The European Union launched three EU-supported investment programmes valued at €700+ million which will mobilise €6.3 billion in public and private investments, taking a big step towards closing the Sustainable Development Goals (SDG) investment gap.
The programmes, which all reflect a strong commitment towards climate resilience and inclusive economic prosperity, are all supported by the European Fund for Sustainable Development Plus (EFSD+), one of the financing tools of Global Gateway, promoting sustainable investments in partner countries.
EDFI ‘Carbon Sinks’ Programme
EU and European Development Finance Institutions (EDFI) launch a new Global Gateway climate mitigation programme known as ‘Carbon Sinks’, aiming at mobilising €4 billion of forestry sector and other nature-based climate investments in developing and emerging countries. The programme will remove more than eight million tons of CO2 and other greenhouse gases from the planet’s atmosphere in global efforts to curb global warming and mitigate climate change and restore natural habitats. The EDFI Carbon Sinks Guarantee Programme received an injection of €366 million of EFSD+ support to be managed by the EDFI Management Company (EDFI MC). This support will be used to significantly boost the capacity of EDFIs to support higher investments levels into countries in Sub-Saharan Africa, Americas and Caribbean, Asia, the Middle East, the Pacific, and Western Balkans.
EDFI MSME Platform Plus Programme
The European Union (EU) and EDFI Management Company (EDFI MC) together with European Development Finance Institutions (EDFIs) have also partnered up to scale up a key initiative aimed at generating employment, and enhancing financial inclusion, especially amongst Young Businesses in Africa (IYBA) and women-led businesses. The EDFI MSME Platform Plus Programme, supported by €255 million of EFSD+ guarantees, will provide critical support for job creation, and economic growth for micro, small, and medium enterprises particularly in the manufacturing, supply chain, and agriculture sectors in Sub-Saharan Africa and the EU Neighbourhood East regions, by supporting EDFIs to enhance their lending support to local banks. By addressing financial constraints faced by MSMEs, the programme intends to mobilise more than €2 billion in financing and enable smaller local banks to access EDFIs’ financing for the first time.
DFCD Aya Programme
The European Commission and the Dutch entrepreneurial development bank FMO, the manager of the Dutch Fund for Climate and Development (DFCD), embark in a new partnership in an effort to fight climate change and foster sustainable development. Under EFSD+, the DFCD is to receive a top-up to its Land Use Facility, further confirming the EU’s commitment to addressing climate adaptation and mitigation through strategic investments in agriculture, forestry and ecological systems. The EU’s budgetary guarantee is worth up to €105 million and is supported by EFSD+. This triple-A EU guarantee enables a €240 million top-up to DFCD’s Land Use Facility.
With additional funding, the programme is expected to further assist entrepreneurs in their growth while promoting private sector development, addressing investment barriers, and fostering gender equality.
European Commissioner for International Partnerships Jutta Urpilainen said: "We are proud to announce the launch of three impactful programmes as key initiatives under Global Gateway, reaffirming our unwavering commitment to sustainable development and climate action. These programmes exemplify our efforts to bridge the global investment gap and build stronger connections worldwide. Each one of them lays the foundation for a more inclusive and resilient future, while reinforcing local value chains for sustainable growth."
European Commissioner for Neighbourhood and Enlargement Olivér Várhelyi said: “As part of our tailored-made Economic and Investment Plans, today's signature is another excellent example of our firm commitment to supporting economic inclusion in the Western Balkans and the Eastern Neighbourhood. Through the EFSD+ Guarantee Programme, we will mobilize €4 billion for the forestry sector to mitigate the heavy effect of climate change and another €2 billion for the job creation of micro-, small- and midsize enterprises, particularly in the manufacturing, supply chain, and agriculture sectors. We are dedicated to promoting growth and jobs in our partner countries with all our available tools and instruments, ensuring a long-term commitment to economic inclusion.”
Rodrigo Madrazo Garcia de Lomana, CEO of EDFI MC, stated: “These initiatives exemplify the EU's and EDFI MC's commitment to delivering on Global Gateway. With the support of €621 million from the European Fund for Sustainable Development Plus (EFSD+) European DFIs will be able to scale up innovative development finance solutions that foster economic opportunities and environmental sustainability in areas where traditional financing options are limited. By supporting European DFIs, we are empowering local businesses and making a tangible impact in EU partner countries. I wish to thank the EU for such excellent collaboration and for supporting us with EFSD+, the financial arm of Global Gateway.”
Huib-Jan De Ruijter, Co-Chief Investment Officer, FMO said: “This new guarantee agreement with the European Commission represents a significant step forward in our mission to drive food security and climate investments. By enhancing the DFCD Land Use Facility, we are better equipped to support local MSMEs, foster sustainable agricultural and forestry practices, and improve the resilience of vulnerable ecosystems. This partnership underscores our commitment to creating impactful, scalable solutions that address climate change and promote sustainable development. We are excited to continue working with the European Commission to achieve these critical goals."
Source: European Commission