European Commission took a major step forward in boosting investment in Africa and the EU Neighbourhood, helping to stimulate global recovery from the pandemic, by concluding ten financial guarantee agreements worth €990 million with partner financial institutions that complete the European Fund for Sustainable Development (EFSD), the financing arm of the External Investment Plan (EIP). Together, these guarantees are expected to generate up to €10 billion in overall investment.
Jutta Urpilainen, Commissioner for International Partnerships, said: “By signing these agreements today, the EU has concluded the implementation of the External Investment Plan’s overall guarantee almost two months early. Now our partner financial institutions can make use of all of the Plan’s individual guarantees to generate billions of euros in much-needed investment, in particular across Africa. These agreements will directly support people who face some of the biggest challenges because of COVID-19: small business owners, the self-employed, women entrepreneurs and businesses led by young people. They will also help to fund a major expansion of renewable energy generation, ensuring that the recovery from the pandemic is green, digital, just and resilient.”
Commissioner for Neighbourhood and Enlargement, Olivér Várhelyi, said: “The guarantee agreements that we sign today clearly show the effective partnership established between the European Commission and the International Financial Institutions in support of our partner countries. Investments have become even more necessary in light of the pandemic. With today’s signature, the European Commission is securing more than €500 million to support EU Neighbourhood countries. These guarantee agreements will stimulate their economic recovery and make them more resilient to future crises.”
Guarantees agreements include the earlier announced €400 million guarantee – that complements the additional €100 million EU grant announced today – for the COVAX Facility, to develop COVID-19 vaccines and ensure fair access once they are available. Other agreements for guarantees amounting to €370 million will help small businesses stay afloat and continue to grow in the face of the COVID-19 pandemic.
All these guarantees are part of the Team Europe response to COVID-19 – a package of combined support for our partner countries from the EU, its Member States, and European financial institutions. They also mark the successful completion of the EFSD and will bring much-needed investment to partner countries in Africa and the EU Neighbourhood.
These guarantees are part of the EU External Investment Plan, which is mobilising more than €50 billion in public and private investment for sustainable development in countries neighbouring the EU and in Africa using €5 billion in EU funds under the EFSD.
The guarantee agreements concluded today are the following:
- European Health Platform
This €438 million guarantee with the European Investment Bank (EIB) will reduce and remove financing constraints for accessing COVID-19 vaccines and health related diagnostic services in Sub-Saharan Africa. It has two components: the first amounts to €400 million and focuses on widening access to future COVID-19 vaccines in Africa and the EU Neighbourhood. The second comes to €38 million and will improve access to high-quality, health-related diagnostic services for low-income communities in Sub-Saharan Africa, particularly in rural areas. It will enable partnerships between governments and private sector laboratory and diagnostic companies.
This €60 million guarantee with CDP, the Italian Development Finance Institution, will support local businesswomen and businessmen in Sub-Saharan Africa and the EU Neighbourhood, who have trouble accessing loans and capital to start or expand their business. The InclusiFI Programme (the “Programme”) is a jointly managed initiative by CDP and AECID (as co-leaders). The Programme aims at leveraging private financing to foster inclusive and sustainable entrepreneurship and MSMEs growth led by women, young people and migrants, ideally through remittances and diaspora capital*. It will also encourage local banks to increase their lending to them by expanding innovative business development and financial services in selected countries. In doing so, it will create jobs and reduce inequality. InclusiFi will also help local banks and other local financial institutions to address the challenges caused by the COVID-19 pandemic. The guarantee will make it possible for diaspora communities in Europe to invest in small businesses in their countries of origin, stimulating the use of remittances.
This €160 million guarantee programme is signed with AFD, the French development cooperation agency, and Proparco, the French Development finance institution. It targets small businesses in Sub-Saharan Africa and the EU Neighbourhood, with a particular focus on MSMEs in the agricultural sector, in rural areas and those particularly impacted by the COVID-19 pandemic. The guarantee will make it more affordable for them to borrow, helping to sustain their businesses.
- Renewable Energy Support Programme for mainly rural parts of Sub-Saharan Africa
This €20 million guarantee with COFIDES, the Spanish development finance institution, will help to develop and finance renewable energy projects, which are not connected to the electricity distribution networks, so-called off-grid and mini-grid projects. It targets rural and peri-urban areas in Sub-Saharan Africa and areas without access to energy. The guarantee will help to generate a total investment of €80 million* and is expected to provide electricity to at least 180,000 new people in rural areas.
