How can the EU leverage MDBs to advance its geoeconomic interests?

Karim Karaki and San Bilal note that the EU has insufficiently leveraged the potential and resources of multilateral and regional development banks. In a context of geopolitical competition and constrained EU budgets, these banks offer capabilities that advance the objectives of the Global Gateway strategy.

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Summary

Global Gateway aims to align the European Union’s development cooperation with its geostrategic, economic, and industrial priorities. While EU instruments for mobilising private investment have expanded, the EU has insufficiently leveraged the potential and resources of multilateral and regional development banks (MDBs/RDBs). In a context of geopolitical competition and constrained EU budgets, more deliberate engagement with these institutions is strategically necessary.

MDBs and RDBs offer capabilities that advance Global Gateway objectives: sustained country presence, strong policy dialogue and technical assistance that strengthens regulatory environments where European firms perform well. These banks’ financial firepower, established pipelines, and ability to crowd in private capital complement EFAD limitations, while MDB procurement provides predictable commercial opportunities for EU companies.

However, current EU–MDB cooperation is fragmented and often transactional. A more coherent and strategically anchored approach should focus on five priorities:

• Identifying where MDBs and RDBs can add value and complement the European financial architecture for development
• Enhance coordination mechanisms by creating sectoral and regional platforms to align pipelines, policy reforms, technical assistance, and guarantees.
• Strengthen EU and member-state influence as MDB shareholders through unified positions on Global Gateway priorities.
• Deploy tailored EU financial instruments - including blending, guarantees, grants as well as trust funds, and risk-sharing platforms - to leverage MDB balance sheets and mobilise private capital.
• Adopt a strategic procurement approach that preserves MDB cooperation while safeguarding EU industrial interests and ensuring access to MDB-financed tenders.

The EU needs a more structured partnership with MDBs and RDBs to deliver Global Gateway 2.0 at scale and reinforce its global competitiveness.