(a) support and promote the efforts of ACP States to achieve long-term, self-determined, self-reliant and self-sustained integrated social, cultural and economic development, on the basis of mutual interest and in a spirit of interdependence;
(b) help raise the standard of living and improve the well-being of the peoples of the ACP States;
(c) promote measures likely to mobilize the capacity for initiative of communities and the participation of those concerned in the design and implementation of development projects;
(d) contribute to the fullest participation of the population in the benefits of development;
(e) contribute to the development of the capacity of the ACP States to innovate, adapt and transform technology;
(f) contribute to optimal and judicious exploration, conservation, processing, transformation and exploitation of the ACP States' natural resources in order to enhance the efforts of ACP States to industrialize and to achieve economic diversification;
(g) provide support for and promote the optimal development of human resources in the ACP States;
(h) facilitate an increase in the financial flows to the ACP States which are responsive to the evolving needs of the ACP States and support the efforts of the ACP States to harmonize international cooperation for their development through cofinancing of operations with other financing agencies or third parties;
(i) contribute to the attenuation of the debt burden, which is a major constraint on the development prospects of ACP States, by ensuring greater non-debt-creating transfers, and by developing and implementing in a coordinated and integrated way the different instruments of this Convention ;
(j) promote and mobilize resources in support of sustainable, effective and growth-oriented adjustment programmes;
(k) seek new approaches to direct private investment promotion in ACP States; support the development of a healthy, prosperous and dynamic ACP private sector and encourage domestic and foreign private investment flows into the productive sectors in the ACP States;
(l) encourage intra-ACP cooperation and regional cooperation among ACP-States;
(m) permit the establishment of more balanced economic and social relations and better understanding between the ACP States, Member States of the Community and the rest of the world, with a view to achieving a new international economic order;
(n) enable the ACP States faced with serious economic and social difficulties of an exceptional nature resulting from natural disasters or extraordinary circumstances having comparable effects to benefit from emergency assistance ;
(o) help the least-developed, landlocked and island ACP States to overcome the specific obstacles which hamper their development efforts.
Section 2. Principles
Article 221.
Development finance cooperation shall :
(a) be implemented on the basis of and be consistent with the development objectives, strategies and priorities established by the ACP States, at both national and regional levels with due regard to their respective geographical, social and cultural characteristics, as well as their specific potential;
(b) be provided on very highly concessional terms;
(c) ensure that resource flows are on a more predictable and continuous basis;
(d) ensure participation by the ACP States in the management and utilization of financial resources and ensure effective decentralization of decisionmaking powers;
(e) strengthen and utilize, as much as possible, the ACP States' human resources and existing administrative structures;
(f) be flexible and appropriate to the situation in each ACP State as well as adapted to the specific nature of the project or programme concerned ;
(g) be carried out with a minimum of administrative formalities using simple and rational procedures so that projects and programmes may be implemented rapidly and efficiently;
(h) ensure that technical assistance is provided only upon the request of the ACP State or States and is of the stipulated quality, relevant, cost-effective and includes arrangements for rapid and effective training of ACP replacement personnel.
Section 3. Guidelines
Article 222.
1. Operations financed within the framework of this Convention 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 are based;
(b) choosing projects and programmes;
(c) preparing and presenting the dossiers of projects and programmes;
(d) preparing, negotiating and concluding contracts;
(e) implementing and managing projects and pro- grammes;
(f) maintaining projects and programmes.
3. The ACP States and the Community shall be jointly responsible for:
(a) establishing within the joint institutions the guidelines for development finance cooperation;
(b) adopting the indicative programmes;
(c) appraising projects and programmes;
(d) ensuring equality of conditions for participation in invitations to tender and contracts;
(e) monitoring and evaluating the effects and results of projects and programmes;
(f) ensuring the proper, prompt and efficient execution of projects and programmes.
4. The Community shall be responsible for taking financing decisions on projects and programmes.
Article 223.
Unless otherwise provided in the Convention, all decisions requiring the approval of either Contracting Party shall be approved, or be deemed approved, within 60 days of notification by the other party.
Section 4. Scope of Financing
Article 224.
