ANNEX

1. Calculation of the cost of funding

The cost of funding shall be calculated in the following steps:

Step 1: Calculation of the daily total costs of an individual funding instrument in a time compartment or in liquidity management compartment

The daily accruals shall be calculated:

For each funding instrument, the agio/disagio shall be linearly distributed over the lifetime of the instrument:

agio/disagiodaily = (100-issuance price):(maturity date-issuance date)

where Issuance price = All-in Price (including bank fees)

For each funding instrument, the daily total costs shall be calculated:

CoFdailydaily per instrument = ACC+agio/disagiodaily

Step 2: Calculation of the aggregate daily total costs of funding

For each time compartment (TC1-TC11), the daily total costs for the compartment before the levelling referred to in Article 5 shall be the sum of all daily total costs of each funding instrument attributed to the time compartment:

CoFdailyTC(x)pre-levelling=∑ CoFdaily per instrument allocated to the TC(x)

For the liquidity management compartment the Cost of Funding shall be:

CoFdailyLMCpre-levelling=∑ CoFdaily per instrument allocated to the LMC

Step 3: Calculation of the liquidity balances in the time compartments

The level of liquidity holdings shall be calculated on daily basis as follows:

LiquidityTC(x) = Inflows [Issuance proceeds + Interestloans/grants + Repaymentsloans/grants] – Outflows [Disbursements + Couponsoutstanding debt + Debt Redemptions]

Step 4: Calculation of the cost of funding of funding instruments affected by liquidity surplus

This step identifies the part of the CoF of the time compartments with a liquidity surplus that can be attributed to the liquidity held in that compartment.

The costs of funding related to the funding instruments shall be calculated as follows:

CoFLiquidity surplusTC(surplus) =

CoFdailyTC(surplus)pre-levelling * Liquidity TC(surplus): TC(surplus)

CoFdailyTC(surplus)post-levelling = CoFdailyTC(surplus)pre-levelling – CoFLiquidity surplusTC(surplus)

Step 5: Calculation of the cost of liquidity management compartment in case cost of funding are attributed to it from the time compartment with liquidity surplus

In case the liquidity management compartment receives surplus from the time compartment, the cost of liquidity management compartment shall be calculated as follows:

CoFdailyLMCpost-levelling = CoFdailyLMCpre-levelling + ∑ CoFLiquidity surplusTC(surplus)

Step 6: Calculation of the cost of funding of the time compartment with liquidity deficit

Any liquidity deficit in a time compartment is levelled with a transfer of liquidity from the liquidity management compartment at its daily costs of funding (Step 5).

For time compartments with a positive liquidity balance, the post-levelling cost of funding already result from Step 4 above.

CoFLiquidity transfer from LMC = CoFdailyLMCpost-levelling * Transfer amount: LMC

CoFdailyTC(deficit)post-levelling = CoFdailyTC(deficit)pre-levelling + CoFLiquidity transfer from LMC

While the cost of funding may vary between six-month time compartments because of differences in funding conditions beyond the control of the Commission, the Commission shall manage borrowing and debt management operations in order to ensure that each time-compartment bears similar maturity profiles to the greatest extent possible.

Step 7: Calculation of the daily cost of funding of a disbursement

The daily cost of funding of disbursement shall be the amount of the disbursement multiplied by the relative share of the disbursement in relation to the time compartment to which it is allocated.

CoF of disbursement in TC(x) =

CoFdailyTC(x)post-levelling * outstand amount of disbursement: ∑ outstanding disbursements in TC(x)

2. Calculation of Cost of Liquidity Management

The costs of liquidity management per disbursement shall be calculated as the sum of the daily costs of the liquidity management compartment holding after the levelling of liquidity balances of the time compartments over the calculation period. Any returns (or costs in case of negative rates) shall be deducted as follows:

LIQMquarter= ∑ CoFdailyLMCpost-levelling over the quarter – RoI of liquidity holdingsquarter

The LIQM shall be attributed to each disbursement as follows:

LIQM of disbursement =

LIQMquarter *

∑ outstanding disbursementend of quarter: ∑ outstanding disbursementsend of quarter

3. Calculation of Cost of Service for administrative overheads

3.1. Calculation of recurring administrative costs

Recurring administrative costs shall be calculated as follows:

annual recurring administrative costs total = ∑ recurring administrative cost items for calendar year

Recurring administrative costs shall be allocated as follows:

annual recurring administrative costs per beneficiary = annual recurring administrative costs total *

∑ disbursement outstanding towards beneficiaryend of year: ∑ outstanding disbursementsend of year

3.2. Calculation and allocation of set-up costs

The set-up costs per beneficiary of RRF loans shall be calculated in the following two steps:

(a) The set-up costs for RRF loans shall be calculated as follows: set-up costs for RRF loans = 48 %*∑ set-up cost items

(b) The set-up costs for RRF loans shall be allocated for the years 2021, 2022 and 2023 to each Member State having signed an RRF loan agreement as follows: set-up costs per RRF loan signed = set-up costs for RRF loans* amount of loan signed per Member State end of year: total maximum amount of RRF loans

(c) As of 1 January 2024, any unallocated set-up costs shall be calculated as follows: unallocated set-up cost for RRF loans = set-up costs for RRF loans – ∑ allocated set-up cost items to RRF loans in 2021, 2022 and 2023 They shall be allocated as additional set-up costs to disbursements to Member States under RRF loan agreement as follows: additional set-up costs per beneficiary = unallocated set-up cost for RRF loans end 2023* ∑ amounts of loan signed per beneficiary end 2023: total amount of loans under signed RRF loan agreements end 2023

3.3. Calculation of Cost of Service per beneficiary

CoSAnnual = ∑ Recurring administrative cost items + ∑ Set-up administrative cost items

4. Glossary of acronyms