The European Commission and European Investment Bank launched Thursday a trust fund to finance infrastructure in Africa, polishing Europe's image as a top donor.
The EU wants to fund road construction projects, like this one in Rwanda
In its start-up phase running to 2007, the fund would receive 60 million euros ($72 million) in grants from the European Commission and 260 million euros in EIB loans, while member states were invited to make additional contributions.
EU member states agreed last May to increase development aid by an additional 20 billion euros per year by 2010, with half of that targeted at Africa, in order to reach an annual total of 66 billion euros.
Development commissioner Louis Michel stressed that Africa had a huge need for investment in infrastructure for economic development to get off the ground.
"It's a huge challenge, it's a matter of creating the backbone of the road network, rail network, energy infrastructure, water, telecommunications," he said. "No single donor can possibly hope to do this so we need to join our efforts."
No rival to World Ba n k
The commissioner denied recent reports that the fund would rival efforts by the World Bank, which would remain a close partner of the EU.
"It's only normal that Europeans equip themselves with their own financial instruments to conduct their own initiatives for policies that characterize their values," Michel said.
EIB president Philippe Maystadt hoped that the fund would help raise Europe's profile as one of the biggest donors to development projects in the world.
"It's paradoxical that we are the largest donor but are not seen as such," he told a news conference.