Shared management Financial Instruments and InvestEU Member State Compartment

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 2014- 2020 • Post 2020 intervention logic for repayable support • Overview of the InvestEUprogramme 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 2007-2013 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 • InONE 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: • Incase 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 InvestEUprogramme 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. InvestEUMS compartment: key features • InvestEU Regulation • Shared management rules Partnership agreements/programmes Union Budget InvestEU Programme InvestEU fund (EU guarantee): • EU compartment • & • MScompartment Article 10 of the CPR EUR Max 5%

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

16. InvestEU Roadmap 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 Setting up of Advisory and Steering Board (Q4) Adoption of revised State Aid rules (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 2021 (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!