(b) local authorities and private bodies working in the countries concerned for their economic and social development;
(c) undertakings carrying out their activities in accordance with industrial and business management methods and formed as companies or firms of an ACP State within the meaning of Article 161;
(d) groups of producers that are nationals of the ACP States or like bodies, and, where no such groups or bodies exist, the producers themselves;
(e) for training purposes, award holders and trainees.
Chapter 2. Financial Resources and Methods of Financing
Article 95.
For the duration of the Convention, the overall amount of the Community's financial assistance shall be 5 227 million EUA.
This amount shall comprise:
1. 4542 million EUA from the European Development Fund hereinafter referred to as "the Fund", allocated as follows:
(a) for the purposes set out in Articles 91 and 92, 3 712 million EUA, consisting of:
- 2928 million EUA in the form of grants,
- 504 million EUA in the form of special loans,
- 280 million EUA in the form of risk capital;
(b) for the purposes set out in Title II, up to 550 million EUA in the form of transfers for the stabilization of export earnings;
(c) for the purposes set out in Title III, Chapter 1, a special financing facility up to 280 million EUA;
2. for the purposes set out in Articles 91 and 92, up to 685 million EUA in the form of loans from the Bank, made from its own resources in accordance with the terms and conditions provided for in its Statute. These loans shall carry, under the conditions laid down in Article 104, a 3 % interest rate subsidy, the cost of which shall be charged against the amounts of aid provided for in 1 (a).
Article 96.
At the request of the ACP States and by consent of the parties the financial resources of the Community may be applied to co-financing, where that permits an increase in the financial flows to the ACP States and supports their efforts to harmonize international cooperation for their development. Special consideration shall be given in particular to:
(a) large projects which cannot be financed by any one source of financing alone;
(b) projects in which participation by the Community and input of its project expertise might facilitate the participation of other financing institutions;
(c) projects for which diversification of financing might be advantageous, from the point of view of the terms of financing or the cost of the investment, and particularly projects of a social nature;
(d) projects of a regional or inter-regional nature.
Article 97.
Co-financing may take the form of joint or parallel financing. Preference shall be given to the solution that is best from a cost and efficiency viewpoint.
Article 98.
With the agreement of the parties concerned, and without prejudice to the particular rules of each financing institution, necessary measures shall be taken to coordinate and harmonize operations of the Community and of the other co-financing bodies during the preparation and implementation of the project or programme being co-financed in order to avoid an increase in the number of procedures to be implemented by the ACP States and to allow those procedures to be made more flexible.
Article 99.
With the agreement of the ACP State concerned, the Community may provide the other co-financing bodies with administrative help, should they so desire, in order to facilitate the implementation of the project or programme being co-financed.
Article 100.
At the request of the ACP State in question and with the agreement of the other parties concerned the Commission or the Bank may act as a leading or coordinating agency for projects part-financed by them.
Article 101.
1. Projects or programmes may be financed by grant, or by special loan, or by risk capital, or by loans from the Bank from its own resources, or jointly by two or more of these means of financing.
2. The financing of productive investment projects in industry, agro-industry, tourism, mining and energy production linked with investment in those sectors shall be borne in the first place by loans from the Bank from its own resources and by risk capital.
3. For resources of the Fund which are managed by the Commission the means of financing shall be fixed jointly in accordance with the level of development and the geographical, economic and financial situation of the ACP State or States concerned, so as to ensure the best use of available resources. Account may also be taken of their economic and social impact.
4. For resources managed by the Bank, the means of financing shall be fixed in accordance with the nature of the project, the prospects for its economic and financial return and the stage of development and economic and financial situation of the ACP State or States concerned. Account shall be taken in addition of factors guaranteeing the servicing of repayable aid.
Article 102.
Special loans shall be made for a duration of 40 years, with a grace period of 10 years. They shall bear interest at the rate of 1 % per annum.
Article 103.
1. Grants or special loans may be accorded to an ACP State or may be channelled by that State to a final recipient.
2. In the latter case, the terms on which the money may be made available, by the ACP State to the final recipient shall be laid down in the financing agreement.
