Union for the Mediterranean Role and vision of the EIBThe European Investment Bank (EIB) is the Mediter-ranean region’s main financial partner, with morethan EUR 10 billion invested since 2002.The Facility for Euro-Mediterranean Investmentand Partnership (FEMIP) is its financial arm in theregion. In October 2008, the EIB was asked by theEuro-Mediterranean finance ministers at a meetingin Luxembourg to support three priority initiativesof the UfM (Union for the Mediterranean).Two years after the Paris summit, the EIB presentsa broad outline of its involvement in this reinforcedpartnership.
Facilit y for Euro -M editer ranean I nvestment and Par tnership • Facilit y for Euro -M editer ranean I nvestment and Par tnership Through its loans and private equity operations and regional and national studies and technical assistance, FEMIP has proven to be a reliable partner and shown its capacity to serve the Medi- terranean countries according to the recommendations of the European Union, as illustrated in the following pages by its efforts to meet the UfM’s priorities: cleaning up the Mediterra- nean Sea, the Mediterranean Solar Plan, land and sea motorways and the Mediterranean Business Development Initiative. It is often said that Europe has built peace and prosperity gradually, first through technical and economic coop- eration with the European Coal and Steel Community, then through the Common Market. In its own way, and with European backing, the Mediterra- The logic of Mediterranean action nean can draw inspiration from this long march to build the Union for the “Always make sure you understand Mediterranean. With FEMIP, the UfM the logic behind the action”. The FEMIP already has all the advantages of an teams often hear me say this. With our important financial tool whereas the partners, they are responsible for EIB only began with the Treaty of ensuring the success of numerous ini- Rome. The capacity to provide finan- tiatives, more than four-fifths of which cial support and targeted technical directly serve the aims of the UfM assistance for national and regional (Union for the Mediterranean). These projects, combined with efforts to initiatives are often ambitious and enhance coordination among part- their success always poses a certain ners, is an enormous asset which could challenge. Ambitious because they b e co m e e ve n m o re i m p o r t a nt , contribute to the necessary conver- depending on the direction soon to be gence between the two shores of the taken by the European Union in terms Mediterranean, thanks to significant of external policy. and ever-increasing FEMIP funding – in 2009, FEMIP signed loan agree- In order to meet the strategic guide- ments totalling some EUR 1.6 billion, a lines that will be adopted in the next record amount that is expected to be few months and support the ambi- maintained or even exceeded in 2010. tions of the Union for the Mediterra- A continual challenge, because nean, FEMIP stands more ready than although we are giving financial, ever to take action. operational and technical support to both public and private partners, it is the States themselves who must drive Philippe de Fontaine Vive this change and modernisation to EIB Vice-President form a regional identity. responsible for FEMIP 2 Union for the Mediterranean • Role and vision of the EIB
Facilit y for Euro -M editer ranean I nvestment and Par tnership • Facilit y for Euro -M editer ranean I nvestment and Par tnership FEMIP serving the UfM: an overview At the ECOFIN Council/FEMIP joint ministerial meeting that followed the Paris Summit (held on 7 October 2008 in Luxembourg) the Euro-Mediterranean finance ministers expressed their satisfaction with the active role played by the EIB in supporting three of the six priority initiatives of the UfM, namely cleaning up the Mediterranean Sea, the Mediterranean Solar Plan and land and sea motorways. Through the FEMIP Trust Fund, the EIB also provides support for the Mediterranean Business Development Initiative, another of the UfM’s priority projects. FEMIP’s participation in the UfM’s projects Sea has made considerable progress, with In order to achieve its objectives, FEMIP has quickly became one of the EIB’s pillars the identification of 78 priority projects a wide range of financial and non-financial of action in the Mediterranean partner and the implementation of a facility to instruments at its disposal: loans, equity countries 1. As soon as 2009, 80% of fund- help promoters develop projects that and quasi-equity investment, technical ing concerned the priorities set out in are financially and technically viable assistance and sector-based studies during the Paris Declaration of July 2008 and in and therefore “bankable”. Using a similar the project preparation stage. FEMIP can the conclusions of the meeting of For- methodology for