Within the framework of the Convention, development finance cooperation shall cover:
(a) capital projects and programmes;
(b) rehabilitation of projects and programmes;
(c) sectoral and general import support programmes, in accordance with Article 225, which may take the form of:
(i) sectoral import programmes (SIPs) through direct procurement;
(ii) sectoral import programmes (SIPs) in the form of foreign exchange released in instalments for financing sectoral imports; and/or
(iii) general import programmes (GIPs) in the form of foreign exchange released in instalments for financing general imports covering a wide range of products;
(d) budgetary support to alleviate domestic financial constraints through the use of counterpart funds generated by the various Community instruments;
(e) support for measures which contribute to attenuate the debt burden and balance of payments problems;
(f) technical cooperation programmes;
(g) deployment of flexible resources in support of the efforts of grassroots communities;
(h) recurrent costs (including current administrative, operating, and maintenance costs, both local and foreign) of new, ongoing and completed projects and programmes;
(i) on a case-by-case basis, supplementary expenses borne by the ACP States arising out of and strictly relating to the administration and the supervision of projects and programmes financed by the European Development Fund, hereinafter referred to as "the Fund";
(j) credit lines and support of regional payment mechanisms and export credit operations in the ACP States;
(k) equity participation;
(l) a combination of all or part of the above components integrated into sectoral development programmes.
Article 225.
Sectoral import programmes shall be provided, upon request, from the resources of the indicative programme to support the measures taken by the ACP State concerned in the sector or sectors for which the assistance is requested in accordance with Article 281.
The purpose of import programmes is to contribute to.
the optimal functioning of the productive sectors of the economy, to assist in the expansion of production and export capacity, to facilitate the transfer or development of technology and to help meet basic human needs. Import programmes may include the financing of inputs to the productive system such as capital and intermediate goods, raw materials, spare parts, fertilizers, insecticides and supplies to improve health and education services and standards. In addition, the resources provided under structural adjustment support may be used for sectoral import programmes as referred to in Article 224 (c) (i) and (ii), and for general import programmes as referred to in Article 224 (c) (iii).
Article 226.
Counterpart funds generated from various Community instruments shall, except otherwise provided for, be used in a targeted way for the financing of local expenditure under:
(a) fund projects and programmes within the indicative programme;
(b) other agreed projects and programmes;
(c) specific budget headings under public expenditure programmes of the ACP States such as those relating to health, education, training, job creation and protection of the environment;
(d) measures to attenuate the negative social consequences of structural adjustment; such measures may include:
(i) assistance to indigenous organizations such as cooperatives and other types of mutual-help ventures; oo
(ii) nutrition and health support for target groups and the modernization of health facilities;
(ii) re-training;
(iv) the provision of pre-primary and primary education, particularly in depressed areas;
(v) rehabilitating, maintaining and upgrading social and economic infrastructure;
(vi) the payment of redundancy benefits to public or semi-public workers made redundant, or as a contribution towards keeping them in employment for a specific period, or as a form of assistance for finding alternative employment;
(vii) the provision or subsidization of basic tools;
(viii) small labour-intensive projects which can be used to create employment for the unskilled, youths and women and at the same time be used to provide training and help to rehabilitate or develop the infrastructure in both rural and urban areas;
(ix) strengthening of the management capacity of the ACP State to administer social programmes;
(x) appropriate measures to assist women, the aged, the handicapped and other vulnerable groups, for whom the social consequences of adjustment can be particularly severe.
Article 227.
1. Recurrent cost financing (to cover current administrative, maintenance and operating expenses) may be granted to an ACP State, in order to ensure that full-use is made of investments which are of special importance for the economic and social development of the ACP State concerned and the running of which temporarily constitutes a burden for the ACP State or other eligible beneficiaries. Such support may, for new, ongoing or past projects and programmes, cover current administrative, maintenance and operating expenses such as:
(a) expenditure incurred in the start-up period, for setting up, launching and operating the capital projects or programmes in question;
(b) the cost of operating, maintaining and/or managing capital projects and programmes implemented earlier.
2. Special treatment shall be accorded to the financing of recurrent cost in the least-developed ACP States.
Article 228.
The funds provided under the Convention may be used to cover the total costs of both the local and foreign expenditure of projects and programmes.
