Part 4. Development Finance Cooperation
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The objectives of development finance cooperation shall be, through the provision of adequate financial resources and appropriate technical assistance, to support and promote the efforts of ACP States to achieve the objectives set out in this Agreement on the basis of mutual interest and in a spirit of interdependence.
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Development finance cooperation shall be implemented on the basis of and be consistent with the development objectives, strategies and priorities established by the ACP States, at both national and regional levels. Their respective geographical, social and cultural characteristics, as well as their specific potential, shall be taken into account. In addition, cooperation shall:
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promote local ownership at all levels of the development process;
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reflect a partnership based on mutual rights and obligations;
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emphasise the importance of predictability and security in resource flows, granted on highly concessional terms and on a continuous basis;
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be flexible and appropriate to the situation in each ACP State as well as adapted to the specific nature of the project or programme concerned; and
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ensure efficiency, coordination and consistency.
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Cooperation shall ensure special treatment for LDC ACP countries and duly take into account the vulnerability of landlocked and island ACP countries. In addition, the specific needs of post-conflict countries shall also be addressed.
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Operations financed within the framework of this Agreement shall be implemented by the ACP States and the Community in close cooperation, the concept of equality between the partners being recognised.
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The ACP States shall be responsible for:
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defining the objectives and priorities on which the indicative programmes are based;
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choosing projects and programmes;
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preparing and presenting the dossiers of projects and programmes;
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preparing, negotiating and concluding contracts;
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implementing and managing projects and programmes; and
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maintaining projects and programmes.
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Without prejudice to the provisions above, eligible non State actors may also be responsible for proposing and implementing programmes and projects in areas concerning them.
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The ACP States and the Community shall be jointly responsible for:
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establishing, within the joint institutions, the guidelines for development finance cooperation;
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adopting the indicative programmes;
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appraising projects and programmes;
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ensuring equality of conditions for participation in invitations to tender and contracts;
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monitoring and evaluating the effects and results of projects and programmes; and
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ensuring the proper, prompt and efficient execution of projects and programmes.
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The Community shall be responsible for taking financing decisions on projects and programmes.
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Unless otherwise provided for in this Agreement, all decisions requiring the approval of either Party shall be approved, or be deemed approved, within 60 days of notification by the other Party.
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The following entities or bodies shall be eligible for financial support provided under the Agreement:
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ACP States;
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regional or inter-State bodies to which one or more ACP States belong, including bodies with non-ACP State members, which are authorised by those ACP States; and
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joint bodies set up by the ACP States and the Community to pursue certain specific objectives.
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Subject to the agreement of the ACP State or ACP States concerned, the following shall also be eligible for financial support:
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national and/or regional public or semi-public agencies and departments of ACP States, including Parliaments, and, in particular, their financial institutions and development banks;
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companies, firms and other private organisations and private operators of ACP States;
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enterprises of a Community Member State to enable them, in addition to their own contribution, to undertake productive projects in the territory of an ACP State;
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ACP or Community financial intermediaries providing, promoting and financing private investments in ACP States; and
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local decentralised authorities from ACP States and the Community; and
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developing countries that are not part of the ACP Group where they participate in a joint initiative or regional organisation with ACP States.
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Non-State actors from ACP States and the Community which have a local character shall be eligible for financial support provided under this Agreement, according to the modalities agreed in the national and regional indicative programmes.
Within the framework of the priorities established by the ACP State or States concerned at both national and regional levels, support may be given to projects, programmes and other forms of operations contributing to the objectives set out in this Agreement.
The scope of financing may include, inter alia, depending on the needs and thePage 42 types of operation considered most appropriate, support to:
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measures which contribute to attenuate the debt burden and balance of payments problems of the ACP countries;
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macroeconomic and structural reforms and policies;
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mitigation of adverse effects of instability in export earnings;
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sectoral policies and reforms;
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institutional development and capacity building;
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technical cooperation programmes; and
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humanitarian and emergency assistance including assistance to refugees and displaced persons, short term rehabilitation measures and disaster preparedness.