3. Any profit accruing to the ACP State because it receives either a grant or a loan for which the interest rate or the repayment period is more favourable than that of the final loan shall be used by the ACP State for development purposes on the conditions laid down in the financing agreement.
4. Taking account of a request of the ACP State concerned, the Bank may, in accordance with Article 101, grant finance which it shall administer either directly to the final recipient, via a development bank, or via the ACP State concerned.
Article 104.
1. Scrutiny by the Bank of eligibility of projects and the provision of loans from its own resources shall be effected in conjunction with the ACP State or States concerned in accordance with the rules, conditions and procedures provided for in the Bank's Statute and in this Convention, consideration being given to the economic and financial situation of the ACP State or States concerned and to the factors which guarantee the servicing of repayable aid.
2. The duration of loans made by the Bank from its own resources shall be governed by terms stipulated on the basis of the economic and financial characteristics of the project, but may not exceed 25 years.
3. The rate of interest shall be the rate charged by the Bank at the time of signing of each loan contract. This rate shall be reduced by 3 % by means of an interest rate subsidy, except where loans are intended for investment in the oil sector.
This interest rate subsidy shall, however, be automatically adjusted so that the interest rate actually borne by the borrower will be neither less than 5 % nor more than 8 %.
4. The aggregate amount of interest rate subsidies, calculated in terms of its value at the time of the signature of the loan contract at a rate and according to detailed rules to be laid down by the Community, shall be charged against the amount of grant aid specified in Article 95 and shall be paid direct to the Bank.
Article 105.
1. In order to enable projects to be carried out in industry, agro-industry, mining, tourism, and, in exceptional circumstances, transport and_ telecommunications, and in energy production linked with investment in those sectors, the Community may grant financial assistance in the form of risk capital where they are of general interest to the economy of the ACP State or States concerned.
2. Risk capital assistance may be used inter alia for:
(a) increasing directly or indirectly the own resources or resources assimilated thereto of public, semi-public or private undertakings and granting quasi-capital assistance to such undertakings;
(b) financing specific studies for the preparation and the drawing up of projects and providing assistance to undertakings during the start-up period;
(c) financing research and investment in preparation for the launching of projects in the mining and energy sectors.
3. To attain these objectives the Community may acquire temporary minority holdings in the capital of the undertakings concerned or in that of institutions for financing development in the ACP States. Such holdings may be acquired in conjunction with a loan from the Bank or with another form of risk-capital assistance. As soon as the conditions are met they shall be transferred, preferably to nationals or institutions of the ACP States.
4. Quasi-capital assistance may also take the form of:
(a) subordinated loans, which shall be redeemed and in respect of which interest, if any, shall be paid only after other bank claims have been settled;
(b) conditional loans, the repayment or duration of which shall be governed by terms laid down when the loan is made. Conditional loans may be made directly, with the agreement of the ACP State concerned, to a given firm. They may also be granted to an ACP State or to institutions in the ACP States specializing in development financing to enable them to acquire a holding in the capital of undertakings operating in the sectors referred to in paragraph 1, where such an operation comes under the financing of preparatory or new productive investments and may be supplemented by other Community financing, possibly together with other sources of financing, as a co-financing operation;
(c) loans made to development financing institutions in the ACP States, where the characteristics of their activities and management so permit. Such loans may be used for on lending to other firms and acquiring holdings in other undertakings.
5. The terms of the quasi-capital assistance referred to in paragraph 4 shall be determined case by case by reference to the characteristics of the projects financed. However, the terms on which quasi-capital assistance is granted shall generally be more favourable than those for subsidized loans from the Bank. The interest rate shall not be greater than that on subsidized loans.
6. Where the assistance referred to in this Article is granted to consultancy firms or is used to finance research or investment in preparation for the launching of a project, it may be incorporated in any capital assistance to which the promoting company may be entitled if the project is carried out.
Article 106.
