Communication from the Commission to the European Parliament, the Council and the Court of Auditors — Annual accounts of the European Development Fund 2015
Date: 2016-10-14
Institutions: European Commission
Subjects: European Development Fund, balance sheet, closing of accounts, consolidated account, general budget (EU), implementation of the budget




C_2016379EN.01000101.xml










14.10.2016   


EN


Official Journal of the European Union


C 379/1





COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS
Annual accounts of the European Development Fund 2015
(2016/C 379/01)

CONTENTS






CERTIFICATION OF THE ACCOUNTS
2








IMPLEMENTING AND ACCOUNTING FOR THE EDF RESOURCES
3








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








FINANCIAL STATEMENTS OF THE EDF
7








NOTES TO THE FINANCIAL STATEMENTS OF THE EDF
15








FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND
39








CERTIFICATION OF THE ACCOUNTS
40








BACKGROUND INFORMATION ON THE BÊKOU EU TRUST FUND
41








NOTES TO THE FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND
43








CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE BÊKOU TRUST FUND
47








EDF REPORT ON FINANCIAL IMPLEMENTATION
50








FINANCIAL STATEMENTS AND EXPLANATORY NOTES — FUNDS MANAGED BY THE EUROPEAN INVESTMENT BANK
78



CERTIFICATION OF THE ACCOUNTS
The annual accounts of the European Development Fund for the year 2015 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


12 July 2016



IMPLEMENTING AND ACCOUNTING FOR THE EDF RESOURCES
1.   BACKGROUND

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

The European Council of 2 December 2013 adopted the Multi-annual Financial Framework for 2014-2020. 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 when a trust fund has been created under the EDF (see 3.2 below), its accounts, as well as the consolidated (EDF and trust fund) accounts are presented below.
The annual accounts are adopted by the Commission by 31 July of the subsequent year and presented to the European Parliament and to the Council for discharge.
3.2.   BÊKOU TRUST FUND

In accordance with Article 187(1) of the Financial Regulation applicable to the general budget of the Union (EU FR) and Article 42 of the Financial Regulation applicable to the transition period, the Commission is allowed to create Union Trust Funds for external actions under an agreement concluded with other donors. These trust funds may be created for emergency, post-emergency and thematic actions. In accordance with Article 187(6) of the EU FR, the accounting officer of the Union Trust Fund shall be the Accounting Officer of the Commission.
The first multi-donor EU Trust Fund called Bêkou, was established on 15 July 2014, by the EU 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 European Parliament to decide whether to grant discharge to the Commission for the financial implementation of the EDF resources for a given financial year. This decision is based on a review of the accounts and the annual report of the ECA (which includes an official statement of assurance) and replies of the Commission, and also following questions and further information requests to the Commission.
FINANCIAL STATEMENTS AND EXPLANATORY NOTES — FUNDS MANAGED BY THE EUROPEAN COMMISSION (1)


CONTENTS






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








FINANCIAL STATEMENTS OF THE EDF
7








EDF BALANCE SHEET
7








EDF STATEMENT OF FINANCIAL PERFORMANCE
8








EDF CASHFLOW STATEMENT
9








EDF STATEMENT OF CHANGES IN NET ASSETS
10








BALANCE SHEET BY EDF
11








STATEMENT OF FINANCIAL PERFORMANCE BY EDF
12








STATEMENT OF CHANGES IN NET ASSETS BY EDF
13








NOTES TO THE FINANCIAL STATEMENTS OF THE EDF
15








FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND
39








CERTIFICATION OF THE ACCOUNTS
40








BACKGROUND INFORMATION ON THE BÊKOU EU TRUST FUND
41








BÊKOU TRUST FUND BALANCE SHEET
41








BÊKOU TRUST FUND STATEMENT OF FINANCIAL PERFORMANCE
42








BÊKOU TRUST FUND CASHFLOW STATEMENT
42








BÊKOU TRUST FUND STATEMENT OF CHANGES IN NET ASSETS
42








NOTES TO THE FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND
43








CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE BÊKOU TRUST FUND
47








CONSOLIDATED BALANCE SHEET
47








CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE
48








CONSOLIDATED CASH FLOW STATEMENT
48








CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
49








EDF REPORT ON FINANCIAL IMPLEMENTATION
50




FINANCIAL STATEMENTS OF THE EDF
 (8)


EDF BALANCE SHEET









EUR millions




 


Note


31.12.2015


31.12.2014





NON-CURRENT ASSETS



 


 


 





Pre-financing




2.1




516




472






Trust Fund contributions




2.2




34




39





 


 



550




511






CURRENT ASSETS



 


 


 





Pre-financing




2.3




1 145 




1 403 






Receivables




2.4




171




84






Cash and cash equivalents




2.6




504




391





 


 



1 820 




1 879 






TOTAL ASSETS



 



2 370 




2 389 





 


 


 


 





NON-CURRENT LIABILITIES



 


 


 





Provisions




2.7




(4)




—






Payables




2.8




(10)




(34)





 


 



(14)




(34)






CURRENT LIABILITIES



 


 


 





Payables




2.9




(1 376 )




(1 423 )





 


 



(1 376 )




(1 423 )






TOTAL LIABILITIES



 



(1 390 )




(1 457 )






NET ASSETS



 



980




932






FUNDS & RESERVES



 


 


 





Called fund capital — active EDFs




2.10




38 873 




35 673 






Called fund capital from closed EDFs carried forward




2.11




2 252 




2 252 






Economic result carried forward from previous years



 



(36 994 )




(33 468 )






Economic result of the year



 



(3 152 )




(3 526 )






NET ASSETS



 



980




932









EDF STATEMENT OF FINANCIAL PERFORMANCE









EUR millions




 


Note


2015


2014





OPERATING REVENUE




3.2




132




132






OPERATING EXPENSES



 


 


 





Operating expenses




3.3




(3 179 )




(3 650 )






Administrative expenses




3.4




(113)




(22)





 


 



(3 291 )




(3 671 )






SURPLUS/(DEFICIT) FROM OPERATING ACTIVITIES



 



(3 160 )




(3 539 )






Financial revenue




3.5




8




13






Financial charges



 



(0)




(0)






SURPLUS/(DEFICIT) FROM FINANCIAL ACTIVITIES



 



8




13






ECONOMIC RESULT OF THE YEAR



 



(3 152 )




(3 526 )









EDF CASHFLOW STATEMENT









EUR millions




 


Note


2015


2014





Economic result of the year



 



(3 152 )




(3 526 )






OPERATING ACTIVITIES



 


 


 





Ordinary contributions from Member States



 



3 232 




3 068 






(Reversal of) impairment losses on receivables



 



1




14






(Increase)/decrease in pre-financing



 



214




(165)






(Increase)/decrease in Trust Fund contributions



 



5




(39)






(Increase)/decrease in current receivables
 (*)



 



(88)




(15)






Increase/(decrease) in non-current liabilities



 



(20)




9






Increase/(decrease) in current liabilities
 (**)



 


(211)


152





Increase/(decrease) in accrued charges and deferred income



 



132




134






NET CASHFLOW



 



113




(368)






Net increase/(decrease) in cash and cash equivalents



 



113




(368)






Cash and cash equivalents at the beginning of the year




2.6




391




759






Cash and cash equivalents at year-end




2.6




504




391









EDF STATEMENT OF CHANGES IN NET ASSETS












EUR millions




 


Fund capital — active EDFs
(A)


Uncalled funds — active EDFs
(B)


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


Cumulative Reserves
(D)


Called fund capital from closed EDFs carried forward
(E)


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






BALANCE AS AT 31.12.2013





45 691 




13 162 




32 529 




(33 468 )




2 252 




1 313 






Capital increase — ordinary contributions



—



(3 144 )




3 144 



—


—



3 144 






Economic result of the year



—


—


—



(3 526 )



—



(3 526 )







BALANCE AS AT 31.12.2014





45 691 




10 018 




35 673 




(36 994 )




2 252 




932






Capital increase — contributions



 



(4 795 )




4 795 



—


—



4 795 






Capital decrease — funds committed under the Bridging Facility




(1 595 )



 



(1 595 )



 


 



(1 595 )






Recognition of the 11th EDF capital




29 367 




29 367 




—



 


 



—






Economic result of the year



—



—




—




(3 152 )



—



(3 152 )







BALANCE AS AT 31.12.2015





73 464 




34 590 




38 873 




(40 146 )




2 252 




980









BALANCE SHEET BY EDF















EUR millions




 


 


31.12.2015


31.12.2014




 


Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF


Eighth EDF


Ninth EDF


10th EDF


11th EDF





NON-CURRENT ASSETS



 


 


 


 


 


 


 


 


 





Pre-financing




2.1



—



63




368




84



—



17




411




44






Trust Fund contributions




2.2



—


—


—



34



 


 


 



39





 


 


—



63




368




118



—



17




411




83






CURRENT ASSETS



 


 


 


 


 


 


 


 


 





Pre-financing




2.3




3




67




879




195




5




142




1 178 




77






Receivables




2.4




1




65




103




2




3




66




15




0






Liaison accounts




2.5




214




657




1 190 




—




216




810



—



607






Cash and cash equivalents




2.6



—


—


—



504



—


—



—




391





 


 



218




790




2 172 




701




224




1 018 




1 193 




1 076 






TOTAL ASSETS



 



218




853




2 541 




819




224




1 035 




1 604 




1 159 






NON-CURRENT LIABILITIES



 


 


 


 


 


 


 


 


 





Provisions




2.7



—


—



—




(4)



—


—



—



—





Payables




2.8



—


—



(10)



—


—


—



(34)



—




 


 


—


—



(10)




(4)



—


—



(34)



—





CURRENT LIABILITIES



 


 


 


 


 


 


 


 


 





Payables




2.9




(3)




(128)




(1 174 )




(71)




(10)




(175)




(1 195 )




(43)






Liaison accounts




2.5



—


—



—




(2 062 )



—


—



(1 633 )



—




 


 



(3)




(128)




(1 174 )




(2 132 )




(10)




(175)




(2 828 )




(43)






TOTAL LIABILITIES



 



(3)




(128)




(1 184 )




(2 136 )




(10)




(175)




(2 862 )




(43)






NET ASSETS



 



214




726




1 357 




(1 317 )




214




860




(1 258 )




1 116 






FUNDS & RESERVES



 


 


 


 


 


 


 


 


 





Called fund capital — active EDFs




2.10




12 164 




10 973 




15 737 



—



12 840 




11 699 




11 134 



—





Called fund capital from closed EDFs carried forward




2.11




627




1 625 



—


—



627




1 625 



—


—





Called fund capital transfers between active EDFs




2.12




(2 476 )




2 376 




35




65




(3 147 )




1 758 




(209)




1 597 






Economic result carried forward from previous years



 



(10 107 )




(14 223 )




(12 183 )




(482)




(10 114 )




(13 988 )




(9 356 )




(10)






Economic result of the year



 



6




(26)




(2 232 )




(901)




8




(235)




(2 828 )




(472)





 


 



214




726




1 357 




(1 317 )




214




860




(1 258 )




1 116 






NET ASSETS



 



214




726




1 357 




(1 317 )




214




860




(1 258 )




1 116 









STATEMENT OF FINANCIAL PERFORMANCE BY EDF















EUR millions




 


 


2015


2014




Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF


Eighth EDF


Ninth EDF


10th EDF


11th EDF





OPERATING REVENUE




3.2




4




24




99




5




9




43




79




1






OPERATING EXPENSES



 


 


 


 


 


 


 


 


 





Operating expenses




3.3




2




(56)




(2 297 )




(828)




(1)




(293)




(2 881 )




(475)






Administrative expenses




3.4




(0)




—




(34)




(79)



—



0




(22)



—




 


 



2




(56)




(2 331 )




(907)




(1)




(293)




(2 903 )




(475)






SURPLUS/(DEFICIT) FROM OPERATING ACTIVITIES



 



6




(32)




(2 232 )




(902)




8




(249)




(2 824 )




(474)






Financial revenue




3.5




(0)




6




0




2




0




15




(3)




2






Financial charges



 


—


—



0




(0)



—


—



(0)



—





SURPLUS/(DEFICIT) FROM FINANCIAL ACTIVITIES



 



(0)




6




1




2




0




15




(4)




2






ECONOMIC RESULT OF THE YEAR



 



6




(26)




(2 232 )




(901)




8




(235)




(2 828 )




(472)









STATEMENT OF CHANGES IN NET ASSETS BY EDF













EUR millions




Eighth EDF


Fund capital — active EDFs
(A)


Uncalled funds — active EDFs
(B)


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


Cumulative Reserves
(D)


Called fund capital from closed EDFs carried forward
(E)


Called fund capital transfers between active EDFs
(F)


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





BALANCE AS AT 31.12.2013




12 840 



—



12 840 




(10 114 )




627




(3 083 )




270






Transfers to/from the 10th EDF



 


 


—


 


 



(64)




(64)






Economic result of the year



 


 


—



8



 


 



8






BALANCE AS AT 31.12.2014




12 840 



—



12 840 




(10 107 )




627




(3 147 )




214






Capital decrease — funds committed under the Bridging Facility




(676)



 



(676)



 


 


 



(676)






Transfers to/from the 10th EDF



 


 


—


 


 



(6)




(6)






Transfers to/from the 11th EDF



 


 



—



 


 



676




676






Economic result of the year



 


 


—



6



 


 



6






BALANCE AS AT 31.12.2015




12 164 



 



12 164 




(10 100 )




627




(2 476 )




214




















EUR millions




Ninth EDF


Fund capital — active EDFs
(A)


Uncalled funds — active EDFs
(B)


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


Cumulative Reserves
(D)


Called fund capital from closed EDFs carried forward
(E)


Called fund capital transfers between active EDFs
(F)


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





BALANCE AS AT 31.12.2013




11 699 



—



11 699 




(13 988 )




1 625 




2 130 




1 467 






Transfers to/from the 10th EDF



 


 


—


 


 



(372)




(372)






Economic result of the year



 


 


—



(235)



 


 



(235)






BALANCE AS AT 31.12.2014




11 699 



—



11 699 




(14 223 )




1 625 




1 758 




860






Capital decrease — funds committed under the Bridging Facility




(727)



 



(727)



 


 


 



(727)






Transfers to/from the 10th EDF



 


 


—


 


 



(109)




(109)






Transfers to/from the 11th EDF



 


 


—


 


 



727




727






Economic result of the year



 


 


—



(26)



 


 



(26)






BALANCE AS AT 31.12.2015




10 973 



 



10 973 




(14 249 )




1 625 




2 376 




726




















EUR millions




10th EDF


Fund capital — active EDFs
(A)


Uncalled funds — active EDFs
(B)


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


Cumulative Reserves
(D)


Called fund capital from closed EDFs carried forward
(E)


Called fund capital transfers between active EDFs
(F)


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





BALANCE AS AT 31.12.2013




21 152 




13 162 




7 990 




(9 365 )



—



952




(423)






Capital increase — contributions



—



(3 144 )




3 144 



 


 


 



3 144 






Transfers to/from the Eighth and Ninth EDF



 


 


—


 


 



(936)




(936)






Transfers to/from the 11th EDF



 


 


 


 


 



(225)




(225)






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



 


 


 



10



 


 



10






Economic result of the year



 


 


—



(2 828 )



 


 



(2 828 )






BALANCE AS AT 31.12.2014




21 152 




10 018 




11 134 




(12 183 )



—



(209)




(1 258 )






Capital increase — contributions



 



(4 795 )




4 795 



 


 


 



4 795 






Capital decrease — funds committed under the Bridging Facility




(192)



 



(192)



 


 


 



(192)






Transfers to/from the Eighth and Ninth EDF



 


 


—


 


 



84




84






Transfers to/from the 11th EDF



 


 


—


 


 



160




160






Economic result of the year



 


 



—




(2 232 )



 


 



(2 232 )






BALANCE AS AT 31.12.2015




20 960 




5 223 




15 737 




(14 415 )



—



35




1 357 




















EUR millions




11th EDF


Fund capital — active EDFs
(A)


Uncalled funds — active EDFs
(B)


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


Cumulative Reserves
(D)


Called fund capital from closed EDFs carried forward
(E)


Called fund capital transfers between active EDFs
(F)


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





BALANCE AS AT 31.12.2013



—


—


—


—


—


 


—





Capital increase — ordinary contributions



—


—


—


 


 


 


—





Transfers to/from the Eighth, Ninth and 10th EDF



 


 


—


 


—



1 597 




1 597 






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



 


 


 



(10)



 


 



(10)






Economic result of the year



 


 


—



(472)



 


 



(472)






BALANCE AS AT 31.12.2014



—


—


—



(482)



 



1 597 




1 116 






Recognition of the 11th EDF capital in line with the Internal Agreement




29 301 




29 301 



—


 


 


 


—





Transfers to/from the Eighth, Ninth and 10th EDF



 


 


—


 


 



(1 532 )




(1 532 )






Economic result of the year



 


 


—



(901)



 


 



(901)






BALANCE AS AT 31.12.2015




29 301 




29 301 



—



(1 382 )



 



65




(1 317 )






NOTES TO THE FINANCIAL STATEMENTS OF THE EDF

1.   SIGNIFICANT ACCOUNTING POLICIES

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 1 ‘Financial Statements’ (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

1.3.1.   
Currency and basis for conversion


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

Euro exchange rates











Currency


31.12.2015


31.12.2014


Currency


31.12.2015


31.12.2014





BGN




1,9558 




1,9558 




LTL




—




3,4528 






CZK




27,0230 




27,7350 




PLN




4,2639 




4,2732 






DKK




7,4626 




7,4453 




RON




4,5240 




4,4828 






GBP




0,7340 




0,7789 




SEK




9,1895 




9,3930 






HRK




7,6380 




7,6580 




CHF




1,0835 




1,2024 






HUF




315,9800 




315,5400 




JPY




131,0700 




145,2300 





 


 


 



USD




1,0887 




1,2141 





1.3.2.   
Use of estimates


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

1.4.1   
Intangible assets


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


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






Type of asset


Straight line depreciation rate





Buildings




4 % to 10 %






Plant and equipment




10 % to 25 %






Furniture and vehicles




10 % to 25 %






Fixtures and fittings




10 % to 33 %






Computer hardware




25 % to 33 %






Other




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 lease’s commencement at the lower of the fair value of the leased asset and the present value of the minimum lease payments. The interest element of the finance lease payment is charged to expenditure over the period of the lease at a constant periodic rate in relation to the balance outstanding. The rental obligations, net of finance charges, are included as liabilities. The assets held under finance leases are depreciated over the shorter of the asset's useful life and the lease term.
Leases where the lessor retains a significant portion of the risks and rewards inherent to ownership are classified as operating leases. Payments made under operating leases are charged to the statement of financial performance on a straight-line basis over the period of the lease.
1.4.3   
Impairment of non-financial assets


