms.
The project will use donor funds, including the EU contribution, to leverage international finance institutions’ loans to boost investments for energy efficiency and environment in the municipal sector of Belarus. Such investments will help reduce emissions of CO2 and other greenhouse gases and provide other cross- border and local environmental benefits. Investments will be combined with policy dialogue, regulatory and institutional reforms.
The E5P follows the NIP objectives to improve energy efficiency and promote renewable sources, addressing climate change and threats to environment, as well as promoting smart, sustainable and inclusive growth. The action is also in accordance with the Strategy Paper and Multiannual Indicative Programme for EU support to Belarus for 2014-2017. The EU grant adds value by enhancing economic competitiveness through energy efficiency at municipal level, enabling municipalities to meet high service or environmental standards while respecting affordability constraints, which leads to environmental and social sustainability. EIP / EFSD OPERATIONAL REPORT 2017 - ANNEXES 60 ANNEXES BLENDING OPERATIONS SUPPORTED BY NIP IN 2017
Consortium of Amount to be Year of Rio Type of Country Title of the project Finance Sector Total project cost EU contribution reported as Climate approval Marker Support Institutions action support
Armenia 2017 Armenia – Road Safety Improvement EIB Transport 23,17 5,41 IG, TA
Armenia 2017 Road links between Yerevan and E60 in Georgia EIB Transport 0,58 0,58 IG, TA
E5P Expansion to other Eastern Partnership Belarus 2017 EBRD Environment 113,20 10,20 4,00 IG countries: Belarus
Georgia 2017 Transport Connectivity (Georgia) EIB Transport 1137,24 6,14 TA
Georgia 2017 Adjara KfW Water/Sanitation 59,86 7,36 2,80 IG, TA
Georgia 2017 Enguri HPP EBRD Water/Sanitation 35,35 7,35 7,01 IG, TA
Ukraine 2017 Transport Connectivity (Ukraine) EIB Transport 2,64 2,14 TA
Ukraine 2017 Urban Road Safety EIB Transport 176,82 4,42 TA
Regional East 2017 EU DCFTA Facility, EBRD, Phase 2 EBRD Private sector 751,90 38,90 IG, TA, FI
Regional East 2017 EFSE Local Currency KfW Private Sector 53,18 43,75 17,20 FI
Regional East 2017 Green for Growth Fund Top-Up KfW Environment 53,20 10,20 10,00 TA, FI
Egypt 2017 Fayoum Wastewater Expansion Programme EBRD Water/Sanitation 456,49 38,09 14,88 IG, TA
Egypt 2017 Rehabilitation of Alexandria's Raml Tram AFD Transport 363,30 8,30 3,20 TA
Egypt 2017 Kitchener Drain (Joint EIB/EBRD) EIB/EBRD Environment 482,28 46,98 18,32 IG, TA
As-Samra Wastewater Treatment Plant Jordan 2017 EBRD Water/Sanitation 170,60 30,80 30,20 IG, TA Expansion BOT
Morocco 2017 Université Euro-méditerranéenne de Fès (UEMF) EIB Education 147,57 13,57 5,32 IG
SUNREF PALESTINE : Sustainable Use of Natural Energy/environment/ Palestine 2017 AFD 42,45 8,35 3,20 IG Resources and Energy Finance Private sector
Programme de Relance de l’Investissement Tunisia 2017 de Modernisation des Exploitations Agricoles AFD Agriculture 300,78 10,30 4,00 TA (PRIMEA)
Tunisia 2017 Proville 2 AFD Social 235,69 30,69 IG, TA
Extending the EBRD’s Small Business Initiative Regional South 2017 EBRD Private Sector 6,40 5,20 TA to Lebanon, West Bank and Gaza
EU Trade and Competitiveness Programme in Regional South 2017 EIB Private Sector 265,60 25,60 IG, TA Egypt and Jordan - EIB component BLENDING OPERATIONS SUPPORTED BY NIP AND AIP 2017 61
