o As at writing date, 5 additional operations are expected by the end of 2016.

oAn additional operational achievement within the year was the conclusion of the public procurement process for the selection of the technical expert and the actual delivery of the first expert support training to the bank from the Czech Repulic.

oafter the publication of the "Request for proposals in order to become a financial intermediary under the PF4EE" in January 2015, the EIB reported that so far 10 banks manifested an interest to implement the PF4EE. The EIB signed three agreements with 3 banks in different Member States (Czech Republic, Spain and France) in Q3 and Q4 2015.

oAs mentioned in the Delegation Agreement Annex 5a, Section III, operations will be chosen having regard to the fields of intervention of the PF4EE and carefully monitored and evaluated to assess the impact on energy efficiency and GHG saving and other impact indicators.

oAccordingly with the provision of the Delegation Agreement Annex 1, section 7.2 the assessment of eligibility of Final Recipient will need to be performed against specific requirements and financing should only support Eligible Energy Efficiency Investment.

oconsidering that lending is implemented through financial intermediaries, the assessment of compliance of final recipient and eligible investments and impact indicators with the provisions set in the Delegation Agreement is challenging. EIB's monitoring and reporting on these critical aspects will need to be scrutinized by the PF4EE Board.

oThe EIB is committed under the Delegation Agreement art. 17 to carry out by 2017 a specific evaluation of the cash collateral approach to assess the effectiveness of the cash collateral approach, including through a comparison with alternative unfunded approaches, such as financial guarantees provided by the Union through entrusted entities or directly to Financial Intermediaries.

oSince its structure is fully decentralized (i.e. the risk protection is provided by the Commission by means of collateral deposited on collateral accounts, set for each financial intermediaries and managed by the EIB) the PF4EE is designed to allow for scalable levels of finance using structural funds. In this respect Managing Authorities of Member States can replicate (or provide financial contributions to) this instrument which ensures that the impact of the contribution provided remain within the relevant geographical area, building on the existing ex-ante assessment and benefiting from the basic legal structure of the PF4EE instrument as described in the Delegation Agreement.

othe PF4EE instrument will provide valuable piloting experience for possible up scaling. This piloting phase will allow in particular to test the most appropriate level of protection (i.e. minimise) to be provided to financial intermediaries in about 10 banks in different Member States for different categories of beneficiaries.

The Delegation Agreement (DA) was signed in December 2014. Agreements with three financial intermediaries were signed in 2015. No final recipients yet.

(l)The contribution of the financial instrument to the achievement of the objectives of the programme concerned as measured by the established indicators, including, where applicable, the geographical diversification;

The Delegation Agreement (DA) was signed in December 2014. Agreements with three financial intermediaries were signed in 2015. No final recipients yet.

The Delegation Agreement (DA) was signed in December 2014. Agreements with three financial intermediaries were signed in 2015. No final recipients yet. The calculation will follow the same rationale as outlined for the target leverage factor.

The target leverage effect (defined also as Target Investment Leverage) as indicated in the Delegation Agreement is 8.

The total amount of loan financing by the EIB is expected to reach up to approximately EUR 430 million. Additional debt financing is expected from other financial intermediaries. The total investment in EE over this period could be at around EUR 540 million. However, on the basis of the three first operations signed in 2015 (CZ, ES and FR) and the pipeline, the EIB now targets to achieve EUR 1 billion of new investments in energy efficiency.

The EU budget allocation foreseen in the LIFE regulation for the programming period 2014-2017 amounts to EUR 80 million (4% of which will finance the Expert Support Facility and are not considered in the calculation of the leverage).

(j)The accumulated figures on impairments of assets of equity or risk-sharing instruments, and on called guarantees for guarantee instruments;

Impact of negative interest on PF4EE: no impact as at 31/12/2015.

(f)An evaluation of the use of any amounts returned to the instrument as internal assigned revenue under paragraph 6;

The PF4EE delegation agreement was signed on 8 December 2014. Agreements with three financial intermediaries were signed in 2015. No final recipients yet.

The final recipients include private individuals, home-owner associations, SMEs, corporates and/or public institutions/bodies, undertaking EE investments in line with the NEEAP of each Member States.

The RSF aims to increase lending activity and to improve financing conditions for final recipients through, among others, lower pricing, longer maturities and lighter securities requirements. The EIB loan for EE to the FIs may complement the RSF. Such EIB loans for EE will be provided by the EIB at competitive rates and with long-maturities.

The size of the EE loans provided to beneficiaries range from EUR 40 000, which can be reduced to accommodate small investments within the residential sector, to EUR 5 million and in exceptional cases up to EUR 15 million.

The RSF is designed to mitigate the credit risk faced by FIs when lending to final recipients undertaking eligible EE investments. By means of collateral deposited on the collateral account, the RSF will cover losses at the collateral rate incurred under EE loans included in the portfolio to be built by the FIs for the financing of EE investments.

expert support services for the FIs in order to support the implementation of the PF4EE instrument and

The PF4EE is conceived as a pilot initiative in the years 2014-2017 to provide access to adequate and affordable commercial financing for eligible energy efficiency (EE) investments targeted by schemes developed by Participating Countries to implement their National Energy Efficiency Action Plans (NEEAP) or other programmes in line with EU Directives relating to Energy Efficiency.

The PF4EE is a guarantee instrument which is implemented under indirect management by the European Investment Bank. The delegation agreement (DA) was signed on 8 December 2014.

(b)Description of the financial instrument, implementation arrangements and the added value of the Union contribution;

Regulation (EU) N° 1293/2013 of the European Parliament and of the Council of 11 December 2013 on the establishment of a Programme for the Environment and Climate Action (LIFE) Article 17.

(a)Identification of the financial instrument and the basic act;

The instrument aims to increase lending activity and to improve financing conditions for final recipients through, among others, lower pricing, longer maturities and lighter securities requirements.

It is implemented under indirect management by the European Investment Bank. The delegation agreement (DA) was signed on 8 December 2014.

The PF4EE is a guarantee instrument providing access to finance for energy efficiency (EE) investments which implement National Energy Efficiency Action Plans (NEEAP) of Participating Countries, or other programmes in line with EU Directives relating to Energy Efficiency. The final recipients include private individuals, home-owner associations, SMEs, corporates and/or public institutions/bodies.

oHowever, a rapid turnaround of the contracting process will be necessary to ensure loans can be made available for the academic year 2016-17.

obased on market testing carried out by the EIF and direct contacts at information events for potential Financial Intermediaries, there is a positive forecast demand for the guarantees.

oAs HEIs are organised in academic years, demand tends to be limited to specific periods: June to October, and to a lesser extent, November to January for some courses beginning in January.

oThe number of loans supported through the instrument are sufficient to meet student demand.

oThe build-up towards an adequate geographical spread of Financial Intermediaries, so as to ensure wide availability of the student loans across the 33 Erasmus+ Programme Countries.

oa sufficient critical mass of Financial Intermediaries to ensure a successful implemenation of the programme.

The Student Loan Guarantee Facility is available to financial institutions, which agree to offer loans on favourable terms to such mobile students. This additional and innovative tool for learning mobility will neither replace any current, nor impede the development of any future grant or loan system supporting student mobility at local, national, or Union level.

To support mobility, equity and study excellence, the Student Loan Guarantee Facility (EU contribution of EUR 517 million unlocking EUR 3 billion in student loans) targets enabling up to 200 000 students, regardless of their social background, to take their Master degree in another Erasmus+ Programme country (by 2023, as signed guarantee agreements have a 3-year duration).

A first guarantee agreement was signed in June 2015, just ahead of the new academic year 2015-2016, enabling a bank from Spain to provide the first 85 Master Loans for Spanish students going abroad to take their Master's degree (66 students), as well as 19 students from other countries coming to Spain. About half of the Erasmus+ Programme Countries are either a country of origin or of destination for benefiting Master students.

A call for Expression of Interest by Financial Intermediaries was published by the EIF in February 2015. As at the end of 2015, the ERASMUS+ Student Loan Guarantee Facility contributed a provision of almost EUR 60 million of financing (through 2 signed guarantee agreements totalling EUR 9 720 000), enabling to provide Erasmus+ Master Loans to an estimated 4 000 eligible Final Recipients during the next 3 years.

(l)The contribution of the financial instrument to the achievement of the objectives of the programme concerned as measured by the established indicators, including, where applicable, the geographical diversification;

EU contribution of EUR 517 million is targeted to unlock about EUR 3 billion in student loans.

(j)The accumulated figures on impairments of assets of equity or risk-sharing instruments, and on called guarantees for guarantee instruments;

The balance of the fiduciary account at 31/12/15 stands at EUR 3 783 047,77 in cash positions and EUR 12 000 104,17 in treasury assets.

also a "call account" with the EIF is being set up.

a reduction of the Minimum Reserve from 10 to 5 million euro is being agreed;

In order to minimise risks on negative interest, regular cooperation is ongoing and an avoidance strategy is being implemented:

(f)An evaluation of the use of any amounts returned to the instrument as internal assigned revenue under paragraph 6;

Amount of investments already made by eligible final recipients due to the financing provided through the instrument, if applicable.

Amount of financing already provided by the instrument to eligible final recipients,

Amount of investments expected to be made by eligible final recipients due to the financing, if applicable

Amount of financing expected to be provided by the instrument (including EU contribution committed) to eligible final recipients,

2015 saw the launching of the financial instrument; despite a deteriorating interest climate, a small interest was realised on the investment. In order to minimise risks on negative interest, an avoidance strategy is being implemented (via active treasury management).

The Facility was created to support transnational mobility for Master students, who will make an increasingly important contribution to innovation and entrepreneurship in Europe but who also face difficulties in accessing finance, especially for transnational student mobility where a market gap has been identified

The Facility aims at granting students access to Master’s programmes abroad through loans provided by financial institutions, at favourable conditions because of effective portfolio credit risk transfer (via a guarantee or a counter-guarantee) by the EIF on behalf of the Commission.

