Eu-south Africa Joint Cooperation Council



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DRAFT MINUTES
12th meeting of the EU-SA Joint Cooperation Council

Brussels, 20 July 2011
On 20 July 2011, the 12th EU-South Africa Joint Cooperation Council (the body that oversees the overall implementation of the Trade and Development Cooperation Agreement - TDCA) met in Brussels. The main purpose of the meeting was to take stock of progress in implementing the TDCA and also to discuss the way forward on the wide range of areas where policy dialogues and cooperation have been established in the context of the EU-South Africa Strategic Partnership. The JCC had previously met in Pretoria in September 2010.


  1. Opening remarks

EEAS Managing Director Africa, Nicholas Westcott welcomed the delegations from SA, EU Member States, and EU institutions and thanked all participants for their hard work over the course of the year and in the run up to the JCC. He noted the significant achievements made in bilateral relations. He welcomed the timing of the JCC on the eve of the approaching Ministerial meeting and 4th SA-EU Summit in Brussels on 14-15 September 2011.


DG DIRCO Jerry Matjila thanked the EU for hosting the event, for the first time since the creation of the EEAS. He underlined how the EU has accompanied SA since the advent of democracy, in its endeavour to enhance the lives of its citizens, in particular but not only through development cooperation. He also thanked EU Member States for their support (six EU Member States were in attendance). DG Matjila stressed that the EU-SA Strategic Partnership was of key importance, and that SA's membership to other groupings can not be at the detriment of its relationship with the EU.


  1. Adoption of the draft agenda

The draft agenda was adopted (see Annex A).




  1. Adoption of minutes of the 11th meeting of the JCC

The minutes of the 11th JCC were adopted with no amendments.




  1. Consideration of progress and reports on EU-SA cooperation




  1. Development (see adopted joint progress report Annex B)

Both sides (DEVCO Director Sub-Saharan Africa Francesca Mosca and Director Europe SA Treasury Robin Toli) converged in recognising the importance of EU development cooperation support to SA in fostering innovative, added value and piloting actions aligned with SA domestic priorities. The strong foundations of the EU-SA development partnership were stressed as also demonstrated by the detailed presentations of some of the European Investment Bank's flagship interventions in SA (see annex 1).

While the debate on the EU's post-2013 multiannual financial framework is currently ongoing, it was acknowledged that the EU-SA partnership is in evolution and that further discussions will take place in the context of the 4th EU-SA Summit. SA expressed strong interest in infrastructure financing to foster economic growth, advocating a holistic approach by the EU (EU+27 MS) fostering complementarities of assistance, also in the perspective of regional integration.


  1. Trade (see adopted joint progress report Annex C)

Both sides (DTI DDG Xavier Carim, and DG Trade SADC desk Carlos Bermejo) concurred on the importance of growing EU-SA trade flows and overall satisfactory implementation of the TDCA, whose provisions are due to be revised in the framework of the EU-SADC EPA. During 2010, the EU continued to be SA’s most important trade and investment partner, accounting for 35 % of South Africa's total imports and 28% of its total exports. South Africa remains an important trade and investment partner for the EU, accounting for 17% of EU exports to Africa and 14% of EU imports from Africa. Prospects for concluding the SADC EPA were judged reasonable and depending on SADC internal consultations at end-August possibly paving the way for a new negotiating round with the EU around the Summit. In order to address the discrepancies between the EU and SA trade statistics, it was agreed that Eurostat and the Chief Economist Unit of DG Trade on the EU side and the SA Revenue Service (SARS) on the SA side will start to analyse and compare the overall trade figures with a view to identify which countries and main product sectors account for most of the discrepancies. Increasing convergence and cooperation was acknowledged in the fisheries sector, while continued contacts and expert-level meetings should facilitate communication on sanitary and phytosanitary matters. Both SA and EU expressed concern at the lack of progress to conclude the negotiations of the Doha Development Agenda, with negative effects on the multilateral trade system.