- European Guarantee for Renewable Energy
These guarantee agreements worth €62 million are signed with AFD, the French development cooperation agency in partnership with CDP, the Italian Development Finance Institution*. They aim to promote renewable energy solutions by reducing the off-take risk of energy projects – the risk of not getting paid for the energy sold. By providing a partial risk coverage, these guarantees will give investors more certainty and thus a bigger incentive to invest in or to finance a renewable energy project. These guarantees are expected to give over one million people access to electricity.
- EU Market Creation Facility
This €150 million guarantee with KfW, the German development bank, and the Currency Exchange Fund (TCX) aims to increase the use of local currency in development finance. It increases the risk capacity for TCX and enables the fund to grow even in challenging circumstances like the COVID-19 pandemic. The increased capacity of TCX will allow financial institutions to lend more to people and businesses in Sub-Saharan Africa and the European Neighbourhood, whilst not exposing borrowers to unprecedented currency risk. The programme makes financial institutions more stable and creates lending capacity in local currency.
- Municipal, Infrastructure and Industrial Resilience Programme
This €100 million guarantee programme with the European Bank for Reconstruction and Development (EBRD) will support municipal, industrial and infrastructure investments in the EU Southern and Eastern Neighbourhood, which have been affected by the COVID-19 pandemic. The programme also supports the transitioning to green, low-carbon and climate-resilient economies. It does so by supporting investments in green city infrastructure, green logistic chains, energy efficiency and green technology transfers in industrial processes, commercial operations and buildings. The guarantee will help improve infrastructure and municipal services, increase energy and water efficiency and create jobs in the EU Neighbourhood.
EU clears way for the EU Digital COVID Certificate
Today, the Presidents of the three EU institutions, the European Parliament, the Council of the EU and the European Commission attended the official signing ceremony for the Regulation on the EU Digital COVID Certificate, marking the end of the legislative process. On this occasion Presidents David Sassoli and Ursula von der Leyen and Prime Minister António Costa said:
“The EU Digital COVID Certificate is a symbol of what Europe stands for. Of a Europe that does not falter when put to the test. A Europe that unites and grows when faced with challenges. Our Union showed again that we work best when we work together. The EU Digital COVID Certificate Regulation was agreed between our institutions in the record time of 62 days. While we worked through the legislative process, we also built the technical backbone of the system, the EU gateway, which is live since 1 June.
We can be proud of this great achievement. The Europe that we all know and that we all want back is a Europe without barriers. The EU Certificate will again enable citizens to enjoy this most tangible and cherished of EU rights – the right to free movement. Signed into law today, it will enable us to travel more safely this summer. Today we reaffirm together that an open Europe prevails.”
EU Digital COVID Certificate
The aim of the EU Digital COVID Certificate is to facilitate safe and free movement inside the EU during the COVID-19 pandemic. All Europeans have the right to free movement, also without the certificate, but the certificate will facilitate travel, exempting holders from restrictions like quarantine.
The EU Digital COVID Certificate will be accessible for everyone and it will:
- cover COVID-19 vaccination, test and recovery;
- be free of charge and available in all EU languages;
- be available in a digital and paper-based format;
- be secure and include a digitally signed QR code;
Member States shall refrain from imposing additional travel restrictions on the holders of an EU Digital COVID Certificate, unless they are necessary and proportionate to safeguard public health.
In addition, the Commission committed to mobilising €100 million under the Emergency Support Instrument to support Member States in providing affordable tests.
The Regulation will apply for 12 months as of 1 July 2021.
On 17 March 2021, the European Commission presented a proposal to create an EU COVID Certificate to facilitate the safe free movement of citizens within the EU during the pandemic. On 20 May, co-legislators reached a provisional agreement. On 1 June, the technical backbone of the systems, the EU gateway, went live. The gateway allows the verification of the security features contained in the QR codes.
Following the official signature today, the Regulation will enter into application on 1 July, with a phasing-in period of six weeks for the issuance of certificates for those Member States that need additional time.