the Solar Plan, FEMIP also count on its solid partnership with eign Affairs Ministers in November 2008 in has identified a number of renewable the European Commission and other Marseille. The projects funded by FEMIP energy projects in the region and is cur- international financing institutions and on include a sanitation project in Lebanon rently defining a financial package for a the relationship of trust developed with (EUR 140 million), the construction of a large-scale pilot project in Morocco. A the Member States and partner countries. wind farm in Gabal El-Zeit in Egypt (EUR similar debate and identification of prior- In this respect, the FEMIP Trust Fund 50 million), the widening of the Rabat- ity projects have been instigated with the brings significant added value and much Casablanca motorway in Morocco (EUR other partners in relation to the land and greater flexibility to the EIB’s activities in 225 million) and the first venture capital sea motorways initiative. FEMIP has also the region. In its role as a think tank, it fund for Palestinian private enterprises conducted a study to establish the speci- finances debate in new fields that could (EUR 5 million). fications of the business development ini- help to tailor FEMIP’s services more closely tiative. The EIB has set up a think tank of to the UfM’s objectives. As can be seen in the following pages, the lenders in the urban development sector, initiative to clean up the Mediterranean aimed at identifying assessment criteria In accordance with the targets of its for sustainable urban projects. operational plan, FEMIP will continue to finance the UfM’s priority projects during the period 2010-2012 and strengthen Breakdown of FEMIP funding in 2009 its commitment on a political level by sector according to UfM priorities through close collaboration with the UfM’s Secretariat in Barcelona, to which Businesses* 26% two EIB employees will be seconded. The Education* 13% EIB’s main remit will be to evaluate the Urban Development 3% “bankability” of the UfM’s projects and Cleaning up the Mediterranean Sea* 9% ensure coordination among multilateral and bilateral institutions active in the region. Water 12% Land and Sea Motorways* 29% Transport 5% Renewable Energy* 3% 1) Algeria, Egypt, Gaza/West Bank, Israel, Jordan, * Project categories marked by an asterisk are those that correspond to the UfM’s priorities Lebanon, Morocco, Syria and Tunisia. Union for the Mediterranean • Role and vision of the EIB 3
Facilit y for Euro -M editer ranean I nvestment and Par tnership • Facilit y for Euro -M editer ranean I nvestment and Par tnership Cleaning up the Mediterranean Sea This major initiative of the Union for the Mediterranean is aimed at combating the main sources of pollution in the Mediterranean Sea between now and 2020. A year after its launch in 2009, the “Mediterranean Hot Spot Investment Programme – Project Prepa- ration and Implementation Facility”, managed by the EIB, is showing its first results. The “Cleaning up of the Mediterranean This structural and regional approach is ranean Sea. In 2009, it earmarked EUR 140 Sea” initiative is part of the Horizon 2020 aimed at selecting projects according million to this programme to finance a strategy, which has benefited from solid to financial viability criteria, which is sanitation projec t in Lebanon and backing from the European Commission essential for meeting the objective of improve a drinking water and sanitation and the EIB for several years. The principal cleaning up the Mediterranean Sea by network for four million people in Egypt. aim of this initiative is to reduce the 2020. level of pollution in the Mediterranean The EIB’s activity in the region is also Sea by identifying and combating the At present, there are 78 investment marked by greater coordination with main sources between now and 2020. projects in the Horizon 2020 programme other financing institutions, starting Wa s te wate r, m u n i c i p a l wa s te a n d with a total cost of around EUR 5.7 billion. with its European partners, the European industrial emissions account for 80% of More than half of these have already Commission, AFD and KfW, in addition pollution in the Mediterranean Sea. received financing. Among the projects to other European agencies depending that have not yet been funded, the EIB on the project involved, the World Bank With an overall budget of EUR 6.2 million has selected nine investment operations and the African Development Bank. The managed by the EIB, the Mediterranean totalling EUR 1.2 billion that it wants to Horizon 2020 programme subgroup Hot Spot Investment Programme - examine and potentially finance during charged with pollution abatement, Project Preparation and Implementation the period 2010-2013. chaired by the EIB in close cooperation Facility illustrates the selective strategic with other financial institutions, serves approach implemented by the EIB to The EIB is therefore conducting a highly to exchange information on priority identify bankable projects and address proactive policy to support the UfM’s investment projects and identify possible the region’s major environmental issues. core initiative of cleaning up the Mediter- financing operations. 4 Union for the Mediterranean • Role and vision of the EIB
