Explanatory Memorandum to COM(2005)51-4 - Release and use of the remaining EUR 482 million of the conditional EUR 1 billion under the 9th European Development Fund for cooperation with African, Caribbean and Pacific countries

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The Financial Protocol attached as Annex 1 to the ACP-EC Partnership Agreement, signed in Cotonou on 23 June 2000, establishes in its paragraph 2 a 9th EDF for African, Caribbean and Pacific countries of a total amount of up to EUR 13.5 billion. As specified in the EU Declaration on the Financial Protocol - Declaration XVIII under the Final Act of the ACP-EC Partnership Agreement – within the overall amount of EUR 13.5 billion, only EUR 12.5 billion were made available upon the entry into force of the Financial Protocol (1 April 2003). The remaining EUR 1 billion is to be released on the basis of a performance review of the EDF by assessing the degree of realisation of commitments and disbursements. This performance review is to be undertaken in 2004, on the basis of a proposal from the Commission, in accordance with Declaration XVIII attached to the ACP-EC Partnership Agreement as well as Article 2 i of the Internal Agreement between Representatives of the Governments of the Member States on the Financing and Administration of Community Aid under the Financial Protocol to the ACP-EC Partnership Agreement.

On 22 March 2004 the Council agreed on the establishment of an ‘EU Water Facility for ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement for this Water Facility and to release a first allocation of EUR 250 million. This decision was taken on the basis that the level of commitments and disbursements at the end of the year 2003, in conjunction with forecasts for the period 2004 to 2007 presented by the Commission, indicated that ninth EDF resources for ACP countries could be fully committed, and a first tranche of the conditional billion be released on the basis of the performance to date.

In the light of the outcome of the mid-term reviews of the country strategies and of the Council’s performance review of the EDF, the Council has to decide by March 2005 on the mobilisation of a second instalment of EUR 250 million for the Water Facility and on the use of the remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2 i on the Internal Agreement for purposes to be agreed.

1.

Proposal for a


COUNCIL DECISION

concerning the mobilisation of a second allocation of EUR 250 million from the conditional EUR 1 billion under the 9th EDF to be used for the second instalment of the ACP-EU Water Facility

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 310, in conjunction with the second subparagraph of Article 300 i thereof,

Having regard to the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000,

Having regard to the Internal Agreement between the Representatives of the Governments of the Member States, meeting within the Council, on measures to be taken and procedures to be followed for the implementation of the ACP-EC Partnership Agreement i,

Having regard to the Internal Agreement between the Representatives of the Governments of the Member States, meeting within the Council, on the financing and administration of Community aid under the Financial Protocol to the ACP-EC Partnership Agreement, signed on 18 September 2000, and in particular Article 2 i thereof (Internal Agreement) i,

Having regard to the proposal from the Commission,

Whereas:

In accordance with Article 2 i of the Internal Agreement, as well as the EU Declaration on the Financial Protocol, attached as Declaration XVIII to the ACP-EC Partnership Agreement, out of the total amount of EUR 13.5 billion of the ninth EDF for ACP countries, only EUR 12.5 billion were released upon the entry into force of the Financial Protocol on 1 April 2003.

In accordance with Article 2 i of the Internal Agreement an amount of EUR 1 billion may be released only following a performance review undertaken by the Council in 2004, on the basis of a proposal from the Commission. Paragraph 7 of the Financial Protocol and Declaration XVIII specify that this performance review shall be an assessment of the degree of realisation of commitments and disbursements.

On 22 March 2004 the Council agreed on the establishment of a Water Facility for ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement, for this Water Facility, and to release a first allocation of EUR 250 million. This decision was taken on the basis that the level of commitments and disbursements at the end of the year 2003 in conjunction with forecasts for the period 2004 to 2007 presented by the Commission indicating that ninth EDF resources for ACP countries could be fully committed.

This first allocation of EUR 250 million was released and was distributed as follows in accordance with Article 2 i and 2 i of the Internal Agreement: EUR 185 million to the envelope for support for long-term development; EUR 24 million to the envelope for regional cooperation and integration and EUR 41 million to the Investment Facility.

By the same decision the Council decided that in the light of the outcome of the mid-term reviews of the country strategies and of the Council’s performance review of the EDF by the end of 2004, the Council would decide by March 2005 on the mobilisation of a second allocation of EUR 250 million and on the use of the remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement for purposes to be agreed.

HAS DECIDED AS FOLLOWS:

2.

Article 1


In the light of the outcome of the mid-term reviews of the country strategies and of the Council’s performance review of the EDF, the Council agrees on the mobilisation of a second allocation of EUR 250 million for the Water Facility for ACP countries.

3.

Article 2


The second allocation of EUR 250 million shall be released and be distributed as follows:

EUR 185 million to the envelope for support for long-term development, referred to in Article 2(1)(a) of the Internal Agreement as well as in paragraph 3(a) of the Financial Protocol;

EUR 24 million to the envelope for regional cooperation and integration, referred to in Article 2(1)(b) of the Internal Agreement as well as in paragraph 3(b) of the Financial Protocol;

EUR 41 million to the Investment Facility, referred to in Article 2(1)(c) of the Internal Agreement as well as in paragraph 3(c) of the Financial Protocol.

4.

Article 3


This Decision shall be communicated to the ACP Council of Ministers.

5.

Article 4


This Decision shall enter into force on the day of its adoption.

Done at Brussels,

6.