The objective of Erasmus + Master Student Loans (a guarantee facility under the Erasmus+ programme), is to incentivise commercial/retail banks, promotional banks, student loan bodies and other financial intermediaries (“Intermediaries”) to extend loans (up to a maximum of EUR 12 000 for one-year, up to EUR 18 000 for a two-year programme) to mobile students pursuing a full higher education degree (Masters’ programme) in an Erasmus+ Programme country which is neither their country of residence nor the country in which they obtained their qualification giving them access to Master's studies.

(b)Description of the financial instrument, implementation arrangements and the added value of the Union contribution;

Regulation (EU) No 1288/2013 of the European Parliament and of the Council of 11 December 2013 establishing 'Erasmus+': the Union programme for education, training, youth and sport and repealing Decisions No 1719/2006/EC, No 1720/2006/EC and No 1298/2008/EC.

(a)Identification of the financial instrument and the basic act;

The Erasmus+ Master Student Loan seeks to make available EUR 517 million (with a total commitment of EUR 61,35 million at 31/12/2015) of guarantees to support mobility, equity and study excellence via guarantees to financial institutions which agree to offer loans for Master's studies in other Erasmus+ Programme countries on favorable terms for mobile students (regardless of their social background), with an expected leverage of 5,7, unlocking EUR 3 billion in student loans. The main priority in 2016 is to ensure a broad geographical coverage so that students across Europe will be able to access loans supported through the facility in 2016.

oThe scheme itself will start in earnest after a signature of Delegation Agreement between the European Commission and the EIF, expected in Q2 of year 2016.

obased on market testing carried out by the EIF and direct contacts and an info session with potential Financial Intermediaries, there is a positive forecast demand for the guarantees.

o To reach a sufficient critical mass of Financial Intermediaries to ensure a successful start to the programme.

o signature of a Delegation Agreement with the EIF in the course of year 2016.

VI)the achieved leverage effect of guaranteed loans in relation to the indicative leverage effect (1 to 5,7).

IV)the number of SMEs and micro, small and medium- sized organisations benefiting from the Guarantee Facility, categorised by national origin, size and sectors;

I)the volume of loans guaranteed in the framework of the Guarantee Facility, categorised by national origin, size and sectors of SMEs and micro, small and medium-sized organisations;

The contribution of the CCS GF to the achievement of the objectives of the Creative Europe programme will be measured by the indicators established in the legal basis:

Additionally, companies will be able to build closer relationships with the financial sector, both thanks to the capacity-building arm of the scheme addressed to the financial intermediaries and the training programmes for operators of the sector that will be provided under the Creative Europe Programme.

The use of a financial instrument may have a strong structuring effect on the CCS, thanks to the leverage effect on EU funds and to the expected progressive transition from grants to loan support for some types of supports and beneficiaries, such as: micro-loans for all types of individual cultural project development; funding for independent game developers; funding for publishers of books or sound recordings; loans to exhibitors for the digitisation of cinema theatres; working capital loans to distributors to cover distribution costs (print, marketing, advertising, dubbing and subtitling) etc.

(l)The contribution of the financial instrument to the achievement of the objectives of the programme concerned as measured by the established indicators, including, where applicable, the geographical diversification;

The targeted leverage is 5,7. With a total budgetary appropriation of EUR 121 million in the 2016-2020 period the financial instrument may leverage around EUR 690 million of additional funding for the cultural and creative industries.

(j)The accumulated figures on impairments of assets of equity or risk-sharing instruments, and on called guarantees for guarantee instruments;

(f)An evaluation of the use of any amounts returned to the instrument as internal assigned revenue under paragraph 6;

Hence the implementation of a Cultural and Creative Sector Guarantee Facility improves access to finance for companies and organisations in the cultural and creative sectors, leading to the strengthening of their financial capacity and competitiveness.

CCS GF aims at strengthening the competitiveness of the cultural and creative sector, by providing guarantees or counter guarantees to financial institutions lending to cultural and creative SMEs in Participating Countries (i.e. EU 28 + Norway and Iceland). A capacity building scheme (technical assistance) will be an integral component of the CCS GF.

The Guarantee Facility has been the subject of an impact assessment, in-depth analysis of the pre-existing market gap, market testing with a sample of financial institutions and a dedicated study on 'Access to finance for cultural and creative sectors'.

The European Commission retains an overall responsibility for managing the CCS GF but day-to-day management will be entrusted to the European Investment Fund (EIF) under a Delegation Agreement.

to maximise the European geographical diversification of financial institutions willing to work with cultural and creative SMEs.

to increase the number of financial institutions which are willing to work with cultural and creative SMEs;

to provide guarantees to banks dealing with cultural and creative SMEs resulting in easier access to bank credits;

The Cultural and Creative Sectors (CCS) count for more than 1 million enterprises and represent nearly 4,5% of the total business economy in Europe. The sector employs over 3,2 million people, predominantly in very small enterprises, and provides work to many self-employed people. CCS grow quickly yet suffer from negative stereotypes when it comes to assessing their economic performance. Hence the operational objectives are:

The Cultural and Creative Sectors Guarantee Facility (CCS GF) is part of the Creative Europe programme. The general objective of the Cultural and Creative Sectors Guarantee Facility is in line with those of the Creative Europe Programme which is to foster the safeguarding and promotion of European cultural and linguistic diversity, and strengthen the competitiveness of the cultural and creative sectors, with a view to promoting smart, sustainable and inclusive growth, in line with the Europe 2020 strategy.

(b)Description of the financial instrument, implementation arrangements and the added value of the Union contribution;

Thereof: Art 14 and Annex 1 on the Cultural and Creative Sectors Guarantee Facility specific political and operational objectives.

REGULATION (EU) No 1295/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 December 2013 establishing the Creative Europe Programme (2014 to 2020) and repealing Decisions No 1718/2006/EC, No 1855/2006/EC and No 1041/2009/EC.

(a)Identification of the financial instrument and the basic act;

The Cultural and Creative Sectors Guarantee Facility is a facility under which the European Commission through the European Investment Fund (EIF) will provide guarantees and counter-guarantees on debt financing to Financial Intermediaries in order to improve access to finance to SMEs from cultural and creative sectors. Thanks to the CCS GF, Financial intermediaries selected by the EIF will be able to provide additional debt financing to SMEs in Participating Countries. In addition, the action will provide expertise/capacity building to the financial institutions wishing to build dedicated portfolios of loans targeting cultural and creative SMEs. This may result in an increase in the number of financial institutions which are willing to work with cultural and creative SMEs as well as maximising the European geographical diversification of targeted financial products for the sector.With a total budgetary appropriation for CCS GF of EUR 121million in the 2016-2020 period and a targeted leverage effect of 5,7 the financial instrument may leverage around EUR 690 million of additional funding or the cultural and creative industries.

oProvided that the InnovFin SME Guarantee instrument can be implemented as foreseen, it would be able to make a significant contribution to addressing the loan finance gap for innovative smaller companies.

oDemand for longer-term (up to 10 years) loan finance in the range of EUR 25,000 to 7,5 million for the target group innovative SMEs/ Small Midcaps should remain high across EU Member States and Associated countries, due to the incentives built into the instrument (regulatory capital relief of the 50% uncapped guarantee per loan for financial intermediaries).

obased on the very successful implementation of the Pilot guarantee facility (RSI) during the period 2012-2013, it can be reasonably expected that the InnovFin SME Guarantee will successfully be taken up by the market.

oThe contractual arrangements between the European Commission (represented by DG RTD) and EIF allow for flexibility as regards product development for the period 2014-2020.

oIn this context, the fees charged to financial intermediaries need to reflect the risk taken at EU level while, at the same time, offering risk-sharing and capital relief for financial intermediaries.

oit will be crucial for the implementation of the InnovFin SME Guarantee to attract a sufficient number of financial intermediaries (banks and guarantee institutions) as risk-sharing partners of the EIF and loan providers to final recipients.

In terms of incentivizing the implementation of the InnovFin SME Guarantee and its geographical coverage (EU Member States and Associated Countries), similar milestones and indicators are in place, as part of the Delegation Agreement with the EIF, to make sure that within the period 2014-2020, the instrument will be rolled out successfully and in an efficient manner.

allow, in combination with the COSME Loan Guarantee Facility which focuses on increasing the competitiveness of SMEs in general, improved access to finance for SMEs (and Small Midcaps) as part of a single EU debt financial instrument for SMEs.

support, via risk-sharing (guarantees and counter-guarantees), for innovative SMEs and Small Midcaps investing across Horizon 2020 Societal Challenges through better access to longer-term loan and lease finance, for loan amounts between EUR 25,000 and 7.5 million;

increase in private finance and address the financing gap for innovative SMEs and Small Midcaps seeking loan finance for their riskier investments in RDI;

The dedicated InnovFin SME Guarantee makes the following contribution to the objectives of Horizon 2020:

As at 31/12/2015, the Innovfin SME Guarantee already contributed to provide 310 million EUR of financing to 727 Final Recipients, accounting for an estimated 443 million EUR investment amount, and had thus an important impact on the real economy of the EU as described below

(l)The contribution of the financial instrument to the achievement of the objectives of the programme concerned as measured by the established indicators, including, where applicable, the geographical diversification;

The achieved leverage effect as at 31/12/2015 equals 1,1 with an amount of financing provided of EUR 310,1 million and an EU contribution of EUR 291,7 million.

The expected leverage effect as at 31/12/2015 equals 9,24 with an amount of financing expected to be provided of EUR 2 694 million and an EU contribution of EUR 291,7 million.

The target leverage effect equals 9 with an amount of financing expected to be provided by financial intermediaries of EUR 9 500 million and an EU contribution of EUR 1060 million.