  1. Customs (see adopted joint progress report Annex D)

Participants (Thapsana Molepo, SA Mission to the EU, and Benoit Chapas, EEAS international relations officer South Africa) highlighted that Customs cooperation should constitute a central element of the EPA. The launch of a Customs Coop project financed under TDCA dialogue facility was welcomed. The bilateral capacity building project, as agreed during the EU-SA Summit of July 2008, will aim to promote the WCO SAFE Framework of Standards by helping to establish an Authorised Economic Operators (AEO) programme in SA, which would enhance supply chain security and be beneficial for both SA and the EU.




  1. Science and Technology (see adopted joint progress report Annex E)

SA (Daan du Toit, DST, SA Mission to the EU) highlighted some key aspects of the joint progress report on S&T, stressing that this area is one of the historical foundations of EU-SA cooperation, since the conclusion of the 1997 EC-SA agreement on scientific and technical cooperation. Cooperation has grown in strength over the years, with SA having been a very dynamic partner in the successive Framework Programmes for Research. In the previous Framework Programme (FP6) South Africa ranked fourth in terms of participation/success, behind the US, China and Russia. This is also evidenced by the ongoing strong policy S&T dialogue between the European Commission and the DST including in multilateral and regional fora. S&T cooperation between SA and the EU spans many scientific domains; projects frequently address key global challenges such as climate change, hunger and disease, and the partnership has resulted in a significant sharing of expertise and pooling of resources, and supports S&T capacity-building and human capital development in SA. The upcoming visit in SA of Commissioner Geoghan-Quinn in November 2011 will be another reminder of the strong collaboration in place. SA also highlighted the contribution of S&T to reaching SA development goals through the ongoing SBS programme to support research and innovation for poverty alleviation.

The EU side (Fadila Boughanemi, DG RTD) underlined that SA has been participating in more than 200 projects since the first Framework Programme for Research and Innovation. The diversity of programmes concerned demonstrates the breadth of EU-SA partnership in S&T. EU also recalled that this cooperation was embedded within the broader Joint EU-Africa Strategy objectives, and within the overall EU-ACP S&T cooperation. Finally, participants were informed of the request formulated by the EEAS to contemplate the appointment of a dedicated S&T attaché in the EU Delegation to SA, which is currently under review by DG RTD.


  1. Space (see adopted joint progress report Annex F)

EU (Antoine Kopp, DG ENTR) emphasized that the Treaty of Lisbon gives a clear mandate to the EU to act in space matters and to establish a dedicated space policy. In this context, the Commission and the Council have recently stated the objective to strengthen the space dialogue between the EU and South Africa.

The relevant Commission and South Africa Departments [Galileo Team on EU side - DG ENTR - and the Department of Science and Technology, of Transport, the local Air Navigation Service Provider and the upcoming Space Agency for SA] continue to work on a priority area of cooperation: the extension of the navigation system EGNOS over SA's airspace. Considerable work was undertaken by SA, and both sides agreed in April to work towards the objective of finalizing the implementation plan in 2011. Two management meetings were already held this year and an action plan agreed. Excellent and tangible results of cooperation have also been achieved in the field of space research, in particular in the area of Earth Monitoring "GMES" (Global Monitoring for Environment and Security), with an important SA participation in projects funded by the 7th Framework Programme. The EU welcomed the decision by European Space Agency and the recently launched South African Space Agency to develop institutional cooperation.

Upon EU's request, SA (Daan du Toit, DST, SA Mission to the EU) confirmed its commitment to work towards the signature of an MoU on EGNOS by Commissioner Tajani and Minister Pandor in October 2011 on the occasion of the international astronomic congress in SA. SA stressed that the extension of EGNOS to SA is a priority, as it constitutes SANSA's flagship navigation activity. SA also stressed how space could be instrumental in advancing SA's development agenda, by supporting practical activities such as support for agriculture, planning, sustainable development, etc. Against this background, both sides concurred in considering the broader EU-Africa space cooperation critical.