For the Council


The President

EXPLANATORY MEMORANDUM

The Financial Protocol attached as Annex 1 to the ACP-EC Partnership Agreement, signed in Cotonou on 23 June 2000, establishes in its paragraph 2 a 9th EDF for African, Caribbean and Pacific countries of a total amount of up to EUR 13.5 billion. As specified in the EU Declaration on the Financial Protocol - Declaration XVIII under the Final Act of the ACP-EC Partnership Agreement – within the overall amount of EUR 13.5 billion, only EUR 12.5 billion were made available upon the entry into force of the Financial Protocol (1 April 2003). The remaining EUR 1 billion is to be released on the basis of a performance review of the EDF by assessing the degree of realisation of commitments and disbursements. This performance review is to be undertaken in 2004, on the basis of a proposal from the Commission, in accordance with Declaration XVIII attached to the ACP-EC Partnership Agreement as well as Article 2 i of the Internal Agreement between Representatives of the Governments of the Member States on the Financing and Administration of Community Aid under the Financial Protocol to the ACP-EC Partnership Agreement.

On 22 March 2004 the Council agreed to the establishment of an ‘EU Water Facility’ for ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement for this Water Facility and to release a first allocation of EUR 250 million. This decision was taken on the basis that the level of commitments and disbursements at the end of the year 2003 in conjunction with forecasts for the period 2004 to 2007 presented by the Commission indicated that ninth EDF resources for ACP countries could be fully committed, and a first tranche of the conditional billion be released on the basis of the performance to date.

In the light of the outcome of the mid-term reviews of the country strategies and of the Council’s performance review of the EDF, the Council has to decide by March 2005 on the mobilisation of a second instalment of EUR 250 million for the Water Facility and on the use of the remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement for purposes to be agreed.

In 2003 the joint ACP-EU Council approved the accession of Timor Leste to the ACP-EC Partnership Agreement. While the initial development needs of Timor Leste were covered under the EC budget, further funding beyond 2005 when Timor Leste is expected to ratify the Cotonou Agreement is not foreseen, as this would be incompatible with the existing ALA Regulation which does not allow ALA funding in favour of ACP Group member countries.

Based on Articles 62 i and 94 i of the Cotonou Agreement, the Commission therefore proposed to top up the 9th EDF by an amount of EUR 18 million, which corresponds to the pro rata amount which would have been earmarked for Timor Leste had the normal aid allocation criteria for the 9th EDF been applied.

In discussion in the ACP Group in the Council of Ministers, there was no unanimity among Member States for this proposal and the Council “expressed willingness to consider positively the use of the conditional billion to meet the needs of Timor Leste, considering that at present there are no unearmarked funds available under the 9th EDF”[28].

It is therefore proposed to release EUR 18 million from the conditional EUR 1 billion under the 9th EDF and to earmark the long-term development envelope to cover the financing of the National Indicative Programme of Timor Leste for the period 2006-2007.

7.

Proposal for a


COUNCIL DECISION

concerning the release and use of EUR 18 million from the conditional EUR 1 billion under the 9th EDF to be used to cover the financing of the National Indicative Programme of Timor Leste during the period 2006-2007

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 310, in conjunction with the second subparagraph of Article 300 i thereof,

Having regard to the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000,

Having regard to Article 1 of the Internal Agreement between the Representatives of the Governments of the Member States, meeting within the Council, on measures to be taken and procedures to be followed for the implementation of the ACP-EC Partnership Agreement,

Having regard to the Internal Agreement between the Representatives of the Governments of the Member States, meeting within the Council, on the financing and administration of Community aid under the Financial Protocol to the ACP-EC Partnership Agreement, signed on 18 September 2000, and in particular Articles 2 i and 1 i thereof,

Having regard to the proposal from the Commission,

Whereas:

In accordance with Article 2 i of the Internal Agreement, as well as the EU Declaration on the Financial Protocol, attached as Declaration XVIII to the ACP-EC Partnership Agreement, out of the total amount of EUR 13.5 billion of the ninth EDF for ACP countries, only EUR 12.5 billion were released upon the entry into force of the Financial Protocol on 1 April 2003.

In accordance with Article 2 i of the Internal Agreement an amount of EUR 1 billion may be released only following a performance review undertaken by the Council in 2004, on the basis of a proposal from the Commission. Paragraph 7 of the Financial Protocol and Declaration XVIII specify that this performance review shall be an assessment of the degree of realisation of commitments and disbursements.

On 22 March 2004 the Council agreed to the establishment of a Water Facility for ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement, for this water facility and to release a first allocation of EUR 250 million. This decision was taken on the basis of the level of commitments and disbursements at the end of the year 2003 in conjunction with forecasts for the period 2004 to 2007 presented by the Commission indicating that ninth EDF resources for ACP countries could be fully committed.

In the same decision the Council decided that, in the light of the outcome of the mid-term reviews of the country strategies and of the Council’s performance review of the EDF by the end of 2004, the Council would decide by March 2005 on the mobilisation of a second allocation of EUR 250 million for the Water Facility and on the use of the remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement for purposes to be agreed.

By Decision N°1/2003 of the ACP-EC Council of Ministers of 16 May 2003, Timor Leste became signatory to the ACP-EC Partnership Agreement. This Decision stipulated that Timor-Leste would not have immediate access to the resources of the 9th European Development Fund (EDF) but would only benefit, as a temporary special arrangement from funds earmarked for regional cooperation. The Decision did not take into account the fact that, after ratification of the Cotonou Agreement, Timor Leste will no longer qualify for the development assistance which has been provided for until now under Council Regulation 443/92 (the ALA Regulation). While the development needs shall be covered by the ALA funds until 2005, further funding under ALA funds would not be possible once Timor-Leste has ratified the ACP-EC Partnership Agreement in the course of 2005.

