| Investment: EUROPE BANK GETS CLOSER TO THE ISLANDS |
EIB to focus on renewable energy, SMEs
Samisoni Pareti
If the European Investment Bank had accumulated a portfolio of nearly 400 million Euros in the absence of an office in the region, one wonders how much the portfolio will grow now that the bank has a Pacific office.
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Development clients... Jean-Philippe de Jong (right), head of EIB’s Pacific office, greets two of his Pacific clients—the CEO of Fiji Development Bank, Tukana Bovoro, and Tonga’s Development Bank’s Simione Sefanaia.
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Officially opened last month in Sydney, the “European Investment Bank is looking forward to establishing itself in the Pacific as an efficient initiator and facilitator of new operations by meeting the needs of the 19 countries in the region that this office will cover in the best possible way,” says Jean-Philippe de Jong, head of the bank’s Pacific office.
de Jong’s boss at the bank’s Luxembourg’s headquarters, Jean-Louis Biancarelli, who is EIB director-general for operations outside the EU, said the bank’s activities in the Pacific as indeed in the ACP group of countries is provided under the Cotonou Agreement that links European Union member countries and the ACP.
Under this agreement and the investment facility it offers, the EIB, Biancarelli said, concentrates its focus on the islands’ private sector by providing loans, equity and guarantees for investment projects.
Sector-wise, bulk of EIB’s finances had been poured into the manufacturing and mining sector in the Pacific. To-date, some 152.8 million Euros had gone into this sector—accounting for about 40% of its portfolio.
This included investment in a coconut palm furniture processing sawmill in Fiji under the bank’s sustainable agro-industrial projects.
Energy and environmental protection is also a key sector for EIB. Some 26% of its investment portfolio is in this sector, totalling some 98.6 million Euros.
This includes a 3.5 million Euro loan for a tropical hardwood plantation at Kolombangara, an island near Gizo, in the Solomon Islands’ Western Province.
Fiji’s national power utility, Fiji Electricity Authority, is also a beneficiary as it had secured from EIB a 24.5 million Euro loan to finance a new 42 MW run-of-the-river hydropower in northern Viti Levu, Fiji’s main island.
“The bank’s attractive loan conditions ensure the provision of electricity at sustainable prices to consumers,” said an EIB document.
“Furthermore, the reduction in greenhouse gas emissions resulting from the replacement of old fossil fuel technology by hydropower will bring environmental benefits to the islands. The project is eligible for registration under the clean development mechanism of the Kyoto Protocol.”
Small, medium enterprises (SMEs) and communication, transport and tourism also benefit from EIB loans.
“EIB was already covering the needs of the Pacific from Luxembourg but we are confident we will be able to do this much more efficiently with its new regional office in Sydney,” said de Jong.
“We have in the past signed more than 100 financial agreements in sectors ranging from micro-finance operations to large mining projects. It is our intention to focus in the coming years on renewable energy and the financial sector, as well as consider finance proposals in infrastructure that are of importance to the national development of individual countries, as well as regional integration.
“Apart from the provision of loans and equity, we also intend to provide technical assistance to support the private sector.”
The fact that some islands of the Pacific were not particularly happy about having the EIB office in Sydney was actually raised at a function the bank hosted at the office’s official opening early last month.
It was Misa Telefoni, Samoa’s deputy prime minister and currently the president in office of the ACP Council of Ministers, who raised the matter when he addressed bank executives at the Sydney function. “I’ve just come from a joint parliamentary council of both people from the EU and the ACP and I have to be frank—many of them asked me why this office is in Sydney and not in any of the Pacific islands country,” Telefoni told guests.
“They also told me that to be fair, they were also concerned that the Caribbean office was in Martinique which is not part of the Caribbean.”
Telefoni felt the issue was not the location of the office but its output. “The key is not where you are located. Whether you are located in Sydney, Suva or Apia, the key is whether you succeed and you have to get on those planes because we are quite far away from here.
“So while your office may be located here, we expect Jean Philippe and his team to be mostly on the road and mostly out in the fields visiting the islands, your constituency.”
Living up to his reputation as a straight shooter, Telefoni also offered frank advice for de Jong and his team at the Pacific office.
“The initiative and the drive need to come from you. At the end of the day you can’t blame the Pacific islands if you say it’s a matter of them not coming up with the information.
“I think you have to drive the agenda in everything. You have to make sure in your dealings with people that the EIB will do more than they would normally do in any other region to make sure ventures succeed.”
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