Article 93 shall also apply to the amendments made.
The Council of Ministers shall adopt any transitional measures that may be required in respect of the amended provisions until they come into force.
4. Eighteen months before the end of the total period of the Agreement, the Parties shall enter into negotiations in order to examine what provisions shall subsequently govern their relations.
The Council of Ministers shall adopt any transitional measures that may be re- quired until the new Agreement comes into force.
Article 96. Essential Elements: Consultation Procedure and Appropriate Measures as Regards Human Rights, Democratic Principles and the Rule of Law
1. Within the meaning of this Article, the term "Party" refers to the Community and the Member States of the European Union, of the one part, and each ACP State, of the other part.
1a) Both Parties agree to exhaust all possible options for dialogue under Article 8, except in cases of special urgency, prior to commencement of the consultations referred to in paragraph 2(a) of this Article.
2.(a) If, despite the political dialogue on the essential elements as provided for un- der Article 8 and paragraph 1a of this Article, a Party considers that the other Party fails to fulfil an obligation stemming from respect for human rights, democratic principles and the rule of law referred to in Article 9(2), it shall, except in cases of special urgency, supply the other Party and the Council of Ministers with the relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties. To this end, it shall invite the other Party to hold consultations that focus on the measures taken or to be taken by the Party concerned to remedy the situation in accordance with Annex VII.
The consultations shall be conducted at the level and in the form considered most appropriate for finding a solution.
The consultations shall begin no later than 30 days after the invitation and shall continue for a period established by mutual agreement, depending on the nature and gravity of the violation. In no case shall the dialogue under the consultations procedure last longer than 120 days.
If the consultations do not lead to a solution acceptable to both Parties, if consultation is refused or in cases of special urgency, appropriate measures may be taken. These measures shall be revoked as soon as the reasons for taking them no longer prevail.
(b) The term "cases of special urgency" shall refer to exceptional cases of particularly serious and flagrant violation of one of the essential elements re- ferred to in paragraph 2 of Article 9, that require an immediate reaction.
(c) The Party resorting to the special urgency procedure shall inform the other Party and the Council of Ministers separately of the fact unless it does not have time to do so.
The "appropriate measures" referred to in this Article are measures taken in accordance with international law, and proportional to the violation. In the selection of these measures, priority must be given to those which least disrupt the application of this agreement.
It is understood that suspension would be a measure of last resort.
If measures are taken in cases of special urgency, they shall be immediately notified to the other Party and the Council of Ministers, At the request of the Party concerned, consultations may then be called in order to examine the situation thoroughly and, if possible, find solutions. These consultations shall be conducted according to the arrangements set out in the second and third subparagraphs of paragraph (a).
Article 97. Consultation Procedure and Appropriate Measures as Regards Corruption
1. The Parties consider that when the Community is a significant partner in terms of financial support to economic and sectoral policies and programmes, serious cases of corruption should give rise to consultations between the Parties.
2. In such cases either Party may invite the other to enter into consultations. Such consultations shall begin no later than 30 days after the invitation and dialogue under the consultation procedure shall last no longer than 120 days.
3. If the consultations do not lead to a solution acceptable to both Parties or if consultation is refused, the Parties shall take the appropriate measures. In all cases, it is above all incumbent on the Party where the serious cases of corruption have occurred to take the measures necessary to remedy the situation immediately. The measures taken by either Party must be proportional to the seriousness of the situation. In the selection of these measures, priority must be given to those which least disrupt the application of this agreement. It is understood that suspension would be a measure of last resort.
4. Within the meaning of this Article, the term "Party" refers to the Community and the Member States of the European Union, of the one part, and each ACP State, of the other part.
Article 98. Dispute Settlement
1. Any dispute arising from the interpretation or application of this Agreement between one or more Member States or the Community, on the one hand, and one or more ACP States on the other, shall be submitted to the Council of Ministers.
Between meetings of the Council of Ministers, such disputes shall be submitted to the Committee of Ambassadors.
