# IMMC.COM_2019_0317_FIN.ENG.xhtml.1_EN_ACT_part1_v6.docx

european flagEUROPEAN COMMISSION

Brussels, 26.6.2019

COM(2019) 317 final

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS

Annual Accounts of the European Development Fund 2018

Annual Accounts of the
  European Development Fund 2018

CONTENTS

CERTIFICATION OF THE ACCOUNTS

IMPLEMENTING AND ACCOUNTING FOR THE EDF RESOURCES

FUNDS MANAGED BY THE EUROPEAN COMMISSION

FINANCIAL STATEMENTS OF THE EDF

FINANCIAL STATEMENTS OF THE EU TRUST FUNDS CONSOLIDATED IN EDF

FINAL ANNUAL ACCOUNTS OF THE BÊKOU EU TRUST FUND 2018

FINAL ANNUAL ACCOUNTS OF THE EUTF AFRICA 2018

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE EU TRUST FUNDS

EDF REPORT ON FINANCIAL IMPLEMENTATION

ANNUAL REPORT ON IMPLEMENTATION - FUNDS MANAGED BY THE EUROPEAN INVESTMENT BANK

CERTIFICATION OF THE ACCOUNTS

The annual accounts of the European Development Fund for the year 2018 have been prepared in accordance with Title X of the Financial Regulation of the 11th European Development Fund and with the accounting principles, rules and methods set out in the notes to the financial statements.

I acknowledge my responsibility for the preparation and presentation of the annual accounts of the European Development Fund in accordance with Article 18 of the Financial Regulation of the 11th European Development Fund.

I have obtained from the authorising officer and from the EIB, who guarantee its reliability, all the information necessary for the production of the accounts that show the European Development Fund's assets and liabilities and the budgetary implementation.

I hereby certify that based on this information, and on such checks as I deemed necessary to sign off the accounts, I have a reasonable assurance that the accounts present a true and fair view of the financial position of the European Development Fund in all material aspects.

Rosa ALDEA BUSQUETS

Accounting Officer

June 2019

IMPLEMENTING AND ACCOUNTING FOR THE EDF RESOURCES

1.BACKGROUND

The European Union (hereinafter referred to as the EU) has cooperative relations with a large number of developing countries. The main objective is to promote economic, social and environmental development, with the primary aim of reducing and eradicating poverty in the long-term, by providing beneficiary countries with development aid and technical assistance. To achieve this, the EU draws up, jointly with the partner countries, cooperation strategies and mobilises the financial resources to implement them. These EU resources allocated to development cooperation come from three sources:

-The EU budget;

-The European Development Fund;

-The European Investment Bank.

The European Development Fund (hereinafter referred to as the EDF) is the main instrument for providing EU aid for development cooperation to the African, Caribbean and Pacific (hereinafter referred to as the ACP) States and Overseas Countries and Territories (hereinafter referred to as the OCTs).

The EDF is not funded by the EU budget. It is established by an internal agreement of the Representatives of the Member States, sitting within the Council, and managed by a specific committee. The European Commission (hereinafter referred to as the Commission) is responsible for the financial implementation of the operations carried out with EDF resources. The European Investment Bank (hereinafter referred to as the EIB) manages the Investment Facility.

During the period 2014-2020, the geographic aid granted to ACP States and OCTs will continue to be mainly funded by the EDF. Each EDF is usually concluded for a period of around five years and is governed by its own Financial Regulation which requires the preparation of financial statements for each individual EDF. Accordingly, financial statements are prepared separately for each EDF in respect of the part that is managed by the Commission. These financial statements are also presented in an aggregated way so as to provide a global view of the financial situation of the resources for which the Commission is responsible.

The Internal Agreement establishing the 11th EDF was signed by the participating Member States, meeting within the Council, in June 2013
  1
  . It came into force on 1 March 2015.

In 2018, the Council adopted the Financial Regulation applicable to the 11th EDF
  2
  . This repealed the previous regulation in force and is applicable to operations financed from previous EDFs without prejudice to existing legal commitments. This Regulation does not apply to the Investment Facility under previous EDFs.

Within the framework of the ACP-EU Partnership Agreement, the Investment Facility was established. This Investment Facility is managed by the EIB and is used to support private sector development in the ACP States by financing essentially – but not exclusively – private investments. The Facility is designed as a renewable fund, so that loan repayments can be reinvested in other operations, thus resulting in a self-renewing and financially independent facility. As the Investment Facility is not managed by the Commission, it is not consolidated in the first part of the annual accounts – the financial statements of the EDF and the related report on financial implementation. The financial statements of the Investment Facility are included as a separate part of the annual accounts (part II) to provide a full picture of the development aid of the EDF.

2.HOW IS THE EDF FUNDED?

The European Council of 2 December 2013 adopted the Multi-annual Financial Framework for 2014-2020. In this context, it was decided that geographical cooperation with the ACP States would not be integrated into the EU budget (budgetised), but would continue to be funded through the existing intergovernmental EDF.

The EU budget is annual and according to the budgetary principle of annuality, expenditure and revenue are planned and authorised for one year. Unlike the EU Budget, the EDF is a fund operating on the basis of multiannuality. Each EDF establishes an overall fund to implement development cooperation during a period of usually five years. As resources are allocated on a multiannual basis, the allocated funds may be used over the period of the EDF. The lack of budget annuality is highlighted in the budgetary reporting, where the budgetary implementation of the EDFs is measured against the total funds.

The EDF resources are "ad hoc" contributions from the EU Member States. Approximately every five years, Member State representatives meet at intergovernmental level to decide on an overall amount that will be allocated to the fund and to oversee its implementation. The Commission then manages the fund in accordance with the Union policy on development cooperation. Since Member States have their own development and aid policies in parallel to the Union policy, the Member States must coordinate their policies with the EU to ensure they are complementary.

In addition to the above mentioned contributions, it is also possible for Member States to enter into cofinancing arrangements or to make voluntary financial contributions to the EDF.

3.YEAR-END REPORTING

3.1.ANNUAL ACCOUNTS

In accordance with Articles 18(3) of the EDF Financial Regulation, the EDF financial statements are prepared on the basis of accrual-based accounting rules that themselves are based on International Public Sector Accounting Standards (IPSAS). The accounting rules adopted by the Accounting Officer of the Commission are applied by all the Institutions and bodies of the EU in order to establish a uniform set of rules for accounting, valuation and presentation of the accounts with a view to harmonising the process for drawing up the financial statements. These EU accounting rules are also applied to the EDF while taking into account the specific nature of its activities.

The preparation of the EDF annual accounts is entrusted to the Commission's Accounting Officer who is the Accounting Officer of the EDF. She ensures that the annual accounts of EDF present a true and fair view of the financial position of the EDF.

The annual accounts are presented as follows:

Part I: Funds managed by the Commission

(I)Financial statements and explanatory notes of the EDF

(II)Financial statements of the EU trust funds consolidated in the EDF

(III)Consolidated financial statements of EDF and the EU trust funds

(IV)Report on financial implementation of the EDF

Part II: Annual report on implementation - Funds managed by the EIB

(I)Financial statements of the Investment Facility

The part 'Financial statements of the European trust funds consolidated in the EDF' includes financial statements of the two trust funds created under the EDF: The Bêkou EU Trust Fund (see section 'Financial statements of the Bêkou EU Trust Fund') and the EU Trust Fund for Africa (see section 'Financial statements of EU Trust Fund for Africa'). The trust funds individual financial statements are prepared under the responsibility of the Commission’s Accounting Officer and are subject to external audit carried out by a private auditor. The trust funds' figures included in these annual accounts are provisional.

The EDF annual accounts must be adopted by the Commission not later than 31 July of the subsequent year and presented to the European Parliament and to the Council for discharge.

4.AUDIT AND DISCHARGE

4.1.AUDIT

The EDF annual accounts are overseen by its external auditor, the European Court of Auditors (hereinafter referred to as the ECA), which draws up an annual report for the European Parliament and the Council.

4.2.DISCHARGE

The final control of the financial implementation of the EDF resources for a given financial year is the discharge. The European Parliament is the discharge authority of the EDF. This means that following the audit and finalisation of the annual accounts it falls to the Council to recommend, and then to the European Parliament to decide, whether to grant discharge to the Commission for the financial implementation of the EDF resources for a given financial year. This decision is based on a review of the accounts and the annual report of the ECA (which includes an official statement of assurance) and replies of the Commission to questions and further information requests.

EUROPEAN DEVELOPMENT FUND

FINANCIAL YEAR 2018

FUNDS MANAGED BY THE EUROPEAN COMMISSION

It should be noted that due to the rounding of figures into millions of euros, some financial data in the tables below may appear not to add-up.

CONTENTS

FINANCIAL STATEMENTS OF THE EDF

EDF BALANCE SHEET

EDF STATEMENT OF FINANCIAL PERFORMANCE

EDF CASHFLOW STATEMENT

EDF STATEMENT OF CHANGES IN NET ASSETS

BALANCE SHEET BY EDF

STATEMENT OF FINANCIAL PERFORMANCE BY EDF

STATEMENT OF CHANGES IN NET ASSETS BY EDF

NOTES TO THE FINANCIAL STATEMENTS OF THE EDF

FINANCIAL STATEMENTS OF THE EU TRUST FUNDS CONSOLIDATED IN EDF

FINAL ANNUAL ACCOUNTS OF THE BÊKOU EU TRUST FUND 2018

BALANCE SHEET

STATEMENT OF FINANCIAL PERFORMANCE

CASHFLOW STATEMENT

STATEMENT OF CHANGES IN NET ASSETS

FINAL ANNUAL ACCOUNTS OF THE EUTF AFRICA 2018

BALANCE SHEET

STATEMENT OF FINANCIAL PERFORMANCE

CASHFLOW STATEMENT

STATEMENT OF CHANGES IN NET ASSETS

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE EU TRUST FUNDS

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE

CONSOLIDATED CASH FLOW STATEMENT

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

EDF REPORT ON FINANCIAL IMPLEMENTATION

FINANCIAL STATEMENTS OF THE EDF

It should be noted that due to the rounding of figures into millions of euros, some financial data in the tables may appear not to add-up.

EDF BALANCE SHEET

| | | | EUR millions |
| --- | --- | --- | --- |
| | Note | 31.12.2018 | 31.12.2017 |
| NON-CURRENT ASSETS | | | |
| Pre-financing | 2.1 | 887 | 582 |
| Trust Fund contributions | 2.2 | 201 | 163 |
| | | 1 088 | 745 |
| CURRENT ASSETS | | | |
| Pre-financing | 2.1 | 1 448 | 1 518 |
| Exchange receivables and non-exchange recoverables | 2.3 | 138 | 92 |
| Cash and cash equivalents | 2.4 | 387 | 347 |
| | | 1 973 | 1 958 |
| TOTAL ASSETS | | 3 061 | 2 703 |
| | | | |
| NON-CURRENT LIABILITIES | | | |
| Provisions | 2.5 | – | (4) |
| Financial liabilities | 2.6 | (18) | (14) |
| | | (18) | (18) |
| CURRENT LIABILITIES | | | |
| Payables | 2.7 | (241) | (563) |
| Accrued charges and deferred income | 2.8 | (1 281) | (733) |
| | | (1 523) | (1 296) |
| TOTAL LIABILITIES | | (1 540) | (1 314) |
| | | | |
| NET ASSETS | | 1 521 | 1 389 |
| | | | |
| FUNDS & RESERVES | | | |
| Called fund capital - active EDFs | 2.9 | 50 423 | 46 173 |
| Called fund capital from closed EDFs carried forward | 2.9 | 2 252 | 2 252 |
| Economic result carried forward from previous years | | (47 037) | (43 219) |
| Economic result of the year | | (4 118) | (3 818) |
| NET ASSETS | | 1 521 | 1 389 |

EUR millions

Note

31.12.2018

31.12.2017

NON-CURRENT ASSETS

Pre-financing

2.1

887

582

Trust Fund contributions

2.2

201

163

1 088

745

CURRENT ASSETS

Pre-financing

2.1

1 448

1 518

Exchange receivables and non-exchange recoverables

2.3

138

92

Cash and cash equivalents

2.4

387

347

1 973

1 958

TOTAL ASSETS

3 061

2 703

NON-CURRENT LIABILITIES

Provisions

2.5

–

(4)

Financial liabilities

2.6

(18)

(14)

(18)

(18)

CURRENT LIABILITIES

Payables

2.7

(241)

(563)

Accrued charges and deferred income

2.8

(1 281)

(733)

(1 523)

(1 296)

TOTAL LIABILITIES

(1 540)

(1 314)

NET ASSETS

1 521

1 389

FUNDS & RESERVES

Called fund capital - active EDFs

2.9

50 423

46 173

Called fund capital from closed EDFs carried forward

2.9

2 252

2 252

Economic result carried forward from previous years

(47 037)

(43 219)

Economic result of the year

(4 118)

(3 818)

NET ASSETS

1 521

1 389

EDF STATEMENT OF FINANCIAL PERFORMANCE

| | | | EUR millions |
| --- | --- | --- | --- |
| | Note | 2018 | 2017 |
| REVENUE | | | |
| Revenue from non-exchange transactions | 3.1 | | |
| Recovery activities | | 4 | 61 |
| | | 4 | 61 |
| Revenue from exchange transactions | 3.2 | | |
| Financial revenue | | 10 | 4 |
| Other revenue | | 46 | 22 |
| | | 57 | 25 |
| Total Revenue | | 60 | 87 |
| EXPENSES | | | |
| Aid instruments | 3.3 | (4 054) | (3 700) |
| Co-financing expenses | 3.4 | 17 | (42) |
| Finance costs | 3.6 | 7 | (8) |
| Other expenses | 3.7 | (148) | (154) |
| Total Expenses | | (4 178) | (3 904) |
| | | | |
| ECONOMIC RESULT OF THE YEAR | | (4 118) | (3 818) |

EUR millions

Note

2018

2017

REVENUE

Revenue from non-exchange transactions

3.1

Recovery activities

4

61

4

61

Revenue from exchange transactions

3.2

Financial revenue

10

4

Other revenue

46

22

57

25

Total Revenue

60

87

EXPENSES

Aid instruments

3.3

(4 054)

(3 700)

Co-financing expenses

3.4

17

(42)

Finance costs

3.6

7

(8)

Other expenses

3.7

(148)

(154)

Total Expenses

(4 178)

(3 904)

ECONOMIC RESULT OF THE YEAR

(4 118)

(3 818)

EDF CASHFLOW STATEMENT

| | | | EUR millions |
| --- | --- | --- | --- |
| | Note | 2018 | 2017 |
| Economic result of the year | | (4 118) | (3 818) |
| Operating activities | | | |
| Capital increase - contributions (net) | | 4 250 | 3 850 |
| (Increase)/decrease in trust funds contributions | | (38) | (66) |
| (Increase)/decrease in pre-financing | | (235) | (319) |
| (Increase)/decrease in exchange receivables and non-exchange recoverables | | (46) | 40 |
| Increase/(decrease) in provisions | | (4) | – |
| Increase/(decrease) in financial liabilities | | 3 | 8 |
| Increase/(decrease) in payables | | (322) | 14 |
| Increase/(decrease) in accrued charges and deferred income | | 548 | (42) |
| | | | |
| NET CASHFLOW | | 40 | (333) |
| | | | |
| Net increase/(decrease) in cash and cash equivalents | | 40 | (333) |
| Cash and cash equivalents at the beginning of the year | 2.4 | 347 | 680 |
| Cash and cash equivalents at year-end | 2.4 | 387 | 347 |

EUR millions

Note

2018

2017

Economic result of the year

(4 118)

(3 818)

Operating activities

Capital increase - contributions (net)

4 250

3 850

(Increase)/decrease in trust funds contributions

(38)

(66)

(Increase)/decrease in pre-financing

(235)

(319)

(Increase)/decrease in exchange receivables and non-exchange recoverables

(46)

40

Increase/(decrease) in provisions

(4)

–

Increase/(decrease) in financial liabilities

3

8

Increase/(decrease) in payables

(322)

14

Increase/(decrease) in accrued charges and deferred income

548

(42)

NET CASHFLOW

40

(333)

Net increase/(decrease) in cash and cash equivalents

40

(333)

Cash and cash equivalents at the beginning of the year

2.4

347

680

Cash and cash equivalents at year-end

2.4

387

347

EDF STATEMENT OF CHANGES IN NET ASSETS

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Fund capital - active EDFs (A) | Uncalled funds - active EDFs (B) | Called fund capital - active EDFs (C) = (A)-(B) | Cumulative Reserves (D) | Called fund capital from closed EDFs carried forward (E) | Total Net Assets (C)+(D)+(E) |
| BALANCE AS AT 31.12.2016 | 73 464 | 31 140 | 42 323 | (43 219) | 2 252 | 1 357 |
| Capital increase - contributions | – | (4 050) | 4 050 | – | – | 4 050 |
| Refund to Member States | (200) | – | (200) | – | – | (200) |
| Economic result of the year | – | – | – | (3 818) | – | (3 818) |
| BALANCE AS AT 31.12.2017 | 73 264 | 27 090 | 46 173 | (47 037) | 2 252 | 1 389 |
| Capital increase - contributions | – | (4 250) | 4 250 | – | – | 4 250 |
| Economic result of the year | – | – | – | (4 118) | – | (4 118) |
| BALANCE AS AT 31.12.2018 | 73 264 | 22 840 | 50 423 | (51 155) | 2 252 | 1 521 |

EUR millions

Fund capital - active EDFs (A)

Uncalled funds - active EDFs (B)

Called fund capital - active EDFs (C) = (A)-(B)

Cumulative Reserves (D)

Called fund capital from closed EDFs carried forward (E)

Total Net Assets (C)+(D)+(E)

BALANCE AS AT 31.12.2016

73 464

31 140

42 323

(43 219)

2 252

1 357

Capital increase - contributions

–

(4 050)

4 050

–

–

4 050

Refund to Member States

(200)

–

(200)

–

–

(200)

Economic result of the year

–

–

–

(3 818)

–

(3 818)

BALANCE AS AT 31.12.2017

73 264

27 090

46 173

(47 037)

2 252

1 389

Capital increase - contributions

–

(4 250)

4 250

–

–

4 250

Economic result of the year

–

–

–

(4 118)

–

(4 118)

BALANCE AS AT 31.12.2018

73 264

22 840

50 423

(51 155)

2 252

1 521

BALANCE SHEET BY EDF

| | | | | | | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | 31.12.2018 | | | | | 31.12.2017 | | | | |
| | Note | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | Total | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | Total |
| NON-CURRENT ASSETS | | | | | | | | | | | |
| Pre-financing | 2.1 | – | 23 | 520 | 344 | 887 | – | 32 | 221 | 330 | 582 |
| Trust Fund contributions | 2.2 | – | – | – | 201 | 201 | – | 86 | – | 77 | 163 |
| | | – | 23 | 520 | 546 | 1 088 | – | 118 | 221 | 407 | 745 |
| CURRENT ASSETS | | | | | | – | | | | | – |
| Pre-financing | 2.1 | 0 | 19 | 445 | 984 | 1 448 | 1 | 40 | 867 | 610 | 1 518 |
| Exchange receivables and non-exchange recoverables | 2.3 | 1 | 65 | 36 | 36 | 138 | 0 | 64 | 17 | 11 | 92 |
| Inter-EDF accounts | 2.3 | 183 | 111 | 2 421 | – | 2 715 | 189 | 88 | 3 555 | – | 3 832 |
| Cash and cash equivalents | 2.4 | – | – | – | 387 | 387 | – | – | – | 347 | 347 |
| | | 184 | 195 | 2 902 | 1 407 | 4 689 | 190 | 193 | 4 439 | 968 | 5 791 |
| TOTAL ASSETS* | | 184 | 218 | 3 422 | 1 953 | 5 777 | 190 | 311 | 4 660 | 1 375 | 6 536 |
| | | | | | | – | | | | | – |
| NON-CURRENT LIABILITIES | | | | | | – | | | | | – |
| Provisions | 2.5 | – | – | – | – | – | – | – | – | (4) | (4) |
| Financial liabilities | 2.6 | – | – | (1) | (16) | (18) | – | – | (7) | (7) | (14) |
| | | – | – | (1) | (16) | (18) | – | – | (7) | (11) | (18) |
| CURRENT LIABILITIES | | | | | | – | | | | | – |
| Payables | 2.7 | (0) | (6) | (125) | (111) | (241) | (0) | (13) | (133) | (417) | (563) |
| Inter-EDF accounts | 2.3 | – | – | – | (2 715) | (2 715) | – | – | – | (3 833) | (3 833) |
| Accrued charges and deferred income | 2.8 | (0) | (83) | (358) | (840) | (1 281) | (0) | (76) | (517) | (140) | (733) |
| | | (0) | (89) | (482) | (3 666) | (4 237) | (0) | (89) | (650) | (4 389) | (5 128) |
| TOTAL LIABILITIES* | | (0) | (89) | (484) | (3 682) | (4 255) | (0) | (89) | (657) | (4 401) | (5 147) |
| | | | | | | – | | | | | – |
| NET ASSETS* | | 184 | 129 | 2 938 | (1 729) | 1 521 | 190 | 222 | 4 003 | (3 025) | 1 389 |
| | | | | | | – | | | | | – |
| FUNDS & RESERVES | | | | | | – | | | | | – |
| Called fund capital - active EDFs | 2.9 | 12 164 | 10 773 | 20 960 | 6 527 | 50 423 | 12 164 | 10 773 | 20 960 | 2 277 | 46 173 |
| Called fund capital from closed EDFs carried forward | 2.9 | 627 | 1 625 | – | – | 2 252 | 627 | 1 625 | – | – | 2 252 |
| Called fund capital transfers between active EDFs | 2.9 | (2 509) | 2 137 | 55 | 317 | – | (2 503) | 2 177 | 120 | 206 | – |
| Economic result carried forward from previous years | | (10 098) | (14 352) | (17 078) | (5 508) | (47 037) | (10 098) | (14 339) | (15 812) | (2 969) | (43 219) |
| Economic result of the year | | 0 | (53) | (1 000) | (3 065) | (4 118) | 0 | (13) | (1 266) | (2 539) | (3 818) |
| NET ASSETS | | 184 | 129 | 2 938 | (1 729) | 1 521 | 190 | 222 | 4 003 | (3 025) | 1 389 |

EUR millions

31.12.2018

31.12.2017

Note

Eighth EDF

Ninth EDF

10th EDF

11th EDF

Total

Eighth EDF

Ninth EDF

10th EDF

11th EDF

Total

NON-CURRENT ASSETS

Pre-financing

2.1

–

23

520

344

887

–

32

221

330

582

Trust Fund contributions

2.2

–

–

–

201

201

–

86

–

77

163

–

23

520

546

1 088

–

118

221

407

745

CURRENT ASSETS

–

–

Pre-financing

2.1

0

19

445

984

1 448

1

40

867

610

1 518

Exchange receivables and non-exchange recoverables

2.3

1

65

36

36

138

0

64

17

11

92

Inter-EDF accounts

2.3

183

111

2 421

–

2 715

189

88

3 555

–

3 832

Cash and cash equivalents

2.4

–

–

–

387

387

–

–

–

347

347

184

195

2 902

1 407

4 689

190

193

4 439

968

5 791

TOTAL ASSETS*

184

218

3 422

1 953

5 777

190

311

4 660

1 375

6 536

–

–

NON-CURRENT LIABILITIES

–

–

Provisions

2.5

–

–

–

–

–

–

–

–

(4)

(4)

Financial liabilities

2.6

–

–

(1)

(16)

(18)

–

–

(7)

(7)

(14)

–

–

(1)

(16)

(18)

–

–

(7)

(11)

(18)

CURRENT LIABILITIES

–

–

Payables

2.7

(0)

(6)

(125)

(111)

(241)

(0)

(13)

(133)

(417)

(563)

Inter-EDF accounts

2.3

–

–

–

(2 715)

(2 715)

–

–

–

(3 833)

(3 833)

Accrued charges and deferred income

2.8

(0)

(83)

(358)

(840)

(1 281)

(0)

(76)

(517)

(140)

(733)

(0)

(89)

(482)

(3 666)

(4 237)

(0)

(89)

(650)

(4 389)

(5 128)

TOTAL LIABILITIES*

(0)

(89)

(484)

(3 682)

(4 255)

(0)

(89)

(657)

(4 401)

(5 147)

–

–

NET ASSETS*

184

129

2 938

(1 729)

1 521

190

222

4 003

(3 025)

1 389

–

–

FUNDS & RESERVES

–

–

Called fund capital - active EDFs

2.9

12 164

10 773

20 960

6 527

50 423

12 164

10 773

20 960

2 277

46 173

Called fund capital from closed EDFs carried forward

2.9

627

1 625

–

–

2 252

627

1 625

–

–

2 252

Called fund capital transfers between active EDFs

2.9

(2 509)

2 137

55

317

–

(2 503)

2 177

120

206

–

Economic result carried forward from previous years

(10 098)

(14 352)

(17 078)

(5 508)

(47 037)

(10 098)

(14 339)

(15 812)

(2 969)

(43 219)

Economic result of the year

0

(53)

(1 000)

(3 065)

(4 118)

0

(13)

(1 266)

(2 539)

(3 818)

NET ASSETS

184

129

2 938

(1 729)

1 521

190

222

4 003

(3 025)

1 389

- from total assets and liabilities, inter-EDF accounts should be deducted in order to reconcile them to the totals on the EDF Balance sheet

STATEMENT OF FINANCIAL PERFORMANCE BY EDF

| | | | | | | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | 2018 | | | | | 2017 | | | |
| | Note | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | Total | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | Total |
| | | | | | | | | | | | |
| REVENUE | | | | | | | | | | | |
| Revenue from non-exchange transactions | 3.1 | | | | | | | | | | |
| Recovery activities | | 0 | 3 | (3) | 4 | 4 | 0 | 5 | 49 | 7 | 61 |
| | | 0 | 3 | (3) | 4 | 4 | 0 | 5 | 49 | 7 | 61 |
| Revenue from exchange transactions | 3.2 | | | | | | | | | | |
| Financial revenue | | 0 | 2 | 8 | 1 | 10 | (0) | (1) | 4 | (0) | 4 |
| Other revenue | | 1 | 6 | 27 | 12 | 46 | 1 | 5 | 13 | 4 | 22 |
| | | 1 | 8 | 35 | 13 | 57 | 1 | 4 | 17 | 4 | 25 |
| Total revenue | | 1 | 11 | 32 | 17 | 60 | 1 | 9 | 66 | 11 | 87 |
| EXPENSES | | | | | | | | | | | |
| Aid instruments | 3.3 | 0 | (59) | (984) | (3 012) | (4 054) | (0) | (14) | (1 251) | (2 435) | (3 700) |
| Co-financing expenses | 3.4 | – | – | 18 | (1) | 17 | – | – | (42) | (1) | (42) |
| Finance costs | 3.6 | 0 | 1 | 5 | 1 | 7 | 1 | 1 | (10) | (0) | (8) |
| Other expenses | 3.7 | (1) | (7) | (71) | (70) | (148) | (2) | (9) | (29) | (114) | (154) |
| Total expenses | | (0) | (64) | (1 031) | (3 082) | (4 178) | (1) | (22) | (1 332) | (2 549) | (3 904) |
| | | | | | | | | | | | |
| ECONOMIC RESULT OF THE YEAR | | 0 | (53) | (1 000) | (3 065) | (4 118) | 0 | (13) | (1 266) | (2 539) | (3 818) |

EUR millions

2018

2017

Note

Eighth EDF

Ninth EDF

10th EDF

11th EDF

Total

Eighth EDF

Ninth EDF

10th EDF

11th EDF

Total

REVENUE

Revenue from non-exchange transactions

3.1

Recovery activities

0

3

(3)

4

4

0

5

49

7

61

0

3

(3)

4

4

0

5

49

7

61

Revenue from exchange transactions

3.2

Financial revenue

0

2

8

1

10

(0)

(1)

4

(0)

4

Other revenue

1

6

27

12

46

1

5

13

4

22

1

8

35

13

57

1

4

17

4

25

Total revenue

1

11

32

17

60

1

9

66

11

87

EXPENSES

Aid instruments

3.3

0

(59)

(984)

(3 012)

(4 054)

(0)

(14)

(1 251)

(2 435)

(3 700)

Co-financing expenses

3.4

–

–

18

(1)

17

–

–

(42)

(1)

(42)

Finance costs

3.6

0

1

5

1

7

1

1

(10)

(0)

(8)

Other expenses

3.7

(1)

(7)

(71)

(70)

(148)

(2)

(9)

(29)

(114)

(154)

Total expenses

(0)

(64)

(1 031)

(3 082)

(4 178)

(1)

(22)

(1 332)

(2 549)

(3 904)

ECONOMIC RESULT OF THE YEAR

0

(53)

(1 000)

(3 065)

(4 118)

0

(13)

(1 266)

(2 539)

(3 818)

STATEMENT OF CHANGES IN NET ASSETS BY EDF

| | | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Eighth EDF | Fund capital - active EDFs (A) | Uncalled funds - active EDFs (B) | Called fund capital - active EDFs (C) = (A)-(B) | Cumulative Reserves (D) | Called fund capital from closed EDFs carried forward (E) | Called fund capital transfers between active EDFs (F) | Total Net Assets (C)+(D)+ (E)+(F) |
| BALANCE AS AT 31.12.2016 | 12 164 | – | 12 164 | (10 098) | 627 | (2 496) | 197 |
| Transfers to/from the 10th EDF | | | – | | | (7) | (7) |
| Transfers to/from the 11th EDF | | | – | | | – | – |
| Economic result of the year | | | – | 0 | | | 0 |
| BALANCE AS AT 31.12.2017 | 12 164 | – | 12 164 | (10 098) | 627 | (2 503) | 190 |
| Transfers to/from the 10th EDF | | | – | | | (7) | (7) |
| Economic result of the year | | | – | 0 | | – | 0 |
| BALANCE AS AT 31.12.2018 | 12 164 | – | 12 164 | (10 098) | 627 | (2 509) | 184 |

EUR millions

Eighth EDF

Fund capital - active EDFs (A)

Uncalled funds - active EDFs (B)

Called fund capital - active EDFs (C) = (A)-(B)

Cumulative Reserves (D)

Called fund capital from closed EDFs carried forward (E)

Called fund capital transfers between active EDFs (F)

Total Net Assets (C)+(D)+ (E)+(F)

BALANCE AS AT 31.12.2016

12 164

–

12 164

(10 098)

627

(2 496)

197

Transfers to/from the 10th EDF

–

(7)

(7)

Transfers to/from the 11th EDF

–

–

–

Economic result of the year

–

0

0

BALANCE AS AT 31.12.2017

12 164

–

12 164

(10 098)

627

(2 503)

190

Transfers to/from the 10th EDF

–

(7)

(7)

Economic result of the year

–

0

–

0

BALANCE AS AT 31.12.2018

12 164

–

12 164

(10 098)

627

(2 509)

184

EUR millions

| | | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Ninth EDF | Fund capital - active EDFs (A) | Uncalled funds - active EDFs (B) | Called fund capital - active EDFs (C) = (A)-(B) | Cumulative Reserves (D) | Called fund capital from closed EDFs carried forward (E) | Called fund capital transfers between active EDFs (F) | Total Net Assets (C)+(D)+


  (E)+(F) |
| BALANCE AS AT 31.12.2016 | 10 973 | – | 10 973 | (14 339) | 1 625 | 2 214 | 472 |
| Refund to Member States | (200) | – | (200) | | | | (200) |
| Transfers to/from the 10th EDF | | | – | | | (37) | (37) |
| Economic result of the year | | | – | (13) | | | (13) |
| BALANCE AS AT 31.12.2017 | 10 773 | – | 10 773 | (14 352) | 1 625 | 2 177 | 222 |
| Transfers to/from the 10th EDF | | | – | | | (40) | (40) |
| Transfers to/from the 11th EDF | | | – | | | – | – |
| Economic result of the year | | | – | (53) | | – | (53) |
| BALANCE AS AT 31.12.2018 | 10 773 | – | 10 773 | (14 406) | 1 625 | 2 137 | 129 |

Ninth EDF

Fund capital - active EDFs (A)

Uncalled funds - active EDFs (B)

Called fund capital - active EDFs (C) = (A)-(B)

Cumulative Reserves (D)

Called fund capital from closed EDFs carried forward (E)

Called fund capital transfers between active EDFs (F)

Total Net Assets (C)+(D)+

(E)+(F)

BALANCE AS AT 31.12.2016

10 973

–

10 973

(14 339)

1 625

2 214

472

Refund to Member States

(200)

–

(200)

(200)

Transfers to/from the 10th EDF

–

(37)

(37)

Economic result of the year

–

(13)

(13)

BALANCE AS AT 31.12.2017

10 773

–

10 773

(14 352)

1 625

2 177

222

Transfers to/from the 10th EDF

–

(40)

(40)

Transfers to/from the 11th EDF

–

–

–

Economic result of the year

–

(53)

–

(53)

BALANCE AS AT 31.12.2018

10 773

–

10 773

(14 406)

1 625

2 137

129

EUR millions

| | | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- | --- |
| 10th EDF | Fund capital - active EDFs (A) | Uncalled funds - active EDFs (B) | Called fund capital - active EDFs (C) = (A)-(B) | Cumulative Reserves (D) | Called fund capital from closed EDFs carried forward (E) | Called fund capital transfers between active EDFs (F) | Total Net Assets (C)+(D)+ (E)+(F) |
| BALANCE AS AT 31.12.2016 | 20 960 | 1 773 | 19 187 | (15 812) | – | 247 | 3 622 |
| Capital increase - contributions | | (1 773) | 1 773 | | | | 1 773 |
| Transfers to/from the Eighth and Ninth EDF | | | – | | | 44 | 44 |
| Transfers to/from the 11th EDF | | | – | | | (171) | (171) |
| Economic result of the year | | | – | (1 266) | | | (1 266) |
| BALANCE AS AT 31.12.2017 | 20 960 | | 20 960 | (17 078) | – | 120 | 4 003 |
| Transfers to/from the Eighth and Ninth EDF | | | – | | | 47 | 47 |
| Transfers to/from the 11th EDF | | | – | | | (112) | (112) |
| Economic result of the year | | | – | (1 000) | | – | (1 000) |
| BALANCE AS AT 31.12.2018 | 20 960 | – | 20 960 | (18 077) | – | 55 | 2 938 |

10th EDF

Fund capital - active EDFs (A)

Uncalled funds - active EDFs (B)

Called fund capital - active EDFs (C) = (A)-(B)

Cumulative Reserves (D)

Called fund capital from closed EDFs carried forward (E)

Called fund capital transfers between active EDFs (F)

Total Net Assets (C)+(D)+ (E)+(F)

BALANCE AS AT 31.12.2016

20 960

1 773

19 187

(15 812)

–

247

3 622

Capital increase - contributions

(1 773)

1 773

1 773

Transfers to/from the Eighth and Ninth EDF

–

44

44

Transfers to/from the 11th EDF

–

(171)

(171)

Economic result of the year

–

(1 266)

(1 266)

BALANCE AS AT 31.12.2017

20 960

20 960

(17 078)

–

120

4 003

Transfers to/from the Eighth and Ninth EDF

–

47

47

Transfers to/from the 11th EDF

–

(112)

(112)

Economic result of the year

–

(1 000)

–

(1 000)

BALANCE AS AT 31.12.2018

20 960

–

20 960

(18 077)

–

55

2 938

EUR millions

| | | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- | --- |
| 11th EDF | Fund capital - active EDFs (A) | Uncalled funds - active EDFs (B) | Called fund capital - active EDFs (C) = (A)-(B) | Cumulative Reserves (D) | Called fund capital from closed EDFs carried forward (E) | Called fund capital transfers between active EDFs (F) | Total Net Assets (C)+(D)+ (E)+(F) |
| BALANCE AS AT 31.12.2016 | 29 367 | 29 367 | – | (2 969) | – | 35 | (2 934) |
| Capital increase - contributions | | (2 277) | 2 277 | | | – | 2 277 |
| Transfers to/from the Eighth, Ninth and 10th EDF | | | – | | – | 171 | 171 |
| Economic result of the year | | | – | (2 539) | | – | (2 539) |
| BALANCE AS AT 31.12.2017 | 29 367 | 27 090 | 2 277 | (5 508) | – | 206 | (3 025) |
| Capital increase - contributions | | (4 250) | 4 250 | | | 112 | 4 362 |
| Transfers to/from the Eighth, Ninth and 10th EDF | | | – | | | – | – |
| Economic result of the year | | | – | (3 065) | | – | (3 065) |
| BALANCE AS AT 31.12.2018 | 29 367 | 22 840 | 6 527 | (8 573) | – | 317 | (1 729) |

11th EDF

Fund capital - active EDFs (A)

Uncalled funds - active EDFs (B)

Called fund capital - active EDFs (C) = (A)-(B)

Cumulative Reserves (D)

Called fund capital from closed EDFs carried forward (E)

Called fund capital transfers between active EDFs (F)

Total Net Assets (C)+(D)+ (E)+(F)

BALANCE AS AT 31.12.2016

29 367

29 367

–

(2 969)

–

35

(2 934)

Capital increase - contributions

(2 277)

2 277

–

2 277

Transfers to/from the Eighth, Ninth and 10th EDF

–

–

171

171

Economic result of the year

–

(2 539)

–

(2 539)

BALANCE AS AT 31.12.2017

29 367

27 090

2 277

(5 508)

–

206

(3 025)

Capital increase - contributions

(4 250)

4 250

112

4 362

Transfers to/from the Eighth, Ninth and 10th EDF

–

–

–

Economic result of the year

–

(3 065)

–

(3 065)

BALANCE AS AT 31.12.2018

29 367

22 840

6 527

(8 573)

–

317

(1 729)

NOTES TO THE FINANCIAL STATEMENTS OF THE EDF

It should be noted that due to the rounding of figures into millions of euros, some financial data in the tables may appear not to add-up.

1.SIGNIFICANT ACCOUNTING POLICIES

1.1.ACCOUNTING PRINCIPLES

The objective of financial statements is to provide information about the financial position, performance and cashflows of an entity that is useful to a wide range of users.

The overall considerations (or accounting principles) to be followed when preparing the financial statements are laid down in EU Accounting Rule 1 'Financial Statements' and are the same as those described in IPSAS 1: fair presentation, accrual basis, going concern, consistency of presentation, materiality, aggregation, offsetting and comparative information. The qualitative characteristics of financial reporting are relevance, faithful representation (reliability), understandability, timeliness, comparability and verifiability.

1.2.BASIS OF PREPARATION

2.Reporting period

Financial statements are presented annually. The accounting year begins on 1 January and ends on 31 December.

3.Currency and basis for conversion

The annual accounts are presented in millions of euros, the euro being the EDF's functional and reporting currency. Foreign currency transactions are translated into euros using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the re-translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of financial performance. Different conversion methods apply to property, plant and equipment and intangible assets, which retain their value in euros at the date when they were purchased.

Year-end balances of monetary assets and liabilities denominated in foreign currencies are translated into euros on the basis of the European Central Bank (ECB) exchange rates applying on 31 December.

Euro exchange rates

| Currency | 31.12.2018 | 31.12.2017 | Currency | 31.12.2018 | 31.12.2017 |
| --- | --- | --- | --- | --- | --- |
| BGN | 1.9558 | 1.9558 | PLN | 4.3014 | 4.177 |
| CZK | 25.7240 | 25.5350 | RON | 4.6635 | 4.6585 |
| DKK | 7.4673 | 7.4449 | SEK | 10.2548 | 9.8438 |
| GBP | 0.8945 | 0.8872 | CHF | 1.1269 | 1.1702 |
| HRK | 7.4125 | 7.4400 | JPY | 125.8500 | 135.01 |
| HUF | 320.9800 | 310.3300 | USD | 1.145 | 1.1993 |

Currency

31.12.2018

31.12.2017

Currency

31.12.2018

31.12.2017

BGN

1.9558

1.9558

PLN

4.3014

4.177

CZK

25.7240

25.5350

RON

4.6635

4.6585

DKK

7.4673

7.4449

SEK

10.2548

9.8438

GBP

0.8945

0.8872

CHF

1.1269

1.1702

HRK

7.4125

7.4400

JPY

125.8500

135.01

HUF

320.9800

310.3300

USD

1.145

1.1993

4.Use of estimates

In accordance with IPSAS and generally accepted accounting principles, the financial statements necessarily include amounts based on estimates and assumptions by management based on the most reliable information available. Significant estimates include, but are not limited to accrued and deferred revenue and charges, provisions, financial risk on accounts receivables, contingent assets and liabilities, and degree of impairment of assets. Actual results could differ from those estimates.

Reasonable estimates are an essential part of the preparation of financial statements and do not undermine their reliability. An estimate may need revision if changes occur in the circumstances on which the estimate was based or as a result of new information or more experience. By its nature, the revision of an estimate does not relate to prior periods and is not the correction of an error. The effect of a change in accounting estimate shall be recognised in the surplus or deficit in the periods in which it becomes known.

4.1.BALANCE SHEET

5.Financial assets

Financial assets are classified in the following categories: financial assets at fair value through surplus or deficit; loans and receivables; held-to-maturity investments; and available for sale financial assets. The classification of the financial instruments is determined at initial recognition and re-evaluated at each balance sheet date.

(I)Financial assets at fair value through surplus or deficit

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by the entity. Derivatives are also categorised in this category. Assets in this category are classified as current assets if they are expected to be realised within 12 months of the balance sheet date. During this financial year, the entity did not hold any investments in this category.

(II)Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the entity provides money, goods or services directly to a debtor with no intention of trading the receivable. They are included in non-current assets, except for maturities within 12 months of the balance sheet date. Loans and receivables include term deposits with the original maturity above three months.

(III)Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the entity has the positive intention and ability to hold to maturity. During this financial year, the entity did not hold any investments in this category.

(IV)Available for sale financial assets

Available for sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are classified as either current or non-current assets, depending on the period of time the entity expects to hold them, which is usually the maturity date. During this financial year, the entity did not hold any investments in this category.

Initial recognition and measurement

Purchases and sales of financial assets at fair value through surplus or deficit, held-to-maturity and available for sale are recognised on trade date - the date on which the entity commits to purchase or sell the asset. Cash equivalents and loans are recognised when cash is deposited in a financial institution or advanced to borrowers. Financial instruments are initially recognised at fair value. For all financial assets not carried at fair value through surplus or deficit transaction costs are added to the fair value at initial recognition.

Financial instruments are derecognised when the rights to receive cashflows from the investments have expired or the entity has transferred substantially all risks and rewards of ownership to another party.

Subsequent measurement

Financial assets at fair value through surplus or deficit are subsequently carried at fair value with gains and losses arising from changes in the fair value being included in the statement of financial performance in the period in which they arise.

Loans and receivables and held-to maturity investments are carried at amortised cost using the effective interest method.

Available for sale financial assets are subsequently carried at fair value. Gains and losses arising from changes in the fair value are recognised in the fair value reserve. Interest on available for sale financial assets calculated using the effective interest method is recognised in the statement of financial performance.

The entity assesses at each balance sheet date whether there is objective evidence that a financial asset is impaired and whether an impairment loss should be recorded in the statement of financial performance.

6.Pre-financing amounts

Pre-financing is a payment intended to provide the beneficiary with a cash advance, i.e. a float. It may be split into a number of payments over a period defined in the particular contract, decision, agreement or basic legal act. The float or advance is either used for the purpose for which it was provided during the period defined in the agreement or it is repaid. If the beneficiary does not incur eligible expenditure, he has the obligation to return the pre-financing advance to the entity. The amount of the pre-financing may be reduced (wholly or partially) by the acceptance of eligible costs (which are recognised as expenses).

Pre-financing is, on subsequent balance sheet dates, measured at the amount initially recognised on the balance sheet less eligible expenses (including estimated amounts where necessary) incurred during the period.

7.Receivables and recoverables

As the EU accounting rules require a separate presentation of exchange and non-exchange transactions, for the purpose of drawing up the accounts, receivables are defined as stemming from exchange transactions and recoverables are defined as stemming from non-exchange transactions (when the entity receives value from another entity without directly giving approximately equal value in exchange).

Receivables from exchange transactions meet the definition of financial instruments and are thus classified as loans and receivables and measured accordingly (see 1.3.1 above).

Recoverables from non-exchange transactions are carried at original amount (adjusted for interests and penalties) less write-down for impairment. A write-down for impairment is established when there is objective evidence that the entity will not be able to collect all amounts due according to the original terms of the recoverables. The amount of the write-down is the difference between the asset's carrying amount and the recoverable amount. The amount of the write-down is recognised in the statement of financial performance.

8.Cash and cash equivalents

Cash and cash equivalents are financial instruments and include cash at hand, deposits held at call or at short notice with banks, and other short-term highly liquid investments with original maturities of three months or less.

9.Provisions

Provisions are recognised when the entity has a present legal or constructive obligation towards third parties as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognised for future operating losses. The amount of the provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date. Where the provision involves a large number of items, the obligation is estimated by weighting all possible outcomes by their associated probabilities ('expected value' method).

10.Payables

Included under accounts payable are both amounts related to exchange transactions such as the purchase of goods and services and to non-exchange transactions e.g. to cost claims from beneficiaries, grants or other EU funding.

Where grants or other funding are provided to the beneficiaries, the cost claims are recorded as payables for the requested amount when the cost claim is received. Upon verification and acceptance of the eligible costs, the payables are valued at the accepted and eligible amount.

Payables arising from the purchase of goods and services are recognised at invoice reception for the original amount and corresponding expenses are entered in the accounts when the supplies or services are delivered and accepted by the entity.

11.Accrued and deferred revenue and charges

Transactions and events are recognised in the financial statements in the period to which they relate. At year-end, if an invoice is not yet issued but the service has been rendered, the supplies have been delivered by the entity or a contractual agreement exists (e.g. by reference to a contract), an accrued revenue will be recognised in the financial statements. In addition, at year-end, if an invoice is issued but the services have not yet been rendered or the goods supplied have not yet been delivered, the revenue will be deferred and recognised in the subsequent accounting period.

Expenses are also accounted for in the period to which they relate. At the end of the accounting period, accrued expenses are recognised based on an estimated amount of the transfer obligation of the period. The calculation of accrued expenses is done in accordance with detailed operational and practical guidelines issued by the Accounting Officer which aim at ensuring that the financial statements provide a faithful representation of the economic and other phenomena they purport to represent. By analogy, if a payment has been made in advance for services or goods that have not yet been received, the expense will be deferred and recognised in the subsequent accounting period.

11.1.STATEMENT OF FINANCIAL PERFORMANCE

12.Revenue

Revenue comprises gross inflows of economic benefits or service potential received and receivable by the entity, which represents an increase in net assets, other than increases relating to contributions from owners.

Depending on the nature of the underlying transactions in the statement of financial performance it is distinguished between:

(I)Revenue from non-exchange transactions

Revenue from non-exchange transactions are taxes and transfers because the transferor provides resources to the recipient entity without the recipient entity providing approximately equal value directly in exchange.

Transfers are inflows of future economic benefits or service potential from non-exchange transactions, other than taxes. The entity shall recognise an asset in respect of transfers when the entity controls the resources as a result of a past event (the transfer) and expects to receive future economic benefits or service potential from those resources, and when the fair value can be reliably measured. An inflow of resources from a non-exchange transaction recognised as an asset (i.e. cash) is also recognised as revenue, except to the extent that the entity has a present obligation in respect of that transfer (condition), which needs to be satisfied before the revenue can be recognised. Until the condition is met the revenue is deferred and recognised as a liability (pre-financing received).

(II)Revenue from exchange transactions

Revenue from the sale of goods and services is recognised when the significant risk and rewards of ownership of the goods are transferred to the purchaser. Revenue associated with a transaction involving the provision of services is recognised by reference to the stage of completion of the transaction at the reporting date.

13.Expenses

Expenses are decreases in economic benefits or service potential during the reporting period in the form of outflows or consumption of assets or incurrence of liabilities that result in decreases in net assets/equity. They include both the expenses from exchange transactions and expenses from nonexchange transactions.

Expenses from exchange transactions arising from the purchase of goods and services are recognised when the supplies are delivered and accepted by the entity. They are valued at original invoice amount. Furthermore, at the balance sheet date expenses related to the service delivered during the period for which an invoice has not yet been received or accepted are recognised in the statement of financial performance.

Expenses from nonexchange transactions relate to transfers to beneficiaries and can be of three types: entitlements, transfers under agreement and discretionary grants, contributions and donations. Transfers are recognised as expenses in the period during which the events giving rise to the transfer occurred, as long as the nature of the transfer is allowed by regulation or an agreement has been signed authorising the transfer; any eligibility criteria have been met by the beneficiary; and a reasonable estimate of the amount can be made.

When a request for payment or cost claim is received and meets the recognition criteria, it is recognised as an expense for the eligible amount. At year-end, incurred eligible expenses due to the beneficiaries but not yet reported are estimated and recorded as accrued expense.

13.1.CONTINGENT ASSETS AND LIABILITIES

14.Contingent assets

A contingent asset is a possible asset that arises from past events and of which the existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. A contingent asset is disclosed when an inflow of economic benefits or service potential is probable.

15.Contingent liabilities

A contingent liability is a possible obligation that arises from past events and of which the existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or a present obligation that arises from past events but is not recognised because: it is not probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation or, in the rare circumstances where the amount of the obligation cannot be measured with sufficient reliability.

15.1.CO-FINANCING

Co-financing contributions received fulfil the criteria of revenues from non-exchange transactions under conditions and they are presented as payables to Member States, non-Member States and others. The EDF is required to use the contributions to deliver services to third parties or is otherwise required to return the assets (the contributions received). The outstanding payables relating to co-financing agreements represent the co-financing contributions received less the expenses incurred related to the project. The effect on net assets is nil.

Expenses relating to co-financing projects are recognised as they are incurred. The corresponding amount of contributions is recognised as operating revenue and the effect on economic result of the year is nil.

16.NOTES TO THE BALANCE SHEET

ASSETS

16.1.PRE-FINANCING

Many contracts provide for payments of advances before the commencement of works, delivery of supplies or the provision of services. Sometimes the payment schedules of contracts foresee payments on the basis of progress reports. Pre-financing is normally paid in the currency of the country or territory where the project is executed.

The timing of the recoverability or utilisation of pre-financing governs whether it is disclosed as a current or a non-current pre-financing asset. The utilisation is defined by the project's underlying agreement. Any repayments or utilisation due within twelve months of the reporting date are disclosed as current prefinancing. As many of the EDF projects are long-term in nature, it is necessary that the related advances are available for more than one year. Thus some pre-financing amounts are shown as noncurrent assets.

| | | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | Note | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Non-current pre-financing | 2.1.1 | – | 23 | 520 | 344 | 887 | 582 |
| Current pre-financing | 2.1.2 | 0 | 19 | 445 | 984 | 1 448 | 1 518 |
| Total | | 0 | 42 | 964 | 1 328 | 2 335 | 2 100 |

EUR millions

Note

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Non-current pre-financing

2.1.1

–

23

520

344

887

582

Current pre-financing

2.1.2

0

19

445

984

1 448

1 518

Total

0

42

964

1 328

2 335

2 100

The increase in non-current pre-financing was mainly caused by the extension up to 2023 (with 7 years disbursement period) of a contract that was supposed to end in 2017. In 2017 the total value of this contract had been expensed, whereas after the extension, the non-current pre-financing was estimated at EUR 217 million.

The decrease in current pre-financing was caused by a decrease in the pre-financing payments made (by 10%) and an increase in the level of clearings (mainly in the 10th EDF).

This decrease is in line with the lifecycle of the EDF. Many contracts have been cleared and completed in the 10th EDF: this can be seen in the drop of their number – from 3.4k in 2017 to 2.6k in 2018.

At the same time the number of open contracts in the 11th EDF increased from 1.6k in 2017 to 2.3k in 2018. The 11th EDF started in 2015 and 2018 was thus the fourth year of its existence. The 11th EDF has reached maturity with regards to the implementation of adopted actions.

17.Non-current pre-financing

| | | EUR millions |
| --- | --- | --- |
| | 31.12.2018 | 31.12.2017 |
| Direct Management | 188 | 159 |
| Implemented by: | | |
| Commission | 140 | 105 |
| EU executive agencies | 0 | 6 |
| EU delegations | 48 | 48 |
| Indirect Management | 698 | 423 |
| Implemented by : | | |
| EIB and EIF | 367 | 166 |
| International organisations | 280 | 189 |
| Private law bodies with a public service mission | 6 | 11 |
| Public law bodies | 24 | 37 |
| Third countries | 21 | 20 |
| EU bodies and Public Private Partnership | 0 | – |
| Private law bodies implementing Public Private Partnership | – | 0 |
| Total | 887 | 582 |

EUR millions

31.12.2018

31.12.2017

Direct Management

188

159

Implemented by:

Commission

140

105

EU executive agencies

0

6

EU delegations

48

48

Indirect Management

698

423

Implemented by :

EIB and EIF

367

166

International organisations

280

189

Private law bodies with a public service mission

6

11

Public law bodies

24

37

Third countries

21

20

EU bodies and Public Private Partnership

0

–

Private law bodies implementing Public Private Partnership

–

0

Total

887

582

18.Current pre-financing

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Pre-financing (gross) | 1 | 113 | 2 034 | 3 005 | 5 153 | 5 288 |
| Cleared via cut-off | (1) | (94) | (1 589) | (2 021) | (3 705) | (3 770) |
| Total | 0 | 19 | 445 | 984 | 1 448 | 1 518 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Pre-financing (gross)

1

113

2 034

3 005

5 153

5 288

Cleared via cut-off

(1)

(94)

(1 589)

(2 021)

(3 705)

(3 770)

Total

0

19

445

984

1 448

1 518

EUR millions

| | | EUR millions |
| --- | --- | --- |
| | 31.12.2018 | 31.12.2017 |
| Direct Management | 280 | 256 |
| Implemented by: | | |
| Commission | 102 | 86 |
| EU executive agencies | 8 | 10 |
| Trust Funds | 1 | – |
| EU delegations | 169 | 161 |
| Indirect Management | 1 169 | 1 262 |
| Implemented by : | | |
| EIB and EIF | 100 | 345 |
| International organisations | 658 | 563 |
| Private law bodies with a public service mission | 78 | 59 |
| Public law bodies | 124 | 108 |
| Third countries | 208 | 186 |
| EU Bodies and Public Private Partnership | 0 | - |
| Private law bodies implementing Public Private Partnership | 0 | 0 |
| Total | 1 448 | 1 518 |

31.12.2018

31.12.2017

Direct Management

280

256

Implemented by:

Commission

102

86

EU executive agencies

8

10

Trust Funds

1

–

EU delegations

169

161

Indirect Management

1 169

1 262

Implemented by :

EIB and EIF

100

345

International organisations

658

563

Private law bodies with a public service mission

78

59

Public law bodies

124

108

Third countries

208

186

EU Bodies and Public Private Partnership

0

-

Private law bodies implementing Public Private Partnership

0

0

Total

1 448

1 518

19.Guarantees received in respect of pre-financing

Guarantees are held to secure pre-financing and are released when the final claim under a project is paid. At 31 December 2018 the guarantees received by the EDF in respect of pre-financing amounted to EUR 79 million (2017 EUR 54 million).

The majority of pre-financing is paid under the indirect management mode. In this case the beneficiary of the guarantee is not the EDF but the contracting authority. Even though the EDF is not the beneficiary, those guarantees secure its assets. In 2018 those guarantees amounted to EUR 534 million.

19.1.TRUST FUND CONTRIBUTIONS

This heading represents the amount paid as contributions to the EU Trust Fund for Africa and the Bêkou EU Trust Fund. The contributions are net of the costs incurred by the trust funds and attributable to the EDF.

