Private Sector Participation Possibilities in Actions Funded within EU’s External Action

The involvement of the private sector in the implementation of the EU’s development cooperation programs has been strengthened in the context of the effort to meet commitments related to the Sustainable Development Goals and the 2030 Agenda. The World Bank has identified a relevant financial gap (5 to 7 billion EUR) which should be covered by the private sector.

In 2017, the External Investment Plan (EIP) was created to boost investment in partner countries in Africa and the European Neighbourhood. The EIP aims to mobilise and leverage sustainable public and private investments to improve economic and social development with a particular focus on creating decent jobs and addressing some of the root causes of migration. Under the first pillar of EIP (European Fund for Sustainable Development/ EFSD), guarantees are provided to facilitate investors’ access to funds. Under the second pillar, technical assistance is provided to prepare sustainable and attractive investment projects. The third pillar focuses on supporting the improvement of the investment climate and the business environment.

Over the past years, the main focus of the funding mechanisms and of the EU, in general, has been moving towards the creation of an environment of stability and prosperity in the partner countries in Africa and the European Neighbourhood. Therefore, in the future, actions to support governance, strengthen the rule of law and improve the business environment are expected to be of high priority.

The current financial period (2014-2020) is coming to an end. Information on the possibilities for private sector participation in the post-2020 period comes from the Commission’s proposal for a new budget (2021-2027), which has not been finalized. Negotiations on the new Multiannual Financial Framework (MFF) are ongoing and the process towards the establishment of the Neighborhood, Development and International Cooperation Instrument (NDICI) is underway.

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