As part of its new strategy to further address the UN Sustainable Development Goals, the IDB is exploring ways to scale-up its partnership with the European Investment Bank (EIB) and co-finance new projects in Africa and Southern Mediterranean countries. MARC ROUSSOT delves deeper.
By increasing their cooperation, both multilateral development banks want to improve the lives of the most vulnerable, help refugees and small enterprises. The IDB and the Luxembourg-based financier are also planning to support the construction of infrastructures and foster innovation.
“There is an acute need to support sustainable investment in many regions where we are both active. We can deliver more impact by bundling our respective strengths and working closely together,” shared Werner Hoyer, the president of the EIB.
Africa’s infrastructure financing need is estimated at US$170 billion per year, according to the African Development Bank, and the continent faces a US$331 billion MSME financing gap.
In addition, the ongoing 2015 migrant crisis is putting enormous pressure on several Southern European countries while African nations are already destabilized by Jihadi-inspired rebellions and irredentist groups.
Overall, based on IDB estimates, the world is facing a US$200 trillion development financing gap. Addressing it is urgent for the Islamic multilateral bank whom 27 of its 57 member-countries are from Africa and all are part of the developing world.
In this context, boosting its financial firepower through renewed collaboration with international development banks is a priority for the IDB, which recently expressed its worry that the UN SDGs will not be achieved by 2030 if there is not a dramatic change in strategy.
“The close relationship between the IDB and EIB will bring significant contributions to the development of the Islamic finance industry as well as the private sector in communities we have committed to serve,” said Dr Bandar Hajjar, the president of the IDB, which have been joining hands with the EIB since 2005.
Over the past 14 years, both institutions have co-financed nine projects with a total investment of EUR1 billion (US$1.15 billion) in Lebanon, Morocco, Tunisia and Sub-Sahara Africa.