COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS ANNUAL ACCOUNTS OF THE EUROPEAN DEVELOPMENT FUND 2014
Date: 2015-07-23
Institutions: Directorate-General for Budget, European Commission
Subjects: European Development Fund, audit, balance sheet, closing of accounts, consolidated account, implementation of the budget

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 23.7.2015  COM(2015) 379 final   COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS   ANNUAL ACCOUNTS OF THE EUROPEAN DEVELOPMENT FUND 2014  
 
 
Annual accounts of the  

European Development 

Fund 2014 

1 

 
 
 
 
 
 
CONTENTS 

CERTIFICATION OF THE ACCOUNTS .................................................................... 4 

IMPLEMENTING AND ACCOUNTING FOR THE EDF RESOURCES ................................ 5 

FINANCIAL STATEMENTS AND EXPLANATORY NOTES - FUNDS MANAGED BY THE 
EUROPEAN COMMISSION .................................................................................. 8 

FINANCIAL STATEMENTS OF THE EDF ............................................................ 10 

NOTES TO THE FINANCIAL STATEMENTS OF THE EDF ....................................... 19 

FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND ..................................... 46 

NOTES TO THE FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND ................ 53 

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE BÊKOU TRUST 
FUND ......................................................................................................... 55 

EDF REPORT ON FINANCIAL IMPLEMENTATION ................................................ 59 

FINANCIAL STATEMENTS AND EXPLANATORY NOTES – FUNDS MANAGED BY THE 
EUROPEAN INVESTMENT BANK ......................................................................... 74 

2 

 
 
 
 
Annual accounts of the European Development Fund 2014 

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 

4 

 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

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  2014-2020,  the  geographic  aid  granted  to  ACP  States  and  OCTs  will  continue  to  be 
mainly funded by the EDF. Each EDF is usually concluded for a period of around five years. 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  20131.  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  Regulation3  was  amended  and  the  new  Financial  Regulation 
applicable  to  the  transition  period  was  adopted4.  They  entered  into  force  on  30  May  2014.  On  2  March 
2015  the  Council  adopted  the  11th  EDF  Financial  Regulation5  and  the  Implementation  Rules6.  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 

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. 17–38. 
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. 1–16. 

5 

 
 
                                                            
Annual accounts of the European Development Fund 2014 

Facility  are  included  as  a  separate  part  of  the  annual  accounts  (part  II)  to  provide  a  full  picture  of  the 
development aid of the EDF7. 

2.  HOW IS THE EDF FUNDED? 

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

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, Art. 43. 

6 

 
 
                                                            
Annual accounts of the European Development Fund 2014 

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. 

7 

 
 
 
Annual accounts of the European Development Fund 2014 

EUROPEAN DEVELOPMENT FUND 
FINANCIAL YEAR 2014 

FINANCIAL STATEMENTS AND 
EXPLANATORY NOTES - FUNDS MANAGED 
BY THE EUROPEAN COMMISSION 

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

8 

 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

CONTENTS 

FINANCIAL STATEMENTS OF THE EDF ............................................................ 10 

EDF BALANCE SHEET ................................................................................ 11 

EDF STATEMENT OF FINANCIAL PERFORMANCE ............................................ 12 

EDF CASHFLOW STATEMENT ...................................................................... 13 

EDF STATEMENT OF CHANGES IN NET ASSETS ............................................. 14 

BALANCE SHEET BY EDF ............................................................................ 15 

STATEMENT OF FINANCIAL PERFORMANCE BY EDF ....................................... 16 

STATEMENT OF CHANGES IN NET ASSETS BY EDF ........................................ 17 

NOTES TO THE FINANCIAL STATEMENTS OF THE EDF .................................... 19 

FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND ..................................... 46 

CERTIFICATION OF THE ACCOUNTS ............................................................ 47 

BACKGROUND INFORMATION ON THE BÊKOU TRUST FUND ............................ 48 

BÊKOU TRUST FUND BALANCE SHEET ......................................................... 49 

BÊKOU TRUST FUND STATEMENT OF FINANCIAL PERFORMANCE ..................... 50 

BÊKOU TRUST FUND CASHFLOW STATEMENT ............................................... 51 

BÊKOU TRUST FUND STATEMENT OF CHANGES IN NET ASSETS ...................... 52 

NOTES TO THE FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND ............. 53 

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE BÊKOU TRUST 
FUND ......................................................................................................... 55 

CONSOLIDATED BALANCE SHEET ............................................................... 56 

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE ........................... 57 

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS ............................ 58 

EDF REPORT ON FINANCIAL IMPLEMENTATION ................................................ 59 

9 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

FINANCIAL STATEMENTS OF THE EDF 

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

10 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

EDF BALANCE SHEET 

Note 

31.12.2014 

31.12.2013 

 EUR millions 

NON-CURRENT ASSETS 
Pre-financing 
Trust Fund contributions 

CURRENT ASSETS 
Pre-financing 
Receivables 
Cash and cash equivalents  

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Payables 

CURRENT LIABILITIES 
Payables 

TOTAL LIABILITIES 

NET ASSETS 

FUNDS & RESERVES 
Called fund capital - active EDFs 
Called fund capital from closed EDFs carried forward 
Economic result carried forward from previous years 
Economic result of the year 
NET ASSETS 

2.1 
2.2 

2.3 
2.4 
2.6 

2.7 

2.8 

2.9 
2.10 

 472 
 39 

 511 

1 403 
 84 
 391 

1 878 
2 389 

 (34) 

 (34) 

 424 
– 

 424 

1 286 
 84 
 759 

2 128 
2 553 

 (25) 

 (25) 

(1 423) 

(1 423) 
(1 457) 

(1 214) 

(1 214) 
(1 239) 

 932 

1 313 

35 673 
2 252 
(33 468) 
(3 526) 
 932 

32 529 
2 252 
(30 396) 
(3 072) 
1 313 

11 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

EDF STATEMENT OF FINANCIAL PERFORMANCE 

OPERATING REVENUE 

OPERATING EXPENSES 
Operating expenses 
Administrative expenses 

Note 
3.2 

3.3 
3.4 

2014 
 132 

(3 650) 
 (22) 

(3 671) 

EUR millions 

2013 
 123 

(3 027) 
 (167) 

(3 194) 

SURPLUS/(DEFICIT) FROM OPERATING 
ACTIVITIES 

(3 539) 

(3 072) 

Financial revenue 
Financial charges 
SURPLUS/(DEFICIT) FROM FINANCIAL ACTIVITIES 

3.5 

 13 
 (0) 
 13 

 0 
 0 
 0 

ECONOMIC RESULT OF THE YEAR 

(3 526) 

(3 072) 

12 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

EDF CASHFLOW STATEMENT 

Note 

2014 
(3 526) 

EUR millions 

2013 
(3 072) 

Economic result of the year 
OPERATING ACTIVITIES 
Ordinary contributions from Member States 
Co-financing contributions 
(Reversal of) impairment losses on receivables 
(Increase)/decrease in non-current pre-financing 
(Increase)/decrease in Trust Fund contributions 
(Increase)/decrease in current pre-financing 
(Increase)/decrease in current receivables* 
Increase/(decrease) in non-current liabilities 
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 

2.5 
2.5 

3 068 
66 
14 
 (47) 
 (39) 
 (117) 
 (22) 
9 
227 

 (368) 

 (368) 

 759 
 391 

2 961 
 18 
 (2) 
 14 
– 
 48 
 (7) 
 (15) 
 123 

 69 

 69 

 690 
 759 

* Current receivables excluding receivables relating to ordinary contributions and co-financing. 
** Current liabilities excluding liabilities relating to ordinary contributions and co-financing 

13 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EDF STATEMENT OF CHANGES IN NET ASSETS 

Annual accounts of the European Development Fund 2014 

Fund capital - 
active EDFs (A) 

Uncalled funds 
- active EDFs 
(B) 

BALANCE AS AT 31.12.2012 
Capital increase - ordinary contributions 
Economic result of the year 
BALANCE AS AT 31.12.2013 
Capital increase - ordinary contributions 
Economic result of the year 
BALANCE AS AT 31.12.2014 

45 691 
– 
– 
45 691 
– 
– 
45 691 

16 112 
(2 950) 
– 
13 162 
(3 144) 
– 
10 018 

Called fund 
capital - active 
EDFs (C) = 
(A)-(B) 
29 579 
2 950 
– 
32 529 
3 144 
– 
35 673 

Cumulative 
Reserves (D) 

(30 396) 
– 
(3 072) 
(33 468) 
– 
(3 526) 
(36 994) 

Called fund capital 
from closed EDFs 
carried forward 
(E) 
2 252 
– 
– 
2 252 
– 
– 
2 252 

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

1 435 
2 950 
(3 072) 
1 313 
3 144 
(3 526) 
 932 

14 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

BALANCE SHEET BY EDF 

31.12.2014 

31.12.2013 

 EUR millions 

Note 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF 

Eighth EDF 

Ninth EDF 

10th EDF 

11th EDF 

NON-CURRENT ASSETS 
Pre-financing 
Trust Fund contributions 

CURRENT ASSETS 
Pre-financing 
Receivables 
Liaison accounts 
Cash and cash equivalents 

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Payables 

CURRENT LIABILITIES 
Payables 
Liaison accounts 

TOTAL LIABILITIES 

2.1 
2.2 

2.3 
2.4 
2.5 
2.6 

2.7 

2.8 
2.5 

– 
– 
– 

 5 
 3 
 216 
– 
 224 
 224 

– 
– 

 (10) 
– 
 (10) 
 (10) 

 17 
– 
 17 

 142 
 66 
 810 
– 
1 018 
1 035 

 411 
– 
 411 

1 178 
 15 
– 
– 
1 193 
1 604 

– 
– 

 (34) 
 (34) 

 (175) 
– 
 (175) 
 (175) 

(1 195) 
(1 633) 
(2 828) 
(2 862) 

 44 
 39 
 83 

 77 
 0 
 607 
 391 
1 076 
1 159 

– 
– 

 (43) 
– 
 (43) 
 (43) 

– 

– 

 5 
 2 
 290 
– 
 297 
 297 

– 
– 

 (28) 
– 
 (28) 
 (28) 

 90 

 90 

 259 
 58 
1 323 
– 
1 640 
1 730 

 334 

 334 

1 021 
 24 
– 
 759 
1 804 
2 138 

– 
– 

 (25) 
 (25) 

 (263) 
– 
 (263) 
 (263) 

 (923) 
(1 613) 
(2 536) 
(2 561) 

NET ASSETS 

 214 

 860 

(1 258) 

1 116 

 270 

1 467 

 (423) 

FUNDS & RESERVES 
Called fund capital - active EDFs 
Called fund capital from closed 
EDFs carried forward 
Called fund capital transfers 
between active EDFs 
Economic result carried forward 
from previous years 
Economic result of the year 

NET ASSETS 

2.9 
2.10 

12 840 
 627 

11 699 
1 625 

11 134 
– 

– 
– 

12 840 
 627 

11 699 
1 625 

7 990 
– 

2.11 

(3 147) 

1 758 

 (209) 

1 597 

(3 083) 

2 130 

 952 

(10 114) 

(13 988) 

(9 356) 

 (10) 

(10 125) 

(13 658) 

(6 614) 

 8 
 214 
 214 

 (235) 
 860 
 860 

(2 828) 
(1 258) 
(1 258) 

 (472) 
1 116 
1 116 

 10 
 270 
 270 

 (331) 
1 467 
1 467 

(2 751) 
 (423) 
 (423) 

15 

– 

– 

– 
– 
– 
– 
– 
– 

– 
– 

– 
– 
– 
– 

– 

– 
– 

– 

– 
– 
– 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENT OF FINANCIAL PERFORMANCE BY EDF 

Annual accounts of the European Development Fund 2014 

2014 

2013 

EUR millions 

Note 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF 

Eighth EDF 

Ninth EDF 

10th EDF 

11th EDF 

3.2 

3.3 
3.4 

3.5 

OPERATING REVENUE 

OPERATING EXPENSES 
Operating expenses 
Administrative expenses 

SURPLUS/(DEFICIT) FROM 
OPERATING ACTIVITIES 

Financial revenue 
Financial charges 
SURPLUS/(DEFICIT) FROM 
FINANCIAL ACTIVITIES 

ECONOMIC RESULT OF THE 
YEAR 

 9 

 43 

 79 

 1 

 64 

 34 

 25 

 (1) 
– 
 (1) 
 8 

 0 
– 
 0 

 (293) 
 0 
 (293) 
 (249) 

(2 881) 
 (22) 
(2 903) 
(2 824) 

 (475) 
– 
 (475) 
 (474) 

 15 
– 
 15 

 (3) 
 (0) 
 (4) 

 2 
– 
 2 

 (53) 
– 
 (53) 
 11 

 (0) 
– 
 (0) 

 (362) 
 (0) 
 (362) 
 (328) 

(2 612) 
 (167) 
(2 779) 
(2 754) 

 (3) 
– 
 (3) 

 3 
 0 
 3 

 8 

 (235) 

(2 828) 

 (472) 

 10 

 (331) 

(2 751) 

– 

– 
– 
– 
– 

– 
– 
– 

– 

16 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENT OF CHANGES IN NET ASSETS BY EDF 

Annual accounts of the European Development Fund 2014 

Eighth EDF 

BALANCE AS AT 31.12.2012 
Capital increase - ordinary contributions 
Transfer to/from the 10th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2013 
Capital increase - ordinary contributions 
Transfer to/from the 10th EDF 
Transfer to/from the 11th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2014 

Ninth EDF 

Fund capital - 
active EDFs 
(A) 

Uncalled funds 
- active EDFs 
(B) 

Cumulative 
Reserves 
(D) 

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

Called fund 
capital from 
closed EDFs 
carried forward 
(E) 

12 840 
– 

12 840 
– 

12 840 

– 
– 

– 
– 

– 

12 840 
– 
– 
– 
12 840 
– 
– 
– 
– 
12 840 

(10 125) 

 627 

 10 
(10 114) 

 8 
(10 107) 

 627 

(3 083) 

– 
– 

 (64) 
– 

 627 

(3 147) 

Fund capital - 
active EDFs 
(A) 

Uncalled funds 
- active EDFs 
(B) 

Cumulative 
Reserves 
(D) 

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

Called fund 
capital from 
closed EDFs 
carried forward 
(E) 

BALANCE AS AT 31.12.2012 
Capital increase - ordinary contributions 
Transfers to/from the 10th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2013 
Capital increase - ordinary contributions 
Transfers to/from the 10th EDF 
Transfers to/from the 11th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2014 

