SME INITIATIVE SPAIN APRIL 2015 1
SMES INITIATIVE IN FINANCIAL INSTRUMENTS PROPOSAL 2.Centrally managed by COM (Financial Regulation) 1.Shared Management with MS (Common Provisions Regulation) Research, Development Innovation Growth, Jobs and Social Cohesion Infrastructure Horizon 2020 Equity and Risk Sharing Instruments 3,6% = 2.700 3.500 M COSME Creative Europe Equity & guarantees Guarantee Facility 60% = 1.400 M 210 M Employment and Erasmus+ social innovation Guarantee Facility microfinance 192 M 600 M Connecting Europe Facility (CEF) Risk sharing and equity instruments Broadband, Trans European Energy, Transport ESIF EU level (central management). SME initiative. National/regional instruments (shared management) Off-the shelf FIs Tailor made FIs
REASONS WHY SPAIN DECIDED TO PARTICIPATE No national co-financing required for the contributions from ESIF Ex-ante assessment carried out by the Commission with input of EIB Group Benefit passed onto SMEs: lending to riskier SMEs (e.g. innovative SMEs, start-ups, etc. ); reduction of collateral requirements and reduced pricing Simplified control (article 40.2) Simplified State Aid consideration (minimis) Leverage effect on the ESIF contribution by a combination of resources it is possible to allow for a pro-rata return to a region or group of regions within the same Member State (Article 39.11)
EX-ANTE ASSESMENT SMEs make up 99.9% of enterprises SMEs account for 75.4% of employment workers SMEs loan have shrunk by 11.2% (2007-2011) The trend of SMEs unsuccessful in obtaining loan is increasing +21.8% Debt financing gap ranging between EUR 6,003m EUR 26,397m
LENDING TO RISKIER SMES Article 39.1 a) uncapped guarantees providing capital relief to financial intermediaries for new portfolios of debt finance to eligible SMEs in accordance with Article 37(4) of this Regulation; Benefit passed onto SMEs: lending to riskier SMEs (e.g. innovative SMEs, start-ups, etc.); reduction of collateral requirements and reduced pricing
CONTROL SIMPLIFICATION Article 38.1 In implementing Article 37, managing authorities may provide a financial contribution to the following financial instruments: (a) financial instruments set up at Union level, managed directly or indirectly by the Commission; Article 40.2: The bodies responsible for the audit of programs shall not carry out audits of operations comprising financial instruments implemented under point (a) of Article 38(1) and of management and control systems relating to those financial instruments. They shall receive regular control reports from the auditors designated in the agreements setting up those financial instruments.
LEVERAGE EFFECT BY A COMBINATION OF RESOURCES SME Initiative Schematic allocation of risks (option 1 Guarantee facility for portfolios of new SME loans): Portfolios created from eligible SME loans Tranches associated with different risks Guarantee Rate up to 80% Loan by Loan Financial Intermediary (FI) SME Loans 1.975 M (EIB) EIF guarantee Beneficiaries Upper (EIF) 129 M Middle (UE H2020) 14 M Lower(Spain-ERDF) 86 M SME 1 SME 2 SME n 658 M (Spain-ERDF) Risk tranching
REGION REGIONALISATION ERDF ALLOCATION Extremadura 75.761.532 Canarias 27.348.428 Andalucía 98.309.951 Castilla-La Mancha 28.914.772 Murcia 7.222.684 Galicia 21.235.080 Ceuta 1.200.000 Com. Valenciana 88.905.066 Castilla y León 28.022.444 Cantabria 22.066.790 Baleares 27.500.337 La Rioja 6.269.164 Aragón 25.461.062 Cataluña 66.012.057 País Vasco 12.020.723 Com. Madrid 263.786.510 TOTAL 800.036.598
OUTPUT INDICATORS IndicaTor EXPECTED OUTPUT 2023 ERDF allocation 800 millions Total new financial debt 3.200 millions SMEs supported 32.000 New SMEs supported 2.700 Increase of employment in supported SMEs 6.400
RESULTS INDICATORS Indicator Base Value Base year Result to be achieved Source (2023) Monitoring report frequency SMEs Debt 16.200 millions financing gap (*) 2014 13.000 millions (20% reduction) Monitoring reports by BEI/COM annual report Expected leverage 0 2014 4 Monitoring reports by BEI/COM annual report
26/Jan. Spain and the EIB Group sign the Funding Agreement. And the Intercreditor Agreement First meeting Investors Board. MS approves the Call for Expression of Interest FIs apply Call for Expression of Interest by the 30 September 2016 End of Commitment Period of MS Contribution to the EIF Dedicated Window Jan 2015 Feb 2015 Mar-Apr 2015 May - July 2015 2016. 2019 Publication of the Call for Expression of Interest Screening and due diligence on selected banks. Negotiation of Operational Agreement Inclusion period deadline for the origination of new debt by the FIs
Increase leverage effect from 3 to 4 FUNDING AGREEMENT NEGOTIATION Fees are calculated according to really allocated loans Fees increase 2% if a leverage of 4 is achieved and only arrive to the maximum if is 5 Leverage milestone for fees are calculated according to total allocations (without deduction of fees) Investors board change from 4 management authority member and 1 IEF member to 5 MA and 1 FEI. Observers form 1 BEI, 1 Commission to 4 MA, 1 BEI and 1 Commission Only contribution form Horizon 2020 (no COSME) with a leverage of 9 instead of 20 Reserve fee will be used to pay third party claims Under Luxembourg laws and the European Court of justice
The agreements were signed 26 th January 2015 in Madrid the by EIB Vice-President Román Escolano, EIF Chief Executive Pier Luigi Gilibert and Secretary of State Marta Fernández Currás.