The trust fund contributions are implemented by the EDF under the direct management mode.

| | | | | EUR millions |
| --- | --- | --- | --- | --- |
| Trust Funds | Net contribution at 31.12.2017 | Contributions paid in 2018 | Allocation of TF's net expenses 2018 | Net contribution at 31.12.2018 |
| Africa | 148 | 345 | (301) | 192 |
| Bêkou | 16 | – | (7) | 9 |
| Total | 163 | 345 | (308) | 201 |

EUR millions

Trust Funds

Net contribution at 31.12.2017

Contributions paid in 2018

Allocation of TF's net expenses 2018

Net contribution at 31.12.2018

Africa

148

345

(301)

192

Bêkou

16

–

(7)

9

Total

163

345

(308)

201

19.2.NON-EXCHANGE RECOVERABLES AND EXCHANGE RECEIVABLES

| | | | EUR millions |
| --- | --- | --- | --- |
| | Note | 31.12.2018 | 31.12.2017 |
| Recoverables from non-exchange transactions | 2.3.1 | 37 | 19 |
| Receivables from exchange transactions | 2.3.2 | 101 | 73 |
| Total | | 138 | 92 |

EUR millions

Note

31.12.2018

31.12.2017

Recoverables from non-exchange transactions

2.3.1

37

19

Receivables from exchange transactions

2.3.2

101

73

Total

138

92

20.Recoverables from non-exchange transactions

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Member States | – | – | – | 5 | 5 | 7 |
| Customers | 2 | 7 | 16 | 1 | 26 | 19 |
| Public bodies | 0 | 9 | 9 | 7 | 25 | 20 |
| Third states | 0 | 1 | 3 | 0 | 5 | 6 |
| Write down | (2) | (15) | (10) | (0) | (27) | (34) |
| Inter-company accounts with EU institutions | – | – | – | 3 | 3 | 2 |
| Total | 1 | 2 | 18 | 16 | 37 | 19 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Member States

–

–

–

5

5

7

Customers

2

7

16

1

26

19

Public bodies

0

9

9

7

25

20

Third states

0

1

3

0

5

6

Write down

(2)

(15)

(10)

(0)

(27)

(34)

Inter-company accounts with EU institutions

–

–

–

3

3

2

Total

1

2

18

16

37

19

21.Receivables from exchange transactions

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Accrued income | 0 | 63 | 18 | 0 | 81 | 74 |
| Receivable from EU | – | – | – | 20 | 20 | – |
| Inter-EDF accounts | 183 | 111 | 2 421 | (2 715) | (0) | (0) |
| Total | 183 | 174 | 2 439 | (2 695) | 101 | 73 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Accrued income

0

63

18

0

81

74

Receivable from EU

–

–

–

20

20

–

Inter-EDF accounts

183

111

2 421

(2 715)

(0)

(0)

Total

183

174

2 439

(2 695)

101

73

Included under accrued income are amounts of accrued interest on pre-financing related to projects (EUR 63 million) and on pre-financing related to the EU-Africa Trust Fund (EUR 18 million).

The receivable from the EU is the amount that was transferred to the trust account owned by the European Commission.

For efficiency reasons, the single treasury covering all the EDFs is allocated to the 11th EDF; this leads to operations between the various EDFs, which are balanced out in the inter-EDF accounts between the various EDF balance sheets.

Inter-EDF accounts are presented only in the individual EDFs. The total of inter-EDF accounts is nil.

21.1.CASH AND CASH EQUIVALENTS
  3

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Central banks | – | – | – | 276 | 276 | 105 |
| Commercial banks | – | – | – | 87 | 87 | 242 |
| Cash belonging to financial instruments | – | – | – | 24 | 24 | – |
| Total | – | – | – | 387 | 387 | 347 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Central banks

–

–

–

276

276

105

Commercial banks

–

–

–

87

87

242

Cash belonging to financial instruments

–

–

–

24

24

–

Total

–

–

–

387

387

347

The total level of cash and cash equivalents remained stable. However, the structure of the cash position has changed. A significant decrease (EUR 136 million) was observed in the UK’s contribution account in the commercial bank Natwest. It was mainly because at the end of 2017 the UK paid the first instalment of its 2018 contribution of EUR 170 million.

On 31.12.2018 more cash was kept in the central banks, in order to limit counterparty risk (see note 5.4).

LIABILITIES

21.2.PROVISIONS

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Provisions | – | – | – | – | – | 4 |
| Total | – | – | – | – | – | 4 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Provisions

–

–

–

–

–

4

Total

–

–

–

–

–

4

The provision for the Centre de Development (CDE) has been released as the court cases have been finished and no additional costs should be incurred.

21.3. FINANCIAL LIABILITIES

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Co-financing - payables | – | – | 1 | 16 | 18 | 14 |
| Total | – | – | 1 | 16 | 18 | 14 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Co-financing - payables

–

–

1

16

18

14

Total

–

–

1

16

18

14

The change in the total co-financing liabilities is explained in note 2.7.2.1.

21.4.PAYABLES

| | | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | Note | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Current payables | 2.7.1 | 0 | 6 | 80 | 88 | 173 | 361 |
| Sundry payables | 2.7.2 | – | – | 45 | 23 | 68 | 202 |
| Total | | 0 | 6 | 125 | 111 | 241 | 563 |

EUR millions

Note

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Current payables

2.7.1

0

6

80

88

173

361

Sundry payables

2.7.2

–

–

45

23

68

202

Total

0

6

125

111

241

563

22. Current payables

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Suppliers | 0 | 5 | 65 | 32 | 102 | 133 |
| Member States | – | – | 0 | 1 | 1 | 12 |
| Third states | 0 | – | 6 | 31 | 37 | 146 |
| Public bodies | – | 2 | 10 | 30 | 43 | 83 |
| Other current payables | (0) | (2) | (2) | (6) | (10) | (13) |
| Total | 0 | 6 | 80 | 88 | 173 | 361 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Suppliers

0

5

65

32

102

133

Member States

–

–

0

1

1

12

Third states

0

–

6

31

37

146

Public bodies

–

2

10

30

43

83

Other current payables

(0)

(2)

(2)

(6)

(10)

(13)

Total

0

6

80

88

173

361

Payables include cost statements received by the EDF relating to its grant activity. They are recorded for the amount being claimed from the moment the demand is received. The same procedure applies to invoices and credit notes received under procurement activities. The cost claims concerned have been taken into account for the year-end cut-off procedures. Following the cut-off entries, estimated eligible amounts have been recognised in the statement of financial performance. Non-eligible amounts have been shown as other current payables.

23.Sundry payables

| | | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | Note | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Co-financing payables | 2.7.2.1 | – | – | 47 | 21 | 68 | 28 |
| Deferred fund capital contributions | 2.7.2.2 | – | – | – | – | – | 173 |
| Other sundry payables | | – | – | (2) | 2 | – | 1 |
| Total | | – | – | 45 | 23 | 68 | 202 |

EUR millions

Note

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Co-financing payables

2.7.2.1

–

–

47

21

68

28

Deferred fund capital contributions

2.7.2.2

–

–

–

–

–

173

Other sundry payables

–

–

(2)

2

–

1

Total

–

–

45

23

68

202

24.Co-financing payables

The breakdown of the non-current and current co-financing payables by Member State is summarised in the table below:

EUR millions

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Non-current co-financing | | | | | | |
| Austria | – | – | – | 1 | 1 | – |
| Belgium | – | – | 0 | 2 | 2 | 2 |
| Czech Republic | – | – | – | 1 | 1 | – |
| Denmark | – | – | – | 3 | 3 | 0 |
| Finland | – | – | – | 1 | 1 | – |
| France | – | – | 1 | 1 | 2 | 4 |
| Luxembourg | – | – | – | 1 | 1 | – |
| Netherlands | – | – | – | 3 | 3 | – |
| Portugal | – | – | – | 0 | 0 | – |
| Sweden | – | – | 0 | – | 0 | 3 |
| United Kingdom | – | – | – | 2 | 2 | 1 |
| Australia | – | – | 0 | – | 0 | 0 |
| USAID | – | – | – | 2 | 2 | 4 |
| | – | – | 1 | 16 | 18 | 14 |
| Current co-financing | | | | | | |
| Austria | – | – | – | 0 | 0 | – |
| Belgium | – | – | 4 | 0 | 4 | 3 |
| Czech Republic | – | – | – | 0 | 0 | – |
| Denmark | – | – | 0 | 2 | 3 | (0) |
| Finland | – | – | – | 0 | 0 | – |
| France | – | – | 21 | 1 | 22 | 12 |
| Germany | – | – | 1 | – | 1 | 0 |
| Luxembourg | – | – | – | 0 | 0 | – |
| Netherlands | – | – | 1 | 1 | 2 | 0 |
| Poland | – | – | 0 | – | 0 | – |
| Portugal | – | – | – | 0 | 0 | – |
| Spain | – | – | 2 | – | 2 | 1 |
| Sweden | – | – | 5 | 1 | 5 | 5 |
| Switzerland | – | – | 0 | – | 0 | 0 |
| United Kingdom | – | – | 13 | 12 | 25 | 4 |
| Canada | – | – | 0 | – | 0 | 0 |
| Australia | – | – | 0 | – | 0 | 1 |
| USAID | – | – | – | 4 | 4 | 2 |
| | – | – | 47 | 21 | 68 | 28 |
| Total | – | – | 48 | 37 | 86 | 42 |

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Non-current co-financing

Austria

–

–

–

1

1

–

Belgium

–

–

0

2

2

2

Czech Republic

–

–

–

1

1

–

Denmark

–

–

–

3

3

0

Finland

–

–

–

1

1

–

France

–

–

1

1

2

4

Luxembourg

–

–

–

1

1

–

Netherlands

–

–

–

3

3

–

Portugal

–

–

–

0

0

–

Sweden

–

–

0

–

0

3

United Kingdom

–

–

–

2

2

1

Australia

–

–

0

–

0

0

USAID

–

–

–

2

2

4

–

–

1

16

18

14

Current co-financing

Austria

–

–

–

0

0

–

Belgium

–

–

4

0

4

3

Czech Republic

–

–

–

0

0

–

Denmark

–

–

0

2

3

(0)

Finland

–

–

–

0

0

–

France

–

–

21

1

22

12

Germany

–

–

1

–

1

0

Luxembourg

–

–

–

0

0

–

Netherlands

–

–

1

1

2

0

Poland

–

–

0

–

0

–

Portugal

–

–

–

0

0

–

Spain

–

–

2

–

2

1

Sweden

–

–

5

1

5

5

Switzerland

–

–

0

–

0

0

United Kingdom

–

–

13

12

25

4

Canada

–

–

0

–

0

0

Australia

–

–

0

–

0

1

USAID

–

–

–

4

4

2

–

–

47

21

68

28

Total

–

–

48

37

86

42

The total non-current and current co-financing payables increased by EUR 44 million compared to the previous reporting period.

During 2018, a total of EUR 28 million new co-financing contributions were received.

The total co-financing payables increased by EUR 17 million in order to recognise revenue and expenses related to co-financed projects (see notes 3.1.1 and 3.4).

25.Deferred fund capital contributions

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| United Kingdom | – | – | – | – | – | 170 |
| Lithuania | – | – | – | – | – | 2 |
| Total | – | – | – | – | – | 173 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

United Kingdom

–

–

–

–

–

170

Lithuania

–

–

–

–

–

2

Total

–

–

–

–

–

173

This heading completely relates to Member States' 2018 contributions paid in advance.

25.1.ACCRUED CHARGES AND DEFERRED INCOME

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Accrued charges | 0 | 83 | 358 | 838 | 1 279 | 730 |
| Other accruals and deferrals | – | – | – | 3 | 3 | 3 |
| Total | 0 | 83 | 358 | 840 | 1 281 | 733 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Accrued charges

0

83

358

838

1 279

730

Other accruals and deferrals

–

–

–

3

3

3

Total

0

83

358

840

1 281

733

Accrued charges comprise estimated operating expenses for on-going or completed contracts without validated cost claims where the 2018 eligible expenses incurred by beneficiaries of EDF were estimated using the best available information. The portion of the estimated accrued charges which relates to pre-financing paid has been recorded as a reduction of the pre-financing amounts (see note 2.1).

Accrued charges increased mainly in the 11th EDF (from EUR 140 million in 2017 to EUR 840 million in 2018). This is in line with the increase in the number of contracts (from 1.6k in 2017 to 2.3k in 2018). The 11th EDF started in 2015 and 2018 was thus the fourth year of its existence. The 11th EDF has reached maturity with regards to the implementation of adopted actions.

NET ASSETS

25.2.FUND CAPITAL

26.Called fund capital – active EDFs

| | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | Total |
| Fund capital | 12 164 | 10 773 | 20 960 | 29 367 | 73 264 |
| Uncalled fund capital | – | – | – | (27 090) | (27 090) |
| Called fund capital 31.12.2017 | 12 164 | 10 773 | 20 960 | 2 277 | 46 173 |
| | | | | | |
| Fund capital | 12 164 | 10 773 | 20 960 | 29 367 | 73 264 |
| Uncalled fund capital | – | – | – | (22 840) | (22 840) |
| Called fund capital 31.12.2018 | 12 164 | 10 773 | 20 960 | 6 527 | 50 423 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

Total

Fund capital

12 164

10 773

20 960

29 367

73 264

Uncalled fund capital

–

–

–

(27 090)

(27 090)

Called fund capital 31.12.2017

12 164

10 773

20 960

2 277

46 173

Fund capital

12 164

10 773

20 960

29 367

73 264

Uncalled fund capital

–

–

–

(22 840)

(22 840)

Called fund capital 31.12.2018

12 164

10 773

20 960

6 527

50 423

The fund capital represents the total amount of contributions from Member States for the relevant EDF fund as laid down in each of the Internal Agreements. The uncalled funds represent the initial allocation not yet called from Member States.

The called fund capital represents the amount of the initial allocations which have been called up for transfer to the treasury accounts by the Member States (see note 2.9.2 below).

27.Called and uncalled fund capital by Member State

| | | | | EUR millions |
| --- | --- | --- | --- | --- |
| Contributions 11th EDF | % | Uncalled capital 31.12.2017 | Capital called in 2018 | Uncalled capital 31.12.2018 |
| Austria | 2.40 | 650 | (102) | 548 |
| Belgium | 3.25 | 880 | (138) | 742 |
| Bulgaria | 0.22 | 59 | (9) | 50 |
| Croatia | 0.23 | 61 | (10) | 51 |
| Cyprus | 0.11 | 30 | (5) | 25 |
| Czech Republic | 0.80 | 216 | (34) | 182 |
| Denmark | 1.98 | 537 | (84) | 452 |
| Estonia | 0.09 | 23 | (4) | 20 |
| Finland | 1.51 | 409 | (64) | 345 |
| France | 17.81 | 4 826 | (757) | 4 068 |
| Germany | 20.58 | 5 575 | (875) | 4 700 |
| Greece | 1.51 | 408 | (64) | 344 |
| Hungary | 0.61 | 166 | (26) | 140 |
| Ireland | 0.94 | 255 | (40) | 215 |
| Italy | 12.53 | 3 394 | (533) | 2 862 |
| Latvia | 0.12 | 31 | (5) | 27 |
| Lithuania | 0.18 | 49 | (8) | 41 |
| Luxemburg | 0.26 | 69 | (11) | 58 |
| Malta | 0.04 | 10 | (2) | 9 |
| Netherlands | 4.78 | 1 294 | (203) | 1 091 |
| Poland | 2.01 | 544 | (85) | 458 |
| Portugal | 1.20 | 324 | (51) | 273 |
| Romania | 0.72 | 195 | (31) | 164 |
| Slovakia | 0.38 | 102 | (16) | 86 |
| Slovenia | 0.22 | 61 | (10) | 51 |
| Spain | 7.93 | 2 149 | (337) | 1 812 |
| Sweden | 2.94 | 796 | (125) | 671 |
| United Kingdom | 14.68 | 3 976 | (624) | 3 353 |
| Total | 100.00 | 27 090 | (4 250) | 22 840 |

EUR millions

Contributions 11th EDF

%

Uncalled capital 31.12.2017

Capital called in 2018

Uncalled capital 31.12.2018

Austria

2.40

650

(102)

548

Belgium

3.25

880

(138)

742

Bulgaria

0.22

59

(9)

50

Croatia

0.23

61

(10)

51

Cyprus

0.11

30

(5)

25

Czech Republic

0.80

216

(34)

182

Denmark

1.98

537

(84)

452

Estonia

0.09

23

(4)

20

Finland

1.51

409

(64)

345

France

17.81

4 826

(757)

4 068

Germany

20.58

5 575

(875)

4 700

Greece

1.51

408

(64)

344

Hungary

0.61

166

(26)

140

Ireland

0.94

255

(40)

215

Italy

12.53

3 394

(533)

2 862

Latvia

0.12

31

(5)

27

Lithuania

0.18

49

(8)

41

Luxemburg

0.26

69

(11)

58

Malta

0.04

10

(2)

9

Netherlands

4.78

1 294

(203)

1 091

Poland

2.01

544

(85)

458

Portugal

1.20

324

(51)

273

Romania

0.72

195

(31)

164

Slovakia

0.38

102

(16)

86

Slovenia

0.22

61

(10)

51

Spain

7.93

2 149

(337)

1 812

Sweden

2.94

796

(125)

671

United Kingdom

14.68

3 976

(624)

3 353

Total

100.00

27 090

(4 250)

22 840

In 2018 EUR 4 250 million has been called from the 11th EDF. At 31 December 2018 the capital of the Eighth, Ninth and 10th EDF has been called up and received in its entirety.

28.Called fund capital from closed EDFs carried forward

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Funds transferred from closed EDFs | 627 | 1 625 | – | – | 2 252 | 2 252 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Funds transferred from closed EDFs

627

1 625

–

–

2 252

2 252

This heading includes the resources transferred from closed EDFs to the Eighth and Ninth EDFs.

29.Called fund capital transfers between active EDFs

| | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | Total |
| Balance at 31.12.2016 | (2 496) | 2 214 | 247 | 35 | – |
| Transfer of decommitted amounts to the 10th EDF performance reserve from previous EDFs | (7) | (37) | 44 | – | – |
| Transfer of decommitted amounts to the 11th EDF performance reserve from previous EDFs | – | – | (171) | 171 | – |
| Balance at 31.12.2017 | (2 503) | 2 177 | 120 | 206 | – |
| Transfer of decommitted amounts to the 10th EDF performance reserve from previous EDFs | (7) | (40) | 47 | – | – |
| Transfer of decommitted amounts to the 11th EDF performance reserve from previous EDFs | – | – | (112) | 112 | – |
| Balance at 31.12.2018 | (2 509) | 2 137 | 55 | 317 | – |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

Total

Balance at 31.12.2016

(2 496)

2 214

247

35

–

Transfer of decommitted amounts to the 10th EDF performance reserve from previous EDFs

(7)

(37)

44

–

–

Transfer of decommitted amounts to the 11th EDF performance reserve from previous EDFs

–

–

(171)

171

–

Balance at 31.12.2017

(2 503)

2 177

120

206

–

Transfer of decommitted amounts to the 10th EDF performance reserve from previous EDFs

(7)

(40)

47

–

–

Transfer of decommitted amounts to the 11th EDF performance reserve from previous EDFs

–

–

(112)

112

–

Balance at 31.12.2018

(2 509)

2 137

55

317

–

This heading includes the resources transferred between the active EDFs.

Since the entry into force of the Cotonou Agreement, all the unspent funds in previous active EDFs are transferred to the most recently opened EDF after decommitment. The resources transferred from other EDFs increase the appropriations of the receiving fund and reduce the appropriations of the fund of origin. Funds transferred to the performance reserve of the 10th and 11th EDFs can be committed only under specific conditions set out in the Internal Agreements.

30.NOTES TO THE STATEMENT OF FINANCIAL PERFORMANCE

REVENUE

| | | | EUR millions |
| --- | --- | --- | --- |
| | Note | 2018 | 2017 |
| Revenue from non-exchange transactions | 3.1 | 4 | 61 |
| Revenue from exchange transactions | 3.2 | 57 | 25 |
| Total | | 60 | 87 |

EUR millions

Note

2018

2017

Revenue from non-exchange transactions

3.1

4

61

Revenue from exchange transactions

3.2

57

25

Total

60

87

30.1.REVENUE FROM NON-EXCHANGE TRANSACTIONS

| | | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | Note | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 2018 | 2017 |
| Recovery of expenses | | 0 | 3 | 14 | 3 | 21 | 19 |
| Recovery of STABEX funds | | – | – | 0 | – | 0 | 0 |
| Co-financing revenue | 3.1.1 | – | – | (18) | 1 | (17) | 42 |
| Total | | 0 | 3 | (3) | 4 | 4 | 61 |

EUR millions

Note

Eighth EDF

Ninth EDF

10th EDF

11th EDF

2018

2017

Recovery of expenses

0

3

14

3

21

19

Recovery of STABEX funds

–

–

0

–

0

0

Co-financing revenue

3.1.1

–

–

(18)

1

(17)

42

Total

0

3

(3)

4

4

61

Non-exchange revenue can be broken down by management mode as follows:

| | | EUR millions |
| --- | --- | --- |
| | 2018 | 2017 |
| Direct Management | 4 | 5 |
| Implemented by: | | |
| Commission | 1 | 1 |
| EU delegations | 3 | 4 |
| Indirect Management | 0 | 56 |
| Implemented by : | | |
| Third countries | (13) | 55 |
| International organisations | 12 | 2 |
| Public law bodies | 0 | 0 |
| Private law bodies with a public service mission | 1 | (1) |
| Total | 4 | 61 |

EUR millions

2018

2017

Direct Management

4

5

Implemented by:

Commission

1

1

EU delegations

3

4

Indirect Management

0

56

Implemented by :

Third countries

(13)

55

International organisations

12

2

Public law bodies

0

0

Private law bodies with a public service mission

1

(1)

Total

4

61

31.Co-financing revenue

The cofinancing contributions received fulfil the criteria of revenues from non-exchange transactions under conditions and as such should not affect the statement of financial performance. The received contributions remain under liabilities (see note 2.7.2.1) until the conditions attached to the donated funds are met, i.e. eligible expenses are incurred (see note 3.4). The corresponding amount is then recognised as non-exchange revenue from cofinancing. Consequently the effect on the economic result of the year is nil.

31.1.REVENUE FROM EXCHANGE TRANSACTIONS

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 2018 | 2017 |
| Financial revenue | 0 | 2 | 8 | 1 | 10 | 4 |
| Other revenue | 1 | 6 | 27 | 12 | 46 | 22 |
| Total | 1 | 8 | 35 | 13 | 57 | 25 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

2018

2017

Financial revenue

0

2

8

1

10

4

Other revenue

1

6

27

12

46

22

Total

1

8

35

13

57

25

Financial revenue comprises interest from the Trust Funds and interest on pre-financing.

Other income entirely relates to the realised and unrealised foreign exchange gains.

EXPENSES

31.2.AID INSTRUMENTS

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 2018 | 2017 |
| Programmable aid | (0) | 1 | 532 | 1 468 | 2 001 | 2 150 |
| Macro-economic support | – | 26 | – | – | 26 | 21 |
| Sectoral policy | – | 2 | – | – | 2 | (9) |
| Intra ACP projects | – | 27 | 389 | 410 | 827 | 1 112 |
| Emergency aid | – | 3 | 60 | 811 | 873 | 289 |
| Other aid programmes related to former EDFs | – | 0 | – | – | 0 | (1) |
| Institutional support | – | – | 3 | 15 | 18 | 23 |
| Compensation export receipts | 0 | (0) | – | – | 0 | (1) |
| Contributions to Trust Funds | – | – | – | 307 | 307 | 114 |
| Total | (0) | 59 | 984 | 3 012 | 4 054 | 3 700 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

2018

2017

Programmable aid

(0)

1

532

1 468

2 001

2 150

Macro-economic support

–

26

–

–

26

21

Sectoral policy

–

2

–

–

2

(9)

Intra ACP projects

–

27

389

410

827

1 112

Emergency aid

–

3

60

811

873

289

Other aid programmes related to former EDFs

–

0

–

–

0

(1)

Institutional support

–

–

3

15

18

23

Compensation export receipts

0

(0)

–

–

0

(1)

Contributions to Trust Funds

–

–

–

307

307

114

Total

(0)

59

984

3 012

4 054

3 700

The EDF operating expenditure covers various aid instruments and takes different forms, depending on how the money is paid out and managed.

The increase in overall expenses on aid instruments is mainly in the 11th EDF. This is in line with the lifecycle of this EDF. The 11th EDF started in 2015 and 2018 was thus the fourth year of its existence. In 2018 the 11th EDF reached maturity with regards to the implementation of adopted actions and thus the expenses have increased compared to 2017. The number of open contracts in the 11th EDF increased from 1.6k in 2017 to 2.3k in 2018.

This increase is in line with the increase in clearings of pre-financing and increase in accrued charges.

The sectoral policy expenses were negative in 2017 due to reversal of an invoice that was incorrectly recorded in 2016.

31.3.CO-FINANCING EXPENSES

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 2018 | 2017 |
| Co-financing | – | – | (18) | 1 | (17) | 42 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

2018

2017

Co-financing

–

–

(18)

1

(17)

42

Included under this heading are the expenses incurred on co-financing projects in 2018. It should be noted that the expenses incurred include estimated amounts related to the cut-off exercise (and consequently reversals of the estimated amounts related to last year). Because the reversals of the 2017 estimated expenses (EUR 52 million) exceeded the expenses incurred in 2018 (EUR 36 million), the co-financing expenses are negative for 2018.

Corresponding negative revenue has been recognised in the statement of financial performance (see note 3.1.1).

31.4.AID INSTRUMENTS AND CO-FINANCING EXPENSES BY MANAGEMENT TYPE

| | | EUR millions |
| --- | --- | --- |
| | 2018 | 2017 |
| Direct Management | 1 750 | 1 447 |
| Implemented by: | | |
| Commission | 122 | 122 |
| EU executive agencies | 31 | 26 |
| Trust Funds | 594 | 89 |
| EU delegations | 1 003 | 1 209 |
| Indirect Management | 2 287 | 2 295 |
| Implemented by: | | |
| EIB and EIF | 44 | 48 |
| International organisations | 920 | 1 171 |
| Private law bodies with a public service mission | 114 | (20) |
| Public law bodies | 231 | 356 |
| Third countries | 977 | 739 |
| EU bodies with Public Private Partnership | 1 | – |
| Private law bodies implementing Public Private Partnership | 0 | 0 |
| Total | 4 037 | 3 742 |

EUR millions

2018

2017

Direct Management

1 750

1 447

Implemented by:

Commission

122

122

EU executive agencies

31

26

Trust Funds

594

89

EU delegations

1 003

1 209

Indirect Management

2 287

2 295

Implemented by:

EIB and EIF

44

48

International organisations

920

1 171

Private law bodies with a public service mission

114

(20)

Public law bodies

231

356

Third countries

977

739

EU bodies with Public Private Partnership

1

–

Private law bodies implementing Public Private Partnership

0

0

Total

4 037

3 742

31.5.FINANCE COSTS

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 2018 | 2017 |
| Write-down of receivables | (0) | (1) | (5) | (1) | (7) | 9 |
| Other financial expenses | – | – | – | (0) | (0) | (1) |
| Total | (0) | (1) | (5) | (1) | (7) | 8 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

2018

2017

Write-down of receivables

(0)

(1)

(5)

(1)

(7)

9

Other financial expenses

–

–

–

(0)

(0)

(1)

Total

(0)

(1)

(5)

(1)

(7)

8

The heading write-down of receivables comprises the estimate of expenses on irrecoverable receivables. Because the estimate also includes reversals of the previous year's estimation, the overall expenses were negative in 2018 (from EUR 34 million in 2017 to EUR 27 million in 2018 – see note 2.3.1).

31.6.OTHER EXPENSES

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 2018 | 2017 |
| Administrative and IT expenses | (0) | (0) | 45 | 67 | 112 | 107 |
| Provision for risks and charges | – | – | – | (4) | (4) | – |
| Realised losses on trade debtors | 0 | 0 | 0 | – | 1 | 3 |
| Exchange losses | 0 | 6 | 26 | 7 | 39 | 44 |
| Total | 1 | 7 | 71 | 70 | 148 | 154 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

2018

2017

Administrative and IT expenses

(0)

(0)

45

67

112

107

Provision for risks and charges

–

–

–

(4)

(4)

–

Realised losses on trade debtors

0

0

0

–

1

3

Exchange losses

0

6

26

7

39

44

Total

1

7

71

70

148

154

This heading includes support expenditure, i.e. the administrative costs related to the programming and implementation of the EDFs. This includes expenses for preparation, follow-up, monitoring, and evaluation of projects as well as expenses for computer networks, technical assistance etc.

32.CONTINGENT ASSETS & LIABILITIES AND OTHER SIGNIFICANT DISCLOSURES

32.1.CONTINGENT ASSETS

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Performance guarantees | – | 0 | 10 | 0 | 11 | 10 |
| Retention guarantees | – | 0 | 6 | – | 7 | 8 |
| Total | – | 1 | 16 | 0 | 17 | 18 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Performance guarantees

–

0

10

0

11

10

Retention guarantees

–

0

6

–

7

8

Total

–

1

16

0

17

18

Performance guarantees are requested to ensure that beneficiaries of EDF funding meet the obligations of their contracts with the EDF.

Retention guarantees concern only works contracts. Typically 10 % of the interim payments to beneficiaries are withheld to ensure that the contractors fulfil their obligations. These withheld amounts are reflected as amounts payable. Subject to the approval of the contracting authority, the contractor may instead submit a retention guarantee which replaces the amounts withheld on interim payments. These received guarantees are disclosed as contingent assets.

For contracts managed under the indirect mode, the guarantees belong to a contracting authority other than the EDF and they are therefore not recorded by the EDF. In 2018 those guarantees amounted to EUR 501 million.

32.2.OTHER SIGNIFICANT DISCLOSURES

33.Outstanding commitments not yet expensed

The amount disclosed below is the budgetary RAL ('Reste à Liquider') less related amounts that have been included as expenses in the statement of financial performance. The budgetary RAL is an amount representing the commitments for which payments and/or de-commitments have not yet been made. This is the normal consequence of the existence of multi-annual programmes.

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Eighth EDF | Ninth EDF | 10th EDF | 11th EDF | 31.12.2018 | 31.12.2017 |
| Outstanding commitments not yet expensed | 0 | 88 | 1 650 | 8 009 | 9 071 | 8 508 |
| Total | 0 | 88 | 1 650 | 8 009 | 9 071 | 8 508 |

EUR millions

Eighth EDF

Ninth EDF

10th EDF

11th EDF

31.12.2018

31.12.2017

Outstanding commitments not yet expensed

0

88

1 650

8 009

9 071

8 508

Total

0

88

1 650

8 009

9 071

8 508

At 31 December 2018 the budgetary RAL totalled EUR 10 616 million (2017: EUR 9 745 million).

34.The United Kingdom's withdrawal from the European Union

Background

On 23 June 2016 a majority of the citizens of the United Kingdom who voted in the referendum on membership of the European Union voted to leave the EU. On 29 March 2017 the United Kingdom formally notified the European Council of its intention to leave the EU and the European Atomic Energy Community (Euratom). In doing so it triggered Article 50 of the Treaty on European Union, which sets out the procedure for a Member State to withdraw from the Union.

The negotiation process

On 19 March 2018 the Commission published a draft of the Withdrawal Agreement that outlined the progress made in the negotiations. In the financial settlement part of the Withdrawal Agreement, the EU and the UK translated the progress achieved in the first phase of negotiations into a legal text.

A Joint Report was published on 14 November 2018 reporting agreement at negotiators’ level on the full text of the draft Withdrawal Agreement, and on an outline of the Political Declaration on the framework for the future relationship between the United Kingdom and the European Union. On the same day, this updated and agreed draft Withdrawal Agreement was published, in which the UK agreed to pay all its obligations under the current Multiannual Financial Framework (MFF) and previous financial perspectives as if it were still a Member State, including its share of the Union's liabilities and contingent liabilities. The UK government approved the draft Withdrawal Agreement on the 14 November and the European Council endorsed it on 25 November 2018. On 11 January 2019, the Council (Article 50) approved the decision on the conclusion of the Withdrawal Agreement and sent it to the European Parliament for its consent. On the request of the United Kingdom, in accordance with the procedure set in the Article 50 of the TFEU, on 21 March 2019 the European Council agreed to extend the UK’s departure date to 22 May 2019, provided the Withdrawal Agreement was approved by the House of Commons by 29 March 2019 at the latest and to the 12 April 2019 if it was not the case (European Council Decision (EU) 2019/476 of 22 March 2019, OJ L80 22.3.2019, p. 1). Subsequent to this, the House of Commons did not approve the Withdrawal Agreement by 29 March 2019 and so, again on the request of the United Kingdom, on 10 April 2019 the European Council agreed to an extension to the UK’s departure until 31 October 2019 (European Council Decision (EU) 2019/584 of 11 April 2019, OJ L101 11.4.2019, p. 1). The withdrawal should take place on the first day of the month following the completion of the ratification procedures or on 1 November 2019, whichever is the earliest. The United Kingdom will remain a Member State until the new withdrawal date, with full rights and obligations in accordance with Article 50 TEU, and the United Kingdom has a right to revoke its notification at any time.

With regard to the EDF

The draft Withdrawal Agreement states that the United Kingdom shall remain party to the EDF until the closure of the 11th EDF and all previous unclosed EDFs, and shall in this respect assume the same obligations as the Member States under the Internal Agreement by which it was set up, as well as the obligations resulting from previous EDFs until their closure. It may participate, as observer, without voting rights, in the EDF Committee.

The draft Withdrawal Agreement also states that, where the amounts from projects under the 10th EDF or from previous EDFs have not been committed or have been decommitted on the date of entry into force of this agreement, the United Kingdom's share of those amounts shall not be reused. The same applies to the United Kingdom share of funds not committed or decommitted amounts under 11th EDF after 31 December 2020.

At the time of the signature of these accounts, and in the absence of ratification by the United Kingdom, the actual departure date and manner of the departure (with or without agreement) is not yet known. Based on this current situation, there is no financial impact to be reported in the EDF financial statements as at 31 December 2018.

35.FINANCIAL RISK MANAGEMENT

The following disclosures with regard to the financial risk management of the EDF relate to the treasury operations carried out by the Commission on behalf of the EDF in order to implement its resources.

35.1.RISK MANAGEMENT POLICIES AND HEDGING ACTIVITIES

The rules and principles for the management of the treasury operations are laid down in the 11th EDF Financial Regulation and in the Internal Agreement.

As a result of the above regulation, the following main principles apply:

(a)The EDF contributions are paid by Member States in special accounts opened with the bank of issue of each Member State or the financial institution designated by it. The amounts of the contributions shall remain in those special accounts until the payments of EDF need to be made.

(b)EDF contributions are paid by Member States in EUR, while the EDF's payments are denominated in EUR and in other currencies, including less well-known ones.

(c)Bank accounts opened by the Commission on behalf of the EDF may not be overdrawn.

In addition to the special accounts, other bank accounts are opened by the Commission in the name of the EDF, with financial institutions (central banks and commercial banks), for the purpose of executing payments and receiving receipts other than the Member State contributions to the budget.

Treasury and payment operations are highly automated and rely on modern information systems. Specific procedures are applied to guarantee system security and to ensure segregation of duties in line with the Financial Regulation, the Commission’s internal control standards, and audit principles.

A written set of guidelines and procedures regulate the management of the treasury and payment operations with the objective of limiting operational and financial risk and ensuring an adequate level of control. They cover the different areas of operation, and compliance with the guidelines and procedures is checked regularly.

35.2.CURRENCY RISK

Exposure of the EDF to currency risk at year end – net position

| | | | | | | | | | | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | 31.12.2018 | | 31.12.2017 |
| | USD | GBP | DKK | SEK | EUR | Other | Total | | USD | GBP | DKK | SEK | EUR | Other | Total |
| Financial assets | | | | | | | | | | | | | | | |
| Receivables and recoverables | 63 | – | 0 | – | 67 | 8 | 138 | | 64 | – | – | – | 26 | 2 | 92 |
| Cash and cash equivalents | 1 | 0 | – | – | 386 | – | 387 | | 4 | 0 | – | – | 344 | – | 347 |
| Total | 64 | 0 | 0 | – | 453 | 8 | 525 | | 68 | 0 | – | – | 370 | 2 | 439 |
| Financial liabilities | | | | | | | | | | | | | | | |
| Non-current financial liabilities | – | – | – | – | (18) | – | (18) | | – | – | – | – | (14) | – | (14) |
| Payables | (1) | – | – | – | (218) | (22) | (241) | | 0 | – | – | – | (533) | (30) | (563) |
| Total | (1) | – | – | – | (236) | (22) | (259) | | 0 | – | – | – | (547) | (30) | (577) |
| Total | 63 | 0 | 0 | – | 217 | (14) | 267 | | 68 | 0 | – | – | (177) | (28) | (138) |

EUR millions

31.12.2018

31.12.2017

USD

GBP

DKK

SEK

EUR

Other

Total

USD

GBP

DKK

SEK

EUR

Other

Total

Financial assets

Receivables and recoverables

63

–

0

–

67

8

138

64

–

–

–

26

2

92

Cash and cash equivalents

1

0

–

–

386

–

387

4

0

–

–

344

–

347

Total

64

0

0

–

453

8

525

68

0

–

–

370

2

439

Financial liabilities

Non-current financial liabilities

–

–

–

–

(18)

–

(18)

–

–

–

–

(14)

–

(14)

Payables

(1)

–

–

–

(218)

(22)

(241)

0

–

–

–

(533)

(30)

(563)

Total

(1)

–

–

–

(236)

(22)

(259)

0

–

–

–

(547)

(30)

(577)

Total

63

0

0

–

217

(14)

267

68

0

–

–

(177)

(28)

(138)

All contributions are held in EUR, and other currencies are purchased only when they are needed for the execution of payments. As a result the EDF's treasury operations are not exposed to currency risk.

35.3.INTEREST RATE RISK

The EDF does not borrow money and as a consequence it is not exposed to interest rate risk.

Interest is accrued on balances it holds in its different banks accounts. The Commission, on behalf of the EDF, has therefore put in place measures to ensure that interest earned regularly reflects market interest rates as well as their possible fluctuation.

Contributions to the EDF budget are credited by each Member State to a special account opened with the financial institution designed by it. As the remuneration applied to some of these accounts may currently be negative, cash management procedures are in place to minimise balances kept on the accounts concerned. In addition, in accordance with Council Regulation (EU)2016/888, any negative remuneration on these accounts is borne by the relevant Member State.

Overnight balances held in commercial bank accounts are remunerated on a daily basis. The remuneration of balances on such accounts is based on variable market rates to which a contractual margin (positive or negative) is applied. For most of the accounts the interest calculation is linked to a market reference rate and is adjusted to reflect any fluctuations of this rate. As a result no risk is taken by the EDF that its balances remunerated at rates lower than market rates.

35.4.CREDIT RISK (COUNTERPARTY RISK)

Financial assets that are neither past due nor impaired:

| | | | EUR millions |
| --- | --- | --- | --- |
| | Total | Neither past due nor impaired | Past due but not impaired |
| | | | < 1 year | 1-5 years | > 5 years |
| Exchange receivables and non-exchange recoverables | 138 | 121 | 12 | 5 | – |
| Total at 31.12.2018 | 138 | 121 | 12 | 5 | – |
| Exchange receivables and non-exchange recoverables | 92 | 92 | 0 | – | – |
| Total at 31.12.2017 | 92 | 92 | 0 | – | – |

EUR millions

Total

Neither past due nor impaired

Past due but not impaired

< 1 year

1-5 years

> 5 years

Exchange receivables and non-exchange recoverables

138

121

12

5

–

Total at 31.12.2018

138

121

12

5

–

Exchange receivables and non-exchange recoverables

92

92

0

–

–

Total at 31.12.2017

92

92

0

–

–

Financial assets by risk category:

| | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- |
| | 31.12.2018 | 31.12.2017 |
| | Receivables | Cash | Total | Receivables | Cash | Total |
| Counterparties with external credit rating | | | | | | |
| Prime and high grade | 5 | 303 | 308 | 3 | 103 | 106 |
| Upper medium grade | – | 80 | 80 | 0 | 240 | 240 |
| Lower medium grade | – | 4 | 4 | 3 | 4 | 7 |
| Non- investment grade | – | 0 | 0 | 1 | 0 | 2 |
| Total | 5 | 387 | 391 | 7 | 347 | 354 |
| Counterparties without external credit rating | | | | | | |
| Group 1 (debtors without defaults in the past) | 133 | 0 | 134 | 86 | 0 | 86 |
| Group 2 (debtors with defaults in the past) | – | – | – | – | – | – |
| Total | 133 | 0 | 134 | 86 | 0 | 86 |
| Total | 138 | 387 | 525 | 92 | 347 | 440 |

EUR millions

31.12.2018

31.12.2017

Receivables

Cash

Total

Receivables

Cash

Total

Counterparties with external credit rating

Prime and high grade

5

303

308

3

103

106

Upper medium grade

–

80

80

0

240

240

Lower medium grade

–

4

4

3

4

7

Non- investment grade

–

0

0

1

0

2

Total

5

387

391

7

347

354

Counterparties without external credit rating

Group 1 (debtors without defaults in the past)

133

0

134

86

0

86

Group 2 (debtors with defaults in the past)

–

–

–

–

–

–

Total

133

0

134

86

0

86

Total

138

387

525

92

347

440

Funds in the categories non-investment grade and lower medium grade relate mainly to Member State contributions to the EDF paid to the special accounts opened by Member States in accordance with Article 20(3) of the EDF FR. According to this regulation the amount of such contributions must remain in those special accounts until the payments need to be made.

Most of the EDF's treasury resources are kept, in accordance with the EDF FR, in the "special accounts" opened by Member States for the payment of their contributions. The majority of such accounts are held with Member States' treasuries or national central banks. These institutions carry the lowest counterparty risk for the EDF (exposure is with its Member States).

For the part of the EDF's treasury resources kept with commercial banks in order to cover the execution of payments, replenishment of these accounts is executed on a just-in-time basis and is automatically managed by the Commission treasury's cash management system. Minimum cash levels, proportional to the average amount of daily payments made from it, are kept on each account. As a consequence the amounts kept overnight on these accounts remain constantly at low levels which ensure the EDF's risk exposure is limited.

In addition, specific guidelines are applied for the selection of commercial banks in order to further minimise counterparty risk to which the EDF is exposed.

All commercial banks are selected by calls for tender. The minimum short-term credit rating required for admission to the tendering procedures is Moody's P-1 or equivalent (S&P A-1 or Fitch F1). A lower level may be required in specific and duly justified circumstances.

35.5.LIQUIDITY RISK

Maturity analysis of financial liabilities by remaining contractual maturity

| | | | | EUR millions |
| --- | --- | --- | --- | --- |
| | < 1 year | 1-5 years | > 5 years | Total |
| Financial liabilities | 241 | 7 | 11 | 259 |
| Total at 31.12.2018 | 241 | 7 | 11 | 259 |
| Financial liabilities | 563 | 13 | 1 | 577 |
| Total at 31.12.2017 | 563 | 13 | 1 | 577 |

EUR millions

< 1 year

1-5 years

> 5 years

Total

Financial liabilities

241

7

11

259

Total at 31.12.2018

241

7

11

259

Financial liabilities

563

13

1

577

Total at 31.12.2017

563

13

1

577

Budget principles applied to the EDF ensure that overall cash resources for the budgetary period are always sufficient for the execution of all related payments. Indeed the total Member States' contributions equal the overall amount of payment appropriations for the relevant budgetary period.

Member States contributions to EDF, however, are paid in three instalments per year, while payments are subject to certain seasonality.

In order to ensure that treasury resources are always sufficient to cover the payments to be executed in any given month, information on the treasury situation is regularly exchanged between the Commission's treasury and the relevant spending departments.

In addition to the above, in the context of the EDF's treasury operations, automated cash management tools ensure that sufficient liquidity is available on each of the EDF's bank accounts, on a daily basis.

36.RELATED PARTY DISCLOSURES

The related parties of the EDF are the Bêkou- and Africa EU Trust Funds and the European Commission. Transactions between these entities take place as part of the normal operations of the EDF and as this is the case, no specific disclosure requirements are necessary for these transactions in accordance with the EU accounting rules.

The EDF has no separate management since it is managed by the Commission. The entitlements of the key management of the EU, including the Commission, have been disclosed in the Consolidated annual accounts of the European Union under heading 7.2 "Key management entitlements".

37.EVENTS AFTER THE BALANCE SHEET DATE

At the date of signature of these accounts, no material issues had come to the attention of or were reported to the Accounting Officer of the EDF that would require separate disclosure under this section. The annual accounts and related notes were prepared using the most recently available information and this is reflected in the information presented above.

38.RECONCILIATION OF ECONOMIC RESULT AND BUDGET RESULT

The economic result of the year is calculated on the basis of accrual accounting principles. The budget result is however based on cash accounting rules. As the economic result and the budget result both cover the same underlying operational transactions, it is a useful control to ensure that they are reconcilable. The table below shows this reconciliation, highlighting the key reconciling amounts, split between revenue and expenditure items.

| | | EUR millions |
| --- | --- | --- |
| | 2018 | 2017 |
| ECONOMIC RESULT OF THE YEAR | (4 118) | (3 818) |
| | | |
| Revenue | | |
| Entitlements not affecting the budget result | (1) | (7) |
| Entitlements established in current year but not yet collected | (11) | (3) |
| Entitlements established in previous years and collected in current year | 11 | 29 |
| Net effect of pre-financing | 36 | 57 |
| Accrued revenue (net) | (39) | (62) |
| Other | (1) | (2) |
| Expenses | | |
| Expenses of the current year not yet paid | 115 | 19 |
| Expenses of previous years paid in the current year | (366) | (60) |
| Net effect of pre-financing | (179) | (685) |
| Accrued expenses (net) | 484 | 373 |
| | | |
| BUDGET RESULT OF THE YEAR | (4 069) | (4 158) |

EUR millions

2018

2017

ECONOMIC RESULT OF THE YEAR

(4 118)

(3 818)

Revenue

Entitlements not affecting the budget result

(1)

(7)

Entitlements established in current year but not yet collected

(11)

(3)

Entitlements established in previous years and collected in current year

11

29

Net effect of pre-financing

36

57

Accrued revenue (net)

(39)

(62)

Other

(1)

(2)

Expenses

Expenses of the current year not yet paid

115

19

Expenses of previous years paid in the current year

(366)

(60)

Net effect of pre-financing

(179)

(685)

Accrued expenses (net)

484

373

BUDGET RESULT OF THE YEAR

(4 069)

(4 158)

38.1.RECONCILING ITEMS - REVENUE

The budgetary revenue of a financial year corresponds to the revenue collected from entitlements established in the course of the year and amounts collected from entitlements established in previous years.

The entitlements not affecting the budget result are recorded in the economic result but from a budgetary perspective cannot be considered as revenues as the cashed amount is transferred to reserves and cannot be recommitted without a Council decision.

The entitlements established in the current year but not yet collected are to be deducted from the economic result for reconciliation purposes as they do not form part of budgetary revenue. On the contrary, the entitlements established in previous years and collected in the current year must be added to the economic result for reconciliation purposes.

The net effect of pre-financing is the clearing of the recovered pre-financing amounts. This is a cash receipt which has no impact on the economic result.

The net accrued revenue mainly consists of accruals made for year-end cut-off purposes. Only the net effect, i.e. the accrued revenue of the current year less the reversal of accrued revenue of the previous year, is taken into consideration.

38.2.RECONCILING ITEMS – EXPENDITURE

Expenses of the current year not yet paid are to be added for reconciliation purposes as they are included in the economic result but do not form part of budgetary expenditure. On the contrary, the expenses of previous years paid in the current year must be deducted from the economic result for reconciliation purposes as they are part of the current year's budgetary expenditure but have either no effect on the economic result or they decrease the expenses in case of corrections.

The cash receipts from payment cancellations do not affect the economic result whereas they impact the budget result.

The net effect of pre-financing is the combination of the new pre-financing amounts paid in the current year (recognised as budgetary expenditure of the year) and the clearing of pre-financing paid in the current year or previous years through the acceptance of eligible costs. The latter represents an expense in accrual terms but not in the budgetary accounts since the payment of the initial pre-financing had already been considered as a budgetary expenditure at the time of its payment.

The net accrued expenses mainly consist of accruals made for year-end cut-off purposes, i.e. eligible expenses incurred by beneficiaries of EDF funds but not yet reported to the EDF. Only the net effect, i.e. the accrued expenses of the current year less the reversal of accrued expenses of the previous year, is taken into consideration.

FINANCIAL STATEMENTS OF THE EU TRUST FUNDS CONSOLIDATED IN EDF

FINAL ANNUAL ACCOUNTS OF THE BÊKOU EU TRUST FUND 2018

It should be noted that due to the rounding of figures into thousands of euros, some financial data in the tables may appear not to add-up.

BACKGROUND INFORMATION ON THE BÊKOU EU TRUST FUND

General background on Union Trust Funds

In accordance with Articles 234 and 235 of the Financial Regulation applicable to the general budget of the Union (EU FR)
  4
  and Article 35 of the Financial Regulation applicable to the 11th European Development Fund (EDF FR)
  5
  , the European Commission may establish Union trust funds for external actions (‘Union trust funds’). The Union trust funds are constituted under an agreement concluded with other donors for emergency and post-emergency actions necessary to react to a crisis, or for thematic actions.

Union trust funds are established by the European Commission with a decission after consulting or approval of the European Parliament and the Council. This decission includes the constitutive agreement with other donors.

Union trust funds are only established and implemented subject to the following conditions:

•there is added value of the Union intervention: the objectives of Union trust funds, in particular by reason of their scale or potential effects, may be better achieved at Union level than at national level and the use of the existing financing instruments would not be sufficient to achieve policy objectives of the Union;

•Union trust funds bring clear political visibility for the Union and managerial advantages as well as better control by the Union of risks and disbursements of the Union and other donors’ contributions;

•Union trust funds do not duplicate other existing funding channels or similar instruments without providing any additionality;

•the objectives of Union trust funds are aligned with the objectives of the Union instrument or budgetary item from which they are funded.

A board chaired by the Commission is established for each Union trust fund to ensure a fair representation of the donors and to decide upon the use of the funds. The board includes a representative of each non-contributing Member State as an observer. The rules for the composition of the board and its internal rules shall be laid down in the constitutive agreement of the Union trust fund.

Union trust funds are established for a limited duration as determined in their constitutive agreement. That duration may be extended upon request of the board of the Union trust fund and upon presentation by the Commission of a report justifying the extension. The European Parliament and/or the Council may request the Commission to discontinue the appropriations for the Trust Fund or revise the constitutive act with a view to liquidate it.

The accounting officer of the Commission serves as the accounting officer of the Union trust funds. The accounting officer is responsible for laying down accounting procedures and chart of accounts common to all Union trust funds. The Commission’s internal auditor, OLAF and the Court of Auditors exercise the same powers over Union trust funds as they do in respect of other actions carried out by the Commission. The Union trust funds are also subject to an independent external audit every year.

Current EU Trust Funds

To date, the Commission has set up four EUTFs:

- The BÊKOU EUTF, whose objective is to support all aspects of the Central African Republic's exit from crisis and its reconstruction efforts. Established on 15 July 2014;

- The MADAD EUTF, a European Union Regional Trust Fund in response to the Syrian crisis. Established on 15 December 2014;

- The AFRICA EUTF; a European Union Emergency Trust Fund for stability and addressing root causes of irregular migration and displaced persons in Africa. Established on 12 November 2015;

- The COLOMBIA EUTF; to support the implementation of the peace agreement in the early recovery and stabilisation post conflict. Established on 12 December 2016.

Further information is available on the websites of individual EUTFs:

Bekou -
     

  http://ec.europa.eu/europeaid/bekou-trust-fund-introduction_en

Madad -
     

  http://ec.europa.eu/enlargement/neighbourhood/countries/syria/madad/index_en.htm

Africa -
     

  http://ec.europa.eu/europeaid/regions/africa/eu-emergency-trust-fund-africa_en

Colombia -

  http://ec.europa.eu/europeaid/eu-trust-fund-colombia_en

The Bêkou Trust Fund

The first multi-donor EU Trust Fund called Bêkou, which means 'hope' in Sango, was established on 15 July 2014, by the Commission (represented by DGs DEVCO and ECHO, and the EEAS) and three of its Member States (Germany, France and the Netherlands), with the aim of promoting the stabilisation and reconstruction of the Central African Republic (CAR). It has been established for a maximum duration of 60 months. The trust fund is managed from Brussels.

The Trust Fund Board and the Operational Committee of the Bêkou EU Trust Fund are composed of representatives of the donors, of the Commission and observers.

The Board adopts and reviews the strategy of the EUTF. The Board shall meet at least once a year.

The Operational Committee examines, approves and supervises the implementation of the actions financed by the Fund. The Committee also approves the annual accounts and the annual reports on the activities financed by the Trust Fund.

Annual accounts of the Bêkou Trust Fund

According to Article 8 of the Agreement establishing the European Union Trust Fund for the Central African Republic, the 'Bêkou EU Trust Fund' and article 11.2.1 of the Constitutive agreement, the annual accounts comprise two parts: (1) The annual financial report prepared by the EUTF manager and (2) The annual financial statements prepared by the Commission's Accounting Officer, who is, based on the same article also the Accounting Officer of the trust fund.

According to Article 8 of the Constitutive agreement the financial statements shall be prepared in accordance with the accounting rules adopted by the Commission's Accounting Officer (EU Accounting Rules, EAR) that are based on the International Public Sector Accounting Standards (IPSAS).

The annual accounts are subject to independent external audit and the final annual accounts are submitted by the EUTF manager and the Accounting Officer to the Operational Committee for approval (Article 8.3.4(c)).

Highlights of the year

The Bêkou EU Trust Fund (Bêkou EUTF) aims to ensure access to basic services, support economic recovery and job creation, and promote social cohesion and reconciliation. Since its creation, the Bêkou EUTF has adopted 16 programmes and has reached more than 2 million beneficiaries.

Despite the existence of a democratically elected government and its efforts to return to stability, the security situation in the CAR remains volatile. It is in this complex and fragile context, where the Bêkou EUTF takes full advantage of its comparative advantages of flexibility and adaptability to changing circumstances. Additionally, the Bêkou EUTF remains the only instrument building resilience for both the population and the state, in a true Linking Relief Rehabilitation and Development (LRRD) approach.

Given the current situation in CAR and in view of the expiration of the Bêkou EUTF in July 2019, in November 2018, the EUTF Board formally requested an extension of 18 months, thus bringing the total duration of the Bêkou EUTF from 60 months to 78 months. The official procedure, which includes a consultation of the European Parliament and the Council, was launched in December 2018.

The operational highlights of the 2018 are the following:

·The Bêkou EUTF adopted a new action for a total amount of EUR 35 million in the sector of health and increased by EUR 2 million each the budget of two already adopted actions in the sectors of economic recovery and promotion of social cohesion, dialogue and reconciliation.

·The Bêkou EUTF Results Framework was adopted, responding to the Court of Auditors’ recommendation on the identification of SMART objectives at a EUTF level. This strategic tool will better demonstrate the overall results of the Bêkou EUTF actions.

·The Bêkou EUTF projects were marked by the relative stability in the north-eastern and south-western parts of the country that called for additional interventions, the localised conflicts in Bangui and the hinterland, as well as the redeployment of public officials outside Bangui.

On the financial side, by the end of 2018, pledges by EUTF contributors amounted to more than EUR 242 million. This is an increase of EUR 6 million compared to 2017. Only EUR 5 million out of these EUR 242 million remain to be certified.

In terms of contracts, the Bêkou EUTF signed 30 new contracts in 2018 for a total amount of nearly EUR 80 million (representing 48% of the total amount contracted since its creation). They contribute to the implementation of its programmes in the sectors of health, economic recovery, rural resilience and job creation, water and sanitation, reconciliation and opening-up of regions.

Last but not least, more than EUR 57 million (representing nearly 50% of the total amount paid since the creation of Bêkou EUTF) was paid in 2018 on top of payments made during previous years; total disbursements have nearly reached EUR 119 million since the creation of the Bêkou EUTF.

