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Supporting EPA implementation:
EU Development Co-operation in action
EPA outreach in Lesotho and Swaziland14-20 March 2018
Roberto CecuttiTrade Affairs Officerfor SADC EPA implementation
European CommissionDirectorate-General for TradeUnit D.2 Economic Partnership Agreements – Africa,Caribbean and Pacific, Overseas Countries and Territories
EU-SADC EPA Article 12
• "The Parties commit to co-operating in order to implement
this Agreement […]. The co-operation may take both financial and non-financial forms.
• […]
• The Parties recognise that development co-operation is a crucial element of their partnership and an essential factor for the achivement of the objectives of this Agreement […].
• The EU financing […] shall be carried out within the framework of the rules and relevant procedures provided
for by the Cotonou Agreement. […]"
Funding instruments external cooperation and external aid
2014/2020
Thematic instruments Geographical instruments
European Instrument for Democracy and Human Rights
EIDHR
Instrument for Nuclear Safety
Cooperation
INSCPartnership Instrument
PI
Instrument contributing to Stability and
PeaceIcSP
Instrument for Development Cooperation DCI
Global Public Goods and Challenges
GPGC
Civil society organisations and local authorities
Instrument for Development Cooperation
DCI
Latin AmericaAsiaCentral Asiathe Middle-East South Africa
Pan-African programme
European Development Fund
EDF
ACP countries Overseas Countries and Territories of Member States
Instrument for Pre-accession Assistance
II IPA
European Neighbourhood
Instrument ENI
Instrument for Greenland
IfG € 15.4 billion
€ 30.5 billion € 11.8 billion
€ 11.7 billion
€ 217.8 million
€ 845 million
€1332.75 million
€120.34 million
€ 2 338.719 million
€ 954.7 million
€7 billion External Investment Plan
EIP€ 4.1 billion
Regional Indicative Programme 2014-2020
RIP focal area
Support through regional structures (including SADC Secretariat) to:
M€
Regional economic integration
1. Trade facilitation (SADC; COMESA)2. Industrialisation and value chain
development (SADC)3. Infrastructure (transport and energy)
68 + 15*18*
63** Under preparation following the mid-term review
Presently ongoing EU-funded SADC Trade Related Facility:• Trade Policy• Competition Policy• SQAM• Trade and Tariff Administration• Trade Facilitation• SPS/TBT• Industrial development
Mid-term review: securing EPA implementation
From To €
Reserve EPA implementation – country level + 36 million
• ESA EPA: Comoros + deepening + 6 million
• SADC EPA: Botswana, Lesotho,
Mozambique, Namibia, Swaziland
+ 30 million
Mid-term review: strengthening the focus on job creation
Focal area Region-wide programme M€
Regional economicintegration
EIP Technical Assistance facility for job creation and prosperity
+ 125
1. Policy dialogue with private sector, civil society, social partners
2. Regulatory and institutional reforms for improved investment and business climate
3. Development of value chains and services
National EPA Implementation Plan (1)
• Strategic document identifying implementation-related needs and solutions, e.g. regarding
• Compliance with the EPA
• Communication and education on the EPA
• Creation of a business-conducive environment and supply chains
• Financial and fiscal adjustments
• Trade-related infrastructure
• Plans are developed in a participatory process, are owned by the government, include strategic and technical analyses and operational proposals
7
National EPA Implementation Plan (2)
• Very important!
• The plan has to be aligned with national and regional development priorities (manufacturing, agriculture, regional integration, value chains, export orientation) and assess how the EPAs can be 'used' to achieve them
8
The EU's External Investment Plan The new generation instrument for sustainable development
#EIP #InvestGlobal
What are the EIP goals?
Contribute to Sustainable Development
Focus onjobs and growth
Tackle rootcauses of migration
Encourage private Investments
ImproveInvestment
climate
Why do we act?
3.9
Total annualInvestment
needs
Current Annual Investment
Total Investment gap
Source: World Economic Forum (2015)
Estimated global investment gap in key SDG sectors, 2015-30Trillions of USD, annual average
1.4
2.5
Estimates of Annual Incremental Investment Needsfor Africa to Achieve the SDGs
$ 210 Billionper year
Source: UNCTAD (2014)
Where do we act?
How do we act? The Three-Pillar Approach
What is new?
