2. (a) To attain these objectives, risk capital may be used to acquire temporary minority holdings on behalf of the Community in the capital of the enterprises concerned or in that of institutions specialized in the financing of 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. Once the conditions are met, the holdings shall be transferred, preferably to nationals or institutions of the ACP States.
(b) Financing decisions relating to risk capital shall be taken by the Community within the framework of Article 220(5) to (8).
3. Quasi-capital assistance may 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 financial institutions in the ACP States to enable them to acquire a holding in the capital of enterprises operating in the sectors referred to in Article 197(5), where such an operation comes under the financing of preparatory or new productive capital projects and may be supplemented by other Community financing, possibly together with other sources of financing, as a co-financing operation. Such loans may also be granted, case by case, at the request of the ACP State, subject to the same conditions and by derogation from Article 191, to an enterprise of a Community Member State to enable it to undertake a productive capital project in the territory of that ACP State;
(c) loans made to financial institutions in the ACP States, where the characteristics of their activities and management so permit. Such loans may be used for onlending to other firms and acquiring holdings in other enterprises.
4. The terms of quasi-capital assistance referred to in paragraph 3 shall be determined by reference to the characteristics of each project 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.
5, 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.
6. The projects and programmes identified and promoted by the joint bodies set up by the Community and the ACP States and authorized by those States to attain certain specific objectives within the framework of Article 191(1)(c) may also be entitled to the quasi-capital assistance referred to in paragraph 3 of this Article.
Section 5. Co-financing
Article 200.
1. The financial resources of the Community may be applied, at the request of the ACP States, to co-financing, particularly where they will facilitate an increase in the financial flows to the ACP States and support their efforts to harmonize international co-operation for their development. Special consideration shall be given to the possibility of co-financing in the following cases, among others:
(a) large-scale projects which cannot be financed by any one source of financing alone;
(b) projects in which Community participation, and an input of its project expertise, might facilitate the participation of other additional sources of finance;
(c) projects which may benefit from a blend of concessionary and non-concessionary financing;
(d) projects which may be broken down into subprojects which could be eligible for financing from different sources; (e) projects for which a diversification of financing may lead to an advantageous solution from the point of view of the financing and investment costs and of other aspects of the implementation of the said projects;
(f) projects of a regional or inter-regional nature.
2. Co-financing may be in the form of joint or parallel financing.
Preference shall be given to the more suitable solution from the point of view of cost-effectiveness.
3. Whenever possible, the Commission and the Bank shall try to involve private sector resources in projects financed by them, and in particular:
(a) to seek out and negotiate with commercial partners for joint financial operations;
(b) to apply the various techniques developed in recent years to attract private-sector resources into co-financing operations,
4. With the agreement of the parties concerned, necessary measures shall be taken to co-ordinate and harmonize operations of the Community and of the other co-financing bodies, in order to avoid an increase in the number of procedures to be undertaken by the ACP States and to allow those procedures to be made more flexible, notably as regards:
(a) the needs of other co-financing bodies and recipients;
(b) the choice of projects to be co-financed and the arrange- ments for carrying them out;
(c) the harmonization of works, supply and services contracts rules and procedures;
(d) the payment terms;
(e) the rules of eligibility and competition;
(f) the margin of preference granted to ACP enterprises.
5. 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 projects or programmes being co-financed.
6. 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 lead or co-ordinating agency for projects part-financed by them.
Section 6. Microprojects
Article 201.
1. In order to make a practical response to the needs of local communities with regard to development, the Fund shall participate in the financing of microprojects at the ACP States' request.
2. Programmes for microprojects shall cover small projects within the framework of Article 187 and other projects which meet the criteria referred to in paragraph 3 and have an economic and social impact on the life of the people and the local communities in the ACP States. These projects shall normally be located in rural areas. However, the Community may also assist in the financing of microprojects in urban areas.
3. In order to be eligible for Community financing, micropro- jects must:
- meet a priority need demonstrated and observed at local level;
- be undertaken with the active participation of the local community.
4. Special priority shall be accorded to the preparation and implementation of microprojects in the least-developed ACP States.
Article 202.
1. Each project for which Community assistance is requested must stem from an initiative taken by the local community which will benefit therefrom. Contributions to microprojects shall normally come from:
- the community concerned, to be provided in kind, in the form of supply of services or in cash and matched to its capacity to contribute;
- the Fund.
