COMMISSION STAFF WORKING DOCUMENT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on amending Regulation (EU) 2021/947 as regards increased efficiency of the External Action Guarantee
Date: 2025-05-28
Institutions: Directorate-General for International Partnerships, European Commission
Subjects: EU financial instrument, European neighbourhood policy, budgetary reserve (EU), financial management, foreign policy, international cooperation, sustainable development

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 28.5.2025  SWD(2025) 262 final  COMMISSION STAFF WORKING DOCUMENT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on amending Regulation (EU) 2021/947 as regards increased efficiency of the External Action Guarantee {COM(2025) 262 final}  
 
 
1. Introduction 

The Political Guidelines for the 2024-2029 European Commission affirm that Europe needs to 

be more assertive on the global scene in pursuing its strategic interests by leveraging its power 

and  partnerships.  Enlargement  must  be  seen  as  a  geopolitical  imperative,  a  more  strategic 

approach to our neighbourhood needs to be followed, including flagship initiatives under the 

New  Pact  for  the  Mediterranean,  and  a  new  economic  foreign  policy  must  be  pursued  in  a 

world where geopolitics and geoeconomics go together. 

The  European  Fund  for  Sustainable  Development  Plus1  (EFSD+)  is  the  largest  instrument 

currently in place to support investments outside the EU, both through blending operations and 

through  the  EFSD+  guarantee.  It  has  raised  a  demand  from  implementing  partners2  largely 

above its current resources.  

The  evaluation  of  the  External  Financing  Instruments3  highlighted  the  catalytic  effect  of 

EFSD+  in  mobilising  additional  finance  and  expertise  and  its  alignment  with  the  Global 

Gateway  strategy.  In  addition,  the  report  on  ‘The  Future  of  European  Competitiveness’  by 

Mario  Draghi4  recommends  upgrading  the  Global  Gateway  to  reduce  Europe’s  excessive 

external dependencies by securing supply of raw materials, clean energy, sustainable transport 

fuels and clean tech. Leveraged investments are also necessary to support the Growth Plans for 

the Enlargement countries and the flagship initiatives under the new Pact for the Mediterranean.  

With  emphasis  on  the  importance  for  Europe  in  the  current  geopolitical  and  geoeconomic 

context to reaffirm its role as a global actor in the world, as well as the high demand for the 

EFSD+ guarantee, a legislative proposal5 to amend the NDICI – Global Europe Regulation has 

been made to: 

−  assign  in  2025,  2026  and  2027  to  EFSD+  the  surpluses  of  the  European  Fund  for 

Sustainable Development6 (EFSD) guarantee as from 31 December 2024,  

1 Established by Regulation (EU) 2021/947 of the European Parliament and the Council of 9 June 2021, OJ L 

209/1, 14.6.2021 

2  The  EIB,  the  EBRD,  European  public  development  banks  and  development  financial  institutions  and  other 

financial institutions, such as the International Finance Corporation (IFC). 

3 COM(2024) 208 final of 15.5.2024 
4 The Draghi report on EU competitiveness 
5 COM(2025) 262 of 28.5.2025 
6 Established by Regulation (EU) 2017/1601 of the European Parliament and the Council of 26 September 2017, 

OJ L 249/1, 27.9.2017 

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−  use EFSD+ resources that do not meet the conditions of Article 214(6) of the Financial 

Regulation7 to be used by the EFSD+ guarantee, to pay EFSD guarantee calls as from 

31  December  2024,  which  will  result  in  larger  EFSD  surpluses  and,  therefore, 

additional efficiency gains, 

− 

reduce  the  EU  coverage  of  the  EIB  exclusive  dedicated  investment  window  for 

sovereign and sub-sovereign non-commercial operations from 65 % to 60 %. 

In parallel, a series of simplification measures, already being implemented or under discussion, 

will  allow  implementing  partners  to  achieve  efficiency  gains  and  reorient  resources  to  the 

origination and implementation of projects that maximises added value for partner countries. 

The reduced time to market will also support Global Gateway acceleration and implementing 

policy objectives in a faster way. 

2. Use of EFSD surpluses to increase EFSD+ resources 

The constitution phase of the EFSD Guarantee ended on 31 December 2024. From this date, 

the working document referred to in Article 41(5) of the Financial Regulation, attached every 

year to the draft budget, must indicate whether there is a surplus of provisions or a need to 

replenish  provisions.  In case  of  surplus  in  2025,  2026  and  2027, the  legislative  proposal  to 

amend  the  NDICI  –  Global  Europe  Regulation  proposes  to  transfer  it  to  the  EFSD+ 

provisioning. 

