The EU has greenlit an €800m investment package, which is expected to leverage up to €9bn in public and private investment in Africa.
The latest tranche of funding is part of the EU’s External Investment Plan, which in total aims to catalyse €44bn in public and private investment in Africa, with an EU contribution of €4.1bn, between 2017 and 2020. This level of investment will stimulate sustainable growth and job creation, as part of the European Commission’s overarching strategy to address the causes of irregular migration.
The targeted €800m investment will support programmes for economic growth, including an initiative which will enable more than 25,000 small business owners to access mobile accounts and long-term credit. Another project will help displaced people, refugees and returnees to borrow money at affordable rates.
How are funds from the External Investment Plan allocated?
The EU’s investments are divided into two pillars. The first is the guarantee fund, from which the most recent tranche of funding will be made available, and which provides financing for small businesses, agriculture, sustainable energy, and connectivity, including internet access and digital services.
The second pillar includes ‘blended’ financing, which means a combination of EU grants and loans, and which will support transport, energy, environment and urban development, as well as providing backing for some small and medium-sized enterprises.
What impact has the External Investment Plan had?
In terms of mobilising additional public and private investment in Africa beyond the EU’s contributions, the commission has celebrated the donation of around €53m by the Bill and Melinda Gates Foundation, which will make a particular impact on catalysing investment in e-health.
Commission High Representative Federica Mogherini celebrated this success, saying: “The EU’s External Investment Plan has already started to bring real benefits to the people in our partner countries. These guarantee programmes for sustainable investment give now access to affordable loans to people who have been forced to flee their country and those who have recently returned home to rebuild their lives: to start small businesses or to have access to new technologies. This plan is about building a new present for many people and for their countries, it is about changing lives, now and for good.”
