European and Mediterranean officials have voted to renew and expand the Facility for Euro-Mediterranean Investment & Partnership (FEMIP), the EU's largest provider of loans to the Middle East, after its first term expires this year.
European and Mediterranean officials have voted to renew and expand the Facility for Euro-Mediterranean Investment & Partnership (FEMIP), the EU's largest provider of loans to the Middle East, after its first term expires this year.At an annual meeting in Tunis on 25-26 June, delegates agreed to broaden the scope of FEMIP's brief for the 2007-13 period. This will include providing new and expanded financial instruments that target small and medium-sized enterprises (SMEs) in the EU partner states. The facility has already directed more than Eur 7,000 million ($9,050 million) towards 77 public and private sector projects since it was set up by the European Investment Bank (EIB) in 2002.One proposal, to create an EIB subsidiary bank in place of FEMIP, was rejected by most delegates. However, a broad range of the EIB's proposals gained wide support.These include increasing the use of the Special FEMIP envelope (SFE) by some Eur 100 million ($129 million) to help provide finance for high-risk operations.The EIB is also considering targeting SMEs in the region by ringfencing a certain proportion of its loans to local banks under FEMIP for small companies, as well as making the remuneration for these intermediary banks dependent on the number of SMEs reached though its global loan instrument.In addition, delegates backed extending the use of technical assistance to help local banks and SMEs to improve, for example, business plans and credit appraisal expertise.Thirdly, the EIB is proposing to increase the amount it provides in local currency loans under FEMIP, as well as minimising the need for large collateral requirements by, for example, developing its micro-finance activities.Finally, the bank plans to merge a number of ancillary funds in order to streamline FEMIP.During the meeting, delegates supported the creation of a permanent supervisory committee - with the participation of all 35 Euromed members - to improve dialogue and the co-ordination of funding across the region. The Syrian and Israeli delegations also offered to host new FEMIP offices in their countries. The European Council of Ministers will vote on the draft proposals at their meeting in November.FEMIP directed more than Eur 2,000 million ($2,515 million) towards projects in 2005, up from Eur 1,600 million ($2,010 million) in its first year of operation. The vast majority of the funding has been channelled into energy projects, such as the liquified natural gas (LNG) plant under development at Idku, and transport schemes.