  1. ICT (see adopted joint progress report Annex G)

Bilateral cooperation in the ICT sector was highly revitalized through the organization of a second Information Society dialogue meeting held in Brussels on 7 June 2011. The Dialogue allowed addressing cooperation in the sector in a comprehensive way, thanks to the participation of both the Department of Communications and the Department of Science and Technology on the SA side, DG INFSO on the EU side. The Dialogue notably allowed highlighting clear synergies between the Digital Agenda for Europe (as one of the seven flagship initiatives of the EU 2020 Strategy) and the South African ICT and R&D national strategies such as the Ten Years Innovation Plan. The agreed Roadmaps identify cooperation priorities: Concrete actions will include preparing two requests for TDCA dialogue Facility funding to deepen cooperation on topical policy/regulatory issues, as well as organizing thematic workshops. The EU side highlighted that an action will notably promote exchange of best practices regarding the Digital Switch-Over (the migration process from analogue to digital TV), following the important South African decision to adopt the European digital DVB-T2 standard in January 2011. Other concrete outcomes of this Dialogue meeting include the joint organization of thematic workshops to be held in the context of the next EuroAfrica-ICT Forum, funded by the EC to promote Africa-EU cooperation in the ICT sector and that will be held in Cape Town on 15-17 November 2011. The Dialogue also allowed to address regional cooperation, notably related to the implementation of the Africa-EU Partnership on Science, Information society and Space and to exchange information on global issues such as internet governance or cyber security.

From the DST side, participants stressed that the cooperation in this sector is now well on tracks and cover many aspects from regulatory to research and innovation issues, with the aim to unleash the unique potential of ICTs to fast track development objectives in all socio-economic sectors. There is a lot of potential in this domain, as highlighted by the fact South Africa is already the 5th international partner (in terms of number of participations) of the EU 7th Framework Programme for ICT research.


  1. Environment and Sustainable Development (see adopted joint progress report Annex H)

EU (Hans Stielstra, DG ENV) reiterated the importance for the EU of environmental cooperation with SA particularly in the run-up to the "Rio+20" World Conference on Sustainable Development (2012 Brazil). The EU suggested that in the "Rio+20" perspective EU and SA work together to delineate a common approach and concrete deliverables. The EU and SA side (DG DIRCO Jerry Matjila and Zintle Koza FS SA Mission to the EU) acknowledged the new momentum of cooperation generated inter alia by the last meeting of the Forum on Environment and Sustainable Development) and the Green Growth Workshop (both held in February 2011 in South Africa). Both events allowed in depth discussions on various themes. Biodiversity and endangered species were central in the Forum discussions while the mainstreaming of green growth/jobs was the leading issue of the workshop. For 2012 the EU proposed to identify working priorities from the following: study on green jobs and various workshops (on the Convention on Biological Diversity (CBD), economics of ecosystems "Rio+20", waste management and chemicals. SA highlighted as its overarching priority the green growth theme, that is one of the main pillars of new SA Economic Growth Path Plan that focuses on key physical and social infrastructure areas -energy, transport, communication, water and housing for job creation purposes in the next decade. SA emphasised the importance of strong synergies between the sustainable development and energy dimensions of the EU-SA partnership and agreed to holding further discussions with the EU on the issues above in early 2012 after the Durban Climate Conference.

On climate change the EU (Marco Morettini, EEAS international relations officer- South Africa) reiterated its support for South Africa as presidency of the incoming Climate Conference in Durban (COP-17) in November stressing the need for renewed political impetus and leadership in the months ahead to operationalise the Cancun agreements. The EU recalled that the Forum on Environment and Sustainable Development in February also laid emphasis on climate action in terms of national development and offered support to SA' climate and energy policy development and implementation, building on current work to shape SA National Policy on Climate Change. SA referred to its Master Energy Plan aiming at revising in the 2030 perspective the current energy mix towards green power, with the objective of a 33% share of nuclear energy. SA also thanked the EU for the meaningful financial support provided through the UNFCCC for the organisation of COP-17 and indicated that EU-SA collaboration and ideas will be crucial particularly in these areas still requiring agreement in the post Cancun phase, hinting in particular to the future of the Kyoto Protocol. The strong foundations of the EU-SA cooperation on climate change/energy were backed also by the detailed presentation of the European Investment Bank's activities on climate and energy in SA (see annex 2), welcomed by JCC.