2.(a) If the Council of Ministers does not succeed in settling the dispute, either Party may request settlement of the dispute by arbitration. To this end, each Party shall appoint an arbitrator within thirty days of the request for arbitration. In the event of failure to do so, either Party may ask the Secretary General of the Permanent Court of Arbitration to appoint the second arbitrator.
(b) The two arbitrators shall in turn appoint a third arbitrator within thirty days. In the event of failure to do so, either Party may ask the Secretary General of the Permanent Court of Arbitration to appoint the third arbitrator.
(c) Unless the arbitrators decide otherwise, the procedure applied shall be that laid down in the optional arbitration regulation of the Permanent Court of Arbitration for International Organisations and States. The arbitrators' decisions shall be taken by majority vote within three months.
(d) Each Party to the dispute shall be bound to take the measures necessary to carry out the decision of the arbitrators.
(e) For the application of this procedure, the Community and the Member States shall be deemed to be one Party to the dispute.
Article 99. Denunciation Clause
This Agreement may be denounced by the Community and its Member States in respect of each ACP State and by each ACP State in respect of the Community and its Member States, upon six months' notice.
Article 100. Status of the Texts
The Protocols and Annexes attached to this Agreement shall form an integral part thereof. Annexes la, Ib, Il, Ill, IV and VI may be revised, reviewed and/or amended by the Council of Ministers on the basis of a recommendation from the ACP-EC Development Finance Cooperation Committee.
This Agreement, drawn up in two copies in the Bulgarian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish and Swedish languages, all texts being equally authentic, shall be deposited in the archives of the General Secretariat of the Council of the European Union and the Secretariat of the ACP States, which shall both transmit a certified copy to the government of each of the signatory states.
Conclusion
ANNEX I. FINANCIAL PROTOCOL
1. For the purposes set out in this Agreement and for a period of five years com- mencing 1 March 2000, the overall amount of the Community's financial assistance to the ACP States shall be EUR 15 200 million.
2. The Community's financial assistance shall comprise an amount up to EUR 13 500 million from the 9th European Development Fund (EDF).
3. The 9th EDF shall be allocated between the instruments of cooperation as follows:
(a) EUR 10 000 million in the form of grants shall be reserved for an envelope for support for long-term development. This envelope shall be used to finance national indicative programmes in accordance with Articles 1 to 5 of Annex IV "Implementation and management procedures" to this Agreement. From the envelope for support for long-term development:
(i) EUR 90 million shall be reserved for the financing of the budget of the Centre for the Development of Enterprise (CDE);
(ii) EUR 70 million shall be reserved for the financing of the budget of the Centre for the Development of Agriculture (CTA); and
(iii) an amount not exceeding EUR 4 million shall be reserved for the purposes referred to in Article 17 of this Agreement (Joint Parliamentary Assembly).
(b) EUR 1 300 million in the form of grants shall be reserved for the financing of support for regional cooperation and integration of the ACP States in accordance with Articles 6 to 14 of Annex IV "Implementation and management procedures" to this Agreement.
(c) EUR 2 200 million shall be allocated to finance the Investment Facility according to the terms and conditions set out in Annex II "Terms and conditions of financing" to this Agreement without prejudice to the financing of the interest rate subsidies provided for in Articles 2 and 4 of Annex II to this Agreement funded from the resources mentioned in paragraph 3(a) of this Annex.
4. An amount of up to EUR 1 700 million shall be provided from the European Investment Bank in the form of loans made from its own resources. These re- sources shall be granted for the purposes set out in Annex II "Terms and conditions of financing" to this Agreement in accordance with the conditions provided for by its statutes and the relevant provisions of the terms and conditions for investment financing as laid down in the aforementioned Annex. The Bank may, from the resources it manages, contribute to the financing of regional projects and programmes.
5. Any balances remaining from previous EDFs on the date of entry into force of this Financial Protocol, as well as any amounts that shall be decommitted at a later date from ongoing projects under these Funds, shall be transferred to the 9th EDF and shall be used in accordance with the conditions laid down in this Agreement. Any resources thus transferred to the 9th EDF that previously had been allocated to the indicative programme of an ACP State or region shall remain allocated to that state or region. The overall amount of this Financial Protocol, supplemented by the transferred balances from previous EDFs, will cover the period of 2000-07.
