Date of effectiveness: 2007
Created in 2007 by the European Commission and European Union Member States, the EU-Africa Infrastructure Trust Fund (EU-AITF) was the first EU “blending instrument” with the objective of promoting infrastructure projects in Sub-Saharan Africa with a regional impact.
“Blending” means combining long-term investments from development finance institutions (loans, risk capital, etc) with grant monies to gain financial and qualitative leverage as well as project sustainability. Another objective of Blending is the promotion of cooperation and coordination between European and non-European aid actors.
EU-AITF can deliver grant support to various stages of a project:
- “Project identification” – when a project aims to develop or prioritise other projects
- “Project preparation” – assessment of feasibility and design of a specific project
- “Investment phase” – project construction and implementation
Grants can be provided in the form of:
- Technical assistance for preparatory work like feasibility studies, Environmental and Social Impact Assessments, Resettlement Action Plans, etc., for project supervision, and also for targeted capacity building such as reinforcing the technical and administrative capacity of local staff in Africa.
- Interest rate subsidies to enable EU-AITF Financiers to make long-term loan finance available in flexible ways in order to reduce the total amount of debt service. Such subsidies allow the final financing package to achieve the level of concessionality required by debt sustainability programmes of e.g. the World Bank or the IMF.
- Investment Grants are non-reimbursable contributions to finance tangible or intangible project components with the aim to decrease the total investment costs or to increase the concessionality level of the financing package of a project. Investment grants can also target the financing of specific project components which have substantial demonstrable social or environmental benefits or which can mitigate negative environmental or social impacts.
- Financial Instruments comprise, but are not limited to, guarantees, loan guarantee cost financing, insurance premia, equity or quasi-equity investments or participations and risk-sharing instruments.