11 699 
– 

11 699 
– 

11 699 

11 699 
– 
– 
– 
11 699 
– 
– 
– 
– 
11 699 

– 
– 

– 
– 

– 

17 

(13 657) 

1 625 

 (331) 
(13 988) 

 (235) 
(14 223) 

1 625 

2 130 

 (372) 

1 625 

1 758 

Called fund 
capital 
transfers 
between 
active 
EDFs (F) 
(2 980) 

 (102) 

Called fund 
capital 
transfers 
between 
active 
EDFs (F) 
2 501 

 (371) 

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

 361 
– 
 (102) 
 10 
 270 
– 
 (64) 
– 
 8 
 214 

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

2 168 
– 
 (371) 
 (331) 
1 467 
– 
 (372) 
– 
 (235) 
 860 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10th EDF 

BALANCE AS AT 31.12.2012 
Capital increase - ordinary contributions 
Transfers to/from the eighth and ninth EDF 
Economic result of the year 
BALANCE AS AT 31.12.2013 
Capital increase - ordinary contributions 
Transfers to/from the eighth and ninth EDF 
Transfers to/from the 11th EDF 
Transfer of economic result carried forward - 
treasury - from the 10th EDF to the 11th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2014 

Annual accounts of the European Development Fund 2014 

Fund capital - 
active EDFs 
(A) 

Uncalled funds 
- active EDFs 
(B) 

Cumulative 
Reserves 
(D) 

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

Called fund 
capital from 
closed EDFs 
carried forward 
(E) 

21 152 
– 

21 152 
– 

16 112 
(2 950) 

13 162 
(3 144) 

5 040 
2 950 
– 
– 
7 990 
3 144 
– 
– 

(6 614) 

(2 751) 
(9 365) 

 10 

– 

– 

Called fund 
capital 
transfers 
between 
active 
EDFs (F) 
 479 

 473 

 952 

 (936) 
 (225) 

21 152 

10 018 

– 
11 134 

(2 828) 
(12 183) 

– 

 (209) 

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

(1 095) 
2 950 
 473 
(2 751) 
 (423) 
3 144 
 (936) 
 (225) 
 10 

(2 828) 
(1 258) 

11th EDF 

Fund capital - 
active EDFs 
(A) 

Uncalled funds 
- active EDFs 
(B) 

Cumulative 
Reserves 
(D) 

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

Called fund 
capital from 
closed EDFs 
carried forward 
(E) 

Called fund 
capital 
transfers 
between 
active 
EDFs (F) 

EUR millions 
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 
Transfer of economic result carried forward - 
treasury - from the 10th EDF to the 11th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2014 

– 
– 

– 
– 

– 

– 
– 
– 
– 
– 
– 
– 

– 
– 

– 

– 
– 

 (10) 

 (472) 
 (482) 

– 

– 

– 

1 597 

1 597 

– 
– 
– 
– 
– 
– 
1 597 
 (10) 

 (472) 
1 116 

– 
– 

– 
– 

– 

18 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

NOTES TO THE FINANCIAL STATEMENTS 
OF THE EDF 

19 

 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

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 
BGN 
CZK 
DKK 
GBP 
HRK 
HUF 
LVL 

31.12.2014 
1.9558 
27.7350 
7.4453 
0.7789 
7.6580 
315.5400 
- 

31.12.2013 
1.9558 
27.4270 
7.4593 
0.8337 
7.6265 
297.0400 
0.7028 

Currency 
LTL 
PLN 
RON 
SEK 
CHF 
JPY 
USD 

31.12.2014 
3.4528 
4.2732 
4.4828 
9.3930 
1.2024 
145.2300 
1.2140 

31.12.2013 
3.4528 
4.1543 
4.4710 
8.8591 
1.2276 
144.7200 
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. 

20 

 
 
 
Annual accounts of the European Development Fund 2014 

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 
Buildings 
Plant, machinery and equipment 
Furniture 
Fixtures and fittings 
Vehicles 
Computer hardware 
Other tangible assets 

Straight line depreciation rate 

4%  
10% to 25% 
10% to 25% 
10% to 33% 
25% 
25% 
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 

21 

 
 
 
Annual accounts of the European Development Fund 2014 

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 

22 

 
 
 
Annual accounts of the European Development Fund 2014 

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. 

23 

 
 
 
 
Annual accounts of the European Development Fund 2014 

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. 

24 

 
 
 
Annual accounts of the European Development Fund 2014 

2.  NOTES TO THE BALANCE SHEET 

NON-CURRENT ASSETS

2.1.  PRE-FINANCING 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF 

Pre-financing 
Total 

– 
– 

 17 
 17 

 411 
 411 

 44 
 44 

EUR millions 

Total 
31.12.2014 
 472 
 472 

Total 
31.12.2013 
 424 
 424 

Direct Management 
Implemented by: 
Commission 
EU executive agencies 
EU delegations 

Indirect Management 
Implemented by : 

Third countries 
International organisations 
EIB and EIF 
Public law bodies 
Private law bodies with a public service mission 

Total 

EUR millions 
Total  
31.12.2014 
 72 

 47 
 3 
 22 
 400 

 22 
 127 
 223 
 24 
 4 
 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 twelve 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. 

25 

 
 
 
 
 
 
 
 
 
  
 
 
 
 
  
 
 
Annual accounts of the European Development Fund 2014 

CURRENT ASSETS 

2.3.  PRE-FINANCING 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF 

Pre-financing (gross) 
Cleared via cut-off 
Total 

 20 
 (15) 
 5 

 517 
 (375) 
 142 

3 413 
(2 235) 
1 178 

 384 
 (307) 
 77 

Total 
31.12.2014 
4 335 
(2 932) 
1 403 

EUR millions 
Total 
31.12.2013 
3 931 
(2 645) 
1 286 

Direct Management 
Implemented by: 
Commission 
EU executive agencies 
EU delegations 

Indirect Management 
Implemented by : 

Third countries 
International organisations 
EIB and EIF 
Public law bodies 
Private law bodies with a public service mission 
Private law bodies implementing Public Private Partnership 

Total 

2.3.1.  Guarantees received in respect of pre-financing 

EUR millions 
Total 
 31.12.2014 
 227 

 116 
4 
 106 
1 176 

 257 
 494 
 357 
 41 
 24 
 2 
1 403 

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 

Note  Eighth EDF  Ninth EDF  10th EDF  11th EDF 

Receivables from customers, 
public bodies, EFTA and third 
states 
Receivables from Member 
States 
Accrued income and deferred 
charges 
Total 

2.4.1 

2.4.2 

 3 

– 

 0 

 3 

 10 

– 

 56 

 66 

 7 

– 

 7 

 0 

 0 

 (0) 

 15 

 0 

EUR millions 

Total 
31.12.2014 

Total 
31.12.2013 

 21 

 0 

 63 

 84 

 24 

 3 

 57 

 84 

Recoverables from non-exchange transactions 
Receivables from exchange transactions 
Total 

26 

Total at 
31.12.2014 
 21 
 63 
 84 

EUR millions 
Total at 
31.12.2013 
 22 
 62 
 84 

 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
Annual accounts of the European Development Fund 2014 

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

Receivables from 
customers, public bodies, 
EFTA and third states 
Write-down 
Total 

Eighth 
EDF 

 6 

 (3) 
 3 

Ninth EDF 

10th EDF 

11th EDF 

EUR millions 

Total 
31.12.2014 

Total 
31.12.2013 

 34 

 (23) 
 10 

 9 

 (2) 
 7 

 0 

 (0) 
 0 

 49 

 38 

 (28) 
 21 

 (14) 
 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 

Liaison accounts 
Total 

Eighth EDF 

Ninth EDF 

10th EDF 

11th EDF 

 216 
 216 

 810 
 810 

(1 633) 
(1 633) 

 607 
 607 

EUR millions 

Total 
31.12.2014 
 - 
 - 

For reason of efficiency, the single treasury covering all the EDFs is allocated to the 11th EDF8; 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 EQUIVALENTS9 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF 

EUR millions 

Total 
31.12.2014 

Total 
31.12.2013 

– 

– 

Special accounts: 
financial institutions of 
Member States 
Current accounts: 
commercial banks 
Democratic Republic 
Congo Special fund* 
Total 
 759 
*This balance represents the amounts available for the Democratic Republic of the Congo in accordance 
with the provisions of Council Decision 2003/583/EC7 

 391 

 391 

 344 

 719 

 344 

 47 

 39 

 47 

 1 

 1 

 1 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

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 

8  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. 

9 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. 

27 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
Annual accounts of the European Development Fund 2014 

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 Agreement10 (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 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF 

Co-financing - payables 
Total 

– 
– 

– 
– 

 34 
 34 

– 
– 

The change in the total co-financing payables is explained in the note 2.8.1.2. 

EUR millions 

Total 
31.12.2014 
 34 
 34 

Total 
31.12.2013 
 25 
 25 

CURRENT LIABILITIES 

2.8.  PAYABLES 

Note  Eighth EDF  Ninth EDF  10th EDF  11th EDF 

EUR millions 

Total 
31.12.2014 

Total 
31.12.2013 

Current payables 
Accrued charges 
Deferred fund capital 
contribution 
Total 

2.8.1 
2.8.2 
2.8.3 

 0 
 10 
– 

 22 
 153 
– 

 446 
 521 
 228 

 5 
 37 
– 

 474 
 722 
 228 

 322 
 588 
 304 

 10 

 175 

1 195 

 43 

1 423 

1 214 

2.8.1.  Current payables 

Note  Eighth EDF  Ninth EDF  10th EDF  11th EDF 

EUR millions 

Total 
31.12.2014 

Total 
31.12.2013 

Suppliers and other 
Co-financing payables 
Sundry payables 
Total 

2.8.1.1 
2.8.1.2 
2.8.1.3 

 0 
– 
– 
 0 

 23 
 (0) 
 (1) 
 22 

 379 
 67 
 (0) 
 446 

 (0) 
 0 
 6 
 5 

 402 
 67 
 4 
 474 

 244 
 75 
 3 
 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 

10 OJ L 156, 29.5.1998, p. 3-106. 

28 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
Annual accounts of the European Development Fund 2014 

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  primarly  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 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF 

Accrued charges 
Total 

 10 
 10 

 153 
 153 

 521 
 521 

 37 
 37 

EUR millions 

Total 
31.12.2014 
 722 
 722 

Total 
31.12.2013 
 588 
 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 

United Kingdom 
Czech Republic 
Ireland 
Lithuania 
Total 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF 

– 
– 
– 
– 
– 

– 
– 
– 
– 
– 

 222 
 4 
– 
 1 
 228 

– 
– 
– 
– 
– 

Total 
31.12.2014 
 222 
 4 
– 
 1 
 228 

EUR millions 

Total 
31.12.2013 
 296 
– 
 5 
 2 
 304 

These are Member States' contributions paid in advance. 

29 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

NET ASSETS 

2.9.  CALLED FUND CAPITAL – ACTIVE EDFs 

Fund capital 
Uncalled fund capital 
Called fund capital 31.12.2013 

Eighth EDF 
12 840 
– 
12 840 

Ninth EDF 
11 699 
– 
11 699 

10th EDF 
21 152 
(13 162) 
7 990 

11th EDF 
– 
– 
– 

EUR millions 

Total 
45 691 
(13 162) 
32 529 

Fund capital 
Uncalled fund capital 
Called fund capital 31.12.2014 

12 840 
– 
12 840 

11 699 
– 
11 699 

21 152 
(10 018) 
11 134 

– 
– 
– 

45 691 
(10 018) 
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 

Contributions 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxemburg 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
United Kingdom 
Total 

Called up in 
2014 

 76 
 111 
 4 
 3 
 16 
 63 
 2 
 46 
 615 
 645 
 46 
 17 
 29 
 404 
 2 
 4 
 8 
 1 
 152 
 41 
 36 
 12 
 7 
 6 
 247 
 86 
 466 
3 144 

EUR millions 
Uncalled 10th 
EDF 
31.12.2014 
 (241) 
 (354) 
 (14) 
 (9) 
 (51) 
 (200) 
 (5) 
 (147) 
(1 958) 
(2 053) 
 (147) 
 (55) 
 (91) 
(1 288) 
 (7) 
 (12) 
 (27) 
 (3) 
 (486) 
 (130) 
 (115) 
 (37) 
 (21) 
 (18) 
 (786) 
 (274) 
(1 485) 
(10 018) 

Uncalled 
10th EDF 
31.12.2013 
 (317) 
 (465) 
 (18) 
 (12) 
 (67) 
 (263) 
 (7) 
 (193) 
(2 573) 
(2 698) 
 (193) 
 (72) 
 (120) 
(1 693) 
 (9) 
 (16) 
 (36) 
 (4) 
 (638) 
 (171) 
 (151) 
 (49) 
 (28) 
 (24) 
(1 033) 
 (361) 
(1 951) 
(13 162) 

% 

2.41 
3.53 
0.14 
0.09 
0.51 
2.00 
0.05 
1.47 
19.55 
20.50 
1.47 
0.55 
0.91 
12.86 
0.07 
0.12 
0.27 
0.03 
4.85 
1.30 
1.15 
0.37 
0.21 
0.18 
7.85 
2.74 
14.82 
100.00 

30 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

2.10.  CALLED FUND CAPITAL FROM CLOSED EDFs CARRIED 

FORWARD 

Funds transferred from closed 
EDFs 
Balance at 31.12.2014 

Eighth EDF  Ninth EDF 
1 625 

 627 

10th EDF  11th EDF 
– 

– 

EUR millions 
Total 
2 252 

627 

1 625 

- 

- 

2 252 

This heading includes the resources transferred from closed EDFs. 

2.11.  CALLED FUND CAPITAL TRANSFERS BETWEEN ACTIVE 

EDFs 

Balance at 31.12.2012 
Transfer of decommitted amounts 
to the 10th EDF from the eighth 
and ninth EDFs 
Balance at 31.12.2013 
Transfer of decommitted amounts 
to the 10th EDF performance 
reserve from previous EDFs 
Transfer of decommitted amounts 
to the 11th EDF performance 
reserve from previous EDFs 
Transfer from the 10th and 11th 
performance reserves to the 
Bridging Facility 
Balance at 31.12.2014 

Eighth EDF  Ninth EDF 
2 501 
 (371) 

(2 980) 
 (102) 

10th EDF  11th EDF 
– 
– 

 479 
 473 

EUR millions 
Total 
0 
 0 

(3 083) 
 (64) 

2 130 
 (372) 

 952 
 436 

– 

 (225) 

 225 

(1 372) 

1 372 

(3 147) 

1 758 

 (209) 

1 597 

0 
 0 

 0 

 0 

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.   

