The proposal on the European Fund for Sustainable Development (EFSD) and the establishment of the EFSD Guarantee and the EFSD Guarantee Fund(1) is currently within the trilogue process between the Parliament, the Council and the Commission. While the final outcome of the legislative process cannot be prejudged, the Commission shares the objective to enhance the desired development impact of the European Union action avoiding any negative social impact such as increases in food prices.
To this effect, the proposed EFSD Regulation sets criteria for investment support including, inter alia, the need for consistency and alignment with European Union policies, in particular development and neighbourhood policies and the partner countries’ strategies and policies, the contribution to economic, social development and the support to operations which are socially and environmentally sustainable.
In consistency with the strategy set in the Multiannual Indicative Programme on Global Public Goods and Challenges(2) and more specifically the ‘sustainable energy’ strategic area programme, the EFSD will not support biofuel projects. Any other renewable energy projects (including solar) to be supported under EFSD will be selected on the basis of appropriate Social and Environmental Impact Assessment studies.
The increased demand for food from the growing population in Africa is projected to be mostly met through productivity gains of the agricultural sector, whose greatest challenge is the weak infrastructure, including energy infrastructure(3). The anticipated EFSD support to sustainable energy projects is expected to contribute to higher productivity and yields by increasing access of farmers to reliable, affordable, sustainable and modern energy.