In the financial statements, the impact of the above mentioned activities are most visible when looking at:

·Pre-financing: an increase of kEUR 24 839 resulting from the high number of new contracts signed and advances paid out;

·Cash and cash equivalents: a decrease of kEUR 26 017 is mainly caused by the increased payments of pre-financing, highlighted above;

·Outstanding commitments not yet expensed: an increase from kEUR 25 310 to 54 645 kEUR due to the new contracts.

BALANCE SHEET

| | | | EUR '000 |
| --- | --- | --- | --- |
| | | 31.12.2018 | 31.12.2017 |
| NON-CURRENT ASSETS | | | |
| Pre-financing | | 3 443 | 686 |
| | | 3 443 | 686 |
| CURRENT ASSETS | | | |
| Pre-financing | | 29 546 | 7 465 |
| Exchange receivables and non-exchange recoverables | | 1 138 | 877 |
| Cash and cash equivalents | | 13 926 | 39 943 |
| | | 44 611 | 48 285 |
| TOTAL ASSETS | | 48 054 | 48 971 |
| | | | |
| NON-CURRENT LIABILITIES | | | |
| Financial liabilities | | (42 737) | (44 720) |
| | | (42 737) | (44 720) |
| CURRENT LIABILITIES | | | |
| Payables | | (918) | (716) |
| Accrued charges and deferred revenue | | (4 399) | (3 536) |
| | | (5 317) | (4 252) |
| TOTAL LIABILITIES | | (48 054) | (48 971) |
| | | | |
| NET ASSETS | | – | – |
| | | | |
| FUNDS & RESERVES | | | |
| Accumulated surplus | | – | – |
| Economic result of the year | | – | – |
| NET ASSETS | | – | – |

EUR '000

31.12.2018

31.12.2017

NON-CURRENT ASSETS

Pre-financing

3 443

686

3 443

686

CURRENT ASSETS

Pre-financing

29 546

7 465

Exchange receivables and non-exchange recoverables

1 138

877

Cash and cash equivalents

13 926

39 943

44 611

48 285

TOTAL ASSETS

48 054

48 971

NON-CURRENT LIABILITIES

Financial liabilities

(42 737)

(44 720)

(42 737)

(44 720)

CURRENT LIABILITIES

Payables

(918)

(716)

Accrued charges and deferred revenue

(4 399)

(3 536)

(5 317)

(4 252)

TOTAL LIABILITIES

(48 054)

(48 971)

NET ASSETS

–

–

FUNDS & RESERVES

Accumulated surplus

–

–

Economic result of the year

–

–

NET ASSETS

–

–

STATEMENT OF FINANCIAL PERFORMANCE

| | | | EUR '000 |
| --- | --- | --- | --- |
| | | 2018 | 2017 |
| REVENUE | | | |
| Revenue from non-exchange transactions | | | |
| Revenue from donations | | 33 682 | 29 620 |
| | | 33 682 | 29 620 |
| Revenue from exchange transactions | | | |
| Financial revenue | | 1 | 1 |
| | | 1 | 1 |
| Total Revenue | | 33 683 | 29 621 |
| EXPENSES | | | |
| Operating expenses | | (32 825) | (28 918) |
| Other expenses | | (858) | (703) |
| Total Expenses | | (33 683) | (29 621) |
| ECONOMIC RESULT OF THE YEAR | | – | – |

EUR '000

2018

2017

REVENUE

Revenue from non-exchange transactions

Revenue from donations

33 682

29 620

33 682

29 620

Revenue from exchange transactions

Financial revenue

1

1

1

1

Total Revenue

33 683

29 621

EXPENSES

Operating expenses

(32 825)

(28 918)

Other expenses

(858)

(703)

Total Expenses

(33 683)

(29 621)

ECONOMIC RESULT OF THE YEAR

–

–

CASHFLOW STATEMENT

| | | EUR '000 |
| --- | --- | --- |
| | 2018 | 2017 |
| Economic result of the year | – | – |
| Operating activities | | |
| (Increase)/decrease in pre-financing | (24 839) | 7 912 |
| (Increase)/decrease in exchange receivables and non-exchange recoverables | (261) | 578 |
| Increase/(decrease) in financial liabilities | (1 982) | (14 620) |
| Increase/(decrease) in payables | 202 | 716 |
| Increase/(decrease) in accrued charges and deferred revenue | 863 | 2 321 |
| | | |
| NET CASHFLOW | (26 017) | (3 092) |
| | | |
| Net increase/(decrease) in cash and cash equivalents | (26 017) | (3 092) |
| Cash and cash equivalents at the beginning of the year | 39 943 | 43 036 |
| Cash and cash equivalents at year-end | 13 926 | 39 943 |

EUR '000

2018

2017

Economic result of the year

–

–

Operating activities

(Increase)/decrease in pre-financing

(24 839)

7 912

(Increase)/decrease in exchange receivables and non-exchange recoverables

(261)

578

Increase/(decrease) in financial liabilities

(1 982)

(14 620)

Increase/(decrease) in payables

202

716

Increase/(decrease) in accrued charges and deferred revenue

863

2 321

NET CASHFLOW

(26 017)

(3 092)

Net increase/(decrease) in cash and cash equivalents

(26 017)

(3 092)

Cash and cash equivalents at the beginning of the year

39 943

43 036

Cash and cash equivalents at year-end

13 926

39 943

STATEMENT OF CHANGES IN NET ASSETS

| | | | EUR '000 |
| --- | --- | --- | --- |
| | Accumulated surplus/


  (deficit) | Economic result of the year | Net assets |
| BALANCE AS AT 31.12.2017 | – | – | – |
| Economic result of the year | – | – | – |
| BALANCE AS AT 31.12.2018 | – | – | – |

EUR '000

Accumulated surplus/

(deficit)

Economic result of the year

Net assets

BALANCE AS AT 31.12.2017

–

–

–

Economic result of the year

–

–

–

BALANCE AS AT 31.12.2018

–

–

–

FINAL ANNUAL ACCOUNTS OF THE EUTF AFRICA 2018

It should be noted that due to the rounding of figures into thousands of euros, some financial data in the tables may appear not to add-up.

BACKGROUND INFORMATION ON THE EUTF FOR AFRICA

General background on Union Trust Funds

In accordance with Articles 234 and 235 of the Financial Regulation applicable to the general budget of the Union (EU FR)
  6
  and Article 35 of the Financial Regulation applicable to the 11th European Development Fund (EDF FR)
  7
  , the European Commission may establish Union trust funds for external actions (‘Union trust funds’). The Union trust funds are constituted under an agreement concluded with other donors for emergency and post-emergency actions necessary to react to a crisis, or for thematic actions.

Union trust funds are established by the European Commission with a decission after consulting or approval of the European Parliament and the Council. This decission includes the constitutive agreement with other donors.

Union trust funds are only established and implemented subject to the following conditions:

•there is added value of the Union intervention: the objectives of Union trust funds, in particular by reason of their scale or potential effects, may be better achieved at Union level than at national level and the use of the existing financing instruments would not be sufficient to achieve policy objectives of the Union;

•Union trust funds bring clear political visibility for the Union and managerial advantages as well as better control by the Union of risks and disbursements of the Union and other donors’ contributions;

•Union trust funds do not duplicate other existing funding channels or similar instruments without providing any additionality;

•the objectives of Union trust funds are aligned with the objectives of the Union instrument or budgetary item from which they are funded.

A board chaired by the Commission is established for each Union trust fund to ensure a fair representation of the donors and to decide upon the use of the funds. The board includes a representative of each non-contributing Member State as an observer. The rules for the composition of the board and its internal rules shall be laid down in the constitutive agreement of the Union trust fund.

Union trust funds are established for a limited duration as determined in their constitutive agreement. That duration may be extended upon request of the board of the Union trust fund and upon presentation by the Commission of a report justifying the extension. The European Parliament and/or the Council may request the Commission to discontinue the appropriations for the Trust Fund or revise the constitutive act with a view to liquidate it.

The accounting officer of the Commission serves as the accounting officer of the Union trust funds. The accounting officer is responsible for laying down accounting procedures and chart of accounts common to all Union trust funds. The Commission’s internal auditor, OLAF and the Court of Auditors exercise the same powers over Union trust funds as they do in respect of other actions carried out by the Commission. The Union trust funds are also subject to an independent external audit every year.

Current EU Trust Funds

To date, the Commission has set up four EUTFs:

- The BÊKOU EUTF, whose objective is to support all aspects of the Central African Republic's exit from crisis and its reconstruction efforts. Established on 15 July 2014;

- The MADAD EUTF, a European Union Regional Trust Fund in response to the Syrian crisis. Established on 15 December 2014;

- The AFRICA EUTF; a European Union Emergency Trust Fund for stability and addressing root causes of irregular migration and displaced persons in Africa. Established on 12 November 2015;

- The COLOMBIA EUTF; to support the implementation of the peace agreement in the early recovery and stabilisation post conflict. Established on 12 December 2016.

Further information is available on the websites of individual EUTFs:

Bekou -
     

  http://ec.europa.eu/europeaid/bekou-trust-fund-introduction_en

Madad -
     

  http://ec.europa.eu/enlargement/neighbourhood/countries/syria/madad/index_en.htm

Africa -
     

  http://ec.europa.eu/europeaid/regions/africa/eu-emergency-trust-fund-africa_en

Colombia -

  http://ec.europa.eu/europeaid/eu-trust-fund-colombia_en

The EUTF for Africa

European Union Emergency Trust Fund for stability and addressing root causes of irregular migration and displaced persons in Africa ('EUTF Africa') was launched on 12 November 2015 during the Valletta Summit on Migration. The main objectives of this trust fund is to support all aspects of stability and contribute to better migration management as well as addressing the root causes of destabilisation, forced displacement and irregular migration, in particular by promoting resilience, economic and equal opportunities, security and development and addressing human rights abuses.

The trust fund operates in three main geographic areas, namely the Sahel region and Lake Chad area, the Horn of Africa and the North of Africa but also the neighbouring countries of the eligible countries may benefit, on a case by case basis, from the Trust fund's projects. The Trust Fund is established for a limited period, until 31 December 2020 in order to provide a short and medium-term response to the challenges of the regions. The trust fund is managed from Brussels.

The Trust Fund Board and the Operational Committee of the EUTF Africa are composed of representatives of the donors and of the Commission, as well as representatives of non-contributing EU Member States, authorities of eligible countries' and regional organisations as observers.

The Board establishes and reviews the strategy of the EUTF. The Board shall meet at least once a year.

The Operational Committee examines, approves and supervises the implementation of the actions financed by the Fund. The Committee also approves the annual accounts and the annual reports on the activities financed by the Trust Fund.

Annual accounts of the EUTF for Africa

According to Article 7 of 'The agreement establishing the European Union emergency trust fund for stability and addressing root causes of irregular migration and displaced persons in Africa and its internal rules' ('Constitutive agreement') the annual accounts comprise two parts: (1) The annual financial report which is the responsibility of the EUTF manager and (2) The annual financial statements prepared by the EC Accounting Officer, who is, based on the same article, also the Accounting Officer of the trust fund.

According to Article 8 of the Consitutive agreement the financial statements shall be prepared in accordance with the accounting rules adopted by the Commission's Accounting Officer (EU Accounting Rules, EAR) that are based on the International Public Sector Accounting Standards (IPSAS).

The annual accounts are subject to independent external audit and the final annual accounts are submitted by the EUTF manager and the Accounting Officer to the Operational Committee for approval (Article 8.3.4(c)).

Highlights of the year

As of 31 December 2018, resources pledged to the EUTF Africa amounted to approximately EUR 4.2 billion. This includes around EUR 3.7 billion from the European Development Fund (EDF) and EU financial instruments including the Development Cooperation Instrument (DCI), the European Neighbourhood Instrument (ENI), the Asylum, Migration and Integration Fund (AMIF) and funding from the Directorate-General for European Civil Protection and Humanitarian Aid Operations (DG ECHO), as well as EUR 489.5 million from EU Member States and other donors (Switzerland and Norway).

In the course of 2018, the overall resources of the EUTF Africa increased by EUR 902 million, including new pledges of EUR 674 million from the EDF and EUR 117 million from EU Budget. The EUTF Africa received 24 new pledges from EU Member States and other donors amounting to EUR 110 million (EUR 49 million to the Sahel and Lake Chad window, EUR 47 million to the North of Africa window and EUR 14 million to the Horn of Africa window). All pledges from EU Member States and other donors made in 2018 plus an outstanding pledge of 2017 were certified by the end of 2018. The conclusions of the European Council of 28 June 2018 called on the EU and its Member States to provide additional funding to the EUTF Africa. As a follow-up, the Commission adopted on 6 July a decision to transfer EUR 500 million from the 11th EDF reserve.

With regards the state of implementation of the EUTF Africa in the year 2018, 45 new programmes were adopted as well as 13 top-ups across the three regions including cross-window programmes (16 in the Sahel/Lake Chad, 26 in the Horn of Africa and 9 in the North of Africa and 7 cross-window). This brings, as of the end of 2018, the total number of programmes approved by Operational committees to 187 for a total of EUR 3 590 million. As of the end of 2018, contracts signed with implementing partners have reached 366, for an overall amount of EUR 2 461 million, of which 949.3 million in new operational contracts for 2018 only. Modifications to old contracts bring the total operational contracted amount in 2018 to 959.9 million. The contracting rate as of the end of 2018 has improved compared to the contracting rate as of the end of 2017 (69% of signed contracts over approved funding as opposed to 62.9%).

In the course of 2018, the EUTF Africa has further intensified its efforts together with its African and European partners, to foster stability and contribute to improved migration management in the Sahel and Lake Chad, the Horn of Africa and the North of Africa regions. It continued addressing the root causes of destabilization, forced displacement and irregular migration, by promoting development and security. During its third year, the EUTF Africa has further demonstrated its added-value as a swift and effective implementation tool which facilitates political dialogue with partner countries, applies innovative approaches and produces concrete results by pooling together funding and expertise from a variety of stakeholders.

Through the EUTF Africa, over 5.3 million vulnerable people benefitted from basic services and food security and nutrition programmes. Over 150 000 people were reached by information campaigns on resilience-building practices and basic rights and 96 000 migrants, or potential migrants, were reached out by information campaign on migration and risks linked to irregular migration. Through the EU-IOM Initiative, the EUTF Africa has supported 42 628 vulnerable migrants voluntary returns mostly from Libya (18 329) and Niger (17 226), and more than 58 000 vulnerable migrants were assisted upon return to their country of origin. Through the Better Migration Management programme in the Horn of Africa alone, the EUTF Africa has already assisted almost 11 000 migrants and forcibly displaced people and has trained nearly 1 600 persons on migration management.

In the financial statements, the impact of this increased activity and new contracts is most visible when looking at:

·Pre-financing: increased by kEUR 57 110 as advances on the new contracts were paid out;

·Payables and accrued charges: increased by kEUR 81 753 as more cost claims are processed but also more expenses must be accrued for;

·Expenses: increased from kEUR 279 299 in 2017 to kEUR 576 808 in 2018 as the Trust Fund is in its third year of existence and many more contracts are being implemented;

·Outstanding commitments not yet expensed increased from kEUR 926 139 to kEUR 1 310 069 due to the new contracts.

BALANCE SHEET

| | | | EUR '000 |
| --- | --- | --- | --- |
| | | 31.12.2018 | 31.12.2017 |
| NON-CURRENT ASSETS | | | |
| Pre-financing | | 34 144 | 52 990 |
| | | 34 144 | 52 990 |
| CURRENT ASSETS | | | |
| Pre-financing | | 273 214 | 197 258 |
| Exchange receivables and non-exchange recoverables | | 16 656 | 3 020 |
| Cash and cash equivalents | | 146 864 | 162 571 |
| | | 436 734 | 362 849 |
| TOTAL ASSETS | | 470 878 | 415 838 |
| | | | |
| NON-CURRENT LIABILITIES | | | |
| Financial liabilities | | (369 999) | (396 713) |
| | | (369 999) | (396 713) |
| CURRENT LIABILITIES | | | |
| Payables | | (12 733) | (526) |
| Accrued charges and deferred revenue | | (88 146) | (18 600) |
| | | (100 879) | (19 126) |
| TOTAL LIABILITIES | | (470 878) | (415 838) |
| | | | |
| NET ASSETS | | – | – |
| | | | |
| FUNDS & RESERVES | | | |
| Accumulated surplus | | – | – |
| Economic result of the year | | – | – |
| NET ASSETS | | – | – |

EUR '000

31.12.2018

31.12.2017

NON-CURRENT ASSETS

Pre-financing

34 144

52 990

34 144

52 990

CURRENT ASSETS

Pre-financing

273 214

197 258

Exchange receivables and non-exchange recoverables

16 656

3 020

Cash and cash equivalents

146 864

162 571

436 734

362 849

TOTAL ASSETS

470 878

415 838

NON-CURRENT LIABILITIES

Financial liabilities

(369 999)

(396 713)

(369 999)

(396 713)

CURRENT LIABILITIES

Payables

(12 733)

(526)

Accrued charges and deferred revenue

(88 146)

(18 600)

(100 879)

(19 126)

TOTAL LIABILITIES

(470 878)

(415 838)

NET ASSETS

–

–

FUNDS & RESERVES

Accumulated surplus

–

–

Economic result of the year

–

–

NET ASSETS

–

–

STATEMENT OF FINANCIAL PERFORMANCE

| | | | EUR '000 |
| --- | --- | --- | --- |
| | | 2018 | 2017 |
| REVENUE | | | |
| Revenue from non-exchange transactions | | | |
| Revenue from donations | | 576 802 | 279 027 |
| | | 576 802 | 279 027 |
| Revenue from exchange transactions | | | |
| Financial revenue | | 2 | 2 |
| Other exchange revenue | | 5 | 270 |
| | | 6 | 271 |
| Total revenue | | 576 808 | 279 299 |
| EXPENSES | | | |
| Operating expenses | | (561 761) | (271 669) |
| Other expenses | | (15 047) | (7 630) |
| Total expenses | | (576 808) | (279 299) |
| ECONOMIC RESULT OF THE YEAR | | – | – |

EUR '000

2018

2017

REVENUE

Revenue from non-exchange transactions

Revenue from donations

576 802

279 027

576 802

279 027

Revenue from exchange transactions

Financial revenue

2

2

Other exchange revenue

5

270

6

271

Total revenue

576 808

279 299

EXPENSES

Operating expenses

(561 761)

(271 669)

Other expenses

(15 047)

(7 630)

Total expenses

(576 808)

(279 299)

ECONOMIC RESULT OF THE YEAR

–

–

CASHFLOW STATEMENT

| | | EUR '000 |
| --- | --- | --- |
| | 2018 | 2017 |
| Economic result of the year | – | – |
| Operating activities | | |
| (Increase)/decrease in pre-financing | (57 110) | (134 662) |
| (Increase)/decrease in exchange receivables and non-exchange recoverables | (13 636) | 6 456 |
| Increase/(decrease) in financial liabilities | (26 713) | 258 211 |
| Increase/(decrease) in payables | 12 207 | (177) |
| Increase/(decrease) in accrued charges and deferred revenue | 69 546 | 17 864 |
| | | |
| NET CASHFLOW | (15 706) | 147 691 |
| | | |
| Net increase/(decrease) in cash and cash equivalents | (15 706) | 147 691 |
| Cash and cash equivalents at the beginning of the year | 162 571 | 14 879 |
| Cash and cash equivalents at year-end | 146 864 | 162 571 |

EUR '000

2018

2017

Economic result of the year

–

–

Operating activities

(Increase)/decrease in pre-financing

(57 110)

(134 662)

(Increase)/decrease in exchange receivables and non-exchange recoverables

(13 636)

6 456

Increase/(decrease) in financial liabilities

(26 713)

258 211

Increase/(decrease) in payables

12 207

(177)

Increase/(decrease) in accrued charges and deferred revenue

69 546

17 864

NET CASHFLOW

(15 706)

147 691

Net increase/(decrease) in cash and cash equivalents

(15 706)

147 691

Cash and cash equivalents at the beginning of the year

162 571

14 879

Cash and cash equivalents at year-end

146 864

162 571

STATEMENT OF CHANGES IN NET ASSETS

| | | | EUR '000 |
| --- | --- | --- | --- |
| | Accumulated surplus/


  (deficit) | Economic result of the year | Net assets |
| BALANCE AS AT 31.12.2017 | – | – | – |
| Economic result of the year | – | – | – |
| BALANCE AS AT 31.12.2018 | – | – | – |

EUR '000

Accumulated surplus/

(deficit)

Economic result of the year

Net assets

BALANCE AS AT 31.12.2017

–

–

–

Economic result of the year

–

–

–

BALANCE AS AT 31.12.2018

–

–

–

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE EU TRUST FUNDS

It should be noted that due to the rounding of figures into millions of euros, some financial data in the tables may appear not to add-up.

CONSOLIDATED BALANCE SHEET

| | | EUR millions |
| --- | --- | --- |
| | 31.12.2018 | 31.12.2017 |
| NON-CURRENT ASSETS | | |
| Pre-financing | 924 | 636 |
| | 924 | 636 |
| CURRENT ASSETS | | |
| Pre-financing | 1 751 | 1 723 |
| Exchange receivables and non-exchange recoverables | 156 | 96 |
| Cash and cash equivalents | 548 | 550 |
| | 2 455 | 2 369 |
| TOTAL ASSETS | 3 379 | 3 005 |
| | | |
| NON-CURRENT LIABILITIES | | |
| Provisions | – | (4) |
| Financial liabilities | (229) | (292) |
| | (229) | (296) |
| CURRENT LIABILITIES | | |
| Payables | (255) | (564) |
| Accrued charges and deferred income | (1 374) | (755) |
| | (1 629) | (1 319) |
| TOTAL LIABILITIES | (1 858) | (1 615) |
| | | |
| NET ASSETS | 1 521 | 1 389 |
| | | |
| FUNDS & RESERVES | | |
| Called fund capital - active EDFs | 50 423 | 46 173 |
| Called fund capital from closed EDFs carried forward | 2 252 | 2 252 |
| Economic result carried forward from previous years | (47 037) | (43 219) |
| Economic result of the year | (4 118) | (3 818) |
| NET ASSETS | 1 521 | 1 389 |

EUR millions

31.12.2018

31.12.2017

NON-CURRENT ASSETS

Pre-financing

924

636

924

636

CURRENT ASSETS

Pre-financing

1 751

1 723

Exchange receivables and non-exchange recoverables

156

96

Cash and cash equivalents

548

550

2 455

2 369

TOTAL ASSETS

3 379

3 005

NON-CURRENT LIABILITIES

Provisions

–

(4)

Financial liabilities

(229)

(292)

(229)

(296)

CURRENT LIABILITIES

Payables

(255)

(564)

Accrued charges and deferred income

(1 374)

(755)

(1 629)

(1 319)

TOTAL LIABILITIES

(1 858)

(1 615)

NET ASSETS

1 521

1 389

FUNDS & RESERVES

Called fund capital - active EDFs

50 423

46 173

Called fund capital from closed EDFs carried forward

2 252

2 252

Economic result carried forward from previous years

(47 037)

(43 219)

Economic result of the year

(4 118)

(3 818)

NET ASSETS

1 521

1 389

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE

| | | EUR millions |
| --- | --- | --- |
| | 2018 | 2017 |
| REVENUE | | |
| Revenue from non-exchange transactions | | |
| Recovery activities | 4 | 61 |
| Revenue from trust funds donations | 303 | 194 |
| | 307 | 255 |
| Revenue from exchange transactions | | |
| Financial revenue | 10 | 4 |
| Other revenue | 46 | 22 |
| | 57 | 26 |
| Total Revenue | 364 | 281 |
| EXPENSES | | |
| Aid instruments | (3 747) | (3 585) |
| Expenses implemented by trust funds | (595) | (301) |
| Co-financing expenses | 17 | (42) |
| Finance costs | 7 | (8) |
| Other expenses | (164) | (162) |
| Total Expenses | (4 482) | (4 099) |
| | | |
| ECONOMIC RESULT OF THE YEAR | (4 118) | (3 818) |

EUR millions

2018

2017

REVENUE

Revenue from non-exchange transactions

Recovery activities

4

61

Revenue from trust funds donations

303

194

307

255

Revenue from exchange transactions

Financial revenue

10

4

Other revenue

46

22

57

26

Total Revenue

364

281

EXPENSES

Aid instruments

(3 747)

(3 585)

Expenses implemented by trust funds

(595)

(301)

Co-financing expenses

17

(42)

Finance costs

7

(8)

Other expenses

(164)

(162)

Total Expenses

(4 482)

(4 099)

ECONOMIC RESULT OF THE YEAR

(4 118)

(3 818)

CONSOLIDATED CASH FLOW STATEMENT

| | | EUR milions |
| --- | --- | --- |
| | 2018 | 2017 |
| Economic result of the year | (4 118) | (3 818) |
| Operating activities | | |
| Capital increase - contributions | 4 250 | 3 850 |
| (Increase)/decrease in trust funds contributions | (0) | – |
| (Increase)/decrease in pre-financing | (317) | (446) |
| (Increase)/decrease in exchange receivables and non-exchange recoverables | (60) | 47 |
| Increase/(decrease) in financial liabilities | (63) | 186 |
| Increase/(decrease) in payables | (309) | 15 |
| Increase/(decrease) in accrued charges and deferred income | 618 | (22) |
| | | |
| NET CASHFLOW | (2) | (188) |
| | | |
| Net increase/(decrease) in cash and cash equivalents | (2) | (188) |
| Cash and cash equivalents at the beginning of the year | 550 | 738 |
| Cash and cash equivalents at year-end | 548 | 550 |

EUR milions

2018

2017

Economic result of the year

(4 118)

(3 818)

Operating activities

Capital increase - contributions

4 250

3 850

(Increase)/decrease in trust funds contributions

(0)

–

(Increase)/decrease in pre-financing

(317)

(446)

(Increase)/decrease in exchange receivables and non-exchange recoverables

(60)

47

Increase/(decrease) in financial liabilities

(63)

186

Increase/(decrease) in payables

(309)

15

Increase/(decrease) in accrued charges and deferred income

618

(22)

NET CASHFLOW

(2)

(188)

Net increase/(decrease) in cash and cash equivalents

(2)

(188)

Cash and cash equivalents at the beginning of the year

550

738

Cash and cash equivalents at year-end

548

550

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

| | | | | | | EUR millions |
| --- | --- | --- | --- | --- | --- | --- |
| | Fund capital - active EDFs (A) | Uncalled funds - active EDFs (B) | Called fund capital - active EDFs (C) = (A)-(B) | Cumulative Reserves (D) | Called fund capital from closed EDFs carried forward (E) | Total Net Assets (C)+(D)+(E) |
| BALANCE AS AT 31.12.2016 | 73 464 | 31 140 | 42 323 | (43 219) | 2 252 | 1 357 |
| Capital increase - contributions | | (4 050) | 4 050 | – | – | 4 050 |
| Refund to Member States | (200) | | (200) | | | (200) |
| Economic result of the year | – | – | – | (3 818) | – | (3 818) |
| BALANCE AS AT 31.12.2017 | 73 264 | 27 090 | 46 173 | (47 037) | 2 252 | 1 389 |
| Capital increase - contributions | | (4 250) | 4 250 | | | 4 250 |
| Economic result of the year | | | – | (4 118) | | (4 118) |
| BALANCE AS AT 31.12.2018 | 73 264 | 22 840 | 50 423 | (51 155) | 2 252 | 1 521 |

EUR millions

Fund capital - active EDFs (A)

Uncalled funds - active EDFs (B)

Called fund capital - active EDFs (C) = (A)-(B)

Cumulative Reserves (D)

Called fund capital from closed EDFs carried forward (E)

Total Net Assets (C)+(D)+(E)

BALANCE AS AT 31.12.2016

73 464

31 140

42 323

(43 219)

2 252

1 357

Capital increase - contributions

(4 050)

4 050

–

–

4 050

Refund to Member States

(200)

(200)

(200)

Economic result of the year

–

–

–

(3 818)

–

(3 818)

BALANCE AS AT 31.12.2017

73 264

27 090

46 173

(47 037)

2 252

1 389

Capital increase - contributions

(4 250)

4 250

4 250

Economic result of the year

–

(4 118)

(4 118)

BALANCE AS AT 31.12.2018

73 264

22 840

50 423

(51 155)

2 252

1 521

EDF REPORT ON FINANCIAL IMPLEMENTATION

INTRODUCTORY NOTE

1.Previous EDFs

As the sixth EDF was closed in 2006 and the seventh EDF was closed in 2008, the annual accounts no longer contain implementation tables for these EDFs. However, implementation of the transferred balances can be found in the ninth EDF.

As in past years and to ensure transparency in the presentation of the accounts, the tables set out separately for the eighth EDF, the part used for Lomé Convention programming and, the part used for programming under the Cotonou Agreement.

In accordance with article 1(2)(b) of the Internal Agreement of the ninth EDF, balances and decommitments of previous EDFs have been transferred to the ninth EDF, and, during the life of the ninth EDF, have been committed as ninth EDF funds.

In 2018 the Commission launched a special exercise for the closure of the remaining contracts under the eighth and ninth EDF. A final report on the financial implementation of the eighth EDF should be available by the end of 2019 (and on the ninth EDF by the end of 2020).

2.11th EDF

The ACP-EC Partnership Agreement signed on 23 June 2000 in Cotonou by the Member States of the European Community and the States of Africa, the Caribbean and the Pacific (ACP States) entered into force on 1 April 2003. The Cotonou Agreement was amended twice, firstly by the agreement signed in Luxembourg on 25 June 2005, secondly by the agreement signed in Ouagadougou on 22 June 2010.

The EU Council Decision of 27 November 2001 (2001/822/EC) on the association of the overseas countries and territories (OCT) with the European Union entered into force on 2 December 2001. This Decision was amended on 19 March 2007 (Decision 2007/249/EC).

The Internal Agreement on the financing of Community aid under the multiannual financial framework for the period 2014-2020 in accordance with the revised Cotonou Agreement, adopted by the Representatives of the Governments of the Member States of the European Community in August 2013, entered into force in March 2015.

Under the Cotonou Agreement, the third period (2014-2020) of Community aid to the ACP States and OCTs is funded by the 11th EDF for an amount of EUR 30 506 million, of which:

·EUR 29 089 million is allocated to the ACP countries in accordance with Article 1.2(a) and Article 2(d) of the Internal Agreement, of which EUR 27 955 million is managed by the European Commission;

·EUR 364.5 million is allocated to the OCTs in accordance with Article 1.2(a) and Article 3.1 of the Internal Agreement, of which EUR 359.5 million is managed by the European Commission;

·EUR 1 052.5 million is for the Commission to finance the costs arising from the programming and implementation of 11th EDF resources, in accordance with Article 1.2(a) of the Internal Agreement.

Remaining funds on non-mobilisable performance reserves at 31 December 2018

The amounts decommitted from projects under the ninth and previous EDFs are transferred to the performance reserve of the 10th EDF, with the exception of Stabex funds.

The decommited funds from projects under the 10th EDF are transferred to the performance reserve of the 11th EDF.

During 2018, all decommitted funds from previous EDFs were transferred to the respective reserves.

In accordance with article 1.4 of the 11th EDF Internal Agreement and the Council Decision of 2 August 2016 (2016/1337), an amount of decommitted funds from the 10th EDF has been allocated for the purpose of replenishing the African Peace Facility for the period 2016-2018 up to a maximum of EUR 491 million and up to EUR 16 million for support of expenditure.

EUR millions

| Total available on non-mobilisable performance reserves | 31.12.2018 |
| --- | --- |
| Non-mobilisable reserve from decommitted funds under the eight and ninth EDF | 157 |
| Non-mobilisable reserve from decommitted funds under the 10th EDF | 318 |
| Total | 475 |

Total available on non-mobilisable performance reserves

31.12.2018

Non-mobilisable reserve from decommitted funds under the eight and ninth EDF

157

Non-mobilisable reserve from decommitted funds under the 10th EDF

318

Total

475

EDF Co-financing

Under the 10th and 11th EDF, transfer agreements for co-financing projects were signed and commitment appropriations were opened for an amount of EUR 241.9 million, while payment appropriations were opened for the cashed amounts totalling EUR 230.2 million.

The situation of co-financing appropriations at 31 December 2018 is shown in the table below :

EUR millions

| | Commitments appropriations | Payment appropriations |
| --- | --- | --- |
| Co-financing - A Envelope | 211.5 | 200.0 |
| Co-financing - Intra ACP | 23.3 | 23.2 |
| Co-financing – Administrative expenses | 7.1 | 7.0 |
| | 241.9 | 230.2 |

Commitments appropriations

Payment appropriations

Co-financing - A Envelope

211.5

200.0

Co-financing - Intra ACP

23.3

23.2

Co-financing – Administrative expenses

7.1

7.0

241.9

230.2

The following tables, concerning the amounts decided, contracted and paid, show net figures. The tables presenting the situation by instrument are annexed.

Table 1.1

8th EDF

EVOLUTION OF APPROPRIATIONS: 31 December 2018

ANALYSIS OF CREDITS PER INSTRUMENT

| INSTRUMENT | INITIAL APPROPRIATION | INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2017 | INCREASE OR DECREASE IN RESOURCES IN 2018 | Notes | CURRENT LEVEL APPROPRIATION | |
| --- | --- | --- | --- | --- | --- | --- |
| | Lomé | | | | | | |
| | Regular MS Contributions | 12,967 | (3,278) | (7) | | 9,683 | |
| ACP | Aid for refugees | 120 | (20) | – | (1) | 100 | Regular MS Contributions |
| | Emergency aid (Lomé) | 140 | (4) | | | 136 | |
| | Heavily indebted poor countries (Lomé) | – | 1,060 | | | 1,060 | |
| | Interest-rate subsidies | 370 | (301) | | | 69 | |
| | Risk capital | 1,000 | 15 | (3) | (1) | 1,012 | |
| | Stabex | 1,800 | (1,077) | | | 723 | |
| | Structural adjustment | 1,400 | 97 | | | 1,497 | |
| | Sysmin | 575 | (474) | | | 101 | |
| | Total indicative programmes | 7,562 | (2,608) | (3) | (1) | 4,951 | |
| | Utilisation of interest income | – | 35 | | | 35 | |
| | Cotonou | | | | | | |
| | Regular MS Contributions | – | 650 | | | 650 | |
| | A Envelope - National Allocations | – | 417 | | | 417 | Regular MS Contributions |
| | B Envelope - National Allocations | – | 233 | | | 233 | |
| | Interests and other receipts | – | – | | | – | |
| ACP | | | | | | | |
| | SUB TOTAL ACP | 12,967 | (2,628) | (7) | | 10,333 | |
| | | | | | | | |
| | Lomé | | | | | | |
| | Regular MS Contributions | – | 46 | | | 46 | |
| OCT | Interest-rate subsidies | – | 1 | | | 1 | Regular MS Contributions |
| | Risk capital | – | 6 | | | 6 | |
| | Stabex | – | 1 | | | 1 | |
| | Sysmin | – | 2 | | | 2 | |
| | Total indicative programmes | – | 35 | | | 35 | |
| OCT | | | | | | | |
| | SUB TOTAL OCT | – | 46 | | | 46 | |
| | | | | | | | |
| | TOTAL 8th EDF | 12,967 | (2,582) | (7) | | 10,379 | |
| | | | | | | | |
| (1) | All decreases are decommitments transferred to the non-mobilisable performance reserve of the 10th EDF | |

INSTRUMENT

INITIAL APPROPRIATION

INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2017

INCREASE OR DECREASE IN RESOURCES IN 2018

Notes

CURRENT LEVEL APPROPRIATION

Lomé

Regular MS Contributions

12,967

(3,278)

(7)

9,683

ACP

Aid for refugees

120

(20)

–

(1)

100

Regular MS Contributions

Emergency aid (Lomé)

140

(4)

136

Heavily indebted poor countries (Lomé)

–

1,060

1,060

Interest-rate subsidies

370

(301)

69

Risk capital

1,000

15

(3)

(1)

1,012

Stabex

1,800

(1,077)

723

Structural adjustment

1,400

97

1,497

Sysmin

575

(474)

101

Total indicative programmes

7,562

(2,608)

(3)

(1)

4,951

Utilisation of interest income

–

35

35

Cotonou

Regular MS Contributions

–

650

650

A Envelope - National Allocations

–

417

417

Regular MS Contributions

B Envelope - National Allocations

–

233

233

Interests and other receipts

–

–

–

ACP

SUB TOTAL ACP

12,967

(2,628)

(7)

10,333

Lomé

Regular MS Contributions

–

46

46

OCT

Interest-rate subsidies

–

1

1

Regular MS Contributions

Risk capital

–

6

6

Stabex

–

1

1

Sysmin

–

2

2

Total indicative programmes

–

35

35

OCT

SUB TOTAL OCT

–

46

46

TOTAL 8th EDF

12,967

(2,582)

(7)

10,379

(1)

All decreases are decommitments transferred to the non-mobilisable performance reserve of the 10th EDF

Table 1.2

9th EDF

EVOLUTION OF APPROPRIATIONS: 31 December 2018

ANALYSIS OF CREDITS PER INSTRUMENT

| | | | | | (EUR million) | |
| --- | --- | --- | --- | --- | --- | --- |
| INSTRUMENT | INITIAL APPROPRIATION | INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2017 | INCREASE OR DECREASE IN RESOURCES IN 2018 | Notes | CURRENT LEVEL APPROPRIATION | |
| | Lomé | | | | | | |
| | Regular MS Contributions | – | 669 | (2) | | 668 | |
| ACP | Transfers from 6th EDF - Lomé | – | 20 | – | (1) | 20 | Regular MS Contributions |
| | Transfers from 7th EDF - Lomé | – | 649 | (2) | (1) | 647 | |
| | Cotonou | | | | | | |
| | Regular MS Contributions | 8,919 | 5,549 | (36) | | 14,433 | |
| | A Envelope - National Allocations | 5,318 | 3,306 | (16) | (1) | 8,608 | Regular MS Contributions |
| | B Envelope - National Allocations | 2,108 | (898) | (2) | (1) | 1,208 | |
| | CDE, CTA and Parliamentary Assembly | 164 | (10) | | | 154 | |
| | Implementation costs | 125 | 52 | | | 177 | |
| | Interests and other receipts | – | 63 | | | 63 | |
| | Other Intra-ACP allocations | 300 | 2,302 | (13) | (1) | 2,589 | |
| | Peace facility | – | 354 | – | (1) | 353 | |
| | Regional allocations | 904 | (139) | (5) | (1) | 759 | |
| | Special allocation R.D. Congo | – | 105 | | | 105 | |
| | Special allocation South Sudan | – | 267 | | (3) | 267 | |
| | Special allocation Sudan | – | 110 | | (2) | 110 | |
| | Voluntary contribution Peace facility | – | 39 | | | 39 | |
| ACP | | | | | | | |
| | SUB TOTAL ACP | 8,919 | 6,219 | (38) | | 15,100 | |
| | | | | | | | |
| | Lomé | | | | | | |
| | Regular MS Contributions | – | 3 | | | 3 | |
| OCT | Transfers from 6th EDF - Lomé | – | – | | | – | Regular MS Contributions |
| | Transfers from 7th EDF - Lomé | – | 3 | | | 3 | |
| | Cotonou | | | | | | |
| | Regular MS Contributions | – | 289 | (2) | | 287 | |
| | A Envelope - National Allocations | – | 237 | – | (1) | 237 | Regular MS Contributions |
| | B Envelope - National Allocations | – | 4 | | | 4 | |
| | Regional allocations | – | 47 | (2) | (1) | 45 | |
| | Studies / Technical assistance OCT | – | 1 | | | 1 | |
| OCT | | | | | | | |
| | SUB TOTAL OCT | – | 292 | (2) | | 290 | |
| | | | | | | | |
| | TOTAL 9th EDF | 8,919 | 6,511 | (40) | | 15,390 | |
| | | | | | | | |
| (1) | All decreases are decommitments transferred to the non-mobilisable performance reserve of the 10th EDF | |
| (2) | Following Council Decision 2010/406/EU, 150 million was added from non-mobilisable performance reserve 10th EDF for Sudan (147 million to special allocation Sudan


  and 3 million to implementation costs) | |
| (3) | Following Council Decision 2011/315/EU, 200 million was added from non-mobilisable performance reserve 10th EDF for Sudan (194 million to special allocation South


  Sudan and 6 million to implementation costs) | |

(EUR million)

INSTRUMENT

INITIAL APPROPRIATION

INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2017

INCREASE OR DECREASE IN RESOURCES IN 2018

Notes

CURRENT LEVEL APPROPRIATION

Lomé

Regular MS Contributions

–

669

(2)

668

ACP

Transfers from 6th EDF - Lomé

–

20

–

(1)

20

Regular MS Contributions

Transfers from 7th EDF - Lomé

–

649

(2)

(1)

647

Cotonou

Regular MS Contributions

8,919

5,549

(36)

14,433

A Envelope - National Allocations

5,318

3,306

(16)

(1)

8,608

Regular MS Contributions

B Envelope - National Allocations

2,108

(898)

(2)

(1)

1,208

CDE, CTA and Parliamentary Assembly

164

(10)

154

Implementation costs

125

52

177

Interests and other receipts

–

63

63

Other Intra-ACP allocations

300

2,302

(13)

(1)

2,589

Peace facility

–

354

–

(1)

353

Regional allocations

904

(139)

(5)

(1)

759

Special allocation R.D. Congo

–

105

105

Special allocation South Sudan

–

267

(3)

267

Special allocation Sudan

–

110

(2)

110

Voluntary contribution Peace facility

–

39

39

ACP

SUB TOTAL ACP

8,919

6,219

(38)

15,100

Lomé

Regular MS Contributions

–

3

3

OCT

Transfers from 6th EDF - Lomé

–

–

–

Regular MS Contributions

Transfers from 7th EDF - Lomé

–

3

3

Cotonou

Regular MS Contributions

–

289

(2)

287

A Envelope - National Allocations

–

237

–

(1)

237

Regular MS Contributions

B Envelope - National Allocations

–

4

4

Regional allocations

–

47

(2)

(1)

45

Studies / Technical assistance OCT

–

1

1

OCT

SUB TOTAL OCT

–

292

(2)

290

TOTAL 9th EDF

8,919

6,511

(40)

15,390

(1)

All decreases are decommitments transferred to the non-mobilisable performance reserve of the 10th EDF

(2)

Following Council Decision 2010/406/EU, 150 million was added from non-mobilisable performance reserve 10th EDF for Sudan (147 million to special allocation Sudan

and 3 million to implementation costs)

(3)

Following Council Decision 2011/315/EU, 200 million was added from non-mobilisable performance reserve 10th EDF for Sudan (194 million to special allocation South

Sudan and 6 million to implementation costs)

Table 1.3

10th EDF

EVOLUTION OF APPROPRIATIONS: 31 December 2018

ANALYSIS OF CREDITS PER INSTRUMENT

| INSTRUMENT | INITIAL APPROPRIATION | INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2017 | INCREASE OR DECREASE IN RESOURCES IN 2018 | Notes | CURRENT LEVEL APPROPRIATION | |
| --- | --- | --- | --- | --- | --- | --- |
| | Regular MS Contributions | 20,896 | (87) | (65) | | 20,744 | |
| ACP | A Envelope - National Allocations | – | 13,100 | (177) | (2) | 12,922 | Regular MS Contributions |
| | A Envelope reserve | 13,500 | (13,500) | | | – | |
| | B Envelope - National Allocations | – | 2,004 | (4) | (2) | 2,000 | |
| | B Envelope reserve | 1,800 | (1,800) | | | – | |
| | Implementation costs | 430 | 15 | – | (2) | 445 | |
| | Institutional and support expenditure | – | 232 | (1) | (2) | 230 | |
| | Interests and other receipts | – | 85 | (1) | (2) | 85 | |
| | Intra-ACP Reserve | 2,700 | (2,700) | | | – | |
| | National allocations Reserve A Envelope STABEX | – | – | | | – | |
| | NIP/RIP reserve | 683 | (683) | | | – | |
| | Non-mobilisable reserve | – | 86 | 45 | (2) | 131 | |
| | Other Intra-ACP allocations | – | 1,886 | (18) | (2) | 1,868 | |
| | Peace facility | – | 1,014 | 105 | | 1,119 | |
| | Regional allocations | – | 1,956 | (14) | (2) | 1,942 | |
| | Regional allocations reserve | 1,783 | (1,783) | | | – | |
| | Co-financing | – | 204 | – | | 204 | |
| | A Envelope - National Allocations | – | 187 | – | (3) | 187 | Co-financing |
| | Implementation costs | – | 5 | – | (3) | 5 | |
| | Other Intra-ACP allocations | – | 12 | | (3) | 12 | |
| | Peace facility | – | 1 | | (3) | 1 | |
| ACP | | | | | | | |
| | SUB TOTAL ACP | 20,896 | 117 | (65) | | 20,948 | |
| | | | | | | | |
| | Regular MS Contributions | – | 275 | – | | 275 | |
| OCT | A Envelope - National Allocations | – | 192 | (2) | (2) | 190 | Regular MS Contributions |
| | A Envelope reserve | – | – | | | – | |
| | B Envelope - National Allocations | – | 15 | | | 15 | |
| | B Envelope reserve | – | – | | | – | |
| | National allocations Reserve A Envelope STABEX | – | – | | | – | |
| | Non-mobilisable reserve | – | 23 | 2 | (2) | 25 | |
| | Regional allocations | – | 40 | | | 40 | |
| | Regional allocations reserve | – | – | | | – | |
| | Studies / Technical assistance OCT | – | 5 | | | 5 | |
| OCT | | | | | | | |
| | SUB TOTAL OCT | – | 275 | – | | 275 | |
| | | | | | | | |
| | TOTAL 10th EDF | 20,896 | 392 | (65) | | 21,223 | |
| | | | | | | | |
| (1) | Transfer in decommitments from projects of the 9th and previous EDF's to the non mobilisable performance reserve for 377 million less transfer out of reserves to South Sudan for 200 million (to 9th EDF). Year to date the total of the non-mobilisable reserve ACP created was 807 million, of which 350 million has been used (150 million for Sudan, 200 million for South Soudan, both transfered to 9th EDF). | |
| (2) | Transfers in / from the 10th EDF reserves | |
| (3) | For the cofinancings, the table only presents the commitment appropriations | |

INSTRUMENT

INITIAL APPROPRIATION

INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2017

INCREASE OR DECREASE IN RESOURCES IN 2018

Notes

CURRENT LEVEL APPROPRIATION

Regular MS Contributions

20,896

(87)

(65)

20,744

ACP

A Envelope - National Allocations

–

13,100

(177)

(2)

12,922

Regular MS Contributions

A Envelope reserve

13,500

(13,500)

–

B Envelope - National Allocations

–

2,004

(4)

(2)

2,000

B Envelope reserve

1,800

(1,800)

–

Implementation costs

430

15

–

(2)

445

Institutional and support expenditure

–

232

(1)

(2)

230

Interests and other receipts

–

85

(1)

(2)

85

Intra-ACP Reserve

2,700

(2,700)

–

National allocations Reserve A Envelope STABEX

–

–

–

NIP/RIP reserve

683

(683)

–

Non-mobilisable reserve

–

86

45

(2)

131

Other Intra-ACP allocations

–

1,886

(18)

(2)

1,868

Peace facility

–

1,014

105

1,119

Regional allocations

–

1,956

(14)

(2)

1,942

Regional allocations reserve

1,783

(1,783)

–

Co-financing

–

204

–

204

A Envelope - National Allocations

–

187

–

(3)

187

Co-financing

Implementation costs

–

5

–

(3)

5

Other Intra-ACP allocations

–

12

(3)

12

Peace facility

–

1

(3)

1

ACP

SUB TOTAL ACP

20,896

117

(65)

20,948

Regular MS Contributions

–

275

–

275

OCT

A Envelope - National Allocations

–

192

(2)

(2)

190

Regular MS Contributions

A Envelope reserve

–

–

–

B Envelope - National Allocations

–

15

15

B Envelope reserve

–

–

–

National allocations Reserve A Envelope STABEX

–

–

–

Non-mobilisable reserve

–

23

2

(2)

25

Regional allocations

–

40

40

Regional allocations reserve

–

–

–

Studies / Technical assistance OCT

–

5

5

OCT

SUB TOTAL OCT

–

275

–

275

TOTAL 10th EDF

20,896

392

(65)

21,223

(1)

Transfer in decommitments from projects of the 9th and previous EDF's to the non mobilisable performance reserve for 377 million less transfer out of reserves to South Sudan for 200 million (to 9th EDF). Year to date the total of the non-mobilisable reserve ACP created was 807 million, of which 350 million has been used (150 million for Sudan, 200 million for South Soudan, both transfered to 9th EDF).