The ACP State concerned may also contribute, either in the form of a financial contribution, or through the use of public equipment or the supply of services.
2. The share contributed by the Fund shall not normally exceed two-thirds of the total cost of each project and may not exceed 250 000 ECU. The contributions shall be mobilized at the same time. For each project, the local community shall undertake to maintain and run the project, where appropriate, in conjunction with the national authorities.
3. The amounts representing the Fund's contribution shall be charged against the grant allocation under the indicative programme of Community aid referred to in Article 215.
Section 7. Emergency Aid and Aid for Refugees and Returnees
Article 203.
1. Emergency aid shall be accorded to ACP States faced with serious economic and social difficulties of an exceptional nature resulting from natural disasters or extraordinary circum- stances having comparable effects.
2. (a) Emergency aid shall cover assistance urgently necessary immediately an exceptional situation arises. This could take the form of works, supplies, the provision of services and payments in cash. It may be used to procure food, seeds, shelter, materials, medical supplies, clothing and transport. As regards other specific requests from the ACP States, the conditions of implementation of such aid shall be sufficiently flexible to enable the range of products and services to be widened.
(b) Emergency aid may also cover the financing of immediate measures to make damaged structures and equipment operational again and to ensure minimum viability.
(c) Emergency aid may also be integrated into national indicative programmes in order to prepare, by financing the immediate measures mentioned under (b), the execution of reconstruction or rehabilitation operations in the framework of these programmes.
3. Emergency aid shall:
(a) help finance the most suitable means of remedying the serious difficulties encountered;
(b) be non-reimbursable;
(c) be granted and made available quickly and easily;
(d) make a real contribution to solving the problems concerned.
4. For all operations relating to emergency aid, the ACP States may, in agreement with the Commission delegate, and in accordance with Article 234, authorize the placing of contracts after restricted invitations to tender, the conclusion of contracts by direct agreement and the performance of contracts by direct labour.
They may obtain their supplies from the markets of the Community, ACP States or third countries under the conditions laid down in Article 232.
5. Where appropriate, such aid may, with the agreement of the ACP State concerned, be implemented via specialized agencies or directly by the Commission.
6. The detailed rules for the allocation of such aid shall be the subject of an emergency procedure. The conditions governing the payment and implementation of such aid shall be determined, case by case; advances may be granted by the National Authorizing Officer where implementation is based on an estimate.
7. The Community shall take adequate steps to facilitate the speedy action which is required to meet the urgent needs for which emergency aid is intended, including such measures as the retroactive financing of immediate relief measures undertaken by the ACP States themselves.
8. (a) Funds provided under emergency aid must be committed within six months of the implementing arrangements being established, unless otherwise stipulated by those arrangements and provided that it is not agreed by common accord during the implementation period to extend that time-limit owing to extraordinary circumstances;
(b) where the funds made available have not all been committed within the time-limit set, they may be reduced to an amount corresponding to the funds committed within that time-limit;
(c) the unexpended portion shall then be paid back into the special appropriation.
Article 204.
1. Aid may be granted to ACP States taking in refugees or returnees to meet acute needs not covered by emergency aid, to implement in the longer term projects and action programmes aimed at self-sufficiency and the integration or reintegration of such people.
2. It shall be administered and implemented under proce- dures permitting rapid action. Conditions for payment and implementation shall be laid down case by case.
3. Such aid may be implemented, if the ACP State concerned so agrees, through the intermediary of and in conjunction with specialized organizations, in particular the United Nations, or by the Commission direct.
Article 205.
1. For the financing of the aid referred to in Article 203 and Article 204, a special appropriation of 290 million ECU shall be constituted within the Fund, of which 210 million ECU shall be for the aid referred to in Article 203 and 80 million ECU for the aid referred to in Article 204.
2. Should the appropriations provided for under one of the aforementioned Articles be used up before this Convention expires, transfers may be made from the appropriations provided for in the other Article.
3. On the expiry of this Convention, appropriations not committed for emergency aid or aid for refugees and returnees shall be paid back to the assets of the Fund for the purpose of financing other operations coming within the scope of financial and technical co-operation, save as otherwise decided by the Council of Ministers.
4. Should the special appropriations be used up before this Convention expires, the ACP States and the Community, within the relevant joint institutions, shall adopt appropriate measures to deal with the situations referred to in Articles 203 and 204.