BLENDING OPERATIONS SUPPORTED BY NIP IN 2017 ALL FIGURES ARE IN € MILLION
Consortium of Amount to be Year of Rio Type of Country Title of the project Finance Sector Total project cost EU contribution reported as Climate approval Marker Support Institutions action support
Armenia 2017 Armenia – Road Safety Improvement EIB Transport 23,17 5,41 IG, TA
Armenia 2017 Road links between Yerevan and E60 in Georgia EIB Transport 0,58 0,58 IG, TA
E5P Expansion to other Eastern Partnership Belarus 2017 EBRD Environment 113,20 10,20 4,00 IG countries: Belarus
Georgia 2017 Transport Connectivity (Georgia) EIB Transport 1137,24 6,14 TA
Georgia 2017 Adjara KfW Water/Sanitation 59,86 7,36 2,80 IG, TA
Georgia 2017 Enguri HPP EBRD Water/Sanitation 35,35 7,35 7,01 IG, TA
Ukraine 2017 Transport Connectivity (Ukraine) EIB Transport 2,64 2,14 TA
Ukraine 2017 Urban Road Safety EIB Transport 176,82 4,42 TA
Regional East 2017 EU DCFTA Facility, EBRD, Phase 2 EBRD Private sector 751,90 38,90 IG, TA, FI
Regional East 2017 EFSE Local Currency KfW Private Sector 53,18 43,75 17,20 FI
Regional East 2017 Green for Growth Fund Top-Up KfW Environment 53,20 10,20 10,00 TA, FI
Egypt 2017 Fayoum Wastewater Expansion Programme EBRD Water/Sanitation 456,49 38,09 14,88 IG, TA
Egypt 2017 Rehabilitation of Alexandria's Raml Tram AFD Transport 363,30 8,30 3,20 TA
Egypt 2017 Kitchener Drain (Joint EIB/EBRD) EIB/EBRD Environment 482,28 46,98 18,32 IG, TA
As-Samra Wastewater Treatment Plant Jordan 2017 EBRD Water/Sanitation 170,60 30,80 30,20 IG, TA Expansion BOT
Morocco 2017 Université Euro-méditerranéenne de Fès (UEMF) EIB Education 147,57 13,57 5,32 IG
SUNREF PALESTINE : Sustainable Use of Natural Energy/environment/ Palestine 2017 AFD 42,45 8,35 3,20 IG Resources and Energy Finance Private sector
Programme de Relance de l’Investissement Tunisia 2017 de Modernisation des Exploitations Agricoles AFD Agriculture 300,78 10,30 4,00 TA (PRIMEA)
Tunisia 2017 Proville 2 AFD Social 235,69 30,69 IG, TA
Extending the EBRD’s Small Business Initiative Regional South 2017 EBRD Private Sector 6,40 5,20 TA to Lebanon, West Bank and Gaza
EU Trade and Competitiveness Programme in Regional South 2017 EIB Private Sector 265,60 25,60 IG, TA Egypt and Jordan - EIB component EIP / EFSD OPERATIONAL REPORT 2017 - ANNEXES 62 ANNEXES BLENDING OPERATIONS SUPPORTED BY AIP IN 2017 Consortium of Amount to be reported Year of Rio Type of Country Title of the project Finance Sector Total project cost EU contribution as Climate action approval Marker Support Institutions support
Modernisation and reinforcement of the network of Senegal 2017 SENELEC to support the development of renewable energies 2 AFD Energy 52,93 7 6,65 IG, TA and acces to energy
Rehabilitation of the Trans Gambian Road Sénoba- Senegal 2017 Zinguinchor (phase 2) AfDB, EIB Transport 97,6 25,6 6,65 IG, TA
Agriculture development and food security in the rural areas Senegal 2017 of the Tiers Sud Region ( Tiers Sud "Beydaare" project) 1 AFD Agriculture 47,53 20,53 8 IG, TA
Guinea and Guinea- Construction and asphalting on the road between Boké Bissau 2017 (Guinea) and Quebo (Guinea-Bissau) AfDB Transport 114,74 30,71 IG,TA
Doubling of the 225kV interconnector Manantali-Bamako / Mali 2017 OMVS 2 AFD, WB, others Energy 352,16 26,66 26 IG, TA