Section 5. Sectors of Intervention
Article 229.
1. Within the framework of the priorities established by the ACP State or States concerned at both national and regional level, support may be given to projects and programmes in every sector or area referred to in this Convention and may, inter alia, be in:
(a) agricultural and rural development, and in particular food self-sufficiency and food security programmes;
(b) industrialization, artisanal activities, energy, mining and tourism;
(c) economic and social infrastructure ;
(d) structural improvement of the productive sectors of the economy;
(e) preservation and protection of the environment;
(f) prospecting for, exploration and exploitation of, natural resources;
(g) education and training programmes, basic and applied scientific research and applied technology, technological adaptation or innovation and the transfer of technology;
(h) industrial promotion and information ;
(i) marketing and trade promotion;
0) promotion, development and reinforcement of small and medium-sized national and regional enterprises;
(k) support to national and regional development banks and financial institutions, and to clearing and payment institutions which are designed to promote regional and intra-ACP trade ;
(l) micro-projects for grassroots development;
(m) transport and communications, including promotion of sea and air transport;
(n) fisheries development;
(o) development and optimal utilization of human resources, special account being taken of the role of women in development;
(p) improvement of social and cultural infrastructure and services including health, housing, water supply etc;
(q) assisting ACP and ACP-EEC professional and business organizations with the aim of improving production and marketing of products on external markets;
(r) support for structural adjustment programmes, thus contributing also to debt-attenuation measures;
(s) investment promotion and support measures;
(t) support for development operations put forward by economic, cultural, social and educational organizations in the framework of decentralized cooperation, in particular where they combine the efforts and resources of ACP organizations and of their Community counterparts.
2. The projects and programmes may also concern operations on specific themes, such as:
(a) drought and desertification control and protection of natural resources;
(b) assisting ACP States in the fields of disaster prevention and preparedness, including prediction and early-warning systems, with a view to reducing the consequences of disasters;
(c) control of endemic human diseases and epidemics;
(d) hygiene and primary health care ;
(e) control of endemic livestock diseases;
(f) measures to save energy;
(g) long-term operations, in general, which extend beyond any specific time scale.
Section 6. Eligibility for Financing
Article 230.
1 . The following entities or bodies shall be eligible for financial support provided under the Convention :
(a) ACP States;
(b) regional or inter-state bodies to which one or more ACP States belong and which are authorized by those States;
(c) joint bodies set up by the ACP States and the Community to pursue certain specific objectives.
2 . Subject to the agreement of the ACP State or ACP States concerned, the following shall also be eligible for financial support:
(a) national and/or regional public or semi-public agencies, departments or local authorities of the ACP States and in particular their financial institutions and development banks;
(b) companies and firms of ACP States;
(c) enterprises of a Community Member State to enable them, in addition to their own contribution, to undertake productive projects in the territory of an ACP State;
(d) ACP or Community financial intermediaries providing financing to small and medium-sized enterprises, as well as financial institutions promoting and financing private investments in ACP States;
(e) groups of producers who are nationals of the ACP States;
(f) award-holders and trainees;
(g) ACP as well as Community local communities, cooperatives, trade unions, non-governmental organizations, and teaching and research institutions to enable them to undertake economic, cultural, social and educational projects and programmes in the ACP States in the framework of decentralized cooperation.
Chapter 2. Financial Cooperation
Section 1. Financial Resources
Article 231.
For the purposes set out in the present Title, the overall amount of the Community's financial assistance is provided for in the Financial Protocol to this Convention.
Article 232.
1. Should an ACP State fail to ratify or denounce this Convention, the Contracting Parties shall adjust the amounts of the resources provided in. the Financial Protocol. .
2. Such adjustment shall also apply upon:
(a) the accession to the Convention of new ACP States which did not take part in its negotiation;
(b) the enlargement of the Community.
Section 2. Terms and Conditions of Financing
Article 233.
1. Projects or programmes may be financed by grant or by risk capital from the Fund, or by loans from the Bank's own resources, or jointly by two or more of these means of financing.
2. The methods of financing for each project or programme shall be determined jointly by the ACP State or States concerned and the Community by reference to:
(a) the level of development, the geopraphical situation and economic and financial circumstances of these States;