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Africa-Europe Alliance: Four new financial guarantees worth €216 million

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The European Commission signed today four guarantee agreements worth €216 million that will help unlock €2 billion to invest in renewables, urban infrastructure and start-ups in Africa and the Neighbourhood. The guarantees were signed with the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the German KfW Group and the Spanish development cooperation agency, Agencia Española de Cooperación Internacional para el Desarrollo (AECID), at the 4th Strategic Board meeting of the External Investment Plan (EIP).

Commenting on these financial guarantees, Jutta Urpilainen, Commissioner for International Cooperation and Development, said: “The agreements signed today, worth €216 million, will aim to unlock €2 billion in new investment in Africa and the EU Neighbourhood. These guarantees share in the risk and help mobilise and attract public and private investments. They will help boost the supply of renewable energy to communities and businesses in Africa and the EU Neighbourhood, help small businesses invest and create jobs, and make African cities more resilient to growing populations and the effects of climate change. They are an example of how the EU’s new Green Deal initiative benefits citizens of our partner countries outside the EU”.

Commissioner for Neighbourhood and Enlargement Olivér Várhelyi added: “We want to ensure an investment boost that will drive forward growth and provide concrete benefits and opportunities to the people, for example when it comes to big infrastructure projects or the support to young entrepreneurs. The direct support to investment is a key element, but so are good governance and a conducive business environment that helps attracting investment, both domestic and foreign. This is why the External Investment Plan supports our partner countries also in developing more effective legal frameworks, policies and institutions that promote economic stability, sustainable investment and inclusive growth.”

Four guarantees, one goal: more investment where it’s needed the most

These guarantees will significantly boost investment in renewable energy and increase access to finance for small businesses (MSMEs), while also improving investment in urban infrastructure and services in Sub-Saharan Africa and in the EU Neighbourhood.

·     Resilient City Development (RECIDE)

This €100 million guarantee agreement is signed with AECID, the Spanish development cooperation agency. It targets Sub-Saharan Africa and the EU Neighbourhood. It will help cities develop public-private partnerships and lower the risks for private investors involved in financing urban infrastructure, focusing on: energy efficiency, flood protection, public transport, water sanitation and solid waste treatment. The guarantee reassures lenders that they will recover at least some of their investment in the event of losses and lowers borrowing costs.

·     Boosting Investment in Renewable Energy 

This €50 million guarantee agreement with EBRD will help to scale up investment in renewable energy in Ukraine and in the EU Southern Neighbourhood, in particular in Jordan, Lebanon and Tunisia. It will substantially boost renewable energy potential. The guarantee will help to generate a total investment of up to €500 million and is expected to provide 340 MW of additional installed renewable energy capacity.

·     Supporting Investment in Sustainable Energy 

This €46 million guarantee agreement with the KfW Group will help to expand the generation of renewable energy in Sub-Saharan Africa and cut the region’s carbon emissions and increase energy efficiency. It will partially cover the offtake risks in renewable energy projects, such as windfarms and solar energy. This guarantee will give many more people access to energy and reduce power shortages. 

·     SME Access to Finance

This €20 million guarantee agreement with EIB is targeting Small and Medium Enterprises (SMEs) in the EU Neighbourhood, with a particular focus on young entrepreneurs, women entrepreneurs and start-ups. It will provide affordable funding to small businesses, with less access to finance because local financial institutions consider them as riskier clients. The guarantee is providing local banks and financial institutions a first loss credit protection. This guarantee will sustain around 18,000 jobs and support 1,000 small businesses. 

These guarantees are part of the External Investment Plan, which aims to mobilize more than €47 billion by 2020 in public and private investment for development in countries neighbouring the EU and in Africa using €4.6 billion in EU funds.

Background

The EU External Investment Plan has three pillars. The first is finance. Through financial guarantees, the EU mitigates the risk in countries with difficult environments so that private investors and development banks will lend to entrepreneurs or finance development projects. Three guarantee agreements had previously been signed so far: Nasira Risk-Sharing Facility and FMO Ventures, with the Dutch Development Bank and Archipelagos – One Platform for Africa, with Cassa Depositi e Prestiti (CDP), the Italian Development Bank, and the African Development Bank (AfDB).

The plan’s second part is technical assistance. This funds experts who help authorities, investors and companies develop new projects. Technical assistance may include, for example, market intelligence and investment climate analysis, targeted legislative and regulatory advice, support to partner countries in implementing reforms, chains and identification, preparation, and help to carry out necessary investments.

The third pillar consists of investment climate support. The EU works closely with governments in partner countries to help them improve the conditions which investors need like a good business environment and political and economic stability. The EU also brings together governments and business to discuss investment challenges.

