FEMIP:
Financing in Algeria, Egypt, Gaza/West Bank, Israel, Jordan, Lebanon,
Morocco, Syria, Tunisia and Turkey
• Financing the private sec tor in the Mediterranean par tner countries • Financing the private sec tor in the Mediterranean par tner countries
Private sector
in the Mediterranean partner countries
The Barcelona Declaration adopted on
28 November 1995 at the Euro-Mediterra-
nean Conference of Foreign Affairs Ministers
gave fresh impetus to relations between the
European Union and its neighbours on the
southern and eastern shores of the Mediter-
ranean. On the economic front, the goal is to
create a free-trade zone – meaning an area
of shared prosperity – by 2010. With this in
view, the Mediterranean partner countries are
committed to modernising their economies,
a vital prerequisite to establishing sustainable
Lending to the private sector
1995-2004: EUR 4.6 billion
Global Loans
Energy
(45%)
(16%)
Transport
(8%)
Services
(2%)
Industry
(29%)
FEMIP
Since October 2002, the European Investment Bank (EIB)’s operations in
the Mediterranean partner countries(1) have been brought together under the
Facility for Euro-Mediterranean Investment and Partnership (FEMIP).
FEMIP represents a milestone in the financial partnership between the European
Union and its Mediterranean neighbours, which goes back more than thirty
years and was intensified in the 1990s to underpin the Barcelona Process. In
line with the Wider Europe-Neighbourhood Policy, FEMIP aims to help the
Mediterranean partner countries meet the challenges of economic and social
modernisation and regional integration, particularly in the run-up to the crea-
tion of a customs union with the European Union by 2010.
Against this backdrop, FEMIP gives priority to financing private sector
ventures, whether local initiatives or foreign direct investment. In order to
create an enabling environment for the development of private enterprise,
FEMIP also supports infrastructure projects, investment in human capital and
schemes specifically targeting environmental protection.
To this end, FEMIP operations primarily involve three types of product:
loans, investment capital (equity and quasi-equity) and technical assistance
grants.
FEMIP also endeavours to promote greater dialogue with all those involved
in the Euro-Mediterranean financial partnership, both on the institutional
front and with the representatives of the private sector and civil society.
1
Algeria, Egypt, Gaza/West Bank, Israel, Jordan, Lebanon, Morocco, Syria, Tunisia and Turkey.
Financing the private sec tor in the Mediterranean par tner countries • Financing the private sec tor in the Mediterranean par tner countries •

Example: FEMIP provides active backing for

Tunisia’s efforts

Tunisia has opted to forge a strong economic partnership

with the EU, drawing in particular on FEMIP’s support
for the development of a more open economy. Since 1995,
over EUR 500 million has thereby been channelled into
setting up and modernising enterprises in the agri-food,
industrial and tourism sectors as well as into agricultural
development.

FEMIP has provided finance in the form of long-term

credit lines to carefully selected financial intermediaries
and risk capital (over EUR 70 million has been com-
mitted in this way in Tunisia) for the medium and long-
term financing of manufacturing and service companies
undergoing restructuring (upgrading) and investing in
the growth or modernisation of their businesses. In addition, FEMIP has given strong backing to the privatisation
programme implemented by the government, while at the same time providing extensive assistance with the creation
of new financing structures such as investment funds and risk capital investment companies.

growth and an enabling environment

for investment and entrepreneurship.
Only the development of new private
sector initiatives and the modernisa-
tion of existing companies will generate
the five million jobs each year needed
to provide the new entrants into the
labour market with employment op-
portunities. FEMIP is the financing in-
strument serving this objective.

To this end, FEMIP has revamped its

operational structures and strength-
ened its resources, notably by open-
ing representative offices fostering an
enhanced presence on the ground in
tune with promoters’ needs. It has also
expanded the gamut of its support
tools, for example by creating a “special
envelope” allowing it to begin building
• Financing the private sec tor in the Mediterranean par tner countries • Financing the private sec tor in the Mediterranean par tner countries

Growth of financing for the private sector tially modest, with an annual volume in this sector equivalent to
EUR 15 million, they grew to an average of over EUR 900 million in
EUR million
2003 and 2004.
1000

