A new fund to boost private investment in developing countries and address the root causes of the migration crisis has been approved today by MEPs.

A new fund to boost private investment in developing countries and address the root causes of the migration crisis has been approved today by MEPs.

The European Fund for Sustainable Development (EFSD) is a direct response to a report – Private Sector and Development – by ECR Development spokesman Nirj Deva MEP, which was passed by the European Parliament last year.
The EFSD combines existing funding of €2.6 billion with a further €1.5 billion to assist projects proposed by the private sector, financial institutions or public bodies. Eligible schemes will support jobs, growth, wealth creation and stability in Africa and countries on the EU’s eastern and southern borders. It is hoped the fund will leverage at least €44 billion of private investment.

Mr Deva welcomed the EFSD as a vehicle for implementing the ideas contained in his breakthrough report, which for the first time secured EU backing for the use of public-private partnerships in development.

He said: “International development must be about more than just alleviating poverty. It has to provide security, hope and opportunities to people so they do not need to flee their own country in search of a better life.

“If we are serious about stemming the flow of refugees and migrants then finding innovative ways, such as the EFSD, to support development is far more effective than building walls and razor wire fences.

“Using just taxpayers’ money will never be sufficient. Instead we need to mobilise the private sector, the real engine of economic growth.

“The model is simple, blend public, private and charitable contributions under strict conditions but with rigorous private sector standards, rather than trust money to public sector actors who often treat donor cash with contempt.”

A World Economic Forum survey found that every $1 of public money invested in this way attracted as much as $20 of private sector investment.

It is hoped the EFSD will be operational in time for the EU/Africa Summit in November.