Objectives

The External Investment Plan will allow the EU to lead by example in developing more innovative and effective partnerships that go beyond classical development assistance. The Plan represents a fundamentally new approach to the way the EU supports development and how it identifies, prepares, and delivers support for investment projects in countries outside the European Union. The EIP offers an integrated and coherent framework enabling full cooperation between the EU, international financial institutions, donors, civil society organisations, public authorities and the private sector.

Actions

The EIP will support partner countries through a coordinated three-pillar approach.

Mobilising finance (pillar 1)

The European Fund for Sustainable Development (EFSD) will be composed of two Regional Investment Platforms (Africa and the Neighbourhood) combining blending activities with a new guarantee, to unblock bottlenecks to private investment by reducing the risks involved.

The new EFSD guarantee will have a number of investment windows under which partial guarantees will be provided to a portfolio of investments made by public finance institutions and the private sector.

European Fund for Sustainable Development (EFSD)European Fund for Sustainable Development (EFSD)

Stepping up technical assistance (pillar 2)

The Commission has made significant resources available to help partner countries attract investments by developing a higher number of bankable projects and introducing them to the international investment community.

Technical assistance will also be provided to support micro, small and medium-sized enterprises in preparing bankable projects, to promote public and private dialogue and improve the regulatory and business environment in partner countries.

Promoting a conducive investment climate (pillar 3)

The External Investment Plan will provide a multi-level approach in our partner countries through the following elements, in which EU Delegations will play a key role:

  • structured dialogue with businesses at country, sector and strategic levels, including through the promotion of European and local business fora
  • policy and political dialogue with partner governments to address key constraints to investments and promote good governance
  • support to regulatory, policy and governance reforms, building upon market, sectoral and value-chain intelligence at country level
  • ensuring coherence with other European Union policies, aid modalities and EU country initiatives.

4 boxes explaining the content above on promoting a conducive investment climate

Background

Instability and conflicts in Africa and the EU Neighbourhood have been aggravated by the global economic crisis, resulting in increased overall indebtedness and reduced access to finance for badly needed investment. Instability and conflict have also exacerbated the ongoing migration crisis, with more people than ever on the move in Africa and in the Neighbourhood.

This poses short and long term challenges that need to be addressed in order to deal with the root causes of migration. A key focus here will be the provision of support for inclusive and sustainable growth and job creation.

Smart and sustainable investment can play an essential role in boosting jobs and growth in developing countries, bringing more stability and improving conditions on the ground in fragile countries affected by conflict.

In recognition of this, in June 2016, the Commission adopted a Communication on establishing a new Partnership Framework with third countries under the European Agenda for Migration which, among its other objectives, called for a long term strategy to achieve the Sustainable Development Goals (SDG) set in the 2030 Agenda.

Given the limited nature of ODA financing, private sector engagement plays a central role in this strategy. The private sector will be key to generating the huge amounts of investment needed to achieve the SDG and transform development policy to allow it to address the multiple challenges faced in both the EU's Neighbourhood and Africa.

The External Investment Plan builds on the experience gained with the very successful Investment Plan for Europe. It also builds on the European Commission’s experience in implementing regional investment facilities and a wide number of economic and governance programmes in Africa and the Neighbourhood.

Innovative Financial Instruments (blending)