REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN COURT OF AUDITORS ON THE MANAGEMENT OF THE GUARANTEE FUND OF THE EUROPEAN FUND FOR STRATEGIC INVESTMENTS IN 2015
Date: 2016-05-31
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU investment, European Investment Bank, European Investment Fund, financial control, fund (EU), operation of the Institutions

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   EN 

   EUROPEAN COMMISSION  Brussels, 31.5.2016  COM(2016) 353 final   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN COURT OF AUDITORS ON THE MANAGEMENT OF THE GUARANTEE FUND OF THE EUROPEAN FUND FOR STRATEGIC INVESTMENTS IN 2015  
 
 
Table of Contents 

1. 

INTRODUCTION ................................................................................................................... 3 

2.  OPERATIONAL CONTEXT .................................................................................................... 3 

3.  FINANCIAL ACCOUNTS ........................................................................................................ 4 

4.  MANAGEMENT OF THE EFSIGF IN 2015 ........................................................................... 4 

5.  ASSESSMENT OF THE ADEQUACY OF THE TARGET AMOUNT AND THE LEVEL OF THE 
EFSIGF ..................................................................................................................................... 5 

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1. 

INTRODUCTION 

The legal basis for this report is Regulation (EU) 2015/1017 of the European Parliament and 
of the Council of 25 June 2015 on the European Fund for Strategic Investments, the European 
Investment  Advisory  Hub  and  the  European  Investment  Project  Portal  and  amending 
Regulations (EU) No 1291/2013 and (EU) No 1316/2013 — the European Fund for Strategic 
Investments1 (the "EFSI Regulation"). The agreement on the management of the EFSI and on 
the  granting  of  the  EU  guarantee  (the  "EFSI  Agreement")  was  signed  by  the  European 
Commission and the European Investment Bank (the "EIB") on 22 July 2015. 

Article 16(6) of the EFSI Regulation provides that the Commission shall, by 31 May of each 
year,  submit  to  the  European  Parliament,  to  the  Council  and  to  the  European  Court  of 
Auditors an annual report on the management of the EFSI Guarantee Fund (the "EFSIGF") in 
the previous calendar year, including an assessment of the adequacy of the target amount and 
the level of the EFSIGF and of the need for its replenishment. This annual report shall contain 
the presentation of the financial position  of the EFSIGF at the end of the previous calendar 
year,  the  financial  flows  during  the  previous  calendar  year  as  well  as  the  significant 
transactions  and  any  relevant  information  on  the  financial  accounts.  The  report  shall  also 
include  information  about  the  financial  management,  the  performance  and  the  risk  of  the 
EFSIGF at the end of the previous calendar year. 

The  EFSI  Regulation  also  provides,  in  Article  16(2),  that  the  EIB,  in  cooperation  with  the 
European  Investment  Fund  (the  "EIF")  where  appropriate,  shall  submit  a  separate  annual 
report  to  the  European  Parliament  and  to  the  Council  on  EIB  financing  and  investment 
operations  covered  by  the  Regulation  ("EFSI  operations"),  which  shall  be  made  public.  To 
date, the EIB has not yet adopted the annual report for 2015. 

2. 

OPERATIONAL CONTEXT 

The EU Guarantee covers  financing and investment  operations signed by the EIB under the 
Infrastructure and Innovation Window and by the EIF under the SME Window. Part of these 
operations is covered by the EU Guarantee while a part is carried out at the own risk of the 
EIB Group. 

In 2015, total signatures under EFSI amounted to EUR 3 billion covering 19 Member States, 
of which EUR 1.2 billion signed by the  EIB (10 operations) and EUR 1.8 billion signed by 
the EIF (83 operations). Of these signatures, as of end 2015, EUR 1,553 million was covered 
by  the  EU  Guarantee  (EUR  1,155  million  from  EIB  and  EUR  398  million  from  EIF).  The 
total  outstanding  exposure  covered  by  the  EU  Guarantee  in  terms  of  disbursements  was 
around EUR 202 million. 

The EIB and the EIF are responsible for assessing  and monitoring the risk of the individual 
operations and reported back to the Commission and the European Court of Auditors in line 
with Article 16(3) of the EFSI Regulation in March 2016. On the basis of this reporting, the 
Commission will review the adequacy of the target amount and the level of the EFSIGF.  

Pursuant to Article 16(2) of the EFSI Regulation, the annual report of the EIB to the European 
Parliament  and  Council  shall  contain  specific  information  on  the  aggregate  risk  associated 

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OJ L 169, 1.7.2015, p. 1. 

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with  the  financing  and  investment  operations  carried  out  under  EFSI  as  well  on  guarantee 
calls. 

