The European Union will increase the EU-Africa Infrastructure Fund, giving hopes that projects like the Kenya-Ethiopia electricity interconnection will continue to receive funding. The EU is a major financier of power and telecommunications projects in Africa says the Business Daily.
The fund will be increased by an equivalent of Sh50 billion by next year. Kenya plans to interconnect its grid with that of Ethiopia in order to draw power from that country by end of next year. The electricity will ease local shortage. Part of it will be re-exported to other East Africa member countries.
It is part of the EU plans to help Africa to improve its infrastructure including roads and electricity generation to ease the cost of doing business and increase the competitiveness of African products in the global market. Supporting development in Africa is part of conditions for Africa to sign a new trade deal with EU known as the Economic Partnership Agreements (EPA). Another condition is to support regional cooperation institutions. That is why some of the projects that have been financed cut across many countries.
One of the cross-country projects that has been financed is the East African Submarine Cable System (EASSy), a 10,000 km fibre optic submarine cable along the East African coast, linking Sudan to South Africa with landings at points in Djibouti, Somali, Kenya, Tanzania, Madagascar, Mozambique, Mayotte, and the Comoros.
The new deal, if agreed on, will guarantee Africa unrestricted access to the EU market but unlike the previous deal that expired in 2007, African countries must progressively open up their markets to EU products and services.
Mr Stefano Manservisi, the European Commission Director General for Development, said in an interview that the fund would be increased by 500 million Euros (about Sh50 billion) between now and next year. Since it was set up by the African Union and the EU in 2007, the fund has spent 2.5 billion Euros (about Sh250 billion) to support several transport, energy, water and ICT projects. The projects are financed through loans and grants.
“We want to increase our blending of low interest loans and grants to ensure that we improve our capacity to finance projects of higher value,” said Mr Manservisi.