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Global Gateway: Boosting sustainable finance in EU partner countries
The European Commission today received the final recommendations of the High-level expert group on expanding sustainable finance in low- and middle-income countries (HLEG), in the presence of the Director General of the International Monetary Fund, Kristalina Georgieva.
Since 2022, emerging markets have seen the worst capital outflows ever. The report presents concrete and innovative actions that the Commission can take to mobilize private capital for sustainable investments in Global Gateway partner countries.
It outlines ten recommendations, with emphasis on the establishment of a strengthened strategic engagement model with partner countries, whilst ensuring greater flexibility in leveraging the EU’s external financial support instruments. Additionally, GPAN recommends innovative solutions to mobilize private capital and increase fiscal resources for sustainable investments, along with measures to strengthen the size and depth of sustainable local capital markets.
The recommendations contained in the report contribute to the broader debate on how to attract more private financing for sustainable development in partner countries through innovative models, in a context of limited public resources and limits to concessional financing. For this to happen, partner countries need to continue working on developing their sustainable financial ecosystems and sustainable capital markets. In parallel, ongoing discussions on the mandates of multilateral development banks and development finance institutions will also be key to attracting the private sector.
European Commissioner for International Partnerships, Jutta Urpilainen said: “Sustainable finance in low- and middle-income countries needs to be scaled up, given current constraints on public finances and the limited availability of concessional finance. This has been a priority of my mandate within Global Gateway’s investment strategy. This report sends a strong signal to our partners that the European Commission is committed to mobilizing large-scale private capital for sustainable investment in low- and middle-income countries.”
European Commissioner for Neighborhood and Enlargement, Olivér Várhelyi added: «Mobilizing sustainable investment in our partner countries has been a key priority during my tenure. Our ambitious Economic and Investment Plans in the Western Balkans, the Eastern Partnership and the Southern Neighborhood have been key in this context. These projects are expected to promote almost 50 billion euros of investment in vital sectors that cover the development needs of our partners: sustainable connectivity, human capital, competitiveness and inclusive growth, the dual ecological and digital transition, and much more. These recommendations will help our partners develop further in the current volatile economic and geopolitical scenario.”
Director General of the International Monetary Fund, Kristalina Georgia stated: “Constraints on public finances, coupled with high interest rates around the world, are making it increasingly difficult to close the investment gap in low- and middle-income countries. This report is a valuable contribution to ongoing international reflection on how to mobilize private capital for these countries and is in line with the IMF’s own ongoing work in this area. The IMF will continue to work closely with the European Commission to support our partners in developing their capital markets, attracting private investors and overcoming financial obstacles to ensure a brighter, more prosperous future for all.”
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GPAN was mandated by the European Commission to identify challenges and opportunities for sustainable finance in low- and middle-income countries and to provide recommendations on concrete and transformative actions that the European Commission could take to support sustainable finance in these countries. It brought together a diverse group of international experts representing a wide range of expertise, both financial and non-financial, including EU cross-border investors, local investors, local businesses, civil society, standardization bodies and universities. Created in September 2022, GPAN held twelve meetings in plenary and working group formats. The recommendations are the result of more than 18 months of dedicated work.
Global Portal represents the European Union’s effort to reduce the global investment gap and boost smart, clean and secure connections in the digital, energy and transport sectors, and to strengthen health, education and research systems. It provides sustainable investment opportunities to increase the prosperity and security of our global partners and Europe. The Global Gateway strategy incorporates a collaborative approach that brings together the European Union, EU Member States and European development finance institutions. The objective is to mobilize up to 300 billion euros in public and private investments between 2021 and 2027, creating essential connections instead of dependencies and closing the global investment gap.
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