The European Union (EU) and the Government of Mauritius signed on Thursday 4th March in Port Louis, three financing agreements which provide Mauritius with a total grant of Euro 93.5 million, an equivalent of approximately Rs 4 billion, over a period of three years as general budget support under the Promoting Sustainable and Equitable Development (PSED) programme.

The agreement, which is the largest between the EU and Mauritius in terms of grant funding, combines the following envelopes:
—An allocation of approximately Rs 2.5 billion for 2009 and 2010 under the EU Accompanying Measures for Sugar Protocol countries;
—Around Rs 1.5 billion from the 10th European Development Fund (EDF) National Indicative programmes; and around Rs 2.1 million for the Fluctuation in Exports Earnings (FLEX) 2008.

In addition and as part of the support package from the EU, an amount of Rs 2.1 billion has been granted to Mauritius as support under the Technical Cooperation Facility (TCF).

Through the PSED grant, the EU will contribute to increasing the competitiveness of the sugar cluster with emphasis on energy, enhancing economic opportunities for socially vulnerable people, and improving access to pre-primary education for children as well as protecting the environment.

The PSED will contribute to two pillars of the economic reform agenda that is, improving trade competitiveness with special focus on enhancing the revenue generating capacity of the sugar industry through the export of white refined sugar and widening the circle of opportunities for the vulnerable groups.

Disbursement of funds under the programme for both the fixed and variable tranches will be on basis of the positive achievements of Mauritius based on several indicators namely sound public finance management, overall macroeconomic stability and continued implementation of the economic reform programme of Mauritius.

It will be recalled that the total resources disbursed by the EU since 2006 to support the ten-year economic reform programme of the Government of Mauritius amounts to date to over Rs 7 billion, covering areas relating to economic development and focusing on poverty alleviation, good governance and protection of natural resources.