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Euro MPs quiz Brussels on Africa infrastructure funding

Pushed to rival Beijing’s Belt and Road scheme, the EU’s Global Gateway plan is coming under fire

The European Parliament has heavily criticised the opacity in the EU’s Global Gateway infrastructure investment programme, particularly the lack of clarity over where the cash for projects is coming from.

The EU Commission has marketed Global Gateway as its ‘values based’ alternative to China’s Belt and Road Initiative. But the EU scheme has only a fraction of China’s financial firepower, estimated at around US$1.3 trillion over the past decade (AC Vol 66 No 23, Brussels pushes Global Gateway to rival US-China deal-making & Vol 66 No 21, The price of processing). The EU executive says that it has already mobilised around €130 billion ($153.6bn) in funding for projects across Africa alone.

‘Hardly any Europeans have ever even heard of this strategy, which claims to have mobilised over €400bn in investment,’ said Barry Andrews, the Irish MEP who chairs the Parliament’s Committee on Development, which drafted and voted on the report on 26 February.

The EU programme is also heavily reliant on private sector finance. Only €10bn in public money has been put up by the Commission in guarantees from the EU Budget. The European Investment Bank, the EU’s development finance arm, has been tasked with mobilising around €100bn. But the vast majority of this is not an EIB stake.

MEPs have also urged the Commission to make sure that demand in partner countries is matched with offers from European businesses, allowing the EU to benefit from securing procurement contracts. Otherwise, EU project finance would be used to grant tenders to companies from China and other rival powers, they argue.

There is also frustration about how money is being raised for projects, with the committee report stating that it ‘deplores the lack of clarity and transparency regarding the funding track record and how the figure of €306 billion was reached.’



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