Global Solutions, International Partnerships E-Book

• Herausgeber: European Investment Bank
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 137

Veröffentlichungsjahr: 2021

Beschreibung

The climate crisis and the COVID-19 pandemic remind us that we cannot face down our challenges alone—our solutions must be global. The European Investment Bank is at the heart of the push to turn EU policy initiatives into real development solutions on the ground. This report provides insights into our vital projects and initiatives outside the European Union, data on their impact and ideas for the future of development through a series of expert essays.

Leseprobe

GLOBAL SOLUTIONS, INTERNATIONAL PARTNERSHIPS

THE EUROPEAN INVESTMENT BANK DEVELOPMENT REPORT 2021

About the European Investment Bank

The European Investment Bank is the world’s biggest multilateral lender. The only bank owned by and representing the interests of the EU countries, the EIB finances Europe’s economic growth. Over six decades the Bank has backed start-ups like Skype and massive schemes like the Øresund Bridge linking Sweden and Denmark. Headquartered in Luxembourg, the EIB Group includes the European Investment Fund, a specialist financer of small and medium-sized enterprises.

CONTENTS

FOREWORD BY THE PRESIDENT

PROJECT DATA FROM AROUND THE WORLD

SOLUTIONS AND PARTNERSHIPS

THE PANDEMIC AND DEVELOPMENT FINANCE: WHAT COVID-19 MEANS FOR DEVELOPMENT

COVAX: VACCINE SOLIDARITY

COVID-19 AND MOROCCO’S HOSPITALS: FAST RELIEF

EDUCATION AND DEVELOPMENT: AGAINST THE IMPACT OF COVID-19 IN MOROCCO AND TUNISIA

CLIMATE CHANGE AND DEVELOPMENT FINANCE: HOW TO CALCULATE CLIMATE RISK FOR A DEVELOPING COUNTRY

CLIMATE CHANGE AND GENDER: HOW TO FIGHT CLIMATE CHANGE WITH EQUALITY

THE LUXEMBOURG CLIMATE FINANCE PLATFORM: DE-RISKING CLIMATE INVESTMENT

COCOA AND SUSTAINABLE FORESTS IN CÔTE D’IVOIRE: FOREST REHAB FOR YOUR CHOCOLATE

WATER ENGINEERING IN EAST AFRICA: CREATIVE FLOW

WATER AND KNOWLEDGE TRANSFER: SHARE IT

PLASTIC POLLUTION AND THE OCEANS: PROTECTING THE WATERWAYS

WATER SOLUTIONS IN NIGER: FRESH WATER DOUSES VIOLENCE

SUSTAINABLE TRANSPORT AND GENDER: ALL ABOARD

GENDER INVESTMENT: CREDIT WHERE IT’S OVERDUE

FRAGILE AND CONFLICT-AFFECTED COUNTRIES: HOW TO BE SENSITIVE

INDIGENOUS STAKEHOLDER ENGAGEMENT IN HONDURAS: HOW TO LISTEN

AFRICA URBAN PLANNING: PROSPERITY TO THE CITY

DIGITALISATION: THE GREATER THE RISK, THE GREATER THE REWARD

VENTURE CAPITAL: EQUITY FOR INNOVATIVE BUSINESS MODELS

MICROFINANCE IN AFRICA: A BIG DIFFERENCE FOR SMALL FARMERS

GEORGIA SMALL BUSINESSES: A GUARANTEE FOR STRAWBERRIES

MOLDOVA AGRICULTURE: CULTIVATING SUCCESS

IMPACT IN DETAIL

OUR APPROACH TO EXAMINING RESULTS AND IMPACT

EXPECTED RESULTS OF NEW PROJECTS

THE EIB’S CONTRIBUTION TO NEW PROJECTS

CARBON FOOTPRINT EXERCISE

MACROECONOMIC IMPACT MODELLING

RESULTS OF COMPLETED PROJECTS

IN-DEPTH IMPACT STUDIES

LENDING VOLUMES

AFTERWORD BY THE VICE-PRESIDENTS FOR DEVELOPMENT

PRESIDENT’S FOREWORD

The climate crisis, the mass displacement of people and the international dimension of the COVID-19 pandemic remind us that we cannot face our challenges alone—our solutions must be global. The European Investment Bank is at the heart of the EU effort to turn Europe’s policy initiatives into real development solutions on the ground. This report provides insights into our vital projects and initiatives in all regions around the world that are of priority to the European Union, data and insights on their impact and ideas for our contribution to an enhanced European architecture for development through a series of expert essays.

