European governments and EU institutions are grappling with budget constraints, competing domestic priorities, political volatility and geopolitical fragmentation. Meanwhile, the climate imperative in emerging and developing countries is growing: infrastructure needs, adaptation, just energy transitions, resilience, and technology diffusion all demand enormous front-loaded investment.
Responding to this challenge will require European public financial institutions – particularly Europe-based multilateral and national development banks – to step up, not only by doing more with existing resources, but by becoming more catalytic in leveraging private capital and structuring higher-risk, higher-impact operations. The EU’s Global Gateway will be key to pushing for bigger, more transformative ambition.
Global Gateway: Europe’s Strategic Investment Framework
Europe’s external investment agenda is being reshaped under the Global Gateway, the EU’s global connectivity strategy focused on transport, energy, digital, health, education, research, and more. The aim is to mobilise up to €300 billion in investments globally, through a “Team Europe” approach that brings together EU institutions, Member States, and public and private finance actors.
Since its launch in 2021, Global Gateway has become Europe’s vehicle to bridge infrastructure deficits in partner countries, under a values-based framework (sustainability, governance, equity) designed to offer a strategic counterpoint to China’s Belt and Road Initiative (BRI). However, flagship Global Gateway projects have been criticised on a number of fronts: that coordination across Team Europe remains weak; and that private sector engagement is still nascent and often opaque.
In addition, while the need for development goals and European strategic interests to align is broadly understood, the way in which this ‘alignment’ is done in practice leaves much to be desired. The Global Gateway has been criticised for taking a blunt, project-by-project approach to interpreting alignment with European interests (for instance, by focusing overly on securing European content in Gateway projects) which fails to fully account for the diplomatic, security and competitiveness equities Europe holds in preserving development outcomes and fostering relationships with economically entwined international partners.
The upcoming second Global Gateway Forum provides a key opportunity for Europe to showcase a better vision: it will determine whether the initiative evolves into a credible, impactful platform that responds to the challenges of co-ordinating European external development. As European governments consider their future climate finance pledges and the Commission advances development of a much needed, beefed up Global Europe Instrument, the EU must also act to make sure it is creating the right delivery architecture for success.
While the full range of European development finance providers will be integral for rising to the challenge, the major European multilateral development banks – the European Investment Bank (EIB) and European Bank for Reconstruction and Development (EBRD), and in particular their newer global initiatives – EIB Global and the EBRD’s expansion into sub-Saharan Africa – are central to Europe’s development and climate toolkit.
The EIB, in particular, has recently been shown to be sitting on a huge amount of reserve assets that could be put to use in pursuit of European and global sustainable investment. The EIB has just updated its Climate Bank Roadmap, with EBRD following with an update to its climate strategy later this year. There are major opportunities to enhance their role as global actors: enhancing climate targets and strategies, pushing into more challenging areas, scaling climate transition-oriented instruments, and providing better coordination across Europe’s public finance network. Most importantly, they must do much more to create a meaningful interface between abundant European private capital and the immense clean and resilient investment opportunities in the Global South.
The Global Gateway Forum 2025 must set the groundwork for delivery
The Forum is not just a stage for announcements, but a unique convening of Heads of State, finance institutions, private sector actors, and development stakeholders.
To shift the dial in development and climate finance, policymakers must prioritise the following outcomes and make sure the Forum takes steps towards them:
Europe’s strength in climate and development finance lies in its diversity of institutions: multilateral development banks (MDBs), national development finance institutions (DFIs), export credit agencies (ECAs), climate funds, and grant instruments. But that diversity risks fragmentation and duplication. The Global Gateway Forum should reinforce mechanisms for joint programming, co-financing, pipeline alignment, and strategic coordination.
That means, for example, ensuring complementarity between EIB and national DFIs, aligning EU grant instruments (NDICI-Global Europe climate allocations, external action instruments) with MDB strategies, and coordinating ECAs to avoid crowding out or perverse incentives. The Forum should take steps to enhance coherence and effectiveness in the international financial architecture, including strengthened collaboration, co-financing and joint action within and beyond Europe.
Crucially, European public finance institutions must address in a coordinated fashion major challenges in the enabling environment. Transition planning, regulatory reform, grid integration, market design, capacity-building, and monitoring and evaluation must all accompany investments. That requires coordinated, long-term technical assistance and institutional reform instruments built into every investment decision. Public banks are at the interface of this effort. The Global Gateway should prioritise commitments to embedded capacity support – combining this with capital investment rather than responding to stand-alone infrastructure deals
The Forum should anchor more ambitious targets for climate and development finance under the Global Gateway umbrella – not just in quantum (‘mobilised billions’) but in quality. That means tighter standards on Paris alignment, additionality, social inclusion, and equitable partnerships. Participants should commit to rigorous tracking and independent evaluation of outcomes, not just inputs or announcements.