(j)The accumulated figures on impairments of assets of equity or risk-sharing instruments, and on called guarantees for guarantee instruments;

Impact of negative interest rates on the Facility: no impact as at 31/12/2015.

(f)An evaluation of the use of any amounts returned to the instrument as internal assigned revenue under paragraph 6;

Amount of investments already made by eligible final recipients due to the financing provided through the instrument, if applicable.

- of which Operations made possible thanks to EFSI

Amount of financing already provided by the instrument to eligible final recipients,

- of which Operations made possible thanks to EFSI

Amount of investments expected to be made by eligible final recipients due to the financing, if applicable

- of which Operations made possible thanks to EFSI

Amount of financing expected to be provided by the instrument (including EU contribution committed) to eligible final recipients,

Expected impact: R&I-driven SMEs and small midcaps able to carry out a greater amount of R&I. The indicators are the number of agreements signed with financial intermediaries and the number and volume of loans made.

This is a demand-driven instrument, with no prior allocations between sectors, countries or regions, or types or sizes of firms or other entities.

b) For loans: according to the internal processes of the intermediary bank or other financial institution that the SME or small midcap applies to, using normal commercial criteria.

a) For financial intermediaries: EIF issues calls for expression of interest, with eligibility and selection criteria defined as part of each call after consultation with DG Research & Innovation.

Selection procedure: financial intermediaries selected by entrusted entities for the implementation of financial instruments pursuant to Article 139(4) of Regulation (EU, Euratom) No 966/2012 on the basis of open, transparent, proportionate and non- discriminatory procedures, may include private financial institutions as well as governmental and semi-governmental financial institutions, national and regional public banks as well as national and regional investment banks

R&I-driven SMEs or small midcaps wishing to apply for a loan should contact one of the financial intermediaries signing an agreement (see Selection procedure) with EIF. This is a demand-driven facility, with no prior allocations between sectors, countries or regions. However, the Commission incentivises EIF to make a particular effort to ensure that a significant proportion of final recipients are eco-innovative SMEs and small midcaps.

The European Investment Fund (EIF) is providing direct guarantees to financial intermediaries such as banks, who will extend the actual loans to final recipients. The guarantee covers up to 50% of intermediaries' potential losses. EIF also offers counter-guarantees to financial intermediaries (such as guarantee institutions) providing risk protection to banks extending loans to R&I-driven SMEs and small midcaps. This facility is available since 10 June 2014.

The EIF implements this guarantee instrument, which will be delivered by financial intermediaries (such as banks). Financial intermediaries will be guaranteed against a proportion of their potential losses by EIF, which will also offer counter-guarantees to guarantee institutions.

This guarantee facility succeeds and refines the RSI pilot under the RSFF in FP7, and is part of a single debt financial instrument supporting the growth of enterprises and their R&I activities. It targets R&I-driven SMEs and small midcaps (up to 499 employees) requiring loans of between EUR 25 000 and EUR 7,5 million. A loan of more than EUR 7,5 million will be considered on a case-by-case basis.

(b) Description of the financial instrument, implementation arrangements and the added value of the Union contribution;

Council Decision 2013/743/EU of 3 December 2013 establishing the specific programme implementing Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020) (OJ L 347/965, 20.12.2013).

Regulation (EU) No 1290/2013 of the European Parliament and of the Council of 11 December 2013 laying down the rules for participation and dissemination in "Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020)" (OJ L 347/81, 20.12.2013).

Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11 December 2013 establishing Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020) (OJ L 347/104, 20.12.2013).

(a) Identification of the financial instrument and the basic act;

Based on the foreseen Union budget coming from Horizon 2020, the risk-sharing arrangements between the EU and EIF as well as between the EIF and its financial intermediaries, a significant loan and lease volume in support of innovative small companies and their investment can be expected. For the period 2014-2020, it is expected to mobilize a loan and lease volume of approximately EUR 9,5 billion in support of 3 000 innovative companies and their investments in RDI.

Due to the advantages the InnovFin SME Guarantee offers, notably in the form of risk-sharing and capital relief for banks, guarantee institutions and other financial intermediaries, this instrument is able to successfully address the financing gap for innovative small companies.

The EU and the EIF, as risk-sharing partners at EU level, support loan finance to such innovative SMEs and Small Midcaps through direct or indirect guarantees which the EIF will provide to financial intermediaries.

This instrument addresses the financing gap for innovative SMEs and Small Midcaps (with up to 499 employees) for their investments in innovative products and processes containing significant technology or application risks.

*Please note that the total indicative budget for SME/ small midcap guarantee instruments is EUR 1,060 million that also includes the Horizon 2020 contribution to the SME Initiative. The minimum Horizon 2020 contribution to the SMEs and Small Midcaps Loan Service for R&I is EUR 880 million but might be increased depending on the actual size of the contribution from Horizon 2020 to the SME Initiative.

The Risk Sharing Instrument (RSI) has paved the way to the financial instrument SMEs & Small Midcaps R&I Loans Service under Horizon 2020 which is implemented on a larger scale as well in term of budget than geographical coverage or specific target groups.

As at the end of 2015, the instrument has so far provided over EUR 2,33 billion in guarantees and counter-guarantees to 36 banks and guarantee societies: this will enable them to support up to an estimated 4 133 innovative SMEs and small midcaps via loans, financial leases, and loan guarantees and had thus an important impact on the real economy of the EU as described below. In only two years' time, these financial intermediaries now cover 18 countries in the European Union and Associated Countries.

The Risk Sharing Instrument (RSI) under the 7th Framework Programme is a guarantee facility dedicated for loan and lease finance addressing the finance gap for innovative SMEs and Small Midcaps (enterprises with up to 499 employees).

(l)The contribution of the financial instrument to the achievement of the objectives of the programme concerned as measured by the established indicators, including, where applicable, the geographical diversification;

The achieved leverage effect is above 8,5 with an amount of financing expected to be provided by financial intermediaries of EUR 2 336 million and an EU contribution of EUR 270 million

The expected leverage effect is above 12 with an amount of financing expected to be provided by financial intermediaries of EUR 3 241 million and an EU contribution of EUR 270 million.

For the period 2012-2015 the following revenues and repayments were received by the EU on the EU RSI Account:

Please note that the figures provided are also included in RSFF.

Impact of negative interest on RSI: no impact as at 31/12/2015.

(f)An evaluation of the use of any amounts returned to the instrument as internal assigned revenue under paragraph 6;

Amount of investments already made by eligible final recipients due to the financing provided through the instrument, if applicable.

Amount of financing already provided by the instrument to eligible final recipients,

Amount of investments expected to be made by eligible final recipients due to the financing, if applicable

Amount of financing expected to be provided by the instrument (including EU contribution committed) to eligible final recipients,

The instrument has so far provided over EUR 2,33 billion in guarantees and counter-guarantees to 36 banks and guarantee societies: this will enable them to support up to an estimated 4 133 innovative SMEs and small midcaps via loans, financial leases, and loan guarantees.

The aggregate number of applications from financial intermediaries is 47, including four guarantee increases.

RSI is a dedicated guarantee facility for loan and lease finance addressing the finance gap for innovative SMEs and Small Midcaps (with up to 499 employees). Through risk-sharing via guarantees provided by the EIF to financial intermediaries, it made a significant contribution to support innovative smaller companies by improving their access to loan finance.

The RSI guarantee facility is part of the RSFF implementation (see the relevant section in this report) and is carried out by the European Investment Fund (EIF). No new commitment were made since 31/12/2013.

The RSFF, co-developed by the European Commission and the EIB, was established in June 2007. In early 2012, within this programme a new pilot guarantee facility, RSI (Risk-Sharing Instrument for SMEs and small midcaps, with maximum 499 employees) was launched to improve access loan finance for RDI investments.

(b)Description of the financial instrument, implementation arrangements and the added value of the Union contribution;

Council Decision 2006/974/EC of 19 December 2006 on the Specific Programme: ‘Capacities’ implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013) (OJ L 400, 30.12.2006, p. 299).

Council Decision 2006/971/EC of 19 December 2006 concerning the specific programme ‘Cooperation’ implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013) (OJ L 400, 30.12.2006, p. 86).

Decision No 1982/2006/EC of the European Parliament and of the Council of 18 December 2006 concerning the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007-2013) (OJ L 412, 30.12.2006, p. 1).

(a)Identification of the financial instrument and the basic act;

The Risk-Sharing Instrument has so far provided over EUR 2,33 billion in guarantees and counter-guarantees to 36 banks and guarantee societies: this has enabled them to support up to an estimated 4 133 innovative SMEs and small midcaps (estimated corresponding investment amount: EUR 4 660 million). In only two years' time, these financial intermediaries now cover 18 countries in the European Union and Associated Countries.

RSI (Risk-Sharing Instrument for SMEs and small midcaps, with maximum 499 employees) was launched to improve access loan finance for RDI investments. The RSI guarantee facility is part of the RSFF implementation and is carried out by the European Investment Fund (EIF).

oA third amendment to the COSME Delegation Agreement becomes effective in April 2016 to allow for the implementation of the securitisation option under the SME Initiative. It is expected that Member States interested in this option may decide for a pooling of resources with the COSME LGF.

oThe very strong market demand continues in 2016 as shown by the latest pipeline reports received from the EIF and support provided from EFSI will continue to allow frontloading also in 2016.

oNo risks were identified with regard to eligibility of financial intermediaries and final recipients, contractual compliance process and performance.

oDue to the currently foreseen release of the guarantee provided under EFSI once additional COSME LGF appropriations become available in subsequent years, we expect budget shortages as early as of 2017 while market demand for the LGF is not expected to diminish. It would therefore be important to investigate additional ways of financing the COSME financial instruments, both under EU and EFSI budget, in order to help those SMEs which without the COSME support would not be able to get the financing they need.

At the end of 2015, 27 guarantee agreements have been signed with 26 financial intermediaries located in 17 participating countries, with actual financing already provided to SMEs in 13 countries, as set out in the graphs below.

