On Wednesday 28 May, the European Commission proposed a series of targeted changes to the current rules governing EU investment in partner countries.
The EU institution wants to increase the effectiveness and scope of the ‘European Fund for Sustainable Development Plus’ (EFSD+) budget guarantee, the External Action Guarantee (EAG), the Union’s main risk-sharing instrument for supporting priority investments outside the EU. Up to €471 million in additional resources would be mobilised, according to the Commission.
In its legislative proposal, the Commission points out that “the potential pipeline of projects generated by the European Investment Bank (EIB) under its dedicated investment windows is in excess of the available lending volume by the end of the investment period, i.e., December 2028”, and that “overall, the demand for the EFSD+ guarantee exceeds the available amounts”.
Transfers. In this way, the Commission wishes to facilitate the transfer of funds between the various guarantee products. These transfers would optimise the use of the financial capacity already available.
Risk coverage. The Commission is also proposing to reduce the level of risk cover provided by the EU for certain EIB loans in order to free up additional guarantee capacity.
Simplification. At the same time, the Commission has announced that it is in the process of ‘simplifying’ EAG procedures.
“These new measures will allow the EU's implementing partners, such as the EIB, the European Bank for Reconstruction and Development (EBRD) and other European Development Finance Institutions, to work more efficiently by streamlining procedures”, said the Commission in a press release.
This simplification is aimed in particular at reducing reporting requirements, reducing negotiations through the increased use of top-up financing and framework agreements, and simplifying the process of combining financing (‘blending’).
According to the European Commissioner for Simplification, Valdis Dombrovskis, the proposal presented on Wednesday could save the EU’s implementing partners €21.5 million, “on top of the more than €8 billion in broader simplification measures already identified this year”, he said.
The legislative proposal amends the current ‘NDICI - Europe in the World’ regulation and introduces a derogation from the EU Financial Regulation.
See the legislative proposal: https://aeur.eu/f/h3v (Original version in French by Bernard Denuit)