Related News

Dutch ECA readies critical minerals import facility

Export credit agencies on hook as Northvolt powers down

Germany aims to boost struggling industry with export credit revamp

Low-income countries left out of ECA renewables boom: study

Prospects fade for deal to end OECD fossil fuel support

The European Union’s proposed alternative to China’s Belt and Road Initiative is struggling to scale and requires the launch of a specialist unit coordinating export and development finance, experts say.

The Trade and Private Sector Development and Engagement (TPSDE) Facility, an advisory service to the European Commission, published a paper this week assessing how export credit agencies (ECAs) and development finance institutions (DFIs) can be wielded in aid of the bloc’s Global Gateway Initiative.

Launched four years ago, the EU’s Global Gateway aims to mobilise up to €300bn in infrastructure projects globally by 2027.

But the report, titled Scaling up Global Gateway: Boosting coordination in development and export finance, argues for an overhaul of the EU’s external financial instruments.

“[There is a] need to set clear strategic, policy and regulatory frameworks to enhance the complementarity and coordination of European DFIs and ECAs, and more broadly the EU development ambitions and geoeconomic interests, under a coherent European financial architecture for international investments,” says the paper, penned by researchers San Bilal and Andreas Klasen.

For years, the EU has been deliberating how it can better deploy ECAs in aid of policy goals. In mid-2024, the bloc launched its inaugural risk-sharing mechanism for the export credit industry and said it would initially focus on a €300mn pilot for SME exports to Ukrainian buyers.

But experts warn the EU is still struggling to compete with rivals such as China, with the share of European contractors active in Africa, Asia and the Middle East having dropped significantly since 2010.

The research paper, requested by the European Commission, outlines several potential reforms, including the creation of a specialist unit.

“It is essential to establish a dedicated EU coordination entity within the COM [European Commission]. This unit must be staffed properly and would act as a central hub for coordinating DFI, ECA and EU actions to create a unified Team Europe package,” the paper says.

The initial phase could be supported by secondments from an ECA and a DFI to ensure cross-institutional knowledge transfer, the report suggests.

In practice, the unit could identify potential Global Gateway projects and help them secure financing.

“This new unit would lead joint project development task forces, ensure continuity of efforts, establish a project pipeline facility to coordinate European DFI-ECA (and, more broadly, multi-stakeholders) actions, and possibly co-finance flagship projects.”

In another recommendation, the report calls for “more targeted EU funding mechanisms” to help fill financing gaps and support geostrategic projects.

There have been “some successful” cases of cooperation previously, it says.

One example is the Dutch Good Growth Fund (DGGF), first launched in 2014, which demonstrates the potential of a blended approach combining export finance, technical assistance and development finance to boost SME exports to developing markets.

A deal signed by Enel Green Power in 2024 is also cited. Last year, the firm secured a €560mn package from the European Investment Bank, Italy’s export credit agency Sace and a pool of Italian lenders for a photovoltaic facility in Sicily.

But there is a need to scale up these solutions and help ECAs sign deals they would “otherwise avoid”, the researchers argue.

“The lack of a unified coordination mechanism within the EU has prevented these successes from being systematically scaled up,” they add.

EU guarantees could be provided through a special purpose vehicle (SPV) or a mechanism led by the European Investment Bank. This would help streamline processes and reduce administrative burdens, especially for smaller ECAs, the paper says.

European export credit providers have expressed a desire to boost their support, with a group of about 20 agencies signing a letter of intent outlining their commitment to the Global Gateway in November.

One of the signees, Finland’s Finnvera, said exporters could look to strike deals in sectors such as digitalisation, education and climate solutions: “We encourage Finnish companies to boldly seek export deals also in new, developing markets.”

Broadly, the paper is calling for Brussels to develop a “whole of government” financing strategy that would integrate grants, loans, equity, guarantees and insurance – thereby offering a “comprehensive 360° financing”.

“This holistic strategy would enable EU actors to compete effectively with countries such as Japan and China, which provide integrated financial support packages to developing countries,” it says.