Leveraging EU Sustainable Investment Facilitation Agreements (SIFAs): Opportunities for partners countries

Sustainable Investment Facilitation Agreements (SIFAs) are a new instrument in the EU’s trade and investment toolbox. They aim to increase sustainable investment by EU companies in partner countries while enhancing investment facilitation measures, backed by EU technical and financial assistance. Notably, SIFAs do not include market access commitments or investor-state dispute settlement provisions. At the time of writing, the EU has concluded SIFAs: one with Angola and one with Ecuador. The SIFA portfolio is set to grow: negotiations with Côte d’Ivoire are under way, Ghana has been identified as a partner country for a future SIFA, and the Pact for the Mediterranean signals further SIFAs in the Southern Neighbourhood.

Despite this expansion, SIFAs have received limited attention. This study, commissioned by the Greens/EFA Group in the European Parliament at the initiative of MEP Catarina Vieira, examines what instruments deliver in practice, drawing on the two SIFAs concluded so far. It finds that SIFAs fill a gap in the EU’s engagement with developing countries, particularly on the sustainability dimension, and go beyond comparable facilitation initiatives. At the same time, the best-endeavour nature of many sustainability commitments in SIFAs, coupled with the fact that obligations fall almost entirely on the host state, suggests that SIFAs’ impact on advancing sustainability depends on effective implementation commitments on both sides.

In particular, the study highlights the implications of SIFAs for West Africa, where the next SIFAs are expected to be finalised, focusing on the instrument’s implications for the cocoa sectors and broader value addition agendas in Côte d’Ivoire and Ghana. On this basis, it sets out six recommendations to inform ongoing and upcoming SIFA negotiations:

• Strengthen sustainability commitments through firmer language and country-specific obligations, and mainstream them across the agreement. This should go hand-in-hand with increased technical and financial assistance commitments, given that the sustainability obligations fall predominantly on the host country.

• Preserve binding state-to-state dispute settlement and enable countermeasures.

• Anchor cooperation on sustainable cocoa through a dedicated sectoral annex that delivers on sustainability and value addition – given the weight of cocoa in both Ghana’s and Côte d’Ivoire’s economies and their dependence on the EU market.

• Enhance implementation, monitoring, and ex post evaluation, including through dedicated roadmaps and adequate staffing.

• Deepen civil society and business involvement through a dedicated avenue for regulatory engagement on SIFA implementation.

• Situate SIFA cooperation within a broader enabling environment, since many obstacles that constrain investment in developing countries lie beyond the regulatory and procedural issues a SIFA addresses.