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The nature of financing shall, inter alia, include:
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projects and programmes;
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credit lines, guarantee schemes and equity participation;
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budgetary support, either directly, for the ACP States whose currencies are convertible and freely transferable, or indirectly, from counterparts funds generated by the various Community instruments;
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the human and material resources necessary for effective administration and supervision of projects and programmes;
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sectoral and general import support programmes which may take the form of:
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sectoral import programmes through direct procurement including financing of inputs in the productive system and supplies to improve social services;
ii) sectoral import programmes in the form of foreign exchange released in instalments for financing sectoral imports; and
iii) general import programmes in the form of foreign exchange released in instalments for financing general imports covering a wide range of products.
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Direct budgetary assistance in support of macroeconomic or sectoral reforms shall be granted where:
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public expenditure management is sufficiently transparent, accountable and effective;
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well defined macroeconomic or sectoral policies established by the country itself and agreed to by its main donors are in place; and
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public procurement is open and transparent.
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Similar direct budgetary assistance shall be granted gradually to sectoral policies in substitution for individual projects.
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The instruments of import programmes or budgetary support defined above can also be used to support eligible ACP States implementing reforms aimed at intra-regional economic liberalisation which generate net transitional costs.
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In the framework of the Agreement, the European Development Fund (hereinafter referred to as the Fund) including counterpart funds, unexpended balance from previous Funds, own resources of the European Investment Bank (hereinafter referred to as the Bank) and where appropriate resources drawn from the European Community's budget, shall be used to finance projects, programmes and other forms of operations contribut-Page 43ing to the achievement of the objectives of this Agreement.
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The funds provided under the Agreement may be used to cover the total costs of both the local and foreign expenditure of projects and programmes, including recurrent cost financing.
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For the purposes set out in this Agreement, the overall amount of the Community's financial assistance and the detailed terms and conditions of financing are provided for in the Annexes to this Agreement.
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Should an ACP State fail to ratify this Agreement or denounce it, the Parties shall adjust the amounts of the resources provided for in the Financial Protocol set out in Annexe I. Adjustment of the financial resources shall also apply upon:
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the accession to the Agreement of new ACP States which did not take part in its negotiation; and
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the enlargement of the Community.
The methods of financing for each project or programme shall be determined jointly by the ACP State or States concerned and the Community by reference to:
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the level of development, the geographical situation and economic and financial circumstances of these States;
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the nature of the project or programme, its economic and financial return as well as its social and cultural impact; and
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in the case of loans, factors guaranteeing their servicing.
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Financial assistance may be made available to or through the ACP States concerned or, subject to the provisions of this Agreement through eligible financial institutions or directly to any other eligible beneficiary. Where financial assistance is granted to the final recipient through an intermediary or directly to the final beneficiary in the private sector:
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the terms and conditions on which the assistance may be made available by the intermediary to the final recipient or directly to the final beneficiary in the private sector shall be laid down in the financing agreement or loan contract; and
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any financial benefit accruing to the intermediary from the on lending transaction or resulting from direct lending operations to the final beneficiary in the private sector, shall be used for development purposes on the conditions laid down in the financing agreement or the loan contract, after taking into account administrative costs, exchange and financial risks and the cost of technical assistance given to the final recipient.
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Where the financing is undertaken through an on-lending body based and/or operating in the ACP States, it shall be the responsibility of that body to select and appraise individual projectsPage 44 and to administer the funds placed at its disposal under the conditions provided for in this Agreement and by mutual agreement between the Parties.
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The financial resources provided for in this Agreement may be applied, at the request of the ACP States, to co-financing undertaken in particular with development agencies and institutions, Community Member States, ACP States, third countries or international or private financial institutions, firms or export credit agencies.
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Special consideration shall be given to the possibility of co-financing in cases where Community participation will encourage the participation of other sources of finance and where such financing may lead to an advantageous financial package for the ACP State concerned.