This starts with European policymakers acknowledging the reality that Europe’s wellbeing relies on it being outward looking and deeply entwined with global trends, both in and beyond its immediate neighbourhood. But implementing this agenda also requires pushing beyond rhetoric – and closing the gaps between principle and practice. The Forum must signal that the next phase of the Global Gateway will set transformational best practice standards, strengthen climate finance targets, further the Paris alignment agenda, and increase scale and private mobilisation.
To achieve this, risk-bearing capacity and innovation must grow. European institutions must expand their risk appetite – not recklessly, but strategically. That means enlarging counter-guarantee schemes, first-loss tranches, credit enhancement, hedging arrangements, and long-tenor finance. European MDBs and DFIs should focus on capital injections or new guarantee windows specifically for riskier frontier markets and segments (e.g. energy access, adaptation, off-grid, industrial decarbonisation).
One of the greatest gaps in the current landscape is the persistent reluctance of private capital to engage in riskier markets or sectors, particularly in Africa. The Forum must spotlight innovative financial instruments and risk-sharing mechanisms – guarantees, counter-guarantees, first-loss buffers, blended finance vehicles, climate transition bonds, local currency instruments – and commit to scaling them. Public finance agencies (the EIB, EBRD and national DFIs) should pledge new instruments and co-financing frameworks.
Guarantees, in particular, have long been championed to crowd in private capital. But they must be deployed more aggressively and creatively. The EU’s European Fund for Sustainable Development Plus (EFSD+) guarantees can be expanded and reconfigured for higher impact, especially in Africa, where risk premiums and financing constraints continue to block climate investment. Moreover, new blended finance models, e.g., Clean Trade and Investment Partnerships (CTIPs), Modern Infrastructure Facilities, and sector-specific risk pools should be concretised as part of the Global Gateway’s strategic priorities.
Similarly, the European development system can do much more to work with the private sector to create secondary markets for European investment in safe, mature assets in emerging markets. Such an approach has been announced by the IDB through its Reinvest model, and there is no reason a similar model could not be delivered by European banks.
Development and climate impact depend on country-level coherence: plans, policies, investments, stakeholder alignment, and sequencing. The Forum should commit to establishing or scaling country platforms – joint coordination vehicles in partner countries involving governments, DFIs and MDBs, private sector and civil society – as a way to deploy strategic packages rather than isolated projects. The EBRD’s experience in running country platforms (e.g., in North Macedonia and Egypt) is an example of this approach. In these cases, country-level coordination allowed harmonised climate action across sectors. A stronger Global Gateway could replicate and scale that model.
Pipeline development and deal origination are critical. Many MDBs and DFIs still struggle with pipeline –i.e. the origination of investible, bankable projects under sustainable parameters. The Forum should trigger new flagship pipelines, with early-stage development support, integrated project preparation facilities, and pre-investment funding. Europe’s national development banks and international partners should pledge new “blended preparation funds” to seed high-ambition, high-impact projects in priority partner countries.
But this will only work if Europe works as one and has a strategic and long-term outlook for international partnerships which sees it act to create pipelines rather than passively respond to them. The Global Gateway has the potential to do this, but to do so it must combine long-term technical assistance with a co-ordinated effort by public actors to bring in and channel wider investment.
The Global Gateway Forum is an opportunity Europe can’t afford to miss
This Global Gateway Forum is not just symbolic: it is a rare convening at which high-level political will and finance institutions can align, announce commitments, and set new norms. Given mounting scepticism about the ability of public institutions to lead big climate finance, the Forum can reset expectations, codify stronger collaboration, and shift behaviours.
If the EIB and EBRD reviews are to mean anything, their outcomes must feed into Global Gateway’s upgraded architecture. If Europe wants to reclaim credibility in global development, this is a chance to show that it can orchestrate scale with consistency, accountability, equity and climate integrity.
- The Forum should lock in ambitious, impact-oriented climate finance targets, with built-in metrics and accountability
- It should mobilise new risk-sharing, guarantee and blended instruments to attract private capital
- It should accelerate country platforms and integrated system transformation at partner level
- It must embed coherence across European institutions, MDBs, DFIs, and grant instruments
- And it must open space for civil society, accountability, and equitable partnerships
Europe has the technical, financial and institutional levers to play a transformative role. The Global Gateway Forum 2025 offers a moment to seize the opportunity – to push for a new frontier of development and climate finance that is bigger, bolder, and more equitable. If it delivers on these ambitions, it could be the turning point in how Europe engages with the Global South in the decade to come.
