As part of its External Investment Plan, the EU gave its green light to a package of financial guarantee programmes worth around €800 million on 10 July. This will help to leverage an estimated €8-9 billion in public and private investment in Africa and the Neighbourhood. This decision is a major milestone towards delivering investments in Africa and the Neighbourhood through the EU’s External Investment Plan (EIP), which is expected to leverage €44 billion of investments through an EU contribution worth €4.1 billion. The EIP aims to promote inclusive growth, job creation and sustainable development and in this way to tackle some of the root causes of irregular migration.

The EIP consists of three pillars: The financial pillar, with its European Fund for Sustainable Development worth €4.1 billion; technical assistance to help beneficiaries to develop financially attractive and viable projects; as well as policy dialogue, to help improve the investment climate and business environment in our partner countries.

The agreement on first guarantee programmes concerns the EIP’s financial pillar, and paves the way for signing the first contracts for guarantee agreements with eligible partner financial institutions already in the second half of 2018. These institutions will then use EU guarantees to finance new development projects and attract additional private investments.

The guarantees lower some specific risks of investing in projects in the EU’s partner countries in Africa and in the EU’s Neighbourhood. This will help to bring private investment in areas where public development assistance on its own would not have been sufficient to get projects off the ground, as well as where investments would not have taken place otherwise, or where they would not have done so at the same scale – what is known as additionality.

Detailed information on the twelve guarantee tools for investment products