(2)

Transfers in / from the 10th EDF reserves

(3)

For the cofinancings, the table only presents the commitment appropriations

Table 1.4

11th EDF

EVOLUTION OF APPROPRIATIONS: 31 December 2018

ANALYSIS OF CREDITS PER INSTRUMENT

| | | | | | (EUR million) | |
| --- | --- | --- | --- | --- | --- | --- |
| INSTRUMENT | INITIAL APPROPRIATION | INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2017 | INCREASE OR DECREASE IN RESOURCES IN 2018 | Notes | CURRENT LEVEL APPROPRIATION | |
| | Regular MS Contributions | 29,008 | 224 | 110 | | 29,342 | |
| ACP | A Envelope - National Allocations | – | 15,540 | (121) | | 15,419 | Regular MS Contributions |
| | B Envelope - National Allocations | – | 715 | 2 | | 717 | |
| | B Envelope reserve | – | – | | | – | |
| | Implementation costs | 1,053 | – | | | 1,053 | |
| | Institutional and support expenditure | – | 246 | | | 246 | |
| | Interests and other receipts | – | 16 | – | | 16 | |
| | Intra-ACP Reserve | 3,590 | (3,497) | (24) | | 69 | |
| | National allocations Reserve A Envelope STABEX | – | – | | | – | |
| | NIP/RIP reserve | 24,365 | (22,014) | (1,080) | | 1,270 | |
| | Non-mobilisable reserve | – | 201 | 110 | (1) | 311 | |
| | Other Intra-ACP allocations | – | 2,251 | 449 | | 2,700 | |
| | Peace facility | – | 1,000 | | | 1,000 | |
| | Regional allocations | – | 5,766 | 775 | | 6,541 | |
| | Co-financing | – | 24 | 13 | | 38 | |
| | A Envelope - National Allocations | – | 22 | 1 | | 23 | Co-financing |
| | Implementation costs | – | 1 | 1 | | 2 | |
| | Peace facility | – | 1 | 10 | | 11 | |
| | Regional allocations | – | – | 2 | | 2 | |
| | EC Internal SLA | – | 1 | | | 1 | |
| | A Envelope - National Allocations | – | 1 | | | 1 | EC Internal SLA |
| ACP | | | | | | | |
| | SUB TOTAL ACP | 29,008 | 249 | | | 29,381 | |
| | | | | | | | |
| | Regular MS Contributions | – | 358 | (9) | | 350 | |
| OCT | A Envelope - National Allocations | – | 183 | 13 | | 196 | Regular MS Contributions |
| | B Envelope - National Allocations | – | – | 8 | | 8 | |
| | NIP/RIP reserve | – | 165 | (116) | | 49 | |
| | Non-mobilisable reserve | – | 5 | 2 | (1) | 7 | |
| | Regional allocations | – | 1 | 80 | | 81 | |
| | Studies / Technical assistance OCT | – | 5 | 4 | | 9 | |
| | Co-financing | – | – | | | – | |
| | A Envelope - National Allocations | – | – | | | – | Co-financing |
| | EC Internal SLA | – | – | | | – | |
| | A Envelope - National Allocations | – | – | | | – | EC Internal SLA |
| OCT | | | | | | | |
| | SUB TOTAL OCT | – | 358 | | | 350 | |
| | | | | | | | |
| | Regular MS Contributions | – | 6 | 11 | | 17 | |
| | A Envelope - National Allocations | – | 6 | 4 | | 10 | Regular MS Contributions |
| | B Envelope - National Allocations | – | – | 7 | | 7 | |
| | | | | | | | |
| | SUB TOTAL | – | 6 | | | 17 | |
| | | | | | | | |
| | TOTAL 11th EDF | 29,008 | 614 | 126 | | 29,747 | |
| | | | | | | | |
| (1) | Council Decision No 2013/759/EU (3) established transitional European Development Fund (EDF) management measures (‘Bridging Facility’) to ensure the availability of funds for cooperation with African, Caribbean and Pacific (ACP) States and with Overseas Countries and Territories (OCTs), as well as for support expenditure, from 1 January 2014 until the entry into force of the 11th EDF Internal Agreement | |

(EUR million)

INSTRUMENT

INITIAL APPROPRIATION

INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2017

INCREASE OR DECREASE IN RESOURCES IN 2018

Notes

CURRENT LEVEL APPROPRIATION

Regular MS Contributions

29,008

224

110

29,342

ACP

A Envelope - National Allocations

–

15,540

(121)

15,419

Regular MS Contributions

B Envelope - National Allocations

–

715

2

717

B Envelope reserve

–

–

–

Implementation costs

1,053

–

1,053

Institutional and support expenditure

–

246

246

Interests and other receipts

–

16

–

16

Intra-ACP Reserve

3,590

(3,497)

(24)

69

National allocations Reserve A Envelope STABEX

–

–

–

NIP/RIP reserve

24,365

(22,014)

(1,080)

1,270

Non-mobilisable reserve

–

201

110

(1)

311

Other Intra-ACP allocations

–

2,251

449

2,700

Peace facility

–

1,000

1,000

Regional allocations

–

5,766

775

6,541

Co-financing

–

24

13

38

A Envelope - National Allocations

–

22

1

23

Co-financing

Implementation costs

–

1

1

2

Peace facility

–

1

10

11

Regional allocations

–

–

2

2

EC Internal SLA

–

1

1

A Envelope - National Allocations

–

1

1

EC Internal SLA

ACP

SUB TOTAL ACP

29,008

249

29,381

Regular MS Contributions

–

358

(9)

350

OCT

A Envelope - National Allocations

–

183

13

196

Regular MS Contributions

B Envelope - National Allocations

–

–

8

8

NIP/RIP reserve

–

165

(116)

49

Non-mobilisable reserve

–

5

2

(1)

7

Regional allocations

–

1

80

81

Studies / Technical assistance OCT

–

5

4

9

Co-financing

–

–

–

A Envelope - National Allocations

–

–

–

Co-financing

EC Internal SLA

–

–

–

A Envelope - National Allocations

–

–

–

EC Internal SLA

OCT

SUB TOTAL OCT

–

358

350

Regular MS Contributions

–

6

11

17

A Envelope - National Allocations

–

6

4

10

Regular MS Contributions

B Envelope - National Allocations

–

–

7

7

SUB TOTAL

–

6

17

TOTAL 11th EDF

29,008

614

126

29,747

(1)

Council Decision No 2013/759/EU (3) established transitional European Development Fund (EDF) management measures (‘Bridging Facility’) to ensure the availability of funds for cooperation with African, Caribbean and Pacific (ACP) States and with Overseas Countries and Territories (OCTs), as well as for support expenditure, from 1 January 2014 until the entry into force of the 11th EDF Internal Agreement

Table 2.1

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2018

PROGRESS REPORT

| | | | | | | (EUR million) | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | EDF | |
| | ALLOCATION | 8 | 9 | 10 | 11 | TOTAL | |
| Lomé | Sundry Income | 35 | | | | 35 | |
| | Total indicative programmes | 4,986 | | | | 4,986 | |
| | Total Non-Programmable Aid | 4,707 | | | | 4,707 | |
| | Transfers from other funds | | 671 | | | 671 | |
| | SUB TOTAL: REGULAR MS CONTRIBUTIONS | 9,728 | 671 | | | 10,399 | |
| | | | | | | | |
| Cotonou | A Envelope - National Allocations | 417 | 8,845 | 13,113 | 15,625 | 38,000 | |
| | B Envelope - National Allocations | 233 | 1,213 | 2,015 | 732 | 4,193 | |
| | Bridging facility | | | | – | – | |
| | CDE, CTA and Parliamentary Assembly | | 154 | | | 154 | |
| | Country reserve | | | – | – | – | |
| | Implementation Costs and Interests Revenues | – | 240 | 535 | 1,077 | 1,853 | |
| | Intra-ACP allocations | | 2,942 | 3,218 | 3,946 | 10,106 | |
| | Intra-ACP Reserve | | | – | 69 | 69 | |
| | National allocations Reserve A Envelope STABEX | | | – | – | – | |
| | NIP/RIP reserve | | | – | 1,320 | 1,320 | |
| | Non-mobilisable reserve | | | 156 | 318 | 475 | |
| | Regional allocations | | 804 | 1,982 | 6,622 | 9,408 | |
| | Regional allocations reserve | | | – | | – | |
| | Special allocation R.D. Congo | | 105 | | | 105 | |
| | Special allocation South Sudan | | 267 | | | 267 | |
| | Special allocation Sudan | | 110 | | | 110 | |
| | Voluntary contribution Peace facility | | 39 | | | 39 | |
| | SUB TOTAL: REGULAR MS CONTRIBUTIONS | 650 | 14,719 | 21,019 | 29,709 | 66,097 | |
| | | | | | | | |
| | A Envelope - National Allocations | | | | 1 | 1 | |
| | SUB TOTAL: EC INTERNAL SLA | | | | 1 | 1 | |
| | | | | | | | |
| | A Envelope - National Allocations | | | 187 | 23 | 210 | |
| | Implementation Costs and Interests Revenues | | | 5 | 2 | 7 | |
| | Intra-ACP allocations | | | 12 | 11 | 23 | |
| | Regional allocations | | | | 2 | 2 | |
| | SUB TOTAL: CO-FINANCING | | | 204 | 38 | 242 | |
| | | | | | | | |
| | TOTAL | 10,379 | 15,390 | 21,223 | 29,747 | 76,739 | |

(EUR million)

EDF

ALLOCATION

8

9

10

11

TOTAL

Lomé

Sundry Income

35

35

Total indicative programmes

4,986

4,986

Total Non-Programmable Aid

4,707

4,707

Transfers from other funds

671

671

SUB TOTAL: REGULAR MS CONTRIBUTIONS

9,728

671

10,399

Cotonou

A Envelope - National Allocations

417

8,845

13,113

15,625

38,000

B Envelope - National Allocations

233

1,213

2,015

732

4,193

Bridging facility

–

–

CDE, CTA and Parliamentary Assembly

154

154

Country reserve

–

–

–

Implementation Costs and Interests Revenues

–

240

535

1,077

1,853

Intra-ACP allocations

2,942

3,218

3,946

10,106

Intra-ACP Reserve

–

69

69

National allocations Reserve A Envelope STABEX

–

–

–

NIP/RIP reserve

–

1,320

1,320

Non-mobilisable reserve

156

318

475

Regional allocations

804

1,982

6,622

9,408

Regional allocations reserve

–

–

Special allocation R.D. Congo

105

105

Special allocation South Sudan

267

267

Special allocation Sudan

110

110

Voluntary contribution Peace facility

39

39

SUB TOTAL: REGULAR MS CONTRIBUTIONS

650

14,719

21,019

29,709

66,097

A Envelope - National Allocations

1

1

SUB TOTAL: EC INTERNAL SLA

1

1

A Envelope - National Allocations

187

23

210

Implementation Costs and Interests Revenues

5

2

7

Intra-ACP allocations

12

11

23

Regional allocations

2

2

SUB TOTAL: CO-FINANCING

204

38

242

TOTAL

10,379

15,390

21,223

29,747

76,739

Decisions

| Decisions | | Aggregate Total | Cummulative Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | EDF | At 31/12/2018 | % of allocation | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | |
| | 8 | 10,377 | 100% | 10,786 | (42) | (45) | (60) | (64) | (98) | (63) | (12) | (13) | (9) | (4) | |
| | 9 | 15,357 | 100% | 16,633 | (54) | (116) | (9) | (297) | (72) | (381) | (170) | (104) | (38) | (33) | |
| | 10 | 20,905 | 99% | 4,766 | 3,501 | 2,349 | 3,118 | 3,524 | 4,131 | (95) | (156) | (80) | (5) | (147) | |
| | 11 | 23,359 | 79% | | | | | | | 1,160 | 5,372 | 6,688 | 5,807 | 4,332 | |
| Total | | 69,998 | | 32,185 | 3,405 | 2,187 | 3,049 | 3,163 | 3,961 | 621 | 5,034 | 6,491 | 5,754 | 4,147 | |
| Assigned Funds | | Aggregate Total | Cummulative Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | |
| | EDF | At 31/12/2018 | % of allocation | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | |
| | 8 | 10,375 | 100% | 10,541 | (42) | 8 | (13) | (46) | (11) | (37) | (16) | (6) | (3) | – | |
| | 9 | 15,305 | 99% | 14,209 | 997 | 476 | 9 | (187) | (96) | (1) | (52) | (46) | (20) | 16 | |
| | 10 | 20,361 | 96% | 130 | 3,184 | 2,820 | 2,514 | 3,460 | 3,457 | 2,687 | 783 | 541 | 550 | 236 | |
| | 11 | 18,140 | 61% | | | | | | | 731 | 3,293 | 3,745 | 5,684 | 4,687 | |
| Total | | 64,182 | | 24,881 | 4,140 | 3,304 | 2,509 | 3,226 | 3,350 | 3,380 | 4,008 | 4,234 | 6,211 | 4,940 | |
| Payments | | Aggregate Total | Cummulative Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | Annual Figures | |
| | EDF | At 31/12/2018 | % of allocation | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | |
| | 8 | 10,375 | 100% | 9,930 | 152 | 158 | 90 | 15 | 18 | 16 | (3) | – | (1) | – | |
| | 9 | 15,187 | 99% | 10,011 | 1,806 | 1,304 | 906 | 539 | 231 | 145 | 43 | 68 | 111 | 23 | |
| | 10 | 18,829 | 89% | 90 | 1,111 | 1,772 | 1,879 | 2,655 | 2,718 | 2,760 | 2,024 | 1,466 | 1,277 | 1,076 | |
| | 11 | 9,175 | 31% | | | | | | | 595 | 1,024 | 1,816 | 2,770 | 2,970 | |
| Total | | 53,566 | | 20,031 | 3,069 | 3,233 | 2,874 | 3,209 | 2,967 | 3,516 | 3,088 | 3,350 | 4,158 | 4,069 | |
| | | | | | | | | | | | | | | | |
| * Negative figures represent decommitments | |

Aggregate Total

Cummulative Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

EDF

At 31/12/2018

% of allocation

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

8

10,377

100%

10,786

(42)

(45)

(60)

(64)

(98)

(63)

(12)

(13)

(9)

(4)

9

15,357

100%

16,633

(54)

(116)

(9)

(297)

(72)

(381)

(170)

(104)

(38)

(33)

10

20,905

99%

4,766

3,501

2,349

3,118

3,524

4,131

(95)

(156)

(80)

(5)

(147)

11

23,359

79%

1,160

5,372

6,688

5,807

4,332

Total

69,998

32,185

3,405

2,187

3,049

3,163

3,961

621

5,034

6,491

5,754

4,147

Assigned Funds

Aggregate Total

Cummulative Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

EDF

At 31/12/2018

% of allocation

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

8

10,375

100%

10,541

(42)

8

(13)

(46)

(11)

(37)

(16)

(6)

(3)

–

9

15,305

99%

14,209

997

476

9

(187)

(96)

(1)

(52)

(46)

(20)

16

10

20,361

96%

130

3,184

2,820

2,514

3,460

3,457

2,687

783

541

550

236

11

18,140

61%

731

3,293

3,745

5,684

4,687

Total

64,182

24,881

4,140

3,304

2,509

3,226

3,350

3,380

4,008

4,234

6,211

4,940

Payments

Aggregate Total

Cummulative Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

Annual Figures

EDF

At 31/12/2018

% of allocation

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

8

10,375

100%

9,930

152

158

90

15

18

16

(3)

–

(1)

–

9

15,187

99%

10,011

1,806

1,304

906

539

231

145

43

68

111

23

10

18,829

89%

90

1,111

1,772

1,879

2,655

2,718

2,760

2,024

1,466

1,277

1,076

11

9,175

31%

595

1,024

1,816

2,770

2,970

Total

53,566

20,031

3,069

3,233

2,874

3,209

2,967

3,516

3,088

3,350

4,158

4,069

- Negative figures represent decommitments

Table 2.2

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2018

CLASS OF AID

| | | | | | | (EUR million) | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | EDF | |
| | 8 | % | 9 | % | 10 | % | 11 | % | TOTAL | % | |
| | | | | (1) | | (1) | | (1) | (1) | (1) | |
| Lomé | Sundry Income | | | | | | | | | | | |
| | Appropriations | 35 | | | | | | | | 35 | | |
| | Decisions | 35 | 100% | | | | | | | 35 | 100% | |
| | Assigned funds | 35 | 100% | | | | | | | 35 | 100% | |
| | Payments | 35 | 100% | | | | | | | 35 | 100% | |
| | Total indicative programmes | | | | | | | | | | | |
| | Appropriations | 4,986 | | | | | | | | 4,986 | | |
| | Decisions | 4,986 | 100% | | | | | | | 4,986 | 100% | |
| | Assigned funds | 4,986 | 100% | | | | | | | 4,986 | 100% | |
| | Payments | 4,985 | 100% | | | | | | | 4,985 | 100% | |
| | Total Non-Programmable Aid | | | | | | | | | | | |
| | Appropriations | 4,707 | | | | | | | | 4,707 | | |
| | Decisions | 4,706 | 100% | | | | | | | 4,706 | 100% | |
| | Assigned funds | 4,706 | 100% | | | | | | | 4,706 | 100% | |
| | Payments | 4,706 | 100% | | | | | | | 4,706 | 100% | |
| | Transfers from other funds | | | | | | | | | | | |
| | Appropriations | | | 671 | | | | | | 671 | | |
| | Decisions | | | 671 | 100% | | | | | 671 | 100% | |
| | Assigned funds | | | 671 | 100% | | | | | 671 | 100% | |
| | Payments | | | 670 | 100% | | | | | 670 | 100% | |
| | Regular MS Contributions | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Cotonou | A Envelope - National Allocations | | | | | | | | | | | |
| | Appropriations | 417 | | 8,845 | | 13,113 | | 15,625 | | 38,000 | | |
| | Decisions | 417 | 100% | 8,837 | 100% | 13,009 | 99% | 12,822 | 82% | 35,085 | 92% | |
| | Assigned funds | 417 | 100% | 8,825 | 100% | 12,663 | 97% | 9,387 | 60% | 31,292 | 82% | |
| | Payments | 417 | 100% | 8,799 | 99% | 11,712 | 89% | 4,549 | 29% | 25,478 | 67% | |
| | B Envelope - National Allocations | | | | | | | | | | | |
| | Appropriations | 233 | | 1,213 | | 2,015 | | 732 | | 4,193 | | |
| | Decisions | 233 | 100% | 1,213 | 100% | 2,010 | 100% | 707 | 97% | 4,162 | 99% | |
| | Assigned funds | 231 | 99% | 1,209 | 100% | 1,990 | 99% | 704 | 96% | 4,134 | 99% | |
| | Payments | 231 | 99% | 1,203 | 99% | 1,952 | 97% | 607 | 83% | 3,992 | 95% | |
| | Bridging facility | | | | | | | | | | | |
| | Appropriations | | | | | | | – | | – | | |
| | Decisions | | | | | | | | | | | |
| | Assigned funds | | | | | | | | | | | |
| | Payments | | | | | | | | | | | |
| | CDE, CTA and Parliamentary Assembly | | | | | | | | | | | |
| | Appropriations | | | 154 | | | | | | 154 | | |
| | Decisions | | | 154 | 100% | | | | | 154 | 100% | |
| | Assigned funds | | | 154 | 100% | | | | | 154 | 100% | |
| | Payments | | | 154 | 100% | | | | | 154 | 100% | |
| | Implementation Costs and Interests Revenues | | | | | | | | | | | |
| | Appropriations | – | | 240 | | 535 | | 1,077 | | 1,853 | | |
| | Decisions | | | 240 | 100% | 510 | 95% | 715 | 66% | 1,464 | 79% | |
| | Assigned funds | | | 240 | 100% | 508 | 95% | 658 | 61% | 1,405 | 76% | |
| | Payments | | | 240 | 100% | 507 | 95% | 613 | 57% | 1,359 | 73% | |
| | Intra-ACP allocations | | | | | | | | | | | |
| | Appropriations | | | 2,942 | | 3,218 | | 3,946 | | 10,106 | | |
| | Decisions | | | 2,940 | 100% | 3,212 | 100% | 3,249 | 82% | 9,401 | 93% | |
| | Assigned funds | | | 2,931 | 100% | 3,151 | 98% | 2,391 | 61% | 8,473 | 84% | |
| | Payments | | | 2,922 | 99% | 2,916 | 91% | 1,843 | 47% | 7,681 | 76% | |
| | Regional allocations | | | | | | | | | | | |
| | Appropriations | | | 804 | | 1,982 | | 6,622 | | 9,408 | | |
| | Decisions | | | 801 | 100% | 1,965 | 99% | 5,840 | 88% | 8,605 | 91% | |
| | Assigned funds | | | 789 | 98% | 1,855 | 94% | 4,977 | 75% | 7,622 | 81% | |
| | Payments | | | 773 | 96% | 1,587 | 80% | 1,561 | 24% | 3,921 | 42% | |
| | Special allocation R.D. Congo | | | | | | | | | | | |
| | Appropriations | | | 105 | | | | | | 105 | | |
| | Decisions | | | 105 | 100% | | | | | 105 | 100% | |
| | Assigned funds | | | 105 | 100% | | | | | 105 | 100% | |
| | Payments | | | 105 | 100% | | | | | 105 | 100% | |
| | Special allocation South Sudan | | | | | | | | | | | |
| | Appropriations | | | 267 | | | | | | 267 | | |
| | Decisions | | | 266 | 100% | | | | | 266 | 100% | |
| | Assigned funds | | | 253 | 95% | | | | | 253 | 95% | |
| | Payments | | | 200 | 75% | | | | | 200 | 75% | |
| | Special allocation Sudan | | | | | | | | | | | |
| | Appropriations | | | 110 | | | | | | 110 | | |
| | Decisions | | | 107 | 97% | | | | | 107 | 97% | |
| | Assigned funds | | | 105 | 95% | | | | | 105 | 95% | |
| | Payments | | | 97 | 88% | | | | | 97 | 88% | |
| | Voluntary contribution Peace facility | | | | | | | | | | | |
| | Appropriations | | | 39 | | | | | | 39 | | |
| | Decisions | | | 24 | 62% | | | | | 24 | 62% | |
| | Assigned funds | | | 24 | 62% | | | | | 24 | 62% | |
| | Payments | | | 24 | 62% | | | | | 24 | 62% | |
| | Regular MS Contributions | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | A Envelope - National Allocations | | | | | | | | | | | |
| | Appropriations | | | | | 187 | | 23 | | 210 | | |
| | Decisions | | | | | 183 | 98% | 20 | 89% | 203 | 97% | |
| | Assigned funds | | | | | 179 | 95% | 20 | 89% | 199 | 95% | |
| | Payments | | | | | 143 | 76% | 1 | 5% | 144 | 69% | |
| | Implementation Costs and Interests Revenues | | | | | | | | | | | |
| | Appropriations | | | | | 5 | | 2 | | 7 | | |
| | Decisions | | | | | 5 | 100% | 1 | 70% | 7 | 92% | |
| | Assigned funds | | | | | 3 | 62% | | | 3 | 46% | |
| | Payments | | | | | 2 | 40% | | | 2 | 29% | |
| | Intra-ACP allocations | | | | | | | | | | | |
| | Appropriations | | | | | 12 | | 11 | | 23 | | |
| | Decisions | | | | | 11 | 92% | 2 | 16% | 13 | 56% | |
| | Assigned funds | | | | | 11 | 91% | 2 | 16% | 13 | 55% | |
| | Payments | | | | | 11 | 89% | 1 | 11% | 12 | 52% | |
| | Regional allocations | | | | | | | | | | | |
| | Appropriations | | | | | | | 2 | | 2 | | |
| | Decisions | | | | | | | 2 | 100% | 2 | 100% | |
| | Assigned funds | | | | | | | 2 | 100% | 2 | 100% | |
| | Payments | | | | | | | | | | | |
| | Co-financing | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | A Envelope - National Allocations | | | | | | | | | | | |
| | Appropriations | | | | | | | 1 | | 1 | | |
| | Decisions | | | | | | | 1 | 71% | 1 | 71% | |
| | Assigned funds | | | | | | | 1 | 71% | 1 | 71% | |
| | Payments | | | | | | | 1 | 52% | 1 | 52% | |
| | EC Internal SLA | | | | | | | | | | | |
| | | | | | | | | | | | | |

(EUR million)

EDF

8

%

9

%

10

%

11

%

TOTAL

%

(1)

(1)

(1)

(1)

(1)

Lomé

Sundry Income

Appropriations

35

35

Decisions

35

100%

35

100%

Assigned funds

35

100%

35

100%

Payments

35

100%

35

100%

Total indicative programmes

Appropriations

4,986

4,986

Decisions

4,986

100%

4,986

100%

Assigned funds

4,986

100%

4,986

100%

Payments

4,985

100%

4,985

100%

Total Non-Programmable Aid

Appropriations

4,707

4,707

Decisions

4,706

100%

4,706

100%

Assigned funds

4,706

100%

4,706

100%

Payments

4,706

100%

4,706

100%

Transfers from other funds

Appropriations

671

671

Decisions

671

100%

671

100%

Assigned funds

671

100%

671

100%

Payments

670

100%

670

100%

Regular MS Contributions

Cotonou

A Envelope - National Allocations

Appropriations

417

8,845

13,113

15,625

38,000

Decisions

417

100%

8,837

100%

13,009

99%

12,822

82%

35,085

92%

Assigned funds

417

100%

8,825

100%

12,663

97%

9,387

60%

31,292

82%

Payments

417

100%

8,799

99%

11,712

89%

4,549

29%

25,478

67%

B Envelope - National Allocations

Appropriations

233

1,213

2,015

732

4,193

Decisions

233

100%

1,213

100%

2,010

100%

707

97%

4,162

99%

Assigned funds

231

99%

1,209

100%

1,990

99%

704

96%

4,134

99%

Payments

231

99%

1,203

99%

1,952

97%

607

83%

3,992

95%

Bridging facility

Appropriations

–

–

Decisions

Assigned funds

Payments

CDE, CTA and Parliamentary Assembly

Appropriations

154

154

Decisions

154

100%

154

100%

Assigned funds

154

100%

154

100%

Payments

154

100%

154

100%

Implementation Costs and Interests Revenues

Appropriations

–

240

535

1,077

1,853

Decisions

240

100%

510

95%

715

66%

1,464

79%

Assigned funds

240

100%

508

95%

658

61%

1,405

76%

Payments

240

100%

507

95%

613

57%

1,359

73%

Intra-ACP allocations

Appropriations

2,942

3,218

3,946

10,106

Decisions

2,940

100%

3,212

100%

3,249

82%

9,401

93%

Assigned funds

2,931

100%

3,151

98%

2,391

61%

8,473

84%

Payments

2,922

99%

2,916

91%

1,843

47%

7,681

76%

Regional allocations

Appropriations

804

1,982

6,622

9,408

Decisions

801

100%

1,965

99%

5,840

88%

8,605

91%

Assigned funds

789

98%

1,855

94%

4,977

75%

7,622

81%

Payments

773

96%

1,587

80%

1,561

24%

3,921

42%

Special allocation R.D. Congo

Appropriations

105

105

Decisions

105

100%

105

100%

Assigned funds

105

100%

105

100%

Payments

105

100%

105

100%

Special allocation South Sudan

Appropriations

267

267

Decisions

266

100%

266

100%

Assigned funds

253

95%

253

95%

Payments

200

75%

200

75%

Special allocation Sudan

Appropriations

110

110

Decisions

107

97%

107

97%

Assigned funds

105

95%

105

95%

Payments

97

88%

97

88%

Voluntary contribution Peace facility

Appropriations

39

39

Decisions

24

62%

24

62%

Assigned funds

24

62%

24

62%

Payments

24

62%

24

62%

Regular MS Contributions

A Envelope - National Allocations

Appropriations

187

23

210

Decisions

183

98%

20

89%

203

97%

Assigned funds

179

95%

20

89%

199

95%

Payments

143

76%

1

5%

144

69%

Implementation Costs and Interests Revenues

Appropriations

5

2

7

Decisions

5

100%

1

70%

7

92%

Assigned funds

3

62%

3

46%

Payments

2

40%

2

29%

Intra-ACP allocations

Appropriations

12

11

23

Decisions

11

92%

2

16%

13

56%

Assigned funds

11

91%

2

16%

13

55%

Payments

11

89%

1

11%

12

52%

Regional allocations

Appropriations

2

2

Decisions

2

100%

2

100%

Assigned funds

2

100%

2

100%

Payments

Co-financing

A Envelope - National Allocations

Appropriations

1

1

Decisions

1

71%

1

71%

Assigned funds

1

71%

1

71%

Payments

1

52%

1

52%

EC Internal SLA

Appropriations

| Appropriations | 8 | % | 9 | % | 10 | % | 11 | % | TOTAL | % | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | (1) | | (1) | | (1) | (1) | (1) | |
| Cotonou | Country reserve | | | | | – | | – | | – | | |
| | Intra-ACP Reserve | | | | | – | | 69 | | 69 | | |
| | National allocations Reserve A Envelope STABEX | | | | | – | | – | | – | | |
| | NIP/RIP reserve | | | | | – | | 1,320 | | 1,320 | | |
| | Regional allocations reserve | | | | | – | | | | – | | |
| | Mobilisable reserves | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | Non-mobilisable reserve | | | | | 156 | | 318 | | 475 | | |
| | Non-mobilisable reserve | | | | | | | | | | | |
| | | | | | | | | | | | | |

8

%

9

%

10

%

11

%

TOTAL

%

(1)

(1)

(1)

(1)

(1)

Cotonou

Country reserve

–

–

–

Intra-ACP Reserve

–

69

69

National allocations Reserve A Envelope STABEX

–

–

–

NIP/RIP reserve

–

1,320

1,320

Regional allocations reserve

–

–

Mobilisable reserves

Non-mobilisable reserve

156

318

475

Non-mobilisable reserve

8

| | 8 | % | 9 | % | 10 | % | 11 | % | TOTAL | % | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | (1) | | (1) | | (1) | (1) | (1) | |
| | Appropriations | 10,379 | | 15,390 | | 21,223 | | 29,747 | | 76,739 | | |
| | Decisions | 10,377 | 100% | 15,357 | 100% | 20,905 | 99% | 23,359 | 79% | 69,998 | 91% | |
| | Assigned funds | 10,375 | 100% | 15,305 | 99% | 20,361 | 96% | 18,140 | 61% | 64,182 | 84% | |
| | Payments | 10,375 | 100% | 15,187 | 99% | 18,829 | 89% | 9,175 | 31% | 53,566 | 70% | |
| | TOTAL: ALL ALLOCATIONS | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| (1) % of appropriations | |

%

9

%

10

%

11

%

TOTAL

%

(1)

(1)

(1)

(1)

(1)

Appropriations

10,379

15,390

21,223

29,747

76,739

Decisions

10,377

100%

15,357

100%

20,905

99%

23,359

79%

69,998

91%

Assigned funds

10,375

100%

15,305

99%

20,361

96%

18,140

61%

64,182

84%

Payments

10,375

100%

15,187

99%

18,829

89%

9,175

31%

53,566

70%

TOTAL: ALL ALLOCATIONS

(1) % of appropriations

Table 2.3

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2018

CLASS OF AID

ACP + PTOM - 8 th EDF

| | | | | | | | | | | | (EUR million) | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | CREDITS | DECISIONS | ASSIGNED FUNDS | PAYMENTS | |
| | | AGGREG. | ANNUAL | % | AGGREG. | ANNUAL | % | AGGREG. | ANNUAL | % | |
| | (1) | (2) | | (2) : (1) | (3) | | (3) : (2) | (4) | | (4) : (3) | |
| | ACP | | | | | | | | | | | |
| | Regular MS Contributions | | | | | | | | | | | |
| Lomé | Utilisation of interest income | 35 | 35 | | 100% | 35 | | 100% | 35 | | 100% | ACP |
| | SUB TOTAL: SUNDRY INCOME | 35 | 35 | | 100% | 35 | | 100% | 35 | | 100% | |
| | Total indicative programmes | 4,951 | 4,951 | (1) | 100% | 4,950 | – | 100% | 4,950 | – | 100% | |
| | SUB TOTAL: TOTAL INDICATIVE PROGRAMMES | 4,951 | 4,951 | (1) | 100% | 4,950 | – | 100% | 4,950 | – | 100% | |
| | Aid for refugees | 100 | 100 | | 100% | 100 | | 100% | 100 | | 100% | |
| | Emergency aid (Lomé) | 136 | 136 | | 100% | 136 | | 100% | 136 | | 100% | |
| | Heavily indebted poor countries (Lomé) | 1,060 | 1,060 | | 100% | 1,060 | | 100% | 1,060 | | 100% | |
| | Interest-rate subsidies | 69 | 69 | | 100% | 68 | | 100% | 68 | | 100% | |
| | Risk capital | 1,012 | 1,012 | (3) | 100% | 1,012 | | 100% | 1,012 | | 100% | |
| | Stabex | 723 | 723 | – | 100% | 722 | | 100% | 722 | | 100% | |
| | Structural adjustment | 1,497 | 1,497 | – | 100% | 1,497 | | 100% | 1,497 | | 100% | |
| | Sysmin | 101 | 101 | | 100% | 101 | | 100% | 101 | | 100% | |
| | SUB TOTAL: TOTAL NON-PROGRAMMABLE AID | 4,697 | 4,696 | (3) | 100% | 4,695 | | 100% | 4,695 | | 100% | |
| | ACP | | | | | | | | | | | |
| | Regular MS Contributions | | | | | | | | | | | |
| Cotonou | A Envelope - National Allocations | 417 | 417 | | 100% | 417 | | 100% | 417 | | 100% | |
| | SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS | 417 | 417 | | 100% | 417 | | 100% | 417 | | 100% | |
| | B Envelope - National Allocations | 233 | | | | | | | | | | |
| | Compensation export earnings | | 233 | – | | 231 | – | 99% | 231 | – | 100% | |
| | SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS | 233 | 233 | – | 100% | 231 | – | 99% | 231 | – | 100% | |
| | Interests and other receipts | – | | | | | | | | | | |
| | SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES | – | | | | | | | | | | |
| | | | | | | | | | | | | |
| | TOTAL ACP (A) | 10,333 | 10,332 | (4) | 100% | 10,330 | – | 100% | 10,329 | – | 100% | |
| | OCT | | | | | | | | | | | |
| | Regular MS Contributions | | | | | | | | | | | |
| Lomé | Total indicative programmes | 35 | 35 | | 100% | 35 | | 100% | 35 | | 100% | OCT |
| | SUB TOTAL: TOTAL INDICATIVE PROGRAMMES | 35 | 35 | | 100% | 35 | | 100% | 35 | | 100% | |
| | Interest-rate subsidies | 1 | 1 | | 100% | 1 | | 100% | 1 | | 100% | |
| | Risk capital | 6 | 6 | | 100% | 6 | | 100% | 6 | | 100% | |
| | Stabex | 1 | 1 | | 100% | 1 | | 100% | 1 | | 100% | |
| | Sysmin | 2 | 2 | | 100% | 2 | | 100% | 2 | | 100% | |
| | SUB TOTAL: TOTAL NON-PROGRAMMABLE AID | 10 | 10 | | 100% | 10 | | 100% | 10 | | 100% | |
| | | | | | | | | | | | | |
| | TOTAL OCT | 46 | 46 | | 100% | 46 | | 100% | 46 | | 100% | |
| | | | | | | | | | | | | |
| | TOTAL: ACP+OCT (A+B) | 10,379 | 10,377 | (4) | 100% | 10,375 | – | 100% | 10,375 | – | 100% | |

(EUR million)

CREDITS

DECISIONS

ASSIGNED FUNDS

PAYMENTS

AGGREG.

ANNUAL

%

AGGREG.

ANNUAL

%

AGGREG.

ANNUAL

%

(1)

(2)

(2) : (1)

(3)

(3) : (2)

(4)

(4) : (3)

ACP

Regular MS Contributions

Lomé

Utilisation of interest income

35

35

100%

35

100%

35

100%

ACP

SUB TOTAL: SUNDRY INCOME

35

35

100%

35

100%

35

100%

Total indicative programmes

4,951

4,951

(1)

100%

4,950

–

100%

4,950

–

100%

SUB TOTAL: TOTAL INDICATIVE PROGRAMMES

4,951

4,951

(1)

100%

4,950

–

100%

4,950

–

100%

Aid for refugees

100

100

100%

100

100%

100

100%

Emergency aid (Lomé)

136

136

100%

136

100%

136

100%

Heavily indebted poor countries (Lomé)

1,060

1,060

100%

1,060

100%

1,060

100%

Interest-rate subsidies

69

69

100%

68

100%

68

100%

Risk capital

1,012

1,012

(3)

100%

1,012

100%

1,012

100%

Stabex

723

723

–

100%

722

100%

722

100%

Structural adjustment

1,497

1,497

–

100%

1,497

100%

1,497

100%

Sysmin

101

101

100%

101

100%

101

100%

SUB TOTAL: TOTAL NON-PROGRAMMABLE AID

4,697

4,696

(3)

100%

4,695

100%

4,695

100%

ACP

Regular MS Contributions

Cotonou

A Envelope - National Allocations

417

417

100%

417

100%

417

100%

SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS

417

417

100%

417

100%

417

100%

B Envelope - National Allocations

233

Compensation export earnings

233

–

231

–

99%

231

–

100%

SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS

233

233

–

100%

231

–

99%

231

–

100%

Interests and other receipts

–

SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES

–

TOTAL ACP (A)

10,333

10,332

(4)

100%

10,330

–

100%

10,329

–

100%

OCT

Regular MS Contributions

Lomé

Total indicative programmes

35

35

100%

35

100%

35

100%

OCT

SUB TOTAL: TOTAL INDICATIVE PROGRAMMES

35

35

100%

35

100%

35

100%

Interest-rate subsidies

1

1

100%

1

100%

1

100%

Risk capital

6

6

100%

6

100%

6

100%

Stabex

1

1

100%

1

100%

1

100%

Sysmin

2

2

100%

2

100%

2

100%

SUB TOTAL: TOTAL NON-PROGRAMMABLE AID

10

10

100%

10

100%

10

100%

TOTAL OCT

46

46

100%

46

100%

46

100%

TOTAL: ACP+OCT (A+B)

10,379

10,377

(4)

100%

10,375

–

100%

10,375

–

100%

Table 2.4

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2018

CLASS OF AID

ACP + PTOM - 9 th EDF

| | | | | | | | | | | | (EUR million) | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | CREDITS | DECISIONS | ASSIGNED FUNDS | PAYMENTS | |
| | | AGGREG. | ANNUAL | % | AGGREG. | ANNUAL | % | AGGREG. | ANNUAL | % | |
| | (1) | (2) | | (2) : (1) | (3) | | (3) : (2) | (4) | | (4) : (3) | |
| | | | | | | | | | | | | |
| | ACP | | | | | | | | | | | |
| | Regular MS Contributions | | | | | | | | | | | |
| Lomé | Transfers from 6th EDF - Lomé | 20 | 20 | – | 100% | 20 | | 100% | 20 | | 100% | ACP |
| | Transfers from 7th EDF - Lomé | 647 | 647 | – | 100% | 647 | | 100% | 647 | | 100% | |
| | SUB TOTAL: TRANSFERS FROM OTHER FUNDS | 668 | 668 | – | 100% | 668 | | 100% | 667 | | 100% | |
| | | | | | | | | | | | | |
| | ACP | | | | | | | | | | | |
| | Regular MS Contributions | | | | | | | | | | | |
| Cotonou | A Envelope - National Allocations | 8,608 | 8,600 | (15) | 100% | 8,590 | (9) | 100% | 8,565 | (1) | 100% | |
| | SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS | 8,608 | 8,600 | (15) | 100% | 8,590 | (9) | 100% | 8,565 | (1) | 100% | |
| | B Envelope - National Allocations | 1,208 | | | | | | | | | | |
| | Compensation export earnings | | 148 | – | | 148 | – | 100% | 148 | | 100% | |
| | Emergency aid | | 1,049 | – | | 1,045 | – | 100% | 1,040 | – | 99% | |
| | Heavily indebted poor countries | | 11 | | | 11 | | 100% | 11 | | 100% | |
| | SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS | 1,208 | 1,208 | – | 100% | 1,204 | – | 100% | 1,198 | – | 100% | |
| | CDE, CTA and Parliamentary Assembly | 154 | 154 | | 100% | 154 | | 100% | 154 | | 100% | |
| | SUB TOTAL: CDE, CTA AND PARLIAMENTARY ASSEMBLY | 154 | 154 | | 100% | 154 | | 100% | 154 | | 100% | |
| | Implementation costs | 177 | 177 | (1) | 100% | 177 | – | 100% | 177 | | 100% | |
| | Interests and other receipts | 63 | 63 | | 100% | 63 | | 100% | 63 | | 100% | |
| | SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES | 240 | 239 | (1) | 100% | 239 | – | 100% | 239 | | 100% | |
| | Other Intra-ACP allocations | 2,589 | 2,586 | (9) | 100% | 2,577 | (7) | 100% | 2,568 | 1 | 100% | |
| | Peace facility | 353 | 353 | – | 100% | 353 | | 100% | 353 | | 100% | |
| | SUB TOTAL: INTRA-ACP ALLOCATIONS | 2,942 | 2,940 | (9) | 100% | 2,931 | (7) | 100% | 2,922 | 1 | 100% | |
| | Regional allocations | 759 | 756 | (7) | 100% | 745 | (2) | 99% | 729 | (1) | 98% | |
| | SUB TOTAL: REGIONAL ALLOCATIONS | 759 | 756 | (7) | 100% | 745 | (2) | 99% | 729 | (1) | 98% | |
| | Special allocation R.D. Congo | 105 | 105 | | 100% | 105 | | 100% | 105 | | 100% | |
| | SUB TOTAL: SPECIAL ALLOCATION R.D. CONGO | 105 | 105 | | 100% | 105 | | 100% | 105 | | 100% | |
| | Special allocation South Sudan | 267 | 266 | – | 100% | 253 | 35 | 95% | 200 | 16 | 79% | |
| | SUB TOTAL: SPECIAL ALLOCATION SOUTH SUDAN | 267 | 266 | – | 100% | 253 | 35 | 95% | 200 | 16 | 79% | |
| | Special allocation Sudan | 110 | 107 | (1) | 97% | 105 | – | 98% | 97 | 8 | 93% | |
| | SUB TOTAL: SPECIAL ALLOCATION SUDAN | 110 | 107 | (1) | 97% | 105 | – | 98% | 97 | 8 | 93% | |
| | Voluntary contribution Peace facility | 39 | 24 | | 62% | 24 | | 100% | 24 | | 100% | |
| | SUB TOTAL: VOLUNTARY CONTRIBUTION PEACE FACILITY | 39 | 24 | | 62% | 24 | | 100% | 24 | | 100% | |
| | | | | | | | | | | | | |
| | TOTAL: ACP (A) | 15,100 | 15,067 | (33) | 100% | 15,018 | 17 | 100% | 14,900 | 23 | 99% | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | OCT | | | | | | | | | | | |
| | Regular MS Contributions | | | | | | | | | | | |
| Lomé | Transfers from 6th EDF - Lomé | – | – | | 100% | – | | 100% | – | | 100% | OCT |
| | Transfers from 7th EDF - Lomé | 3 | 3 | | 100% | 3 | | 100% | 3 | | 100% | |
| | SUB TOTAL: TRANSFERS FROM OTHER FUNDS | 3 | 3 | | 100% | 3 | | 100% | 3 | | 100% | |
| | | | | | | | | | | | | |
| | OCT | | | | | | | | | | | |
| | Regular MS Contributions | | | | | | | | | | | |
| Cotonou | A Envelope - National Allocations | 237 | 237 | | 100% | 235 | | 99% | 235 | | 100% | |
| | SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS | 237 | 237 | | 100% | 235 | | 99% | 235 | | 100% | |
| | B Envelope - National Allocations | 4 | | | | | | | | | | |
| | Emergency aid | | 4 | | | 4 | | 100% | 4 | | 100% | |
| | SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS | 4 | 4 | | 100% | 4 | | 100% | 4 | | 100% | |
| | Studies / Technical assistance OCT | 1 | 1 | | 100% | 1 | | 100% | 1 | | 100% | |
| | SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES | 1 | 1 | | 100% | 1 | | 100% | 1 | | 100% | |
| | Regional allocations | 45 | 45 | – | 100% | 45 | – | 99% | 45 | – | 100% | |
| | SUB TOTAL: REGIONAL ALLOCATIONS | 45 | 45 | – | 100% | 45 | – | 99% | 45 | – | 100% | |
| | | | | | | | | | | | | |
| | TOTAL: OCT | 290 | 290 | – | 100% | 288 | – | 99% | 288 | – | 100% | |
| | | | | | | | | | | | | |
| | TOTAL: ACP+OCT (A+B) | 15,390 | 15,357 | (33) | 100% | 15,305 | 16 | 100% | 15,187 | 23 | 99% | |

(EUR million)

CREDITS

DECISIONS

ASSIGNED FUNDS

PAYMENTS

AGGREG.

ANNUAL

%

AGGREG.

ANNUAL

%

AGGREG.

ANNUAL

%

(1)

(2)

(2) : (1)

(3)

(3) : (2)

(4)

(4) : (3)

ACP

Regular MS Contributions

Lomé

Transfers from 6th EDF - Lomé

20

20

–

100%

20

100%

20

100%

ACP

Transfers from 7th EDF - Lomé

647

647

–

100%

647

100%

647

100%

SUB TOTAL: TRANSFERS FROM OTHER FUNDS

668

668

–

100%

668

100%

667

100%

ACP

Regular MS Contributions

Cotonou

A Envelope - National Allocations

8,608

8,600

(15)

100%

8,590

(9)

100%

8,565

(1)

100%

SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS

8,608

8,600

(15)

100%

8,590

(9)

100%

8,565

(1)

100%

B Envelope - National Allocations

1,208

Compensation export earnings

148

–

148

–

100%

148

100%

Emergency aid

1,049

–

1,045

–

100%

1,040

–

99%

Heavily indebted poor countries

11

11

100%

11

100%

SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS

1,208

1,208

–

100%

1,204

–

100%

1,198

–

100%

CDE, CTA and Parliamentary Assembly

154

154

100%

154

100%

154

100%

SUB TOTAL: CDE, CTA AND PARLIAMENTARY ASSEMBLY

154

154

100%

154

100%

154

100%

Implementation costs

177

177

(1)

100%

177

–

100%

177

100%

Interests and other receipts

63

63

100%

63

100%

63

100%

SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES

240

239

(1)

100%

239

–

100%

239

100%

Other Intra-ACP allocations

2,589

2,586

(9)

100%

2,577

(7)

100%

2,568

1

100%

Peace facility

353

353

–

100%

353

100%

353

100%

SUB TOTAL: INTRA-ACP ALLOCATIONS

2,942

2,940

(9)

100%

2,931

(7)

100%

2,922

1

100%

Regional allocations

759

756

(7)

100%

745

(2)

99%

729

(1)

98%

SUB TOTAL: REGIONAL ALLOCATIONS

759

756

(7)

100%

745

(2)

99%

729

(1)

98%

Special allocation R.D. Congo

105

105

100%

105

100%

105

100%

SUB TOTAL: SPECIAL ALLOCATION R.D. CONGO

105

105

100%

105

100%

105

100%

Special allocation South Sudan

267

266

–

100%

253

35

95%

200

16

79%

SUB TOTAL: SPECIAL ALLOCATION SOUTH SUDAN

267

266

–

100%

253

35

95%

200

16

79%

Special allocation Sudan

110

107

(1)

97%

105

–

98%

97

8

93%

SUB TOTAL: SPECIAL ALLOCATION SUDAN

110

107

(1)

97%

105

–

98%

97

8

93%

Voluntary contribution Peace facility

39

24

62%

24

100%

24

100%

SUB TOTAL: VOLUNTARY CONTRIBUTION PEACE FACILITY

39

24

62%

24

100%

24

100%

TOTAL: ACP (A)

15,100

15,067

(33)

100%

15,018

17

100%

14,900

23

99%

OCT

Regular MS Contributions

Lomé

Transfers from 6th EDF - Lomé

–

–

100%

–

100%

–

100%

OCT

Transfers from 7th EDF - Lomé

3

3

100%

3

100%

3

100%

SUB TOTAL: TRANSFERS FROM OTHER FUNDS

3

3

100%

3

100%

3

100%

OCT

Regular MS Contributions

Cotonou

A Envelope - National Allocations

237

237

100%

235

99%

235

100%

SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS

237

237

100%

235

99%

235

100%

B Envelope - National Allocations

4

Emergency aid

4

4

100%

4

100%

SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS

4

4

100%

4

100%

4

100%

Studies / Technical assistance OCT

1

1

100%

1

100%

1

100%

SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES

1

1

100%

1

100%

1

100%

Regional allocations

45

45

–

100%

45

–

99%

45

–

100%

SUB TOTAL: REGIONAL ALLOCATIONS

45

45

–

100%

45

–

99%

45

–

100%

TOTAL: OCT

290

290

–

100%

288

–

99%

288

–

100%

TOTAL: ACP+OCT (A+B)

15,390

15,357

(33)

100%

15,305

16

100%

15,187

23

99%

Table 2.5

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2018

CLASS OF AID

ACP + PTOM - 10 th EDF

| | | | | | | | | | | | (EUR million) | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | CREDITS | DECISIONS | ASSIGNED FUNDS | PAYMENTS | |
| | | AGGREG. | ANNUAL | % | AGGREG. | ANNUAL | % | AGGREG. | ANNUAL | % | |
| | (1) | (2) | | (2) : (1) | (3) | | (3) : (2) | (4) | | (4) : (3) | |
| | | | | | | | | | | | | |
| | Regular MS Contributions | | | | | | | | | | | |
| | Allocations | | | | | | | | | | | |
| ACP | A Envelope - National Allocations | 12,922 | 12,820 | (201) | 99% | 12,482 | 5 | 97% | 11,568 | 586 | 93% | ACP |
| | SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS | 12,922 | 12,820 | (201) | 99% | 12,482 | 5 | 97% | 11,568 | | 586 | 93% |
| | B Envelope - National Allocations | 2,000 | | | | | | | | | | |
| | Compensation export earnings | | 203 | (1) | | 200 | 2 | 99% | 190 | | 8 | 95% |
| | Emergency aid | | 840 | (4) | | 831 | (5) | 99% | 813 | | 23 | 98% |
| | Heavily indebted poor countries | | 49 | – | | 49 | – | 100% | 49 | | | 100% |
| | Other chocs with budgetary impact | | 904 | (1) | | 896 | (1) | 99% | 886 | | 4 | 99% |
| | SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS | 2,000 | 1,995 | (6) | 100% | 1,976 | (4) | 99% | 1,938 | | 34 | 98% |
| | Implementation costs | 445 | 436 | 4 | 98% | 436 | 5 | 100% | 435 | | 6 | 100% |
| | Interests and other receipts | 85 | 68 | – | 80% | 67 | – | 98% | 67 | | – | 100% |
| | SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES | 530 | 504 | 4 | 95% | 503 | 5 | 100% | 502 | | 6 | 100% |
| | Institutional and support expenditure | 230 | 229 | (3) | 99% | 229 | (1) | 100% | 209 | | (2) | 91% |
| | Other Intra-ACP allocations | 1,868 | 1,864 | (18) | 100% | 1,823 | (4) | 98% | 1,683 | | 73 | 92% |
| | Peace facility | 1,119 | 1,119 | 105 | 100% | 1,099 | 227 | 98% | 1,023 | | 209 | 93% |
| | SUB TOTAL: INTRA-ACP ALLOCATIONS | 3,218 | 3,212 | 85 | 100% | 3,151 | 221 | 98% | 2,916 | | 280 | 93% |
| | Regional allocations | 1,942 | 1,926 | (24) | 99% | 1,818 | (8) | 94% | 1,555 | | 144 | 86% |
| | SUB TOTAL: REGIONAL ALLOCATIONS | 1,942 | 1,926 | (24) | 99% | 1,818 | (8) | 94% | 1,555 | | 144 | 86% |
| | Co-financing | | | | | | | | | | | |
| | Allocations | | | | | | | | | | | |
| | A Envelope - National Allocations | 187 | 183 | (1) | 98% | 179 | – | 97% | 143 | | 12 | 80% |
| | SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS | 187 | 183 | (1) | 98% | 179 | – | 97% | 143 | | 12 | 80% |
| | Implementation costs | 5 | 5 | 1 | 100% | 3 | 1 | 62% | 2 | | 1 | 63% |
| | SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES | 5 | 5 | 1 | 100% | 3 | 1 | 62% | 2 | | 1 | 63% |
| | Other Intra-ACP allocations | 12 | 11 | (1) | 92% | 10 | – | 99% | 10 | | – | 97% |
| | Peace facility | 1 | 1 | | 100% | 1 | | 99% | 1 | | | 100% |
| | SUB TOTAL: INTRA-ACP ALLOCATIONS | 12 | 11 | (1) | 92% | 11 | – | 99% | 11 | | – | 97% |
| | Mobilisable reserves | | | | | | | | | | | |
| | Reserves | | | | | | | | | | | |
| | A Envelope reserve | – | | | | | | | | | | |
| | B Envelope reserve | – | | | | | | | | | | |
| | SUB TOTAL: COUNTRY RESERVE | – | | | | | | | | | | |
| | Intra-ACP Reserve | – | | | | | | | | | | |
| | SUB TOTAL: INTRA-ACP RESERVE | – | | | | | | | | | | |
| | National allocations Reserve A Envelope STABEX | – | | | | | | | | | | |
| | SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX | – | | | | | | | | | | |
| | NIP/RIP reserve | – | | | | | | | | | | |
| | SUB TOTAL: NIP/RIP RESERVE | – | | | | | | | | | | |
| | Regional allocations reserve | – | | | | | | | | | | |
| | SUB TOTAL: REGIONAL ALLOCATIONS RESERVE | – | | | | | | | | | | |
| | Non-mobilisable reserve | | | | | | | | | | | |
| | Reserves | | | | | | | | | | | |
| | Non-mobilisable reserve | 131 | | | | | | | | | | |
| | SUB TOTAL: NON-MOBILISABLE RESERVE | 131 | | | | | | | | | | |
| | | | | | | | | | | | | |
| | Regular MS Contributions | | | | | | | | | | | |
| | Allocations | | | | | | | | | | | |
| OCT | A Envelope - National Allocations | 190 | 189 | (2) | 99% | 182 | 17 | 96% | 144 | 13 | 79% | OCT |
| | SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS | 190 | 189 | (2) | 99% | 182 | 17 | 96% | 144 | | 13 | 79% |
| | B Envelope - National Allocations | 15 | | | | | | | | | | |
| | Emergency aid | | 9 | – | | 8 | – | 99% | 8 | | – | 89% |
| | Other chocs with budgetary impact | | 6 | | | 6 | | 100% | 6 | | | 100% |
| | SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS | 15 | 15 | – | 98% | 14 | – | 99% | 14 | | – | 93% |
| | Studies / Technical assistance OCT | 5 | 5 | – | 100% | 5 | – | 98% | 5 | | – | 100% |
| | SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES | 5 | 5 | – | 100% | 5 | – | 98% | 5 | | – | 100% |
| | Regional allocations | 40 | 39 | (1) | 98% | 37 | (1) | 95% | 32 | | – | 87% |
| | SUB TOTAL: REGIONAL ALLOCATIONS | 40 | 39 | (1) | 98% | 37 | (1) | 95% | 32 | | – | 87% |
| | Mobilisable reserves | | | | | | | | | | | |
| | Reserves | | | | | | | | | | | |
| | A Envelope reserve | – | | | | | | | | | | |
| | B Envelope reserve | – | | | | | | | | | | |
| | SUB TOTAL: COUNTRY RESERVE | – | | | | | | | | | | |
| | National allocations Reserve A Envelope STABEX | – | | | | | | | | | | |
| | SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX | – | | | | | | | | | | |
| | Regional allocations reserve | – | | | | | | | | | | |
| | SUB TOTAL: REGIONAL ALLOCATIONS RESERVE | – | | | | | | | | | | |
| | Non-mobilisable reserve | | | | | | | | | | | |
| | Reserves | | | | | | | | | | | |
| | Non-mobilisable reserve | 25 | | | | | | | | | | |
| | SUB TOTAL: NON-MOBILISABLE RESERVE | 25 | | | | | | | | | | |
| | | | | | | | | | | | | |
| | TOTAL: ACP+OCT (INCL. RESERVES) (A+B) | 21,223 | 20,905 | (147) | 99% | 20,361 | 236 | 97% | 18,829 | 1,076 | 92% | |

(EUR million)

CREDITS

DECISIONS

ASSIGNED FUNDS

PAYMENTS

AGGREG.

ANNUAL

%

AGGREG.

ANNUAL

%

AGGREG.

ANNUAL

%

(1)

(2)

(2) : (1)

(3)

(3) : (2)

(4)

(4) : (3)

Regular MS Contributions

Allocations

ACP

A Envelope - National Allocations

12,922

12,820

(201)

99%

12,482

5

97%

11,568

586

93%

ACP

SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS

12,922

12,820

(201)

99%

12,482

5

97%

11,568

586

93%

B Envelope - National Allocations

2,000

Compensation export earnings

203

(1)

200

2

99%

190

8

95%

Emergency aid

840

(4)

831

(5)

99%

813

23

98%

Heavily indebted poor countries

49

–

49

–

100%

49

100%

Other chocs with budgetary impact

904

(1)

896

(1)

99%

886

4

99%

SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS

2,000

1,995

(6)

100%

1,976

(4)

99%

1,938

34

98%

Implementation costs

445

436

4

98%

436

5

100%

435

6

100%

Interests and other receipts

85

68

–

80%

67

–

98%

67

–

100%

SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES

530

504

4

95%

503

5

100%

502

6

100%

Institutional and support expenditure

230

229

(3)

99%

229

(1)

100%

209

(2)

91%

Other Intra-ACP allocations

1,868

1,864

(18)

100%

1,823

(4)

98%

1,683

73

92%

Peace facility

1,119

1,119

105

100%

1,099

227

98%

1,023

209

93%

SUB TOTAL: INTRA-ACP ALLOCATIONS

3,218

3,212

85

100%

3,151

221

98%

2,916

280

93%

Regional allocations

1,942

1,926

(24)

99%

1,818

(8)

94%

1,555

144

86%

SUB TOTAL: REGIONAL ALLOCATIONS

1,942

1,926

(24)

99%

1,818

(8)

94%

1,555

144

86%

Co-financing

Allocations

A Envelope - National Allocations

187

183

(1)

98%

179

–

97%

143

12

80%

SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS

187

183

(1)

98%

179

–

97%

143

12

80%

Implementation costs

5

5

1

100%

3

1

62%

2

1

63%

SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES

5

5

1

100%

3

1

62%

2

1

63%

Other Intra-ACP allocations

12

11

(1)

92%

10

–

99%

10

–

97%

Peace facility

1

1

100%

1

99%

1

100%

SUB TOTAL: INTRA-ACP ALLOCATIONS

12

11

(1)

92%

11

–

99%

11

–

97%

Mobilisable reserves

Reserves

A Envelope reserve

–

B Envelope reserve

–

SUB TOTAL: COUNTRY RESERVE

–

Intra-ACP Reserve

–

SUB TOTAL: INTRA-ACP RESERVE

–

National allocations Reserve A Envelope STABEX

–

SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX

–

NIP/RIP reserve

–

SUB TOTAL: NIP/RIP RESERVE

–

Regional allocations reserve

–

SUB TOTAL: REGIONAL ALLOCATIONS RESERVE

–

Non-mobilisable reserve

Reserves

Non-mobilisable reserve

131

SUB TOTAL: NON-MOBILISABLE RESERVE

131

Regular MS Contributions

Allocations

OCT

A Envelope - National Allocations

190

189

(2)

99%

182

17

96%

144

13

79%

OCT

SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS

190

189

(2)

99%

182

17

96%

144

13

79%

B Envelope - National Allocations

15

Emergency aid

9

–

8

–

99%

8

–

89%

Other chocs with budgetary impact

6

6

100%

6

100%

SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS

15

15

–

98%

14

–

99%

14

–

93%

Studies / Technical assistance OCT

5

5

–

100%

5

–

98%

5

–

100%

SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES

5

5

–

100%

5

–

98%

5

–

100%

Regional allocations

40

39

(1)

98%

37

(1)

95%

32

–

87%

SUB TOTAL: REGIONAL ALLOCATIONS

40

39

(1)

98%

37

(1)

95%

32

–

87%

Mobilisable reserves

Reserves

A Envelope reserve

–

B Envelope reserve

–

SUB TOTAL: COUNTRY RESERVE

–

National allocations Reserve A Envelope STABEX

–

SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX

–

Regional allocations reserve

–

SUB TOTAL: REGIONAL ALLOCATIONS RESERVE

–

Non-mobilisable reserve

Reserves

Non-mobilisable reserve

25

SUB TOTAL: NON-MOBILISABLE RESERVE

25

TOTAL: ACP+OCT (INCL. RESERVES) (A+B)

21,223

20,905

(147)

99%

20,361

236

97%

18,829

1,076

92%

Table 2.6

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2018

CLASS OF AID

ACP + PTOM - 11 th EDF

| | | | | | | | | | | | (EUR million) | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | CREDITS | DECISIONS | ASSIGNED FUNDS | PAYMENTS | |
| | | AGGREG. | ANNUAL | % | AGGREG. | ANNUAL | % | AGGREG. | ANNUAL | % | |
| | (1) | (2) | | (2) : (1) | (3) | | (3) : (2) | (4) | | (4) : (3) | |
| | | | | | | | | | | | | |
| | Regular MS Contributions | | | | | | | | | | | |
| | Allocations | | | | | | | | | | | |
| ACP | A Envelope - National Allocations | 15,419 | 12,634 | 1,743 | 82% | 9,202 | 2,346 | 73% | 4,467 | 1,536 | 49% | ACP |
| | SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS | 15,419 | 12,634 | 1,743 | 82% | 9,202 | 2,346 | 73% | 4,467 | | 1,536 | 49% |
| | B Envelope - National Allocations | 717 | | | | | | | | | | |
| | Emergency aid | | 592 | 2 | | 589 | 10 | 99% | 493 | | 50 | 84% |
| | Other chocs with budgetary impact | | 109 | | | 109 | – | 100% | 109 | | 80 | 100% |
| | SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS | 717 | 701 | 2 | 98% | 698 | 10 | 100% | 601 | | 130 | 86% |
| | Bridging facility | – | | | | | | | | | | |
| | SUB TOTAL: BRIDGING FACILITY | – | | | | | | | | | | |
| | Implementation costs | 1,053 | 700 | 162 | 67% | 646 | 157 | 92% | 603 | | 148 | 93% |
| | Interests and other receipts | 16 | 10 | – | 59% | 7 | 1 | 71% | 6 | | – | 92% |
| | SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES | 1,069 | 710 | 162 | 66% | 653 | 157 | 92% | 609 | | 148 | 93% |
| | Institutional and support expenditure | 246 | 133 | 27 | 54% | 98 | 7 | 74% | 85 | | 16 | 87% |
| | Other Intra-ACP allocations | 2,700 | 2,116 | 871 | 78% | 1,347 | 537 | 64% | 899 | | 408 | 67% |
| | Peace facility | 1,000 | 1,000 | 6 | 100% | 946 | 61 | 95% | 859 | | 54 | 91% |
| | SUB TOTAL: INTRA-ACP ALLOCATIONS | 3,946 | 3,249 | 905 | 82% | 2,391 | 604 | 74% | 1,843 | | 478 | 77% |
| | Regional allocations | 6,541 | 5,803 | 1,381 | 89% | 4,940 | 1,426 | 85% | 1,554 | | 610 | 31% |
| | SUB TOTAL: REGIONAL ALLOCATIONS | 6,541 | 5,803 | 1,381 | 89% | 4,940 | 1,426 | 85% | 1,554 | | 610 | 31% |
| | Co-financing | | | | | | | | | | | |
| | Allocations | | | | | | | | | | | |
| | A Envelope - National Allocations | 23 | 20 | | 89% | 20 | – | 100% | 1 | | 1 | 6% |
| | SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS | 23 | 20 | | 89% | 20 | – | 100% | 1 | | 1 | 6% |
| | Implementation costs | 2 | 1 | 1 | 70% | | | | | | | |
| | SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES | 2 | 1 | 1 | 70% | | | | | | | |
| | Peace facility | 11 | 2 | 1 | 16% | 2 | 1 | 100% | 1 | | | 68% |
| | SUB TOTAL: INTRA-ACP ALLOCATIONS | 11 | 2 | 1 | 16% | 2 | 1 | 100% | 1 | | | 68% |
| | Regional allocations | 2 | 2 | 2 | 100% | 2 | 2 | 100% | | | | |
| | SUB TOTAL: REGIONAL ALLOCATIONS | 2 | 2 | 2 | 100% | 2 | 2 | 100% | | | | |
| | Mobilisable reserves | | | | | | | | | | | |
| | Reserves | | | | | | | | | | | |
| | B Envelope reserve | – | | | | | | | | | | |
| | SUB TOTAL: COUNTRY RESERVE | – | | | | | | | | | | |
| | Intra-ACP Reserve | 69 | | | | | | | | | | |
| | SUB TOTAL: INTRA-ACP RESERVE | 69 | | | | | | | | | | |
| | National allocations Reserve A Envelope STABEX | – | | | | | | | | | | |
| | SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX | – | | | | | | | | | | |
| | NIP/RIP reserve | 1,270 | | | | | | | | | | |
| | SUB TOTAL: NIP/RIP RESERVE | 1,270 | | | | | | | | | | |
| | Non-mobilisable reserve | | | | | | | | | | | |
| | Reserves | | | | | | | | | | | |
| | Non-mobilisable reserve | 311 | | | | | | | | | | |
| | SUB TOTAL: NON-MOBILISABLE RESERVE | 311 | | | | | | | | | | |
| | EC Internal SLA | | | | | | | | | | | |
| | Reserves | | | | | | | | | | | |
| | A Envelope - National Allocations | 1 | 1 | | 71% | 1 | | 100% | 1 | | | 73% |
| | SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS | 1 | 1 | | 71% | 1 | | 100% | 1 | | | 73% |
| | | | | | | | | | | | | |
| | Regular MS Contributions | | | | | | | | | | | |
| | Allocations | | | | | | | | | | | |
| OCT | A Envelope - National Allocations | 196 | 183 | 92 | 93% | 179 | 97 | 98% | 76 | 50 | 43% | OCT |
| | SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS | 196 | 183 | 92 | 93% | 179 | 97 | 98% | 76 | | 50 | 43% |
| | B Envelope - National Allocations | 8 | | | | | | | | | | |
| | Emergency aid | | 3 | 3 | | 3 | 3 | 100% | 2 | | 2 | 68% |
| | Other chocs with budgetary impact | | 3 | 3 | | 3 | 3 | 100% | 3 | | 3 | 100% |
| | SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS | 8 | 6 | 6 | 75% | 6 | 6 | 100% | 5 | | 5 | 85% |
| | Bridging facility | – | | | | | | | | | | |
| | SUB TOTAL: BRIDGING FACILITY | – | | | | | | | | | | |
| | Studies / Technical assistance OCT | 9 | 5 | – | 60% | 5 | 1 | 90% | 3 | | 1 | 72% |
| | SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES | 9 | 5 | – | 60% | 5 | 1 | 90% | 3 | | 1 | 72% |
| | Regional allocations | 81 | 37 | 37 | 46% | 37 | 37 | 99% | 7 | | 7 | 20% |
| | SUB TOTAL: REGIONAL ALLOCATIONS | 81 | 37 | 37 | 46% | 37 | 37 | 99% | 7 | | 7 | 20% |
| | Co-financing | | | | | | | | | | | |
| | Allocations | | | | | | | | | | | |
| | A Envelope - National Allocations | – | | | | | | | | | | |
| | SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS | – | | | | | | | | | | |
| | Mobilisable reserves | | | | | | | | | | | |
| | Reserves | | | | | | | | | | | |
| | NIP/RIP reserve | 49 | | | | | | | | | | |
| | SUB TOTAL: NIP/RIP RESERVE | 49 | | | | | | | | | | |
| | Non-mobilisable reserve | | | | | | | | | | | |
| | Reserves | | | | | | | | | | | |
| | Non-mobilisable reserve | 7 | | | | | | | | | | |
| | SUB TOTAL: NON-MOBILISABLE RESERVE | 7 | | | | | | | | | | |
| | EC Internal SLA | | | | | | | | | | | |
| | Reserves | | | | | | | | | | | |
| | A Envelope - National Allocations | – | | | | | | | | | | |
| | SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS | – | | | | | | | | | | |
| | | | | | | | | | | | | |
| | Regular MS Contributions | | | | | | | | | | | |
| | Allocations | | | | | | | | | | | |
| | A Envelope - National Allocations | 10 | 6 | | 60% | 6 | – | 98% | 6 | 4 | 98% | |
| | SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS | 10 | 6 | | 60% | 6 | – | 98% | 6 | | 4 | 98% |
| | B Envelope - National Allocations | 7 | | | | | | | | | | |
| | SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS | 7 | | | | | | | | | | |
| | | | | | | | | | | | | |
| | TOTAL: ACP+OCT (INCL. RESERVES) (A+B) | 29,747 | 23,359 | 4,332 | 79% | 18,140 | 4,687 | 78% | 9,175 | 2,970 | 51% | |

(EUR million)

CREDITS

DECISIONS

ASSIGNED FUNDS

PAYMENTS

AGGREG.

