The Independent Uganda: You get the Truth we Pay the Price
European Commission says the private sector is key to sustainable development
ANALYSIS | RONALD MUSOKE | The European Investment Bank (EIB Global), the European Union’s long-term lending institution, has signed agreements with seven EU member states, pledging over Shs 295 billion (€74 million) to a new funding envelope aimed at promoting inclusive and sustainable economic growth and human development in least developed countries and fragile states in Africa, the Caribbean, and the Pacific.
This new funding envelope falls under the Africa-Caribbean-Pacific (ACP) Trust Fund, which is supported by EU member states. It will focus on “EU Global Gateway” projects in ACP countries such as Uganda which align with the UN’s Agenda 2030, as well as the Sustainable Development Goals (SDGs).
“This is a great example of Team Europe partners working together. I look forward to welcoming future donors to the Fund so that, together, we can invest in energy, health, climate, food security and digital solutions that will foster green and inclusive growth – ultimately boosting prosperity in Africa, the Caribbean and the Pacific,” said EIB Vice-President Thomas Östros in a statement issued on Oct.9.
‘EU Global Gateway’
The “EU Global Gateway strategy” is the European Union’s offer for EU member countries to support their resilience and sustainable development. It aims to narrow the global investment gap with value-driven investments from the public and private sectors, supporting global economic recovery and accompanying the twin green and digital transitions outside the European Union. Worldwide, the Global Gateway aims to mobilise €300 million (Shs1.199 trillion) in investments between 2021 and 2027, with a mix of grants, concessional loans and guarantees to de-risk private sector investments.
Denmark has pledged around €9.9 million (Shs 39.5 billion), Finland €4.3 million (Shs 17.2billion), Germany €30.6 million (Shs 122.3billion), Luxembourg €5.4 million (Sh 21.5 billion), Portugal €2.8 million (Shs 11.2billion), Spain €9 million (Shs 35.9billion), and Sweden €12.25 million (Shs 48.9 billion).
“Denmark is committed to supporting inclusive green growth globally, including in least developed countries and fragile states. Our ambition is to promote the European Union as an effective and impactful global actor, and that is why we support the EIB’s new ACP Trust Fund,” said Lars Løkke Rasmussen, Denmark’s Minister for Foreign Affairs.
“Through the trust fund, we are delighted to be contributing to inclusive and sustainable development – especially in Africa, which is well-aligned with Denmark’s new strategy of stronger engagement with African countries. The trust fund is financed by a true Team Europe approach, and I strongly encourage other European partners to join.”
Last year, the European Commission and EIB Global signed an agreement for €500 million (Shs 2 trillion) and launched the first of two envelopes of the ACP Trust Fund to realise high-impact projects in the private sector that could not otherwise be brought to fruition.
The ACP Trust Fund forms part of the Neighbourhood, Development and International Cooperation Instrument (NDICI – Global Europe). Through this programme, the European Commission supports technical assistance and financial instruments spanning equity, quasi-equity, subordinated debt and risk sharing.
Uganda already a beneficiary
Last year, for example, the ACP Trust Fund helped Uganda fund the installation of over 500 telecom towers to broaden access to communications in the countryside. In the Indian Ocean island of Madagascar, the Fund supported agricultural mechanization for smallholder farmers and the construction of a refrigerated facility for local fishermen.
The member states’ envelope of the ACP Trust Fund is an effective complement to the European Commission-financed envelope, and provides technical assistance, investment grants and interest rate subsidies in both the public and private sectors.
The technical assistance is expected to help raise standards and ensure that environmental and social requirements are met throughout the preparation and implementation of each project. Investment grants and interest rate subsidies help reduce total financing needs, especially where a project promoter faces debt sustainability constraints.
Juha Savolainen, the Director General (Department for Development Policy) of Finland’s Ministry for Foreign Affairs says his country sees the ACP Trust Fund as an important vehicle to support the implementation of the Global Gateway in African, Caribbean and Pacific countries.
“We hope that our contribution will, for example, contribute to greater, safer digital connectivity in our partner countries and give European companies more ways to invest in and develop projects in the ACP countries.”
According to Dirk Meyer, the Director-General of Germany’s Federal Ministry for Economic Cooperation and Development, fostering human and social development, addressing climate change and mobilizing investments for sustainable and inclusive growth are at the heart of the EU-ACP partnership.
“The EIB-ACP Trust Fund can help increase the development impact of EIB projects in ACP partner countries, including with regard to the implementation of Global Gateway projects. Therefore, we support it in a Team Europe spirit together with other EU partners,” he said.
Gilles Roth, the Finance Minister of Luxembourg noted that his country is proud to contribute €5.4 million to the ACP Trust Fund, reflecting Luxembourg’s commitment to sustainable and inclusive growth in African, Caribbean and Pacific countries.
“This funding, from the reflows of the former ACP Investment Facility, aims to empower communities, promote environmental sustainability and enhance resilience. We look forward to ongoing collaboration with the EIB, the European Commission and EU member states to achieve impactful development outcomes.”
Joaquim Miranda Sarmento, the Portuguese Minister of State of Finance says Portugal’s contribution to the ACP Trust Fund reflects his country’s ongoing commitment to sustainable economic, social and environmental development in these regions.
“By partnering with the European Union and other member states, we can better leverage resources and collectively unlock financial and technical assistance to target global challenges and achieve impact in areas like climate action, connectivity and job creation.”
José Manuel Albares, Spain’s Minister for Foreign Affairs in charge of European Union and Cooperation adds that: “Spain’s €9 million contribution will increase EIB Global’s capacity to reach ACP countries through tailored instruments, such as technical assistance to support capacity-building.”
“We need to unlock sustainable finance for the countries that need it the most, as they often face adverse financing conditions that hinder sustainable development. This contribution reinforces our support for the ACP countries, and is consistent with our commitment to implementing the SDGs and raising more financing for the development agenda, as shown by Spain’s move to host the Fourth International Conference on Financing for Development in Seville in 2025.”
“Sweden is glad to contribute to the ACP Trust Fund in a renewal of the historic partnership between the EU and African, Caribbean and Pacific States. The Trust Fund will play an important role in fulfilling the overall objectives of the Global Gateway, linking trade, business and development cooperation in the entire ACP region,” said Benjamin Dousa, Sweden’s Minister for International Development Cooperation and Foreign Trade.
“We look forward to being part of a broad collaboration encompassing four continents, 79 countries and 1.5 billion people, and to work together on issues of green transition, entrepreneurship and digitalisation.”
The European Commission noted that enabling the private sector is key to sustainable development. I welcome the Member States’ contribution to the ACP Trust Fund.
“Together with our powerful risk-sharing instrument, the European Fund for Sustainable Development Plus (EFSD+), these resources will underpin the implementation of the Global Gateway investment strategy,” said Jutta Urpilainen, the Commissioner for International Partnerships.