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Co-financing may be in the form of joint or parallel financing. Preference shall be given in each case to the solution, which is more suitable from the point of view of cost effectiveness. In addition, measures shall be taken to coordinate and harmonise operations of the Community and those of other co-financing bodies in order to minimise the number of procedures to be undertaken by the ACP States and to render those procedures more flexible.
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The process of consultation and coordination with other donors and co-financiers should be strengthened and developed, where possible, through the establishment of co-financing framework agreements and co-financing policies and procedures should be reviewed to ensure effectiveness and the best terms and conditions possible.
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In order to attenuate the debt burden of the ACP States and their balance-of-payment problems, the Parties agree to use the resources provided for in this Agreement to contribute to debt relief initiatives approved at international level for the benefit of ACP countries. In addition, on a case by case basis, the use of resources which have not been committed in the framework of past indicative programmes shall be accelerated through the quick disbursing instruments provided for in this Agreement. The Community furthermore commits itself to examine how in the longer term other resources than the EDF can be mobilised in support of internationally agreed debt relief initiatives.
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At the request of an ACP State, the Community may grant:
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assistance in studying and finding practical solutions to indebtedness including domestic debt, debt-servicing difficulties and balance of payments problems;
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training in debt management and international financial negotiations as well as support for training workshops, courses and seminars in these fields; and
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assistance to develop flexible techniques and instruments of debt management.
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In order to contribute to the servicing of the debt resulting from loans from the Bank's own resources, special loans and risk capital, the ACP States may, in accordance with arrangements to be made on a case by case basis with the Commission, use the available foreign currency referred to in this Agreement for such servicing, as and when debt repayment falls due and up to thePage 45 amount required for payments in national currency.
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Given the seriousness of the international debt problem and its impact on economic growth, the Parties declare their readiness to continue to exchange views, within the context of international discussions, on the general problem of debt, and without prejudice to specific discussions taking place in the relevant fora.
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The Agreement shall provide support for macroeconomic and sectoral reforms implemented by the ACP States. In this framework, the Parties shall ensure that adjustment is economically viable and socially and politically bearable. Support shall be given in the context of a joint assessment between the Community and the ACP State concerned on the reform measures being undertaken or contemplated either at macroeconomic or sectoral level, and permit an overall evaluation of the reform efforts. Quick disbursement shall be an important feature of support programmes.
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The ACP States and the Community recognise the necessity to encourage reform programmes at regional level ensuring that, in the preparation and execution of national programmes, due consideration is given to regional activities which have an influence on national development. To this end, support for structural adjustment shall also seek to:
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incorporate, from the beginning of the diagnosis, measures to encourage regional integration and take account of the consequences of trans border adjustment;
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support the harmonisation and coordination of macroeconomic and sectoral policies, including fiscal and customs areas, so as to fulfil the dual aim of regional integration and of structural reform at national level; and
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take account of the effects of net transitional costs of regional integration on budget revenue and balance of payments, either through general import programmes or budgetary support.
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ACP States undertaking or contemplating reform at the macroeconomic or sectoral level shall be eligible for structural adjustment assistance, giving consideration to the regional context, their effectiveness and the likely impact on the economic, social and political dimension of development and on economic and social hardships being experienced.
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The ACP States undertaking reform programmes that are acknowledged and supported at least by the principal multilateral donors, or that are agreed with such donors but not necessarily financially supported by them, shall be treated as having automatically satisfied the requirements for adjustment assistance.
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Structural adjustment support shall be mobilised in a flexible manner and in the form of sectoral and general import programmes or budgetary support.
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The preparation, appraisal and financing decision for structural adjustment programmes shall be carried out according to the provisions on implementation procedures of this Agreement with due regard to the quick disbursing feature of structural adjustment programmes. On a case-by-case basis, retroactive financing of a limited part of imports of ACP-EC origin may be permissible.
