European Union institutions

The European Union (EU) – EU institutions and member states together – accounts for the largest share of total official development assistance (ODA) and has a development co-operation presence in all regions and across all sectors. Among the EU institutions, the European Commission and the European Investment Bank (EIB) manage funding; the European External Action Service co-ordinates foreign policy. Total ODA (USD 19.0 billion, preliminary data) decreased in 2021.

Find the methodological notes behind the profile here.

In 2017, the EU and its member states adopted the New European Consensus for Development as a common strategic vision. The European Commission aims to be “geopolitical”, better aligning external and internal policies. While active across all regions and sectors, co-operation priorities include partnerships with Africa and the European neighbourhood, the green deal, sustainable growth, migration, governance, and promoting the humanitarian-development-peace nexus. The Multiannual Financial Framework 2021-27 (MFF) has established new instruments including the Neighbourhood, Development and International Cooperation Instrument (NDICI) – Global Europe, which has earmarked EUR 79.5 billion for co-operation for 2021-27.

The EU places a renewed importance on the multilateral system with the 2021 Joint Communication on strengthening the EU’s contribution to rules-based multilateralism. At the international level, it plays an important convening and leadership role to advocate for sustainable development. Equally, the EU is a leader in promoting policy coherence for sustainable development and supports coherence across member states. The 2021 Better Regulation initiative requires impact assessments to analyse, when relevant, the specific impacts of internal EU policies on developing countries and enhances coherence between internal and external action, and in general to identify how EU actions contribute to the Sustainable Development Goals at home and abroad.

The 2022 OECD-DAC mid-term review praised the EU’s major reform to establish a range of new instruments with robust results frameworks and a focus on climate change, gender and poverty. The review also commended efforts to work closely with member states in organising a strong COVID response, including with “Team Europe”, and noted the important role the EU plays to support policy coherence for sustainable development. The EU could make further progress to address cumbersome procedures and pursue a more coherent financial architecture. The review noted the structural challenges in increasing resources to least developed countries (LDCs).

The EU institutions provided USD 19.0 billion (preliminary data) of ODA in 2021.1 This was a decrease of 8.1% in real terms in volume due to repayments on private sector loans as well as frontloading of payments in 2020 in response to the COVID-19 pandemic. The EU institutions and member states have committed to collectively achieve a 0.7% ODA/GNI ratio by 2030. The bulk of the EU’s ODA over the next years will stem from the new “Neighbourhood, Development and International Cooperation Instrument – Global Europe”, with an envelope of EUR 79.5 billion for 2021-27. Within the EU institutions’ ODA portfolio in 2020, 71.3% was provided in the form of grants and 28.7% in the form of non-grants.2

The EU institutions rank third of all Development Assistance Committee (DAC) members in terms of ODA volume as a grant equivalent. The EU institutions provide almost exclusively bilateral aid, although a fifth of this is earmarked support through other multilateral institutions. In 2020, the EU institutions had one of the highest shares of bilateral ODA allocated to Africa (40.9%). A high share of its ODA supports aid for trade (44.1% in 2020) and the EU is one of the largest providers in this area.

The EU institutions are committed to several international targets and Development Assistance Committee standards and recommendations. Learn more about DAC recommendations.

The EU institutions provided most of its ODA bilaterally in 2020. Gross bilateral ODA was 99.0% of total ODA. Nineteen per cent of gross bilateral ODA was channelled through multilateral organisations (earmarked contributions). The EU institutions allocated 1.0% of total ODA as core contributions to multilateral organisations.

In 2020, the EU institutions provided USD 1.3 billion of gross bilateral ODA for the COVID-19 response, representing 5.5% of the EU institutions’ total gross bilateral ODA. One per cent of total gross bilateral ODA was provided as health expenditure within the COVID-19 response.

In 2020, the EU institutions provided USD 4.7 billion of gross ODA to the multilateral system, an increase of 7.5% in real terms from 2019. Of this, USD 250.9 million was core multilateral ODA, while non-core contributions were earmarked for a specific country, region, theme or purpose. Project-type funding that is earmarked for a specific theme and/or country accounted for 87.4% of the EU institutions’ non-core contributions and 12.6% was programmatic funding (to pooled funds and specific-purpose programmes and funds).

Eighty per cent of the EU institutions’ total contributions to multilateral organisations in 2020 was allocated to the United Nations (UN) system and other multilateral institutions.

The UN system received 61.5% of the EU institutions’ gross ODA to the multilateral system, mainly through earmarked contributions. Out of a total volume of USD 2.9 billion to the UN system, the top three UN recipients of the EU institutions’ support (core and earmarked contributions) were: the UNDP (USD 559.1 million), UNICEF (USD 330.1 million) and the WFP (USD 328.5 million).

See the section on Geographic and sectoral focus of ODA for the breakdown of bilateral allocations, including ODA earmarked through the multilateral development system. Learn more about multilateral development finance.

In 2020, the EU institutions’ bilateral spending increased significantly compared to the previous year. It provided USD 24.0 billion of gross bilateral ODA (which includes earmarked contributions to multilateral organisations). This represented an increase of 30.8% in real terms from 2019, frontloading spending from 2021 in response to the COVID-19 pandemic.

