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The ACP-EU Water Facility

In 2004 the European Commission created the ACP-EU Water Facility which aims at achieving the Millennium Development Goal targets in the water sector.

The Water Facility:

  • combines EIB loans with grants
  • involves the EIB much earlier in the project cycle, hence improving project preparation
  • allows the EIB to support innovative project design and implementation, ensuring that the benefits of the project reach poorer and more vulnerable communities

Results from the first call for projects under the facility have led EIB and EU to set up the EIB/ACP water sector Project Preparation Facility. This facility aims to help the Bank to better prepare new water projects, increase lending volume, improve project quality and sustainability and facilitate the use of innovative financing mechanisms.

The EIB’s objectives in water and sanitation projects are:

  • quality of life, health and environmental development
  • sustainability of the project and good service at least cost
  • affordability and cost effectiveness
  • developing managerial capabilities

Following the creation of the ACP-EU Water Facility, the EIB has been able to develop its approach to financing projects in the sector. The Bank’s thorough appraisal process is being continued, notably to account for projects’ cost recovery, through appropriate technology and tariff setting.