Rehabilitation of the Malian section of the Trans Saharan Mali 2017 road AfDB, others Transport 542,72 70,96 26 IG, TA
WAPP 330 kV Ghana-Côte d'Ivoire Interconnection Ghana and Côte d'Ivoire 2017 Reinforcement Project 2 KfW, EIB Energy 181,3 30,7 30 IG, TA
Sustainable Energy for Côte d'Ivoire: 30 MWp Solar Power Côte d'Ivoire 2017 Plant in the context of the West African Power Pool 2 KfW Energy 42 10 9;77 IG, TA
Extension and rehabilitation of CEET's electricity network in Togo 2017 the Greater Lomé area 1 AFD, KfW, WB Energy 87 8 3,1 IG, TA
Burkina Faso, Benin, Niger and Nigeria 2017 North Core / Interconnector 330 kV 2 AfDB, AFD, WB, others Energy 634,68 30,68 30 IG, TA
DEFISSOL projects: Construction of a 25MWc solar power Benin 2017 plant and modernisation of the information system of SBEE 1 AFD Energy 60,85 10,35 4 IG, TA
Niger 2017 Construction of a hybrid power plant in Agadez 1 AFD Energy 34,02 16,42 6,4 IG, TA
Niger 2017 Construction of a solar power plant in Gorou Banda 2 AFD Energy 30,3 5,3 5 IG, TA
Construction of a bridge on the Logone river between Cameroun and Chad 2017 Yagoua (Cameroon) and Bongor (Chad) and acillary works AfDB Transport 105,13 40,95 IG, TA
Republic of Congo 2017 Port of Pointe Noire Extension and Upgrade Programme 1 AFD Transport 196,98 29,98 11,72 IG, TA
Burundi, Democratic Republic of Congo and 2017 Complementary studies for the hydro-power plant Ruzizi IV AfDB, others Energy 9,3 8,3 TA Rwanda
Kenya 2017 Kenya Agriculture Value Chain Facility EIB Agriculture 110 10 TA, IRS
Uganda 2017 Construction of Muzizi Hydro Power Project 2 KfW, AFD Energy 123,3 20,5 20 IG, TA
Zambia 2017 Great North Road Upgrade Project EIB, AfDB Transport 435,85 73,66 20 IG, TA
Malawi 2017 Malawi M1 Road Rehabilitation EIB, WB Transport 159,16 44,16 IG, TA
Mozambique and Malawi 2017 Mozambique-Malawi Interconnector 2 KfW, IDA Energy 88.35 20,4 20 IG, TA
Republic of Seychelles 2017 Port Victoria Rehabilitation and Extension 1 EIB, AFD Transport 36,9 5,4 2,06 IG, TA
Madagascar 2017 Madagascar Road Network Modernisation EIB Transport 236,54 116 IG, TA
Urban development and sanitation in priority neighbou- Infrastructure and Madagascar 2017 rhoods of Antananarivo - Phase II ("Lalankely III") AFD urban development 26,37 3 IG, TA
Benin, Côte d'Ivore, Nigeria, Zambia 2017 ElectriFI Country windows 2 FMO, EDFIs, others Energy 285 85 84,15 FI, ATA
Sub-Saharan Africa 2017 EDFI-AgriFI 1 FMO, EDFIs, others Agriculture 75,5 29,25 11,5 TA, FI
Sub-Saharan Africa 2017 Transferability and Convertibility Facility 2 PROPARCO, others Energy 289,34 20,17 19,73 TA, FI
Sub-Saharan Africa 2017 Climate Investor One 2 FMO, others Energy 270,7 30,7 30 FI
Sub-Saharan Africa 2017 EURIZ 1 AFD, SIDA Private Sector 664,36 21,16 8,25 TA, FI
Sub-Saharan Africa 2017 Boost Africa EIB, AfDB Private Sector 181,05 61,05 TA, FI BLENDING OPERATIONS SUPPORTED BY NIP AND AIP 2017 63
BLENDING OPERATIONS SUPPORTED BY AIP IN 2017 ALL FIGURES ARE IN € MILLION Consortium of Amount to be reported Year of Rio Type of Country Title of the project Finance Sector Total project cost EU contribution as Climate action approval Marker Support Institutions support
Modernisation and reinforcement of the network of Senegal 2017 SENELEC to support the development of renewable energies 2 AFD Energy 52,93 7 6,65 IG, TA and acces to energy
Rehabilitation of the Trans Gambian Road Sénoba- Senegal 2017 Zinguinchor (phase 2) AfDB, EIB Transport 97,6 25,6 6,65 IG, TA
