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EU: €10 billion in investment in Africa and EU Neighbourhood and stimulate global recovery

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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.  

  • InclusiFi

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.

  • AgreenFi

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.

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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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