EU Funding Options and

Financial Instruments 2014 - 2020

Presentation made from European Commission & EIB presentations

Convergence(Objective I)

National Regional

Regional Competitiveness and Employment(Objective II)

National Regional

Other Funding Sources

EU Cohesion Funding

Cohesion Fund ERDF European Social Fund

ENPIIPA

ETC(Objective III)

Cross-borderEU WidenetworkingTransnational

EUSDR Relevant Funding Options

Danube region relevant funding sources

18 Cross-borderco-operation Programs

11 EIB-linked facilitiesand instruments

15 regional Programs under Convergence Objectives

4 national Programsunder Regional Competitivenaess

and Employment Objectives

3 TransnationalCo-operation Programs

8 IPA Cross-border Co-operation Programs with MSs

6 IPA Cross-border co-operation Programs for Accession Countries

3 ENPI Cross-border 3rd Country Programs Other Funding

Sources

13 Regional Programsunder Regional Competitivenessand Employment Objectives

32 National Programsunder Convergence Objectives4 EU-wide

networking programs

Bucharest, 30.01.2012

Danube Region Relevant Funding Sources – at least 106 programmes

A single package comprising:

1. European Social Fund (ESF) 2. European Regional Development Fund (ERDF)3. European Agricultural and Development Fund

(EARDF) 4. European Maritime and Fisheries Fund (EMFF)5. Cohesion Fund (CF)

4

Structural and Investment Funds 2014-2020 - a package of funds

EU LEGISLATIVE PACKAGE (Regulations)ERDF, ESF, CF, EAFRD, EMFF

PARTNERSHIP AGREEMENTERDF, ESF, CF, EAFRD, EMFF

National or regional level

Operational Programmes for ERDF

Rural development programmes (EAFRD)

Operational Programmes for ESF

Operational Programmes for CF

EU level

National level

Multifund Operational Programmes for ERDF,

ESF, CF

Operational Programmes for (EMFF)

"Structural and Investment Funds" 2014-2020 – shared management

5

Structural and Investment Funds 2014-2020 – key principles

Principles guiding design of new funds:

• Align EU cohesion policy more closely to the Europe 2020 strategy• Geographical concentration in less developed regions (as now)• Increased thematic concentration in individual programmes on

limited number of priorities• Investments part of broader, well-founded strategies (ex-ante

conditionality)• Simplify implementation and improve links with other EU

programmes

6

Budget

 

Initial Commission Proposal (billion

EUR)

Revised Commission breakdown (billion EUR) – April 2013

Less developed regions 162.6 164.3

Transition regions 39.0 31.7

More developed regions 53.1 49.5

Territorial Cooperation 11.7 8.95

Cohesion Fund 68.7 66.4

Extra allocation for outermost and northern regions

0.9 1.39

Youth Employment Initiative (Top-up)

- 3

TOTAL 336.0 325.2

7

1. Research & innovation

2. Information and communication technologies (ICT)3. Competitiveness of Small and Medium-sized Enterprises (SMEs) 4. Shift towards a low-carbon economy5. Climate change adaptation & risk prevention and management6. Environmental protection & resource efficiency7. Sustainable transport & removing bottlenecks in key network

infrastructures

8. Employment & supporting labour mobility

9. Social inclusion & combating poverty

10. Education, skills & lifelong learning

11. Institutional capacity building & efficient public administrations

R&D target

Climate change/energy target

Employment target

Education target

Poverty target

8

Thematic Objectives (with links to Europe 2020)

Financial operations and instruments in support of EU policies

• The Commission encourages the financing of investment in European enterprises and industries through a wide range of financial programmes and instruments.

• DG ECFIN is in charge of implementing a number of these programmes and instruments for financing investment from the Community budget. The funding is channelled through international financial institutions (IFIs) and through specialised programmes (e.g. for SMEs and Trans-European Networks).

The main participating IFIs: the European Investment Bank (EIB) Group, including the European Investment Fund (EIF), the European Bank for Reconstruction and Development (EBRD), and the Council of Europe Development Bank (CEB) in co-operation with the Kreditanstalt für Wiederaufbau (KfW).

DG ECFIN ensures the necessary coordination between the Commission and the EIB Group and the EBRD, and is represented on the governing bodies of these institutions.

