Communication from the Commission to the European Parliament, the Council and the Court of Auditors — Annual accounts of the European Development Fund 2014
Date: 2015-07-13
Institutions: European Commission
Subjects: European Development Fund, audit, balance sheet, closing of accounts, financial situation, implementation of the budget








C_2015379EN.01000101.xml










13.11.2015   


EN


Official Journal of the European Union


C 379/1





COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS
Annual accounts of the European Development Fund 2014
(2015/C 379/01)

CONTENTS






CERTIFICATION OF THE ACCOUNTS
2








IMPLEMENTING AND ACCOUNTING FOR THE EDF RESOURCES
3








FINANCIAL STATEMENTS AND EXPLANATORY NOTES — FUNDS MANAGED BY THE EUROPEAN COMMISSION
6








FINANCIAL STATEMENTS OF THE EDF
7








NOTES TO THE FINANCIAL STATEMENTS OF THE EDF
15








FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND
37








NOTES TO THE FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND
41








CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE BÊKOU TRUST FUND
42








EDF REPORT ON FINANCIAL IMPLEMENTATION
44








FINANCIAL STATEMENTS AND EXPLANATORY NOTES — FUNDS MANAGED BY THE EUROPEAN INVESTMENT BANK
72



CERTIFICATION OF THE ACCOUNTS
The annual accounts of the European Development Fund for the year 2014 have been prepared in accordance with Title IX of the Financial Regulation of the 11th European Development Fund and with the accounting principles, rules and methods set out in annex to the financial statements.
I acknowledge my responsibility for the preparation and presentation of the annual accounts of the European Development Fund in accordance with Article 20 of the Financial Regulation of the 11th European Development Fund.
I have obtained from the authorising officers and from the EIB, who guarantee its reliability, all the information necessary for the production of the accounts that show the European Development Fund’s assets and liabilities and the budgetary implementation.
I hereby certify that based on this information, and on such checks as I deemed necessary to sign off the accounts, I have a reasonable assurance that the accounts present a true and fair view of the financial position of the European Development Fund in all material aspects.



[signed]

Manfred KRAFF

Accounting Officer


13 July 2015



IMPLEMENTING AND ACCOUNTING FOR THE EDF RESOURCES
1.   BACKGROUND

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






—


The EU budget;










—


The European Development Fund;










—


The European Investment Bank.




The European Development Fund (hereinafter referred to as the EDF) is the main instrument for providing EU aid for development cooperation to the African, Caribbean and Pacific (hereinafter referred to as the ACP) States and Overseas Countries and Territories (hereinafter referred to as the OCTs).
The EDF is not funded by the EU budget. It is established by an internal agreement of the Representatives of the Member States, sitting within the Council, and managed by a specific committee. The European Commission (hereinafter referred to as the Commission) is responsible for the financial implementation of the operations carried out with EDF resources. The European Investment Bank (hereinafter referred to as the EIB) manages the Investment Facility.
During the period 2014-20, the geographic aid granted to ACP States and OCTs will continue to be mainly funded by the EDF. Each EDF is usually concluded for a period of around five years. Each EDF is governed by its own Financial Regulation which requires the preparation of financial statements for each individual EDF. Accordingly, financial statements are prepared separately for each EDF in respect of the part that is managed by the Commission. These financial statements are also presented in an aggregated way so as to provide a global view of the financial situation of the resources for which the Commission is responsible.
The Internal Agreement establishing the 11th EDF was signed by the participating Member States, meeting within the Council, in June 2013 (1). It came into force on 1 March 2015. In order to assure continuity between the end of the 10th EDF and the entry into force of the 11th EDF, the Commission proposed transitional measures, known as the Bridging Facility (BF) (2). The BF is presented under the 11th EDF.
At the same time the 10th EDF Financial Regulation (3) was amended and the new Financial Regulation applicable to the transition period was adopted (4). They entered into force on 30 May 2014. On 2 March 2015 the Council adopted the 11th EDF Financial Regulation (5) and the Implementation Rules (6). They entered into force on 6 March 2015.
Within the framework of the ACP-EU Partnership Agreement, the Investment Facility was established. This Investment Facility is managed by the EIB and is used to support private sector development in the ACP States by financing essentially — but not exclusively — private investments. The Facility is designed as a renewable fund, so that loan repayments can be reinvested in other operations, thus resulting in a self-renewing and financially independent facility. As the Investment Facility is not managed by the Commission, it is not consolidated in the first part of the annual accounts — the financial statements of the EDF and the related report on financial implementation. The financial statements of the Investment Facility are included as a separate part of the annual accounts (part II) to provide a full picture of the development aid of the EDF (7).
2.   HOW IS THE EDF FUNDED?

The European Council of 2 December 2013 adopted the Multi-annual Financial Framework for 2014-20. In this context it was decided that geographical cooperation with the ACP States would not be integrated into the EU budget (budgetised), but would continue to be funded through the existing inter-governmental EDF.
The EU budget is annual and according to the budgetary principle of annuality, expenditure and revenue are planned and authorised for one year. Unlike the EU, the EDF is a fund operating on the basis of multiannuality. Each EDF establishes an overall fund to implement development cooperation during a period of usually five years. As resources are allocated on a multiannual basis, the allocated funds may be used over the period of the EDF. The lack of budget annuality is highlighted in the budgetary reporting, where the budgetary implementation of the EDFs is measured against the total funds.
The EDF resources are ‘ad hoc’ contributions from the EU Member States. Approximately every five years, Member State representatives meet at intergovernmental level to decide on an overall amount that will be allocated to the fund and to oversee its implementation. The Commission then manages the fund in accordance with the Union policy on development cooperation. Since Member States have their own development and aid policies in parallel to the Union policy, the Member States must coordinate their policies with the EU to ensure they are complementary.
In addition to the above mentioned contributions, it is also possible for Member States to enter into co-financing arrangements or to make voluntary financial contributions to the EDF.
3.   YEAR-END REPORTING

3.1.   Annual accounts

It is the Accounting Officer’s responsibility to prepare the annual accounts and ensure that they present a true and fair view of the financial position of the EDF.
The annual accounts are presented as follows:
Part I: Funds managed by the Commission






(i)


Financial statements of the EDF










(ii)


Report on financial implementation of the EDF




Part II: Funds managed by the EIB






(i)


Financial statements of the Investment Facility




In addition, since 2014 is the first year that a trust fund has been created under the EDF (see 3.2 below), its accounts, together with the consolidated (EDF and trust fund) accounts are presented below.
The annual accounts are adopted by the Commission by 31 July of the subsequent year and presented to the European Parliament and to the Council for discharge.
3.2.   Bêkou Trust Fund

In accordance with Article 187(1) of the Financial Regulation applicable to the general budget of the Union (EU FR) and Article 42 of the Financial Regulation applicable to the transition period, the Commission is allowed to create Union Trust Funds for external actions under an agreement concluded with other donors. These trust funds may be created for emergency, post-emergency and thematic actions. In accordance with Article 187(6) of the EU FR, the accounting officer of the Union Trust Fund shall be the accounting officer of the Commission.
The first multi-donor EU Trust Fund called Bêkou, was established on 15 July 2014, by the European Union and Germany, France and the Netherlands, with the aim to promote the stabilisation and reconstruction of the Central African Republic. The maximum duration of the Bêkou Trust fund is 60 months.
As the Bêkou Trust fund was established under the EDF, its annual accounts are consolidated with the EDF accounts.
4.   AUDIT AND DISCHARGE

4.1.   Audit

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

The final control is the discharge of the financial implementation of the EDF resources for a given financial year. The European Parliament is the discharge authority of the EDF. This means that following the audit and finalisation of the annual accounts it falls to the Council to recommend and then to the Parliament to decide whether to grant discharge to the Commission for the financial implementation of the EDF resources for the preceding financial year. This decision is based on a review of the accounts and the annual report of the ECA (which includes an official statement of assurance) and replies of the Commission, and also following questions and further information requests to the Commission.
FINANCIAL STATEMENTS AND EXPLANATORY NOTES — FUNDS MANAGED BY THE EUROPEAN COMMISSION (8)


CONTENTS






FINANCIAL STATEMENTS OF THE EDF
7








EDF BALANCE SHEET
7








EDF STATEMENT OF FINANCIAL PERFORMANCE
8








EDF CASHFLOW STATEMENT
9








EDF STATEMENT OF CHANGES IN NET ASSETS
10








BALANCE SHEET BY EDF
11








STATEMENT OF FINANCIAL PERFORMANCE BY EDF
12








STATEMENT OF CHANGES IN NET ASSETS BY EDF
13








NOTES TO THE FINANCIAL STATEMENTS OF THE EDF
15








FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND
37








CERTIFICATION OF THE ACCOUNTS
38








BACKGROUND INFORMATION ON THE BÊKOU TRUST FUND
39








BÊKOU TRUST FUND BALANCE SHEET
39








BÊKOU TRUST FUND STATEMENT OF FINANCIAL PERFORMANCE
40








BÊKOU TRUST FUND CASHFLOW STATEMENT
40








BÊKOU TRUST FUND STATEMENT OF CHANGES IN NET ASSETS
40








NOTES TO THE FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND
41








CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE BÊKOU TRUST FUND
42








CONSOLIDATED BALANCE SHEET
42








CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE
43








CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
43








EDF REPORT ON FINANCIAL IMPLEMENTATION
44




FINANCIAL STATEMENTS OF THE EDF
 (9)


EDF BALANCE SHEET









(EUR millions)




 


Note


31.12.2014


31.12.2013





NON-CURRENT ASSETS



 


 


 





Pre-financing




2.1




472




424






Trust Fund contributions




2.2




39



—




 


 



511




424






CURRENT ASSETS



 


 


 





Pre-financing




2.3




1  403




1  286






Receivables




2.4




84




84






Cash and cash equivalents




2.6




391




759





 


 



1  878




2  128






TOTAL ASSETS



 



2  389




2  553





 


 


 


 





NON-CURRENT LIABILITIES



 


 


 





Payables




2.7




(34)




(25)





 


 



(34)




(25)






CURRENT LIABILITIES



 


 


 





Payables




2.8




(1  423)




(1  214)





 


 



(1  423)




(1  214)






TOTAL LIABILITIES



 



(1  457)




(1  239)






NET ASSETS



 



932




1  313






FUNDS & RESERVES



 


 


 





Called fund capital — active EDFs




2.9




35  673




32  529






Called fund capital from closed EDFs carried forward




2.10




2  252




2  252






Economic result carried forward from previous years



 



(33  468)




(30  396)






Economic result of the year



 



(3  526)




(3  072)






NET ASSETS



 



932




1  313









EDF STATEMENT OF FINANCIAL PERFORMANCE









(EUR millions)




 


Note


2014


2013





OPERATING REVENUE




3.2




132




123






OPERATING EXPENSES



 


 


 





Operating expenses




3.3




(3  650)




(3  027)






Administrative expenses




3.4




(22)




(167)





 


 



(3  671)




(3  194)






SURPLUS/(DEFICIT) FROM OPERATING ACTIVITIES



 



(3  539)




(3  072)






Financial revenue




3.5




13




0






Financial charges



 



(0)




0






SURPLUS/(DEFICIT) FROM FINANCIAL ACTIVITIES



 



13




0






ECONOMIC RESULT OF THE YEAR



 



(3  526)




(3  072)









EDF CASHFLOW STATEMENT









(EUR millions)




 


Note


2014


2013





Economic result of the year



 



(3  526)




(3  072)






OPERATING ACTIVITIES



 


 


 





Ordinary contributions from Member States



 



3  068




2  961






Co-financing contributions



 



66




18






(Reversal of) impairment losses on receivables



 



14




(2)






(Increase)/decrease in non-current pre-financing



 



(47)




14






(Increase)/decrease in Trust Fund contributions



 



(39)



—





(Increase)/decrease in current pre-financing



 



(117)




48






(Increase)/decrease in current receivables
 (10)



 



(22)




(7)






Increase/(decrease) in non-current liabilities



 



9




(15)






Increase/(decrease) in current liabilities
 (11)



 


227


123





NET CASHFLOW



 



(368)




69






Net increase/(decrease) in cash and cash equivalents



 



(368)




69






Cash and cash equivalents at the beginning of the year




2.5




759




690






Cash and cash equivalents at year-end




2.5




391




759









EDF STATEMENT OF CHANGES IN NET ASSETS












(EUR millions)




 


Fund capital — active EDFs
(A)


Uncalled funds — active EDFs
(B)


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


Cumulative Reserves
(D)


Called fund capital from closed EDFs carried forward
(E)


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






BALANCE AS AT 31.12.2012





45  691




16  112




29  579




(30  396)




2  252




1  435






Capital increase — ordinary contributions



—



(2  950)




2  950



—


—



2  950






Economic result of the year



—


—


—



(3  072)



—



(3  072)







BALANCE AS AT 31.12.2013





45  691




13  162




32  529




(33  468)




2  252




1  313






Capital increase — ordinary contributions



—



(3  144)




3  144



—


—



3  144






Economic result of the year



—


—


—



(3  526)



—



(3  526)







BALANCE AS AT 31.12.2014





45  691




10  018




35  673




(36  994)




2  252




932









BALANCE SHEET BY EDF















(EUR millions)




 


 


31.12.2014


31.12.2013




 


Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF


Eighth EDF


Ninth EDF


10th EDF


11th EDF





NON-CURRENT ASSETS



 


 


 


 


 


 


 


 


 





Pre-financing




2.1



—



17




411




44



—



90




334



—





Trust Fund contributions




2.2



—


—


—



39



 


 


 


 




 


 


—



17




411




83



—



90




334



—





CURRENT ASSETS



 


 


 


 


 


 


 


 


 





Pre-financing




2.3




5




142




1  178




77




5




259




1  021



—





Receivables




2.4




3




66




15




0




2




58




24



—





Liaison accounts




2.5




216




810



—



607




290




1  323



—


—





Cash and cash equivalents




2.6



—


—


—



391



—


—



759



—




 


 



224




1  018




1  193




1  076




297




1  640




1  804



—





TOTAL ASSETS



 



224




1  035




1  604




1  159




297




1  730




2  138



—





NON-CURRENT LIABILITIES



 


 


 


 


 


 


 


 


 





Payables




2.7



—


—



(34)



—


—


—



(25)



—




 


 


—


—



(34)



—


—


—



(25)



—





CURRENT LIABILITIES



 


 


 


 


 


 


 


 


 





Payables




2.8




(10)




(175)




(1  195)




(43)




(28)




(263)




(923)



—





Liaison accounts




2.5



—


—



(1  633)



—


—


—



(1  613)



—




 


 



(10)




(175)




(2  828)




(43)




(28)




(263)




(2  536)



—





TOTAL LIABILITIES



 



(10)




(175)




(2  862)




(43)




(28)




(263)




(2  561)



—





NET ASSETS



 



214




860




(1  258)




1  116




270




1  467




(423)



—





FUNDS & RESERVES



 


 


 


 


 


 


 


 


 





Called fund capital — active EDFs




2.9




12  840




11  699




11  134



—



12  840




11  699




7  990



—





Called fund capital from closed EDFs carried forward




2.10




627




1  625



—


—



627




1  625



—


—





Called fund capital transfers between active EDFs




2.11




(3  147)




1  758




(209)




1  597




(3  083)




2  130




952



 





Economic result carried forward from previous years



 



(10  114)




(13  988)




(9  356)




(10)




(10  125)




(13  658)




(6  614)



—





Economic result of the year



 



8




(235)




(2  828)




(472)




10




(331)




(2  751)



—




 


 



214




860




(1  258)




1  116




270




1  467




(423)



—





NET ASSETS



 



214




860




(1  258)




1  116




270




1  467




(423)



—








STATEMENT OF FINANCIAL PERFORMANCE BY EDF















(EUR millions)




 


 


2014


2013




Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF


Eighth EDF


Ninth EDF


10th EDF


11th EDF





OPERATING REVENUE




3.2




9




43




79




1




64




34




25



—





OPERATING EXPENSES



 


 


 


 


 


 


 


 


 





Operating expenses




3.3




(1)




(293)




(2  881)




(475)




(53)




(362)




(2  612)



—





Administrative expenses




3.4



—



0




(22)



—


—



(0)




(167)



—




 


 



(1)




(293)




(2  903)




(475)




(53)




(362)




(2  779)



—





SURPLUS/(DEFICIT) FROM OPERATING ACTIVITIES



 



8




(249)




(2  824)




(474)




11




(328)




(2  754)



—





Financial revenue




3.5




0




15




(3)




2




(0)




(3)




3



—





Financial charges



 


—


—



(0)



—


—


—



0



—





SURPLUS/(DEFICIT) FROM FINANCIAL ACTIVITIES



 



0




15




(4)




2




(0)




(3)




3



—





ECONOMIC RESULT OF THE YEAR



 



8




(235)




(2  828)




(472)




10




(331)




(2  751)



—








STATEMENT OF CHANGES IN NET ASSETS BY EDF













(EUR millions)




Eighth EDF


Fund capital — active EDFs
(A)


Uncalled funds — active EDFs
(B)


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


Cumulative Reserves
(D)


Called fund capital from closed EDFs carried forward
(E)


Called fund capital transfers between active EDFs
(F)


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





BALANCE AS AT 31.12.2012




12  840



—



12  840




(10  125)




627




(2  980)




361






Capital increase — ordinary contributions



—


—


—


 


 


 


—





Transfer to/from the 10th EDF



 


 


—


 


 



(102)




(102)






Economic result of the year



 


 


—



10



 


 



10






BALANCE AS AT 31.12.2013




12  840



—



12  840




(10  114)




627




(3  083)




270






Capital increase — ordinary contributions



—


—


—


 


 


 


—





Transfer to/from the 10th EDF



 


 


—


 


—



(64)




(64)






Transfer to/from the 11th EDF



 


 


—


 


—


—


—





Economic result of the year



 


 


—



8



 


 



8






BALANCE AS AT 31.12.2014




12  840



—



12  840




(10  107)




627




(3  147)




214




















(EUR millions)




Ninth EDF


Fund capital — active EDFs
(A)


Uncalled funds — active EDFs
(B)


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


Cumulative Reserves
(D)


Called fund capital from closed EDFs carried forward
(E)


Called fund capital transfers between active EDFs
(F)


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





BALANCE AS AT 31.12.2012




11  699



—



11  699




(13  657)




1  625




2  501




2  168






Capital increase — ordinary contributions



—


—


—


 


 


 


—





Transfers to/from the 10th EDF



 


 


—


 


 



(371)




(371)






Economic result of the year



 


 


—



(331)



 


 



(331)






BALANCE AS AT 31.12.2013




11  699



—



11  699




(13  988)




1  625




2  130




1  467






Capital increase — ordinary contributions



—


—


—


 


 


 


—





Transfers to/from the 10th EDF



 


 


—


 


 



(372)




(372)






Transfers to/from the 11th EDF



 


 


—


 


 


 


—





Economic result of the year



 


 


—



(235)



 


 



(235)






BALANCE AS AT 31.12.2014




11  699



—



11  699




(14  223)




1  625




1  758




860




















(EUR millions)




10th EDF


Fund capital — active EDFs
(A)


Uncalled funds — active EDFs
(B)


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


Cumulative Reserves
(D)


Called fund capital from closed EDFs carried forward
(E)


Called fund capital transfers between active EDFs
(F)


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





BALANCE AS AT 31.12.2012




21  152




16  112




5  040




(6  614)



—



479




(1  095)






Capital increase — ordinary contributions



—



(2  950)




2  950



 


 


 



2  950






Transfers to/from the eighth and ninth EDF



 


 


—


 


 



473




473






Economic result of the year



 


 


—



(2  751)



 


 



(2  751)






BALANCE AS AT 31.12.2013




21  152




13  162




7  990




(9  365)



—



952




(423)






Capital increase — ordinary contributions



—



(3  144)




3  144



 


 


 



3  144






Transfers to/from the eighth and ninth EDF



 


 


—


 


 



(936)




(936)






Transfers to/from the 11th EDF



 


 


—


 


 



(225)




(225)






Transfer of economic result carried forward — treasury — from the 10th EDF to the 11th EDF



 


 


 



10



 


 



10






Economic result of the year



 


 


—



(2  828)



 


 



(2  828)






BALANCE AS AT 31.12.2014




21  152




10  018




11  134




(12  183)



—



(209)




(1  258)




















(EUR millions)




11th EDF


Fund capital — active EDFs
(A)


Uncalled funds — active EDFs
(B)


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


Cumulative Reserves
(D)


Called fund capital from closed EDFs carried forward
(E)


Called fund capital transfers between active EDFs
(F)


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





BALANCE AS AT 31.12.2012



—


—


—


—


—


 


—





Capital increase — ordinary contributions



—


—


—


 


 


 


—





Transfers to/from the eighth, ninth and 10th EDF



 


 


—


 


—


 


—





Economic result of the year



 


 


—


—


 


 


—





BALANCE AS AT 31.12.2013



—


—


—


—


—


 


—





Capital increase — ordinary contributions



—


—


—


 


 


 


—





Transfers to/from the eighth, ninth and 10th EDF



 


 


—


 


 



1  597




1  597






Transfer of economic result carried forward — treasury — from the 10th EDF to the 11th EDF



 


 


 



(10)



 


 



(10)






Economic result of the year



 


 


—



(472)



 


 



(472)






BALANCE AS AT 31.12.2014



—


—


—



(482)



 



1  597




1  116






NOTES TO THE FINANCIAL STATEMENTS OF THE EDF

1.   SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the EDF are the same as those applied by the European Union (EU) and are outlined in the note 1 of the consolidated annual accounts of the EU. A summary of the most important policies is given below.
1.1.   Legal basis and accounting rules

In accordance with Article 46 of the EDF Financial Regulation, the EDF financial statements are prepared on the basis of accrual-based accounting rules that are based on International Public Sector Accounting Standards (IPSAS). The accounting rules adopted by the Accounting Officer of the Commission are applied by all the Institutions and bodies of the EU in order to establish a uniform set of rules for accounting, valuation and presentation of the accounts with a view to harmonising the process for drawing up the financial statements and consolidation, as required by Article 152 of the EU Financial Regulation. These rules are also applied to the EDF while taking into account the specific nature of its activities.
1.2.   Accounting principles

The overall considerations (or accounting principles) to be followed when preparing the financial statements are laid down in EU accounting rule 2 (the same as in IPSAS 1): fair presentation, accrual basis, going concern, consistency of presentation, aggregation, offsetting and comparative information. The qualitative characteristics of financial reporting according to Article 144 of the EU Financial Regulation are relevance, reliability, understandability and comparability.
1.3.   Basis of preparation


Currency and basis for conversion

The annual accounts are presented in millions of euros, the euro being the EU’s functional and reporting currency. Foreign currency transactions are translated into euros using the exchange rates prevailing at the dates of the transactions. Year-end balances of monetary assets and liabilities denominated in foreign currencies are converted into euros on the basis of the exchange rates applying on 31 December.

Euro exchange rates











Currency


31.12.2014


31.12.2013


Currency


31.12.2014


31.12.2013





BGN




1,9558




1,9558




LTL




3,4528




3,4528






CZK




27,7350




27,4270




PLN




4,2732




4,1543






DKK




7,4453




7,4593




RON




4,4828




4,4710






GBP




0,7789




0,8337




SEK




9,3930




8,8591






HRK




7,6580




7,6265




CHF




1,2024




1,2276






HUF




315,5400




297,0400




JPY




145,2300




144,7200






LVL



—



0,7028




USD




1,2140




1,3791





1.3.1.   
Use of estimates


In accordance with IPSAS and generally accepted accounting principles, the financial statements necessarily include amounts based on estimates and assumptions by management based on the most reliable information available. Significant estimates include, but are not limited to; amounts for employee benefit liabilities, provisions, financial risk on inventories and accounts receivables, accrued income and charges, contingent assets and liabilities, and degree of impairment of intangible assets and property, plant and equipment. Actual results could differ from those estimates. Changes in estimates are reflected in the period in which they become known.
1.4.   Balance sheet

1.4.1.   
Intangible assets


Acquired computer software licences are stated at historical cost less accumulated amortisation and impairment losses. The assets are amortised on a straight-line basis over their estimated useful lives. The estimated useful lives of intangible assets depend on their specific economic lifetime or legal lifetime determined by an agreement. Internally developed intangible assets are capitalised when the relevant criteria of the EU accounting rules are met. The costs capitalisable include all directly attributable costs necessary to create, produce, and prepare the asset to be capable of operating in the manner intended by management. Costs associated with research activities, non-capitalisable development costs and maintenance costs are recognised as expenses as incurred.
1.4.2.   
Property, plant and equipment


All property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition or construction of the asset. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits or service potential associated with the item will flow to the entity and its cost can be measured reliably. Repairs and maintenance costs are charged to the statement of financial performance during the financial period in which they are incurred. Land and works of art are not depreciated as they are deemed to have an indefinite useful life. Assets under construction are not depreciated as these assets are not yet available for use. Depreciation on other assets is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:






Type of asset


Straight line depreciation rate





Buildings




4 %






Plant, machinery and equipment




10 % to 25 %






Furniture




10 % to 25 %






Fixtures and fittings




10 % to 33 %






Vehicles




25 %






Computer hardware




25 %






Other tangible assets




10 % to 33 %





Gains or losses on disposals are determined by comparing proceeds less selling expenses with the carrying amount of the disposed asset and are included in the statement of financial performance.

