This side event took place on 15 July in the margin of the Third International Conference on Financing for Development (13 – 16 July 2015). It focused on the need to work for the development of the private sector and to engage with the private sector to achieve development goals. The event looked specifically at the role of blending in particular in the agricultural and energy sectors. The side event was organised jointly by the European and African Union Commissions and gathered representatives from the UN, AU, EU, EIB, other European Finance institutions as well as European and African private sector. The event follows up from the 5th EU Africa Business Forum held in 2014 in Brussels.
The overarching objective of this session was to:
- contribute to building a strategic framework for working for and with the private sector towards achieving the AU “Agenda 2063”
- discuss how private sector resources and engagement can be catalysed for development in Africa notably in the agriculture and energy sector.
Speakers and panellists emphasized the need of the creation of enabling environment for private sector engagement as the private sector will play a key role in the transformation agenda of the African continent. The following key enabling elements were mentioned:
- Inclusion of the private sector in policy-making efforts and policy dialogue;
- Strengthening institutional capacity of private sector representing bodies and public sector institutions;
- Improving skills development of youth and women, capacity development of SMEs through training and knowledge transfer;
- Developing risk mitigation and credit enhancement solutions, improving access to finance;
- Reinforcing productive capacity through industrialization and value addition.
The EU and AU reiterated their determination to work with the private sector to reinforce its role in achieving inclusive and sustainable growth in Africa.
Sustainable agriculture and energy were identified as two key drivers of structural change. Private sector development and engagement should also be mainstreamed through blending mechanisms in these sectors in order to push the transformation of the continent.
Three successful case studies of blending mechanisms were presented:
- A program of the Agence Française de Développement, SunRef regarding the sustainable use of natural resources in energy sector in West Africa.
- The Geothermal risk mitigation facility launched in 2012 in Africa by the EC, together with the AUC and the German government.
- The Lake Turkana wind project in Kenya, a 300 MW installed capacity farm in which the EU provided capital participation managed by the EIB.
What commitments have been announced?
EU investments of up to EUR 8 billion in grants should generate over EUR 40 billion from public finance institutions which should help mobilise over EUR 100 billion by 2020 through blending mechanisms.
The EU, working together with partner countries, will invest in key sectors such as infrastructure, sustainable energy, sustainable agriculture and support to small and medium-sized enterprises. The new Africa Investment Facility is one such programme that will be launched by the EU in 2015.
New programmes such as "AgriFI" and "ElectriFI" will be committed to harnessing private sector resources through blending mechanism in order to push the transformation of the continent in the agriculture and energy sectors.
EU action will focus on promoting an enabling business environment and responsible business practices.