2. COTONOU AGREEMENT

3. 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.

4. 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

5. 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

6. 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)

7. 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)

8. APPROACHING EIB FOR FINANCE Larger projects: telephone/write/fax/ , 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