In 2020, country programmable aid was 59.0% of the EU institutions’ gross bilateral ODA, compared to a DAC country average of 49.7%.

The EU institutions disbursed USD 24.7 million for triangular co-operation in 2020, guided by a specific strategy. Its regional priority is Latin America and the Caribbean, with a sectoral focus on environmental protection. Learn more about specific projects at the OECD’s voluntary triangular co-operation project repository and more broadly.

In 2020, the EU institutions channelled bilateral ODA mainly through the public sector. Technical co-operation made up 10.7% of gross ODA in 2020.

In 2020, civil society organisations (CSOs) received USD 2.3 billion of gross bilateral ODA. No bilateral ODA was allocated to CSOs as core contributions and 9.4% of gross bilateral ODA was channelled through CSOs to implement projects initiated by the donor (earmarked funding). From 2019 to 2020, the combined core and earmarked contributions for CSOs decreased as a share of bilateral ODA, from 11.5% to 9.5%. Learn more about ODA allocations to and through CSOs, civil society engagement in development co-operation and the DAC Recommendation on Enabling Civil Society in Development Co-operation and Humanitarian Aid.

In 2020, the EU institutions’ bilateral ODA was primarily focused on Africa and ODA-eligible countries in Europe. USD 9.8 billion was allocated to Africa and USD 5.7 billion to Europe, accounting respectively for 40.9% and 23.6% of gross bilateral ODA. USD 2.9 billion was allocated to Asia. Africa was also the main regional recipient of the EU institutions’ earmarked contributions to multilateral organisations, in line with the policy priorities of its overall strategy.

In 2020, 31.7% of gross bilateral ODA went to the EU institutions’ top 10 recipients. In line with its policy priorities, its top 10 recipients are mainly in its Eastern and Southern neighbourhood. The share of gross bilateral ODA that was not allocated by country was 24.8%, in part due to global and regional funds and programmes.

In 2020, the LDCs received 20.5% of the EU institutions’ gross bilateral ODA (USD 4913.0 million). This is below the DAC country average of 24.4%. The EU institutions allocated the highest share of gross bilateral ODA (33.9%) to lower middle-income countries in 2020, noting that 24.8% was unallocated by income group. The EU institutions allocated 1.8% of gross bilateral ODA to small island developing states (SIDS) in 2020, equal to USD 430.5 million.

Support to fragile contexts reached USD 6.3 billion in 2020, representing 26.4% of the EU institutions’ gross bilateral ODA. Twenty-six per cent of this ODA was provided in the form of humanitarian assistance, increasing from 21.8% in 2019, while 17.5% was allocated to peace, a slight decrease from 19.4% in 2019. Seven per cent went to conflict prevention, a subset of contributions to peace, representing a decrease from 8.0% in 2019.

Learn more about support to fragile contexts on the States of Fragility platform.

In 2020, economic infrastructure and services was the largest focus of the EU institutions’ bilateral ODA. Investments in this area accounted for 27.0% of bilateral ODA commitments (USD 7.2 billion), with a strong focus on financial and business services (USD 2.7 billion), energy (USD 2.3 billion), and transport (USD 2.1 billion). ODA for social infrastructure and services totalled USD 7.0 billion, with a focus on support to government and civil society (USD 3.4 billion). Bilateral humanitarian assistance amounted to USD 3.3 billion (12.3% of bilateral ODA). Earmarked contributions to multilateral organisations focused also on social sectors and governance as well as other macro sectors in 2020.

In 2020, the EU institutions committed USD 17.8 million of bilateral ODA to the mobilisation of domestic resources in developing countries, amounting to 0.1% of its bilateral allocable aid. The EU institutions also committed USD 10.0 billion (44.1% of its bilateral allocable aid) to promote aid for trade and improve developing countries’ trade performance and integration into the world economy in 2020. The EU institutions is among the top 10 providers of aid for trade globally.

In 2020, the EU institutions committed 58.0% of its screened bilateral allocable aid to gender equality and women’s empowerment, as either a principal or significant objective (similar to 57.8% in 2019),3 compared with the 2020 DAC country average excluding the EU institutions of 44.6%. This is equal to USD 8.9 billion of bilateral ODA in support of gender equality. The share of screened bilateral allocable aid committed to gender equality and women’s empowerment as a principal objective was 3.8%, compared with the 2020 DAC country average excluding the EU institutions of 4.8%. Interventions in the water and sanitation sector focus comparatively less on gender than other sectors. The EU institutions screens the majority of activities against the DAC gender equality policy marker (67.7% in 2020). Learn more about ODA focused on gender equality, the DAC Network on Gender Equality and the DAC Recommendation on Ending Sexual Exploitation in Development Co-operation.