Leases

Leases of tangible assets, where the entity has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased asset and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The rental obligations, net of finance charges, are included as liabilities. The interest element of the finance cost is charged to the statement of financial performance over the lease period so as to produce a constant periodic interest rate on the remaining balance of the liability for each period. The assets held under finance leases are depreciated over the shorter of the assets’ useful life and the lease term.
Leases where the lessor retains a significant portion of the risks and rewards inherent to ownership are classified as operating leases. Payments made under operating leases are charged to the statement of financial performance on a straight-line basis over the period of the lease.
1.4.3.   
Impairment of non-financial assets


Assets that have an indefinite useful life are not subject to amortisation/depreciation and are tested annually for impairment. Assets that are subject to amortisation/depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use.
Intangible assets and property, plant and equipment residual values and useful lives are reviewed, and adjusted if appropriate, at least once per year. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. If the reasons for impairments recognised in previous years no longer apply, the impairment losses are reversed accordingly.
1.4.4.   
Financial assets


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

Financial assets at fair value through profit or loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by the entity. Derivatives are also categorised in this category. Assets in this category are classified as current assets if they are expected to be realised within 12 months of the balance sheet date.

Loans and receivables

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

Held-to-maturity investments

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

Available for sale financial assets

Available for sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are classified as either current or non-current assets, depending on the time period in which the entity expects to dispose of them which is usually the remaining maturity at the balance sheet date.
1.4.5.   
Pre-financing amounts


Pre-financing is a payment intended to provide the beneficiary with a cash advance, i.e. a float. It may be split into a number of payments over a period defined in the particular pre-financing agreement. The float or advance is repaid or used for the purpose for which it was provided during the period defined in the agreement. If the beneficiary does not incur eligible expenditure, it has the obligation to return the pre-financing advance to the entity. The amount of the pre-financing is reduced (wholly or partially) by the acceptance of eligible costs (which are recognised as expenses) and amounts returned.
At year-end, outstanding pre-financing amounts are valued at the original amount(s) paid less: amounts returned, eligible amounts expensed, estimated eligible amounts not yet cleared at year-end, and value reductions.
1.4.6.   
Receivables and recoverables


Receivables and recoverables are carried at original amount less write-down for impairment. A write-down for impairment is established when there is objective evidence that the entity will not be able to collect all amounts due according to the original terms of the receivables. The amount of the write-down is the difference between the asset’s carrying amount and the recoverable amount. The amount of the write-down is recognised in the statement of financial performance.
1.4.7.   
Cash and cash equivalents


Cash and cash equivalents are financial instruments and classified as available for sale financial assets. They include cash at hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less.
1.4.8.   
Provisions


Provisions are recognised when the entity has a present legal or constructive obligation towards third parties as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognised for future operating losses. The amount of the provision is the best estimate of the expenditures expected to be required to settle the present obligation at the reporting date. Where the provision involves a large number of items, the obligation is estimated by weighting all possible outcomes by their associated probabilities (‘expected value’ method).
1.4.9.   
Payables


A significant amount of the payables of the entity are not related to the purchase of goods or services — instead they are unpaid cost claims from beneficiaries of grants or other EU funding. They are recorded as payables for the requested amount when the cost claim is received. Upon verification and acceptance of the eligible costs, the payables are valued at the accepted and eligible amount.
Payables arising from the purchase of goods and services are recognised at invoice reception for the original amount and corresponding expenses are entered in the accounts when the supplies or services are delivered and accepted by the entity.
1.4.10.   
Accrued and deferred income and charges


At the end of the accounting period, accrued expenses are recognised based on an estimated amount of the transfer obligation of the period. Revenue is also accounted for in the period to which it relates. At year-end, if an invoice is not yet issued but the service has been rendered, the supplies have been delivered by the entity or a contractual agreement exists, an accrued income will be recognised in the financial statements. In addition, at year-end, if an invoice is issued but the services have not yet been rendered or the goods supplied have not yet been delivered, the revenue will be deferred and recognised in the subsequent accounting period.
1.5.   Statement of financial performance

1.5.1.   
Revenue


Revenue from non-exchange transactions are taxes and transfers because the transferor provides resources to the recipient entity without the recipient entity providing approximately equal value directly in exchange. Transfers are inflows of future economic benefits or service potential from non-exchange transactions, other than taxes.
Exchange revenue from the sale of goods and services is recognised when the significant risk and rewards of ownership of the goods are transferred to the purchaser. Revenue associated with a transaction involving the provision of services is recognised by reference to the stage of completion of the transaction at the reporting date.
1.5.2.   
Expenses


Exchange expenses arising from the purchase of goods and services are recognised when the supplies are delivered and accepted by the entity. They are valued at original invoice cost.
Non-exchange expenses account for the majority of the entity’s expenses. They relate to transfers to beneficiaries and can be of three types: entitlements, transfers under agreement and discretionary grants, contributions and donations. Transfers are recognised as expenses in the period during which the events giving rise to the transfer occurred, as long as the nature of the transfer is allowed by regulation or a contract has been signed authorising the transfer; any eligibility criteria have been met by the beneficiary; and a reasonable estimate of the amount can be made.
When a request for payment or cost claim is received and meets the recognition criteria, it is recognised as an expense for the eligible amount.
1.6.   Contingent assets and liabilities

1.6.1.   
Contingent assets


A contingent asset is a possible asset that arises from past events and of which the existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. A contingent asset is disclosed when an inflow of economic benefits or service potential is probable.
1.6.2.   
Contingent liabilities


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

Co-financing contributions received fulfil the criteria of revenues from non-exchange transactions under condition and they are presented as payables to Member States, non-Member States and others. The EDF is required to use the contributions to deliver services to third parties or is otherwise required to return the assets (the contributions received). The outstanding payables relating to co-financing agreements represent the co-financing contributions received less the expenses incurred related to the project. The effect on net assets is nil.
Expenses relating to co-financing projects are recognised as they are incurred. The corresponding amount of contributions is recognised as operating revenue and the effect on economic result of the year is nil.
2.   NOTES TO THE BALANCE SHEET

NON-CURRENT ASSETS
2.1.   Pre-financing












(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 31.12.2014




Total 31.12.2013






Pre-financing



—



17




411




44




472




424






Total



—



17




411




44




472




424














(EUR millions)




 


Total
31.12.2014





Direct Management




72











 



Implemented by:







 










 








 



Commission












47











 








 



EU executive agencies












3











 








 



EU delegations












22






Indirect Management




400











 



Implemented by:







 










 








 



Third countries












22











 








 



International organisations












127











 








 



EIB and EIF












223











 








 



Public law bodies












24











 








 



Private law bodies with a public service mission












4






Total




472





Many contracts provide for payments of advances before the commencement of works, deliveries of supplies or the provision of services. Sometimes the payment schedules of contracts foresee payments on the basis of progress reports. Pre-financing is normally paid in the currency of the country or territory where the project is executed.
The timing of the recoverability or utilisation of the pre-financing governs whether it is disclosed as a current or a non-current pre-financing asset. The utilisation is defined by the project’s underlying agreement. Any repayments or utilisation due within 12 months of the reporting date are disclosed as current pre-financing. As many of the EDF projects are long-term in nature, it is necessary that the related advances are available for more than one year. Thus some pre-financing amounts are shown as non-current assets, but since the eighth and the ninth EDFs are winding down, most pre-financing is current.
The increase in non-current pre-financing by EUR 80 million compared to 31 December 2013 is mainly explained by the implementation of new contracts under the Bridging Facility (EUR 77 million).
2.2.   Trust fund contributions

This heading represents the amount paid as contribution to the Bêkou EU Trust Fund.
CURRENT ASSETS
2.3.   Pre-financing












(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 31.12.2014




Total 31.12.2013






Pre-financing (gross)




20




517




3  413




384




4  335




3  931






Cleared via cut-off




(15)




(375)




(2  235)




(307)




(2  932)




(2  645)






Total




5




142




1  178




77




1  403




1  286














(EUR millions)




 


Total
31.12.2014





Direct Management




227











 



Implemented by:







 










 








 



Commission












116











 








 



EU executive agencies












4











 








 



EU delegations












106






Indirect Management




1  176











 



Implemented by:







 










 








 



Third countries












257











 








 



International organisations












494











 








 



EIB and EIF












357











 








 



Public law bodies












41











 








 



Private law bodies with a public service mission












24











 








 



Private law bodies implementing Public Private Partnership












2






Total




1  403





2.3.1.   
Guarantees received in respect of pre-financing


Guarantees are held to secure pre-financing and are released when the final claim under a project is paid. At 31 December 2014 the nominal value of guarantees received by the EDF in respect of pre-financing amounts to EUR 259 million.
2.4.   Receivables













(EUR millions)




 


Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 31.12.2014




Total 31.12.2013






Receivables from customers, public bodies, EFTA and third states




2.4.1




3




10




7




0




21




24






Receivables from Member States



 


—


—


—



0




0




3






Accrued income and deferred charges




2.4.2




0




56




7




(0)




63




57






Total



 



3




66




15




0




84




84















(EUR millions)




 


Total at 31.12.2014


Total at 31.12.2013





Recoverables from non-exchange transactions




21




22






Receivables from exchange transactions




63




62






Total




84




84





2.4.1.   
Receivables from customers, public bodies, EFTA and third states













(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 31.12.2014




Total 31.12.2013






Receivables from customers, public bodies, EFTA and third states




6




34




9




0




49




38






Write-down




(3)




(23)




(2)




(0)




(28)




(14)






Total




3




10




7




0




21




24





2.4.2.   
Accrued income and deferred charges


Accrued income and deferred charges include primarily accrued interest on pre-financing amounts.
2.5.   Liaison accounts











(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 31.12.2014






Liaison accounts




216




810




(1  633)




607



—





Total




216




810




(1  633)




607



—




For reason of efficiency, the single treasury covering all the EDFs is allocated to the 11th EDF (12); this leads to operations between the various EDFs, which are balanced out in the liaison accounts between the various EDF balance sheets. Liaison accounts are presented only in the individual EDFs.
2.6.   Cash and cash equivalents
 (13)












(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 31.12.2014




Total 31.12.2013






Special accounts: financial institutions of Member States



—


—


—



344




344




719






Current accounts: commercial banks



—


—


—



47




47




39






Democratic Republic Congo Special fund (14)




—


—


—



1




1




1






Total



—


—


—



391




391




759





The overall decrease in cash and cash equivalents is mainly explained by the level of payments made and a higher level of budget execution than in the previous reporting period.
It should be noted that there are Stabex funds held by beneficiary ACP States and thus not included on the EDF balance sheet. Stabex is the acronym for a EU compensatory finance scheme to stabilise export earnings of the ACP countries. Once the Commission and the beneficiary (ACP) State reach agreement on how the Stabex funds are to be utilised, a transfer convention is signed by both parties. In accordance with the provisions of Article 211 of the Lomé IV Agreement (15) (as revised), the funds are transferred into an interest bearing double signature account (Commission and Beneficiary State) opened in the name of the ACP State. The funds remain in these double signature accounts until a Framework of Mutual Obligations (FMO) justifies a transfer for a project. The Commission’s Authorising Officer retains the power of signature over the account in order to ensure that the funds are disbursed as intended. The funds in the double signature accounts are the property of the ACP State and are consequently not recorded as assets in the EDF accounts. The transfers to these accounts are recorded as Stabex payments. See also note 3.2.2 for more information.
NON-CURRENT LIABILITIES
2.7.   Payables












(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 31.12.2014




Total 31.12.2013






Co-financing — payables



—


—



34



—



34




25






Total



—


—



34



—



34




25





The change in the total co-financing payables is explained in the note 2.8.1.2.
CURRENT LIABILITIES
2.8.   Payables













(EUR millions)




 


Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 31.12.2014




Total 31.12.2013






Current payables




2.8.1




0




22




446




5




474




322






Accrued charges




2.8.2




10




153




521




37




722




588






Deferred fund capital contribution




2.8.3



—


—



228



—



228




304






Total



 



10




175




1  195




43




1  423




1  214





2.8.1.   
Current payables














(EUR millions)




 


Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 31.12.2014




Total 31.12.2013






Suppliers and other




2.8.1.1




0




23




379




(0)




402




244






Co-financing payables




2.8.1.2



—



(0)




67




0




67




75






Sundry payables




2.8.1.3



—



(1)




(0)




6




4




3






Total



 



0




22




446




5




474




322





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

Included under this heading are amounts owed to suppliers as well as amounts payable to public bodies and third states.
The increase of EUR 158 million compared to the previous reporting period relates primarily to a EUR 160 million increase in payables to third states.
2.8.1.2.   Co-financing payables

The total non-current and current co-financing payables are in line with last year. During 2014, new co-financing contributions were received from the EIB (EUR 48 million), Belgium (EUR 5 million), Sweden (EUR 3 million) and other countries.
Co-financing payables were decreased by EUR 57 million in order to recognise revenue related to co-financing projects (see 3.2.3 and 3.3.2).
2.8.1.3.   Sundry payables

Sundry payables mainly comprise unallocated cash receipts and returned amounts.
2.8.2.   
Accrued charges













(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 31.12.2014




Total 31.12.2013






Accrued charges




10




153




521




37




722




588






Total




10




153




521




37




722




588





At year-end, an assessment is made concerning eligible expenses incurred by beneficiaries of EDF funds but not yet reported. Following these cut-off calculations, estimated eligible amounts are recorded as accrued charges.
Estimated utilisation of pre-financing amounts is presented as an estimated clearing of pre-financing (see 2.3).
2.8.3.   
Deferred fund capital contribution













(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 31.12.2014




Total 31.12.2013






United Kingdom



—


—



222



—



222




296






Czech Republic



—


—



4



—



4



—





Ireland



—


—


—


—


—



5






Lithuania



—


—



1



—



1




2






Total



—


—



228



—



228




304





These are Member States’ contributions paid in advance.
NET ASSETS
2.9.   Called fund capital — active EDFs











(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total






Fund capital




12  840




11  699




21  152



—



45  691






Uncalled fund capital



—


—



(13  162)



—



(13  162)






Called fund capital 31.12.2013




12  840




11  699




7  990



—



32  529





 


 


 


 


 


 





Fund capital




12  840




11  699




21  152



—



45  691






Uncalled fund capital



—


—



(10  018)



—



(10  018)






Called fund capital 31.12.2014




12  840




11  699




11  134



—



35  673





The fund capital represents the total amount of contributions from Member States for the relevant EDF fund as laid down in each of the Internal Agreements. The uncalled funds represent the initial allocation not yet called up from Member States.
The called fund capital represents the amount of the initial allocations which have been called up for transfer to the treasury accounts by the Member States.
The capital of the eighth and the ninth EDF has been called up and received in its entirety.
The 2014 activities of the Bridging Facility were financed through decommitted amounts from previous EDFs (see 2.11 Called fund capital transfers between active EDFs). As the Internal Agreement establishing the 11th EDF did not yet enter into force at 31 December 2014, no fund capital is presented under the 11th EDF.

Called and uncalled fund capital by Member State










(EUR millions)




Contributions


%


Uncalled 10th EDF 31.12.2013


Called up in 2014


Uncalled 10th EDF 31.12.2014




Austria


2,41


(317)


76


(241)




Belgium


3,53


(465)


111


(354)




Bulgaria


0,14


(18)


4


(14)




Cyprus


0,09


(12)


3


(9)




Czech Republic


0,51


(67)


16


(51)




Denmark


2,00


(263)


63


(200)




Estonia


0,05


(7)


2


(5)




Finland


1,47


(193)


46


(147)




France


19,55


(2  573)


615


(1  958)




Germany


20,50


(2  698)


645


(2  053)




Greece


1,47


(193)


46


(147)




Hungary


0,55


(72)


17


(55)




Ireland


0,91


(120)


29


(91)




Italy


12,86


(1  693)


404


(1  288)




Latvia


0,07


(9)


2


(7)




Lithuania


0,12


(16)


4


(12)




Luxembourg


0,27


(36)


8


(27)




Malta


0,03


(4)


1


(3)




Netherlands


4,85


(638)


152


(486)




Poland


1,30


(171)


41


(130)




Portugal


1,15


(151)


36


(115)




Romania


0,37


(49)


12


(37)




Slovakia


0,21


(28)


7


(21)




Slovenia


0,18


(24)


6


(18)




Spain


7,85


(1  033)


247


(786)




Sweden


2,74


(361)


86


(274)




United Kingdom


14,82


(1  951)


466


(1  485)





Total





100,00






(13  162)






3  144






(10  018)






2.10.   Called fund capital from closed EDFs carried forward











(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF


Total





Funds transferred from closed EDFs




627




1  625



—


—



2  252






Balance at 31.12.2014




627




1  625



—


—



2  252





This heading includes the resources transferred from closed EDFs.
2.11.   Called fund capital transfers between active EDFs











(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF


Total





Balance at 31.12.2012




(2  980)




2  501




479



—



0






Transfer of decommitted amounts to the 10th EDF from the eighth and ninth EDFs




(102)




(371)




473



—



0






Balance at 31.12.2013




(3  083)




2  130




952



—



0






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




(64)




(372)




436



 



0






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



 


 



(225)




225




0






Transfer from the 10th and 11th performance reserves to the Bridging Facility



 


 



(1  372)




1  372




0






Balance at 31.12.2014




(3  147)




1  758




(209)




1  597




0





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

3.1.   Revenue from exchange and non-exchange transactions








(EUR millions)




 


Total 2014


Total 2013





Revenue from non-exchange transactions




87




79






Revenue from exchange transactions




59




43






Total




145




123





The EUR 87 million of revenue from non-exchange transactions is exclusively operating revenue while the EUR 59 million of revenue from exchange transactions comprises operating revenue (EUR 45 million) and financial revenue (EUR 13 million — see note 3.5).
3.2.   Operating revenue













(EUR millions)




 


Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 2014




Total 2013






Recovery of expenses




3.2.1




2




22




3



—



26




13






Recovery of Stabex funds




3.2.2




4



—


—


—



4




61






Foreign exchange gains



 



3




21




19




1




45




41






Operating income co-financing




3.2.3



—


—



57



—



57




8






Total



 



9




43




79




1




132




123














(EUR millions)




 


Total 2014





Direct Management




17











 



Implemented by:







 










 








 



Commission












0











 








 



EU delegations












17






Indirect Management




70











 



Implemented by:







 










 








 



Third countries












68











 








 



International organisations












1






Total operating revenue excluding foreign exchange gains




86





3.2.1.   
Recovery of expenses


This heading represents the recovery orders issued by the EDF and the deduction from subsequent payments recorded in the EDF accounting system, to recover amounts previously paid out, based on controls, audits or eligibility analysis. It should be noted that recovery of pre-financing amounts is not included as revenue, but credited to the pre-financing heading on the balance sheet.

Recovery of undue payments

During 2014, recovery orders for EUR 48 million were issued in respect of undue payments, compared to EUR 23 million in 2013. Out of these, EUR 25 million related to the recovery of expenses and were thus recorded as operating revenue. EUR 23 million represented recoveries of pre-financing amounts paid and were credited to the pre-financing asset on the balance sheet.
The nature of the recovery of undue payments can be summarised as follows:











(EUR millions)




 


Revenue


Pre-financing



Total 2014



Revenue


Pre-financing



Total 2013






Error




0




2




2




2




4




6






Irregularity




24




20




44




4




12




16






OLAF notified




1




0




1



—



1




1






Total




25




23




48




6




17




23





3.2.2.   
Recovery of Stabex funds


During 2014, EUR 4 million was returned to the EDF from double signature accounts in ACP countries. These funds were transferred mainly from Ivory Coast (EUR 2 million) and Uganda (EUR 1 million). These revenues are included in operating income (recovery of Stabex funds) in the statement of financial performance of the eighth EDF.
3.2.3.   
Operating income co-financing


The operating income relating to co-financing represents the contributions used (see ERS.2).
3.3.   Operating expenses













(EUR millions)




 


Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 2014




Total 2013






Operating expenses — aid instruments




3.3.1




(0)




261




2  813




472




3  545




2  957






Operating expenses co-financing




3.3.2



—


—



57



—



57




8






Foreign exchange losses



 



2




18




11




3




33




60






Write-down of receivables



 



(0)




14




0




0




14




1






Total



 



1




293




2  881




475




3  650




3  027














(EUR millions)




 


Total
2014





Direct Management




933











 



Implemented by:







 










 








 



Commission












114











 








 



EU executive agencies












2











 








 



EU delegations












817











 








 



Trust Funds











—





Indirect Management




2  670











 



Implemented by:







 










 








 



Third countries












1  111











 








 



International organisations












1  148











 








 



EIB and EIF












179











 








 



Public law bodies












144











 








 



Private law bodies with a public service mission












46











 








 



Private law bodies implementing Public Private Partnership












41






Total operating expenses: aid instruments and co-financing




3  603





3.3.1.   
Operating expenses — aid instruments













(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 2014




Total 2013






Programmable aid




(7)




(3)




2  038




130




2  159




1  719






Macroeconomic support



—



42



—


—



42




21






Sectoral policy




0




10




(1)



—



10




222






Interest rate subsidies




3



—


—


—



3




(0)






Intra ACP projects



—



215




507




258




979




645






Emergency aid



—



2




250




84




335




270






Refugee aid




(0)



—


—


—



(0)




1






Risk capital




0



—


—


—



0




0






Stabex




2



—


—


—



2




(1)






Sysmin




0



—


—


—



0




0






Other aid programmes related to former EDFs



—



2



—


—



2




5






Institutional support



—


—



19



—



19




62






Compensation export receipts




1




(6)



—


—



(5)




13






Total




(0)




261




2  813




472




3  545




2  957





The EDF operating expenditure covers various aid instruments and takes different forms, depending on how the money is paid out and managed.
3.3.2.   
Operating expenses co-financing


These are the expenses incurred on co-financing projects in 2014. As the co-financing contributions received fulfil the criteria of revenues from non-exchange transactions under condition, a corresponding amount of contributions has been recognised as operating revenue (see 3.2.3).
3.4.   Administrative expenses












(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 2014




Total 2013






Administrative expenses



—



(0)




22



—



22




167






Total



—



(0)




22



—



22




167





This heading includes support expenditure, i.e. the administrative costs related to the programming and implementation of the EDFs. This includes expenses for preparation, follow-up, monitoring, and evaluation of projects as well as expenses for computer networks, technical assistance etc.
The decrease in administrative expenses is mainly caused by a change in the estimation method for accruals. If the same method had been applied in 2013, total administrative expenses (including accrued charges) would have been EUR 80 million lower.
3.5.   Financial revenue












(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 2014




Total 2013







Interest income — European banks






0






1






(3)






0






(1)






0








Interest on pre-financing






(0)






13






(1)






2






15






(0)












—



accrued interest








(0)




12




(1)



—



11




(5)











—



recovered interest








0




1




0




2




3




5






Total




0




15




(3)




2




13




(0)





Interest on pre-financing is recognised in accordance with the provisions of Article 9(2)(d) of the Financial Regulation applicable to the transition period. The negative interest revenue in 2013 was caused by the reversal of the previous year accrual for interest on pre-financing. The higher amount of interest revenue in 2014 in the ninth EDF is mainly caused by fluctuations in the foreign currency exchange rate USD/EUR.
Financial revenue is considered as revenue from exchange transactions.
4.   CONTINGENT ASSETS & LIABILITIES AND OTHER SIGNIFICANT DISCLOSURES

4.1.   Contingent assets












(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 31.12.2014




Total 31.12.2013






Performance guarantees




3




44




54



—



101




116






Retention guarantees




2




30




18



—



50




56






Total




5




74




72



—



150




171





4.1.1.   
Performance guarantees


Performance guarantees are sometimes requested to ensure that beneficiaries of EDF funding meet the obligations of their contracts with the EDF.
4.1.2.   
Retention guarantees


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

4.2.1.   
Centre for the Development of Enterprise


The ACP-EU Council of Ministers agreed in June 2014 ‘to proceed with the orderly closing of the CDE’, and at the same time ‘to ensure that the private sector support projects implemented by the CDE in ACP countries and regions are completed in full’. For this purpose, the ACP-EU Council of Ministers granted a delegation of powers to the ACP-EU Committee of Ambassadors to take this matter forward with a view to adopt the necessary decisions.
The ACP-EU Committee of Ambassadors authorised, by Decision No 4/2014 of 23/10/2014, the Executive Board of the CDE to take, with immediate effect, all appropriate measures to prepare for the closure of the CDE. As stipulated in Article 2 of that Decision, the Executive Board was instructed to contract a Curator to prepare and implement a closure plan. That closure plan ‘should permit the closure of the CDE in an orderly manner, while respecting the rights of all involved third parties, and ensuring that the ongoing private sector support projects are completed either by the CDE itself or by an entity to whom their management can be assigned’. The closure plan is to envisage the finalisation of the winding-up of the CDE by 31 December 2016.
The curator has submitted to the CDE Executive Board, at the end of June 2015, a definitive strategic plan, with a budget and work-plan, which reflects the outcome of the social dialogue. The budget of the definitive strategic plan, approved by the CDE Executive Board, will be the basis for the Commission’s proposal for a Financing Decision, to be adopted after having received the opinion of the EDF Committee. Subsequent to the adoption of that Financing decision, a grant agreement will be concluded between the CDE and the Commission which provides the necessary financing for the full realization of CDE’s assets and full settlement of its liabilities. Following the entry into force of that grant agreement, the Curator will be able to implement the definitive strategic plan, adopt the actions it envisages and commit to paying the expenses arising.
At the date of the preparation of the EDF financial statements, the strategic plan and its budget estimate that total costs related to the closure will be around EUR 18 million euro and these will be covered by the EDF.
4.3.   Other significant disclosures

4.3.1.   
Outstanding commitments not yet expensed


The amount disclosed below is the budgetary RAL (‘Reste à Liquider’) less related amounts that have been included as expenses in the 2014 statement of financial performance. The budgetary RAL is an amount representing the open commitments for which payments and/or de-commitments have not yet been made. This is the normal consequence of the existence of multi-annual programmes.











