On 11 November 2019, the European Commission signed two guarantee agreements with the Dutch and Italian development finance institutions at the 2019 Africa Investment Forum in Johannesburg, South Africa. 

“The agreements signed today, worth €70 million, will help us to unlock more than €500 million in new investment in Africa and the EU Neighbourhood. These guarantees aim at mitigating and sharing the risk with other private investors in countries where otherwise these investments would not be as attractive. They will help to boost access to finance for small businesses, notably in the tech sector – and create up to 175,000 jobs directly and indirectly.” - Commissioner for International Cooperation and Development, Neven Mimica said.

The partnership agreements signed with the Dutch 'Financierings-Maatschappij voor Ontwikkelingslanden N.V' (FMO) and the Italian 'Cassa Depositi e Prestiti' (CDP) are part of the EU External Investment Plan of the Africa-Europe Alliance for Sustainable Investment and Jobs, launched by European Commission last year. The Alliance aims to boost strategic investment, strengthen the role of the private sector to create jobs and promote sustainable development.

FMO, the Dutch Development Bank signed a partnership agreement, guaranteeing €40 million for Sub-Saharan Africa and the EU Neighbourhood. It will guarantee venture capital provided by FMO to start-up companies, in particular led by young entrepreneurs. The companies will use technology to lower the costs of making or supplying products and services that were previously unaffordable to many people. The guarantee will target companies offering digital solutions in a wide range of areas, from agriculture, access to energy and financial services to education, healthcare, transport and logistics. It will support up to 125,000 new jobs, directly and indirectly.

The partnership agreement signed by CDP, the Italian development bank and the African Development Bank (AfDB) will guarantee €30 million will support access to finance across Africa for high potential small businesses. In order to help their growth, the programme supported by the guarantee will provide financing through innovative capital markets solutions. It will also enable financing partners to share the risk of investing in projects. By doing so it will generate up to 50,000 jobs, many for young people, and benefit about 1,500 small businesses in 11 African countries.

The two guarantees are expected to boost investment and access to finance for small businesses (MSMEs), especially in the technology sector. The Plan is using €4.5 billion in public funds to leverage €44 billion by 2020 in public and private investment for development in countries neighbouring the EU and in Africa. 

Source: European Commission