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OPPORTUNITIES FOR THE PRIVATE SECTOR INNOVATIVE EU FINANCIAL INSTRUMENTS Dr. Roberto Ridolfi Director DG DEVCO Sus

OPPORTUNITIES FOR THE PRIVATE SECTOR INNOVATIVE EU FINANCIAL INSTRUMENTS Dr. Roberto Ridolfi Director DG DEVCO Sustainable Growth and Development. Commission is a public grant funder but can join hands with the PS. Levels of intervention: . public goods character .

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OPPORTUNITIES FOR THE PRIVATE SECTOR INNOVATIVE EU FINANCIAL INSTRUMENTS Dr. Roberto Ridolfi Director DG DEVCO Sus

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  1. OPPORTUNITIES FOR THE PRIVATE SECTOR INNOVATIVE EU FINANCIAL INSTRUMENTS Dr. Roberto Ridolfi Director DG DEVCO SustainableGrowth and Development

  2. Commission is a public grant funder but can join hands with the PS Levels of intervention: public goods character ministries, central banks, public institutions BIOs, chambers of commerce, bank training institutes crowding-in private sector investment through pilots, demonstration effect banks, SMEs

  3. Our new private sector communication Strengthening the Role of the Private Sector in Achieving Inclusive and Sustainable Growth in Developing Countries

  4. Our new private sector communication WAYS TO ENGAGE WITH THE PRIVATE SECTOR Programming Public-private policy dialogue Responsible business practices Inclusive business models

  5. INVESTMENT FACILITIES

  6. BLENDING FINANCIAL mobilise additional public & private resources NON-FINANCIAL improve project sustainability, quality & speed AID EFFECTIVENESS improve cooperation between donors and FIs POLICY support reforms in line with EU policies LEVERAGE VISIBILITY provide more visibility for EU funding

  7. Sectors covered Figures since 2007

  8. extending partnerships expandingsectors Future of blending more private financing Innovate more and kick start private financing more use of innovative financial tools guarantees risk capital start-up financing etc.

  9. BLENDING • PARTNER FINANCIAL INSTITUTIONS • TENDER???

  10. OPPORTUNITIES IN THE DIFFERENT SECTORS

  11. Currentspecificopportunities for PS in Agriculture • All ACP Commodities Programme (2014-2017, € 18 million). • AAF/TAF – African Agriculture Fund (2012-2016, EU TAF contribution of € 10 million; Fund itself approx. € 150, multi-donor). • PIP - Pesticides Initiative Programme (2010-2014, € 32.5 million). • GIIF – Global Index InsuranceFacility (2009-2016), €24.5 million • Various programmes at national level. Mostly targeted at smallholders, SMEs, inclusive business. EU Delegations are in the lead. Example: Uganda SME agribusiness fund (2013-2025, • € 30 million, multi-donor).

  12. The case of the Uganda SME Agribusinessfund Objective: support marketdriven and privatesectorledeconomicgrowth and foodsecurity Targets: Small and Medium Agribusiness (the missing middle) Funding: 15 ml euro 10th EDF 15 ml euro private and developmentpartners

  13. ENERGY • Sustainable energy services • renewable energy • energy efficiency • access/rural electrification • Sustainable energy sector management • transparency & business climate • Sustainable energy financing

  14. EU FUNDING TOOLS FOR ENERGY • Investment Facilities • European Development Finance Institutions (EDFI) Private Sector Development Facility – 50 Mio € • GEEREF - 130 Mio. € • Technical Assistance Facility (TAF) – 65 Mio. €

  15. A 15 years Fund-of-Funds with €108 M (target €200 M+) in commitments Target: Private Equity Funds dedicated to small and medium sized projects in the renewable energy and energy efficiency sector Investors: EU (€75 M), Germany (€24 M) and Norway (€9 M) Portfolio: South Africa & East Africa, Asia, Latin America and Caribbean Catalytic role: “crowding-in” private capital (~25-50% in the current portfolio funds, further leverage at project level) Global Energy Efficiency and Renewable Energy Fund (GEEREF)

  16. WHERE THE PRIVATE SECTOR CAN INTERVENE • National utilities (public or not) in urban areas • Rural areas • Decentralised solutions for electricity provision

  17. BARRIERS OF PRIVATE SECTOR INVESTMENTS IN ENERGY • Weakness of institutional frameworks • Lack of incentive framework for investment • Distorted competition with "traditional" solutions • Lack of adapted financing instruments • Lack of capacity at all levels

  18. WHAT WE CAN DO - ENERGY • long-term financing instruments • Support transparent procedures • Support elaboration of adequate frameworks for rural electrification • Energy policies that integrate social and environmental benefits • Promote capacity development, awareness raising and transfer of technology

  19. EU SUSTAINABLE ENERGY FOR ALL TRUST FUND • Increasing access to sustainable energy services • scaling-up of renewable energy • providing energy efficiency solutions at national and regional level

  20. TRANSPORT 1 - National level 2- Regional level – 4 RIPs • In some 8 countries in SSA: • Primary and Secondary(Access) Road Networks • Urban transport • Capacitybuilding • Pillar: Governance • FOCUS on Axle Load and other Trade facilitation measures – • (accompanying measures) • Pillar: Corridor Investments • Blending of grants and loans, • Multiplier effect; • Focus on PIDA and REC priorities Proposed 10-15% of Transport Related Allocation Proposed 80-85% of Transport Related Allocation 4 - Intra ACP Level 3 - Pan-African Level PrivateSector Support • Pillar: Governance • General Transport Policy • Pillar: Investments • Towards Connecting Northern Africa to Sub-Saharan Africa - by means of Blending • Space/Aviation Max EUR 5-10 million About EUR 210 million for Infrastructure

  21. TRANSPORT Exploreon maintenance inclusive contracts • In response to the maintenance backlog in many countries; • Ensuring to keep a pre-defined service levelof a road over medium-term horizon; • Following the principle of output perfomancebasedcontractsfor the maintenance component Considering to enhance the use of Yellow, Silver and Gold FIDIC Books-likeprocedures

  22. Red book Which FIDIC contract should I use?  Yellow book Silver book Gold book

  23. - • Involve know how and innovation skills of contractors to compete for bothprice and quality + • Tendering roughly only based on the price • Risk of bad estimation relies on the contractor, whichcommitted to deliver the projectat a determinedcost • Final costoftenhigherdue to the badquantities estimation, pricerevision and claims • For Gold book only : contractorisalsoresponsible for maintenance whichcanovercomegovernments' failureespecially in lowincome countries • After the defectliabilityperiod, the contractoris no more responsible

  24. How the EU supports transformation towards Green Economy • Internally • Resource EfficiencyFlagship • Eco-innovation • Internationally • Lead on policy dialogue on global challenge • Provide support to enabling conditions • Support innnovative business development • Indicative amount of 97 mio to support GE relatedactivitiesunder the GPGC

  25. THANK YOU FOR YOUR ATTENTION

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