(EUR millions)




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total 31.12.2014




Total 31.12.2013






Outstanding commitments not yet expensed




12




360




4  777




143




5  291




5  243






Total




12




360




4  777




143




5  291




5  243





At 31 December 2014 the budgetary RAL totalled EUR 5  889 million (2013: EUR 6  025 million).
5.   FINANCIAL RISK MANAGEMENT

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

The rules and principles for the management of the treasury operations are laid down in the 10th EDF FR, in the Internal Agreement and in the Financial Regulation applicable to the transition period.
As a result of the above regulation, the following main principles apply:






—


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










—


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










—


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




In addition to the special accounts, other bank accounts are opened by the Commission in the name of the EDF, with financial institutions (central banks and commercial banks), for the purpose of executing payments and receiving receipts other than the Member State contributions to the budget.
Treasury and payment operations are highly automated and rely on modern information systems. Specific procedures are applied to guarantee system security and to ensure segregation of duties in line with the Financial Regulation, the Commission’s internal control standards, and audit principles.
A written set of guidelines and procedures regulate the management of the treasury and payment operations with the objective of limiting operational and financial risk and ensuring an adequate level of control. They cover the different areas of operation, and compliance with the guidelines and procedures is checked regularly.
5.2.   Currency risk


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




















(EUR millions)




 


31.12.2014


31.12.2013




USD


GBP


DKK


SEK


EUR


Other


Total


USD


GBP


DKK


SEK


EUR


Other


Total





Financial assets



 


 


 


 


 


 


 


 


 


 


 


 


 


 





Receivables and recoverables




0



 


 


 



76




8




84




4



 


 


 



75




4




84






Cash and cash equivalents




6




0



 


 



386



 



391




0




0



 


 



759



 



759






Total




6




0



—


—



462




8




475




4




0



—


—



834




4




843






Financial liabilities



 


 


 


 


 


 


 


 


 


 


 


 


 


 





Payables




0



 


 


 



(691)




(45)




(736)




(1)




0



 


 



(574)




(74)




(648)






Total




0



—


—


—



(691)




(45)




(736)




(1)




0



—


—



(574)




(74)




(648)






Total




6




0



—


—



(229)




(37)




(261)




3




0



—


—



260




(70)




195





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

The EDF does not borrow monies and as a consequence it is not exposed to interest rate risk.
It however earns interest on balances it holds on its different banks accounts. The Commission, on behalf of the EDF, has therefore put in place measures to ensure that interest earned regularly reflect market interest rates as well as their possible fluctuation.
Overnight balances held on commercial bank accounts are remunerated on a daily basis. The remuneration of balances on such accounts is based on variable market rates to which a contractual margin (positive or negative) is applied. For most of the accounts the interest calculation is linked to the EONIA (Euro Over Night Index Average), and is adjusted to reflect any fluctuations of this rate. For some other accounts the interest calculation is linked to the ECB rate (the one used for the ECB refinancing operations). As a result no risk is taken by the EDF that its balances be remunerated at rates lower than market rates.
5.4.   Credit risk (counterparty risk)


Financial assets that are neither past due nor impaired:











(EUR millions)




 


Total


Neither past due nor impaired


Past due but not impaired




< 1 year


1-5 years


> 5 years





Exchange receivables and non-exchange recoverables




84




75




5




4



 





Total at 31.12.2014




84




75




5




4



—





Exchange receivables and non-exchange recoverables




84




73




9




1



—





Total at 31.12.2013




84




73




9




1



—








Financial assets by risk category:












(EUR millions)




 


31.12.2014


31.12.2013




Receivables


Cash


Total


Receivables


Cash


Total





Counterparties with external credit rating



 


 


 


 


 


 





Prime and high grade




0




318




318




3




606




609






Upper medium grade



 



39




39



 



12




12






Lower medium grade



 



7




7



 



123




123






Non- investment grade



 



27




27



 



17




17







Total






0






391






391






3






758






761







Counterparties without external credit rating



 


 


—


 


 


—





Group 1 (debtors without defaults in the past)




83



 



83




79



 



79






Group 2 (debtors with defaults in the past)




1



 



1




2



 



2







Total






84




 




84






81




 




81







Total




84




391




475




84




758




842





Funds in the categories non-investment grade and lower medium grade relate mainly to Member State contributions to the EDF paid to the special accounts opened by Member States in accordance with Article 22(3) of the EDF FR. According to this regulation the amount of such contributions must remain in those special accounts until the payments need to be made.
Most of the EDF’s treasury resources are kept, in accordance with the EDF FR, in the ‘special accounts’ opened by Member States for the payment of their contributions. The majority of such accounts are held with Member States’ treasuries or national central banks. These institutions carry the lowest counterparty risk for the EDF (exposure is with its Member States).
For the part of the EDF’s treasury resources kept with commercial banks in order to cover the execution of payments, replenishment of these accounts is executed on a just-in-time basis and is automatically managed by the Commission treasury’s cash management system. Minimum cash levels, proportional to the average amount of daily payments made from it, are kept on each account. As a consequence the amounts kept overnight on these accounts remain constantly at low levels which ensure the EDF’s risk exposure is limited.
In addition, specific guidelines are applied for the selection of commercial banks in order to further minimise counterparty risk to which the EDF is exposed.
All commercial banks are selected by call for tenders. The minimum short-term credit rating required for admission to the tendering procedures is Moody’s P-1 or equivalent (S&P A-1 or Fitch F1). A lower level may be required in specific and duly justified circumstances.
5.5.   Liquidity risk


Maturity analysis of financial liabilities by remaining contractual maturity










(EUR millions)




 


< 1 year


1-5 years


> 5 years


Total




Payables


702


34


 


736





Total at 31.12.2014





702






34




—




736






Payables


623


25


 


648





Total at 31.12.2013





623






25




—




648






Budget principles applied to the EDF ensure that overall cash resources for the budgetary period are always sufficient for the execution of all related payments. Indeed the total Member States’ contributions equal the overall amount of payment appropriations for the relevant budgetary period.
Member States contributions to EDF, however, are paid in three instalments per year, while payments are subject to certain seasonality.
In order to ensure that treasury resources are always sufficient to cover the payments to be executed in any given month, information on the treasury situation is regularly exchanged between the Commission’ treasury and the relevant spending departments in order to ensure that payments executed in any given period do not exceed the available treasury resources.
In addition to the above, in the context of the EDF’s daily treasury operations, automated cash management tools ensure that sufficient liquidity is available on each of the EDF’s bank accounts, on a daily basis.
6.   RELATED PARTY DISCLOSURES

No related party transactions requiring separate disclosure under this heading have been identified.
7.   EVENTS AFTER THE BALANCE SHEET DATE

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

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







(EUR millions)




 


2014


2013





ECONOMIC RESULT OF THE YEAR




(3  526)




(3  072)






Revenue



 


 





Entitlements not affecting the budget result




(10)




(68)






Entitlements established in current year but not yet collected




(19)




(6)






Entitlements established in previous years and collected in current year




12




10






Net effect of pre-financing




41




71






Accrued revenue (net)




(71)




19






Expenses



 


 





Expenses of the current year not yet paid




165




90






Expenses of previous years paid in the current year




(28)




(53)






Payments cancellation




65




13






Net effect of pre-financing




(562)




(431)






Accrued expenses (net)




417




464






BUDGET RESULT OF THE YEAR




(3  516)




(2  963)





8.1.   Reconciling items — Revenue

The budgetary revenue of a financial year corresponds to the revenue collected from entitlements established in the course of the year and amounts collected from entitlements established in previous years.
The entitlements not affecting the budget result are recorded in the economic result but from a budgetary perspective cannot be considered as revenues as the cashed amount is transferred to reserves and cannot be recommitted without a Council decision.
The entitlements established in the current year but not yet collected are to be deducted from the economic result for reconciliation purposes as they do not form part of budgetary revenue. On the contrary, the entitlements established in previous years and collected in the current year must be added to the economic result for reconciliation purposes.
The net effect of pre-financing is the clearing of the recovered pre-financing amounts. This is a cash receipt which has no impact on the economic result.
The net accrued revenue mainly consists of accruals made for year-end cut-off purposes. Only the net effect, i.e. the accrued revenue of the current year less the reversal of accrued revenue of the previous year, is taken into consideration.
8.2.   Reconciling items — Expenditure


Expenses of the current year not yet paid are to be added for reconciliation purposes as they are included in the economic result but do not form part of budgetary expenditure. On the contrary, the expenses of previous years paid in the current year must be deducted from the economic result for reconciliation purposes as they are part of the current year’s budgetary expenditure but have either no effect on the economic result or they decrease the expenses in case of corrections.
The cash receipts from payment cancellations do not affect the economic result whereas they impact the budget result.
The net effect of pre-financing is the combination of the new pre-financing amounts paid in the current year (recognised as budgetary expenditure of the year) and the clearing of pre-financing paid in the current year or previous years through the acceptance of eligible costs. The latter represents an expense in accrual terms but not in the budgetary accounts since the payment of the initial pre-financing had already been considered as a budgetary expenditure at the time of its payment.
The net accrued expenses mainly consist of accruals made for year-end cut-off purposes, i.e. eligible expenses incurred by beneficiaries of EDF funds but not yet reported to the EDF. Only the net effect, i.e. the accrued expenses of the current year less the reversal of accrued expenses of the previous year, is taken into consideration.

FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND
 (16)

CERTIFICATION OF THE ACCOUNTS
The annual accounts of the Bêkou EU Trust Fund for the year 2014 have been prepared in accordance with the Financial Regulation applicable to the general budget of the European Union and the accounting rules adopted by myself in my capacity as the Commission’s Accounting Officer, as are to be applied by all the institutions and community bodies.
I acknowledge my responsibility for the preparation and presentation of the annual accounts of the Bêkou EU Trust Fund in accordance with Article 68 of the Financial Regulation.
I have obtained from the authorising officers, who certified its reliability, all the information necessary for the production of the accounts that show the Bêkou EU Trust Fund’s assets and liabilities and the budgetary implementation.
I hereby certify that based on this information, and on such checks as I deemed necessary to sign off the accounts, I have a reasonable assurance that the accounts present fairly, in all material aspects, the financial position, the results of the operations and the cash-flow of the Bêkou EU Trust Fund.



[signed]

Manfred KRAFF

Accounting Officer of the Commission


5 June 2015




BACKGROUND INFORMATION ON THE BÊKOU TRUST FUND

In accordance with Article 187(1) of the Financial Regulation applicable to the general budget of the Union (EU FR) and Article 42 of the Financial Regulation applicable to the 10th European Development Fund for the implementation of the Bridging Facility, the Commission is allowed to create Union Trust Funds for external actions under an agreement concluded with other donors. These trust funds may be created for emergency, post-emergency and thematic actions. The constitutive act of each trust fund defines its objectives.
The first multi-donor EU Trust Fund called Bêkou, which means ‘hope’ in Sango, was established on 15 July 2014, by the European Union (represented by DGs DEVCO and ECHO, and the EEAS) and three of its Member States (Germany, France and the Netherlands), with the aim to promote the stabilisation and reconstruction of the Central African Republic. It has been established for a maximum duration of 60 months in order to provide a medium-term response.
Union trust funds for external actions are required to prepare and adopt their own annual accounts. As the Bêkou EU Trust Fund was established under the EDF, its annual accounts will be consolidated in those of the EDF. The preparation of the annual accounts is entrusted to the Bêkou EU Trust Fund Accounting Officer, who is the Accounting Officer of the Commission, in accordance with Article 187(5) EU FR.
During 2014, the activities of the Bêkou EU Trust Fund were very limited. During the year, some contributions were received from donors but no payments were made.

BÊKOU TRUST FUND BALANCE SHEET








(EUR millions)




 


Note


31.12.2014





CURRENT ASSETS



 


 





Pre-financing



 


—





Receivables




1.1




45






Cash and cash equivalents



 


—




 


 



45






TOTAL ASSETS



 



45






NON-CURRENT LIABILITIES



 


 





Payables




1.2




(45)





 


 



(45)






CURRENT LIABILITIES



 


 





Payables



 


—




 


 


—





TOTAL LIABILITIES



 



(45)






NET ASSETS



 


—





FUNDS & RESERVES



 


 





Economic result carried forward from previous years



 


—





Economic result of the year



 


—





NET ASSETS



 


—





BÊKOU TRUST FUND STATEMENT OF FINANCIAL PERFORMANCE

There were no revenue or expense transactions during 2014.

BÊKOU TRUST FUND CASHFLOW STATEMENT








(EUR millions)




 


 


2014





Economic result of the year



 


—





OPERATING ACTIVITIES



 


 





(Reversal of) impairment losses on receivables



 


—





(Increase)/decrease in non-current pre-financing



 


—





(Increase)/decrease in current pre-financing



 


—





(Increase)/decrease in current receivables



 



(45)






(Increase)/decrease in non-current liabilities



 



45






Increase/(decrease) in current liabilities



 


—





NET CASHFLOW



 


—





Net increase/(decrease) in cash and cash equivalents



 


—





Cash and cash equivalents at the beginning of the year



 


—





Cash and cash equivalents at year-end



 


—





BÊKOU TRUST FUND STATEMENT OF CHANGES IN NET ASSETS












(EUR millions)




 


Fund capital
(A)


Uncalled funds
(B)


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


Cumulative Reserves
(D)


Other reserves
(E)


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





BALANCE AS AT 31.12.2013



—


—


—


—


—


—





Economic result of the year



—


—


—


—


—


—





BALANCE AS AT 31.12.2014



—


—


—


—


—


—





NOTES TO THE FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND


NOTES TO THE BALANCE SHEET

ASSETS

Receivables

The Bêkou EU Trust Fund does not have a treasury function of its own, instead it uses a common central treasury system established for the EU trust funds. All payments are processed via the trust funds’ central treasury system and recorded on intercompany accounts which are presented under this heading. Cash receipts are accepted in a specific bank account of the Bêkou EU Trust Fund before being pooled into the trust funds’ central treasury bank account. The EUR 45 million represents contributions received from the European Development Fund, France and the Netherlands during 2014.
LIABILITIES

Payables

The contributions received from participants are presented as financial liabilities to the European Development Fund and to Member States as they fulfil the criteria of revenues from non-exchange transactions under condition. The trust fund is required to use the contributions to deliver services to third parties or is otherwise required to return the assets (the contributions received) to the donors.
The total non-current financial liabilities to Member States relates to EUR 39 million of contributions from the European Development Fund, EUR 5 million from France and EUR 1 million from the Netherlands.

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE BÊKOU TRUST FUND
 (17)


CONSOLIDATED BALANCE SHEET







(EUR millions)




 


31.12.2014





NON-CURRENT ASSETS



 





Pre-financing




472





 



472






CURRENT ASSETS



 





Pre-financing




1  403






Receivables




129






Cash and cash equivalents




391





 



1  923






TOTAL ASSETS




2  395






NON-CURRENT LIABILITIES



 





Payables




(40)





 



(40)






CURRENT LIABILITIES



 





Payables




(1  423)





 



(1  423)






TOTAL LIABILITIES




(1  463)






NET ASSETS




932






FUNDS & RESERVES



 





Called fund capital — active EDFs




35  673






Called fund capital from closed EDFs carried forward




2  252






Economic result carried forward from previous years




(33  468)






Economic result of the year




(3  526)






NET ASSETS




932






CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE







(EUR millions)




 


2014





OPERATING REVENUE




132






OPERATING EXPENSES



 





Operating expenses




(3  650)






Administrative expenses




(22)





 



(3  671)






SURPLUS/(DEFICIT) FROM OPERATING ACTIVITIES




(3  539)






Financial revenue




13






Financial charges




(0)






SURPLUS/(DEFICIT) FROM FINANCIAL ACTIVITIES




13






ECONOMIC RESULT OF THE YEAR




(3  526)






CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS












(EUR millions)




 


Fund capital
(A)


Uncalled funds
(B)


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


Cumulative Reserves
(D)


Other reserves
(E)


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






BALANCE AS AT 31.12.2013





45  691




13  162




32  529




(33  468)




2  252




1  313






Capital increase — ordinary contributions



—



(3  144)




3  144



—


—



3  144






Economic result of the year



—


—


—



(3  526)



—



(3  526)







BALANCE AS AT 31.12.2014





45  691




10  018




35  673




(36  994)




2  252




932






EDF REPORT ON FINANCIAL IMPLEMENTATION


REPORT ON FINANCIAL IMPLEMENTATION — 2014

INTRODUCTORY NOTE


Previous EDFs


As the 6th EDF was closed in 2006 and the 7th DF was closed in 2008, the annual accounts no longer contain implementation tables for these EDFs. However, implementation of the transferred balances can be found in the 9th EDF.
As in past years, to ensure transparency in the presentation of the accounts for 2014, the tables set out separately for the 8th EDF the part used for Lomé Convention programming and the part used for programming under the Cotonou Agreement.
In accordance with Article 1(2)(b) of the Internal Agreement of the 9th EDF, balances and decommitments of previous EDFs have been transferred to the 9th EDF, and, during the life of the 9th EDF, have been committed as 9th EDF funds.


10th EDF


The ACP-EC Partnership Agreement signed on 23 June 2000 in Cotonou by the Member States of the European Community and the States of Africa, the Caribbean and the Pacific (ACP States) entered into force on 1 April 2003. The Cotonou Agreement was amended twice, firstly by the agreement signed in Luxembourg on 25 June 2005, secondly by the agreement signed in Ouagadougou on 22 June 2010.
The EU Council Decision of 27 November 2001 (2001/822/EC) on the association of the Overseas Countries and Territories (OCTs) with the European Union entered into force on 2 December 2001. This Decision was amended on 19 March 2007 (Decision 2007/249/EC).
The Internal Agreement on the financing of Community aid under the multiannual financial framework for the period 2008-13 in accordance with the revised Cotonou Agreement, adopted by the Representatives of the Governments of the Member States of the European Community on 17 July 2006, entered into force on 1 July 2008.
Under the Cotonou Agreement, the second period (2008-13) of Community aid to the ACP States and OCTs is funded by the 10th EDF for an amount of EUR 22  682 million, of which:






—


EUR 21  966 million is allocated to the ACP countries in accordance with the multiannual financial framework set out in Annex Ib to the revised Cotonou Agreement, of which EUR 20  466 million is managed by the European Commission,










—


EUR 286 million is allocated to the OCTs in accordance with Annex IIAa of the revised Council Decision on the association of the OCTs with the European Community, of which 256 million is managed by the European Commission,










—


EUR 430 million is for the Commission to finance the costs arising from the programming and implementation of 10th EDF resources, in accordance with Article 6 of the Internal Agreement.




According to the ‘Sunset clause’ of the 10th EDF (Article 1(4) and (5) of the 10th EDF Internal Agreement) no funds could be committed after 31 December 2013. Uncommitted funds were transferred to the performance reserve.

Bridging Facility

The Internal Agreement establishing the eleventh European Development Fund (11th EDF) was signed by the Member States, meeting within the Council, in June 2013. It came into force on 1 March 2015.
In order to assure continuity between the end of the 10th EDF and the entry into force of the 11th EDF, the Commission proposed transitional measures, known as the ‘Bridging Facility’, to ensure availability of funds for cooperation with African, Caribbean and Pacific countries and with Overseas Countries and Territories, as well as for support expenditure.
The Bridging Facility was adopted on 12 December 2013 (Decision 2013/759/EU), entered into force on 1 January 2014. The Bridging Facility is financed from:






—


funds decommitted from 8th and 9th EDF up to 31/12/2013,










—


uncommitted balances from the 10th EDF at 31/12/2013,










—


funds decommitted from the 10th and previous EDFs as from 1/1/2014 and throughout the year.




A total of EUR 1  597 million were made available on the Bridging Facility in 2014, of which EUR 1  488 million were allocated and are accounted for under the 11th EDF, and EUR 109 million remained unallocated on the Bridging Facility.
The total amount available on the 11th EDF in 2014, including interests and Stabex (EUR 19 million), was EUR 1  616 million (see total of table 2.6).

Committed and uncommitted/unallocated funds as of 31/12/2014

As of 31/12/2014, EUR 1  160 million were committed and 456 million were uncommitted or unallocated:






(EUR million)




Available funds


1  616




Less committed funds during 2014


-  1  160




Total uncommitted and unallocated funds at 31/12/2014


456




The detail of uncommitted and unallocated funds is as follows:






(EUR million)




ACP uncommitted (Bilateral, regional, Intra-ACP, Reserve NIP/RIP)


333




OCTs uncommitted


14




Bridging Facility unallocated


109




Total uncommitted+unallocated funds at 31/12/2014


456





Remaining funds on non-mobilisable performance reserves at 31/12/2014

Until the coming into force of the ‘Bridging Facility’ on 1 January 2014, the amounts decommitted from projects under the 9th and previous EDFs were transferred to the performance reserve of the 10th EDF. On 1 January 2014 the uncommitted funds of the 10th EDF were transferred to the performance reserve of the 11th EDF, with the exception of Stabex funds and administrative envelope.
During 2014 all decommitted funds from previous EDFs were transferred to the respective reserves.
In accordance with Article 1(4) of the 10th EDF Internal Agreement, and the Council Decision of 12 December 2013 (2013/759/EU) those funds were allocated to the Bridging Facility.






(EUR million)




Total available on non-mobilisable performance reserves at 31/12/2013


938




Total made available on non-mobilisable performance reserves during 2014


661




Less total transferred to the Bridging facility


-  1  597




Non-mobilisable performance reserve not transferred to Bridging Facility at 31/12/2014


2






11th EDF Stabex reserve


Following the closure of Stabex accounts, unused/decommitted funds are transferred to the 11th EDF Stabex A Envelope reserve (10th EDF Internal Agreement Article 1(4)) and then to the national indicative programmes of the countries concerned. As of 31 December 2014, the total amount of de-committed Stabex funds, transferred to the 11th EDF reached EUR 5 million.