Based on Articles 62 i and 94 i of the ACP-EC Partnership Agreement, the Commission proposed i to top up the 9th European Development Fund for an amount of €18 million, which corresponds to the pro rata amount which would have been earmarked for Timor Leste had the normal aid allocation criteria for the 9th EDF been applied.

In discussion in the Council of Ministers, it seems that there was no unanimity among Member States for this proposal and the Council “expressed willingness to consider positively the use of the conditional billion to meet the needs of Timor Leste, considering that at present there are no unearmarked funds available under the 9th EDF”[30].

It is therefore proposed to release €18 million from the conditional EUR 1 billion under the 9th EDF and to earmark the long-term development envelope to cover the financing of the National Indicative Programme of Timor Leste for the period 2006-2007.

HAS DECIDED AS FOLLOWS:

8.

Article 1


In the light of the outcome of the mid-term reviews of the country strategies and of the Council’s performance review of the EDF, the Council agrees on the release of EUR 18 million from the conditional EUR 1 billion under the 9th EDF to cover the financing of the National Indicative Programme of Timor Leste for the period 2006-2007.

9.

Article 2


The allocation of EUR 18 million shall be released and be earmarked to the envelope for support for long-term development, referred to in Article 2(1)(a) of the Internal Agreement as well as in paragraph 3(a) of the Financial Protocol.

10.

Article 3


This Decision shall be communicated to the ACP Council of Ministers.

11.

Article 4


This Decision shall enter into force on the day of its adoption.

Done at Brussels,

12.

For the Council


The President

EXPLANATORY MEMORANDUM

The Financial Protocol attached as Annex 1 to the ACP-EC Partnership Agreement, signed in Cotonou on 23 June 2000, states in paragraph 2 that the Community’s financial assistance from the 9th EDF for African, Caribbean and Pacific countries shall comprise a total amount of up to EUR 13.5 billion. As specified in the EU Declaration on the Financial Protocol - Declaration XVIII under the Final Act of the ACP-EC Partnership Agreement – within the overall amount of EUR 13.5 billion, only EUR 12.5 billion were made available upon the entry into force of the Financial Protocol on1 April 2003. The remaining EUR 1 billion is to be released on the basis of a performance review of the EDF by assessing the degree of realisation of commitments and disbursements. This performance review is to be undertaken in 2004, on the basis of a proposal from the Commission, in accordance with Declaration XVIII attached to the ACP-EC Partnership Agreement as well as Article 2 i of the Internal Agreement between Representatives of the Governments of the Member States on the Financing and Administration of Community Aid under the Financial Protocol to the ACP-EC Partnership Agreement.

On 22 March 2004 the Council agreed on the establishment of an ‘EU Water Facility’ for ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement for this water facility and to release a first allocation of EUR 250 million. This decision was taken on the basis that the level of commitments and disbursements at the end of 2003, in conjunction with forecasts for the period 2004 to 2007 presented by the Commission, indicated that 9th EDF resources for ACP countries could be fully committed, and that a first tranche of the conditional EUR 1 billion could be released on the basis of the performance to date.

In the light of the outcome of the mid-term reviews of the country strategies and of the Council’s performance review of the EDF, the Council has to decide by March 2005 on the mobilisation of a second instalment of EUR 250 million for the Water Facility and on the use of the remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement for purposes to be agreed.

For the EUR 482 million out of the conditional EUR 1 billion, the selection of proposals has been made on the basis of the obligations resulting from the ACP-EC Partnership Agreement and on the basis of the so far unmet joint ACP-EC commitments on the international scene, taking into account the principles of urgency and poverty focus, concentration of aid and absorption capacity.

It is therefore proposed to release the EUR 482 million and to allocate them on the basis of the obligations resulting from the ACP-EC Partnership Agreement and for contributions to international initiatives and commitments.

13.

Proposal for a


COUNCIL DECISION

concerning the release and use of the remaining EUR 482 million of the conditional EUR 1 billion under the 9th European Development Fund for cooperation with African, Caribbean and Pacific countries

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 310, in conjunction with the second subparagraph of Article 300 i thereof,

14.

Having regard to the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000


Having regard to Article 1 of the Internal Agreement between the representatives of the governments of the Member States, meeting within the Council, on measures to be taken and procedures to be followed for the implementation of the ACP-EC Partnership Agreement,

Having regard to the Internal Agreement between the Representatives of the Governments of the Member States, meeting within the Council, on the financing and administration of Community aid under the Financial Protocol to the ACP-EC Partnership Agreement, signed on 18 September 2000, and in particular Article 2 i thereof (Internal Agreement)

Having regard to the proposal from the Commission,

Whereas:

In accordance with Article 2 i of the Internal Agreement, as well as the EU Declaration on the Financial Protocol, attached as Declaration XVIII to the ACP-EC Partnership Agreement, out of the total amount of EUR 13.5 billion of the ninth EDF for ACP countries, only EUR 12.5 billion were released upon the entry into force of the Financial Protocol on 1 April 2003.

In accordance with Article 2 i of the Internal Agreement an amount of EUR 1 billion may be released only following a performance review undertaken by the Council in 2004, on the basis of a proposal from the Commission. Paragraph 7 of the Financial Protocol and Declaration XVIII specify that this performance review shall be an assessment of the degree of realisation of commitments and disbursements.