ANNUAL

%

AGGREG.

ANNUAL

%

AGGREG.

ANNUAL

%

(1)

(2)

(2) : (1)

(3)

(3) : (2)

(4)

(4) : (3)

Regular MS Contributions

Allocations

ACP

A Envelope - National Allocations

15,419

12,634

1,743

82%

9,202

2,346

73%

4,467

1,536

49%

ACP

SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS

15,419

12,634

1,743

82%

9,202

2,346

73%

4,467

1,536

49%

B Envelope - National Allocations

717

Emergency aid

592

2

589

10

99%

493

50

84%

Other chocs with budgetary impact

109

109

–

100%

109

80

100%

SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS

717

701

2

98%

698

10

100%

601

130

86%

Bridging facility

–

SUB TOTAL: BRIDGING FACILITY

–

Implementation costs

1,053

700

162

67%

646

157

92%

603

148

93%

Interests and other receipts

16

10

–

59%

7

1

71%

6

–

92%

SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES

1,069

710

162

66%

653

157

92%

609

148

93%

Institutional and support expenditure

246

133

27

54%

98

7

74%

85

16

87%

Other Intra-ACP allocations

2,700

2,116

871

78%

1,347

537

64%

899

408

67%

Peace facility

1,000

1,000

6

100%

946

61

95%

859

54

91%

SUB TOTAL: INTRA-ACP ALLOCATIONS

3,946

3,249

905

82%

2,391

604

74%

1,843

478

77%

Regional allocations

6,541

5,803

1,381

89%

4,940

1,426

85%

1,554

610

31%

SUB TOTAL: REGIONAL ALLOCATIONS

6,541

5,803

1,381

89%

4,940

1,426

85%

1,554

610

31%

Co-financing

Allocations

A Envelope - National Allocations

23

20

89%

20

–

100%

1

1

6%

SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS

23

20

89%

20

–

100%

1

1

6%

Implementation costs

2

1

1

70%

SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES

2

1

1

70%

Peace facility

11

2

1

16%

2

1

100%

1

68%

SUB TOTAL: INTRA-ACP ALLOCATIONS

11

2

1

16%

2

1

100%

1

68%

Regional allocations

2

2

2

100%

2

2

100%

SUB TOTAL: REGIONAL ALLOCATIONS

2

2

2

100%

2

2

100%

Mobilisable reserves

Reserves

B Envelope reserve

–

SUB TOTAL: COUNTRY RESERVE

–

Intra-ACP Reserve

69

SUB TOTAL: INTRA-ACP RESERVE

69

National allocations Reserve A Envelope STABEX

–

SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX

–

NIP/RIP reserve

1,270

SUB TOTAL: NIP/RIP RESERVE

1,270

Non-mobilisable reserve

Reserves

Non-mobilisable reserve

311

SUB TOTAL: NON-MOBILISABLE RESERVE

311

EC Internal SLA

Reserves

A Envelope - National Allocations

1

1

71%

1

100%

1

73%

SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS

1

1

71%

1

100%

1

73%

Regular MS Contributions

Allocations

OCT

A Envelope - National Allocations

196

183

92

93%

179

97

98%

76

50

43%

OCT

SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS

196

183

92

93%

179

97

98%

76

50

43%

B Envelope - National Allocations

8

Emergency aid

3

3

3

3

100%

2

2

68%

Other chocs with budgetary impact

3

3

3

3

100%

3

3

100%

SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS

8

6

6

75%

6

6

100%

5

5

85%

Bridging facility

–

SUB TOTAL: BRIDGING FACILITY

–

Studies / Technical assistance OCT

9

5

–

60%

5

1

90%

3

1

72%

SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES

9

5

–

60%

5

1

90%

3

1

72%

Regional allocations

81

37

37

46%

37

37

99%

7

7

20%

SUB TOTAL: REGIONAL ALLOCATIONS

81

37

37

46%

37

37

99%

7

7

20%

Co-financing

Allocations

A Envelope - National Allocations

–

SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS

–

Mobilisable reserves

Reserves

NIP/RIP reserve

49

SUB TOTAL: NIP/RIP RESERVE

49

Non-mobilisable reserve

Reserves

Non-mobilisable reserve

7

SUB TOTAL: NON-MOBILISABLE RESERVE

7

EC Internal SLA

Reserves

A Envelope - National Allocations

–

SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS

–

Regular MS Contributions

Allocations

A Envelope - National Allocations

10

6

60%

6

–

98%

6

4

98%

SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS

10

6

60%

6

–

98%

6

4

98%

B Envelope - National Allocations

7

SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS

7

TOTAL: ACP+OCT (INCL. RESERVES) (A+B)

29,747

23,359

4,332

79%

18,140

4,687

78%

9,175

2,970

51%

ANNUAL REPORT ON IMPLEMENTATION - FUNDS MANAGED BY THE EUROPEAN INVESTMENT BANK

| EUROPEAN INVESTMENT BANK | CA/521/19 |
| --- | --- |
| | 14 March 2019 |
| | Document 19/092 |
| | |
| | |
| BOARD OF DIRECTORS |
| Investment Facility |
| financial statements |
| as at 31 december 2018 |
| | | |
| | -Statement of financial position


  -Statement of profit or loss and other comprehensive income


  -Statement of changes in contributors’ resources


  -Statement of cash flows


  -Notes to the financial statements | |
| | |
| | |
| | |
| | |

EUROPEAN INVESTMENT BANK

CA/521/19

14 March 2019

Document 19/092

BOARD OF DIRECTORS

Investment Facility

financial statements

as at 31 december 2018

-Statement of financial position

-Statement of profit or loss and other comprehensive income

-Statement of changes in contributors’ resources

-Statement of cash flows

-Notes to the financial statements

STATEMENT OF FINANCIAL POSITION

| | Notes | 31.12.2018 | 31.12.2017 |
| --- | --- | --- | --- |
| | | | |
| ASSETS | | | |
| Cash and cash equivalents | 5 | 573,708 | 549,101 |
| Amounts receivable from contributions | 9/17 | 100,000 | 150,000 |
| Treasury financial assets | 10 | 335,140 | 144,382 |
| Derivative financial instruments | 6 | 9,873 | 12,521 |
| Loans and advances | 7 | 1,540,991 | 1,666,725 |
| Shares and other variable yield securities | 8 | 567,292 | 497,539 |
| Other assets | 11 | 171 | 4,385 |
| | | | |
| Total assets | | 3,127,175 | 3,024,653 |
| | | | |
| | | | |
| LIABILITIES AND CONTRIBUTORS' RESOURCES | | | |
| | | | |
| LIABILITIES | | | |
| Derivative financial instruments | 6 | 8,493 | 1,153 |
| Deferred income | 12 | 33,764 | 25,802 |
| Provisions for guarantees issued | 13 | 793 | 484 |
| Provisions for loan commitments | 14 | 23,822 | - |
| Amount owed to third parties | 15 | 143,813 | 157,285 |
| Other liabilities | 16 | 2,493 | 2,462 |
| | | | |
| Total liabilities | | 213,178 | 187,186 |
| | | | |
| CONTRIBUTORS' RESOURCES | | | |
| Facility Member States Contribution called | 17 | 2,697,000 | 2,517,000 |
| Fair value reserve (IAS 39) | | - | 125,816 |
| Retained earnings | | 216,997 | 194,651 |
| | | | |
| Total contributors' resources | | 2,913,997 | 2,837,467 |
| | | | |
| Total liabilities and contributors' resources | | 3,127,175 | 3,024,653 |

Notes

Notes

31.12.2018

31.12.2018

31.12.2017

31.12.2017

ASSETS

ASSETS

Cash and cash equivalents

Cash and cash equivalents

5

5

573,708

573,708

549,101

549,101

Amounts receivable from contributions

Amounts receivable from contributions

9/17

9/17

100,000

100,000

150,000

150,000

Treasury financial assets

Treasury financial assets

10

10

335,140

335,140

144,382

144,382

Derivative financial instruments

Derivative financial instruments

6

6

9,873

9,873

12,521

12,521

Loans and advances

Loans and advances

7

7

1,540,991

1,540,991

1,666,725

1,666,725

Shares and other variable yield securities

Shares and other variable yield securities

8

8

567,292

567,292

497,539

497,539

Other assets

Other assets

11

11

171

171

4,385

4,385

Total assets

Total assets

3,127,175

3,127,175

3,024,653

3,024,653

LIABILITIES AND CONTRIBUTORS' RESOURCES

LIABILITIES AND CONTRIBUTORS' RESOURCES

LIABILITIES

LIABILITIES

Derivative financial instruments

Derivative financial instruments

6

6

8,493

8,493

1,153

1,153

Deferred income

Deferred income

12

12

33,764

33,764

25,802

25,802

Provisions for guarantees issued

Provisions for guarantees issued

13

13

793

793

484

484

Provisions for loan commitments

Provisions for loan commitments

14

14

23,822

23,822

-

-

Amount owed to third parties

Amount owed to third parties

15

15

143,813

143,813

157,285

157,285

Other liabilities

Other liabilities

16

16

2,493

2,493

2,462

2,462

Total liabilities

Total liabilities

213,178

213,178

187,186

187,186

CONTRIBUTORS' RESOURCES

CONTRIBUTORS' RESOURCES

Facility Member States Contribution called

Facility Member States Contribution called

17

17

2,697,000

2,697,000

2,517,000

2,517,000

Fair value reserve (IAS 39)

Fair value reserve (IAS 39)

-

-

125,816

125,816

Retained earnings

Retained earnings

216,997

216,997

194,651

194,651

Total contributors' resources

Total contributors' resources

2,913,997

2,913,997

2,837,467

2,837,467

Total liabilities and contributors' resources

Total liabilities and contributors' resources

3,127,175

3,127,175

3,024,653

3,024,653

STATEMENT OF profit or loss and other COMPREHENSIVE INCOME

for the year ENDED 31 DECEMBER 2018

(In EUR’000)

| | Notes | From 01.01.2018 | From 01.01.2017 |
| --- | --- | --- | --- |
| | | to 31.12.2018 | to 31.12.2017 |
| | | | |
| Interest and similar income | 19 | 96,730 | 101,406 |
| Interest and similar expenses | 19 | -2,539 | -2,671 |
| | | | |
| Net interest and similar income | | 94,191 | 98,735 |
| | | | |
| Fee and commission income | 20 | 284 | 210 |
| Fee and commission expenses | 20 | -106 | -60 |
| | | | |
| Net fee and commission income | | 178 | 150 |
| | | | |
| Fair value change of derivative financial instruments | | -9,987 | 29,637 |
| Net result on shares and other variable yield securities (2017 AFS) | 21 | -10,179 | 2,711 |
| Net result on loans and advances at FVTPL | 21 | -702 | - |
| Net foreign exchange loss | | -32,436 | -38,165 |
| | | | |
| Net result on financial operations | | -53,304 | -5,817 |
| | | | |
| Change in impairment on loans and advances, net of reversal | 7 | -22,771 | -10,721 |
| Change in provisions for guarantees | 13 | -485 | -65 |
| Change in provisions for loan commitments | 14 | -19,612 | - |
| Impairment on available-for-sale financial assets (IAS 39) | 8 | - | -22,024 |
| General administrative expenses | 22 | -47,799 | -45,105 |
| | | | |
| (Loss)/profit for the year | | -49,602 | 15,153 |
| | | | |
| Other comprehensive income: | | | |
| | | | |
| Items that are or may be reclassified to profit or loss: | | | |
| Available-for-sale financial assets – Fair value reserve (IAS 39) | 8 | | |
| 1. Net change in fair value of available-for-sale financial assets | | - | -31,034 |
| 2. Net amount transferred to profit or loss | | - | 13,966 |
| Total available-for-sale financial assets | | - | -17,068 |
| | | | |
| Total other comprehensive (loss) | | - | -17,068 |
| | | | |
| Total comprehensive (loss) for the year | | -49,602 | -1,915 |
| (1) For the year ended 31 December 2018, interests and similar income include EUR 96.7 million calculated on assets held at amortised cost based on effective interest method. |

Notes

Notes

From 01.01.2018

From 01.01.2018

From 01.01.2017

From 01.01.2017

to 31.12.2018

to 31.12.2018

to 31.12.2017

to 31.12.2017

Interest and similar income

Interest and similar income

19

19

96,730

96,730

101,406

101,406

Interest and similar expenses

Interest and similar expenses

19

19

-2,539

-2,539

-2,671

-2,671

Net interest and similar income

Net interest and similar income

94,191

94,191

98,735

98,735

Fee and commission income

Fee and commission income

20

20

284

284

210

210

Fee and commission expenses

Fee and commission expenses

20

20

-106

-106

-60

-60

Net fee and commission income

Net fee and commission income

178

178

150

150

Fair value change of derivative financial instruments

Fair value change of derivative financial instruments

-9,987

-9,987

29,637

29,637

Net result on shares and other variable yield securities (2017 AFS)

Net result on shares and other variable yield securities (2017 AFS)

21

21

-10,179

-10,179

2,711

2,711

Net result on loans and advances at FVTPL

Net result on loans and advances at FVTPL

21

21

-702

-702

-

-

Net foreign exchange loss

Net foreign exchange loss

-32,436

-32,436

-38,165

-38,165

Net result on financial operations

Net result on financial operations

-53,304

-53,304

-5,817

-5,817

Change in impairment on loans and advances, net of reversal

Change in impairment on loans and advances, net of reversal

7

7

-22,771

-22,771

-10,721

-10,721

Change in provisions for guarantees

Change in provisions for guarantees

13

13

-485

-485

-65

-65

Change in provisions for loan commitments

Change in provisions for loan commitments

14

14

-19,612

-19,612

-

-

Impairment on available-for-sale financial assets (IAS 39)

Impairment on available-for-sale financial assets (IAS 39)

8

8

-

-

-22,024

-22,024

General administrative expenses

General administrative expenses

22

22

-47,799

-47,799

-45,105

-45,105

(Loss)/profit for the year

(Loss)/profit for the year

-49,602

-49,602

15,153

15,153

Other comprehensive income:

Other comprehensive income:

Items that are or may be reclassified to profit or loss:

Items that are or may be reclassified to profit or loss:

Available-for-sale financial assets – Fair value reserve (IAS 39)

Available-for-sale financial assets – Fair value reserve (IAS 39)

8

8

1. Net change in fair value of available-for-sale financial assets

1. Net change in fair value of available-for-sale financial assets

-

-

-31,034

-31,034

2. Net amount transferred to profit or loss

2. Net amount transferred to profit or loss

-

-

13,966

13,966

Total available-for-sale financial assets

Total available-for-sale financial assets

-

-

-17,068

-17,068

Total other comprehensive (loss)

Total other comprehensive (loss)

-

-

-17,068

-17,068

Total comprehensive (loss) for the year

Total comprehensive (loss) for the year

-49,602

-49,602

-1,915

-1,915

(1) For the year ended 31 December 2018, interests and similar income include EUR 96.7 million calculated on assets held at amortised cost based on effective interest method.

(1) For the year ended 31 December 2018, interests and similar income include EUR 96.7 million calculated on assets held at amortised cost based on effective interest method.

STATEMENT OF CHANGES IN CONTRIBUTORS’ RESOURCES

| | | Contribution called | Fair Value Reserve * | Retained earnings * | Total |
| --- | --- | --- | --- | --- | --- |
| At 1 January 2018 | Notes | 2,517,000 | - | 266,599 | 2,783,599 |
| | | | | | |
| Member States contribution called during the year | 17 | 180,000 | - | - | 180,000 |
| | | | | | |
| Loss for the year 2018 | | - | - | -49,602 | -49,602 |
| | | | | | |
| Changes in contributors’ resources | | 180,000 | - | -49,602 | 130,398 |
| | | | | | |
| At 31 December 2018 | | 2,697,000 | - | 216,997 | 2,913,997 |
| | | | | | |
| | | Contribution called | Fair value reserve | Retained earnings | Total |
| At 1 January 2017 | | 2,377,000 | 142,884 | 179,498 | 2,699,382 |
| | | | | | |
| Member States contribution called during the year | 17 | 140,000 | - | - | 140,000 |
| | | | | | |
| Profit for the year 2017 | | - | - | 15,153 | 15,153 |
| | | | | | |
| Total other comprehensive income for the year* | | - | -17,068 | - | -17,068 |
| | | | | | |
| Changes in contributors’ resources | | 140,000 | -17,068 | 15,153 | 138,085 |
| | | | | | |
| At 31 December 2017 | | 2,517,000 | 125,816 | 194,651 | 2,837,467 |
| | | | | | |
| *As at 31 December 2017, the Facility had classified equity investments as available-for-sale, while from 1 January 2018, with the IFRS 9 adoption, the Facility has reclassified equity investments to shares and other variable yield securities measured at FVTPL. The related fair value reserve of EUR 125,816 thousands as at 31 December 2017 has been released against the Facility’s retained earnings as an opening balance adjustment (Note 2.5). Additionally, EUR 49,712 thousands representing the ECL impairment recognised for performing, Stage 1 and Stage 2 operations of the debt lending portfolio, as well as EUR 4,156 thousands ECL provision for undisbursed exposures of performing, Stage 1 and Stage 2 operations of the debt portfolio were included in the Retained earnings 2018 opening balance. For detailed reconciliation please refer to note 2.5. |
| |
| |
| |

Contribution called

Contribution called

Fair Value Reserve *

Fair Value Reserve *

Retained earnings *

Retained earnings *

Total

Total

At 1 January 2018

At 1 January 2018

Notes

Notes

2,517,000

2,517,000

-

-

266,599

266,599

2,783,599

2,783,599

Member States contribution called during the year

Member States contribution called during the year

17

17

180,000

180,000

-

-

-

-

180,000

180,000

Loss for the year 2018

Loss for the year 2018

-

-

-

-

-49,602

-49,602

-49,602

-49,602

Changes in contributors’ resources

Changes in contributors’ resources

180,000

180,000

-

-

-49,602

-49,602

130,398

130,398

At 31 December 2018

At 31 December 2018

2,697,000

2,697,000

-

-

216,997

216,997

2,913,997

2,913,997

Contribution called

Contribution called

Fair value reserve

Fair value reserve

Retained earnings

Retained earnings

Total

Total

At 1 January 2017

At 1 January 2017

2,377,000

2,377,000

142,884

142,884

179,498

179,498

2,699,382

2,699,382

Member States contribution called during the year

Member States contribution called during the year

17

17

140,000

140,000

-

-

-

-

140,000

140,000

Profit for the year 2017

Profit for the year 2017

-

-

-

-

15,153

15,153

15,153

15,153

Total other comprehensive income for the year*

Total other comprehensive income for the year*

-

-

-17,068

-17,068

-

-

-17,068

-17,068

Changes in contributors’ resources

Changes in contributors’ resources

140,000

140,000

-17,068

-17,068

15,153

15,153

138,085

138,085

At 31 December 2017

At 31 December 2017

2,517,000

2,517,000

125,816

125,816

194,651

194,651

2,837,467

2,837,467

*As at 31 December 2017, the Facility had classified equity investments as available-for-sale, while from 1 January 2018, with the IFRS 9 adoption, the Facility has reclassified equity investments to shares and other variable yield securities measured at FVTPL. The related fair value reserve of EUR 125,816 thousands as at 31 December 2017 has been released against the Facility’s retained earnings as an opening balance adjustment (Note 2.5). Additionally, EUR 49,712 thousands representing the ECL impairment recognised for performing, Stage 1 and Stage 2 operations of the debt lending portfolio, as well as EUR 4,156 thousands ECL provision for undisbursed exposures of performing, Stage 1 and Stage 2 operations of the debt portfolio were included in the Retained earnings 2018 opening balance. For detailed reconciliation please refer to note 2.5.

*As at 31 December 2017, the Facility had classified equity investments as available-for-sale, while from 1 January 2018, with the IFRS 9 adoption, the Facility has reclassified equity investments to shares and other variable yield securities measured at FVTPL. The related fair value reserve of EUR 125,816 thousands as at 31 December 2017 has been released against the Facility’s retained earnings as an opening balance adjustment (Note 2.5). Additionally, EUR 49,712 thousands representing the ECL impairment recognised for performing, Stage 1 and Stage 2 operations of the debt lending portfolio, as well as EUR 4,156 thousands ECL provision for undisbursed exposures of performing, Stage 1 and Stage 2 operations of the debt portfolio were included in the Retained earnings 2018 opening balance. For detailed reconciliation please refer to note 2.5.

STATEMENT OF Cash FlowS

| | Notes | From 01.01.2018 to 31.12.2018 | From 01.01.2017 to 31.12.2017 |
| --- | --- | --- | --- |
| OPERATING ACTIVITIES | | | |
| (Loss)/Profit for the financial year | | -49,602 | 15,153 |
| Adjustments made for | | | |
| Impairment on available-for-sale financial assets (IAS 39) | 8 | - | 22,024 |
| Net result in fair value on shares and other variable yield securities | | 20,665 | - |
| Change in impairment on loans and advances, net of reversal | 7 | 22,771 | 10,721 |
| Net result on loans and advances at FVTPL | | 702 | - |
| Change in accrued interest and amortised cost on loans and advances | 7 | -1,833 | -1,198 |
| Net change in provisions for guarantees issued | 13 | 309 | -141 |
| Net change in provisions for loan commitments | | 19,666 | - |
| Change in accrued interest and amortised cost on treasury financial assets | 10 | -1,645 | -398 |
| Change in deferred income | | 7,962 | -481 |
| Effect of exchange rate changes on loans | 7 | -44,927 | 168,304 |
| Effect of exchange rate changes on shares and other variable yield securities | | -17,300 | -1,655 |
| Effect of exchange rate changes on cash held | | 2,561 | -6,473 |
| Loss on operating activities before changes in operating assets and liabilities | | -40,671 | 205,856 |
| Loan disbursements | 7 | -259,214 | -368,662 |
| Repayments of loans | 7 | 354,855 | 253,486 |
| Change in accrued interest on cash and cash equivalents | 5 | -178 | 63 |
| Fair value changes on derivatives | | 9,987 | -29,637 |
| (Decrease) in treasury financial assets | 10 | -2,219,062 | -1,084,149 |
| Maturities of treasury financial assets | 10 | 2,026,659 | 1,109,563 |
| (Decrease) in shares and other variable yield securities | 8 | -95,434 | -62,660 |
| Repayments/sales of shares and other variable yield securities | | 32,802 | 44,568 |
| (Increase) in other assets | | -4,214 | -4,040 |
| (Decrease)/increase in other liabilities | | 31 | -84 |
| Increase in amounts payable to the European Investment Bank | | 2,168 | 2,202 |
| Net cash flows used in/from operating activities | | -192,271 | 66,506 |
| FINANCING ACTIVITIES | | | |
| Contribution received from Member States | 17 | 230,000 | 76,395 |
| Amounts received from Member States with regard to interest subsidies and technical assistance | | 20,000 | 60,000 |
| Amounts paid on behalf of Member States with regard to interest subsidies and technical assistance | | -35,641 | -21,026 |
| Net cash flows from financing activities | | 214,359 | 115,369 |
| Net increase in cash and cash equivalents | | 22,088 | 181,875 |
| Summary statement of cash flows: | | | |
| Cash and cash equivalents at the beginning of financial year | | 549,169 | 360,821 |
| Net cash from: | | | |
| Operating activities | | -192,271 | 66,506 |
| Financing activities | | 214,359 | 115,369 |
| Effects of exchange rate changes on cash and cash equivalents | | 2,561 | 6,473 |
| Cash and cash equivalents at the end of financial year | | 573,818 | 549,169 |
| Cash and cash equivalents are composed of: | | | |
| Cash in hand | 5 | 51,936 | 166,445 |
| Term deposits (excluding accrued interest) | 5 | 521,882 | 367,721 |
| Commercial papers | 5 | - | 15,003 |
| | | 573,818 | 549,169 |

Notes

Notes

From 01.01.2018 to 31.12.2018

From 01.01.2018 to 31.12.2018

From 01.01.2017 to 31.12.2017

From 01.01.2017 to 31.12.2017

OPERATING ACTIVITIES

OPERATING ACTIVITIES

(Loss)/Profit for the financial year

(Loss)/Profit for the financial year

-49,602

-49,602

15,153

15,153

Adjustments made for

Adjustments made for

Impairment on available-for-sale financial assets (IAS 39)

Impairment on available-for-sale financial assets (IAS 39)

8

8

-

-

22,024

22,024

Net result in fair value on shares and other variable yield securities

Net result in fair value on shares and other variable yield securities

20,665

20,665

-

-

Change in impairment on loans and advances, net of reversal

Change in impairment on loans and advances, net of reversal

7

7

22,771

22,771

10,721

10,721

Net result on loans and advances at FVTPL

Net result on loans and advances at FVTPL

702

702

-

-

Change in accrued interest and amortised cost on loans and advances

Change in accrued interest and amortised cost on loans and advances

7

7

-1,833

-1,833

-1,198

-1,198

Net change in provisions for guarantees issued

Net change in provisions for guarantees issued

13

13

309

309

-141

-141

Net change in provisions for loan commitments

Net change in provisions for loan commitments

19,666

19,666

-

-

Change in accrued interest and amortised cost on treasury financial assets

Change in accrued interest and amortised cost on treasury financial assets

10

10

-1,645

-1,645

-398

-398

Change in deferred income

Change in deferred income

7,962

7,962

-481

-481

Effect of exchange rate changes on loans

Effect of exchange rate changes on loans

7

7

-44,927

-44,927

168,304

168,304

Effect of exchange rate changes on shares and other variable yield securities

Effect of exchange rate changes on shares and other variable yield securities

-17,300

-17,300

-1,655

-1,655

Effect of exchange rate changes on cash held

Effect of exchange rate changes on cash held

2,561

2,561

-6,473

-6,473

Loss on operating activities before changes in operating assets and liabilities

Loss on operating activities before changes in operating assets and liabilities

-40,671

-40,671

205,856

205,856

Loan disbursements

Loan disbursements

7

7

-259,214

-259,214

-368,662

-368,662

Repayments of loans

Repayments of loans

7

7

354,855

354,855

253,486

253,486

Change in accrued interest on cash and cash equivalents

Change in accrued interest on cash and cash equivalents

5

5

-178

-178

63

63

Fair value changes on derivatives

Fair value changes on derivatives

9,987

9,987

-29,637

-29,637

(Decrease) in treasury financial assets

(Decrease) in treasury financial assets

10

10

-2,219,062

-2,219,062

-1,084,149

-1,084,149

Maturities of treasury financial assets

Maturities of treasury financial assets

10

10

2,026,659

2,026,659

1,109,563

1,109,563

(Decrease) in shares and other variable yield securities

(Decrease) in shares and other variable yield securities

8

8

-95,434

-95,434

-62,660

-62,660

Repayments/sales of shares and other variable yield securities

Repayments/sales of shares and other variable yield securities

32,802

32,802

44,568

44,568

(Increase) in other assets

(Increase) in other assets

-4,214

-4,214

-4,040

-4,040

(Decrease)/increase in other liabilities

(Decrease)/increase in other liabilities

31

31

-84

-84

Increase in amounts payable to the European Investment Bank

Increase in amounts payable to the European Investment Bank

2,168

2,168

2,202

2,202

Net cash flows used in/from operating activities

Net cash flows used in/from operating activities

-192,271

-192,271

66,506

66,506

FINANCING ACTIVITIES

FINANCING ACTIVITIES

Contribution received from Member States

Contribution received from Member States

17

17

230,000

230,000

76,395

76,395

Amounts received from Member States with regard to interest subsidies and technical assistance

Amounts received from Member States with regard to interest subsidies and technical assistance

20,000

20,000

60,000

60,000

Amounts paid on behalf of Member States with regard to interest subsidies and technical assistance

Amounts paid on behalf of Member States with regard to interest subsidies and technical assistance

-35,641

-35,641

-21,026

-21,026

Net cash flows from financing activities

Net cash flows from financing activities

214,359

214,359

115,369

115,369

Net increase in cash and cash equivalents

Net increase in cash and cash equivalents

22,088

22,088

181,875

181,875

Summary statement of cash flows:

Summary statement of cash flows:

Cash and cash equivalents at the beginning of financial year

Cash and cash equivalents at the beginning of financial year

549,169

549,169

360,821

360,821

Net cash from:

Net cash from:

Operating activities

Operating activities

-192,271

-192,271

66,506

66,506

Financing activities

Financing activities

214,359

214,359

115,369

115,369

Effects of exchange rate changes on cash and cash equivalents

Effects of exchange rate changes on cash and cash equivalents

2,561

2,561

6,473

6,473

Cash and cash equivalents at the end of financial year

Cash and cash equivalents at the end of financial year

573,818

573,818

549,169

549,169

Cash and cash equivalents are composed of:

Cash and cash equivalents are composed of:

Cash in hand

Cash in hand

5

5

51,936

51,936

166,445

166,445

Term deposits (excluding accrued interest)

Term deposits (excluding accrued interest)

5

5

521,882

521,882

367,721

367,721

Commercial papers

Commercial papers

5

5

-

-

15,003

15,003

573,818

573,818

549,169

549,169

Notes to the financial statements as at 31 December 2018

Notes to the financial statements as at 31 December 2018

1General information

1

General information

The Investment Facility (“the Facility” or “IF”) has been established within the framework of the Cotonou Agreement (the “Agreement”) on co-operation and development assistance negotiated between the African, Caribbean and Pacific Group of States (the “ACP States”) and the European Union and its Member States on 23 June 2000, revised on 25 June 2005 and 22 June 2010.

The Investment Facility (“the Facility” or “IF”) has been established within the framework of the Cotonou Agreement (the “Agreement”) on co-operation and development assistance negotiated between the African, Caribbean and Pacific Group of States (the “ACP States”) and the European Union and its Member States on 23 June 2000, revised on 25 June 2005 and 22 June 2010.

The Facility is not a separate legal entity and the European Investment Bank (“EIB” or “the Bank”) manages the contributions on behalf of the Member States (“Donors”) in accordance with the terms of the Agreement and acts as an administrator of the Facility.

Financing under the Agreement is provided from EU Member States’ budgets. EU Member States contribute with the amounts allocated to finance the IF and grants for the financing of the interest subsidies as provided for under the multi-annual financial frameworks (First Financial Protocol covering the period 2000 - 2007 and referred to as the 9th European Development Fund (EDF), Second Financial Protocol covering the period 2008 - 2013 and referred to as the 10th EDF and the Third Financial Protocol covering the period 2014 - 2020 referred to as the 11th EDF). The EIB is entrusted with the management of:

-the Facility, a EUR 3,685.5 million risk-bearing revolving fund geared to fostering private sector investment in ACP countries of which EUR 48.5 million are allocated to Overseas Countries and territories (“OCT countries”);

-grants for the financing of interest subsidies worth max. EUR 1,220.85 million for ACP countries and max. EUR 8.5 million for OCT countries. Up to 15% of these subsidies can be used to fund project-related technical assistance (“TA”).

The present financial statements cover the period from 1 January 2018 to 31 December 2018.

On a proposal from the Management Committee of EIB, the Board of Directors of EIB adopted the Financial Statements on 14 March 2019, and authorised their submission to the Board of Governors for approval by 26 April 2019.

2Significant accounting policies

2.1Basis of preparation – Statement of compliance

The Facility’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

2.2Significant accounting judgments and estimates

The preparation of financial statements requires the use of accounting estimates. It also requires the European Investment Bank’s Management to exercise its judgment in the process of applying the Investment Facility’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed hereafter.

The most significant use of judgments and estimates are as follows:

§Measurement of fair value of financial instruments

Fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or broker price quotations. Where the fair values cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of mathematical models. The input to these models is taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. The valuations are categorised into different levels in the fair value hierarchy based on the inputs used in the valuation techniques as described and disclosed in Notes 2.4.2 and 4.

§Impairment losses on loans and advances

The expected credit loss (‘ECL’) measurement requires management to apply significant judgments, in particular, the assessment of a significant increase in credit risk since initial recognition, the incorporation of forward looking information and further the estimation of the amount and timing of future cash flows and collateral values when determining impairment losses. These estimates are driven by a number of factors, changes in which can result in significant changes to the timing and amount of allowance for credit loss to be recognized (Note 2.4.2).

§Valuation of unquoted equity investments

Valuation of unquoted equity investments is normally based on one of the following:

-recent arm’s length market transactions;

-current fair value of another instrument that is substantially the same;

-the expected cash flows discounted at current rates applicable for items with similar terms and risk characteristics;

-adjusted net assets method; or

-other valuation models.

The determination of the cash flows and discount factors for unquoted equity investments requires significant estimation. The Facility calibrates the valuation techniques periodically and tests them for validity using either price from observable current market transactions in the same instrument or from other available observable market data.

§Impairment of available-for-sale equity investments (applicable before 1 January 2018)

The Facility treats available-for-sale equity investments as impaired when there has been a significant or prolonged decline in the fair value below its cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires judgment. The Facility treats “significant” generally as 30% or more and “prolonged” greater than 12 months. In addition, the Facility evaluates other factors, including normal volatility in share price for quoted equities and the future cash flows and the discount factors for unquoted equities.

§Consolidation of entities in which the Facility holds interest

The Facility made significant judgements that none of the entities in which it holds interest, are controlled by the Facility. This is due to the fact that in all such entities, either the General Partner or the Fund Manager or the Management Board have the sole responsibility for the management and control of the activities and affairs of the partnership and have the power and authority to do all things necessary to carry out the purpose and objectives of the partnership complying with the investment and policy guidelines.

2.3Changes in accounting policies

Except for the changes below, the Facility has consistently applied the accounting policies set out in Note 2.4 to all periods presented in these financial statements. The Facility has adopted the following new standards and amendments to standards.

Standards adopted

IFRS 9 Financial Instruments

The Facility has adopted IFRS 9 as issued by the IASB in July 2014 with a date of transition of 1st January 2018, which resulted in changes in accounting policies and adjustments to the amounts previously recognized in the financial statements. For more details refer to note 2.5.

As permitted by the transitional provisions of IFRS 9, the Facility elected not to restate comparative periods. Any adjustment to the carrying amounts of financial assets and liabilities resulting from the adoption of IFRS 9 were recognized in the reserve fund and the fair value reserve as of 1st January 2018. Accordingly, the information presented for 2017 under the applicability does not reflect the requirements of IFRS 9 and therefore is not comparable to the information presented for 2018 under IFRS 9.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programmes.

The Facility adopted the standard using the modified retrospective approach which means that the cumulative impact of the adoption is recognised in retained earnings as of 1 January 2018 and the comparatives were not restated.

The application of IFRS 15, did not have a significant impact on the Facility’s financial statements.

IFRIC 22 Foreign currency transactions and advance consideration

The Interpretation clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the date of the transactions for each payment or receipt of advance consideration.

This Interpretation adoption had no material impact on the Facility’s financial statements.

Annual Improvements to IFRSs 2014-2016 Cycle (Amendments to IAS 28)

Amendments to IAS 28 Investments in Associates and Joint Ventures - Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice

The amendments clarify that an entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. If an entity that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, then it may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognised; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent.

The Facility does not use have investment in in joint ventures. Therefore, there is no impact on the Facility’s financial statements

Standards issued but not yet adopted

IFRS 16 Leases

IFRS 16 was issued in January 2016 and replaces the current guidance of IAS 17. It will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exemptions are short-term and low-value leases. The accounting for lessors will not significantly change.

IFRS 16 has been endorsed by the EU on 31 October 2017 and is effective for annual reporting periods beginning on or after 1 January 2019, with early adoption permitted if IFRS 15 is applied.

The Facility expects that this change will have no material impact on the Facility`s financial statements.

2.4Summary of significant accounting policies

The statement of financial position represents assets and liabilities in decreasing order of liquidity and does not distinguish between current and non-current items.

2.4.1 Foreign currency translation

The Facility uses the Euro (EUR) for presenting its financial statements, which is also the functional currency. Except as otherwise indicated, financial information presented in EUR has been rounded to the nearest thousand.

Foreign currency transactions are translated, at the exchange rate prevailing on the date of the transaction.

Monetary assets and liabilities denominated in currencies other than Euro are translated into Euro at the exchange rate prevailing at the statement of financial position date. The gain or loss arising from such translation is recorded in the statement of profit or loss and other comprehensive income.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of transactions at rates different from those at the date of the transaction, and unrealised foreign exchange differences on unsettled foreign currency monetary assets and liabilities, are recognised in the statement of profit or loss and other comprehensive income.

The elements of the statement of profit or loss and other comprehensive income are translated into Euro on the basis of the exchange rates prevailing at the date of the transaction.

2.4.2 Financial assets other than derivatives

Non-derivative financial instruments are initially recognised using the settlement date basis.

Classification and measurement

Financial assets - Policy applicable after 1 January 2018

On initial recognition, a financial asset is classified as measured at amortized cost (“AC”), fair value through other comprehensive income (“FVOCI”) or fair value through P&L (“FVTPL”) and a financial liability is classified as measured at AC or FVTPL.

Under IFRS 9, classification starts with determining whether the financial asset shall be considered as a debt or equity instrument. IFRS 9 refers to the definitions in IAS 32 Financial Instruments: Presentation.

Debt instruments are those instruments that meet the definition of a financial liability from the counterparty’s perspective, such as loans, government and corporate bonds.

A debt instrument is classified at AC if it meets both of the following conditions and is not designated as at FVTPL:

-the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

-the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding (SPPI criteria).

A debt instrument is classified at FVOCI only if it meets both of the following conditions and is not designated as at FVTPL:

-the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and

-the contractual terms of the financial asset give rise on specific dates to cash flows that are fulfilling the SPPI criteria.

The above requirements should be applied to an entire financial asset, even if it contains an embedded derivative.

Equity instruments are instruments that meet the definition of equity from the issuer’s perspective; that is, instruments that do not contain a contractual obligation to pay and that evidence a residual interest in the issuer’s net assets. Equity instruments are measured at FVTPL.

On initial recognition of an equity investment that is not held for trading, the Facility may irrevocably elect to present subsequent changes in other comprehensive income. This election is made on an investment-by-investment basis.

All other financial assets are classified as measured at FVTPL.

Business model assessment

The EIB, as a manager of the Facility, makes an assessment of the objective of a business model in which a debt instrument is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

-the stated policies and objectives for the portfolio and the operation of those policies in practice. In particular, whether management ́s strategy focuses on earning contractual interest revenue, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of the liabilities that are funding those assets or realising cash flows through the sale of the assets;

-how the performance of the portfolio is evaluated and reported to the Facility’s management;

-the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; and

-the frequency, volume and timing of sales in prior periods, the reasons for such sales and its expectation about future sales activity.

However, information about sales activity is not considered in isolation, but as part of an overall assessment of how the Facility stated objective for managing the financial assets is achieved and how cash flows are realised.

Solely payment of principal and interests (‘SPPI’) criteria

For the purpose of this assessment, ‘principal’ is defined as the fair value of the debt instrument on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the contractual terms of the instrument are considered. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.

Financial assets - Policy applicable before 1 January 2018

The Facility classified its financial assets into one of the following categories:

-Loans and receivables (‘L&R’),

-Held-to-maturity (‘HTM’),

-Available-for-sale (‘AFS’),

-at Fair Value through Profit or Loss (‘FVTPL’)

Derecognition

The Facility derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or which the Facility neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

On derecognition of a financial asset or financial liability (Note 2.4.4), the difference between the carrying amount of the asset or liability (or the carrying amount allocated to the portion of the asset or liability derecognised) and the sum of (i) the consideration received or paid and (ii) any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss except for the cumulative gains or losses recognised in other comprehensive income for equity investments measured at fair value through other comprehensive income which are transferred to the reserve fund rather than profit or loss on disposal.

Reclassification

Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Facility changes its business model for managing financial assets.

Measurement of fair values of financial instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal, or in its absence, the most advantageous market to which the Facility has access at that date.

When applicable, the EIB on behalf of the Facility measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an on-going basis.

Where the fair values of financial assets and financial liabilities recorded on the statement of financial position cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of mathematical models. The input to these models is taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. The chosen valuation technique incorporates all the factors that market participants would take into account in pricing a transaction.

These valuation techniques may include net present value and discounted cash flow models, comparison to similar instruments for which market observable prices exist, Black-Scholes and polynomial option pricing models and other valuation models. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads used in estimating discount rates, bond and equity prices, foreign currency exchange rates, equity and equity index prices and expected price volatilities and correlations.

The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.

The Facility uses widely recognised valuation models for determining the fair value of common and more simple financial instruments, like interest rate and currency swaps that use only observable market data and require limited management judgement and estimation. Observable prices and model inputs are usually available in the market for listed debt and equity securities, exchange traded derivatives and simple over the counter derivatives like interest rate swaps. Availability of observable market prices and model inputs reduces the need for management judgement and estimation and also reduces the uncertainty associated with determination of fair values. Availability of observable market prices and inputs varies depending on the products and markets and is prone to changes based on specific events and general conditions in the financial markets.

For more complex instruments, the Facility uses own valuation models, which are developed from recognised valuation models. Some or all of the significant inputs into these models may not be observable in the market, and are derived from market prices or rates or are estimated based on assumptions. Example of instruments involving significant unobservable inputs includes certain loans and guarantees for which there is no active market. Valuation models that employ significant unobservable inputs require a higher degree of management judgement and estimation in the determination of fair value. Management judgement and estimation are usually required for selection of the appropriate valuation model to be used, determination of expected future cash flows on the financial instrument being valued, determination of probability or counterparty default and prepayments and selection of appropriate discount rates.

The Facility measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

-Level 1: inputs that are unadjusted quoted market prices in active markets for identical instruments to which the Facility has access.

-Level 2: inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using quoted market prices in active markets for similar instruments, quoted prices for identical or similar instruments in markets that are considered less than active or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

-Level 3: inputs that are not observable. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

The Facility recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred.

Impairment on financial assets

Impairment - policy applicable after 1 January 2018

IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with a forward-looking ‘expected credit loss’ (‘’ECL’’) model. This will require judgement to determine the underlying variable (PD, LGD, EAD) used in order to assess how changes in economic and other factors affect ECLs, which will be determined on a probability-weighted basis.

The new impairment model will apply to financial assets measured at AC, to financial guarantee contracts, as well as to off-balance sheet commitments.

Under IFRS 9, loss allowances will be measured on either of the following bases:

-12-month ECL’s: these are the ECLs that result from possible default events within the 12 months after the reporting date; and

-Lifetime ECLs: these are the ECLs that result from all possible default events over the expected life of a financial instrument.

The IFRS 9 Standard sets out a “three-stage” model for impairment based on changes in credit quality since initial recognition. Financial instruments are classified in Stage 1 except for those instruments for which significant increase in credit risk (‘SICR’) since initial recognition is identified. This includes both quantitative and qualitative information and analysis, based on the Bank’s expertise, including forward-looking information.

Purchased or originated credit-impaired assets (‘POCI’) are the financial assets with exception to initial recognition of the ECLs as the POCI assets is always maintained in stage 3. For POCI financial assets, the cumulative changes in lifetime ECL since initial recognition are recognised in the statement of profit or loss.

The Facility’s assessment of the Stage is based on a sequential approach which is consistent with the Credit Risk Guidelines (‘CRG’) and the Financial Monitoring Guidelines and Procedures (‘FMGs’), notably covering watch list, internal rating and arrears.

If significant increase in credit risk has occurred, the financial instrument is moved to Stage 2 but is not yet deemed to be credit-impaired. If the financial instrument is credit-impaired, the financial instrument is then moved to Stage 3.

To identify Stage 3 exposures, the Facility determines whether or not there is objective evidence of default event. A financial asset is considered to be in default when the borrower is unlikely to pay its credit obligations to the Facility in full, without recourse by the Facility or the borrower is past due more than 90 days on any material credit obligation to the Facility.

In this respect, a financial asset is considered impaired when it is determined that it is probable that the Facility will not be able to collect all amounts due according to the original contractual terms or an equivalent value. Individual credit exposures are evaluated based upon the borrower’s characteristics, overall financial condition, resources and payment record, the prospects for support from any financially responsible guarantors and, where applicable, the realisable value of any collateral.

All impaired claims are reviewed and analysed at least semi-annually. Any subsequent changes to the amounts and timing of the expected future cash flows compared to the prior estimates will result in a change in the provision for credit losses and be charged or credited to the income statement. An allowance for impairment is reversed only when the credit quality has improved such that there is reasonable assurance of timely collection of principal and interest in accordance with the original contractual terms of the claim agreement. A write-off is made when all or part of a claim is deemed uncollectible or forgiven. Write-offs are charged against previously established impairments or directly to the income statement and reduce the principal amount of a claim. Recoveries in part or in full of amounts previously written off are credited to the income statement.

Measuring ECL – Inputs, Assumptions and Techniques

Lifetime ECL measurement applies to stage 2 and stage 3 assets, while 12-month ECL measurement applies to stage 1 assets.

The expected credit losses were calculated based on the following variables:

-Probability of default (PD),

-Loss Given default (LGD),

-Exposure at default (EAD).

The probability of default represents the likelihood of a counterpart defaulting on its financial obligation, either over the next 12 months, or over the remaining lifetime of the obligation. PD is estimated at a certain date, which are calculated based on statistical rating models, and assessed using rating tools tailored to the various categories of counterparties and exposures.

Ratings are primary input into the determination of the term structure of PD for exposures. The EIB collects performance and default information about the Facility’s credit risk exposures. The collected data are segmented by type of industry and by type of region. Different industries and regions reacting in a homogenous manner to credit cycles are analysed together.

The EIB employs statistical models to analyse the data collected and generate estimates of the remaining lifetime PD of exposures and how these are expected to change as a result of the passage of time.

The loss given default represents the EIB’s expectation of the ratio of the loss on an exposure due to the default of a counterparty to the amount outstanding at default. Loss given default can be also defined as “1 - Recovery Rate”. LGD estimates are determined mainly by geography and by type of counterparty, with five main exposure classes: Sovereigns, Public Institutions, Financial Institutions, Corporate and Project Finance. LGD values can be further adjusted based on the product and contract specific features of the exposure.

The EIB incorporates forward-looking information into both its assessment of whether the credit risk of an instrument has increased significantly since its initial recognition and its measurement of expected credit losses.

Impairment - policy applicable before 1 January 2018

The Facility assesses at each statement of financial position date whether there is any objective evidence that a financial asset is impaired. A  financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter into bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For the loans outstanding at the end of the financial year and carried at amortised cost, impairments are made when presenting objective evidence of risks of non-recovery of all or part of their amounts according to the original contractual terms or the equivalent value. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of profit or loss and other comprehensive income. Interest income continues to be accrued on the reduced carrying amount based on the effective interest rate of the asset. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account.

The Facility conducts the credit risk assessments based on each individual operation and does not consider a collective impairment.

For the available-for-sale financial assets, the Facility assesses at each statement of financial position date whether there is objective evidence that an investment is impaired. Objective evidence would include a significant or prolonged decline in the fair value of the investment below its costs. Where there is evidence of impairment, the cumulative loss (measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the statement of profit or loss and other comprehensive income) is removed from contributors’ resources and recognised in the statement of profit or loss and other comprehensive income. Impairment losses on available-for-sale financial assets are not reversed through the statement of profit or loss and other comprehensive income; increases in their fair value after impairment are recognised directly in contributors’ resources.

The European Investment Bank’s Risk Management reviews financial assets for impairment at least once a year. Resulting adjustments include the unwinding of the discount in the statement of profit or loss and other comprehensive income over the life of the asset, and any adjustments required in respect of a reassessment of the initial impairment.

2.4.2.1Cash and cash equivalents

The Facility defines cash and cash equivalents as current accounts, short-term deposits or commercial papers with original maturities of three months or less. Cash and cash equivalents are carried at AC in the statement of financial position.

2.4.2.2Treasury financial assets

Treasury financial assets were presented as Held-to-maturity financial assets in the Investment Facility Financial Statements as at 31  December 2017.

Treasury financial assets comprise quoted and unquoted bonds with the intention of holding them to maturity, and commercial papers with original maturities of more than three months and are consequently classified at AC.

Those bonds and commercial papers are initially measured at cost, which is the fair value plus any directly attributable transaction cost. The difference between entry price and redemption value is amortised in accordance with the effective interest method over the remaining life of the instrument.

2.4.2.3Loans and advances

Loans and advances were presented as loans and receivables in the Investment Facility Financial Statements as at 31 December 2017 and measured at amortised cost.

Loans and advances include:

- Loans and advances measured at AC

-Loans and advances mandatorily measured at FVTPL.

Loans originated by the Facility are recognised in the assets of the Facility when cash is advanced to borrowers. Undisbursed parts of loans are recorded in the off-balance at their nominal value.

Loans passing the SPPI test are initially recorded at cost (their net disbursed amounts), which is the fair value of the cash given to originate the loan, including any transaction costs, and are subsequently measured at AC using the effective interest rate method.

Loans not fulfilling the SPPI criterion are mandatorily measured at FVTPL.

The fair value measurement technique used is based on a discounted cash flow technique.

2.4.2.4Shares and other variable yield securities

Shares and other variable yield securities were presented as available-for-sale financial assets in the Investment Facility Financial Statements as at 31 December 2017.

There are two types of equity investments at the Facility: (i) direct equity investments and (ii) venture capital funds. The shares and other variable yield securities are initially recognised at fair value plus transactions costs. Subsequently changes in fair value, including foreign currency translation gains and losses, are recognised in the statement of profit or loss and other comprehensive income under the caption net result on shares and other variable yield securities.

For unquoted investment, when the fair value cannot be derived from active markets, the fair value is determined by applying recognised valuation techniques (Note 4.2.1).

The participations acquired by the Facility typically represent investments in private equity or venture capital funds. According to industry practice, such investments are generally investments jointly subscribed by a number of investors, none of whom is in a position to individually influence the daily operations and the investment activity of such fund. As a consequence, any membership by an investor in a governing body of such fund does not in principle entitle such investor to influence the day-to-day operations of the fund. In addition, individual investors in a private equity or a venture capital fund do not determine policies of a fund such as distribution policies on dividends or other distributions. Such decisions are typically taken by the management of a fund on the basis of the shareholders agreement governing the rights and obligations of the management and all shareholders of the fund. The shareholders’ agreement also generally prevents individual investors from bilaterally executing material transactions with the fund, interchanging managerial personnel or obtaining privileged access to essential technical information. The Facility’s investments are executed in line with the above stated industry practice, ensuring that the Facility neither controls nor exercises any form of significant influence within the meaning of IFRS 10 and IAS 28 over any of these investments, including those investments in which the Facility holds over 20 % of the voting rights.

