§ Sue DoughtyTo ask the Secretary of State for International Development if he will make a statement on the estimated annual amount of investment that the Government will make through CDC when it becomes a Government-owned investment company. [153421]
§ Hilary BennThe Commonwealth Development Corporation Act of 1999 transformed CDC into a Government-owned investment company that deploys some £1.1 billion of public capital for investment. This100W capital was injected into CDC by the Government over several decades up to the mid-1990s. We have no current plans to invest additional funds in CDC.
All new investments made by CDC in the future will be funded from the proceeds of realisation of existing investments. CDC's business plan for the next few years estimates that between £200 million and £300 million will be invested each year into the new funds to be managed by Actis. The intention is that, in the medium term, third party investors will be attracted to commit capital to these funds alongside CDC.
§ Sue DoughtyTo ask the Secretary of State for International Development what the environmental sustainability requirements of Actis and the Commonwealth Development Corporation will be following the reorganisation announced in his Written Statement of 8 January. [153445]
§ Hilary BennSince 1999, CDC has been required to follow a set of business principles that require compliance with best practice, both at fund and investee company level. These principles include environmental standards, where, as a minimum, World Bank rules must be applied, or at least met within an agreed timeframe.
The other business principles cover the areas of personal and corporate integrity, social issues such as child or forced labour or discriminatory practices, health and safety, transparency and legal and fiscal compliance.
The reorganisation does not affect these principles. They will in future apply to both Actis and CDC.
§ Sue DoughtyTo ask the Secretary of State for International Development what(a) objectives and (b) return requirements will be required for investment of capital provided to an Actis-managed fund by the CDC following the reorganisation announced in his Written Statement of 8 January. [153446]
§ Hilary BennAs set out in my Written Statement of 8 January,Official Report, column 15WS, CDC's objective is to maximise the creation and long-term growth of viable businesses in poorer developing countries by making responsible investments and mobilising private capital alongside public funds. This objective will remain unchanged under the reorganisation proposals and will apply to all CDC capital invested in any Actis-managed fund.
The rates of return of the different Actis funds will vary according to the region or sector at which a particular fund is targeted; for example, the rate of return for the Africa fund will differ from that for the Power fund. Target rates of return will be set according to the requirements of businesses in the region or sector in question and according to the requirements of potential co-investors in the fund.
§ Sue DoughtyTo ask the Secretary of State for International Development whether ventures managed by Actis that are fully commercial will be eligible for investment capital from the Commonwealth Development Corporation. [153455]
101W
§ Hilary BennActis will be a fully commercial organisation and all ventures that it manages will be on fully commercial terms. CDC will only invest its capital in businesses that offer the prospect, with the help of the investment offered by CDC, of generating returns acceptable to CDC and co-investors. CDC's mission is to develop the private sector in the poorer developing countries. It does not plan to make available any form of concessional financing
§ Sue DoughtyTo ask the Secretary of State for International Development if he will list the(a) salaries and (b) bonuses awarded to each board member and member of senior management of the Commonwealth Development Corporation for each year since 1997. [153456]
§ Hilary BennThe salaries, bonuses and/or fees paid to the executive and non-executive directors of Commonwealth Development Corporation each year are published in the directors' remuneration report included in CDC's Annual Report. For the period 1997 to 2002, they were as follows:
102W
£ Salary/fee Bonus 2002 Non-Executive Directors Lord Cairns (Chair) 48,000 Jayne Almond (Deputy Chair) 22,432 Jonathan Kydd 16,658 Lalith de Mel 17,000 Pen Kent (to 1 December 2001) 10,250 Russel Seal (to 2 May 2001) 4,375 Peter Smitham (from 15 March 2001) 17,000 Tim Parker (from I December 2001) 17,000 Executive Directors Alan Gillespie (CEO to 30 November 2002) 143,055 90,000 Paul Fletcher (from 17 January 2001) 141,225 90,000 Richard Laing 139,425 75,000 Andrew Reicher (from 17 January 2001) 137,000 90,000 Nicholas Selbie (from 17 January 2001) 147,900 67,500 2001 Non-Executive Directors Lord Cairns (Chair) 37,500 Jayne Almond (Deputy Chair) 16,333 Jonathan Kydd 10,833 Lalith de Mel (from 13 April 2000) 10,916 Pen Kent (to 1 December 2001) 10,250 Russel Seal (to 2 May 2001) 4,375 Peter Smitham (from 15 March 2001) 8,637 Tim Parker (from 1 December 2001) 1,416 Executive Directors Alan Gillespie (CEO) 170,000 43,350 Richard Laing (from 24 January 2000) 135,000 35,000 Paul Fletcher (from 17 January 2001) 128,769 42,300 Andrew Reicher (from 17 January 2001) 128,769 32,300 Nicholas Selbie (from 17 January 2001) 138,308 32,100 2000 Non-Executive Directors Lord Cairns (Chair) 32,250 Jayne Almond (Deputy Chair) 13,146 Pen Kent 9,000 Jonathan Kydd 8,250 Russel Seal 10,260 Lalith de Mel (from 13 April 2000) 5,909 Executive Directors Alan Gillespie (CEO) 160,000 57,600 Richard Laing (from 24 January 2000) 114,583 45,000
