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European Development Fund

European Development Fund (EDF) is the main instrument for European Union (EU) aid for development cooperation in Africa, the Caribbean, and Pacific (ACP Group) countries and the Overseas Countries and Territories (OCT) The Fund was established under Articles 131 and 136 of the Treaty of Rome on the European Economic Community as the Development Fund for Overseas Countries and Territories.

Its original purpose was to stimulate transformation in overseas territories (that were still colonised at that time and had historical links with the Netherlands, Belgium, France and Italy) and to support the development of trading between the Communities and those countries. At the moment, EDF is a non-budget instrument, financed by EU Member States. It follows its own financial rules and it is managed by the European Commission via the EDF Committee. The main objective of the Fund is to reduce poverty in ACP and OCT and to support actions for peace and safety, political stability and democracy in those states.

ACP Group member states

Editions of the European Development Fund

Since the creation of the first EDF (1959), each subsequent partnership agreement that outlines the framework for the cooperation with the EU to stimulate economic, social and cultural growth of ECP Group and OCT states required establishing another edition of EDF, except for the 1990 Lomé Convention that was binding for 10 years and involved two EDF editions and for the current Partnership Agreement between ACP Group and EU of June 2000 (Cotonou Agreement) made for 20 years, which will cover three EDF editions.

Under the Cotonou Agreement, the cooperation of the EU and the ACP Group and OCT countries focuses on reducing, and ultimately on eradicating poverty and on attaining the millennium development goals. Moreover, it is intended to contribute to peace and safety, political and democratic stability of ACP Group states. In order to ensure that the EU Member States comply with the obligations arising from the Cotonou Agreement as well as to ensure the necessary sources of financing for subsequent editions of EDF, the so-called internal agreements are drawn up.

EDF
Name

Duration

Convention Name

Funding

1. EDF

1959-1964

Convention on Overseas Territories

581 million EUA*

2. EDF

1964-1970

Jaunde I Convention

730 million EUA*

3. EDF

1970-1975

Jaunde II Convention

905 million EUA*

4. EDF

1975-1980

Lome I Convention

3 150 million EUA*

5. EDF

1980-1985

Lome II Convention

4 542 million ECU

6. EDF

1985-1990

Lome III Convention

7 500 million ECU

7. EDF

1990-1995

Lome IV Convention

10 940 million ECU

8. EDF

1995-2000

Lome IV Convention and
Revised Lome IV a Convention

13 132 million euro

9. EDF

2000-2007

Cotonou Agreement

13 500 million euro

10. EDF

2008-2013

Revised Cotonou Agreement

22 682 million euro

11. EDF

2014-2020

Revised Cotonou Agreement

30 506 million euro

* EUA - European Unit of Account

Financial resources of the 11th EDF

In line with the Cotonou Agreement, EDF aid is available to different entities from ACP Group and OCT, including regional or inter-regional organisations with at least one member from the ACP Group or OCT states, or at least one organisation operating in one of those states, as well as commercial entities, joint-ventures, established by ACP Group/OCT states and te EU. The projects financed under EDF are subject to open tenders organised by the European Commission, and the local or community enterprises have the pre-emptive right to participate in such tenders.

By joining the EU, Poland joined the ranks of countries that are currently donating over half of the Official Development Aid – ODA and tightly cooperate with other donors associated in OECD to implement the international development agenda shaped by the Millennium Development Goals. Therefore, Poland, like other EU Member States, is obliged to participate in financing EDF. During the pre-accession negotiations it was agreed that Poland will join EDF upon entering into force of the 2008-2013 financial perspective, and the payment were set to begin on 1 January 2011.

EDF Budget and Poland’s share

The key to Polish contribution to the 10th EDF 2008-2013 was established in the Internal Agreement between the Representatives of the Governments of the Member States of the European Union, meeting within the Council, on the financing of European Union aid under the multiannual financial framework for the period 2008-2013, in accordance with the ACP-EU Partnership Agreement, and on the allocation of financial assistance for the Overseas Countries and Territories to which Part Four of the Treaty on the Functioning of the European Union applies and amounts to 1,3%. It means that the Polish contribution to the 10th EDF was EUR 294,866,000.