Facilit y for Euro -M editer ranean I nvestment and Par tnership • Facilit y for Euro -M editer ranean I nvestment and Par tnership Renewable energy: Mediterranean Solar Plan One of the flagship policies of the Union for the Mediterranean, the Mediterranean Solar Plan is aimed at capitalising on the enor- mous potential of renewable energy sources in the Mediterranean. The EIB underpins this ambitious policy by examining the pos- sible financial mechanisms to be implemented and supporting pilot projects. The aim of the Solar Plan is to provide action plan to develop renewable energy 2008. The EIB also promotes the transfer of additional capacity of 20 GW of renew- at national level. New high-tech indus- knowledge and best practices for renewa- able energy in the Mediterranean region tries should develop as a result and con- ble energy and energy efficiency projects (particularly solar and wind) by 2020 in tribute to job creation and the transfer of in the region. Accordingly, it has imple- order to meet increasing energy demand technology and know-how. In addition mented an energy efficiency project com- and reduce greenhouse gas emissions. to its importance in terms of energy and prising industrial energy audits in Morocco The countries in the south and east of the the environment, the Solar Plan will be a (“Optima Audit”). Mediterranean region are expected to source of economic leverage by stimu- find themselves under enormous pressure lating growth and the integration of the On an operational level, FEMIP finances in terms of energy demand, with a growth Mediterranean region. key renewable energy and energy effi- rate four times that of the European coun- ciency projects, such as the first Moroccan tries up to 2025. FEMIP has begun to play its role in this Solar Plan project promoted by MASEN, respect in two main ways. Ahead of the the Moroccan solar energy agency, i.e. the Launched in July 2008 at the Paris Summit projects, the FEMIP Trust Fund has financed construction of a 500 MW solar energy for the Mediterranean, the Solar Plan has a study on the Solar Plan which lists the capacity in Ouarzazate. This operation, boosted the market considerably, result- projects identified in the region as well the first under the Mediterranean Solar ing in unprecedented organisation of the as their technical and financial progress 2. Plan, is being carried out in collaboration private sector into consortiums accom- The study should help to define an invest- with the European Commission, develop- panied by strong interest and involve- ment plan for renewable energy financing ment agencies active in the region such ment on the part of the governments of in the Mediterranean, in response to the as AFD and KfW, and the World Bank. Fur- partner countries such as Morocco, Tuni- request of the Euro-Mediterranean indus- ther projects are also being appraised in sia and Egypt who have implemented an try ministers who met in Nice in November Egypt, Israel, Jordan and Tunisia. 2) Available on the EIB’s website: www.eib.org/femip Union for the Mediterranean • Role and vision of the EIB 5
Facilit y for Euro -M editer ranean I nvestment and Par tnership • Facilit y for Euro -M editer ranean I nvestment and Par tnership Land and sea motorways The implementation of integrated, efficient transport is a prerequisite for sustainable development in the Mediterranean region. By extending trans-European networks and upgrading transport networks between the countries of the South, trade with the EU and within the Mediterranean region will be reinforced and increased. This is why the development of land and sea motorways is one of the six priority initiatives of the Union for the Mediterranean. The “Land and Sea Motorways” initia- a trans-Mediterranean transport network natories of the joint declaration defining tive aims at facilitating the movement and draw up a list of priority projects of the guidelines to be followed by multilat- of goods and people at sea and on land regional interest for which financial back- eral development banks to ensure road by integrating transport systems both ing will be sought. In particular, it pro- safety. It was within this context that the between the two shores of the Mediter- vides the technical assistance required to EIB helped to devise a road safety pro- ranean and among the various Mediter- prepare some of these projects such as a gramme