10th EDF Co-financings


Under the 10th EDF, transfer agreements for co-financings from Member States were signed, and commitment appropriations were opened for a total amount of EUR 198,4 million, while payment appropriations were opened for the cashed amounts totalling EUR 177,1 million.
The situation of co-financing appropriations at 31.12.2014 is shown in the table below:







(EUR million)




 


Commitments appropriations


Payment appropriations




Co-financing — A Envelope


181,4


160,5




Co-financing — Intra ACP


12,1


12,1




Co-financing — Administrative expenses


4,9


4,5




 



198,4




177,1





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

Table 1.1


8th EDF


EVOLUTION OF APPROPRIATIONS: 31 December 2014


ANALYSIS OF CREDITS PER INSTRUMENT











(EUR million)




INSTRUMENT


INITIAL APPROPRIATION


INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2013


INCREASE OR DECREASE IN RESOURCES IN 2014


Notes


CURRENT LEVEL APPROPRIATION





A C P



 


 


 


 


 





Lomé



 


 


 


 


 






Regular MS Contributions






12  967






(3  190)






(62)




 




9  715






Aid for refugees


120


(17)


(2)



 (18)



100




Interest-rate subsidies


370


(287)


(4)



 (18)



79




Risk capital


1  000


19


(4)



 (18)



1  016




Structural adjustment


1  400


97


(0)



 (18)



1  497




Total indicative programmes


7  562


(2  542)


(52)



 (18)



4  967




Use of interest income


0


35


(0)



 (18)



35




Sysmin


575


(474)


 


 


101




Emergency aid (Lomé)


140


(4)


 


 


136




Stabex


1  800


(1  077)


 


 


723




Heavily indebted poor countries (Lomé)


0


1  060


 


 


1  060





Cotonou



 


 


 


 


 






Regular MS Contributions






0






656






(2)




 




654






A Envelope — National Allocations


0


418


(1)



 (18)



418




B Envelope — National Allocations


0


238


(1)



 (18)



237




Interests and other receipts


0


0


 


 


0





SUB TOTAL ACP




12  967




(2  534)




(64)



 



10  369






O C T



 


 


 


 


 





Lomé



 


 


 


 


 






Regular MS Contributions






167






(118)






(0)




 




48






Interest-rate subsidies


9


(8)


 


 


1




Risk capital


30


(24)


 


 


6




Emergency aid


3


(3)


 


 


0




Aid for refugees


1


(1)


 


 


0




Total indicative programmes


115


(78)


(0)



 (18)



37




Sysmin


3


(1)


 


 


2




Stabex


6


(5)


 


 


1





SUB TOTAL OCT




167




(118)




(0)



 



48






TOTAL 8th EDF




13  134




(2  652)




(64)



 



10  417






Table 1.2


9th EDF


EVOLUTION OF APPROPRIATIONS: 31 December 2014


ANALYSIS OF CREDITS PER INSTRUMENT











(EUR million)




INSTRUMENT


INITIAL APPROPRIATION


INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2013


INCREASE OR DECREASE IN RESOURCES IN 2014


Notes


CURRENT LEVEL APPROPRIATION





ACP



 


 


 


 


 





Lomé



 


 


 


 


 






Regular MS Contributions






0






717






(17)




 




700






Transfers from 6th EDF — Lomé


0


21


(0)



 (19)



20




Transfers from 7th EDF — Lomé


0


696


(17)



 (19)



679





Cotonou



 


 


 


 


 






Regular MS Contributions






10  401






4  692






(354)




 




14  739






A Envelope — National Allocations


5  318


3  640


(212)



 (19)



8  746




B Envelope — National Allocations


2  108


(843)


(33)


 


1  232




Long term development reserve


258


(258)


0


 


0




National allocations reserve


1  224


(1  224)


0


 


0




Regional allocations


904


(45)


(38)



 (19)



821




Other Intra-ACP allocations


300


2  411


(48)



 (19)



2  663




Peace facility


0


380


(18)


 


362




CDE, CTA and Parliamentary Assembly


164


(6)


(4)


 


154




Implementation costs


125


53


(0)



 (20)+ (21)



178




Interests and other receipts


0


63


(0)


 


63




Special allocation R.D. Congo


0


105


(0)


 


105




Voluntary contribution Peace facility


0


39


0


 


39




Stabex Sudan


0


36


0


 


36




Special allocation Sudan


0


74


0



 (20)



74




Special allocation South Sudan


0


267


0



 (21)



267





SUB TOTAL ACP




10  401




5  408




(371)



 



15  439






OCT



 


 


 


 


 





Lomé



 


 


 


 


 






Regular MS Contributions






0






3




 


 




3






Transfers from 6th EDF — Lomé


0


0


 


 


0




Transfers from 7th EDF — Lomé


0


3


 


 


3





Cotonou



 


 


 


 


 






Regular MS Contributions






154






145






(2)




 




297






A Envelope — National Allocations


0


245


(2)


 


244




B Envelope — National Allocations


0


4


 


 


4




Long term development reserve


144


(144)


 


 


0




Regional allocations


8


40


 


 


48




Studies/Technical assistance OCT


2


(1)


 


 


1





SUB TOTAL OCT




154




148




(2)



 



300






TOTAL 9th EDF




10  555




5  556




(373)



 



15  739






Table 1.3


10th EDF


EVOLUTION OF APPROPRIATIONS: 31 December 2014


ANALYSIS OF CREDITS PER INSTRUMENT











(EUR million)




INSTRUMENT


INITIAL APPROPRIATION


INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2013


INCREASE OR DECREASE IN RESOURCES IN 2014


Notes


CURRENT LEVEL APPROPRIATION





ACP



 


 


 


 


 






Regular MS Contributions






20  896






1  132






(1  157)




 




20  871






A Envelope — National Allocations


0


13  652


(126)



 (23)



13  526




B Envelope — National Allocations


0


2  037


(11)



 (23)



2  026




Regional allocations


0


1  987


(2)



 (23)



1  985




National allocations Reserve A Envelope STABEX


0


0


0


 


0




NIP/RIP reserve


683


(658)


(25)



 (23)



0




Institutional and support expenditure


0


280


(38)



 (23)



242




Other Intra-ACP allocations


0


1  915


(10)



 (23)



1  904




Peace facility


0


700


(12)



 (23)



688




Implementation costs


430


0


(1)



 (23)



429




Interests and other receipts


0


77


(8)



 (23)



70




Non-mobilisable reserve


0


925


(925)



 (23)



0




A Envelope reserve


13  500


(13  500)


 


 


0




B Envelope reserve


1  800


(1  800)


 


 


0




Intra-ACP Reserve


2  700


(2  700)


 


 


0




Regional allocations reserve


1  783


(1  783)


 


 


0






Co-financing






0






134






64




 




198






A Envelope — National Allocations


0


118


63



 (24)



181




Other Intra-ACP allocations


0


12


 



 (24)



12




Peace facility


0


1


 



 (24)



1




Implementation costs


0


4


1



 (24)



5





SUB TOTAL ACP




20  896




1  266




(1  093)



 



21  069






OCT



 


 


 


 


 






Regular MS Contributions






256






15






(12)




 




259






A Envelope — National Allocations


0


196


(0)



 (23)



196




B Envelope — National Allocations


0


15


 


 


15




Regional allocations


0


40


 


 


40




National allocations Reserve A Envelope STABEX


0


0


 


 


0




Non-mobilisable reserve


0


14


(12)



 (23)



2




Studies/Technical assistance OCT


6


0


 


 


6




A Envelope reserve


195


(195)


 



 (23)



0




B Envelope reserve


15


(15)


 



 (23)



0




Regional allocations reserve


40


(40)


 


 


0





SUB TOTAL OCT




256




15




(12)



 



259






TOTAL 10th EDF




21  152




1  281




(1  105)



 



21  328







Table 1.4



11th EDF — Bridging Facility


EVOLUTION OF APPROPRIATIONS: 31 December 2014


ANALYSIS OF CREDITS PER INSTRUMENT











(EUR million)




INSTRUMENT


INITIAL APPROPRIATION


INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2013


INCREASE OR DECREASE IN RESOURCES IN 2014


Notes


CURRENT LEVEL APPROPRIATION





ACP



 


 


 


 


 






Regular MS Contributions






1  583






0






19




 




1  602






Bridging facility


1  583


0


(1  485)



 (25)+ (27)



98




A Envelope — National Allocations


0


0


653


 


653




B Envelope — National Allocations


0


0


86


 


86




Regional allocations


0


0


103


 


103




National allocations Reserve A Envelope STABEX


0


0


0



 (28)



0




Institutional and support expenditure


0


0


33


 


33




Other Intra-ACP allocations


0


0


56


 


56




Peace facility


0


0


445


 


445




Implementation costs


0


0


115


 


115




Interests and other receipts


0


0


13



 (28)



13




Non-mobilisable reserve


0


0


(0)



 (29)



(0)





SUB TOTAL ACP




1  583




0




19



 



1  602






OCT



 


 


 


 


 






Regular MS Contributions






14






0






0




 




14






Bridging facility


14


0


(3)



 (25)+ (27)



11




Non-mobilisable reserve


0


0


0



 (29)



0




Studies/Technical assistance OCT


0


0


3


 


3





SUB TOTAL OCT




14




0




0



 



14






TOTAL 11th EDF




1  597




0




19




 (26)




1  616






Table 2.1


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2014


PROGRESS REPORT












(EUR million)




 


ALLOCATION


EDF




 


8


9


10


11


TOTAL




Lomé


Sundry Income


35


 


 


 


35




Total indicative programmes


5  005


 


 


 


5  005




Total Non-Programmable Aid


4  723


 


 


 


4  723




Transfers from other funds


 


703


 


 


703




 



SUB TOTAL: REGULAR MS CONTRIBUTIONS



9  763


703


 


 


10  466




Cotonou


A Envelope — National Allocations


418


8  990


13  721


653


23  781




B Envelope — National Allocations


237


1  236


2  041


86


3  599




Bridging facility


 


 


 


109


109




CDE, CTA and Parliamentary Assembly


 


154


 


 


154




 


Country reserve


 


 


0


 


0




 


Implementation Costs and Interests Revenues


0


242


505


131


878




 


Intra-ACP allocations


 


3  025


2  835


533


6  393




 


Intra-ACP Reserve


 


 


0


 


0




 


National allocations Reserve A Envelope STABEX


 


 


0


0


1




 


NIP/RIP reserve


 


 


0


 


0




 


Non-mobilisable reserve


 


 


2


0


2




 


Regional allocations


 


869


2  025


103


2  997




 


Regional allocations reserve


 


 


0


 


0




 


Special allocation R.D. Congo


 


105


 


 


105




 


Special allocation South Sudan


 


267


 


 


267




 


Special allocation Sudan


 


110


 


 


110




 


Voluntary contribution Peace facility


 


39


 


 


39




 



SUB TOTAL: REGULAR MS CONTRIBUTIONS



654


15  036


21  129


1  616


38  435




 


A Envelope — National Allocations


 


 


181


 


181




 


Implementation Costs and Interests Revenues


 


 


5


 


5




 


Intra-ACP allocations


 


 


12


 


12




 



SUB TOTAL: CO-FINANCING



 


 


198


 


198




 



TOTAL



10  417


15  739


21  328


1  616


49  100



















 


EDF


Aggregate Total


Annual Figures




At 31/12/2014


% of allocation


2008


2009


2010


2011


2012


2013


2014





Decisions



 


 


 


 


 


 


 


 


 


 




 


8


10  415


100 %


(53)


(42)


(45)


(60)


(64)


(98)


(63)




 


9


15  703


100 %


775


(54)


(116)


(9)


(297)


(72)


(381)




 


10


21  294


100 %


4  766


3  501


2  349


3  118


3  524


4  131


(95)




 


11


1  160


72 %


 


 


 


 


 


 


1  160





Total



 



48  573



 



5  488




3  405




2  187




3  049




3  163




3  961




621






Assigned Funds



 


 


 


 


 


 


 


 


 


 




 


8


10  400


100 %


55


(42)


8


(13)


(46)


(11)


(37)




 


9


15  407


98 %


3  163


997


476


9


(187)


(96)


(1)




 


10


18  252


86 %


130


3  184


2  820


2  514


3  460


3  457


2  687




 


11


731


45 %


 


 


 


 


 


 


731





Total



 



44  790



 



3  348




4  140




3  304




2  509




3  226




3  350




3  380






Payments



 


 


 


 


 


 


 


 


 


 




 


8


10  379


100 %


323


152


158


90


15


18


16




 


9


14  941


95 %


3  253


1  806


1  304


906


539


230


145




 


10


12  985


61 %


90


1  111


1  772


1  879


2  655


2  715


2  760




 


11


595


37 %


 


 


 


 


 


 


595





Total



 



38  900



 



3  666




3  069




3  233




2  874




3  209




2  963




3  516











*


Negative figures represent decommitments.









Table 2.2


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2014


CLASS OF AID

















(EUR million)




 


EDF




8


%


9


%


10


%


11


%


TOTAL


%





 (30)




 (30)




 (30)




 (30)




 (30)





Lomé



Sundry Income



 


 


 


 


 


 


 


 


 


 




Appropriations


35


 


 


 


 


 


 


 


35


 




Decisions


35


100 %


 


 


 


 


 


 


35


100 %




Assigned funds


35


100 %


 


 


 


 


 


 


35


100 %




Payments


35


100 %


 


 


 


 


 


 


35


100 %





Total indicative programmes



 


 


 


 


 


 


 


 


 


 




Appropriations


5  005


 


 


 


 


 


 


 


5  005


 




Decisions


5  003


100 %


 


 


 


 


 


 


5  003


100 %




Assigned funds


4  992


100 %


 


 


 


 


 


 


4  992


100 %




Payments


4  988


100 %


 


 


 


 


 


 


4  988


100 %





Total Non-Programmable Aid



 


 


 


 


 


 


 


 


 


 




Appropriations


4  723


 


 


 


 


 


 


 


4  723


 




Decisions


4  723


100 %


 


 


 


 


 


 


4  723


100 %




Assigned funds


4  722


100 %


 


 


 


 


 


 


4  722


100 %




Payments


4  707


100 %


 


 


 


 


 


 


4  707


100 %





Transfers from other funds



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


703


 


 


 


 


 


703


 




Decisions


 


 


700


100 %


 


 


 


 


700


100 %




Assigned funds


 


 


688


98 %


 


 


 


 


688


98 %




Payments


 


 


670


95 %


 


 


 


 


670


95 %





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




 


 





C o t o n o u




A Envelope — National Allocations



 


 


 


 


 


 


 


 


 


 




Appropriations


418


 


8  990


 


13  721


 


653


 


23  781


 




Decisions


418


100 %


8  980


100 %


13  720


100 %


458


70 %


23  575


99 %




Assigned funds


418


100 %


8  917


99 %


11  402


83 %


197


30 %


20  933


88 %




Payments


417


100 %


8  805


98 %


7  800


57 %


185


28 %


17  207


72 %





B Envelope — National Allocations



 


 


 


 


 


 


 


 


 


 




Appropriations


237


 


1  236


 


2  041


 


86


 


3  599


 




Decisions


237


100 %


1  236


100 %


2  040


100 %


83


96 %


3  596


100 %




Assigned funds


235


99 %


1  226


99 %


1  944


95 %


65


75 %


3  470


96 %




Payments


232


98 %


1  206


98 %


1  670


82 %


47


55 %


3  155


88 %





C o t o n o u




Bridging facility



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


 


 


 


 


109


 


109


 




Decisions


 


 


 


 


 


 


 


 


 


 




Assigned funds


 


 


 


 


 


 


 


 


 


 




Payments


 


 


 


 


 


 


 


 


 


 





CDE, CTA and Parliamentary Assembly



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


154


 


 


 


 


 


154


 




Decisions


 


 


154


100 %


 


 


 


 


154


100 %




Assigned funds


 


 


154


100 %


 


 


 


 


154


100 %




Payments


 


 


154


100 %


 


 


 


 


154


100 %





Implementation Costs and Interests Revenues



 


 


 


 


 


 


 


 


 


 




Appropriations


0


 


242


 


505


 


131


 


878


 




Decisions


 


 


242


100 %


505


100 %


104


79 %


851


97 %




Assigned funds


 


 


240


99 %


502


99 %


92


70 %


834


95 %




Payments


 


 


239


99 %


480


95 %


92


70 %


812


92 %





Intra-ACP allocations



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


3  025


 


2  835


 


533


 


6  393


 




Decisions


 


 


3  020


100 %


2  835


100 %


413


77 %


6  267


98 %




Assigned funds


 


 


2  983


99 %


2  689


95 %


315


59 %


5  987


94 %




Payments


 


 


2  885


95 %


2  012


71 %


232


43 %


5  130


80 %





Regional allocations



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


869


 


2  025


 


103


 


2  997


 




Decisions


 


 


865


100 %


2  023


100 %


103


100 %


2  991


100 %




Assigned funds


 


 


833


96 %


1  557


77 %


63


61 %


2  453


82 %




Payments


 


 


770


89 %


972


48 %


39


38 %


1  781


59 %





Special allocation R.D. Congo



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


105


 


 


 


 


 


105


 




Decisions


 


 


105


100 %


 


 


 


 


105


100 %




Assigned funds


 


 


105


100 %


 


 


 


 


105


100 %




Payments


 


 


105


100 %


 


 


 


 


105


100 %





Special allocation South Sudan



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


267


 


 


 


 


 


267


 




Decisions


 


 


266


100 %


 


 


 


 


266


100 %




Assigned funds


 


 


131


49 %


 


 


 


 


131


49 %




Payments


 


 


38


14 %


 


 


 


 


38


14 %





C o t o n o u




Special allocation Sudan



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


110


 


 


 


 


 


110


 




Decisions


 


 


110


100 %


 


 


 


 


110


100 %




Assigned funds


 


 


105


95 %


 


 


 


 


105


95 %




Payments


 


 


45


41 %


 


 


 


 


45


41 %





Voluntary contribution Peace facility



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


39


 


 


 


 


 


39


 




Decisions


 


 


24


62 %


 


 


 


 


24


62 %




Assigned funds


 


 


24


62 %


 


 


 


 


24


62 %




Payments


 


 


24


62 %


 


 


 


 


24


62 %





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 





A Envelope — National Allocations



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


 


 


185


 


 


 


185


 




Decisions


 


 


 


 


156


84 %


 


 


156


84 %




Assigned funds


 


 


 


 


145


79 %


 


 


145


79 %




Payments


 


 


 


 


41


22 %


 


 


41


22 %





Implementation Costs and Interests Revenues



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


 


 


5


 


 


 


5


 




Decisions


 


 


 


 


3


59 %


 


 


3


59 %




Assigned funds


 


 


 


 


1


10 %


 


 


1


10 %




Payments


 


 


 


 


1


10 %


 


 


1


10 %





Intra-ACP allocations



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


 


 


12


 


 


 


12


 




Decisions


 


 


 


 


12


99 %


 


 


12


99 %




Assigned funds


 


 


 


 


12


98 %


 


 


12


98 %




Payments


 


 


 


 


9


70 %


 


 


9


70 %





Co-financing



 


 


 


 


 


 


 


 


 


 




 


 




 


Appropriations


8


%


9


%


10


%


11


%


TOTAL


%




 



 (30)




 (30)




 (30)




 (30)




 (30)






C o t o n o u



Country reserve


 


 


 


 



0



 


 


 



0



 




Intra-ACP Reserve


 


 


 


 



0



 


 


 



0



 




National allocations Reserve A Envelope STABEX


 


 


 


 



0



 



0



 



1



 




NIP/RIP reserve


 


 


 


 



0



 


 


 



0



 




Regional allocations reserve


 


 


 


 



0



 


 


 



0



 





Mobilisable reserves



 


 


 


 


 


 


 


 


 


 




Non-mobilisable reserve


 


 


 


 



2



 



0



 



2



 





Non-mobilisable reserve



 


 


 


 


 


 


 


 


 


 




 


 


8


%


9


%


10


%


11


%


TOTAL


%




 



 (30)




 (30)




 (30)




 (30)




 (30)





 


Appropriations


10  417


 


15  739


 


21  331


 


1  615


 


49  103


 




 


Decisions


10  415


100 %


15  703


100 %


21  294


100 %


1  160


72 %


48  573


99 %




 


Assigned funds


10  400


100 %


15  407


98 %


18  252


86 %


731


45 %


44  790


91 %




 


Payments


10  379


100 %


14  941


95 %


12  985


61 %


595


37 %


38  900


79 %




 



TOTAL: ALL ALLOCATIONS



 


 


 


 


 


 


 


 


 


 





Table 2.3


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2014


CLASS OF AID


ACP + OCT — 8th EDF

















 


(EUR million)




 


 


CREDITS


DECISIONS


ASSIGNED FUNDS


PAYMENTS




AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%




(1)


(2)


 


(2): (1)


(3)


 


(3): (2)


(4)


 


(4): (3)





Lomé




Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




Use of interest income


35


35


 


100 %


35


 


100 %


35


 


100 %





SUB TOTAL: SUNDRY INCOME




35




35



 



100 %




35



 



100 %




35



 



100 %





Total indicative programmes


4  967


4  967


(52)


100 %


4  956


(29)


100 %


4  952


10


100 %





SUB TOTAL: TOTAL INDICATIVE PROGRAMMES




4  967




4  967




(52)




100 %




4  956




(29)




100 %




4  952




10




100 %





Aid for refugees


100


100


(1)


100 %


100


(0)


100 %


100


(0)


100 %




Emergency aid (Lomé)


136


136


 


100 %


136


 


100 %


136


 


100 %




Heavily indebted poor countries (Lomé)


1  060


1  060


 


100 %


1  060


 


100 %


1  060


 


100 %




Interest-rate subsidies


79


79


(4)


100 %


79


(3)


100 %


69


(0)


86 %




Risk capital


1  016


1  016


(4)


100 %


1  015


(4)


100 %


1  012


0


100 %




Stabex


723


723


1


100 %


723


1


100 %


722


3


100 %




Structural adjustment


1  497


1  497


(0)


100 %


1  497


 


100 %


1  497


(0)


100 %




Sysmin


101


101


 


100 %


101


 


100 %


101


 


100 %





SUB TOTAL: TOTAL NON-PROGRAMMABLE AID




4  713




4  712




(7)




100 %




4  711




(7)




100 %




4  696




3




100 %






Cotonou




Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


418


418


(1)


100 %


418


0


100 %


417


0


100 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




418




418




(1)




100 %




418




0




100 %




417




0




100 %





B Envelope — National Allocations


237


 


 


 


 


 


 


 


 


 




Compensation export earnings


 


237


(1)


 


235


(2)


99 %


232


3


99 %





SUB TOTAL: B ENVELOPE — NATIONAL ALLOCATIONS




237




237




(1)




100 %




235




(2)




99 %




232




3




99 %





Interests and other receipts


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




0



 


 


 


 


 


 


 


 


 




 



TOTAL ACP (A)




10  369




10  369




(61)




100 %




10  354




(37)




100 %




10  332




16




100 %






Lomé




Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




Total indicative programmes


37


36


(2)


96 %


35


 


98 %


35


 


100 %





SUB TOTAL: TOTAL INDICATIVE PROGRAMMES




37




36




(2)




96 %




35



 



98 %




35



 



100 %





Interest-rate subsidies


1


1


 


100 %


1


 


100 %


1


 


100 %




Risk capital


6


6


 


100 %


6


 


100 %


6


 


100 %




Stabex


1


1


 


100 %


1


 


100 %


1


 


100 %




Sysmin


2


2


 


100 %


2


 


99 %


2


 


100 %





SUB TOTAL: TOTAL NON-PROGRAMMABLE AID




11




11



 



100 %




11



 



100 %




11



 



100 %





 



TOTAL OCT (B)




48




47




(2)




97 %




46



 



99 %




46



 



100 %





 



TOTAL: ACP+OCT (A+B)




10  417




10  415




(63)




100 %




10  400




(37)




100 %




10  379




16




100 %






Table 2.4


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2014


CLASS OF AID


ACP + OCT — 9th EDF

















 


(EUR million)




 


 


CREDITS


DECISIONS


ASSIGNED FUNDS


PAYMENTS




AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%




(1)


(2)


 


(2): (1)


(3)


 


(3): (2)


(4)


 


(4): (3)





Lomé




ACP



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




Transfers from 6th EDF — Lomé


20


20


(0)


100 %


20


(0)


99 %


20


 


100 %




Transfers from 7th EDF — Lomé


679


676


(19)


100 %


664


(1)


98 %


647


(1)


97 %





SUB TOTAL: TRANSFERS FROM OTHER FUNDS




700




697




(20)




100 %




685




(1)




98 %




667




(1)




97 %






Cotonou




ACP



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


8  746


8  740


(212)


100 %


8  679


(74)


99 %


8  569


27


99 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




8  746




8  740




(212)




100 %




8  679




(74)




99 %




8  569




27




99 %





B Envelope — National Allocations


1  232


 


 


 


 


 


 


 


 


 




Compensation export earnings


 


156


(13)


 


155


(7)


99 %


150


0


96 %




Emergency aid


 


1  064


(20)


 


1  056


(6)


99 %


1  040


(3)


99 %




Heavily indebted poor countries


 


11


 


 


11


 


100 %


11


 


100 %





SUB TOTAL: B ENVELOPE — NATIONAL ALLOCATIONS




1  232




1  232




(33)




100 %




1  222




(12)




99 %




1  201




(3)




98 %






Cotonou



CDE, CTA and Parliamentary Assembly


154


154


(4)


100 %


154


(0)


100 %


154


 


100 %





SUB TOTAL: CDE, CTA AND PARLIAMENTARY ASSEMBLY




154




154




(4)




100 %




154




(0)




100 %




154



 



100 %





Implementation costs


178


178


(0)


100 %


177


(0)


99 %


176


6


99 %




Interests and other receipts


63


63


(0)


100 %


63


(0)


99 %


63


 


100 %





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




241




241




(0)




100 %




240




(0)




99 %




239




6




100 %





Other Intra-ACP allocations


2  663


2  660


(49)


100 %


2  622


(17)


99 %


2  531


40


97 %




Peace facility


362


361


(19)


100 %


361


(15)


100 %


354


0


98 %





SUB TOTAL: INTRA-ACP ALLOCATIONS




3  025




3  020




(69)




100 %




2  983




(32)




99 %




2  885




40




97 %





Regional allocations


821


818


(38)


100 %


787


(10)


96 %


725


30


92 %





SUB TOTAL: REGIONAL ALLOCATIONS




821




818




(38)




100 %




787




(10)




96 %




725




30




92 %





Special allocation R.D. Congo


105


105


(0)


100 %


105


 


100 %


105


 


100 %





SUB TOTAL: SPECIAL ALLOCATION R.D. CONGO




105




105




(0)




100 %




105



 



100 %



 


 



100 %





Special allocation South Sudan


267


266


(0)


100 %


131


74


49 %


38


22


29 %





SUB TOTAL: SPECIAL ALLOCATION SOUTH SUDAN




267




266




(0)




100 %




131




74




49 %




38




22




29 %





Special allocation Sudan


110


110


0


100 %


105


57


95 %


45


20


43 %





SUB TOTAL: SPECIAL ALLOCATION SUDAN




110




110




0




100 %




105




57




95 %




45




20




43 %





Voluntary contribution Peace facility


39


24


(0)


62 %


24


(0)


100 %


24


 


100 %





SUB TOTAL: VOLUNTARY CONTRIBUTION PEACE FACILITY




39




24




(0)




62 %




24




(0)




100 %




24



 



100 %





 



TOTAL: ACP (A)




15  439




15  407




(376)




100 %




15  115




3




98 %




14  651




143




97 %






Lomé




OCT



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




Transfers from 6th EDF — Lomé


0


0


 


100 %


0


 


100 %


0


 


100 %




Transfers from 7th EDF — Lomé


3


3


 


100 %


3


 


99 %


3


 


100 %





SUB TOTAL: TRANSFERS FROM OTHER FUNDS




3




3



 



100 %




3



 



99 %




3



 



100 %






Cotonou




OCT



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


244


240


(5)


99 %


238


(4)


99 %


236


2


99 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




244




240




(5)




99 %




238




(4)




99 %




236




2




99 %





B Envelope — National Allocations


4


 


 


 


 


 


 


 


 


 




Emergency aid


 


4


 


 


4


 


100 %


4


 


100 %





SUB TOTAL: B ENVELOPE — NATIONAL ALLOCATIONS




4




4



 



100 %




4



 



100 %




4



 



100 %





Studies/Technical assistance OCT


1


1


 


100 %


1


 


100 %


1


 


100 %





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




1




1



 



100 %




1



 



100 %




1



 



100 %





Regional allocations


48


48


(0)


99 %


46


(0)


97 %


45


0


97 %





SUB TOTAL: REGIONAL ALLOCATIONS




48




48




(0)




99 %




46




(0)




97 %




45




0




97 %





 



TOTAL: OCT (B)