13 Member States have already started to issue EU Digital COVID Certificates.
EU proposes a strong multilateral trade response to the COVID-19 pandemic
EU has submitted its proposal seeking the commitment of World Trade Organization (WTO) members for a multilateral trade action plan to expand the production of COVID-19 vaccines and treatments, and ensure universal and fair access. With this proposal to the WTO, divided in two communications, the EU underlines the WTO’s central role in the response to the COVID-19 pandemic and urges fellow WTO members to agree on a set of commitments, including on intellectual property rights.
President von der Leyen said: “The EU has actively shown solidarity with the world since the beginning of the pandemic. The European Union authorized exports of around half of the total amount of vaccines produced in Europe. Our immediate, urgent goal is to ensure equitable access for low – and middle-income countries, to share vaccines wider and faster. And we continue to help ramping up production. The EU proposes concrete short and medium term solutions to ensure universal access at affordable prices. I am looking forward to discuss with the G7 leaders next week how to achieve this goal. Beyond the current crisis, it is important to ensure global preparedness for future pandemics: diversifying manufacturing so that it is not centralised only in a handful of countries and strengthening the resilience of the healthcare infrastructure in least developed countries”.
Executive Vice-President and Commissioner for Trade Valdis Dombrovskis said: “The pandemic is still with us and there can be no room for complacency. We need to urgently concentrate on proposals that accelerate the equitable distribution of COVID-19 vaccines worldwide. In this respect, a strong multilateral trade response could deliver a huge boost in the fight against COVID-19. In reality, the main problem at this moment relates to the lack of sufficient manufacturing capacity to rapidly produce the required quantities. The objective must be to ensure that any available and adequate manufacturing capacity anywhere in the world is used for the COVID-19 vaccines production.”
More on the EU’s proposal
The EU calls on governments to:
- Ensure that COVID-19 vaccines, treatments and their components can cross borders freely;
- encourage producers to expand their production, while ensuring that those countries most in need of vaccines receive them at an affordable price, and;
- facilitate the use of compulsory licensing within the WTO’s existing Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The TRIPS Agreement already provides this flexibility, which is a legitimate tool during the pandemic that can be used swiftly where needed
The first element aims to limit the use of export restrictions and keep supply chains open. Vaccine-producing countries should be ready to export a fair share of their domestic production. Supply chains are highly interconnected and should not be disrupted. In addition, the EU considers that supplies to the COVAX Facility should never be restricted, and no measures should limit trade in inputs necessary for the production of COVID-19 vaccines and treatments.
The second element calls on governments to strongly encourage and support vaccine manufacturers and developers to expand production and ensure the affordable supply of vaccines to low- and middle-income countries. Such actions could include licensing agreements, the sharing of expertise, tiered pricing including non-profit sales to low-income countries, contract manufacturing and new investments in manufacturing facilities in developing countries. The EU expects all vaccine producers and developers to make concrete pledges that increase supplies to vulnerable developing countries. In this regard, the EU welcomes the commitment of companies such as BioNTech and Pfizer, Johnson & Johnson and Moderna, which have already committed to delivering 1.3 billion doses this year to low-income countries at no profit and to middle-income countries at lower cost.
The third element, on intellectual property, sets out that voluntary licences are the most effective instrument to facilitate the expansion of production and sharing of expertise. Where voluntary cooperation fails, compulsory licences, whereby a government grants a targeted licence allowing a willing producer to make a vaccine without the consent of a patent holder, are a legitimate tool in the context of a pandemic. The EU considers that all WTO members should be ready to:
- agree that the COVID-19 pandemic is an exceptional circumstance of national emergency, and that the requirement to negotiate with the rights’ holder may be legitimately waived where needed;
- support manufacturers that are ready to produce vaccines and/or treatments at affordable prices under a compulsory licence so that the level of remuneration paid by the manufacturer to the patent holder reflects such affordable prices;
- agree that the compulsory licence could cover any exports destined to countries that lack manufacturing capacity, including via the COVAX facility.
