Supporting regional growth and co-operation
Thanks to its own experience, the European Union knows the value of regional co-operation as an engine of economic growth, development and security. It is keen to help other areas of the world make the most of co-operative activities and supports a number of programmes and initiatives that serve to benefit whole regions, rather than individual countries.
In 2004, the African Union asked the EU to help fund its peace support efforts. In response, the European Commission established the Africa Peace Facility (APF). Total funding so far stands at €300 million – and in 2006 the EU agreed to provide a further €300 million to maintain the APF until 2010.
The money is spent on transporting troops, soldiers living expenses and developing peace support efforts. It is not used to fund the purchase of weapons, ammunition, specific military equipment or spare parts for arms. It also cannot be used to pay for soldiers’ salaries or their training.
To date, the APF has funded operations in the Darfur region of Sudan, the Central African Republic and the Comoros Islands.
Boosting water, energy and infrastructure
The Commission has also created innovative funds to encourage sustained, large-scale investment, with a regional focus, in the infrastructure of ACP countries.
The ACP-EU Water Facility provides crucial but hard-to-find seed financing that encourages private companies and other stakeholders to invest in clean water and sanitation projects.
The fund has so far spent €500 million in the form of financing grants, soft loans, guarantees and micro-finance. The cash helps forge new partnerships and increase spending on water and sanitation in some of the world’s poorest nations.
The ACP-EU Water Facility has also helped to finance:
- The African Water Facility – an initiative from African water ministries which aims to boost investment in clean water and basic sanitation
- The Nile Basin Initiative, which is developing ‘fast-track’ investment to better manage resources and strengthen flood defences
ACP countries must have greater access to affordable energy if they are to tackle poverty and boost economic growth. The ACP-EU Energy Facility provides seed financing to help energy projects raise extra capital from other sources. So far, the facility has spent €220 million to fulfil its objectives.
It should be noted that the ACP-EU Energy Facility has provide €10 million to the EU-Africa Infrastructure Partnership. For further information on EU assistance to Africa and the partnership’s aims, see the Europe Cares website.
Investment in Africa’s infrastructure needs to be doubled if the continent is to meet its Millennium Development Goals by the 2015 target date. Infrastructure is crucial to Africa’s sustainable development. Its economic growth and efforts to reduce poverty depend on creating a more effective transport network, better water and energy facilities and improved communication linkages.
The EU-Africa Infrastructure Fund, which was launched in 2007, will encourage financial institutions to invest more in Africa’s future development. The Commission has committed €60 million to the fund in the form of grants, while the European Investment Bank has made €260 million available as loans.
The fund will co-finance infrastructure projects with EU Member States, development banks and private European and African investment banks. It will offer a mix of grants and loans in the form of co-financing, interest rate subsidies and risk guarantees.