This shows that the LGF, by providing financing to riskier SMEs that otherwise would not have had access to such financing, has an important impact on the real economy in the EU and other participating countries of the COSME programme. Furthermore, the combination of resources with EFSI allows addressing sub-optimal investment situations in the Member States at a much faster pace than would have been possible under LGF on its own, significantly speeding up the much needed financing of the economy.

As at 31 December 2015, the LGF already contributed to provide around EUR 1 292 million of financing to more than 51 000 SMEs, out of which almost EUR 347 million of financing were provided to more than 9 300 SMEs thanks to the support from the EFSI guarantee.

(l)The contribution of the financial instrument to the achievement of the objectives of the programme concerned as measured by the established indicators, including, where applicable, the geographical diversification;

Based on the maximum financing available to SMEs under the operations signed with financial intermediaries as at 31 December 2015 (EUR 7 068,3 million, including the operations signed thanks to EFSI) , the expected leverage for the operations signed in 2015 is almost 1 to 30.

Based on the amount of financing already provided by financial intermediaries to eligible final recipients compared to the aggregate budgetary commitments as at 31 December 2015, the leverage achieved amounts to 1 to 5.

The target leverage effect indicated in the COSME legal base is in the 1 to 20 – 1 to 30 range for the debt instrument over the lifetime of the programme, with an overall value of financing expected to be mobilised by the EU contribution ranging from EUR 14,3 billion to EUR 21,5 billion.

(j)The accumulated figures on impairments of assets of equity or risk-sharing instruments, and on called guarantees for guarantee instruments;

Impact of negative interest rates on COSME LGF: No impact as at 31/12/2015.

(f)An evaluation of the use of any amounts returned to the instrument as internal assigned revenue under paragraph 6;

As the resources available under the LGF in 2015 were not sufficient to satisfy market demand (i.e. total of applications received from Financial Intermediaries by the EIF) for the financing of SMEs, a second amendment of the COSME Delegation Agreement was signed in July 2015, allowing for the combination of LGF resources with additional risk-bearing capacity under the European Fund for Strategic Investment (EFSI) so as to avoid disruption of the succesful rollout of the LGF. The LGF Enhancement under COSME and the InnovFin SMEG Enhancement under Horizon 2020 are the first debt products set up in 2015 under the SME window of EFSI.

Amount of investments already made by eligible final recipients due to the received financing, if applicable.

out of which thanks to EFSI frontloading;

and the corresponding number of financial intermediaries ,

out of which thanks to EFSI frontloading,

out of which thanks to EFSI frontloading;

out of which thanks to EFSI frontloading;

Amount of financing already provided by financial intermediaries to eligible final recipients,

out of which thanks to EFSI frontloading;

out of which thanks to EFSI frontloading ,

Amount of financing expected to be provided by financial intermediaries to eligible final recipients,

out of which thanks to EFSI frontloading;

and the corresponding number of financial intermediaries ,

out of which thanks to EFSI frontloading,

The EIF provides under the LGF (counter-)guarantees for a portfolio of newly generated SMEs transactions which have a higher risk profile than transactions offered by the financial intermediary under its normal business practice, thereby providing financing to SMEs who otherwise would not be able to obtain financing.

The EIF is responsible for evaluating and selecting the financial intermediaries by applying selection criteria and processes set out in the Delegation Agreement. The related open call for expression of interest for financial intermediaries published by the EIF is available at

The LGF may also contribute to the financial instruments to be deployed under the SME initiative, a joint instrument combining EU funds available under COSME and/or Horizon 2020 and ESIF resources in cooperation with EIB/EIF with a view to generate additional lending to SMEs in specific Member States. This contribution may take the form of uncapped portfolio guarantees or securitisation operations and cover the mezzanine tranche of the portfolio.

Target final recipients under the capped portfolio guarantees and the securitisation transactions are SMEs without a specific sector focus. The guarantee instrument is planned to last until 31 December 2034 (until last operations are wound down). Individual guarantee agreements to be signed by the entrusted entity will have a maximum duration of 10 years.

The LGF is implemented by the EIF on behalf of the Commission, as part of the single EU debt financial instrument for EU enterprises’ growth and research and innovation (R&I), together with the InnovFin SME Guarantee Facility set up under the Horizon 2020 programme. The Delegation Agreement signed with the EIF on 22 July 2014 ensures that the LGF is accessible for a broad range of financial intermediaries (guarantee societies, national promotional institutes, commercial banks, cooperatives, etc.) which are experienced in financial transactions with SMEs or which have the capacity to enter into financial transactions with SMEs.

The LGF covers, except for loans in the securitised portfolio, loans up to EUR 150 000 and with a minimum maturity of 12 months. The LGF may also cover loans above EUR 150 000 in cases where SMEs would not meet the innovation criteria specified under the SME window in the Debt Facility of the Horizon 2020 programme (the InnovFin SME Guarantee Facility).

osecuritisation of SME debt finance portfolios, providing guarantee coverage on a part of the mezzanine tranche of a securitised SME lending portfolio coupled with an undertaking by the originating institutions to build up a new SME loan portfolio.

ocapped guarantees for debt financing covering any type of loans, including subordinated and participating loans, bank guarantees, leasing transactions and working capital financing;

odirect guarantees and other risk sharing arrangements for any other financial intermediaries meeting the eligibility criteria.

In line with the Europe 2020 strategy, the overall policy objective of the COSME Financial Instruments is to improve access to finance for SMEs in the form of equity and debt. Under the LGF, this will be achieved by incentivising financial intermediaries to provide financing to those SMEs which the financial intermediary would under its normal business practices not finance due to the higher risks involved.

(b)Description of the financial instrument, implementation arrangements and the added value of the Union contribution;

Loan Guarantee Facility (LGF) under the Programme for the Competitiveness of Enterprises and small and medium-sized enterprises (COSME) – 2014 to 2020 -Regulation (EU) No 1287/2013 of the European Parliament and of the Council of 11 December 2013 establishing a Programme for the Competitiveness of Enterprises and small and medium-sized enterprises (COSME) (2014 – 2020) and repealing Decision No 1639/2006/EC (O.J. L347, 20.12.2013).

(a)Identification of the financial instrument and the basic act;

The capped portfolio guarantees offered under the LGF and implemented by the EIF under the COSME Delegation Agreement signed in July 2014 created strong market demand from financial intermediaries and the whole 2014-2015 budget available was already exhausted by mid-2015. Thanks to the guarantee provided by the European Fund for Strategic Investment (EFSI), the EIF was able to continue signing COSME LGF guarantee agreements in the second half of 2015.Thanks to EFSI, it was possible to deliver an even more significant contribution to providing financing for riskier SME transactions as would have been the case without the EFSI guarantee. It is expected that especially start-ups and smaller SMEs, which find it hardest to access finance, will benefit from the enhanced LGF. As of 31 December 2015, more than 51 000 SMEs already received financing for almost EUR 1 300 million.

oIn the area of social entrepreneurship there was an initially slower take up but taking into account the novelty of the offer, this is not unusual. Based on the pipeline, we expect significantly higher levels of implementation in the next years. In the area of Microfinance, EaSI has already committed to financial intermediaries the amount of EUR 23,64 million (42,2% of the total amount of EUR 56 million foreseen for Microfinance) within a period of only 3 months of initial implementation (30/9/2015-31/12/2015).

oThe risks related to social enterprises are linked to the fact that that market has not yet developed and the EU financial instrument has to help building it. Given the level of its development and the changes in the socio-economic environment, the market also tends to change very rapidly. This might cause a situation where the instrument in question may not be fit anymore for future situations.

oin comparison to the existing Progress Microfinance (EPMF-G), EaSI may provide a strengthened capacity-building element to help mitigate this risk.

o At the current stage, EaSI Guarantee financial instrument is fully deployed covering the already anticipated increased market demand. The main issues arising for the implementation of the instrument are the necessity to ensure sufficient and on time available funding in order to facilitate the ongoing implementation of the Programme.

For informative reasons, at the end of 2015, the EaSI Guarantee financial instrument already provided EUR 6,81 million of financing to 416 eligible Final Recipients. According to the Annual Impact Report provided by EIF with data as of 30/09/2015, all the above 416 final recipients involved microloans disbursed by a financial intermediary in Ireland.

Considering the facts that a) EaSI Guarantee Financial instrument was at the beginning of its implementation in 2015, b) the first operation was signed on 30/9/2015 and c) data presented in the 2015 EaSI Annual Operational Report is as of 31/12/2015, the basic indicators of the instrument cannot provide us with meaningful conclusions.

(l)The contribution of the financial instrument to the achievement of the objectives of the programme concerned as measured by the established indicators, including, where applicable, the geographical diversification;

Considering the fact that EaSI Guarantee Financial instrument was at the beginning of its implementation in 2015, that the first operation was signed on 30/9/2015 and that the data presented in the 2015 EaSI Annual Operational Report is as of 31/12/2015, the calculation of the achieved leverage effect as at 31/12/2015 cannot provide us with meaningful conclusions. Nevertheless, the expected leverage from the first 11 operations signed (10 Microfinance, 1 Social Entrepreneurship) is estimated at 5,7 (expected financing of 342m/budgetary commitment of 59,8m).

The leverage effect, agreed with the EIF in the Delegation agreement, is 5,5 over the lifetime of the financial instrument for the guarantees part (which with the Union contribution of EUR 96 million is intended to support about EUR 528 million of financing volumes) and not yet available for the funded instruments funds.

(j)The accumulated figures on impairments of assets of equity or risk-sharing instruments, and on called guarantees for guarantee instruments;

At the end of the financial year 31/12/2015 EUR 3 795 596

(f)An evaluation of the use of any amounts returned to the instrument as internal assigned revenue under paragraph 6;

• Based on forecasts subject to variations a further EUR 9,8 million in operations is expected to be signed with Financial intermediaries for Social Entrepreneurship by the end of Q3 2016.

