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EU Launches Trust Fund For African Infrastructure, February 10, 2006
In its start-up phase running to 2007, the fund would receive EUR60 million ($72 million) in grants from the European Commission and EUR260 million in EIB loans, while member states were invited to make additional contributions. EU member states agreed last May to increase development aid by an additional EUR20 billion per year by 2010, with half of that targeted at Africa, in order to reach an annual total of EUR66 billion. Development commissioner Louis Michel stressed that Africa had a huge need for investment in infrastructure for economic development to get off the ground. He said, “No single donor can possibly hope to do this so we need to join our efforts.”
Reuters writes that the fund aims to create a backbone of road, rail, energy, water and telecommunications infrastructures, Michel told a news conference. It will mainly provide subsidized low-interest loans, with a focus on cross-border projects. The European Commission wants the fund to promote EU policy on the continent.
La Libre Belgique (Belgium) reports that the World Bank, which could see EU member states euros disappearing from its own pocket and heading instead to this trust fund, says it is not worried. “The size of the development aid pie in the world is increasing,” emphasized World Bank Special Representative to the EU, Haleh Bridi. That the Europeans are spending this additional money is a good thing, she said. “Frankly, we want everyone to help Africa… We do not see this European initiative as competition,” concluded the representative of the institution.
Dow Jones notes that there is no formal obligation for member states to contribute to the trust fund, but all 25 member states of the EU will be asked to contribute to the fund and a number of countries have already expressed an interest, a spokesman for Michel said. The Commission will begin looking for commitments to the fund immediately and hopes to have the fund running by June.
La Tribune (France) writes that funding for the first concrete projects planned for the end are construction of a hydroelectric installation shared by Senegal, Mauritania and Mali in addition to the establishment of an electricity network between Mozambique and Malawi.
Xinhua (China) adds that the trust fund is a financial instrument of the EU-Africa Partnership on Infrastructure, one of the pillars of the new EU Strategy for Africa. It is estimated that current investment in infrastructure in Africa needs to be doubled with an initial increase of EUR8 billion per year until 2010, rising to EUR16 billion for the following five years.
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