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The implementation of each support programme shall ensure that the eligibility of ACP economic operators for access to the resources of the programme is as wide and transparent as possible and that the procurement procedures accord with the administrative and commercial practices in the State concerned, while ensuring the best possible price/quality ratio on imported goods and the necessary consistencyPage 46 with the progress achieved internationally for harmonising the procedures for supporting structural adjustment.
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The Parties recognise that instability of export earnings, particularly in the agricultural and mining sectors, may adversely affect the development of the ACP States and jeopardise the attainment of their development requirements. A system of additional support in order to mitigate the adverse effects of any instability in export earnings, including in the agricultural and mining sectors, is therefore set up within the financial envelope for support to long-term development.
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The purpose of support in cases of short-term fluctuations in export earnings is to safeguard socio-economic reforms and policies that could be affected negatively pas a result of a drop in revenue and to remedy the adverse effects of instability of export earnings, in particular from agricultural and mining products.
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The extreme dependence of the ACP States' economies on exports, in particular from the agricultural and mining sectors, shall be taken into account in the allocation of resources in the year of application. In this context, the least developed, landlocked and island, post conflict and post natural disaster ACP States shall receive more favourable treatment.
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The additional resources shall be provided in accordance with the specific modalities of the support mechanism as set out in Annexe II on Terms and Conditions of Financing.
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The Community shall also provide support for market based insurance schemes designed for ACP States seeking to protect themselves against the risk of fluctuations in export earnings.
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Cooperation shall support, through the various instruments and modalities provided for in the Agreement:
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social and economic sectoral policies and reforms;
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measures to enhance productive sector activity and export competitiveness;
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measures to expand social sector services; and
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thematic and cross cutting issues.
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This support shall be provided as appropriate through:
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sectoral programmes;
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budgetary support;
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investments;
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rehabilitation;
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training;
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technical assistance; and
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institutional support.
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In order to respond to the needs of local communities with regard to development, and to encourage all agents of decentralised cooperation which are in a position to contribute to the autonomous development of the ACP States to put forward and implement initiatives, cooperation shall support, within the framework laid down in the rules and national legislation of the ACP States concerned and the provisions of the indicative programme, such development operations. In this context, cooperation shall support:
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micro projects at local level which have an economic and social impact on the life of the people, meet a demonstrated and observed priority need, and shall be undertaken at the initiative and with the active participation of the local community which shall benefit there-from; and
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decentralised cooperation, in particular where such operations combine efforts and resources of decentralised agents from the ACP States and their counterparts from the Community. This form of cooperation shall enable the mobilisation of capabilities, innovative operating methods and resources of decentralised agents for the development of the ACP State.
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Microprojects and decentralised cooperation operations may be supported from the financial resources of the Agreement. Projects or programmes under this form of cooperation may or may not be linked to programmes in the sectors of concentration of the indicative programmes, but may be a way of achieving the specific objectives of the indicative programme or the results of initiatives by local communities or decentralised agents.
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Contributions for the financing of micro-projects and decentralised cooperation shall be made by the Fund, in which case the contribution shall not normally exceed three quarters of the total cost of each project and may not exceed the limit set in the indicative programme. The remaining balance shall be provided:
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by the local community concerned in case of micro-projects (either in kind or in the form of services or cash and adapted to its capacity to contribute);
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by the agents of decentralised cooperation, provided that the financial, technical, material and other resources brought in by such agents shall not normally be less than 25% of the estimated cost of the project/programme; and
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exceptionally by the ACP State concerned, either in the form of a financial contribution or through the use of public equipment or the supply of services.
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The procedures applicable to projects and programmes financed within the framework of microprojects or decentralised cooperation shall be those laid down in the Agreement, in particular those referred to in multi-annual programmes.
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Humanitarian and emergency assistance shall be accorded to the population in ACP States faced with serious economic and social difficulties of an exceptionalPage 48 nature resulting from natural disasters, man made crises such as wars and other conflicts or extraordinary circumstances having comparable effects. The humanitarian and emergency assistance shall be maintained for as long as necessary to deal with the emergency needs resulting from these situations.