  1. Energy (see adopted joint progress report Annex I)

EU (Nicholas Westcott EEAS MD and Marta Abrantes DG ENER) welcomed progress in the negotiations between EURATOM and SA on the peaceful uses of nuclear energy and underscored the importance of critically taking stock of the status of the SA-EU energy dialogue in previously identified areas of cooperation as a pre-requisite for further joint work. The EU side recalled the antecedents of the SA-EU dialogue mentioning the SA Integrated Energy Plan aiming at intensifying energy efficiency, the role of SA as an observer in the International Partnership on Energy Efficiency Cooperation (IPEEC) and the collaboration with the EU in the Clean Energy Ministerial. Progress on CCS/CCT could be achieved notably through two projects, one with the SA National Energy research Institute (SANERI) and the other one with the SA Centre for Carbon Capture and Storage (SACCCS).

On nuclear the EU explained its intention to put in place the most advanced common legal framework so to ensure safe and sustainable use of nuclear energy. In the Fukushima accident aftermath the EU launched comprehensive safety risk assessments to be complemented by security assessments. SA (Zintle Koza FS SA Mission to the EU) highlighted the problematic nature of the dialogue that generated frustration on both sides in the last months. For the same domestic policy purposes highlighted during the discussions on environment and sustainable development SA is very keen in pursuing this dialogue, with an added value. From the SA angle there is potential and willingness to do more on energy efficiency linking discussions to environmental/climate change discussions. The first step should be to improve communication and for this purpose a video-conference could be organised before the Summit.



  1. Transport (see adopted joint progress report Annex J)

SA (Lawrence Venkile, acting COO, DoT) gave a detailed account of discussions held the day before during the transport dialogue forum meeting. SA proposal to broaden the dialogue to encompass all dimensions of transport (inter alia road and rail, but also infrastructure development and climate-change related issues), and to take more into account the developmental aspects of transport, in the spirit of Article 59 of the TDCA, was recalled. Both sides aim to refine Terms of reference for this broader transport dialogue in the coming months, building on the established fruitful dialogues on air and maritime transport.

SA stressed that it was very conscious of the urgency of reaching a solution on the proposed horizontal air transport agreement, now that the assessment study had been completed. SA committed to work towards a solution by the ministerial meeting on 14 September 2011. On maritime transport, SA reminded participants of the agreed areas of cooperation contained in the joint progress report, emphasizing its wish to have a meeting organized by year-end bringing all interested parties together.

The EU (Dorte Lomholt and Ana Rios Olmedo, DG MOVE) welcomed the initiative to broaden the scope of the transport dialogue. However, the issue of EU competences (in relations to EU Member States and to the private sector for maritime transport) should be taken into account. It was recalled that progress on ToR should go hand in hand with progress on finding a solution to the issue of the horizontal air transport agreement negotiations.





  1. Education & Training (including Culture)

On culture the EU (Deirdre Lennan, DG EAC) highlighted the commonality of views at international level with SA on the UNESCO Convention on cultural diversity and recalled a special action (call) for SA under the EU Culture Programme in 2012-2014. As regards the question of a possible separate future policy dialogue on culture the need for further consultations emerged and was confirmed by SA (Jan Van Vollenhoven, Chief Director DIRCO) while internal discussions on both sides are ongoing.

On Education both the EU and SA concurred on the remarkable progress achieved in cooperation terms in 2010, as proven by a long series of joint activities (Primary Education Sector Policy Support Programme, specific SA lot under Erasmus Mundus higher education and the successful EU-Africa Summit higher education side event) and indicated that they should be further consolidated possibly at regional and African continental level.

An additional positive element acknowledged by the EU was the good response from SA on Marie Curie, EdulinK and Erasmus Mundus Programmes. Initiatives on sharing of experiences on quality in teaching and learning and on the tuning approach to the harmonization of higher education programmes gathered very positiive results in 2011. Finally the extension of the 'Study in Europe' campaign to SA proved also successful and discussions are ongoing to make it a recurrent event starting in 2012.