1. Special treatment shall be accorded to the least- developed ACP States when determining the volume of the financial resources which such States may expect from the Community for the purpose of their indicative programmes.
In addition, account shall be taken of the particular difficulties of the land-locked or island ACP States.
2. These financial resources shall be combined with particularly favourable terms of financing, having regard to the economic situation and the nature of the needs specific to each State. They shall consist essentially of grants and, in appropriate cases, of special loans or risk capital.
3. Special loans for the least-developed ACP States shall be made for a duration of 40 years with a grace period of 10 years. They shall bear an interest rate of 0-75 % per annum.
4. The Community shall as a matter of priority facilitate access for the least-developed ACP States to risk capital assistance administered by the Bank.
5, Loans from the Bank's own resources may also be granted in the least-developed ACP States, having regard to the criteria laid down in Article 104.
Article 107.
At the request of the least-developed ACP States, the Community may, under the conditions laid down in Article 139 (4), lend assistance in studying solutions to their indebtedness, debt-servicing and balance-of- payments problems.
Chapter 3. ACP and EEC Responsibilities
Article 108.
1. Operations financed by the Community shall be implemented by the ACP States and the Community in close cooperation, the concept of equality between the partners being recognized.
2. The ACP States shall be responsible for:
(a) defining the objectives and priorities on which the indicative programmes drawn up by them shall be based;
(b) choosing the projects and programmes which they decide to put forward for Community financing;
(c) preparing and presenting to the Community the dossiers of projects and programmes;
(d) preparing, negotiating and concluding contracts;
(e) implementing projects and programmes financed by the Community;
(f) managing and maintaining operations carried out in the context of financial and technical cooperation.
3. If requested by the ACP States, the Community may provide them with technical assistance in performing the tasks referred to in paragraph 2. It shall examine in particular specific measures for alleviating the particular difficulties encountered by the least-developed, land-locked and island ACP States in the implementation of their projects and programmes.
4. The ACP States and the Community shall bear joint responsibility for:
(a) defining, within the joint institutions, the genéral policy and guidelines of financial and technical cooperation;
(b) adopting the indicative programmes of Community aid;
(c) appraising projects and programmes, and examining the extent to which they fit the objectives and priorities and comply with the provisions of the Convention;
(d) taking the necessary implementing measures to ensure equality of conditions for participation in invitations to tender and contracts;
(e) evaluating the effects and results of projects and programmes completed or under way;
(f) ensuring that the projects and programmes. financed by the Community are executed in accordance with the arrangements decided upon and with the provisions of the Convention.
5. The Community shall be responsible for preparing and taking financing decisions on projects and programmes.
6. (a) An ACP-EEC Committee shall be set up within the Council of Ministers to study, in general terms and on the basis of specific examples, suitable measures to improve the implementation of financial and technical cooperation, notably by accelerating and streamlining procedures.
(b) The Committee shall be composed, on a basis of parity, of representatives of the ACP States and of the Community appointed by the Council of Ministers, or their authorized representatives. It shall meet every quarter and at least once a year at ministerial level.
A representative of the Bank shall be present at Committee meetings.
(c) The Council of Ministers shall lay down the Committee's rules of procedure in particular the conditions for representation and the number of members of the Committee, the detailed arrangements for their deliberations and the conditions for holding the chair.
(d) Within the powers delegated to it by the Council of Ministers the Committee shall carry out the following tasks:
(i) it shall collect information on existing procedures relating to the implementation of financial and technical cooperation and give any necessary clarification on these procedures;
(ii) it shall examine, at the request of the Community or of the ACP States, any specific difficulties which may arise in the course of implementing such financial and technical cooperation;
(iii) it shall inform the Council of Ministers in the annual report referred to in subparagraph (f), of any comments and suggestions on the annual report referred to in Article 119;
(iv) it shall submit to the Council of Ministers any suggestions likely to lead to improvement or acceleration in the implementation of financial and technical cooperation;
(v) it shall examine any problems in connection with the implementation of the timetables of commitments, execution and payments as provided for in Article 110, with a view to facilitating the removal of any difficulties and bottlenecks discovered at different levels;
(vi) it shall carry out such other tasks entrusted to it by the Council of Ministers.
