FEMIP CALLS FOR THE EXTENSION THE
TRANS-EUROPEAN NETWORKS AND THE REINFORCEMENT OF PUBLIC
PRIVATE PARTNERSHIPS IN WATER AND TRANSPORT IN THE
MEDITERRANEAN
Under the Dutch Presidency within the European Union, the
2nd Experts’ Committee of the Facility for
Euro-Mediterranean Investment and Partnership (FEMIP) met in
Amsterdam, on 25 and 26 October 2004.
Conceived as a think tank and charged with the task of
putting forward practical and operational recommendations to
FEMIP’s Ministerial Committee, made up of the Economics and
Finance Ministers of the EU and the MPCs, this Committee was
hosted by Mr Gerrit Zalm, Dutch Minister of Finance, and
Mr Philippe de Fontaine Vive, Vice-President of the EIB in
charge of FEMIP.
Mr Zalm stressed that: "While this Meeting focuses on
specific sectoral issues, its underlying aim is to develop a
better business climate. This is FEMIP's primary objective.
The challenge is to reduce the cost of doing business
through regulatory reforms that will enhance the quality of
investment climate. This can increase annual economic growth
with up to 2%, and result in productive jobs, profitable
businesses and poverty alleviation. There is still ample
opportunity to increase growth through further reducing the
administrative burden and introducing 'smarter' regulation
in both Regions. I would therefore welcome an initiative
from FEMIP to discuss recent regulatory reforms and
remaining challenges at the Ministerial Meeting in Morocco
next year".
Mr Philippe de Fontaine Vive, for his part, said: “We
are all committed to achieving results in the development
and management of effective water resources, which is a key
prerequisite for sustainable growth. Creating an environment
conducive to private investment is essential and
particularly relevant for the Mediterranean region, which is
an area with a high, if not the highest, level of water
stress. Building on its experience, FEMIP believes that
reducing water and sanitation deficits requires a
combination of reforms from Governments, a supply of
expertise from private enterprises and funding from a wider
range of sources and types.”
“A few months after a new phase of enlargement, which has
redrawn Europe’s borders”, continued Mr Philippe de Fontaine
Vive, “FEMIP has considered it crucial to put on its agenda
the extension of the TENs to the Mediterranean partner
countries, which are now, more than ever, Europe’s new
neighbours. I believe the financing of an expanded transport
network, designed to strengthen economic, social and
cultural ties between the two shores of the Mediterranean,
represents a significant opportunity for cooperation between
all the financial institutions active in the region. FEMIP
is meant to examine the options for financing and managing
efficiently the principal infrastructure, necessary to
establish a large Euro-Mediterranean area as aspired by the
Barcelona Process and how FEMIP itself can best serve for
this.”
The speakers being senior representatives of EU and MPCs,
banks, industry, business organisations, academic
institutions and the European Commission, animated a
fruitful exchange of views among the some 100 participating
experts. They concentrated at the role of private sector
participation (PSP) and the appropriate financial
instruments for developing the water/sanitation and
transport in the Mediterranean Region. More specifically
they called for the creation of a Euro-Med Transport
Network, and more frequent involvement of the private sector
in the management of water/sanitation and transport
services.
The first session on water and sanitation was chaired by Mr
Gérard Payen, member of Kofi Annan’s Advisory Board on Water
and Sanitation and member of the World panel on Financing
Water for All, while the second session devoted to transport
was chaired by Mr Alfonso Gonzalez-Finat, Director at the
Directorate-General for Energy and Transport in the Euopean
Commission.
Participants came up with the conclusion, that for both
sectors MPCs and International Finance Institutions (IFIs)
shall aim their attention actions and support at the:
Need for capacity building of public
sector, in terms of planning and regulation;
Need for tariff reform to ensure
cash-flows for the expansion of water and sanitation
services, and in transport;
Identification and preparation of
sound projects;
Encouragement of a Public Private
Partnership (PPP) strategy;
Development of the local private
sector to play a role;
Progressively developing local
currency lending lowering exchange risk.
For achieving the above, the following measures are
proposed:
Improvement of donor coordination to
a) develop coherent projects and sector framework and b)
optimise mix of available funding instruments for
projects with regard to their revenue potential (loans)
and social and environmental impact (grants).
Use available financing resources to
a) support institutional restructuring, b) develop the
capacity of the public sector to create and regulate
PPPs and c) provide technical assistance for regulation;
Encourage development of PPPs,
initially mainly to improve services and private funding
and later on if this adds value along two axes:
Promote transfer of operational
know-how from international private operators;
Stimulate local private sector to
supply specific sector expertise to public entities.
Consider developing sub-sovereign
lending and local currency lending instruments for
funding investment and lower exchange risks for
infrastructure services remunerated in local currencies.
In his closing address, Mr Philippe de Fontaine
Vive noted that: “Funds are ready to flow into
well-structured sectors and viable projects in
water/sanitation as well as transport in the MPCs.
FEMIP’s lending in 2003 and 2004 is in the order of EUR
2 billion, of which some 50% for private sector. FEMIP
should now establish itself as the benchmark for the
Euro-Mediterranean economic partnership.”
Background information
Lending in the Mediterranean Partner Countries (MPCs)
takes place under the ”Facility for Euro-Mediterranean
Investment and Partnership” (FEMIP). FEMIP focuses
primarily on developing the private sector and financing
socio-economic infrastructure underpinning private
sector development.
This is the culmination of a partnership between the
European Union and its neighbour countries on the
Mediterranean that goes back more than thirty years, and
has been intensified in the ‘90’s in support of the
Barcelona Process, first launched at the Barcelona
Conference in November 1995. FEMIP aims to help the
Mediterranean Partner Countries meet the challenges of
economic and social modernisation and enhanced regional
integration within the framework of “Wider
Europe-Neighbourhood”, and with a view to the
establishment of a Euro-Mediterranean free-trade area.
It has enabled Europe to step up its cooperation with
the Partner Countries. Thanks to this Facility, endowed
with increased financial resources, lending activity in
the region has increased from EUR 1.5 billion to EUR 2
billion annually. FEMIP gives priority to financing
private sector ventures, with the dual aim of
liberalizing the economies of the MPCs and developing
their potential in the run-up to the planned creation of
an EU/MPC customs union in 2010. It focuses on foreign
direct investment and local private sector initiatives
as well as social-sector projects, particularly in the
fields of health, education and environmental
protection, which are fundamental in achieving social
stability and encouraging productive investment.
Since 1995, out of a total of EUR 11.5 billion in the
MPCs, environmental lending amounted to some EUR 2.4
billion, i.e. 21% of the total lending in this period,
(of which half for water and sanitation), while lending
for transport projects equally reached EUR 2.4 billion
(21%).
Contacts :
For further information on lending in the MPCs and
FEMIP, as well as for press inquiries please contact the
Information and Communications Department (Mrs Helen
Kavvadia, principal press officer for the MPCs: tel. :
+352 4379 6756, fax: +352 4379 6898, website: http://www.eib.org/lending/med/en/index.htm
).