On 22 March 2004 the Council agreed on the establishment of a Water Facility for ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement, for this water facility and to release a first allocation of EUR 250 million. This decision was taken on the basis that the level of commitments and disbursements at the end of the year 2003 in conjunction with forecasts for the period 2004 to 2007 presented by the Commission indicating that ninth EDF resources for ACP countries could be fully committed.

By the same decision the Council decided that, in the light of the outcome of the mid-term reviews of the country strategies and of its own performance review of the EDF by the end of 2004, the Council would decide by March 2005 on the mobilisation of a second allocation of EUR 250 million for the Water Facility and on the use of the remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement for purposes to be agreed.

The 9th EDF, including the balances transferred from the previous EDFs, will be entirely committed by the end of 2007 without allowing the Community to fully comply with its international commitments and to respond to new international initiatives.

A selection of proposals has been made for the total amount of EUR 482 million on the basis of the obligations resulting from the ACP-EC Partnership Agreement and on the basis of the so far unmet joint ACP-EC commitments on the international scene, taking into account the principles of urgency and poverty focus, concentration of aid and absorption capacity.

Under the existing implementation modalities of the Centre for the Development of the Enterprise (CDE) and the Centre for the Development of Agriculture (CTA) the annual budgetary needs are estimated at respectively EUR 18 million and EUR 14 million. It is therefore proposed to earmark EUR 64 million out of the long-term development envelope released from the remaining conditional billion in resources to cover the functioning of the CDE and CTA during the years 2006-2007, in compliance with Annexes I and III to the ACP-EC Partnership Agreement.

The Communication from the Commission to the Council and European Parliament COM (2004) 711 of 28 October 2004 on the future development of the EU Energy Initiative and the modalities for the establishment of an Energy Facility for ACP countries proposed to mobilise EUR 250 million for this initiative. In its conclusions the Communication suggests that this new initiative be financed through the remaining balances of the conditional billion. Considering the high expectations generated by the launch of the EU Energy Initiative, the crucial contribution of energy to the achievement of the MDGs, and the critical importance for the poor of access to cost-effective and environmentally sound energy services, it is therefore suggested that the proposed ACP/EU Energy Facility be financed with an indicative amount of EUR 250 million from the conditional balances and that the totality of this amount be transferred to the intra-ACP envelope for this purpose.

The Council adopted in April 2004 an EU Action Plan prepared by the Commission, which includes a proposal to facilitate producer access to community risk insurance and trade finance.[31] The purpose of the Commission contribution to this initiative is to complement the World Bank technical assistance in this area for the establishment of an international financing facility to support ACP countries accessing market-based instruments for commodity risk management through the temporary co-financing of their premiums. This will contribute to reducing the vulnerability of the ACP beneficiary countries to commodity shocks and to the development of commodity risk instruments for further uptake. It is proposed to earmark an indicative amount of up to EUR 25 million from the remaining balance of the conditional billion to contribute to the international commodity risk management financing facility in line with Article 68.5 of the ACP-EC Partnership Agreement and to transfer the entire amount to the intra-ACP envelope for this purpose.

Regulation (EC) N°882/2004 of the European Parliament and of the Council of 29 April 2004 on official controls performed to ensure the verification of compliance with feed and food law, animal health and animal welfare rules i, entering into force in 2006, requires third countries to provide detailed information about the general structure and management of their feed and food sanitary and phyto-sanitary control systems and to provide sufficient guarantees that products destined for the EU market meet EU safety standards. To maintain their access to the EU markets and cope with these new regulations, the ACP countries will have to make major investments. Article 12 of the ACP-EC Partnership Agreement on coherence of Community policies foresees that, in such cases and at the request of the ACP, consultations be held so that account may be taken of their concerns as to the impact of these measures. It is therefore proposed to put aside an indicative amount of €30 million from the remaining balance of the conditional billion to contribute to the initial phase of a capacity building programme to help the ACP adapt to the new EU sanitary and phyto-sanitary rules and to transfer the entire amount to the intra-ACP envelope for this purpose.

Considering the increasing importance of the African Union (AU) in peacekeeping and conflict prevention as well as in promoting regional integration and good governance, and the positive reception by the Council of the Communication on an enhanced EU-Africa dialogue i, it seems appropriate to move towards a more strategic support to the AU institutions and to reserve an additional amount for a pan-African support programme within the framework of the “Vision and Mission of the African Union and Strategic Plan for 2004-2007” adopted by the summit of the Heads of State and Government in Addis Ababa in July 2004. To contribute to a pan-African support programme, it is proposed to earmark an indicative amount of up to EUR 50 million from the remaining balance of the conditional billion, and to transfer the amount to the intra-ACP envelope for this purpose.

The Education for All Fast Track Initiative (FTI) is a global partnership, launched in mid-2002 to help low-income countries reach the education Millennium Development Goals of giving all children a complete primary education by 2015. It is one of the first instruments that make operational the Monterrey consensus on effective partnerships between donors and developing countries to increase the effectiveness of official development assistance. The FTI primarily relies on existing funding mechanisms in partner countries. As it proved impossible to provide support to the FTI in a systematic way through the 2004 national mid-term review exercise, it is proposed that an indicative amount of EUR 63 million be contributed to the Fast Track Initiative from the remaining balances of the conditional billion and that the amount be transferred to the intra-ACP for this purpose.

HAS DECIDED AS FOLLOWS:

15.

Article 1


In the light of the outcome of the mid-term reviews of the country strategies and of the Council’s performance review of the EDF, the Council agrees to the release and use of the EUR 482 million of the conditional EUR 1 billion under the ninth European Development Fund for cooperation with African, Caribbean and Pacific countries.

16.