In 2016, the demand from microfinance providers will remain significant and the new EaSI Microfinance Guarantee (EPMF-G successor programme) is already covering fast and effective the needs of the microfinance market.

Based on forecasts subject to variations a further EUR 24,4 million in operations is expected to be signed with Financial intermediaries for Microfinance by the end of Q3 2016.

As of 31/12/2015, 11 Guarantee Agreements (10 Microfinance, 1 Social Entrepreneurship) have been signed in 8 Member States for a total guarantee cap amount of EUR 27,18 million.

EaSI achievements for the Social Entrepreneurship Guarantee Instrument are not available since there was only one agreement signed on 17/12/2015.

For the entire period as of 31 December 2015, EaSI achievements for the Microfinance Guarantee Instrument were as follows:

Amount of investments already made by eligible final recipients due to the financing provided through the instrument, if applicable.

Amount of financing already provided by the instrument to eligible final recipients,

Amount of investments expected to be made by eligible final recipients due to the financing, if applicable

Amount of financing expected to be provided by the instrument (including EU contribution committed) to eligible final recipients,

(e)The performance of the financial instrument, including investments realised (as of 31/12/2015);

From a technical point of view, the EIF is instructed to provide guarantees to the financial intermediaries to cover a portion of expected losses of a portfolio of newly generated self-employed and micro-entreprises transactions with a higher risk profile.

The Delegation Agreement signed with the EIF ensures that EaSI Microfinance and Social Entrepreneurship is accessible for a broad range of financial intermediaries (microcredit providers, both banks and non-banks, and social enterprise investors) which are experienced in financial transactions with self-employed and micro-entreprises.

The Delegation Agreement between EC and the EIF was signed on 22/06/2015.

Micro-enterprises, meaning an enterprise, including a self- employed person, that employs fewer than 10 people and whose annual turnover or annual balance sheet total does not exceed EUR 2 million, in accordance with Commission Recommendation 2003/361/EC (OJ L124/36, 20.05.2003).

Vulnerable people, i.e. persons who are in a disadvantaged position with regard to access to the conventional credit market and who want to start or further develop their own micro-enterprise, including self-employment; (the Regulation gives special focus to young people as vulnerable group).

The instruments provide support not directly to final recipients, but rather to relevant intermediaries, i.e. microfinance providers and social enterprise investors.

to support the development of social enterprises, in particular by facilitating access to finance.

to increase access to, and the availability of, microfinance for vulnerable groups who want to set up or develop their business as well as for existing micro-enterprises,

(b)Description of the financial instrument, implementation arrangements and the added value of the Union contribution;

Regulation (EU) No 1296/2013 of the European Parliament and of the Council of 11 December 2013 on a European Union Programme for Employment and Social Innovation ("EaSI") and amending Decision No 283/2010/EU establishing a European Progress Microfinance Facility for employment and social inclusion.

(a)Identification of the financial instrument and the basic act;

As has been shown by ex-ante evaluations, it is essential to provide financial instruments for microfinance and social enterprises in order to successfully achieve the objectives of the EaSI programme. In line with the outcome of ex ante evaluations, debt finance, risk-sharing instruments, and equity investments are likely to be used.

o Furthermore, the observance of specific requirements set out in the Facility's Fiduciary and Management Agreement with regard to reporting, monitoring and auditing, data protection, promotion and visibility, protects the interests of the Union against any risks of contractual, processes and performance non-compliance.

o In order to encourage utilisation by the microfinance provider, a commitment fee is charged if not at least specific percentage of the Agreed Portfolio is reached during a contractually defined Availability Period.

o In addition, the Commission safeguards that the requirements included in the Facility's Fiduciary and Management Agreement are fully respected by both EIF and the microfinance providers.

o Contractual and process compliance of the microfinance providers is ensured through contractual reporting and monitoring after the signature of the guarantee agreements in accordance with the EIF internal procedures.

o The provision of regulatory capital relief under the Guarantee Agreements has been identified as important issue in attracting qualified microfinance providers. During the negotiations with EIF many Intermediaries, mainly banks, raised this issue especially when EIF asked Intermediaries to pass the EPMF benefit to the final recipients through price reduction.

o Room for improvement has been identified for accompanying mentoring and training for micro-entrepreneurs since it is considered as important factor for the sustainability of the micro-enterprises. The issue of Microfinance providers’ institutional capacity concerning mainly small non-bank microfinance institutions is a bottleneck which hurdles the disbursement of the agreed micro-loans and affects negatively their prospects in the microfinance market.

o In terms of the number of micro-loans disbursed, the European microfinance sector as a whole continued to grow in 2015, which is also reflected by the guarantee activity under EPMF. The continuously decreasing bank lending, the limited capacity of national governments to support microfinance and the strong market demand for microfinance still suggest that there is a clear rationale for intervention at EU-level by providing risk-sharing solutions to Microfinance providers.

The share of each participating country in the total amount of financing already provided (EUR 217,45 million as of 30/09/2015) by the EPMF – G instrument to eligible final recipients is presented in the following graph.

Regarding the age group, with respect to final recipients who are natural persons the outreach to individuals in disadvantaged age groups (younger and older people combined) remains at noteworthy levels (17,9%).

At Facility level, individuals which were final recipients of micro-loans were, by and large, educated at the secondary level (40,3%). Nevertheless, EPMF continues to be of importance in serving the financing needs of individuals with more substantial education beyond the secondary level (39,7%).

In addition, 49,2% of individual micro-borrowers who received support under the Facility so far, were either unemployed or inactive at the time they received their loan. Furthermore, a clear majority (88,2%) of micro-enterprises, which received financing under the Facility, were established no earlier than three years since the micro-loan inclusion date.

At the aggregate EPMF Facility level (including both Guarantee and Funded Instruments), the gender breakdown for the 43 332 natural persons benefitting from loans under the Facility show that considerable outreach to females was achieved (36,9% of the micro-borrowers guaranteed were women).

See below some information on the impact of EU Financial Instruments for micro-entrepreneurs SMEs (The economic environment for micro-finance).

As at 30/9/2015, the EPMF-G already contributed to provide more than 217,4 million EUR of financing to 18 490 Final Recipients through 19 574 underlying loans, accounting for an estimated 310,6 million EUR investment amount.

(l)The contribution of the financial instrument to the achievement of the objectives of the programme concerned as measured by the established indicators, including, where applicable, the geographical diversification;

As for achieved leverage until 30/09/2015, the total guarantee cap amount of EUR 21,90 million has supported so far EUR 217,45 million of new micro-loans, implying a leverage of 9,93.

As of 30/09/2015, based on the signed Guarantee agreements, the total guarantee cap amounts to EUR 21,90 million and the expected volumes of micro-loans to final recipients are estimated to EUR 284,91 million that brings the expected leverage effect to 13,00 which is much higher than the minimum target leverage estimated at 6,67.

Impact of negative interest rates on EPMF-G : no impact as at 31/12/2015.

At the end of the financial year 31/12/2015 EUR 5 078 009

Given the high demand for additional commitments due to the success of the EPMF Guarantee facility all the proceeds (see point (h)) received of the fiduciary account were used for the purposes of the Facility (as foreseen in the FMA).

(f)An evaluation of the use of any amounts returned to the instrument as internal assigned revenue under paragraph 6;

As of 30/09/2015 the European Progress Microfinance Facility including both Guarantees (EPMF- G) and Funded instruments (EPMF – FCP FIS) already provided 45 999 micro-loans to final recipients reaching the volume of EUR 390,4 million, compared to the initial programme target of 46,000 micro-loans with the volume of EUR 500 million. The Facility is on track to reach the initial programme target, as new loan inclusions will take place until 2018.

In 2016, the demand from microfinance providers will remain significant and the new EaSI Microfinance Guarantee (EPMF-G successor programme) is already covering fast and effectively the needs of the microfinance market.

As of 30/09/2015, 36 Guarantee Agreements have been signed in 18 Member States for a total guarantee cap amount of EUR 21,90 million.

For the entire period as of 30 September 2015, EPMF achievements for the Guarantee Facility component of the programme were as follows:

Amount of investments already made by eligible final recipients due to the financing provided through the instrument, if applicable.

Amount of financing already provided by the instrument to eligible final recipients,

Amount of investments expected to be made by eligible final recipients due to the financing, if applicable

Amount of financing expected to be provided by the instrument (including EU contribution committed) to eligible final recipients,

(e)The performance of the financial instrument, including investments realised (as of 30/09/2015);

This Facility allows microfinance providers to reach out to target groups, who could normally not be served; for instance, because persons from these groups could not provide sufficient collateral or because the interest rates, which they would have to pay in accordance to their actual risk, profile are too high.

The Facility also seeks to promote a balanced geographic distribution and the set target is to cover at least 12 Member States until 31 December 2016. As of 30/09/2015, the Facility covers 18 Member States. The EPMF Guarantee Facility shall remain in full force and effect until 31 December 2020. However, as the budget of the EPMF Guarantee Facility has been fully utilised by Q2 2014, no new transactions took place.

EPMF Guarantee Facility is subject to the following requirements and restrictions that have to be respected by the participating Microfinance providers:

The EPMF Guarantee Facility is implemented via direct guarantees and counter-guarantees. The implementation foresees also support measures, such as communication activities, monitoring, control, audit and evaluation which are directly necessary for the effective and efficient implementation of the Decision No 283/2010/EU and for the achievement of its objectives.

Guarantees provided by the EIF in accordance with the Agreement shall be open to any intermediaries being public or private bodies established on national, regional and local levels in the Member States, which provide microfinance to persons and micro-enterprises in the Member States, such as financial institutions, microfinance institutions, guarantee institutions or any other institution authorised to provide microfinance instruments.

