On 9 February 2006 the European Commission and the European Investment Bank (EIB) agreed to create a Trust Fund for infrastructure in Africa. The fund is a financial instrument of the EU-Africa Partnership on Infrastructure, one of the pillars of the new EU Strategy for Africa approved in December 2005. In the start-up phase (2006-2007) the Commission intends to mobilise up to EUR 60 million in grants and the EIB up to EUR 260 million in loans for the fund’s operation. It hopes to have the fund running by June 2006. Participation in the fund is open to EU Member States, their development agencies and financial institutions, but there is no formal obligation to contribute.

The fund aims to create a backbone of road, rail, energy, water, and telecommunications infrastructures, focusing on cross-border projects. While mainly providing subsidised low-interest loans, the fund will also allow for project preparation, capacity building activities, and co-financing of projects that may receive financial support in the form of grants. The first concrete projects planned include a hydroelectric plant shared by Senegal, Mauritania, and Mali, and an electricity network between Mozambique and Malawi.

Related news: African Development Bank to host Africa Infrastructure Consortium, Source Weekly - , 21 Oct 2005 ; Africa: World Bank to raise Africa infrastructure spending, Source Weekly, 14 Jun 2005

Source: European Commission, 9 Feb 2006 ; World Bank Press Review, 10 Feb 2006