300




296




(5)




99 %




292




(4)




99 %




289




2




99 %





 



TOTAL: ACP+OCT (A+B)




15  739




15  703




(381)




100 %




15  407




(1)




98 %




14  941




145




97 %






Table 2.5


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2014


CLASS OF AID


ACP + OCT — 10th EDF
















(EUR million)




 


CREDITS


DECISIONS


ASSIGNED FUNDS


PAYMENTS




AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%




(1)


(2)


 


(2): (1)


(3)


 


(3): (2)


(4)


 


(4): (3)





ACP



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


13  526


13  524


(108)


100 %


11  270


1  550


83 %


7  696


1  751


68 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




13  526




13  524




(108)




100 %




11  270




1  550




83 %




7  696




1  751




68 %





B Envelope — National Allocations


2  026


 


 


 


 


 


 


 


 


 




Compensation export earnings


 


210


(0)


 


183


78


87 %


130


75


71 %




Emergency aid


 


856


(0)


 


809


141


95 %


656


109


81 %




Heavily indebted poor countries


 


49


 


 


49


0


100 %


49


0


100 %




Other shocks with budgetary impact


 


911


(3)


 


890


19


98 %


823


75


92 %





SUB TOTAL: B ENVELOPE — NATIONAL ALLOCATIONS




2  026




2  025




(4)




100 %




1  931




238




95 %




1  658




259




86 %





Implementation costs


429


429


(1)


100 %


429


9


100 %


414


8


97 %




Interests and other receipts


70


70


(1)


100 %


68


5


97 %


62


4


92 %





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




499




499




(2)




100 %




497




13




99 %




476




12




96 %





Institutional and support expenditure


242


242


(19)


100 %


240


8


99 %


211


20


88 %




Other Intra-ACP allocations


1  904


1  904


(9)


100 %


1  766


320


93 %


1  167


219


66 %




Peace facility


688


688


(12)


100 %


683


69


99 %


634


104


93 %





SUB TOTAL: INTRA-ACP ALLOCATIONS




2  835




2  835




(39)




100 %




2  689




397




95 %




2  012




343




75 %





Regional allocations


1  985


1  983


(3)


100 %


1  531


386


77 %


964


324


63 %





SUB TOTAL: REGIONAL ALLOCATIONS




1  985




1  983




(3)




100 %




1  531




386




77 %




964




324




63 %






Co-financing



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


181


156


59


86 %


145


82


93 %


41


27


29 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




181




156




59




86 %




145




82




93 %




41




27




29 %





Implementation costs


5


3


2


62 %


1


0


17 %


1


0


100 %





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




5




3




2




62 %




1




0




17 %




1




0




100 %





Other Intra-ACP allocations


12


11


(0)


98 %


11


(0)


99 %


8


2


70 %




Peace facility


1


1


 


100 %


1


 


99 %


1


 


100 %





SUB TOTAL: INTRA-ACP ALLOCATIONS




12




12




(0)




99 %




12




(0)




99 %




9




2




72 %






Mobilisable reserves



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




A Envelope reserve


0


 


 


 


 


 


 


 


 


 




B Envelope reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: COUNTRY RESERVE




0



 


 


 


 


 


 


 


 


 




Intra-ACP Reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: INTRA-ACP RESERVE




0



 


 


 


 


 


 


 


 


 




National allocations Reserve A Envelope STABEX


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX




0



 


 


 


 


 


 


 


 


 




NIP/RIP reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: NIP/RIP RESERVE




0



 


 


 


 


 


 


 


 


 




Regional allocations reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: REGIONAL ALLOCATIONS RESERVE




0



 


 


 


 


 


 


 


 


 





Non-mobilisable reserve



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




Non-mobilisable reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: NON-MOBILISABLE RESERVE




0



 


 


 


 


 


 


 


 


 





TOTAL: ACP (INCL. RESERVES) (A)




21  069




21  037




(95)




99 %




18  076




2  666




86 %




12  857




2  719




71 %






ACP



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


 


 


 


 


 


 


 


2


 


 





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS



 


 


 


 


 


 


 



2



 


 




Compensation export earnings


 


 


 


 


 


 


 


0


 


 




Emergency aid


 


 


 


 


 


 


 


0


 


 





SUB TOTAL: B ENVELOPE — NATIONAL ALLOCATIONS



 


 


 


 


 


 


 



0



 


 




Other Intra-ACP allocations


 


 


 


 


 


 


 


0


 


 





SUB TOTAL: INTRA-ACP ALLOCATIONS



 


 


 


 


 


 


 



0



 


 




Regional allocations


 


 


 


 


 


 


 


0


 


 





SUB TOTAL: REGIONAL ALLOCATIONS



 


 


 


 


 


 


 



0



 


 





TOTAL: ACP (INCL. RESERVES)



 


 


 


 


 


 


 



3



 


 





OCT



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


196


196


0


100 %


131


12


67 %


101


25


77 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




196




196




0




100 %




131




12




67 %




101




25




77 %





B Envelope — National Allocations


15


 


 


 


 


 


 


 


 


 




Emergency aid


 


9


 


 


7


0


76 %


6


4


89 %




Other shocks with budgetary impact


 


6


 


 


6


0


100 %


6


6


100 %





SUB TOTAL: B ENVELOPE — NATIONAL ALLOCATIONS




15




15



 



100 %




13




0




86 %




12




10




94 %





Studies/Technical assistance OCT


6


6


0


100 %


5


2


89 %


4


1


81 %





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




6




6




0




100 %




5




2




89 %




4




1




81 %





Regional allocations


40


40


0


100 %


26


7


65 %


8


4


31 %





SUB TOTAL: REGIONAL ALLOCATIONS




40




40




0




100 %




26




7




65 %




8




4




31 %






Mobilisable reserves



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




A Envelope reserve


0


 


 


 


 


 


 


 


 


 




B Envelope reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: COUNTRY RESERVE




0



 


 


 


 


 


 


 


 


 




National allocations Reserve A Envelope STABEX


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX




0



 


 


 


 


 


 


 


 


 




Regional allocations reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: REGIONAL ALLOCATIONS RESERVE




0



 


 


 


 


 


 


 


 


 





Non-mobilisable reserve



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




Non-mobilisable reserve


2


 


 


 


 


 


 


 


 


 





SUB TOTAL: NON-MOBILISABLE RESERVE




2



 


 


 


 


 


 


 


 


 





TOTAL: OCT (INCL. RESERVES) (B)




259




257




0




99 %




176




21




68 %




126




41




72 %






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




21  328




21  294




(95)




99 %




18  252




2  687




86 %




12  985




2  760




71 %






Table 2.6


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2014


CLASS OF AID


ACP + OCT — 11th EDF
















(EUR million)




 


CREDITS


DECISIONS


ASSIGNED FUNDS


PAYMENTS




AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%




(1)


(2)


 


(2): (1)


(3)


 


(3): (2)


(4)


 


(4): (3)





ACP



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


653


458


458


70 %


197


197


43 %


185


185


94 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




653




458




458




70 %




197




197




43 %




185




185




94 %





B Envelope — National Allocations


86


 


 


 


 


 


 


 


 


 




Emergency aid


 


83


83


 


65


65


78 %


47


47


73 %





SUB TOTAL: B ENVELOPE — NATIONAL ALLOCATIONS




86




83




83




96 %




65




65




78 %




47




47




73 %





Bridging facility


98


 


 


 


 


 


 


 


 


 





SUB TOTAL: BRIDGING FACILITY




98



 


 


 


 


 


 


 


 


 




Implementation costs


115


99


99


86 %


92


92


93 %


92


92


100 %




Interests and other receipts


13


5


5


38 %


 


 


 


 


 


 





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




128




104




104




81 %




92




92




88 %




92




92




100 %





Institutional and support expenditure


33


33


33


100 %


14


14


42 %


6


6


43 %




Other Intra-ACP allocations


56


55


55


99 %


 


 


 


 


 


 




Peace facility


445


325


325


73 %


301


301


93 %


226


226


75 %





SUB TOTAL: INTRA-ACP ALLOCATIONS




533




413




413




77 %




315




315




76 %




232




232




74 %





Regional allocations


103


103


103


100 %


63


63


61 %


39


39


63 %





SUB TOTAL: REGIONAL ALLOCATIONS




103




103




103




100 %




63




63




61 %




39




39




63 %






Mobilisable reserves



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




National allocations Reserve A Envelope STABEX


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX




0



 


 


 


 


 


 


 


 


 





Non-mobilisable reserve



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




Non-mobilisable reserve


(0)


 


 


 


 


 


 


 


 


 





SUB TOTAL: NON-MOBILISABLE RESERVE




(0)



 


 


 


 


 


 


 


 


 





TOTAL: ACP (INCL. RESERVES) (A)




1  602




1  160




1  160




72 %




731




731




63 %




595




595




81 %






OCT



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 




Bridging facility


11


 


 


 


 


 


 


 


 


 





SUB TOTAL: BRIDGING FACILITY




11



 


 


 


 


 


 


 


 


 




Studies/Technical assistance OCT


3


0


0


0 %


 


 


 


 


 


 





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




3




0




0




0 %



 


 


 


 


 


 





Non-mobilisable reserve



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




Non-mobilisable reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: NON-MOBILISABLE RESERVE




0



 


 


 


 


 


 


 


 


 





TOTAL: OCT (INCL. RESERVES) (B)




14




0




0




0 %



 


 


 


 


 


 





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




1  616




1  160




1  160




72 %




731




731




63 %




595




595




81 %





FINANCIAL STATEMENTS AND EXPLANATORY NOTES — FUNDS MANAGED BY THE EUROPEAN INVESTMENT BANK








EUROPEAN INVESTMENT BANK






CA/481/15


12 March 2015




 



Document 15/082







BOARD OF DIRECTORS







INVESTMENT FACILITY


FINANCIAL STATEMENTS


AS AT 31 DECEMBER 2014











—


Statement of financial position










—


Statement of profit or loss and other comprehensive income










—


Statement of changes in contributors’ resources










—


Statement of cash flows










—


Notes to the financial statements










—


Independent auditor’s report








INVESTMENT FACILITY

Statement of financial position as at 31 December 2014









(In EUR ’000)




 


Notes


31.12.2014


31.12.2013





ASSETS



 


 


 




Cash and cash equivalents


5


5 45  399


5 99  515




Derivative financial instruments


6


448


1  024




Loans and receivables


7


1 3 31  918


1 2 22  199




Available-for-sale financial assets


8


4 03  085


3 31  699




Amounts receivable from contributors


9/15


42  590


—




Held-to-maturity financial assets


10


99  988


1 02  562




Other assets


11


5  522


148





Total assets



 



2 4 28  950




2 2 57  147






LIABILITIES AND CONTRIBUTORS’ RESOURCES



 


 


 





LIABILITIES



 


 


 




Derivative financial instruments


6


14  632


3  545




Deferred income


12


31  310


35  083




Amounts owed to third parties


13


68  824


3 31  235




Other liabilities


14


2  591


2  572





Total liabilities



 



1 17  357




3 72  435






CONTRIBUTORS’ RESOURCES



 


 


 




Member States Contribution called


15


2 0 57  000


1 6 61  309




Fair value reserve


 


1 56  122


78  191




Retained earnings


 


98  471


1 45  212





Total contributors’ resources



 



2 3 11  593




1 8 84  712






Total liabilities and contributors’ resources



 



2 4 28  950




2 2 57  147









Statement of profit or loss and other comprehensive income


For the year ended 31 December 2014









(In EUR ’000)




 


Notes


From 01.01.2014


From 01.01.2013




to 31.12.2014


to 31.12.2013




Interest and similar income


17


77  240


69  593




Interest and similar expenses


17


-  1  522


-  1  175





Net interest and similar income



 



75  718




68  418





Fee and commission income


18


1  163


2  728




Fee and commission expenses


18


- 37


- 43





Net fee and commission income



 



1  126




2  685





Fair value change of derivative financial instruments


 


-  11  663


4  399




Net realised gains on available-for-sale financial assets


19


8  109


5  294




Net foreign exchange loss


 


- 222


-  6  925





Net result on financial operations



 



-  3  776




2  768





Change in impairment on loans and receivables, net of reversal


7


-  75  756


-  27  334




Impairment on available-for-sale financial assets


8


-  6  262


-  8  176




Other income


21


337


—




General administrative expenses


20


-  38  128


-  37  851





(Loss)/profit for the year



 



-  46  741




510






Other comprehensive income:



 


 


 





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



 


 


 




Available-for-sale financial assets — Fair value reserve


8


 


 










1.


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






 


87  230


12  350










2.


Net amount transferred to profit or loss






 


-  9  299


-  2  593





Total available-for-sale financial assets



 



77  931




9  757






Total other comprehensive income



 



77  931




9  757






Total comprehensive income for the year



 



31  190




10  267









Statement of changes in contributors’ resources


For the year ended 31 December 2014











(In EUR ’000)




 


Notes


Contribution called


Fair value reserve


Retained earnings


Total





At 1 January 2014



 



1 6 61  309




78  191




1 45  212




1 8 84  712





Member States contribution called during the year


15


1 05  691


—


—


1 05  691




Unused interest subsidies and technical assistance


15


2 90  000


—


—


2 90  000




Loss for the year 2014


 


—


—


-  46  741


-  46  741




Total other comprehensive income for the year


 


—


77  931


—


77  931





Changes in contributors’ resources



 



3 95  691




77  931




-  46  741




4 26  881






At 31 December 2014



 



2 0 57  000




1 56  122




98  471




2 3 11  593






At 1 January 2013



 



1 5 61  309




68  434




1 44  702




1 7 74  445





Member States contribution called during the year


15


1 00  000


—


—


1 00  000




Profit for the year 2013


 


—


—


510


510




Total other comprehensive income for the year


 


—


9  757


—


9  757





Changes in contributors’ resources



 



1 00  000




9  757




510




1 10  267






At 31 December 2013



 



1 6 61  309




78  191




1 45  212




1 8 84  712









Statement of cash flows


For the year ended 31 December 2014









(In EUR ’000)




 


Notes


From 01.01.2014 to 31.12.2014


From 01.01.2013 to 31.12.2013





OPERATING ACTIVITIES



 


 


 




(Loss)/profit for the financial year


 


-  46  741


510




Adjustments made for:


 


 


 




Impairment on available-for-sale financial assets


8


6  262


8  176




Other income


21


- 337


—




Net change in impairment on loans and receivables


7


75  756


27  334




Interest capitalised on loans and receivables


7


-  11  915


-  10  363




Change in accrued interest and amortised cost on loans and receivables


 


895


- 249




Change in accrued interest and amortised cost on held-to-maturity financial assets


10


12


733




Change in deferred income


 


-  3  773


-  2  725




Effect of exchange rate changes on loans


7


-  92  707


30  402




Effect of exchange rate changes on available-for-sale financial assets


 


- 449


-  1  154




Effect of exchange rate changes on cash held


 


-  9  362


- 378





(Loss)/profit on operating activities before changes in operating assets and liabilities



 



-  82  359




52  286





Loan disbursements


7


- 2 48  326


- 2 42  203




Repayments of loans


7


1 66  578


1 19  160




Change in accrued interest on cash and cash equivalent


5


7


- 1




Fair value changes on derivatives


 


11  663


-  4  399




Increase in held-to-maturity financial assets


10


-  1 6 10  057


- 6 80  635




Maturities of held-to-maturity financial assets


10


1 6 12  619


6 76  369




Increase in available-for-sale financial assets


8


-  42  646


-  34  700




Repayments/Sales of available-for-sale financial assets


8


43  378


38  737




(Increase)/Decrease in in other assets


 


-  5  374


76




Increase in other liabilities


 


19


1  419




Decrease in amounts payable to the European Investment Bank


 


- 175


-  6  539





Net cash flows used in operating activities



 



- 1 54  673




-  80  430






FINANCING ACTIVITIES



 


 


 




Contribution received from Member States


15


1 05  691


1 87  310




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


 


7  410


50  000




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


 


-  21  899


-  24  312





Net cash flows from financing activities



 



91  202




2 12  998






Net (decrease)/increase in cash and cash equivalents



 



-  63  471




1 32  568






Summary statement of cash flows:



 


 


 





Cash and cash equivalents at the beginning of financial year



 



5 99  507




4 66  561





Net cash from:


 


 


 




Operating activities


 


- 1 54  673


-  80  430




Financing activities


 


91  202


2 12  998




Effects of exchange rate changes on cash and cash equivalents


 


9  362


378





Cash and cash equivalents at the end of the financial year



 



5 45  398




5 99  507






Cash and cash equivalents are composed of:



 


 


 




Cash in hand


5


9  642


1 94  107




Term deposits (excluding accrued interest)


 


4 15  756


4 05  400




Commercial papers


5


1 20  000


—




 


 



5 45  398




5 99  507






Notes to the financial statements as at 31 December 2014

1.   General information

The Investment Facility (‘the Facility’ or ‘IF’) has been established within the framework of the Cotonou Agreement (the ‘Agreement’) on cooperation and development assistance negotiated between the African, Caribbean and Pacific Group of States (the ‘ACP States’) and the European Union and its Member States on 23 June 2000, revised on 25 June 2005 and 23 June 2010.
The Facility is not a separate legal entity and the European Investment Bank (‘EIB’ or ‘the Bank’) manages the contributions on behalf of the Member States (‘Donors’) in accordance with the terms of the Agreement and acts as an administrator of the Facility.
Financing under the Agreement is provided from EU Member States’ budgets. EU Member States contribute with the amounts allocated to finance the IF and grants for the financing of the interest subsidies as provided for under the multi-annual financial frameworks (First Financial Protocol covering the period 2000 — 2007 and referred to as the 9th European Development Fund (EDF), Second Financial Protocol covering the period 2008 — 2013 and referred to as the 10th EDF as well as the ‘Bridging Facility’ covering the period from 1 January 2014 until the entry into force of the Third Financial Protocol covering the period 2014 — 2020 referred to as the 11th EDF). The EIB is entrusted with the management of:






—


the Facility, a EUR 3  185,5 million risk-bearing revolving fund geared to fostering private sector investment in ACP countries of which EUR 48,5 million are allocated to Overseas Countries and territories (‘OCTs countries’);










—


grants for the financing of interest subsidies worth max. EUR 586,85 million for ACP countries and max. EUR 3,5 million for OCTs countries. Up to 15 % of these subsidies can be used to fund project-related technical assistance (‘TA’);










—


the ‘Bridging Facility’ covering the grants to finance the interest subsidies and project-related technical assistance and being composed of un- and de-committed balances from previous EDFs.




The present financial statements cover the period from 1 January 2014 to 31 December 2014.
On a proposal from the Management Committee of EIB, the Board of Directors of EIB adopted the Financial Statements on 12 March 2015, and authorised their submission to the Board of Governors for approval by 28 April 2015.
2.   Significant accounting policies

2.1.   Basis of preparation — Statement of compliance

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

The presentation of commitment fees under fee and commission income changed to interest and similar income.
The impact of the reclassification on the 2013 comparatives amounts to EUR 1,323 k.
2.3.   Significant accounting judgments and estimates

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

Measurement of fair values of financial instruments

Fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or broker price quotations. Where the fair values cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of mathematical models. The input to these models is taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. The valuations are categorised into different levels in the fair value hierarchy based on the inputs used in the valuation techniques as described and disclosed in Notes 2.5.3 and 4.
These valuation techniques may include net present value and discounted cash flow models, comparison to similar instruments for which market observable prices exist, Black-Scholes and polynomial option pricing models and other valuation models. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads used in estimating discount rates, bond and equity prices, foreign currency exchange rates, equity and equity index prices and expected price volatilities and correlations.
The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.
The Facility uses widely recognised valuation models for determining the fair value of common and more simple financial instruments, like interest rate and currency swaps that use only observable market data and require limited management judgement and estimation. Observable prices and model inputs are usually available in the market for listed debt and equity securities, exchange traded derivatives and simple over the counter derivatives like interest rate swaps. Availability of observable market prices and model inputs reduces the need for management judgement and estimation and also reduces the uncertainty associated with determination of fair values. Availability of observable market prices and inputs varies depending on the products and markets and is prone to changes based on specific events and general conditions in the financial markets.
For more complex instruments, the Facility uses own valuation models, which are developed from recognised valuation models. Some or all of the significant inputs into these models may not be observable in the market, and are derived from market prices or rates or are estimated based on assumptions. Example of instruments involving significant unobservable inputs includes certain loans and guarantees for which there is no active market. Valuation models that employ significant unobservable inputs require a higher degree of management judgement and estimation in the determination of fair value. Management judgement and estimation are usually required for selection of the appropriate valuation model to be used, determination of expected future cash flows on the financial instrument being valued, determination of probability or counterparty default and prepayments and selection of appropriate discount rates.
The Facility has an established control framework with respect to the measurement of fair values. This framework includes the EIB’s Investment Bank’s Risk Management and Market Data Management functions. These functions are independent of front office management and are responsible for verifying significant fair value measurements. Specific controls include:






—


Verification of observable pricing;










—


A review and approval process for new valuation models and changes to existing models;










—


Calibration and back testing of models against observed market transactions;










—


Analysis and investigation of significant valuation movements;










—


Review of significant unobservable inputs and valuation adjustments.




Where third-party information such as broker quotes or pricing services are used to measure fair value, the Facility verifies that such valuations meet the requirements of IFRS. This includes the following:






—


Determining where broker quote or pricing service pricing is appropriate;










—


Assessing whether a particular broker quote or pricing service is reliable;










—


Understanding how the fair value has been arrived at and the extent to which it represents actual market transactions;










—


When prices for similar instruments are used to measure fair value, how these prices have been adjusted to reflect the characteristics of the instrument subject to measurement.





Impairment losses on loans and receivables

The Facility reviews its loans and receivables at each reporting date to assess whether an allowance for impairment should be recorded in the statement of profit or loss and other comprehensive income. In particular, judgment by the European Investment Bank’s Management is required in the estimation of the amount and timing of future cash flows when determining the level of allowance required. Such estimates are based on assumptions about a number of factors and actual results may differ, resulting in future changes to the allowance. In addition to specific allowances against individually significant loans and receivables, the Facility may also book a collective impairment allowance against exposures which have not been individually identified as impaired and have a greater risk of default than when originally granted.
In principle, a loan is considered as impaired when payment of interest and principal are past due by 90 days or more and, at the same time, the European Investment Bank’s Management considers that there is an objective indication of impairment.

Valuation of unquoted available-for-sale equity investments

Valuation of unquoted available-for-sale equity investments is normally based on one of the following:






—


recent arm’s length market transactions;










—


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










—


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










—


adjusted net assets method; or










—


other valuation models.




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

Impairment of available-for-sale financial assets

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

Consolidation of entities in which the Facility holds interest

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

Except for the changes below, the Facility has consistently applied the accounting policies set out in Note 2.5 to all periods presented in these financial statements. The Facility has adopted the following new standards and amendments to standards.

Standards adopted

The following standards, amendments to standards and interpretations were adopted in the preparation of these financial statements:
IFRS 10 Consolidated Financial Statements

IFRS 10 replaces the part of IAS 27 ‘Consolidated and Separate Financial Statements’ that deals with consolidated financial statements and SIC 12 ‘Consolidation-Special Purpose Entities’. Under IFRS 10, there is a new definition of control, providing a single basis for consolidation for all entities. This basis is built on the concept of power over the investee, variability of returns from the involvement with the investee and their linkage, replacing thus focus on legal control or exposure to risks and rewards, depending on the nature of the entity. The adoption of IFRS 10 had no impact on the consolidation of investments held by the Facility. Therefore no restatements are necessary on application of IFRS 10.
IFRS 11 Joint Arrangements

IFRS 11 replaces IAS 31 ‘Interests in Joint Ventures’ and SIC-13 ‘Jointly Controlled Entities — Non — Monetary Contributions by Ventures’ and establishes principles for financial reporting by entities that have an interest in arrangements that are controlled jointly.
Under IFRS 11, there are only two types of joint arrangements, joint operations and joint ventures and their classification is based on the parties’ rights and obligations arising from the arrangement, rather than its legal form. The adoption of this standard had no impact on the Facility’s financial statements.
IFRS 12 Disclosure of Interests in Other Entities

IFRS 12 specifies the disclosures required in annual financial statements to enable users of financial statements to evaluate the nature of and risks associated with the reporting entity’s interests in subsidiaries, associates, joint arrangements and unconsolidated structured entities. The disclosure requirements of IFRS 12 do not require comparative information to be provided for periods prior to initial application. New disclosures are provided in Note 22.
IFRS 10, 11 and 12 Amendments — Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance

The amendments clarify the transition guidance in IFRS 10 and provide additional transition relief in IFRS 10, 11 and 12, requiring adjusted comparative information to be limited only to the preceding comparative period. In addition, for disclosures related to unconsolidated structured entities, the requirement to present comparative information for periods before IFRS 12 is first applied, is removed. The adoption of the amendment had no impact on the Facility’s financial statements.
IAS 36 Amendment — Recoverable Amount Disclosures for Non-Financial Assets

The amendments restrict the requirement to disclose the recoverable amount of an asset or cash generating unit only to periods in which an impairment loss has been recognized or reversed.
They also include detailed disclosure requirements applicable when an asset or cash generating unit’s recoverable amount has been determined on the basis of fair value less costs of disposal and an impairment loss has been recognized or reversed during the period.
The adoption of the amendment had no impact on the Facility’s financial statements.

