europeaninternationalcontractors
industryfederationsince 1970

EU Multiannual Financial Framework 2021-27 ramps up NDICI and EFSD+

On 02 June 2020, the European Commission proposed a reinforced Multiannual Financial Framework (MFF) for the years 2021-27 that amounts to € 1.85 trillion. The package shall help navigate the economic recession caused by the Covid-19 pandemic.

The Commission proposed to merge different financing instruments into a new Neighbourhood, Development and International Cooperation Instrument (NDICI), thus amending Regulation (EU) 2017/1601, to reduce existing inconsistencies and complexities. The NDICI will be increased to € 96.4 billion in current prices (of which € 10.5 billion come from the Next Generation EU fund). At least 92% of the budget shall count as Official Development, and fulfil the requirements of the OECD Development Assistance Committee to ensure the NDICI’s alignment with the OECD legislation on untied aid.

European Fund for Sustainable Development Plus
When the Commission presented the NDICI in 2018, it proposed establishing a European Fund for Sustainable Development Plus (EFSD+) that is supported by an External Action Guarantee and serves as financing arm of a reinforced External Investment Plan.

The EFSD+ is a comprehensive instrument that includes not only guarantees, but also grants provided through blending. Under the EFSD+, licensed European and International Financial Institutions will submit programme requests to the Commission asking for guarantee support to finance projects in high risk environments.

Infrastructure in Africa remains a priority
The EFSD+ will streamline the current architecture and ensure world-wide coverage for blending, guarantees and other financial operations. Including the Recovery Package adopted in May 2020, the External Action Guarantee will have a capacity of € 130 billion (compared to € 60 billion proposed in 2018) for EFSD+ operations, as well as macro-financial assistance and loans to third countries.

Cooperation with Africa remains a priority as talks with partner countries continue in line with the Africa-Europe Alliance for Sustainable Investment and Jobs. Particular attention shall be paid to regions with critical infrastructure and connectivity needs.

Further reading
You can find the European Commission's official documents here: EU Multiannual Financial Framework 2021-27