Analysis of market failures in pre-identified areas and sectors, for the planning of EFSD+ within EU Neighborhood and Enlargement Countries

The Regulation establishing the Neighbourhood, Development and International Cooperation Instruments (NDICI), adopted by the Parliament and the Council in 2021, required the European Commission (EC) to conduct an analysis on the market failures or sub-optimal investment situations in regions where post-2020 EU budgetary guarantees and blending interventions will be deployed. The analysis of market failures and sub-optimal investment situations was an essential element for the programming of EU assistance funds under the Multiannual Financial Framework 2021-2027 as well as for the set-up of investment windows and areas and sectors of investment that could be supported by the EU financial instruments (blending and EU budgetary guarantees) established under the framework of the European Fund for Sustainable Development Plus (EFSD+) within the broader framework of NDICI regulation. The overall objective of this assignment was to provide DG NEAR with an overview of key market failures and sub-optimal investment situations to which the Commission should respond when setting up investment windows under the EFSD+ Guarantee and updating investment priorities to be addressed by the EU’s respective blending platforms, namely the Western Balkans Investment Framework (WBIF) and the Neighbourhood Investment Platform (NIP). The analysis covered all DG NEAR countries of operation for blending and budgetary guarantees (clustered for analytical purposes in four regions, namely Western Balkans, Turkey, Eastern Neighbourhood, Southern Neighbourhood) and provided detailed assessments on the market failures and sub-optimal investment situations in the preidentified areas, namely: • Access to Finance for private companies, particularly Micro, Small and Medium Enterprises (MSMEs); • Green finance; and • Financing Digital Transformation. The analysis thereby helped to target EU intervention under both blending facilities under DG NEAR responsibility (WBIF, NIP) and under all types of budgetary guarantees foreseen under the EFSD+. More specifically, it helped to target financing operations that could be provided by the European Investment Bank and other implementing partners. The analysis was driven by empirical knowledge of the economic situations and financial market environments in the respective NEAR regions.


Project Details
Country EUROPEAN UNION
Start date 2021.01.11
End date 2021.11.08
Client DG NEAR
Sector REGIONAL POLICIES
Sub-sector Innovation Policies
Ref. ADE A596-024