Agriculture development and food security in the rural areas Senegal 2017 of the Tiers Sud Region ( Tiers Sud "Beydaare" project) 1 AFD Agriculture 47,53 20,53 8 IG, TA
Guinea and Guinea- Construction and asphalting on the road between Boké Bissau 2017 (Guinea) and Quebo (Guinea-Bissau) AfDB Transport 114,74 30,71 IG,TA
Doubling of the 225kV interconnector Manantali-Bamako / Mali 2017 OMVS 2 AFD, WB, others Energy 352,16 26,66 26 IG, TA
Rehabilitation of the Malian section of the Trans Saharan Mali 2017 road AfDB, others Transport 542,72 70,96 26 IG, TA
WAPP 330 kV Ghana-Côte d'Ivoire Interconnection Ghana and Côte d'Ivoire 2017 Reinforcement Project 2 KfW, EIB Energy 181,3 30,7 30 IG, TA
Sustainable Energy for Côte d'Ivoire: 30 MWp Solar Power Côte d'Ivoire 2017 Plant in the context of the West African Power Pool 2 KfW Energy 42 10 9;77 IG, TA
Extension and rehabilitation of CEET's electricity network in Togo 2017 the Greater Lomé area 1 AFD, KfW, WB Energy 87 8 3,1 IG, TA
Burkina Faso, Benin, Niger and Nigeria 2017 North Core / Interconnector 330 kV 2 AfDB, AFD, WB, others Energy 634,68 30,68 30 IG, TA
DEFISSOL projects: Construction of a 25MWc solar power Benin 2017 plant and modernisation of the information system of SBEE 1 AFD Energy 60,85 10,35 4 IG, TA
Niger 2017 Construction of a hybrid power plant in Agadez 1 AFD Energy 34,02 16,42 6,4 IG, TA
Niger 2017 Construction of a solar power plant in Gorou Banda 2 AFD Energy 30,3 5,3 5 IG, TA
Construction of a bridge on the Logone river between Cameroun and Chad 2017 Yagoua (Cameroon) and Bongor (Chad) and acillary works AfDB Transport 105,13 40,95 IG, TA
Republic of Congo 2017 Port of Pointe Noire Extension and Upgrade Programme 1 AFD Transport 196,98 29,98 11,72 IG, TA
Burundi, Democratic Republic of Congo and 2017 Complementary studies for the hydro-power plant Ruzizi IV AfDB, others Energy 9,3 8,3 TA Rwanda
Kenya 2017 Kenya Agriculture Value Chain Facility EIB Agriculture 110 10 TA, IRS
Uganda 2017 Construction of Muzizi Hydro Power Project 2 KfW, AFD Energy 123,3 20,5 20 IG, TA
Zambia 2017 Great North Road Upgrade Project EIB, AfDB Transport 435,85 73,66 20 IG, TA
Malawi 2017 Malawi M1 Road Rehabilitation EIB, WB Transport 159,16 44,16 IG, TA
Mozambique and Malawi 2017 Mozambique-Malawi Interconnector 2 KfW, IDA Energy 88.35 20,4 20 IG, TA
Republic of Seychelles 2017 Port Victoria Rehabilitation and Extension 1 EIB, AFD Transport 36,9 5,4 2,06 IG, TA
Madagascar 2017 Madagascar Road Network Modernisation EIB Transport 236,54 116 IG, TA
Urban development and sanitation in priority neighbou- Infrastructure and Madagascar 2017 rhoods of Antananarivo - Phase II ("Lalankely III") AFD urban development 26,37 3 IG, TA
Benin, Côte d'Ivore, Nigeria, Zambia 2017 ElectriFI Country windows 2 FMO, EDFIs, others Energy 285 85 84,15 FI, TA
Sub-Saharan Africa 2017 EDFI-AgriFI 1 FMO, EDFIs, others Agriculture 75,5 29,25 11,5 TA, FI
Sub-Saharan Africa 2017 Transferability and Convertibility Facility 2 PROPARCO, others Energy 289,34 20,17 19,73 TA, FI
Sub-Saharan Africa 2017 Climate Investor One 2 FMO, others Energy 270,7 30,7 30 FI
Sub-Saharan Africa 2017 EURIZ 1 AFD, SIDA Private Sector 664,36 21,16 8,25 TA, FI
Sub-Saharan Africa 2017 Boost Africa EIB, AfDB Private Sector 181,05 61,05 TA, FI EIP / EFSD OPERATIONAL REPORT 2017 - ABBREVIATIONS 64 ABBREVIATIONS