Financing Options (EU, national, IFIs)

• A political priority (Europe 2020 , Communication on a Budget for Europe 2020)

• Effective way to support Europe 2020 objectives of smart, sustainable and inclusive growth

• 3 types of benefits

– Financial leverage – multiplication of scarce budgetary resources by attracting additional finance

– Policy impact – financial intermediaries pursue EU policies

– Institutional know-how – EU can use the resources and expertise of financial intermediaries

EU Financial Instruments - why?

11

High-Medium Financial

Profitability,Low risk

PositiveEconomic

rate of returns

Commercial loan,(Including EIB loan)

EU budgetgrant

JointInstrumente.g. credit

enhancement

Project characteristics

PotentialBlending

area

Funding instruments

High-Medium Financial

Profitability/High risk

Low or negative financial profitability

CohesionAgriResearchIPA/ENI

National public funds

EU Financial Instruments – when ?

• Equity / risk capital: e.g. venture capital to SMEs with high growth potential or risk capital to infrstructure projects.

• Guarantees to financial intermediaries that provide lending to e.g. infrstructure projects, SMEs, people in risk of social exclusion.

• Other risk-sharing arrangements with financial intermediaries in order to increase leverage capacity of EU funds.

• Or a combination of the above with oter of EU financial assistance.

What are EU Financial Instruments ?

Financial Instruments included in 2014 – 2020 MFF proposals

Centrally managed by COM Shared management

Research, Development, Innovation

HORIZON 2020Equity and Risk Sharing Instruments

EUR 3.5bn

Instruments under Structural and Cohesion

FundsEU level

Off the shelf instrumentsTailor made instruments

Significant higher amounts than currently

Growth, Jobs and Social Cohesion

Competitiveness & SME (COSME)

Equity & guaranteesEUR 1.4bn

Creative EuropeGuarantee facility

EUR 0.8bn

Social Change & Innovation

MicrofinanceEUR 0.3bn

Erasmus for allGuarantee facility

EUR 0.8bn

Infrastructure

Connecting Europe Facility (CEF)Risk Sharing (project bonds) and equity

instrumentsEUR 40bn

Financial Instruments included in 2014 – 2020 MFF proposals

2014-2020: Financial Instruments for internal policies ANNEX III

Interventions Amount Interventions Amount

Horizon 2020 (RTD)Equity facility (venture capital, equity and quasi-equity)

(*) Debt facility (loans, guarantees, counter-guarantees andother forms of debt and risk finance)

3,5 bill €

Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME)

Equity Facility for Growth (investment in funds, funds-of-funds or investment vehicles that provide venture capital and mezzanine finance -subordinated and participating loans-)

(*) Loan Guarantee facility (loans, subordinated and participating loans, leasing: up to 150k€, >12 months). Securitisation of SME debt finance portfolios.

1,4 bill €

Creative Europe Programme

(*) Cultural and Creative Sectors Financial Instrument (guarantees to financial intermediaries)

ca. 190 M€ ca. 190 M€

Erasmus for allGuarantees for loans to students

880 M€ 880 M€

Connecting Europe Facility

Equity participations in equity funds which provide risk capital to actions contributing to projects of common interest

Loans and/or guarantees to projects of common interest facilitated by risk-sharing instruments, including enhancement mechanisms for long-term bank lending and for project bonds issued by project companies

ca. 2,5 bill € (transport) ca. 1 bill € (energy) ca.

1,4 bill € (digital)

EU Programme for Social Change

Social Entrepreneurship (investments for developing and expanding social enterprises)

95,5 M€Microfinance facility (support to microcredit providers)

87 M€ 182,5 M€

Total ca. 11 bill €(*) Under a common EU Debt Financial Instrument

Equity DebtProgramme

Total amount (in current prices)

EU Financial Instruments current and new

EQUITY INSTRUMENTS FOR SMEs 2007-2013High Growth and Innovative SME Facility (GIF) under the Competitiveness and Innovation Framework Programme (CIF) – EUR 0.6bn

GIF 1 – invests in seed, start-up and early stage SMEs GIF 2 – invests in expansion-stage SMEs

EQUITY INSTRUMENTS FOR SMEs 2014-2020EU Equity Financial instrument for EU enterprises growth and RDI

