The European Investment Bank and the European Commission announced on Monday a new €5 billion ($5.7 billion) guarantee aimed at unlocking as much as €10 billion in global investments, targeting clean energy, infrastructure and small business development in countries outside the European Union.

The new guarantee instrument, presented during the Fourth International Conference on Financing for Development, is part of the EU’s Global Gateway strategy and marks a significant shift from earlier models by offering increased flexibility.

For the first time, it allows support to companies without state backing, broadening the scope to include local public entities and state-influenced firms operating independently on the financial markets.

Expanding Investment Scope

The guarantee falls under the European Fund for Sustainable Development Plus, a central pillar of the Global Gateway initiative, and aims to attract both public and private investors to high-risk but high-impact projects.

The mechanism is designed to mitigate investment risk in sectors such as renewable energy, telecommunications, and municipal services.

It will initially focus on regions including North Africa, the Middle East, Central Asia, Latin America, the Caribbean and the EU’s Eastern Neighborhood and enlargement regions.

“This new agreement will help to position Europe as a trustworthy and reliable partner around the world,” said EIB President Nadia Calviño. “It expands the scope of our financing and strengthens the EU’s ability to invest in high-impact projects from basic services like water and health to clean energy and critical raw materials.”

Global Gateway Strategy

The Global Gateway initiative, launched in 2021, is the EU’s flagship international investment strategy.

It seeks to mobilize up to €300 billion by 2027 to develop infrastructure and foster economic growth in partner countries through sustainable, values-based partnerships.

Jozef Síkela, European commissioner for international partnerships, described the guarantee as “an important boost” for the Global Gateway. “We are providing a €5 billion guarantee to unlock high-impact investments where they are needed the most—from clean energy and infrastructure to empowering small businesses,” he said.

Regional Impact and EU Enlargement

The announcement also aligns with broader geopolitical objectives, including fostering stability and economic integration in the EU’s neighborhood and beyond.

Marta Kos, commissioner for Enlargement, said the guarantee would help integrate accession countries into the EU by supporting investment in “key areas such as energy, digital and municipal infrastructure.”

In the Mediterranean, the initiative complements the New Pact for the Mediterranean, which aims to build a connected and resilient regional economy.

“We are one step closer to a connected Mediterranean,” said Dubravka Šuica, commissioner for Mediterranean, noting its importance for job creation and mutual benefits.

Guarantee Mechanics and Financial Risk Sharing

Unlike previous EU guarantees, which largely targeted state-backed projects, the new model also covers entities operating without sovereign guarantees.

This change is expected to make financing more accessible and faster to deploy, especially in challenging markets.

Under EFSD+, guarantees act as insurance for lenders. If a project fails, the EU covers part of the losses; if successful, the guarantee remains unused, preserving EU funds for other initiatives.

EIB Global, the development arm of the EIB, will manage the guarantee. It aims to support €100 billion in investments globally by 2027, a third of the Global Gateway’s total target.