2.4.3 
      Financial guarantees

Financial guarantee contracts are contracts that require the Facility to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.

Under the existing rules, these guarantees do not meet the definition of an insurance contract (IFRS 4 Insurance Contracts).

Policy applicable after 1 January 2018

Financial guarantees are accounted for under IFRS 9 – Financial Instruments, either as “Derivatives” or as “Financial Guarantees”, depending on their features and characteristics as defined by IFRS 9.

The accounting policy for derivatives is disclosed under Note 2.4.5.

Financial guarantees are initially recognised in the statement of financial position under “Provisions for guarantees issued” at fair value plus transaction costs that are directly attributable to the issuance of the financial guarantees. At initial recognition the obligation to pay corresponds to the Net Present Value (NPV) of expected premium inflows or the initial expected loss.

Subsequent to initial recognition, financial guarantees are measured at the higher of:

- The amount of the loss allowance as determined under IFRS 9; and

- The premium initially recognised less income recognised in accordance with the principles of IFRS 15.

Any increase or decrease in the net liability (as measured per IFRS 9) relating to financial guarantees other than the payment of guarantee calls is recognised in the statement of profit or loss and other comprehensive income under “Change in provisions for guarantees”.

The premium received is recognised in the statement of profit or loss and other comprehensive income in “Fee and commission income” on the basis of an amortisation schedule in accordance with IFRS 15 over the life of the financial guarantee.

In addition, when a guarantee agreement is signed, it is presented as a contingent liability for the Facility and when the guarantee is engaged, as a commitment for the Facility.

Policy applicable before 1 January 2018

At initial recognition, the financial guarantees are recognised at fair value corresponding to the Net Present Value (NPV) of expected premium inflows and initial expected loss. This calculation is performed at the starting date of each transaction and is recognised on the statement of financial position as “Financial guarantees” under “other assets” and “other liabilities”.

Subsequent to initial recognition, the Facility’s liabilities under such guarantees are measured at the higher of:

- the amount initially recognised less, where appropriate, cumulative amortisation recognised in accordance with IAS 18 Revenue

and

- the best estimate of expenditure required to settle any present financial obligation arising as a result of the guarantee, in accordance

with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

The best estimate of expenditure is determined in accordance with IAS 37. Financial guarantee provisions correspond to the cost of settling the obligation, which is the expected loss, estimated on the basis of all relevant factors and information existing at the statement of financial position date.

When a financial guarantee operation measured under IAS 39 is derecognised and treated under IAS 37, its value previously recorded under “Other liabilities” is transferred to the caption “Provisions for guarantees issued” on the statement of financial position.

The provision for financial guarantees (as measured per IAS 37) is recognised in the statement of profit or loss and other comprehensive income under “Change in provisions for guarantees”.

2.4.4 Financial liabilities other than derivatives

Classification and measurement

Financial liabilities - Policy applicable after 1 January 2018

A financial liability is measured at amortised cost except for financial liabilities that meet the definition of held for trading (e.g. derivative liabilities).

IFRS 9 largely retains the existing requirements in IAS 39 for the classification of financial liabilities and the Facility`s financial liabilities are measured at AC under IAS 39 and IFRS 9 as well.

Financial liabilities - Policy applicable before 1 January 2018

The Facility classified its financial liabilities into one of the following categories

-measured at amortised cost (‘AC’),

-at fair value through profit or loss (‘FVTPL’), and within this category as Held for trading (‘HFT’).

Derecognition

The Facility derecognises a financial liability when its contractual obligations are discharged, cancelled or expired.

2.4.5 Derivative financial instruments

Derivative financial instruments include cross currency swaps, cross currency interest rate swaps, short term currency swaps (“FX swaps”) and interest rate swaps.

Derivative financial instruments are initially recognised using the trade date basis.

In the normal course of its activity, the Facility may enter into swap contracts with a view to hedge specific lending operations or into currency forward contract with a view to hedge its currency positions, denominated in actively traded currencies other than the Euro, in order to offset any gain or loss caused by foreign exchange rate fluctuations.

All derivatives are measured at FVTPL and are reported as derivative financial instruments. Fair values are derived primarily from discounted cash-flow models, option-pricing models and from third party quotes.

Derivatives are recorded at fair value and carried as assets when their fair value is positive and as liabilities when their fair value is negative. Changes in the fair value of derivative financial instruments are shown in the statement of profit and loss and other comprehensive income under “Fair value change of derivative financial instruments”.

Under IFRS 9, bifurcation requirements embedded derivatives have been eliminated for financial assets or financial liabilities and therefore, the hybrid contract is treated as a whole for classification of financial assets or financial liability accordingly.

2.4.6 Contributions

Contributions from Member States are recognised as receivables in the statement of financial position on the date of the Council Decision fixing the financial contribution to be paid by the Member States to the Facility.

The Member States contributions meet the following conditions and are consequently classified as equity:

-as defined in the contribution agreement, they entitle the Member States to decide on the utilisation of the Facility’s net assets in the events of the Facility’s liquidation;

-they are in the class of instruments that is subordinated to all other classes of instruments;

-all financial instruments in the class of instruments that are subordinated to all other classes of instruments have identical features;

-the instrument does not include any features that would require classification as a liability; and

-the total expected cash flows attributable to the instrument over its life are based substantially on the profit or loss, the change in the recognised net assets or the change in the fair value of the recognised and unrecognised net assets of the Facility over the life of the instrument.

Contributions are classified and measured at AC in the financial statements.

2.4.7 Interest and similar income

Interest on loans originated by the Facility is recorded in the statement of profit or loss and other comprehensive income (‘Interest and similar income’) and in the statement of financial position (‘Loans and advances’) on an accrual basis using the effective interest rate, which is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the loan to the net carrying amount of the loan. Once the recorded value of a loan has been reduced due to impairment, interest income continues to be recognised using the original effective interest rate applied to the new carrying amount.

Interest on the POCI loans is recorded in the statement of profit or loss and other comprehensive income (‘Interest and similar income’) and in the statement of financial position (‘Loans and advances’) on an accrual basis using the credit- adjusted  effective interest rate through the whole life of the loan, which is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the loan to the amortised cost of the loan.

Commitment fees are deferred and recognised in income using the effective interest method over the period from disbursement to repayment of the related loan, and are presented in the statement of profit or loss and other comprehensive income within interest and similar income.

2.4.8

  Interest subsidies and technical assistance

As part of its activity, the Facility manages interest subsidies and technical assistance on behalf of the Member States.

The part of the Member States contributions allocated to the payment of interest subsidies and TA is not accounted for in the Facility’s contributors’ resources but is classified as amounts owed to third parties. The Facility operates the disbursement to the final beneficiaries and then decreases the amounts owed to third parties.

When amounts contributed with regard to interest subsidies and TA are not fully granted, they are reclassified as contribution to the Facility.

2.4.9 Interest income on cash and cash equivalents

Interest income on cash and cash equivalents is recognised in the statement of profit or loss and other comprehensive income of the Facility on an accrual basis.

2.4.10Fees, commissions and dividends

Fees received in respect of services provided over a period of time are recognised as income as the services are provided, while fees that are earned on the execution of a significant act are recognised as income when the significant act has been completed. These fees are presented in the statement of profit or loss and other comprehensive income within fee and commission income.

Dividends relating to shares and other variable yield securities are recognised when received and presented in the statement of profit or loss and other comprehensive income within net realised gains on shares and other variable yield securities.

2.4.11Taxation

The Protocol on the Privileges and Immunities of the European Union, appended to the treaty on the European Union and the treaty of the functioning of the European Union, stipulates that the assets, revenues and other property of the Institutions of the Union are exempt from all direct taxes.

2.5 Transition disclosures

The following table shows the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 for the Facility’s assets and liabilities as at 1 January 2018.

ASSETS in EUR '000

| ASSETS in EUR '000 | | | | | |
| --- | --- | --- | --- | --- | --- |
| Statement of financial position
  as at 31 December 2017 | Measurement Category IAS 39 | Net carrying amount | Measurement category IFRS 9 | Net carrying amount | Statement of financial position
  as from 1 January 2018 |
| 1.Cash and cash equivalents | L&R (Loans and receivables) | 549,101 | AC (Amortised Cost) | 549,101 | 1.Cash and cash equivalents |
| 2.Amounts receivable from contributors | L&R (Loans and receivables) | 150,000 | AC (Amortised Cost) | 150,000 | 2.Amounts receivable from contributors |
| 3.Held-to-maturity financial assets | HTM (Held to Maturity) | 144,382 | AC (Amortised Cost) | 144,382 | 3.Treasury financial assets |
| 4.Derivative financial instruments | FVTPL (Fair Value Through Profit and loss) | 12,521 | FVTPL (Fair Value Through Profit and loss) | 12,521 | 4.Derivative financial instruments |
| 5.Loans and receivables | L&R (Loans and receivables) | 1,666,725 | AC (Amortised Cost) | 1,615,589 | 5.Loans and advances |
| | | | FVTPL (Fair Value Through Profit and loss) | 1,422 | |
| 6.Available-for-sale financial assets | AFS (Available for Sale) | 497,539 | FVTPL (Fair Value Through Profit and loss) | 497,539 | 6.Shares and other variable yield securities |
| 7.Other assets | L&R (Loans and receivables) | 4,385 | AC (Amortised Cost) | 4,385 | 7.Other assets |
| Total Assets | | 3,024,653 | | 2,974,939 | Total Assets |

Statement of financial position
  as at 31 December 2017

Measurement Category IAS 39

Net carrying amount

Measurement category IFRS 9

Net carrying amount

Statement of financial position
  as from 1 January 2018

1.Cash and cash equivalents

L&R (Loans and receivables)

549,101

AC (Amortised Cost)

549,101

1.Cash and cash equivalents

2.Amounts receivable from contributors

L&R (Loans and receivables)

150,000

AC (Amortised Cost)

150,000

2.Amounts receivable from contributors

3.Held-to-maturity financial assets

HTM (Held to Maturity)

144,382

AC (Amortised Cost)

144,382

3.Treasury financial assets

4.Derivative financial instruments

FVTPL (Fair Value Through Profit and loss)

12,521

FVTPL (Fair Value Through Profit and loss)

12,521

4.Derivative financial instruments

5.Loans and receivables

L&R (Loans and receivables)

1,666,725

AC (Amortised Cost)

1,615,589

5.Loans and advances

FVTPL (Fair Value Through Profit and loss)

1,422

6.Available-for-sale financial assets

AFS (Available for Sale)

497,539

FVTPL (Fair Value Through Profit and loss)

497,539

6.Shares and other variable yield securities

7.Other assets

L&R (Loans and receivables)

4,385

AC (Amortised Cost)

4,385

7.Other assets

Total Assets

3,024,653

2,974,939

Total Assets

LIABILITIES in EUR '000

| LIABILITIES in EUR '000 | | | | | |
| --- | --- | --- | --- | --- | --- |
| Statement of financial position
  as at 31 December 2017 | Measurement Category IAS 39 | Net carrying amount | Measurement category IFRS 9 | Net carrying amount | Statement of financial position
  as from 1 January 2018 |
| 8.Derivative financial instruments | FVTPL (Fair Value Through Profit and loss) | 1,153 | FVTPL (Fair Value Through Profit and loss) | 1,153 | 8.Derivative financial instruments |
| 9.Deferred income | AC (Amortised Cost) | 25,802 | AC (Amortised Cost) | 25,802 | 9.Deferred income |
| 10.Provisions for guarantees issued | Financial guarantees | 484 | Financial guarantees | 484 | 10.Provisions for guarantees issued |
| 11.Provisions for loan commitments | AC (Amortised Cost) | - | AC (Amortised Cost) | 4,156 | 11.Provisions for loan commitments |
| 12.Amounts owed to third parties | AC (Amortised Cost) | 157,285 | AC (Amortised Cost) | 157,285 | 12.Amounts owed to third parties |
| 13.Other liabilities | AC (Amortised Cost) | 2,462 | AC (Amortised Cost) | 2,462 | 13.Other liabilities |
| Total Liabilities | | 187,186 | | 191,342 | Total Liabilities |
| | | | | | |
| 14.Contributors’ resources | | | | | 14.Contributors’ resources |
| 13.1.Member States Contribution called | | 2,517,000 | | 2,517,000 | 13.1.Member States Contribution called |
| 13.2.Fair value reserve | | 125,816 | | - | 13.2.Fair value reserve |
| 13.3.Retained earnings | | 194,651 | | 266,597 | 13.3.Retained earnings |
| Total Liabilities and Equity | | 3,024,653 | | 2,974,939 | Total Liabilities and Equity |

Statement of financial position
  as at 31 December 2017

Measurement Category IAS 39

Net carrying amount

Measurement category IFRS 9

Net carrying amount

Statement of financial position
  as from 1 January 2018

8.Derivative financial instruments

FVTPL (Fair Value Through Profit and loss)

1,153

FVTPL (Fair Value Through Profit and loss)

1,153

8.Derivative financial instruments

9.Deferred income

AC (Amortised Cost)

25,802

AC (Amortised Cost)

25,802

9.Deferred income

10.Provisions for guarantees issued

Financial guarantees

484

Financial guarantees

484

10.Provisions for guarantees issued

11.Provisions for loan commitments

AC (Amortised Cost)

-

AC (Amortised Cost)

4,156

11.Provisions for loan commitments

12.Amounts owed to third parties

AC (Amortised Cost)

157,285

AC (Amortised Cost)

157,285

12.Amounts owed to third parties

13.Other liabilities

AC (Amortised Cost)

2,462

AC (Amortised Cost)

2,462

13.Other liabilities

Total Liabilities

187,186

191,342

Total Liabilities

14.Contributors’ resources

14.Contributors’ resources

13.1.Member States Contribution called

2,517,000

2,517,000

13.1.Member States Contribution called

13.2.Fair value reserve

125,816

-

13.2.Fair value reserve

13.3.Retained earnings

194,651

266,597

13.3.Retained earnings

Total Liabilities and Equity

3,024,653

2,974,939

Total Liabilities and Equity

The following table reconciles the carrying amounts of the Facility’s assets and liabilities from their previous measurement category under IAS 39 to their new measurement categories upon transition to IFRS 9 on 1st January 2018.

FINANCIAL ASSETS

| FINANCIAL ASSETS


  in EUR '000 | IAS 39 carrying amount 31.12.2017 | Reclassifications | Remeasurements | IFRS 9 carrying amount 01.01.2018 |
| --- | --- | --- | --- | --- |
| Amortized Cost | | | | |
| 1. Cash and cash equivalents | | | | |
| Opening balance under IAS 39 and closing balance under IFRS 9 | 549,101 | - | - | 549,101 |
| 2. Amounts receivable from contributors | | | | |
| Opening balance under IAS 39 and closing balance under IFRS 9 | 150,000 | - | - | 150,000 |
| 3. Treasury financial assets | | | | |
| Opening balance under IAS 39 and closing balance under IFRS 9 | 144,382 | - | - | 144,382 |
| 4. Derivative financial instruments | | | | |
| Opening balance under IAS 39 and closing balance under IFRS 9 | 12,521 | - | - | 12,521 |
| 5.Loans and advances | | | | |
| Opening balance under IAS 39 | 1,666,725 | - | - | 1,666,725 |
| Transfer from AC to FVTPL | - | -1,422 | - | -1,422 |
| Remeasurement: ECL allowance | - | - | -49,714 | -49,714 |
| Closing balance under IFRS 9 | 1,666,725 | -1,422 | -49,714 | 1,615,589 |
| 7. Other assets | | | | |
| Opening balance under IAS 39 and closing balance under IFRS 9 | 4,385 | - | - | 4,385 |
| | | | | |
| Total financial assets measured at amortized cost | 2,527,114 | -1,422 | -49,714 | 2,475,978 |
| | | | | |
| | IAS 39 carrying amount 31.12.2017 | Reclassifications | Remeasurements | IFRS 9 carrying amount 01.01.2018 |
| Fair Value Through OCI / AFS | | | | |
| 6. Shares and other variable yield securities | | | | |
| Opening balance under IAS 39 | 497,539 | - | - | 497,539 |
| Transfer from AFS to FVTPL | - | -497,539 | - | -497,539 |
| Closing balance under IFRS 9 | 497,539 | -497,539 | - | - |
| Total financial assets measured at Fair Value Through OCI | 497,539 | -497,539 | - | - |
| | | | | |
| Fair Value Through Profit and Loss | | | | |
| 5.Loans and advances | | | | |
| Opening balance under IAS 39 | - | - | - | - |
| Transfer from AC to FVTPL | - | 1,422 | - | 1,422 |
| Remeasurement: ECL allowance | - | - | - | - |
| Closing balance under IFRS 9 | - | 1,422 | - | 1,422 |
| 6. Shares and other variable yield securities | | | | |
| Opening balance under IAS 39 | - | - | - | - |
| Transfer from AFS to FVTPL | - | 497,539 | - | 497,539 |
| Closing balance under IFRS 9 | - | 497,539 | - | 497,539 |
| Total financial assets measured at Fair Value Through Profit and Loss | - | 498,961 | - | 498,961 |
| | | | | |
| Total financial assets | 3,024,653 | - | -49,714 | 2,974,939 |
| | | | | |

in EUR '000

IAS 39 carrying amount 31.12.2017

Reclassifications

Remeasurements

IFRS 9 carrying amount 01.01.2018

Amortized Cost

1. Cash and cash equivalents

Opening balance under IAS 39 and closing balance under IFRS 9

549,101

-

-

549,101

2. Amounts receivable from contributors

Opening balance under IAS 39 and closing balance under IFRS 9

150,000

-

-

150,000

3. Treasury financial assets

Opening balance under IAS 39 and closing balance under IFRS 9

144,382

-

-

144,382

4. Derivative financial instruments

Opening balance under IAS 39 and closing balance under IFRS 9

12,521

-

-

12,521

5.Loans and advances

Opening balance under IAS 39

1,666,725

-

-

1,666,725

Transfer from AC to FVTPL

-

-1,422

-

-1,422

Remeasurement: ECL allowance

-

-

-49,714

-49,714

Closing balance under IFRS 9

1,666,725

-1,422

-49,714

1,615,589

7. Other assets

Opening balance under IAS 39 and closing balance under IFRS 9

4,385

-

-

4,385

Total financial assets measured at amortized cost

2,527,114

-1,422

-49,714

2,475,978

IAS 39 carrying amount 31.12.2017

Reclassifications

Remeasurements

IFRS 9 carrying amount 01.01.2018

Fair Value Through OCI / AFS

6. Shares and other variable yield securities

Opening balance under IAS 39

497,539

-

-

497,539

Transfer from AFS to FVTPL

-

-497,539

-

-497,539

Closing balance under IFRS 9

497,539

-497,539

-

-

Total financial assets measured at Fair Value Through OCI

497,539

-497,539

-

-

Fair Value Through Profit and Loss

5.Loans and advances

Opening balance under IAS 39

-

-

-

-

Transfer from AC to FVTPL

-

1,422

-

1,422

Remeasurement: ECL allowance

-

-

-

-

Closing balance under IFRS 9

-

1,422

-

1,422

6. Shares and other variable yield securities

Opening balance under IAS 39

-

-

-

-

Transfer from AFS to FVTPL

-

497,539

-

497,539

Closing balance under IFRS 9

-

497,539

-

497,539

Total financial assets measured at Fair Value Through Profit and Loss

-

498,961

-

498,961

Total financial assets

3,024,653

-

-49,714

2,974,939

| | | | | |
| --- | --- | --- | --- | --- |
| FINANCIAL LIABILITIES


  in EUR '000 | IAS 39 carrying amount 31.12.2017 | Reclassifications | Remeasurements | IFRS 9 carrying amount 01.01.2018 |
| Amortized Cost | | | | |
| 9. Deferred income | | | | |
| Opening balance under IAS 39 and closing balance under IFRS 9 | 25,802 | - | - | 25,802 |
| 10. Provisions for loan commitments | | | | |
| Opening balance under IAS 39 | - | - | - | |
| Remeasurement ECL allowance | - | - | 4,156 | 4,156 |
| Closing balance under IFRS 9 | | - | 4,156 | 4,156 |
| 11. Amounts owed to third parties | | | | |
| Opening balance under IAS 39 and closing balance under IFRS 9 | 157,285 | - | - | 157,285 |
| 12. Other liabilities | | | | |
| Opening balance under IAS 39 and closing balance under IFRS 9 | 2,462 | - | - | 2,462 |
| | | | | |
| Total financial liabilities measured at amortised cost | 185,549 | - | 4,156 | 189,705 |
| | | | | |
| Fair Value Through Profit and Loss | | | | |
| 13. Derivative financial instruments | | | | |
| Opening balance under IAS 39 and closing balance under IFRS 9 | 1,153 | - | - | 1,153 |
| 14. Provisions for guarantees issued | | | | |
| Opening balance under IAS 39 and closing balance under IFRS 9 | 484 | - | - | 484 |
| Remeasurement ECL allowance | - | - | - | - |
| Closing balance under IFRS 9 | 484 | - | - | 484 |
| | | | | |
| Total financial liabilities measured at Fair Value Through Profit and Loss | 1,637 | - | - | 1,637 |
| | | | | |
| Total financial liabilities | 187,186 | - | 4,156 | 191,342 |

FINANCIAL LIABILITIES

in EUR '000

IAS 39 carrying amount 31.12.2017

Reclassifications

Remeasurements

IFRS 9 carrying amount 01.01.2018

Amortized Cost

9. Deferred income

Opening balance under IAS 39 and closing balance under IFRS 9

25,802

-

-

25,802

10. Provisions for loan commitments

Opening balance under IAS 39

-

-

-

Remeasurement ECL allowance

-

-

4,156

4,156

Closing balance under IFRS 9

-

4,156

4,156

11. Amounts owed to third parties

Opening balance under IAS 39 and closing balance under IFRS 9

157,285

-

-

157,285

12. Other liabilities

Opening balance under IAS 39 and closing balance under IFRS 9

2,462

-

-

2,462

Total financial liabilities measured at amortised cost

185,549

-

4,156

189,705

Fair Value Through Profit and Loss

13. Derivative financial instruments

Opening balance under IAS 39 and closing balance under IFRS 9

1,153

-

-

1,153

14. Provisions for guarantees issued

Opening balance under IAS 39 and closing balance under IFRS 9

484

-

-

484

Remeasurement ECL allowance

-

-

-

-

Closing balance under IFRS 9

484

-

-

484

Total financial liabilities measured at Fair Value Through Profit and Loss

1,637

-

-

1,637

Total financial liabilities

187,186

-

4,156

191,342

The following table analyses the impact of transition to IFRS 9 on the Facility’s Contributors’ resources as at 1 January 2018. The impact relates to the fair value reserve. There is no impact on other components of Contributors’ resources.

in EUR '000

| in EUR '000 | Fair value reserve |
| --- | --- |
| Closing balance under IAS 39 (31 December 2017) | 125,816 |
| Reclassification of shares and other variable-yield securities from AFS to FVTPL | -125,816 |
| Opening balance under IFRS 9 (1 January 2018) | - |
| | |
| | Retained earnings |
| Closing balance under IAS 39 (31 December 2017) | 194,651 |
| | |
| Reclassification of shares and other variable-yield securities from AFS to FVTPL | 125,816 |
| Recognition of ECL under IFRS 9 (loans and advances) | -49,712 |
| Recognition of provisions under IFRS 9 (loan commitments) | -4,156 |
| | |
| Opening balance under IFRS 9 (1 January 2018) | 266,599 |
| | |
| Total changes in equity due to adopting IFRS 9 | - 53,868 |

Fair value reserve

Closing balance under IAS 39 (31 December 2017)

125,816

Reclassification of shares and other variable-yield securities from AFS to FVTPL

-125,816

Opening balance under IFRS 9 (1 January 2018)

-

Retained earnings

Closing balance under IAS 39 (31 December 2017)

194,651

Reclassification of shares and other variable-yield securities from AFS to FVTPL

125,816

Recognition of ECL under IFRS 9 (loans and advances)

-49,712

Recognition of provisions under IFRS 9 (loan commitments)

-4,156

Opening balance under IFRS 9 (1 January 2018)

266,599

Total changes in equity due to adopting IFRS 9

- 53,868

The following table reconciles the closing impairment allowance measured in accordance with IAS 39 to the new impairment allowance measured in accordance with IFRS 9:

| in EUR '000 | 01.01.2018 | 31.12.2017 |
| --- | --- | --- |
| Impairment allowance for | 12-month ECL (stage 1) | Lifetime ECL not credit-impaired (stage 2) | Lifetime ECL credit-impaired (stage 3) | Total | Total |
| 1. Cash and cash equivalents at AC under IAS 39 and IFRS 9 | - | - | - | - | - |
| 2. Treasury financial assets | - | - | - | - | - |
| 3.1 Loans and advances - Balance Sheet | 19,738 | 29,976 | 113,255 | 162,969 | 113,255 |
| 3.2 Loan commitments - Off Balance Sheet | 1,993 | 2,163 | - | 4,156 | - |
| 4. Financial guarantee contracts issued | - | 484 | - | 484 | 484 |
| Total | 21,731 | 32,623 | 113,255 | 167,609 | 113,739 |

in EUR '000

01.01.2018

31.12.2017

Impairment allowance for

12-month ECL (stage 1)

Lifetime ECL not credit-impaired (stage 2)

Lifetime ECL credit-impaired (stage 3)

Total

Total

1. Cash and cash equivalents at AC under IAS 39 and IFRS 9

-

-

-

-

-

2. Treasury financial assets

-

-

-

-

-

3.1 Loans and advances - Balance Sheet

19,738

29,976

113,255

162,969

113,255

3.2 Loan commitments - Off Balance Sheet

1,993

2,163

-

4,156

-

4. Financial guarantee contracts issued

-

484

-

484

484

Total

21,731

32,623

113,255

167,609

113,739

3
     Risk Management

This note presents information about the Facility’s exposure to and its management and control of credit and financial risks, in particular the primary risks associated with its use of financial instruments. These are:

-credit risk – the risk of loss resulting from client or counterparty default and arising on credit exposure in all forms, including settlement risk;

-liquidity risk – the risk that an entity is not able to fund increases in assets and meet obligations as they come due, without incurring unacceptable losses;

-market risk – the risk that changes in market prices and rates, such as interest rates, equity prices and foreign exchange rates will affect an entity’s income or the value of its holdings in financial instruments.

3.1 Risk management organisation

The European Investment Bank adapts its risk management on an ongoing basis.

The Risk Management of EIB independently identifies, assesses, monitors and reports the risks to which the Facility is exposed. Within a framework whereby the segregation of duties is preserved, the Risk Management is independent of the Front Offices. At EIB level the Director General of Risk Management reports for risk matters to the designated Vice-President for Risk Management. The designated Vice-President is responsible for overseeing risk reporting to the European Investment Bank’s Management Committee and the Board of Directors.

3.2 Credit risk

Credit risk is the potential loss that could result from client or counterparty default and arising on credit exposure in all forms, including settlement.

3.2.1 Credit risk policy

In carrying out the credit analysis on loan counterparts, EIB assesses the credit risk and expected loss with a view to quantify and price the risk. EIB has developed an Internal Rating Methodology (IRM) to determine the Internal Ratings of its credit-relevant borrower/guarantor counterparts. The methodology is based on a system of scoring sheets tailored for each major credit counterpart type (e.g. Corporates, Banks, Public Sector Entities, etc). Taking into consideration both, Best Banking Practice and the principles set under the Basel International Capital Accord (Basel II), all counterparts that are material to the credit profile of a specific transaction are classified into internal rating categories using the IRM for the specific counterpart type. Each counterpart is assigned an Internal Rating reflecting its probability of default foreign currency rating following an in-depth analysis of the counterpart’s business and financial risk profile and its country risk operating context.

The credit assessment of project finance and other structured limited recourse operations is using credit risk tools relevant for the sector, focused mainly on cash flow availability and debt service capacity. These tools include the analysis of projects’ contractual framework, counterpart’s analysis and cash flow simulations. Similarly to corporates and financial institutions, each project is assigned an internal risk rating.

All Internal Ratings are monitored over loan life, and periodically updated.

All non-sovereign (or non sovereign guaranteed/assimilated) operations are subject to specific transaction-level and counterpart size limits. Counterpart limits are set at consolidated group exposure level, where applicable. Such limits typically reflect e.g. the size of counterparts own funds.

In order to mitigate credit risk the EIB uses, where appropriate and on a case by case basis, various credit enhancements which are:

-Counterparty or project related securities (e.g., pledge over the shares; pledge over the assets; assignment of rights; pledge over the accounts); or/and

-guarantees, generally provided by the sponsor of the financed project (e.g., completion guarantees, first demand guarantees) or bank guarantees.

The Facility does not use any credit derivatives to mitigate credit risk.

3.2.2Maximum exposure to credit risk without taking into account any collateral and other credit enhancements

The following table shows the maximum exposure to credit risk for the components of the statement of financial position, including derivatives. The maximum exposure is shown gross, before the effect of mitigation through the use of collateral.

| Maximum exposure (in EUR’000) | 31.12.2018 | 31.12.2017 |
| --- | --- | --- |
| ASSETS | | |
| Cash and cash equivalents | 573,708 | 549,101 |
| Amounts receivable from contributors | 100,000 | 150,000 |
| Treasury financial assets | 335,140 | 144,382 |
| Derivative financial instruments | 9,873 | 12,521 |
| Loans and advances | 1,540,991 | 1,666,725 |
| Other assets | 171 | 4,385 |
| Total assets | 2,559,883 | 2,527,114 |
| | | |
| Provisions for loan commitments | -23,822 | - |
| | | |
| OFF BALANCE SHEET | | |
| | | |
| OFF BALANCE SHEET | | |
| Contingent liabilities | | |
| - Issued Guarantees | 1,553,668 | 74,569 |
| Commitments | | |
| - Undisbursed loans | 1,283,931 | 869,983 |
| - Non-issued guarantees | 2,800 | 7,682 |
| Total off balance sheet | 2,840,399 | 952,234 |
| | | |
| Total credit exposure | 5,376,460 | 3,479,348 |

Maximum exposure (in EUR’000)

31.12.2018

31.12.2017

ASSETS

Cash and cash equivalents

573,708

549,101

Amounts receivable from contributors

100,000

150,000

Treasury financial assets

335,140

144,382

Derivative financial instruments

9,873

12,521

Loans and advances

1,540,991

1,666,725

Other assets

171

4,385

Total assets

2,559,883

2,527,114

Provisions for loan commitments

-23,822

-

OFF BALANCE SHEET

OFF BALANCE SHEET

Contingent liabilities

- Issued Guarantees

1,553,668

74,569

Commitments

- Undisbursed loans

1,283,931

869,983

- Non-issued guarantees

2,800

7,682

Total off balance sheet

2,840,399

952,234

Total credit exposure

5,376,460

3,479,348

3.2.3Credit risk on loans and advances

3.2.3.1Credit risk measurement for loans and advances

Each and every loan or guarantee undertaken by the Facility benefits from a comprehensive risk assessment and quantification of expected loss estimates that are reflected in a Loan Grading (“LG”). Operations under the IFE (as described in Note 24), with the exception of intermediated loans, are not subject to the Credit Risk Policy Guidelines and are subject to a different procedure. LGs are established according to generally accepted criteria, based on the quality of the borrower, the maturity of the loan, the guarantee and, where appropriate, the guarantor.

The loan grading (LG) system comprises the methodologies, processes, databases and IT systems supporting the assessment of credit risk in lending operations and the quantification of expected loss estimates. It summarises a large amount of information with the purpose of offering a relative ranking of loans’ credit risks. LGs reflect the present value of the estimated level of the “expected loss”, this being the product of the probability of default of the main obligors, the exposure at risk and the loss severity in the case of default. LGs are used for the following purposes:

-as an aid to a finer and more quantitative assessment of lending risks;

-as help in distributing monitoring efforts;

-as a description of the loan’s portfolio quality at any given date;

-as one input in risk-pricing decisions based on the expected loss.

The following factors enter into the determination of an LG:

I)The borrower’s creditworthiness: Risk Management independently reviews borrowers and assesses their creditworthiness based on internal methodologies and external data. In line with the Basel II Advanced Approach chosen, the Bank has developed an internal rating methodology (IRM) to determine the internal ratings of borrowers and guarantors. This is based on a set of scoring sheets specific to defined counterparty types.

II)The default correlation: it quantifies the chances of simultaneous financial difficulties arising for both the borrower and the guarantor. The higher the correlation between the borrower and the guarantor’s default probabilities, the lower the value of the guarantee and therefore the lower (worse) the LG.

III)The value of guarantee instruments and of securities: this value is assessed on the basis of the combination of the issuer’s creditworthiness and the type of instrument used.

IV)The applicable recovery rate: being the amount assumed to be recovered following a default by the relevant counterpart expressed as a percentage of the relevant loan exposure

V)The contractual framework: a sound contractual framework will add to the loan’s quality and enhance its internal grading.

VI)The duration of the loan or, more generally, the cash-flows of the loan: all else being equal, the longer the loan, the higher the risk of incurring difficulties in the servicing of the loan .

A loan’s expected loss is computed by combining the five elements discussed above. Depending on the level of this loss, a loan is assigned to one of the following LG classes listed below:

“A” Prime quality loans of which there are three sub-categories:

“A0” comprising loans to or guaranteed by an EU Member State which have an expected loss of 0% (based on the Bank’s preferred creditor status and statutory protection which are deemed to assure a full recovery of the Bank’s assets upon maturity).

“A+” comprising loans granted to (or guaranteed by) entities other than EU Member States in respect of which there is no expectation of deterioration in quality over their term.

“A-“ includes those lending operations where there is some doubt about the maintenance of their current status but where any downside is expected to be limited.

“B” High quality loans: these represent an asset class with which the bank feels comfortable, although a minor deterioration is not ruled out in the future. B+ and B- are used to denote the relative likelihood of the possibility of such deterioration occurring.

“C” Good quality loans: an example could be unsecured loans to solid banks and corporates with a 7-year bullet, or equivalent amortising, maturity at disbursement.

“D” This rating class represents the borderline between “acceptable quality” loans and those that have experienced some difficulties. This watershed in loan grading is more precisely determined by the sub-classifications D+ and D-. Loans rated D- require heightened monitoring.

“E” This LG category includes loans with a risk profile greater than generally accepted. It also includes loans which in the course of their lives have experienced severe problems and their sliding into a situation of loss cannot be excluded. For this reason, the loans are subject to close and high monitoring. The sub-classes E+ and E- differentiate the intensity of this special monitoring process, with those operations graded E- being in a position where there is a strong possibility that debt service cannot be maintained on a timely basis and therefore some form of debt restructuring is required, possibly leading to an impairment loss.

“F” F (fail) denotes loans representing unacceptable risks. F- graded loans can only arise out of outstanding transactions that have experienced, after signature, unforeseen, exceptional and dramatic adverse circumstances. All operations where there is a loss of principal to the Facility are graded F and a specific provision is applied.

Generally, loans internally graded D- or below are placed on the Watch List. However, if a loan was originally approved with a risk profile of D- or weaker, it will only be placed on the Watch List as a result of a material credit event causing a further deterioration of its LG classification.

The table in section 3.2.3.3 shows the credit quality analysis of the Facility’s loan portfolio based on the various LG classes as described above.

3.2.3.2Analysis of lending credit risk exposure

The following table shows the maximum exposure (net of ECL) to credit risk on loans signed and disbursed by nature of borrower taking into account guarantees provided by guarantors:

| At 31.12.2018 | Guaranteed | Other credit enhancements | Not guaranteed | Total | % of Total |
| --- | --- | --- | --- | --- | --- |
| In EUR’000 | | | | | |
| Banks | 88,263 | - | 856,484 | 944,747 | 61% |
| Corporates | 147,551 | 45,820 | 205,198 | 398,569 | 26% |
| Public institutions | 29,182 | - | - | 29,182 | 2% |
| States | - | 2,647 | 165,846 | 168,493 | 11% |
| Total disbursed | 264,996 | 48,467 | 1,227,528 | 1,540,991 | 100% |
| Signed not disbursed | 170,356 | - | 1,089,753 | 1,260,110 | |
| | | | | | |
| At 31.12.2017 | Guaranteed | Other credit enhancements | Not guaranteed | Total | % of Total |
| In EUR’000 | | | | | |
| Banks | 46,860 | 11,651 | 919,216 | 977,727 | 59% |
| Corporates | 145,914 | 59,462 | 285,492 | 490,868 | 29% |
| Public institutions | 30,882 | - | - | 30,882 | 2% |
| States | - | 3,218 | 164,030 | 167,248 | 10% |
| Total disbursed | 223,656 | 74,331 | 1,368,738 | 1,666,725 | 100% |
| Signed not disbursed | 89,597 | - | 780,386 | 869,983 | |

At 31.12.2018

Guaranteed

Other credit enhancements

Not guaranteed

Total

% of Total

In EUR’000

Banks

88,263

-

856,484

944,747

61%

Corporates

147,551

45,820

205,198

398,569

26%

Public institutions

29,182

-

-

29,182

2%

States

-

2,647

165,846

168,493

11%

Total disbursed

264,996

48,467

1,227,528

1,540,991

100%

Signed not disbursed

170,356

-

1,089,753

1,260,110

At 31.12.2017

Guaranteed

Other credit enhancements

Not guaranteed

Total

% of Total

In EUR’000

Banks

46,860

11,651

919,216

977,727

59%

Corporates

145,914

59,462

285,492

490,868

29%

Public institutions

30,882

-

-

30,882

2%

States

-

3,218

164,030

167,248

10%

Total disbursed

223,656

74,331

1,368,738

1,666,725

100%

Signed not disbursed

89,597

-

780,386

869,983

3.2.3.3Credit quality analysis per type of borrower

3.2.3.3

Credit quality analysis per type of borrower

The tables below show the credit quality analysis of the Facility’s loan portfolio as at 31 December 2018 and 31 December 2017 by the Loan Grading applications, based on the exposure signed (disbursed and un-disbursed):

The tables below show the credit quality analysis of the Facility’s loan portfolio as at 31 December 2018 and 31 December 2017 by the Loan Grading applications, based on the exposure signed (disbursed and un-disbursed):

| At 31.12.2018 | | High Grade | Standard Grade | Min. Accept. Risk | High Risk | No grading | Total | % of Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| In EUR’000 | | | | | | | | |
| | | A to B- | C | D+ | D- and below | | | |
| Borrower | Banks | 232,467 | 238,619 | 349,756 | 698,562 | - | 1,519,404 | 54% |
| | Corporates | 103,845 | 7,564 | 744 | 693,100 | 50,000 | 855,253 | 31% |
| | Public institutions | - | - | 29,182 | 2,994 | - | 32,176 | 1% |
| | States | - | 4,786 | 7,681 | 381,801 | - | 394,268 | 14% |
| Total | | 336,312 | 250,969 | 387,363 | 1,776,457 | 50,000 | 2,801,101 | 100% |
| | | | | | | | | |
| At 31.12.2017 | | High Grade | Standard Grade | Min. Accept. Risk | High Risk | No grading | Total | % of Total |
| In EUR’000 | | | | | | | | |
| | | A to B- | C | D+ | D- and below | | | |
| Borrower | Banks | 208,601 | 187,225 | 189,727 | 870,913 | - | 1,456,466 | 58% |
| | Corporates | 114,769 | 8,018 | 3,288 | 533,382 | 1,428 | 660,885 | 26% |
| | Public institutions | - | - | 30,882 | - | - | 30,882 | 1% |
| | States | - | - | 13,861 | 374,614 | - | 388,475 | 15% |
| Total | | 323,370 | 195,243 | 237,758 | 1,778,909 | 1,428 | 2,536,708 | 100% |

At 31.12.2018

High Grade

Standard Grade

Min. Accept. Risk

High Risk

No grading

Total

% of Total

In EUR’000

A to B-

C

D+

D- and below

Borrower

Banks

232,467

238,619

349,756

698,562

-

1,519,404

54%

Corporates

103,845

7,564

744

693,100

50,000

855,253

31%

Public institutions

-

-

29,182

2,994

-

32,176

1%

States

-

4,786

7,681

381,801

-

394,268

14%

Total

336,312

250,969

387,363

1,776,457

50,000

2,801,101

100%

At 31.12.2017

High Grade

Standard Grade

Min. Accept. Risk

High Risk

No grading

Total

% of Total

In EUR’000

A to B-

C

D+

D- and below

Borrower

Banks

208,601

187,225

189,727

870,913

-

1,456,466

58%

Corporates

114,769

8,018

3,288

533,382

1,428

660,885

26%

Public institutions

-

-

30,882

-

-

30,882

1%

States

-

-

13,861

374,614

-

388,475

15%

Total

323,370

195,243

237,758

1,778,909

1,428

2,536,708

100%

3.2.3.4Risk concentrations of loans and advances

3.2.3.4.1Geographical analysis

Based on the country of borrower, the Facility’s loan portfolio can be analysed by the following geographical regions (in EUR‘000):

| Country of borrower | 31.12.2018 | 31.12.2017 |
| --- | --- | --- |
| Kenya | 233,269 | 331,891 |
| Nigeria | 172,515 | 230,042 |
| Tanzania | 124,718 | 116,093 |
| Uganda | 81,766 | 169,869 |
| Burundi | 77,568 | 74,703 |
| Barbados | 74,638 | 25,124 |
| Egypt | 74,431 | - |
| Jamaica | 72,165 | 85,728 |
| Congo (Democratic Republic) | 62,708 | 62,439 |
| Mauritius | 55,564 | 26,598 |
| Ethiopia | 55,215 | 51,719 |
| Dominican Republic | 54,326 | 61,326 |
| Mauritania | 50,727 | 64,007 |
| Ghana | 39,246 | 49,895 |
| Togo | 30,634 | 45,574 |
| Rwanda | 28,704 | 38,555 |
| Malawi | 26,827 | 22,800 |
| Regional-ACP | 24,335 | 751 |
| New Caledonia | 21,124 | 21,670 |
| Angola | 20,651 | 14,850 |
| Cape Verde | 18,923 | 20,487 |
| Senegal | 18,330 | 13,881 |
| Zambia | 17,700 | 10,910 |
| French Polynesia | 17,453 | 17,235 |
| Cameroon | 14,784 | 25,012 |
| Mozambique | 14,719 | 19,212 |
| Cayman Islands | 13,213 | 14,958 |
| Niger | 9,655 | 5,631 |
| Botswana | 7,278 | 7,618 |
| Seychelles | 4,786 | 5,036 |
| Mali | 4,767 | 5,612 |
| Haiti | 4,748 | 6,006 |
| Burkina Faso | 4,649 | 6,041 |
| Samoa | 3,986 | 5,100 |
| Vanuatu | 1,848 | 2,162 |
| Liberia | 1,153 | 1,553 |
| Palau | 1,107 | 1,384 |
| Micronesia | 759 | 868 |
| South Africa | 2 | 653 |
| Namibia | - | 1,971 |
| Congo | - | 1,730 |
| Tonga | - | 31 |
| Total | 1,540,991 | 1,666,725 |

Country of borrower

31.12.2018

31.12.2017

Kenya

233,269

331,891

Nigeria

172,515

230,042

Tanzania

124,718

116,093

Uganda

81,766

169,869

Burundi

77,568

74,703

Barbados

74,638

25,124

Egypt

74,431

-

Jamaica

72,165

85,728

Congo (Democratic Republic)

62,708

62,439

Mauritius

55,564

26,598

Ethiopia

55,215

51,719

Dominican Republic

54,326

61,326

Mauritania

50,727

64,007

Ghana

39,246

49,895

Togo

30,634

45,574

Rwanda

28,704

38,555

Malawi

26,827

22,800

Regional-ACP

24,335

751

New Caledonia

21,124

21,670

Angola

20,651

14,850

Cape Verde

18,923

20,487

Senegal

18,330

13,881

Zambia

17,700

10,910

French Polynesia

17,453

17,235

Cameroon

14,784

25,012

Mozambique

14,719

19,212

Cayman Islands

13,213

14,958

Niger

9,655

5,631

Botswana

7,278

7,618

Seychelles

4,786

5,036

Mali

4,767

5,612

Haiti

4,748

6,006

Burkina Faso

4,649

6,041

Samoa

3,986

5,100

Vanuatu

1,848

2,162

Liberia

1,153

1,553

Palau

1,107

1,384

Micronesia

759

868

South Africa

2

653

Namibia

-

1,971

Congo

-

1,730

Tonga

-

31

Total

1,540,991

1,666,725

3.2.3.4.2Industry sector analysis

The table below analyses the Facility’s loan portfolio by industry sector of the borrower. Operations which are first disbursed to a financial intermediary before being disbursed to the final beneficiary are reported under global loans (in EUR’000):

| Industry sector of borrower | 31.12.2018 | 31.12.2017 |
| --- | --- | --- |
| Tertiary and other | 957,602 | 991,282 |
| Urban development, renovation and transport | 192,400 | 194,101 |
| Electricity, coal and others | 181,317 | 290,364 |
| Basic material and mining | 45,820 | 59,462 |
| Materials processing, construction | 33,144 | 2,194 |
| Roads and motorways | 32,043 | 40,960 |
| Airports and air traffic management systems | 29,182 | 30,882 |
| Telecommunications | 26,095 | 20,310 |
| Chemicals, plastics and pharmaceuticals | 20,436 | - |
| Food chain | 15,386 | 15,586 |
| Waste recuperation | 7,564 | 8,018 |
| Social infrastructure, education and health | 2 | 1,100 |
| Oil, gas and petroleum | - | 12,466 |
| Total | 1,540,991 | 1,666,725 |

Industry sector of borrower

31.12.2018

31.12.2017

Tertiary and other

957,602

991,282

Urban development, renovation and transport

192,400

194,101

Electricity, coal and others

181,317

290,364

Basic material and mining

45,820

59,462

Materials processing, construction

33,144

2,194

Roads and motorways

32,043

40,960

Airports and air traffic management systems

29,182

30,882

Telecommunications

26,095

20,310

Chemicals, plastics and pharmaceuticals

20,436

-

Food chain

15,386

15,586

Waste recuperation

7,564

8,018

Social infrastructure, education and health

2

1,100

Oil, gas and petroleum

-

12,466

Total

1,540,991

1,666,725

3.2.3.5Credit risk exposure for each internal risk rating

The Facility uses an internal rating methodology in line with the Internal ratings based approach under Basel III. The majority of the Facility’s counterparties have been assigned an internal rating according to this methodology. The table below shows a breakdown of the Facility’s loan portfolio by the better of the borrower’s or guarantor’s internal ratings, where available. In cases where an internal rating is not available, the external rating has been used for this analysis.

The table shows both the exposures signed (disbursed and undisbursed) and the risk-weighted exposures, based on an internal methodology that the Facility uses for limit management.

2018

| | 2018 |
| --- | --- |
| (in EUR '000) | 12-month ECL | Lifetime ECL not credit-impaired | Lifetime ECL credit-impaired | POCI | FVTPL | Total |
| Loans and advances at AC | | | | | | |
| Internal Rating 1 -  minimal credit risk | - | 90,875 | - | - | - | 90,875 |
| Internal Rating  2 - very low credit risk | 74,650 | - | - | - | - | 74,650 |
| Internal Rating  3 - low credit risk | 17,804 | - | - | - | - | 17,804 |
| Internal Rating  4 - moderate credit risk | 39,295 | 18,783 | - | - | - | 58,078 |
| Internal Rating  5 - financially weak counterpart | 165,551 | - | - | - | - | 165,551 |
| Internal Rating  6 - high credit risk | 834,194 | 94,749 | - | - | - | 928,943 |
| Internal Rating  7 - very high credit risk | 75,057 | 134,701 | - | - | 1,806 | 211,564 |
| Internal Rating  8 - counterpart in default | - | - | 185,273 | 3,588 | - | 188,861 |
| | | | | | | |
| Loss allowance | -22,023 | -27,342 | -143,092 | -1,794 | -1,084 | -195,335 |
| Carrying amount | 1,184,528 | 311,766 | 42,181 | 1,794 | 722 | 1,540,991 |
| | | | | | | |
| Loan commitments | | | | | | |
| Internal Rating  1 -  minimal credit risk | - | - | - | - | - | - |
| Internal Rating  2 - very low credit risk | 102,092 | - | - | - | - | 102,092 |
| Internal Rating  3 - low credit risk | 12,000 | - | - | - | - | 12,000 |
| Internal Rating  4 - moderate credit risk | 12,463 | - | - | - | - | 12,463 |
| Internal Rating  5 - financially weak counterpart | 230,455 | - | - | - | - | 230,455 |
| Internal Rating  6 - high credit risk | 567,573 | 22,467 | - | - | - | 590,040 |
| Internal Rating  7 - very high credit risk | 100,055 | 96,074 | - | - | - | 196,129 |
| Internal Rating  8 - counterpart in default | - | - | 16,932 | - | - | 16,932 |
| No internal rating* | 123,821 | - | - | - | - | 123,821 |
| | | | | | | |
| Loss allowance | -7,225 | -16,597 | - | - | - | -23,822 |
| Carrying amount | 1,141,234 | 101,944 | 16,932 | - | - | 1,260,110 |
| | | | | | | |
| (*) agency agreements for which at reporting date there is no underlying counterparts



  The Facility continually monitors events affecting its borrowers and guarantors, especially banks. In particular, the Facility is assessing on a case-by-case basis its contractual rights in case of rating deterioration and is seeking mitigating measures. It is also closely following the renewals of bank guarantees received for its loans to ensure that these are replaced or action is taken in a timely manner if need be. |

(in EUR '000)

12-month ECL

Lifetime ECL not credit-impaired

Lifetime ECL credit-impaired

POCI

FVTPL

Total

Loans and advances at AC

Internal Rating 1 -  minimal credit risk

-

90,875

-

-

-

90,875

Internal Rating  2 - very low credit risk

74,650

-

-

-

-

74,650

Internal Rating  3 - low credit risk

17,804

-

-

-

-

17,804

Internal Rating  4 - moderate credit risk

39,295

18,783

-

-

-

58,078

Internal Rating  5 - financially weak counterpart

165,551

-

-

-

-

165,551

Internal Rating  6 - high credit risk

834,194

94,749

-

-

-

928,943

Internal Rating  7 - very high credit risk

75,057

134,701

-

-

1,806

211,564

Internal Rating  8 - counterpart in default

-

-

185,273

3,588

-

188,861

Loss allowance

-22,023

-27,342

-143,092

-1,794

-1,084

-195,335

Carrying amount

1,184,528

311,766

42,181

1,794

722

1,540,991

Loan commitments

Internal Rating  1 -  minimal credit risk

-

-

-

-

-

-

Internal Rating  2 - very low credit risk

102,092

-

-

-

-

102,092

Internal Rating  3 - low credit risk

12,000

-

-

-

-

12,000

Internal Rating  4 - moderate credit risk

12,463

-

-

-

-

12,463

Internal Rating  5 - financially weak counterpart

230,455

-

-

-

-

230,455

Internal Rating  6 - high credit risk

567,573

22,467

-

-

-

590,040

Internal Rating  7 - very high credit risk

100,055

96,074

-

-

-

196,129

Internal Rating  8 - counterpart in default

-

-

16,932

-

-

16,932

No internal rating*

123,821

-

-

-

-

123,821

Loss allowance

-7,225

-16,597

-

-

-

-23,822

Carrying amount

1,141,234

101,944

16,932

-

-

1,260,110

(*) agency agreements for which at reporting date there is no underlying counterparts

The Facility continually monitors events affecting its borrowers and guarantors, especially banks. In particular, the Facility is assessing on a case-by-case basis its contractual rights in case of rating deterioration and is seeking mitigating measures. It is also closely following the renewals of bank guarantees received for its loans to ensure that these are replaced or action is taken in a timely manner if need be.

3.2.3.6Arrears on loans and impairments

Amounts in arrears are identified, monitored and reported according to the procedures defined into the bank wide “Finance Monitoring Guidelines and Procedures”. These procedures are in line with best banking practices and are adopted for all loans managed by the EIB.

The monitoring process is structured in order to make sure that (i) potential arrears are detected and reported to the services in charge with minimum delay; (ii) critical cases are promptly escalated to the right operational and decision level; (iii) regular reporting to EIB management and to Member States is provided on the overall status of arrears and on the recovery measures already taken or to be taken.

The arrears and impairments on loans can be analysed as follows (in EUR’000):

| | | Loans and advances | Loans and receivables |
| --- | --- | --- | --- |
| | | 31.12.2018 | 31.12.2017 |
| Carrying amount | | 1,540,991 | 1,666,725 |
| | | | |
| Lifetime ECL credit- impaired | | | |
| Gross amount | | 188,861 | 136,827 |
| Impairment- loss allowance | | -144,886 | -106,203 |
| Carrying amount of lifetime ECL credit-impaired | | 43,975 | 30,624 |
| | | | |
| | | | |
| Past due but not credit- impaired | | | |
| | | | |
| Past due comprises | | | |
| 0-30 days | | 804 | 1,227 |
| 30-60 days | | - | 77 |
| 60-90 days | | - | 31 |
| 90-180 days | | - | 18 |
| more 180 days | | 1 | 1 |
| Carrying amount past due but not credit- impaired | | 805 | 1,354 |
| | | | |
| Carrying amount neither past due nor credit- impaired | | 1,496,211 | 1,634,747 |
| | | | |
| Total carrying amount loans and advances | | 1,540,991 | 1,666,725 |

Loans and advances

Loans and receivables

31.12.2018

31.12.2017

Carrying amount

1,540,991

1,666,725

Lifetime ECL credit- impaired

Gross amount

188,861

136,827

Impairment- loss allowance

-144,886

-106,203

Carrying amount of lifetime ECL credit-impaired

43,975

30,624

Past due but not credit- impaired

Past due comprises

0-30 days

804

1,227

30-60 days

-

77

60-90 days

-

31

90-180 days

-

18

more 180 days

1

1

Carrying amount past due but not credit- impaired

805

1,354

Carrying amount neither past due nor credit- impaired

1,496,211

1,634,747

Total carrying amount loans and advances

1,540,991

1,666,725

3.2.3.7Loan renegotiation and forbearance

The Facility considers loans to be forborne if in response to adverse changes in the financial position of a borrower the Facility renegotiates the original terms of the contractual arrangements with this borrower affecting directly the future cash flows of the financial instrument, which may result in a loss to the Facility. However, the financial impact of restructuring activities is in general limited to impairment losses, if any, as financial neutrality is generally applied by the Facility and reflected in the renegotiated pricing conditions of the operations restructured.

In the normal course of business, the Loan Grading (LG) of the loans in question would have deteriorated and the loan would have been included in the Watch List before renegotiation. Once renegotiated, the Facility will continue to closely monitor these loans. If the renegotiated payment terms will not recover the original carrying amount of the asset, it will be considered as impaired. The corresponding impairment losses will be calculated based on the forecasted cash flows discounted at the original effective interest rate. The need for impairment for all loans whose LG deteriorated to E- is assessed regularly; all loans with a LG of F require impairment. Once the Loan Grading of a loan has improved sufficiently, it will be removed from the Watch List in line with the procedures of the Facility.

Forbearance measures and practices undertaken by the Bank’s restructuring team during the reporting period includes extension of maturity, deferral of capital only, deferral of capital and interest and capitalisation of arrears. Such forbearance measures do not lead to the derecognition of the underlying operation unless the impact of the contractual changes on the net present value of the loan at the date of restructuring is considered significant. If such newly recognised financial asset is credit-impaired, it would meet the definition of the POCI financial asset.

Exposures subject to changes in contractual terms which do not affect future cash flows, such as collateral or other security arrangements or the waiver of contractual rights under covenants, are not considered as forborne and hence those events are not considered as sufficient to indicate impairment on their own.