  1. Employment & Social Affairs (see adopted joint progress report Annex K)

Both EU and SA participants (Ioana Toma DG EMPL, Pinkie Moleko Counsellor SA Mission to the EU) agreed to continue their efforts- following initial fruitful discussions through a videoconference in January 2011- to operationalise their structured dialogue. For the EU the priority is to focus on the promotion of the decent work agenda (both at global and regional level) accompanied by bilateral exchanges on specific 'decent work' issues such as employment, rights at work, social protection, social dialogue as well as equal opportunities. SA highlighted the need to move forward to concrete programs and actions, particularly in the area of employment creation .A Memorandum of Understanding, to be finalised soon hopefully signature in the margins of the next Ministerial Dialogue in September 2011 will capture these aspects.




  1. Health (see adopted joint progress report Annex L)

SA (Dr Aquina Tulare, Adviser to Minister of Health) gave a detailed presentation of the in-depth discussions with the EU (Andrea Milkowski, DG DEVCO) held the day before and previously through regular contacts. Given their strategic importance in the current SA political/policy context the EU and SA agreed to re-focus their work on two "super-priorities" among the five identified (and still valid) in 2009 for the health sector dialogue and namely a) the crisis in human resources and b) health economics/financing.

On the first point concrete dialogue activities will be elaborated in support of the future South African National Strategy on Human Resources in Health. In this regard both sides recognised that issues pertaining to circular migration are not confined to the health sector but potentially affect other sectors of the economy. This implies dealing with circular migration in a more strategic and comprehensive fashion also covering the management of the foreign workforce. On the second priority in the light of the policy developments on the National Health Insurance (NHI), joint activities (for which support/cooperation is also sought from EU Member States) will focus in the near future on technical assistance (study tour and support for institutional arrangements through TDCA facility funding) in support of capacity building on health system financing.

Such activities take place against the backdrop of the rolling out of the EU Primary Health Care 126 M € SPS. DG Matjila acknowledged the important contribution and the appreciation of SA for this programme.




  1. Migration (see adopted joint progress report Annex M)

SA (Lindile Kgasi, Chief Director Home Affairs) gave a detailed account of discussions held the day before during the two sectoral meetings on a) asylum- (for the first time) and b) human trafficking, as well as during the c) proper Migration Forum dialogue. Such interactions have now clearly set the future policy dialogue agenda with a first pillar focussing on the promotion of legal migration (in the mobility perspective (see below) and a second complementary one on the fight against illegal migration (i.e. challenges brought by unrest in Northern Africa, economical migration and use of asylum regime for illegal migration). The EU agreed (R. Rozengurg, DG HOME) that the discussions proved mutually beneficial particularly from the information exchange point of view overall demonstrating that the EU and SA share similar trends, challenges but also common positions.

EU and SA will work together on a wider mobility strategy encompassing, among other topics, various aspects such as ethics in recruitment, visa facilitation and the management of circular migration thus establishing linkages and synergies with other dialogue strands such as health and employment.

In separate meetings, DG Matjila reiterated South Africa's request for visa facilitation/waiver fir SA citizens.





  1. Crime & Justice (including Human Rights)

On Human Rights, the EU (Charles Michel Geurts EEAS/Human Rights Policy Instruments) recalled the rich exchanges and informal Human rights dialogue since 2010 between the EU and SA centred on the multilateral agenda (e.g. complementary standards, Durban+10, working group on private military and security companies, all complex issues on which preparatory bilateral discussions have proven extremely helpful). Such topics were also part of discussions in the margins of the JCC between DIRCO DG J. Matjila and EEAS MD Multilateral Mara Marinaki. SA reiterated on both occasions its request to the EU to formalise the current Human rights dialogue. DG Matjila ensured that the EU can count on SA for its engagement on Human Rights issues.

On Crime and Justice the EU (Margarete Hofmann, Head of Unit OLAF/European Anti-Fraud Office/ External relations) provided a comprehensive presentation of OLAF competences and activities (for details see Annex 3) seeking, on the basis of a "win-win" approach a reliable partnership and mutual cooperation with SA, thus reactivating operational contacts (discontinued for two years) with the competent SA interlocutors (NPA or SAPS). In order to follow-up on this initial contact once a counterpart is identified in SA the EU side through OLAF is ready to organise a video-conference to explore concrete cooperation modalities. SA (i.a. SAPS) indicated it will consult internally and then respond to the EU/OLAF proposal.

