Development finance meets geoeconomic power EU: Investigating energy investments in the EU’s Southern Neighbourhood

The geoeconomic turn and in the EU’s trade, investment, development and energy policies have attracted considerable scholarly attention recently. Due to the high level of external technological, material and supply dependence; the increasing geoeconomic great power rivalry and securitized logic behind these industries at the global level; and the tighter integration of trade and investment policies with neighbourhood and developmental strategies of the EU, energy transition has become a key area where the EU’s geopolitical/geoeconomic is contested. There is a rapidly increasing documentation of how this integration and centralization of external policies embraced a distinctively geoeconomic logic and framing in recent years – yet the real impacts of these organizational and discursive changes in terms of investments and policy outcomes remained relatively under the radar so far. Recently emerging scholarship on the new European Financial Architecture for Development (EFAD) and the catalytic state uncovered crucial shifts in the organizational and ideational context of external policies. The movement towards financialization and a more prominent role of EU organizations and states in coordinating a complex network of state-private hybrids suggest a ’European answer’ to new state capitalism as identified in International Political Economy (IPE) debates. The EU’s Global Gateway, supported by a more geopolitical external strategy and a streamlined budget, has been advocated (and occasionally criticized) for adopting the framing and logic of China’s flagship Belt and Road Initiative. In my paper, I would like to contribute to these debates by more explicitly addressing the questions of to what extent and in what ways this geoeconomic turn is reflected in the external climate, energy and investment policy outcomes. More specifically, I intend to offer a more detailed outlook on how EU linked development finance delivers and constraints this geoeconomic logic articulated at the EU level. Existing literature on specific EU policies, as well as on the EFAD often remains focused on the programmes, interests, framings and budgetary allocation at the level of the European Commission (EC), specific DGs or funding arrangements. Research on specific policy areas or actors, in turn, could deliver context-rich but sometimes isolated case studies. I argue that there is a missing element that needs a broader definition of how development finance is analysed. Defining it as a network of development banks, EU funds, EU state investments, EU/local/external private investors aligning with EU geoeconomic goals could give us a more nuanced understanding of the outcomes of EU geoeconomic turn in energy. By investigating the broader context of EU-linked energy and climate policies and projects in the Southern Neighbourhood we can see to what extent EU goals and funding shifts are reflected at project level. Using a more detailed political economy analysis could also highlight how different actors shape, take advantage or counter geoeconomic frames and goals. Finally, questioning the often EC-centric, monolithic geopolitical view of energy, the geoeconomic turn could describe a contested, complex policy space where member states, funding goals and even local interests surround and shape the EU level policy goals.