EU Development Chief Calls for Blended Grants, Loans as Aid Instruments

To increase the impact of the European Union’s development aid, Andris Piebalgs is suggesting a shift to a mix of loans and grants-based aid instruments.

“We need to consider very seriously how we can move from a grant-focused approach towards increasingly a blended grant and loan based aid instruments, focused on using development funds to leverage investment in infrastructure in developing countries, and particularly in Africa,” the EU development chief said Sept. 27 in a speech at the international policy summit in Brussels.

Piebalgs also reiterated his call for channeling aid through budget support, fostering sustainable development and promoting a coherent EU policy for development as some of the “specific issues which I believe should be at the heart of putting our objective of higher impact aid into practice over the next years.”

>> Andris Piebalgs Outlines Priorities for EU Development Cooperation

Better coordination of the bloc’s aid will help save between 3 billion euros and 6 billion euros each year.

“This means we will have to put in place more effective mechanisms to enable Member States and the Commission to be informed and take [into] account of one-another’s intentions regarding aid programming when reaching our own decisions. This means progressively bringing together the timing of national and EU programming cycles at partner country level by 2013 and using the joint programming framework to avoid duplication and overlap. The European External Action Service will be instrumental in this respect,” he said.

About the author

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    Ma. Rizza Leonzon

    As a former staff writer, Rizza focused mainly on business coverage, including key donors such as the Asian Development Bank and AusAID.