2.1 EFSD surplus 2024 

Under  EFSD,  the  Commission  signed  EUR  1,548.7  million  of  EU  cover  in  18  guarantee 

agreements.  The  provisionally  estimated  2024  EFSD  surplus  of  EUR  405  million  is 

exceptionally high as, being the first one to be calculated since the establishment of EFSD, it 

reckons the provisions initially set aside but not needed anymore for 7 guarantee agreements, 

totalling  EUR  399.5  million  of  EU  cover,  for  which  the  investment  period8  ended  without 

underlying transactions signed  or –  as in  one case  – which has been cancelled. This  under-

implementation is mainly due to the shock of the Covid outbreak and, in some cases, to the 

lack  of  demand  for  the  financial  products  proposed,  a  lesson  learnt  and  integrated  in  the 

7 Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on 

the financial rules applicable to the general budget of the Union. 

8 Period during which the implementing partners may sign underlying transactions covered by the EU guarantee. 

The EFSD regulation established a maximum investment period of four years for guarantee agreements. 

2 

 
 
 
selection of EFSD+ guarantee agreements. Based on the EFSD provisioning rate of 50 %, it 

implies EUR 199.75 million of estimated EFSD surplus as of 31 December 2024. 

An additional EUR 135 million of surplus is due to the termination without losses of two loans 

of EUR 270 million in total under the ‘COVAX I’ guarantee agreement with the EIB. 

The  remaining  10  guarantee  agreements,  totalling  initially  EUR  879.2  million  of  EU  cover 

including the loan of EUR 130 million expected to be called under the EU guarantee, reached 

a level of consumption of the EU cover, in terms of underlying transactions signed, between 

75 % and 100 %, except one that reached 35 %. Taking into account the reimbursements, claims 

and recoveries related to the underlying transactions, the EU liability as of 31 December 2024 

was of EUR 760.2 million, i.e. EUR 119 million less than the initial EU cover.  

The above figures are summarised in the following table: 

EU liability 
(EUR m) 

Provisioning 
(EUR m) 

EFSD guarantee agreements: 

−  Signed 
−  Cancelled or no EU liability committed 

during the investment period 

−  Terminated without losses 
−  Decrease of the EU liability following the 
evolution of the underlying operations 
terminated (reimbursements or claims) (EUR 
879.2 – 760.2 million) 

EFSD provisions (market value as of 31.12.2024) 

Unused estimated provisioning capacity [(e) – (a)] 

1,548.7 

399.5 

270 

119 

EFSD estimated surplus as of 31.12.2024 [(b) + (c) + (d) + (f)] 

EFSD estimated provisions left [(e) – (g)] 

2.2 EFSD surplus 2025 

774.35 

199.75 

135 

59.5 

785.2 

10.85 

405.1 

380.1 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

The year 2025 will be a particular one in terms of implementation for EFSD as a guarantee call 

of EUR 130 million is expected. 

On the other hand, as of 31 March 2025, EUR 193.9 million of EFSD+ resources coming form 

other sources than contributions to provisioning, mainly returns on investments of the EFSD+ 

resources held in the common provisioning fund, cannot be used during the current MFF to 

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restore  the  EFSD+  guarantee  up  to  its  initial  amount,  as  foreseen  by Article  214(6)  of  the 

Financial Regulation, because there have been very few guarante calls on the EFSD+ guarantee 

and a limited amount of calls is forecasted until 2027: 

EFSD+ Resources 

Article 214(6) FR 

EUR million 

EU budget contributions paid 

Returns on investments (value as of 31 March 2025) 

Recoveries 

Fees 

Other contributons (ACP reflows) 

Point (a) 

Point (b) 

Point (c) 

Point (d) 

Point (e) 

Available estimated resources to restore the guarantee [(2) + (3) + (4)] 

Claims 

Available estimated resources not usable [(6) – (7)] 

2,397.85 

193.59 

0.085 

0.97 

372.52 

194.64 

0.71 

193.93 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

The legislative proposal to amend the NDICI – Global Europe Regulation proposes to allow 

paying EFSD guarantee calls as from 31 December 2024 with EFSD+ resources not usable by 

EFSD+ itself. 

In addition to the call on the EFSD guarantee of EUR 130 million foreseen by the end of 2025, 

two other EFSD guarantee calls of EUR  1,742,537 in total have already been paid as of 30 

April 2025.  

By the end of 2025, these EUR 131,742,537 of EFSD claims will reduce by the same amount 

the  EU  liability  under  EFSD,  whereas  the  EFSD  provisions  will  remain  unchanged  as  the 

claims will have been paid by EFSD+ resources. On that basis, and leaving aside the unknown 

evolution  until  the  end  of  2025  of  the  EU  liabilities  and  the  EFSD  provisions  linked  to 

reimbursments,  claims,  recoveries  and  fees  on  current  underlying  transactions  covered  by 

EFSD, the estimated EFSD surplus as of 31 December 2025 would be: 

EU liability [= 760.232.823 – 131,742,537] 

Provisions (see table p. 3, point h) 

Effective provisioning rate 

Provisions requested [(1) x (3)] 

EFSD surplus as of 31.12.2025 [(2) – (4)] 

EUR million 

628.49 

380.12 

50 % 

314.25 

65.87 

(1) 

(2) 

(3) 

(4) 

(5) 

4 

 
 
 
 
 
 
 
The aggregate EFSD surpluses 2024-2025 would then amount to EUR 471 million (i.e. EUR 

405.1m + EUR 65.9m). 