31 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

3.  NOTES  TO  THE  STATEMENT  OF  FINANCIAL 

PERFORMANCE 

3.1.  REVENUE FROM EXCHANGE AND NON-EXCHANGE 

TRANSACTIONS 

Revenue from non-exchange transactions 
Revenue from exchange transactions 
Total 

Total 2014 
 87 
 59 
 145 

EUR millions 
Total 2013 
 79 
 43 
 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 

Recovery of expenses 
Recovery of STABEX funds 
Foreign exchange gains 
Operating income co-
financing 
Total 

Note  Eighth EDF  Ninth EDF  10th EDF  11th EDF  Total 2014 
3.2.1 
3.2.2 

 2 
 4 
 3 
– 

 22 
– 
 21 
– 

 3 
– 
 19 
 57 

– 
– 
 1 
– 

 26 
 4 
 45 
 57 

3.2.3 

EUR millions 

Total 2013 

 13 
 61 
 41 
 8 

 9 

 43 

 79 

 1 

 132 

 123 

Direct Management 
Implemented by: 
Commission 
EU delegations 

Indirect Management 
Implemented by : 

Third countries 
International organisations 

Total operating revenue excluding foreign exchange gains 

3.2.1.  Recovery of expenses 

EUR millions 
Total 2014 
 17 

 0 
 17 
 70 

 68 
 1 
 86 

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. 

32 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

The nature of the recovery of undue payments can be summarised as follows: 

Error 
Irregularity 
OLAF notified 
Total 

Revenue  Pre-financing 
 2 
 20 
 0 
 23 

 0 
 24 
 1 
 25 

Total 2014 
 2 
 44 
 1 
 48 

Revenue  Pre-financing 
 4 
 12 
 1 
 17 

 2 
 4 
– 
 6 

EUR millions 
Total 2013 
 6 
 16 
 1 
 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 
perfomance of the eighth EDF. 

3.2.3.  Operating income co-financing 

The  operating  income  relating  to  co-financing  represents  the  contributions  used  (see  3.3.2). 

3.3.  OPERATING EXPENSES 

Operating expenses - aid 
instruments 
Operating expenses co-
financing 
Foreign exchange losses 
Write-down of receivables 
Total 

Note  Eighth EDF  Ninth EDF  10th EDF  11th EDF  Total 2014 
3.3.1 

2 813 

3 545 

 261 

 472 

 (0) 

EUR millions 

Total 2013 

2 957 

3.3.2 

– 

 2 
 (0) 
 1 

– 

 57 

– 

 18 
 14 
 293 

 11 
 0 
2 881 

 3 
 0 
 475 

 57 

 33 
 14 
3 650 

 8 

 60 
 1 
3 027 

Direct Management 
Implemented by: 
Commission 
EU executive agencies 
EU delegations 
Trust Funds 
Indirect Management 
Implemented by : 

Third countries 
International organisations 
EIB and EIF 
Public law bodies 
Private law bodies with a public service mission 
Private law bodies implementing Public Private Partnership 

Total operating expenses: aid instruments and co-financing 

EUR millions 
Total 
2014 
933 

114 
 2 
817 
– 
2 670 

 1 111 
 1 148 
 179 
 144 
 46 
 41 
3 603 

33 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

3.3.1.  Operating expenses – aid instruments 

EUR millions 

Programmable aid 
Macro-economic support 
Sectoral policy 
Interest rate subsidies 
Intra ACP projects 
Emergency aid 
Refugee aid 
Risk capital 
STABEX 
SYSMIN 
Other aid programmes 
related to former EDFs 
Institutional support 
Compensation export 
receipts 
Total 

Eighth EDF  Ninth EDF 
 (3) 
 42 
 10 
– 
 215 
 2 
– 
– 
– 
– 

 (7) 
– 
 0 
 3 
– 
– 
 (0) 
 0 
 2 
 0 

– 

– 

 1 

 (0) 

 2 

– 

 (6) 

 261 

10th EDF 
2 038 
– 
 (1) 
– 
 507 
 250 
– 
– 
– 
– 

– 

 19 

– 

11th EDF  Total 2014  Total 2013 
1 719 
 21 
 222 
 (0) 
 645 
 270 
 1 
 0 
 (1) 
 0 

2 159 
 42 
 10 
 3 
 979 
 335 
 (0) 
 0 
 2 
 0 

 130 
– 
– 
– 
 258 
 84 
– 
– 
– 
– 

– 

– 

– 

 2 

 19 

 (5) 

 5 

 62 

 13 

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 

Administrative expenses 
Total 

Eighth EDF  Ninth EDF 
 (0) 
 (0) 

– 
– 

10th EDF 
 22 
 22 

EUR millions 

11th EDF  Total 2014  Total 2013 
 167 
 167 

 22 
 22 

– 
– 

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. 

34 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

3.5.  FINANCIAL REVENUE 

Interest income - 
European banks 
Interest on pre-
financing 
- accrued interest 
- recovered interest 
Total 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF  Total 2014  Total 2013 

EUR millions 

 0 

 (0) 

 (0) 
 0 
 0 

 1 

 13 

 12 
 1 
 15 

 (3) 

 (1) 

 (1) 
 0 
 (3) 

 0 

 2 

– 
 2 
 2 

 (1) 

 15 

 11 
 3 
 13 

 0 

 (0) 

 (5) 
 5 
 (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. 

35 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

4. 

CONTINGENT  ASSETS  &  LIABILITIES  AND 
OTHER SIGNIFICANT DISCLOSURES 

4.1.  CONTINGENT ASSETS 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF 

Performance guarantees 
Retention guarantees 
Total 

 3 
 2 
 5 

 44 
 30 
 74 

 54 
 18 
 72 

– 
– 
– 

EUR millions 

Total 
31.12.2014 
 101 
 50 
 150 

Total 
31.12.2013 
 116 
 56 
 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 

36 

 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

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. 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF 

EUR millions 

Total 
31.12.2014 

Total 
31.12.2013 

Outstanding 
commitments not yet 
expensed 
Total 

 12 

 12 

 360 

4 777 

 143 

5 291 

5 243 

 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). 

37 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

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. 

38 

 
 
 
5.2.  CURRENCY RISK 

Annual accounts of the European Development Fund 2014 

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

Financial assets 
Receivables and recoverables 
Cash and cash equivalents 
Total 
Financial liabilities 
Payables 
Total 
Total 

USD 

GBP 

DKK 

SEK 

EUR 

Other 

Total 

USD 

GBP 

DKK 

SEK 

EUR 

Other 

Total 

31.12.2014 

31.12.2013 

EUR millions 

 0 

 6 

 6 

 0 

 0 
 6 

 0 

 0 

– 
 0 

– 

– 
– 

 76 
 386 

 462 

 8 

 8 

 (691) 

 (691) 
 (229) 

 (45) 

 (45) 
 (37) 

– 

– 
– 

 84 
 391 

 475 

 (736) 

 (736) 
 (261) 

 4 
 0 

 4 

 (1) 

 (1) 
 3 

 0 
 0 

 0 
 0 

 0 

– 

– 
– 

 75 
 759 

 834 

 (574) 

 (574) 
 260 

– 

– 
– 

 4 

 4 

 (74) 

 (74) 
 (70) 

 84 
 759 

 843 

 (648) 

 (648) 
 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. 

39 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

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: 

Exchange receivables and non 
exchange recoverables 
Total at 31.12.2014 
Exchange receivables and non 
exchange recoverables 
Total at 31.12.2013 

Financial assets by risk category: 

Counterparties with external credit rating 
Prime and high grade 
Upper medium grade 
Lower medium grade 
Non- investment grade 
Total 
Counterparties without external credit 
rating 
Group 1 (debtors without defaults in the 
past) 
Group 2 (debtors with defaults in the 
past) 
Total 
Total 

Total 

Neither past 
due nor 
impaired 

EUR millions 

Past due but not impaired 

 84 

 84 
 84 

 84 

 75 

 75 
 73 

 73 

< 1 year 

 5 

 5 
 9 

 9 

1-5 years 
 4 

> 5 years 

 4 
 1 

 1 

– 
– 

– 

EUR millions 

Receivables 

31.12.2014 
Cash 

Total  Receivables 

31.12.2013 
Cash 

Total 

 0 

 0 

 83 

 1 

 84 
 84 

 318 
 39 
 7 
 27 
 391 

 391 

 318 
 39 
 7 
 27 
 391 
– 

 83 

 1 

 84 
 475 

 3 

 3 

 79 

 2 

 81 
 84 

 606 
 12 
 123 
 17 
 758 

 758 

 609 
 12 
 123 
 17 
 761 
– 

 79 

 2 

 81 
 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). 

40 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

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 

Payables 
Total at 31.12.2014 
Payables 
Total at 31.12.2013 

< 1 year 
 702 
 702 
 623 
 623 

1-5 years 
 34 
 34 
 25 
 25 

> 5 years 

– 

– 

EUR millions 
Total 
 736 
 736 
 648 
 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. 

41 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

6.  RELATED PARTY DISCLOSURES 

No related party transactions requiring separate disclosure under this heading have been identified. 

42 

 
 
 
Annual accounts of the European Development Fund 2014 

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. 

43 

 
 
 
Annual accounts of the European Development Fund 2014 

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. 

ECONOMIC RESULT OF THE YEAR 

Revenue 
Entitlements not affecting the budget result 
Entitlements established in current year but not yet collected 
Entitlements established in previous years and collected in 
current year 
Net effect of pre-financing 
Accrued revenue (net) 
Expenses 
Expenses of the current year not yet paid 
Expenses of previous years paid in the current year 
Payments cancellation 
Net effect of pre-financing 
Accrued expenses (net) 

2014 
(3 526) 

EUR millions 
2013 
(3 072) 

 (10) 
 (19) 
 12 

 41 
 (71) 

 165 
 (28) 
 65 
 (562) 
 417 

 (68) 
 (6) 
 10 

 71 
 19 

 90 
 (53) 
 13 
 (431) 
 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 

44 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

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. 

45 

 
 
 
Annual accounts of the European Development Fund 2014 

FINANCIAL STATEMENTS OF THE BÊKOU 
TRUST FUND 

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. 

46 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

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 

05 June 2015 

47 

 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

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. 

48 

 
 
 
Annual accounts of the European Development Fund 2014 

BÊKOU TRUST FUND BALANCE SHEET 

CURRENT ASSETS 
Pre-financing 
Receivables 
Cash and cash equivalents  

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Payables 

CURRENT LIABILITIES 
Payables 

TOTAL LIABILITIES 

NET ASSETS 

FUNDS & RESERVES 
Economic result carried forward from previous years 
Economic result of the year 
NET ASSETS 

Note 

1.1 

1.2 

 EUR millions 
31.12.2014 

– 
 45 
– 
 45 
 45 

 (45) 
 (45) 

– 
– 
 (45) 

– 

– 
– 
– 

49 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

BÊKOU TRUST FUND STATEMENT OF FINANCIAL 
PERFORMANCE 

There were no revenue or expense transactions during 2014. 

50 

 
 
 
Annual accounts of the European Development Fund 2014 

BÊKOU TRUST FUND CASHFLOW STATEMENT 

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 
(Increase)/decrease in non-current liabilities 
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 

EUR millions 
2014 
– 

– 
– 
– 
 (45) 
 45 
– 

– 

– 
– 
– 

51 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BÊKOU TRUST FUND STATEMENT OF CHANGES IN NET ASSETS 

Annual accounts of the European Development Fund 2014 

Fund capital 
(A) 

Uncalled funds 
(B) 

BALANCE AS AT 31.12.2013 
Economic result of the year 
BALANCE AS AT 31.12.2014 

– 
– 
– 

– 
– 
– 

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

Cumulative 
Reserves (D) 

Other reserves (E) 

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

– 
– 
– 

– 
– 
– 

– 
– 
– 

52 

 
  
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

NOTES TO THE FINANCIAL STATEMENTS 
OF THE BÊKOU TRUST FUND 

53 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

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  fulfill  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. 

54 

 
 
 
Annual accounts of the European Development Fund 2014 

CONSOLIDATED FINANCIAL STATEMENTS 
OF THE EDF AND THE BÊKOU TRUST FUND 

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. 

55 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

CONSOLIDATED BALANCE SHEET 

NON-CURRENT ASSETS 
Pre-financing 

CURRENT ASSETS 
Pre-financing 
Receivables 
Cash and cash equivalents  

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Payables 

CURRENT LIABILITIES 
Payables 

TOTAL LIABILITIES 

NET ASSETS 

FUNDS & RESERVES 
Called fund capital - active EDFs 
Called fund capital from closed EDFs carried forward 
Economic result carried forward from previous years 
Economic result of the year 
NET ASSETS 

 EUR millions 
31.12.2014 

 472 
 472 

1 403 
 129 
 391 
1 923 
2 395 

 (40) 
 (40) 

(1 423) 
(1 423) 
(1 463) 

 932 

35 673 
2 252 
(33 468) 
(3 526) 
 932 

56 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE 

OPERATING REVENUE 

OPERATING EXPENSES 
Operating expenses 
Administrative expenses 

SURPLUS/(DEFICIT) FROM OPERATING ACTIVITIES 

Financial revenue 
Financial charges 
SURPLUS/(DEFICIT) FROM FINANCIAL ACTIVITIES 

ECONOMIC RESULT OF THE YEAR 

EUR millions 
2014 
 132 

(3 650) 
 (22) 
(3 671) 

(3 539) 

 13 
 (0) 
 13 

(3 526) 

57 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS 

Annual accounts of the European Development Fund 2014 

Fund capital 
(A) 

Uncalled funds 
(B) 

BALANCE AS AT 31.12.2013 
Capital increase - ordinary contributions 
Economic result of the year 
BALANCE AS AT 31.12.2014 

45 691 
– 
– 
45 691 

13 162 
(3 144) 
– 
10 018 

Called fund 
capital  (C) = 
(A)-(B) 
32 529 
3 144 
– 
35 673 

Cumulative 
Reserves (D) 

Other reserves (E) 

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

(33 468) 
– 
(3 526) 
(36 994) 

2 252 
– 
– 
2 252 

1 313 
3 144 
(3 526) 
 932 

58 

 
  
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

EDF REPORT ON FINANCIAL 
IMPLEMENTATION 

59 

 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

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 9 th 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  (OCT)  with  the  European  Union  entered  into  force  on  2  December  2001.  This 
Decision was amended on 19 March 2007 (Decision 2007/249/EC). 

