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EU-AFD Facility on Inequalities 2026-2028: Reducing Inequalities through Investments
Building on nearly ten years of collaboration, the third phase of the EU-AFD Facility on Inequalities takes a more operational approach: it focuses on how investments – particularly in infrastructures and the private sector – can help reduce inequalities. It aims, more specifically, to strengthen the effective integration of inequality reduction into Global Gateway investments, in line with the EU Inequality-Marker (I-Marker).
Context
While investment has become a central instrument of development strategies, its effects on inequalities remain difficult to measure and monitor. Infrastructure and private sector projects often generate indirect and uneven distributional effects, making it challenging to assess who benefits, how value is created, and how gains are shared across territories and social groups.
Yet investment is a critical lever for reducing inequalities, through access to services, economic opportunities and the distribution of economic rents. This challenge lies at the heart of the European Union’s Global Gateway strategy, which aims to mobilise public and private investment in sustainable and inclusive infrastructure as one of the pillars of EU external action.
Building on the analytical tools and evidence developed during its previous phases, the third phase of the EU–AFD Facility on Inequalities focuses on investment processes, with the objective of strengthening the capacity of European institutions and public development banks to integrate inequality reduction into Global Gateway investments.
Objectives
Coordinated by AFD with €1.68 million from the European Commission for 2026-2028, the third phase of the Facility has three priorities:
- Considering inequalities from the start: the Facility will inform the scoping and early design of public and private investments by providing analyses that highlight their potential effects on inequalities;
- Practical guidance for Team Europe actors: the Facility will develop tools and methodologies to help Team Europe actors better integrate redistributive considerations into project identification and early structuring;
- Better tracking of distributional impacts: using inequality-specific indicators, the Facility will help strengthen the monitoring and analysis of the impacts of Global Gateway investments on different population groups.
This applied research work and practical tools will help the EU and its Member States make informed, evidence-based investment decisions that integrate inequality-reduction objectives into their external action, in line with the Global Gateway strategy. By improving both upstream project design and downstream impact assessment, the Facility seeks to ensure that Global Gateway investments deliver tangible benefits for disadvantaged groups, including the bottom 40%, and contribute to more equitable development outcomes.
Components
The Facility is designed to generate applied research and operational tools to support Team Europe actors across the entire project cycle – from early scoping and identification to monitoring and evaluation:
Through applied research on private and public investments in strategic sectors, this first component addresses a key upstream gap: the limited and uneven integration of inequality analysis at the earliest stages of project development, especially in investment programming.
By identifying structural barriers, targeting challenges and redistributive mechanisms, this component is intended to help project teams and institutions assess where and how investments can reduce inequalities from the outset, and avoid reinforcing existing patterns of exclusion.
More details coming soon.
The second component focuses on anticipating the distributional effects of infrastructure projects – including those with indirect or dispersed beneficiaries – in priority sectors such as energy, transport, digital, health and education.
By providing ex ante inequality assessment methods, sector-specific checklists, and actionable design levers, this component will equip Team Europe actors with concrete instruments to integrate redistributive considerations into project identification and early structuring.
More details coming soon.
The third component strengthens the monitoring and analysis of the distributional impacts of Global Gateway investments:
- Building on the Distributional Impact Assessment (DIA/DIA+) methodology, it will assess how project benefits of investments in priority sectors are actually distributed across income groups, territories and social categories.
- In parallel, it will develop practical inequality-related indicators, adapted by Global Gateway sector and financing instrument (e.g. guarantees, blending), to support consistent tracking and reporting across Team Europe actors, including European Development Finance Institutions (EDFIs) and European Public Development Banks.
More details coming soon.
Contact
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Anda DAVID
Economist, scientific coordinator of the EU-AFD Research Facility on Inequalities