(e) With the agreement of the Committee of Ambassadors, the Committee. may convene meetings of experts to study periodically the causes of any difficulties or bottlenecks which may arise in implementing financial and technical cooperation. These experts shall suggest to the Committee possible ways of removing such difficulties and bottlenecks.
(f) The Committee shall examine the annual report on the management of Community financial and technical aid, which shall be forwarded to it by the Commission pursuant to Article 119 (2). It shall draw up, for the attention of the Council of Ministers, recommendations and_ resolutions relating to measures directed towards attainment of the objectives of financial and technical cooperation, within the framework of the powers conferred upon it by that Council. It shall draw up an annual report giving details of progress, which shall be examined by the Council at its annual meeting on the definition of the policy and guidelines for. financial and technical cooperation referred to in Article 119.
7. Where the financing of projects within the Bank's sphere of competence is concerned, the arrangements and procedures for implementing financial and technical cooperation, as set out in Chapters 4, 6, 7 and 8, may, in coordination with the ACP States concerned, be adapted to take account of the nature of the projects financed by the Bank and to permit it, within the framework of the procedures laid down by its Statute, to act in accordance with the objectives of this Convention.
Chapter 4. Programming, Appraisal, Implementation and Evaluation
Article 109.
1. The schemes financed by the Community, which are complementary to the ACP States' own efforts, shall be integrated into the economic and social development plans and programmes of the said States and shall tie in with the development objectives and priorities which they set both at national and regional level.
2, At the beginning of the period covered by this Convention, financial and technical cooperation shall be programmed so as to enable:
(a) each ACP State to have the clearest and earliest possible indication, before the indicative programme is drawn up, of the amount of the financial assistance administered by the Commission and from which it may benefit during that period and of the terms and conditions which may be attached thereto;
(b) the Contracting Parties to ensure that optimum use is made of the different instruments and means of cooperation provided for in this Convention; in order to attain the objectives of financial and technical cooperation; ,
(c) the Community to know the development objectives and priorities set by each ACP State and the projects and programmes which the ACP States decide to put forward for financing in the framework of their objectives and priorities.
3. An indicative programme shall be adopted by mutual agreement between the Community and each ACP State on the basis of proposals made by that State. The programme shall set out:
(a) the guidelines and scope of financial and technical cooperation as they emerge from the exchange of views between the representatives of the ACP State and those of the Community;
(b) the ACP State's objectives and priorities for which the Community's financial support is seen as particularly appropriate;
(c) specific projects and programmes, where they have been clearly identified, to achieve the development objectives. These projects and programmes together with those subsequently identified in the light of the objectives and priorities. written into the indicative programme, shall then be appraised in accordance with Article 112.
4. In the light of these various aspects, an optimum rate of commitment shall be determined under the conditions set out in Article 110.
5. The indicative programmes shall be sufficiently flexible to take account of any changes occurring in the economic situation of each of the ACP States, and any modifications of their initial priorities and objectives. Each programme may be revised at the request of the ACP State concerned. In any case, it shall be reviewed at least once during the period covered by this Convention.
6. These programmes shall not cover the emergency aid referred to in Article 137 or the measures for stabilizing export earnings referred to in Title IL
7. When the indicative programme of an ACP State is drawn up, its representatives and those of the Community shall hold an exchange of views on the ACP State's priorities and objectives at regional level. Note shall be taken of specific projects and programmes enabling these objectives to be attained in the context of regional cooperation.
Article 110.
1. (a) When the Fund's resources administered by the Commission are programmed the optimum pace for overall commitments, year by year, shall be worked out with the ACP State concerned in the light of the various constraints on the parties and priorities to be observed by them.
(b) This optimum pace shall be determined in such a way that the overall amount of sums to be committed each year is distributed as evenly as possible throughout the period of application of this Convention.
(c) Any balance remaining from the Fund that has not been committed by the end of the last year of the application of this Convention will be utilized until it has been exhausted, in accordance with the same conditions as those laid down in this Convention.
