EU and EIB sign €4 billion agreement to support businesses in African, Caribbean, and Pacific countries

EU and EIB sign €4 billion agreement to support businesses in African, Caribbean, and Pacific countries
02 March 2023

The European Investment Bank (EIB) and the European Commission have signed an agreement to mobilize up to €3.5 billion in lending and contribute €500 million to a Trust Fund to support businesses in African, Caribbean, and Pacific (ACP) countries until 2027. The agreement, which is part of the EU's Global Gateway strategy, aims to enhance public and private investments in key areas like digitalization, climate and energy, transport, and health in partner countries.

The Guarantee Agreement under the European Fund for Sustainable Development Plus (EFSD+) will enable the EIB to provide up to €3.5 billion in loans on favorable terms to create jobs and opportunities, particularly for women and youth, and support green and digital transitions in EU partner countries, in line with Global Gateway. The agreement also includes an EU contribution of €500 million to the ACP Trust Fund, established and managed by the EIB, to enable high-impact operations.

The investment programmes are implemented through two main paths.

The EU is providing a €26.7 billion guarantee in partnership with the EIB for financing to support investments in sectors such as clean energy, green infrastructure, and health. The EFSD+ guarantees are offered on favorable, highly competitive terms, allowing investors to finance projects in more challenging markets by assuming the risks of more unstable environments while avoiding market distortions. The instrument has €40 billion in guarantee capacity.

Under the EFSD+ open architecture, the EU is providing an up to €13 billion guarantee cover until 2027. This will be deployed by a range of implementing partners, i.e., International Financial Institutions (including the EIB) and European development finance institutions aiming to mobilize private investments in support of partner countries achieving the SDGs. In December 2022, the Operational Board of the EFSD+ gave a positive opinion to €6.05 billion in financial guarantees to support 40 investment programs in Sub-Saharan Africa, Latin America, and the Asia Pacific, which is the first allocation under the EFSD+ Open Architecture program.

The agreement will support small renewable energy power plants in areas with no grid connection, enabling autonomous electricity supply, improving people's livelihoods, and decreasing dependency on fossil fuels and rising energy prices. The agreement will also create jobs and opportunities, particularly for women and youth, and support green and digital transitions in partner countries.

The EIB has signed an agreement with the local banks CRDB, NMB, and KCB-Tanzania to unlock €270 million in credit lines backed by the guarantee. The credit lines will finance projects benefitting women and advancing the blue economy. The Green African Agricultural Value Chain Facility provides financing to intermediaries across sub-Saharan Africa for on-lending to eligible small and medium-sized enterprises (SMEs) active in agri-food value chains.

The agreement illustrates European investments in the Dakar-Abidjan strategic corridor with the aim of consolidating economic exchanges in the region, strengthening regional integration, and boosting sustainable growth. The agreement is part of the EU's investment framework for external action and ensures worldwide coverage for blending, guarantees, and other financial operations.

In conclusion, the Guarantee Agreement and Trust Fund contribution signed by the EIB and the European Commission marks an important step in rolling out the EU's Global Gateway strategy and achieving development impact by enabling the EIB to enhance public and private investments in key areas like digitalization, climate and energy, transport, and health in partner countries.


Related news

On November 15th, the European Union (EU) and its Member States officially signed the "Samoa Agreement," a partnership accord with the African, Caribbean, and Pacific States...
More details Samoa Agreement: EU and its Member States sign new Partnership Agreement with the Members of the Organisation of the African, Caribbean and Pacific States
The Horn of Africa and the Great Lakes regions continue to grapple with a series of complex humanitarian crises, exacerbated by a combination of conflict and climate-related...
More details EU Announces €26 Million Aid Boost for East Africa
The program aims to mobilise more than 1 Billion Euros in sustainable investments in Sub-Saharan Africa. Program Details Geographical Focus: The programme will...
More details Global Gateway Forum: EU and Finnfund Launch the Africa Connected Programme

Stay in touch with us!

For more information about our services and working opportunities at our company, do not hesitate to: