In-situ evaluation of BIO investments confirms their relevance, additionality and sustainability

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Brussels, 9 October 2014 – The Special Evaluation Unit, which is part of the FPS Foreign Affairs, Foreign Trade and Development Cooperation, has published the second part of its Evaluation Report on BIO. BIO welcomes this constructive report by the external evaluators which not only confirms the positive conclusions of the first phase conducted in 2013, but also demonstrates the tangible impact that BIO has in the target areas, recognizing its specific role within Development Cooperation.

To arrive at this conclusion, the evaluators visited 70 clients in 9 countries and conducted an in-depth study of BIO's investment projects. The report confirms the relevance of 65 out of the 70 projects visited. Certain investments have a further positive impact at the macroeconomic level and constitute a real incentive for development in the economic zones concerned. The additionality of the interventions is also confirmed; according to the report, the projects would not have proceeded without BIO support, and this applies equally to investments in investment funds, infrastructure projects and direct investments in small and medium-sized enterprises (SME).

Employment growth among numerous clients, introduction of local taxes - profitability or local regulations permitting-, the catalyst effect on financial institutions and SMEs, newly accessible working capital facilities at local banks ... these are all concrete indicators of the effectiveness of BIO investments, as stated in the report.

Although, in most cases, the sustainability of direct investments in SMEs, especially micro enterprises, is evaluated as relatively low, investments in microfinance institutes (MFI), local commercial banks and SME investment funds are considered sustainable.

The Special Evaluators confirm BIO's usefulness in its private sector support role. They recognize the key role of DFIs in terms of investment in SMEs (even though this is more costly for BIO), in particular in Africa, and recommend that DFIs exert more influence on investment strategies targeting SME funds.

The evaluators also recommend stepping up our communication and collaboration with development agencies, and more specifically the BTC and DGD, aiming to achieve more complementarity and synergy in development policy while respecting the specific features and mandates of each body.

BIO is pleased with the positive conclusions of the evaluation, as well as with the recommendations to improve our performance. As such, we will apply ourselves more to optimize the development impact of the funds and MFIs. To this end, we are improving our system of impact measurement, so that it can contribute to adjusting our strategy and maximizing the positive effects of our future investments.

The full report can be downloaded (in French) here.