Standards issued but not yet effective

The following standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2014, and have not been applied in preparing these financial statements. Those of which may be relevant for the Facility are set out below.
IFRS 9 Financial instruments

The standard was issued on 24 July 2014 and replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. IFRS 9 has not yet been adopted by the EU. The Facility has not yet determined the extent of the impact of this standard.
IFRS 15 Revenue from Contracts with Customers

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programmes. IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2017, with early adoption permitted. IFRS 15 has not yet been adopted by the EU. The Facility has not yet determined the extent of the impact of this standard.
2.5.   Summary of significant accounting policies

The statement of financial position represents assets and liabilities in decreasing order of liquidity and does not distinguish between current and non-current items.
2.5.1.   
Foreign currency translation


The Facility uses the Euro (EUR) for presenting its financial statements, which is also the functional currency. Except as otherwise indicated, financial information presented in EUR has been rounded to the nearest thousand.
Foreign currency transactions are translated, at the exchange rate prevailing on the date of the transaction.
Monetary assets and liabilities denominated in currencies other than Euro are translated into Euro at the exchange rate prevailing at the balance sheet date. The gain or loss arising from such translation is recorded in the statement of profit or loss and other comprehensive income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Exchange differences arising on the settlement of transactions at rates different from those at the date of the transaction, and unrealised foreign exchange differences on unsettled foreign currency monetary assets and liabilities, are recognised in the statement of profit or loss and other comprehensive income.
The elements of the statement of profit or loss and other comprehensive income are translated into Euro on the basis of the exchange rates prevailing at the end of each month.
2.5.2.   
Cash and cash equivalents


The Facility defines cash and cash equivalents as current accounts, short-term deposits or commercial papers with original maturities of three months or less.
2.5.3.   
Financial assets other than derivatives


Financial assets are accounted for using the settlement date basis.

Fair value of financial instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal, or in its absence, the most advantageous market to which the Facility has access at that date.
When applicable, the EIB on behalf of the Facility measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an on-going basis.
Where the fair values of financial assets and financial liabilities recorded on the balance sheet cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of mathematical models. The input to these models is taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. The chosen valuation technique incorporates all the factors that market participants would take into account in pricing a transaction.
The EIB measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:






—


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










—


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










—


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




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

Held-to-maturity financial assets

Held-to-maturity financial assets comprise quoted bonds with the intention of holding them to maturity, and commercial papers with original maturities of more than three months.
Those bonds and commercial papers are initially recorded at their fair value plus any directly attributable transaction cost. The difference between entry price and redemption value is amortised in accordance with the effective interest method over the remaining life of the instrument.
The Facility assesses at each balance sheet date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event (or event) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Impairment loss is recognised in profit and loss and the amount of the loss is measured as the difference between the carrying value and the present value of estimated future cash flows discounted at the instrument’s original effective interest rate.

Loans

Loans originated by the Facility are recognised in the assets of the Facility when cash is advanced to borrowers. They are initially recorded at cost (net disbursed amounts), which is the fair value of the cash given to originate the loan, including any transaction costs, and are subsequently measured at amortised cost, using the effective yield method, less any provision for impairment or uncollectability.

Available-for-sale financial assets

Available-for-sale financial assets are those which are designated as such or do not qualify to be classified as designated at fair value through profit or loss, held-to-maturity or loans and receivables. They include direct equity investments and investments in venture capital funds.
After initial measurement, available-for-sale financial assets are subsequently carried at fair value. Note the following details for the fair value measurement of equity investments, which cannot be derived from active markets:
a.   Venture capital funds
The fair value of each venture capital fund is based on the latest available Net Asset Value (NAV), reported by the fund, if calculated based on international valuation guidelines recognised to be in line with IFRS (for example: the International Private Equity and Venture Capital Valuation guidelines, IPEV Guidelines, as published by the European Venture Capital Association). The Facility may however decide to adjust the NAV reported by the fund if there are issues that may affect the valuation.
b.   Direct equity investments
The fair value of the investment is based on the latest set of financial statements available, re-using, if applicable, the same model as the one used at the acquisition of the participation.
Unrealised gains or losses on venture capital funds and direct equity investments are reported in contributors’ resources until such investments are sold, collected or disposed of, or until such investments are determined to be impaired. If an available-for-sale investment is determined to be impaired, the cumulative unrealised gain or loss previously recognised in equity is transferred to the statement of profit or loss and other comprehensive income.
For unquoted investment, the fair value is determined by applying recognised valuation techniques (for example adjusted net assets, discounted cash flows or multiple). These investments are accounted for at cost when the fair value cannot be reliably measured. To be noted that in the first 2 years of the investments, they are recognised at cost.
The participations acquired by the Facility typically represent investments in private equity or venture capital funds. According to industry practice, such investments are generally investments jointly subscribed by a number of investors, none of whom is in a position to individually influence the daily operations and the investment activity of such fund. As a consequence, any membership by an investor in a governing body of such fund does not in principle entitle such investor to influence the day-to-day operations of the fund. In addition, individual investors in a private equity or a venture capital fund do not determine policies of a fund such as distribution policies on dividends or other distributions. Such decisions are typically taken by the management of a fund on the basis of the shareholders agreement governing the rights and obligations of the management and all shareholders of the fund. The shareholders’ agreement also generally prevents individual investors from bilaterally executing material transactions with the fund, interchanging managerial personnel or obtaining privileged access to essential technical information. The Facility’s investments are executed in line with the above stated industry practice, ensuring that the Facility neither controls nor exercises any form of significant influence within the meaning of IFRS 10 and IAS 28 over any of these investments, including those investments in which the Facility holds over 20 % of the voting rights.

Guarantees

At initial recognition, the financial guarantees are recognised at fair value corresponding to the Net Present Value (NPV) of expected premium inflows. This calculation is performed at the starting date of each transaction and is recognised on balance sheet as ‘Financial guarantees’ under ‘other assets’ and ‘other liabilities’.
Subsequent to initial recognition, the Facility’s liabilities under such guarantees are measured at the higher of:






—


the best estimate of expenditure required to settle any financial obligation arising as a result of the guarantee, which is estimated based on all relevant factors and information existing at the date of the statement of financial position.










—


the amount initially recognised less cumulative amortisation. The amortisation of the amount initially recognised is done using the actuarial method.




Any increase or decrease in the liability relating to financial guarantees is taken to the statement of profit or loss and other comprehensive income under ‘fee and commission income’.
The Facility’s assets under such guarantee are subsequently amortized using the actuarial method and tested for impairment.
In addition, when a guarantee agreement is signed, it is presented as a contingent liability for the Facility and when the guarantee is engaged, as a commitment for the Facility.
2.5.4.   
Impairment of financial assets


The Facility assesses at each balance sheet date whether there is any objective evidence that a financial asset is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter into bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For the loans outstanding at the end of the financial year and carried at amortised cost, impairments are made when presenting objective evidence of risks of non-recovery of all or part of their amounts according to the original contractual terms or the equivalent value. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of profit or loss and other comprehensive income. Interest income continues to be accrued on the reduced carrying amount based on the effective interest rate of the asset. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account.
The Facility conducts the credit risk assessments based on each individual operation and does not consider a collective impairment.
For the available-for-sale financial assets, the Facility assesses at each balance sheet date whether there is objective evidence that an investment is impaired. Objective evidence would include a significant or prolonged decline in the fair value of the investment below its costs. Where there is evidence of impairment, the cumulative loss (measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the statement of profit or loss and other comprehensive income) is removed from contributors’ resources and recognised in the statement of profit or loss and other comprehensive income. Impairment losses on available-for-sale financial assets are not reversed through the statement of profit or loss and other comprehensive income; increases in their fair value after impairment are recognised directly in contributors’ resources.
The European Investment Bank’s Risk Management reviews financial assets for impairment at least once a year. Resulting adjustments include the unwinding of the discount in the statement of profit or loss and other comprehensive income over the life of the asset, and any adjustments required in respect of a reassessment of the initial impairment.
2.5.5.   
Derivative financial instruments


Derivatives include cross currency swaps, cross currency interest rate swaps, short term currency swaps (‘FX swaps’) and interest rate swaps.
In the normal course of its activity, the Facility may enter into swap contracts with a view to hedge specific lending operations or into currency forward contract with a view to hedge its currency positions, denominated in actively traded currencies other than the Euro, in order to offset any gain or loss caused by foreign exchange rate fluctuations.
The Facility does not use any of the hedge possibilities under IAS 39. All derivatives are measured at fair value through the profit or loss and are reported as derivative financial instruments. Fair values are derived primarily from discounted cash-flow models, option-pricing models and from third party quotes.
Derivatives are recorded at fair value and carried as assets when their fair value is positive and as liabilities when their fair value is negative. Changes in the fair value of derivative financial instruments are shown in the statement of profit and loss and other comprehensive income under ‘Fair value change of derivative financial instruments’.
Derivatives are initially recognised using the trade date basis.
2.5.6.   
Contributions


Contributions from Member States are recognised as receivables in the statement of financial position on the date of the Council Decision fixing the financial contribution to be paid by the Member States to the Facility.
The Member States contributions meet the following conditions and are consequently classified as equity:






—


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










—


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










—


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










—


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










—


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




2.5.7.   
Interest income on loans


Interest on loans originated by the Facility is recorded in the statement of profit or loss and other comprehensive income (‘Interest and similar income’) and on the statement of financial position (‘Loans and receivables’) on an accrual basis using the effective interest rate, which is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the loan to the net carrying amount of the loan. Once the recorded value of a loan has been reduced due to impairment, interest income continues to be recognised using the original effective interest rate applied to the new carrying amount.
Commitment fees are deferred and recognised in income using the effective interest method over the period from disbursement to repayment of the related loan, and are presented in the statement of profit or loss and other comprehensive income within interest and similar income.
2.5.8.   
Interest subsidies and technical assistance


As part of its activity, the Facility manages interest subsidies and technical assistance on behalf of the Member States.
The part of the Member States contributions allocated to the payment of interest subsidies and TA is not accounted for in the Facility’s contributors’ resources but is classified as amounts owed to third parties. The Facility operates the disbursement to the final beneficiaries and then decreases the amounts owed to third parties.
When amounts contributed with regard to interest subsidies and TA are not fully granted, they are reclassified as contribution to the Facility.
2.5.9.   
Interest income on cash and cash equivalents


Interest income on cash and cash equivalents is recognised in the statement of profit or loss and other comprehensive income of the Facility on an accrual basis.
2.5.10.   
Fees, commissions and dividends


Fees received in respect of services provided over a period of time are recognised as income as the services are provided, while fees that are earned on the execution of a significant act are recognised as income when the significant act has been completed. These fees are presented in the statement of profit or loss and other comprehensive income within fee and commission income.
Dividends relating to available-for-sale financial assets are recognised when received and presented in the statement of profit or loss and other comprehensive income within net realised gains on available-for-sale financial assets.
2.5.11.   
Taxation


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

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






—


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










—


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










—


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




3.1.   Risk management organisation

The European Investment Bank adapts its risk management on an ongoing basis.
The Risk Management of EIB independently identifies, assesses, monitors and reports the risks to which the Facility is exposed. Within a framework whereby the segregation of duties is preserved, the Risk Management is independent of the Front Offices. The Director-General of Risk Management reports for risk matters, to the designated Vice-President of the European Investment Bank. The designated Vice-President meets regularly with the Audit Committee to discuss topics relating to risks. He is also responsible for overseeing risk reporting to the European Investment Bank’s Management Committee and the Board of Directors.
3.2.   Credit risk

Credit risk is the potential loss that could result from client or counterparty default and arising on credit exposure in all forms, including settlement.
3.2.1.   
Credit risk policy


In carrying out the credit analysis on loan counterparts, EIB assesses credit risk with a view to quantify and pricing it. The Facility has developed an Internal Rating Methodology (IRM) for corporates or financial institutions to determine the Internal Ratings of its main borrower/guarantor beneficiary counterparts. The methodology is based on a system of scoring sheets tailored for each major credit counterpart type (e.g. Corporates, Banks, Public Sector Entities, etc.). Taking into consideration both, Best Banking Practice and the principles set under the Basel International Capital Accord (Basel II), all counterparts that are material to the credit profile of a specific transaction are classified into internal rating categories using the IRM for the specific counterpart type. Each counterpart is initially assigned to an Internal Rating reflecting the counterpart’s long-term foreign currency rating following an in-depth analysis of the counterpart’s risk profile and its country risk operating context.
The credit assessment of project finance and other structured limited recourse operations is using credit risk tools relevant for the sector, focused mainly on cash flow availability and debt service capacity. These tools include the analysis of projects’ contractual framework, counterpart’s analysis and cash flow simulations. Similarly to corporates and financial institutions, each project is assigned to an internal risk rating and an expected loss.
All non-sovereign (or non-sovereign guaranteed/assimilated) operations are subject to specific transaction-level and counterpart size limits. The maximum nominal amount of transactions are capped by a limit which depends on the transaction expected loss. Counterpart limits are applied to consolidated exposures. Such limits typically reflect the size of counterparts own funds as well as their total external long-term funding.
In order to mitigate credit risk the Facility uses various credit enhancements which are:






—


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










—


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




In addition, the Facility uses sometimes credit enhancements which are not immediately correlated to the project risk, like collaterals or bank guarantees.
The Facility does not use any credit derivatives to mitigate credit risk.
3.2.2.   
Maximum exposure to credit risk without taking into account any collateral and other credit enhancements


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







Maximum exposure (in EUR ’000)


31.12.2014


31.12.2013





ASSETS



 


 




Cash and cash equivalents


5 45  399


5 99  515




Derivative financial instruments


448


1  024




Loans and receivables


1 3 31  918


1 2 22  199




Amounts receivable from contributors


42  590


—




Held-to-maturity financial assets


99  988


1 02  562




Other assets


5  522


148





Total assets




2 0 25  865




1 9 25  448






OFF BALANCE SHEET



 


 




Contingent liabilities


 


 










—


Signed non-issued guarantees






25  000


25  000




Commitments


 


 










—


Un-disbursed loans






1 1 61  859


8 89  866










—


Issued guarantees






2  298


4  414





Total off balance sheet




1 1 89  157




9 19  280






Total credit exposure




3 2 15  022




2 8 44  728





3.2.3.   
Credit risk on loans and receivables


3.2.3.1.   Credit risk measurement for loans and receivables

Each and every lending transaction undertaken by the Facility benefits from a comprehensive risk assessment and quantification of expected loss estimates that are reflected in a Loan Grading (‘LG’). LGs are established according to generally accepted criteria, based on the quality of the borrower, the maturity of the loan, the guarantee and, where appropriate, the guarantor.
The loan grading (LG) system comprises the methodologies, processes, databases and IT systems supporting the assessment of credit risk in lending operations and the quantification of expected loss estimates. It summarises a large amount of information with the purpose of offering a relative ranking of loans’ credit risks. LGs reflect the present value of the estimated level of the ‘expected loss’, this being the product of the probability of default of the main obligors, the exposure at risk and the loss severity in the case of default. LGs are used for the following purposes:






—


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










—


as help in distributing monitoring efforts;










—


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










—


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




The following factors enter into the determination of an LG:






(i)


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










(ii)


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










(iii)


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










(iv)


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










(v)


The loan’s duration: all else being equal, the longer the loan, the higher the risk of incurring difficulties in the servicing of the loan.




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






A


Prime quality loans: there are three sub-categories. A comprises all EU sovereign risks, i.e. loans granted to or fully, explicitly and unconditionally guaranteed by Member States, where no repayment difficulties are expected and for which an unexpected loss of 0 % is allocated. A+ denotes loans granted to (or guaranteed by) entities other than Member States, with no expectation of deterioration over their duration. A- includes those lending operations where there is some doubt about the maintenance of their current status (for instance because of a long maturity, or for the high volatility of the future price of an otherwise excellent collateral), but where any downside is expected to be quite limited.










B


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










C


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










D


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










E


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










F


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




Generally, loans internally graded D- or below are placed on the Watch List. However, if a loan was originally approved with a risk profile of D- or weaker, it will only be placed on the Watch List as a result of a material credit event causing a further deterioration of its LG classification.
The table in section 3.2.3.3 shows the credit quality analysis of the Facility’s loan portfolio based on the various LG classes as described above.
3.2.3.2.   Analysis of lending credit risk exposure

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










In EUR ’000




At 31.12.2014


Guaranteed


Other credit enhancements


Not guaranteed


Total


% of Total




Banks


16  457


1 06  667


5 71  609



6 94  733




52





Corporates


23  494


93  731


3 10  396



4 27  621




32





Public institutions


33  279


—


31



33  310




3





States


—


4  815


1 71  439



1 76  254




13






Total disbursed




73  230




2 05  213




1 0 53  475




1 3 31  918




100






Signed not disbursed




1 21  826




1 17  758




9 22  275




1 1 61  859



 

















In EUR ’000




At 31.12.2013


Guaranteed


Other credit enhancements


Not guaranteed


Total


% of Total




Banks


18  341


1 12  178


3 38  464



4 68  983




38





Corporates


26  315


94  365


4 17  990



5 38  670




44





Public institutions


29  120


—


31



29  151




2





States


—


5  322


1 80  073



1 85  395




16






Total disbursed




73  776




2 11  865




9 36  558




1 2 22  199




100






Signed not disbursed




14  966




1 17  758




7 57  142




8 89  866



 




Transaction Management and Restructuring is tasked with the responsibility of performing borrower and guarantor monitoring, as well as project-related financial and contractual monitoring. Thus, the creditworthiness of the Facility’s loans, borrowers and guarantors are continually monitored, at least annually but more frequently on an as-needed basis and as a function of credit events taking place. In particular, Transaction Management and Restructuring reviews if contractual rights are met and, in case of a rating deterioration and/or contractual default, remedy action is taken. Mitigation measures are pursued, whenever necessary in accordance with the credit risk guidelines. Also, in case of renewals of bank guarantees received for its loans, it is ensured that these are replaced or action is taken in a timely manner.
3.2.3.3.   Credit quality analysis per type of borrower

The tables below show the credit quality analysis of the Facility’s loan portfolio as at 31 December 2014 and 31 December 2013 by the Loan Grading applications, based on the exposure signed (disbursed and un-disbursed):













In EUR ’000




At 31.12.2014


High Grade


Standard Grade


Min. Accept. Risk


High Risk


No grading


Total


% of Total




A to B-


C


D+


D- and below




Borrower


Banks


75  268


7  074


3 07  049


8 79  420


3 36  318



1 6 05  129




65





Corporates


1 02  974


7  964


16  713


4 56  210


—



5 83  861




23





Public institutions


—


—


33  279


40  031


—



73  310




3





States


—


—


4  815


2 26  662


—



2 31  477




9






Total




1 78  242




15  038




3 61  856




1 6 02  323




3 36  318




2 4 93  777




100





















In EUR ’000




At 31.12.2013


High Grade


Standard Grade


Min. Accept. Risk


High Risk


No grading


Total


% of Total




A to B-


C


D+


D- and below




Borrower


Banks


65  571


15  434


97  478


6 89  905


4 04  129



1 2 72  517




60





Corporates


6  773


15  970


5  691


5 20  048


—



5 48  482




26





Public institutions


—


—


—


69  151


—



69  151




3





States


—


—


—


2 21  915


—



2 21  915




11






Total




72  344




31  404




1 03  169




1 5 01  019




4 04  129




2 1 12  065




100





3.2.3.4.   Risk concentrations of loans and receivables

3.2.3.4.1.   Geographical analysis

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







Country of borrower


31.12.2014


31.12.2013




Uganda


1 61  657


1 44  816




Kenya


1 55  168


1 31  384




Nigeria


1 37  832


73  469




Regional-ACP


1 36  182


1 01  863




Mauritania


95  319


93  455




Jamaica


77  272


68  000




Ethiopia


68  614


75  962




Dominican Republic


64  614


64  015




Tanzania


62  916


26  121




Cameroon


61  067


70  154




Togo


45  780


50  319




Congo (Democratic Republic)


39  786


39  047




Mauritius


35  811


1 08  511




Mozambique


29  139


26  202




Cape Verde


26  101


27  470




Ghana


16  130


6  365




Rwanda


14  854


6  439




French Polynesia


14  622


13  994




Senegal


12  046


13  063




Malawi


9  945


3  999




Samoa


7  595


8  872




Burkina Faso


7  456


8  944




Haiti


7  379


5  511




Mali


7  207


7  717




Congo


6  919


8  649




Zambia


5  761


6  412




Vanuatu


3  835


5  028




Angola


3  623


6  380




New Caledonia


3  211


3  708




Niger


2  581


3  020




Saint Lucia


2  363


2  102




Palau


2  254


2  224




Grenada


1  996


2  243




Trinidad and Tobago


1  180


—




Micronesia


1  141


—




Liberia


821


364




Tonga


681


1  416




Gabon


528


512




Fiji


474


1  032




Burundi


40


—




Chad


18


—




Lesotho


—


3  417





Total




1 3 31  918




1 2 22  199





3.2.3.4.2.   Industry sector analysis

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







Industry sector of borrower



31.12.2014




31.12.2013





Global loans and agency agreements


5 41  600


3 37  482




Urban development, renovation and transport


2 09  849


2 16  244




Electricity, coal and others


1 98  604


2 34  106




Tertiary and other


1 68  689


1 48  875




Basic material and mining


1 08  367


1 76  909




Roads and motorways


43  993


38  880




Airports and air traffic management systems


33  310


29  116




Materials processing, construction


16  243


20  884




Telecommunications


6  089


11  746




Paper chain


5  156


4  540




Food chain


18


—




Investment goods/consumer durables


—


3  417





Total




1 3 31  918




1 2 22  199





3.2.3.5.   Arrears on loans and impairments

Amounts in arrears are identified, monitored and reported according to the procedures defined into the bank wide ‘Finance Monitoring Guidelines and Procedures’. These procedures are in line with best banking practices and are adopted for all loans managed by the EIB.
The monitoring process is structured in order to make sure that (i) potential arrears are detected and reported to the services in charge; (ii) critical cases are promptly escalated to the right operational and decision level; (iii) regular reporting to management and to relevant external institutions (EU Commission and Member States) is provided on the overall status of arrears and on the recovery measures already taken or to be taken.
The arrears and impairments on loans can be analysed as follows (in EUR ’000):








 


 


Loans and receivables


Loans and receivables




Notes


31.12.2014


31.12.2013





Carrying amount



 



1 3 31  918




1 2 22  199






Individually impaired



 


 


 




Gross amount


 


2 10  338


2 27  007




Allowance for impairment


7


- 1 52  137


-  70  791





Carrying amount individually impaired



 



58  201




1 56  216






Collectively impaired



 


 


 




Gross amount


 


—


—




Allowance for impairment


 


—


—





Carrying amount collectively impaired



 


—


—





Past due but not impaired



 


 


 





Past due comprises



 


 


 




0-30 days


 


2  558


1  561




30-60 days


 


528


—




60-90 days


 


5


—




90-180 days


 


—


—




more 180 days


 


—


—





Carrying amount past due but not impaired



 



3  091




1  561






Carrying amount neither past due nor impaired



 



1 2 70  626




1 0 64  422






Total carrying amount loans and receivables



 



1 3 31  918




1 2 22  199





3.2.4.   
Credit risk on cash and cash equivalents


Available funds are invested in accordance with the Facility’s schedule of contractual disbursement obligations. As of 31 December 2014 and 31 December 2013, investments were in the form of bank deposits, certificates of deposit and commercial papers.
The authorized entities have a rating similar to the short- and long-term ratings required for the EIB’s own treasury placements. The minimum short term rating required for authorised entities is P-1/A-1/F1 (Moody’s, S&P, Fitch). In case of different ratings being granted by more than one credit rating agency, the lowest rating governs. The maximum authorized limit for each authorised bank (excluding the operational cash accounts of the Facility) is currently EUR 5 0 0 00  000 (fifty million euro).
All investments have been done with authorised entities with a maximum tenor of three months from trading date and up to the credit exposure limit. As at 31 December 2014 and 31 December 2013 all bank deposits, certificates of deposit, commercial papers and cash in hand held by the treasury portfolio of the Facility had a minimum rating of P-1 (Moody’s equivalent) at settlement day.
The following table shows the situation of cash and cash equivalents including accrued interest (in EUR ’000):










Minimum short-term rating


Minimum long-term rating


31.12.2014


31.12.2013




(Moody’s term)


(Moody’s term)




P-1


Aaa


47  937


9 %


—


0 %




P-1


Aa1


—


0 %


48  130


8 %




P-1


Aa2


38


0 %


48


0 %




P-1


Aa3


—


0 %


50  000


8 %




P-1


A1


1 37  820


25 %


1 06  572


18 %




P-1


A2


3 59  604


66 %


3 94  765


66 %





Total




5 45  399




100 %




5 99  515




100 %





3.2.5.   
Credit risk on derivatives


3.2.5.1.   Credit risk policy of derivatives

The credit risk with respect to derivatives is represented by the loss which a given party would incur where the other counterparty to the deal would be unable to honour its contractual obligations. The credit risk associated with derivatives varies according to a number of factors (such as interest and exchange rates) and generally corresponds to only a small portion of their notional value.
In the normal course of its activity, the Facility may enter into swap contracts with a view to hedge specific lending operations or into currency forward contracts, with a view to hedge its currency positions denominated in actively traded currencies other than the Euro. All the swaps are executed by the European Investment Bank with an external counterpart. The swaps are arranged by the same Master Swap Agreements and Credit Support Annexes signed between the European Investment Bank and its external counterparts.
3.2.5.2.   Credit risk measurement for derivatives

