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Discussion Papers (series)

The EIB’s innovative role in ACP countries under the Cotonou Agreement: Options beyond 2020

Discussion Paper 196

July 2016

Bilal, S., Große-Puppendahl, S. 2016. The EIB's innovative role in ACP countries under the Cotonou Agreement: Options beyond 2020. (Discussion Paper 196). Maastricht: ECDPM.

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The European Investment Bank (EIB) operations in Africa, the Caribbean and Pacific (ACP) take place under the ACP-EU partnership agreement, the Cotonou Partnership Agreement (CPA). The EIB’s activities in the ACP are aimed at contributing to the objectives of the Cotonou Partnership Agreement, supporting projects that yield sustainable social, economic and environmental benefits. Under the CPA, the EIB administers the operations made under the ACP Investment Facility (IF), focused on private sector, as well as the loans made under its own resources, mainly infrastructure projects, guaranteed by EU Member States.

The purpose of the study is to identify what aspects of the CPA have been critical for EIB operations in ACP countries. Over the last months, these questions have served to guide numerous bilateral interviews with officials from the EIB (headquarters and in the field), the EU and Member States, the ACP Group, African government and regional officials, state/parastatal companies, private sector actors, and civil society organisations.

Key messages

  • With operations both inside (90%) and outside (10%) the EU, the European Investment Bank (EIB) activities are wellplaced to contribute to the SDGs. Their universal dimension is closely aligned to EIB core activities, e.g. infrastructure investments, climate financing and private sector support. The EIB’s legal mandate to operate in the ACP is the Cotonou Partnership Agreement (CPA), which expires in 2020.
  • Considering EIB operations beyond 2020, this study looks at aspects of the CPA that have been critical for EIB operations in ACP countries. While under the External Lending Mandate, the EIB needs bilateral framework agreements to operate in non-ACP countries outside the EU, the CPA allows the EIB to operate under a single legal framework.
  • The CPA’s main innovation is the ACP Investment Facility (IF), which supports the private sector, and its Impact Financing Envelope (IFE), targeting higher development impact while bearing greater risks. Yet, EIB operations face many challenges, e.g. limited field presence, country coverage, alignment with EU and ACP priorities, and mostly, how to best reconcile risk, financial return and development impact.
  • Strategic and political decisions need to be taken for EIB operations to continue post-2020, including a new mandate for the EIB in the ACP. Options are a continuation, possible extension (financially/ geographically) and possible merge of the IF and IFE, further establishment of funds-of funds, increased EIB capacity and greater synergy with other relevant actors as well as with EU, ACP and international actions along the 2030 Agenda.

Read Discussion Paper 196

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Photo: Darling Wind Farm. Courtesy of Warrenski via Flickr.

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Economic recovery and transformationDiscussion Papers (series)ACP Group of StatesPost Cotonou