The Internal Agreement on the financing of Community aid under the multiannual financial framework for 
the  period  2008-2013  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 (2008-2013) 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  10  th  EDF,  (articles  1(4)  and  1(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, 

60 

 
 
 
 
 
Annual accounts of the European Development Fund 2014 

- 
- 

uncommitted balances from the 10th EDF at 31/12/2013, 
funds decommitted from the 10th  and previous EDFs as from 01/01/2014 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: 

Available funds 

Less committed funds during 2014 
Total uncommitted and unallocated funds at 31/12/2014  

The detail of uncommitted and unallocated funds is as follows: 

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

OCT uncommitted  

Bridging Facility unallocated 
Total  uncommitted+unallocated funds at 31/12/2014  

(EUR million) 

1,616 

-1,160 
456 

(EUR million) 

333 

14 

109 
456 

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

Untill 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.  

61 

 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

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

Total made available on non-mobilisable performance reserves during 2014 

Less total transferred to the Bridging facility 

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

(EUR million) 

938 

661 

-1,597 

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  Art.  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 
Co-financing - Intra ACP 
Co-financing – Administrative 
expenses 

181.4 
12.1 

4.9 

198.4 

160.5 
12.1 

4.5 

177.1 

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

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63 

(EUR million)INITIAL APPROPRIATIONINCREASES/DECREASES IN CUMULATIVE  RESOURCES AT 31 DECEMBER 2013INCREASE OR DECREASE IN RESOURCES IN 2014NotesCURRENT LEVEL APPROPRIATIONRegular MS Contributions12.967(3.190)(62)9.715       Aid for refugees120(17)(2)(1)100       Interest-rate subsidies370(287)(4)(1)79       Risk capital1.00019(4)(1)1.016       Structural adjustment1.40097(0)(1)1.497       Total indicative programmes7.562(2.542)(52)(1)4.967       Use of interest income035(0)(1)35       Sysmin575(474)101       Emergency aid (Lomé)140(4)136       Stabex1.800(1.077)723       Heavily indebted poor countries (Lomé)01.0601.060Regular MS Contributions0656(2)654       A Envelope - National Allocations0418(1)(1)418       B Envelope - National Allocations0238(1)(1)237       Interests and other receipts000SUB TOTAL ACP 12.967(2.534)(64)10.369Regular MS Contributions167(118)(0)48       Interest-rate subsidies9(8)1       Risk capital30(24)6       Emergency aid3(3)0       Aid for refugees1(1)0       Total indicative programmes115(78)(0)(1)37       Sysmin3(1)2       Stabex6(5)1SUB TOTAL OCT167(118)(0)48TOTAL 8th EDF13.134(2.652)(64)10.417(1)All decreases are decommitments transferred to the non-mobilisable performance reserve of the 10th EDF.CotonouLoméO C TTable 1.18th EDFEVOLUTION OF APPROPRIATIONS:  31 December 2014ANALYSIS OF CREDITS PER INSTRUMENTINSTRUMENTLoméA C P  
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64 

(EUR million)INITIAL APPROPRIATIONINCREASES/DECREASES IN CUMULATIVE  RESOURCES AT 31 DECEMBER 2013INCREASE OR DECREASE IN RESOURCES IN 2014NotesCURRENT LEVEL APPROPRIATIONRegular MS Contributions0717(17)700       Transfers from 6th EDF - Lomé021(0)(1)20       Transfers from 7th EDF - Lomé0696(17)(1)679Regular MS Contributions10.4014.692(354)14.739       A Envelope - National Allocations5.3183.640(212)(1)8.746       B Envelope - National Allocations2.108(843)(33)1.232       Long term development reserve258(258)00       National allocations reserve1.224(1.224)00       Regional allocations904(45)(38)(1)821       Other Intra-ACP allocations3002.411(48)(1)2.663       Peace facility0380(18)362       CDE, CTA and Parliamentary Assembly164(6)(4)154       Implementation costs12553(0)(2) + (3)178       Interests and other receipts063(0)63       Special allocation R.D. Congo0105(0)105       Voluntary contribution Peace facility039039       Stabex Sudan036036       Special allocation Sudan0740(2)74       Special allocation South Sudan02670(3)267SUB TOTAL ACP 10.4015.408(371)15.439Regular MS Contributions033       Transfers from 6th EDF - Lomé000       Transfers from 7th EDF - Lomé033Regular MS Contributions154145(2)297       A Envelope - National Allocations0245(2)244       B Envelope - National Allocations044       Long term development reserve144(144)0       Regional allocations84048       Studies / Technical assistance OCT2(1)1SUB TOTAL OCT154148(2)300TOTAL 9th EDF10.5555.556(373)15.739(1)(2)(3)Table 1.29th EDFEVOLUTION OF APPROPRIATIONS:  31 December 2014ANALYSIS OF CREDITS PER INSTRUMENTINSTRUMENTLoméACP All decreases are decommitments transferred to the non-mobilisable performance reserve of the 10th EDF.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).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).CotonouLoméOCTCotonou 
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65 

(EUR million)INITIAL APPROPRIATIONINCREASES/DECREASES IN CUMULATIVE  RESOURCES AT 31 DECEMBER 2013INCREASE OR DECREASE IN RESOURCES IN 2014NotesCURRENT LEVEL APPROPRIATIONRegular MS Contributions20.8961.132(1.157)20.871       A Envelope - National Allocations013.652(126)(2)13.526       B Envelope - National Allocations02.037(11)(2)2.026       Regional allocations01.987(2)(2)1.985       National allocations Reserve A Envelope STABEX0000       NIP/RIP reserve683(658)(25)(2)0       Institutional and support expenditure0280(38)(2)242       Other Intra-ACP allocations01.915(10)(2)1.904       Peace facility0700(12)(2)688       Implementation costs4300(1)(2)429       Interests and other receipts077(8)(2)70       Non-mobilisable reserve0925(925)(2)0       A Envelope reserve13.500(13.500)0       B Envelope reserve1.800(1.800)0       Intra-ACP Reserve2.700(2.700)0       Regional allocations reserve1.783(1.783)0Co-financing013464198       A Envelope - National Allocations011863(3)181       Other Intra-ACP allocations012(3)12       Peace facility01(3)1       Implementation costs041(3)5SUB TOTAL ACP 20.8961.266(1.093)21.069Regular MS Contributions25615(12)259       A Envelope - National Allocations0196(0)(2)196       B Envelope - National Allocations01515       Regional allocations04040       National allocations Reserve A Envelope STABEX000       Non-mobilisable reserve014(12)(2)2       Studies / Technical assistance OCT606       A Envelope reserve195(195)(2)0       B Envelope reserve15(15)(2)0       Regional allocations reserve40(40)0SUB TOTAL OCT25615(12)259TOTAL 10th EDF21.1521.281(1.105)21.328(1)(2)(3)OCTTransfer 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 transfered to 9th EDF).Transfers in / from the 10th EDF reservesFor the cofinancings, the table only presents  the commitment appropriations.Table 1.310th EDFEVOLUTION OF APPROPRIATIONS:  31 December 2014ANALYSIS OF CREDITS PER INSTRUMENTINSTRUMENTACP  
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(EUR million)INITIAL APPROPRIATIONINCREASES/DECREASES IN CUMULATIVE  RESOURCES AT 31 DECEMBER 2013INCREASE OR DECREASE IN RESOURCES IN 2014NotesCURRENT LEVEL APPROPRIATIONRegular MS Contributions1.5830191.602       Bridging facility 1.5830(1.485)(1) + (3)98       A Envelope - National Allocations00653653       B Envelope - National Allocations008686       Regional allocations00103103       National allocations Reserve A Envelope STABEX000(4)0       Institutional and support expenditure003333       Other Intra-ACP allocations005656       Peace facility00445445       Implementation costs00115115       Interests and other receipts0013(4)13       Non-mobilisable reserve00(0)(5)(0) SUB TOTAL ACP 1.5830191.602Regular MS Contributions140014       Bridging facility 140(3)(1) + (3)11       Non-mobilisable reserve000(5)0       Studies / Technical assistance OCT0033SUB TOTAL OCT140014TOTAL 11th EDF1.597019(2)1.616(1)(2)(3)(4)(5)Table 1.411th EDF - Bridging FacilityEVOLUTION OF APPROPRIATIONS:  31 December 2014ANALYSIS OF CREDITS PER INSTRUMENTINSTRUMENTACP Non-mobilisable reserves are the results of transfers (decommitments) from the 10th EDF non-mobilisable performance reserve for 225 million euros which are directly transferred to the Bridging Facility (224.7 million) and to other instruments from 11 EDF (0.8 million).OCTCouncil 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.Initial appropriations on the Bridging Facility originate from transfers non-mobilisable reserves of the 8th and 9th EDF for 1,372.5 million euros 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.Transfer of initial appropriations from the Bridging Facility to other instruments of the 11th EDF for a total of 1,488 million euros (for both ACP and OCT)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 16.56 million euros and from Revenue Increasing Budget  (RO) for 2.1 million euros. 
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67 

891011TOTAL35355.0055.0054.7234.7237037039.76370310.4664188.99013.72165323.7812371.2362.041863.5991091091541540002425051318783.0252.8355336.39300001002028692.0251032.99700105105267267110110393965415.03621.1291.61638.43518118155121219819810.41715.73921.3281.61649.100Table 2.1EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2014PROGRESS REPORT(EUR million)EDF                                      ALLOCATIONL o m éSundry IncomeTotal indicative programmesTotal Non-Programmable AidTransfers from other fundsSUB TOTAL: REGULAR MS CONTRIBUTIONSCDE, CTA and Parliamentary AssemblyCountry reserveImplementation Costs and Interests RevenuesIntra-ACP allocationsIntra-ACP ReserveNational allocations Reserve A Envelope STABEXNIP/RIP reserveNon-mobilisable reserveRegional allocationsRegional allocations reserveSpecial allocation R.D. CongoSpecial allocation South SudanSpecial allocation SudanVoluntary contribution Peace facilitySUB TOTAL: REGULAR MS CONTRIBUTIONSA Envelope - National AllocationsImplementation Costs and Interests RevenuesIntra-ACP allocationsSUB TOTAL: CO-FINANCINGTOTALC o t o n o uA Envelope - National AllocationsB Envelope - National AllocationsBridging facilityAnnual FiguresAnnual FiguresAnnual FiguresAnnual FiguresAnnual FiguresAnnual FiguresAnnual FiguresEDFAt 31/12/2014% of allocation2008200920102011201220132014810.415100%(53)(42)(45)(60)(64)(98)(63)915.703100%775(54)(116)(9)(297)(72)(381)1021.294100%4.7663.5012.3493.1183.5244.131(95)111.16072%1.16048.5735.4883.4052.1873.0493.1633.961621Annual FiguresAnnual FiguresAnnual FiguresAnnual FiguresAnnual FiguresAnnual FiguresAnnual FiguresEDFAt 31/12/2014% of allocation2008200920102011201220132014810.400100%55(42)8(13)(46)(11)(37)915.40798%3.1639974769(187)(96)(1)1018.25286%1303.1842.8202.5143.4603.4572.6871173145%73144.7903.3484.1403.3042.5093.2263.3503.380Annual FiguresAnnual FiguresAnnual FiguresAnnual FiguresAnnual FiguresAnnual FiguresAnnual FiguresEDFAt 31/12/2014% of allocation2008200920102011201220132014810.379100%32315215890151816914.94195%3.2531.8061.3049065392301451012.98561%901.1111.7721.8792.6552.7152.7601159537%59538.9003.6663.0693.2332.8743.2092.9633.516DecisionsAggregate TotalTotalAssigned FundsAggregate TotalTotalTotal* Negative figures represent decommitments.PaymentsAggregate Total 
 
 
 
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68 

%%%(1)(1)(1)35353535100%3535100%3535100%5.0055.0055.0035.003100%4.9924.992100%4.9884.988100%4.7234.7234.7234.723100%4.7224.722100%4.7074.707100%703703700700100%68868898%67067095%4188.99065323.7814188.980100%45870%23.57599%4188.91783%19730%20.93388%4178.80557%18528%17.20772%2371.236863.5992371.236100%8396%3.596100%2351.22695%6575%3.47096%2321.20682%4755%3.15588%109109154154154154100%154154100%154154100%0242131878242100%10479%85197%24099%9270%83495%23995%9270%81292%3.0255336.3933.020100%41377%6.26798%2.98395%31559%5.98794%2.88571%23243%5.13080%8691032.997865100%103100%2.991100%83377%6361%2.45382%77048%3938%1.78159%105105105105100%105105100%105105100%267267266266100%13113149%383814%110110110110100%10510595%454541%3939242462%242462%242462%18584%15684%79%14579%22%4122%559%359%10%110%10%110%1299%1299%98%1298%70%970%%%%(1)(1)(1)00010002%%%(1)(1)(1)10.41715.7391.61549.10310.41515.703100%1.16072%48.57399%10.40015.40786%73145%44.79091%10.37914.94161%59537%38.90079%Table 2.2EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2014CLASS OF AID(EUR million)EDF8%9%1011TOTAL(1)(1)LoméSundry IncomeAppropriationsDecisions100%Assigned funds100%Payments100%Total indicative programmesAppropriationsDecisions100%Assigned funds100%Payments100%Total Non-Programmable AidAppropriationsDecisions100%Assigned funds100%Payments100%Transfers from other fundsAppropriationsDecisions100%Assigned funds98%Payments95%Regular MS ContributionsC o t o n o uA Envelope - National AllocationsAppropriations13.721Decisions100%100%13.720Assigned funds100%99%11.402Payments100%98%7.800B Envelope - National AllocationsAppropriations2.041Decisions100%100%2.040Assigned funds99%99%1.944Payments98%98%1.670Bridging facilityAppropriationsDecisionsAssigned fundsPaymentsCDE, CTA and Parliamentary AssemblyAppropriationsDecisions100%Assigned funds100%Payments100%Implementation Costs and Interests RevenuesAppropriations505Decisions100%505Assigned funds99%502Payments99%480Intra-ACP allocationsAppropriations2.835Decisions100%2.835Assigned funds99%2.689Payments95%2.012Regional allocationsAppropriations2.025Decisions100%2.023Assigned funds96%1.557Payments89%972Special allocation R.D. CongoAppropriationsDecisions100%Assigned funds100%Payments100%Special allocation South SudanAppropriationsDecisions100%Assigned funds49%Payments14%Special allocation SudanAppropriationsDecisions100%Assigned funds95%Payments41%Voluntary contribution Peace facilityAppropriationsDecisions62%Assigned funds62%Payments62%Regular MS ContributionsA Envelope - National AllocationsAppropriations185Decisions156Assigned funds145Payments41Implementation Costs and Interests RevenuesAppropriations5Decisions3Assigned funds1Payments1Intra-ACP allocationsAppropriations12Decisions12Assigned funds12Payments9Co-financingAppropriations8%9%1011TOTAL(1)(1)C o t o n o uCountry reserve0Intra-ACP Reserve0National allocations Reserve A Envelope STABEX0NIP/RIP reserve0Regional allocations reserve0Mobilisable reservesNon-mobilisable reserve2Non-mobilisable reserve8%9%1011TOTAL(1)(1)Appropriations21.331Decisions100%100%21.294Assigned funds100%98%18.252Payments100%95%12.985TOTAL: ALL ALLOCATIONS(1) % of appropriations 
 