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


The financial assets are classified in the following categories: financial assets at fair value through profit or loss; loans and receivables; held-to-maturity investments; and available for sale financial assets. The classification of the financial instruments is determined at initial recognition and re-evaluated at each balance sheet date.
(i)   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. During this financial year, the entity did not hold any investments in this category.
(ii)   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.
(iii)   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.
(iv)   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 contract, decision, agreement or the basic legal act. The float or advance is either used for the purpose for which it was provided during the period defined in the agreement or it is repaid. If the beneficiary does not incur eligible expenditures, he 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 measured at the amount(s) initially recognised on the balance sheet less amounts returned and eligible expenses, including estimated amounts where necessary, incurred during the period.
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 receivables. The amount of the write-down is the difference between the asset’s carrying amount and the recoverable amount. The amount of the write-down is recognised in the statement of financial performance.
1.4.7   
Cash and cash equivalents


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


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


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


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

1.5.1   
Revenue


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


Exchange expenses arising from the purchase of goods and services are recognised when the supplies are delivered and accepted by the entity. They are valued at original invoice amount. Futhermore, at the balance sheet date expenses related to the service delivered during the period for which an invoice has not yet been received or accepted are recognised in the statement of financial performance.
Non-exchange expenses 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. At year-end, incurred eligible expenses due to the beneficiaries but not yet reported are estimated and recorded as accrued expense.
1.6.   CONTINGENT ASSETS AND LIABILITIES

1.6.1   
Contingent assets


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


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

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

NON-CURRENT ASSETS
2.1.   PRE-FINANCING












EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015




31.12.2014






Pre-financing



—



63




368




84




516




472






Total



—



63




368




84




516




472















EUR millions




 


31.12.2015


31.12.2014





Direct Management




65




72











 



Implemented by:







 


 










 








 



Commission












43




47











 








 



EU executive agencies












1




3











 








 



EU delegations












21




22






Indirect Management




451




400











 



Implemented by:







 


 










 








 



Third countries












25




22











 








 



International organisations












90




127











 








 



EIB and EIF












323




223











 








 



Public law bodies












10




24











 








 



Private law bodies with a public service mission












3




4






Total




516




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 44 million compared to 31 December 2014 is mainly explained by the implementation of new contracts under the 11th EDF and the extension of 2 significant contracts under the Ninth EDF.
2.2.   TRUST FUND CONTRIBUTIONS

This heading represents the amount paid as contributions to the Bêkou EU Trust Fund less the estimated proportion of costs incurred by the trust fund.
The trust fund contributions are implemented by the EDF under the direct management mode.
CURRENT ASSETS
2.3.   PRE-FINANCING












EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015




31.12.2014






Pre-financing (gross)




14




265




3 032 




939




4 250 




4 335 






Cleared via cut-off




(11)




(198)




(2 153 )




(744)




(3 105 )




(2 932 )






Total




3




67




879




195




1 145 




1 403 















EUR millions




 


31.12.2015


31.12.2014





Direct Management




284




227











 



Implemented by:







 


 










 








 



Commission












123




116











 








 



EU executive agencies












1




4











 








 



EU delegations












159




106






Indirect Management




861




1 176 











 



Implemented by:







 


 










 








 



Third countries












229




257











 








 



International organisations












336




494











 








 



EIB and EIF












235




357











 








 



Public law bodies












56




41











 








 



Private law bodies with a public service mission












5




24











 








 



Private law bodies implementing Public Private Partnership












0




2






Total




1 145 




1 403 





The decrease in current pre-financing by EUR 298 million compared to 31 December 2014 is mainly explained by a number of clearings under the Ninth and 10th EDF.
2.3.1.   
Guarantees received in respect of pre-financing


Guarantees are held to secure pre-financing and are released when the final claim under a project is paid. At 31 December 2015 the nominal value of guarantees received by the EDF in respect of pre-financing amounts to EUR 198 million. At year-end, an in-depth review of guarantees has been performed to comply with the accounting standards. Following this review, guarantees in respect of pre-financing with a nominal value of EUR 444 million have been written-off as not belonging to the EDF but to the contracting authority.
2.4.   RECEIVABLES













EUR millions




 


Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015




31.12.2014






Receivables from customers, public bodies, EFTA and third states




2.4.1




1




5




6




2




13




21






Receivables from Member States




2.4.2



—


—



90




—




90




0






Accrued income and deferred charges




2.4.3




—




60




7




—




67




63






Total



 



1




65




103




2




171




84















EUR millions




 


31.12.2015


31.12.2014





Recoverables from non-exchange transactions




104




21






Receivables from exchange transactions




67




63






Total




171




84





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













EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015




31.12.2014






Receivables from customers, public bodies and third states




4




22




15




2




42




49






Write-down




(3)




(17)




(10)




—




(29)




(28)






Total




1




5




6




2




13




21





2.4.2   
Receivables from Member States


Receivables from Member States include amounts to be received as well as the amounts to be deducted from the future Member States contributions. This is a consequence of Bridging Facility adjustments (see note 2.10 Called fund capital — active EDFs).








EUR millions




Member States


Amounts to be received by MS


Amounts to be deducted from MS's contributions


Net amount at 31.12.2015





Belgium




1




(5)



 





Denmark



 



(2)



 





Greece




3



 


 





Ireland




2



 


 





Luxemburg



 


—


 





Portugal




3



 


 





Spain




28



 


 





United Kingdom




16



 


 





Austria



 



(3)



 





Finland



 


—


 





Cyprus




1



 


 





Czech Republic




7



 


 





Estonia




1



 


 





Hungary




8



 


 





Lithuania




1



 


 





Latvia




1



 


 





Malta



—


 


 





Poland




18



 


 





Slovenia




3



 


 





Slovakia




3



 


 





Romania




5



 


 





Total





101






(11)






90






2.4.3   
Accrued income and deferred charges


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











EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015






Liaison accounts




214




657




1 190 




(2 062 )



—





Total




214




657




1 190 




(2 062 )



—




For efficiency reasons, the single treasury covering all the EDFs is allocated to the 11th EDF (9); this leads to operations between the various EDFs, which are balanced out in the liaison accounts between the various EDF balance sheets. Liaison accounts are presented only in the individual EDFs.
2.6.   CASH AND CASH EQUIVALENTS
 (10)












EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015




31.12.2014







Special accounts:
Financial institutions of Member States




—


—


—



489




489




378







Current accounts:
Commercial banks




—


—


—



14




14




13







Democratic Republic Congo Special fund
 (***)




—


—


—



1




1




1






Total



—


—


—



504




504




391





The overall increase in cash and cash equivalents is mainly explained by the advance payment of the first 2016 contributions by some Member States in December 2015.
It should be noted that there are STABEX funds held by beneficiary ACP States and thus not included on the EDF balance sheet. STABEX is the acronym for a EU compensatory finance scheme to stabilise export earnings of the ACP countries. Once the Commission and the beneficiary (ACP) State reach agreement on how the STABEX funds are to be utilised, a transfer convention is signed by both parties. In accordance with the provisions of Article 211 of the Lomé IV Agreement (11) (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 3.2.1 for more information.
With the aim of improving the presentation in the 2015 annual accounts, the classification of financial insitutions and banks has been reviewed. The comparative figures for 2014 are disclosed accordingly.
NON-CURRENT LIABILITIES
2.7.   PROVISIONS












EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015




31.12.2014






Provisions



—


—



—




4




4




—






Total



—


—



—




4




4




—





This is the estimate of amounts that will probably have to be paid out more than 12 months after the year-end in relation to the liquidation phase and a probable legal case with the Centre de Development of Enterprise.
The liquidation phase, to be managed by a Curator, will only comprise residual administrative tasks, for example keeping the archives of the CDE, replying to any administrative formality, or managing residual litigations that could not have been settled up to 31 December 2016. This phase will be financed by the EDF and at the date of preparation of the EDF financial statements, a very rough budget estimate of the total costs needed for the passive phase is EUR 2,6 million. An amount of around EUR 1,2 million should be as well taken into account in case the CDE will be condemned by the International Labour Organisation Tribunal to pay indemnities for the three persons currently in litigation. See also note 4.2.1 for more information.
2.8.   PAYABLES












EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015




31.12.2014






Co-financing — payables



—


—



10



—



10




34






Total



—


—



10



—



10




34





The change in the total co-financing payables is explained in the note 2.9.1.2.
CURRENT LIABILITIES
2.9.   PAYABLES













EUR millions




 


Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015




31.12.2014






Current payables




2.9.1




0




13




184




17




215




474






Accrued charges




2.9.2




3




114




684




54




854




722






Deferred fund capital contribution




2.9.3



—


—



307



—



307




228






Total



 



3




128




1 174 




71




1 376 




1 423 





2.9.1   
Current payables














EUR millions




 


Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015




31.12.2014






Suppliers and other




2.9.1.1




0




14




153




14




181




403






Co-financing payables




2.9.1.2



—



(0)




31




(0)




31




67






Sundry payables




2.9.1.3




(0)




(1)




(0)




4




3




4






Total



 



0




13




184




17




215




474





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.
2.9.1.1   Suppliers and other

Included under this heading are amounts owed to suppliers as well as amounts payable to public bodies and third states.
The decrease of EUR 222 million compared to the previous reporting period relates primarly to a EUR 224 million decrease in payables to third states.
2.9.1.2   Co-financing payables

The total non-current and current co-financing payables decreased by EUR 60 million compared to the previous reporting period.
During 2015, new co-financing contributions were received from the France (EUR 5 million), United Kingdom (EUR 1,5 million) and other countries.
The total non-current and current co-financing payables were decreased by EUR 69 million in order to recognise revenue and expenses related to co-financing projects (see 3.2.2 and 3.3.2).
2.9.1.3   Sundry payables

Sundry payables mainly comprise unallocated cash receipts and returned payments.
2.9.2   
Accrued charges













EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015




31.12.2014






Accrued charges




3




114




684




54




854




722






Total




3




114




684




54




854




722





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.
In 2015 the Commission refined its methodology for estimating accrued charges for the budget support contracts. Had this refinement not been made, the operating expenses would have been EUR 3 545 million instead of EUR 3 671 million and the accrued charges amount would have been EUR 126 million lower.
2.9.3   
Deferred fund capital contribution













EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015




31.12.2014






United Kingdom



—


—



259



—



259




222






Sweden



—


—



48



—



48



—





Czech Republic



—


—


—


—


—



4






Lithuania



—


—



—



—



—




1






Total



—


—



307



—



307




228





These are Member States' contributions paid in advance.
NET ASSETS
2.10.   CALLED FUND CAPITAL — ACTIVE EDFs











EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



Total






Fund capital




12 840 




11 699 




21 152 



—



45 691 






Uncalled fund capital



—


—



(10 018 )



—



(10 018 )






Called fund capital 31.12.2014




12 840 




11 699 




11 134 



—



35 673 





 


 


 


 


 


 





Fund capital




12 164 




10 973 




20 960 




29 367 




73 464 






Uncalled fund capital



—


—



(5 223 )




(29 367 )




(34 590 )






Called fund capital 31.12.2015




12 164 




10 973 




15 737 



—



38 873 





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 activities of the Bridging Facility were financed through decommitted amounts from previous EDFs (see 2.13 Called fund capital transfers between active EDFs).
The Council decision establishing the Bridging Facility stipulates that the funds committed under the Bridging Facility should be deducted from the shares of the Member States' contributions set out in Article 1(2)(a) of the Internal Agreements of the Eighth, Ninth and 10th EDF after the entry into force of the 11th EDF Internal Agreement. (2)

The 11th EDF internal Agreement entered into force on 1 March 2015 and total fund capital has been decreased by EUR 1 595 million (Eighth EDF — EUR 676 million, Eighth EDF — EUR 727 million, 10th EDF — EUR 192 million).
As the Internal Agreement establishing the 11th EDF enters into force, fund capital presented under the 11th EDF has been recognised in line with the Agreement.
2.11.   CALLED AND UNCALLED FUND CAPITAL BY MEMBER STATES











EUR millions




Contributions


%


Uncalled 10th EDF 31.12.2014


Called up in 2015


Reduction of the 10th EDF capital


Uncalled 10th EDF 31.12.2015





Austria




2,41 




(241)




111




5




(126)






Belgium




3,53 




(354)




162




7




(184)






Bulgaria




0,14 




(14)




6




0




(7)






Cyprus




0,09 




(9)




4




0




(5)






Czech Republic




0,51 




(51)




23




1




(27)






Denmark




2,00 




(200)




92




4




(104)






Estonia




0,05 




(5)




2




0




(3)






Finland




1,47 




(147)




68




3




(77)






France




19,55 




(1 958 )




900




38




(1 021 )






Germany




20,50 




(2 053 )




944




39




(1 070 )






Greece




1,47 




(147)




68




3




(77)






Hungary




0,55 




(55)




25




1




(29)






Ireland




0,91 




(91)




42




2




(48)






Italy




12,86 




(1 288 )




592




25




(672)






Latvia




0,07 




(7)




3




0




(4)






Lithuania




0,12 




(12)




6




0




(6)






Luxemburg




0,27 




(27)




12




1




(14)






Malta




0,03 




(3)




1




0




(2)






Netherlands




4,85 




(486)




223




9




(253)






Poland




1,30 




(130)




60




2




(68)






Portugal




1,15 




(115)




53




2




(60)






Romania




0,37 




(37)




17




1




(19)






Slovakia




0,21 




(21)




10




0




(11)






Slovenia




0,18 




(18)




8




0




(9)






Spain




7,85 




(786)




361




15




(410)






Sweden




2,74 




(274)




126




5




(143)






United Kingdom




14,82 




(1 485 )




682




28




(774)






Total





100,00 






(10 018 )






4 603 






192






(5 223 )






Capital called in 2015 consists of ordinary call (EUR 3 200 million) and special call (called ‘special consumption’ — EUR 1 403 million). The special call was made in order to get funds for the reduction of the capital of the Eighth and Ninth EDF.
2.12.   CALLED FUND CAPITAL FROM CLOSED EDFs CARRIED FORWARD











EUR millions




 


Eighth EDFF


Ninth EDF


10th EDF


11th EDF


Total





Funds transferred from closed EDFs




627




1 625 



—


—



2 252 






Balance at 31.12.2015




627




1 625 



—


—



2 252 





This heading includes the resources transferred from closed EDFs to the Eighth and Ninth EDFs.
2.13.   CALLED FUND CAPITAL TRANSFERS BETWEEN ACTIVE EDFs











EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF


Total





Balance at 31.12.2013




(3 083 )




2 130 




952



—



0






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




(64)




(372)




436



 



0






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



 


 



(225)




225




0






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



 


 



(1 372 )




1 372 




0






Balance at 31.12.2014




(3 147 )




1 758 




(209)




1 597 




0






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




(6)




(109)




114



 



0






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



 


 



(32)




32




0






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



 


 



(41)




41




0






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



 


 



11




(11)




0






Return of funds committed under the Bridging Facility




676




727




192




(1 595 )




0






Balance at 31.12.2015




(2 476 )




2 376 




35




65




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.
In 2015 funds committed under the Bridging Facility of EUR 1 595 million came back to the performance reserve of the 10th EDF and they were used to refund capital of the Eighth, Ninth and 10th EDF (see 2.10 Called fund capital — active EDFs).
At year-end the non-mobilisable Performance Reserve of the 10th EDF is EUR 84 million while the one of the 11th EDF is EUR 65 million.
3.   NOTES TO THE STATEMENT OF FINANCIAL PERFORMANCE

3.1.   REVENUE FROM EXCHANGE AND NON-EXCHANGE TRANSACTIONS








EUR millions




 


2015


2014





Revenue from non-exchange transactions




89




87






Revenue from exchange transactions




51




59






Total




140




145





The EUR 89 million of revenue from non-exchange transactions is exclusively operating revenue while the EUR 51 million of revenue from exchange transactions comprises operating revenue (EUR 43 million) and financial revenue (EUR 8 million — see note 3.5).
3.2.   OPERATING REVENUE













EUR millions




 


Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF



2015




2014






Recovery of expenses




3.2.1




1




10




9




1




20




26






Recovery of STABEX funds




3.2.2




1



—


—


—



1




4






Foreign exchange gains



 



3




15




22




2




42




45






Operating income co-financing




3.2.3



—


—



68




1




69




57






Total



 



4




24




99




5




132




132















EUR millions




 


2015


2014





Direct Management




61




17











 



Implemented by:







 


 










 








 



Commission












3




0











 








 



EU delegations












58




17






Indirect Management




29




70











 



Implemented by:







 


 










 








 



Third countries












14




68











 








 



International organisations












14




1











 








 



Public law bodies












0




—











 








 



Private law bodies with a public service mission












1




—






Total operating revenue excluding foreign exchange gains




90




86





3.2.1   
Recovery of STABEX funds


During 2015, EUR 1 million was returned to the EDF from double signature accounts in ACP countries. These revenues are included in operating income (recovery of STABEX funds) in the statement of financial perfomance of the Eighth EDF.
3.2.2   
Operating income co-financing


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













EUR millions




 


Note


Eighth EDF


Ninth EDF


10th EDF


11th EDF



2015




2014






Operating expenses aid instruments




3.3.1




(5)




47




2 197 




820




3 059 




3 545 






Operating expenses co-financing




3.3.2



—


—



68




1




69




57






Foreign exchange losses



 



3




14




24




3




44




33






Write-down of receivables & provisions for Risk and charges



 



(0)




(5)




8




4




7




14






Total



 



(2)




56




2 297 




828




3 179 




3 650 















EUR millions




 


2015


2014





Direct Management




1 106 




933











 



Implemented by:







 


 










 








 



Commission












99




114











 








 



EU executive agencies












2




2











 








 



EU delegations












1 000 




817











 








 



Trust Funds












5




—






Indirect Management




2 023 




2 670 











 



Implemented by:







 


 










 








 



Third countries












900




1 111 











 








 



International organisations












990




1 148 











 








 



EIB and EIF












31




179











 








 



Public law bodies












70




144











 








 



Private law bodies with a public service mission












31




46











 








 



Private law bodies implementing Public Private Partnership












1




41











 








 



Persons implementing CFSP actions












0




—






Total operating expenses: aid instruments and co-financing




3 128 




3 603 





3.3.1.   
Operating expenses — aid instruments













EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



2015




2014






Programmable aid




1




18




1 557 




394




1 971 




2 159 






Macro-economic support



—



51



—


—



51




42






Sectoral policy




0




(25)




—



—



(24)




10






Interest rate subsidies




(6)



—


—


—



(6)




3






Intra ACP projects



—



5




459




282




746




979






Emergency aid



—



1




167




117




285




335






Refugee aid




0



—


—


—



0




(0)






Risk capital




—



—


—


—



—




0






STABEX




—



—


—


—



—




2






SYSMIN




(0)



—


—


—



(0)




0






Other aid programmes related to former EDFs



—



0



—


—



0




2






Institutional support



—


—



13




20




34




19






Compensation export receipts




0




(3)



—


—



(3)




(5)






Contributions to Trust Funds




—




—



—



5




5




—






Total




(5)




47




2 197 




820




3 059 




3 545 





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 2015. 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 3.2.2).
3.4.   ADMINISTRATIVE EXPENSES












EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



2015




2014






Administrative expenses




0




(0)




34




79




113




22






Total




0




(0)




34




79




113




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 variation in the administrative costs between 2014 and 2015 (EUR 91 million) is due to a change in accounting methodology in 2014. This new methodology had a one-time impact on decreasing the amount of administrative costs.
3.5.   FINANCIAL REVENUE












EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



2015




2014







Interest income-European banks






(0)






(0)






(0)






2






1






(1)








Interest on pre-financing






—






6






0






0






7






15












 



Accrued interest








—




4




0



—



4




11











 



Recovered interest








—




2




0




0




3




3






Total




(0)




6




0




2




8




13





Interest on pre-financing is recognised in accordance with the provisions of Article 9(2)d of the Financial Regulation applicable to the 11th EDF.
Financial revenue is considered as revenue from exchange transactions.
4.   CONTINGENT ASSETS & LIABILITIES AND OTHER SIGNIFICANT DISCLOSURES

4.1.   CONTINGENT ASSETS












EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015




31.12.2014






Performance guarantees




0




7




7




(0)




13




101






Retention guarantees




—




3




3



—



6




50






Total




0




10




10




(0)




20




150





Overall, the amount of guarantees held to secure EDF assets under a project has increased in 2015. However, in 2015, more guarantees have been linked to contracts managed with an indirect mode. In such case, the beneficiary of the guarantee is not the EDF but the contracting authority. By comparison, in 2014, those guarantees belonging to a contracting authority other than the EDF amounted to 273 million while they amount to 723 million in 2015.
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, had been the basis for the Commission's proposal for a Financing Decision, that has been adopted after having received the opinion of the EDF Committee for a total of EUR 18,2 million. Subsequent to the adoption of that Financing decision, a grant agreement was concluded in December 2015 between the CDE and the Commission which provides the necessary financing for the realization of CDE's assets and full settlement of its liabilities. The implementation of the definitive strategic plan started on 1 January 2016. Following the revision of the Annex III of the Cotonou Agreement, currently under negotiation between the EU Council and the ACP, the CDE will enter into its passive phase during which it will solely exist for the needs of its liquidation — as from 1 January 2017 and for a period that will last up to 5 years. See also note 2.7 for more information.
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 2015 statement of financial performance. The budgetary RAL is an amount representing the open commitments for which payments and/or de-commitments have not yet been made. This is the normal consequence of the existence of multi-annual programmes.











