The European Commission on Wednesday announced a plan to “mobilise” €300bn in spending between now and 2027 on transport, energy, health and digital infrastructure in low and middle-income countries as an alternative to China’s much bigger Belt and Road Initiative (BRI).
It said the Covid-19 pandemic had “harshly exposed” the human impacts of inadequate infrastructure, citing a G20 estimate that the global infrastructure investment deficit would reach €13 trillion by 2040.
Called “Global Gateway”, the plan is to issue loans, some grants and to use financial tools to attract private investment.
The commission said the EU was “exploring the possibility” of establishing a European Export Credit Facility to help EU businesses in third countries, where they face competition from state-supported companies in infrastructure projects, a clear reference to China’s approach.
Addressing the Gateway as a response the China’s BRI, which has been criticised for loading poor countries with unsustainable debt, the commission said: “Global Gateway can demonstrate how democratic values provide certainty and transparency for investors, sustainability for partners and long-term benefits for people around the world.”
It said it will offer financing under “fair and favourable terms in order to limit the risk of debt distress”.
“We want to deliver mutual benefits through quality infrastructure, based on our values and principles, that work for people and planet, whilst also defending our interests and strengthening the rules-based world,” it added.
The Commission will set up a business advisory group to discuss the Global Gateway strategy, ensuring private sector involvement.
Announcing plan, European Commission president Ursula von der Leyen, said: “We will support smart investments in quality infrastructure, respecting the highest social and environmental standards, in line with the EU’s democratic values and international norms and standards. The Global Gateway Strategy is a template for how Europe can build more resilient connections with the world.”