 
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AGGREG.ANNUAL%AGGREG.ANNUAL%AGGREG.ANNUAL%(1)(2)(2) : (1)(3)(3) : (2)(4)(4) : (3)3535100%35100%35100%3535100%35100%35100%4.9674.967(52)100%4.956(29)100%4.95210100%4.9674.967(52)100%4.956(29)100%4.95210100%100100(1)100%100(0)100%100(0)100%136136100%136100%136100%1.0601.060100%1.060100%1.060100%7979(4)100%79(3)100%69(0)86%1.0161.016(4)100%1.015(4)100%1.0120100%7237231100%7231100%7223100%1.4971.497(0)100%1.497100%1.497(0)100%101101100%101100%101100%4.7134.712(7)100%4.711(7)100%4.6963100%418418(1)100%4180100%4170100%418418(1)100%4180100%4170100%237237(1)235(2)99%232399%237237(1)100%235(2)99%232399%0010.36910.369(61)100%10.354(37)100%10.33216100%3736(2)96%3598%35100%3736(2)96%3598%35100%11100%1100%1100%66100%6100%6100%11100%1100%1100%22100%299%2100%1111100%11100%11100%4847(2)97%4699%46100%10.41710.415(63)100%10.400(37)100%10.37916100%Table 2.3EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2014CLASS OF AIDACP + OCT - 8 th EDF(EUR million)CREDITSDECISIONSASSIGNED FUNDSPAYMENTSACP Regular MS ContributionsLomé      Use of interest incomeSUB TOTAL: SUNDRY INCOME      Total indicative programmesSUB TOTAL: TOTAL INDICATIVE PROGRAMMES      Aid for refugees      Emergency aid (Lomé)      Heavily indebted poor countries (Lomé)      Interest-rate subsidies      Risk capital      Stabex      Structural adjustment      SysminSUB TOTAL: TOTAL NON-PROGRAMMABLE AIDACP Regular MS ContributionsC o t o n o u      A Envelope - National AllocationsSUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS      B Envelope - National Allocations      Compensation export earningsSUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS      Interests and other receiptsSUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUESTOTAL ACP     (A)L o m é      Total indicative programmesSUB TOTAL: TOTAL INDICATIVE PROGRAMMES      Interest-rate subsidies      Risk capital      Stabex      SysminSUB TOTAL: TOTAL NON-PROGRAMMABLE AIDTOTAL OCT    (B)TOTAL: ACP+OCT (A+B)OCTRegular MS Contributions 
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AGGREG.ANNUAL%AGGREG.ANNUAL%AGGREG.ANNUAL%(1)(2)(2) : (1)(3)(3) : (2)(4)(4) : (3)2020(0)100%20(0)99%20100%679676(19)100%664(1)98%647(1)97%700697(20)100%685(1)98%667(1)97%8.7468.740(212)100%8.679(74)99%8.5692799%8.7468.740(212)100%8.679(74)99%8.5692799%1.232156(13)155(7)99%150096%1.064(20)1.056(6)99%1.040(3)99%1111100%11100%1.2321.232(33)100%1.222(12)99%1.201(3)98%154154(4)100%154(0)100%154100%154154(4)100%154(0)100%154100%178178(0)100%177(0)99%176699%6363(0)100%63(0)99%63100%241241(0)100%240(0)99%2396100%2.6632.660(49)100%2.622(17)99%2.5314097%362361(19)100%361(15)100%354098%3.0253.020(69)100%2.983(32)99%2.8854097%821818(38)100%787(10)96%7253092%821818(38)100%787(10)96%7253092%105105(0)100%105100%105100%105105(0)100%105100% 100%267266(0)100%1317449%382229%267266(0)100%1317449%382229%1101100100%1055795%452043%1101100100%1055795%452043%3924(0)62%24(0)100%24100%3924(0)62%24(0)100%24100%15.43915.407(376)100%15.115398%14.65114397%00100%0100%0100%33100%399%3100%33100%399%3100%244240(5)99%238(4)99%236299%244240(5)99%238(4)99%236299%444100%4100%44100%4100%4100%11100%1100%1100%11100%1100%1100%4848(0)99%46(0)97%45097%4848(0)99%46(0)97%45097%300296(5)99%292(4)99%289299%15.73915.703(381)100%15.407(1)98%14.94114597%Table 2.4EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2014CLASS OF AIDACP + OCT - 9 th EDF(EUR million)CREDITSDECISIONSASSIGNED FUNDSPAYMENTSACP Regular MS ContributionsL o m é      Transfers from 6th EDF - Lomé      Transfers from 7th EDF - LoméSUB TOTAL: TRANSFERS FROM OTHER FUNDSACP Regular MS ContributionsC o t o n o u      A Envelope - National AllocationsSUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS      B Envelope - National Allocations      Compensation export earnings      Emergency aid      Heavily indebted poor countriesSUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS      CDE, CTA and Parliamentary AssemblySUB TOTAL: CDE, CTA AND PARLIAMENTARY ASSEMBLY      Implementation costs      Interests and other receiptsSUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUESSUB TOTAL: SPECIAL ALLOCATION SOUTH SUDAN      Special allocation SudanSUB TOTAL: SPECIAL ALLOCATION SUDAN      Voluntary contribution Peace facility      Other Intra-ACP allocations      Peace facilitySUB TOTAL: INTRA-ACP ALLOCATIONS      Regional allocationsSUB TOTAL: REGIONAL ALLOCATIONS      Special allocation R.D. CongoL o m é      Transfers from 6th EDF - Lomé      Transfers from 7th EDF - LoméSUB TOTAL: TRANSFERS FROM OTHER FUNDSSUB TOTAL: VOLUNTARY CONTRIBUTION PEACE FACILITYTOTAL: ACP     (A)TOTAL: ACP+OCT    (A+B)OCTRegular MS Contributions      Regional allocationsC o t o n o u      A Envelope - National AllocationsSUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS      B Envelope - National Allocations      Emergency aidRegular MS ContributionsOCTSUB TOTAL: SPECIAL ALLOCATION R.D. CONGO      Special allocation South SudanTOTAL: OCT    (B)SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS      Studies / Technical assistance OCTSUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUESSUB TOTAL: REGIONAL ALLOCATIONS 
Annual accounts of the European Development Fund 2014 

71 

AGGREG.ANNUAL%AGGREG.ANNUAL%AGGREG.ANNUAL%(1)(2)(2) : (1)(3)(3) : (2)(4)(4) : (3)13.52613.524(108)100%11.2701.55083%7.6961.75168%13.52613.524(108)100%11.2701.55083%7.6961.75168%2.026210(0)1837887%1307571%856(0)80914195%65610981%49490100%490100%911(3)8901998%8237592%2.0262.025(4)100%1.93123895%1.65825986%429429(1)100%4299100%414897%7070(1)100%68597%62492%499499(2)100%4971399%4761296%242242(19)100%240899%2112088%1.9041.904(9)100%1.76632093%1.16721966%688688(12)100%6836999%63410493%2.8352.835(39)100%2.68939795%2.01234375%1.9851.983(3)100%1.53138677%96432463%1.9851.983(3)100%1.53138677%96432463%1811565986%1458293%412729%1811565986%1458293%412729%53262%1017%10100%53262%1017%10100%1211(0)98%11(0)99%8270%11100%199%1100%1212(0)99%12(0)99%9272%000000000000021.06921.037(95)99%18.0762.66686%12.8572.71971%Table 2.5EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2014CLASS OF AIDACP + OCT - 10 th EDF(EUR million)CREDITSDECISIONSASSIGNED FUNDSPAYMENTSRegular MS ContributionsAllocationsACP       A Envelope - National AllocationsSUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS      B Envelope - National Allocations      Compensation export earnings      Emergency aid      Heavily indebted poor countries      Other chocs with budgetary impactSUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS      Implementation costs      Interests and other receiptsSUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES      Institutional and support expenditure      Other Intra-ACP allocations      Peace facilitySUB TOTAL: INTRA-ACP ALLOCATIONS      Regional allocationsSUB TOTAL: REGIONAL ALLOCATIONSCo-financingAllocations      A Envelope - National AllocationsSUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS      Implementation costsSUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES      Other Intra-ACP allocations      Peace facilitySUB TOTAL: INTRA-ACP ALLOCATIONSMobilisable reservesReserves      A Envelope reserveNon-mobilisable reserve      B Envelope reserveSUB TOTAL: COUNTRY RESERVE      Intra-ACP ReserveSUB TOTAL: INTRA-ACP RESERVE      National allocations Reserve A Envelope STABEXSUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEXReserves      Non-mobilisable reserveSUB TOTAL: NON-MOBILISABLE RESERVETOTAL: ACP  (INCL. RESERVES)    (A)      NIP/RIP reserveSUB TOTAL: NIP/RIP RESERVE      Regional allocations reserveSUB TOTAL: REGIONAL ALLOCATIONS RESERVE 
Annual accounts of the European Development Fund 2014 

72 

22000000031961960100%1311267%1012577%1961960100%1311267%1012577%1597076%6489%660100%66100%1515100%13086%121094%660100%5289%4181%660100%5289%4181%40400100%26765%8431%40400100%26765%8431%000000022259257099%1762168%1264172%21.32821.294(95)99%18.2522.68786%12.9852.76071%Regular MS ContributionsAllocationsA C P      A Envelope - National AllocationsSUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS      Compensation export earnings      Emergency aidSUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS      Other Intra-ACP allocations      Other chocs with budgetary impactSUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONSReserves      Studies / Technical assistance OCTSUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUESSUB TOTAL: INTRA-ACP ALLOCATIONS      Regional allocationsSUB TOTAL: REGIONAL ALLOCATIONSTOTAL: ACP (INCL. RESERVES)    Regular MS ContributionsAllocationsNon-mobilisable reserve      Non-mobilisable reserveOCT      A Envelope - National AllocationsSUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS      B Envelope - National Allocations      Emergency aid      Regional allocationsSUB TOTAL: REGIONAL ALLOCATIONS      B Envelope reserveSUB TOTAL: COUNTRY RESERVE      National allocations Reserve A Envelope STABEXMobilisable reservesReserves      A Envelope reserveTOTAL: OCT (INCL. RESERVES)    (B)TOTAL: ACP+OCT (INCL. RESERVES)    (A+B)SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX      Regional allocations reserveSUB TOTAL: REGIONAL ALLOCATIONS RESERVESUB TOTAL: NON-MOBILISABLE RESERVE 
73 

AGGREG.ANNUAL%AGGREG.ANNUAL%AGGREG.ANNUAL%(1)(2)(2) : (1)(3)(3) : (2)(4)(4) : (3)65345845870%19719743%18518594%65345845870%19719743%18518594%868383656578%474773%86838396%656578%474773%9898115999986%929293%9292100%135538%12810410481%929288%9292100%333333100%141442%6643%56555599%44532532573%30130193%22622675%53341341377%31531576%23223274%103103103100%636361%393963%103103103100%636361%393963%00(0)(0)1.6021.1601.16072%73173163%59559581%11113000%3000%0014000%1.6161.1601.16072%73173163%59559581%Table 2.6EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2014CLASS OF AIDACP + OCT - 11 th EDF(EUR million)CREDITSDECISIONSASSIGNED FUNDSPAYMENTSRegular MS ContributionsAllocationsA C P       A Envelope - National AllocationsSUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS      B Envelope - National Allocations      Emergency aidSUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS      Bridging facility ReservesSUB TOTAL: BRIDGING FACILITY      Implementation costs      Interests and other receiptsSUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES      Institutional and support expenditure      Other Intra-ACP allocations      Peace facilitySUB TOTAL: INTRA-ACP ALLOCATIONS      Regional allocationsSUB TOTAL: REGIONAL ALLOCATIONSMobilisable reservesO C T      Bridging facility SUB TOTAL: BRIDGING FACILITY      Studies / Technical assistance OCTSUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES      Non-mobilisable reserveSUB TOTAL: NON-MOBILISABLE RESERVETOTAL: ACP  (INCL. RESERVES)    (A)      National allocations Reserve A Envelope STABEXSUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEXNon-mobilisable reserveReservesTOTAL: OCT (INCL. RESERVES)    (B)TOTAL:ACP+OCT (INCL. RESERVES)    (A+B)Regular MS ContributionsAllocations      Non-mobilisable reserveNon-mobilisable reserveReservesSUB TOTAL: NON-MOBILISABLE RESERVE 
 
Annual accounts of the European Development Fund 2014 

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

74  

 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2014 

EUROPEAN INVESTMENT BANK 

CA/481/15 

12 March 2015 

Document 15/082 

B O A R D   O F   D I R E C T O R S  

IN VESTMENT  FAC IL IT Y  

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 

ORG.: E 

75  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

STATEMENT OF FINANCIAL POSITION 
AS AT 31 DECEMBER 2014 
(In EUR’000) 

ASSETS 

Cash and cash equivalents 

Derivative financial instruments 

Loans and receivables 

Available-for-sale financial assets 

Amounts receivable from contributors 

Held-to-maturity financial assets 

Other assets 

Total assets 

LIABILITIES AND CONTRIBUTORS' RESOURCES 

LIABILITIES 

Derivative financial instruments 

Deferred income 

Amounts owed to third parties 

Other liabilities 

Total liabilities 

CONTRIBUTORS' RESOURCES 

Member States Contribution called 

Fair value reserve 

Retained earnings 

Notes 

31.12.2014 

31.12.2013 

5 

6 

7 

8 

9/15 

10 

11 

6 

12 

13 

14 

545,399 

448 

1,331,918 

403,085 

42,590 

99,988 

5,522 

599,515 

1,024 

1,222,199 

331,699 

- 

102,562 

148 

2,428,950 

2,257,147 

14,632 

31,310 

68,824 

2,591 

3,545 

35,083 

331,235 

2,572 

117,357 

372,435 

15 

2,057,000 

1,661,309 

156,122 

98,471 

78,191 

145,212 

Total contributors' resources 

2,311,593 

1,884,712 

Total liabilities and contributors' resources 

2,428,950 

2,257,147 

76 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

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 

Interest and similar expenses 

Net interest and similar income 

Fee and commission income 

Fee and commission expenses 

Net fee and commission income 

Fair value change of derivative financial instruments  

Net realised gains on available-for-sale financial assets 

Net foreign exchange loss 

Net result on financial operations 

Change in impairment on loans and receivables, net of reversal 

Impairment on available-for-sale financial assets 

Other income 

General administrative expenses 

(Loss)/profit for the year 

Other comprehensive income: 

