1. Shared management Financial Instruments and InvestEU Member State Compartment
10 October 2019, Brussels
Axel Badrichani, deputy Head of Unit, REGIO B3
Jacek Truszczynski, policy officer, ECFIN 01

2. Content
ERDF / Cohesion Fund financial instruments – uptake during
Post 2020 intervention logic for repayable support
Overview of the InvestEU programme and of its MS compartment
State of play
Conclusions

3. ERDF/ Cohesion Fund FIs – uptake 2014-2020
The use of shared management FIs is progressively increasing :
the total programme amount, which includes estimated national co financing, is almost EUR 25.0 billion (in the final programme amount paid to FIs was EUR 15.5 billion)
85% of the planned FIs are already set-up: programme amounts for the selected FIs operations were already EUR 21.3 billion in the end of 2018
at least 33% of the planned amount (EUR 8 billion) was paid to financial instruments and 16% (EUR 3.9 billion) to final recipients
24 Member States report using FIs
8 thematic objectives – see graph

4. 2. Post 2020 CPR intervention logic for repayable support
The policy objectives defined in the partnership agreements and/or programmes can be implemented through the following delivery modes:
Grants
Repayable support for revenue-generating and cost-saving investments:
Financial instruments under the CPR (FIs)
Budgetary guarantee under InvestEU
Justification for using any form of support needed!

5. 2. FIs under shared management
FIs are an implementation tool of the specific objectives of the underlying programmes
For investments with revenue-generating or cost-saving potential
Simplified and a more user-friendly framework – e.g.:
Ex-ante assessment
Combination with grants in one FI operation
Eligibility, including management costs and fees
Payments
Financial instruments better integrated into the programming and implementation process from the outset

6. 2. FIs under shared management
Streamlined ex ante assessment:
NEW! Partly covered in the programmes (grants and FIs):
Market failures, investment needs and complementarity with other forms of support (Article 17(3)(a)(ii))
Justification for selecting a specific form of support (Article 17(3)(b))
NEW! For FIs only:
Proposed amount/financial product/targeted final recipients, expected leverage effect, contribution to the specific objectives, need for differentiated treatment (Article 52)
NEW! Possibility to use existing or updated ex-ante assessment

7. 2. FIs under shared management
Combination:
In TWO separate operations: each form of support following its own rules
In ONE FI operation: the grant shall be directly linked and necessary for the investment supported by the FI and shall have a lower value than the investment supported
E.g. interest rate/guarantee fees subsidies, technical support, NEW!: “capital rebate”
Combination of Funds with InvestEU under the CPR (type SME Initiative, ESIF/EFSI combination) not anymore possible
replaced with the contribution from the Funds to InvestEU under ONE set of rules i.e. those of InvestEU

8. 2. FIs under shared management
Payments from EC to MA:
In case of direct implementation by the MA: eligible expenditure incurred
In case of FIs managed under the responsibility of the MA:
NEW!:
First payment claim: advance of 25% of amounts committed and paid to the FI; to be cleared no later than in the final accounting year and disclosed separately in the appendix to the payment application
Subsequent payment claims: eligible expenditure

9. 3. Overview of the InvestEU programme and of its Member State compartment

10. InvestEU Programme (2021 – 2027)
InvestEU Fund:
Single fund bringing together the many different EU-level financial instruments
EUR 38 bn EU budgetary guarantee (EU compartment)
Mobilise EUR 650 bn in additional investment across Europe
Four thematic policy windows

11. EU compartment MS compartment
Fosters EU level action and tackles EU level market gaps
Consists of four policy windows
Budgetary guarantee size of EUR 38bn, provisioned at 40%
Guarantee is not geographically ring- fenced
Fosters MS level action and tackles local level market gaps
On a voluntary basis by MS can allocate amounts to provision the MS compartment from ERDF, ESF+, EMFF, EAFRD or cohesion fund
Established at the level of each policy window; 1 Member State = 1 sub- compartment
Based on a specific contribution agreement defining size, provisioning, contingent liability…
Contributions are geographically ring- fenced
InvestEU rules apply
InvestEU
Fund