The EU is also tabling a dedicated communication on intellectual property to the WTO body in charge of implementing the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Council). Here, the EU provides more detail and clarity on each of the three points on intellectual property and links them with the specific provisions in the TRIPS Agreement. As regards the broad waiver proposed by a number of WTO members, the European Commission, while ready to discuss any option that helps end the pandemic as soon as possible, is not convinced that this would provide the best immediate response to reach the objective of the widest and timely distribution of COVID-19 vaccines that the world urgently needs. Today’s proposals aim at achieving that objective in a swift and effective manner.
EU Digital COVID Certificate: Parliament and Council reach agreement
The Commission welcomes today’s provisional political agreement between the European Parliament and the Council on the Regulation governing the EU Digital COVID Certificate. This means that the certificate (previously called the Digital Green Certificate) is well on track to be ready end of June, as planned. Today’s agreement has been reached in record time just two months after the Commission’s proposal. The negotiations on the certificate for the Commission have been led by Commissioner Didier Reynders in close cooperation with Vice-Presidents Vera Jourová and Margaritis Schinas and Commissioners Thierry Breton, Stella Kyriakides, and Ylva Johansson.
Welcoming this swift progress, President Ursula von der Leyen said:
“We are delivering on our commitment to have the EU Digital COVID Certificate up and running before the summer. European citizens are looking forward to travelling again, and today’s agreement means they will be able to do so safely very soon.
The EU Digital COVID Certificate is free of charge, secure and accessible to all. It will cover vaccination, test and recovery offering different options to the citizens. It fully respects citizens’ fundamental rights, including protection of personal data.
All EU citizens have a fundamental right to free movement in the EU. The EU Digital COVID Certificate, available in paper or digital format, will make it easier for Europeans to travel – whether to see their families and loved ones or to get some well-deserved rest.
We would like to thank the European Parliament and the Portuguese Presidency for their dedication, perseverance and immense work at record speed to find an agreement on the proposal we presented.
Work still remains. At EU level, the system will be ready in the next few days. It is now crucial that all Member States press ahead with the roll-out of their national systems to ensure that the system can be up and running as soon as possible. This is what EU citizens rightly expect.
Today’s agreement has demonstrated that with the commitment and cooperation of all, the EU Digital COVID Certificate will be available on time.”
The EU Digital COVID Certificate – key features
Following the agreement reached by the European Parliament and the Council, the EU Digital COVID Certificate:
- will cover vaccination, test and recovery;
- will be available in a digital and paper-based format, depending on the choice of the recipients, and contain a digitally signed QR code;
- will be free of charge, be obtained easily and also available to persons vaccinated before the EU Digital COVID Certificate Regulation has entered into force;
- may also be used by Member States for national purposes, if this is provided for in national law.
- Member States shall refrain from imposing additional travel restrictions on the holders of an EU Digital COVID Certificate, unless they are necessary and proportionate to safeguard public health.
- The Commission will also mobilise €100 million to support Member States in providing affordable tests.
The political agreement will now have to be formally adopted by the European Parliament and the Council. The Regulation will enter into force on 1 July, with a phasing-in period of six weeks for the issuance of certificates for those Member States that need additional time.
In parallel, the Commission will continue to support the Member States in finalising their national solutions for the issuance and verification of EU Digital COVID Certificate, and to provide technical and financial support to Member States to on-board the gateway.
On 17 March 2021, the European Commission presented a proposal to create an EU COVID certificate to facilitate the safe free movement of citizens within the EU during the COVID-19 pandemic. At the Commission’s request, the Parliament voted in favour of the activation of the urgent procedure for the two proposals on 25 March. The Council adopted its negotiating position on 14 April, and the Parliament did so on 29 April. On 20 May co-legislators reached provisional agreement on this file.
In parallel to the legislative process, important progress was already made on the technical side. The EU Gateway, which allows to verify certificates across borders, is ready and will go live as of June. Successful pilot tests took place with 17 Member States and Iceland during the last two weeks, further five Member States will test next week.
The Commission also provide open source reference software to support Member States to develop their national solution to issue certificates, to scan and check the QR codes, and a reference wallet for storage.
Previously, on 21 April, technical specification guidelines were adopted by Member States representatives in the eHealth Network, a voluntary network connecting national authorities responsible for eHealth. They are building on the close work of the Commission with the Member States, having resulted in first guidelines adopted in January and updated on 12 March, and a trust framework outline agreed on 12 March 2021. In addition, a common design template was developed in the eHealth network.
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