EUR millions




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF



31.12.2015




31.12.2014






Outstanding commitments not yet expensed




5




303




3 174 




2 338 




5 821 




5 291 






Total




5




303




3 174 




2 338 




5 821 




5 291 





At 31 December 2015 the budgetary RAL totalled EUR 6 809 million (2014: EUR 5 889 million). In December 2015, EUR 1 316 million were committed to finance the new Emergency EU Trust Fund for stability and addressing root causes of illegal migration in Africa (EU Trust Fund Africa). When excluding the effect of that exceptional event, the RAL would amount to EUR 5 493 million, which represents a reduction of EUR 396 million compared to the previous year.
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 11th EDF Financial Regulation and in the Internal Agreement.
As a result of the above regulation, the following main principles apply:






—


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










—


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










—


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




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


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




















EUR millions




 


31.12.2015


31.12.2014




USD


GBP


DKK


SEK


EUR


Other


Total


USD


GBP


DKK


SEK


EUR


Other


Total





Financial assets



 


 


 


 


 


 


 


 


 


 


 


 


 


 





Receivables and recoverables




—




—




—




—




171




1




171




0




—




—




—




76




8




84






Cash and cash equivalents




4




0




—




—




500




—




504




6




0




—




—




386




—




391






Total




4




0



—


—



671




1




675




6




0



—


—



462




8




475






Financial liabilities



 


 


 


 


 


 


 


 


 


 


 


 


 


 





Payables




0




—




—




—




(485)




(47)




(532)




0




—




—




—




(691)




(45)




(736)






Total




0



—


—


—



(485)




(47)




(532)




0




—



—


—



(691)




(45)




(736)






Total




4




0



—


—



186




(46)




143




6




0



—


—



(229)




(37)




(261)





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

The EDF does not borrow money and as a consequence it is not exposed to interest rate risk.
Interest is accrued 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 a market reference rate and is adjusted to reflect any fluctuations of this rate. As a result no risk is taken by the EDF that its balances be remunerated at rates lower than market rates.
5.4.   CREDIT RISK (COUNTERPARTY RISK)


Financial assets that are neither past due nor impaired:











EUR millions




 


Total


Neither past due nor impaired


Past due but not impaired




< 1 year


1-5 years


> 5 years





Receivables and recoverables




171




50




120




1




—






Total at 31.12.2015




171




50




120




1



—





Receivables Recoverables




84




75




5




4



 





Total at 31.12.2014




84




75




5




4



—








Financial assets by risk category:












EUR millions




 


31.12.2015


31.12.2014




Receivables


Cash


Total


Receivables


Cash


Total





Counterparties with external credit rating



 


 


 


 


 


 





Prime and high grade




6




167




173




0




318




318






Upper medium grade




34




16




50




—




39




39






Lower medium grade




36




312




348




—




7




7






Non- investment grade




14




9




23




—




27




27







Total






90






503






593






0






391






391







Counterparties without external credit rating



 


 


 


 


 


 





Debtors without defaults in the past




81




1




98




83



 



83






Debtors with defaults in the past




—




—




—




1



 



1







Total






97






1






98






84




 




84







Total




171




504




692




84




391




475





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


Maturity analysis of financial liabilities by remaining contractual maturity










EUR millions




 


< 1 year


1-5 years


> 5 years


Total





Payables




522




10



 



532






Total at 31.12.2015





522






10




—




532







Payables




702




34



 



736






Total at 31.12.2014





702






34




—




736






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

The related parties of the EDF are Bêkou and Africa EU Trust Funds. Transactions between these entities take place as part of the normal operations of the EDF and as this is the case, no specific disclosure requirements are necessary for these transactions in accordance with the EU accounting rules.
The EDF has no separate management since it is managed by the Commission. The entitlements of the key management of the EU, including the Commission, have been disclosed in the Consolidated annual accounts of the European Union under heading 8.2 ‘Key management entitlements’.
7.   EVENTS AFTER THE BALANCE SHEET DATE

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

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







EUR millions




 


2015


2014





ECONOMIC RESULT OF THE YEAR




(3 152 )




(3 526 )






Revenue



 


 





Entitlements not affecting the budget result




(1)




(10)






Entitlements established in current year but not yet collected




(11)




(19)






Entitlements established in previous years and collected in current year




19




12






Net effect of pre-financing




28




41






Accrued revenue (net)




29




(71)






Expenses



 


 





Expenses of the current year not yet paid




61




165






Expenses of previous years paid in the current year




(221)




(28)






Payments cancellation




12




65






Net effect of pre-financing




(53)




(562)






Accrued expenses (net)




200




417






BUDGET RESULT OF THE YEAR




(3 088 )




(3 516 )





8.1.   RECONCILING ITEMS — REVENUE

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


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

FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND
 (12)

CERTIFICATION OF THE ACCOUNTS
The annual accounts of the Bêkou EU Trust Fund for the year 2015 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 Union 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




BACKGROUND INFORMATION ON THE BÊKOU EU 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 11th European Development Fund, the Commission is authorised 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 EU (represented by DGs DEVCO and ECHO, and the EEAS) and three of its Member States (Germany, France and the Netherlands), with the aim of promoting 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. At the end of 2015 7 donors contributed to the Bêkou Trust Fund: the European Development Fund, the European Commission via the EU Budget, 4 Member States and 1 non-Member State.
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(6) EU FR.

BÊKOU TRUST FUND BALANCE SHEET









EUR '000




 


Note


31.12.2015


31.12.2014





NON-CURRENT ASSETS



 


 


 





Pre-financing




1.1




3 446 



—





CURRENT ASSETS



 


 


 





Pre-financing




1.2




6 047 




—






Exchange receivables and non-exchange recoverables




1.3




1 364 



—





Cash and cash equivalents




1.4




52 461 




45 000 





 


 



59 873 




45 000 






TOTAL ASSETS



 



63 319 




45 000 






NON-CURRENT LIABILITIES



 


 


 





Financial liabilities




1.5




(63 125 )




(45 000 )





 


 



(63 125 )




(45 000 )






CURRENT LIABILITIES



 


 


 





Accrued charges and deferred income



 



(193)




—





 


 



(193)



—





TOTAL LIABILITIES



 



(63 319 )




(45 000 )






NET ASSETS



 


—


—





FUNDS & RESERVES



 


 


 





Economic result of the year



 


—


—





NET ASSETS



 


—


—





BÊKOU TRUST FUND STATEMENT OF FINANCIAL PERFORMANCE









EUR '000




 


Note


2015


2014





REVENUE



 


 


 





Revenue from non-exchange transactions



 


 


 





Revenue from donations




2.1




9 354 




—






Revenue from exchange transactions



 


 


 





Financial income



 



101




—






Total



 



9 455 




—






EXPENSES



 


 


 





Operating expenses




2.2




(8 824 )




—






Other expenses




2.3




(631)




—






Total



 



(9 455 )




—






ECONOMIC RESULT OF THE YEAR



 



—




—






BÊKOU TRUST FUND CASHFLOW STATEMENT









EUR '000




 


Note


2015


2014





Economic result of the year



 


—


—





OPERATING ACTIVITIES



 


 


 





(Increase)/decrease in pre-financing



 



(9 493 )




—






(Increase)/decrease in exchange receivables and non-exchange recoverables



 



(1 364 )




—






Increase/(decrease) in non-current liabilities



 



18 125 




45 000 






Increase/(decrease) in current liabilities



 



193




—






NET CASHFLOW



 



7 461 




45 000 






Net increase/(decrease) in cash and cash equivalents



 



7 461 




45 000 






Cash and cash equivalents at the beginning of the year



 



45 000 




—






Cash and cash equivalents at year-end




1.4




52 461 




45 000 






BÊKOU TRUST FUND STATEMENT OF CHANGES IN NET ASSETS









EUR '000




 


Accumulated surplus/
(deficit)


Economic result of the year


Net assets





BALANCE AS AT 31.12.2014



—


—


—





Economic result of the year



—


—


—





BALANCE AS AT 31.12.2015



—


—


—





NOTES TO THE FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND

1.   NOTES TO THE BALANCE SHEET

NON-CURRENT ASSETS
1.1.   PRE-FINANCING








EUR '000




 



Total 31.12.2015




Total 31.12.2014






Pre-financing




3 446 




—






Total




3 446 




—















EUR '000




 


Total 31.12.2015


Total 31.12.2014





Direct Management




1 078 




—











 



Implemented by:







 


 










 








 



Commission












1 078 




—











 








 



Indirect Management












2 368 




—











 



Implemented by:







 


 










 








 



Public law bodies












1 155 




—











 








 



Private law bodies with a public service mission












1 213 




—






Total




3 446 




—





CURRENT ASSETS
1.2.   PRE-FINANCING








EUR '000




 



Total 31.12.2015




Total 31.12.2014






Pre-financing




14 860 




—






Cleared via cut-off




(8 813 )




—






Total




6 047 




—















EUR '000




 


Total 31.12.2015


Total 31.12.2014





Direct Management




4 046 




—











 



Implemented by:







 


 










 








 



Commission












4 046 




—






Indirect Management




2 002 




—











 



Implemented by:







 


 










 








 



Public law bodies












806




—











 








 



Private law bodies with a public service mission












1 196 




—






Total




6 047 




—





1.3.   EXCHANGE RECEIVABLES AND NON-EXCHANGE RECOVERABLES

This heading represents deferred management costs (EUR 1,3 million) and accrued income (kEUR 45).
1.4.   CASH AND CASH EQUIVALENTS

Funds controlled by the Bêkou EU Trust Fund were presented in the 2014 annual accounts as receivables to the common central treasury system. With the aim of improving the presentation in the 2015 annual accounts, these funds were presented as cash and cash equivalents. The comparative figures for 2014 are disclosed accordingly.
NON-CURRENT LIABILITIES
1.5.   FINANCIAL LIABILITIES










EUR '000




Contributions


%


Paid contributions


Allocation of net results


Financialliabilities





European Commission




6




4 554 




(588)




3 966 






EDF




54




39 000 




(5 033 )




33 967 






Member States:




39




28 000 




(3 614 )




24 386 






Germany



 



15 000 




(1 936 )




13 064 






France



 



10 000 




(1 291 )




8 709 






Netherlands



 



2 000 




(258)




1 742 






Italy



 



1 000 




(129)




871






Non-Member States:




1




925




(119)




806






Switzerland



 



925




(119)




806






Total




100




72 480 




(9 354 )




63 125 





The total non-current financial liabilities relate to EUR 34 million of contributions from the European Development Fund, EUR 4 million from the European Commission via the EU Budget, EUR 24 million from various Member States and EUR 1 million from non-Member State.
The allocation of net results is only indicative and is made purely for accounting purposes. If the Bêkou Trust Fund is wound up, the final decision on the return of remaining funds will be made by the Trust Fund Board.
2.   NOTES TO THE STATEMENT OF FINANCIAL PERFORMANCE

2.1.   REVENUE FROM NON-EXCHANGE TRANSACTIONS

This heading represents contributions from donors recognised as operating revenue in line with the net expenses (3). Consequently the economic result of the year is nil.
2.2.   OPERATING EXPENSES








EUR '000




 



2015




2014






Food aid/food security programmes




460




—






Women's equality organisations and institutions




389




—






Basic health care — basic and primary health care




6 678 




—






Urban development and management




539




—






Reconstruction relief and rehabilitation




758




—






Total




8 824 




—















EUR '000




 


2015


2014





Direct Management




7 527 




—











 



Implemented by:







 


 










 








 



Commission












7 527 




—






Indirect Management




1 297 




—











 



Implemented by:







 


 










 








 



Public law bodies












539




—











 








 



Private law bodies with a public service mission












758




—






Total




8 824 




—





2.3.   OTHER EXPENSES








EUR '000




 



2015




2014






Other expenses




615




—






Foreign exchange losses




16




—






Total




631




—





This heading includes the Commission management costs (EUR 0,4 million), technical assistance (EUR 0,15 million), audit (EUR 0,05 million) and other costs.
3.   OTHER SIGNIFICANT DISCLOSURES

3.1.   Outstanding commitments not yet expensed

At 31 December 2015 the outstanding commitments not yet expensed amounted to EUR 12 million. The amount comprises the budgetary RAL (‘Reste à Liquider’) less related amounts that have been included as expenses in the 2015 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.
3.2.   Related parties

The related party of the Bêkou EU Trust Fund is the European Development Fund. Transactions between these entities take place as part of the normal operations of the Bêkou EU Trust Fund and as this is the case, no specific disclosure requirements are necessary for these transactions in accordance with the EU accounting rules.
3.3.   Events after reporting date

At the date of transmission of these accounts, no material issues had come to the attention of the Accounting Officer of the Bêkou EU Trust Fund 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.
4.   FINANCIAL INSTRUMENTS DISCLOSURES

4.1.   CURRENCY RISKS


Exposure of the Bêkou EU Trust Fund to currency risk at year end

At 31 December 2015 the ending balances of financial assets and financial liabilities did not include any material amounts quoted in different currencies than euro.
4.2.   CREDIT RISK

The financial assets compose of cash and cash equivalent of EUR 52 million and receivables and recoverables that amounted to EUR 1,4 million at 31 December 2015.

Financial assets that are neither past due nor impaired

Receivables and recoverables are neither past due nor impaired.

Financial assets by risk category

The entire amount of EUR 52 million of cash and cash equivalents is placed in a bank with prime and high grade.
4.3.   LIQUIDITY RISK


Maturity analysis of financial liabilities by remaining contractual maturity

The financial liabilities are entirely composed of liabilities to donors. They will be paid when the Bêkou EU Trust Fund is wound-up.
5.   RECONCILIATION OF ECONOMIC RESULT AND BUDGET RESULT

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






EUR '000




 


2015





ECONOMIC RESULT OF THE YEAR




—






Revenue



 





Entitlements not affecting the budget result




(9 455 )






Entitlements collected in current years




45 595 






Accrued revenue (net)




40






Expenses



 





Net effect of pre-financing




(18 306 )






Accrued expenses (net)




7 703 






BUDGET RESULT OF THE YEAR




25 577 






CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE BÊKOU TRUST FUND
 (13)


CONSOLIDATED BALANCE SHEET








EUR millions




 


31.12.2015


31.12.2014





NON-CURRENT ASSETS



 


 





Pre-financing




520




472





 



520




472






CURRENT ASSETS



 


 





Pre-financing




1 151 




1 403 






Receivables




172




84






Cash and cash equivalents




556




436





 



1 879 




1 923 






TOTAL ASSETS




2 399 




2 395 






NON-CURRENT LIABILITIES



 


 





Provisions




(4)



 





Payables




(39)




(40)





 



(43)




(40)






CURRENT LIABILITIES



 


 





Payables




(1 376 )




(1 423 )





 



(1 376 )




(1 423 )






TOTAL LIABILITIES




(1 419 )




(1 463 )






NET ASSETS




980




932






FUNDS & RESERVES



 


 





Called fund capital — active EDFs




38 873 




35 673 






Called fund capital from closed EDFs carried forward




2 252 




2 252 






Economic result carried forward from previous years




(36 994 )




(33 468 )






Economic result of the year




(3 152 )




(3 526 )






NET ASSETS




980




932






CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE








EUR millions




 


2015


2014





OPERATING REVENUE




136




132






OPERATING EXPENSES



 


 





Operating expenses




(3 182 )




(3 650 )






Administrative expenses




(114)




(22)





 



(3 296 )




(3 671 )






SURPLUS/(DEFICIT) FROM OPERATING ACTIVITIES




(3 160 )




(3 539 )






Financial revenue




8




13






Financial charges




(0)




(0)






SURPLUS/(DEFICIT) FROM FINANCIAL ACTIVITIES




8




13






ECONOMIC RESULT OF THE YEAR




(3 152 )




(3 526 )






CONSOLIDATED CASH FLOW STATEMENT







EUR millions




 


2015





Economic result of the year




(3 152 )






OPERATING ACTIVITIES



 





Ordinary contributions from Member States




3 232 






(Reversal of) impairment losses on receivables




1






(Increase)/decrease in pre-financing




204






(Increase)/decrease in current receivables




(89)






(Increase)/decrease in non-current liabilities




2






Increase/(decrease) in current liabilities




(211)






Increase/(decrease) in accrued charges and deferred income




132






NET CASHFLOW




120






Net increase/(decrease) in cash and cash equivalents




120






Cash and cash equivalents at the beginning of the year




436






Cash and cash equivalents at year-end




556






CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS












EUR millions




 


Fund capital
(A)


Uncalled funds
(B)


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


Cumulative Reserves
(D)


Other reserves
(E)


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






BALANCE AS AT 31.12.2013





45 691 




13 162 




32 529 




(33 468 )




2 252 




1 313 






Capital changes



—



(3 144 )




3 144 



—


—



3 144 






Economic result of the year



—


—


—



(3 526 )



—



(3 526 )







BALANCE AS AT 31.12.2014





45 691 




10 018 




35 673 




(36 994 )




2 252 




932






Capital changes




27 772 




24 572 




3 200 



—


—



3 200 






Economic result of the year



—


—


—



(3 152 )



—



(3 152 )







BALANCE AS AT 31.12.2015





73 464 




34 590 




38 873 




(40 146 )




2 252 




980






EDF REPORT ON FINANCIAL IMPLEMENTATION



REPORT ON FINANCIAL IMPLEMENTATION — 2015


INTRODUCTORY NOTE


Previous EDFs








—


As the Sixth EDF was closed in 2006 and the Seventh EDF 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 Ninth EDF.