6. The Bank shall administer the loans made from its own resources, as well as the operations financed under the Investment Facility. All other financial resources of this Agreement shall be administered by the Commission.
7. Before the expiry of this Financial Protocol, the Parties shall assess the degree of realisation of commitments and disbursements. This assessment shall constitute the basis for re-evaluating the overall amount of resources as well for evaluating the need for new resources to support financial cooperation under this Agreement.
8. In the event of the funds provided for in any of the instruments of the Agreement being exhausted before the expiry of this Financial Protocol, the joint ACP- EC Council of Ministers shall take the appropriate measures.
9. By derogation from Article 58 of this Agreement, an amount of EUR 90 million shall be transferred to the intra ACP envelope under the 9th EDF. This amount may be allocated to finance devolution for the period 2006-07, and shall be managed directly by the Commission.
ANNEX I-A. MULTI-ANNUAL FINANCIAL FRAMEWORK OF COOPERATION UNDER THIS AGREEMENT
1. For the purposes set out in this Agreement and for a period beginning on 1 March 2005, a multi-annual financial framework of cooperation shall cover commitments beginning on 1 January 2008 for a period of five or six years.
2. For this new period, the European Union shall maintain its aid effort to ACP States at least at the same level as that of the 9th EDF, not including balances; to this shall be added, based on Community estimates, the effects of inflation, growth within the European Union and enlargement to 10 new Member States in 2004.
3. Any required amendments to the multi-annual financial framework or relative parts of the Agreement shall be decided by the Council of Ministers by derogation from Article 95 of this Agreement.
ANNEX IB. MULTIANNUAL FINANCIAL FRAMEWORK FOR THE PERIOD 2008 TO 2013
1. For the purposes set out in this Agreement and for a period starting on 1 January 2008, the overall amount of the financial assistance for the ACP Group of States within this multiannual financial framework shall be EUR 23 966 million, as specified in points 2 and 3.
2. The sum of EUR 21 966 million under the 10th European Development Fund (EDF), shall be made available on entry into force of the multiannual financial framework. It shall be allocated between the instruments of cooperation as follows:
(a) EUR 17 766 million to finance national and regional indicative programmes.
This allocation will be used to finance:
(i) the national indicative programmes of the ACP Group of States in accordance with Articles 1 to 5 of Annex IV to this Agreement concerning implementation and management procedures;
(ii) the regional indicative programmes of support for regional and interregional cooperation and integration of ACP Group of States in accordance with Articles 6 to 11, 13(1) and 14 of Annex IV to this Agreement concerning implementation and management procedures;
(b) EUR 2 700 million to finance intra-ACP and interregional cooperation with many or all of the ACP Group of States, in accordance with Articles 12, 13(2) and 14 of Annex IV to this Agreement concerning implementation and management procedures. This envelope shall include structural support to the joint institutions: the CDE and the CTA referred to and supervised in accordance with the rules and procedures set out in Annex III to this Agreement, and the Joint Parliamentary Assembly referred to in Article 17 of this Agreement. This envelope shall also cover assistance for the operating expenditures of the ACP Secretariat referred to in points 1 and 2 of Protocol 1 attached to this Agreement;
(c) EUR 1 500 million to finance the Investment Facility in accordance with the terms and conditions set out in Annex II (Terms and conditions of financing) to this Agreement, comprising an additional contribution of EUR 1100 million to the resources of the Investment Facility, managed as a revolving fund, and EUR 400 million under the form of grants for the financing of the interest rate subsidies provided for in Articles 2 and 4 of that Annex over the period of the 10th EDF.
3. The operations financed under the Investment Facility, including the corresponding interest rate subsidies, shall be managed by the European Investment Bank (EIB). An amount of up to EUR 2 000 million in addition to the 10th EDF shall be made available by the EIB in the form of loans from own resources. These resources shall be granted for the purposes set out in Annex II to this Agreement, in accordance with the conditions laid down in the statutes of the EIB and the relevant provisions of the terms and conditions for investment financing in that Annex. All other financial resources under this multiannual financial framework shall be administered by the Commission.