Member States' contributions to the EDF

For the purposes of the 11th edition of EDF 2014-2020 the Internal Agreement between the Representatives of the Governments of the Member States of the European Union, meeting within the Council, on the financing of European Union aid under the multiannual financial framework for the period 2014-2020, in accordance with the ACP-EU Partnership Agreement, and on the allocation of financial assistance for the Overseas Countries and Territories to which Part Four of the Treaty on the Functioning of the European Union applies, was drawn up, which entered into force on 1 March 2015.

The Internal Agreement specifies the principles of spending the total amount at the disposal of the 11th EDF of EUR 30,506 million in the following manner:

  • EUR 29,089 million will be allocated to cooperation with ACP Group states, of which:
    a) EUR 24,365 million to finance national and regional programmes to support cooperation and regional and inter-regional cooperation of ACP Group states, in line with the provisions of the ACP-EU Partnership Agreement;
    b) EUR 3,590 million to finance cooperation within ACP Group and inter-regional cooperation focused on structural areas (e.g. development of institutions that promote the development of the private sector), in line with the provisions of the ACP-EU Partnership Agreement;
    c) EUR 1,134 million allocated at the European Investment Bank (EIB) to finance the Investment Facility in line with Annex no. II of the ACP-EU Partnership Agreement. This amount includes an additional renewable fund (EUR 500 million) and funds allocated to finance subsidies to interest and technical assistance (EUR 634 million).
  • EUR 364.5 million to finance aid for the Overseas Countries and Territories divided as follows:
    a) EUR 359.5 million to finance regional and territorial programmes;
    b) EUR 5 million for subsidies to repay interest and for technical assistance.
  • EUR 1,052.5 million to finance the expenses of EC related to handling and implementing the 11th edition of EDF, comprising 3.45% of the total value of EDF.

It is estimated that as regards the 11th edition of EDF 2014-2020, over 70% of the total value will be paid by five EU Member States with the highest contributions, i.e.: Germany (EUR 6,278 million, 20.58% according to the contribution key), France (approx. EUR 5,434 million – 17.81%), the United Kingdom (approx. EUR 4,478 million – 14.68%), Italy (approx. EUR 3,822 million – 12.53%) and Spain (approx. EUR 2,420 million – 7.93%). The Polish contribution will amount to EUR 612,359,140 in total, 2.00734% in line with the contribution key.

Payments for EDF in the 10th and 11th editions of EDF are presented in the table below.

Payments for the European Development Fund

In a year, the EDF contributions vary and largely depend on the spending of the funds available. Every year the European Commission sets the limits of resources for the next and subsequent years and the value of contributions made by the EU Member States in the current year. Every year, the contributions are made in three instalments, based on the decisions made by the Council, preceded by the arrangements in the Council’s working group for ACP.

EDF Committee

EDF Committee is comprised of the representatives of the Governments of the Member States of the European Union. It is responsible for the resources of the 11th edition of EDF, managed by the Commission. During the Committee sessions, key decisions are made as regards programming and allocating development aid to ACP Group and OCT states.

Weighted votes of the Member States within the EDF Committee

The EDF Committee is chaired by a representative of the Commission. The secretarial services are also ensured by the Commission. The EDF Committee has a qualified majority required of 721 votes out of 1000 votes in total, and a motion passes if at least 15 Member States vote for adopting the motion. The blocking minority is 280 votes. If a new state joins the Union, the weights of the votes and the qualified majority required are amended by the decision of the Council acting by unanimity. The weight of a vote of individual Member States depends on the value of their financial contributions. On request of the Commission, the rules of the EDF Committee is adopted unanimously by the Council. Poland holds 20 votes.

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