Operations subject to forbearance measures are reported as such in the table below:

| In EUR’000 | 31.12.2018 | 31.12.2017 |
| --- | --- | --- |
| Number of operations subject to forbearance practices | 33 | 27 |
| Carrying values | 280,720 | 136,973 |
| of which impaired | 9,506 | 112,423 |
| Impairment recognised | 86,334 | 107,256 |
| Interest income in respect of forborne operations | 13,465 | 8,418 |
| Exposures written off (following the termination/sale of the operation) | - | 9,395 |

In EUR’000

31.12.2018

31.12.2017

Number of operations subject to forbearance practices

33

27

Carrying values

280,720

136,973

of which impaired

9,506

112,423

Impairment recognised

86,334

107,256

Interest income in respect of forborne operations

13,465

8,418

Exposures written off (following the termination/sale of the operation)

-

9,395

Forbearance measures

| | | | Forbearance measures | | | |
| --- | --- | --- | --- | --- | --- | --- |
| In EUR’000 | 31.12.2017 | Extension of maturities | Deferral of capital only | Deferral of capital and interest | Other | Contractual repayment and termination (1) | 31.12.2018 |
| Banks | 30,347 | - | 290 | 5,654 | 765 | -9,464 | 27,592 |
| Corporates | 106,626 | 3,463 | - | 15,271 | 143,261 | -15,493 | 253,128 |
| Total | 136,973 | 3,463 | 290 | 20,925 | 144,026 | -24,957 | 280,720 |
| | | | | | | | |
| (1) Decreases are explained by repayments of capital occurred during the year on operations already considered as forborne as of 31 December 2018 and by termination of forborne measures during the year. |

In EUR’000

31.12.2017

Extension of maturities

Deferral of capital only

Deferral of capital and interest

Other

Contractual repayment and termination (1)

31.12.2018

Banks

30,347

-

290

5,654

765

-9,464

27,592

Corporates

106,626

3,463

-

15,271

143,261

-15,493

253,128

Total

136,973

3,463

290

20,925

144,026

-24,957

280,720

(1) Decreases are explained by repayments of capital occurred during the year on operations already considered as forborne as of 31 December 2018 and by termination of forborne measures during the year.

3.2.4Credit risk on cash and cash equivalents

Available funds are invested in accordance with the Facility’s schedule of contractual disbursement obligations. As of 31 December 2018 and 31 December 2017, investments were in the form of bank deposits, certificates of deposit and commercial papers.

The authorized entities have a rating similar to the short-term and long-term ratings required for the EIB’s own treasury placements. In case of different ratings being granted by more than one credit rating agency, the lowest rating governs. The maximum authorized limit for each authorised bank is currently EUR 50,000,000 (fifty million euro). An exception to this rule has been granted to Societe Generale where the Facility has its operational cash accounts. The short term credit limit for Societe Generale as at 31 December 2018 and 31 December 2017 amounts to EUR 110,000,000 (one hundred and ten million euro). The increased limit applies to the sum of the cash held at the operational cash accounts and the instruments issued by this counterpart and held by the treasury portfolio.

All investments have been done with authorised entities with a maximum tenor of three months from value date. All credit exposure limit breaches have been reported to the mandators. As at 31 December 2018 all term deposits, commercial papers and cash in hand held by the treasury portfolio of the Facility had a minimum rating of at least P-2 (Moody’s equivalent) at settlement day. As at 31 December 2017 all term deposits, commercial papers and cash in hand held by the treasury portfolio of the Facility had a minimum rating of P-1 (Moody’s equivalent) at settlement day.

The following table shows the situation of cash and cash equivalents including accrued interest (in EUR’000):

| Minimum short-term rating | Minimum long-term rating | 31.12.2018 | | 31.12.2017 | |
| --- | --- | --- | --- | --- | --- |
| (Moody’s term) | (Moody’s term) | | | | |
| P-1 | Aaa | 71,914 | 13% | 49,616 | 9% |
| P-1 | Aa3 | 49,972 | 9% | 89,971 | 16% |
| P-1 | A1 | 199,938 | 34% | 143,080 | 26% |
| P-1 | A2 | 201,899 | 35% | 266,434 | 49% |
| P-2 | A3 | 49,985 | 9% | - | 0% |
| Total | | 573,708 | 100% | 549,101 | 100% |

Minimum short-term rating

Minimum long-term rating

31.12.2018

31.12.2017

(Moody’s term)

(Moody’s term)

P-1

Aaa

71,914

13%

49,616

9%

P-1

Aa3

49,972

9%

89,971

16%

P-1

A1

199,938

34%

143,080

26%

P-1

A2

201,899

35%

266,434

49%

P-2

A3

49,985

9%

-

0%

Total

573,708

100%

549,101

100%

3.2.5Credit risk on derivatives

3.2.5.1Credit risk policy of derivatives

The credit risk with respect to derivatives is represented by the loss which a given party would incur where the other counterparty to the deal would be unable to honour its contractual obligations. The credit risk associated with derivatives varies according to a number of factors (such as interest and exchange rates) and generally corresponds to only a small portion of their notional value.

In the normal course of its activity, the Facility may enter into swap contracts with a view to hedge specific lending operations or into currency forward contracts, with a view to hedge its currency positions denominated in actively traded currencies other than the Euro. All the swaps are executed by the European Investment Bank with an external counterpart. The swaps are arranged by the same Master Swap Agreements and Credit Support Annexes signed between the European Investment Bank and its external counterparts.

3.2.5.2Credit risk measurement for derivatives

All the swaps executed by the European Investment Bank that are related to the Facility are treated within the same contractual framework and methodologies applied for the derivatives negotiated by the European Investment Bank for its own purposes. In particular, eligibility of swap counterparts is determined by the European Investment Bank based on the same eligibility conditions applied for its general swap purposes.

The European Investment Bank measures the credit risk exposure related to swaps and derivatives transactions using the Net Market Exposure (“NME”) and Potential Future Exposure (“PFE”) approach for reporting and limit monitoring. The NME and the PFE fully include the derivatives related to the Investment Facility.

·The following table shows the maturities of cross currency interest rate swaps, sub-divided according to their notional amount and fair value:

Swap contracts at 31.12.2018

| Swap contracts at 31.12.2018 | less than | 1 year | 5 years | more than | Total 2018 |
| --- | --- | --- | --- | --- | --- |
| In EUR’000 | 1 year | to 5 years | to 10 years | to 10 years | |
| Notional amount | - | 5,245 | - | - | 5,245 |
| Fair Value (i.e. net discounted value) | - | -325 | - | - | -325 |
| | | | | | |
| | | | | | |
| Swap contracts at 31.12.2017 | less than | 1 year | 5 years | more than | Total 2017 |
| In EUR’000 | 1 year | to 5 years | to 10 years | to 10 years | |
| Notional amount | - | 8,098 | - | - | 8,098 |
| Fair Value (i.e. net discounted value) | - | -955 | - | - | -955 |

less than

1 year

5 years

more than

Total 2018

In EUR’000

1 year

to 5 years

to 10 years

to 10 years

Notional amount

-

5,245

-

-

5,245

Fair Value (i.e. net discounted value)

-

-325

-

-

-325

Swap contracts at 31.12.2017

less than

1 year

5 years

more than

Total 2017

In EUR’000

1 year

to 5 years

to 10 years

to 10 years

Notional amount

-

8,098

-

-

8,098

Fair Value (i.e. net discounted value)

-

-955

-

-

-955

·The Facility enters into foreign exchange short term currency swaps (“FX swaps”) contracts in order to hedge currency risk on loan disbursements in currencies other than EUR. FX swaps have a maturity of maximum three months and are regularly rolled-over. The notional amount of FX swaps stood at EUR 1,460.6 million at 31 December 2018 against EUR 1,500.0 million at 31 December 2017. The fair value of FX swaps amounts to EUR 1.1 million at 31 December 2018 against EUR 12.0 million at 31 December 2017.

·The Facility enters into interest rate swap contracts in order to hedge the interest rate risk on loans disbursed. As at 31 December 2018 there are two interest rate swaps outstanding with a notional amount of EUR 28.5 million (2017: EUR 31.7 million) and a fair value of EUR 0.7 million (2017: EUR 0.3 million).

3.2.6Credit risk on treasury financial assets

The following table shows the situation of the treasury portfolio entirely composed of commercial papers issued by sub-sovereigns, banks and non-bank entities with remaining maturities of up to three months. EU Member States, their agencies, banks and non-bank entities are eligible issuers. The maximum authorized limit for each authorised issuer is EUR 50,000,000 (fifty million euro). Investments in medium and long-term bonds could also be eligible, according to the investment guidelines and depending on liquidity requirements:

| Minimum short-term rating | Minimum long-term rating | 31.12.2018 | 31.12.2017 |
| --- | --- | --- | --- |
| (Moody’s term) | (Moody’s term) | | |
| P-1 | Aa2 | 80,041 | 24% | - | 0% |
| P-1 | Aa3 | 95,055 | 29% | - | 0% |
| P-1 | A1 | 15,005 | 4% | - | 0% |
| P-1 | A2 | 45 008 | 13% | - | 0% |
| P-2 | A2 | 50,015 | 15% | - | 0% |
| P-2 | A3 | 50,016 | 15% | - | 0% |
| P-2 | Baa2 | - | 0% | 94,353 | 65% |
| NP | Ba1 | - | 0% | 50,029 | 35% |
| Total | | 335,140 | 100% | 144,382 | 100% |

Minimum short-term rating

Minimum long-term rating

31.12.2018

31.12.2017

(Moody’s term)

(Moody’s term)

P-1

Aa2

80,041

24%

-

0%

P-1

Aa3

95,055

29%

-

0%

P-1

A1

15,005

4%

-

0%

P-1

A2

45 008

13%

-

0%

P-2

A2

50,015

15%

-

0%

P-2

A3

50,016

15%

-

0%

P-2

Baa2

-

0%

94,353

65%

NP

Ba1

-

0%

50,029

35%

Total

335,140

100%

144,382

100%

3.3Liquidity risk

Liquidity risk refers to an enitity’s ability to fund increases in assets and meet obligations as they come due, without incurring unacceptable losses. It can be split into funding liquidity risk and market liquidity risk. Funding liquidity risk is the risk that an entity will not be able to meet efficiently both expected and unexpected current and future cash flow needs without affecting its daily operations or its financial condition. Market liquidity risk is the risk that an entity cannot easily offset or eliminate a position at the market price because of inadequate market depth or market disruption.

3.3.1 
     Liquidity risk management

The Facility is primarily funded by annual contributions from Member States as well as by reflows stemming from the Facility’s operations. The Facility manages its funding liquidity risk primarily by planning of its net liquidity needs and the required Member States annual contributions.

In order to calculate Member States’ annual contributions, disbursement patterns of the existing and pipelined portfolio is analysed and followed up throughout the year. Special events, such as early reimbursements, sales of shares or default cases are taken into account to correct annual liquidity requirements.

To further minimize the liquidity risk, the Facility maintains a liquidity reserve sufficient to cover at any point in time forecasted cash disbursements, as communicated periodically by EIB’s Lending Department. Funds are invested on the money market and bond markets in the form of interbank deposits and other short term financial instruments by taking into consideration the Facility’s cash disbursement obligations. The Facility’s liquid assets are managed by the Bank’s Treasury Department with a view to maintain appropriate liquidity to enable the Facility to meet its obligations.

In accordance with the principle of segregation of duties between the Front and Back Office, settlement operations related to the investment of these assets are under the responsibility of the EIB’s Planning and Settlement of Operations Department. Furthermore, the authorisation of counterparts and limits for treasury investments, as well as the monitoring of such limits, are the responsibility of the Bank’s Risk Management Directorate.

3.3.2 
     Liquidity risk measurement

The tables in this section analyse the financial liabilities of the Facility by maturity on the basis of the period remaining between the balance sheet date and the contractual maturity date (based on undiscounted cash flows).

In terms of non-derivative financial liabilities, the Facility holds commitments in form of un-disbursed portions of the credit under signed loan agreements, of un-disbursed portions of signed capital subscription/investment agreements, of loan guarantees granted, or of committed interest subsidies and TA.

Loans under the IF have a disbursement deadline. However, disbursements are made at times and in amounts reflecting the progress of underlying investment projects. Moreover, the IF’s loans are transactions performed in a relatively volatile operating environment, hence their disbursement schedule is subject to a significant degree of uncertainty.

Capital investments become due when and as soon as equity fund managers issue valid calls for capital, reflecting the progress in their investment activities. The drawdown period is usually of 3 years, with frequent prolongation by one or two years. Some disbursement commitments usually survive the end of the drawdown period until full disposal of the fund’s underlying investments, as the fund’s liquidity may be insufficient from time to time to meet payment obligations arising in respect of fees or other expenses.

Guarantees are not subject to specific disbursement commitments unless a guarantee is called. The amount of guarantees outstanding is reduced alongside the repayment schedule of guaranteed loans.

Committed interest subsidies’ cash outflows occur in the case of subsidized loans financed by the Bank’s own resources. Therefore, reported outflows represent only commitments related to these loans rather than the total amount of committed un-disbursed interest subsidies. As in the case of loans, their disbursement schedule is uncertain.

Committed TA “gross nominal outflow” in the “Maturity profile of non-derivative financial liabilities” table refers to the total un-disbursed portion of signed TA contracts. The disbursement time pattern is subject to a significant degree of uncertainty. Cash outflows classified in the “3 months or less” bucket represent the amount of outstanding invoices received by the reporting date.

Commitments for non-derivative financial liabilities for which there is no defined contractual maturity date are classified under “Maturity Undefined”. Commitments, for which there is a recorded cash disbursement request at the reporting date, are classified under the relevant time bucket.

In terms of derivative financial liabilities, the maturity profile represents the contractual undiscounted gross cash flows of swap contracts including cross currency swaps (CCS), cross currency interest rate swaps (CCIRS), short term currency swaps and interest rate swaps.

| Maturity profile of non-derivative financial liabilities | 3 months or less | More than 3 months to 1 year | More than 1 year to 5 years | More than 5 years | Maturity Undefined | Gross nominal outflow |
| --- | --- | --- | --- | --- | --- | --- |
| In EUR’000 as at 31.12.2018 | | | | | | |
| Outflows for committed but un-disbursed loans | 7,854 | - | - | - | 1,276,077 | 1,283,931 |
| Outflows for committed investment funds and share subscription | 2,023 | - | - | - | 345,144 | 347,167 |
| Others (signed non-issued guarantees, issued guarantees) | - | - | - | - | 1,556,468 | 1,556,468 |
| Outflows for committed interest subsidies | - | - | - | - | 360,655 | 360,655 |
| Outflows for committed TA | 2,373 | - | - | - | 24,082 | 26,455 |
| Total | 12,250 | - | - | - | 3,562,426 | 3,574,676 |
| | | | | | | |
| Maturity profile of non-derivative financial liabilities | 3 months or less | More than 3 months to 1 year | More than 1 year to 5 years | More than 5 years | Maturity Undefined | Gross nominal outflow |
| In EUR’000 as at 31.12.2017 | | | | | | |
| Outflows for committed but un-disbursed loans | 5,543 | - | - | - | 864,440 | 869,983 |
| Outflows for committed investment funds and share subscription | 5,039 | - | - | - | 316,656 | 321,695 |
| Others (signed non-issued guarantees, issued guarantees) | - | - | - | - | 82,251 | 82,251 |
| Outflows for committed interest subsidies | 1,245 | - | - | - | 286,066 | 287,311 |
| Outflows for committed TA | 1,931 | - | - | - | 24,720 | 26,651 |
| Total | 13,758 | - | - | - | 1,574,133 | 1,587,891 |
| | | | | | | |
| | | | | | | |

Maturity profile of non-derivative financial liabilities

3 months or less

More than 3 months to 1 year

More than 1 year to 5 years

More than 5 years

Maturity Undefined

Gross nominal outflow

In EUR’000 as at 31.12.2018

Outflows for committed but un-disbursed loans

7,854

-

-

-

1,276,077

1,283,931

Outflows for committed investment funds and share subscription

2,023

-

-

-

345,144

347,167

Others (signed non-issued guarantees, issued guarantees)

-

-

-

-

1,556,468

1,556,468

Outflows for committed interest subsidies

-

-

-

-

360,655

360,655

Outflows for committed TA

2,373

-

-

-

24,082

26,455

Total

12,250

-

-

-

3,562,426

3,574,676

Maturity profile of non-derivative financial liabilities

3 months or less

More than 3 months to 1 year

More than 1 year to 5 years

More than 5 years

Maturity Undefined

Gross nominal outflow

In EUR’000 as at 31.12.2017

Outflows for committed but un-disbursed loans

5,543

-

-

-

864,440

869,983

Outflows for committed investment funds and share subscription

5,039

-

-

-

316,656

321,695

Others (signed non-issued guarantees, issued guarantees)

-

-

-

-

82,251

82,251

Outflows for committed interest subsidies

1,245

-

-

-

286,066

287,311

Outflows for committed TA

1,931

-

-

-

24,720

26,651

Total

13,758

-

-

-

1,574,133

1,587,891

Maturity profile of derivative financial liabilities

| Maturity profile of derivative financial liabilities | 3 months or less | More than 3 months to 1 year | More than 1 year to 5 years | More than 5 years | Gross nominal inflow/outflow |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| In EUR’000 as at 31.12.2018 | | | | | |
| CCS and CCIRS – Inflows | 5 | 3,281 | 1,816 | - | 5,102 |
| CCS and CCIRS – Outflows | - | -4,081 | -1,770 | - | -5,851 |
| Short term currency swaps – Inflows | 1,460,608 | - | - | - | 1,460,608 |
| Short term currency swaps – Outflows | -1,465,498 | - | - | - | -1,465,498 |
| Interest Rate Swaps – Inflows | 397 | 1,171 | 3,473 | 204 | 5,245 |
| Interest Rate Swaps - Outflows | - | -1,340 | -3,030 | -175 | -4,545 |
| Total | -4,488 | -969 | 489 | 29 | -4,939 |
| | | | | | |
| Maturity profile of derivative financial liabilities | 3 months or less | More than 3 months to 1 year | More than 1 year to 5 years | More than 5 years | Gross nominal inflow/outflow |
| | | | | | |
| In EUR’000 as at 31.12.2017 | | | | | |
| CCS and CCIRS – Inflows | 7 | 3,144 | 5,122 | - | 8,273 |
| CCS and CCIRS – Outflows | - | -4,051 | -5,959 | - | -10,010 |
| Short term currency swaps – Inflows | 1,500,000 | - | - | - | 1,500,000 |
| Short term currency swaps – Outflows | -1,493,987 | - | - | - | -1,493,987 |
| Interest Rate Swaps – Inflows | 355 | 1,102 | 4,138 | 625 | 6,219 |
| Interest Rate Swaps - Outflows | - | -1,502 | -3,782 | -556 | -5,840 |
| Total | 6,375 | -1,307 | -482 | 69 | 4,655 |

3 months or less

More than 3 months to 1 year

More than 1 year to 5 years

More than 5 years

Gross nominal inflow/outflow

In EUR’000 as at 31.12.2018

CCS and CCIRS – Inflows

5

3,281

1,816

-

5,102

CCS and CCIRS – Outflows

-

-4,081

-1,770

-

-5,851

Short term currency swaps – Inflows

1,460,608

-

-

-

1,460,608

Short term currency swaps – Outflows

-1,465,498

-

-

-

-1,465,498

Interest Rate Swaps – Inflows

397

1,171

3,473

204

5,245

Interest Rate Swaps - Outflows

-

-1,340

-3,030

-175

-4,545

Total

-4,488

-969

489

29

-4,939

Maturity profile of derivative financial liabilities

3 months or less

More than 3 months to 1 year

More than 1 year to 5 years

More than 5 years

Gross nominal inflow/outflow

In EUR’000 as at 31.12.2017

CCS and CCIRS – Inflows

7

3,144

5,122

-

8,273

CCS and CCIRS – Outflows

-

-4,051

-5,959

-

-10,010

Short term currency swaps – Inflows

1,500,000

-

-

-

1,500,000

Short term currency swaps – Outflows

-1,493,987

-

-

-

-1,493,987

Interest Rate Swaps – Inflows

355

1,102

4,138

625

6,219

Interest Rate Swaps - Outflows

-

-1,502

-3,782

-556

-5,840

Total

6,375

-1,307

-482

69

4,655

3.3.3 
     Long term financial assets and liabilities

The following table sets out the carrying amounts of non-derivative financial assets and financial liabilities expected to be recovered or settled more than 12 months after the reporting date.

| In EUR’000 | 31.12.2018 | 31.12.2017 |
| --- | --- | --- |
| | | |
| Financial assets: | | |
| Loans and advances | 1,666,232 | 1,608,488 |
| Shares and other variable yield securities | 567,292 | 497,539 |
| Other assets | 171 | 318 |
| Total | 2,233,695 | 2,106,345 |
| | | |
| Financial liabilities: | | |
| Provisions for guarantees issued | 793 | 549 |
| Amount owed to third parties | 93,641 | 109,004 |
| Provisions for loan commitments | 23,822 | - |
| Total | 118,256 | 109,553 |

In EUR’000

31.12.2018

31.12.2017

Financial assets:

Loans and advances

1,666,232

1,608,488

Shares and other variable yield securities

567,292

497,539

Other assets

171

318

Total

2,233,695

2,106,345

Financial liabilities:

Provisions for guarantees issued

793

549

Amount owed to third parties

93,641

109,004

Provisions for loan commitments

23,822

-

Total

118,256

109,553

3.4Market risk

Market risk represents the risk that changes in market prices and rates, such as interest rates, equity prices and foreign exchange rates will affect an entity’s income or the value of its holdings in financial instruments.

3.4.1 
     Interest rate risk

Interest rate risk arises from the volatility in the economic value of, or in the income derived from, interest rate bearing positions due to adverse movements in interest rates.

The Facility is not directly impacted by the fluctuation of its economic value or to pricing mismatches between different assets, liabilities and hedge instruments because (i) it does not have any direct borrowing costs or interest rate bearing liabilities and (ii) it accepts the impact of interest rate fluctuations on the revenues from its investments.

The Facility measures the sensitivity of its loan portfolio and micro hedging swaps to interest rate fluctuations via a Basis Point Value (BPV) calculation.

The BPV measures the gain or loss in the net present value of the relevant portfolio, due to a 1 basis point (0.01%) increase in interest rates tenors ranging within a specified time bucket “money market – up to one year”, “very short – 2 to 3 years”, “short – 4 to 6 years”, “medium – 7 to 11 years”, “long – 12 to 20 years” or “extra-long – more than 21 years”.

To determine the net present value (NPV) of the loans’ cash flows denominated in EUR, the Facility uses the EIB’s EUR base funding curve (EUR swap curve adjusted with EIB’s global funding spread). The EIB’s USD funding curve is used for the calculation of the NPV of loan’s cash flows denominated in USD. The NPV of the loans’ cash flows denominated in currencies for which a reliable and sufficiently complete discount curve is not available, is determined by using EIB’s EUR base funding curve as a proxy.

To calculate the net present value of the micro hedging swaps, the facility uses the EUR swap curve for cash flows denominated in EUR and the USD swap curve for cash flows denominated in USD.

As shown in the following table the net present value of the loan portfolio including related micro-hedging swaps as at 31 December 2018 would decrease by EUR 483k (as at 31 December 2017: decrease by EUR 488k) if all relevant interest rates curves are simultaneously shifted upwards in parallel by 1 basis point.

| Basis point value | Money | Very Short | Short | Medium | Long | Extra Long | Total |
| --- | --- | --- | --- | --- | --- | --- | --- |
| In EUR’000 | Market | | | | | | |
| As at 31.12.2018 | 1 year | 2 to 3 years | 4 to 6 years | 7 to 11 years | 12 to 20 years | 21 years | |
| Total sensitivity of loans and micro hedging swaps | -38 | -94 | -168 | -154 | -29 | - | -483 |
| | | | | | | | |
| Basis point value | Money | Very Short | Short | Medium | Long | Extra Long | Total |
| In EUR’000 | Market | | | | | | |
| As at 31.12.2017 | 1 year | 2 to 3 years | 4 to 6 years | 7 to 11 years | 12 to 20 years | 21 years | |
| Total sensitivity of loans and micro hedging swaps | -49 | -96 | -159 | -168 | -16 | - | -488 |

Basis point value

Money

Very Short

Short

Medium

Long

Extra Long

Total

In EUR’000

Market

As at 31.12.2018

1 year

2 to 3 years

4 to 6 years

7 to 11 years

12 to 20 years

21 years

Total sensitivity of loans and micro hedging swaps

-38

-94

-168

-154

-29

-

-483

Basis point value

Money

Very Short

Short

Medium

Long

Extra Long

Total

In EUR’000

Market

As at 31.12.2017

1 year

2 to 3 years

4 to 6 years

7 to 11 years

12 to 20 years

21 years

Total sensitivity of loans and micro hedging swaps

-49

-96

-159

-168

-16

-

-488

3.4.2Foreign exchange risk

Foreign exchange (“FX”) risk for the IF is the risk of loss in earnings or economic value due to adverse movements of FX rates.

Given a reference accounting currency (EUR for the IF), the Facility is exposed to FX risk whenever there is a mismatch between assets and liabilities denominated in a non-reference accounting currency. FX risk also includes the effect of changes in the value of future cash flows denominated in non-reference accounting currency, e.g. interest and dividend payments, due to fluctuations in exchange rates.

3.4.2.1Foreign exchange risk and treasury assets

The IF’s treasury assets are denominated either in EUR or USD.

FX risk is hedged by means of FX cross currency spot or forward transactions, FX swaps or cross-currency swaps. The EIB’s Treasury Department can, where deemed necessary and appropriate, use any other instrument, in line with the Bank’s policy, that provide protection against market risks incurred in connection with the IF’s financial activities.

3.4.2.2Foreign exchange risk and operations financed or guaranteed by the IF

Member States’ IF contributions are received in EUR. The operations financed or guaranteed by the IF as well as interest subsidies can be denominated in EUR, USD or any other authorized currency.

A foreign exchange risk exposure (against the EUR reference currency) arises whenever transactions denominated in currencies other than the EUR are left un-hedged. The IF’s foreign exchange risk hedging guidelines are set out below.

3.4.2.2.1.Hedging of operations denominated in USD

The FX risk generated by IF operations denominated in USD shall be covered on an aggregated basis via the use of USD/EUR FX swaps, rolled over and adjusted in terms of amount on a periodic basis. The use of FX swaps serves a dual purpose. On one side the necessary liquidity for new disbursements (loans and equity) is generated and on the other side an FX macro hedging is maintained.

At the beginning of each period, the cash flows to be received or paid in USD during the next period shall be estimated on the basis of planned or expected reflows/disbursements. Subsequently, the maturing FX swaps shall be rolled over, their amount being adjusted to cover at least the USD liquidity needs projected over the next period.

-On a monthly basis, the USD FX position shall be hedged, if exceeding the relevant limits, by means of a spot or forward operation.

-Within a roll-over period, unexpected USD liquidity deficits shall be covered by means of ad hoc FX swap operations while liquidity surpluses shall either be invested in treasury assets or converted into EUR if occurred from an increase of the FX position.

3.4.2.2.2.Hedging of operations denominated in currencies other than EUR or USD

-IF operations denominated in currencies other than EUR and USD shall be hedged through cross-currency swap contracts with the same financial profile as the underlying Loan, provided that a swap market is operational.

-IF has operations denominated in currencies for which hedging possibilities are either not efficiently available or available at a high cost. These operations are denominated in local currencies (LCs) but settled in EUR or USD. IF’s financial risk framework, which was approved by the IF Committee on 22 January 2015, offers the possibility to hedge the FX exposure in LCs that exhibit a significant positive correlation with the USD synthetically via USD-denominated derivatives. The LCs hedged synthetically with USD denominated derivatives are reported in the table in section 3.4.2.2.3 below under item “Local currencies (under synthetic hedge)”, while the LCs not hedged synthetically with the USD are reported in the same table under item “Local currencies (not under synthetic hedge)”.

3.4.2.2.3Foreign exchange position (in EUR’000)

The tables of this note show the Facility’s foreign exchange position.

The foreign exchange position is presented in the tables below in accordance with the IF’s Risk Policies (as described in the IF’s financial risk framework). The FX position as per Risk Policies is based on accounting figures and defined as the balance between selected assets and liabilities. The assets and liabilities defined in the FX position as per Risk Policies are selected so as to ensure that the earnings will only be converted into the reporting currency (EUR) when received.

Policy applicable before 1 January 2018

The unrealised gains/losses and impairment on available-for sale financial assets (IAS 39) are included in the FX position as per Risk Policies, as well as impairments on loans and receivables. Derivatives included in the FX position as per Risk Policies are considered at their nominal value instead of their fair value, in order to be aligned with the retained value of the assets, considered also at their nominal value adjusted by the impairment for loans.

Policy applicable after 1 January 2018

The fair value change on shares and other variable yield securities are included in the FX position as per Risk Policies, as well as impairments on loans and advances. Derivatives included in the FX position as per Risk Policies are considered at their nominal value instead of their fair value, in order to be aligned with the retained value of the assets, considered also at their nominal value adjusted by the impairment for loans.

In the tables below is the remaining part of the assets and liabilities, which includes mainly interest accruals on loans, derivatives and subsidies, is presented as “FX position excluded from Risk Policies”.

| At 31 December 2018 | Assets and liabilities | | Commitments and contingent liabilities |
| --- | --- | --- | --- |
| Currencies | FX position as per Risk Policies | FX position excluded from Risk Policies | Balance sheet FX position | | |
| USD | -157,177 | -52,111 | -209,288 | | 600,271 |
| Local currencies


  (under synthetic hedge)* | | | | | |
| KES | 35,806 | 252 | 36,058 | | - |
| TZS | 71,195 | 814 | 72,009 | | - |
| DOP | 35,311 | 821 | 36,132 | | - |
| UGX | 45,731 | 769 | 46,500 | | - |
| RWF | 24,176 | 17 | 24,193 | | - |
| Local currencies


  (not under synthetic hedge)* | | | | | |
| HTG, MUR, MZN, XOF, ZMW, BWP, JMD, NGN, ZAR | 74,265 | -432 | 73,833 | | - |
| Total non-EUR currencies | 129,307 | -49,870 | 79,437 | | 600,271 |
| EUR | - | 2,834,560 | 2,834,560 | | 3,044,623 |
| Total EUR and non-EUR | 129,307 | 2,784,690 | 2,913,997 | | 3,644,894 |
| |
| * See section 3.4.2.2.2 for explanations on synthetic hedge. |

At 31 December 2018

Assets and liabilities

Commitments and contingent liabilities

Currencies

FX position as per Risk Policies

FX position excluded from Risk Policies

Balance sheet FX position

USD

-157,177

-52,111

-209,288

600,271

Local currencies

(under synthetic hedge)*

KES

35,806

252

36,058

-

TZS

71,195

814

72,009

-

DOP

35,311

821

36,132

-

UGX

45,731

769

46,500

-

RWF

24,176

17

24,193

-

Local currencies

(not under synthetic hedge)*

HTG, MUR, MZN, XOF, ZMW, BWP, JMD, NGN, ZAR

74,265

-432

73,833

-

Total non-EUR currencies

129,307

-49,870

79,437

600,271

EUR

-

2,834,560

2,834,560

3,044,623

Total EUR and non-EUR

129,307

2,784,690

2,913,997

3,644,894

- See section 3.4.2.2.2 for explanations on synthetic hedge.

| At 31 December 2017 | Assets and liabilities | | Commitments and contingent liabilities |
| --- | --- | --- | --- |
| Currencies | FX position as per Risk Policies | FX position excluded from Risk Policies | Balance sheet FX position | | |
| USD | -206,535 | 6,087 | -200,448 | | 377,994 |
| Local currencies


  (under synthetic hedge)* | | | | | |
| KES | 88,532 | 2,854 | 91,386 | | - |
| TZS | 98,722 | 1,820 | 100,542 | | - |
| DOP | 37,785 | 1,494 | 39,279 | | - |
| UGX | 52,653 | 1,505 | 54,158 | | - |
| RWF | 32,714 | 354 | 33,068 | | - |
| Local currencies


  (not under synthetic hedge)* | | | | | |
| HTG, MUR, MZN, XOF, ZMW, BWP | 30,802 | 183 | 30,985 | | - |
| Total non-EUR currencies | 134,673 | 14,297 | 148,970 | | 377,994 |
| EUR | - | 2,688,497 | 2,688,497 | | 1,278,511 |
| Total EUR and non-EUR | 134,673 | 2,702,794 | 2,837,467 | | 1,656,505 |

At 31 December 2017

Assets and liabilities

Commitments and contingent liabilities

Currencies

FX position as per Risk Policies

FX position excluded from Risk Policies

Balance sheet FX position

USD

-206,535

6,087

-200,448

377,994

Local currencies

(under synthetic hedge)*

KES

88,532

2,854

91,386

-

TZS

98,722

1,820

100,542

-

DOP

37,785

1,494

39,279

-

UGX

52,653

1,505

54,158

-

RWF

32,714

354

33,068

-

Local currencies

(not under synthetic hedge)*

HTG, MUR, MZN, XOF, ZMW, BWP

30,802

183

30,985

-

Total non-EUR currencies

134,673

14,297

148,970

377,994

EUR

-

2,688,497

2,688,497

1,278,511

Total EUR and non-EUR

134,673

2,702,794

2,837,467

1,656,505

3.4.2.3Foreign exchange sensitivity analysis

As at 31 December 2018 a 10 percent depreciation of EUR versus all non EUR currencies would result in an increase of the contributors’ resources amounting to EUR 8.8 million (31 December 2017: EUR 16.6 million). A 10 percent appreciation of the EUR versus all non EUR currencies would result in a decrease of the contributors’ resources amounting to EUR 7.2 million (31 December 2017: EUR 13.6 million).

3.4.2.4Conversion rates

The following conversion rates were used for establishing the balance sheet at 31 December 2018 and 31 December 2017:

| | 31 December 2018 | 31 December 2017 |
| --- | --- | --- |
| Non-EU currencies | | |
| Botswana Pula (BWP) | 12.2038 | 11.7512 |
| Dominican Republic Pesos (DOP) | 57.4037 | 57.1465 |
| Fiji Dollars (FJD) | 2.4104 | 2.4186 |
| Haitian Gourde (HTG) | 86.92 | 75.69 |
| Jamaican Dollar (JMD) | 144.081 | 148.7032 |
| Kenya Shillings (KES) | 116.24 | 123.7 |
| Mauritania Ouguiyas (MRO)* | - | 422.36 |
| Mauritania Ouguiyas (MRU)* | 41.166 | - |
| Mauritius Rupees (MUR) | 39.05 | 40.07 |
| Mozambican Metical (MZN) | 70.14 | 70.09 |
| Nigerian Naira (NGN) | 351.05 | 367.44 |
| Rwanda Francs (RWF) | 1020.1 | 1003.37 |
| Tanzania Shillings (TZS) | 2624.33 | 2681.78 |
| Uganda Shillings (UGX) | 4239 | 4357 |
| United States Dollars (USD) | 1.145 | 1.1993 |
| Franc CFA Francs (XAF/XOF) | 655.957 | 655.957 |
| South Africa Rand (ZAR) | 16.4594 | 14.8054 |
| Zambia Kvacha (ZMW) | 13.6077 | 11.965 |
| (*) The MRU was introduced as at 1 January 2018, replacing the old MRO at a rate of 1 MRU = 10 MRO |

31 December 2018

31 December 2017

Non-EU currencies

Botswana Pula (BWP)

12.2038

11.7512

Dominican Republic Pesos (DOP)

57.4037

57.1465

Fiji Dollars (FJD)

2.4104

2.4186

Haitian Gourde (HTG)

86.92

75.69

Jamaican Dollar (JMD)

144.081

148.7032

Kenya Shillings (KES)

116.24

123.7

Mauritania Ouguiyas (MRO)*

-

422.36

Mauritania Ouguiyas (MRU)*

41.166

-

Mauritius Rupees (MUR)

39.05

40.07

Mozambican Metical (MZN)

70.14

70.09

Nigerian Naira (NGN)

351.05

367.44

Rwanda Francs (RWF)

1020.1

1003.37

Tanzania Shillings (TZS)

2624.33

2681.78

Uganda Shillings (UGX)

4239

4357

United States Dollars (USD)

1.145

1.1993

Franc CFA Francs (XAF/XOF)

655.957

655.957

South Africa Rand (ZAR)

16.4594

14.8054

Zambia Kvacha (ZMW)

13.6077

11.965

(*) The MRU was introduced as at 1 January 2018, replacing the old MRO at a rate of 1 MRU = 10 MRO

3.4.3Equity price risk

Equity price risk refers to the risk that the fair values of equity investments decrease as the result of changes in the levels of equity prices and/or the value of equity investments.

The IF is exposed to equity price risk via its investments in direct equity and venture capital funds.

The value of non-listed equity positions is not readily available for the purpose of monitoring and control on a continuous basis. For such positions, the best indications available include prices derived from any relevant valuation techniques.

The effects on the Facility’s contributors’ resources (as a result of a change in the fair value of the equity instruments portfolio) due to a +/- 10% change in the value of individual direct equity and venture capital investments, with all other variables held constant, is EUR 56.7 million respectively EUR -56.7 million as at 31 December 2018 (EUR 49.8 million respectively EUR -49.8 million as at 31 December 2017).

4Fair values of financial instruments

4.1Accounting classifications and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. These do not include fair value information for financial assets and financial liabilities not carried at fair value if the carrying amount is a reasonable approximation of fair value.

| At 31 December 2018 | Carrying amount | | Fair value |
| --- | --- | --- | --- |
| In EUR’000 | Held for trading | Shares and other variable yield securities | Cash, loans and advances | Treasury financial assets | Other financial liabilities | Total | | Level 1 | Level 2 | Level 3 | Total |
| Financial assets mandatorily measured at FVTPL | | | | | | | | | | | |
| Derivative financial instruments | 9,873 | - | - | - | - | 9,873 | | - | 9,873 | - | 9,873 |
| Venture Capital Fund | - | 467,152 | - | - | - | 467,152 | | - | - | 467,152 | 467,152 |
| Direct Equity Investment | - | 100,140 | - | - | - | 100,140 | | 16,675 | - | 83,465 | 100,140 |
| Loans and advances | - | - | 720 | - | - | 720 | | - | 720 | - | 720 |
| Total | 9,873 | 567,292 | 720 | - | - | 577,885 | | 16,675 | 10,593 | 550,617 | 577,885 |
| Financial assets at AC | | | | | | | | | | | |
| Cash and cash equivalents | - | - | 573,708 | - | - | 573,708 | | - | - | - | - |
| Loans and advances | - | - | 1,540,271 | - | - | 1,540,271 | | - | 1,760,576 | - | 1,760,576 |
| Amounts receivable from contributors | - | - | 100,000 | - | - | 100,000 | | - | - | - | - |
| Treasury financial assets | - | - | - | 335,140 | - | 335,140 | | 191,475 | 145,061 | - | 336,536 |
| Other assets | - | - | 171 | - | - | 171 | | - | - | - | - |
| Total | - | - | 2,214,150 | 335,140 | - | 2,549,290 | | 191,475 | 1,905,637 | - | 2,097,112 |
| Total financial assets | 9,873 | 567,292 | 2,214,870 | 335,140 | - | 3,127,175 | | | | | |
| | | | | | | | | | | | |
| Financial liabilities mandatorily measured at FVTPL | | | | | | | | | | | |
| Derivative financial instruments | -8,493 | - | - | - | - | -8,493 | | - | -8,493 | - | -8,493 |
| Total | -8,493 | - | - | - | - | -8,493 | | - | -8,493 | - | -8,493 |
| Financial liabilities at AC: | | | | | | | | | | | |
| Provisions for guarantees issued | - | - | - | - | -793 | -793 | | | | | |
| Provisions for loan commitments | - | - | - | - | -23,822 | -23,822 | | | | | |
| Amounts owed to third parties | - | - | - | - | -143,813 | -143,813 | | | | | |
| Other liabilities | - | - | - | - | -2,493 | -2,493 | | | | | |
| Total | - | - | - | - | -170,921 | -170,921 | | | | | |
| Total financial liabilities | -8,493 | - | - | - | -170,921 | -179,414 | | | | | |

At 31 December 2018

At 31 December 2018

Carrying amount

Carrying amount

Fair value

Fair value

In EUR’000

In EUR’000

Held for trading

Held for trading

Shares and other variable yield securities

Shares and other variable yield securities

Cash, loans and advances

Cash, loans and advances

Treasury financial assets

Treasury financial assets

Other financial liabilities

Other financial liabilities

Total

Total

Level 1

Level 1

Level 2

Level 2

Level 3

Level 3

Total

Total

Financial assets mandatorily measured at FVTPL

Financial assets mandatorily measured at FVTPL

Derivative financial instruments

Derivative financial instruments

9,873

9,873

-

-

-

-

-

-

-

-

9,873

9,873

-

-

9,873

9,873

-

-

9,873

9,873

Venture Capital Fund

Venture Capital Fund

-

-

467,152

467,152

-

-

-

-

-

-

467,152

467,152

-

-

-

-

467,152

467,152

467,152

467,152

Direct Equity Investment

Direct Equity Investment

-

-

100,140

100,140

-

-

-

-

-

-

100,140

100,140

16,675

16,675

-

-

83,465

83,465

100,140

100,140

Loans and advances

Loans and advances

-

-

-

-

720

720

-

-

-

-

720

720

-

-

720

720

-

-

720

720

Total

Total

9,873

9,873

567,292

567,292

720

720

-

-

-

-

577,885

577,885

16,675

16,675

10,593

10,593

550,617

550,617

577,885

577,885

Financial assets at AC

Financial assets at AC

Cash and cash equivalents

Cash and cash equivalents

-

-

-

-

573,708

573,708

-

-

-

-

573,708

573,708

-

-

-

-

-

-

-

-

Loans and advances

Loans and advances

-

-

-

-

1,540,271

1,540,271

-

-

-

-

1,540,271

1,540,271

-

-

1,760,576

1,760,576

-

-

1,760,576

1,760,576

Amounts receivable from contributors

Amounts receivable from contributors

-

-

-

-

100,000

100,000

-

-

-

-

100,000

100,000

-

-

-

-

-

-

-

-

Treasury financial assets

Treasury financial assets

-

-

-

-

-

-

335,140

335,140

-

-

335,140

335,140

191,475

191,475

145,061

145,061

-

-

336,536

336,536

Other assets

Other assets

-

-

-

-

171

171

-

-

-

-

171

171

-

-

-

-

-

-

-

-

Total

Total

-

-

-

-

2,214,150

2,214,150

335,140

335,140

-

-

2,549,290

2,549,290

191,475

191,475

1,905,637

1,905,637

-

-

2,097,112

2,097,112

Total financial assets

Total financial assets

9,873

9,873

567,292

567,292

2,214,870

2,214,870

335,140

335,140

-

-

3,127,175

3,127,175

Financial liabilities mandatorily measured at FVTPL

Financial liabilities mandatorily measured at FVTPL

Derivative financial instruments

Derivative financial instruments

-8,493

-8,493

-

-

-

-

-

-

-

-

-8,493

-8,493

-

-

-8,493

-8,493

-

-

-8,493

-8,493

Total

Total

-8,493

-8,493

-

-

-

-

-

-

-

-

-8,493

-8,493

-

-

-8,493

-8,493

-

-

-8,493

-8,493

Financial liabilities at AC:

Financial liabilities at AC:

Provisions for guarantees issued

Provisions for guarantees issued

-

-

-

-

-

-

-

-

-793

-793

-793

-793

Provisions for loan commitments

Provisions for loan commitments

-

-

-

-

-

-

-

-

-23,822

-23,822

-23,822

-23,822

Amounts owed to third parties

Amounts owed to third parties

-

-

-

-

-

-

-

-

-143,813

-143,813

-143,813

-143,813

Other liabilities

Other liabilities

-

-

-

-

-

-

-

-

-2,493

-2,493

-2,493

-2,493

Total

Total

-

-

-

-

-

-

-

-

-170,921

-170,921

-170,921

-170,921

Total financial liabilities

Total financial liabilities

-8,493

-8,493

-

-

-

-

-

-

-170,921

-170,921

-179,414

-179,414

4
     Fair values of financial instruments (continued)

4.1Accounting classifications and fair values (continued)

4.1

Accounting classifications and fair values (continued)

| At 31 December 2017 | Carrying amount | | Fair value |
| --- | --- | --- | --- |
| In EUR’000 | Held for trading | Available-for-sale | Cash, loans and receivables | Held to maturity | Other financial liabilities | Total | | Level 1 | Level 2 | Level 3 | Total |
| In EUR’000 | | | | | | | | | | | |
| Derivative financial instruments | 12,521 | - | - | - | - | 12,521 | | - | 12,521 | - | 12,521 |
| Venture Capital Funds | - | 420,104 | - | - | - | 420,104 | | - | - | 420,104 | 420,104 |
| Direct Equity Investments | - | 77,435 | - | - | - | 77,435 | | 24,458 | - | 52,977 | 77,435 |
| Total | 12,521 | 497,539 | - | - | - | 510,060 | | 24,458 | 12,521 | 473,081 | 510,060 |
| Financial assets not carried at fair value: | | | | | | | | | | | |
| Cash and cash equivalents | - | - | 549,101 | - | - | 549,101 | | | | | |
| Loans and receivables | - | - | 1,666,725 | - | - | 1,666,725 | | - | - | - | - |
| Amounts receivable from contributors | - | - | 150,000 | - | - | 150,000 | | - | 1,852,507 | - | 1,852,507 |
| Bonds | - | - | - | 144,382 | - | 144,382 | | - | - | - | - |
| Other assets | - | - | 4,385 | - | - | 4,385 | | 144,382 | - | - | 144,382 |
| Total | - | - | 2,370,211 | 144,382 | - | 2,514,593 | | 144,382 | 1,852,507 | - | 1,996,889 |
| Total financial assets | 12,521 | 497,539 | 2,370,211 | 144,382 | - | 3,024,653 | | | | | |
| | | | | | | | | | | | |
| Financial liabilities carried at fair value: | | | | | | | | | | | |
| Derivative financial instruments | -1,153 | - | - | - | - | -1,153 | | - | -1,153 | - | -1,153 |
| Total | -1,153 | - | - | - | - | -1,153 | | - | -1,153 | - | -1,153 |
| Financial liabilities not carried at fair value: | | | | | | | | | | | |
| Provisions for guarantees issued | - | - | - | - | -484 | -484 | | | | | |
| Amounts owed to third parties | - | - | - | - | -157,285 | -157,285 | | | | | |
| Other liabilities | - | - | - | - | -2,462 | -2,462 | | | | | |
| Total | - | - | - | - | -160,231 | -160,231 | | | | | |
| Total financial liabilities | -1,153 | - | - | - | -160,231 | -161,384 | | | | | |
| | | | | | | | | | | | |

At 31 December 2017

At 31 December 2017

Carrying amount

Carrying amount

Fair value

Fair value

In EUR’000

In EUR’000

Held for trading

Held for trading

Available-for-sale

Available-for-sale

Cash, loans and receivables

Cash, loans and receivables

Held to maturity

Held to maturity

Other financial liabilities

Other financial liabilities

Total

Total

Level 1

Level 1

Level 2

Level 2

Level 3

Level 3

Total

Total

In EUR’000

In EUR’000

Derivative financial instruments

Derivative financial instruments

12,521

12,521

-

-

-

-

-

-

-

-

12,521

12,521

-

-

12,521

12,521

-

-

12,521

12,521

Venture Capital Funds

Venture Capital Funds

-

-

420,104

420,104

-

-

-

-

-

-

420,104

420,104

-

-

-

-

420,104

420,104

420,104

420,104

Direct Equity Investments

Direct Equity Investments

-

-

77,435

77,435

-

-

-

-

-

-

77,435

77,435

24,458

24,458

-

-

52,977

52,977

77,435

77,435

Total

Total

12,521

12,521

497,539

497,539

-

-

-

-

-

-

510,060

510,060

24,458

24,458

12,521

12,521

473,081

473,081

510,060

510,060

Financial assets not carried at fair value:

Financial assets not carried at fair value:

Cash and cash equivalents

Cash and cash equivalents

-

-

-

-

549,101

549,101

-

-

-

-

549,101

549,101

Loans and receivables

Loans and receivables

-

-

-

-

1,666,725

1,666,725

-

-

-

-

1,666,725

1,666,725

-

-

-

-

-

-

-

-

Amounts receivable from contributors

Amounts receivable from contributors

-

-

-

-

150,000

150,000

-

-

-

-

150,000

150,000

-

-

1,852,507

1,852,507

-

-

1,852,507

1,852,507

Bonds

Bonds

-

-

-

-

-

-

144,382

144,382

-

-

144,382

144,382

-

-

-

-

-

-

-

-

Other assets

Other assets

-

-

-

-

4,385

4,385

-

-

-

-

4,385

4,385

144,382

144,382

-

-

-

-

144,382

144,382

Total

Total

-

-

-

-

2,370,211

2,370,211

144,382

144,382

-

-

2,514,593

2,514,593

144,382

144,382

1,852,507

1,852,507

-

-

1,996,889

1,996,889

Total financial assets

Total financial assets

12,521

12,521

497,539

497,539

2,370,211

2,370,211

144,382

144,382

-

-

3,024,653

3,024,653

Financial liabilities carried at fair value:

Financial liabilities carried at fair value:

Derivative financial instruments

Derivative financial instruments

-1,153

-1,153

-

-

-

-

-

-

-

-

-1,153

-1,153

-

-

-1,153

-1,153

-

-

-1,153

-1,153

Total

Total

-1,153

-1,153

-

-

-

-

-

-

-

-

-1,153

-1,153

-

-

-1,153

-1,153

-

-

-1,153

-1,153

Financial liabilities not carried at fair value:

Financial liabilities not carried at fair value:

Provisions for guarantees issued

Provisions for guarantees issued

-

-

-

-

-

-

-

-

-484

-484

-484

-484

Amounts owed to third parties

Amounts owed to third parties

-

-

-

-

-

-

-

-

-157,285

-157,285

-157,285

-157,285

Other liabilities

Other liabilities

-

-

-

-

-

-

-

-

-2,462

-2,462

-2,462

-2,462

Total

Total

-

-

-

-

-

-

-

-

-160,231

-160,231

-160,231

-160,231

Total financial liabilities

Total financial liabilities

-1,153

-1,153

-

-

-

-

-

-

-160,231

-160,231

-161,384

-161,384

4.2Measurement of fair values

4.2

Measurement of fair values

4.2.1Valuation techniques and significant unobservable inputs

4.2.1

Valuation techniques and significant unobservable inputs

The table below sets out information about the valuation techniques and significant unobservable inputs used in measuring financial instruments, categorised as level 2 and 3 in the fair value hierarchy:

The table below sets out information about the valuation techniques and significant unobservable inputs used in measuring financial instruments, categorised as level 2 and 3 in the fair value hierarchy:

Valuation technique

| | Valuation technique | Significant unobservable inputs | Relationship of unobservable inputs to fair value measurement |
| --- | --- | --- | --- |
| Financial instruments carried at fair value | | |
| | | | |
| Derivative financial instruments | Discounted cash flow: Future cash flows are estimated based on forward exchange/interest rates (from observable forward exchange rates and yield curves at the end of the reporting period) and contract forward/interest rates, discounted at a rate that reflects the credit risk of various counterparties. | Not applicable. | Not applicable. |
| | | | |
| Venture Capital Fund (VCF) | Adjusted net assets method: The fair value is determined by applying either the Facility’s percentage ownership in the underlying vehicle to the net asset value reflected in the most recent report adjusted for cash flows or, where available, the precise share value at the same date, submitted by the respective Fund Manager. In order to bridge the interval between the last available Net assets value (NAV) and the year-end reporting, a subsequent event review procedure is performed and if necessary the reported NAV is adjusted. | Adjustment for time elapsed between the last reporting date of the VCF and the measurement date, taking into account: operating expenses and management fees, subsequent changes in the fair value of the VCF’s underlying assets, additional liabilities incurred, market changes or other economic condition changes. | The longer the period between the fair value measurement date and the last reporting date of the VCF, the higher the adjustment for time elapsed. |
| | | | |
| Direct Equity Investment | Adjusted net assets. | Adjustment for time elapsed between the last reporting date of the investee and the measurement date, taking into account: operating expenses, subsequent changes in the fair value of the investee’s underlying assets, additional liabilities incurred, market changes or other economic condition changes, capital increase, sale/change of control. | The longer the period between the fair value measurement date and the last reporting date of the investee, the higher the adjustment for time elapsed. |
| | | | |
| | | Discount for lack of marketability (liquidity) determined by reference to previous transaction prices for similar equities in the country/region, ranging from 5 to 30%. | The higher the marketability discount, the lower the fair value. |
| | | | |
| Financial instruments not carried at fair value | | |
| | | | |
| Loans and advances | Discounted cash flows: The valuation model uses contractual cash flows that are conditional upon the non-occurrence of default by the debtor and do not take into account any collateral values or early repayments’ scenarios. To obtain the Net Present Value (NPV) of the loans, the model retained discounts the contractual cash flows of each loan using an adjusted market discount curve. The individual loan NPV is then adjusted to take into consideration the relevant associated Expected Loss. The results are then summed to obtain the fair value of loans and advances. | Not applicable. | Not applicable. |
| | | | |
| Treasury financial assets | Discounted cash flows. | Not applicable. | Not applicable. |

Valuation technique

Significant unobservable inputs

Significant unobservable inputs

Relationship of unobservable inputs to fair value measurement

Relationship of unobservable inputs to fair value measurement

Financial instruments carried at fair value

Financial instruments carried at fair value

Derivative financial instruments

Derivative financial instruments

Discounted cash flow: Future cash flows are estimated based on forward exchange/interest rates (from observable forward exchange rates and yield curves at the end of the reporting period) and contract forward/interest rates, discounted at a rate that reflects the credit risk of various counterparties.

Discounted cash flow: Future cash flows are estimated based on forward exchange/interest rates (from observable forward exchange rates and yield curves at the end of the reporting period) and contract forward/interest rates, discounted at a rate that reflects the credit risk of various counterparties.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Venture Capital Fund (VCF)

Venture Capital Fund (VCF)

Adjusted net assets method: The fair value is determined by applying either the Facility’s percentage ownership in the underlying vehicle to the net asset value reflected in the most recent report adjusted for cash flows or, where available, the precise share value at the same date, submitted by the respective Fund Manager. In order to bridge the interval between the last available Net assets value (NAV) and the year-end reporting, a subsequent event review procedure is performed and if necessary the reported NAV is adjusted.

Adjusted net assets method: The fair value is determined by applying either the Facility’s percentage ownership in the underlying vehicle to the net asset value reflected in the most recent report adjusted for cash flows or, where available, the precise share value at the same date, submitted by the respective Fund Manager. In order to bridge the interval between the last available Net assets value (NAV) and the year-end reporting, a subsequent event review procedure is performed and if necessary the reported NAV is adjusted.

Adjustment for time elapsed between the last reporting date of the VCF and the measurement date, taking into account: operating expenses and management fees, subsequent changes in the fair value of the VCF’s underlying assets, additional liabilities incurred, market changes or other economic condition changes.

Adjustment for time elapsed between the last reporting date of the VCF and the measurement date, taking into account: operating expenses and management fees, subsequent changes in the fair value of the VCF’s underlying assets, additional liabilities incurred, market changes or other economic condition changes.

The longer the period between the fair value measurement date and the last reporting date of the VCF, the higher the adjustment for time elapsed.

The longer the period between the fair value measurement date and the last reporting date of the VCF, the higher the adjustment for time elapsed.

Direct Equity Investment

Direct Equity Investment

Adjusted net assets.

Adjusted net assets.

Adjustment for time elapsed between the last reporting date of the investee and the measurement date, taking into account: operating expenses, subsequent changes in the fair value of the investee’s underlying assets, additional liabilities incurred, market changes or other economic condition changes, capital increase, sale/change of control.

