Top European donors: What you need to know

By Manola De Vos 30 October 2015

Map of Europe. Which European countries are the biggest donors? Photo by: gingerbeardman / CC BY-NC-ND

The global aid architecture is changing, and it’s changing fast. But for all the talk on emerging donors, multistakeholder partnerships and innovative financing mechanisms, some familiar names continue to drive the global development agenda — and these include European donors.

Despite budgetary constraints, the European Union and its member states have collectively managed to keep their place as the world's largest aid donor. In 2014, six out of the top 10 donors of official development assistance were European.

But European donors are far from resting on their laurels. Eager to stay at the forefront of the global fight against poverty, these big funders are not only building on past achievements to make new progress — they are also seeking to reinvent themselves.

To help you understand the latest trends, priorities and strategies currently driving Europe’s global giving, Devex dug into the latest data published by the Organization for Economic Development and Cooperation and other official donor documents. Below is a detailed overview of six major European donors — including the United Kingdom, Germany, France, Sweden, the Netherlands and Norway — and their plans for the future.

United Kingdom

One of the only major aid actors with a development ministry responsible for both policy and implementation, the United Kingdom is also the first country to enshrine in law the U.N. target to spend 0.7 percent of gross national income on aid every year. Buoyed by the country’s steady economic growth, the U.K. Department for International Development annual budget reached an all-time high of $19.4 billion in 2014.

Priorities: U.K. aid is praised for its clear focus on the neediest. Out of the 28 countries it prioritizes, 21 are fragile and conflict-affected states. DfID is also the largest European donor to global health — particularly basic health care, infectious diseases, malaria, and reproductive health.

More recently, the U.K. has taken on a trailblazing role in putting women’s rights at the heart of the global development agenda. DfID is legally required to take gender into account when deciding on how it spends aid.

Distinctive features:

As its aid budget continues to grow, demonstrating results and value for money has become a prime concern for DfID. The U.K. government is a top performer on transparency, and DfID claims one of the most robust measurement, management and reporting systems among foreign aid donors.

Engagement with partners: The U.K. channels growing volumes of ODA through civil society organizations, and around a fifth of its bilateral program is currently implemented by CSOs. DfID also increasingly relies on private contractors to deliver its programs, and while British aid is completely open to foreign companies, over 90 percent of its centrally managed contracts — which represent a significant share of contract value — are awarded to U.K. suppliers.

Click here to learn more about the latest funding and contracting opportunities with DfID.

Germany

These are promising times for the world’s third biggest bilateral donor. In 2014, Germany’s foreign aid spending reached a record high of $16.25 billion, with increases slated to reach a whopping 10.3 billion euros ($11.3 billion) between 2014 and 2019.

Priorities: After undergoing major reforms in 2011, German foreign aid is now seeking to be more selective and strategic in its spending priorities. But for the time being, Germany’s political commitment to focus on the poorest countries, especially in Africa, has yet to be reflected in its ODA allocations.

Germany is a prominent player and advocate in the field of sustainable development. Climate action is well embedded in the confederation’s aid programming, both thematically and as a crosscutting dimension. Meanwhile, GIZ, Germany’s main technical agency, spearheads a range of capacity-building interventions focused on strategic sectors such as sustainable energy and environment protection.

German development assistance has also been fast to respond to global crises. Ongoing emergencies such as the Ebola outbreak in West Africa and the Syrian refugee crisis have notably propelled health systems strengthening and refugee support to the top of Germany’s aid agenda.

Distinctive features:

The German development ministry, or BMZ, boasts a comprehensive mix of instruments and approaches which can be tailored to fit specific contexts. Germany also stands out for its efforts to improve the quality of its aid. For instance, quality management processes and monitoring and evaluation activities are firmly rooted in all aspects of GIZ’s work.

Engagement with partners: Germany values the role of civil society, and the latest peer review released by the OECD’s Development Assistance Committee has found that the country channels 8 percent of its ODA to nongovernmental organizations. Contracting opportunities with GIZ have also reached new heights. In 2014, GIZ awarded 723.8 million euros ($806.6 million) worth of consultancy contracts — a first since the merged organization began its activities four years ago.

Click here to learn more about the latest funding and contracting opportunities with GIZ.

France

President François Hollande’s budgetary choices might have set the country back by more than a decade in reaching the 0.7 percent aid target, but France is now expected to stabilize its aid budget in 2016. In the next few years, French ODA is further slated to increase by 4 billion euros and half of that amount will be dedicated to climate change.

Priorities: After adopting its first aid road map in 2014, French development assistance is now governed by so-called differentiated partnerships. The world’s poorest countries, including crisis and post-crisis situations — the bulk of which are located in sub-Saharan Africa, where France enjoys longstanding cultural and linguistic ties with former colonies — are a topmost priority of French aid. Other areas of focus include maternal and child health, as well as the environment. In 2014, 53 percent of AFD-funded projects had a climate component, an achievement that puts France at the forefront of the fight against climate change.

Distinctive features:

France is a strong proponent of innovative financing, and plays an active role in mobilizing private investments and creating synergies between public and private stakeholders in development. Through its subsidiary Proparco — a financial development institution dedicated to private sector financing — the French development agency, or AFD, often carries out its development activities by matching aid resources with private investment. AFD also has a diverse set of financial tools at its disposal, which allows it to be responsive to a range of political, economic and social contexts in partner countries.

Engagement with partners: French ODA disbursements to NGOs remain extremely limited —  less than 1 percent of total ODA according to the OECD DAC’s most recent peer review. But France still holds civil society in high regard, notably by bringing together a multitude of stakeholders from North and South around specific issues. These partnerships can take several different forms — such as cofinancing, sharing of know-how and research. It’s also important to note that French aid is largely untied and AFD-funded schemes are carried out by local contracting authorities.

