European Union

Inclusive Business in Development Cooperation of EU Member States

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 also in charge of implementing 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.

The key policy document is the Commission Communication – 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.

Another recent Commission Communication is the Achieving Prosperity through Trade and Investment Updating 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 the three pillars, providing a guarantee, technical assistance and promoting a conducive investment climate. One of the EIP windows are focused on Micro, small and medium enterprises, including inclusive aspects such as targeting women entrepreneurs, as well as having a focus on fragile states.

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 also 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.

Sustainable Energy for Women

Budget (mio €)
18.10
Region
Sub-Saharan Africa
Programme description

Objective:

Increasing the number of women in the sustainable energy sector’ value chains, boosting women’s active role, their entrepreneurship and improving their access to financial and energy services. Fostering the development of private sector and jobs creation in particular for women in developing countries. Promoting gender equality, improvement of women’s lives and status, eradication of poverty and jobs creation.

Mining

Funding
European Union
Budget (mio €)
5.30
Region
Sub-Saharan Africa
Programme description

Objective:

Implementation at the mining areas of the "accompanying measures" to the Conflict Minerals Regulation (EU) 2017/821 to ensure the responsible sourcing of 3TGs minerals from conflict affected and high risk areas (CAHRA). While focusing on the sustainable socio-economic development of the local artisanal mining communities, the activities will help Union importers to meet the due-diligence requirement of the EU Regulation.

ElectriFI (Electrification Financing Initiative)

Funding
European Union
Implementation
Association of European Development Finance Institutions (EDFI)
Budget (mio €)
125.00
Region
East Asia and Pacific
Europe and Central Asia
Latin America and the Caribbean
Middle East and North Africa
South Asia
Sub-Saharan Africa
Programme description

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.

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AgriFI (Agriculture Financing Initiative)

Funding
European Union
Implementation
Association of European Development Finance Institutions (EDFI)
Budget (mio €)
39.00
Region
Global
Programme description

Objective:

Respond to the lack of financing mechanisms adapted to smallholders with limited market orientation, vulnerable groups, women and youth, farmers and entrepreneurs.

Activities:

Support the increase of yields at affordable rates. Help raise farmer incomes. Adhere to the highest environmental and social standards. Support sustainable supply chains that create additional employment. Improve food security and enhance environmental and social practices.

Local economic development programme – PRODEL

Funding
European Development Fund (EDF)
Implementation
National Directorate for Rural Development (DNDR/MITADER)
Budget (mio €)
25.00
Region
Sub-Saharan Africa
Programme description

Objective:

To contribute to poverty reduction through income generation and employment opportunities in the rural areas of Mozambique.

Activities:

Strengthening the productive base and the competitiveness of local MSMEs. Promoting complementarities and coordination amongst sectors and between central and local authorities, together with the overall policy dialogue on Local Economic Development for poverty alleviation.

Rural Economic Development Programme (RED2)

Funding
European Development Fund (EDF)
Implementation
United Nations Capital Development Fund (UNCDF)
Budget (mio €)
6.00
Programme description

Objective:

To improve rural infrastructure in the Highlands region; to develop access to financial services for agricultural value chain financing; to develop value chain support services and service delivery capacity of local government in the Highlands region.

Inclusive Business Action Network (iBAN)

Funding
The Federal Ministry for Economic Cooperation and Development (BMZ)
Implementation
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
Budget (mio €)
8.50
Region
Global
Programme description

Objective:

To unlock the power of inclusive business for sustainable development. To act as an entry point and facilitator to the global IB community.

Activities:

Capacity development for inclusive businesses, fostering the private-public dialogue, curated knowledge and information sharing.