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COTONOU AGREEMENT

COTONOU AGREEMENT: EIB’S MISSION Private sector support Catalyst for local savings and Foreign Direct Investment Through: A new Investment Facility (IF) of EUR 2.2bn for ”risk capital” loans Long-term loans on own resources for EUR 1.7bn All sectors with debt service capacity.

COTONOU AGREEMENT – Types of Project Public or private borrowers, in productive sectors Specific project or programme – greenfield, expansion, rehabilitation, feasibility study Larger projects (Project cost>10m EUR): direct EIB Smaller projects (Project cost<10m EUR): indirect Technical, environmental, financial, economic criteria; competitive tendering EIB financing < 50% of project cost

COTONOU AGREEMENT – Types of Finance a) Ordinary Loans Loans on EIB own resources Long-term loans (up to 20 years) Foreign currency (EUR, USD) First-class security/guarantee required Standard EIB rate (AAA borrowing+a few bps), fixed or variable basis

COTONOU AGREEMENT – Types of Finance b) Cotonou Facility Loans Foreign or local currency(availability subject to internal limits) Guarantees required (ie project risks) Interest rate a function of risk (eg mark-up or link to variations in sales volume or price) Long-term (up to 20 years)

COTONOU AGREEMENT – Types of Finance c) Cotonou Facility Equity/Quasi-equity To support the capital base of a project (eg preference shares, participating loan) Normally EIB not a direct ordinary share-holder in industrial companies EIB can be direct investor in financial institutions or investment funds (subject to internal limits)

APPROACHING EIB FOR FINANCE Larger projects: telephone/write/fax/e-mail, with outline of project and financing needed Smaller projects: approach local banks Feasibility (or at least pre-feasibility) must already have been completed, financial evaluation and forecasts Government “no-objection” will be required