Experience with financial instruments in the period of and the new framework for the period of

Transcription

1 Experience with financial instruments in the period of and the new framework for the period of Workshop 22 January 2015, Stefan Appel, DG and Urban European Commission

2 Financial engineering instruments in 2013 FEIs are implemented in 25 MS (ex-hr, IRL, LU) 941 Financial engineering instruments, out of which: 69 Holding Funds, 872 specific funds 854 for enterprises, 56 for urban development and 32 for energy efficiency & renewable energy inter alia, 392 loan funds, 127 guarantee funds, 146 equity funds and 105 mixed funds 2

3 Commitments and Payments (2013) OP contributions commitment to FEI OP contributions paid to FEIs out of which Structural Funds OP contribution paid to final recipients out of which Structural Funds OP contributions remaining in HF Contributions remaining in specific funds 17.5 billion 17.1 billion 12.6 billion (100%) 14.3 billion (100%) 8.4 billion 9.6 billion 4.7 billion (37%) 6.7 billion (47%) 2.7 billion 4.0 billion 3.1 billion (25%) 2.1 billion (15%) 4.7 billion (37%) 5.4 billion (38%) 3

4 Why are financial instruments popular? Higher immediate policy impact through leveraged resources (public and private) Sustainability of support due to revolving funds which remain in the programme area Financing provided before investment takes place (different from grants) Better quality of projects (investment must be repaid) Incentives to use FIs as alternative to grants (move away from "grant dependency" culture) 4

5 Financial Instruments Centrally managed by COM (Financial Regulation) Shared Management with MS (Common Provisions Regulation) Research, Development Innovation Growth, Jobs and Social Cohesion Infrastructure Horizon 2020 InnovFin (Equity and Risk Sharing Instruments) Competitiveness & SME (COSME) Equity & guarantees Social Change & Innovation Creative Europe Guarantee Facility Erasmus for all Guarantee Facility Connecting Europe Facility (CEF) Risk sharing (e.g. project bonds) and equity instruments Instruments under Structural and Cohesion Funds Contribution to EU level (central management) National/regional instruments (shared management) Off-the shelf FIs Tailor made FIs Significantly higher amounts expected than in current MFF!

6 Financial instruments : legislation and guidance Common Provisions Regulation for all ESIF: Title IV for the financial instruments (Articles 37 46) (2013/1383/EU) Delegated Act: Section II, Articles 4-14 (2014/480/EU) Implementing Acts: Off the shelf instruments (2014/964/EU) Funding agreement SME initiative (2014/660/EU) Financial Instruments in ESIF programmes : A short reference guide for Managing Authorities 6

7 What does the framework offer? 1. Wider scope: Use in all types of ESIF programmes (including ETC programmes) Common provisions cover all five Funds: ERDF, ESF, Cohesion Fund, EAFRD and EMFF Expansion to all thematic objectives & priorities foreseen by OPs!! Support investments expected to be financially viable which do not give rise to sufficient funding from market sources 7

8 What does the framework offer? 2. More implementation options for managing authorities Traditional implementation: MA sets up a FI at national, regional, transnational or cross-border level: Taylor made instruments (cf ) Standardised off-the-shelf instruments, quick roll-out MA can implement loans or guarantees directly (or through intermediate body) without formal set-up of a fund MA can contribute OP allocations to EU level instrument (COSME, Horizon, "SME Initiative") 8

9 What does the framework offer? SME initiative Objectives: Increase the volume of lending to SMEs in the EU by Pooling resources: European Structural Investment Funds + COSME and Horizon 2020; Combining and fully utilising EIB/EIF and possibly National Promotional Banks' capacities; Providing Capital Relief to banks to make them more robust and to incentivize them to extend additional loans to SMEs; Design: Ex-ante assessment carried out at EU level (EIB and Commission); SMEI indirectly managed by the Commission; implementation with EIF; A single dedicated OP at MS level with voluntary contribution (ERDF EAFRD); Two options proposed: (1) Uncapped Guarantee Instrument; (2) Joint securitisation instrument for new and existing loans; 9

10 What does the framework offer? 3. Continuity of principles and concepts of ,e.g.: Reuse of resources paid back National co-financing at different times and levels, Combination of grants and FIs 4.a Some changes to adapt to market practise and to reinforce flexibility, e.g.: VAT eligibility, Follow on investments Extended eligibility of management costs for some FIs Incentives on national co-financing 10

11 What does the framework offer? Incentives regarding national co-financing Co-financing rate EU-level instruments: Up to 100% of the paid support may come from ERDF, ESF and CF; separate priority axis to be established Instruments implemented at national/regional level: ERDF, ESF, CF co-financing rate to increase by 10 percentage points if an entire priority axis is implemented through financial instruments National co-financing in payment applications to the Commission The request for payment may include national co-financing expected to be paid into financial instrument (or at the level of investments in final recipients). 11

12 What does the framework offer? 4.b Some changes to ensure sound design and implementation of financial instruments, e.g.: Compulsory ex-ante assessment which must be carried out prior to decision to support financial instruments Payments in relation to FIs phased and subject to implementation on the ground Management costs and fees performance oriented Comprehensive annual reporting by managing authority on each financial instrument 12

13 Financial instruments : "Off-the-shelf" Two for SMEs 1. Loan for SME's based on a portfolio risk sharing loan model (Risk Sharing Loan). 2. Guarantee for SMEs (partial first loss portfolio, capped guarantee). + Equity fund for SMEs and start-up companies (in the future). One for energy efficiency/renewable energies and one for urban development 3. Renovation Loan based on a Risk sharing loan model (RS Loan). + Urban Development Fund (in the future). 13

14 Financial instruments : key steps Regulations: Common Provisions Regulation and ESI Funds specific Regulations adopted, Delegated Act and Implementing Acts adopted (off-the-shelf" instruments and SME initiative) Technical assistance platform for financial instruments in cohesion policy (launching event in January 2015 but already some products!) Negotiation of the Partnership Agreements and Operational Programmes with Member States/ Managing Authorities (2014) 14

15 ESIF and the Investment Plan for Europe: Doubling of financial instruments Financial instruments are particularly effective to increase the impact of ESIF An overall doubling of the use of financial instruments in relative to (increase from EUR 12 billion to close to EUR 30 billion) is an ambitious but realistic target This extra EUR 18 billion could leverage additional investments between EUR 40-70bn (of which at least EUR 20bn in first three years) 15

16 Over three years Positive impact on investment throughout the economy Priorities at national and regional level (e.g. SMEs, research, transport, environment) Impact of Member States' contributions to the Fund EUR 315 bn SMEs and mid-cap companies Improved investment environment at EU and national level Better use of the European Structural and Investment Funds Possible Member States' contributions to the Fund Strategic investments of European significance in energy, transport, broadband, education, research and innovation European Fund for Strategic Investments: EUR 21 bn (initially)

17 Thank you for your attention! 17