All the swaps executed by the European Investment Bank that are related to the Facility are treated within the same contractual framework and methodologies applied for the derivatives negotiated by the European Investment Bank for its own purposes. In particular, eligibility of swap counterparts is determined by the European Investment Bank based on the same eligibility conditions applied for its general swap purposes.
The European Investment Bank measures the credit risk exposure related to swaps and derivatives transactions using the Net Market Exposure (‘NME’) and Potential Future Exposure (‘PFE’) approach for reporting and limit monitoring. The NME and the PFE fully include the derivatives related to the Investment Facility.
The following table shows the maturities of cross currency swaps and cross currency interest rate swaps, sub-divided according to their notional amount and fair value:










In EUR ’000




Swap contracts at 31.12.2014


less than


1 year


5 years


more than


Total 2014




1 year


to 5 years


to 10 years


to 10 years




Notional amount


—


11  606


—


—



11  606





Fair Value (i.e. net discounted value)


—


-  3  219


—


—



-  3  219


















In EUR ’000




Swap contracts at 31.12.2013


less than


1 year


5 years


more than


Total 2014




1 year


to 5 years


to 10 years


to 10 years




Notional amount


2  453


2  584


13  491


—



18  528





Fair Value (i.e. net discounted value)


19


- 62


-  1  892


—



-  1  935





The Facility enters into foreign exchange short term currency swaps (‘FX swaps’) contracts in order to hedge currency risk on loan disbursements in currencies other than EUR. FX swaps have a maturity of maximum three months and are regularly rolled-over. The notional amount of FX swaps stood at EUR 1  059 million at 31 December 2014 against EUR 700 million at 31 December 2013. The fair value of FX swaps amounts to EUR -  10,8 million at 31 December 2014 against EUR - 1,5 million at 31 December 2013.
The Facility enters into interest rate swap contracts in order to hedge the interest rate risk on loans disbursed. As at 31 December 2014 there are two interest rate swaps outstanding with a notional amount of EUR 44,7 million (2013: EUR 43,3 million) and a fair value of EUR - 0,1 million (2013: EUR 0,9 million).
3.2.6.   
Credit risk on held-to-maturity financial assets


The following table shows the situation of the held-to-maturity portfolio entirely composed of treasury bills issued by Belgium, France, Italy, Portugal and Spain with remaining maturities of less than three months. EU Member States are eligible issuers. The maximum authorized limit for each authorised issuer is EUR 5 0 0 00  000 (fifty million euro). Investments in medium and long-term bonds could also be eligible, according to the investment guidelines and depending on liquidity requirements:










Minimum short-term rating


Minimum long-term rating



31.12.2014




31.12.2013





(Moody’s term)


(Moody’s term)




P-1


Aa2


—


0 %


16  199


16 %




P-1


Aa3


—


0 %


39  399


38 %




NP


Ba2


49  994


50 %


—


0 %




P-3


Baa3


49  994


50 %


46  964


46 %





Total




99  988




100 %




1 02  562




100 %





3.3.   Liquidity risk

Liquidity risk refers to an entity’s ability to fund increases in assets and meet obligations as they come due, without incurring unacceptable losses. It can be split into funding liquidity risk and market liquidity risk. Funding liquidity risk is the risk that an entity will not be able to meet efficiently both expected and unexpected current and future cash flow needs without affecting its daily operations or its financial condition. Market liquidity risk is the risk that an entity cannot easily offset or eliminate a position at the market price because of inadequate market depth or market disruption.
3.3.1.   
Liquidity risk management


The Facility is primarily funded by annual contributions from Member States (9th and 10th EDF resources) as well as by reflows stemming from the Facility’s operations. The Facility manages its funding liquidity risk primarily by planning of its net liquidity needs and the required Member States annual contributions.
Each year, the EC, taking into account EIB’s forecasts concerning the management and operations of the Facility, shall establish and communicate to the Council by 15 October a statement of the commitments, payments and the annual amount of the calls for contributions (interest subsidies included) to be made in the current and the following budget years.
In order to calculate Member States’ annual contributions, disbursement patterns of the existing and pipelined portfolio is analysed and followed up throughout the year. Special events, such as early reimbursements, sales of shares or default cases are taken into account to correct annual liquidity requirements.
To further minimize the liquidity risk, the Facility maintains a liquidity reserve sufficient to cover at any point in time forecasted cash disbursements, as communicated periodically by EIB’s Lending Department. Funds are invested on the money market and bond markets in the form of interbank deposits and other short term financial instruments by taking into consideration the Facility’s cash disbursement obligations. The Facility’s liquid assets are managed by the Bank’s Treasury Department with a view to maintain appropriate liquidity to enable the Facility to meet its obligations.
In accordance with the principle of segregation of duties between the Front and Back Office, settlement operations related to the investment of these assets are under the responsibility of the EIB’s Planning and Settlement of Operations Department. Furthermore, the authorisation of counterparts and limits for treasury investments, as well as the monitoring of such limits, are the responsibility of the Bank’s Risk Management Directorate.
3.3.2.   
Liquidity risk measurement


The tables in this section analyse the financial liabilities of the Facility by maturity on the basis of the period remaining between the balance sheet date and the contractual maturity date (based on undiscounted cash flows).
In terms of non-derivative financial liabilities, the Facility holds commitments in form of un-disbursed portions of the credit under signed loan agreements, of un-disbursed portions of signed capital subscription/investment agreements, of loan guarantees granted, or of committed interest subsidies and TA.
Loans under the IF have a disbursement deadline. However, disbursements are made at times and in amounts reflecting the progress of underlying investment projects. Moreover, the IF’s loans are transactions performed in a relatively volatile operating environment, hence their disbursement schedule is subject to a significant degree of uncertainty.
Capital investments become due when and as soon as equity fund managers issue valid calls for capital, reflecting the progress in their investment activities. The drawdown period is usually of 3 years, with frequent prolongation by one or two years. Some disbursement commitments usually survive the end of the drawdown period until full disposal of the fund’s underlying investments, as the fund’s liquidity may be insufficient from time to time to meet payment obligations arising in respect of fees or other expenses.
Guarantees are not subject to specific disbursement commitments unless a guarantee is called. The amount of guarantees outstanding is reduced alongside the repayment schedule of guaranteed loans.
Committed interest subsidies’ cash outflows occur in the case of subsidized loans financed by the Bank’s own resources. Therefore, reported outflows represent only commitments related to these loans rather than the total amount of committed un-disbursed interest subsidies. As in the case of loans, their disbursement schedule is uncertain.
Committed TA ‘gross nominal outflow’ in the ‘Maturity profile of non-derivative financial liabilities’ table refers to the total un-disbursed portion of signed TA contracts. The disbursement time pattern is subject to a significant degree of uncertainty. Cash outflows classified in the ‘3 months or less’ bucket represent the amount of outstanding invoices received by the reporting date.
Commitments for non-derivative financial liabilities for which there is no defined contractual maturity date are classified under ‘Maturity Undefined’. Commitments, for which there is a recorded cash disbursement request at the reporting date, are classified under the relevant time bucket.
In terms of derivative financial liabilities, the maturity profile represents the contractual undiscounted gross cash flows of swap contracts including cross currency swaps (CCS), cross currency interest rate swaps (CCIRS), short term currency swaps and interest rate swaps.











Maturity profile of non-derivative financial liabilities


3 months or less


More than 3 months to 1 year


More than 1 year to 5 years


More than 5 years


Maturity Undefined


Gross nominal outflow




In EUR ’000 as at 31.12.2014




Outflows for committed but un-disbursed loans


1  576


—


—


—


1 1 60  283


1 1 61  859




Outflows for committed investment funds and share subscription


4  584


—


—


—


1 96  053


2 00  637




Others (signed non-issued guarantees, issued guarantees)


—


—


—


—


27  298


27  298




Outflows for committed interest subsidies


—


—


—


—


2 41  890


2 41  890




Outflows for committed TA


595


—


—


—


18  978


19  573





Total




6  755



—


—


—



1 6 44  502




1 6 51  257



















Maturity profile of non-derivative financial liabilities


3 months or less


More than 3 months to 1 year


More than 1 year to 5 years


More than 5 years


Maturity Undefined


Gross nominal outflow




In EUR ’000 as at 31.12.2013




Outflows for committed but un-disbursed loans


363


—


—


—


8 89  503


8 89  866




Outflows for committed investment funds and share subscription


1  689


—


—


—


1 75  132


1 76  821




Others (signed non-issued guarantees, issued guarantees)


—


—


—


—


29  414


29  414




Outflows for committed interest subsidies


—


—


—


—


1 91  760


1 91  760




Outflows for committed TA


759


—


—


—


14  707


15  466





Total




2  811



—


—


—



1 3 00  516




1 3 03  327


















Maturity profile of derivative financial liabilities


3 months or less


More than 3 months to 1 year


More than 1 year to 5 years


More than 5 years


Gross nominal inflow/outflow




In EUR ’000 as at 31.12.2014




CCS and CCIRS — Inflows


6


2  218


10  036


—


12  260




CCS and CCIRS — Outflows


—


-  3  202


-  12  809


—


-  16  011




Short term currency swaps — Inflows


1 0 59  000


—


—


—


1 0 59  000




Short term currency swaps — Outflows


-  1 0 70  677


—


—


—


-  1 0 70  677




Interest Rate Swaps — Inflows


371


1  103


6  495


3  619


11  588




Interest Rate Swaps — Outflows


—


-  2  143


-  6  373


-  3  022


-  11  538





Total




-  11  300




-  2  024




-  2  651




597




-  15  378


















Maturity profile of derivative financial liabilities


3 months or less


More than 3 months to 1 year


More than 1 year to 5 years


More than 5 years


Gross nominal inflow/outflow




In EUR ’000 as at 31.12.2013




CCS and CCIRS — Inflows


506


5  183


11  476


2  731


19  896




CCS and CCIRS — Outflows


- 539


-  5  858


-  12  894


-  2  819


-  22  110




Short term currency swaps — Inflows


7 00  000


—


—


—


7 00  000




Short term currency swaps — Outflows


- 7 01  490


—


—


—


- 7 01  490




Interest Rate Swaps — Inflows


232


1  053


6  341


5  720


13  346




Interest Rate Swaps — Outflows


—


-  1  874


-  6  385


-  3  773


-  12  032





Total




-  1  291




-  1  496




-  1  462




1  859




-  2  390





3.4.   Market risk

Market risk represents the risk that changes in market prices and rates, such as interest rates, equity prices and foreign exchange rates will affect an entity’s income or the value of its holdings in financial instruments.
3.4.1.   
Interest rate risk


Interest rate risk arises from the volatility in the economic value of, or in the income derived from, the Facility’s interest rate bearing positions due to adverse movements in interest rates.
The Facility’s exposure to interest rate risk arises from the volatility in the economic value of its interest bearing assets and micro-hedging swaps.
The Facility measures the sensitivity of its loan portfolio and micro hedging swaps to interest rate risk via a Basis Point Value (BPV) calculation. Micro hedging swaps include CCS, CCIRS and interest rate swaps which are associated with the hedging of specific lending operations.
The BPV measures the gain or loss in the net present value of the relevant portfolio, due to a 1 basis point (0.01 %) increase in interest rates tenors ranging within a specified time bucket ‘money market — up to one year’, ‘very short — 2 to 3 years’, ‘short — 4 to 6 years’, ‘medium — 7 to 11 years’, ‘long — 12 to 20 years’ or ‘extra-long — more than 21 years’.
To determine the net present value (NPV) of the loans’ cash flows denominated in EUR, the Facility uses the EIB’s EUR base funding curve (EUR swap curve adjusted with EIB’s global funding spread). The EIB’s USD funding curve is used for the calculation of the NPV of loan’s cash flows denominated in USD. The NPV of the loans’ cash flows denominated in currencies for which a reliable and sufficiently complete discount curve is not available, is determined by using EIB’s EUR base funding curve as a proxy.
To calculate the net present value of the micro hedging swaps, the facility uses the EUR swap curve for cash flows denominated in EUR and the USD swap curve for cash flows denominated in USD.
As shown in the following table the net present value of the loan portfolio including related micro-hedging swaps as at 31 December 2014 would decrease by EUR 419 k (as at 31 December 2013: decrease by EUR 344 k) if all relevant interest rates curves are simultaneously shifted upwards in parallel by 1 basis point.












Basis point value


Money Market


Very Short


Short


Medium


Long


Extra Long


Total




In EUR ’000




As at 31.12.2014


1 year


2 to 3 years


4 to 6 years


7 to 11 years


12 to 20 years


21 years




Total sensitivity of loans and micro hedging swaps


- 33


- 70


- 126


- 146


- 44


—


- 419



















Basis point value


Money Market


Very Short


Short


Medium


Long


Extra Long


Total




In EUR ’000




As at 31.12.2013


1 year


2 to 3 years


4 to 6 years


7 to 11 years


12 to 20 years


21 years




Total sensitivity of loans and micro hedging swaps


- 25


- 57


- 90


- 124


- 48


—


- 344




3.4.2.   
Foreign exchange risk


Foreign exchange (‘FX’) risk is the volatility in the economic value of, or in the income derived from, the Facility’s positions due to adverse movements of foreign exchange rates.
Given a reference accounting currency (EUR for the IF), there is an exposure to FX risk whenever there is a mismatch between assets and liabilities denominated in a non-reference accounting currency. Foreign exchange risk also includes the effect of changes in the value of future cash flows denominated in non-reference accounting currency, e.g. interest and dividend payments, due to fluctuations in exchange rates.
3.4.2.1.   Foreign exchange risk and treasury assets

The IF’s treasury assets are denominated either in EUR or USD.
FX risk is hedged by means of FX cross currency spot or forward transactions, FX swaps or cross-currency swaps. The EIB’s Treasury Department can, where deemed necessary and appropriate, use any other instrument, in line with the Bank’s policy, that provide protection against market risks incurred in connection with the IF’s financial activities.
3.4.2.2.   Foreign exchange risk and operations financed or guaranteed by the IF

Member States’ IF contributions are received in EUR. The operations financed or guaranteed by the IF as well as interest subsidies can be denominated in EUR, USD or any other authorized currency.
A foreign exchange risk exposure (against the EUR reference currency) arises whenever transactions denominated in currencies other than the EUR are left un-hedged. The IF’s foreign exchange risk hedging guidelines are set out below.
3.4.2.2.1.   Hedging of operations denominated in USD

The total outstanding amount of all IF Operations (loans and equity) denominated in USD shall be hedged by means of USD/EUR FX swaps, rolled over on a periodic basis. At the beginning of each period, the cash flows to be received or paid in USD during the next period shall be estimated on the basis of planned or expected reflows/disbursements. Subsequently, the maturing FX swaps shall be rolled over, their amount being adjusted to cover at least the USD liquidity needs projected over the next period.






—


A periodic calculation of the overall USD exposure as per the accounting records is performed to adjust, when necessary, the hedge on the next FX swap roll.










—


If deemed operationally convenient by the Treasury Department, cross-currency swaps can also be used to hedge specific USD Loans.










—


Within a roll-over period, unexpected USD liquidity deficits shall be covered by means of ad hoc FX swap operations while liquidity surpluses shall either be invested in treasury assets or swapped into EUR.




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







—


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










—


Operations denominated in currencies for which there is no efficient market and FX hedging cannot be undertaken by the Treasury Department are left un-hedged and therefore the IF is exposed to the FX risk incurred thereby. This principle is applied to operations denominated in local currencies (LCs) but settled in EUR or USD.




3.4.2.2.3.   Foreign exchange position

The foreign exchange position is presented according to the new financial risk framework that the Risk Management of EIB developed during 2014. Under this framework, which was approved by the IF Committee on 22 January 2015, the net reported FX position is based on accounting figures and defined as the balance between selected assets and liabilities. The assets and liabilities defined in the net reported foreign exchange position are selected so as to ensure that the earnings will only be converted into the reporting currency (EUR) when received.
Under the new framework, the unrealised gains/losses and impairment on available-for-sale financial assets are included in the net reported FX position, as well as impairments on loans and receivables. Derivatives included in the reported FX position are considered at their nominal value instead of their fair value, in order to be aligned with the retained value of the assets, considered also at their nominal value adjusted by the impairment for loans.
The FX position as at 31 December 2013, as presented in these financial statements, has been restated accordingly.
The following tables show the Facility’s foreign exchange position (in EUR ’000):













At 31 December 2014 (in EUR ’000)


EUR


USD


KES


DOP


TZS


UGX


ACP/OCTs Currencies


Total





ASSETS



 


 


 


 


 


 


 


 




Cash and cash equivalents


4 46  872


98  526


—


—


—


—


—


5 45  398




Loans and receivables


3 93  296


6 97  247


97  921


26  317


52  799


27  029


25  243


1 3 19  852




Available-for-sale financial assets


65  979


3 29  472


—


4  949


—


—


2  685


4 03  085




Amounts receivable from contributors


42  590


—


—


—


—


—


—


42  590




Held-to-maturity financial assets


99  988


—


—


—


—


—


—


99  988





Total assets in the reported FX position




1 0 48  725




1 1 25  245




97  921




31  266




52  799




27  029




27  928




2 4 10  913






Total assets out of the reported FX position




6  085




6  639




2  481




1  273




613




503




443




18  037






Total assets




1 0 54  810




1 1 31  884




1 00  402




32  539




53  412




27  532




28  371




2 4 28  950






LIABILITIES AND CONTRIBUTORS’ RESOURCES



 


 


 


 


 


 


 


 





Liabilities



 


 


 


 


 


 


 


 




Derivative financial instruments


-  1 0 70  606


1 0 83  166


—


—


—


—


—


12  560




Amount owed to third parties


68  824


—


—


—


—


—


—


68  824




Other liabilities


1  944


29


—


—


—


1


75


2  049





Total liabilities in the reported FX position




- 9 99  838




1 0 83  195



—


—


—



1




75




83  433






Total liabilities out of the reported FX position




31  282




2  642



—


—


—


—


—



33  924






Total liabilities




- 9 68  556




1 0 85  837



—


—


—



1




75




1 17  357






Net reported FX Position




2 0 48  563




42  050




97  921




31  266




52  799




27  028




27  853




2 3 27  480






Contributors’ resources



 


 


 


 


 


 


 


 




Member States Contribution called


2 0 57  000


—


—


—


—


—


—


2 0 57  000




Fair value reserve


1 56  122


—


—


—


—


—


—


1 56  122




Retained earnings


98  471


—


—


—


—


—


—


98  471





Total contributors’ resources




2 3 11  593



—


—


—


—


—


—



2 3 11  593






Total liabilities and contributors’ resources




1 3 43  037




1 0 85  837



—


—


—



1




75




2 4 28  950






As at 31 December 2014:



 


 


 


 


 


 


 


 





COMMITMENTS



 


 


 


 


 


 


 


 




Un-disbursed loans and available-for-sale financial assets


1 1 24  509


2 37  987


—


—


—


—


—


1 3 62  496




Issued guarantees


—


—


—


—


—


—


2  298


2  298




Interest subsidies and TA


2 85  239


—


—


—


—


—


—


2 85  239





CONTINGENT LIABILITIES



 


 


 


 


 


 


 


 




Signed non-issued guarantees


25  000


—


—


—


—


—


—


25  000




















At 31 December 2013 (in EUR ’000)


EUR


USD


KES


DOP


TZS


UGX


ACP/OCTs Currencies


Total





ASSETS



 


 


 


 


 


 


 


 




Cash and cash equivalents


5 42  365


57  142


—


—


—


—


—


5 99  507




Derivative financial instruments


3  250


-  3  060


—


—


—


—


—


190




Loans and receivables


4 83  066


5 67  294


64  488


28  117


25  966


25  133


14  138


1 2 08  202




Available-for-sale financial assets


70  299


2 52  668


—


6  427


—


—


2  305


3 31  699




Held-to-maturity financial assets


1 02  562


—


—


—


—


—


—


1 02  562





Total assets in the reported FX position




1 2 01  542




8 74  044




64  488




34  544




25  966




25  133




16  443




2 2 42  160






Total assets out of the reported FX position




5  109




5  968




1  623




1  336




155




438




358




14  987






Total assets




1 2 06  651




8 80  012




66  111




35  880




26  121




25  571




16  801




2 2 57  147






LIABILITIES AND CONTRIBUTORS’ RESOURCES



 


 


 


 


 


 


 


 





Liabilities



 


 


 


 


 


 


 


 




Derivative financial instruments


- 7 15  278


7 17  012


—


—


—


—


—


1  734




Amount owed to third parties


3 31  235


—


—


—


—


—


—


3 31  235




Other liabilities


1  827


—


—


—


—


—


142


1  969





Total liabilities in the reported FX position




- 3 82  216




7 17  012



—


—


—


—



142




3 34  938






Total liabilities out of the reported FX position




34  814




2  683



—


—


—


—


—



37  497






Total liabilities




- 3 47  402




7 19  695



—


—


—


—



142




3 72  435






Net reported FX Position




1 5 83  758




1 57  032




64  488




34  544




25  966




25  133




16  301




1 9 07  222






Contributors’ resources



 


 


 


 


 


 


 


 




Member States Contribution called


1 6 61  309


—


—


—


—


—


—


1 6 61  309




Fair value reserve


78  191


—


—


—


—


—


—


78  191




Retained earnings


1 45  212


—


—


—


—


—


—


1 45  212





Total contributors’ resources




1 8 84  712



—


—


—


—


—


—



1 8 84  712






Total liabilities and contributors’ resources




1 5 37  310




7 19  695



—


—


—


—



142




2 2 57  147






As at 31 December 2013:



 


 


 


 


 


 


 


 





COMMITMENTS



 


 


 


 


 


 


 


 




Un-disbursed loans and available-for-sale financial assets


8 96  655


1 70  032


—


—


—


—


—


1 0 66  687




Issued guarantees


—


—


—


—


—


—


4  414


4  414




Interest subsidies and TA


2 22  588


—


—


—


—


—


—


2 22  588





CONTINGENT LIABILITIES



 


 


 


 


 


 


 


 




Signed non-issued guarantees


25  000


—


—


—


—


—


—


25  000




3.4.2.3.   Foreign exchange sensitivity analysis

As at 31 December 2014 a 10 percent depreciation of EUR versus all non EUR currencies would result in an increase of the contributors’ resources amounting to EUR 32,0 million (31 December 2013: EUR 36,7 million). A 10 percent appreciation of the EUR versus all non EUR currencies would result in a decrease of the contributors’ resources amounting to EUR 26,2 million (31 December 2013: EUR 30,0 million).
3.4.2.4.   Conversion rates

The following conversion rates were used for establishing the balance sheet at 31 December 2014 and 31 December 2013:







 


31 December 2014


31 December 2013





Non-EU currencies



 


 




Dominican Republic Pesos (DOP)


53,1988


58,3329




Fiji Dollars (FJD)


2,376


2,5655




Haitian Gourde (HTG)


55,23


60,1459




Kenya Shillings (KES)


109,86


118,73




Mauritania Ouguiyas (MRO)


350,61


398,7




Mauritius Rupees (MUR)


38,46


41,27




Rwanda Francs (RWF)


831,04


926,86




Tanzania Shillings (TZS)


2  096,58


2  179,05




Uganda Shillings (UGX)


3  354,00


3  476,00




United States Dollars (USD)


1,2141


1,3791




Franc CFA Francs (XAF/XOF)


655,957


655,957




South Africa Rand (ZAR)


14,0353


14,566




Mozambican Metical (MZN)


40,04


40,94




3.4.3.   
Equity price risk


Equity price risk refers to the risk that the fair values of equity investments decrease as the result of changes in the levels of equity prices and/or the value of equity investments.
The IF is exposed to equity price risk via its investments in direct equity and venture capital funds.
The value of non-listed equity positions is not readily available for the purpose of monitoring and control on a continuous basis. For such positions, the best indications available include prices derived from any relevant valuation techniques.
The effects on the Facility’s contributors’ resources (as a result of a change in the fair value of the available-for-sale equity portfolio) due to a +/-10 % change in the value of individual direct equity and venture capital investments, with all other variables held constant, is EUR 40,3 million respectively EUR -  40,3 million as at 31 December 2014 (EUR 33,2 million respectively EUR -  33,2 million as at 31 December 2013).
4.   Fair values of financial instruments

4.1.   Accounting classifications and fair values

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















At 31 December 2014


Carrying amount


Fair value





In EUR ’000



Held for trading


Available-for-sale


Cash, loans and receivables


Held to maturity


Other financial liabilities


Total


Level 1


Level 2


Level 3


Total





Financial assets carried at fair value:



 


 


 


 


 


 


 


 


 


 




Derivative financial instruments


448


—


—


—


—


448


—


448


—


448




Venture Capital Funds


—


3 85  245


—


—


—


3 85  245


—


—


3 85  245


3 85  245




Direct Equity Investments


—


17  840


—


—


—


17  840


1  159


—


16  681


17  840





Total




448




4 03  085



—


—


—



4 03  533




1  159




448




4 01  926




4 03  533






Financial assets not carried at fair value:



 


 


 


 


 


 


 


 


 


 




Cash and cash equivalents


—


—


5 45  399


—


—


5 45  399


 


 


 


 




Loans and receivables


—


—


1 3 31  918


—


—


1 3 31  918


—


1 4 88  215


—


1 4 88  215




Amounts receivable from contributors


—


—


42  590


—


—


42  590


 


 


 


 




Bonds


—


—


—


99  988


—


99  988


—


99  985


—


99  985




Other assets


—


—


5  522


—


—


5  522


 


 


 


 





Total



—


—



1 9 25  429




99  988



—



2 0 25  417



—



1 5 88  200



—



1 5 88  200






Total financial assets




448




4 03  085




1 9 25  429




99  988



—



2 4 28  950



 


 


 


 





Financial liabilities carried at fair value:



 


 


 


 


 


 


 


 


 


 




Derivative financial instruments


-  14  632


—


—


—


—


-  14  632


—


-  14  632


—


-  14  632





Total




-  14  632



—


—


—


—



-  14  632



—



-  14  632



—



-  14  632






Financial liabilities not carried at fair value:



 


 


 


 


 


 


 


 


 


 




Amounts owed to third parties


—


—


—


—


-  68  824


-  68  824


 


 


 


 




Other liabilities


—


—


—


—


-  2  591


-  2  591


 


 


 


 





Total



—


—


—


—



-  71  415




-  71  415



 


 


 


 





Total financial liabilities




-  14  632



—


—


—



-  71  415




-  86  047



 


 


 


 






















At 31 December 2013


Carrying amount


Fair value





In EUR ’000



Held for trading


Available-for-sale


Cash, loans and receivables


Held to maturity


Other financial liabilities


Total


Level 1


Level 2


Level 3


Total





Financial assets carried at fair value:



 


 


 


 


 


 


 


 


 


 




Derivative financial instruments


1  024


—


—


—


—


1  024


—


1  024


—


1  024




Venture Capital Funds


—


3 05  642


—


—


—


2 69  252


—


—


3 05  642


2 69  252




Direct Equity Investments


—


26  057


—


—


—


62  447


6  844


—


19  213


62  447





Total




1  024




3 31  699



—


—


—



3 32  723




6  844




1  024




3 24  855




3 32  723






Financial assets not carried at fair value:



 


 


 


 


 


 


 


 


 


 




Cash and cash equivalents


—


—


5 99  515


—


—


5 99  515


 


 


 


 




Loans and receivables


—


—


1 2 22  199


—


—


1 2 22  199


—


1 3 51  244


—


1 3 51  244




Bonds


—


—


—


1 02  562


—


1 02  562


1 02  549


—


—


1 02  549




Other assets


—


—


148


—


—


148


—


—


—


—





Total



—


—



1 8 21  862




1 02  562



—



1 9 24  424




1 02  549




1 3 51  244



—



1 4 53  793






Total financial assets




1  024




3 31  699




1 8 21  862




1 02  562



—



2 2 57  147



 


 


 


 





Financial liabilities carried at fair value:



 


 


 


 


 


 


 


 


 


 




Derivative financial instruments


-  3  545


—


—


—


—


-  3  545


—


-  3  545


—


-  3  545





Total




-  3  545



—


—


—


—



-  3  545



—



-  3  545



—



-  3  545






Financial liabilities not carried at fair value:



 


 


 


 


 


 


 


 


 


 




Amounts owed to third parties


—


—


—


—


- 3 31  235


- 3 31  235


 


 


 


 




Other liabilities


—


—


—


—


-  2  572


-  2  572


 


 


 


 





Total



—


—


—


—



- 3 33  807




- 3 33  807



 


 


 


 





Total financial liabilities




-  3  545



—


—


—



- 3 33  807




- 3 37  352



 


 


 


 




4.2.   Measurement of fair values

4.2.1.   
Valuation techniques and significant unobservable inputs


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









Valuation technique




Significant unobservable inputs




Relationship of unobservable inputs to fair value measurement






Financial instruments carried at fair value



 


 




Derivative financial instruments


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


Not applicable.