4. At 31 December 2007 or at the date of entry into force of this multiannual financial framework, whichever is the later, balances from the Ninth EDF or from previous EDFs and funds decommitted from projects under these EDFs shall no longer be committed, unless the Council of the European Union decides otherwise by unanimity, with the exception of the balances and funds decommitted at the date of entry into force resulting from the system guaranteeing the stabilisation of export earnings from primary agricultural products (STABEX) under the EDFs prior to the Ninth EDF, and the remaining balances and reimbursements of the amounts allocated for the financing of the Investment Facility, excluding the related interest rate subsidies. The funds possibly committed aer 31 December 2007 until the entry into force of this Agreement, as referred to above, will be used exclusively to ensure the working ability of the EU administration and to cover the ongoing costs to sustain running projects until the 10th EDF comes into force.
5. The overall amount of this multiannual financial framework shall cover the period from 1 January 2008 to 31 December 2013. The funds of the 10th EDF, apart from amounts allocated to the Investment Facility, excluding the related interest rate subsidies, shall no longer be committed beyond 31 December 2013, unless the Council of the European Union decides otherwise by unanimity, on a proposal from the Commission.
6. The Committee of Ambassadors, acting on behalf of the ACP–EC Council of Ministers, may, within the overall amount of the multiannual financial framework, take appropriate measures in order to meet programming requirements under one of the allocations provided for in point 2, including the reassignment of funds between these allocations.
7. The Parties will conduct a performance review, assessing the degree of realisation of commitments and disbursements, as well as the results and impact of the aid provided. This review will be undertaken on the basis of a proposal prepared by the Commission in 2010. It shall contribute to a decision on the amount of the financial cooperation after 2013.
8. Any Member State may provide the Commission or the EIB with voluntary contributions to support the objectives of the ACP-EC Partnership Agreement. Member States may also co-finance projects or programmes, for example in the framework of specific initiatives to be managed by the Commission or the EIB. ACP ownership at the national level of such initiatives must be guaranteed.
ANNEX IC. MULTI-ANNUAL FINANCIAL FRAMEWORK FOR THE PERIOD 2014 TO 2020
1. For the purposes set out in this Agreement and for a period starting on 1 January 2014, the overall amount of financial assistance available to the ACP States within this multiannual financial framework shall be EUR 31 589 million, as specified in points 2 and 3.
2. The sum of EUR 29 089 million under the 11th European Development Fund (EDF), shall be made available from the date of entry into force of the multi-annual financial framework. It shall be allocated between the cooperation instruments as follows:
(a) EUR 24 365 million to finance national and regional indicative programmes. This allocation will be used to finance:
(i) the national indicative programmes of individual ACP States in accordance with Articles 1 to 5 of Annex IV to this Agreement concerning implementation and management procedures;
(ii) the regional indicative programmes of support for regional and interregional cooperation and regional integration of ACP States in accordance with Articles 6 to 11 of Annex IV to this Agreement concerning implementation and management procedures;
(b) EUR 3.590 million to finance intra-ACP and interregional cooperation with many or all of the ACP States in accordance with Articles 12 to 14 of Annex IV to this Agreement concerning implementation and management procedures, This envelope shall include support to joint institutions and bodies created under this Agreement. It shall also cover assistance with the operating expenditure of the ACP Secretariat referred to in points 1 and 2 of Protocol No 1 on the operating expenditure of the joint institutions;
(c) EUR 1 134 million to finance the Investment Facility in accordance with the terms and conditions set out in Annex II (Terms and conditions of financing) to this Agreement, comprising an additional contribution to EUR 500 million to the resources of the Investment Facility, managed as a revolving fund, and EUR 634 million under the form of grants for the financing of the interest rate subsidies and project-related technical assistance provided for in Articles 1, 2 and 4 of that Annex over the period of the 11th EDF.
