DCD WKP(2014)2 ADD PROV.pdf


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DCD/WKP(2014)2/ADD/PROV
EUROPEAN UNION INSTITUTIONS

Policies, Institutions and Instruments
16.
The 2011 EU strategy document “Increasing the Impact of EU Development Policy: an Agenda for
Change” underlines the importance of attracting and retaining substantial private local and foreign investment in
order to meet the EU’s development objectives. In particular, it emphasises investment needs in the infrastructure
sectors as well as the need for EU Institutions to develop new ways of engaging with the private sector. This includes
funding project preparation and providing risk mitigation instruments in order to leverage private resources for
delivering social and economic infrastructure.
European Investment Bank
17.
EIB supports EU development policies with respect to investment financing, based on the External
Lending Mandate (ELM) given by the European Commission, as well as on the Africa Caribbean and Pacific (ACP)EU Cotonou Partnership Agreement, under which it manages the ACP Investment Facility aimed at promoting private
sector development in ACP countries. In its operations outside Europe, EIB’s mandate is focused on local private
sector development, development of social and economic infrastructure and supporting climate change mitigation and
adaptation.
18.
At the same time, investments in non-EU member countries constitute only about 10% of the EIB
portfolio, of which most are EU candidate countries, European Neighbourhood Policy (ENP) countries, and the ACP
countries, with Turkey being the single largest recipient of infrastructure disbursements in 2011. Furthermore, the
2013-2015 Operational Plan defines climate change-related energy projects, basic public water services, and transport
investments as the main sectoral priorities of EIB’s non-EU operations. Finally, EIB is working closely with other
donors, in particular with the Agence Française de Développement (AFD), and the German public bank, Kreditanstalt
für Wiederaufbau (KfW). The three donors have created the Mutual Reliance Initiative (MRI) which facilitates cofinanced projects by harmonising assessment efforts among them.
EuropeAid
19.
EuropeAid increasingly uses blending as one of its tools for achieving EU policy objectives. Blending
combines EU grants with additional non-grant resources such as loans and equity for investments in partner countries.
By using grants strategically, additional public and private financing can be unlocked, supporting EU development
policy. Since 2007, the European Commission, together with the European External Action Service and member
states, has set up seven EU regional blending facilities: the EU-Africa Infrastructure Trust Fund (ITF), the
Neighbourhood Investment Facility (NIF), the Latin America Investment Facility (LAIF), the Investment Facility for
Central Asia (IFCA), the Asian Investment Facility (AIF), the Caribbean Investment Facility (CIF) and the
Investment Facility for the Pacific (IFP). On this basis, blending can be used in all regions of EU external cooperation. To date, €1.2 billion grants from the EU budget, the European Development Fund (EDF), and member
states have been used for 168 blending projects. The EU grant contributions to individual projects have enabled
investments with a total volume of approximately €30 billion that would either not have materialised at all, only at a
later stage, or at an unsustainable cost for the partner country. Support to local businesses is becoming an area where
blending can significantly leverage private financing to help businesses grow and create jobs. EuropeAid is currently
working to further exploit the potential of blending as catalyst of private investment in infrastructure.

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