Article 2


The allocation of EUR 482 million shall be released and be distributed as follows:

1. EUR 352 million to the envelope for support for long-term development, referred to in Article 2(1)(a) of the internal Agreement as well as paragraph 3(a) of the Financial Protocol;

2. EUR 48 million to the envelope for regional cooperation and integration, referred to in Article 2(1)(b) of the Internal Agreement as well as paragraph 3(b) of the Financial Protocol;

3. EUR 82 million to the Investment Facility, referred to in Article 2(1)(c) of the Internal Agreement as well as paragraph 3 (c) of the Financial Protocol;

17.

Ar ticle 3


EUR 64 million from the envelope for support for long-term development, referred to in Article 2(1)(a)(ii)(iii) of the Internal Agreement as well as paragraph 3(a)(i)(ii) of the Financial Protocol will be allocated for the financing of the budget of the Centre for the Development of Enterprise (CDE) and of the Technical Centre for Agriculture and Rural Cooperation (CTA).

18.

Article 4


The remaining EUR 418 million EUR will contribute to the financing of the following actions:

Up to EUR 250 million to the EU Energy Initiative;

Up to EUR 25 million for the contribution to the International Commodity Risk Management Financing Facility in favour of the ACP countries;

An indicative amount of 30 million to assist the ACP countries in adapting to the new EU sanitary and phyto-sanitary rules;

19.

Up to EUR 50 million to strengthen the African Union in the implementation of its pan-African mandate


An indicative amount of EUR 63 million as a contribution to the Education for All Fast Track Initiative.

20.

Article 5


This Decision shall be communicated to the ACP Council of Ministers.

21.

Article 6


This Decision shall enter into force on the day of its adoption.

Done at Brussels,

22.

For the Council


The President

EXPLANATORY MEMORANDUM

The Financial Protocol attached as Annex 1 to the ACP-EC Partnership Agreement, signed in Cotonou on 23 June 2000, states in paragraph 2 that the Community’s financial assistance from the 9th EDF for African, Caribbean and Pacific countries shall comprise a total amount of up to € 13.5 billion. As specified in the EU Declaration on the Financial Protocol - Declaration XVIII under the Final Act of the ACP-EC Partnership Agreement – within the overall amount of € 13.5 billion, only € 12.5 billion were made available upon the entry into force of the Financial Protocol on 1 April 2003. According to the Internal Agreement, the remaining € 1 billion is to be released and distributed to the envelopes for long term development, regional cooperation and integration and for the Investment Facility on the basis of a performance review of the EDF by assessing the degree of realisation of commitments and disbursements. This performance review is to be undertaken in 2004, on the basis of a proposal from the Commission, in accordance with Declaration XVIII attached to the ACP-EC Partnership Agreement as well as Article 2 i of the Internal Agreement between Representatives of the Governments of the Member States on the Financing and Administration of Community Aid under the Financial Protocol to the ACP-EC Partnership Agreement.

On 22 March 2004 the Council agreed on the establishment of an ‘EU Water Facility’ for ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement for this water facility and to release a first allocation of EUR 250 million. This decision was taken on the basis that the level of commitments and disbursements at the end of 2003, in conjunction with forecasts for the period 2004 to 2007 presented by the Commission, indicated that 9th EDF resources for ACP countries could be fully committed, and that a first allocation of the conditional EUR 1 billion could be released on the basis of the performance to date.

In the light of the outcome of the mid-term reviews of the country strategies and of the Council’s performance review of the EDF, the Council has to decide by March 2005 on the mobilisation of a second instalment of EUR 250 million for the Water Facility and on the use of the remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement for purposes to be agreed.

For EUR 482 million out of the conditional EUR 1 billion, the selection of proposals has been made on the basis of the obligations resulting from the ACP-EC Partnership Agreement and on the basis of the so far unmet joint ACP-EC commitments on the international scene, taking into account the principles of urgency and poverty focus, concentration of aid and absorption capacity.

Against this background, the Commission proposes that the Council approves the enclosed decision on the position to be adopted by the Community within the ACP-EC Council of Ministers regarding the transfer of EUR 288 million from the reserve of the 9th EDF long-term development envelope as well as EUR 82 million from the 9th EDF Investment Facility, to the allocation for intra-ACP co-operation, to be used for the financing of these initiatives. Together with the increase of EUR 48 million of the allocation for regional cooperation and integration, this will lead to a total amount of EUR 418 million.

EUR 64 million from the envelope for support for long-term development, referred to in Article 2(1)(ii)(iii) of the Internal Agreement as well as paragraph 3(a)(i)(ii) of the Financial Protocol will be allocated for the financing of the budget of the Centre for Development of Enterprise (CDE) and of the Technical Centre for Agriculture and Rural Cooperation (CTA).

23.

Proposal for a


COUNCIL DECISION

on the position to be adopted by the Community within the ACP-EC Council of Ministers regarding a decision on the use of the reserve of the long-term development envelope as well as of resources from the Investment Facility of the ninth European Development Fund for the financing of the EU Energy Initiative, for the contributions to the International Commodity Risk Management Financing Facility, the adaptation to the new EU feed and food sanitary and phyto sanitary rules, the strengthening of the African Union and a contribution to the Education for All Fast Track Initiative

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 310 in conjunction with the second subparagraph of Article 300 i thereof,

Having regard to the proposal from the Commission i,

Whereas:

In accordance with Article 2 i of the Internal Agreement an amount of EUR 1 billion may be released and distributed to the envelopes for long term development, regional cooperation and integration and the Investment Facility only following a performance review undertaken by the Council in 2004, on the basis of a proposal from the Commission. Paragraphs 7 of the Financial Protocol and Declaration XVIII specify that this performance review shall be an assessment of the degree of realisation of commitments and disbursements.