£ Salary/fee Bonus 1999 Members of the Corporation (to 7 December 1999) and Non- Executive Directors of CDC Group plc (from 8 December 1999)
Lord Cairns (Chair) 30,813 Jayne Almond (Deputy Chair) 11,625 Pen Kent 9,000 Jonathan Kydd 8,250 Russel Seal 8,953 Chief Executive Officer (to 7 December 1999) Roy Reynolds 148,750 35,000 Executive Director of CDC Group plc Alan Gillespie (CEO from 8 December 1999) 13,333 Members of the Corporation (to 7 December 1999) Carolyn Hayman 7,728 Roger Murray 7,728 David Pearce 7,728 Hari Shankar Singhania (to June 1999) 3,750 1998 Chairman (Lord Cairns) 29,000 Other Members of the Corporation (Board) 68,000 CEO (Roy Reynolds) 1168,189 Executive Management Committee members 819,429 1997 Chairman (Lord Cairns) 27,000 Other Members of the Corporation (Board) 68,000 CEO (Roy Reynolds) 1153,762 Executive Management Committee members 747,071 1Inclusive of bonus. Notes: 1. The remuneration committee of the board (made up of the independent directors) is responsible for recommending the total remuneration of executive directors including any bonuses. Bonuses reflect individual performances in the context of the overall performance of CDC including performance against the investment policy. 2. Prior to transformation into CDC Group PLC in 1999, remuneration data for the former Commonwealth Development Corporation was not published in full detail.
§ Sue DoughtyTo ask the Secretary of State for International Development what proportion of Commonwealth Development Corporation investment capital was directed to agriculture ventures for each year since 1997. [153457]
§ Hilary BennThe proportion by year of CDC's new and total investments in the agricultural sector were as follows:
Percentage of new investment into agricultural sector Percentage of total portfolio in agricultural sector 1998 23 25 1999 23 18.5 2000 20 17 2001 10.2 10.2 2002 11.3 11.3 2003 5.4 10.9 I regret that the figures for 1997 are not readily available.
§ Sue DoughtyTo ask the Secretary of State for International Development what proportion of Commonwealth Development Corporation investment capital was directed to the poorest quartile of Commonwealth countries in each year since 1997. [153472]
103W
§ Hilary BennThe mandate of the former Commonwealth Development Corporation was widened to include all developing countries in 1969. After transformation into CDC in 1999, we gave it a target of making at least 70 per cent. of its new investments in the poorer developing countries (basically those with a GNI per capita of less than US$1,750).
The poorest quartile of Commonwealth countries all fall within this grouping. For the years 1997 to 2001 (which is the latest year for which data are available) these countries were Bangladesh, Cameroon (1997 only), Gambia, Ghana, India, Kenya, Lesotho (1998 to 2001 only), Malawi, Mozambique, Nigeria, Pakistan, Sierra Leone, Tanzania, Uganda, Zambia and Zimbabwe.
The proportion of CDC's new investment that were made in these countries is as follows:
- 1997—32 per cent.
- 1998—47 per cent.
- 1999—25 per cent.
- 2000—26 per cent.
- 2001—44 per cent.
- 2002—24 per cent.
- 2003—61 per cent.
Note:
2002 and 2003 figures are based on the countries in the poorest quartile in 2001.
§ Sue DoughtyTo ask the Secretary of State for International Development if he will make a statement on the measures that will be in place to ensure that Actis does not obtain capital from the CDC that could be obtained through private investors. [153454]
§ Hilary BennUnder a five-year contract, CDC will place 95 per cent. of its investment capital into the funds that Actis will launch and manage. Actis will be encouraged to raise as much further capital from private and other third party investors as possible for investment in the poorer developing countries. Maximising the mobilisation of third party capital is the key feature of the reorganisation proposals.
CDC's investment policy (set by DFID) obliges it to concentrate its investment in the poorer developing countries where the private sector is generally reluctant to invest. We believe that in practice there is a wide gap between the demand for investment capital in the poorer countries and the amount actually available to them. It is our aim that CDC will help bridge this gap.
We are aware that CDC's investments must not crowd out or otherwise discourage private investors already active in developing countries. This is the opposite of its purpose and we will expect the Board of CDC to be particularly vigilant about this issue.