The External Investment Plan is a key part of the Africa-Europe Alliance for Sustainable Investment and Jobs, launched in September 2018 with the objective of creating 10 million jobs in five years, boosting investment and promote sustainable development. The von der Leyen Commission intends to use the full potential of the External Investment Plan to boost private capital and investment, including through further guarantee agreements.

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Commission sets out key actions for a united front to beat COVID-19

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Two days ahead of the meeting of European leaders on a coordinated response to the COVID-19 crisis, the Commission set out a number of actions needed to step up the fight against the pandemic. In a Communication adopted today, it calls on Member States to accelerate the roll-out of vaccination across the EU: by March 2021, at least 80% of people over the age of 80, and 80% of health and social care professionals in every Member State should be vaccinated. And by summer 2021, Member States should have vaccinated a minimum of 70% of the adult population.

The Commission also calls on Member States to continue to apply physical distancing, limit social contacts, fight disinformation, coordinate travel restrictions, ramp up testing, and increase contact tracing and genome sequencing to face up to the risk from new variants of the virus. As recent weeks have seen an upward trend in case numbers, more needs to be done to support healthcare systems and to address “COVID-fatigue” in the coming months, from accelerating vaccination across the board, helping our partners in the Western Balkans, the Southern and Eastern neighbourhood and in Africa.

Today’s Communication sets out key actions for Member States, the Commission, the European Centre for Disease Prevention and Control (ECDC) and the European Medicines Agency (EMA) which will help reduce risks and keep the virus under control:

Speeding up the roll-out of vaccination across the EU

By March 2021, at least 80% of people over the age of 80, and 80% of health and social care professionals in every Member State, should be vaccinated.

By summer 2021, Member States should have vaccinated 70% of the entire adult population.

The Commission, Member States and the EMA will work with companies to use the EU’s potential for increased vaccine manufacturing capacity to the fullest.

The Commission is working with Member States on vaccination certificates, in full compliance with EU data protection law, which can support the continuity of care. A common approach is to be agreed by the end of January 2021 to allow Member States’ certificates to be rapidly useable in health systems across the EU and beyond.

Testing and genome sequencing

Member States should update their testing strategies to account for new variants and expand the use of rapid antigen tests.

Member States should urgently increase genome sequencing to at least 5% and preferably 10% of positive test results. At present, many Member States are testing under 1% of samples, which is not enough to identify the progression of the variants or detect any new ones.

Preserving the Single Market and free movement while stepping up mitigation measures

Measures should be applied to further reduce the risk of transmission linked to the means of travel, such as hygiene and distancing measures in vehicles and terminuses.

All non-essential travel should be strongly discouraged until the epidemiological situation has considerably improved.

Proportionate travel restrictions, including testing of travellers, should be maintained for those travelling from areas with a higher incidence of variants of concern.

Ensuring European leadership and international solidarity

To ensure early access to vaccines, the Commission is to set up a Team Europe mechanism to structure the provision of vaccines shared by Member States with partner countries. This should allow for sharing with partner countries access to some of the 2.3 billion doses secured through the EU’s Vaccines Strategy, paying special attention to the Western Balkans, our Eastern and Southern neighbourhood and Africa.

The European Commission and Member States should continue supporting COVAX, including through early access to vaccines. Team Europe has already mobilised €853 million in support of COVAX, making the EU one of COVAX’s biggest donors.

Members of the College said:

President of the European Commission, Ursula von der Leyen, said: “Vaccination is essential to get out of this crisis. We have already secured enough vaccines for the entire population of the European Union. Now we need to accelerate the delivery and speed up vaccination. Our aim is to have 70% of our adult population vaccinated by summer. That could be a turning point in our fight against this virus. However, we will only end this pandemic when everyone in the world has access to vaccines. We will step up our efforts to help secure vaccines for our neighbours and partners worldwide.”

Vice-President Margaritis Schinas, responsible for Promoting our European Way of Life, said: “The emergence of new variants of the virus and substantial rises in cases leave us no room for complacency. Now more than ever must come a renewed determination for Europe to act together with unity, coordination and vigilance. Our proposals today aim to protect more lives and livelihoods later and relieve the burden on already stretched health care systems and workers. This is how the EU will come out of the crisis. The end of the pandemic is in sight though not yet in reach.”

Stella Kyriakides, Commissioner for Health and Food Safety, said: “Working together with unity, solidary and determination, we can soon start to see the beginning of the end of the pandemic. Now in particular, we need swift and coordinated action against the new variants of the virus. Vaccinations will still take time until they reach all Europeans and until then we must take immediate, coordinated and proactive steps together. Vaccinations must accelerate across the EU and testing and sequencing must be increased – this is show we can ensure that we leave this crisis behind us as soon as possible.”