On 22 March 2004 the Council agreed on the establishment of a Water Facility for ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement, for this Water Facility, and to release a first allocation of EUR 250 million. This decision was taken on the basis that the level of commitments and disbursements at the end of the year 2003 in conjunction with forecasts for the period 2004 to 2007 presented by the Commission indicating that ninth EDF resources for ACP countries could be fully committed.

By the same decision the Council decided that in the light of the outcome of the mid-term reviews of the country strategies and of its performance review of the EDF by the end of 2004, the Council would decide by March 2005 on the mobilisation of a second allocation of EUR 250 million for the ACP-EU Water Facility and on the use of the remaining EUR 500 million for purposes to be agreed.

A selection of proposals has been made for the total amount of EUR 482 million on the basis of the obligations resulting from the ACP-EC Partnership Agreement and on the basis of so far unmet joint ACP-EC commitments on the international scene, taking into account the principles of urgency and poverty focus, concentration of aid and absorption capacity.

From the latter amount, EUR 64 million from the envelope for support for long-term development will be allocated for the financing of the budget of the Centre for Development of Enterprise (CDE) and of the Technical Centre for Agriculture and Rural Cooperation (CTA), referred to in Article 2(1)(a)(ii)(iii) of the Internal Agreement as well as paragraph 3(a)(i)(ii) of the Financial Protocol. The balance of EUR 418 million will be earmarked for the intra-ACP financing of the EU Energy Initiative, an International Commodity Risk Management Financing Facility, the ACP adaptation to the new EU feed and food sanitary and phyto sanitary rules, the strengthening of the African Union and a contribution to the Education for All Fast Track Initiative.

Article 15 of the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000 establishes an ACP-EC Council of Ministers with powers to take decisions in accordance with the Agreement and Paragraph 8 of Annex I to that Agreement allows the ACP-EC Council of Ministers to take appropriate measures if funds provided for in any of the instruments of the Agreement are exhausted.

Funds from the 9th EDF envelope for regional cooperation and integration are exhausted. The Community’s position within the ACP-EC Council of Ministers should therefore be established with a view to it adopting a decision on the Community’s contribution to the financing of the EU Energy Initiative, an International Commodity Risk Management Financing Facility, the ACP adaptation to the new EU feed and food sanitary and phyto sanitary rules, the strengthening of the African Union and a contribution to the Education for All Fast Track Initiative, from the reserve of the long-term development envelope and from the Investment Facility of the ninth EDF.

HAS DECIDED AS FOLLOWS:

24.

Sole Article


The Community shall take the following position within the ACP-EC Council of Ministers on the use of the reserve of the 9th EDF long-term development envelope and resources from the Investment Facility for the for the financing of the EU Energy Initiative, for the contributions to the International Commodity Risk Management Financing Facility, the adaptation to the new EU feed and food sanitary and phyto sanitary rules, the strengthening of the African Union and a contribution to the Education for All Fast Track Initiative, based on the attached draft decision of the ACP-EC Council of Ministers.

Done at Brussels,

25.

For the Council


The President

DRAFT

DECISION OF THE ACP-EC COUNCIL OF MINISTERS

on the use of the reserve of the long-term development envelope as well as of resources from the Investment Facility of the ninth European Development Fund for the financing of the EU Energy Initiative, for the contributions to the International Commodity Risk Management Financing Facility, the adaptation to the new EU feed and food sanitary and phyto sanitary rules, the strengthening of the African Union and a contribution to the Education for All Fast Track Initiative

THE ACP-EC COUNCIL OF MINISTERS,

Having regard to the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000, and in particular Paragraph 8 of its Annex I,

Whereas:

At its 2527st Session on 22 March 2004, the EU Council of Ministers agreed on the establishment of a Water Facility for ACP countries and agreed to consider an amount of EUR 500 million out of the conditional EUR 1billion under the 9th EDF for this Water facility. It also agreed to release immediately a first allocation of EUR 250 million from the conditional EUR 1 billion and to decide at the latest by March 2005 on the mobilisation of a second instalment of EUR 250 million and on the use of the remaining EUR 500 million of the conditional EUR 1 billion for purposes to be agreed in the light of the outcome of the mid-term reviews of the country strategies and of the Council’s performance review of the EDF by the end of 2004.

To ensure support of the financing of the EU Energy Initiative, for the contributions to the International Commodity Risk Management Financing Facility, the adaptation to the new EU feed and food sanitary and phyto sanitary rules, the strengthen of the African Union and a contribution to the Education for All Fast Track Initiative, it is appropriate to allocate resources to intra-ACP cooperation for a total amount EUR 418 million that can be made available from the resources released by the EU Council of Ministers. However, the envelope for regional cooperation and integration as defined in Paragraph 3(b) of Annex I to the ACP-EC Partnership Agreement is exhausted. The necessary resources must therefore be transferred from unallocated resources of the 9th EDF long term development envelope and from the Investment Facility, referred to in Paragraph 3(b) and (c) of the Financial Protocol.

Article 15 of the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000 establishes an ACP-EC Council of Ministers with powers to take decisions in accordance with the Agreement.

HAS DECIDED AS FOLLOWS:

26.