SA (Pinkie Moleko Counsellor SA Mission to the EU) proposed that while the initial idea of formal Terms of reference for the EU-SA Crime & Justice dialogue is temporarily set-aside (in line with the 2010 JCC conclusions on the matter) the EU and SA should pragmatically focus on concrete "first steps"/operational activities in the form of study visits to Eurojust and Europol, on which an EU proposal was expected. On the EU side, while DG HOME is checking the feasibility of such potential joint activity with EUROPOL, DG JUST would welcome contacts with interested SA prosecutors and judges to make headway in the organisation of a study tour at EUROPOL.





  1. Consideration of progress and reports on EU-SA cooperation

Joint progress reports were adopted on all areas (11 reports) but "education" and "crime and justice", for which no reports were issued. The twelfth joint progress report on "energy" was to be adopted by written procedure.




  1. AOB

DG Matjila recalled that SA wished to reflect in the near future on the role of the TDCA dialogue facility PMU. A proposal will be transmitted in that regard by the SA Mission to the EU side.



ANNEX 1
Outline of EIB intervention on its activities in South Africa
I. In South Africa
The EIB's mandate for South Africa comprises EUR 900 million for the period 2007-2013 to support both public and private sector operations, with a focus on two major areas: (1) priority infrastructure projects, and (2) private sector support, including SMEs.
Status of utilisation of current mandate
Demand for funds that correspond to the agreed EIB lending objectives has been high, and cooperation with the South African authorities and other stakeholders regarding implementation of the lending mandate has been excellent.

The recent mid-term evaluation of the EIB’s external mandate also concluded that South Africa has a high absorption capacity for EIB loans and that the Bank’s strategies and operations in South Africa conform in full to EU policy objectives.


As of 1 July 2011, some 70% of the EUR 900 million envelope have been committed; 2011 promises to be another good year for our operations in South Africa. In particular, disbursements are expected to reach a record EUR 250 million. It is expected that the entire envelope will be fully committed by end 2012/mid 2013. However, the pipeline of projects and the underlying demand over the next 2+ years for EIB funding significantly exceeds this ceiling (EUR 400-500 million).
As this pipeline includes a large number of climate action related projects, the EIB intends to satisfy the demand by accessing two additional sources of funding: (1) an additional optional envelope under the external lending mandate, and (2) the EIB’s Facility for Energy Sustainability and Security of Supply (ESF). Across these two sources, the EIB intends to make available up to EUR 600 million until end 2013.
Three examples of how the EIB can contribute to the mandate’s objectives in a measurable way:
Affordable and Social Housing

In 2007, the Board of the EIB approved a EUR 150 million programme to fund the supply of affordable and social housing and associated infrastructure throughout South Africa.
The funding was made available to two public institutions, the Development Bank of Southern Africa (DBSA) and the National Housing Finance Corporation (NHFC) and three of the largest commercial banks in South Africa (SBSA, ABSA, Nedbank), which identify and finance sub-projects throughout the country.
Eligible investments comprise preparatory measures (such as studies and site preparation), planning, design and construction. The housing units can be destined for rental accommodation or for ownership.
All 5 intermediaries (the two public institutions and the three commercial banks) have benefitted from this facility in roughly equal shares and the full EUR 150 million have been allocated to a total of 30 different sub-projects.
As of 1 July 2011, 90% of this amount has been disbursed, contributing to the construction of approximately 34,000 housing units.
Municipal infrastructure

In line with the lending objectives, the EIB has provided EUR 60 million to DBSA for municipal infrastructure, including water, sanitation, electricity, etc.
In particular, this operation supports improvements in service delivery by specifically targeting investments in under-resourced municipalities.
The full EUR 60 million has now been disbursed, and according to DBSA estimates some 140,000 households have benefitted from gaining access to one or more basic services, while approximately 7,700 jobs were created through the underlying investments, spread across skilled, semi-skilled and unskilled labor.
Private sector support: SMEs

The EIB is working with the Industrial Development Corporation (IDC) through a facility of up to EUR 60 million to support the financing of SMEs.