The EPMF Guarantee Facility provides capped guarantees up to 20% to portfolios, which include micro-credit loans granted by intermediaries to micro–enterprises, including self-employed persons. The micro-credit guarantee covers up to 75% of the individual micro-credit loans included in the respective portfolio.

The EIF is responsible for identifying, investigating, evaluating and selecting the Financial Intermediaries ('FI') by applying selection criteria and processes set out in Annex 1 of the FMA: Operational Guidelines. Under the FMA, the EIF examines, on a continuous basis, proposals collected based on a call for expression of interest.

The Commission empowers and mandates the EIF to provide EU Guarantees in its own name but on behalf of and at the risk of the Commission, under a Financial management Agreement ('FMA', signed 01/07/2010).

2.micro-enterprises, especially in the social economy, as well as micro-enterprises which employ persons referred to in point (a).

1.persons who have lost or are at risk of losing their job, or who have difficulties entering or re-entering the labour market, as well as persons who are facing the threat of social exclusion or vulnerable persons who are in a disadvantaged position with regard to access to the conventional credit market and who want to start or further develop their own micro-enterprise, including self-employment,

The EPMF Facility provides Union resources to increase access to, and availability of, microfinance for:

The aim of the European Progress Microfinance Guarantee Facility is to enhance access to microfinance by reducing microfinance providers' risk.

(b)Description of the financial instrument, implementation arrangements and the added value of the Union contribution;

Decision No 283/2010/EU of the European Parliament and of the Council of 25 March 2010 establishing a European Progress Microfinance Facility for employment and social inclusion.

(a)Identification of the financial instrument and the basic act;

As of 30/09/2015, the European Progress Microfinance Facility including both Guarantees (EPMF-G) and Funded instruments (EPMF – FCP FIS) already provided 45 999 micro-loans to final recipients reaching the volume of EUR 390,4 million.

As of 30/09/2015, EIF has signed 36 guarantee agreements in 18 member states for a total cap amount of EUR 21,90 million, supporting EUR 284,91 million of aggregate volume of micro-loans. During the implementation of the Facility, 18 490 micro-borrowers and vulnerable persons and 33 222 jobs have been supported.

The aim of the instrument is to increase access to and availability of microfinance. The instrument covers part of the losses incurred under the guarantees up to a pre-determined cap amount by setting maximum Guarantee rate of 75% and maximum Guarantee cap rate at 20% - hence requiring a minimum leverage effect of 6,67.

In accordance with the Agreement, the Project Signing Period runs from July 1, 2010 until 31 December 2016, or any later date as notified in writing by the Commission to EIF.

The EPMF Guarantee Facility has been implemented by the European Investment Fund in accordance with the Fiduciary and Management Agreement entered into on 1 July 2010 between the European Union, represented by the Commission and EIF. Under the Agreement, the Commission mandated EIF to provide direct guarantees and counter guarantees on micro credit loans in its own name, but on account and risk of the European Union.

EUR 23,6 million (including any changes in the course of the programme)

DG EMPL, with participation of DG ECFIN for the design of the instruments

The successor of SMEG is the Loan Guarantee Facility (LGF) under COSME, further detailed in this document.

The commitment period for the SME Guarantee facility ended on 31 December 2013 but the instrument will exist until it is wound up after 2026.

Regarding the SMEG, which is a counter-cyclical instrument, there was a high demand for guarantees by financial intermediaries during the period 2007-2013; indeed, the share of the SMEG instrument in the total CIP budget (SMEG and GIF) was increased compared to the original split between the two Facilities, in line with the specific market needs.

results on the checks on the balance of the TA in 2015: no errors/discrepancies.

number of open recommendations in action plans established following ECA, IAS, IAC or ex-post control recommendations: none;

number of findings/minor observations (stemming from ECFIN's monitoring activities): no findings, 7 minor observations (of which, 100% closed as at writing date);

oThe first part of the relevant monitoring on 'return and decommitments of funds' (foreseen in ECFIN L2's 2015 monitoring plan) was successfully carried out: as a result, the procedure on the “Transfer of GIF revenues and repayments to Horizon 2020 and COSME” was agreed with the responsible DGs – BUDG, GROW, and RTD on 09/11/2015 (Ares(2015)4949413). Therefore, while the process was begun in 2015, the relevant Recovery Orders will only be issued in 2016.

oECFIN L2 also accompanied the ECA to an audit visit to the FI "Ziraat Bankasi" in Istanbul (7-9/9/2015) within the framework of the ECA's controls for the DAS 2015 (ECA's random selection process). The official report from ECA has been communicated to ECFIN Director General as at 22/1/2016, stating 3 non-eligible costs (out of a 10 operations sample), leading to an error rate calculation in amount of 1,63%, below the 2% 'acceptable' threshold.

oIn August 2012 the ECFIN Unit R4 has launched an ex-post control of the EIF guarantee calls paid under CIP-SMEG 07 Facility. The provisional scope and objective of this ex-post control includes reviewing of the sample of guarantee calls initiated since 2007 to-date with the objective to examine their legality and regularity and to review related sound financial management aspects. L2 Financial Intermediaries (FI) have been sampled. ECFIN L2 received R4's related report on the 31st of August 2015. After thorough investigations and detailed review of R4's observations in coordination with the EIF, ECFIN L2 replied to R4 as at 9/11/2015 (ref. ARES(2015)5484815), rejecting most of the observations. R4 accepted those extensive explanations in its final report (officially finalized on 23/12/2015 and sent to ECFIN L Director on 4/1/2016 – ref. ARES(2015)6031782), which confirms a Most Likely Error Rate (MLER) nearing 0% (0,002%), hugely below the materiality threshold and acceptable error rate of 2%. Thus, R4 concludes that "there is reasonable assurance that SMEG07 guarantee calls and related payments and recoveries were implemented in compliance with the legal, regulatory and contractual provisions".

oA positive Statement of Assurance was received from the EIF as at 31/3/2016.

The monitoring visits carried out by both the EIF and the Commission for SMEG07 during 2015 allowed to confirm the eligibility of financial intermediaries (FI's) and final recipients, contractual compliance (transposal of the Commission's requirements into the contractual documentation), process compliance (observance of processes prescribed by the Commission) and performance (achievement of predefined targets/objectives). The EIF monitoring report 2015 did not indicate major deviations.

selection of the Financial Intermediaries performed on the basis of open, transparent, objective and non-discriminatory procedures.

improved definition of the target group (final recipients) and reduced deadweight of the instrument;

oin line with suggestions from the European Court of Auditors, the new generation of guarantee financial instruments has been designed by considering, inter alia, the following:

osufficient flexibility in the structure of the programme to accommodate and sustain shifts in the SME credit market (including force majeure and crisis conditions);

oa first class delivery mechanism, such as the EIF, that has proven expertise in working with the SME loan and guarantee provision chain at European level;

oa clear and complete target goal of the financial instrument so as there is no ambiguity as to what needs to be achieved in terms of SME access to finance (including keeping potential deadweight as small as possible);

During the SMEG implementation period, the following presumptions have been identified as necessary:

In this respect, although the overall effect of EU programmes on SMEs' financing remains limited (by nature, EU intervention is limited to market gaps or sub-optimal market situations, meaning by far the largest part of financing is provided by banking and finance market players), the Facility did, however, make a very positive contribution to the development and sustainability of EU SMEs.

Based on the financing volumes supported so far (see the relevant sections above), the CIP market-oriented instruments under both GIF and SMEG have shown high efficiency and relevance in addressing current market conditions, dominated in recent years by a tightening of credit conditions and more difficult access to finance for SMEs. The SMEG Facility is a counter-cyclical instrument and has helped final recipients to face difficulties arising from the economic conditions since the crisis, namely to obtain or maintain access to finance and to create or maintain jobs over the period.

In this regard, the SMEG Facility has a wide geographical coverage. The instrument involves 55 financial intermediaries, which have been providing finance to SMEs in 24 participating countries.

18% stated that without the EU support they would have received only part of the funding needed, 42% stated that the EU support helped them to get additional finance and

46% stated that the EU financing scheme was the only option available for them to get financing,

The relevance of the instrument as assessed by the recipient SMEs is significant :

In addition, there have been improvements in monitoring systems at the level of both EIF (entrusted entity) and financial intermediaries involved in implementation which contributed to tracking comprehensively performance of the instrument and thus more effectively pursuing the policy objectives of the instrument.

The financial instruments appear to be on track to achieve the targets set and seem to be acquiring a certain momentum that may lead them to exceed expectations.

The latest evaluations related to GIF and SMEG financial instruments reiterated that the financial instruments appeared to be on track to achieve the targets set and confirmed that the effectiveness of the financial instruments has increased over time. In more detail, regarding:

As at 30/9/2015, the SMEG07 already contributed to provide more than 20,3 billion EUR of financing to more than 377 000 Final Recipients (SMEs) through nearly 458 000 underlying loans, accounting for an estimated 29,5 billion EUR investment amount, and had thus an important impact on the real economy of the EU as described below.

(l)The contribution of the financial instrument to the achievement of the objectives of the programme concerned as measured by the established indicators, including, where applicable, the geographical diversification;

The expected CIP SMEG07 leverage effect for signed operations (calculated as maximum portfolio loan volume / EU guarantee cap amount) is estimated around 31 for the entire duration of the programme.

The achieved leverage effect for CIP SMEG 07 at the level of entrusted entity (total loan volume received by the recipient SMEs / EU guarantee cap amount) is 35,8.

Impact of negative interest rates on SMEG 07: no impact as at 31/12/2015

For the period 2007-2015, the amount of EUR 12,1 million returned to the instrument (point (h)) has been more than 60% used for further transactions in line with the policy objectives of the Programme.

(f)An evaluation of the use of any amounts returned to the instrument as internal assigned revenue under paragraph 6;

For the entire period as of 30 September 2015 (latest available figures as at writing date), SMEG achievements under CIP were as follows:

- the EIF had signed agreements for a cumulative total amount guaranteed of EUR 14 554,7 million. The loans associated with that guaranteed amount account for EUR 20,3 billion.