Article 1


An amount of EUR 370 million, consisting of EUR 288 million from the reserve of the 9th EDF long-term development envelope and EUR 82 million from the 9th EDF Investment Facility, shall be transferred to the intra-ACP allocation under the envelope for regional co-operation and integration, and used for the establishment of an ACP-EU Water Facility. Together with an amount of EUR 48 million already available under the intra-ACP co-operation, a total amount of EUR 418 million will thus be available for the financing of the EU Energy Initiative, for the contributions to the International Commodity Risk Management Financing Facility, the adaptation to the new EU feed and food sanitary and phyto sanitary rules, the strengthening of the African Union and a contribution to the Education for All Fast Track Initiative.

27.

Article 2


In accordance with Article 13 i of Annex IV to the ACP-EC Partnership Agreement, the ACP Council of Ministers requests the Commission to finance from intra ACP cooperation support for the programmes and the indicative amounts referred to in Article 1.

Done at Brussels,

28.

For the ACP-EU Council of Ministers


The President

EXPLANATORY MEMORANDUM

The Financial Protocol attached as Annex 1 to the ACP-EC Partnership Agreement, signed in Cotonou on 23 June 2000, establishes in its paragraph 2 a ninth EDF for African, Caribbean and Pacific countries of a total amount of up to € 13.5 billion. As specified in the EU Declaration on the Financial Protocol - Declaration XVIII under the Final Act of the ACP-EC Partnership Agreement – within the overall amount of € 13.5 billion, only € 12.5 billion were made available upon the entry into force of the Financial Protocol (April 1 st 2003). According to the Internal Agreement, the remaining € 1 billion is to be released and distributed to the envelopes for long term development, regional cooperation and integration and for the Investment Facility on the basis of a performance review of the EDF by assessing the degree of realisation of commitments and disbursements. This performance review is to be undertaken in 2004, on the basis of a proposal from the Commission, in accordance with Declaration XVIII attached to the ACP-EC Partnership Agreement as well as Article 2 i of the Internal Agreement between Representatives of the Governments of the Member States on the Financing and Administration of Community Aid under the Financial Protocol to the ACP-EC Partnership Agreement.

On 22 March 2004 the Council agreed on the establishment of an ‘EU Water Facility for ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement for this Water Facility and to release a first allocation of EUR 250 million. This decision was taken on the basis that the level of commitments and disbursements at the end of the year 2003 in conjunction with forecasts for the period 2004 to 2007 presented by the Commission indicated that ninth EDF resources for ACP countries could be fully committed, and a first tranche of the conditional billion be released on the basis of the performance to date.

In the light of the outcome of the mid-term reviews of the country strategies and of the Council’s performance review of the EDF, the Council has to decide by March 2005 on the mobilisation of a second instalment of EUR 250 million for the Water Facility and on the use of the remaining EUR 500 million of the conditional EUR 1 billion referred to in Article 2 i on the Internal Agreement for purposes to be agreed.

Against this background, the Commission proposes that the Council adopt the enclosed decision on the position to be adopted by the Community within the ACP-EC Council of Ministers regarding the transfer of €185 million from the reserve (unallocated resources) of the 9th EDF long-term development envelope as well as €41 million from the 9th EDF Investment Facility, to the allocation for intra-ACP co-operation, to be used for the second allocation of the ACP-EU Water Facility. Together with the above-mentioned increase of €24 million of the intra ACP allocation, this will lead to a total amount of €250 million for the second allocation to the Water Facility.

29.

Proposal for a


COUNCIL DECISION

on the position to be adopted by the Community within the ACP-EC Council of Ministers regarding a decision on the use of the long-term development envelope as well as resources from the Investment Facility of the ninth European Development Fund for the second allocation of the ACP-EU Water Facility

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 310 in conjunction with the second subparagraph of Article 300 i thereof,

Having regard to the proposal from the Commission i,

Whereas:

In accordance with Article 2 i of the Internal Agreement an amount of EUR 1 billion may be released and distributed to the envelopes for long term development, regional cooperation and integration and the Investment Facility only following a performance review undertaken by the Council in 2004, on the basis of a proposal from the Commission. Paragraphs 7 of the Financial Protocol as well as Declaration XVIII specify that this performance review shall be an assessment of the degree of realisation of commitments and disbursements.

On 22 March 2004 the Council agreed on the establishment of a Water Facility for ACP countries, to consider an amount of EUR 500 million out of the conditional EUR 1 billion referred to in Article 2 i of the Internal Agreement, for this Water Facility, and to release a first allocation of EUR 250 million. This decision was taken on the basis that the level of commitments and disbursements at the end of the year 2003 in conjunction with forecasts for the period 2004 to 2007 presented by the Commission indicating that ninth EDF resources for ACP countries could be fully committed

This first allocation of EUR 250 million was released and was distributed as follows in accordance with Article 2 i and 2 i of the Internal Agreement: EUR 185 million to the envelope for support for long-term development; EUR 24 million to the envelope for regional cooperation and integration and EUR 41 million to the Investment Facility.

On the same decision the Council decided that in the light of the outcome of the mid-term reviews of the country strategies and of the Council’s performance review of the EDF by the end of 2004, the Council would decide by March 2005 on the mobilisation of a second allocation of EUR 250 million for the ACP-EU Water Facility.

Article 15 of the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000 establishes an ACP-EC Council of Ministers with powers to take decisions in accordance with the Agreement and Paragraph 8 of Annex I to that Agreement allows the ACP-EC Council of Ministers to take appropriate measures if funds provided for in any of the instruments of the Agreement are exhausted.

Funds from the 9th EDF envelope for regional cooperation and integration are exhausted. The Community’s position within the ACP-EC Council of Ministers should therefore be established with a view to it adopting a decision on the Community’s contribution to the establishment of an ACP-EU Water Facility, from the reserve of the long-term development envelope and from the Investment Facility of the ninth EDF.

