What are the blending facilities of the European Union?
The EU blending facilities are instruments used to catalyze financing for investment projects in beneficiary countries of the EU's external cooperation. Each EU blending facility specializes in a specific geographical area. These EU blending facilities strategically use a limited amount of grants to mobilize financing from eligible financial institutions and the private sector in order to enhance the development impact of investment projects.
Through blending, EU grants are combined with non-grant resources such as loans, equities and guarantees from development finance institutions as well as commercial loans and investments with the aim of achieving a leveraged development impact.
Beyond the specific development objectives defined for each operation, the use of blending reflects the following specific goals:
- financial leverage: mobilize public and private financial resources for enhanced development impact and do more with less;
- stronger developmental impact: improve project quality, sustainability, innovation and accelerate the start of the project;
- policy leverage: support reforms in line with EU and partner country policies;
- aid effectiveness: improve coordination between European and non-European development cooperation agents and partners (i.e. donors and financial institutions);
- visibility: provide more visibility for EU development funding.
What are the blending application procedures?
LACIF combines resources from the EU with loans from European development finance institutions (such as AECID, AFD, EIB, KfW and others) as well as from regional development banks (such as CABEI, CAF, IDB). These resources are often pooled together with contributions from governments and the private sector in Latin America and the Caribbean.
Only eligible European development finance institutions can present proposals for consideration to the European Commission. These proposals are the result of an agreement between the development finance institution and the beneficiary government and/or private sector institution in one or several countries of Latin America and the Caribbean. The EU Delegation in the country where the project is planned is involved in all steps of the process.
The process to obtain funding from LACIF includes 6 main stages:
- 1. Project idea: After discussion with the beneficiary countries and the European Union Delegation(s), European financial institutions develop project ideas and present them to the European Commission Directorate-General for International Partnership (INTPA), for assessment by the LACIF management team (INTPA-EFSD-TA-LACIF@ec.europa.eu).
- 2. Action Fiche: If the project is deemed pertinent and relevant, the development financial institutions prepare a Project application form and submit it to the Blending Facilities Secretariat.
- 3. Project application form (PAF) assessment: The European Commission (led by INTPA) evaluates the proposal according to the criteria stated in the blending guidelines.
- 4. Technical Assessment Meeting (TAM): Technical committee in which representatives of the European Commission and development financial institutions participate. It is responsible for conducting a technical review of the funding proposals submitted. In this TAM, proposals can be rejected, sent back for revisions, or approved.
- 5. LACIF Board: Operative committee formed by representatives of the Commission, the European External Action Service and the EU Member States. It examines the proposals that have been submitted by the technical committee and takes a final decision.
- 6. Contract negotiation and signature: The project contract is signed between the EU Delegation and the financial institution.
After the contract is signed, the project’s implementation period begins. The EU Commission delegates management of LACIF resources to the lead European finance institution participating in the project. Additional contract monitoring and follow-up are ensured by the European Union Delegation in the Latin American or Caribbean countries where the project is being implemented, and supported by LACIF headquarters in Brussels.
Are there calls for proposals to request financing from LACIF?
No, there are no calls for proposals on behalf of LACIF. Only eligible European development finance institutions can directly present proposals for consideration to the EU Delegation and the European Commission.
What are the project selection criteria?
Projects are assessed according to the following criteria:
alignment with EU policy objectives and current EU priorities for the Latin American and Caribbean country/region;
consistency with Latin American and Caribbean countries' national, regional and continental development strategies;
contribution to social, environmental and climate change (mitigation/adaptation) aspects as well as specific cross-cutting issues such as gender equality and women’s empowerment aspects, youth inclusion, decent work and human rights;
clarity of the organizational set-up, implementing scheme and financial structure;
- appropriateness of the project's financial structure and other issues, for example debt sustainability;
the EU value added and the justification of the EU contribution, notably amount and financing modality;
complementarity with other actions (planned or under implementation) and coordination mechanisms with similar initiatives;
long term sustainability when grant support expires;
quality of the communication and visibility plan and expected impact.
Where can one obtain additional information?
Please be aware that only eligible European development finance institutions can present proposals. You can contact them on:
You can contact the LACIF Technical Assistance for further information on firstname.lastname@example.org
The LACIF Technical Assistance will put you in contact with the person in charge of LACIF in the EU Delegation of your country.
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