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

Available-for-sale financial assets – Fair value reserve   

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

2. Net amount transferred to profit or loss 

Total available-for-sale financial assets 

Total other comprehensive income 

Total comprehensive income for the year 

17 

17 

18 

18 

19 

7 

8 

21 

20 

8 

77,240 

-1,522 

69,593 

-1,175 

75,718 

68,418 

1,163 

-37 

1,126 

-11,663 

8,109 

-222 

2,728 

-43 

2,685 

4,399 

5,294 

-6,925 

-3,776 

2,768 

-75,756 

-6,262 

337 

-38,128 

-27,334 

-8,176 

- 

-37,851 

-46,741 

510 

87,230 

-9,299 

77,931 

12,350 

-2,593 

9,757 

77,931 

9,757 

31,190 

10,267 

77 

 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
   
 
 
   
 
 
 
   
 
 
 
 
   
 
 
 
   
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

STATEMENT OF CHANGES IN CONTRIBUTORS’ RESOURCES 
FOR THE YEAR ENDED 31 DECEMBER 2014 
(In EUR’000) 

At 1 January 2014 

Notes 

1,661,309 

78,191 

145,212 

1,884,712 

Contribution 
called 

Fair value 
reserve  

Retained 
earnings  

Total  

Member States contribution called during the year 

Unused interest subsidies and technical assistance 

15 

15 

Loss for the year 2014 

Total other comprehensive income for the year 

105,691 

290,000 

- 

- 

- 

- 

- 

- 

- 

105,691 

290,000 

-46,741 

-46,741 

77,931 

- 

77,931 

Changes in contributors’ resources 

395,691 

77,931 

-46,741 

426,881 

At 31 December 2014 

2,057,000 

156,122 

98,471 

2,311,593 

At 1 January 2013 

Contribution 
called 

Fair value 
reserve  

Retained 
earnings  

Total  

1,561,309 

68,434 

144,702 

1,774,445 

Member States contribution called during the year 

15 

100,000 

Profit for the year 2013 

Total other comprehensive income for the year 

- 

- 

- 

- 

- 

100,000 

510 

510 

9,757 

- 

9,757 

Changes in contributors’ resources 

100,000 

9,757 

510 

110,267 

At 31 December 2013 

1,661,309 

78,191 

145,212 

1,884,712 

78 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

STATEMENT OF CASH FLOWS 
FOR THE YEAR ENDED 31 DECEMBER 2014 
(In EUR’000) 

OPERATING ACTIVITIES 

(Loss)/profit for the financial year 

Adjustments made for : 

Impairment on available-for-sale financial assets   

Other income 

Net change in impairment on loans and receivables    

Interest capitalised on loans and receivables  

Change in accrued interest and amortised cost on loans and receivables 

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

Change in deferred income 

Effect of exchange rate changes on loans   

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

Effect of exchange rate changes on cash held  
(Loss)/profit on operating activities before changes in operating assets and liabilities   
Loan disbursements 

Repayments of loans 

Change in accrued interest on cash and cash equivalent 

Fair value changes on derivatives  

Increase in held-to-maturity financial assets 

Maturities of held-to-maturity financial assets 

Increase in available-for-sale financial assets 

Repayments/Sales of available-for-sale financial assets   

(Increase)/Decrease in  in other assets 

Increase in other liabilities 

Decrease in amounts payable to the European Investment Bank 

Net cash flows used in operating activities 

FINANCING ACTIVITIES 

Contribution received from Member States  

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

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

Net cash flows from financing activities 

Net (decrease)/increase in cash and cash equivalents 

Summary statement of cash flows: 

Notes 

From 01.01.2014 
to 31.12.2014 

From 01.01.2013 
to 31.12.2013 

-46,741 

510 

8 

21 

7 

7 

10 

7 

7 

7 

5 

10 

10 

8 

8 

15 

6,262 

-337 

75,756 

-11,915 

895 

12 

-3,773 

-92,707 

-449 

-9,362 

-82,359 

-248,326 

166,578 

7 

11,663 

-1,610,057 

1,612,619 

-42,646 

43,378 

-5,374 

19 

-175 

-154,673 

105,691 

7,410 

-21,899 

91,202 

-63,471 

8,176 

- 

27,334 

-10,363 

-249 

733 

-2,725 

30,402 

-1,154 

-378 

52,286 

-242,203 

119,160 

-1 

-4,399 

-680,635 

676,369 

-34,700 

38,737 

76 

1,419 

-6,539 

-80,430 

187,310 

50,000 

-24,312 

212,998 

132,568 

Cash and cash equivalents at the beginning of financial year 

599,507 

466,561 

Net cash from: 

Operating activities 

Financing activities 

Effects of exchange rate changes on cash and cash equivalents 

Cash and cash equivalents at the end of the financial year 

Cash and cash equivalents are composed of: 

Cash in hand  

Term deposits (excluding accrued interest) 

Commercial papers 

-154,673 

91,202 

9,362 

545,398 

9,642 

415,756 

120,000 

545,398 

-80,430 

212,998 

378 

599,507 

194,107 

405,400 

- 

599,507 

5 

5 

79 

 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

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 co-
operation and development assistance negotiated between the African, Caribbean  and Pacific Group of States (the “ACP States”) and the 
European Union and its Member States on 23 June 2000, revised on 25 June 2005 and 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 (“OCT countries”); 

grants for the financing of interest  subsidies  worth max. EUR 586.85 million for ACP countries and max. EUR 3.5 million for OCT 
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 

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 1,323k. 

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. 

80 

 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

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;  

81 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 

- 

adjusted net assets method; or  

other valuation models. 

INVESTMENT FACILITY 

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. 

82 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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. 

INVESTMENT FACILITY 

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. 

83 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Fair value of financial instruments 

INVESTMENT FACILITY 

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: 

84 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

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. 

85 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

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. 

86 

 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
2.5.7   

Interest income on loans 

INVESTMENT FACILITY 

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. 

87 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3  Risk Management 

INVESTMENT FACILITY 

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. 

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. 

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. 

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. 

88 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

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) 

ASSETS 

Cash and cash equivalents 

Derivative financial instruments 

Loans and receivables 

Amounts receivable from contributors 

Held-to-maturity financial assets 

Other assets 

Total assets 

OFF BALANCE SHEET 

Contingent liabilities 

- Signed non-issued guarantees 

Commitments 

- Un-disbursed loans 

- Issued guarantees 

Total off balance sheet 

Total credit exposure 

Credit risk on loans and receivables 

31.12.2014 

31.12.2013 

545,399 

448 

599,515 

1,024 

1,331,918 

1,222,199 

42,590 

99,988 

5,522 

-  

102,562 

148 

2,025,865 

1,925,448 

25,000 

25,000 

1,161,859 

2,298 

1,189,157 

889,866 

4,414 

919,280 

3,215,022 

2,844,728 

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: 

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. 

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. 

89 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

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. 

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

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 

E 

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. 

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. 

90 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.3.2  Analysis of lending credit risk exposure 

INVESTMENT FACILITY 

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: 

At 31.12.2014 

In EUR’000 

Banks 

Corporates 

Public institutions 

States 

Total disbursed 

Signed not disbursed 

At 31.12.2013 

In EUR’000 

Banks 

Corporates 

Public institutions 

States 

Total disbursed 

Signed not disbursed 

Guaranteed 

Other credit 
enhancements 

Not guaranteed 

Total 

% of Total 

16,457 

23,494 

33,279 

- 

73,230 

121,826 

106,667 

93,731 

- 

4,815 

205,213 

117,758 

571,609 

310,396 

31 

171,439 

1,053,475 

922,275 

694,733 

427,621 

33,310 

176,254 

1,331,918 

1,161,859 

52% 

32% 

3% 

13% 

100% 

Guaranteed 

Other credit 
enhancements 

Not guaranteed 

Total 

% of Total 

18,341 

26,315 

29,120 

- 

73,776 

14,966 

112,178 

94,365 

- 

5,322 

211,865 

117,758 

338,464 

417,990 

31 

180,073 

936,558 

757,142 

468,983 

538,670 

29,151 

185,395 

1,222,199 

889,866 

38% 

44% 

2% 

16% 

100% 

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. 

91 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.3.3  Credit quality analysis per type of borrower 

INVESTMENT FACILITY 

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): 

At 31.12.2014 

In EUR’000 

Borrower 

 High Grade  

 Standard 
Grade  

 Min. 
Accept. Risk 

 High Risk    No grading 

 Total   % of Total 

A to B-  

C  

D+  

 D- and 
below 

Banks 

Corporates 

Public institutions 

States 

75,268 

102,974 

- 

- 

7,074 

7,964 

- 

- 

307,049 

879,420 

336,318 

1,605,129 

16,713 

456,210 

33,279 

40,031 

4,815 

226,662 

- 

- 

- 

583,861 

73,310 

231,477 

65% 

23% 

3% 

9% 

Total 

178,242 

15,038 

361,856 

1,602,323 

336,318 

2,493,777 

100% 

At 31.12.2013 

In EUR’000 

Borrower 

 High Grade  

 Standard 
Grade  

 Min. 
Accept. Risk 

 High Risk    No grading 

 Total   % of Total 

A to B-  

C  

D+  

 D- and 
below 

Banks 

Corporates 

Public institutions 

States 

65,571 

6,773 

15,434 

15,970 

- 

- 

- 

- 

97,478 

689,905 

404,129 

1,272,517 

5,691 

520,048 

- 

- 

69,151 

221,915 

- 

- 

- 

548,482 

69,151 

221,915 

60% 

26% 

3% 

11% 

Total 

72,344 

31,404 

103,169 

1,501,019 

404,129 

2,112,065 

100% 

92 

 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
INVESTMENT FACILITY 

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 

Kenya 

Nigeria 

Regional-ACP 

Mauritania 

Jamaica 

Ethiopia 

Dominican Republic 

Tanzania 

Cameroon 

Togo 

Congo (Democratic Republic) 

Mauritius 

Mozambique 

Cape Verde 

Ghana 

Rwanda 

French Polynesia 

Senegal 

Malawi 

Samoa 

Burkina Faso 

Haiti 

Mali 

Congo 

Zambia 

Vanuatu 

Angola 

New Caledonia 

Niger 

Saint Lucia 

Palau 

Grenada 

Trinidad and Tobago 

Micronesia 

Liberia 

Tonga 

Gabon 

Fiji 

Burundi 

Chad 

Lesotho 

Total 

161,657 

155,168 

137,832 

136,182 

95,319 

77,272 

68,614 

64,614 

62,916 

61,067 

45,780 

39,786 

35,811 

29,139 

26,101 

16,130 

14,854 

14,622 

12,046 

9,945 

7,595 

7,456 

7,379 

7,207 

6,919 

5,761 

3,835 

3,623 

3,211 

2,581 

2,363 

2,254 

1,996 

1,180 

1,141 

821 

681 

528 

474 

40 

18 

- 

144,816 

131,384 

73,469 

101,863 

93,455 

68,000 

75,962 

64,015 

26,121 

70,154 

50,319 

39,047 

108,511 

26,202 

27,470 

6,365 

6,439 

13,994 

13,063 

3,999 

8,872 

8,944 

5,511 

7,717 

8,649 

6,412 

5,028 

6,380 

3,708 

3,020 

2,102 

2,224 

2,243 

- 

- 

364 

1,416 

512 

1,032 

- 

- 

3,417 

1,331,918 

1,222,199 

93 

 
 
 
 
 
3.2.3.4.2 

Industry sector analysis 

INVESTMENT FACILITY 

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 

Global loans and agency agreements 

Urban development, renovation and transport 

Electricity, coal and others 

Tertiary and other 

Basic material and mining 

Roads and motorways 

Airports and air traffic management systems 

Materials processing, construction 

Telecommunications 

Paper chain 

Food chain 

Investment goods/consumer durables 

Total 

31.12.2014 

31.12.2013 

541,600 

209,849 

198,604 

168,689 

108,367 

43,993 

33,310 

16,243 

6,089 

5,156 

18 

- 

337,482 

216,244 

234,106 

148,875 

176,909 

38,880 

29,116 

20,884 

11,746 

4,540 

- 

3,417 

1,331,918 

1,222,199 

94 

 
 
 
 
3.2.3.5  Arrears on loans and impairments 

INVESTMENT FACILITY 

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): 

Carrying amount 

Individually impaired 

Gross amount 

Allowance for impairment 

Carrying amount individually impaired 

Collectively impaired 

Gross amount 

Allowance for impairment 

Carrying amount collectively impaired 

Past due but not impaired 

Past due comprises 

0-30 days 

30-60 days 

60-90 days 

90-180 days 

more 180 days 

Carrying amount past due but not impaired 

Notes 

 7 

Loans and receivables 

Loans and receivables 

31.12.2014 

1,331,918 

31.12.2013 

1,222,199 

210,338 

-152,137 

58,201 

- 

- 

- 

2,558 

528 

5 

- 

- 

3,091 

227,007 

-70,791 

156,216 

- 

- 

- 

1,561 

- 

- 

- 

- 

1,561 

Carrying amount neither past due nor impaired 

1,270,626 

1,064,422 

Total carrying amount loans and receivables 

1,331,918 

1,222,199 

95 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.4. 

Credit risk on cash and cash equivalents 

INVESTMENT FACILITY 

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 50,000,000 (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 

(Moody’s term) 

(Moody’s term) 

P-1 

P-1 

P-1 

P-1 

P-1 

P-1 

Total 

Aaa 

Aa1 

Aa2 

Aa3 

A1 

A2 

3.2.5 

Credit risk on derivatives 

3.2.5.1  Credit risk policy of derivatives 

31.12.2014 

31.12.2013 

47,937 

- 

38 

- 

137,820 

359,604 

545,399 

9% 

0% 

0% 

0% 

25% 

66% 

100% 

- 

48,130 

48 

50,000 

106,572 

394,765 

599,515 

0% 

8% 

0% 

8% 

18% 

66% 

100% 

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: 

96 

 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

Swap contracts at 31.12.2014 

less than 

1 year 

5 years 

more than 

Total 2014 

In EUR’000 

Notional amount 

Fair Value (i.e. net discounted value) 

1 year 

to 5 years 

to 10 years 

to 10 years 

- 

- 

11,606 

-3,219 

- 

- 

- 

- 

11,606 

-3,219 

Swap contracts at 31.12.2013 

less than 

1 year 

5 years 

more than 

Total 2013 

In EUR’000 

Notional amount 

Fair Value (i.e. net discounted value) 

1 year 

to 5 years 

to 10 years 

to 10 years 

2,453 

19 

2,584 

-62 

13,491 

-1,892 

- 

- 

18,528 

-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). 

