(MENAFN– Emirates News Agency (WAM))
BRUSSELS, 28th February, 2023 (WAM) — The European Investment Bank (EIB) and the European Commission today signed agreements for a total volume of €4 billion; consisting of Guarantee Agreement that will mobilise up to €3.5 billion in lending and €500 million Trust Fund contribution, to support businesses in African, Caribbean and Pacific (ACP) countries until 2027. The agreement marks an important step in rolling out the EU’s Global Gateway strategy worldwide and achieving development impact by enabling the EIB to enhance not only public but also private investments in key areas like digitalisation, climate and energy, transport, health in partner countries.
Commissioner for International Partnerships, Jutta Urpilainen, said:“Mobilising the private sector is critical to sustainable development in African, Caribbean and Pacific countries. With Global Gateway, the EU wants to facilitate local value addition, sustainable growth and job creation, especially for youth. Today’s agreement is another milestone in advancing this strategic priority. The resources unlocked by the guarantee and Trust Fund contribution will benefit emerging businesses in key sectors, while enhancing partner countries’ resilience. The EU will continue to rely on the European Investment Bank as key partner in successful implementation and impact on the ground.”
President of the European Investment Bank, Werner Hoyer, said:“The agreement signed today will enable the European Investment Bank to fully contribute to the Global Gateway strategy. The EU guarantee will allow us to scale-up our support for national priorities in Africa, Caribbean and the Pacific regions, in full collaboration with our partners from Team Europe and the African Union. Backing the private sector is key to foster a green and inclusive growth in ACP countries and globally. As public institutions, we need to go the extra mile to make our value proposition attractive for private investors and drive investment in climate, energy, health, food security, digital solutions that will create impact and ultimately boost prosperity.”
Today’s agreement consists of two parts. First, the Guarantee Agreement under European Fund for Sustainable Development Plus (EFSD+), established by the NDICI – Global Europe. It will enable the EIB to provide up to €3.5 billion loans on favourable 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. A pertinent example of how the resources will be used is the agreement, which was signed last week at the EU-Tanzania Business Forum. Credit lines backed by the guarantee will unlock €270 million for three Tanzanian local banks who will finance projects benefitting especially women and advancing the blue economy.
Another example is The Green African Agricultural Value Chain Facility. It 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. Average size of credit lines extended to local banks range from approximately €10-25 million.
Second, an EU contribution of €500 million to the ACP Trust Fund, established and managed by the EIB, to enable high impact operations, which would otherwise not be possible. It will support, for example, small renewable energy power plants in areas with no grid connection. These will enable autonomous electricity supply, improve people’s livelihoods, and decrease dependency from fossil fuels and rising energy prices.
The agreement adds to the €26.7 billion Guarantee Agreement for public lending that the EU and the EIB signed in May 2022. New public investments rolling out Global Gateway are already underway. This includes for example an EU-covered EIB loan on urban mobility for Senegal, signed separately at the EIB Forum as part of the Team Europe Initiative on Green Economy in Senegal, which seeks to support sustainable and digital cities, as well as strengthen and modernise public transport in Dakar. This action illustrates European investments in the Dakar-Abidjan strategic corridor with the aim of consolidating economic exchanges in the region, strengthen regional integration and boosting sustainable growth.