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Humanitarian and emergency assistance shall be granted exclusively according to the needs and interests of victims of disasters and in line with the principles of international humanitarian law. In particular, there shall be no discrimination between victims on grounds of race, ethnic origin, religion, gender, age, nationality or political affiliation and free access to and protection of victims shall be guaranteed as well as the security of humanitarian personnel and equipment.
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Humanitarian and emergency assistance shall aim to:
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safeguard human lives in crises and immediate post crisis situations brought about by natural disasters, conflict or war;
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contribute to the financing and delivery of humanitarian aid and to the direct access to it of its intended beneficiaries by all logistical means available;
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carry out short term rehabilitation and reconstruction to enable the parts of the population affected to benefit once more from a minimum of socio-economic integration and, as soon as possible, create the conditions for a resumption of development on the basis of long term objectives set by the ACP country concerned;
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address the needs arising from the displacement of people (refugees, displaced persons and returnees) following natural or man-made disasters so as to meet, for as long as necessary, all the needs of refugees and displaced persons (wherever they may be) and facilitate action for their voluntary repatriation and re-integration in their country of origin; and
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assist the ACP State in setting up disaster prevention and preparedness mechanisms, including prediction and early-warning systems, with a view to reducing the consequences of disasters.
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Similar assistance, as set out above, may be granted to ACP States taking in refugees or returnees to meet acute needs not covered by emergency assistance.
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Underlining the developmental nature of the assistance granted in accordance with this Article, assistance may be used exceptionally together with the indicative programme at the request of the State concerned.
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Humanitarian and emergency assistance operations shall be undertaken either at the request of the ACP country affected by the crisis situation, the Commission, international organisations or local or international non State organisations. Such assistance shall be administered and implemented under procedures permitting operations that are rapid, flexible and effective. The Community shall take adequate steps to facilitate speedy action, which is required to meet the immediate needs for which emergency assistance is needed.
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Post emergency action, aimed at physical and social rehabilitation consequent on the results of natural disasters or extraordinary circumstances having comparable effects, may be undertaken with Community assistance under this Agreement. Such action, using effective and flexible mechanisms, must ease the transition from the emergency phase to the development phase, promote the socio-economic reintegration of the parts of the population affected,Page 49 remove as far as possible the causes of the crisis and strengthen institutions and the ownership by local and national actors of their role in formulating a sustainable development policy for the ACP country concerned.
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Short term emergency action shall only in exceptional circumstances be financed under the Fund where such assistance cannot be financed from the Community's budget.
Cooperation shall, through financial and technical assistance, support the policies and strategies for investment and private sector development as set out in this Agreement.
The ACP States, the Community and its Member States, within the scope of their respective competencies, recognising the importance of private investment in the promotion of their development cooperation and acknowledging the need to take steps to promote such investment, shall:
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implement measures to encourage participation in their development efforts by private investors who comply with the objectives and priorities of ACP-EC development cooperation and with the appropriate laws and regulations of their respective States;
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take measures and actions which help to create and maintain a predictable and secure investment climate as well as enter into negotiations on agreements which will improve such climate;
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encourage the EU private sector to invest and to provide specific assistance to its counterparts in the ACP countries under mutual business cooperation and partnerships;
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facilitate partnerships and joint ventures by encouraging co financing;
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sponsor sectoral investment fora to promote partnerships and external investment;
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support efforts of the ACP States to attract financing, with particular emphasis on private financing, for infrastructure investments and revenue generating infrastructure critical for the private sector;
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support capacity building for domestic investment promotion agencies and institutions involved in promoting and facilitating foreign investment;
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disseminate information on investment opportunities and business operating conditions in the ACP States; and
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promote national, regional and ACPEU private sector business dialogue, cooperation and partnerships, in particular through an ACP-EU private sector business forum. Support for operations of an ACP-EU private sector business forum shall be provided in pursuit of the following objectives:
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to facilitate dialogue within the ACP/ EU private sector and between the ACP/EU private sector and the bodies established under the Agreement;
ii) to analyse and periodically provide the relevant bodies with information on the whole range of issues concerning relations between the ACP and EU private sectors in the context of the Agreement or, more generally, of economic relations between the Community and the ACP countries; and
iii) to analyse and provide the relevant bodies with information on specific problems of a sectoral nature relatingPage 50 to, inter alia, branches of production or types of products at regional or sub-regional level.