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  50,000,000  (fifty  million  euro).  Investments  in  medium  and  long-term  bonds  could  also  be  eligible, 
according to the investment guidelines and depending on liquidity requirements: 

Minimum short-term 
rating 

Minimum long-term 
rating 

(Moody’s term) 

(Moody’s term) 

P-1 

P-1 

NP 

P-3 

Total 

Aa2 

Aa3 

Ba2 

Baa3 

31.12.2014 

31.12.2013 

-  

-  

49,994 

49,994 

99,988 

0% 

0% 

50% 

50% 

100% 

16,199 

39,399 

-  

46,964 

102,562 

16% 

38% 

0% 

46% 

100% 

97 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
INVESTMENT FACILITY 

Liquidity risk 

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

3.1.1 

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.  

3.1.2 

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.  

98 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

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 

In EUR’000 as at 31.12.2014 

Outflows for committed but un-disbursed loans 

Outflows for committed investment funds and share subscription 

Others (signed non-issued guarantees, issued guarantees) 

Outflows for committed interest subsidies 

Outflows for committed TA  

Total  

 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 

1,576 

4,584 

- 

- 

595 

6,755 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1,160,283 

1,161,859 

196,053 

200,637 

27,298 

27,298 

241,890 

241,890 

18,978 

19,573 

1,644,502 

1,651,257 

Maturity profile of non-derivative financial liabilities 

In EUR’000 as at 31.12.2013 

Outflows for committed but un-disbursed loans 

Outflows for committed investment funds and share subscription 

Others (signed non-issued guarantees, issued guarantees) 

Outflows for committed interest subsidies 

Outflows for committed TA  

Total  

Maturity profile of derivative financial liabilities 

In EUR’000 as at 31.12.2014 

CCS and CCIRS – Inflows 
CCS and CCIRS – Outflows 
Short term currency swaps – Inflows 
Short term currency swaps – Outflows 
Interest Rate Swaps – Inflows 
Interest Rate Swaps - Outflows 

Total  

Maturity profile of derivative financial liabilities 

In EUR’000 as at 31.12.2013 

CCS and CCIRS – Inflows 
CCS and CCIRS – Outflows 
Short term currency swaps – Inflows 
Short term currency swaps – Outflows 
Interest Rate Swaps – Inflows 
Interest Rate Swaps - Outflows 

Total  

Market risk 

 3 months 
or less 

More than 
3 months 
to 1 year 

More than 
1 year to 5 
years 

More than 
5 years 

Maturity 
Undefined 

363 

1,689 

- 

- 

759 

2,811 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

889,503 

175,132 

29,414 

191,760 

191,760 

14,707 

15,466 

1,300,516 

1,303,327 

Gross 
nominal 
outflow 

889,866 

176,821 

29,414 

 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 

6 

- 

2,218 

-3,202 

10,036 

-12,809 

1,059,000 

-1,070,677 

371 

- 

-11,300 

- 

- 

1,103 

-2,143 

-2,024 

- 

- 

6,495 

-6,373 

-2,651 

- 

- 

- 

- 

3,619 

-3,022 

597 

12,260 

-16,011 

1,059,000 

-1,070,677 

11,588 

-11,538 

-15,378 

 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 

506 

-539 

700,000 

-701,490 

232 

- 

-1,291 

5,183 

-5,858 

11,476 

-12,894 

- 

- 

1,053 

-1,874 

-1,496 

- 

- 

6,341 

-6,385 

-1,462 

2,731 

-2,819 

- 

- 

5,720 

-3,773 

1,859 

19,896 

-22,110 

700,000 

-701,490 

13,346 

-12,032 

-2,390 

99 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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. 

INVESTMENT FACILITY 

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  419k  (as  at  31  December  2013:  decrease  by  EUR  344k)  if  all  relevant  interest  rates  curves  are  simultaneously 
shifted upwards in parallel by 1 basis point. 

Basis point value 

In EUR’000 

Money 

Market 

Very Short  

Short 

Medium 

Long 

Extra Long  

Total 

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 

In EUR’000 

Money 

Market 

Very Short  

Short 

Medium 

Long 

Extra Long  

Total 

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 

100 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.4.2. 

Foreign exchange risk 

INVESTMENT FACILITY 

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. 

101 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

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): 

102 

 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

At 31 December 2014 (in EUR'000) 

EUR 

USD 

KES 

DOP 

TZS 

UGX 

ACP/OCT 
Currencies 

Total 

ASSETS 

Cash and cash equivalents 

446,872 

98,526 

- 

- 

- 

- 

- 

545,398 

Loans and receivables 

393,296 

697,247 

97,921 

26,317 

52,799 

27,029 

25,243  1,319,852 

Available-for-sale financial assets 

65,979 

329,472 

Amounts receivable from contributors 

Held-to-maturity financial assets 

42,590 

99,988 

- 

- 

- 

- 

- 

4,949 

- 

- 

- 

- 

- 

- 

- 

- 

2,685 

403,085 

- 

- 

42,590 

99,988 

Total assets in the reported FX position 

1,048,725  1,125,245 

97,921 

31,266 

52,799 

27,029 

27,928  2,410,913 

Total assets out of the reported FX 
position 

6,085 

6,639 

2,481 

1,273 

613 

503 

443 

18,037 

Total assets 

1,054,810  1,131,884 

100,402 

32,539 

53,412 

27,532 

28,371  2,428,950 

LIABILITIES AND CONTRIBUTORS’ 
RESOURCES 

Liabilities 

Derivative financial instruments 

-1,070,606  1,083,166 

Amount owed to third parties 

Other liabilities 

68,824 

1,944 

- 

29 

Total liabilities in the reported FX position 

-999,838  1,083,195 

Total liabilities out of the reported FX 
position 

31,282 

2,642 

Total liabilities 

-968,556  1,085,837 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1 

1 

- 

1 

- 

- 

75 

75 

12,560 

68,824 

2,049 

83,433 

- 

33,924 

75 

117,357 

Net reported FX Position 

2,048,563 

42,050 

97,921 

31,266 

52,799 

27,028 

27,853  2,327,480 

Contributors’ resources 

Member States Contribution called 

2,057,000 

Fair value reserve 

Retained earnings 

156,122 

98,471 

Total contributors’ resources 

2,311,593 

- 

- 

- 

- 

Total liabilities and contributors’ 
resources 

1,343,037  1,085,837 

As at 31 December 2014: 

COMMITMENTS 

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

1,124,509 

237,987 

Issued guarantees 

Interest subsidies and TA 

- 

285,239 

CONTINGENT LIABILITIES 

Signed non-issued guarantees 

25,000 

- 

- 

- 

103 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1 

- 

- 

- 

- 

-  2,057,000 

- 

- 

156,122 

98,471 

-  2,311,593 

75  2,428,950 

-  1,362,496 

2,298 

2,298 

- 

285,239 

- 

25,000 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

At 31 December 2013 (in EUR'000) 

EUR 

USD 

KES 

DOP 

TZS 

UGX 

ACP/OCT 
Currencies 

Total 

ASSETS 

Cash and cash equivalents 

542,365 

57,142 

Derivative financial instruments 

3,250 

-3,060 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

599,507 

190 

Loans and receivables 

483,066 

567,294 

64,488 

28,117 

25,966 

25,133 

14,138  1,208,202 

Available-for-sale financial assets 

70,299 

252,668 

Held-to-maturity financial assets 

102,562 

- 

- 

- 

6,427 

- 

- 

- 

- 

- 

2,305 

331,699 

- 

102,562 

Total assets in the reported FX position 

1,201,542 

874,044 

64,488 

34,544 

25,966 

25,133 

16,443  2,242,160 

Total assets out of the reported FX 
position 

5,109 

5,968 

1,623 

1,336 

155 

438 

358 

14,987 

Total assets 

1,206,651 

880,012 

66,111 

35,880 

26,121 

25,571 

16,801  2,257,147 

LIABILITIES AND CONTRIBUTORS’ 
RESOURCES 

Liabilities 

Derivative financial instruments 

-715,278 

717,012 

Amount owed to third parties 

Other liabilities 

331,235 

1,827 

- 

- 

Total liabilities in the reported FX position 

-382,216 

717,012 

Total liabilities out of the reported FX 
position 

34,814 

2,683 

Total liabilities 

-347,402 

719,695 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

142 

142 

1,734 

331,235 

1,969 

334,938 

- 

37,497 

142 

372,435 

Net reported FX Position 

1,583,758 

157,032 

64,488 

34,544 

25,966 

25,133 

16,301  1,907,222 

Contributors’ resources 

Member States Contribution called 

1,661,309 

Fair value reserve 

Retained earnings 

78,191 

145,212 

Total contributors’ resources 

1,884,712 

- 

- 

- 

- 

Total liabilities and contributors’ 
resources 

1,537,310 

719,695 

As at 31 December 2013: 

COMMITMENTS 

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

896,655 

170,032 

Issued guarantees 

Interest subsidies and TA 

- 

222,588 

CONTINGENT LIABILITIES 

Signed non-issued guarantees 

25,000 

- 

- 

- 

104 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

-  1,661,309 

- 

- 

78,191 

145,212 

-  1,884,712 

142  2,257,147 

-  1,066,687 

4,414 

4,414 

- 

222,588 

- 

25,000 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.4.2.3 

Foreign exchange sensitivity analysis 

INVESTMENT FACILITY 

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) 

Fiji Dollars (FJD) 

Haitian Gourde (HTG) 

Kenya Shillings (KES) 

Mauritania Ouguiyas (MRO) 

Mauritius Rupees (MUR) 

Rwanda Francs (RWF) 

Tanzania Shillings (TZS) 

Uganda Shillings (UGX) 

United States Dollars (USD) 

Franc CFA Francs (XAF/XOF) 

South Africa Rand (ZAR) 

Mozambican Metical (MZN) 

3.4.3. 

Equity price risk 

53.1988 

2.376 

55.23 

109.86 

350.61 

38.46 

831.04 

2,096.58 

3,354.00 

1.2141 

655.957 

14.0353 

40.04 

58.3329 

2.5655 

60.1459 

118.73 

398.7 

41.27 

926.86 

2,179.05 

3,476.00 

1.3791 

655.957 

14.566 

40.94 

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). 

105 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
4 

Fair values of financial instruments 

Accounting classifications and fair values 

INVESTMENT FACILITY 

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 

In EUR’000 

Financial assets carried at fair value: 

Derivative financial instruments  

Venture Capital Funds 

Direct Equity Investments 

Total  

Financial assets not carried at fair value: 

Cash and cash equivalents 

Loans and receivables 

Amounts receivable from contributors 

Bonds 

Other assets 

Total  

Carrying amount 

Fair value 

Held for 
trading 

Available-
for-sale 

Cash, loans 
and 
receivables 

Held to 
maturity 

Other 
financial 
liabilities 

Total 

  Level 1 

Level 2  Level 3 

Total 

448 

- 

- 

- 

385,245 

17,840 

448 

403,085 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

545,399 

1,331,918 

42,590 

- 

- 

- 

- 

- 

- 

- 

- 

99,988 

5,522 

1,925,429 

- 

- 

1,159 

1,159 

448 

- 

448 

-  385,245 

385,245 

- 

16,681 

17,840 

448  401,926 

403,533 

-  1,488,215 

-  1,488,215 

- 

99,985 

- 

99,985 

-  1,588,200 

-  1,588,200 

- 

- 

-14,632 

-14,632 

- 

- 

-14,632 

-14,632 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

-68,824 

-2,591 

-71,415 

-71,415 

448 

385,245 

17,840 

403,533 

545,399 

1,331,918 

42,590 

99,988 

5,522 

2,025,417 

2,428,950 

-14,632 

-14,632 

-68,824 

-2,591 

-71,415 

-86,047 

- 

99,988 

99,988 

- 

- 

- 

- 

- 

- 

Total financial assets 

448 

403,085 

1,925,429 

Financial liabilities carried at fair value: 

Derivative financial instruments 

Total  

Financial liabilities not carried at fair value: 

Amounts owed to third parties 

Other liabilities 

Total  

-14,632 

-14,632 

- 

- 

- 

Total financial liabilities 

-14,632 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

106 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
4 

Fair values of financial instruments (continued) 

Accounting classifications and fair values (continued) 

INVESTMENT FACILITY 

At 31 December 2013 

In EUR’000 

Financial assets carried at fair value: 

Derivative financial instruments  

Venture Capital Funds 

Direct Equity Investments 

Total  

Financial assets not carried at fair value: 

Cash and cash equivalents 

Loans and receivables 

Bonds 

Other assets 

Total  

1,024 

- 

- 

- 

305,642 

26,057 

1,024 

331,699 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

599,515 

1,222,199 

- 

- 

- 

- 

- 

- 

- 

102,562 

148 

- 

1,821,862 

102,562 

Total financial assets 

1,024 

331,699 

1,821,862 

102,562 

Financial liabilities carried at fair value: 

Derivative financial instruments 

Total  

Financial liabilities not carried at fair value: 

Amounts owed to third parties 

Other liabilities 

Total  

Total financial liabilities 

-3,545 

-3,545 

- 

- 

- 

-3,545 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

107 

Carrying amount 

Fair value 

Held for 
trading 

Available-
for-sale 

Cash, loans 
and 
receivables 

Held to 
maturity 

Other 
financial 
liabilities 

Total 

  Level 1 

Level 2  Level 3 

Total 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1,024 

269,252 

62,447 

332,723 

599,515 

1,222,199 

- 

- 

6,844 

6,844 

1,024 

- 

1,024 

-  305,642 

269,252 

- 

19,213 

62,447 

1,024  324,855 

332,723 

-  1,351,244 

-  1,351,244 

102,562 

  102,549 

148 

- 

- 

- 

- 

- 

102,549 

- 

1,924,424 

  102,549  1,351,244 

-  1,453,793 

2,257,147 

-3,545 

-3,545 

- 

- 

-3,545 

-3,545 

- 

- 

-3,545 

-3,545 

-331,235 

-331,235 

-2,572 

-2,572 

-333,807 

-333,807 

-333,807 

-337,352 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
   
 
 
 
Measurement of fair values 

INVESTMENT FACILITY 

Valuation techniques and significant unobservable inputs 

4.2.1 
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 

Financial instruments carried at fair value 

Relationship of 
unobservable inputs 
to fair value 
measurement 

Derivative 
financial 
instruments 

Venture 
Capital Fund 
(VCF) 

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

rates 

the 

fair  value 

Adjusted  net  assets  method:  The 
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 
is 
performed  and 
adjusted. 

the  reported  NAV 

if  necessary 

Not applicable. 

