EU External Investment Plan
In September 2017, the European Parliament and the Council adopted the European Fund for Sustainable Development (EFSD), which is the core piece of the EU's new External Investment Plan (EIP). The intention of the EIP is to support more inclusive and sustainable development in Africa and the EU Neighbourhood.
The EIP will help to address this funding gap by working through partnerships and finding innovative ways to mobilise public and private investments. Its implementation will allow the EU to develop more effective partnerships with its partner countries and at the same time implement international commitments on financing for development.
Leverage of additional finance for development
The Regional Investment Platforms for Africa and the EU Neighbourhood combine existing investment facilities (€2.6 billion indicative budget) and a dedicated financial guarantee instrument (€1.5 billion) in order to attract additional financing of some €44 billion or more by 2020, in particular from the private sector. The new EFSD guarantee is intended to reduce specific risks in investment projects and could absorb potential losses.
Investment Windows define priority sectors for the EFSD Guarantee
At the launch stage of the EIP, five windows are considered essential:
Sustainable Energy and Sustainable Connectivity, targeting sectors such as renewable energy, energy efficiency and transport, enhancing energy security and sustainable development, while addressing climate change risks and helping countries deliver on their commitments to implement the Paris Agreement
Sustainable Cities, exploring innovative mechanisms to address the challenges of sustainable urban development faced by partner countries
Micro, Small and Medium Enterprises (MSMEs) Financing
Sustainable Agriculture, Rural Entrepreneurs and Agrobusiness
Digital for Development
EIC calls for a private sector window
EIC regrets that only public sector Development Financing Agencies are eligible to use the EFSD guarantees and calls for the establishment of a private sector window. In a letter to the Director-General of the European Commission’s DG DEVCO EIC has called for maximum flexibility regarding the assessment of the financial viability of eligible project and to take into consideration the socio-economic benefits of infrastructure projects. Bearing in mind that financing and investment operations shall be consistent and aligned with Union policies, EIC demands that such coherence includes the eligibility criteria governing the European Development Fund and the principles and philosophy currently stipulated in the EU PRAG with respect to nationality and origin rules.