EU, SADC sign US$16.5m infrastructure agreement


Gaborone – The European Union (EU) and the Southern African Development Community (SADC) have signed a €12 million (US$16.5m) Contribution Agreement in EU funding to SADC for the operationilisation of the Project Preparation and Development Facility (SADC PPDF).

The agreement was signed in Botswana capital Gaborone on February 17, 2014. EU Press Officer, Bester Gabotlale, said the aim of the PPDF is to address challenges of adequate project preparation and development capacity, particularly in the infrastructure sector.

“SADC member states have identified economic infrastructure as constituting a critical element in accelerating economic growth and the reduction of poverty,” said Gabotlale.

He said the purpose of the PPDF is to assist SADC member states to and associated regional and national infrastructure development institutions to develop high quality, viable and feasible regional economic infrastructure projects.

Gabotlale said the projects would then be considered for financing through grants, concessionary loans, interest rate subsidies, bank guarantees, public and private equity investments or private sector commercial loans.

“The primary role of the PPDF is thus to provide resources aimed at project identification, feasibility studies, project preparation and the development of investment proposals with a view to making the projects bankable and attractive for funding,” said Gabotlale.

The main regional infrastructure sectors to be covered by the PPADF are energy, transport, information and communication technologies, water resources and tourism.

Gabotlale said that the PPDF is intended to be a demand-driven, quick-access and quick-disbursing facility that will expedite the SADC region’s integration agenda in line with the SADC Regional Infrastructure Development Master Plan.

He further explained that a Contribution Agreement is a financial instrument, which allows for funds transfer to the recipient organisation, according to its own rules and procedures.

These international standards are essential for any international organisation to enter into joint management agreements or Contribution Agreements with the EU.

The SADC Secretariat was formally recognised as compliant with the accepted international standards or good practice in the management of its internal systems, which made it possible to enter into Contribution Agreements with the EU.

SADC Deputy Executive Secretary for Regional Integration, Dr Thembinkosi Mhlongo, speaking at the signing ceremony of the Contribution Agreement on behalf of the SADC Secretariat, hailed the PPDF as a giant leap in the right direction stating that this “is a valuable step towards the implementation of the SADC Regional Infrastructure Development Master Plan, as infrastructure is the cornerstone of economic development and one of the key drivers of the regional integration and cooperation in the SADC region.”

Head of the EU Delegation to Botswana, who signed the agreement on behalf of EU, Gerard McGovern, said the EU was committed to cooperate with SADC in pursuit of its regional integration agenda.

“This programme will narrow the infrastructure deficit in the Southern African Region. This programme will narrow the infrastructure deficit in the SADC region. This progamme is a pragmatic response to the preparation of bankable regional infrastructure projects,” he said.

For the purposes of programme implementation and to carry out administration, management and disbursement of the SADC of PPDF funds, a memorandum of understanding was concluded between the SADC Secretariat and the Development Bank of Southern Africa. 

February 2014
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