Integrated3-pillar
approach
One-stop -shop for public and
private investors
EFSD Guarantee
Moving beyond classical development assistance
Pillar 1: EFSD resources
The EFSD Guarantee
Will provide liquidityfrom its guarantee
fund (liquidity cushion)
Will leverage additional financing, in particular from
the private sector (crowding in), by reducing
the risk associated with specific operations
A risk mitigation mechanism
to stimulate investments in Africa and in the Neighbourhood
A guarantee capacity for credit
enhancement will ultimately benefit
the final investments and allow risk sharing
with other investors, notably private actors
Article 9 of the EFSD Regulation
– additionality– complementarity with other initiatives, clearly distinct, in particular from
the external lending mandate operations managed by the EIB– alignment of interest by providing adequate risk sharing– economically and financially viable– maximise, where possible, the mobilisation of private sector capital– respect the principles of development effectiveness
Pillar 1: EFSD Guarantee Eligibility criteria
Market failures or sub-optimal investment situations
Focus on youth and women empowerment
First investment windows
1. Sustainable Energy and Sustainable Connectivity
2. Micro, Small and Medium Enterprises (MSMEs) Financing
3. Sustainable Agriculture, Rural Entrepreneurs and Agribusiness
4. Sustainable Cities
5. Digitalisation for Sustainable Development
© Ezume Images - fotolia.com© Günter Menzl - fotolia.com
Cross-cutting objective: local currency financing, focus on fragile states, not-distortingmarket competition
The EFSD Guarantee: Where we stand?*
January 31 st ::First two windows the deadline to receive Proposed Investment Programmes (PIPs)
…
…
More than 30 PIPs were submitted from
several financial institutions
The requested amount of proposals exceeds already the EUR 1.5 billion of the EFSD Guarantee
March 31 st deadline for receiving PIPs for the remaining Investment Windows
Last year the EU contribution of almost EUR 900 mi llion via blended finance operations will help leverage the t otal investments
of EUR 5 billion in 31 major projects
*All data referred in this slide are indicative and currently in review
2017 blending operations:
Pillar 2: Technical Assistance in support of Pillar s 1 and 3
Support Pillar 1
Support Pillar 3
Market intelligence, Investment Climate Analysis, Dialogue
Market intelligence, Investment Climate Analysis, Dialogue
Government ReformsGovernment Reforms
Pillar 2
Investment pre-identification phase Investment pre-identification phase
Investment phaseInvestment phase
Investment preparationInvestment preparation
Capacity building and value chainsupgrading
Capacity building and value chainsupgrading
Pillar 2:Where are we today?EU's Existing TA in Sub-Saharan Africa (estimated 2 012-2017)
Pillar 3: Promoting a conducive investment climate
Pillar 3: Promoting a conducive investment climate"3-step bottom -up approach"
Bring in private sector perspective on business
constraints (SB4A)
Structured dialogue with business
Governance, reforms, value chain upgrading, TA,
budget support
Market intelligence, investment opportunities, in
key sectors and value chains
Policy and political dialogue with partner
countries; EU Cooperation
Country analysis: sector and value
chains
Coherence and complementarity
Key role of EU Delegations
Increase local value added
Identification of value chains with high
potential
Development and upgrading
Pillar 3: Support to value chains development and u pgrading
Thematic priorities: economic empowerment of women and youth; decent work and living wages; transparency and traceability in the va lue chain
Pillar 3: Structured dialogue with private sector
THE SUSTAINABLE BUSINESS FOR AFRICA PLATFORM
(SB4A)
African and EU Business perspective on addressing constraints in investment climate
Pillar 3: Sustainable Business for Africa Platform (SB4A) StructuredDialogue for Private and Public Sector
Building on existing work…
Bring in African and EU Business perspective on constraints and ideas for better investment climate
Launch at EU-Africa Business Forum,
Abidjan 27/11/2017
SB4A framework"addressing constraints, generating ideas"
EU and local business (Facilitated by EU Delegations, involving local
government
Sectoral platforms: Agro-business, digital, Energy and MSMEs
(Facilitated by HQ)
Informed Policy dialogue/ Well-targeted support act ions
country levelsectors
Solid market analysis and intelligence
Improved Investment climate and opening pathways in EIP partner countries
Plug-in strategic
partners for network
Plug-in strategic
partners for network
Support to Delegations : SB4A Guidelines including 10 elements of investment climate, knowledge materials (training, webinars), Cap4dev private
group, short term consultancies available upon request
Sectoral platforms : EU-AU Agribusiness platform, High level roundtable on renewable energy, Digital for Development (D4D)
Outreach at country level and in Brussels and in Member States
(20+ mission for 2018)
Communication materials: Guide on the EIP, Leaflet, website,
videos…
SB4A Implementation status
3rd Pillar: Country analysis and market intelligence
Jobs and growth Compact:1. Leverage impact Investments2. Foster convergence of investments towards the EU key priorities
Strategic cooperation1. Policy cooperation and expert meeting with EU MS on PSD and trade and
development/Aid for Trade2. Cooperation with DG Grow and structured dialogue with European business
organization and Enterprise Europe network3. High Level Strategic Dialogue with IOs and International Donors as World Bank
(FIAS, CIIP), UNIDO, ITC, OECD and UNDP
The EIP – Find your way and influence!
✓ One-stop-shop• Single entry point for investors and
partners• Enhancing accessibility
• Identifying key constraints toinvestment
• Country, sector and strategic level -EU Delegations
✓ Structured Dialogue
The EIP – How can businesses access it ?
Micro Small Medium Enterprises/ Cooperativeso Local Financial Institutions that benefit from risk sharin go Single entry point
Start-upso Investment fundso Venture capital supported by EIP
Large Companieso Development Financial Institutionso Private bankso Risk-sharing Instruments
✓ For Funding – through International financial institution s
https://ec.europa.eu/commission/external-investment -plan_en
EC-EIP-EFSD-SECRETARIAT@EC.EUROPA.EU
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