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The private sector holds the largest potential for generating jobs and growth and it is therefore essential to boost responsible private investments — both domestic and foreign — in Africa. Africa’ s strong economic progress over the last two decades shows that there are substantial opportunities. At the same time, it is necessary to generate millions of new jobs, especially for young people entering the job market. Yet, in many African countries, instability and conflicts reduce the access to finance for much needed investment.

The EU is a key investor in Africa and supports investment further through de-risking and facilitating access to finance. The main tool to encourage investment in Africa and the EU Neighbourhood is the EU External Investment Plan (EIP). The Plan will encourage private investors to contribute to sustainable development in countries outside of Europe. The European Fund for Sustainable Development (EFSD) is the financing mechanism supporting investments by public financial institutions and the private sector. The priority goes to sectors with a high potential for job creation, such as: sustainable energy and sustainable connectivity; micro, small and medium enterprises financing; sustainable agriculture, rural entrepreneurs and agroindustry; sustainable cities and digitalisation for sustainable development.

Targets

By 2020, the EU aims to leverage € 44 billion of public and private investments with a contribution of € 4.5 billion from the EU.

Progress

Financial input: The EU’ s financial input to the EU External Investment Plan comprises guarantees and blending mechanisms. In 2018,  the goal was already exceeded with funds worth € 4.6 billion in motion.

Expected investment: In 2018, with the EU’s input, € 47 billion of investments are expected to be achieved, exceeding prior expectations

 

EIP: Check the latest progress here

 

Recently signed agreements:

 

Guarantees

NASIRA

 

Agreement signed on 18 December, 2018 with the Dutch Development Bank (FMO).

The NASIRA risk-sharing facility will boost financing for micro-, small and medium-sized enterprises by addressing the high risks involved in lending to under-served entrepreneurs in partner countries. It will benefit those who usually struggle to access affordable loans, such as internally displaced people, refugees, returnees, women and young people.

  • € 75 million of guarantee
  • Up to € 750 million investments expected
  • Create up to 800,000 jobs in Sub-Saharan Africa and the EU Neighbourhood.

Blending

AGRI-BUSINESS CAPITAL FUND

 

Agreement signed on 15 February 2018 with the International Fund for Agriculture and Development.

The Agri-Business Capital Fund, is a major blending operation for agricultural investments in developing countries. It will support smallholder agriculture by increasing access to finance for individual smallholder farmers.

  • € 45 million of grants
  • € 200 million investments in agri-businesses expected
  • Benefit up to 700,000 households

FMO Ventures Programme

Agreement signed on 12 November 2019 with the Dutch development bank.

The guarantee will target companies offering digital solutions in a wide range of areas, from agriculture, energy access and financial services to education, healthcare, transport and logistics. It will guarantee venture capital provided by FMO to start-up companies, in particular led by young entrepreneurs.

  • € 40 million guarantee agreement
  • Support up to 125,000 jobs, directly and indirectly, in Sub-Saharan Africa and the EU Neighbourhood

 

Archipelagos One4A – One Platform for Africa

Agreement signed on 12 November 2019 with Cassa Depositi e Prestiti (CDP), the Italian Development Bank, and the African Development Bank (AfDB).

The guarantee will support access to finance across Africa for high potential small businesses. In order to help their growth, the programme will provide financing through innovative capital markets solutions. It will also enable financing partners to share the risk of investing in projects.

  • € 30 million guarantee agreement
  • Generate up to 50,000 jobs, many for young people, and benefit about 1,500 small businesses in 10 African countries.