The Mattei Plan: Italy Unveils Strategic Framework to Strengthen Economic Relations and Investments in Africa

The Mattei Plan: A Strategic Blueprint for Italy’s Future in Africa

Pursuant to Article 1 of Law Decree No. 161, adopted on 15 November 2023 (for further insights, please refer to our previous article), and following favourable opinion of the Parliament, on 7 October the Italian government approved the Ministerial Decree laying out the strategic framework for the Mattei Plan (hereafter referred to as the Mattei Plan Strategic Framework or Strategic Framework).

The Strategic Framework not only defines the objectives, resources, and methodologies that underpin the Mattei Plan, but also highlights the key sectors for intervention—specifically agriculture, energy, water resources, infrastructure (including digital), and culture and education. Furthermore, it establishes a comprehensive governance structure and provides insights into the pilot projects already underway, setting the stage for transformative initiatives that will redefine Italy’s engagement with Africa.

The Mattei Plan Strategic Framework: Resources and Financial Instruments – Regarding financial resources, the Mattei Plan Strategic Framework reaffirms the €5.5 billion allocation informally announced earlier this year, offering detailed insights into its sources and intended applications for supporting both public projects and private initiatives.

The primary funding source will be the Italian Climate Fund, Italy’s principal instrument for advancing climate and environmental objectives, which constitutes approximately €3 billion of the total allocation under the Mattei Plan. This substantial investment shall be directed toward transformative initiatives in renewable energy, sustainable resource management, and agricultural adaptation, setting a solid foundation for Italy’s sustainable future.

In addition to the Climate Fund, the Mattei Plan will leverage a diverse array of funding mechanisms. These include development cooperation funds, public-private co-investment platforms, debt-for-development swap operations, and resources from public entities such as Cassa Depositi e Prestiti (CDP) and Multilateral Development Banks.

To further optimize resource deployment, the Mattei Plan is set to introduce innovative financing instruments. A cornerstone of this initiative involves enhancing collaboration with the African Development Bank (AfDB) to support the public sector by establishing a multi-donor fund, which will be open to third-party contributions. This fund will have a duration of over fifty-five years (of which the first five will be aimed at defining the investment portfolio) and will primarily support projects in strategic sectors, including energy, transportation, and water, channelling resources drawn from the Italian Climate Fund. The funds will be allocated for concessional financing to promote investments and grants in countries where the AfDB’s risk policies limit credit extensions, alongside funding for technical assistance activities. Additionally, a bilateral fund with a 30-year duration will be established, featuring contributions from the AfDB and Italy.

For the private sector investments, the Mattei Plan is developing two distinct instruments designed to empower local enterprises and project companies through equity investments, financing, and technical assistance. These instruments will ensure the financial sustainability of operations while actively engaging local stakeholders and catalyzing resources from international investors:

• Plafond Africa: This dedicated fund will facilitate direct investments through senior debt instruments, such as corporate financing, project finance, and bond issuances, as well as subordinated instruments. Projects undertaken within this framework will benefit from public guarantees, subject to case-by-case approval by a specialized technical committee.
• Growth and Resilience Platform for Africa (GRAf): Developed in partnership with CDP, this platform aims to bolster the private sector in partner states by aggregating capital from various investors and collaborating with existing funds active in Africa. GRAf will prioritize essential areas such as food resilience, energy security, environmental protection, and job creation. Designed to operate on a co-investment basis, GRAf will see CDP’s resources complemented by public funds and contributions from institutional investors, development cooperation financial institutions, and leading Italian corporations. Projected to be operational by the end of the current year, GRAf will enable co-investors to make non-binding commitments and retain discretion over investment decisions related to individual opportunities generated by participants.

In addition to these newly established instruments, initiatives supported by the Mattei Plan will also tap into existing financing channels provided by various institutional actors already engaged in Africa. The Strategic Framework emphasizes collaboration between SIMEST and the Ministry of Foreign Affairs, Economy, and Finance to operationalize “Misura Africa”—a public fund endowed with €200 million aimed at facilitating the internationalization of Italian enterprises. Furthermore, SACE will play a pivotal role by focusing on export credit and implementing a “push strategy” to provide guarantees for financing extended to foreign counterparties.

What next

The Mattei Plan has already ignited significant activity across Italy. This initiative has catalyzed small and large-scale projects, notably illustrated by the renewed engagement of the Italian Trade Agency (former ICE) on the African continent, where it plays a crucial role in facilitating and coordinating the expansion of Italian companies.

While many operational details – including implementation criteria and specific financing mechanisms – are yet to be fully delineated, the Ministerial Decree first unveiled in July 2024 and then finally approved on 7 October 2024 provides critical clarification on the framework and priorities established by the Italian government.

As the Plan enters its initial stages of implementation, investors and companies seeking to broaden and consolidate their operations in Africa should:

• Monitor developments: stay informed on the developments surrounding the Mattei Plan and its implications for funding and investment opportunities.
• Explore new investments and opportunities: identify and assess potential investment opportunities in Africa that align with the Mattei Plan’s strategic sectors.

Seek guidance: reach out to relevant institution and advisors to navigate the Mattei Plan effectively and uncover valuable investment opportunities.

Authored by Francesca Rolla, Roberto Isibor, and the Italian Africa team.