3. The operations financed under the Investment Facility, including the corresponding interest rate subsidies, shall be managed by the European Investment Bank (EIB). An amount of up to EUR 2 500 million in addition to the funds available from the 11th EDF shall be made available by the EIB in the form of loans from own resources. These resources shall be granted for the purposes set out in Annex II to this Agreement, in accordance with the conditions laid down in the statutes of the EIB and the relevant provisions of the terms and conditions for investment financing in that Annex. All other financial resources under this multiannual financial framework shall be administered by the Commission.
4. After 31 December 2013 or after the date of entry into force of this multi-annual financial framework, whichever is the later, balances from the LOth EDF or from previous EDFs and funds decommitted from projects under these EDFs shall no longer be committed, unless the Council of the European Union decides otherwise by unanimity, with the exception of the remaining balances and reimbursements of the amounts allocated for the financing of the Investment Facility, excluding the related interest rate subsidies, and the remaining balances of the primary agricultural export receipt stabilisation guarantee system (STABEX) under the EDFs prior to the 9th EDF.
5. The overall amount of this multiannual financial framework shall cover the period from 1 January 2014 to 31 December 2020. The funds of the 11th EDF, and, in the case of the Investment Facility, the funds stemming from reflows, shall no longer be committed beyond 31 December 2020, unless the Council of the European Union decides otherwise by unanimity, on a proposal from the Commission. However, the funds subscribed by Member States under the 9th, 10th and 11th EDF to finance the Investment Facilities shall remain available after 31 December 2020 for disbursement.
6. The Committee of Ambassadors, acting on behalf of the ACP-EU Council of Ministers, may, within the overall amount of the multiannual financial framework, take appropriate measures in order to meet programming requirements under one of the allocations provided for in point 2, including the reassignment of funds between these allocations.
7. At the request of either Side, the Parties may decide to conduct a performance review, at a mutually agreeable time, assessing the degree of realisation of commitments and disbursements, as well as the results and impact of the aid provided. This review would be undertaken on the basis of a proposal prepared by the Commission. It could contribute to the negotiations provided for in Article 95(4) of this Agreement.
8. Any Member State may provide the Commission or the EIB with voluntary contributions to support the objectives of the ACP-EU Partnership Agreement. Member States may also co-finance projects or programmes, for example in the framework of specific initiatives to be managed by the Commission or the EIB. ACP ownership of such initiatives at the national level must be guaranteed,
ANNEX II. TERMS AND CONDITIONS OF FINANCING
Chapter 1. Investment Financing
Article 1.
1. The terms and conditions of financing in relation to the operations of the Investment Facility (Facility), the loans from own resources of the European Investment Bank (Bank) and special operations shall be as laid down in this Chapter. These resources may be channelled to eligible enterprises, either directly or indirectly, through eligible investment funds and/or financial intermediaries.
2. Funds for interest rate subsidies, as provided for under this Annex, will be made available from the interest subsidy allocation specified in Annex Ib, paragraph 2(c), to this Agreement.
3. Interest subsidies may be capitalised or may be used in the form of grants. The amount of the interest rate subsidy, calculated in terms of its value at the times of disbursement of the loan, shall be charged against the interest subsidy allocation specified in Annex Ib, paragraph 2(c), and paid directly to the Bank. Up to 15 % of this allocation for interest rate subsidies may also be used to support project related technical assistance in ACP countries (3).
4. These terms and conditions are without prejudice to terms and conditions that may be imposed upon ACP countries subject to restrictive borrowing conditions under the Heavily Indebted Poor Countries ("HIP") or other internationally agreed debt sustainability frameworks. Accordingly, where such frameworks require a reduction in the interest rate of a loan by more than 3 %, as permitted under Articles 2 and 4 of this Chapter, the Bank shall seek to reduce the average cost of funds through appropriate co-financing with other donors. Should this not be deemed possible, the interest rate of the Bank loan may be reduced by such amount as required to comply with the level arising from the HIPC initiative or any internationally agreed debt sustainability framework.