—


As in past years, to ensure transparency in the presentation of the accounts for 2015, the tables set out separately for the Eighth 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 Ninth EDF, balances and decommitments of previous EDFs have been transferred to the Ninth EDF, and, during the life of the Ninth EDF, have been committed as Ninth 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 EUR 256 million is managed by the European Commission;










—


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




According to the ‘Sunset clause’ of the 10th EDF, (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 11th EDF 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), enterred into force on 1 January 2014. The Bridging Facility and is financed from:






—


funds decommitted from Eighth and Ninth EDF up to 31/12/2013,










—


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










—


funds decommitted from the 10th and previous EDFs as from 01/01/2014 until 28/02/2015.




By the entry into force of the 11th EDF, a total of EUR 1 630 million had been de-committed from former EDF's and were therefore potentially available to the Bridging Facility, of which EUR 1 595 million were allocated and are accounted for under the 11th EDF, and EUR 4 million remained unallocated on the Bridging Facility and returned to the original performance reserve.


11th 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 2014-2020 in accordance with the revised Cotonou Agreement, adopted by the Representatives of the Governments of the Member States of the European Community on August 2013, entered into force on March 2015.
Under the Cotonou Agreement, the third period (2014-2020) of Community aid to the ACP States and OCTs is funded by the 11th EDF for an amount of EUR 30 506 million, of which:






—


EUR 29 089 million is allocated to the ACP countries in accordance with Article 1.2(a) and Article 2(d) of the Internal Agreement, of which EUR 27 955 million is managed by the European Commission;










—


EUR 364,5 million is allocated to the OCTs in accordance with Article 1.2(a) and Article 3.1 of the Internal Agreement, of which 359,5 million is managed by the European Commission;










—


EUR 1 052,5 million is for the Commission to finance the costs arising from the programming and implementation of 11th EDF resources, in accordance with Article 1.2(a) of the Internal Agreement.





- Remaining funds on non-mobilisable performance reserves at 31.12.2015


Until the coming into force of the Bridging Facility on 1 January 2014, the amounts decommitted from projects under the Ninth and previous EDFs were transferred to the performance reserve of the 10th EDF. On 1 January 2014 the uncommited 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 2015 all decommitted funds from previous EDFs were transferred to the respective reserves.
In accordance with article 1.4 of the 10th EDF Internal Agreement, and the Council Decision of 12 December 2013 (2013/759/EU) those funds were allocated to the Bridging Facility.






EUR millions




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


938




Total made available on non-mobilisable performance reserves during 2014


661




Less total transferred to the Bridging facility


(1 597 )




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


2





- 11th EDF Stabex reserve


Following the closure of Stabex accounts, unused/decommitted funds are transferred to the 11th EDF Stabex A Envelope reserve (10th EDF Internal Agreement Art. 1(4)) and then to the national indicative programmes of the countries concerned.

- 10th EDF Co-financings


Under the 10th and 11th EDF, transfer agreements for co-financings from Member States were signed, and commitment appropriations were opened for a total amount of EUR 204,6 million, while payment appropriations were opened for the cashed amounts totalling EUR 184,9 million.
The situation of co-financing appropriations at 31.12.2015 is shown in the table below:







EUR millions




 


Commitments appropriations


Payment appropriations




Co-financing — A Envelope


186,1 


166,8 




Co-financing — Intra ACP


13,4 


13,4 




Co-financing — Administrative expenses


5,1 


4,7 




 



204,6 




184,9 





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

Table 1.1


8th EDF


EVOLUTION OF APPROPRIATIONS: 31 December 2015


ANALYSIS OF CREDITS PER INSTRUMENT











(EUR million)




INSTRUMENT


INITIAL APPROPRIATION


INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2014


INCREASE OR DECREASE IN RESOURCES IN 2015


Notes


CURRENT LEVEL APPROPRIATION





ACP



 


 


 


 


 





Lomé



 


 


 


 


 






Regular MS Contributions






12 967 






(3 252 )






(4)




 




9 711 






Aid for refugees


120


(20)


 


 


100




Emergency aid (Lomé)


140


(4)


 


 


136




Heavily indebted poor countries (Lomé)


0


1 060 


 


 


1 060 




Interest-rate subsidies


370


(291)


 


 


79




Risk capital


1 000 


16


 


 


1 016 




Stabex


1 800 


(1 077 )


 


 


723




Structural adjustment


1 400 


97


 


 


1 497 




Sysmin


575


(474)


 


 


101




Total indicative programmes


7 562 


(2 595 )


(4)



 (4)



4 963 




Utilisation of interest income


0


35


 


 


35





Cotonou



 


 


 


 


 






Regular MS Contributions






0






654




 


 




654






A Envelope — National Allocations


0


418


 


 


418




B Envelope — National Allocations


0


237


 


 


237




Interests and other receipts


0


0


 


 


0





SUB TOTAL ACP




12 967 




(2 598 )




(4)



 



10 365 






OCT



 


 


 


 


 





Lomé



 


 


 


 


 






Regular MS Contributions






163






(115)






(2)




 




47






Interest-rate subsidies


9


(8)


 


 


1




Risk capital


30


(24)


 


 


6




Stabex


6


(5)


 


 


1




Sysmin


3


(1)


 


 


2




Total indicative programmes


115


(78)


(2)



 (4)



36





SUB TOTAL OCT




163




(115)




(2)



 



47






TOTAL 8th EDF




13 130 




(2 713 )




(6)



 



10 412 






Table 1.2


9th EDF


EVOLUTION OF APPROPRIATIONS: 31 December 2015


ANALYSIS OF CREDITS PER INSTRUMENT











(EUR million)




INSTRUMENT


INITIAL APPROPRIATION


INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2014


INCREASE OR DECREASE IN RESOURCES IN 2015


Notes


CURRENT LEVEL APPROPRIATION





ACP



 


 


 


 


 





Lomé



 


 


 


 


 






Regular MS Contributions






0






700






(11)




 




689






Transfers from 6th EDF — Lomé


0


20


(0)



 (5)



20




Transfers from 7th EDF — Lomé


0


679


(11)



 (5)



668





Cotonou



 


 


 


 


 






Regular MS Contributions






8 919 






5 820 






(93)




 




14 646 






A Envelope — National Allocations


5 318 


3 428 


(30)



 (5)



8 716 




B Envelope — National Allocations


2 108 


(876)


(4)



 (5)



1 227 




CDE, CTA and Parliamentary Assembly


164


(10)


 


 


154




Implementation costs


125


53


(1)



 (6)+ (7)



177




Interests and other receipts


0


63


(0)


 


63




Other Intra-ACP allocations


300


2 363 


(34)



 (5)



2 629 




Peace facility


0


362


(1)



 (5)



360




Regional allocations


904


(83)


(22)



 (5)



799




Special allocation R.D. Congo


0


105


 


 


105




Special allocation South Sudan


0


267


 



 (7)



267




Special allocation Sudan


0


110


 



 (6)



110




Voluntary contribution Peace facility


0


39


 


 


39





SUB TOTAL ACP




8 919 




6 520 




(104)



 



15 334 






OCT



 


 


 


 


 





Lomé



 


 


 


 


 






Regular MS Contributions






0






3




 


 




3






Transfers from 6th EDF — Lomé


0


0


 


 


0




Transfers from 7th EDF — Lomé


0


3


 


 


3





Cotonou



 


 


 


 


 






Regular MS Contributions






10






287






(5)




 




292






A Envelope — National Allocations


0


244


(4)



 (5)



239




B Envelope — National Allocations


0


4


 


 


4




Regional allocations


8


40


(0)



 (5)



48




Studies/Technical assistance OCT


2


(1)


 


 


1





SUB TOTAL OCT




10




290




(5)



 



295






TOTAL 9th EDF




8 929 




6 810 




(109)



 



15 630 






Table 1.3


10th EDF


EVOLUTION OF APPROPRIATIONS: 31 December 2015


ANALYSIS OF CREDITS PER INSTRUMENT











(EUR million)




INSTRUMENT


INITIAL APPROPRIATION


INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2014


INCREASE OR DECREASE IN RESOURCES IN 2015


Notes


CURRENT LEVEL APPROPRIATION





ACP



 


 


 


 


 






Regular MS Contributions






20 896 






(25)






34




 




20 905 






A Envelope — National Allocations


0


13 526 


(18)



 (9)



13 507 




A Envelope reserve


13 500 


(13 500 )


 


 


0




B Envelope — National Allocations


0


2 026 


(5)



 (9)



2 020 




B Envelope reserve


1 800 


(1 800 )


 


 


0




Implementation costs


430


(1)


 



 (9)



429




Institutional and support expenditure


0


242


(1)



 (9)



241




Interests and other receipts


0


70


(0)



 (9)



70




Intra-ACP Reserve


2 700 


(2 700 )


 


 


0




National allocations Reserve A Envelope STABEX


0


0


(0)



 (9)



(0)




NIP/RIP reserve


683


(683)


 


 


0




Non-mobilisable reserve


0


0


67



 (9)



67




Other Intra-ACP allocations


0


1 904 


(0)



 (9)



1 904 




Peace facility


0


688


 


 


688




Regional allocations


0


1 985 


(7)



 (9)



1 978 




Regional allocations reserve


1 783 


(1 783 )


 


 


0






Co-financing






0






202






2




 




203






A Envelope — National Allocations


0


185


2



 (10)



186




Implementation costs


0


5


0



 (10)



5




Other Intra-ACP allocations


0


12


 



 (10)



12




Peace facility


0


1


 



 (10)



1





SUB TOTAL ACP




20 896 




177




36



 



21 108 






OCT



 


 


 


 


 






Regular MS Contributions






256






3






17




 




276






A Envelope — National Allocations


0


196


 


 


196




A Envelope reserve


195


(195)


 


 


0




B Envelope — National Allocations


0


15


 


 


15




B Envelope reserve


15


(15)


 


 


0




National allocations Reserve A Envelope STABEX


0


0


 


 


0




Non-mobilisable reserve


0


2


17



 (9)



19




Regional allocations


0


40


 


 


40




Regional allocations reserve


40


(40)


 


 


0




Studies/Technical assistance OCT


6


0


 


 


6





SUB TOTAL OCT




256




3




17



 



276






TOTAL 10th EDF




21 152 




179




53



 



21 384 







Table 1.4



11th EDF


EVOLUTION OF APPROPRIATIONS: 31 December 2015


ANALYSIS OF CREDITS PER INSTRUMENT











(EUR million)




INSTRUMENT


INITIAL APPROPRIATION


INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2014


INCREASE OR DECREASE IN RESOURCES IN 2015


Notes


CURRENT LEVEL APPROPRIATION





ACP



 


 


 


 


 






Regular MS Contributions






29 008 






(88)






173




 




29 093 






A Envelope — National Allocations


0


653


14 146 


 


14 799 




B Envelope — National Allocations


0


86


108


 


194




B Envelope reserve


0


0


71


 


71




Implementation costs


1 053 


5


(5)


 


1 053 




Institutional and support expenditure


0


33


212


 


244




Interests and other receipts


0


13


1


 


15




Intra-ACP Reserve


3 590 


(536)


(2 848 )


 


206




National allocations Reserve A Envelope STABEX


0


0


(0)


 


(0)




NIP/RIP reserve


24 365 


(945)


(18 752 )


 


4 668 




Non-mobilisable reserve


0


0


65


 


65




Other Intra-ACP allocations


0


56


2 184 


 


2 240 




Peace facility


0


445


455


 


900




Regional allocations


0


103


4 537 


 


4 640 






Co-financing






0






0






1




 




1






Implementation costs


0


0


0


 


0




Peace facility


0


0


1


 


1






EC Internal SLA






0






0






1




 




1






A Envelope — National Allocations


0


0


1


 


1





SUB TOTAL ACP




29 008 




(88)




175



 



29 095 






OCT



 


 


 


 


 






Regular MS Contributions






360






0




 


 




360






NIP/RIP reserve


360


(3)


 


 


357




Non-mobilisable reserve


0


0


 


 


0




Studies/Technical assistance OCT


0


3


 


 


3





SUB TOTAL OCT




360




0



 


 



360






TOTAL 11th EDF




29 367 




(87)




175



 



29 455 






Table 2.1


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2015


PROGRESS REPORT












(EUR million)




 


ALLOCATION


EDF




 


8


9


10


11


TOTAL




L o m é


Sundry Income


35


 


 


 


35




Total indicative programmes


4 999 


 


 


 


4 999 




Total Non-Programmable Aid


4 723 


 


 


 


4 723 




Transfers from other funds


 


692


 


 


692




 



SUB TOTAL: REGULAR MS CONTRIBUTIONS



9 757 


692


 


 


10 449 




C o t o n o u


A Envelope — National Allocations


418


8 955 


13 703 


14 799 


37 875 




B Envelope — National Allocations


237


1 232 


2 035 


194


3 697 




Bridging facility


 


 


 


0


0




CDE, CTA and Parliamentary Assembly


 


154


 


 


154




 


Country reserve


 


 


0


71


71




 


Implementation Costs and Interests Revenues


0


240


505


1 070 


1 816 




 


Intra-ACP allocations


 


2 990 


2 833 


3 384 


9 207 




 


Intra-ACP Reserve


 


 


0


206


206




 


National allocations Reserve A Envelope STABEX


 


 


0


0


0




 


NIP/RIP reserve


 


 


0


5 024 


5 024 




 


Non-mobilisable reserve


 


 


86


65


151




 


Regional allocations


 


846


2 018 


4 640 


7 504 




 


Regional allocations reserve


 


 


0


 


0




 


Special allocation R.D. Congo


 


105


 


 


105




 


Special allocation South Sudan


 


267


 


 


267




 


Special allocation Sudan


 


110


 


 


110




 


Voluntary contribution Peace facility


 


39


 


 


39




 



SUB TOTAL: REGULAR MS CONTRIBUTIONS



654


14 938 


21 181 


29 452 


66 226 




 


A Envelope — National Allocations


 


 


 


1


1




 



SUB TOTAL: EC INTERNAL SLA



 


 


 


1


1




 


A Envelope — National Allocations


 


 


186


 


186




 


Implementation Costs and Interests Revenues


 


 


5


0


5




 


Intra-ACP allocations


 


 


12


1


13




 



SUB TOTAL: CO-FINANCING



 


 


203


1


205




 



TOTAL



10 412 


15 630 


21 384 


29 455 


76 880 




















 


EDF


Aggregate Total


Cummulative Figures


Annual Figures




At 31/12/2015


% of allocation


2008


2009


2010


2011


2012


2013


2014


2015





Decisions



 


 


 


 


 


 


 


 


 


 


 




 


8


10 404 


100 %


10 786 


(42)


(45)


(60)


(64)


(98)


(63)


(12)




 


9


15 533 


99 %


16 633 


(54)


(116)


(9)


(297)


(72)


(381)


(170)




 


10


21 137 


99 %


4 766 


3 501 


2 349 


3 118 


3 524 


4 131 


(95)


(156)




 


11


6 533 


22 %


 


 


 


 


 


 


1 160 


5 372 





Total



 



53 607 



 



32 185 




3 405 




2 187 




3 049 




3 163 




3 961 




621




5 034 






Assigned Funds



 


 


 


 


 


 


 


 


 


 


 




 


8


10 385 


100 %


10 541 


(42)


8


(13)


(46)


(11)


(37)


(16)




 


9


15 355 


98 %


14 209 


997


476


9


(187)


(96)


(1)


(52)




 


10


19 035 


89 %


130


3 184 


2 820 


2 514 


3 460 


3 457 


2 687 


783




 


11


4 024 


14 %


 


 


 


 


 


 


731


3 293 





Total



 



48 798 



 



24 881 




4 140 




3 304 




2 509 




3 226 




3 350 




3 380 




4 008 






Payments



 


 


 


 


 


 


 


 


 


 


 




 


8


10 376 


100 %


9 930 


152


158


90


15


18


16


(3)




 


9


14 985 


96 %


10 011 


1 806 


1 304 


906


539


231


145


43




 


10


15 009 


70 %


90


1 111 


1 772 


1 879 


2 655 


2 718 


2 760 


2 024 




 


11


1 619 


5 %


 


 


 


 


 


 


595


1 024 





Total



 



41 989 



 



20 031 




3 069 




3 233 




2 874 




3 209 




2 967 




3 516 




3 088 











*


Negative figures represent decommitments









Table 2.2


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2015


CLASS OF AID

















(EUR million)




 


EDF




8


%


9


%


10


%


11


%


TOTAL


%





 (11)




 (11)




 (11)




 (11)




 (11)






L o m é




Sundry Income



 


 


 


 


 


 


 


 


 


 




Appropriations


35


 


 


 


 


 


 


 


35


 




Decisions


35


100 %


 


 


 


 


 


 


35


100 %




Assigned funds


35


100 %


 


 


 


 


 


 


35


100 %




Payments


35


100 %


 


 


 


 


 


 


35


100 %





Total indicative programmes



 


 


 


 


 


 


 


 


 


 




Appropriations


4 999 


 


 


 


 


 


 


 


4 999 


 




Decisions


4 994 


100 %


 


 


 


 


 


 


4 994 


100 %




Assigned funds


4 989 


100 %


 


 


 


 


 


 


4 989 


100 %




Payments


4 986 


100 %


 


 


 


 


 


 


4 986 


100 %





Total Non-Programmable Aid



 


 


 


 


 


 


 


 


 


 




Appropriations


4 723 


 


 


 


 


 


 


 


4 723 


 




