Today, the European Commission and the European Bank for Reconstruction and Development (EBRD) signed a new guarantee agreement worth up to €76.75 million to accelerate the development of greener and fairer global value chains.
Aligned with the EU’s Global Gateway strategy and backed by the European Fund for Sustainable Development Plus (EFSD+), this initiative will make it easier for Small and Medium-Sized Enterprises (SMEs) and MidCaps to access financing in the Western Balkans, the Eastern Neighbourhood, North Africa and the Middle East, Türkiye, Central Asia and Mongolia. Support will focus on those companies whose projects meet Environmental, Social and Governance (ESG) criteria. The goal is to strengthen their ability to compete in rapidly evolving markets and to navigate new business landscapes, while advancing sustainable growth and job creation in local economies worldwide.
Through this guarantee, the EBRD will work with local banks to channel financing to SMEs and mid-sized firms through two key instruments:
- Supply Chain Solutions Framework (SCSF): providing short-term financing to suppliers working with major buyers.
- Risk Sharing Framework (RSF): offering loans and guarantees for capital expenditure, working capital, acquisitions or business expansion.
EU Commissioner for Enlargement, Marta Kos, said: “Protecting the environment and citizens’ wellbeing is a core part of becoming an EU member. By supporting local businesses that invest in clean energy and sustainable practices, we’ll help candidate countries protect their beautiful nature and the health of their citizens, all while growing their economies.”
EU Commissioner for the Mediterranean Dubravka Šuica stated: “As Directorate-General responsible for the Mediterranean, we are committed to ensuring that small businesses in our partner countries have the means to thrive. Through this guarantee agreement with the EBRD, the European Commission supports the creation of opportunities and capital with the view of providing benefit to communities at large. And this is, eventually, the aim of our Pact for the Mediterranean”.
Zsuzsanna Hargitai, EBRD Managing Director for the SME Finance and Development group said: “Supporting local companies in adopting best Environmental, Social and Governance practices will increase their competitiveness and resilience and will create positive spillovers beyond the direct beneficiaries of the programme, including job creation. EBRD is proud to partner with the EU, partner banks and technology platforms to increase access to finance and technical assistance to a broad range of SMEs committed to sustainability, enabling systemic change in the SME sectors and across the supply chains of our countries of operation.”
Background
Global Gateway is the EU’s positive offer to reduce the worldwide investment disparity and boost smart, clean and secure connections in digital, energy and transport sectors, and to strengthen health, education and research systems. The Global Gateway strategy embodies a Team Europe approach that brings together the European Union, EU Member States, and European development finance institutions. Together, they aim to mobilise up to €300 billion in public and private investments from 2021 to 2027, creating essential links rather than dependencies, and closing the global investment gap.
The European Fund for Sustainable Development Plus (EFSD+) was established in June 2021 to support public and private sustainable investment in EU’s partner countries, and as a key tool of EU’s Global Gateway initiative. EFSD+ makes available grants and guarantees for investment projects through International Financial Institutions (IFIs) and has €39.8 billion in guarantee capacity globally for the period 2021 to 2027.