The EU External Investment Plan (EIP), including the European Fund for Sustainable Development.
The EU External Investment Plan is helping to generate jobs, growth and prosperity in countries neighbouring the EU and in Africa. It means public and private investors are more willing to bring in investment. And in doing so, to create jobs, boost economies - and offer people a brighter future. A major component of the Plan is the European Fund for Sustainable Development, which aims in its founding regulation at supporting investments primarily in Africa and the Union’s Neighbourhood as a means to contribute to the achievement of the SDGs under the 2030 Agenda for Sustainable Development, in particular poverty eradication.
1. More investment in countries outside the EU. We help countries neighbouring the EU and in Africa attract much more investment, especially from the private sector, than they could otherwise. 2. More jobs, higher growth. This investment helps to bridge the gap between the financing already available and the financing still needed to create jobs, boost growth and meet the other UN Sustainable Development Goals (SDGs). 3. More stability, prosperity and opportunities. More jobs and higher growth make those countries more stable and prosperous. This gives people living in those countries more opportunities to stay and build their lives, and offers investors more reasons to enter those markets.
The European Fund for Sustainable Development is the financing arm of the Plan. It comprises financial guarantees and ‘blending’ projects, which combine EU grants with other public and private finance. The Fund targets the SDGs directly by generating investment in: GOAL 6: Clean Water and Sanitation GOAL 7: Affordable and Clean Energy GOAL 9: Industry, Innovation and Infrastructure By doing so the Fund aims to achieve: GOAL 5: Gender Equality GOAL 8: Decent Work and Economic Growth GOAL 10: Reduced Inequalities
Implementation of both financial guarantees and blending projects is well underway. With the guarantees, we've refocused them to help countries respond to the coronavirus (COVID-19) pandemic. We're targeting in particular small business owners, women and young people. We're also devoting more of the available financing to: • small businesses - helping them stay afloat by: o encouraging local banks to lend more to them o making it more affordable for them to borrow - in many cases they'll be able to pay less in interest, or repay the loan over a longer period, than they would otherwise. • healthcare - and in particular testing labs. We've allocated all €1.55 billion available through the Plan for financial guarantees. This should bring in €17.5 billion in overall investment. And we’ve concluded 18 agreements with partner institutions to put all the guarantees into practice. With blending we've allocated all €3.5 billion available through the Plan for grants for blending projects – financing 181 in all. This should bring in about €32.6 billion in overall investment. In parallel we’ve provided major support to help partner countries become more attractive places in which to invest and do business (improving the investment climate). This includes: • work in 15 countries to identify what puts off potential investors – and how to bring them on board • bringing together governments and businesses on a regular basis in 16 countries to discuss challenges to securing investment • backing government reforms and other initiatives to attract more investment – to the tune of over €600 million in 2019 alone.
Experts predict the Plan will have a major impact: Jobs and small firms More than 5.2 million jobs created/sustained Over €1.9 billion in loans and financing for local entrepreneurs, small business owners Energy, climate Each year: 14,800 MW of extra power generated 2,800 GW-hours of energy saved 15,800 kilotons of CO2 emissions avoided 48,300 GW of renewable energy generated Clean water, sanitation 3,400 km of water pipes installed or upgraded 896,300 cubic metres of extra wastewater treated daily 1,800 km of sewer pipes installed or upgraded 4,340 000 people to benefit from improved sanitation services Connectivity 7,100 km of roads built or upgraded 12,400 km of electricity lines constructed or upgraded 109,100 new connections to urban water networks Figures show the expected results of blending projects approved in 2017-19. Expected results for the EFSD guarantees are also included in figures for jobs, CO2 cuts, and renewable energy.
Enabling conditions – the EU has provided substantial funding for the Plan - €5.1 billion - and has established close partnerships with financial institutions and governments, business and civil society groups in partner countries. This has allowed the Plan to generate over €50 billion in overall investment – a major contribution to the SDGs.
In its next long-term budget (2021-2027), the EU will continue to use the financing model of the EFSD through its successor, the EFSD+. This will have significantly more financing and a much wider geographic scope.
See text above on ‘Implementation’.
SDGS & Targets
Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
Deliverables & Timeline
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All states in: the EU's Eastern Partnership: • Armenia • Azerbaijan • Belarus • Georgia • Moldova • Ukraine the EU's Southern Neighbourhood: • Algeria • Egypt • Israel • Jordan • Lebanon • Libya • Morocco • Palestine • Syria • Tunisia Sub-Saharan Africa.