in Tunisia. ranean partner countries. The project rail link between Damascus and Amman includes the development of port con- and a logistics platform in Homs in Syria. FEMIP also supports the development of nections, the construction of coastal a Euro-Mediterranean logistics platforms motorways and modernisation of the Between 2002 and 2009, FEMIP devoted network called LOGISMED. The project trans-Maghreb rail link. Particular atten- EUR 2.3 billion to the transport sector, of involves creating logistics platforms that tion is paid to cooperation in the field which 85% went to the construction of will provide services across the entire of safety and security, with a view to the roads and motorways and maritime and logistics chain, including administrative region’s economic integration. rail transport. In 2010, the EIB contributed services and training. Through its Trust EUR 50 million to InfraMed, the UfM’s first Fund, FEMIP has financed a study on set- This initiative is based on work insti- financing facility. This fund, launched in ting up an initial network of standardised gated by the EuroMed Transport Forum conjunction with financial institutions platforms, defining the common charac- in 2005. The Forum is organised around from the north and south of the Mediter- teristics of a maiden network of Euro-Med- thematic working groups including the ranean, will invest in urban, transport and iterranean logistics platforms in order to Mediterranean partner countries, the energy infrastructure projects. establish a base of common criteria 3. Member States of the EU and the Euro- pean Commission. The EIB is a member of The EIB is also helping to implement the the Working Group on Infrastructure and safety component of the land and sea Regulatory Issues whose aim is to define motorways initiative. It is one of the sig- 3) Available on the EIB’s website: www.eib.org/femip 6 Union for the Mediterranean • Role and vision of the EIB
Facilit y for Euro -M editer ranean I nvestment and Par tnership • Facilit y for Euro -M editer ranean I nvestment and Par tnership SMEs, drivers of growth in the Mediterranean Small and medium-sized enterprises (SMEs) are one of the main drivers of economic growth. In a changing global environment, characterised by constant structural changes and increasing competitive pressures, SMEs play a crucial role in job creation and economic and social prosperity. The Mediterranean Business Development The guiding principles of the initiative are Commission and the interested parties Initiative (MBDI) is a priority initiative of added value, market orientation and joint on the basis of its extensive experience in the Union for the Mediterranean aimed responsibility in order to ensure their com- financing SMEs. at encouraging the development of plementarity with existing instruments. entrepreneurship and promoting viable, Thanks to its active collaboration with sustainable economic growth in the Through its Trust Fund, FEMIP financed a over a hundred banks and forty invest- Mediterranean basin. The declaration of feasibility study on the MBDI. The study ment funds, FEMIP made EUR 1.6 billion the Paris Summit of July 2008 states that was submitted to the Euro-Mediterra- available to SMEs between October 2002 the MBDI is “aimed at assisting the existing nean finance ministers at the joint FEMIP/ and December 2009 via two instruments, entities in partner countries operating in ECOFIN ministerial meeting of the Union namely credit lines and private equity support of micro, small and medium-sized for the Mediterranean held in Brussels in operations. enterprises by assessing the needs of these May 2010. In accordance with the support enterprises, defining policy solutions and expressed at the ministerial meeting, the Credit lines set up in cooperation with providing these entities with resources EIB will submit technical proposals for con- local intermediary banks enable EIB funds in the form of technical assistance and crete implementation of the MBDI, coor- to be extended to small businesses oper- financial instruments”. dinated jointly by FEMIP, the European ating in such diverse sectors as industry, agri-food, health, education, tourism and advanced technologies. Through these credit lines, FEMIP has granted EUR 1.4 billion in funds to Mediterranean SMEs. FEMIP’s private equity operations are aimed at strengthening the capital base of productive enterprises through financ- ing in the form of equity and quasi-equity investments. FEMIP’s investment portfolio amounts to nearly EUR 500 million, divided between 39 investment funds, 26 direct investments and 474 joint investments with local financial intermediaries. In addi- tion, FEMIP has provided EUR 27 million to support the development of microfinance in the region. Union for the Mediterranean • Role and vision of the EIB 7