3. Reduction of the EU cover of the EIB’s exclusive dedicated investment window 

Article 36(1) of the NDICI – Global Europe Regulation foresees that the EIB shall have the 

exclusivity  for  operations  with  sovereign  counterparts  and  non-commercial  sub-sovereign 

counterparts  under  an  ‘exclusive  dedicated  investment  window’.  It  also  states  that  for  this 

window the EU guarantee shall cover a first loss tranche of 65 % of the portfolio of EIB loans 

guaranteed by the EU. The EIB assumes the residual risk of 35 %.  

The legislative proposal to amend the NDICI – Global Europe Regulation proposes reducing 

the EU cover to 60 %.  

4. Simplifying EFSD+ implementation 

A  series  of  simplification  measures  in  the  implementation  of  EFSD+  have  already  been 

implemented or are under discussion with the implementing partners. These measures do not 

require  amending  the  NDICI-Global  Europe  Regulation.  They  will  allow  implementing 

partners  to  achieve  efficiency  gains  and  reorient  resources  to  the  origination  and 

implementation of projects that maximises added value for partner countries. The reduced time 

to market will also support Global Gateway acceleration and implementing policy objectives 

in a faster way. 

Simplification measures already implemented: 

−  Reduced  negotiation  and  implementation  burden  for  EFSD+  guarantee  agreements  by 

consolidating 9 proposals from 4 implementing partner under a single guarantee agreement 

with each implementing partner. 

The consolidation implies negotiating 4 guarantee agreements instead of 9. The negotiation 

of each guarantee agreement is a heavy process requiring legal counselling services and, 

on  average,  a  three  months  full  time  effort  by  three  people.  The  negotiation  savings 

generated by the consolidation are EUR 0.8 million. 

In  addition,  the  consolidation  diminishes  proportionately  the  number  of  deliverables  by 

implementing  partner.  Each  guarantee  agreement  requires  annuallly,  during  15  years  on 

5 

 
 
  
average, two financial and risk reports, an annual progress report, a set of unaudited and 

audited financial statements and a management declaration. The savings in terms of audit 

services and staff work would amount to EUR 3.2 million. 

The aggregated savings of consolidating 9 guarantee agreements into 4 are EUR 4 million. 

−  Signing one contribution agreement covering several technical assistance (TA) components 

per implementing partner. 

Each  TA  contribution  agreement  is  a  one  month  full  time  effort  by  one  person.  The 

consolidation of 40 TA contribution agreements into 18 ones represents EUR 0.275 million 

of savings. 

−  Prioritising where possible top-ups to existing guarantee agreements for new proposals by 

implementing  partners,  which  require  negotiating  only  the  terms  related  to  the  new 

operations. 

Based  on  an  assumption  of  10  top-ups  during  the  remaining  period  of  the  current 

multiannual financial framework (MFF), the top-ups represent EUR 1.5 million of savings. 

−  Reducing the financial reporting for guarantee agreements from a quarterly frequency to a 

semi-annual one implies for 40 guarantee agreements during 15 years, EUR 8.6 million of 

savings. 

The aggregate savings of the simplification measures already implemented amount to  EUR 

14.4 million. 

A simplification measure has been proposed by repealing Article 38(6) of the NDICI – Global 

Europe Regulation, i.e. the removal of the requirement in the annual reporting on guarantee 

agreements by implementing partners to the Commission to audit the information on individual 

operations. It concerns 40 guarantee agreements with a remaining average lifetime of 15 years. 

The audit costs reduction represents EUR 1.5 million. 

A simplification of the blending framework is under discussion with implementing partners. It 

concerns: 

− 

the streamlining of the application form and the approval process, 

6 

 
 
− 

− 

the  simplification  of  the  contracting  arrangements  by  signing  framework  blending 

contracts, 

the  consolidation  of  the  reporting  by  aggregating  the  current  individual  reporting  by 

blending operation under a single report by framework contract. 

Assuming  that  five  implementing  partners  will  agree  to  the  simplification,  representing  a 

portfolio of 250 blending operations, 100 of them already approved, EUR 5.6 million of savings 

would be realised. 

The overall savings for implementing partners generated by the simplification of the EFSD+ 

implementation would amount to EUR 21.5 million. 

7