According  to  Article  12  of  the  EFSI  Regulation,  the  EFSIGF  shall  constitute  a  liquidity 
cushion  from  which  the  EIB  shall  be  paid  in  the  event  of  a  call  on  the  EU  guarantee.  In 
accordance  with  the  EFSI  Agreement  between  the  EU  and  the  EIB,  calls  are  paid  by  the 
EFSIGF  if  their  amount  is  in  excess  of  the  funds  at  the  disposal  of  the  EIB  on  the  EFSI 
Account. The EFSI Account, managed by the EIB, has been established for the purposes of 
collecting the EU revenues resulting from EFSI guaranteed operations and recovered amounts 
and to the extent of the available balance, for the payment of calls under the EU guarantee.  

The EFSIGF is provisioned progressively taking into account the increase in exposure borne 
by the EU Guarantee. 

The  resources  of  the  EFSIGF  are  directly  managed  by  the  Commission  and  invested  in 
accordance  with  the  principle  of  sound  financial  management  following  appropriate 
prudential rules.  

3. 

FINANCIAL ACCOUNTS 

There  were  no  funds  in  the  EFSIGF  as  at  31  December  2015.  Consequently,  the  2015 
consolidated financial statements of the European Union do not contain the EFSIGF. 

A  receivable  of  EUR  1,399,423,  corresponding  to  the  net  EU  revenue  stemming  from  the 
2015 EFSI guaranteed operations was recorded in the 2015 financial statements of the EU and 
credited to the EFSI Account in January 2016.  

The  guarantee  exposure  of  the  EU  in  relation  to  disbursed  outstanding  EFSI  operations 
amounted to EUR 201,899,614, as at 31 December 2015, out of the overall maximum amount 
of  EUR  16,000,000,000  guaranteed  by  the  EU  (Article  11  of  the  EFSI  Regulation).  The 
amount  of  EUR  201,899,614  is  recorded  as  a  contingent  liability  in  the  notes  to  the  2015 
financial statements of the EU. 

Significant transactions  

A  budgetary  appropriation  of  EUR  1.35  billion  was  committed  in  2015  relating  to  the 
provisioning of the EFSIGF in 2016 and 2017.  

It is disclosed under the chapter "Outstanding budgetary commitments not yet expensed" of 
the notes to the financial statements of the EU for 2015. 

4. 

MANAGEMENT OF THE EFSIGF IN 2015 

On  21  January  2016,  the  Commission  adopted  Decision  C(2016)165  approving  the  asset 
management guidelines of the guarantee fund of the European Fund for Strategic Investments. 

There  were  no  funds  in  the  EFSIGF  at  any  time  in  2015.  The  first  report  on  the  financial 
management, performance and risk of the assets of the EFSIGF will therefore be presented in 
2017 for the year 2016. 

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5. 

ASSESSMENT OF THE ADEQUACY OF THE TARGET AMOUNT AND THE LEVEL OF THE 
EFSIGF 

As of end of 2015, ten operations with EFSI guarantee coverage were signed by the EIB for a 
total amount of EUR 1,155 million, of which EUR 202 million disbursed. Should there be any 
losses due to these operations, these will be covered by the EU Guarantee in accordance with 
the  terms  set  out  in  the  EFSI  Agreement.  In  particular,  the  EU  Guarantee  under  the 
Infrastructure and Innovation Window is granted in the form of a Portfolio First Loss Piece 
coverage  for  EIB  debt  operations  and  in  the  form  of  a  full  guarantee  for  equity/equity-type 
operations  where  the  EIB  invests  at  its  own  risk  on  a  pari  passu  basis  the  same  amount  of 
resources.  

EIF  operations  signed  in  2015  under  EFSI  guarantee  coverage  amount  to  around  EUR  398 
million; should there be any losses due to these operations, those would be covered primarily 
by  the  contributions  of  the  InnovFin  SME  Guarantee  Facility  and  the  COSME  Loan 
Guarantee Facility. 

According to the EFSI Regulation, the target amount of the EFSIGF is set at 50% of the total 
EU  guarantee  obligations,  which  currently  stand  at  EUR  16  billion.  Given  the  relatively 
limited  level  of  signatures  and  disbursements  until  the  end  of  2015,  there  are  no  sufficient 
elements  allowing  an  assessment  of  the  adequacy  of  the  target  amount  based  on  actual 
operations. The  first  report  on  the assessment  of  the  adequacy  of  the  target  amount  and  the 
level of the EFSIGF will therefore be presented by 31 May 2017 for the year 2016.  

It is presently foreseen in the EU budget that around EUR 500 million will be paid into the 
EFSIGF during the course of 2016. 

As the size of the portfolio of EFSI operations is expected to considerably increase over time, 
and also in view of budgetary constraints over the EFSI programming period, more detailed 
assessments will be carried out by the Commission going forward. 

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