Decisions


4 722 


100 %


 


 


 


 


 


 


4 722 


100 %




Assigned funds


4 711 


100 %


 


 


 


 


 


 


4 711 


100 %




Payments


4 706 


100 %


 


 


 


 


 


 


4 706 


100 %





Transfers from other funds



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


692


 


 


 


 


 


692


 




Decisions


 


 


678


98 %


 


 


 


 


678


98 %




Assigned funds


 


 


671


97 %


 


 


 


 


671


97 %




Payments


 


 


670


97 %


 


 


 


 


670


97 %





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




 


 





C o t o n o u




A Envelope — National Allocations



 


 


 


 


 


 


 


 


 


 




Appropriations


418


 


8 955 


 


13 703 


 


14 799 


 


37 875 


 




Decisions


418


100 %


8 918 


100 %


13 570 


99 %


3 287 


22 %


26 193 


69 %




Assigned funds


417


100 %


8 862 


99 %


12 004 


88 %


1 483 


10 %


22 767 


60 %




Payments


417


100 %


8 798 


98 %


9 298 


68 %


673


5 %


19 186 


51 %





B Envelope — National Allocations



 


 


 


 


 


 


 


 


 


 




Appropriations


237


 


1 232 


 


2 035 


 


194


 


3 697 


 




Decisions


235


99 %


1 220 


99 %


2 034 


100 %


163


84 %


3 653 


99 %




Assigned funds


233


98 %


1 215 


99 %


1 973 


97 %


113


58 %


3 533 


96 %




Payments


231


98 %


1 204 


98 %


1 792 


88 %


86


44 %


3 313 


90 %





C o t o n o u




Bridging facility



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


 


 


 


 


0


 


0


 




Decisions


 


 


 


 


 


 


 


 


 


 




Assigned funds


 


 


 


 


 


 


 


 


 


 




Payments


 


 


 


 


 


 


 


 


 


 





CDE, CTA and Parliamentary Assembly



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


154


 


 


 


 


 


154


 




Decisions


 


 


154


100 %


 


 


 


 


154


100 %




Assigned funds


 


 


154


100 %


 


 


 


 


154


100 %




Payments


 


 


154


100 %


 


 


 


 


154


100 %





Implementation Costs and Interests Revenues



 


 


 


 


 


 


 


 


 


 




Appropriations


0


 


240


 


505


 


1 070 


 


1 816 


 




Decisions


 


 


240


100 %


504


100 %


246


23 %


991


55 %




Assigned funds


 


 


240


100 %


501


99 %


208


19 %


950


52 %




Payments


 


 


239


100 %


495


98 %


194


18 %


929


51 %





Intra-ACP allocations



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


2 990 


 


2 833 


 


3 384 


 


9 207 


 




Decisions


 


 


2 979 


100 %


2 827 


100 %


1 292 


38 %


7 098 


77 %




Assigned funds


 


 


2 959 


99 %


2 723 


96 %


871


26 %


6 553 


71 %




Payments


 


 


2 910 


97 %


2 193 


77 %


556


16 %


5 658 


61 %





Regional allocations



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


846


 


2 018 


 


4 640 


 


7 504 


 




Decisions


 


 


840


99 %


2 016 


100 %


1 542 


33 %


4 397 


59 %




Assigned funds


 


 


802


95 %


1 663 


82 %


1 347 


29 %


3 812 


51 %




Payments


 


 


767


91 %


1 114 


55 %


110


2 %


1 991 


27 %





Special allocation R.D. Congo



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


105


 


 


 


 


 


105


 




Decisions


 


 


105


100 %


 


 


 


 


105


100 %




Assigned funds


 


 


105


100 %


 


 


 


 


105


100 %




Payments


 


 


105


100 %


 


 


 


 


105


100 %





Special allocation South Sudan



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


267


 


 


 


 


 


267


 




Decisions


 


 


266


100 %


 


 


 


 


266


100 %




Assigned funds


 


 


217


81 %


 


 


 


 


217


81 %




Payments


 


 


53


20 %


 


 


 


 


53


20 %





C o t o n o u




Special allocation Sudan



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


110


 


 


 


 


 


110


 




Decisions


 


 


109


99 %


 


 


 


 


109


99 %




Assigned funds


 


 


106


96 %


 


 


 


 


106


96 %




Payments


 


 


60


55 %


 


 


 


 


60


55 %





Voluntary contribution Peace facility



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


39


 


 


 


 


 


39


 




Decisions


 


 


24


62 %


 


 


 


 


24


62 %




Assigned funds


 


 


24


62 %


 


 


 


 


24


62 %




Payments


 


 


24


62 %


 


 


 


 


24


62 %





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 





A Envelope — National Allocations



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


 


 


186


 


 


 


186


 




Decisions


 


 


 


 


170


92 %


 


 


170


92 %




Assigned funds


 


 


 


 


156


84 %


 


 


156


84 %




Payments


 


 


 


 


106


57 %


 


 


106


57 %





Implementation Costs and Interests Revenues



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


 


 


5


 


0


 


5


 




Decisions


 


 


 


 


4


70 %


 


 


4


69 %




Assigned funds


 


 


 


 


2


45 %


 


 


2


44 %




Payments


 


 


 


 


1


20 %


 


 


1


20 %





Intra-ACP allocations



 


 


 


 


 


 


 


 


 


 




Appropriations


 


 


 


 


12


 


1


 


13


 




Decisions


 


 


 


 


12


99 %


1


100 %


13


99 %




Assigned funds


 


 


 


 


12


97 %


1


100 %


13


98 %




Payments


 


 


 


 


10


83 %


 


 


10


75 %





Co-financing



 


 


 


 


 


 


 


 


 


 




 


 




 


Appropriations


8


%


9


%


10


%


11


%


TOTAL


%




 



 (11)




 (11)




 (11)




 (11)




 (11)






Cotonou



Country reserve


 


 


 


 



0



 



71



 



71



 




Intra-ACP Reserve


 


 


 


 



0



 



206



 



206



 




National allocations Reserve A Envelope STABEX


 


 


 


 



(0)



 



0



 



(0)



 




NIP/RIP reserve


 


 


 


 



0



 



5 024 



 



5 024 



 




Regional allocations reserve


 


 


 


 



0



 


 


 



0



 





Mobilisable reserves



 


 


 


 


 


 


 


 


 


 




Non-mobilisable reserve


 


 


 


 



86



 



65



 



151



 





Non-mobilisable reserve



 


 


 


 


 


 


 


 


 


 




 


 


8


%


9


%


10


%


11


%


TOTAL


%




 



 (11)




 (11)




 (11)




 (11)




 (11)





 


Appropriations


10 412 


 


15 630 


 


21 384 


 


29 455 


 


76 880 


 




 


Decisions


10 404 


100 %


15 533 


99 %


21 137 


99 %


6 533 


22 %


53 607 


70 %




 


Assigned funds


10 385 


100 %


15 355 


98 %


19 035 


89 %


4 024 


14 %


48 798 


63 %




 


Payments


10 376 


100 %


14 985 


96 %


15 009 


70 %


1 619 


5 %


41 989 


55 %




 



TOTAL: ALL ALLOCATIONS



 


 


 


 


 


 


 


 


 


 





Table 2.3


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2015


CLASS OF AID


ACP + OCT — 8 th EDF

















 


(EUR million)




 


 


CREDITS


DECISIONS


ASSIGNED FUNDS


PAYMENTS




AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%




(1)


(2)


 


(2): (1)


(3)


 


(3): (2)


(4)


 


(4): (3)





L o m é




ACP


Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




Utilisation of interest income


35


35


 


100 %


35


 


100 %


35


 


100 %





SUB TOTAL: SUNDRY INCOME




35




35



 



100 %




35



 



100 %




35



 



100 %





Total indicative programmes


4 963 


4 958 


(9)


100 %


4 954 


(3)


100 %


4 951 


(1)


100 %





SUB TOTAL: TOTAL INDICATIVE PROGRAMMES




4 963 




4 958 




(9)




100 %




4 954 




(3)




100 %




4 951 




(1)




100 %





Aid for refugees


100


100


 


100 %


100


 


100 %


100


 


100 %




Emergency aid (Lomé)


136


136


 


100 %


136


 


100 %


136


 


100 %




Heavily indebted poor countries (Lomé)


1 060 


1 060 


 


100 %


1 060 


 


100 %


1 060 


 


100 %




Interest-rate subsidies


79


79


0


100 %


72


(7)


91 %


69


 


95 %




Risk capital


1 016 


1 015 


(1)


100 %


1 012 


(3)


100 %


1 012 


 


100 %




Stabex


723


723


(0)


100 %


723


(0)


100 %


722


(0)


100 %




Structural adjustment


1 497 


1 497 


 


100 %


1 497 


 


100 %


1 497 


 


100 %




Sysmin


101


101


 


100 %


101


 


100 %


101


 


100 %





SUB TOTAL: TOTAL NON-PROGRAMMABLE AID




4 713 




4 711 




(1)




100 %




4 700 




(11)




100 %




4 696 




(0)




100 %






C o t o n o u




ACP


Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


418


418


(0)


100 %


417


(0)


100 %


417


(0)


100 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




418




418




(0)




100 %




417




(0)




100 %




417




(0)




100 %





B Envelope — National Allocations


237


 


 


 


 


 


 


 


 


 




Compensation export earnings


 


235


(1)


 


233


(2)


99 %


231


(1)


99 %





SUB TOTAL: B ENVELOPE — NATIONAL ALLOCATIONS




237




235




(1)




99 %




233




(2)




99 %




231




(1)




99 %





Interests and other receipts


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




0



 


 


 


 


 


 


 


 


 




 



TOTAL ACP (A)




10 365 




10 357 




(12)




100 %




10 339 




(15)




100 %




10 330 




(2)




100 %






L o m é




OCT


Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




Total indicative programmes


36


36


0


100 %


35


(0)


98 %


35


 


100 %





SUB TOTAL: TOTAL INDICATIVE PROGRAMMES




36




36




0




100 %




35




(0)




98 %




35



 



100 %





Interest-rate subsidies


1


1


 


100 %


1


 


100 %


1


 


100 %




Risk capital


6


6


 


100 %


6


 


100 %


6


 


100 %




Stabex


1


1


 


100 %


1


 


100 %


1


 


100 %




Sysmin


2


2


0


100 %


2


(0)


85 %


2


(0)


100 %





SUB TOTAL: TOTAL NON-PROGRAMMABLE AID




11




11




0




100 %




10




(0)




97 %




10




(0)




100 %





 



TOTAL OCT (B)




47




47




0




100 %




46




(0)




98 %




46




(0)




100 %





 



TOTAL: ACP+OCT (A+B)




10 412 




10 404 




(12)




100 %




10 385 




(16)




100 %




10 376 




(3)




100 %






Table 2.4


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2015


CLASS OF AID


ACP + OCT — 9 th EDF

















 


(EUR million)




 


 


CREDITS


DECISIONS


ASSIGNED FUNDS


PAYMENTS




AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%




(1)


(2)


 


(2): (1)


(3)


 


(3): (2)


(4)


 


(4): (3)





L o m é




ACP



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




Transfers from 6th EDF — Lomé


20


20


(0)


100 %


20


 


99 %


20


 


100 %




Transfers from 7th EDF — Lomé


668


654


(22)


98 %


648


(16)


99 %


647


(0)


100 %





SUB TOTAL: TRANSFERS FROM OTHER FUNDS




689




674




(22)




98 %




668




(16)




99 %




667




(0)




100 %






C o t o n o u




ACP



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


8 716 


8 680 


(60)


100 %


8 625 


(54)


99 %


8 563 


(6)


99 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




8 716 




8 680 




(60)




100 %




8 625 




(54)




99 %




8 563 




(6)




99 %





B Envelope — National Allocations


1 227 


 


 


 


 


 


 


 


 


 




Compensation export earnings


 


149


(7)


 


149


(6)


100 %


149


(1)


100 %




Emergency aid


 


1 056 


(8)


 


1 051 


(5)


100 %


1 040 


(0)


99 %




Heavily indebted poor countries


 


11


 


 


11


 


100 %


11


 


100 %





SUB TOTAL: B ENVELOPE — NATIONAL ALLOCATIONS




1 227 




1 216 




(16)




99 %




1 211 




(11)




100 %




1 200 




(1)




99 %






C o t o n o u



CDE, CTA and Parliamentary Assembly


154


154


 


100 %


154


 


100 %


154


 


100 %





SUB TOTAL: CDE, CTA AND PARLIAMENTARY ASSEMBLY




154




154



 



100 %




154



 



100 %




154



 



100 %





Implementation costs


177


177


(1)


100 %


177


(0)


100 %


176


0


99 %




Interests and other receipts


63


63


(0)


100 %


63


 


100 %


63


 


100 %





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




240




240




(2)




100 %




240




(0)




100 %




239




0




100 %





Other Intra-ACP allocations


2 629 


2 625 


(34)


100 %


2 605 


(18)


99 %


2 556 


25


98 %




Peace facility


360


354


(7)


98 %


354


(7)


100 %


353


(1)


100 %





SUB TOTAL: INTRA-ACP ALLOCATIONS




2 990 




2 979 




(41)




100 %




2 959 




(24)




99 %




2 910 




24




98 %





Regional allocations


799


792


(25)


99 %


756


(32)


95 %


722


(3)


96 %





SUB TOTAL: REGIONAL ALLOCATIONS




799




792




(25)




99 %




756




(32)




95 %




722




(3)




96 %





Special allocation R.D. Congo


105


105


 


100 %


105


 


100 %


105


 


100 %





SUB TOTAL: SPECIAL ALLOCATION R.D. CONGO




105




105



 



100 %




105



 



100 %




105



 



100 %





Special allocation South Sudan


267


266


(0)


100 %


217


85


81 %


53


15


25 %





SUB TOTAL: SPECIAL ALLOCATION SOUTH SUDAN




267




266




(0)




100 %




217




85




81 %




53




15




25 %





Special allocation Sudan


110


109


(1)


99 %


106


1


97 %


60


15


57 %





SUB TOTAL: SPECIAL ALLOCATION SUDAN




110




109




(1)




99 %




106




1




97 %




60




15




57 %





Voluntary contribution Peace facility


39


24


 


62 %


24


 


100 %


24


 


100 %





SUB TOTAL: VOLUNTARY CONTRIBUTION PEACE FACILITY




39




24



 



62 %




24



 



100 %




24



 



100 %





 



TOTAL: ACP (A)




15 334 




15 239 




(168)




99 %




15 063 




(51)




99 %




14 696 




44




98 %






L o m é




OCT



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




Transfers from 6th EDF — Lomé


0


0


 


100 %


0


 


100 %


0


 


100 %




Transfers from 7th EDF — Lomé


3


3


(0)


99 %


3


 


100 %


3


 


100 %





SUB TOTAL: TRANSFERS FROM OTHER FUNDS




3




3




(0)




99 %




3



 



100 %




3



 



100 %






C o t o n o u




OCT



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


239


238


(2)


99 %


237


(0)


100 %


235


(1)


99 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




239




238




(2)




99 %




237




(0)




100 %




235




(1)




99 %





B Envelope — National Allocations


4


 


 


 


 


 


 


 


 


 




Emergency aid


 


4


 


 


4


 


100 %


4


 


100 %





SUB TOTAL: B ENVELOPE — NATIONAL ALLOCATIONS




4




4



 



100 %




4



 



100 %




4



 



100 %





Studies/Technical assistance OCT


1


1


 


100 %


1


 


100 %


1


 


100 %





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




1




1



 



100 %




1



 



100 %




1



 



100 %





Regional allocations


48


48


0


100 %


46


(0)


97 %


45


0


98 %





SUB TOTAL: REGIONAL ALLOCATIONS




48




48




0




100 %




46




(0)




97 %




45




0




98 %





 



TOTAL: OCT (B)




295




294




(2)




100 %




292




(0)




99 %




288




(1)




99 %





 



TOTAL: ACP+OCT (A+B)




15 630 




15 533 




(170)




99 %




15 355 




(52)




99 %




14 985 




43




98 %






Table 2.5


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2015


CLASS OF AID


ACP + OCT — 10 th EDF
















(EUR million)




 


CREDITS


DECISIONS


ASSIGNED FUNDS


PAYMENTS




AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%




(1)


(2)


 


(2): (1)


(3)


 


(3): (2)


(4)


 


(4): (3)





A C P



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


13 507 


13 375 


(149)


99 %


11 870 


600


89 %


9 185 


1 487 


77 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




13 507 




13 375 




(149)




99 %




11 870 




600




89 %




9 185 




1 487 




77 %





B Envelope — National Allocations


2 020 


 


 


 


 


 


 


 


 


 




Compensation export earnings


 


210


(0)


 


188


5


90 %


168


37


89 %




Emergency aid


 


855


(1)


 


826


17


97 %


713


57


86 %




Heavily indebted poor countries


 


49


 


 


49


0


100 %


49


0


100 %




Other chocs with budgetary impact


 


906


(5)


 


897


6


99 %


850


27


95 %





SUB TOTAL: B ENVELOPE — NATIONAL ALLOCATIONS




2 020 




2 019 




(6)




100 %




1 960 




28




97 %




1 779 




121




91 %





Implementation costs


429


429


0


100 %


429


(0)


100 %


425


11


99 %




Interests and other receipts


70


69


(1)


99 %


67


(1)


97 %


65


3


97 %





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




499




499




(1)




100 %




496




(1)




99 %




490




14




99 %





Institutional and support expenditure


241


238


(4)


99 %


237


(3)


100 %


210


(0)


89 %




Other Intra-ACP allocations


1 904 


1 901 


(3)


100 %


1 826 


60


96 %


1 365 


198


75 %




Peace facility


688


688


0


100 %


660


(23)


96 %


617


(17)


93 %





SUB TOTAL: INTRA-ACP ALLOCATIONS




2 833 




2 827 




(7)




100 %




2 723 




34




96 %




2 193 




181




81 %





Regional allocations


1 978 


1 976 


(7)


100 %


1 628 


97


82 %


1 101 


137


68 %





SUB TOTAL: REGIONAL ALLOCATIONS




1 978 




1 976 




(7)




100 %




1 628 




97




82 %




1 101 




137




68 %






Co-financing



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


186


170


15


92 %


156


11


92 %


106


65


68 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




186




170




15




92 %




156




11




92 %




106




65




68 %





Implementation costs


5


4


1


70 %


2


2


65 %


1


1


45 %





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




5




4




1




70 %




2




2




65 %




1




1




45 %





Other Intra-ACP allocations


12


11


0


98 %


11


(0)


99 %


9


2


84 %




Peace facility


1


1


 


100 %


1


 


99 %


1


 


100 %





SUB TOTAL: INTRA-ACP ALLOCATIONS




12




12




0




99 %




12




(0)




99 %




10




2




85 %






Mobilisable reserves



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




A Envelope reserve


0


 