Article 2. Resources of the Investment Facility
1. The resources of the Facility may be used, inter alia, to:
(a) provide risk capital in the form of:
(i) equity participation in ACP enterprises, including financial institutions;
(ii) quasi-capital assistance to ACP enterprises, including financial institutions; and
(iii) guarantees and other credit enhancements which may be used to cover political and other investment-related risks, both for foreign and local investors or lenders.
(b) provide ordinary loans.
2. Equity participation shall normally be for non-controlling minority holdings and shall be remunerated on the basis of the performance of the project concerned.
3. Quasi-capital assistance may consist of shareholders' advances, convertible bonds, conditional, subordinated and participating loans or any other similar form of assistance. Such assistance may consist in particular of:
(a) conditional loans, the servicing and/or the duration of which shall be linked to the fulfilment of certain conditions with regard to the performance of the project; in the specific case of conditional loans for pre-investment studies or other project-related technical assistance, servicing may be waived if the investment is not carried out;
(b) participating loans, the servicing and/or the duration of which shall be linked to the financial return of the project; and
(c) subordinated loans, which shall be repaid only after other claims have been settled.
4. The remuneration of each operation shall be specified when the loan is made. However:
(a) in the case of conditional or participating loans, the remuneration shall normally comprise a fixed interest rate of not more than 3 % and a variable component related to the performance of the project; and
(b) in the case of subordinated loans, the interest rate shall be market related.
5. Guarantees shall be priced so as to reflect the risks insured and the particular characteristics of the operation.
6. The interest rate of ordinary loans shall comprise a reference rate applied by the Bank for comparable loans with the same terms and conditions as to grace and repayment periods and a mark up determined by the Bank.
7. Ordinary loans in countries not subject to restrictive borrowing conditions under the HIPC or other internationally agreed debt sustainability frameworks may be extended on concessional terms and conditions in the following cases:
(a) for infrastructure projects, that are a prerequisite for private sector development in the Least Developed Countries, in post-conflict countries and in post-natural disaster countries. In such cases, the interest rate of the loan will be reduced by up to 3%;
(b) for projects which involve restructuring operations in the framework of privatisation or for projects with substantial and clearly demonstrable social or environmental benefits. In such cases, loans may be extended with an interest rate subsidy, the amount and form of which will be decided with respect to the particular characteristics of the project. However, the interest rate subsidy shall not be higher than 3 %,
The final rate of loans falling under (a) or (b) shall, in any case, never be less than 50 % of the reference rate.
8. The funds to be provided for these concessional purposes will be made available from the interest subsidy allocation referred to in Annex I b, paragraph 2(c), to this Agreement.
9. Interest subsidies may be capitalised or used in the form of grants. Up to 15 % of the budget for interest rate subsidies may be used to support project-related technical assistance in ACP countries.
Article 3. Operations of the Investment Facility
1. The Investment Facility shall operate in all economic sectors and support in- vestments of private and commercially run public sector entities, including revenue generating economic and technological infrastructure critical for the private sector. The Facility shall:
(a) be managed as a revolving fund and aim at being financially sustainable. Its operations shall be on market-related terms and conditions and shall avoid creating distortions on local markets and displacing private sources of finances; and
(b) support the ACP financial sector and have a catalytic effect by encouraging the mobilisation of long-term local resources and attracting foreign private investors and lenders to projects in the ACP States;
(c) bear part of the risk of the projects it funds, its financial sustainability being ensured through the portfolio as a whole and not from individual interventions; and
(d) seek to channel funds through ACP national and regional institutions and programmes that promote the development of small-and medium-sized enterprises (SMEs).
1a. The Bank shall be remunerated for the cost incurred in managing the Investment Facility. For the first two years after the entry into force of the second financial protocol, this remuneration shall be up to an amount of 2 % p.a. of the total initial endowment of the Investment Facility. Thereafter, the remuneration of the Bank shall include a fixed component of 0.5 % p.a. of the initial endowment and a variable component of an amount of up to 1.5 % p.a. of the portfolio of the Investment Facility that is invested in projects in ACP countries, The remuneration shall be financed out of the Investment Facility.