In 2020, the EU institutions committed 23.8% of its total bilateral allocable aid (USD 5.4 billion) in support of the environment and the Rio Convention (the DAC country average excluding the EU institutions was 38.8%), down from 35.5% in 2019. Sixteen per cent of screened bilateral allocable aid in 2020 focused on environmental issues as a principal objective, compared with the DAC country average excluding the EU institutions of 10.8%. Twenty per cent of total bilateral allocable aid (USD 4.6 billion) focused on climate change overall, down from 29.9% in 2019 (the DAC country average excluding EU institutions was 34%). The EU institutions had a greater focus adaptation (23.7%) than on mitigation (22.1%) than in 2020. Learn more about climate-related development finance and the DAC Declaration on Aligning Development Co-operation with the Goals of the Paris Agreement on Climate Change.

The OECD initiative Sustainable Oceans for All shows that the EU institutions committed USD 131.6 million in support of the conservation and sustainable use of the ocean in 2020, 26% less than in 2019. The 2020 value is equivalent to 0.6% of the EU institutions’ bilateral allocable aid. Learn more about development co-operation in support of a sustainable ocean economy and the data platform on development finance for a sustainable ocean economy.

The EU institutions provides resource flows to developing countries beyond ODA and make use of leveraging instruments to mobilise private finance for development.

The EU institutions uses its official development finance to mobilise private finance for development. In 2020, the EIB, the European Commission and the European Development Fund mobilised USD 6.9 billion from the private sector through credit lines and to a lesser extent also shares in collective investment vehicles, guarantees, direct investment in companies and special purpose vehicles, and simple co-financing.

A share of 87% targeted middle-income countries and 3% the LDCs in 2020, noting that 10% was unallocated by income. Moreover, USD 414.4 million was mobilised for fragile contexts and USD 30 million for SIDS.

Private finance mobilised by the EU institutions in 2020 related mainly to activities in the banking and financial services (90%), industry, mining and construction (5%) and energy (3%) sectors. Moreover, 4% of the EU institutions’ total private finance mobilised was for climate change mitigation and/or adaptation.

Learn more about the amounts mobilised from the private sector for development.

The EU institutions comprise two main actors: the European Commission (responsible for managing the majority of funds) and the EIB. Within the European Commission, the Directorate-General for International Partnerships (DG INTPA, previously DEVCO) is in charge of formulating overall EU international co-operation and development policy, and covers co-operation with sub-Saharan Africa, Asia and the Pacific, as well as Latin America and the Caribbean. The Directorate-General for European Neighbourhood and Enlargement Negotiations (DG NEAR) manages co-operation with EU neighbours to the east and south. The Directorate-General for European Civil Protection and Humanitarian Aid Operations (DG ECHO) is responsible for humanitarian assistance. The EIB operates with its own resources and through specific Commission mandates with EU development funds. The European External Action Service co-ordinates the EU’s foreign policy, participates in co-operation programming and manages the EU delegations. To co-ordinate their actions, all EU institutions as well as EU member states have signed “The New European Consensus on Development” and are working together as “Team Europe”.

An important mechanism for consulting stakeholders are public consultations on policy initiatives. The European Economic and Social Committee provides opinions on the EU’s external relations. The European Development Days are a large annual forum that brings together stakeholders across Europe to discuss challenges for sustainable development. CSOs active in development co-operation and global citizenship education co-ordinate through the umbrella body CONCORD, and those for humanitarian assistance through the organisation VOICE.

Internal systems and processes help ensure the effective delivery of the EU institutions’ development co-operation. Select features are shown in Features of the EU institutions’ systems for quality and oversight.

Explore the Monitoring Dashboard of the Global Partnership for Effective Development Co-operation.

2018 OECD-DAC peer review of the European Union: www.oecd.org/dac/oecd-development-co-operation-peer-reviews-european-union-2018-9789264309494-en.htm

European Commission, International Cooperation and Development: https://ec.europa.eu/international-partnerships

European Commission, European Neighbourhood Policy and Enlargement Negotiations: https://ec.europa.eu/neighbourhood-enlargement/node_en

European Commission, European Civil Protection and Humanitarian Aid Operations: https://ec.europa.eu/echo/index_en

European External Action Service: https://eeas.europa.eu/headquarters/headquarters-homepage_en

European Investment Bank (EIB): https://www.eib.org/en/index.htm

CSO umbrella organisation Concord – European Confederation of Relief and Development NGOs: https://concordeurope.org

CSO umbrella organisation VOICE – Voluntary Organisations in Cooperation in Emergencies: https://voiceeu.org

EU institutions’ practices on the Development Co-operation TIPs: Tools Insights Practices learning platform: https://www.oecd.org/development-cooperation-learning

Member of the OECD Development Assistance Committee since 1961.

The methodological notes provide further details on the definitions and statistical methodologies applied, including the grant-equivalent methodology, core and earmarked contributions to multilateral organisations, country programmable aid, channels of delivery, bilateral ODA unspecified/unallocated, bilateral allocable aid, the gender equality policy marker, and the environment markers.

Notes

← 1. DAC members adopted the grant-equivalent methodology starting from their reporting of 2018 data as a more accurate way to count the donor effort in development loans. See the methodological notes for further details.

← 2. Non-grants include sovereign loans, multilateral loans, equity investment and loans to the private sector.

← 3. The use of the recommended minimum criteria for the marker by some members in recent years can result in lower levels of aid reported as being focused on gender equality.

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