European Union
Institutional Setup
Within the European Commission, the Directorate-General for International Cooperation and Development (DEVCO) is in charge of development policy in a wider framework of international cooperation, adapting to the evolving needs of partner countries. DEVCO plays a leading role in implementing the 2030 Agenda for Sustainable Development, including its 17 Sustainable Development Goals (SDGs), in EU international cooperation and development policy. DEVCO also coordinates actions to implement the new European Consensus on Development which is a shared vision and framework for action for development cooperation for the European Union (EU) and its Member States. Following the Agenda 2030, the Consensus is focused around the themes people, planet, prosperity, peace, and partnership.
DEVCO is responsible as well on the implementation of the European Union’s external financing instruments financed by the general budget of the Union and the European Development Fund. In this context, DEVCO ensures the high quality and impact of development cooperation, the swift implementation of projects and programs and the visibility
Inclusive Business in Private Sector Promotion
Over the last decade, European Commission support for private sector development has averaged EUR 350 million per year and the current Multiannual Financial Framework for 2014-2020 contains approximately EUR 2 billion for private sector development. This, combined with development assistance from Member States, makes the EU a key player in supporting local private sector development in partner countries.
Private sector engagement and the principles that guide the EU’s collaboration and support to the private sector have been introduced as a new dimension into EU development policy with the 2014 Commission Communication on A Stronger Role of the Private Sector in Achieving Inclusive and Sustainable Growth in Developing Countries. The Communication highlights 12 concrete actions where the Commission believes it can add value and effectively complement actions by Member States and development partners on private sector cooperation. The actions target better regulatory environments in partner countries, business development and access to finance, especially for job-creating micro, small and medium-sized businesses. Action 11 specifically addresses support to the replication and scaling-up of successful inclusive business models and innovative, market-based solutions to development problems by strengthening action-oriented private sector platforms and networks that facilitate knowledge sharing, partnerships and match-making between businesses and other actors.
Another recent Commission Communication entitled Achieving Prosperity through Trade and Investment was adopted in November 2017 and updates the 2007 Joint EU Strategy on Aid for Trade. The Communication highlights the importance of trade as an instrument to poverty reduction and jobs creation through trade and investment. It puts a strong focus on inclusiveness by targeting the least developed countries, and countries in situations of fragility.
One of the Commission’s recent key private sector priorities is the External Investment Plan (EIP), which sets out a coherent and integrated framework to improve investment in Africa and the European neighborhood in order to promote decent job creation as well as, inclusive and sustainable development. This is done through an integrated approach comprising three pillars: a guarantee, technical assistance and support to promoting a conducive investment climate in Africa and the EU Neighborhood. One of the EIP windows are focused on micro, small and medium enterprises, including underserved segments such as women and youth entrepreneurs, as well as informal businesses and those located in fragile states.
The Commission also places strong emphasis on promoting the enforcement of international social, environmental and human right standards to enhance sustainability aspect within global value chains. Since 2016, EUR 38 million have been committed with the core objective to support decent work, transparency and traceability in the garment sector as well as an additional EUR 37 million have been committed with the core objective to support the implementation on the regulation on conflict minerals.
For the upcoming years, the Commission is considering a potential expansion of the EIP, integrating investment mobilisation with investment climate improvements also in other regions, beyond Africa and the European Neighbourhood. In addition, as part of the EIP, an extended European Fund for Sustainable Development+ (EFSD+) would cover all EU partner countries and an External Action Guarantee, with increased resources of up to EUR 60 billion.
At policy level, the Commission could consider a new Communication in the second half of 2020 to develop a clear vision of the EU’s partnership with the private sector for the ten years left to achieve the SDGs.
Regional Focus
DG DEVCO implements programmes and projects around the world, wherever assistance is needed. Programmes with a global reach allow the EU to provide similar support to countries facing similar problems. DG DEVCO seeks to target funds to countries most in need. This is in support of the EU and its Member States’ commitment to provide 0.15%-0.20% of GNI as Official Development Assistance to Least Developed Countries in the timeframe of the 2030 Agenda. Much of DG DEVCO’s work takes place in Sub-Saharan Africa and the European Neighborhood Region.
In 2018, a new Africa-Europe Alliance for Sustainable Investment and Jobs was announced by President Jean-Claude Juncker, deepening the economic and trade relations between the continents and aiming to boost strategic investment and strengthen the role of the private sector, improve the business environment and investment climate and enhance people’s skills for ultimately tapping the full potential of trade economic integration. Since its inception, more than EUR 750 million have been committed to regional economic integration in Africa, via the Pan-African programme and RIPs.
Publications/Websites
Inclusive Business Action Network (iBAN)
Inclusive businesses
Objective: iBAN’s objective is to improve the conditions for the upscaling and replication of inclusive business models.
Activities: To achieve its objective, it develops new approaches to improve IB models, helps deepening the technical know-how and the managerial skills of high ranking managers, promotes the establishment of enabling framework conditions for IB models by high-ranking policy makers, and provides access to curated IB knowledge via iBAN’s online platform.
Women and Sustainable Energy in Developing Countries
Women, Entrepreneurs
Objective: The program’s objective is to increase the involvement of women in sustainable energy value chains, boosting their active role, entrepreneurship skills and improving their access to energy services.
Activites: The main focus of the action is on fostering MSMEs and entrepreneurial activities of women in or thanks to the sustainable energy sector in developing countries. It fosters development of private sector and jobs creation in particular for women, leading to the implementation of suitable models, which could be scaled up in the future.
