FINANCING INSTITUTIONS
The European Union development cooperation
The European Union (EU) is one of the
biggest international donors and is
committed to contribute to the eradication of poverty in the context of sustainable
development, including the achievement of the Millennium Development Goals.
There are several key documents that describe the EU policy for Development and Cooperation and they are used as a basis for policy makers to sustain their strategies. All the projects that are designed need to be in line with these strategic papers. EU development assistance is resourced from both the EU budget (around 70%) and the European Development Fund (EDF – around 30%). The EDF is an inter- governmental agreement of the EU Member States, based on their voluntary contributions.
The EDF was created in 1957 by the Treaty of Rome, and first launched in 1959, and represents the main instrument for providing EU development aid in the African Caribbean and Pacific (ACP) countries and the overseas countries and territories (OCTs). It consists of several mechanisms, namely grants managed by the European Commission and risk capital and loans to the private sector, managed by the European Investment Bank under the Investment Facility.
For the 2014-2020 financial period, the EU has adopted a package of instruments for the implementation of external assistance. External action is mainly based on three geographical instruments: Development Cooperation Instrument (DCI), European Neighbourhood Instrument (ENI) and the 11th European Development Fund (EDF)
. The overall amount for development cooperation that will be channelled through the 11th EDF to 78 ACP countries is of €29.1 billion.
The World Bank Group
Established in 1944, the World Bank is a vital source of
financial and technical assistance to developing countries around the world.
| World Bank provides: |
|---|
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Low-interest loans, interest-free credits and grants,
supporting investments in areas as education, health, public
administration, infrastructure, financial and private sector
development, agriculture, and environmental and natural
resource management. Some projects are co-financed with governments, other multilateral institutions, commercial banks, export credit agencies, and private sector investors. |
| Or facilitates financing through trust fund partnerships with bilateral and multilateral donors |
| Support through policy advice, research and analysis, technical assistance and capacity development. |
The World Bank (WB) Group consists of five institutions managed by their member countries:
- The International Bank for Reconstruction and Development (IBRD): lends to governments of middle-income and creditworthy low-income countries.
- The International Development Association (IDA): provides interest-free loans and grants to governments of the poorest countries.
- The International Finance Corporation (IFC): the largest global development institution, focused exclusively on the private sector. It helps developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments.
- The Multilateral Investment Guarantee Agency (MIGA): promotes foreign direct investment into developing countries by offering political risk insurance (guarantees) to investors and lenders.
- The International Centre for Settlement of Investment Disputes (ICSID): provides international facilities for conciliation and arbitration of investment disputes.
The African Development Bank Group
The African Development Bank (AfDB) was created in 1963
in Khartoum, Sudan. The
overall objective of the AfDB Group is to support the economic development and
social progress of African countries, reduce poverty and improve living conditions.
The Bank Group therefore strives to mobilize internal and external resources to promote investment and provide technical assistance to the Regional Member Countries (RMCs).
The African Development Bank (AfDB) Group comprises three distinct entities: the African Development Bank (AfDB), the parent institution, and two affiliates, the African Development Fund (ADF) and the Nigerian Trust Fund, (NTF).
- The African Development Bank (AfDB) has, since the end of December 2011, 77 member countries, comprising 53 African or regional member countries (RMCs) and 24 non-African or non-regional member countries (NRMCs). To achieve its goals it focuses on financing projects and programs thought loans to governments and to private companies, and assists in the definition of institutional policies, capital investments and emergency aid if need.
- The African Development Fund (AfD) was established in 1972 by the African Development Bank and 13 non-regional countries. It focuses on supporting the poorest countries, especially for projects with long-term maturities or non-financial returns such as roads, education and health.
- The Nigeria Trust (NTF) Fund was set up in 1976 by agreement signed between the Government of the Federal Republic of Nigeria and the Bank Group. The NTF became operational in April 1976 and gives financial support to the poorest of the poor countries.