To date, EUR 40 million have been disbursed to 87 SMEs across a wide variety of sectors, including agriculture, textiles, food / beverage and tourism. Most importantly, more than 11,000 jobs are created through these SMEs.
Furthermore, since 1994 the EIB has had a very fruitful and active relationship with the IDC. This includes since 2001 the co-management of the Risk Capital Facility, which is funded by the European Commission, and which – in the context of Black Economic Empowerment – provides equity funding to SMEs owned and operated by historically disadvantaged persons.
Way forward
The EIB places great importance on a continuation of the excellent cooperation with South Africa and our commitment to continued and further strengthened support during the remainder of the current mandate period and beyond.
In particular, the EIB welcomes the activation of the additional optional mandate which will enable us to provide additional financing for projects that contribute to South Africa’s sustainable economic development. Thanks to the significant demand, funding will not only come from sources under the mandate, but also outside the mandate, at the EIB’s own risk.

II. In the region
The Investment Facility
The initiative to establish the “Investment Facility for South Africa” with South African partners is very much welcome by the Bank who stands ready to participate in the discussions. This Facility is of great importance because it would enable to blend EIB loans with grants in projects in SA, something that is not possible at the moment. In the region, complementarities will have to be looked at in order not to duplicate already existing instruments. The first such instrument is the Investment Facility, managed by the EIB since 2003 and which is an integral component of the Cotonou Agreement between the EU and the ACP group of States. The second such instrument is the EU-Africa Infrastructure Trust Fund which was set up in 2007 at the joint initiative of EIB and the EC (in the wider framework of the EU-Africa Infrastructure Partnership, an innovative instrument gathering the EU MS, the EC, the EIB, the EU development financiers and the African Development Bank).
The South African intermediaries
The second five-yearly revision of the Cotonou Partnership Agreement, which was signed in June 2010, opened the possibility for the Bank to finance operations in the Sub-Saharan African continent through South African intermediaries.
The TA Facility with DBSA
Furthermore, last year saw the implementation of a Project Development and Support Facility, focusing on infrastructure projects in transport, energy, water, sanitation, urban development, and telecommunications sectors in Eastern and Southern Africa (excluding South Africa). This new TA Facility was developed in conjunction with the DBSA. The purpose is to assist national and local infrastructure promoters to prepare and implement projects capable of obtaining financing from public and private sources, including the EIB and DBSA.
The co-financing with DBSA and IDC
Last but not least, the EIB has entered into a partnership, together with 8 other IFIs/DFIs (“African Financing Partnership”), including DBSA and IDC, for enhancing the cooperation and the co-financing of private sector projects in Africa.

ANNEX 2
Outline of EIB intervention on climate related issues, including energy
Introduction – EIB work on climate change/current mandate

The EIB has taken seriously the recommendation to increase the focus of its lending activities on climate change mitigation projects during the remainder of the current mandate period, and beyond.


The EIB has significant expertise in funding climate change projects, both within and outside the European Union, and is keen to identify, together with South African partners, suitable projects that would maximise EIB’s value added and the benefits of the funding made available.
Climate Change eligibility

For the EIB climate action covers a wide spectrum of infrastructure projects in climate-change related measures

In addition to renewable energy projects (wind, solar, hydropower, biomass, and the related component manufacturing facilities), funding can be directed to other climate change projects such as:


  1. Energy efficiency projects (e.g. in public buildings), including energy demand side management programmes and cogeneration projects,

  2. Transport (metro, tramways, rail, etc.),

  3. Forestry/land use (afforestation, reforestation),

  4. Research, Development and Innovation (RDI) (innovative low-carbon technologies, photovoltaic, low-emission engines, etc.),

  5. Adaption measures (flood control / drought management measures, and measures to increase the climate resilience of vulnerable areas (e.g. coasts).


