The European Fund for Sustainable Development as a Catalyst for Sustainable (M)SME Finance


Global Gateway is the new European Strategy to boost smart, clean and secure links in digital, energy and transport and strengthen health, education and research systems across the world. It was launched by EC in 2021, by looking into innovative ways to support developed countries and boosting private investment. The European Fund for Sustainable Development Plus (EFSD+) is the main financial tool to mobilise investments under Global Gateway. It includes guarantees, grants provided through ‘blending’ (a mix of EU grants with bank loans), technical assistance to help improve the quality of projects and the implementation of reforms and other support tools to support the development of partner countries.  

Experience to date has shown that there are many obstacles to the effective deployment of financing instruments and as a result the rate of deployment has been low. It is therefore important that these obstacles be identified and overcome. There are some projects that may be ready to go except for financing but in general there are many project ideas which need to be turned into investable projects to be funded by Multinational Development Banks, International Financial Institutions (IFIs) and the Neighbourhood, Development and International Cooperation Instrument – Global Europe (NDICI-Global Europe). Moreover, to ensure rapid and successful implementation.

Between 2021 and 2023, EU Africa RISE consultants conducted a number of projects which have funding requirements. EU Africa RISE has a few projects where there is a pipeline of projects that have been facilitated in various countries like Madagascar, Rwanda and Mauritius.                     

On the 24th of April, EU Africa RISE, the Mauritius Bankers Association and Blue Acacia hosted a workshop tailored for corporate banking managers and DFI-relation managers who are looking to widen their understanding of the funding opportunities for financial institutions under EFSD+. The workshop was praxis-oriented highlighting guarantee Opportunities for (M)SME Financing and Financing Facilities to Strengthen Local Currency Markets with addresses from the following subject matter experts:

·             Ms. Manisha Dookhony, Economics and Markets Reform Expert, EU Africa Rise,

·             Mr. Daniel Essoo, CEO, Mauritius Bankers Association

·             Mr. Bastian Koop, Policy Officer EFSD+ Guarantees, European Commission

·             Mr. Prakash Hurry, Officer in Charge, Regional Multidisciplinary Centre of Excellence,

·             Mr. David Weiss, Financing Instruments Expert, EU Africa Rise            

The discussions were centered on three sessions:                                                                          

·             Session 1: The EU Global Gateway and EFSD(+)

·             Session 2: Boosting SME Finance with EFSD(+) Guarantees                  

·             Session 3: Strengthening local currency markets with EFSD(+)

In his opening remarks Daniel Essoo, CEO of the Mauritius Bankers Association, addressed the challenges of (M)SME financing in Africa “Mauritian banks are in a lucky position in many ways because we are a financial centre and we don't have a liquidity problem. Strategically Mauritian banks want to lend cross border and the African continent is the natural home for our financing. But it is not easy to do so, because we still face some major challenges in the absence of good Guarantee schemes, it is sometimes hard for banks to lend to certain segments of the market, especially SMEs. There's a huge demand.”

He was then followed by H.E. Oskar Benedict, EU Ambassador to Mauritius who discussed the role of the EFSD+ "Micro, Small and Medium Enterprises are crucial to the growth and development of a country's economy. They are major source of job creation, innovation, and are essential to community development. With a contribution of about 40% to the country’s GDP and representing 54.6% of total employment, SMEs in Mauritius are bound to become a major pillar of the economy.

However, like in many countries MSMEs face challenges, in particular a lack of funding options. Many business ideas fail to become bankable ventures because financing is not forthcoming. A smooth access to finance is therefore a fundamental condition for a vibrant entrepreneurial economy. And this is where, the EFSD+ guarantee can help.

The EFSD+ guarantees are offered on favourable, highly competitive terms. They allow investors to finance projects in more challenging markets, by assuming the risks of more unstable environments while avoiding market distortions. Because the EFSD+ covers a share of the risks, the EU's development finance partners can match the EFSD+ guarantees with their own resources, which in turn will attract additional investors."

Delving further into the intricacies of sustainable finance, the second and third sessions focused on Boosting SME Finance with EFSD(+) Guarantees, and Strengthening local currency markets with EFSD(+).


·             Mr. Bennet Niemann, Financing Instruments Consultant at EU Africa Rise

·             Mr. William Poole, Guarantee and Syndications Manager at EDFI Management Company

·             Ms. Ilayda Atalay, NASIRA Structured Finance Officer at FMO

·             Mr. Christian Abidjuru, Head of Business Banking at I&M Bank Rwanda

·             Mr. Timothy Nuy, CEO of Fin, a pan-African neobank &

·             Mr. Demba Tandia, Vice President for SSA at TCX

Overall a very fruitful event that completed its objective of sharing practical experiences and lessons learned via case studies on current EFSD+ projects and beneficiaries in the region but also providing a platform for exchange among existing and potential future EFSD+ partnerships and projects.