 


 


 


 


 


 


 


 




B Envelope reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: COUNTRY RESERVE




0



 


 


 


 


 


 


 


 


 




Intra-ACP Reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: INTRA-ACP RESERVE




0



 


 


 


 


 


 


 


 


 




National allocations Reserve A Envelope STABEX


(0)


 


 


 


 


 


 


 


 


 





SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX




(0)



 


 


 


 


 


 


 


 


 




NIP/RIP reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: NIP/RIP RESERVE




0



 


 


 


 


 


 


 


 


 




Regional allocations reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: REGIONAL ALLOCATIONS RESERVE




0



 


 


 


 


 


 


 


 


 





Non-mobilisable reserve



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




Non-mobilisable reserve


67


 


 


 


 


 


 


 


 


 





SUB TOTAL: NON-MOBILISABLE RESERVE




67



 


 


 


 


 


 


 


 


 





O C T



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


196


195


(1)


100 %


134


2


69 %


113


12


84 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




196




195




(1)




100 %




134




2




69 %




113




12




84 %





B Envelope — National Allocations


15


 


 


 


 


 


 


 


 


 




Emergency aid


 


9


0


 


7


0


76 %


7


1


99 %




Other chocs with budgetary impact


 


6


 


 


6


 


100 %


6


 


100 %





SUB TOTAL: B ENVELOPE — NATIONAL ALLOCATIONS




15




15




0




100 %




13




0




86 %




13




1




100 %





Studies/Technical assistance OCT


6


5


(1)


88 %


5


(0)


98 %


5


0


91 %





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




6




5




(1)




88 %




5




(0)




98 %




5




0




91 %





Regional allocations


40


40


(0)


99 %


35


9


89 %


13


5


37 %





SUB TOTAL: REGIONAL ALLOCATIONS




40




40




(0)




99 %




35




9




89 %




13




5




37 %






Mobilisable reserves



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




A Envelope reserve


0


 


 


 


 


 


 


 


 


 




B Envelope reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: COUNTRY RESERVE




0



 


 


 


 


 


 


 


 


 




National allocations Reserve A Envelope STABEX


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX




0



 


 


 


 


 


 


 


 


 




Regional allocations reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: REGIONAL ALLOCATIONS RESERVE




0



 


 


 


 


 


 


 


 


 





Non-mobilisable reserve



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




Non-mobilisable reserve


19


 


 


 


 


 


 


 


 


 





SUB TOTAL: NON-MOBILISABLE RESERVE




19



 


 


 


 


 


 


 


 


 





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




21 384 




21 137 




(156)




99 %




19 035 




783




90 %




15 009 




2 024 




79 %






Table 2.6


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2015


CLASS OF AID


ACP + OCT — 11 th EDF
















(EUR million)




 


CREDITS


DECISIONS


ASSIGNED FUNDS


PAYMENTS




AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%




(1)


(2)


 


(2): (1)


(3)


 


(3): (2)


(4)


 


(4): (3)





A C P



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


14 799 


3 287 


2 830 


22 %


1 483 


1 286 


45 %


673


488


45 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




14 799 




3 287 




2 830 




22 %




1 483 




1 286 




45 %




673




488




45 %





B Envelope — National Allocations


194


 


 


 


 


 


 


 


 


 




Emergency aid


 


163


81


 


113


48


69 %


86


39


76 %





SUB TOTAL: B ENVELOPE — NATIONAL ALLOCATIONS




194




163




81




84 %




113




48




69 %




86




39




76 %





Bridging facility


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: BRIDGING FACILITY




0



 


 


 


 


 


 


 


 


 




Implementation costs


1 053 


237


138


23 %


202


110


85 %


191


99


95 %




Interests and other receipts


15


6


1


43 %


5


5


85 %


3


3


47 %





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




1 067 




243




139




23 %




207




115




85 %




194




102




94 %





Institutional and support expenditure


244


101


68


41 %


56


43


56 %


39


34


70 %




Other Intra-ACP allocations


2 240 


291


236


13 %


216


216


74 %


 


 


 




Peace facility


900


900


575


100 %


599


298


67 %


516


290


86 %





SUB TOTAL: INTRA-ACP ALLOCATIONS




3 384 




1 292 




879




38 %




871




556




67 %




556




324




64 %





Regional allocations


4 640 


1 542 


1 439 


33 %


1 347 


1 285 


87 %


110


71


8 %





SUB TOTAL: REGIONAL ALLOCATIONS




4 640 




1 542 




1 439 




33 %




1 347 




1 285 




87 %




110




71




8 %






Co-financing



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 




Implementation costs


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




0



 


 


 


 


 


 


 


 


 




Peace facility


1


1


1


100 %


1


1


100 %


 


 


 





SUB TOTAL: INTRA-ACP ALLOCATIONS




1




1




1




100 %




1




1




100 %



 


 


 





Mobilisable reserves



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




B Envelope reserve


71


 


 


 


 


 


 


 


 


 





SUB TOTAL: COUNTRY RESERVE




71



 


 


 


 


 


 


 


 


 




Intra-ACP Reserve


206


 


 


 


 


 


 


 


 


 





SUB TOTAL: INTRA-ACP RESERVE




206



 


 


 


 


 


 


 


 


 




National allocations Reserve A Envelope STABEX


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX




0



 


 


 


 


 


 


 


 


 




NIP/RIP reserve


4 668 


 


 


 


 


 


 


 


 


 





SUB TOTAL: NIP/RIP RESERVE




4 668 



 


 


 


 


 


 


 


 


 





Non-mobilisable reserve



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




Non-mobilisable reserve


65


 


 


 


 


 


 


 


 


 





SUB TOTAL: NON-MOBILISABLE RESERVE




65



 


 


 


 


 


 


 


 


 





EC Internal SLA



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




A Envelope — National Allocations


1


1


1


100 %


1


1


100 %


1


1


73 %





SUB TOTAL: A ENVELOPE — NATIONAL ALLOCATIONS




1




1




1




100 %




1




1




100 %




1




1




73 %






P T O M



 


 


 


 


 


 


 


 


 


 





Regular MS Contributions



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 




Bridging facility


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: BRIDGING FACILITY




0



 


 


 


 


 


 


 


 


 




Studies/Technical assistance OCT


3


3


3


100 %


1


1


34 %


0


0


39 %





SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




3




3




3




100 %




1




1




34 %




0




0




39 %






Mobilisable reserves



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




NIP/RIP reserve


357


 


 


 


 


 


 


 


 


 





SUB TOTAL: NIP/RIP RESERVE




357



 


 


 


 


 


 


 


 


 





Non-mobilisable reserve



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 




Non-mobilisable reserve


0


 


 


 


 


 


 


 


 


 





SUB TOTAL: NON-MOBILISABLE RESERVE




0



 


 


 


 


 


 


 


 


 





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




29 455 




6 533 




5 372 




22 %




4 024 




3 293 




62 %




1 619 




1 024 




40 %





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









EUROPEAN INVESTMENT BANK







CA/491/16


10 March 2016




 



Document 16/119







BOARD OF DIRECTORS







INVESTMENT FACILITY


FINANCIAL STATEMENTS


AS AT 31 DECEMBER 2015











—


Statement of financial position










—


Statement of profit or loss and other comprehensive income










—


Statement of changes in contributors’ resources










—


Statement of cash flows










—


Notes to the financial statements










—


Independent auditor’s report








INVESTMENT FACILITY

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2015









(In EUR’000)




 


Notes


31.12.2015


31.12.2014





ASSETS



 


 


 




Cash and cash equivalents


5


448 995 


545 399 




Derivative financial instruments


6


311


448




Loans and receivables


7


1 460 057 


1 331 918 




Available-for-sale financial assets


8


419 353 


403 085 




Amounts receivable from contributors


9/15


—


42 590 




Held-to-maturity financial assets


10


228 521 


99 988 




Other assets


11


27


5 522 





Total assets



 



2 557 264 




2 428 950 






LIABILITIES AND CONTRIBUTORS' RESOURCES



 


 


 





LIABILITIES



 


 


 




Derivative financial instruments


6


8 219 


14 632 




Deferred income


12


29 325 


31 310 




Amounts owed to third parties


13


101 202 


68 824 




Other liabilities


14


2 364 


2 591 





Total liabilities



 



141 110 




117 357 






CONTRIBUTORS' RESOURCES



 


 


 




Member States Contribution called


15


2 157 000 


2 057 000 




Fair value reserve


 


163 993 


156 122 




Retained earnings


 


95,161 


98,471 





Total contributors' resources



 



2 416 154 




2 311 593 






Total liabilities and contributors' resources



 



2 557 264 




2 428 950 









STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME


FOR THE YEAR ENDED 31 DECEMBER 2015









(In EUR’000)




 


Notes


From 01.01.2015


From 01.01.2014




to 31.12.2015


to 31.12.2014




Interest and similar income


17


90 385 


77 240 




Interest and similar expenses


17


-1 556 


-1 522 





Net interest and similar income



 



88 829 




75 718 





Fee and commission income


18


932


1 163 




Fee and commission expenses


18


- 63


- 37





Net fee and commission income



 



869




1 126 





Fair value change of derivative financial instruments


 


6 276 


-11 663 




Net realised gains on available-for-sale financial assets


19


33 878 


8 109 




Net foreign exchange loss


 


-52 483 


- 222





Net result on financial operations



 



-12 329 




-3 776 





Change in impairment on loans and receivables, net of reversal


7


-33 988 


-75 756 




Impairment on available-for-sale financial assets


8


-3 646 


-6 262 




Other income


21


—


337




General administrative expenses


20


-43 045 


-38 128 





Loss for the year



 



-3 310 




-46 741 






Other comprehensive income:



 


 


 





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



 


 


 




Available-for-sale financial assets — Fair value reserve


8


 


 










1.


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






 


43 394 


87 230 










2.


Net amount transferred to profit or loss






 


-35 523 


-9 299 





Total available-for-sale financial assets



 



7 871 




77 931 






Total other comprehensive income



 



7 871 




77 931 






Total comprehensive income for the year



 



4 561 




31 190 









STATEMENT OF CHANGES IN CONTRIBUTORS’ RESOURCES


FOR THE YEAR ENDED 31 DECEMBER 2015











(In EUR’000)




 


Notes


Contribution called


Fair value reserve


Retained earnings


Total





At 1 January 2015



 



2 057 000 




156 122 




98 471 




2 311 593 





Member States contribution called during the year


15


100 000 


—


—


100 000 




Loss for the year 2015


 


—


—


-3 310 


-3 310 




Total other comprehensive income for the year


 


—


7 871 


—


7 871 





Changes in contributors’ resources



 



100 000 




7 871 




-3 310 




104 561 






At 31 December 2015



 



2 157 000 




163 993 




95 161 




2 416 154 






At 1 January 2014



 



1 661 309 




78 191 




145 212 




1 884 712 





Member States contribution called during the year


15


105 691 


—


—


105 691 




Unused interest subsidies and technical assistance


15


290 000 


—


—


290 000 




Loss for the year 2014


 


—


—


-46 741 


-46 741 




Total other comprehensive income for the year


 


—


77 931 


—


77 931 





Changes in contributors’ resources



 



395 691 




77 931 




-46 741 




426 881 






At 31 December 2014



 



2 057 000 




156 122 




98 471 




2 311 593 









STATEMENT OF CASH FLOWS


FOR THE YEAR ENDED 31 DECEMBER 2015









(In EUR’000)




 


Notes


From 01.01.2015 to 31.12.2015


From 01.01.2014 to 31.12.2014





OPERATING ACTIVITIES



 


 


 




Loss for the financial year


 


-3 310 


-46 741 




Adjustments made for:


 


 


 




Impairment on available-for-sale financial assets


8


3 646 


6 262 




Other income


21


—


- 337




Net change in impairment on loans and receivables


7


33 988 


75 756 




Interest capitalised on loans and receivables


7


-13 262 


-11 915 




Change in accrued interest and amortised cost on loans and receivables


 


1 594 


895




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


10


12


12




Change in deferred income


 


-1 985 


-3 773 




Effect of exchange rate changes on loans


7


-73 447 


-92 707 




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


 


-9 385 


- 449




Effect of exchange rate changes on cash held


 


-12 216 


-9 362 





Loss on operating activities before changes in operating assets and liabilities



 



-74 365 




-82 359 





Loan disbursements


7


- 282 784 


- 248 326 




Repayments of loans


7


205 772 


166 578 




Change in accrued interest on cash and cash equivalent


5


4


7




Fair value changes on derivatives


 


-6 276 


11 663 




Increase in held-to-maturity financial assets


10


-1 545 550 


-1 610 057 




Maturities of held-to-maturity financial assets


10


1 417 005 


1 612 619 




Increase in available-for-sale financial assets


8


-67 449 


-42 646 




Repayments/sales of available-for-sale financial assets


8


64 791 


43 378 




Decrease/(increase) in other assets


 


5 495 


-5 374 




(Decrease)/increase in other liabilities


 


- 227


19




Increase/(decrease) in amounts payable to the European Investment Bank


 


4 668 


- 175





Net cash flows used in operating activities



 



- 278 916 




- 154 673 






FINANCING ACTIVITIES



 


 


 




Contribution received from Member States


15


100 000 


105 691 




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


 


92 590 


7 410 




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


 


-22 290 


-21 899 





Net cash flows from financing activities



 



170 300 




91 202 






Net decrease in cash and cash equivalents



 



- 108 616 




-63 471 






Summary statement of cash flows:



 


 


 





Cash and cash equivalents at the beginning of financial year



 



545 398 




599 507 





Net cash from:


 


 


 




Operating activities


 


- 278 916 


- 154 673 




Financing activities


 


170 300 


91 202 




Effects of exchange rate changes on cash and cash equivalents


 


12 216 


9 362 





Cash and cash equivalents at the end of financial year



 



448 998 




545 398 






Cash and cash equivalents are composed of:



 


 


 




Cash in hand


5


71 405 


9 642 




Term deposits (excluding accrued interest)


 


290 576 


415 756 




Commercial papers


5


87 017 


120 000 




 


 



448 998 




545 398 






Notes to the financial statements as at 31 December 2015

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 22 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 Ninth European Development Fund (EDF), Second Financial Protocol covering the period 2008 — 2013 and referred to as the 10th EDF, the ‘Bridging Facility’ covering the period from 1 January 2014 until 28 February 2015 and 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 3 685,5 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 1 220,85 million for ACP countries and max. EUR 8,5 million for OCT countries. Up to 15 % of these subsidies can be used to fund project-related technical assistance (‘TA’);










—


the ‘Bridging Facility’ (1 January 2014 to 28 February 2015) 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 2015 to 31 December 2015.
On a proposal from the Management Committee of EIB, the Board of Directors of EIB adopted the Financial Statements on 10 March 2016, and authorised their submission to the Board of Governors for approval by 26 April 2016.
2   Significant accounting policies

2.1   Basis of preparation — Statement of compliance

The Facility’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.
2.2   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 2.4.3 and 4.
These valuation techniques may include net present value and discounted cash flow models, comparison to similar instruments for which market observable prices exist, Black-Scholes and polynomial option pricing models and other valuation models. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads used in estimating discount rates, bond and equity prices, foreign currency exchange rates, equity and equity index prices and expected price volatilities and correlations.
The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.
The Facility uses widely recognised valuation models for determining the fair value of common and more simple financial instruments, like interest rate and currency swaps that use only observable market data and require limited management judgement and estimation. Observable prices and model inputs are usually available in the market for listed debt and equity securities, exchange traded derivatives and simple over the counter derivatives like interest rate swaps. Availability of observable market prices and model inputs reduces the need for management judgement and estimation and also reduces the uncertainty associated with determination of fair values. Availability of observable market prices and inputs varies depending on the products and markets and is prone to changes based on specific events and general conditions in the financial markets.
For more complex instruments, the Facility uses own valuation models, which are developed from recognised valuation models. Some or all of the significant inputs into these models may not be observable in the market, and are derived from market prices or rates or are estimated based on assumptions. Example of instruments involving significant unobservable inputs includes certain loans and guarantees for which there is no active market. Valuation models that employ significant unobservable inputs require a higher degree of management judgement and estimation in the determination of fair value. Management judgement and estimation are usually required for selection of the appropriate valuation model to be used, determination of expected future cash flows on the financial instrument being valued, determination of probability or counterparty default and prepayments and selection of appropriate discount rates.
The Facility has an established control framework with respect to the measurement of fair values. This framework includes the EIB’s Investment Bank’s Risk Management and Market Data Management functions. These functions are independent of front office management and are responsible for verifying significant fair value measurements. Specific controls include:






—


Verification of observable pricing;










—


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










—


Calibration and back testing of models against observed market transactions;










—


Analysis and investigation of significant valuation movements;










—


Review of significant unobservable inputs and valuation adjustments.




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






—


Determining where broker quote or pricing service pricing is appropriate;










—


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










—


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










—


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





Impairment losses on loans and receivables

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

Valuation of unquoted available-for-sale equity investments

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






—


recent arm’s length market transactions;










—


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










—


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










—


adjusted net assets method; or










—


other valuation models.




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

Impairment of available-for-sale financial assets

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

Consolidation of entities in which the Facility holds interest

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

Except for the changes below, the Facility has consistently applied the accounting policies set out in Note 2.4 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:






—


Annual Improvements to IFRSs 2010–2012 Cycle — various standards;










—


Annual Improvements to IFRSs 2011–2013 Cycle — various standards.




These changes had no material impact on the Facility’s financial statements.

Standards issued but not yet effective

The following standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2015, 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 last part of 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 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted. IFRS 9 has not yet been adopted by the EU. The Facility does not plan to adopt this standard early and the impact analysis is currently in progress.
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 2018, 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.
2.4   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.
2.4.1   
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 date of the transaction.
2.4.2   
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.
2.4.3   
Financial assets other than derivatives


Financial assets are accounted for using the settlement date basis.