Adjustment for time elapsed between the last reporting date of the investee and the measurement date, taking into account: operating expenses, subsequent changes in the fair value of the investee’s underlying assets, additional liabilities incurred, market changes or other economic condition changes, capital increase, sale/change of control.

The longer the period between the fair value measurement date and the last reporting date of the investee, the higher the adjustment for time elapsed.

The longer the period between the fair value measurement date and the last reporting date of the investee, the higher the adjustment for time elapsed.

Discount for lack of marketability (liquidity) determined by reference to previous transaction prices for similar equities in the country/region, ranging from 5 to 30%.

Discount for lack of marketability (liquidity) determined by reference to previous transaction prices for similar equities in the country/region, ranging from 5 to 30%.

The higher the marketability discount, the lower the fair value.

The higher the marketability discount, the lower the fair value.

Financial instruments not carried at fair value

Financial instruments not carried at fair value

Loans and advances

Loans and advances

Discounted cash flows: The valuation model uses contractual cash flows that are conditional upon the non-occurrence of default by the debtor and do not take into account any collateral values or early repayments’ scenarios. To obtain the Net Present Value (NPV) of the loans, the model retained discounts the contractual cash flows of each loan using an adjusted market discount curve. The individual loan NPV is then adjusted to take into consideration the relevant associated Expected Loss. The results are then summed to obtain the fair value of loans and advances.

Discounted cash flows: The valuation model uses contractual cash flows that are conditional upon the non-occurrence of default by the debtor and do not take into account any collateral values or early repayments’ scenarios. To obtain the Net Present Value (NPV) of the loans, the model retained discounts the contractual cash flows of each loan using an adjusted market discount curve. The individual loan NPV is then adjusted to take into consideration the relevant associated Expected Loss. The results are then summed to obtain the fair value of loans and advances.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Treasury financial assets

Treasury financial assets

Discounted cash flows.

Discounted cash flows.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

With the application of IFRS 13, valuation adjustments are included in the fair value of derivatives at 31 December 2018 and 2017, namely:

With the application of IFRS 13, valuation adjustments are included in the fair value of derivatives at 31 December 2018 and 2017, namely:

-Credit valuation adjustments (CVA), reflecting counterparty credit risk on derivative transactions, amounting to EUR -37.4k as at 31  December 2018 and to EUR -38k as at 31 December 2017.

-

Credit valuation adjustments (CVA), reflecting counterparty credit risk on derivative transactions, amounting to EUR -37.4k as at 31  December 2018 and to EUR -38k as at 31 December 2017.

-Debit valuation adjustments (DVA), reflecting own credit risk on derivative transactions, amounting to EUR +15.1k as at
  31 December 2018 and EUR +29.5k as at 31 December 2017.

4.2.2Transfers between Level 1 and 2

The Facility’s policy is to recognise the transfers between Levels as of the date of the event or change in circumstances that caused the transfer.

In 2018 and 2017 the Facility did not make transfers from Level 1 to 2 or Level 2 to 1 of the fair value hierarchy.

4.2.3Level 3 fair values

Reconciliation of Level 3 fair values

The following tables present the changes in Level 3 instruments for the year ended 31 December 2018 and 31 December 2017:

| In EUR'000 | Shares and other variable yield securities |
| --- | --- |
| Balance at 1 January 2018 | 473,081 |
| Gains or losses included in profit or loss: | |
| - net realised gains on shares and other variable yield securities | -10,622 |
| - net fair value change on shares and other variable yield securities | -13,411 |
| Total | -24,033 |
| Disbursements | 95,434 |
| Repayments | -11,165 |
| Write offs | 17,300 |
| Balance at 31 December 2018 | 550,617 |
| | |
| In EUR'000 | Available-for-sale financial assets |
| Balance at 1 January 2017 | 494,004 |
| Gains or losses included in profit or loss: | |
| - net realised gains on available-for-sale financial assets | 2,711 |
| - impairment on available-for-sale financial assets | -22,024 |
| Total | -19,313 |
| Gains or losses included in other comprehensive income: | |
| - net change in fair value of available-for-sale financial assets | -17,592 |
| Total | -17,592 |
| Disbursements | 62,660 |
| Repayments | -44,568 |
| Write offs | -2,110 |
| Balance at 31 December 2017 | 473,081 |

In EUR'000

Shares and other variable yield securities

Balance at 1 January 2018

473,081

Gains or losses included in profit or loss:

- net realised gains on shares and other variable yield securities

-10,622

- net fair value change on shares and other variable yield securities

-13,411

Total

-24,033

Disbursements

95,434

Repayments

-11,165

Write offs

17,300

Balance at 31 December 2018

550,617

In EUR'000

Available-for-sale financial assets

Balance at 1 January 2017

494,004

Gains or losses included in profit or loss:

- net realised gains on available-for-sale financial assets

2,711

- impairment on available-for-sale financial assets

-22,024

Total

-19,313

Gains or losses included in other comprehensive income:

- net change in fair value of available-for-sale financial assets

-17,592

Total

-17,592

Disbursements

62,660

Repayments

-44,568

Write offs

-2,110

Balance at 31 December 2017

473,081

5
     Cash and cash equivalents

The cash and cash equivalents are composed of:

| In EUR'000 | 31.12.2018 | 31.12.2017 |
| --- | --- | --- |
| Cash in hand | 51,936 | 166,445 |
| Term deposits | 521,882 | 367,653 |
| Commercial papers | - | 15,003 |
| Cash and cash equivalents in the statement of financial position | 573,818 | 549,101 |
| Accrued interest | -110 | 68 |
| Cash and cash equivalents in the cash flow statement | 573,708 | 549,169 |

In EUR'000

31.12.2018

31.12.2017

Cash in hand

51,936

166,445

Term deposits

521,882

367,653

Commercial papers

-

15,003

Cash and cash equivalents in the statement of financial position

573,818

549,101

Accrued interest

-110

68

Cash and cash equivalents in the cash flow statement

573,708

549,169

At 31 December 2018

| At 31 December 2018 | Fair Value | Notional amount |
| --- | --- | --- |
| In EUR'000 | Assets | Liabilities | |
| Cross currency interest rate swaps | 340 | -665 | 5,245 |
| Interest rate swaps | 654 | - | 28,470 |
| FX swaps | 8,879 | -7,828 | 1,460,608 |
| Total derivative financial instruments | 9,873 | -8,493 | 1,494,323 |
| | | | |
| At 31 December 2017 | Fair Value | Notional amount |
| In EUR'000 | Assets | Liabilities | |
| Cross currency interest rate swaps | 149 | -1,105 | 8,098 |
| Interest rate swaps | 393 | -48 | 31,711 |
| FX swaps | 11,979 | - | 1,500,000 |
| Total derivative financial instruments | 12,521 | -1,153 | 1,539,809 |

At 31 December 2018

Fair Value

Fair Value

Notional amount

Notional amount

In EUR'000

In EUR'000

Assets

Assets

Liabilities

Liabilities

Cross currency interest rate swaps

Cross currency interest rate swaps

340

340

-665

-665

5,245

5,245

Interest rate swaps

Interest rate swaps

654

654

-

-

28,470

28,470

FX swaps

FX swaps

8,879

8,879

-7,828

-7,828

1,460,608

1,460,608

Total derivative financial instruments

Total derivative financial instruments

9,873

9,873

-8,493

-8,493

1,494,323

1,494,323

At 31 December 2017

At 31 December 2017

Fair Value

Fair Value

Notional amount

Notional amount

In EUR'000

In EUR'000

Assets

Assets

Liabilities

Liabilities

Cross currency interest rate swaps

Cross currency interest rate swaps

149

149

-1,105

-1,105

8,098

8,098

Interest rate swaps

Interest rate swaps

393

393

-48

-48

31,711

31,711

FX swaps

FX swaps

11,979

11,979

-

-

1,500,000

1,500,000

Total derivative financial instruments

Total derivative financial instruments

12,521

12,521

-1,153

-1,153

1,539,809

1,539,809

7
     Loans and advances

7

7.1Loans and advances

7.1

Loans and advances

The following table show reconciliation from the opening to the closing balance of the loans and advances with new ECL IFRS 9 impairment model. Comparative impairment amounts for 2017 represent allowance account for credit losses and reflect measurement under IAS 39.

The following table show reconciliation from the opening to the closing balance of the loans and advances with new ECL IFRS 9 impairment model. Comparative impairment amounts for 2017 represent allowance account for credit losses and reflect measurement under IAS 39.

| In EUR'000 | Global loans(*) | Senior loans | Subordinated loans | POCI | Total |
| --- | --- | --- | --- | --- | --- |
| Nominal of loans at AC as at 1 January 2018 | 1,003,294 | 687,499 | 62,546 | - | 1,753,339 |
| Disbursements | 203,352 | 52,274 | - | 3,588 | 259,214 |
| Write offs | - | - | - | - | - |
| Repayments | -192,355 | -157,952 | -4,548 | - | -354,855 |
| Interest capitalised | - | - | - | - | - |
| Foreign exchange rates differences | 37,026 | 11,503 | 2,719 | - | 51,248 |
| Nominal of loans at AC as at 31 December 2018 | 1,051,317 | 593,324 | 60,717 | 3,588 | 1,708,946 |
| | | | | | |
| Impairment – loss allowance as at 1 January 2018 | -35,082 | -57,911 | -62,546 | - | -155,539 |
| Net changes of the 12 month ECL | -1,853 | 288 | - | - | -1,565 |
| Net changes of lifetime ECL not credit-impaired | 4,696 | 870 | -2,146 | - | 3,420 |
| Lifetime ECL credit-impaired | -71,204 | - | - | -1,794 | -72,998 |
| Reversal of lifetime ECL credit-impaired | 2,214 | 8,480 | 37,678 | - | 48,372 |
| Write offs | - | - | - | - | - |
| Foreign exchange rates differences | -2,639 | -1,336 | -2,346 | - | -6,321 |
| Impairment – loss allowance as at 31 December 2018 | -103,868 | -49,609 | -29,360 | -1,794 | -184,631 |
| | | | | | |
| Loans and advances AC as at 31 December 2018 | 947,449 | 543,715 | 31,357 | 1,794 | 1,524,315 |
| | | | | | |
| Nominal of loans at FVTPL as at 1 January 2018 | 1,800 | - | - | - | 1,800 |
| Disbursements | - | - | - | - | - |
| Repayments | - | - | - | - | - |
| Write offs | - | - | - | - | - |
| Foreign exchange rates differences | - | - | - | - | - |
| Nominal of loans at FVTPL as at 31 December 2018 | 1,800 | - | - | - | 1,800 |
| | | | | | |
| Fair value adjustment as at 1 January 2018 | -378 | - | - | - | -378 |
| Net FV change | -702 | - | - | - | -702 |
| Foreign exchange rates differences | - | - | - | - | - |
| Fair value adjustment as at 31 December 2018 | -1,080 | - | - | - | -1,080 |
| | | | | | |
| Loans and advances at FVTPL as at 31 December 2018 | 720 | - | - | - | 720 |
| | | | | | |
| Amortised Cost | -3,550 | -3,109 | 11 | - | -6,648 |
| Interest | 12,330 | 9,243 | 1,031 | - | 22,604 |
| Loans and advances as at 31 December 2018 | 956,949 | 549,849 | 32,399 | 1,794 | 1,540,991 |
| | | | | | |

In EUR'000

In EUR'000

Global loans(*)

Global loans(*)

Senior loans

Senior loans

Subordinated loans

Subordinated loans

POCI

POCI

Total

Total

Nominal of loans at AC as at 1 January 2018

Nominal of loans at AC as at 1 January 2018

1,003,294

1,003,294

687,499

687,499

62,546

62,546

-

-

1,753,339

1,753,339

Disbursements

Disbursements

203,352

203,352

52,274

52,274

-

-

3,588

3,588

259,214

259,214

Write offs

Write offs

-

-

-

-

-

-

-

-

-

-

Repayments

Repayments

-192,355

-192,355

-157,952

-157,952

-4,548

-4,548

-

-

-354,855

-354,855

Interest capitalised

Interest capitalised

-

-

-

-

-

-

-

-

-

-

Foreign exchange rates differences

Foreign exchange rates differences

37,026

37,026

11,503

11,503

2,719

2,719

-

-

51,248

51,248

Nominal of loans at AC as at 31 December 2018

Nominal of loans at AC as at 31 December 2018

1,051,317

1,051,317

593,324

593,324

60,717

60,717

3,588

3,588

1,708,946

1,708,946

Impairment – loss allowance as at 1 January 2018

Impairment – loss allowance as at 1 January 2018

-35,082

-35,082

-57,911

-57,911

-62,546

-62,546

-

-

-155,539

-155,539

Net changes of the 12 month ECL

Net changes of the 12 month ECL

-1,853

-1,853

288

288

-

-

-

-

-1,565

-1,565

Net changes of lifetime ECL not credit-impaired

Net changes of lifetime ECL not credit-impaired

4,696

4,696

870

870

-2,146

-2,146

-

-

3,420

3,420

Lifetime ECL credit-impaired

Lifetime ECL credit-impaired

-71,204

-71,204

-

-

-

-

-1,794

-1,794

-72,998

-72,998

Reversal of lifetime ECL credit-impaired

Reversal of lifetime ECL credit-impaired

2,214

2,214

8,480

8,480

37,678

37,678

-

-

48,372

48,372

Write offs

Write offs

-

-

-

-

-

-

-

-

-

-

Foreign exchange rates differences

Foreign exchange rates differences

-2,639

-2,639

-1,336

-1,336

-2,346

-2,346

-

-

-6,321

-6,321

Impairment – loss allowance as at 31 December 2018

Impairment – loss allowance as at 31 December 2018

-103,868

-103,868

-49,609

-49,609

-29,360

-29,360

-1,794

-1,794

-184,631

-184,631

Loans and advances AC as at 31 December 2018

Loans and advances AC as at 31 December 2018

947,449

947,449

543,715

543,715

31,357

31,357

1,794

1,794

1,524,315

1,524,315

Nominal of loans at FVTPL as at 1 January 2018

Nominal of loans at FVTPL as at 1 January 2018

1,800

1,800

-

-

-

-

-

-

1,800

1,800

Disbursements

Disbursements

-

-

-

-

-

-

-

-

-

-

Repayments

Repayments

-

-

-

-

-

-

-

-

-

-

Write offs

Write offs

-

-

-

-

-

-

-

-

-

-

Foreign exchange rates differences

Foreign exchange rates differences

-

-

-

-

-

-

-

-

-

-

Nominal of loans at FVTPL as at 31 December 2018

Nominal of loans at FVTPL as at 31 December 2018

1,800

1,800

-

-

-

-

-

-

1,800

1,800

Fair value adjustment as at 1 January 2018

Fair value adjustment as at 1 January 2018

-378

-378

-

-

-

-

-

-

-378

-378

Net FV change

Net FV change

-702

-702

-

-

-

-

-

-

-702

-702

Foreign exchange rates differences

Foreign exchange rates differences

-

-

-

-

-

-

-

-

-

-

Fair value adjustment as at 31 December 2018

Fair value adjustment as at 31 December 2018

-1,080

-1,080

-

-

-

-

-

-

-1,080

-1,080

Loans and advances at FVTPL as at 31 December 2018

Loans and advances at FVTPL as at 31 December 2018

720

720

-

-

-

-

-

-

720

720

Amortised Cost

Amortised Cost

-3,550

-3,550

-3,109

-3,109

11

11

-

-

-6,648

-6,648

Interest

Interest

12,330

12,330

9,243

9,243

1,031

1,031

-

-

22,604

22,604

Loans and advances as at 31 December 2018

Loans and advances as at 31 December 2018

956,949

956,949

549,849

549,849

32,399

32,399

1,794

1,794

1,540,991

1,540,991

In EUR'000

| In EUR'000 | Global loans(*) | Senior loans | Subordinated loans | Total |
| --- | --- | --- | --- | --- |
| Nominal as at 1 January 2017 | 994,527 | 764,339 | 71,563 | 1,830,429 |
| Disbursements | 305,059 | 63,603 | - | 368,662 |
| Write offs | -3,257 | -6,138 | - | -9,395 |
| Repayments | -162,361 | -91,125 | - | -253,486 |
| Foreign exchange rates differences | -128,874 | -43,180 | -9,017 | -181,071 |
| Nominal as at 31 December 2017 | 1,005,094 | 687,499 | 62,546 | 1,755,139 |
| | | | | |
| Impairment as at 1 January 2017 | -18,185 | -28,294 | -71,161 | -117,640 |
| Impairment recorded in statement of profit or loss and other comprehensive income | -5,105 | -11,572 | - | -16,677 |
| Write offs | 3,257 | 6,138 | - | 9,395 |
| Reversal of impairment | 2,204 | 3,752 | - | 5,956 |
| Foreign exchange rates differences | 914 | 3,234 | 8,615 | 12,763 |
| Impairment as at 31 December 2017 | -16,915 | -26,742 | -62,546 | -106,203 |
| | | | | |
| Amortised Cost | -3,802 | -3,408 | - | -7,210 |
| Interest | 15,122 | 9,877 | - | 24,999 |
| Loans and receivables as at 31 December 2017 | 999,499 | 667,226 | - | 1,666,725 |
| | | | | |
| (*) including agency agreements | | | | |

In EUR'000

Global loans(*)

Global loans(*)

Senior loans

Senior loans

Subordinated loans

Subordinated loans

Total

Total

Nominal as at 1 January 2017

Nominal as at 1 January 2017

994,527

994,527

764,339

764,339

71,563

71,563

1,830,429

1,830,429

Disbursements

Disbursements

305,059

305,059

63,603

63,603

-

-

368,662

368,662

Write offs

Write offs

-3,257

-3,257

-6,138

-6,138

-

-

-9,395

-9,395

Repayments

Repayments

-162,361

-162,361

-91,125

-91,125

-

-

-253,486

-253,486

Foreign exchange rates differences

Foreign exchange rates differences

-128,874

-128,874

-43,180

-43,180

-9,017

-9,017

-181,071

-181,071

Nominal as at 31 December 2017

Nominal as at 31 December 2017

1,005,094

1,005,094

687,499

687,499

62,546

62,546

1,755,139

1,755,139

Impairment as at 1 January 2017

Impairment as at 1 January 2017

-18,185

-18,185

-28,294

-28,294

-71,161

-71,161

-117,640

-117,640

Impairment recorded in statement of profit or loss and other comprehensive income

Impairment recorded in statement of profit or loss and other comprehensive income

-5,105

-5,105

-11,572

-11,572

-

-

-16,677

-16,677

Write offs

Write offs

3,257

3,257

6,138

6,138

-

-

9,395

9,395

Reversal of impairment

Reversal of impairment

2,204

2,204

3,752

3,752

-

-

5,956

5,956

Foreign exchange rates differences

Foreign exchange rates differences

914

914

3,234

3,234

8,615

8,615

12,763

12,763

Impairment as at 31 December 2017

Impairment as at 31 December 2017

-16,915

-16,915

-26,742

-26,742

-62,546

-62,546

-106,203

-106,203

Amortised Cost

Amortised Cost

-3,802

-3,802

-3,408

-3,408

-

-

-7,210

-7,210

Interest

Interest

15,122

15,122

9,877

9,877

-

-

24,999

24,999

Loans and receivables as at 31 December 2017

Loans and receivables as at 31 December 2017

999,499

999,499

667,226

667,226

-

-

1,666,725

1,666,725

(*) including agency agreements

(*) including agency agreements

2018

| | 2018 |
| --- | --- |
| In EUR'000 | 12-month ECL | Lifetime ECL not credit-impaired | Lifetime ECL credit-impaired | POCI | Total |
| Loans and advances at AC | | | | | |
| Balance at 1 January 2018 | 19,738 | 29,975 | 105,826 | - | 155,539 |
| Transfer to 12-month ECL | 2,285 | - | - | - | 2,285 |
| Transfer to lifetime ECL not credit-impaired | - | -2,633 | - | - | -2,633 |
| Transfer to lifetime ECL credit-impaired | - | - | 27,646 | 1,794 | 29,440 |
| Financial assets that have been derecognised | - | - | - | - | - |
| Write-offs | - | - | - | - | - |
| Balance at 31 December 2018 | 22,023 | 27,342 | 133,472 | 1,794 | 184,631 |

2018

In EUR'000

In EUR'000

12-month ECL

12-month ECL

Lifetime ECL not credit-impaired

Lifetime ECL not credit-impaired

Lifetime ECL credit-impaired

Lifetime ECL credit-impaired

POCI

POCI

Total

Total

Loans and advances at AC

Loans and advances at AC

Balance at 1 January 2018

Balance at 1 January 2018

19,738

19,738

29,975

29,975

105,826

105,826

-

-

155,539

155,539

Transfer to 12-month ECL

Transfer to 12-month ECL

2,285

2,285

-

-

-

-

-

-

2,285

2,285

Transfer to lifetime ECL not credit-impaired

Transfer to lifetime ECL not credit-impaired

-

-

-2,633

-2,633

-

-

-

-

-2,633

-2,633

Transfer to lifetime ECL credit-impaired

Transfer to lifetime ECL credit-impaired

-

-

-

-

27,646

27,646

1,794

1,794

29,440

29,440

Financial assets that have been derecognised

Financial assets that have been derecognised

-

-

-

-

-

-

-

-

-

-

Write-offs

Write-offs

-

-

-

-

-

-

-

-

-

-

Balance at 31 December 2018

Balance at 31 December 2018

22,023

22,023

27,342

27,342

133,472

133,472

1,794

1,794

184,631

184,631

8
     Shares and other variable yield securities

The following table show reconciliation from the opening to the closing balance of the Equity investments with new measurement policy under IFRS  9. Comparative amounts for 2017 represent measurement under IAS 39 when equity instruments were classified under available-for-sale portfolio:

| In EUR'000 | Venture Capital Funds | Direct Equity Investments | Total |
| --- | --- | --- | --- |
| Cost as at 1 January 2018 | 356,086 | 70,310 | 426,396 |
| Disbursements | 73,250 | 22,184 | 95,434 |
| Repayments / sales | -21,681 | -635 | -22,316 |
| Foreign exchange rates differences on repayments / sales | 13,938 | 1,355 | 15,293 |
| Cost as at 31 December 2018 | 421,593 | 93,214 | 514,807 |
| | | | |
| Unrealised gains and losses as at 1 January 2018 | 64,018 | 7,125 | 71,143 |
| Net change in unrealised gains and losses | -20,493 | -172 | -20,665 |
| Foreign exchange rates differences on unrealised gains and losses | 2,034 | -27 | 2,007 |
| Unrealised gains and losses as at 31 December 2018 | 45,559 | 6,926 | 52,485 |
| | | | |
| Shares and other variable yield securities as at 31 December 2018 | 467,152 | 100,140 | 567,292 |
| | | | |
| In EUR'000 | Venture Capital Funds | Direct Equity Investments | Total |
| Cost as at 1 January 2017 | 331,253 | 72,636 | 403,889 |
| Disbursements | 62,660 | - | 62,660 |
| Repayments / sales | -38,990 | -708 | -39,698 |
| Write offs | -437 | -1,673 | -2,110 |
| Foreign exchange rates differences on repayments / sales | 1,600 | 55 | 1,655 |
| Cost as at 31 December 2017 | 356,086 | 70,310 | 426,396 |
| | | | |
| Unrealised gains and losses as at 1 January 2017 | 129,427 | 13,457 | 142,884 |
| Net change in unrealised gains and losses | -20,930 | -1,008 | -21,938 |
| Unrealised gains and losses as at 31 December 2017 | 108,497 | 12,449 | 120,946 |
| | | | |
| Impairment as at 1 January 2017 | -22,892 | -6,997 | -29,889 |
| Impairment recorded in statement of profit or loss and other comprehensive income during the year | -22,024 | - | -22,024 |
| Write offs | 437 | 1,673 | 2,110 |
| Impairment as at 31 December 2017 | -44,479 | -5,324 | -49,803 |
| | | | |
| Available-for-sale financial assets as at 31 December 2017 | 420,104 | 77,435 | 497,539 |

In EUR'000

In EUR'000

Venture Capital Funds

Venture Capital Funds

Direct Equity Investments

Direct Equity Investments

Total

Total

Cost as at 1 January 2018

Cost as at 1 January 2018

356,086

356,086

70,310

70,310

426,396

426,396

Disbursements

Disbursements

73,250

73,250

22,184

22,184

95,434

95,434

Repayments / sales

Repayments / sales

-21,681

-21,681

-635

-635

-22,316

-22,316

Foreign exchange rates differences on repayments / sales

Foreign exchange rates differences on repayments / sales

13,938

13,938

1,355

1,355

15,293

15,293

Cost as at 31 December 2018

Cost as at 31 December 2018

421,593

421,593

93,214

93,214

514,807

514,807

Unrealised gains and losses as at 1 January 2018

Unrealised gains and losses as at 1 January 2018

64,018

64,018

7,125

7,125

71,143

71,143

Net change in unrealised gains and losses

Net change in unrealised gains and losses

-20,493

-20,493

-172

-172

-20,665

-20,665

Foreign exchange rates differences on unrealised gains and losses

Foreign exchange rates differences on unrealised gains and losses

2,034

2,034

-27

-27

2,007

2,007

Unrealised gains and losses as at 31 December 2018

Unrealised gains and losses as at 31 December 2018

45,559

45,559

6,926

6,926

52,485

52,485

Shares and other variable yield securities as at 31 December 2018

Shares and other variable yield securities as at 31 December 2018

467,152

467,152

100,140

100,140

567,292

567,292

In EUR'000

In EUR'000

Venture Capital Funds

Venture Capital Funds

Direct Equity Investments

Direct Equity Investments

Total

Total

Cost as at 1 January 2017

Cost as at 1 January 2017

331,253

331,253

72,636

72,636

403,889

403,889

Disbursements

Disbursements

62,660

62,660

-

-

62,660

62,660

Repayments / sales

Repayments / sales

-38,990

-38,990

-708

-708

-39,698

-39,698

Write offs

Write offs

-437

-437

-1,673

-1,673

-2,110

-2,110

Foreign exchange rates differences on repayments / sales

Foreign exchange rates differences on repayments / sales

1,600

1,600

55

55

1,655

1,655

Cost as at 31 December 2017

Cost as at 31 December 2017

356,086

356,086

70,310

70,310

426,396

426,396

Unrealised gains and losses as at 1 January 2017

Unrealised gains and losses as at 1 January 2017

129,427

129,427

13,457

13,457

142,884

142,884

Net change in unrealised gains and losses

Net change in unrealised gains and losses

-20,930

-20,930

-1,008

-1,008

-21,938

-21,938

Unrealised gains and losses as at 31 December 2017

Unrealised gains and losses as at 31 December 2017

108,497

108,497

12,449

12,449

120,946

120,946

Impairment as at 1 January 2017

Impairment as at 1 January 2017

-22,892

-22,892

-6,997

-6,997

-29,889

-29,889

Impairment recorded in statement of profit or loss and other comprehensive income during the year

Impairment recorded in statement of profit or loss and other comprehensive income during the year

-22,024

-22,024

-

-

-22,024

-22,024

Write offs

Write offs

437

437

1,673

1,673

2,110

2,110

Impairment as at 31 December 2017

Impairment as at 31 December 2017

-44,479

-44,479

-5,324

-5,324

-49,803

-49,803

Available-for-sale financial assets as at 31 December 2017

Available-for-sale financial assets as at 31 December 2017

420,104

420,104

77,435

77,435

497,539

497,539

9
     Amounts receivable from contributors (in EUR’000)

| In EUR'000 | |
| --- | --- |
| Balance as at 1 January 2018 | 144,382 |
| Acquisitions | 2,219,062 |
| Maturities | -2,026,659 |
| Change in amortisation of premium/discount | 149 |
| Change in accrued interest | -1,794 |
| Balance as at 31 December 2018 | 335,140 |
| | |
| In EUR'000 | |
| Balance as at 1 January 2017 | 169,398 |
| Acquisitions | 1,084,149 |
| Maturities | -1,109,563 |
| Change in amortisation of premium/discount | -59 |
| Change in accrued interest | 457 |
| Balance as at 31 December 2017 | 144,382 |

In EUR'000

In EUR'000

Balance as at 1 January 2018

Balance as at 1 January 2018

144,382

144,382

Acquisitions

Acquisitions

2,219,062

2,219,062

Maturities

Maturities

-2,026,659

-2,026,659

Change in amortisation of premium/discount

Change in amortisation of premium/discount

149

149

Change in accrued interest

Change in accrued interest

-1,794

-1,794

Balance as at 31 December 2018

Balance as at 31 December 2018

335,140

335,140

In EUR'000

In EUR'000

Balance as at 1 January 2017

Balance as at 1 January 2017

169,398

169,398

Acquisitions

Acquisitions

1,084,149

1,084,149

Maturities

Maturities

-1,109,563

-1,109,563

Change in amortisation of premium/discount

Change in amortisation of premium/discount

-59

-59

Change in accrued interest

Change in accrued interest

457

457

Balance as at 31 December 2017

Balance as at 31 December 2017

144,382

144,382

In EUR'000

| In EUR'000 | 31.12.2018 | 31.12.2017 |
| --- | --- | --- |
| Amount receivable from EIB | - | 4,117 |
| Financial guarantees | 171 | 268 |
| Total other assets | 171 | 4,385 |

In EUR'000

31.12.2018

31.12.2018

31.12.2017

31.12.2017

Amount receivable from EIB

Amount receivable from EIB

-

-

4,117

4,117

Financial guarantees

Financial guarantees

171

171

268

268

Total other assets

Total other assets

171

171

4,385

4,385

12 Deferred income

The main components of deferred income are as follows:

| In EUR'000 | 31.12.2018 | 31.12.2017 |
| --- | --- | --- |
| Deferred interest subsidies | 32,658 | 24,895 |
| Deferred commissions on loans and advances | 1,106 | 907 |
| Total deferred income | 33,764 | 25,802 |

In EUR'000

In EUR'000

31.12.2018

31.12.2018

31.12.2017

31.12.2017

Deferred interest subsidies

Deferred interest subsidies

32,658

32,658

24,895

24,895

Deferred commissions on loans and advances

Deferred commissions on loans and advances

1,106

1,106

907

907

Total deferred income

Total deferred income

33,764

33,764

25,802

25,802

13
     Provisions for guarantees issued

| | 2018 |
| --- | --- |
| In EUR'000 | 12-month ECL | Lifetime ECL not credit-impaired | Lifetime ECL credit-impaired | Total |
| Guarantees issued | | | | |
| Balance at 1 January | - | 484 | - | 484 |
| Transfer to 12-month ECL | 94 | - | - | 94 |
| Transfer to lifetime ECL not credit-impaired | - | 391 | - | 391 |
| Transfer to lifetime ECL credit-impaired | - | - | - | - |
| Guarantees that have been derecognised | - | - | - | - |
| Guarantee calls | - | - | - | - |
| Amortisation of upfront fees | - | -128 | - | -128 |
| Foreign exchange rates differences | - | -48 | - | -48 |
| Balance at 31 December | 94 | 699 | - | 793 |

2018

2018

In EUR'000

In EUR'000

12-month ECL

12-month ECL

Lifetime ECL not credit-impaired

Lifetime ECL not credit-impaired

Lifetime ECL credit-impaired

Lifetime ECL credit-impaired

Total

Total

Guarantees issued

Guarantees issued

Balance at 1 January

Balance at 1 January

-

-

484

484

-

-

484

484

Transfer to 12-month ECL

Transfer to 12-month ECL

94

94

-

-

-

-

94

94

Transfer to lifetime ECL not credit-impaired

Transfer to lifetime ECL not credit-impaired

-

-

391

391

-

-

391

391

Transfer to lifetime ECL credit-impaired

Transfer to lifetime ECL credit-impaired

-

-

-

-

-

-

-

-

Guarantees that have been derecognised

Guarantees that have been derecognised

-

-

-

-

-

-

-

-

Guarantee calls

Guarantee calls

-

-

-

-

-

-

-

-

Amortisation of upfront fees

Amortisation of upfront fees

-

-

-128

-128

-

-

-128

-128

Foreign exchange rates differences

Foreign exchange rates differences

-

-

-48

-48

-

-

-48

-48

Balance at 31 December

Balance at 31 December

94

94

699

699

-

-

793

793

2017

| | 2017 |
| --- | --- |
| Balance at 1 January | 625 |
| Additions recorded in statement of profit or loss and other comprehensive income | 65 |
| Utilised | -206 |
| Transfer from "Other liabilities", financial guarantees | - |
| Balance at 31 December | 484 |

2017

Balance at 1 January

Balance at 1 January

625

625

Additions recorded in statement of profit or loss and other comprehensive income

Additions recorded in statement of profit or loss and other comprehensive income

65

65

Utilised

Utilised

-206

-206

Transfer from "Other liabilities", financial guarantees

Transfer from "Other liabilities", financial guarantees

-

-

Balance at 31 December

Balance at 31 December

484

484

2018

| | 2018 |
| --- | --- |
| In EUR'000 | 12-month ECL | Lifetime ECL not credit-impaired | Lifetime ECL credit-impaired | Total |
| Loans commitments | | | | |
| Balance at 1 January | 1,993 | 2,163 | - | 4,156 |
| Transfer to 12-month ECL | 5,192 | - | - | 5,192 |
| Transfer to lifetime ECL not credit-impaired | - | 14,420 | - | 14,420 |
| Transfer to lifetime ECL credit-impaired | - | - | - | - |
| Foreign exchange rates differences | 40 | 14 | - | 54 |
| Balance at 31 December | 7,225 | 16,597 | - | 23,822 |

2018

In EUR'000

In EUR'000

12-month ECL

12-month ECL

Lifetime ECL not credit-impaired

Lifetime ECL not credit-impaired

Lifetime ECL credit-impaired

Lifetime ECL credit-impaired

Total

Total

Loans commitments

Loans commitments

Balance at 1 January

Balance at 1 January

1,993

1,993

2,163

2,163

-

-

4,156

4,156

Transfer to 12-month ECL

Transfer to 12-month ECL

5,192

5,192

-

-

-

-

5,192

5,192

Transfer to lifetime ECL not credit-impaired

Transfer to lifetime ECL not credit-impaired

-

-

14,420

14,420

-

-

14,420

14,420

Transfer to lifetime ECL credit-impaired

Transfer to lifetime ECL credit-impaired

-

-

-

-

-

-

-

-

Foreign exchange rates differences

Foreign exchange rates differences

40

40

14

14

-

-

54

54

Balance at 31 December

Balance at 31 December

7,225

7,225

16,597

16,597

-

-

23,822

23,822

15
     Amounts owed to third parties

The main components of amounts owed to third parties are as follows:

| In EUR'000 | 31.12.2018 | 31.12.2017 |
| --- | --- | --- |
| Net general administrative expenses payable to EIB | 47,799 | 45,105 |
| Other amounts payable to EIB | 54 | 580 |
| Interest subsidies and TA not yet disbursed owed to Member States | 95,960 | 111,600 |
| Total amounts owed to third parties | 143,813 | 157,285 |

In EUR'000

In EUR'000

31.12.2018

31.12.2018

31.12.2017

31.12.2017

Net general administrative expenses payable to EIB

Net general administrative expenses payable to EIB

47,799

47,799

45,105

45,105

Other amounts payable to EIB

Other amounts payable to EIB

54

54

580

580

Interest subsidies and TA not yet disbursed owed to Member States

Interest subsidies and TA not yet disbursed owed to Member States

95,960

95,960

111,600

111,600

Total amounts owed to third parties

Total amounts owed to third parties

143,813

143,813

157,285

157,285

16
     Other liabilities

The main components of other liabilities are as follows:

| In EUR'000 | 31.12.2018 | 31.12.2017 |
| --- | --- | --- |
| Loan repayments received in advance | 2,124 | 1,986 |
| Deferred income from interest subsidies | 369 | 436 |
| Financial guarantees | - | 40 |
| Total other liabilities | 2,493 | 2,462 |

In EUR'000

In EUR'000

31.12.2018

31.12.2018

31.12.2017

31.12.2017

Loan repayments received in advance

Loan repayments received in advance

2,124

2,124

1,986

1,986

Deferred income from interest subsidies

Deferred income from interest subsidies

369

369

436

436

Financial guarantees

Financial guarantees

-

-

40

40

Total other liabilities

Total other liabilities

2,493

2,493

2,462

2,462

17
     Member States Contribution called (in EUR’000)

| Member States | Contribution to the Facility | Contribution to interest subsidies and technical assistance | Total


  contributed | Called and not paid |
| --- | --- | --- | --- | --- |
| Austria | 69,935 | 8,869 | 78,804 | 2,410 |
| Belgium | 103,226 | 13,046 | 116,272 | 3,530 |
| Bulgaria | 896 | 294 | 1,190 | 140 |
| Cyprus | 576 | 189 | 765 | 90 |
| Czech Republic | 3,264 | 1,071 | 4,335 | 510 |
| Denmark | 56,820 | 7,275 | 64,095 | 2,000 |
| Estonia | 320 | 105 | 425 | 50 |
| Finland | 39,852 | 5,214 | 45,066 | 1,470 |
| France | 624,971 | 75,972 | 700,943 | 19,550 |
| Germany | 611,715 | 76,616 | 688,331 | 20,500 |
| Greece | 35,121 | 4,883 | 40,004 | 1,470 |
| Hungary | 3,520 | 1,155 | 4,675 | 550 |
| Ireland | 18,577 | 2,802 | 21,379 | 910 |
| Italy | 340,252 | 45,025 | 385,277 | 12,860 |
| Latvia | 448 | 147 | 595 | 70 |
| Lithuania | 768 | 252 | 1,020 | 120 |
| Luxembourg | 7,693 | 984 | 8,677 | 270 |
| Malta | 192 | 63 | 255 | 30 |
| Netherlands | 138,415 | 17,685 | 156,100 | 4,850 |
| Poland | 8,320 | 2,730 | 11,050 | 1,300 |
| Portugal | 27,313 | 3,809 | 31,122 | 1,150 |
| Romania | 2,368 | 777 | 3,145 | 370 |
| Slovakia | 1,344 | 441 | 1,785 | 210 |
| Slovenia | 1,152 | 378 | 1,530 | 180 |
| Spain | 170,369 | 24,876 | 195,245 | 7,850 |
| Sweden | 73,692 | 9,677 | 83,369 | 2,740 |
| United Kingdom | 355,881 | 49,356 | 405,237 | 14,820 |
| Total as at 31 December 2018 | 2,697,000 | 353,691 | 3,050,691 | 100,000 |
| Total as at 31 December 2017 | 2,517,000 | 333,691 | 2,850,691 | 150,000 |

Member States

Member States

Contribution to the Facility

Contribution to the Facility

Contribution to interest subsidies and technical assistance

Contribution to interest subsidies and technical assistance

Total

Total

contributed

contributed

Called and not paid

Called and not paid

Austria

Austria

69,935

69,935

8,869

8,869

78,804

78,804

2,410

2,410

Belgium

Belgium

103,226

103,226

13,046

13,046

116,272

116,272

3,530

3,530

Bulgaria

Bulgaria

896

896

294

294

1,190

1,190

140

140

Cyprus

Cyprus

576

576

189

189

765

765

90

90

Czech Republic

Czech Republic

3,264

3,264

1,071

1,071

4,335

4,335

510

510

Denmark

Denmark

56,820

56,820

7,275

7,275

64,095

64,095

2,000

2,000

Estonia

Estonia

320

320

105

105

425

425

50

50

Finland

Finland

39,852

39,852

5,214

5,214

45,066

45,066

1,470

1,470

France

France

624,971

624,971

75,972

75,972

700,943

700,943

19,550

19,550

Germany

Germany

611,715

611,715

76,616

76,616

688,331

688,331

20,500

20,500

Greece

Greece

35,121

35,121

4,883

4,883

40,004

40,004

1,470

1,470

Hungary

Hungary

3,520

3,520

1,155

1,155

4,675

4,675

550

550

Ireland

Ireland

18,577

18,577

2,802

2,802

21,379

21,379

910

910

Italy

Italy

340,252

340,252

45,025

45,025

385,277

385,277

12,860

12,860

Latvia

Latvia

448

448

147

147

595

595

70

70

Lithuania

Lithuania

768

768

252

252

1,020

1,020

120

120

Luxembourg

Luxembourg

7,693

7,693

984

984

8,677

8,677

270

270

Malta

Malta

192

192

63

63

255

255

30

30

Netherlands

Netherlands

138,415

138,415

17,685

17,685

156,100

156,100

4,850

4,850

Poland

Poland

8,320

8,320

2,730

2,730

11,050

11,050

1,300

1,300

Portugal

Portugal

27,313

27,313

3,809

3,809

31,122

31,122

1,150

1,150

Romania

Romania

2,368

2,368

777

777

3,145

3,145

370

370

Slovakia

Slovakia

1,344

1,344

441

441

1,785

1,785

210

210

Slovenia

Slovenia

1,152

1,152

378

378

1,530

1,530

180

180

Spain

Spain

170,369

170,369

24,876

24,876

195,245

195,245

7,850

7,850

Sweden

Sweden

73,692

73,692

9,677

9,677

83,369

83,369

2,740

2,740

United Kingdom

United Kingdom

355,881

355,881

49,356

49,356

405,237

405,237

14,820

14,820

Total as at 31 December 2018

Total as at 31 December 2018

2,697,000

2,697,000

353,691

353,691

3,050,691

3,050,691

100,000

100,000

Total as at 31 December 2017

Total as at 31 December 2017

2,517,000

2,517,000

333,691

333,691

2,850,691

2,850,691

150,000

150,000

In EUR'000

| In EUR'000 | 31.12.2018 | 31.12.2017 |
| --- | --- | --- |
| Commitments | | |
| Un-disbursed loans | 1,283,931 | 869,983 |
| Un-disbursed commitment in respect of shares and other variable yield securities | 347,167 | 321,695 |
| Issued guarantees | 2,800 | 7,682 |
| Interest subsidies and technical assistance | 457,328 | 382,576 |
| | | |
| Contingent liabilities | | |
| Signed non-issued guarantees | 1,553,668 | 74,569 |
| | | |
| Total contingent liabilities and commitments | 3,644,894 | 1,656,505 |

31.12.2018

31.12.2017

Commitments

Un-disbursed loans

1,283,931

869,983

Un-disbursed commitment in respect of shares and other variable yield securities

347,167

321,695

Issued guarantees

2,800

7,682

Interest subsidies and technical assistance

457,328

382,576

Contingent liabilities

Signed non-issued guarantees

1,553,668

74,569

Total contingent liabilities and commitments

3,644,894

1,656,505

In EUR'000

| In EUR'000 | From 01.01.2018 | From 01.01.2017 |
| --- | --- | --- |
| | to 31.12.2018 | to 31.12.2017 |
| Loans and advances | 92,506 | 97,440 |
| Interest subsidies | 4,224 | 3,966 |
| Total interest and similar income | 96,730 | 101,406 |
| | | |
| | | |
| The main components of interest and similar expenses are as follows: |
| | | |
| In EUR'000 | From 01.01.2018 | From 01.01.2017 |
| | to 31.12.2018 | to 31.12.2017 |
| Derivative financial instruments | -563 | -980 |
| Cash and cash equivalents | -654 | -1,037 |
| Treasury financial assets | -1,322 | -654 |
| Total interest and similar expense | -2,539 | -2,671 |

In EUR'000

From 01.01.2018

From 01.01.2018

From 01.01.2017

From 01.01.2017

to 31.12.2018

to 31.12.2018

to 31.12.2017

to 31.12.2017

Loans and advances

Loans and advances

92,506

92,506

97,440

97,440

Interest subsidies

Interest subsidies

4,224

4,224

3,966

3,966

Total interest and similar income

Total interest and similar income

96,730

96,730

101,406

101,406

The main components of interest and similar expenses are as follows:

The main components of interest and similar expenses are as follows:

In EUR'000

In EUR'000

From 01.01.2018

From 01.01.2018

From 01.01.2017

From 01.01.2017

to 31.12.2018

to 31.12.2018

to 31.12.2017

to 31.12.2017

Derivative financial instruments

Derivative financial instruments

-563

-563

-980

-980

Cash and cash equivalents

Cash and cash equivalents

-654

-654

-1,037

-1,037

Treasury financial assets

Treasury financial assets

-1,322

-1,322

-654

-654

Total interest and similar expense

Total interest and similar expense

-2,539

-2,539

-2,671

-2,671

20
     Fee and commission income and expenses

| In EUR'000 | From 01.01.2018 | From 01.01.2017 |
| --- | --- | --- |
| | to 31.12.2018 | to 31.12.2017 |
| Fee and commission on loans and advances | 107 | - |
| Fee and commission on financial guarantees | 170 | 209 |
| Other | 7 | 1 |
| Total fee and commission income | 284 | 210 |
| | | |
| The main component of fee and commission expenses is as follows: |
| | | |
| In EUR'000 | From 01.01.2018 | From 01.01.2017 |
| | to 31.12.2018 | to 31.12.2017 |
| Commission paid to third parties with regard to shares and other variable yield securities | -106 | -60 |
| Total fee and commission expenses | -106 | -60 |

In EUR'000

In EUR'000

From 01.01.2018

From 01.01.2018

From 01.01.2017

From 01.01.2017

to 31.12.2018

to 31.12.2018

to 31.12.2017

to 31.12.2017

Fee and commission on loans and advances

Fee and commission on loans and advances

107

107

-

-

Fee and commission on financial guarantees

Fee and commission on financial guarantees

170

170

209

209

Other

Other

7

7

1

1

Total fee and commission income

Total fee and commission income

284

284

210

210

The main component of fee and commission expenses is as follows:

The main component of fee and commission expenses is as follows:

In EUR'000

In EUR'000

From 01.01.2018

From 01.01.2018

From 01.01.2017

From 01.01.2017

to 31.12.2018

to 31.12.2018

to 31.12.2017

to 31.12.2017

Commission paid to third parties with regard to shares and other variable yield securities

Commission paid to third parties with regard to shares and other variable yield securities

-106

-106

-60

-60

Total fee and commission expenses

Total fee and commission expenses

-106

-106

-60

-60

In EUR'000

| In EUR'000 | From 01.01.2018 | From 01.01.2017 |
| --- | --- | --- |
| | to 31.12.2018 | to 31.12.2017 |
| Net proceeds from shares and other variable yield securities | 3,166 | 1,030 |
| Dividend income | 7,320 | 1,681 |
| Net fair value change | -20,665 | - |
| Net result on shares and other variable yield securities | -10,179 | 2,711 |

In EUR'000

From 01.01.2018

From 01.01.2018

From 01.01.2017

From 01.01.2017

to 31.12.2018

to 31.12.2018

to 31.12.2017

to 31.12.2017

Net proceeds from shares and other variable yield securities

Net proceeds from shares and other variable yield securities

3,166

3,166

1,030

1,030

Dividend income

Dividend income

7,320

7,320

1,681

1,681

Net fair value change

Net fair value change

-20,665

-20,665

-

-

Net result on shares and other variable yield securities

Net result on shares and other variable yield securities

-10,179

-10,179

2,711

2,711

General administrative expenses represent the actual costs incurred by the EIB for managing the Facility less income generated from standard appraisal fees directly charged by the EIB to clients of the Facility.

| In EUR'000 | From 01.01.2018 | From 01.01.2017 |
| --- | --- | --- |
| | to 31.12.2018 | to 31.12.2017 |
| Actual cost incurred by the EIB | -50,021 | -48,285 |
| Income from appraisal fees directly charged to clients of the Facility | 2,222 | 3,180 |
| Total general administrative expenses | -47,799 | -45,105 |

In EUR'000

In EUR'000

From 01.01.2018

From 01.01.2018

From 01.01.2017

From 01.01.2017

to 31.12.2018

to 31.12.2018

to 31.12.2017

to 31.12.2017

Actual cost incurred by the EIB

Actual cost incurred by the EIB

-50,021

-50,021

-48,285

-48,285

Income from appraisal fees directly charged to clients of the Facility

Income from appraisal fees directly charged to clients of the Facility

2,222

2,222

3,180

3,180

Total general administrative expenses

Total general administrative expenses

-47,799

-47,799

-45,105

-45,105

23
     Involvement with unconsolidated structured entities (in EUR’000)

23

Definition of a structured entity

Definition of a structured entity

A structured entity is one that has been designed so that voting or similar rights are not the dominant factor in deciding, who controls the-entity. IFRS 12 observes that a structured entity often has some or all of the following features:

A structured entity is one that has been designed so that voting or similar rights are not the dominant factor in deciding, who controls the-entity. IFRS 12 observes that a structured entity often has some or all of the following features:

·Restricted activities;

·

Restricted activities;

·A narrow and well-defined objective, such as to effect a tax-efficient lease, carry out research and development activities, provide a source of capital or funding to an entity or provide investment opportunities for investors by passing on risks and rewards associated with the assets of the structured entity to investors;

·

A narrow and well-defined objective, such as to effect a tax-efficient lease, carry out research and development activities, provide a source of capital or funding to an entity or provide investment opportunities for investors by passing on risks and rewards associated with the assets of the structured entity to investors;

·Insufficient equity to permit the structured entity to finance its activities without subordinated financial support;

·

Insufficient equity to permit the structured entity to finance its activities without subordinated financial support;

·Financing in the form of multiple contractually linked instruments to investors that create concentrations of credit or other risks (tranches).

·

Financing in the form of multiple contractually linked instruments to investors that create concentrations of credit or other risks (tranches).

Unconsolidated structured entities

Unconsolidated structured entities

The term 'unconsolidated structured entities' refers to all structured entities that are not controlled by the Facility and includes interests in structured entities that are not consolidated.

The term 'unconsolidated structured entities' refers to all structured entities that are not controlled by the Facility and includes interests in structured entities that are not consolidated.

Definition of Interests in structured entities:

Definition of Interests in structured entities:

IFRS 12 defines "interests" broadly to include any contractual or non-contractual involvement that exposes the reporting entity to variability in returns from the performance of the entity. Examples of such interests include the holding of equity interests and other forms of involvement such as the provision of funding, liquidity support, credit enhancements, commitments and guarantees to the other entity. IFRS 12 states that a reporting entity does not necessarily have an interest in another entity solely because of a typical customer supplier relationship.

The table below describes the types of structured entities that the Facility does not consolidate but in which it holds an interest.

Type of structured entity

| Type of structured entity | Nature and purpose | Interest held by the Facility |
| --- | --- | --- |
| Project Finance - lending to Special Purposes Vehicles (“SPV”) | Project Finance Transactions (PF Operations) are transactions where the Facility relies for the servicing of its debt on a borrower whose sole or main source of revenue is generated by a single or limited number of assets being financed by such debt or other pre-existing assets contractually linked to the project. PF operations are often financed through SPV. | Net disbursed amounts;


  Interest income. |
| Venture capital operations | The Facility finances venture capital and investment funds. Venture capital and investment funds pool and manage money from investors seeking private equity stakes in small and medium-size enterprises with strong growth potential as well as financing infrastructure projects. | Investments in units/shares issued by the venture capital entity;


  Dividends received as dividend income. |

Nature and purpose

Interest held by the Facility

Project Finance - lending to Special Purposes Vehicles (“SPV”)

Project Finance Transactions (PF Operations) are transactions where the Facility relies for the servicing of its debt on a borrower whose sole or main source of revenue is generated by a single or limited number of assets being financed by such debt or other pre-existing assets contractually linked to the project. PF operations are often financed through SPV.

Net disbursed amounts;

Interest income.

Venture capital operations

The Facility finances venture capital and investment funds. Venture capital and investment funds pool and manage money from investors seeking private equity stakes in small and medium-size enterprises with strong growth potential as well as financing infrastructure projects.

Investments in units/shares issued by the venture capital entity;

Dividends received as dividend income.

The table below shows the carrying amounts of unconsolidated structured entities in which the Facility has an interest at the reporting date, as well as the Facility's maximum exposure to loss in relation to those entities. The maximum exposure to loss includes the carrying amounts and the related un-disbursed commitments.

| Type of structured entity | Caption | Carrying amount at 31.12.2018 | Carrying amount at 31.12.2017 | Maximum exposure to loss at 31.12.2018 | Maximum exposure to loss at 31.12.2017 |
| --- | --- | --- | --- | --- | --- |
| Venture capital funds | Shares and other variable yield securities | 467,152 | 420,104 | 797,775 | 737,661 |
| Total | | 467,152 | 420,104 | 797,775 | 737,661 |

Type of structured entity

Caption

Carrying amount at 31.12.2018

Carrying amount at 31.12.2017

Maximum exposure to loss at 31.12.2018

Maximum exposure to loss at 31.12.2017

Venture capital funds

Shares and other variable yield securities

467,152

420,104

797,775

737,661

Total

467,152

420,104

797,775

737,661

24
     Impact financing envelope (in EUR’000)

Direct financing - through debt or equity instruments in projects with sound and experienced promoters and high developmental impacts, but that will, however, also entail higher expectations of losses and difficulties to recover the investment (equity type risk with higher than usual expectation of losses). The EIB will apply strict selection and eligibility criteria for this instrument, as these projects, notwithstanding their high developmental impact, would not be able to meet acceptable financing criteria (i.e. low expectation of recovering the investment or offsetting the losses through interest rates /equity returns).

The IFE will also allow diversification into new sectors, such as health and education, agriculture and food security, and the development of new and innovative risk-sharing instruments.

From a financial and accounting perspective the IFE forms part of the IF portfolio and is accounted for in the overall IF annual financial statements.

The following table represents the carrying amounts and the committed, but undisbursed amounts, per type of asset:

| Type of IFE investment | Caption | Carrying amount at 31.12.2018 | Carrying amount at 31.12.2017 | Undisbursed amount at 31.12.2018 | Undisbursed amount at 31.12.2017 |
| --- | --- | --- | --- | --- | --- |
| Social impact equity funds | Shares and other variable yield securities | 19,134 | 7,839 | 53,672 | 51,720 |
| Loans to financial intermediaries | Loans and advances | 36,277 | 30,804 | 139,329 | 44,017 |
| Risk sharing facilitating instruments | Issued guarantees | -786 | -296 | 43,668 | 64,569 |
| Direct financing – equity participations | Shares and other variable yield securities | 53,183 | 42,981 | 1,014 | 4,014 |
| Total | | 107,808 | 81,328 | 237,683 | 164,320 |

Type of IFE investment

Type of IFE investment

Caption

Caption

Carrying amount at 31.12.2018

Carrying amount at 31.12.2018

Carrying amount at 31.12.2017

Carrying amount at 31.12.2017

Undisbursed amount at 31.12.2018

Undisbursed amount at 31.12.2018

Undisbursed amount at 31.12.2017

Undisbursed amount at 31.12.2017

Social impact equity funds

Social impact equity funds

Shares and other variable yield securities

Shares and other variable yield securities

19,134

19,134

7,839

7,839

53,672

53,672

51,720

51,720

Loans to financial intermediaries

Loans to financial intermediaries

Loans and advances

Loans and advances

36,277

36,277

30,804

30,804

139,329

139,329

44,017

44,017

Risk sharing facilitating instruments

Risk sharing facilitating instruments

Issued guarantees

Issued guarantees

-786

-786

-296

-296

43,668

43,668

64,569

64,569

Direct financing – equity participations

Direct financing – equity participations

Shares and other variable yield securities

Shares and other variable yield securities

53,183

53,183

42,981

42,981

1,014

1,014

4,014

4,014

Total

Total

107,808

107,808

81,328

81,328

237,683

237,683

164,320

164,320

(1)


   OJ L 210, 6.8.2013, p. 1.

Council Regulation (EU) 2018/1877 of 26 November 2018 on the financial regulation applicable to the 11th European Development Fund, and repealing Regulation (EU) 2015/323

In accordance with Article 53 of the Financial Regulation applicable to the 11th European Development Fund, the treasury is presented in the balance sheet of the 11th EDF. The nature of the various bank accounts is outlined in chapter 5, Financial Risk Management.

Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union,

Council regulation (EU) 2018/1877 of 26 November 2018 on the financial regulation applicable to the 11th European Development Fund, and repealing Regulation (EU) 2015/323

Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union

Council regulation (EU) 2018/1877 of 26 November 2018 on the financial regulation applicable to the 11th European Development Fund, and repealing Regulation (EU) 2015/323