Leveraging private finance Want to share this page? Use our short URL ecdpm.org/finance. Development challenges require substantial amounts of finance that scarce public resources alone will not be able to provide. In line with the 2030 Agenda and its Sustainable Development Goals (SDGs), both governments and multilateral institutions are looking increasingly at opportunities to use aid and public finance in a ‘smarter way’. To do so, they strategically use development banks and finance institutions to leverage private investments by mitigating risk and providing appropriate incentives towards potential investors. By blending public and private resources, the overall available amount of funding can be significantly increased to have greater development impact, while potentially allowing to take more risk and promoting investments in countries and regions, where private investors and companies alone would not go. In this regard the role of development banks, as well as development and international finance institutions (DFIs and IFIs), is crucial. They can not only improve the amount and quality of projects and the capacity of local partners but also build a pipeline of projects (e.g. in agriculture or energy). This, in turn, can help attracting investments by philanthropic, institutional and other private investors. Using technical assistance and policy dialogue in combination with a variety of financial instruments further helps to shift from pure grant funding towards blended finance, to promote sustainable investments that are both financially viable and have a high development impact: ECDPM has been and will be supporting such efforts by brokering knowledge, providing policy analysis, and facilitating dialogue among relevant stakeholders and policy-makers. This is our contribution to enhance the overall financial instruments’ and actors’ complementarity, effectiveness, transparency and coherence as well as point to challenges and opportunities in their implementation. Would you like to know more about our work on policy coherence or share your thoughts? Get in touch with San Bilal, Sebastian Große-Puppendahl or Karim Karaki. For media enquiries, please contact Virginia Mucchi. Publications The European External Investment Plan: Challenges and next steps for a game changer (Briefing Note 102) San Bilal and Sebastian Große-Puppendahl, Briefing Note 102, March 2018. What is the European External Investment Plan really about? (Briefing Note 101) Sebastian Große-Puppendahl and San Bilal, Briefing Note 101, March 2018. EU financing and private investments: Time for a quantum leap San Bilal, ECDPM blog, 5 February 2018. The EU’s financial instruments for access to energy in sub-Saharan Africa (Discussion Paper 218) Sebastian Große-Puppendahl, San Bilal and Karim Karaki, Discussion Paper 218, November 2017. Can Africa and Europe jointly walk the talk on investment mobilisation? San Bilal, ECDPM blog, 27 November 2017. Au delà des discours : l’Afrique et l’Europe vont-elles mobiliser ensemble les investissements pour le développement ? [in French] San Bilal, ECDPM blog, 27 November 2017. The European External Investment Plan and sustainable development – don’t reinvent the wheel, just realign it Karim Karaki, Bruce Byiers and Sebastian Große-Puppendahl, ECDPM blog, 3 March 2017. Investment promotion for sustainable development: The roles of DFIs and export credit agencies (Discussion Paper 208) Sebastian Große-Puppendahl, Karim Karaki and San Bilal, Discussion Paper 208, December 2016. Blending 2.0: Towards new (European External) Investment Plans (Discussion Paper 207) San Bilal and Sebastian Große-Puppendahl, Discussion Paper 207, December 2016. The European External Investment Plan: more than old wine in a new bottle San Bilal, Column in Euractiv, 16 September 2016. The EIB’s innovative role in ACP countries under the Cotonou Agreement: Options beyond 2020 (Discussion Paper 196) San Bilal and Sebastian Große-Puppendahl, Discussion Paper 196, July 2016. Beyond aid in private sector engagement (Discussion Paper 187) Sebastian Große-Puppendahl, Bruce Byiers and San Bilal, Discussion Paper 187, May 2016.

Source: ecdpm.org

Brussels on July 10 announced plans to fund a package of financial guarantee programmes worth around €800m. The aim is for the programmes to leverage an estimated €8-9bn in public and private investment in Africa and the neighbourhood.

Source: www.europeaninterest.eu

A factsheet about the European Investment Plan, highlighting examples of projects already supported by the EU, which will be stepped up with the help of the External Investment Plan. The projects highlighted are: EFSE (Neighbourhood Window of the European Fund for South East Europe), the DCFTA Direct Finance Facility, the SME Finance Facility – Phase II, and the Eastern Europe Energy Efficiency and Environment Partnership E5P. The External Investment Plan builds on the European Commission’s experience in implementing regional investment facilities. Since 2008, the Neighbourhood Investment Facility has used €2 billion in grants to leverage more than €16 billion from partner International Financial Institutions.

Source: www.euneighbours.eu

The Dutch Government is increasingly investing in private sector development. The new Dutch Good Growth Fund (DGGF) will provide loans to companies to invest in southern countries. Will this contribute to development? How to ensure positive and prevent negative impacts?

Source: www.youtube.com

 

 

Source: www.scoop.it

 

 

Source: www.scoop.it

Ivana Stanojevic is a Programme and Investment Officer for the EU External Investment Plan (EIP). Here she shares her motivation to join the team working on the EU’s biggest investment programme for Africa and countries neighbouring the EU, the daily challenges she faces and her expectations for the future.

Ivana, who originally comes from Serbia, assesses programmes which development banks and other financial institutions propose to the Commission for funding under the EIP. She joined the EIP Secretariat in December 2017 after more than twelve years in the banking sector.

“Working on the EIP gives me an opportunity to further pursue my interest in EU policy and investment management. It also means I can contribute to the EIP’s mission to boost investments in Africa and the EU Neighbourhood,” says Ivana. “I want to add value and contribute to the management of the financial pillar of the EIP, the European Fund for Sustainable Development (EFSD). I believe the Plan will really help to reduce poverty, promote development in the countries that we work with, and promote good governance and respect for human rights.”

Source: ec.europa.eu

The health of Uganda’s wetlands impacts everything from the livelihoods of surrounding communities to rates of gender-based violence. The proper management of this unique ecosystem can help address root causes of conflict while empowering women at the same time.

Covering 11 per cent of the country, Uganda’s wetlands represent important centres of biodiversity and sources of livelihood for many communities.  For over a decade now, the unique ecosystem has enjoyed relative stability, but this hasn’t always been the case.

Despite a strong legal framework, short-term interests have often won out due to weak enforcement and lack of institutional coordination.

Source: europa.eu

Energy portfolios better explain the complex reality of rural households’ energy choices and help identify previously overlooked opportunities to address their needs

Despite economic growth in recent times, energy poverty remains a critical problem for the rural poor in India. In 2016, 20% of Indians (244 million people) lacked access to electricity, and nearly 70% (819 million people) cooked using solid biomass fuels. The regular use of traditional and inefficient energy sources adversely affects the health of users and their families, their economic development, and the environment.

Source: www.inclusivebusiness.net

Thomas Koutsky of USAID explains that the increasing differences between the quality of network connections will have a “profound impact on the services that are available to low-income people.”  He asks the really tough questions: Has the developing world caught up with digital technology just in time for the game to change with advances in 4G and 5G technology in the western world?

 

If automation puts people in developing countries out of work, is that development? Koutsky argues that we are on the edge of “transformative” digital development to lift people of poverty, but that apps alone won’t save us. The work will still require hard, on the ground, traditional human capital development to capture the opportunities that mobile technology can provide to low-income populations. 

Source: www.inclusivebusiness.net