Not applicable.




Venture Capital Fund (VCF)


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


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


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




Direct Equity Investment


Adjusted net assets.


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


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




 


 


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


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





Financial instruments not carried at fair value



 


 




Loans and receivables


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


Not applicable.


Not applicable.




Amounts owed to third parties


Discounted cash flows.


Not applicable.


Not applicable.




Other liabilities


Discounted cash flows.


Not applicable.


Not applicable.




With the application of IFRS 13, valuation adjustments are included in the fair value of derivatives at 31 December 2014 and 2013, namely:






—


Credit valuation adjustments (CVA), reflecting counterparty credit risk on derivative transactions, amounting to EUR - 184 k as at 31 December 2014 and to EUR - 184 k as at 31 December 2013.










—


Debit valuation adjustments (DVA), reflecting own credit risk on derivative transactions, amounting to EUR + 30 k as at 31 December 2014 and EUR nil as at 31 December 2013.




The Facility’s policy is to recognise the transfers between Levels as of the date of the event or change in circumstances that caused the transfer.
4.2.2.   
Transfers between Level 1 and 2


In both 2014 and 2013 the Facility did not make transfers from Level 1 to 2 or Level 2 to 1 of the fair value hierarchy.
4.2.3.   
Level 3 fair values



Reconciliation of Level 3 fair values

The following tables present the changes in Level 3 instruments for the year ended 31 December 2014 and 31 December 2013:






In EUR ’000




Available-for-sale financial assets





Balance at 1 January 2014




3 24  855






Gains or losses included in profit or loss:



 










—


net realised gains on available-for-sale financial assets






8  109










—


impairment on available-for-sale financial assets






-  2  084





Total




6  025






Gains or losses included in other comprehensive income:



 










—


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






71  778





Total




71  778





Disbursements


42  646




Repayments


-  43  378





Balance at 31 December 2014




4 01  926














In EUR ’000




Available-for-sale financial assets





Balance at 1 January 2013




3 22  000






Gains or losses included in profit or loss:



 










—


net realised gains on available-for-sale financial assets






5  294










—


impairment on available-for-sale financial assets






-  2  701





Total




2  593






Gains or losses included in other comprehensive income:



 










—


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






4  299





Total




4  299





Disbursements


34  700




Repayments


-  38  737





Balance at 31 December 2013




3 24  855





In both 2014 and 2013 the Facility did not make transfers out or to Level 3 of the fair value hierarchy.

Sensitivity analysis

A +/- 10 percent change at the reporting date to one of the significant unobservable inputs used to measure the fair values of the Venture Capital Funds and Direct Equity Investments, holding other inputs constant, would have the following effects on the other comprehensive income:







At 31 December 2014


Increase


Decrease





(in EUR ’000)





Direct Equity Investments


31


- 31





Total




31




- 31















At 31 December 2013


Increase


Decrease





(in EUR ’000)





Venture Capital Funds


20


- 20




Direct Equity Investments


141


- 141





Total




161




- 161





5.   Cash and cash equivalents (in EUR ’000)

The cash and cash equivalents are composed of:







 


31.12.2014


31.12.2013




Cash in hand


9  642


1 94  107




Term deposits


4 15  757


4 05  408




Commercial papers


1 20  000


—





Cash and cash equivalents in the statement of financial position




5 45  399




5 99  515





Accrued interest


- 1


- 8





Cash and cash equivalents in the cash flow statement




5 45  398




5 99  507





6.   Derivative financial instruments (in EUR ’000)

The main components of derivative financial instruments, classified as held for trading, are as follows:








At 31 December 2014


Fair Value


Notional amount




Assets


Liabilities




Cross currency interest rate swaps


—


-  3  219


11  606




Interest rate swaps


448


- 564


44  749




FX swaps


—


-  10  849


1 0 59  000





Total derivative financial instruments




448




-  14  632




1 1 15  355
















At 31 December 2013


Fair Value


Notional amount




Assets


Liabilities




Cross currency swaps


56


—


2  067




Cross currency interest rate swaps


44


-  2  035


16  461




Interest rate swaps


924


—


43  335




FX swaps


—


-  1  510


7 00  000





Total derivative financial instruments




1  024




-  3  545




7 61  863





7.   Loans and receivables (in EUR ’000)

The main components of loans and receivables are as follows:









 


Global loans (31)



Senior loans


Subordinated loans


Total





Nominal as at 1 January 2014




3 42  113




8 06  007




1 31  632




1 2 79  752





Disbursements


2 16  672


31  654


—


2 48  326




Repayments


-  58  417


- 1 07  794


- 367


- 1 66  578




Interest capitalised


—


—


11  915


11  915




Foreign exchange rates differences


42  138


52  696


3  463


98  297





Nominal as at 31 December 2014




5 42  506




7 82  563




1 46  643




1 4 71  712






Impairment as at 1 January 2014




-  7  675




-  12  734




-  50  382




-  70  791





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


—


—


-  79  249


-  79  249




Reversal of impairment


2  586


907


—


3  493




Foreign exchange rates differences


- 662


-  1  664


-  3  264


-  5  590





Impairment as at 31 December 2014




-  5  751




-  13  491




- 1 32  895




- 1 52  137





Amortised Cost


-  2  562


-  5  125


28


-  7  659




Interest


7  407


11  930


665


20  002





Loans and receivables as at 31 December 2014




5 41  600




7 75  877




14  441




1 3 31  918

















 


Global loans (32)



Senior loans


Subordinated loans


Total





Nominal as at 1 January 2013




2 54  686




7 89  970




1 33  780




1 1 78  436





Disbursements


1 50  513


91  690


—


2 42  203




Repayments


-  51  595


-  55  865


-  11  700


- 1 19  160




Interest capitalised


—


- 342


10  705


10  363




Foreign exchange rates differences


-  11  491


-  19  446


-  1  153


-  32  090





Nominal as at 31 December 2013




3 42  113




8 06  007




1 31  632




1 2 79  752






Impairment as at 1 January 2013




-  6  494




-  14  296




-  24  355




-  45  145





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


-  1  341


—


-  27  081


-  28  422




Reversal of impairment


—


1  088


—


1  088




Foreign exchange rates differences


160


474


1  054


1  688





Impairment as at 31 December 2013




-  7  675




-  12  734




-  50  382




-  70  791





Amortised Cost


-  2  109


-  3  883


- 66


-  6  058




Interest


5  154


10  536


3  606


19  296





Loans and receivables as at 31 December 2013




3 37  483




7 99  926




84  790




1 2 22  199





8.   Available-for-sale financial assets (in EUR ’000)

The main components of available-for-sale financial assets are as follows:








 


Venture Capital Funds


Direct Equity Investments


Total





Cost as at 1 January 2014




2 56  161




23  620




2 79  781





Disbursements


41  990


656


42  646




Repayments/sales


-  38  535


-  4  843


-  43  378




Foreign exchange rates differences on repayments/sales


168


281


449





Cost as at 31 December 2014




2 59  784




19  714




2 79  498






Unrealised gains and losses as at 1 January 2014




71  931




6  260




78  191





Net change in unrealised gains and losses


78  064


- 133


77  931





Unrealised gains and losses as at 31 December 2014




1 49  995




6  127




1 56  122






Impairment as at 1 January 2014




-  22  450




-  3  823




-  26  273





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


-  2  084


-  4  178


-  6  262





Impairment as at 31 December 2014




-  24  534




-  8  001




-  32  535






Available-for-sale financial assets as at 31 December 2014




3 85  245




17  840




4 03  085
















 


Venture Capital Funds


Direct Equity Investments


Total





Cost as at 1 January 2013




2 58  426




24  238




2 82  664





Disbursements


33  600


1  100


34  700




Repayments/sales


-  37  361


-  1  376


-  38  737




Foreign exchange rates differences on repayments/sales


1  496


- 342


1  154





Cost as at 31 December 2013




2 56  161




23  620




2 79  781






Unrealised gains and losses as at 1 January 2013




59  234




9  200




68  434





Net change in unrealised gains and losses


12  697


-  2  940


9  757





Unrealised gains and losses as at 31 December 2013




71  931




6  260




78  191






Impairment as at 1 January 2013




-  14  345




-  3  752




-  18  097





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


-  8  105


- 71


-  8  176





Impairment as at 31 December 2013




-  22  450




-  3  823




-  26  273






Available-for-sale financial assets as at 31 December 2013




3 05  642




26  057




3 31  699





9.   Amounts receivable from contributors (in EUR ’000)

The main components of amounts receivable from contributors are as follows:







 


31.12.2014


31.12.2013




Member States contribution called but not paid


42  590


—





Total amounts receivable from contributors




42  590



—




10.   Held-to-maturity financial assets (in EUR ’000)

The held-to-maturity portfolio is composed of quoted bonds which have a remaining maturity of less than three months at reporting date. The following table shows the movements of the held-to-maturity portfolio:







Balance as at 1 January 2014




1 02  562





Acquisitions


1 6 10  057




Maturities


-  1 6 12  619




Change in amortisation of premium/discount


- 12





Balance as at 31 December 2014




99  988















Balance as at 1 January 2013




99  029





Acquisitions


6 80  635




Maturities


- 6 76  369




Change in amortisation of premium/discount


228




Change in accrued interest


- 961





Balance as at 31 December 2013




1 02  562





11.   Other assets (in EUR ’000)

The main components of other assets are as follows:







 


31.12.2014


31.12.2013




Amount receivable from EIB


5  447


6




Financial guarantees


75


142




Amounts receivable with regard to TA disbursements (Note 21)


—


337




Impairment on amounts receivable with regard to TA disbursements (Note 21)


—


- 337





Total other assets




5  522




148





12.   Deferred income (in EUR ’000)

The main components of deferred income are as follows:







 


31.12.2014


31.12.2013




Deferred interest subsidies


30  750


34  787




Deferred commissions on loans and receivables


560


296





Total deferred income




31  310




35  083





13.   Amounts owed to third parties (in EUR ’000)

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







 


31.12.2014


31.12.2013




Net general administrative expenses payable to EIB


38  348


37  851




Other amounts payable to EIB


44


716




Interest subsidies and TA not yet disbursed owed to Member States


30  432


2 92  668





Total amounts owed to third parties




68  824




3 31  235





14.   Other liabilities (in EUR ’000)

The main components of other liabilities are as follows:







 


31.12.2014


31.12.2013




Loan repayments received in advance


1  973


1  827




Deferred income from interest subsidies


542


603




Financial guarantees


76


142





Total other liabilities




2  591




2  572





15.   Member States Contribution called (in EUR ’000)










Member States


Contribution to the Facility


Contribution to interest subsidies and technical assistance (33)



Total contributed


Called and not paid (34)





Austria


54  511


3  808


58  319


1  205




Belgium


80  634


5  633


86  267


1  765




Bulgaria


—


—


—


70




Cyprus


—


—


—


45




Czech Republic


—


—


—


255




Denmark


44  020


3  075


47  095


1  000




Estonia


—


—


—


25




Finland


30  444


2  127


32  571


735




France


4 99  851


34  917


5 34  768


9  775




Germany


4 80  515


33  566


5 14  081


10  250




Greece


25  713


1  796


27  509


735




Hungary


—


—


—


275




Ireland


12  753


891


13  644


455




Italy


2 57  948


18  019


2 75  967


6  430




Latvia


—


—


—


35




Lithuania


—


—


—


60




Luxembourg


5  965


417


6  382


135




Malta


—


—


—


15




Netherlands


1 07  375


7  500


1 14  875


2  425




Poland


—


—


—


650




Portugal


19  953


1  394


21  347


575




Romania


—


—


—


185




Slovakia


—


—


—


105




Slovenia


—


—


—


90




Spain


1 20  129


8  391


1 28  520


3  925




Sweden


56  156


3  923


60  079


1  370




United Kingdom


2 61  033


18  234


2 79  267


—





Total as at 31 December 2014




2 0 57  000




1 43  691




2 2 00  691




42  590






Total as at 31 December 2013




1 6 61  309




4 33  691




2 0 95  000



—




16.   Contingent liabilities and commitments (in EUR ’000)








 


31.12.2014


31.12.2013






Commitments




 


 




Un-disbursed loans


1 1 61  859


8 89  866




Un-disbursed commitment in respect of available-for-sale financial assets


2 00  637


1 76  821




Issued guarantees


2  298


4  414




Interest subsidies and technical assistance


2 85  239


2 22  588






Contingent liabilities




 


 




Signed non-issued guarantees


25  000


25  000





Total contingent liabilities and commitments




1 6 75  033




1 3 18  689





17.   Interest and similar income and expenses (in EUR ’000)

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







 


From 01.01.2014


From 01.01.2013




 


to 31.12.2014


to 31.12.2013




Cash and cash equivalents


543


273




Held-to-maturity financial assets


276


461




Loans and receivables


72  135


64  512




Interest subsidies


4  286


4  347





Total interest and similar income




77  240




69  593





The main component of interest and similar expenses is as follows:







 


From 01.01.2014


From 01.01.2013




 


to 31.12.2014


to 31.12.2013




Derivative financial instruments


-  1  522


-  1  175





Total interest and similar expense




-  1  522




-  1  175





18.   Fee and commission income and expenses (in EUR ’000)

The main component of fee and commission income are as follows:







 


From 01.01.2014


From 01.01.2013




 


to 31.12.2014


to 31.12.2013




Fee and commission on loans and receivables


316


2  573




Fee and commission on financial guarantees


78


145




Other


769


10





Total fee and commission income




1  163




2  728





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







 


From 01.01.2014


From 01.01.2013




 


to 31.12.2014


to 31.12.2013




Commission paid to third parties with regard to available-for-sale financial assets


- 37


- 43





Total fee and commission expenses




- 37




- 43





19.   Net realised gains on available-for-sale financial assets (in EUR ’000)

The main components of net realised gains on available-for-sale financial assets are as follows:







 


From 01.01.2014


From 01.01.2013




 


to 31.12.2014


to 31.12.2013




Net proceeds from available-for-sale financial assets


3  179


2  688




Dividend income


4  930


2  606





Net realised gains on available-for-sale financial assets




8  109




5  294





20.   General administrative expenses (in EUR ’000)

General administrative expenses represent the actual costs incurred by the EIB for managing the Facility less income generated from standard appraisal fees directly charged by the EIB to clients of the Facility.







 


From 01.01.2014


From 01.01.2013




 


to 31.12.2014


to 31.12.2013




Actual cost incurred by the EIB


-  40  912


-  40  966




Income from appraisal fees directly charged to clients of the Facility


2  784


3  115





Total general administrative expenses




-  38  128




-  37  851





Following the entry in force of the revised Cotonou Partnership Agreement on the 1 July 2008, general administrative expenses are not covered anymore by the Member States.
21.   Impairment on other assets (in EUR ’000)

During 2012 the Facility made a technical assistance payment amounting to EUR 638 which due to fraudulent behaviour of the counterparty did not reach the final beneficiary. Following legal interventions, the Facility could recover EUR 301 and the remaining amount outstanding of EUR 337 was recorded as impairment in the Facility’s comprehensive income.
In 2014 the outstanding amount of EUR 337 was allocated to the interest rate subsidies and technical assistance envelope of the Facility and was recorded as other income in the Facility’s statement of profit or loss and other comprehensive income.
22.   Involvement with unconsolidated structured entities (in EUR ’000)


Definition of a structured entity

A structured entity is one that has been designed so that voting or similar rights are not the dominant factor in deciding, who controls the-entity. IFRS 12 observes that a structured entity often has some or all of the following features:






—


Restricted activities;










—


A narrow and well-defined objective, such as to effect a tax-efficient lease, carry out research and development activities, provide a source of capital or funding to an entity or provide investment opportunities for investors by passing on risks and rewards associated with the assets of the structured entity to investors;










—


Insufficient equity to permit the structured entity to finance its activities without subordinated financial support;










—


Financing in the form of multiple contractually linked instruments to investors that create concentrations of credit or other risks (tranches).





Unconsolidated structured entities

The term ‘unconsolidated structured entities’ refers to all structured entities that are not controlled by the Facility and includes interests in structured entities that are not consolidated.

Definition of Interests in structured entities:

IFRS 12 defines ‘interests’ broadly to include any contractual or non-contractual involvement that exposes the reporting entity to variability in returns from the performance of the entity. Examples of such interests include the holding of equity interests and other forms of involvement such as the provision of funding, liquidity support, credit enhancements, commitments and guarantees to the other entity. IFRS 12 states that a reporting entity does not necessarily have an interest in another entity solely because of a typical customer supplier relationship.
The table below describes the types of structured entities that the Facility does not consolidate but in which it holds an interest.







Type of structured entity


Nature and purpose


Interest held by the Facility




Project Finance — lending to Special Purposes Vehicles (‘SPV’)


Project Finance Transactions (PF Operations) are transactions where the Facility relies for the servicing of its debt on a borrower whose sole or main source of revenue is generated by a single or limited number of assets being financed by such debt or other pre-existing assets contractually linked to the project. PF operations are often financed through SPV.


Net disbursed amounts
Interest income




Venture capital operations


The Facility finances venture capital and investment funds. Venture capital and investment funds pool and manage money from investors seeking private equity stakes in small and medium-size enterprises with strong growth potential as well as financing infrastructure projects.


Investments in units/shares issued by the venture capital entity;
Dividends received as dividend income;




The table below shows the carrying amounts of unconsolidated structured entities in which the Facility has an interest at the reporting date, as well as the Facility’s maximum exposure to loss in relation to those entities. The maximum exposure to loss includes the carrying amounts and the related un-disbursed commitments.








Type of structured entity


Caption


Carrying amount at 31.12.2014


Maximum exposure to loss at 31.12.2014




Project finance operations


Loans and receivables


7  225


7  225




Venture capital funds


Available-for-sale financial assets


3 85  245


5 55  629





Total



 



3 92  470




5 62  854





23.   Subsequent events

There have been no material post balance sheet events which could require disclosure or adjustment to the 31 December 2014 financial statements.


(1)  OJ L 210, 6.8.2013, p. 1.

(2)  The creation of the Bridging Facility had been first proposed as an article of the 11th EDF Implementation Regulation (COM(2013)445). The Commission however has proposed, as an alternative, the creation of the Bridging Facility by a specific Council decision (Proposal for a Council decision regarding transitional EDF management measures from 1 January 2014 until the entry into force of the 11th EDF European Development Fund, COM(2013)663).

(3)  Council Regulation (EC) No 215/2008 of 18 February 2008 on the Financial Regulation applicable to the 10th EDF (OJ L 78, 19.2.2008, p. 1).

(4)  Council Regulation (EU) No 567/2014 of 26 May 2014 amending Regulation (EC) No 215/2008 on the Financial Regulation applicable to the 10th EDF as regards the application of the transition period between the 10th EDF and the 11th EDF until the entry into force of the 11th EDF Internal Agreement (OJ L 157, 27.5.2014, p. 52).

(5)  Council Regulation (EU) 2015/323 of 2 March 2015 on the financial regulation applicable to the 11th European Development Fund (OJ L 58, 3.3.2015, p. 17).

(6)  Council Regulation (EU) 2015/322 of 2 March 2015 on the implementation of the 11th European Development Fund (OJ L 58, 3.3.2015, p. 1).

(7)  Council Regulation (EU) No 567/2014 of 26 May 2014 amending Regulation (EC) No 215/2008 on the Financial Regulation applicable to the 10th EDF as regards the application of the transition period between the 10th EDF and the 11th EDF until the entry into force of the 11th EDF Internal Agreement. OJ L 157, 27.5.2014, Article 43.

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


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

(10)  Current receivables excluding receivables relating to ordinary contributions and co-financing.


(11)  Current liabilities excluding liabilities relating to ordinary contributions and co-financing.


(12)  In accordance with Article 59 of the Financial Regulation applicable to the transition period between the 10th European Development Fund and the 11th European Development Fund until the entry into force of the 11th European Development Fund Internal Agreement, the treasury is presented in the balance sheet of the 11th EDF.

(13)  In accordance with Article 59 of the Financial Regulation applicable to the transition period between the 10th European Development Fund and the 11th European Development Fund until the entry into force of the 11th European Development Fund Internal Agreement, the treasury is presented in the balance sheet of the 11th EDF. The nature of the various bank accounts is outlined in chapter 5, Financial Risk Management.

(14)  This balance represents the amounts available for the Democratic Republic of the Congo in accordance with the provisions of Council Decision 2003/583/EC7.

(15)  OJ L 156, 29.5.1998, p. 3.

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

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

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

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

(20)  Following Council Decision 2010/406/EU, 150 million was added from non-mobilisable performance reserve 10th EDF for Sudan (147 million to special allocation Sudan and 3 million to implementation costs).

(21)  Following Council Decision 2011/315/EU, 200 million was added from non-mobilisable performance reserve 10th EDF for Sudan (194 million to special allocation South Sudan and 6 million to implementation costs).

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

(23)  Transfers in/from the 10th EDF reserves

(24)  For the cofinancings, the table only presents the commitment appropriations.

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

(26)  Initial appropriations on the Bridging Facility originate from transfers non-mobilisable reserves of the 8th and 9th EDF for EUR 1  372,5 million and from transfers from the non-mobilisable reserves of the 10th EDF for 224,7 million euros, for a total of 1,597 million euros for both ACP and OCT.

(27)  Transfer of initial appropriations from the Bridging Facility to other instruments of the 11th EDF for a total of EUR 1  488 million (for both ACP and OCT)

(28)  In addition to transfers from the Bridging Facility, other instruments from the 11th EDF are fed by direct transfers from previous EDF (from Envelope A Stabex 10th EDF, Interests and Other Receipts) for EUR 16,56 million and from Revenue Increasing Budget (RO) for EUR 2,1 million.

(29)  Non-mobilisable reserves are the results of transfers (decommitments) from the 10th EDF non-mobilisable performance reserve for EUR 225 million which are directly transferred to the Bridging Facility (224,7 million) and to other instruments from 11 EDF (0,8 million).

(30)  % of appropriations

(31)  Including agency agreements

(32)  Including agency agreements

(33)  During 2014 Member States’ contributions to interest subsidies and TA of EUR 2 90  000 under the 9th EDF, earmarked as pre-financing the interest subsidies and TA under the 10th EDF, were reallocated to contribution to the Facility.

(34)  On 10 November 2014, the Council fixed the amount of financial contributions to be paid by each Member State by 21 January 2015.