The largest source of grant finance for EIB mandates for blending outside the EU is the so-called ‘EU contribution’ contracted with the European Commission (EC).
The EC has established a number of regional and, more recently, thematic investment facilities grouped under the EU Blending Facilities framework.
This framework covers the entire geographic range of the EU’s external cooperation policy and key policy areas of intervention. As such it contributes to the strategic development goals of the EU and partner countries..
Overview of regional investment facilities:
- AIF – Asia Investment Facility
- IFCA – Investment Facility for Central Asia
- LAIF – Latin America Investment Facility
- AIP – Africa Investment Platform, previously AfIF – Africa Investment Facility and EU-Africa Infrastructure Trust Fund (ITF)
- CIF – Caribbean Investment Facility
- IFP – Investment Facility for the Pacific
- NIP – Neighbourhood Investment Platform, previously NIF – Neighbourhood Investment Facility
Overview of thematic investment facilities:
- ElectriFI – Electrification financing initiative
- AgriFI – Agriculture Financing initiative
- Climate Finance Initiative
How it works
The EIB enters into agreements with the EC (representing the EU and the Member States for the European Development Fund) for specific operations under a specific EU regional or thematic blending facility.
The principle of blending mechanism under EU-funded regional and thematic investment facilities outside the EU is to combine long-term financing from eligible financial institutions (FIs), such as the EIB, with EU grant financing, and to attract loans or equity investments from public authorities and private financiers.
On a case-by-case basis, the EU grant contribution can take different forms to support investment projects:
- Investment grant - decreasing the total funding needs for the promoter/partner country at given investment project costs or Interest rate subsidy - reducing the total amount of debt service
- Technical assistance - ensuring the quality, efficiency and sustainability of the project
- Financial instruments such as: risk capital (i.e. equity, quasi-equity) - attracting additional financing or Guarantees - unlocking financing for development by reducing risk
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