2. Where the ACP State has presented a complete project dossier within the meaning of the second subparagraph of Article 111 (1), an advance timetable for appraisal, lasting until the stage when the financing proposal is drawn up, shall be adopted by the Commission and the ACP State concerned.
3. The financing proposal shall contain an advance timetable for the technical and financial implementation of the project, which shall be reproduced in the financing agreement and deal with the duration of the different phases of implementation.
4, A comparative account of commitments and payments shall be drawn up each year by the national authorizing officer and the Commission delegate to determine the causes of delays recorded in the execution of the indicative timetable so that the necessary remedial measures can be proposed.
Article 111.
1. (a) Preparation of the dossiers of projects or programmes proposed under the indicative programmes shall be the responsibility of the ACP States concerned or of other beneficiaries approved by them.
(b) The dossiers must contain all the information necessary for the appraisal of the project.
(c) Where so requested the Community may provide assistance for drawing up the dossiers.
2. Such dossiers shall be officially transmitted to the Community by the ACP States or the other beneficiaries specified in Article 94 (1). Where the beneficiaries specified in Article 94 (2) are concerned, the express agreement of the State or States concerned shall be required.
3. All projects or programmes transmitted officially in accordance with paragraph 2 shall be brought to the attention of the Community body responsible for taking financing decisions.
Article 112.
1. (a) Project and programme appraisal shall be undertaken in close collaboration between the Community and the ACP States or any other beneficiaries.
(b) The various aspects of the projects and programmes shall be appraised, in particular economic, social, technical, financial and administrative aspects.
(c) Appraisal should ensure that the projects and programmes really meet the criteria defined in paragraph 2.
2. The criteria used for appraising projects and programmes shall be as follows:
(a) projects and programmes must correspond to the objectives and priorities of the ACP State. They must take account of national efforts and of other resources of external origin and dovetail with them and the provisions of this Convention;
(b) the effectiveness of projects and programmes shall be assessed by means of an analysis comparing the means to be employed with the effects expected from the technical, social, economic and financial aspects; possible variants shall be examined;
(c) projects and programmes shall be assessed for their viability from the viewpoint of the different economic agents involved, be they the State, an undertaking or local communities. This part of the appraisal procedure is to ascertain that the project will produce the expected effects in a period considered normal for the type of scheme concerned.
It is also to make sure that any staff and other resources, in particular financial, necessary for operating and maintaining the capital projects and for covering any incidental project costs are actually available locally.
This shall be achieved by establishing forward budgets and assessing the opportunities for adapting the project to local constraints and resources;
(d) appraisal of the economic return shall be directed at the various effects expected of the project, notably the physical, economic, social and financial effects, if possible on the basis of a cost-benefit analysis;
(e) appraisal must take account of the non-quantifiable effects of projects, and particular attention shall be paid to the effects of the project on the environment.
3. The specific difficulties and constraints peculiar to the least-developed ACP States which affect the effectiveness, viability and economic return of projects and programmes shall be taken into account when the said projects and programmes are appraised.
Article 113.
1. The conclusions of the appraisal shall be summarized in a financing proposal, which shall serve as the basis for the Community's decision.
2. The financing proposals, drawn up by the relevant departments of the Community, shall be transmitted to the ACP States concerned.
3. (a) Where the Community body responsible for delivering an opinion on projects fails to deliver a favourable opinion, the relevant departments of the Community shall consult the representatives of the ACP State or States concerned on further action to be taken, in particular on the advisability of submitting the dossier afresh, possibly in a modified form, to the relevant Community body.
(b) Before that body gives its final opinion, the representatives of the ACP State or States concerned shall, at their request, be heard by the Community representatives on that body in order to be able to state their grounds for the project.
4. Should the final opinion delivered by that body not be favourable, the competent departments of the Community shall consult afresh with the representatives of the ACP State or States concerned so as to find out whether the project should be submitted as it stands to the Community bodies or whether it should be withdrawn or modified.