- 377 502 SMEs had received debt finance facilitated by financial support provided under SMEG07, through nearly 457 954 loans;

- SMEG 07 consisted of 72 guarantee agreements with 55 Financial Intermediaries from 24 countries, with a total of EUR 567,0 million guarantee cap from the Union budget for direct and counter-guarantees;

By the end of September 2015 (latest available figures as at writing date),

Regarding the payments appropriations for the period 2007-2015, out of the EUR 793,8 million made available for the CIP financial instruments, EUR 379,65 million were paid to the SMEG fiduciary account, managed by the EIF on behalf of the Commission. Funds are drawn down from the fiduciary account as and when defaults occur under SMEG.

For the period 2007-2013, EUR 1 275,1 million of commitment appropriations were made available for the CIP financial instruments, of which EUR 649,9 million for SMEG. The appropriations were fully committed.

Amount of investments already made by eligible final recipients due to the received financing, if applicable.

Amount of financing already provided by financial intermediaries to eligible final recipients,

Amount of financing expected to be provided by financial intermediaries to eligible final recipients,

and the corresponding number of financial intermediaries;

Amount of EU guarantee expected to be provided by the instrument (including EU contribution committed) to eligible final recipients,

Regarding the sustainability and European value-added, the effectiveness of the instruments used has increased over time; notwithstanding the scope for further improvements, European value-added is evident in the development of facilities that are at the cutting-edge of provision for SMEs.

Thanks to the guarantee provided by the EIF, financial intermediaries either provide more financing to SMEs, or extend their financing to more risky and previously not serviced segments of vulnerable SMEs, such as start-ups, young companies and companies lacking sufficient collateral.

- the Designated Service was actively involved in financial intermediary approval process. Each deal was to be approved by the EIF Board of Directors and the Commissions Designated Service. The Designated Service will continue its monitoring and reporting obligations until the wind-up of the facility (estimated 2026).

- the EIF was responsible for identifying, evaluating, and selecting the Financial Intermediaries ('FIs') according to the Guarantee Policy, which is part of the FMA. The EIF examined, on a continuous basis, proposals collected based on a call for expression of interests.

It provides counter- or co-guarantees to guarantee schemes and direct guarantees to Financial Intermediaries operating in eligible countries with the aim of increasing lending volumes available to SMEs. The Facility is a demand-driven instrument, with only indicative country-based allocations, in order to ensure wide geographical coverage. The EIF provides a capped guarantee that covers potential losses against a commitment of the financial intermediary to provide more debt financing (loans, leases or guarantees that support loans and leases) to target SMEs.

SMEG 07 is operated by the EIF under a Fiduciary and Management Agreement ('FMA', signed on 20/9/2007).

The overall objective of the financial instruments under the CIP is the improvement of access to finance for the start-up and growth of SMEs in order to support their investment in innovation activities, including eco-innovation. Under the SME Guarantee Facility, this is done by providing leverage to SME debt financing with a view to increasing the supply of debt finance to SMEs.

SMEG 07 is part of the Entrepreneurship and Innovation Programme (EIP), one of the three specific programmes under the Competitiveness and Innovation Programme (CIP).

(b)Description of the financial instrument, implementation arrangements and the added value of the Union contribution;

Decision No 1639/2006/EC of the European Parliament and of the Council of 24 October 2006 establishing a Competitiveness and Innovation Framework Programme (2007 to 2013).

(a)Identification of the financial instrument and the basic act;

According to the 2011 ECA's Performance Audit, the Facility should be able to reach the number of 315 000 supported SME recipients as foreseen in the ex-ante assessment under CIP. This target has already been trespassed, as 377 502 SMEs were already supported by the end of September 2015.

SMEG07 has a wide geographical coverage: as at 30/9/2015, the instrument involves 55 financial intermediaries, which have been providing finance to SMEs in 24 participating countries (the loans associated with that guaranteed amount account for EUR 20,3 billion).

SMEG 07 is part of the CIP market-oriented instruments and has shown high efficiency and relevance to the current market conditions. Indeed, SMEG07 acts as counter-cyclical measure, ensuring provision of finance to a vulnerable SME segment, which was one of the most hard hit market segments in the wake of the financial crisis. It is a cost-effective financial instrument which is demonstrated by the high leverage ratio: compared to grants, where 1 EUR of budgetary resources provide 1 EUR of financing, the SMEG is expected to support 31 EUR of finance to SMEs for 1 EUR of the Union contribution.

****Including EFTA contributions and third countries contribution paid by Participating Countries as well as regularised interest generated on the trust accounts until 31/12/2012. Relevant interest generated on the trust accounts during 2013 and 2014 was not recovered to the EU budget due to shortages in the balance of the trust account.

***Including EFTA contributions and third countries contribution paid by Participating Countries as well as regularised interest.

DG GROW, with participation of DG ECFIN for the design of the instruments

oThe implementation of the Horizon 2020 InnovFin SME Venture Capital has started end of 2015, after the EIF FAFA and the Delegation Agreement for the Horizon 2020 Financial Instruments between the EU (represented by the Commissioner for Research and Innovation), EIB and EIF were signed.

oGiven the generally pro-cyclical nature of the activities of equity investors, the health of the economy overall is very likely to dominate the evolution of both Europe's VC and BA industries, though some analysts advocate and predict a considerable downsizing of the VC sector in both Europe and the USA in order for a smaller number of funds to enjoy a reasonable level of return and profitability.

oIn the case of conditional closings, despite the EIF making a firm commitment of investing into a fund it may be that fund managers fail to raise the required additional private and public funding to reach the first closing of a fund.

oSpecific support actions such as information and coaching activities for SMEs should be provided. Regional authorities, SMEs associations, chambers of commerce and relevant financial intermediaries may be consulted, where appropriate, in relation to the programming and implementation of these activities.

oThe Union-level InnovFin SME Venture Capital is needed to help improve the availability of equity finance for early and growth-stage investments and to boost the development of the Union venture capital market. During the technology transfer and start-up phase, new companies face a 'valley of death' where public research grants stop and it is not possible to attract private finance. Public support aiming to leverage private seed and start-up funds to fill this gap is currently too fragmented and intermittent, or its management lacks the necessary expertise. Furthermore, most venture capital funds in Europe are too small to support the continued growth of innovative companies and do not have the critical mass to specialize and operate transnationally.

For equity, the Commission proposed that both programmes should make seed, early-stage and growth-stage investments, with Horizon 2020 mainly focusing on risk-capital funds investing in seed, start-up and early-stage R&I-driven SMEs and small midcaps, and COSME mainly focusing on venture capital, (VC), and mezzanine funds investing in SMEs in the expansion and growth phases.

In 2011, the Commission proposed that Horizon 2020 and COSME, the programmes succeeding FP7 and CIP, should jointly support an equity and a debt financial instrument designed to foster the growth of SMEs and small midcaps and their ability to undertake R&I, with Horizon 2020 also providing debt finance for larger entities.

The Commission works with the European Investment Bank Group, national financial intermediaries and private investors to develop proposals addressing the following critical gaps: (i) investment in knowledge transfer and start-ups; (ii) venture capital for fast growing firms expanding in EU and global markets; (iii) risk-sharing finance for investments in R&D and innovation projects; and (iv) loans for innovative fast growing SMEs and midcaps. The proposals shall ensure a high leverage effect, efficient management and simple access for businesses.

On the basis of Commission proposals, the EU should put in place financial instruments to attract a major increase in private finance and close the market gaps in investing in research and innovation. Union contribution should create a major leverage effect and expand on the success of FP7 and CIP.

Generally speaking, the following generic comments can be outlined, based on the Innovation Union Europe 2020 Flagship Initiative of 2010, which contains the following commitment:

The InnovFin SME Venture Capital , supported by a set of accompanying measures, supports the achievement of Horizon 2020 policy objectives. To this end, they are dedicated to consolidating and raising the quality of Europe's science base; promoting research and innovation with a business-driven agenda; and addressing societal challenges, with a focus on activities such as piloting, demonstration, test-beds and market uptake. The budget envelope of EUR 460 million is targeted to mobilize EUR 2,7 billion of new equity investments.

As no effective operations have yet been concluded as at 31/12/2015, no geographical breakdown can be provided.

(l)The contribution of the financial instrument to the achievement of the objectives of the programme concerned as measured by the established indicators, including, where applicable, the geographical diversification;

The leverage of the Equity facility - defined as the total funding (i.e. Union funding plus contribution from other financial institutions) divided by the Union financial contribution - is expected to be around 6, depending on market specificities.

Impact of negative interest rates on InnovFin Venture Capital (Horizon 2020): no impact as at 31/12/2015.

(f)An evaluation of the use of any amounts returned to the instrument as internal assigned revenue under paragraph 6;

Amount of investments already made by eligible final recipients due to the financing provided through the instrument, if applicable.

Amount of financing already provided by the instrument to eligible final recipients,

Amount of investments expected to be made by eligible final recipients due to the financing, if applicable

Amount of financing expected to be provided by the instrument (including EU contribution committed) to eligible final recipients,

In terms of Union added value, the InnovFin SME Venture Capital complements national and regional schemes that cannot cater for cross-border investments in R&I. The early-stage deals also have a demonstration effect that can benefit public and private investors across Europe. For the growth phase, only at European level is it possible to achieve the necessary scale and the strong participation of private investors essential to the functioning of a self-sustaining venture capital market.

This is a demand-driven facility, with no prior allocations between sectors, countries, or regions. However, the Commission incentivises EIF, via an appropriate performance indicator, to make a particular effort to ensure that a proportion of final recipients are eco-innovative SMEs and small midcaps. R&I-driven SMEs or small midcaps wishing to apply for an investment should contact one or more of the funds signing an agreement with EIF.