2. On expiry of the Financial Protocol, and in the absence of a specific decision by the Council of Ministers, the cumulative net reflows to the Investment Facility shall be carried over to the next Protocol.
Article 4. Bank Own Resource Loans
1. The bank shall:
(a) contribute, through the resources it manages, to the economic and industrial development of the ACP States on a national and regional basis; and to this end, finance as a priority productive projects and programmes or other in- vestments aimed at promoting the private sector in all economic sectors;
(b) establish close cooperation links with national and regional development banks and with banking and financial institutions of the ACP States and of the EU; and
(c) in consultation with the ACP State concerned, adapt the arrangements and procedures for implementing development finance cooperation, as set out in this Agreement, if necessary, to take account of the nature of the projects and programmes and to act in accordance with the objectives of this Agreement, within the framework of the procedures laid down by its statute.
2. Loans from the Bank's own resources shall be granted under the following terms and conditions:
(a) the reference rate of interest shall be the rate applied by the Bank for a loan with the same conditions as to currency and the repayment period on the day of signature of the contract or on the date of disbursement;
(b) however, for countries which are not subject to restrictive borrowing conditions under the HIPC or other internationally agreed debt sustainability frameworks:
(i) in principle, public sector projects shall be eligible for an interest rate subsidy of up to 3 %;
(ii) private sector projects falling into the categories specified in Arti- cle 2(7)(b) shall be eligible for interest rate subsidies on the terms specified in that provision.
The final interest rate shall, in any such case, never be less than 50 % of the reference rate.
(c) the repayment period of loans made by the Bank from its own resources shall be determined on the basis of the economic and financial characteristics of the project. These loans shall normally comprise a grace period fixed by reference to the construction period of the project.
3. For investments financed by the Bank from its own resources in public sector companies, specific project-related guarantees or undertakings may be required from the ACP State concerned.
Article 5. Conditions for Foreign Exchange Rate Risk
In order to minimise the effects of exchange rate fluctuations, the problems of exchange rate risk shall be dealt with in the following way:
(a) in the case of equity participation designed to strengthen an enterprise's own funds, the exchange rate risk shall, as a general rule, be borne by the Investment Facility;
(b) in the case of ordinary loans and risk capital financing for small- and medium-sized enterprises (SMEs), the exchange rate risk shall, as a general rule, be shared by the Community, on the one hand, and by the other Parties involved, on the other. On average, the foreign exchange rate risk should be shared equally and;
(c) where feasible and appropriate, particularly in countries characterised by macroeconomic and financial stability, the Facility will endeavour to extend loans in local ACP currencies, thus de facto taking the foreign exchange risk.
Article 6. Conditions for Foreign Exchange Transfer
The ACP States concerned shall, in respect of operations under the Agreement, and in respect of which they have given their written approval within the framework of this Agreement:
(a) grant exemption from all national or local duties, fiscal charges on interest, commission and amortisation of loans due in accordance with the law or laws of the ACP State or States concerned;
(b) place at the disposal of the beneficiaries the currency necessary for the payment of interest, commission and the amortisation of loans due in terms of financing contracts granted for the implementation of projects and pro- grammes on their territories; and
(c) make available to the Bank the foreign currency necessary for the transfer of all sums received by it in national currency at the exchange rate applicable between the Euro or other currencies of transfer and the national currency at the date of the transfer. These include all forms of remuneration, such as, inter alia, interest, dividends, commissions and fees, as well as the amortisation of loans and the proceeds from the sale of shares due in terms of financing contracts granted for the implementation of projects and pro- grammes on their territories.
Article 6A. Annual Reporting on the Investment Facility
Representatives of the EU Member States responsible for the Investment Facility, Representatives of the ACP States, as well as the European Investment Bank, the European Commission, the EU Council Secretariat and the ACP Secretariat shall meet annually to discuss the operations, performance and policy questions con- cerning the Investment Facility.
Article 6B. Review of Performance of the Investment Facility
The overall performance of the Investment Facility shall be subject to a joint review at the mid-term and end-term of a financial protocol. Such an exercise may include a recommendation on how to improve the implementation of the Facility.