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Coronavirus response: EU support for regions to work together in innovative pilot projects

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The Commission has announced the winners of a new EU-funded initiative for interregional partnerships in four areas: coronavirus-related innovative solutions, circular economy in health, sustainable and digital tourism, and hydrogen technologies in carbon–intensive regions. The aim of this new pilot action, which builds on the successful experience of a similar action on “interregional innovation projects” launched at the end of 2017, is to mobilise regional and national innovation actors to address the impact of coronavirus. This initiative also helps the recovery using the new Commission programmes through scaling up projects in new priority areas, such as health, tourism or hydrogen.

Commissioner for Cohesion and Reforms, Elisa Ferreira, said: “Interregional partnerships are proof that when we cooperate beyond borders, we are stronger as we come up with smart and useful solutions for all. This new pilot initiative supporting interregional innovative partnerships is especially important in the current coronavirus context, showing how much cohesion policy is committed to contribute to Europe’s prompt response and recovery.” 

Following a Commission’s call for expression of interest launched in July 2020, four interregional partnerships were selected, with one or several coordinating regions in the lead:

  • País Vasco (ES), together with three regions, will focus on the support to an emerging industry sector for prediction and prevention of the coronavirus pandemic;
  • In the field of Circular Economy in Health, the RegioTex partnership on textile innovation involves 16 regions led by North Portugal (PT);
  • In the field of Sustainable and Digital Tourism, the partnership coordinated by the Time Machine Organisation, an international cooperation network in technology, science and cultural heritage, involves five regions and Cyprus, led by Thüringen (DE); 
  • In order to enable the development of innovative solutions based on Hydrogen technologies in carbon–intensive regions with a broad geographical coverage, two partnerships will merge: the European Hydrogen Valleys partnership gathering 12 regions led by Aragon (ES), Auvergne Rhône Alpes (FR), Normandie (FR) and Northern Netherlands (NL), and the partnership led by Košice Region (SK) with four other regions.

These partnerships will benefit from the Commission experts’ support, providing, among others, advice on how to best combine EU funds to finance projects. In addition to this hands-on support from the Commission, each partnership can benefit from external advisory service of up to €100,000 for scale-up and commercialisation activities. The money comes from the European Regional Development Fund (ERDF).

Next steps

The work with the partnerships will start in this month and will run for one year.This pilot further stimulates interregional cooperation, with the possibility for the partnerships to apply for support under the new programmes and the “Interregional Innovation Investment” instrument from 2021 onwards.

Background

In recent years, the Commission has called on national and regional authorities to develop smart specialisation strategies aiming at more effective innovation policies and enhanced interregional cooperation in value chains across borders. To date, more than 180 regional smart specialisation strategies have been adopted. Their implementation is supported by €40 billion of EU Cohesion policy funds.

As part of a set of actions presented in 2017 by the Commission to take smart specialisation a step further, a pilot action on “Interregional innovation projects” sought to test new ways to encourage regions and cities to develop new value chains and scale up their good ideas in the EU single market. This pilot action, which involved nine partnerships in high-tech priority sectors, was completed in 2019 and showed significant potential to accelerate the investment readiness of interregional investment projects.

The lessons learned will be integrated in the new “Interregional Innovation Investment” instrument proposed in the framework of the post 2020 Cohesion Policy package.

The new pilot action has similar goals. Moreover, in the context of the crisis, it aims at finding solutions to the coronavirus challenges and accelerating the recovery through the commercialisation and scale-up of innovation investment. 

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EU Politics

Commission proposes to purchase up to 300 million additional doses of BioNTech-Pfizer vaccine

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image: BioNTech

The European Commission today proposed to the EU Member States to purchase an additional 200 million doses of the COVID-19 vaccine produced by BioNTech and Pfizer, with the option to acquire another 100 million doses.  

This would enable the EU to purchase up to 600 million doses of this vaccine, which is already being used across the EU.

The additional doses will be delivered starting in the second quarter of 2021. 

The EU has acquired a broad portfolio of vaccines with different technologies. It has secured up to 2.3 billion doses from the most promising vaccine candidates for Europe and its neighbourhood.  

In addition to the BioNTech-Pfizer vaccine, a second vaccine, produced by Moderna, was authorised on 6 January 2021. Other vaccines are expected to be approved soon.  

This vaccine portfolio would enable the EU not only to cover the needs of its whole population, but also to supply vaccines to neighbouring countries.

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