The Consultative Group to Assist the Poor (CGAP) component of the Sustainable Investment Climate and Value Chains Programme II
Poor communities
Objective: The overall rogramme aims at enhancing EU’s participation in various partnerships and actions that improves the role of the private sector as a key developmental actor with emphasis on sustainable value chains, financial inclusion and the role of the financial sector.
Activities: The GCAP component aims to promote and scale up the financial inclusion strategies to allow people living in poverty to capture opportunities and build resilience. A particular emphasize will be placed on digital financial inclusion and e-learning facilities.
Enhancing Decent Work, Transparency and Traceability for Sustainable garment value chains
Companies within the garment value chain
Objective: The programme supports enhanced transparency and traceability by helping both companies and governments to identify opportunities for efficient and sustainable management of resources, as well as risks for labour rights, human health and the environment. It fosters greater transparency, making it possible to gain accurate data, which can then be disclosed, made publicly visible.
Ethical Fashion Initiative “EFI” ITC partnership to strengthen fashion value chains and boost job creation
Artisans and MSMEs in the garment industry
Objective: The goal is to build a responsible fashion industry by connecting talented artisans – the majority of them women – to the international fashion industry. The project aims to spur the creation of dignified jobs and support the sustainable development of micro-enterprises in the ethical fashion and design supply chains.
Activities: The goal is to create around 5,000 direct jobs and 6,000 indirect jobs in social, micro and small enterprises, which will adhere to international fair labour standards.
Filling the gap: Achieving Living Wages through improved transparency –winner of a call for proposal
Workers in the garment and footwear supply chains
Objective: The project aims to reduce the wage gaps in the garment and footwear supply chains between the wages paid and the living costs as well as between wages paid to female and male workers.
Activities: The rationale of the intervention is to increase the active engagement of European consumers as well as the publicly disclosed supply chain information of workers’ wages while supporting the creation of better regulatory frameworks in Europe. On the other side, the activities of the project will focus as well on improving the capacity of workers and empower workers’ (rights) organisations for facilitating social dialogue.
SWITCH-Asia and Central Asia II – Promoting SustainableConsumption and ProductionPart I and Part II
SMEs, retailers, consumer organisations and consumer (groups)
Objective: The overall objective of the programme SWITCH-Asia and Central Asia II is to promote sustainable and inclusive growth, to contribute to the economic prosperity and poverty reduction in Asia and Central Asia and to a transition towards a low-carbon, resource-efficient and circular economy.
Activities: The intervention will support SMEs in adopting sustainable consumption and production practices, getting access to finance for implementing sustainable practices and facilitate their integration within green supply chains.
RED 2 Rural Economic Development Programme (Phase 2)
Rural communities
Objective: The overall objective of the project is to contribute to improving livelihoods of people living in rural areas of Papua New Guinea. The purpose of the project is to develop an enabling business environment in targeted rural areas of the country.
ELECTRIFI: Delivering access to modern, affordable and sustainable energy
Poor, vulnerable and isolated Communities
Objective: To grow viable businesses and projects that creates new connections to reliable and sustainable energy in emerging and developing countries.
Activities: Addressing the energy needs of populations living principally in rural, underserved areas and areas affected by unreliable power supply. Encouraging the adoption of renewable energy, with an emphasis on decentralized energy solutions. Providing funding and support to developers/investors across a range of business models
Minerals: Promoting responsible supply chain in the area of conflict minerals (3TG) in developing countries
Local artisanal mining communities
Objective: The objective of this action is to implement an appropriate set of "accompanying measures" to be carried out in conflict-affected developing countries in support to the Conflict Minerals Regulation (EU) 2017/821 adopted on 17 May 2017 to ensure the responsible sourcing of 3TG minerals (tin, tantalum, tungsten and gold) from conflict-affected and high-risk areas.
NASIRA Risk-Sharing Facility
Local under-represented entrepreneurs and refugees
Objective: The key objective of the Programme is to support local entrepreneurship ecosystem by facilitating lending to under-served entrepreneurs in countries neighbouring the EU and in Sub-Saharan Africa, many of whom have been forced to flee their homes.
Activities: It will give them access to investment loans by offering local financial institutions, such as banks and microfinance institutions, portfolio guarantees containing loans to entrepreneurs.
Archipelagos − One Platform for Africa (ONE4A)
High-potential African SMEs
Objective: ONE4A will spread best business practices and knowhow to SMEs. It will also enable a smaller number of high-growth SMEs, currently perceived as too risky, to obtain institutional investor funding. Thanks to the EU guarantee, some of these businesses will be able to list on capital markets.
Activities: ONE4A will generate up to 50,000 jobs, many for young people, and benefit about 1,500 small businesses in 10 countries in Africa. This will drive economic growth that benefits all sections of society, help to raise living standards, and enable many more people to access healthcare and education services.
FMO Ventures Programme
Innovative start-ups that use digital technologies to offer services to unpreviledge people or the ones working in the informal economy
Objective: The program aims to empower entrepreneurs for sustainable development. This guarantee will boost private investment in innovative start-ups that use digital technologies to offer services to people who currently have little or no access to them. For example, small-scale farmers and agribusinesses will benefit from socalled agri-tech solutions.
Activities: It will also benefit people working in the so-called informal economy. This includes activities such as bartering, odd jobs, and street trading, which aren’t recorded for tax purposes. Services which these start-ups could provide include digital payments and off-grid electricity for street vendors.
Sustainable Energy for Women
Local private sector and local communities
Objective: Identifying, stimulating financially sustainable business models of energy micro/mini-grid investments for productive uses of local RE, delivering electricity, digital and others contributing to financial inclusion, job creation, reducing migration.