12. InvestEU MS compartment: key features
Partnership agreements/programmes
Shared management rules
EUR
Union Budget
InvestEU Programme
InvestEU fund
(EU guarantee):
EU compartment
&
MS compartment
InvestEU Regulation
Max 5%
Article 10 of the CPR

13. Why to contribute to InvestEU?
Possibility to achieve the policy objectives of the contributing PA/programme and to ring-fence geographical coverage
Mobilizing high volume of private finance for final recipients
Implementation based on an institutional and legal framework established under the responsibility of the Commission - lower administrative burden
No need for national co-financing. Contingent liability for the Member State calibrated on the basis of the risks
Implementation under InvestEU rules (single set of rules)
Using ready-made products currently being set up for the EU Compartment: the MS can implement such products either using its own MS compartment guarantee or to top up the EU compartment guarantee

14. Main Features of InvestEU MS compartment and shared management FIs
FIs under shared management
Policy objectives
Delivery tool of the policy objectives of the underlying PA or programmes
Ex-ante assessment
Investment strategy to be agreed in the Contribution Agreement
Mandatory obligation (including Investment strategy)
Management costs and fees (MCF)
No MCF paid to an IP, except in duly justified cases, decided by the EC
MCF paid
Financial products
EU Guarantee for loans, guarantees and equity up to the risk of the provisioning rate; high leverage
Loans, guarantees and equity; possibility to take more risk
Payments
No cash payment; IP uses its own resources
Payments to the MS under shared management rules
Combination
Combination between EU&MS Compartment under a single set of rules possible
Simple combination with shared management grants under the FI; combination with InvestEU only at the level of final recipient

15. Main Features of InvestEU MS compartment and shared management FIs
FIs under shared management
Reporting, monitoring and audit
Implementation under the responsibility of the IP and EC; bi-annual reporting to MS, MS can participate in the monitoring; indirect management assurance model+ECA;
Implementation under the responsibility of the MA; reporting by MS under CPR, audit by the AA, EC + ECA
Resources returned if delays or no implementation
Funds can come back to shared management (indicative deadlines: 4 months to sign the contribution agreement from the PA adoption; 9 months to conclude a Guarantee Agreement and 4 years to implement it)
Modifications of programmes needed
Reflows
Reflows at the disposal of the MSs – to be used to keep the provisioning rate at the agreed level or paid back to MSs to be used for other types of repayable support
National resources to be used during the eligibility period for FIs and during 8 years after the eligibility period, for FIs or any kind of support in line with the policy objectives

16. InvestEU Roadmap 2021 H2 2020 H1 2020 2019 InvestEU LAUNCH
Adoptions & appointments
Appointment of Investment Committee experts (Q4)
Contractual set-up
with implementing partners
Stakeholder events in Brussels and in Member States (Q4)
Events & consultations incl.
“Getting-ready events”: seminars/consultations/working groups/meetings with Implementing Partners*, e.g. thematic events on Sustainability, Risk management, State Aid, Gender, Advisory support…
2021
Adoption of revised State Aid rules (Q4)
Setting up of Advisory and Steering Board (Q4)
Call for expression of interest for Implementing Partners* (Q2)
Guarantee & Advisory Agreements negotiation and signature (Q3-Q4)
Adoption of Investment Guidelines (Q1) & Scoreboard (Q2)
H2 2020
Adoption of InvestEU Regulation**
(Q4)
H1 2020
*Implementing Partners (IPs) = EIB Group and +/- 30 national and multinational potential partners
**Subject to adoption of MFF
2019

17. InvestEU MS compartment: organization

18. 4. State of play
CPR to be adopted by end 2020
Partnership agreements/programmes to be adopted in (draft expected early 2020)
On-going technical meetings with MAs
National authorities to assess the features of shared management FIs/InvestEU and benefit from complementarities

19. 5. Conclusion Decision on the Investment priorities
Consider continuing with shared management FIs
Look at the new opportunities under InvestEU from the programming stage
Prepare to contribute early - at the level of Partnership agreement
Liaise with your NPB and with the EIB Group
DG REGIO would be closely involved also in the negotiations on the Contribution Agreement
If you have questions we are available to support you!