The European Investment Fund (EIF) manages equity investments into risk-capital funds, while investing in a wide range of financial intermediaries, including those cooperating with business angels. The funds concerned make VC and quasi-equity (including mezzanine capital) early-stage investments in enterprises, which are likely to be mainly SMEs. In the case of multistage funds (i.e., covering both early- and growth-stage investments), funding can be provided pro rata from this facility and COSME's growth-stage equity facility, EFG.

Financial intermediaries, selected by entrusted entities for the implementation of financial instruments pursuant to Article 139(4) of Regulation (EU, Euratom) No 966/2012 on the basis of open, transparent, proportionate and non-discriminatory procedures, may include private financial institutions as well as governmental and semi-governmental financial institutions, national and regional public banks as well as national and regional investment banks.

The implementation of the InnovFin SME Venture Capital is made through an entrusted entity, the European Investment Fund (EIF) in Luxembourg, further to the signature of 2 amendments to the Delegation Agreement with the Commission on 15 June and 22 July 2016.

This facility succeeds and refines the GIF-1 scheme under CIP, and is part of a single equity financial instrument supporting the growth of enterprises and their R&I activities. It is designed to improve access to risk finance by early-stage R&I-driven SMEs and small midcaps through supporting early-stage risk capital funds that invest, on a predominantly cross-border basis, in individual enterprises. SMEs and small midcaps located in Member States or in Associated Countries are eligible as final recipients. The COSME programme's Equity Facility for Growth (EFG) complements this facility.

(b)Description of the financial instrument, implementation arrangements and the added value of the Union contribution;

Council Decision of 3 December 2013 establishing the specific programme implementing Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020) and repealing Decisions 2006/971/EC, 2006/972/EC, 2006/973/EC, 2006/974/EC and 2006/975/EC.

Regulation (EU) No 1290/2013 of the European Parliament and of the Council of 11 December 2013 laying down the rules for participation and dissemination in "Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020)" and repealing Regulation (EC) No 1906/2006.

Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11 December 2013 establishing Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020) and repealing Decision No 1982/2006/EC.

(a)Identification of the financial instrument and the basic act;

In terms of Union added value, the InnovFin SME Venture Capital complements national and regional schemes that cannot cater for cross-border investments in R&I. The early-stage deals also have a demonstration effect that can benefit public and private investors across Europe. For the growth phase, only at European level is it possible to achieve the necessary scale and the strong participation of private investors that are essential to the functioning of a self-sustaining venture capital market.

SMEs and small midcaps located in Member States or in Associated Countries are eligible as final recipients. The COSME programme's Equity Facility for Growth complements this facility, which, supported by a set of accompanying measures, supports the achievement of Horizon 2020 policy objectives.

The InnovFin SME Venture Capital succeeds and refines the GIF-1 scheme under CIP, and is part of a single equity financial instrument supporting the growth of enterprises and their R&I activities. It is designed to improve access to risk finance by early-stage R&I-driven SMEs and small midcaps through supporting early-stage risk capital funds that invest, on a predominantly cross-border basis, in individual enterprises.

**This amount includes EFTA appropriations for 2014 and is subject to the outcome of discussions on the budget profile.

oBased on the pipeline report received early 2016, it is expected that the 2014-2016 aggregate budgetary commitments (net of fees) will be fully used for the signature of EFG operations.

oAccording to the latest European Small Business Finance Outlook, despite the recent generally positive developments, private equity and venture capital investment and fundraising activity continues to be far below pre-crisis years (2008/2009) level.

oIn the case of conditional closings, despite the EIF making a firm commitment of investing into a fund it may be that fund managers fail to raise the required additional required private and public funding to reach the first closing of a fund.

oCompared to the due diligence required for the signature of guarantee agreements, the due diligence process for equity is much more complex, and necessitates more time (e.g. due to the fund-raising process involved from various investors).

At the end of 2015, five fund agreements have been signed in Italy, France, the Netherlands, Greece and Germany, and having predominantly a multi-country focus. The expected volume of investments into eligible final recipients amounts to almost EUR 395 million and would provide risk capital to around 53 SMEs.

(l)The contribution of the financial instrument to the achievement of the objectives of the programme concerned as measured by the established indicators, including, where applicable, the geographical diversification;

For the five operations signed with financial intermediaries in 2015, the maximum investment volume available to SMEs amounts to almost EUR 395 million. Based on the cumulative 2014-2015 budgetary commitments for the EFG (i.e. EUR 102,4 million), the expected leverage for the operations signed in 2015 is 3,85.

As the first operations with financial intermediaries under the EFG have been signed towards the end of 2015, no achieved leverage effect can be computed for 2015.

The target leverage effect indicated in the COSME legal base is in the 1 to 4 – 1 to 6 range for the equity instrument over the lifetime of the programme, with an overall value of risk capital investments expected to be mobilised by the EU contribution ranging from EUR 2,6 billion to EUR 3,9 billion.

(j)The accumulated figures on impairments of assets of equity or risk-sharing instruments, and on called guarantees for guarantee instruments;

Impact of negative interest rates on COSME-Equity: no impact as at 31/12/2015.

(f)An evaluation of the use of any amounts returned to the instrument as internal assigned revenue under paragraph 6;

Two of these operations have been unconditionally closed and the respective fund agreement with all investors have been signed. Three further signatures have occurred on a conditional basis, meaning that the EIF committed to invest in these funds provided that the fund managers are able to attract sufficient additional funding commitments from other private and public investors to reach a minimum fund size.

Out of the five operations signed in 2015, two relate to Growth and Expansion Stage funds and three to Multi-Stage funds, in combination with the InnovFin Equity Facility for Early Stage set up under Horizon 2020.

Amount of investments already made by eligible final recipients due to the received financing, if applicable.

Amount of financing already provided by financial intermediaries to eligible final recipients,

Amount of financing expected to be provided by financial intermediaries to eligible final recipients

and the corresponding number of financial intermediaries;

for risk-sharing instruments, total amount of the risk-sharing, including the EU Contribution, committed to financial intermediaries,

and the corresponding number of financial intermediaries;

The added value for the Union of the Financial Instruments lies, inter alia, in strengthening the internal market for venture capital and in developing a pan-European SME finance market as well as in addressing market failures that cannot be addressed by Member States.

The EIF is responsible for evaluating and selecting the financial intermediaries by applying selection criteria and processes set out in the Delegation Agreement. The related continuous open call for expression of interest for financial intermediaries published by the EIF is available at http://www.eif.org/what_we_do/equity/single_eu_equity_instrument/cosme_efg/index.htm

The Delegation Agreement signed with the EIF on 22 July 2014 ensures that the EFG is accessible for a broad range of financial intermediaries provided that these are professionally and independently managed and that the funds are located in one of COSME participating countries. They must display the capacity to successfully support SMEs in their growth and expansion phase (to be verified by the EIF during the due diligence phase). From a technical point of view, the EIF is instructed to invest on a pari-passu basis with other private and public investors. Target final recipients are SMEs in their growth and expansion stage without a specific sector focus. The equity instrument is planned to last until 31 December 2034 (until last operations are wound down).

The EFG is implemented by the EIF on behalf of the Commission, as a window of a single Union equity financial instrument supporting EU enterprises’ growth and research and innovation from the early stage, including seed, up to the growth stage. It focuses on funds that provide venture capital and mezzanine finance, such as subordinated and participating loans, to expansion and growth-stage enterprises, in particular those operating across borders, while having the possibility to make investments in early stage enterprises in conjunction with the equity facility for Research, Development and Innovation (RDI) under Horizon 2020. Support is given in the form of direct investments made by the entrusted entity in financial intermediaries that provide equity or quasi-equity financing to SMEs.

In line with the above, the Equity Facility for Growth (EFG) provides enhanced access to risk capital for which significant market gaps exist in Europe and supports the development of a pan-European risk capital market. The later will be achieved by focusing predominantly on those risk capital funds which invest cross-border.

The overall policy objective of COSME Financial Instruments is to improve access to finance for SMEs in the form of equity and debt. Actions shall aim to stimulate the take-up and supply of both equity and debt finance, which may include seed funding, angel funding and quasi-equity financing subject to market demand but excluding asset stripping.

In line with the Europe 2020 strategy, the COSME financial instruments are designed to address the market gaps in access to finance for SMEs in their start-up, growth and transfer phase and to support the creation of a pan-European finance market.

(b)Description of the financial instrument, implementation arrangements and the added value of the Union contribution;

Regulation (EU) No 1287/2013 of the European Parliament and of the Council of 11 December 2013 establishing a Programme for the Competitiveness of Enterprises and small and medium-sized enterprises (COSME) (2014 – 2020) and repealing Decision No 1639/2006/EC (O.J. L347 of 20 December 2013).

Equity Facility for Growth (EFG) under the Programme for the Competitiveness of Enterprises and small and medium-sized enterprises (COSME) – 2014 to 2020.

(a) Identification of the financial instrument and the basic act:

First fund agreements under the EFG were signed end of 2015.

The overall value of risk capital investments, including venture capital and mezzanine finance, such as subordinated and participating loans, to be mobilised by the EU contribution is expected to range from EUR 2,6 billion to EUR 3,9 billion.

The equity investments offered for funds investing into European SMEs at the growth and expansion stage are implemented by the EIF under the COSME Delegation Agreement signed in July 2014.

The Broadband Investment Fund under CEF Equity Instrument is in preparatory phase. The scope of envisaged operations will depend on the outcome of negotiations with investors, in particular the capacity of the Fund to attract private capital.

N/A (the Instrument is too new to have produced any achievements as at 31/12/2015)

(l)The contribution of the financial instrument to the achievement of the objectives of the programme concerned as measured by the established indicators, including, where applicable, the geographical diversification;

The target leverage effect is 5 to 10, which – given the current budget envelope of 10m – will support a financing amount of 50m to 100m.

Impact of negative interest on RSI: no impact as at