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Cooperation shall provide long-term financial resources, including risk capital, to assist in promoting growth in the private sector and help to mobilise domestic and foreign capital for this purpose. To this end, cooperation shall provide, in particular:
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grants for financial and technical assistance to support policy reforms, human resource development, institutional capacity-building or other forms of institutional support related to a specific investment, measures to increase the competitiveness of enterprises and to strengthen the capacities of the private financial and non-financial intermediaries, investment facilitation and promotion and competitiveness enhancement activities;
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advisory and consultative services to assist in creating a responsive investment climate and information base to guide and encourage the flow of capital;
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risk capital for equity or quasi-equity investments, guarantees in support of domestic and foreign private investment and loans or lines of credit on the conditions laid down in Annexe II "Terms and Conditions of Financing" to this Agreement; and
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loans from the Bank's own resources.
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Loans from the Bank's own resources shall be granted in accordance with its statute and with the terms and conditions laid down in Annexe II to this Agreement.
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Investment guarantees are an increasingly important tool for development finance as they contribute to reducing project risks and inducing private capital flows. Cooperation shall therefore ensure the increasing availability and use of risk insurance as a risk mitigating mechanism in order to boost investor confidence in the ACP States.
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Cooperation shall offer guarantees and assist with guarantees funds covering risks for qualified investment. Specifically, cooperation shall provide support to:
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reinsurance schemes to cover foreign direct investment by eligible investors; against legal uncertainties and the major risks of expropriation, currency transfer restriction, war and civil disturbance, and breach of contract. Investors may insure projects for any combination of the four types of coverage;
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guarantee programmes to cover risk in the form of partial guarantees for debt financing. Both partial risk and partial credit guarantee shall be available; and
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national and regional guarantee funds, involving, in particular, domestic financial institutions or investors for encouraging the development of the financial sector.
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Cooperation shall also provide support to capacity-building, institutional support and participation in the core funding of national and/or regional initiatives to reduce the commercial risks for investors (inter alia guarantee funds, regulatory bodies, arbitration mechanisms and judiciary systems to enhance the protection of investments improving the export credit systems).
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Cooperation shall provide such support on the basis of complementary and added value with respect to private and/or public initiatives and, whenever feasible, in partnership with private and other public organisations. The ACP and the EC will within the framework of the ACP-EC Development Finance Cooperation Committee undertake a joint study on the proposal to set up an ACP-EC Guarantee Agency to provide and manage investment guarantee programmes.
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The ACP States and the Community and its Member States, within the scope of their respective competencies, affirm the need to promote and protect either Party's investments on their respective territories, and in this context affirm the importance of concluding, in their mutual interest, investment promotion and protection agreements which could also provide the basis for insurance and guarantee schemes.
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In order to encourage European investment in development projects of special importance to, and promoted by the ACP States, the Community and the Member States, on the one hand and the ACP States on the other, may also conclude agreements relating to specific projects of mutual interest where the Community and European enterprises contribute towards their financing.
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The Parties also agree to introduce, within the economic partnership agreements, and while respecting the respective competencies of the Community and its Member States, general principles on protection and promotion of investments, which will endorse the best results agreed in the competent international fora or bilaterally.
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Technical cooperation shall assist the ACP States in the development of national and regional manpower resources, the sustained development of the institutions critical for development success, including inter alia strengthening ACP consulting firms and organisations, as well as exchange arrangements involving consultants from both ACP and EU firms.
