(Bloomberg) -- The European Union will seek to mobilize 300 billion euros ($340 billion) in public and private infrastructure investments by 2027 to offer developing countries an alternative to China’s massive Belt and Road program.
The EU’s “Global Gateway,” which will be unveiled on Wednesday, outlines spending on digital, transport, energy and health projects, according to the final draft of the strategy seen by Bloomberg. And while it doesn’t mention China explicitly, the proposal offers a counter to Beijing’s overseas development plan that critics say has pushed countries to unsustainable levels of indebtedness.
“The EU will offer its financing under fair and favorable terms in order to limit the risk of debt distress,” according to the document. Partners will have to adhere “to the rule of law, upholding high standards of human, social, and workers’ rights and respecting norms from international rules and standards to intellectual property,” the draft says.
To finance the project, the EU will use its European Fund for Sustainable Development Plus, which can make available 40 billion euros in guarantee capacity, and will offer grants of up to 18 billion euros from external assistance programs.
The program will also seek to “crowd-in private capital” to boost investments, according to the document.
The plan mostly brings together existing initiatives and funding programs with the goal of supporting Europe’s interests and competitiveness around the world. It also seeks to bolster sustainable environmental standards and values such as democracy and human rights.
“Global Gateway has the potential to turn the EU into a more effective geopolitical player,” said Michael Clauss, Germany’s ambassador to the EU. “For many partner countries, the offer of a rules- and values-based cooperation at eye level will be an attractive alternative to the Chinese Belt and Road initiative.”
The strategy follows a U.S.-led agreement reached during July’s Group of Seven summit where leaders agreed to launch a global infrastructure initiative called Build Back Better World. The push was aimed at helping narrow the gaping infrastructure need in the developing world and provide a green rival to China’s ambitious initiatives.
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