Fair value of financial instruments

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






—


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










—


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










—


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




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

Held-to-maturity financial assets

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

Loans

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

Available-for-sale financial assets

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

Guarantees

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






—


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










—


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




Any increase or decrease in the liability relating to financial guarantees is taken to the statement of profit or loss and other comprehensive income under ‘fee and commission income’.
The Facility’s assets under such guarantee are subsequently amortized using the actuarial method and tested for impairment.
In addition, when a guarantee agreement is signed, it is presented as a contingent liability for the Facility and when the guarantee is engaged, as a commitment for the Facility.
2.4.4   
Impairment of financial assets


The Facility assesses at each balance sheet date whether there is any objective evidence that a financial asset is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter into bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For the loans outstanding at the end of the financial year and carried at amortised cost, impairments are made when presenting objective evidence of risks of non-recovery of all or part of their amounts according to the original contractual terms or the equivalent value. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of profit or loss and other comprehensive income. Interest income continues to be accrued on the reduced carrying amount based on the effective interest rate of the asset. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account.
The Facility conducts the credit risk assessments based on each individual operation and does not consider a collective impairment.
For the available-for-sale financial assets, the Facility assesses at each balance sheet date whether there is objective evidence that an investment is impaired. Objective evidence would include a significant or prolonged decline in the fair value of the investment below its costs. Where there is evidence of impairment, the cumulative loss (measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the statement of profit or loss and other comprehensive income) is removed from contributors’ resources and recognised in the statement of profit or loss and other comprehensive income. Impairment losses on available-for-sale financial assets are not reversed through the statement of profit or loss and other comprehensive income; increases in their fair value after impairment are recognised directly in contributors’ resources.
The European Investment Bank’s Risk Management reviews financial assets for impairment at least once a year. Resulting adjustments include the unwinding of the discount in the statement of profit or loss and other comprehensive income over the life of the asset, and any adjustments required in respect of a reassessment of the initial impairment.
2.4.5   
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.
2.4.6   
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 are subordinated to all other classes of instruments have identical features;










—


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










—


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




2.4.7   
Interest income on loans


Interest on loans originated by the Facility is recorded in the statement of profit or loss and other comprehensive income (‘Interest and similar income’) and on the statement of financial position (‘Loans and receivables’) on an accrual basis using the effective interest rate, which is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the loan to the net carrying amount of the loan. Once the recorded value of a loan has been reduced due to impairment, interest income continues to be recognised using the original effective interest rate applied to the new carrying amount.
Commitment fees are deferred and recognised in income using the effective interest method over the period from disbursement to repayment of the related loan, and are presented in the statement of profit or loss and other comprehensive income within interest and similar income.
2.4.8   
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.
2.4.9   
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.
2.4.10   
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.
2.4.11   
Taxation


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

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






—


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










—


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










—


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




3.1   Risk management organisation

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

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


In carrying out the credit analysis on loan counterparts, EIB assesses the credit risk and expected loss with a view to quantify and price the risk. EIB has developed an Internal Rating Methodology (IRM) to determine the Internal Ratings of its credit-relevant borrower/guarantor 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 assigned an Internal Rating reflecting its probability of default foreign currency rating following an in-depth analysis of the counterpart’s business and financial 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 an internal risk rating.
All Internal Ratings are monitored over loan life, and periodically updated.
All non-sovereign (or non sovereign guaranteed/assimilated) operations are subject to specific transaction-level and counterpart size limits. Counterpart limits are set at consolidated group exposure level, where applicable. Such limits typically reflect e.g. the size of counterparts own funds.
In order to mitigate credit risk the EIB uses, where appropriate and on a case by case basis, various credit enhancements which are:






—


Counterparty or 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) or bank guarantees.




The Facility does not use any credit derivatives to mitigate credit risk.
3.2.2   
Maximum exposure to credit risk without taking into account any collateral and other credit enhancements


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







Maximum exposure (in EUR’000)


31.12.2015


31.12.2014





ASSETS



 


 




Cash and cash equivalents


448 995 


545 399 




Derivative financial instruments


311


448




Loans and receivables


1 460 057 


1 331 918 




Amounts receivable from contributors


—


42 590 




Held-to-maturity financial assets


228 521 


99 988 




Other assets


27


5 522 





Total assets




2 137 911 




2 025 865 






OFF BALANCE SHEET



 


 




Contingent liabilities


 


 










—


Signed non-issued guarantees






10 000 


25 000 




Commitments


 


 










—


Un-disbursed loans






1 189 564 


1 161 859 










—


Issued guarantees






798


2 298 





Total off balance sheet




1 200 362 




1 189 157 






Total credit exposure




3 338 273 




3 215 022 





3.2.3   
Credit risk on loans and receivables


3.2.3.1   Credit risk measurement for loans and receivables

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






—


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










—


as help in distributing monitoring efforts;










—


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










—


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




The following factors enter into the determination of an LG:






i)


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










ii)


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










iii)


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










iv)


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










v)


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




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






A


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










B


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










C


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










D


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










E


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










F


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




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

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










In EUR’000




At 31.12.2015


Guaranteed


Other credit enhancements


Not guaranteed


Total


% of Total




Banks


18 964 


73 670 


758 412 



851 046 




58 %





Corporates


37 431 


89 170 


272 186 



398 787 




27 %





Public institutions


37 112 


—


14



37 126 




3 %





States


—


4 295 


168 803 



173 098 




12 %






Total disbursed




93 507 




167 135 




1 199 415 




1 460 057 




100 %






Signed not disbursed




135 821 




—




1 053 743 




1 189 564 



 

















In EUR’000




At 31.12.2014


Guaranteed


Other credit enhancements


Not guaranteed


Total


% of Total




Banks


16 457 


106 667 


571 609 



694 733 




52 %





Corporates


23 494 


93 731 


310 396 



427 621 




32 %





Public institutions


33 279 


—


31



33 310 




3 %





States


—


4 815 


171 439 



176 254 




13 %






Total disbursed




73 230 




205 213 




1 053 475 




1 331 918 




100 %






Signed not disbursed




121 826 




117 758 




922 275 




1 161 859 



 




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

The tables below show the credit quality analysis of the Facility’s loan portfolio as at 31 December 2015 and 31 December 2014 by the Loan Grading applications, based on the exposure signed (disbursed and un-disbursed):













In EUR’000




At 31.12.2015


High Grade


Standard Grade


Min. Accept. Risk


High Risk


No grading


Total


% of Total




A to B-


C


D+


D- and below




Borrower


Banks


92 260 


31 558 


326 635 


990 971 


245 160 



1 686 584 




64 %





Corporates


125 963 


—


12 493 


450 045 


—



588 501 




22 %





Public institutions


—


—


37 112 


40 014 


—



77 126 




3 %





States


—


—


9 277 


288 133 


—



297 410 




11 %






Total




218 223 




31 558 




385 517 




1 769 163 




245 160 




2 649 621 




100 %





















In EUR’000




At 31.12.2014


High Grade


Standard Grade


Min. Accept. Risk


High Risk


No grading


Total


% of Total




A to B-


C


D+


D- and below




Borrower


Banks


75 268 


7 074 


307 049 


879 420 


336 318 



1 605 129 




65 %





Corporates


102 974 


7 964 


16 713 


456 210 


—



583 861 




23 %





Public institutions


—


—


33 279 


40 031 


—



73 310 




3 %





States


—


—


4 815 


226 662 


—



231 477 




9 %






Total




178 242 




15 038 




361 856 




1 602 323 




336 318 




2 493 777 




100 %





3.2.3.4   Risk concentrations of loans and receivables

3.2.3.4.1   Geographical analysis

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







Country of borrower


31.12.2015


31.12.2014




Nigeria


195 290 


137 832 




Kenya


192 945 


155 168 




Uganda


178 515 


161 657 




Regional-ACP


111 103 


136 182 




Mauritania


94 123 


95 319 




Jamaica


85 278 


77 272 




Togo


75 387 


45 780 




Dominican Republic


72 474 


64 614 




Ethiopia


67 589 


68 614 




Tanzania


56 367 


62 916 




Cameroon


51 930 


61 067 




Ghana


40 439 


16 130 




Congo (Democratic Republic)


39 766 


39 786 




Mozambique


25 124 


29 139 




Cape Verde


24 623 


26 101 




French Polynesia


22 095 


14 622 




Rwanda


20 466 


14 854 




Mauritius


18 882 


35 811 




Malawi


13 030 


9 945 




Senegal


10 991 


12 046 




Zambia


8 733 


5 761 




Haiti


7 071 


7 379 




Mali


6 688 


7 207 




Botswana


6 605 


—




Samoa


6 267 


7 595 




Burkina Faso


5 967 


7 456 




Congo


5 189 


6 919 




Vanuatu


2 772 


3 835 




New Caledonia


2 705 


3 211 




Saint Lucia


2 671 


2 363 




Palau


2 197 


2 254 




Grenada


1 735 


1 996 




Niger


1 372 


2 581 




Micronesia


1 169 


1 141 




Trinidad and Tobago


1 010 


1 180 




Liberia


921


821




Seychelles


468


—




Tonga


54


681




Burundi


40


40




Sint Maarten


6


—




Angola


—


3 623 




Gabon


—


528




Fiji


—


474




Chad


—


18





Total




1 460 057 




1 331 918 





3.2.3.4.2   Industry sector analysis

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







Industry sector of borrower



31.12.2015




31.12.2014





Global loans and agency agreements


658 098 


541 600 




Urban development, renovation and transport


207 773 


209 849 




Tertiary and other


201 361 


168 689 




Electricity, coal and others


197 547 


198 604 




Basic material and mining


88 615 


108 367 




Roads and motorways


48 165 


43 993 




Airports and air traffic management systems


37 126 


33 310 




Materials processing, construction


13 719 


16 243 




Food chain


7 643 


18




Telecommunications


6


6 089 




Waste recuperation


4


—




Paper chain


—


5 156 





Total




1 460 057 




1 331 918 





3.2.3.5   Arrears on loans and impairments

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








 


 


Loans and receivables


Loans and receivables




Notes


31.12.2015


31.12.2014





Carrying amount



 



1 460 057 




1 331 918 






Individually impaired



 


 


 




Gross amount


 


214 232 


210 338 




Allowance for impairment


7


- 191 046 


- 152 137 





Carrying amount individually impaired



 



23 186 




58 201 






Collectively impaired



 


 


 




Gross amount


 


—


—




Allowance for impairment


 


—


—





Carrying amount collectively impaired



 


—


—





Past due but not impaired



 


 


 





Past due comprises



 


 


 




0-30 days


 


1 521 


2 558 




30-60 days


 


15


528




60-90 days


 


—


5




90-180 days


 


—


—




more 180 days


 


13


—





Carrying amount past due but not impaired



 



1 549 




3 091 






Carrying amount neither past due nor impaired



 



1 435 322 




1 270 626 






Total carrying amount loans and receivables



 



1 460 057 




1 331 918 





3.2.4   
Credit risk on cash and cash equivalents


Available funds are invested in accordance with the Facility’s schedule of contractual disbursement obligations. As of 31 December 2015 and 31 December 2014, 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 2015 and 31 December 2014 all term deposits, commercial papers and cash in hand held by the treasury portfolio of the Facility had a minimum rating of P-1 (Moody’s equivalent) at settlement day.
The following table shows the situation of cash and cash equivalents including accrued interest (in EUR’000):










Minimum short-term rating


Minimum long-term rating


31.12.2015


31.12.2014




(Moody’s term)


(Moody’s term)




P-1


Aaa


49 999 


11 %


47 937 


9 %




P-1


Aa2


26


0 %


38


0 %




P-1


A1


115 705 


26 %


137 820 


25 %




P-1


A2


283 265 


63 %


359 604 


66 %





Total




448 995 




100 %




545 399 




100 %





3.2.5   
Credit risk on derivatives


3.2.5.1   Credit risk policy of derivatives

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

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










In EUR’000




Swap contracts at 31.12.2015


less than


1 year


5 years


more than


Total 2015




1 year


to 5 years


to 10 years


to 10 years




Notional amount


—


9 589 


—


—



9 589 





Fair Value (i.e. net discounted value)


—


-3 835 


—


—



-3 835 


















In EUR’000




Swap contracts at 31.12.2014


less than


1 year


5 years


more than


Total 2014




1 year


to 5 years


to 10 years


to 10 years




Notional amount


—


11 606 


—


—



11 606 





Fair Value (i.e. net discounted value)


—


-3 219 


—


—



-3 219 





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 1 400,0 million at 31 December 2015 against EUR 1 059,0 million at 31 December 2014. The fair value of FX swaps amounts to EUR -3,8 million at 31 December 2015 against EUR -10,8 million at 31 December 2014.
The Facility enters into interest rate swap contracts in order to hedge the interest rate risk on loans disbursed. As at 31 December 2015 there are two interest rate swaps outstanding with a notional amount of EUR 44,9 million (2014: EUR 44,7 million) and a fair value of EUR -0,3 million (2014: EUR -0,1 million).
3.2.6   
Credit risk on held-to-maturity financial assets


The following table shows the situation of the held-to-maturity portfolio entirely composed of treasury bills issued by 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



31.12.2015




31.12.2014





(Moody’s term)


(Moody’s term)




P-1


A2


69 502 


31 %


—


0 %




P-3


Baa3


50 012 


22 %


49 994 


50 %




P-2


Baa2


50 007 


22 %


—


0 %




NP


Ba1


49 000 


21 %


—


0 %




P-1


A1


10 000 


4 %


—


0 %




NP


Ba2


—


0 %


49 994 


50 %





Total




228 521 




100 %




99 988 




100 %





3.3   Liquidity risk

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


The Facility is primarily funded by annual contributions from Member States 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.
In order to calculate Member States’ annual contributions, disbursement patterns of the existing and pipelined portfolio is analysed and followed up throughout the year. Special events, such as early reimbursements, sales of shares or default cases are taken into account to correct annual liquidity requirements.
To further minimize the liquidity risk, the Facility maintains a liquidity reserve sufficient to cover at any point in time forecasted cash disbursements, as communicated periodically by EIB’s Lending Department. Funds are invested on the money market and bond markets in the form of interbank deposits and other short term financial instruments by taking into consideration the Facility’s cash disbursement obligations. The Facility’s liquid assets are managed by the Bank’s Treasury Department with a view to maintain appropriate liquidity to enable the Facility to meet its obligations.
In accordance with the principle of segregation of duties between the Front and Back Office, settlement operations related to the investment of these assets are under the responsibility of the EIB’s Planning and Settlement of Operations Department. Furthermore, the authorisation of counterparts and limits for treasury investments, as well as the monitoring of such limits, are the responsibility of the Bank’s Risk Management Directorate.
3.3.2   
Liquidity risk measurement


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











Maturity profile of non-derivative financial liabilities


3 months or less


More than 3 months to 1 year


More than 1 year to 5 years


More than 5 years


Maturity Undefined


Gross nominal outflow




In EUR’000 as at 31.12.2015




Outflows for committed but un-disbursed loans


41 028 


—


—


—


1 148 536 


1 189 564 




Outflows for committed investment funds and share subscription


23 371 


—


—


—


274 984 


298 355 




Others (signed non-issued guarantees, issued guarantees)


—


—


—


—


10 798 


10 798 




Outflows for committed interest subsidies


—


—


—


—


281 682 


281 682 




Outflows for committed TA


811


—


—


—


28 072 


28 883 





Total




65 210 



—


—


—



1 744 072 




1 809 282 



















Maturity profile of non-derivative financial liabilities


3 months or less


More than 3 months to 1 year


More than 1 year to 5 years


More than 5 years


Maturity Undefined


Gross nominal outflow




In EUR’000 as at 31.12.2014




Outflows for committed but un-disbursed loans


1 576 


—


—


—


1 160 283 


1 161 859 




Outflows for committed investment funds and share subscription


4 584 


—


—


—


196 053 


200 637 




Others (signed non-issued guarantees, issued guarantees)


—


—


—


—


27 298 


27 298 




Outflows for committed interest subsidies


—


—


—


—


241 890 


241 890 




Outflows for committed TA


595


—


—


—


18 978 


19 573 





Total




6 755 



—


—


—



1 644 502 




1 651 257 


















Maturity profile of derivative financial liabilities


3 months or less


More than 3 months to 1 year


More than 1 year to 5 years


More than 5 years


Gross nominal inflow/outflow




In EUR’000 as at 31.12.2015




CCS and CCIRS — Inflows


5


2 307 


7 671 


—


9 983 




CCS and CCIRS — Outflows


—


-3 571 


-10 714 


—


-14 285 




Short term currency swaps — Inflows


1 400 000 


—


—


—


1 400 000 




Short term currency swaps — Outflows


-1 407 763 


—


—


—


-1 407 763 




Interest Rate Swaps — Inflows


383


1 269 


6 059 


2 524 


10 235 




Interest Rate Swaps — Outflows


—


-2 145 


-6 127 


-2 206 


-10 478 





Total




-7 375 




-2 140 




-3 111 




318




-12 308 


















Maturity profile of derivative financial liabilities


3 months or less


More than 3 months to 1 year


More than 1 year to 5 years


More than 5 years


Gross nominal inflow/outflow




In EUR’000 as at 31.12.2014




CCS and CCIRS — Inflows


6


2 218 


10 036 


—


12 260 




CCS and CCIRS — Outflows


—


-3 202 


-12 809 


—


-16 011 




Short term currency swaps — Inflows


1 059 000 


—


—


—


1 059 000 




Short term currency swaps — Outflows


-1 070 677 


—


—


—


-1 070 677 




Interest Rate Swaps — Inflows


371


1 103 


6 495 


3 619 


11 588 




Interest Rate Swaps — Outflows


—


-2 143 


-6 373 


-3 022 


-11 538 





Total




-11 300 




-2 024 




-2 651 




597




-15 378 





3.4   Market risk

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


Interest rate risk arises from the volatility in the economic value of, or in the income derived from, interest rate bearing positions due to adverse movements in interest rates.
The Facility is not directly impacted by the fluctuation of its economic value or to pricing mismatches between different assets, liabilities and hedge instruments because (i) it does not have any direct borrowing costs or interest rate bearing liabilities and (ii) it accepts the impact of interest rate fluctuations on the revenues from its investments.
The Facility measures the sensitivity of its loan portfolio and micro hedging swaps to interest rate fluctuations via a Basis Point Value (BPV) calculation.
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 2015 would decrease by EUR 532k (as at 31 December 2014: decrease by EUR 419k) if all relevant interest rates curves are simultaneously shifted upwards in parallel by 1 basis point.












Basis point value


Money Market


Very Short


Short


Medium


Long


Extra Long


Total




In EUR’000




As at 31.12.2015


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


- 37


- 72


- 252


- 139


- 32


—


- 532



















Basis point value


Money Market


Very Short


Short


Medium


Long


Extra Long


Total




In EUR’000




As at 31.12.2014


1 year


2 to 3 years


4 to 6 years


7 to 11 years


12 to 20 years


21 years




Total sensitivity of loans and micro hedging swaps


- 33


- 70


- 126


- 146


- 44


—


- 419




3.4.2   
Foreign exchange risk


Foreign exchange (‘FX’) risk for the IF is the risk of loss in earnings or economic value due to adverse movements of FX rates.
Given a reference accounting currency (EUR for the IF), the Facility is exposed to FX risk whenever there is a mismatch between assets and liabilities denominated in a non-reference accounting currency. FX 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 FX risk generated by IF operations denominated in USD shall be covered on an aggregated basis via the use of USD/EUR FX swaps, rolled over and adjusted in terms of amount on a periodic basis. The use of FX swaps serves a dual purpose. On one side the necessary liquidity for new disbursements (loans and equity) is generated and on the other side an FX macro hedging is maintained.
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.






