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close this book The Courier N°149 - Jan-Feb 1995 - Dossier : Urban development - Country reports Kiribat, Tuvalu, Vanatu
close this folder Country reports
close this folder Tuvalu: We just try our best to look after ourselves
View the document An interview with the Prime Minister of Tuvalu, Kumata Latasi
View the document Koloa Talake, Minister of Finance and Economic Affairs, looks at future economic prospects for Tuvalu
View the document The fuel import programme
View the document EU-Tuvalu cooperation

EU-Tuvalu cooperation

Aid focuses on infrastructure

Tuvalu acceded to the Lomé Convention in January 1979 and the European Union is one of its main donors. Programmable assistance over the years has mainly been concentrated on infrastructure development. Stabex has been important in supporting the country's only agricultural export, copra. The European Investment Bank has made available risk capital resources, and Tuvalu has also received emergency aid.

The Lomé I National Indicative Programme (NIP), which amounted to ECU 600 000, was mainly used to establish a new power station on Funafuti, the island housing the national capital. The remaining funds were allocated to two microproject programmes under which copra sheds and water tanks were constructed.

These activities were continued under the Lomé II NIP, which totalled ECU 1 million. In addition, the electricity distribution network on Funafuti was expanded. A coastal protection programme was also undertaken, involving the construction of seawalls to prevent erosion of coastal areas by the sea.

Under the Lomé III NIP, an amount of ECU 2 million was made available to Tuvalu. This was used to finance a second phase of the coastal protection programme. An electricity development programme was also approved; its purpose is to upgrade the electricity supply and distribution system on Funafuti as well as to provide solar power lighting to households on the outer islands.

Under the Lomé IV NIP signed in April 1991, it was agreed that the programmable assistance managed by the European Commission, totalling ECU 1.3 million, should be concentrated on the economic infrastructure sector. In the light of the particular problems facing Tuvalu, it was also agreed that the Commission would give special attention to the coverage of recurrent costs of projects, including the possibility of providing such assistance by means of a contribution to the Tuvalu Trust Fund. This Fund was established in 1987 to provide a source of recurrent budgetary revenue, and is the key element in the Government's fiscal policy.

In 1992, in fulfilment of the above agreement, the European Commission approved a grant of ECU 900 000 for the fuel import programme, a three-year scheme (described in a separate article) whereby the EDF will meet the cost of fuel purchases by the Tuvalu Electricity Corporation, which will pay equivalent amounts into a counterpart fund to be used by Government for agreed budgetary purposes. This will enable the Government to reinvest an equivalent amount in the Tuvalu Trust Fund.

Since 1992 the EU has also paid the salary of a volunteer development worker to act as technical assistant to the National Authorising Officer. This has facilitated the implementation of the EDF programme in Tuvalu and improved communication flows between Tuvalu and the European Commission Delegation in Fiji.

Tuvalu has received 13 Stabex transfers since 1975, totalling ECU 485 000, all in respect of copra exports. Despite this assistance, however, copra production has been in continuous decline owing to a combination of low world prices and high transport costs.

The European Investment Bank has provided two risk loans to Tuvalu, to cover additional shareholding in the Pacific Forum Shipping Line and as a line of credit to the Development Bank of Tuvalu, for on-lending to small businesses.

In 1993 the European Commission provided emergency aid to Tuvalu following Cyclone Nina. This enabled the Red Cross to provide foodstuffs, shelter, medical supplies and utensils to people whose homes were destroyed.

Tuvalu has also benefited under the Pacific Regional Programme, notably in the areas of civil aviation, energy, fisheries and tourism.