(Athens University) Presentation

Blending grants and finance
Professor Plutarchos Sakellaris
Athens, June 2014
• Blending: combination of grant resources (normally, EC) with loans from
eligible public financial institutions (e.g. EIB) and commercial lenders.
• Blending facilities:
EU-Africa Infrastructure Trust Fund (ITF). Established in 2007.
Neighbourhood Investment Facility (NIF). Launched in 2008.
Facilities set-up following NIF’s model:
Investment Facility for Central Asia (IFCA – 2010)
Latin America Investment Facility (LAIF – 2010)
Asia Investment Facility (AIF – 2012)
Caribbean Investment Facility (CIF – 2012)
Investment Facility for the Pacific (IFP – 2012)
Western Balkans Investment Framework (WBIF). Introduced in 2009.
Blending comprises 5 modalities of support:
Investment grants
Interest rate subsidies
Technical Assistance
Risk capital (i.e. equity & quasi-equity)
Guarantee mechanisms
Objective: mobilize investments
EU-Africa ITF
Objective: contribute to achieving the strategic objectives
of the EU-Africa Partnership through targeted funding
aimed at making up the regional and continental deficit in
Eligible projects:
a) trans-border infrastructure project, or
b) a national project with a demonstrable regional
impact on two or more countries, or
c) a national project in the context of the "Sustainable
Energy for All“ initiative.
Eligible sectors: (a) Energy, (b) Transport, (c) Water, and
(d) IT.
1) East Africa – Lake Turkana Wind Power (300 MW)
Grant: EUR 25 million (preferred equity share)
EIB: EUR 200 million
AfDB: EUR 110 million
EDFIs loans + equity: EUR 288 million
Total project cost: EUR 620 million
2) Africa Sustainable Energy Facility
Risk-sharing with local banks to finance smaller RE
Partial risk guarantee (say 50%, comprehensive, firstdemand)
From EU ITF:
a) EUR 5 million, First-Loss Piece to reduce EIB risk
b) EUR 3 million, Technical Assistance (banks,

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