Click here to learn more about the latest funding and contracting opportunities with AFD.

Sweden

Despite the global financial crisis, Sweden’s aid program has managed to stay the course.  Since 2006, the Nordic country has maintained its ODA at around one percent of its GNI. In 2016, the Swedish government announced that its development aid budget will reach 43.4 billion Swedish krona ($5.1 billion), or nearly 3 billion Swedish krona more than this year.

Priorities: In line with its strong poverty focus, most of Sweden’s bilateral aid resources are directed to low income countries and fragile states. Three specific priorities drive Sweden’s aid giving: democracy and human rights; environment and climate change; and gender equality and the role of women in development.

Sweden has also been particularly reactive to the critical situation in the Middle East, announcing new strategies to respond to the Syrian refugee crisis. The upcoming climate summit in Paris has further prompted Sweden to step up its climate financing by 886 million Swedish krona.

Distinctive features:

Sweden was the first OECD DAC member to apply the principle of policy coherence for development, and has been a powerful advocate of the idea ever since. Sweden’s whole-of-government approach for policy making ensures that all major domestic policies are screened for their impact on developing countries, and do not obstruct poverty reduction goals.

Engagement with partners: Although international NGOs and non-Swedish civil society groups cannot apply for grants directly from the Swedish International Development Cooperation Agency, Sweden’s contributions to civil society are ever-growing and among the highest within the international donor community. Sweden’s support to CSOs in developing countries is channeled through SIDA’s 18 framework organizations. Non-Swedish CSOs can partner with these organizations.

Like many foreign aid agencies, SIDA has increased the amount of aid it channels through the private sector. A new approach, initially called Business for Development, is now being integrated throughout the agency, and SIDA now offers various financial mechanisms to support or co-finance private sector initiatives.

Click here to learn more about the latest funding and contracting opportunities with SIDA.

The Netherlands

The Netherlands was one of the first DAC member countries to meet the ambitious goal of spending at least 0.7 percent of its GNI on ODA. But four decades in, Dutch aid is in a free fall: Dutch ODA is expected to plummet to 3.59 billion euros by 2017, down from 4.68 billion euros in 2014.

Priorities: The past couple of years have seen the Netherlands rationalize its development assistance. Historically focused on social sectors, Dutch aid is now increasingly geared toward economic development and national interests. Only a third of all partner countries will continue to receive ODA, while all others will see Dutch aid either phase out or move to trade.

Distinctive features:

In response to a growing demand by Dutch companies to work in developing countries and in strictly regulated sectors such as energy, logistics, water and agri-business, the Dutch government has recently decided to give trade and investment the upper hand in its development cooperation strategy.

Engagement with partners: Support for civil society is slated to undergo drastic cuts, falling from 452 million euros in 2015 to 219 million euros by 2017. Compared with 2011, major Dutch aid groups — a non-negligible source of funding for local organizations — are expected to lose more than 60 percent of their government support by 2016.

In the near future, private sector actors can expect many funding opportunities to open up. Of all the focus areas of Dutch ODA, private sector strengthening is the only one expected to see a significant increase in funding. Meanwhile, the number of developing countries that can apply for the Dutch Good Growth Fund — an instrument to promote investments in and trade with developing countries — is steadily increasing.

Click here to learn more about the latest funding and contracting opportunities with the Dutch ministry of foreign affairs.

Norway

Known for its long-standing commitment to high aid targets, Norway disbursed $5 billion worth of ODA in 2014, or 1 percent of its gross national income — making it the third most generous OECD DAC member in terms of its ODA/GNI ratio after Sweden and Luxembourg. In the future, ODA levels are likely to be maintained at this level.

Priorities: Selecting its channels, instruments, sectors and partners based on appropriateness and efficiency, Norway’s approach to aid is particularly flexible. The country is one of the world’s most committed donors to least-developed countries, and it plays a central role in thematic initiatives in which it draw on its own experience, such as the sustainable use and development of natural resources, clean energy, good governance, and economic development.

Global education especially in conflict or disaster contexts — a topic which has been sliding off the aid agenda of many top donors — is another area where Norway is trying to lead the way. In the next three years, the Scandinavian country is expected to double its financial support to basic education, particularly for children affected by disaster or conflict. In 2016, Norway’s contribution to education will reach an all time high of 2.85 billion Norwegian kroner ($335.6 million), and the country is already one of the top donors to education in emergencies.

Distinctive features:

The Norwegian government takes an integrated, cross-governmental approach to key areas of its development policy. Norway is also a front-runner when it comes to using ODA as a catalyst for private investment in the natural resource and energy sectors — a choice motivated by the middle-income status of several of its major partner countries.

Engagement with partners: Because its development assistance is 100 percent untied, Norway enjoys strong relationships with civil society organizations worldwide, including those from the ‘global south.’ In 2014, the Norwegian Agency for Development Cooperation funneled 7 billion Norwegian Kroner, or 20 percent of its total budget, to CSOs at home and abroad. NORAD also offers grant schemes dedicated to a range of issues and stakeholders, including actors within research, higher education and the private sector.

Click here to learn more about the latest funding and contracting opportunities with NORAD.

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About the author

Devos manola
Manola De Vos

Manola De Vos is a development analyst for Devex. Based in Manila, she contributes to the Development Insider and Money Matters newsletters. Prior to joining Devex, Manola worked in conflict analysis and political affairs for the United Nations, International Crisis Group and the European Union.


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