HAS DECIDED AS FOLLOWS:

30.

Sole Article


The Community shall take the following position within the ACP-EC Council of ministers on the use of the reserve of the 9th EDF long-term development envelope and resources from the Investment Facility for the second allocation of the ACP-EU Water Facility, based on the attached draft decision of the ACP-EC Council of Ministers.

Done at Brussels,

31.

For the Council


The President

DRAFT

DECISION OF THE ACP-EC COUNCIL OF MINISTERS

on the use of the reserve of the long-term development envelope as well as resources from the Investment Facility of the ninth European Development Fund for the second allocation of the ACP-EU Water Facility

THE ACP-EC COUNCIL OF MINISTERS,

Having regard to the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000, and in particular Paragraph 8 of its Annex I,

Whereas:

At its 2527st Session on 22 March 2004, the EU Council of Ministers agreed on the establishment of a Water Facility for ACP countries and agreed to consider an amount of EUR 500 million out of the conditional EUR 1 billion under the 9th EDF for this Water facility. It also agreed to release immediately a first allocation of EUR 250 million from the conditional EUR 1 billion and to decide at the latest by March 2005 on the mobilisation of a second instalment of EUR 250 million and on the use of the remaining EUR 500 million of the conditional EUR 1 billion, in the light of the outcome of the mid-term reviews of the country strategies and of the Council’s performance review of the EDF by the end of 2004. The second allocation of EUR 250 million is distributed as follows over the envelopes referred to in paragraph 3 of the 9th EDF Financial Protocol: EUR 185 million to the envelope for support for long-term development, EUR 24 million to the envelope for regional cooperation and integration and EUR 41 million to the Investment Facility.

To ensure support for the implementation of the EU Water Initiative for ACP countries, it is appropriate to allocate resources to intra-ACP co-operation for a total amount EUR 250 million that can be made available from the resources released by the EU Council of Ministers. However, the envelope for regional co-operation and integration as defined in Paragraph 3(b) of Annex I to the ACP-EC Partnership Agreement is exhausted. The necessary resources must therefore be transferred from unallocated resources of the 9th EDF long term development envelope and from the Investment Facility, referred to in Paragraph 3(b) and (c) of the Financial Protocol.

Article 15 of the ACP-EC Partnership Agreement signed in Cotonou on 23 June 2000 establishes an ACP-EC Council of Ministers with powers to take decisions in accordance with the Agreement.

HAS DECIDED AS FOLLOWS:

32.

Article 1


An amount of EUR 226 million, consisting of EUR 185 million from the reserve of the 9th EDF long-term development envelope and EUR 41 million from the 9th EDF Investment Facility, shall be transferred to the intra-ACP allocation under the envelope for regional co-operation and integration, and used for the establishment of an ACP-EU Water Facility. Together with an amount of EUR 24 million already available under the intra-ACP co-operation, a total amount of EUR 250 million will thus be available for the second instalment of the ACP-EU Water Facility.

33.

Article 2


In accordance with Article 13 i of Annex IV to the ACP-EC Partnership Agreement, the ACP Council of Ministers request the Commission to finance support for the ACP-EU Water Facility from intra ACP cooperation for the amounts referred to in Article 1.

Done at Brussels,

34.

For the ACP-EU Council of Ministers


The President
d’Ivoire, Equatorial Guinea, Guinea, Haiti, Liberia, Somalia, Sudan, Togo and Zimbabwe. Five small Pacific countries were not reviewed because they became new parties to the Cotonou Agreement and only recently started to benefit from EDF funds: Marshall Islands, Micronesia, Nauru, Niue and Palau.
M¬ resulting from Decision C(2003)2471 regarding Haiti, Liberia and Togo, plus a further n EDF was not notified or notified late, i.e. the 242,6 M€ resulting from Decision C(2003)2471 regarding Haiti, Liberia and Togo, plus a further net decrease of 96,8 M€ approved by the EDF Committee in September 2004 for countries for which the CSP has not been signed yet.

[8] €3 million have already been committed in the framework of the intra-ACP technical cooperation facility for information, communication and evaluation purposes.
– a proposal for an EU Action Plan. See also COM(2004)87 of 12 February 2004 on a Proposal for an EU-Africa Partnership in support of cotton sector development.
€45 million in support of the ACP-EU Action Plan on Agricultural Commodities.
€250 million. This uncertainty can be explained by the seasonal factor which still survives in a lesser form despite the various reforms initiated in recent years, whereby a large stock of commitments are being prepared in the first half of the year, “waiting” for decision after summer break, with a high volume of commitment decisions taken in the last quarter of the year (the commitment rate at the end of August 2004 was over 45% of the year objective, against on average of less than 25% in the previous years). Small delays in the decision making process may then result in a commitment being carried over to the next year.
€ 500 million are expected by February 2005.
– see COM(2004)647 of 08 October 2004 on a Proposal fixing the financial contribution to the EDF (third instalment for 2004) -, leading to treasury problems for member States that had not budgeted the forecasted amounts.
M€ of special assistance to the Democratic Republic of Congo, Council Decision of 21 July 2003.
€365million in 2003, resulting from the continued effort to reduce the abnormal RAL (i.e. RAL which stayed unchanged on specific projects or programmes for several years).
M€ constituted from reduced unnotified national indicative programmes for countries under article 96 - Commission Decision C(2003)2471. However, this amount is being mobilised to equilibrate the national midterm review process and therefore is not included in the long term development reserves but under the NIP line.