BASSETERE, ST. KITTS, JANUARY 18TH 2007 Efforts by St. Kitts and
Nevis' Prime Minister Hon. Dr. Denzil L. Douglas to get European Union
assistance to transform the economy following the closure of the sugar
industry last year has borne fruit.

The Barbados-based European Commission has announced its approval of nearly
EC$10 million for St. Kitts and Nevis as part of the Commissions
development assistance support following last years reform of the European
Unions sugar regime.

The European Commission in a release said St. Kitts and Nevis allocation is
2,845,000 million Euro (BDS$7.1M; EC$9.95M). The EC also announced the
allocated 2,332,000 million Euro (BDS$5.83M; EC$8.16M) to Barbados. These
two sums are part of an overall 40 million Euro (BDS$100M; EC$140M)
allocation for the 18 ACP sugar protocol countries for 2006.

The St. Kitts and Nevis project addresses three crucial elements of the
Federations post sugar reconstruction programme  institutional
strengthening, encompassing primarily capacity building in the key
ministries of Sustainable Development and Social Development; social
protection and community empowerment, targeting former sugar workers and
other vulnerable households; and skills development prioritising business
skills and the promotion of entrepreneurship.

The project is very integrated but approximately 1.5M Euro (BDS$3.75M;
EC$5.25) will go towards institutional strengthening, training and community
development, with the remaining 1.35M Euro (BDS$3.38M; EC$4.73M) going
towards social protection programmes, skills development, and the
procurement of equipment and other supplies to support overall
implementation of the project.


~~adz:Left~~In Barbados the EU assistance will finance a project with a sugar industry
component budgeted for 1.2M Euro (BDS$3M; EC$4.2M) which will be in the form
of technical assistance, while the other 1.13M Euro (BDS$2.83M; EC$4M) will
finance on-line access to public services and human resource development.

The two projects are the first operational support by the EU to Barbados and
St. Kitts and Nevis multi-annual sugar adaptation strategies for the period
2006 to 2013.

St. Kitts and Nevis ceased commercial sugar production in mid-2005 thus
bringing to an end a 350-year-old industry that up until recently had been
the mainstay of the countrys economy. Given the widespread socio-economic
impact of this event the St. Kitts & Nevis strategy is an economy wide
transformation programme focussing on accelerating growth and improving
competitiveness while protecting the vulnerable and ensuring environmental
integrity and sustainability. At the extensive programme activity level the
strategy takes into account the need for fiscal sustainability, retraining
of former sugar workers and communities and the creation of economic and
employment opportunities for all.

The Barbados sugar adaptation strategy focuses on two strategic components,
Economic diversification and restructuring of the sugar industry. Under
economic diversification the aim is to engage in multi-sectoral economic
development initiatives that offer the greatest scope for long term
prosperity and competitiveness. The sugar industry component seeks to
transform the sector from its low value, raw sugar focus into a sustainable
high value multi-product industry through the installation by 2009 of a
multi-purpose plant. This plant is expected to produce 27,000 tonnes of
sugar, 30 megawatts of electricity utilising bagasse and natural gas as well
as 24 million litres of ethanol to replace imported fuel.

The Commission has already set aside 165 million Euro (BDS$412.5M;
EC$577.5M) for 2007 as part of accompanying measures for ACP sugar protocol
countries.

Under the action plan the EC has made a commitment to provide support for
ACP sugar protocol countries over a period of eight years  2006-2013. It is
aimed at addressing economic, fiscal and structural issues and maps out
economic diversification programmes and activities relating to non-sugar
agricultural diversification, social protection, poverty reduction,
environmental protection, investment in new enterprises and overall
production.

For 2007 to 2013, the EC will seek to provide to Barbados and St. Kitts and
Nevis direct budget support for reform in the macro-economic and financial
areas, and for private sector development. The European Commission will seek
to work with other donors and financial institutions such as the Caribbean
Development Bank, the World Bank and the Caribbean Regional Technical
Assistance Centre (CARTAC) in the execution of these projects. 

Under Protocol 3 of the EC/ACP Lomé Convention (1975), commonly known as the
Sugar Protocol, the European Commission is committed to purchase and import
32,097 tonnes of cane sugar from Barbados. As part of this agreement the EU
has undertaken to purchase, several times higher than the world price,
quantities of ACP sugar.