Section 8. Small and Medium-sized Enterprises
Article 206.
1. The Community shall finance schemes in favour of small and medium-sized enterprises in the ACP States. The methods of financing shall be determined by reference to the nature of the programme presented by those States.
2. Technical co-operation from the Community shall help to reinforce the activities of bodies in the ACP States working for the development of small and medium-sized enterprises and to provide the necessary vocational training for such enterprises.
3. The Community's financing may take the form of direct aid or overall allocations in the form of loans or possibly grants. The overall aid may be accorded:
- by the Bank, from the resources administered by it, to banks or financial institutions for onlending to small and medium-sized industrial, agribusiness or tourist enterprises;
- by the Commission, from the resources administered by it, to public bodies, local authorities or co-operatives with a view to developing the artisanal, commercial and agricultural sectors, and to creating or strengthening guarantee funds for credit to small and medium-sized enterprises.
4. Where the financing is undertaken via an onlending body, it shall be that body's responsibility to present individual pro- jects within the programme already approved and to administer the funds placed at its disposal. The methods, terms and conditions for the financing accorded to the final recipient shall be determined by agreement between the ACP State concerned, the relevant Community authority and the onlending body.
5. The projects shall be appraised by the financing body. This body shall decide, within the limits of its own financial responsibility, on final loans to be accorded and on terms established by reference to those obtaining for this type of operation in the ACP State in question.
6. The financing terms accorded by the Community to the financing body shall take into consideration the latter's need to cover its administrative costs, exchange and financial risks and the cost of technical assistance given to the enterprises or final borrower.
Chapter 3. Technical Co-operation
Article 207.
1. The purpose of technical co-operation shall be to provide enhanced support for the development of human resources in the ACP States.
2. Where such co-operation involves the provision of external supplementary human resources, then as a basic principle:
(a) such support through the provision of technical assistance personnel (consultancy firms, consulting engineers or experts, training or research institutions) shall be made available only at the request of the ACP State or States concerned;
(b) however, arrangements shall be made to train local personnel so as to phase out technical assistance and to staff projects entirely with ACP nationals on a permanent basis;
(c) the co-operation shall include arrangements to enhance the capacity of the ACP States to build up their own expertise and improve the technical skills of their own consultants, consulting firms and experts. In furtherance of this, effective training of local personnel shall be part of the assignment of technical assistance personnel;
(d) the experts provided under this co-operation shall be qualified for the specific tasks as defined in the ACP request.
3. The service contracts under which technical assistance personnel is to be recruited shall include those covering the recruitment of consultants and other technical specialists; they shall be negotiated, drawn up and concluded by the ACP State concerned subject to the agreement of the Commission delegate.
4. The Community shall take practical measures to increase and improve the information placed at the disposal of ACP States concerning the availability and qualifications of relevant specialists.
Article 208.
1. Technical co-operation may be either linked with operations or of a general nature.
2. Technical co-operation linked with operations shall comprise inter alia:
(a) development studies;
(b) technical, economic, financial and commercial studies, and research and surveys required to prepare projects or programmes;
(c) help with the preparation of dossiers;
(d) help with the execution and supervision of works;
(e) temporarily meeting the cost of technicians and providing the resources needed for them to accomplish their assignments;
(f) technical co-operation measures which may be required temporarily to permit the establishment, launching, operation and maintenance of a specific project;
(g) aid for the evaluation of operations;
(h) integrated training, information and research programmes.
3. General technical co-operation shall comprise inter alia:
(a) studies of the prospects and resources for economic development and diversification in the ACP States, and of problems of interest to groups of ACP States or to the ACP States as a whole;
(b) sectoral or product studies;
(c) the provision of experts, advisers, technicians and instructors for specific assignments and for limited periods;
(d) the supply of instructional, experimentation, research and demonstration equipment;
(e) general information and documentation to promote the development of the ACP States and the achievement of the aims of co-operation;
(f) exchanges of executive and specialized staff, students, research workers, motivators and heads of social or cultural groups or associations;
(g) the granting of study or training awards, particularly to persons already in employment and requiring further training;
(h) the organization of seminars or sessions for training, infor- mation and further training;
(i) the setting-up or strengthening of information and documentation instruments, particularly for exchanges of know-how, methods and experience between ACP States and between them and the Community;
(j) co-operation between or twinning of ACP institutions or Community and ACP States' institutions, particularly universities and other ACP and EEC training and research establishments;
(k) support for particularly representative cultural events.