As the financing arm of the European Union, and as the only development bank entirely and exclusively owned by the EU’s Member States, we give the European Union the strategic autonomy to act quickly and at scale.

You can see this in our massive and immediate commitment to the European Union’s COVID-19 response, spearheaded by the European Commission through Team Europe. Now that safe and effective COVID-19 vaccines are available—our investment backed the very first to be approved—it is essential that lower-income economies are not left behind. Our €600 million support for the COVAX project in partnership with the European Commission is our largest ever for public health.

With our focus on a green recovery from COVID-19, we never lose sight of the long-term challenge of climate change whether in our investments or our development of new instruments. When we invented green bonds more than a decade ago, we knew that remarkable innovation was only the start of the job. We are still working to ensure transparency and accountability for green investments globally, even as we develop an entirely new market for sustainability awareness bonds.

We have a long history as a cornerstone of Europe’s development finance architecture, with operations in more than 140 countries. In Africa, we achieved record lending levels in 2020, signing €5 billion in financing, half of it with the private sector. Over 70% of our investment in sub-Saharan Africa was in least developed countries and fragile states.

The expert pieces in this report are a reminder that we constantly fine-tune our approach to adapt and respond to evolving EU policy priorities and to deliver greater impact, efficiency and effectiveness. With this in mind, we are further specialising our business delivery outside the European Union. We aim to put more of our bankers and engineers at the disposal of EU Delegations to further strengthen the European Union’s value added on the ground, increase EU visibility and, ultimately, have a stronger developmental impact. This reorganisation is aimed at maximising EU impact and visibility through a dedicated EU development finance partner with technical expertise, upholding and delivering on EU and partner country priorities, including climate, health, migration, gender and digitalisation.

“As the financing arm of the European Union, and as the only development bank entirely and exclusively owned by the EU’s Member States, we give the European Union the strategic autonomy to act quickly and at scale.”

The European Investment Bank is an investment bridge between EU policies and projects on the ground. Working in almost every African country, in the Western Balkans countries on their path to EU accession, in the EU’s Southern and Eastern Neighbourhoods and around the world, we use our unrivalled sector expertise to help build investments that reduce poverty, disease and environmental degradation.

Our plans respond to the growing demand for a stronger partnership between Europe and the world. We are committed to improving lives, together.

Werner Hoyer

PROJECT DATA FROM AROUND THE WORLD

TOTAL LENDING OUTSIDE THE EU €9.3 BILLION

The European Investment Bank does not endorse, accept or judge the legal status of any territory, boundaries, colours, denominations or information depicted on any map in this section. One operation involves three intermediaries in Cameroon, Chad and the Republic of Congo and is counted once in each country.

Kosovo* : This designation is without prejudice to the positions expressed by the EU Member States on Kosovo’s status and is in line with United Nations Security Council Resolution No. 1244/1999 and the International Court of Justice Opinion of 22 July 2010 on Kosovo’s declaration of independence.

Palestine** : This designation shall not be construed as recognition of a State of Palestine and is without prejudice to the individual positions of the Member States on this issue.

The European Investment Bank does not endorse, accept or judge the legal status of any territory, boundaries, colours, denominations or information depicted on this map.

The European Investment Bank does not endorse, accept or judge the legal status of any territory, boundaries, colours, denominations or information depicted on any map in this section.

