Brussels, Belgium – Following yesterday’s joint European Commission and European Investment Bank (EIB) announcement of plans to set up a special fund for Africa disbursing European aid [1], non-governmental organisations which monitor the EIB have warned that the bank is currently not equipped to provide vital development aid and to help to eradicate poverty in Africa.

The EIB has long been criticised for its lack of both institutional transparency and proper assessment procedures, including social and environmental safeguard policies when investing in developing countries.

Magda Stoczkiewicz, Policy Coordinator for CEE Bankwatch Network, commented: “The EIB does not have its own safeguard procedures on indigenous people or resettlement. There is also hardly any expertise within the EIB on development issues, poverty or especially on environmentally sustainable development. Without a decent knowledge base and stringent assessment procedures which would include the proper assessment of development and environmental impacts, as things stand EIB financed projects may actually do more harm than good in Africa.”

The EIB’s lending to countries outside the EU – where it is primarily mandated to invest – has been increasing in recent years. It is already involved in such controversial projects as the Chad-Cameroon pipeline, the Nam Thun 2 dam in Laos and various water privatisation schemes.

When it comes to the EIB's non-EU lending, critics maintain that the EIB has thus far been more concerned with providing soft loans to the private sector, especially European companies with interests in the developing world, rather than with serving the world's poorest people.

Stoczkiewicz added: “The European Commission and the EIB may be determined to forge ahead with this new initiative, but it is imperative that individual EU member states and African countries push to get the EIB’s own house in order before allowing it to potentially squander billions in Africa.”

For more information contact:

Magda Stoczkiewicz
CEE Bankwatch Network
Tel: +32 475 867 637
Email: magdas at bankwatch.org

Notes for editors:

1. “EU plans aid trust fund to by-pass World Bank”, Reuters, Jan 18, 2006

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