Renewable energy

The EIB has followed with great interest the evolution of South Africa’s approach to benefit from its vast renewable energy resources


From the White Paper on Renewable Energy issued by the Department of Energy in 2003, to the promulgation of the Renewable Energy Feed-in Tariff (REFIT) programme in March 2009 by the National Regulator, to the Integrated Resource Plan, mapping South Africa’s long-term path to increase renewable in its energy mix.
In the area of renewable energy, the EIB has engaged with South Africa, both at the policy as well as at the project level.
At the policy level, under the leadership of the departments of Trade and Industry and Public Enterprises the EIB has actively participated – alongside other international partners – in the concept and design of the South African Renewable Initiative (SARi). During a recent meeting on 7 July with Minister Rob Davies on 7 July the EIB discussed future potential funding support and advisory services for this ambitious industrial policy initiative. In the EIB view SARi represents an excellent opportunity for South Africa to increase substantially the contribution of renewable to its power mix, while securing the economic gains, in particular job creation.
At the project level, the EIB approved and signed a EUR 40 million facility with Rand Merchant Bank (RMB) for investments in the area of renewable energy. This facility is being used mostly for smaller hydro-power projects. Furthermore, in June 2011 the EIB Board of Directors approved a framework loan with Investec Bank to provide up to EUR 50 million for small and medium scale investments in renewable energy and energy efficiency. This facility will be signed very soon and will focus largely on industrial co-generation opportunities.
Finally, the EIB has identified a significant number of new renewable energy operations, representing a total potential demand for EIB funding of EUR 400 million, and more. These projects are at various stages of the pre-appraisal and appraisal process, but at this stage EIB looks forward to the finalisation of the regulatory process surrounding the REFIT programme and its launch.
Available Funding for climate action
In order to satisfy the demand for EIB funding, the EIB intends to make available up to EUR 600 million.
Funding would come from two sources: (1) the additional envelope under the External Mandate, and (2) the Facility for Energy Sustainability and Security of Supply (ESF), which is funded from the Bank's Own Resources without recourse to the Community Guarantee, meaning the EIB undertakes these investments fully at its own risk. The EUR 50 million project to Investec, I just mentioned, is the first operation in South Africa under the ESF.
Conclusion
The EIB stands ready to identify, together with South African partners, suitable projects that maximise EIB’s value added and the benefits of the funding made available, and in particular that contribute to supporting “green investments” and the creation of “green jobs” in South Africa.

ANNEX 3

Outline of OLAF (European Anti Fraud Office) Intervention

1 – What is OLAF (http://ec.europa.eu/anti_fraud/index_en.html)
 Fight against fraud, corruption and any other illegal activity detrimental to the EU Budget and EDF.

 Mandate to investigate in any countries receiving EU Funds: that’s why it is essential to have a good network of reliable partners.


2 – Why OLAF needs to cooperate with partners from third countries:

 On a global scale, control bodies are facing the same type of problems: sharing information and experiences can only bring added-value to the work of all organisations.

 The cooperation allows for a win-win situation: for EU citizens funding the EU Budget and the direct beneficiaries receiving EU aid.

 OLAF focuses on building an African network of cooperation: OLAF has strong links with Morocco, Senegal and Benin, as well as the African Development Bank and the African Union.


Concretely, cooperation means that:

 OLAF and its partners meet on a yearly basis in the framework of “the Pilot Group” to discuss issues and priorities relating to the cooperation, training etc.

 There may be joint investigations, assistance whenever necessary.

 Cooperation also means that information that may be of interest to OLAF or the Partner is exchanged between both.


3 – OLAF and South Africa

 OLAF has had in the past good cooperation with the Scorpions and signed an Administrative Cooperation Arrangement with the National Prosecuting Authority in 2008. However, in the last 2 years or so, OLAF has unfortunately not been able to establish any strong contact with the NPA to continue this cooperation.

 It is important for OLAF to have a strong partnership with SA given that it is a key regional player and in light of the amount of EU funds it receives.

 OLAF is currently assessing one file to determine whether to open an investigation. If it does, OLAF would like to use this as an opportunity to develop cooperation. That may be via the NPA or other actors such as the SAPS should you (address to the 2 representatives of SAPS) be interested, or any another control body.


5 – Possible deliverables

 If cooperation is reactivated, OLAF would consider inviting SA counterparts to the next Pilot Group meeting in 2012.

 OLAF is open to discuss any assistance that may be needed, including training, and facilitating contacts with Europol/Eurojust.

 Once a partner is identified, OLAF would be keen to organise a video conference for a first detailed discussion on such a possibility of cooperation.




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