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Begin New Search Topic Investment Author Mikaela Gavas

1. Incentivising Investment in Human Capital through the European Fund for Sustainable Development

Author:
Mikaela Gavas and Samuel Pleeck
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
As the EU prepares to significantly scale up its deployment of blended finance, guarantees, and other risk-sharing tools aimed at stimulating investment in developing countries, and, in the face of spiralling needs as a result of COVID-19, this paper analyses how the EU could use its development budget to incentivise private investment in human capital. The paper provides three contributions. First, it gives an overview of the allocation of the EU’s external investment to date. Second, based on interviews with stakeholders, it documents cases of private investment in health and education while exploring some of the barriers to a higher share of investment in these sectors by the EU and its development finance partners. Finally, it puts forward a set of proposals for how to steer greater European external investment through the European Fund for Sustainable Development Plus (EFSD+) toward human capital.
Topic:
Development, Regional Cooperation, European Union, Investment, Human Capital, and Sustainability
Political Geography:
Europe

2. The EU’s Financial Architecture for External Investment: Progress, Challenges, and Options

Author:
Hannah Timmis and Mikaela Gavas
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
In 2017, the EU launched an ambitious programme of investment mobilisation in Africa and the Neighbourhood: the External Investment Plan (EIP). The EIP aims to increase the scale, impact, and coherence of EU-supported external investment by introducing various innovations to the European financial architecture, including a new guarantee mechanism and a unique “three-pillar” approach to investment support. The European Commission is proposing a significant expansion of the EIP under the EU’s new long-term budget, the Multiannual Financial Framework 2021–27, replacing the current plethora of investment tools and modalities with a single framework. This paper provides a comprehensive overview of the evolution of the EU’s complex external investment architecture. Based on interviews with stakeholders, it documents lessons learned during the EIP’s first year of implementation and proposes a series of options for the design and operationalisation of the new investment framework. To increase the additionality, development effectiveness, and efficiency of EU-supported external investment, it recommends that the European Commission improve the current architecture by providing greater policy steer to investors; increasing competition among institutions for investment support; clarifying linkages between the three pillars; setting clear guidance, fee structures, and standardised contractual terms; and strengthening management of investment tools.
Topic:
Regional Cooperation, European Union, Finance, and Investment
Political Geography:
Europe

3. The EU’s Financial Architecture for External Investment: Progress, Challenges, and Options

Author:
Hannah Timmis and Mikaela Gavas
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
In 2017, the EU launched an ambitious programme of investment mobilisation in Africa and the Neighbourhood: the External Investment Plan (EIP). The EIP aims to increase the scale, impact, and coherence of EU-supported external investment by introducing various innovations to the European financial architecture, including a new guarantee mechanism and a unique “three-pillar” approach to investment support. The European Commission is proposing a significant expansion of the EIP under the EU’s new long-term budget, the Multiannual Financial Framework 2021–27, replacing the current plethora of investment tools and modalities with a single framework. This paper provides a comprehensive overview of the evolution of the EU’s complex external investment architecture. Based on interviews with stakeholders, it documents lessons learned during the EIP’s first year of implementation and proposes a series of options for the design and operationalisation of the new investment framework. To increase the additionality, development effectiveness, and efficiency of EU-supported external investment, it recommends that the European Commission improve the current architecture by providing greater policy steer to investors; increasing competition among institutions for investment support; clarifying linkages between the three pillars; setting clear guidance, fee structures, and standardised contractual terms; and strengthening management of investment tools.
Topic:
Regional Cooperation, European Union, Finance, and Investment
Political Geography:
Europe

4. Redesigning the External Investment Plan to be a Game-Changer for Africa

Author:
Mikaela Gavas
Publication Date:
10-2019
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Despite their potential to achieve high development impact, projects in the poorest and most fragile countries, most in sub-Saharan Africa, are chronically underfinanced by Euro- pean development finance institutions and private investors owing to real or perceived low risk-adjusted returns. The External Investment Plan and its risk-mitigation tools, if struc- tured right, have the potential to mobilise investment where the need is greatest. To make this happen, the new European Commission should n clarify the strategic objectives of external investment and steer it towards leveraging high-risk capital for underserved markets; n explicitly focus assistance on the poorest countries through clear project selection criteria; n provide demand-driven technical assistance and oper- ationalise policy dialogue to improve the business envi- ronment; and n federate the development finance institutions focusing on steering policy, encouraging best practice, and har- monising procedures and results amongst the develop- ment finance institutions and multilateral development banks.
Topic:
Diplomacy, International Cooperation, European Union, and Investment
Political Geography:
Africa, Europe, and Sub-Saharan Africa