Not applicable. 

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

Increase, 

for 

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

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

for 

The 
the 
higher 
marketability  discount, 
fair 
the 
value. 

lower 

the 

Financial instruments not carried at fair value 

Loans and 
receivables 

Amounts 
owed to third 
parties 

Other 
liabilities 

Not applicable. 

Not applicable. 

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. 

Discounted cash flows. 

Not applicable. 

Not applicable. 

Discounted cash flows. 

Not applicable. 

Not applicable. 

108 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

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 -184k as at 31 
December 2014 and to EUR -184k as at 31 December 2013.  
Debit  valuation  adjustments  (DVA),  reflecting  own  credit  risk  on  derivative  transactions,  amounting  to  EUR  +30k  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 

Balance at 1 January 2014 

Gains or losses included in profit or loss: 

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

- impairment on available-for-sale financial assets  

Total 

Gains or losses included in other comprehensive income: 

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

Total 

Disbursements 

Repayments 

Balance at 31 December 2014 

In EUR'000 

Balance at 1 January 2013 

Gains or losses included in profit or loss: 

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

- impairment on available-for-sale financial assets  

Total 

Gains or losses included in other comprehensive income: 

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

Total 

Disbursements 

Repayments 

Balance at 31 December 2013 

109 

Available-for-sale 
financial assets 

324,855 

8,109 

-2,084 

6,025 

71,778 

71,778 

42,646 

-43,378 

401,926 

Available-for-sale 
financial assets 

322,000 

5,294 

-2,701 

2,593 

4,299 

4,299 

34,700 

-38,737 

324,855 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

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 

(in EUR’000) 

Direct Equity Investments 

Total 

At 31 December 2013 

(in EUR’000) 

Venture Capital Funds 

Direct Equity Investments 

Total 

Increase 

Decrease 

31 

31 

-31 

-31 

Increase 

Decrease 

20 

141 

161 

-20 

-141 

-161 

110 

 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

5  Cash and cash equivalents (in EUR’000) 

The cash and cash equivalents are composed of: 

Cash in hand 

Term deposits 

Commercial papers 

Cash and cash equivalents in the statement of financial position 

Accrued interest  

Cash and cash equivalents in the cash flow statement 

6  Derivative financial instruments (in EUR’000) 

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

31.12.2014 

31.12.2013 

9,642 

415,757 

120,000 

545,399 

-1 

545,398 

194,107 

405,408 

- 

599,515 

-8 

599,507 

At 31 December 2014 

Cross currency interest rate swaps 

Interest rate swaps 

FX swaps 

Total derivative financial instruments 

At 31 December 2013 

Cross currency swaps 

Cross currency interest rate swaps 

Interest rate swaps 

FX swaps 

Total derivative financial instruments 

Fair Value 

Assets 

Liabilities 

Notional amount 

- 

448 

- 

448 

-3,219 

-564 

-10,849 

-14,632 

11,606 

44,749 

1,059,000 

1,115,355 

Fair Value 

Assets 

Liabilities 

Notional amount 

56 

44 

924 

- 

1,024 

- 

-2,035 

- 

-1,510 

-3,545 

2,067 

16,461 

43,335 

700,000 

761,863 

111 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

7 

Loans and receivables (in EUR’000) 

The main components of loans and receivables are as follows: 

Nominal as at 1 January 2014 

Disbursements 

Repayments 

Interest capitalised 

Foreign exchange rates differences 

Nominal as at 31 December 2014 

Global loans(*) 

Senior loans 

342,113 

216,672 

-58,417 

- 

42,138 

542,506 

806,007 

31,654 

-107,794 

- 

52,696 

782,563 

Impairment as at 1 January 2014 

-7,675 

-12,734 

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

Reversal of impairment 

Foreign exchange rates differences 

Impairment as at 31 December 2014 

Amortised Cost 

Interest 

- 

2,586 

-662 

-5,751 

-2,562 

7,407 

- 

907 

-1,664 

-13,491 

-5,125 

11,930 

Subordinated 
loans 

Total 

131,632 

1,279,752 

- 

-367 

11,915 

3,463 

146,643 

-50,382 

-79,249 

- 

-3,264 

-132,895 

28 

665 

248,326 

-166,578 

11,915 

98,297 

1,471,712 

-70,791 

-79,249 

3,493 

-5,590 

-152,137 

-7,659 

20,002 

Loans and receivables as at 31 December 2014 

541,600 

775,877 

14,441 

1,331,918 

(*) including agency agreements 

Nominal as at 1 January 2013 

Disbursements 

Repayments 

Interest capitalised 

Foreign exchange rates differences 

Nominal as at 31 December 2013 

Impairment as at 1 January 2013 

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

Reversal of impairment 

Foreign exchange rates differences 

Impairment as at 31 December 2013 

Amortised Cost 

Interest 

Global loans(*) 

Senior loans 

254,686 

150,513 

-51,595 

- 

-11,491 

342,113 

-6,494 

-1,341 

- 

160 

-7,675 

-2,109 

5,154 

789,970 

91,690 

-55,865 

-342 

-19,446 

806,007 

-14,296 

- 

1,088 

474 

-12,734 

-3,883 

10,536 

Subordinated 
loans 

Total 

133,780 

1,178,436 

- 

-11,700 

10,705 

-1,153 

131,632 

-24,355 

-27,081 

- 

1,054 

-50,382 

-66 

3,606 

242,203 

-119,160 

10,363 

-32,090 

1,279,752 

-45,145 

-28,422 

1,088 

1,688 

-70,791 

-6,058 

19,296 

Loans and receivables as at 31 December 2013 

337,483 

799,926 

84,790 

1,222,199 

(*) including agency agreements 

112 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

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

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

Cost as at 1 January 2014 

Disbursements 

Repayments / sales 

Foreign exchange rates differences on repayments / sales 

Cost as at 31 December 2014 

Unrealised gains and losses as at 1 January 2014 

Net change in unrealised gains and losses 

Unrealised gains and losses as at 31 December 2014 

Impairment as at 1 January 2014 

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

Impairment as at 31 December 2014 

Venture Capital 
Funds 

Direct Equity 
Investments 

256,161 

41,990 

-38,535 

168 

259,784 

71,931 

78,064 

149,995 

-22,450 

-2,084 

-24,534 

23,620 

656 

-4,843 

281 

19,714 

6,260 

-133 

6,127 

-3,823 

-4,178 

-8,001 

Total 

279,781 

42,646 

-43,378 

449 

279,498 

78,191 

77,931 

156,122 

-26,273 

-6,262 

-32,535 

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

385,245 

17,840 

403,085 

Cost as at 1 January 2013 

Disbursements 

Repayments / sales 

Foreign exchange rates differences on repayments / sales 

Cost as at 31 December 2013 

Unrealised gains and losses as at 1 January 2013 

Net change in unrealised gains and losses 

Unrealised gains and losses as at 31 December 2013 

Impairment as at 1 January 2013 

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

Impairment as at 31 December 2013 

Venture Capital 
Funds 

Direct Equity 
Investments 

258,426 

33,600 

-37,361 

1,496 

256,161 

59,234 

12,697 

71,931 

-14,345 

-8,105 

-22,450 

24,238 

1,100 

-1,376 

-342 

23,620 

9,200 

-2,940 

6,260 

-3,752 

-71 

-3,823 

Total 

282,664 

34,700 

-38,737 

1,154 

279,781 

68,434 

9,757 

78,191 

-18,097 

-8,176 

-26,273 

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

305,642 

26,057 

331,699 

113 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

9  Amounts receivable from contributors (in EUR’000) 

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

Member States contribution called but not paid 

Total amounts receivable from contributors 

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

31.12.2014 

31.12.2013 

42,590 

42,590 

- 

- 

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 

Acquisitions 

Maturities 

Change in amortisation of premium/discount 

Balance as at 31 December 2014 

Balance as at 1 January 2013 

Acquisitions 

Maturities  

Change in amortisation of premium/discount 

Change in accrued interest  

Balance as at 31 December 2013 

11  Other assets (in EUR’000) 

102,562 

1,610,057 

-1,612,619 

-12 

99,988 

99,029 

680,635 

-676,369 

228 

-961 

102,562 

The main components of other assets are as follows: 

Amount receivable from EIB 

Financial guarantees 

Amounts receivable with regard to TA disbursements (Note 21) 

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

Total other assets 

31.12.2014 

31.12.2013 

5,447 

75 

- 

- 

5,522 

6 

142 

337 

-337 

148 

114 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

12    Deferred income (in EUR’000) 

The main components of deferred income are as follows: 

Deferred interest subsidies 

Deferred commissions on loans and receivables 

Total deferred income 

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

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

Net general administrative expenses payable to EIB 

Other amounts payable to EIB 

Interest subsidies and TA not yet disbursed owed to Member States 

Total amounts owed to third parties 

14  Other liabilities (in EUR’000) 

The main components of other liabilities are as follows: 

Loan repayments received in advance  

Deferred income from interest subsidies 

Financial guarantees 

Total other liabilities 

31.12.2014 

31.12.2013 

30,750 

560 

31,310 

34,787 

296 

35,083 

31.12.2014 

31.12.2013 

38,348 

44 

30,432 

68,824 

37,851 

716 

292,668 

331,235 

31.12.2014 

31.12.2013 

1,973 

542 

76 

2,591 

1,827 

603 

142 

2,572 

115 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

15  Member States Contribution called (in EUR’000) 

Member States 

Austria 

Belgium 

Bulgaria 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

United Kingdom 

Total as at 31 December 2014 

Total as at 31 December 2013 

Contribution to 
the Facility 

Contribution to 
interest subsidies 
and technical 
assistance (*) 

Total 
contributed 

Called and not 
paid (**) 

54,511 

80,634 

- 

- 

- 

44,020 

- 

30,444 

499,851 

480,515 

25,713 

- 

12,753 

257,948 

- 

- 

5,965 

- 

107,375 

- 

19,953 

- 

- 

- 

120,129 

56,156 

261,033 

2,057,000 

1,661,309 

3,808 

5,633 

- 

- 

- 

3,075 

- 

2,127 

34,917 

33,566 

1,796 

- 

891 

18,019 

- 

- 

417 

- 

7,500 

- 

1,394 

- 

- 

- 

8,391 

3,923 

18,234 

143,691 

433,691 

58,319 

86,267 

- 

- 

- 

47,095 

- 

32,571 

534,768 

514,081 

27,509 

- 

13,644 

275,967 

- 

- 

6,382 

- 

114,875 

- 

21,347 

- 

- 

- 

128,520 

60,079 

279,267 

2,200,691 

2,095,000 

1,205 

1,765 

70 

45 

255 

1,000 

25 

735 

9,775 

10,250 

735 

275 

455 

6,430 

35 

60 

135 

15 

2,425 

650 

575 

185 

105 

90 

3,925 

1,370 

- 

42,590 

- 

(*) During 2014 Member States’ contributions to interest subsidies and TA of EUR 290,000 under the 9th EDF, earmarked as pre-financing 
the interest subsidies and TA under the 10th EDF, were reallocated to contribution to the Facility. 

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

116 

 
 
 
 
 
 
 
 
16  Contingent liabilities and commitments (in EUR’000) 

INVESTMENT FACILITY 

Commitments 

Un-disbursed loans 

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

Issued guarantees 

Interest subsidies and technical assistance 

Contingent liabilities 

Signed non-issued guarantees 

31.12.2014 

31.12.2013 

1,161,859 

200,637 

2,298 

285,239 

889,866 

176,821 

4,414 

222,588 

25,000 

25,000 

Total contingent liabilities and commitments 

1,675,033 

1,318,689 

17 

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

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

Cash and cash equivalents 

Held-to-maturity financial assets 

Loans and receivables 

Interest subsidies 

Total interest and similar income 

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

Derivative financial instruments 

Total interest and similar expense 

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

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

Fee and commission on loans and receivables 

Fee and commission on financial guarantees 

Other 

Total fee and commission income 

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

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

Total fee and commission expenses 

117 

From 01.01.2014 

From 01.01.2013 

to 31.12.2014 

to 31.12.2013 

543 

276 

72,135 

4,286 

77,240 

273 

461 

64,512 

4,347 

69,593 

From 01.01.2014 

From 01.01.2013 

to 31.12.2014 

to 31.12.2013 

-1,522 

-1,522 

-1,175 

-1,175 

From 01.01.2014 

From 01.01.2013 

to 31.12.2014 

to 31.12.2013 

316 

78 

769 

1,163 

2,573 

145 

10 

2,728 

From 01.01.2014 

From 01.01.2013 

to 31.12.2014 

to 31.12.2013 

-37 

-37 

-43 

-43 

 
 
 
 
 
 
 
 
   
   
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT FACILITY 

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: 

Net proceeds from available-for-sale financial assets 

Dividend income 

Net realised gains on available-for-sale financial assets  

20  General administrative expenses (in EUR’000) 

From 01.01.2014 

From 01.01.2013 

to 31.12.2014 

to 31.12.2013 

3,179 

4,930 

8,109 

2,688 

2,606 

5,294 

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. 

Actual cost incurred by the EIB 

Income from appraisal fees directly charged to clients of the Facility 

Total general administrative expenses 

From 01.01.2014 

From 01.01.2013 

to 31.12.2014 

to 31.12.2013 

-40,912 

2,784 

-38,128 

-40,966 

3,115 

-37,851 

Following the entry in force of the revised Cotonou Partnership Agreement on the 1st of 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. 

118 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Definition of Interests in structured entities: 

INVESTMENT FACILITY 

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 

Project Finance - 
lending to Special 
Purposes Vehicles 
(“SPV”) 

Venture capital 
operations 

Nature and purpose 

Interest held by the Facility 

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. 

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. 

Net disbursed amounts 

Interest income 

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 

Project finance operations 

Loans and receivables 

Venture capital funds 

Available-for-sale financial assets 

Total 

23  Subsequent events 

Carrying amount at 
31.12.2014 

Maximum exposure 
to loss at 31.12.2014 

7,225 

385,245 

392,470 

7,225 

555,629 

562,854 

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

119