Today, the European Commission and the European Investment Bank (EIB) signed a ambitious guarantee agreementthrough which the European Commission will support EIB financing operations of up to € 26.7 billionto enable critical public investment in areas such as clean energy, digital infrastructure and transport infrastructure, health and education over the next seven years, with the development of the Global Gateway worldwide.
Mr Oliver Varkhey, Commissioner for Neighborhood and Enlargementstated: “Today ‘s landmark guarantee agreement with the European Investment Bank will enable the financing of the implementation of our economic and investment plans for the Western Balkans, the Southern and Eastern Neighborhood. We have launched these three major investment projects to support the socio-economic recovery of these regions after the COVID pandemic and to accelerate the bridging of their growth gap with the EU. We have worked with the regions to identify the main obstacles to their development. Although each investment plan is designed individually for the region, it aims to develop faster and more sustainable road, rail and digital connections, to rid the economy of carbon emissions, to ensure secure energy supply, to create sustainable business opportunities and to create sustainable that will allow the new generation to stay in the periphery. In the coming years, together with the EIB, we will be able to implement these much-needed and expected investments in the Western Balkans, the Southern Neighborhood and the Eastern Partnership countries, achieving growth and jobs immediately and on a larger scale than ever before. »
The Commissioner for International Relations, Utah Urpilainenstated: “The new EU Strategy for the World Gateway will help us connect Europe with partners around the world, by investing in sustainable and high-quality infrastructure. Today, more than ever, we need stronger partnerships backed by ambitious financial instruments, such as today ‘s guarantee agreement. In implementing the Global Portal strategy, we rely on the European Investment Bank, which is our key strategic partner. Through our powerful tool, the European Fund for Sustainable Development +, our guarantees will leverage billions of investments – from both the public and private sectors. “This is the Europe Group in action, working together to create a transformative impact for our partners.”
The President of the European Investment Bank, Mr Werner Hoyerstated: “The agreement signed today is a key tool for implementing the World Gateway strategy and supporting a green, digital and inclusive global recovery. Today’s challenges require unprecedented levels of investment. Partnerships, multilateral cooperation and the mobilization of private capital are prerequisites for success. With the EIB Global, our new international partnership and development finance arm, we aim to enhance the impact of EU investment around the world through closer co-operation under the Europe Group approach. “This will help us to strengthen the impact of Europe’s efforts on all our partner countries.”
This guarantee agreement will be the largest guarantee agreement to be signed under the new European Fund for Sustainable Development + (“ETVA +”), set up by the WFD – Europe in the world. It will support the green and digital transition in EU partner countries and the implementation of the World Portal strategy, including the Africa – Europe World Portal investment package.
This guarantee agreement will enable the EIB to finance the implementation of key investments identified in the EU Economic and Investment Plans for the Western Balkans and the Southern and Eastern Neighborhoods. More than two thirds of this guarantee coverage is intended for investments in the enlargement countries and neighboring countries. It will also help fund post-war reconstruction in Ukraine. The rest will be used for EIB loans for projects in sub-Saharan Africa, Asia, the Pacific, Latin America and the Caribbean.
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The ETVA + guarantee agreement for EIB government lending is important part of the implementation of the new European Fund for Sustainable Development + (“ETVA +”) established by the Regulation on the Neighborhood, Development and International Cooperation Mechanism (“MGADS – Europe in the World”), which entered into force in June 2021. ETVA + also covers countries in the pre-accession stage.
ETVA + is the integrated financial arm of MGADS – Europe in a World that provides financial capacity in the form of budget guarantees, loans, equity, technical assistance and grants worldwide to support investments that support the achievement of sustainable development goals and promoting socio-economic and environmental resilience in partner countries, with particular emphasis on poverty eradication.
Investment support through ETVA + includes guarantee coverage of up to 40 billion euros Of this amount, EUR 26 725 billion is part of the EIB guarantee covering the EIB’s investments.
The rationale behind the EU budget guarantee is to cover the risk of EIB loans outside the EU and, therefore, the Bank’s ability to finance projects to support EU policy in higher risk environments. The EU guarantee enables the EIB to implement public sector investments, such as the rehabilitation and construction of railways, roads, schools, hospitals or water and sewerage infrastructure, in higher risk environments outside the EU.
With the EU guarantee, the EIB will be able to provide loans with longer repayment periods, grace periods and lower interest rates. The EIB-funded financing activities will meet EU policies and the specific policy priorities of EU cooperation with partner countries.
In addition to this EIB-specific guarantee, the Commission will provide under the ETVA’s open architecture + coverage of guarantees of up to € 13 billion by 2027. It will be developed by various implementing partners, ie international financial institutions ( including the EIB) and European Development Financing Institutions to mobilize private investment to support our partner countries in achieving SBAs.
Lena Flytzani
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