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Furthermore, technical cooperation, shall be cost-effective and relevant to the need for which it is intended, and shall also favour the transfer of knowhow and increase national and regional capabilities. Technical cooperation shall contribute to the achievement of project and programme goals, including efforts to strengthen management capacity of the National and Regional Authorising Officers. Technical assistance shall:
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be demand driven and thus made available only at the request of the ACP State or States concerned, and adapted to recipient needs;
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complement and support ACP efforts to identify their own requirements;
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be monitored and followed up to guarantee effectiveness;
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encourage the participation of ACP experts, consultancy firms and educational and research institutions in contracts financed from the Fund and identify ways of employing qualified national and regional personnel on Fund projects;
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encourage the secondment of ACP national cadres as consultants to an institution in their own country, or aPage 52 neighbouring country, or to a regional organisation;
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aim at developing knowledge of national and regional manpower constraints and potential and establish a register of ACP experts, consultants and consultancy firms suitable for employment on projects and programmes financed from the Fund;
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support intra ACP technical assistance in order to promote the exchange between the ACP States of technical assistance, management and professional expertise;
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develop action programmes for long term institution building and staff development as an integral part of project and programme planning, account being taken of the necessary financial requirements;
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support arrangements to enhance the capacity of the ACP States to build up their own expertise; and
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give special attention to the development of the ACP States' capacities in project planning, implementation and evaluation, as well budget management.
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Technical assistance may be provided in all areas of cooperation and within the limits of the mandate of this Agreement. The activities covered would be diverse in scope and nature, and would be tailored to meet the needs of the ACP States.
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Technical cooperation may be either of a specific or a general nature. The ACPEC Development Finance Cooperation Committee shall establish the guidelines for the implementation of technical cooperation.
With a view to reversing the brain drain from the ACP States, the Community shall assist ACP States which so request to facilitate the return of qualified ACP nationals resident in developed countries through appropriate re-installation incentives.
Management procedures shall be transparent, easy to apply and shall enable the decentralisation of tasks and responsibilities to the field. The implementation of ACP-EU development cooperation shall be open to non-State actors in areas that concern them. The detailed procedural provisions for programming, preparation, implementation and the management of financial and technical cooperation are laid down in Annexe IV on Implementation and Management Procedures. The Council of Ministers may review, revise and amend these provisions on the basis of a recommendation from the ACP-EC Development Finance Cooperation Committee.
For the implementation of financial and technical cooperation under this Agreement, executing agents are designated. Detailed provisions for the responsibilities of the executing agents are laid down in Annexe IV on Implementation and Management Procedures.
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The Council of Ministers shall at least once a year examine whether the objectives of development finance cooperation are being attained and shall examine the general and specific problems resulting from the implementation of that cooperation. To this end, an ACP-EC Development Finance Cooperation Committee, hereinafter referred to as "the ACP-EC Committee", shall be set up within the Council of Ministers.
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The ACP-EC Committee shall, inter alia:
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ensure the overall achievement of the objectives and principles of development finance cooperation and establish general guidelines for their effective and timely implementation;
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examine the problems arising from the implementation of development cooperation activities and propose appropriate measures;
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review the annexes to the Agreement to ensure their continued relevance and recommend any appropriate amendments to the Council of Ministers for approval; and
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examine the operations deployed within the framework of the Agreement to attain the objectives of promoting private sector development and investment and the operations of the Investment Facility.
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The ACP-EC Committee, which shall meet every quarter, shall be composed, on a basis of parity, of representatives of the ACP States and of the Community, or their authorised representatives. It shall meet at ministerial level whenever one of the parties so requests and at least once a year.
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The Council of Ministers shall lay down the ACP-EC Committee's rules of procedure, in particular the conditions for representation and the number of members of the Committee, the detailed arrangements for their deliberations and the conditions for holding the chair.
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The ACP-EC Committee may convene meetings of experts to study the cause of any difficulties and bottlenecks, which may impede the efficient implementation of development cooperation. These experts shall make recommendations to the Committee on possible ways of removing such difficulties and bottlenecks.