SOLUTIONS AND PARTNERSHIPS

WHAT DOES COVID-19 MEAN FOR DEVELOPMENT?

From the loss of education to the impact on businesses, jobs and the flow of finance for development, the economic scars of the pandemic will take time to heal. In the light of COVID-19, development finance backing from the European Union is more important than ever

By Tessa Bending, Colin Bermingham and Emily Sinnott

The world was not doing enough for sustainable development, even before the pandemic. The existing gap in financing for the achievement of the Sustainable Development Goals has been estimated at around $2.5 trillion.[1] Growth in developing and emerging economies was, however, steadily reducing the number of people in extreme poverty. The recession caused by COVID-19 has reversed that process, already pushing some 120 million people back into extreme poverty.[2]

Judged by the number of positive COVID tests, many developing countries, particularly in Africa, seem to have weathered the pandemic quite well. But we shouldn’t be complacent. Comparing mortality rates since the start of 2020 with previous years suggests 130 000 excess deaths in South Africa alone. In Egypt, a country where infection rates have appeared comparatively low, there are 75 000 more deaths than usual.[3] Global action to bring the spread of this disease to an end everywhere is a moral imperative.

Even where infection rates have been lower, we must remember that not all countries have the same capacity to respond, to cushion the social and economic impacts. The pandemic has exposed investment needs in public health systems and digital infrastructure, as well as vulnerabilities due to a lack of fiscal space and low economic diversification. Vulnerable groups such as those in precarious or informal employment, economic migrants and women are most exposed to the economic fallout, exacerbating inequalities.

Worse than the immediate economic consequences of the pandemic might be what economists call “scarring”: the damage that could weaken development prospects for years or decades to come.

1.5 billion children out of school

United Nations Secretary-General António Guterres has called the impact of COVID-19 on children's education a “generational catastrophe”.[4] At the initial peak of the pandemic in 2020, some 1.5 billion children were out of school due to school closures.[5] The average child lost around half of their normal annual contact time with teachers. UNESCO estimates that the number of children not reaching an age-appropriate level of reading proficiency could rise by nearly 100 million to 581 million.[6]

“Worse than the immediate economic consequences of the pandemic might be what economists call “scarring”: the damage that could weaken development prospects for years or decades to come.”

The impact of this learning loss will last decades. Not only might it take years for children to catch up with what they have missed, but lost learning may have long-term implications for earnings potential and economic development. Inequalities are likely to be exacerbated. One factor is that poorer children are less likely to have access to the internet and less likely to be able to benefit from online classes, if these are provided. Another is that the rise in poverty triggered by the pandemic is likely to cause more children of very low-income families to drop out of school. Girls are often more likely to be withdrawn from school, so the negative impact on the education of girls may be even greater than that for boys. An end to this disruption of education cannot come soon enough.

Businesses in trouble

The great majority of jobs in developing countries are in the private sector, from informal market stalls and small farms to large corporations. It is chiefly in the private sector that more jobs—and better jobs—must be created to help eradicate poverty. Businesses need to invest, to expand and to raise productivity, but the pandemic makes that harder. The private sector could potentially take years to recover.

Hopes for a rapid rebound of business activity should be tempered by a look at what the pandemic is doing to the financial situation of many firms, particularly smaller firms with more fragile access to finance. Working together with the World Bank and the European Bank for Reconstruction and Development, the European Investment Bank conducted Enterprise Surveys in 2020 of firms in countries across Europe’s Southern and Eastern neighbourhoods and in the Western Balkans. The results reveal some of the strains that weigh on businesses.

First, it is important to note that the situation for many firms was difficult to begin with. In some countries, as few as a fifth of firms were actually carrying out investment each year. That is partly because of credit constraints. More than half of firms in the Eastern and Southern Neighbourhood, and 38% in the Western Balkans, were credit constrained. Most were discouraged from even seeking the loans they need.