800
FEMIP loans to the private sector break down as follows:

600
• EUR 2.6 billion (56% of the total for the private sector) served
400 to finance the expansion of private companies, through foreign
direct investment (Egypt, Jordan, Morocco, Tunisia, Turkey), and
200 joint ventures between promoters from Mediterranean partner
0
countries (Algeria). Of this total, 29% went to industry, 16% to
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 the energy sector, 8% to the transport sector and the remainder
to services;

links with local intermediaries that have hitherto not had access
to its financing or by providing technical assistance for identifying
projects and monitoring ventures financed throughout their life.
With financing worth EUR 4.6 billion put in place since 1995, cor-
responding to nearly one third of its operations, FEMIP underpins
the growth of private enterprise – whether through foreign direct
investment, support for joint ventures between Mediterranean
partner country promoters or finance for SMEs.
Lending has also focused on infrastructure projects, including the
creation of modern industrial parks, as well as transport, telecom-
munications, energy and environmental schemes fostering private
sector development.
The Bank’s first operations in the Mediterranean region, and more
particularly in support of the private sector, go back to 1978. Ini-
• EUR 2 billion (44% of the total for the private sector) facilitated
the financing of small and medium-sized enterprises (SMEs). In
virtually all the Mediterranean countries, FEMIP has deployed its
global loans in cooperation with local partner banks specialising
in SME finance. Such loans have supported almost a thousand
small-scale productive ventures in industry and tourism, generat-
ing around 50 000 jobs.
To encourage private sector development and promote joint
ventures between local and European operators, FEMIP also pro-
vides risk capital finance. This activity targets local venture capital
companies supplying equity for start-up and high-growth SMEs.
FEMIP support consists of the acquisition of equity stakes in such
companies with risk capital, possibly coupled with medium and
long-term FEMIP loans to underpin their growth. Since 1995, some
EUR 300 million in risk capital has been made available, mainly in
the form of global loans to local banks for setting up or consolidat-
 ISBN 92-861-0335-2
Sustained support
for the private sector

Financing the private sec tor in the Mediterranean par tner countries • Financing the private sec tor in the Mediterranean par tner countries •

ing the development of around 1 000 new joint ventures, resulting

in the creation of over 25 000 jobs and mobilising more than EUR 1
billion of new investment.
EUROMED

Nevertheless, the private sector – a key factor in growth and job

creation – has not yet fully taken off. The aim should be to double
the volume of foreign investment in the region in order to make
a real impact and help it to catch up with the other emerging re-

© EIB 11/2005 – EN – QH-71-05-700-EN-C © EIB Photo Library

gions. Turning the trend around calls for efforts on both sides of the
Contacting FEMIP:
Mediterranean: the Mediterranean countries have to step up the
pace of economic reform, implement more stable macro-economic Operational contacts:
policies and make progress towards better governance; and Europe Claudio Cortese
Director, Mediterranean (FEMIP) Department
has to scale up the input of its know-how and resources, especially
3 (+352) 43 79 68 36 5 (+352) 43 79 68 98
through the financial support provided by FEMIP, the financial arm U c.cortese@eib.org
of this Euro-Mediterranean economic partnership.
General information and press contacts:
Helen Kavvadia
3 (+352) 43 79 31 34 5 (+352) 43 79 31 88
U h.kavvadia@eib.org

European Investment Bank

Total financing for the private sector 100, boulevard Konrad Adenauer
L-2950 Luxembourg
3 (+352) 43 79 1 5 (+352) 43 77 04
(as a proportion of total lending in the region)
www.eib.org/femip – U info@eib.org

FEMIP’s Headquarters
EUR million 4, rue Lou-Hemmer
2500 L-1748 Findel

External offices in the Mediterranean partner countries:

2000
Egypt:
6, Boulos Hanna Street
1500
Dokki, 12311 Giza
3 (+20-2) 336 65 83 5 (+20-2) 336 65 84
1000
Morocco:
Riad Business Center, immeuble S3, Aile sud, 4è étage
500 735 Boulevard Er-Riad
Rabat
0 3 (+212) 37 56 54 60 5 (+212) 37 56 53 93
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Tunisia:
70, avenue Mohamed V
TN-1002 Tunis
Total financing
3 (+216) 71 28 02 22 5 (+216) 71 28 09 98
Financing for the private sector