Equity Instrument for research and innovation- early stage funds, funds-of-funds that invest in intellectual property, technology transfer or venture capital

Horizon 2020

Equity facility for growth- investments in expansion stage funds-of-funds that invest in venture capital

COSME

EU Financial Instruments current and new

DEBT INSTRUMENTS FOR SMEs 2007-2013• SME Guarantees (SMEG) under the Competitiveness and Innovation Framework Programme (CIF) – EUR 0.5bn•Risk-Sharing Instrument (RSI): a dedicated compartment for SMEs under the RSFF created in 2011 – EUR 120m

DEBT INSTRUMENTS FOR SMEs 2014-2020

Debt instrument for EU enterprises’ growth and RDI

Loan Guarantee Facility-Guarantees and securitization of loans up to EUR 150.000-Indicatively EUR 0.75bn COSME

RSI – II Facility-Guarantees for R&I SMEs on loans above EUR150.000

Horizon 2020

Cultural and Creative Sector facility (new)- Guarantees for loans to creative and cultural entities. EUR 0.2bn

Creative Europe

EU Financial Instruments current and new

DEBT INSTRUMENT FOR LARGE R&D PROJECTS 2007-2013• Risk Sharing Finance Facility (RSFF)

• under FP7•Loans and guarantees to R&D projects•EU budgetary allocation to large projects and research infrastrucutre (excluding the SME compartment) EUR 0.9bn

DEBT INSTRUMENTS FOR LARGE R&I PROJECTS 2014-2020

Loan & Guarantee Service for Research and Innovation

•Loans and Guarantees to R&I (non-SMEs)

Horizon 2020

EU Financial Instruments current and new

EQUITY AND DEBT INSTRUMENT FOR THE SOCIAL ECONOMY 2007-2013European Progress Microfinance Facility (EPMF, ets. 2010)

• guarantees and counter-guarantees for microcredit lending•Loans and equity to microcredit institutions•EU budgetary contribution EUR 100m

EQUITY AND DEBT INSTRUMENTS FOR THE SOCIAL ECONOMY 2014-2020

Microfinance and social entrepreneurship instrument

•Guarantees, micro credit, equity and quasi-equity to financial institutions that invest or lend to entrepreneurs, especially those furthest from the labour market, and social enterprises.•Proposed EU budgetary contribution

• Access to microfinance EUR 87m• Social enterprise development EUR 96m• Capacity building EUR 9m

Social Change and Innovation

EU Financial Instruments current and new

INSTRUMENT FOR INFRASTRUCTURE 2007-2013Loan Guarantee Facility for TEN-Transport (LGTT, est. 2008)

• EUR 500m of EU budget has generated EUR 12bn of project financing•Pilot phase project bonds

•EUR 230m budget for 2012-13

EQUITY AND DEBT INSTRUMENTS FOR NFRASTRUCTURE 2014-2020

Infrastructure financial instruments (including Project Bonds Initiative)

•Equity instruments, such as investment funds with a focus on providing risk capital for actions contributing to projects of common interest;•Loans and/or guarantees facilitated by risk-sharing instruments, incl. enhancement mechanism to project bonds, issued by a financial institution on its own resources;•Thematic coverage: TEN-T, TEN-E and broadband•Other financial instruments•EUR 40bn

Connecting Europe Facility

EU Financial Instruments current and new

DEBT INSTRUMENT FOR STUDENTS

Student Loan Guarantee Facility

•Guarantees for student loans•EUR 0.8bn

Erasmus for all

EU Financial Instruments current and new

COHESION POLICY 2007-2013

Currently approx. 5 % of ERDF delivered through financial instruments.

COHESION POLICY 2014-2020• In 2014-2020 use of financial instruments in cohesion policy will expand to all thematic objectives and priorities foreseen by OPs, provided that economic viability of final recipient / repayment capacity of projects is demonstrated.• Combination of financial instruments and support, e.g. grants, will be strengthened.•CSF funds may contribute to support financial instruments set up at Union level managed directly / indirectly by COM in line with FR. OP contribution to be ring-fenced for investments in regions and actions covered by OP.•Cohesion fund will for the first time be open to financial instruments.•Volume of ERDF resources that could potentially be delivered through financial instruments could increase up to 3 times.