Through the Investment Facility for Central Asia (IFCA), the European Union backs the priorities of partner governments in the Central Asian region and supports them in undertaking priority investments contributing to inclusive and sustainable growth. The Facility aims at leveraging funds with eligible Financing Institutions for such investment projects.
IFCA, set up in 2010 as part of the Development Cooperation Instrument (DCI), is one of the instruments to support the EU Strategy for Central Asia.
Through IFCA, the European Union backs the priorities of partner governments in the Central Asian region and supports them in undertaking priority investments contributing to inclusive and sustainable growth. The Facility aims at leveraging funds with eligible Financing Institutions for such investment projects.
The Facility intervenes in cases where the regular market fails to offer sufficient or affordable financing which may hinder the timely realisation of high priority investment projects with the potential to promote inclusive and sustainable socio-economic development.
The following partner countries are eligible for support from IFCA: Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan. The Facility can also finance regional projects covering two or more of the above countries.
In line with the objectives of the Regional Indicative Programme 2014 – 2020 for Central Asia, IFCA's main objective is to contribute to sustainable regional development and economic growth.
Consequently, IFCA finances projects with the following aims:
- Better energy infrastructure
- Increasing protection of the environment and better focus and control of climate change impacts
- Creation and growth of SMEs and improvement of the employment situations
- Improving social services and infrastructure, including health and education.
In addition, IFCA may support the implementation of bilateral Indicative Programmes in the region.
IFCA provides its support through:
- Investment grants
- Technical assistance
- Risk capital and other risk sharing instruments
IFCA sets up partnerships, using grant resources from the EU to leverage and pool financing from multilateral and bilateral European Finance Institutions (such as AFD, CDP/SIMEST, EBRD, EIB or KfW), Regional Development Banks (such as the ADB) as well as the WB, partner countries and beneficiary institutions in Central Asia.
The EU blending project cycle comprises seven stages with responsibilities shared by key stakeholders. The main stakeholders in blending are EU Delegations, DG DEVCO and DG NEAR (Headquarters), financial institutions, partner countries and regional organisations.
Project cycle stages in blending operations
- Identification: Projects are identified by the financial institutions and EU Delegations with the partner countries and, where relevant, regional organisations. The EU Delegations ensure the coherence of projects with EU policy objectives and sector priorities. Generation of a “pipeline”.
- Preparation: The lead financial institution is in charge of submitting project proposals and trilateral consultations are held with EU DGs and financial institutions to secure matching criteria
- Assessment: Relevant EU services will assess (i) the alignment to EU policy objectives, (ii) justification of need and added value, (iii) project’s social, environmental and climate change aspects, (iv) financial structure, while analysing political barriers & similar actions.
- Board opinion: Opinions on EU grant requests are taken by consensus at meetings of the relevant Blending Framework Board (voting: Commission, the EEAS and the EU Member States); then the Commission takes their decision.
- Contracting: The Commission decision to proceed with a project is followed by formal contracting, including signature of a delegation agreement with the lead financial institution.
- Monitoring: The lead financial institution is responsible for project implementation (tendering & procurement), monitoring and (financial & operational) reporting, based on indicators.
- Evaluation: Responsibility for the evaluation of blended operations is delegated to the lead financial institution.
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