The external investment plan (EIP) discussed at the Abidjan summit is the largest investment program ever launched for Africa, because other countries bordering the European Union can also benefit from it. With a contribution of € 4.1 billion from the European Commission, EIP is expected to activate, according to estimates based on previous experience, € 44 billion of investments by 2020. The financing vehicle for the Plan is the European Fund for sustainable development (EFSD), to which the individual EU member states and the European Free Trade Association (EFTA) can contribute directly or by providing a guarantee. The mechanism through which the money to be invested is to be collected should be typical of fundraising through the issuing of bonds guaranteed by EFSD’s holdings, for collection of liquid assets for co-financing, together with private individuals and development projects. This would explain the multiplier effect that leads to 44 billion.
The funds for the Plan relating to investment will be assigned to suitable financial institutions, identified by the European Commission. These include: European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD), African Development Bank (Afdb), French Development Agency (AFD), Cassa Depositi e Prestiti (Cdp), Spanish Society for development finance (Cofides), Deutsche investitions undeEntwicklungsgesellschaft (Deg), Kreditanstalt für wiederaufbau (Kfw), Spanish Agency for International Development Cooperation (Aecid), Nederlandse Financierings-maatschappij voor ontwikkelingslanden (Fmo), Promotion and participation for coopération économique (Proparco).
Submiting a project
Companies interested in benefitting from EIP or wishing to make an investment must contact the financial institutions selected to manage the investment phases, where they will find all the information on the available mechanisms. A portal and a secretariat dedicated to the Plan will also be activated, which, among other things, will be able to direct interested companies to selected financial institutions. Moreover, if the project does not present the conditions to be financed with the EFSD guarantee, the secretariat will provide a list of financial institutions active in the regions of interest.
An example, the Climate Investor One
The Climate Investor One (IOC) is a fund managed by the FMO, one of the financial institutions already accredited by the European Commission. Its goal is to provide sustainable energy at affordable prices in emerging markets. The fund provides support to energy projects from start to finish, trying to solve market failures and inefficiencies at every stage of project development. By improving the quality of projects, the CIO aims to attract private investors and finance for countries with low and medium-low income, particularly in Africa. The EU contribution to the Climate Investor One is 30 million euros for an amount of investments activated of 900 million euros.
More information can be found here:
https://ec.europa.eu/commission/sites/beta-political/files/external-investment-plan-factsheet_en.pdf
http://europa.eu/rapid/press-release_MEMO-17-3484_en.htm