Article 209.
1. Technical co-operation shall be provided under service contracts concluded with individual experts, or consultancy firms, training and research institutions, or exceptionally, by direct labour.
The choice of whether to use the services of consultancy firms or of experts recruited individually shall take account of the nature of the problems and the scale and complexity of the technical means and management resources required, as well as the comparative cost of each of the two solutions.
2. The criteria to be observed in the choice of technical co-operation contractors and their staff shall refer to:
(a) professional skills (technical and training ability) and human qualities;
(b) respect for the cultural values and the political and administrative circumstances of the ACP State or States concerned;
(c) knowledge of the language necessary for the execution of the contract;
(d) practical experience of problems of the type to be dealt with;
(e) cost.
3. Given equal competence, preference shall be given to ACP States' experts, institutions or consultancy firms.
4. The recruitment of technical co-operation staff, the determination of their aims and functions and duration of their missions, their remuneration and the ways in which they contribute to the development of the ACP States to which they are sent, must conform to the principles for technical co-operation policy laid down in Article 207. The procedures to be applied in this context must ensure objectivity in terms of the choice and quality of the services provided. The following additional principles shall also apply:
(a) recruitment shall be carried out by the national institutions that will use the technical assistance, with the help of the Commission and its delegate;
(b) due account shall be taken of the availability of suitable candidates, according to the criteria established in paragraph 2, residing in the ACP State itself or in the region;
(c) efforts shall be made to facilitate direct contact between a candidate and the future user of the technical assistance.
Article 210.
1. Service contracts shall be awarded on the basis of restrict- ed invitations to tender.
2. Certain contracts, however, may be awarded by direct agreement, notably in the following cases:
- small-scale or short-term operations;
- operations assigned to individual experts;
- operations continuing others already in hand;
- following an unsuccessful invitation to tender.
3. (a) Where an ACP State has, within its administrative and technical staff, nationals making up a substantial part of the work force necessary for the performance by direct labour of a technical co-operation project, the Community shall contribute exceptionally to the costs of the department involved by providing equipment that it lacks, or supply the required additional staff in the form of experts from another state.
(b) The participation of the Community shall cover only costs incurred by supplementary measures and temporary expenditure relating to execution strictly confined to the requirements of the project in question and shall exclude all operating expenditure of a permanent nature.
4. The manner in which the contract is to be awarded or the services undertaken shall be decided by agreement between the Commission and the ACP State concerned on the basis of the ACP State's needs and available resources.
Article 211.
1. (a) For each technical co-operation scheme for which an invitation to tender has been issued, a shortlist of candidates from the Member States or the ACP States shall be drawn up, within two months of the date of the request, by agreement between the Commission and the ACP State concerned, where appropriate following prequalification; candidates shall be chosen by reference to their legal and financial situation, qualifications, experience, independence, availability and the criteria and principles set out in Article 209.
(b) Depending on requirements, the invitation to tender may cover:
- the design of the co-operation scheme and the services or staff resources to be deployed, the financial information being submitted at the same time but separately and the prices to be paid being negotiated at a later stage;
- prices, where in special, well-founded cases, the co-operation scheme is of a less complex nature.
(c) The invitation to tender dossier, drawn up by the ACP State in agreement with the Commission, shall contain details of the way in which tenders are to be presented and the criteria for selection of the successful tenderer, who must be chosen within thirty days of the date on which tenders are examined.
(d) Without prejudice to the respective powers of the National Authorizing Officer and the delegate referred to in Articles 227 and 228, the relevant authorities of the ACP States shall award the contract subject to the agreement of the Commission. The tender selected for each operation must be the most advantageous one, account being taken notably of its technical qualities, the organization of and methods proposed for the services rendered, the competence, experience and aptitude of the staff employed for the operation and, in the case referred to in the second indent of subparagraph (b), the cost of the services.
2. Where the procedure by direct agreement is applied, the successful candidate shall be chosen by the ACP State on the basis of a Commission proposal. A candidate may also be proposed by the ACP State.
The ACP State shall be notified of the Commissionâs propo- sal within one month of making its request. The ACP State shall take its decision during the month following that notifi- cation.