ACP: AFRICAN, CARIBBEAN AND PACIFIC AFD: AGENCE FRANÇAISE DE DÉVELOPPEMENT AFDB: THE AFRICAN DEVELOPMENT BANK AFIF: AFRICA INVESTMENT FACILITY AGRIFI: THE AGRICULTURE FINANCING INITIATIVE AIP: AFRICA INVESTMENT PLATFORM CEET: COMPAGNIE ENERGIE ELECTRIQUE DU TOGO COMESA: COMMON MARKET FOR EASTERN AND SOUTHERN AFRICA DCI: DEVELOPMENT COOPERATION INSTRUMENT DCFTA: DEEP AND COMPREHENSIVE FREE TRADE AGREEMENT OR AREA EAC: EAST AFRICAN COMMUNITY EBRD: THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT EC: THE EUROPEAN COMMISSION ECGLC: ECONOMIC COMMUNITY OF THE GREAT LAKES COUNTRIES ECOWAS: ECONOMIC COMMUNITY OF WEST AFRICAN STATES EDF: EUROPEAN DEVELOPMENT FUND EDFIS: EUROPEAN DEVELOPMENT FINANCE INSTITUTIONS EEAS: EUROPEAN EXTERNAL ACTION SERVICE EFSD: EUROPEAN FUND FOR SUSTAINABLE DEVELOPMENT EIB: THE EUROPEAN INVESTMENT BANK EIP: EXTERNAL INVESTMENT PLAN ELECTRIFI: ELECTRIFICATION FINANCING INITIATIVE ENI: EUROPEAN NEIGHBOURHOOD INSTRUMENT ENP: EUROPEAN NEIGHBOURHOOD POLICY ENTSO-E: EUROPEAN NETWORK OF TRANSMISSION SYSTEM OPERATORS FOR ELECTRICITY ESMP: ENVIRONMENTAL AND SOCIAL MANAGEMENT PLAN EU: EUROPEAN UNION FDI: FOREIGN DIRECT INVESTMENT FMO: NEDERLANDSE FINANCIERINGS-MAATSCHAPPIJ VOOR ONTWIKKELINGSLANDEN ABBREVIATIONS 65
GDP: GROSS DOMESTIC PRODUCT GEF: GLOBAL ENVIRONMENT FUND GTC: GEORGIA TRANSPORT CONNECTIVITY ICT: INFORMATION AND COMMUNICATIONS TECHNOLOGIES IDA: INTERNATIONAL DEVELOPMENT ASSOCIATION IDB: ISLAMIC DEVELOPMENT BANK IFIS: INTERNATIONAL FINANCIAL INSTITUTIONS IMF: INTERNATIONAL MONETARY FUND JICA: JAPAN INTERNATIONAL COOPERATION AGENCY KFW: KREDITANSTALT FÜR WIEDERAUFBAU MENA: THE MIDDLE EAST AND NORTH AFRICA REGION (M)SMES: MICRO, SMALL AND MEDIUM-SIZED ENTERPRISES NAP: NATIONAL ACTION PLAN NAPTIN: NATIONAL POWER TRAINING INSTITUTE OF NIGERIA NIF: NEIGHBOURHOOD INVESTMENT FACILITY NIP: NEIGHBOURHOOD INVESTMENT PLATFORM NRSP: NATIONAL RURAL SANITATION PROGRAMME OMVS: SENEGAL RIVER BASIN DEVELOPMENT AUTHORITY PAPN: PORT OF POINTE NOIRE PASET 1: SUPPORT PROGRAM FOR THE ENERGY SECTOR IN TOGO - PHASE 1 PIP: PROPOSED INVESTMENT PROGRAMME PRIMEA: PROGRAMME TO RESTART MODERNISATION INVESTMENT IN AGRICULTURE PROPARCO: PROMOTION ET PARTICIPATION POUR LA COOPÉRATION ÉCONOMIQUE PRSE: PLAN DE REDRESSEMENT DURABLE DU SOUS-SECTEUR DE L’ELECTRICITÉ SADC: SOUTHERN AFRICAN DEVELOPMENT COMMUNITY SAPP: SOUTHERN AFRICA POWER POOL SBEE: SOCIÉTÉ BENINOISE D'ENERGIE ELECTRIQUE SB4A: SUSTAINABLE BUSINESS FOR AFRICA SCADA: COMMUNICATION AND REMOTE CONTROL SYSTEM SDG: SUSTAINABLE DEVELOPMENT GOAL SENELEC: SOCIÉTÉ NATIONALE D’ELECTRICITÉ DU SÉNÉGAL SIDA: SWEDISH INTERNATIONAL DEVELOPMENT COOPERATION AGENCY EIP / EFSD OPERATIONAL REPORT 2017 - ABBREVIATIONS 66
SME: SMALL MEDIUM ENTERPRISE SOGEM: MANANTALI ENERGY MANAGEMENT COMPANY SONABEL: LA SOCIÉTÉ NATIONALE D'ÉLECTRICITÉ DU BURKINA FASO SUNREF: SUSTAINABLE USE OF NATURAL RESOURCESAND ENERGY FINANCING TA: TECHNICAL ASSISTANCE TRACECA: TRANSPORT CORRIDOR EUROPE-CAUCASUS-ASIA UEMF: THE UNIVERSITÉ EURO-MÉDITERRANÉENNE DE FÈS UEMOA: WEST AFRICAN ECONOMIC AND MONETARY UNION UN: UNITED NATIONS USAID: THE UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT WAPP: WEST AFRICAN POWER POOL WB: WORLD BANK WTTP: WASTEWATER TREATMENT PLANT ABBREVIATIONS 67 EIP/EFSD OPERATIONAL REPORT
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