A special survey module on the impact of the pandemic indicates that most firms in these regions have been forced to close temporarily and about three-quarters of them face reduced liquidity or cash-flow availability. 19% said they are already late on loan repayments. Small and medium-sized enterprises (SMEs) appear to be paying the price for limited use of digital technologies. Compared to large firms, only half as many were able to implement remote working and even fewer managed to shift some business online. Some firms will not survive the pandemic, and many of those that do will have to rebuild their finances before they can return to the long-term investment needed to create decent jobs.

In other regions, the situation may be even worse. A COVID-19 survey module in seven African countries found that around 90% of firms have seen a decrease in sales and cash-flow availability. 24% are in loan arrears. In a region where 38% of firms say access to finance is a major constraint, only 17% of businesses used bank loans to tackle cash-flow shortages.

Again, low penetration of digital technologies has increased vulnerability, with only 18% of firms able to increase online activity and just 17% able to shift to remote work. A mere 7% received or expected government assistance, which helps to explain why 9% had already filed for insolvency or bankruptcy.

Financial flows at risk

Businesses in financial trouble could spell bad news for banks. Although they have so far proved resilient, banks often suffer in the aftermath of economic crises, as bad debts build up on their books, even as the rest of the economy starts to pick up. There is a strong risk that rising numbers of non-performing loans could increasingly constrain the ability of banks to lend to healthy businesses. Preliminary results from a survey of banks in Africa, carried out by the EIB Economics Department in early 2021, reveal what these banks see as the main ways the pandemic is affecting them so far. Those effects are declining asset quality (such as more bad loans) as well as reduced demand for loans, mirroring what we see from surveying businesses.

Ultimately, the severity of the economic impact of the pandemic will depend a lot on whether governments are able to implement policy support that cushions the shock and supports recovery, keeping businesses afloat and people in employment. As well as aid to businesses, continued spending on public services, welfare systems and infrastructure is vital to support the recovery and prevent the negative consequences of the pandemic multiplying even further. This requires finance. On top of an annual $2.5 trillion gap to achieve the Sustainable Development Goals, the OECD estimates the gap in COVID-19 recovery spending for developing countries to be in the order of $1 trillion per year.

Yet, most emerging and developing countries have little capacity to implement the kind of emergency economic measures deployed by developed economies. Instead, there are rising concerns for sovereign debt sustainability, especially for countries that already had high levels of debt before the pandemic. Currently, 36 of 70 low-income countries assessed are at high risk of debt distress or are already experiencing difficulties in servicing debt.[7] The prospect of higher inflation and rising interest rates in the United States could potentially undermine risk appetite and place further pressure on access to external finance for emerging and developing economies. Private external finance for developing countries already collapsed by an estimated $700 billion in 2020, with remittances down an estimated 20%, foreign direct investment down 35% and net portfolio investment inflows (money invested in financial assets such as government bonds) down 80%.[8]

Stopping the spread

The first priority, of course, is to stop the spread of COVID-19 and to end the global medical emergency. This requires global cooperation and solidarity. The European Investment Bank came together with the European Commission to finance the COVAX Advance Market Commitment to help COVAX secure and accelerate the deployment of 1 billion doses of vaccines for people in 92 low- and middle-income countries. Other elements of the EIB’s pandemic response include support for urgent medical equipment supplies and COVID-19 treatment facilities and increased local African manufacturing capacity of pharmaceutical ingredients.

“Stopping the spread of COVID-19 also means stepping up our support for microenterprises and small businesses to help them weather the effects of the pandemic, limiting the degree to which a health crisis also triggers an economic one.”

Stopping the spread of COVID-19 also means stepping up our support for microenterprises and small businesses to help them weather the effects of the pandemic, limiting the degree to which a health crisis also triggers an economic one. In 2020, we increased our lending in support of microenterprises and SMEs outside the EU by 83% to €4.2 billion. At the same time, it is important that the strain placed on government finances by the pandemic does not lead to a decline in infrastructure investment. Our continued support for investment in social and economic infrastructure helps protect against this knock-on effect of the pandemic.

Green, inclusive, resilient