—


On a monthly basis, the USD FX position shall be hedged, if exceeding the relevant limits, by means of a spot or forward operation.










—


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 converted into EUR if occurred from an increase of the FX position.




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







—


IF operations 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.










—


IF has operations denominated in currencies for which hedging possibilities are either not efficiently available or available at a high cost. These operations are denominated in local currencies (LCs) but settled in EUR or USD. IF’s financial risk framework, which was approved by the IF Committee on 22 January 2015, offers the possibility to hedge the FX exposure in LCs that exhibit a significant positive correlation with the USD synthetically via USD-denominated derivatives. The LCs hedged synthetically with USD denominated derivatives are reported in the table in section 3.4.2.2.3 below under item ‘Local currencies (under synthetic hedge)’, while the LCs not hedged synthetically with the USD are reported in the same table under item ‘Local currencies (not under synthetic hedge)’.




3.4.2.2.3   Foreign exchange position (in EUR’000)

The tables of this note show the Facility’s foreign exchange position.
The foreign exchange position is presented in the tables below in accordance with the IF’s Risk Policies (as described in the IF’s financial risk framework). The FX position as per Risk Policies is based on accounting figures and defined as the balance between selected assets and liabilities. The assets and liabilities defined in the FX position as per Risk Policies are selected so as to ensure that the earnings will only be converted into the reporting currency (EUR) when received.
The unrealised gains/losses and impairment on available-for-sale financial assets are included in the FX position as per Risk Policies, as well as impairments on loans and receivables. Derivatives included in the FX position as per Risk Policies 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.
In the tables below the remaining part of the assets and liabilities, which includes mainly interest accruals on loans, derivatives and subsidies, is presented as ‘FX position excluded from Risk Policies’.









At 31 December 2015


Assets and liabilities


Commitments and contingent liabilities




Currencies


FX position as per Risk Policies


FX position excluded from Risk Policies


Balance sheet FX position





USD



- 207 050 


5 023 


- 202 027 


270 236 





Local currencies


(under synthetic hedge)
 (****)



 


 


 


 





KES



129 862 


3 101 


132 963 


—





TZS



46 246 


780


47 025 


—





DOP



40 799 


1 274 


42 073 


—





UGX



30 182 


565


30 747 


—





RWF



11 979 


164


12 143 


—





Local currencies


(not under synthetic hedge)
 (****)



 


 


 


 





HTG, MUR, MZN, XOF, ZMW



15 474 


201


15 675 


798





Total non-EUR currencies




67 492 




11 108 




78 599 




271 034 






EUR



—



2 337 555 




2 337 555 




1 579 719 






Total EUR and non-EUR




67 492 




2 348 663 




2 416 154 




1 850 753 

















At 31 December 2014


Assets and liabilities


Commitments and contingent liabilities




Currencies


FX position as per Risk Policies


FX position excluded from Risk Policies


Balance sheet FX position





USD



42 050 


3 997 


46 047 


237 987 





Local currencies


(under synthetic hedge)
 (*****)



 


 


 


 





KES



97 921 


2 481 


100 402 


—





TZS



52 799 


613


53 412 


—





DOP



31 266 


1 273 


32 539 


—





UGX



27 028 


503


27 531 


—





RWF



11 937 


178


12 115 


—





Local currencies


(not under synthetic hedge)
 (*****)



 


 


 


 





HTG, MUR, MZN, XOF



15 916 


265


16 181 


2 298 





Total non-EUR currencies




278 917 




9 310 




288 227 




240 285 






EUR



—



2 023 366 




2 023 366 




1 434 748 






Total EUR and non-EUR




278 917 




2 032 676 




2 311 593 




1 675 033 





3.4.2.3   Foreign exchange sensitivity analysis

As at 31 December 2015 a 10 percent depreciation of EUR versus all non EUR currencies would result in an increase of the contributors’ resources amounting to EUR 8,7 million (31 December 2014: EUR 32,0 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 7,1 million (31 December 2014: EUR 26,2 million).
3.4.2.4   Conversion rates

The following conversion rates were used for establishing the balance sheet at 31 December 2015 and 31 December 2014:







 


31 December 2015


31 December 2014





Non-EU currencies



 


 




Dominican Republic Pesos (DOP)


49,0144 


53,1988 




Fiji Dollars (FJD)


2,3124 


2,376 




Haitian Gourde (HTG)


61,19 


55,23 




Kenya Shillings (KES)


111,3 


109,86 




Mauritania Ouguiyas (MRO)


326,46 


350,61 




Mauritius Rupees (MUR)


38,85 


38,46 




Mozambican Metical (MZN)


50,59 


40,04 




Rwanda Francs (RWF)


806,36 


831,04 




Tanzania Shillings (TZS)


2 344,42 


2 096,58 




Uganda Shillings (UGX)


3 665,00 


3 354,00 




United States Dollars (USD)


1,0887 


1,2141 




Franc CFA Francs (XAF/XOF)


655,957 


655,957 




South Africa Rand (ZAR)


16,953 


14,0353 




Zambia Kvacha (ZMW)


11,9571 


7,753 




3.4.3   
Equity price risk


Equity price risk refers to the risk that the fair values of equity investments decrease as the result of changes in the levels of equity prices and/or the value of equity investments.
The IF is exposed to equity price risk via its investments in direct equity and venture capital funds.
The value of non-listed equity positions is not readily available for the purpose of monitoring and control on a continuous basis. For such positions, the best indications available include prices derived from any relevant valuation techniques.
The effects on the Facility’s contributors’ resources (as a result of a change in the fair value of the available-for-sale equity portfolio) due to a +/-10 % change in the value of individual direct equity and venture capital investments, with all other variables held constant, is EUR 41,9 million respectively EUR -41,9 million as at 31 December 2015 (EUR 40,3 million respectively EUR -40,3 million as at 31 December 2014).
4   Fair values of financial instruments

4.1   Accounting classifications and fair values

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















At 31 December 2015


Carrying amount


Fair value





In EUR’000



Held for trading


Available-for-sale


Cash, loans and receivables


Held to maturity


Other financial liabilities


Total


Level 1


Level 2


Level 3


Total





Financial assets carried at fair value:



 


 


 


 


 


 


 


 


 


 




Derivative financial instruments


311


—


—


—


—


311


—


311


—


311




Venture Capital Funds


—


396 203 


—


—


—


396 203 


—


—


396 203 


396 203 




Direct Equity Investments


—


23 150 


—


—


—


23 150 


178


—


22 972 


23 150 





Total




311




419 353 



—


—


—



419 664 




178




311




419 175 




419 664 






Financial assets not carried at fair value:



 


 


 


 


 


 


 


 


 


 




Cash and cash equivalents


—


—


448 995 


—


—


448 995 


 


 


 


 




Loans and receivables


—


—


1 460 057 


—


—


1 460 057 


—


1 649 401 


—


1 649 401 




Amounts receivable from contributors


—


—


—


—


—


—


 


 


 


 




Bonds


—


—


—


228 521 


—


228 521 


124 009 


104 520 


—


228 529 




Other assets


—


—


27


—


—


27


 


 


 


 





Total



—


—



1 909 079 




228 521 



—



2 137 600 




124 009 




1 753 921 



—



1 877 930 






Total financial assets




311




419 353 




1 909 079 




228 521 



—



2 557 264 



 


 


 


 





Financial liabilities carried at fair value:



 


 


 


 


 


 


 


 


 


 




Derivative financial instruments


-8 219 


—


—


—


—


-8 219 


—


-8 219 


—


-8 219 





Total




-8 219 



—


—


—


—



-8 219 



—



-8 219 



—



-8 219 






Financial liabilities not carried at fair value:



 


 


 


 


 


 


 


 


 


 




Amounts owed to third parties


—


—


—


—


- 101 202 


- 101 202 


 


 


 


 




Other liabilities


—


—


—


—


-2 364 


-2 364 


 


 


 


 





Total



—


—


—


—



- 103 566 




- 103 566 



 


 


 


 





Total financial liabilities




-8 219 



—


—


—



- 103 566 




- 111 785 



 


 


 


 






















At 31 December 2014


Carrying amount


Fair value





In EUR’000



Held for trading


Available-for-sale


Cash, loans and receivables


Held to maturity


Other financial liabilities


Total


Level 1


Level 2


Level 3


Total





Financial assets carried at fair value:



 


 


 


 


 


 


 


 


 


 




Derivative financial instruments


448


—


—


—


—


448


—


448


—


448




Venture Capital Funds


—


385 245 


—


—


—


385 245 


—


—


385 245 


385 245 




Direct Equity Investments


—


17 840 


—


—


—


17 840 


1 159 


—


16 681 


17 840 





Total




448




403 085 



—


—


—



403 533 




1 159 




448




401 926 




403 533 






Financial assets not carried at fair value:



 


 


 


 


 


 


 


 


 


 




Cash and cash equivalents


—


—


545 399 


—


—


545 399 


 


 


 


 




Loans and receivables


—


—


1 331 918 


—


—


1 331 918 


—


1 488 215 


—


1 488 215 




Amounts receivable from contributors


—


—


42 590 


—


—


42 590 


 


 


 


 




Bonds


—


—


—


99 988 


—


99 988 


99 985 


—


—


99 985 




Other assets


—


—


5 522 


—


—


5 522 


—


—


—


—





Total



—


—



1 925 429 




99 988 



—



2 025 417 




99 985 




1 488 215 



—



1 588 200 






Total financial assets




448




403 085 




1 925 429 




99 988 



—



2 428 950 



 


 


 


 





Financial liabilities carried at fair value:



 


 


 


 


 


 


 


 


 


 




Derivative financial instruments


-14 632 


—


—


—


—


-14 632 


—


-14 632 


—


-14 632 





Total




-14 632 



—


—


—


—



-14 632 



—



-14 632 



—



-14 632 






Financial liabilities not carried at fair value:



 


 


 


 


 


 


 


 


 


 




Amounts owed to third parties


—


—


—


—


-68 824 


-68 824 


 


 


 


 




Other liabilities


—


—


—


—


-2 591 


-2 591 


 


 


 


 





Total



—


—


—


—



-71 415 




-71 415 



 


 


 


 





Total financial liabilities




-14 632 



—


—


—



-71 415 




-86 047 



 


 


 


 




4.2   Measurement of fair values

4.2.1   
Valuation techniques and significant unobservable inputs


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









Valuation technique




Significant unobservable inputs




Relationship of unobservable inputs to fair value measurement






Financial instruments carried at fair value



 


 




Derivative financial instruments


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


Not applicable.


Not applicable.




Venture Capital Fund (VCF)


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


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


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




Direct Equity Investment


Adjusted net assets.


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


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




 


 


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


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





Financial instruments not carried at fair value



 


 




Loans and receivables


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


Not applicable.


Not applicable.




Held-to-maturity financial assets


Discounted cash flows.


Not applicable.


Not applicable.




Amounts owed to third parties


Discounted cash flows.


Not applicable.


Not applicable.




Other liabilities


Discounted cash flows.


Not applicable.


Not applicable.




With the application of IFRS 13, valuation adjustments are included in the fair value of derivatives at 31 December 2015 and 2014, namely:






—


Credit valuation adjustments (CVA), reflecting counterparty credit risk on derivative transactions, amounting to EUR - 122k as at 31 December 2015 and to EUR - 184k as at 31 December 2014.










—


Debit valuation adjustments (DVA), reflecting own credit risk on derivative transactions, amounting to EUR + 64k as at 31 December 2015 and EUR + 30k as at 31 December 2014.




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.


Transfers between Level 1 and 2


In 2015 and 2014 the Facility did not make transfers from Level 1 to 2 or Level 2 to 1 of the fair value hierarchy.


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 2015 and 31 December 2014:






In EUR'000




Available-for-sale financial assets





Balance at 1 January 2015




401 926 






Gains or losses included in profit or loss:



 










—


net realised gains on available-for-sale financial assets






-33 878 










—


impairment on available-for-sale financial assets






-2 665 





Total




-36 543 






Gains or losses included in other comprehensive income:



 










—


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






52 365 





Total




52 365 





Disbursements


67 449 




Repayments


-64 791 




Write offs


-1 231 





Balance at 31 December 2015




419 175 














In EUR'000




Available-for-sale financial assets





Balance at 1 January 2014




324 855 






Gains or losses included in profit or loss:



 










—


net realised gains on available-for-sale financial assets






8 109 










—


impairment on available-for-sale financial assets






-2 084 





Total




6 025 






Gains or losses included in other comprehensive income:



 










—


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






71 778 





Total




71 778 





Disbursements


42 646 




Repayments


-43 378 





Balance at 31 December 2014




401 926 





In 2015 and 2014 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 2015


Increase


Decrease





(in EUR’000)





Direct Equity Investments


31


- 31





Total




31




- 31















At 31 December 2014


Increase


Decrease





(in EUR’000)





Direct Equity Investments


31


- 31





Total




31




- 31





5   Cash and cash equivalents (in EUR’000)

The cash and cash equivalents are composed of:







 


31.12.2015


31.12.2014




Cash in hand


71 405 


9 642 




Term deposits


290 573 


415 757 




Commercial papers


87 017 


120 000 





Cash and cash equivalents in the statement of financial position




448 995 




545 399 





Accrued interest


3


- 1





Cash and cash equivalents in the cash flow statement




448 998 




545 398 





6   Derivative financial instruments (in EUR’000)

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








At 31 December 2015


Fair Value


Notional amount




Assets


Liabilities




Cross currency interest rate swaps


—


-3 835 


9 589 




Interest rate swaps


311


- 639


44 913 




FX swaps


—


-3 745 


1 400 000 





Total derivative financial instruments




311




-8 219 




1 454 502 
















At 31 December 2014


Fair Value


Notional amount




Assets


Liabilities




Cross currency interest rate swaps


—


-3 219 


11 606 




Interest rate swaps


448


- 564


44 749 




FX swaps


—


-10 849 


1 059 000 





Total derivative financial instruments




448




-14 632 




1 115 355 





7   Loans and receivables (in EUR’000)

The main components of loans and receivables are as follows:









 


Global loans (******)



Senior loans


Subordinated loans


Total





Nominal as at 1 January 2015




542 506 




782 563 




146 643 




1 471 712 





Disbursements


196 607 


86 177 


—


282 784 




Repayments


- 106 921 


-96 147 


-2 704 


- 205 772 




Interest capitalised


—


—


13 262 


13 262 




Foreign exchange rates differences


29 600 


45 414 


3 354 


78 368 





Nominal as at 31 December 2015




661 792 




818 007 




160 555 




1 640 354 






Impairment as at 1 January 2015




-5 751 




-13 491 




- 132 895 




- 152 137 





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


-3 692 


-7 576 


-24 995 


-36 263 




Reversal of impairment


381


57


1 837 


2 275 




Foreign exchange rates differences


- 341


-1 435 


-3 145 


-4 921 





Impairment as at 31 December 2015




-9 403 




-22 445 




- 159 198 




- 191 046 





Amortised Cost


-3 129 


-5 781 


284


-8 626 




Interest


8 838 


10 533 


4


19 375 





Loans and receivables as at 31 December 2015




658 098 




800 314 




1 645 




1 460 057 

















 


Global loans (*******)



Senior loans


Subordinated loans


Total





Nominal as at 1 January 2014




342 113 




806 007 




131 632 




1 279 752 





Disbursements


216 672 


31 654 


—


248 326 




Repayments


-58 417 


- 107 794 


- 367


- 166 578 




Interest capitalised


—


—


11 915 


11 915 




Foreign exchange rates differences


42 138 


52 696 


3 463 


98 297 





Nominal as at 31 December 2014




542 506 




782 563 




146 643 




1 471 712 






Impairment as at 1 January 2014




-7 675 




-12 734 




-50 382 




-70 791 





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


—


—


-79 249 


-79 249 




Reversal of impairment


2 586 


907


—


3 493 




Foreign exchange rates differences


- 662


-1 664 


-3 264 


-5 590 





Impairment as at 31 December 2014




-5 751 




-13 491 




- 132 895 




- 152 137 





Amortised Cost


-2 562 


-5 125 


28


-7 659 




Interest


7 407 


11 930 


665


20 002 





Loans and receivables as at 31 December 2014




541 600 




775 877 




14 441 




1 331 918 





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

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








 


Venture Capital Funds


Direct Equity Investments


Total





Cost as at 1 January 2015




259 784 




19 714 




279 498 





Disbursements


63 574 


3 875 


67 449 




Repayments/sales


-64 181 


- 610


-64 791 




Write offs


-1 231 


—


-1 231 




Foreign exchange rates differences on repayments/sales


9 385 


—


9 385 





Cost as at 31 December 2015




267 331 




22 979 




290 310 






Unrealised gains and losses as at 1 January 2015




149 995 




6 127 




156 122 





Net change in unrealised gains and losses


3 906 


3 965 


7 871 





Unrealised gains and losses as at 31 December 2015




153 901 




10 092 




163 993 






Impairment as at 1 January 2015




-24 534 




-8 001 




-32 535 





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


-1 726 


-1 920 


-3 646 




Write offs


1 231 


—


1 231 





Impairment as at 31 December 2015




-25 029 




-9 921 




-34 950 






Available-for-sale financial assets as at 31 December 2015




396 203 




23 150 




419 353 
















 


Venture Capital Funds


Direct Equity Investments


Total





Cost as at 1 January 2014




256 161 




23 620 




279 781 





Disbursements


41 990 


656


42 646 




Repayments/sales


-38 535 


-4 843 


-43 378 




Foreign exchange rates differences on repayments/sales


168


281


449





Cost as at 31 December 2014




259 784 




19 714 




279 498 






Unrealised gains and losses as at 1 January 2014




71 931 




6 260 




78 191 





Net change in unrealised gains and losses


78 064 


- 133


77 931 





Unrealised gains and losses as at 31 December 2014




149 995 




6 127 




156 122 






Impairment as at 1 January 2014




-22 450 




-3 823 




-26 273 





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


-2 084 


-4 178 


-6 262 





Impairment as at 31 December 2014




-24 534 




-8 001 




-32 535 






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




385 245 




17 840 




403 085 





9   Amounts receivable from contributors (in EUR’000)

The amounts receivable from contributors are entirely composed of Member States contribution called but not paid.
10   Held-to-maturity financial assets (in EUR’000)

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







Balance as at 1 January 2015




99 988 





Acquisitions


1 545 550 




Maturities


-1 417 005 




Change in amortisation of premium/discount


- 12





Balance as at 31 December 2015




228 521 















Balance as at 1 January 2014




102 562 





Acquisitions


1 610 057 




Maturities


-1 612 619 




Change in amortisation of premium/discount


- 12





Balance as at 31 December 2014




99 988 





11   Other assets (in EUR’000)

The main components of other assets are as follows:







 


31.12.2015


31.12.2014




Amount receivable from EIB


1


5 447 




Financial guarantees


26


75





Total other assets




27




5 522 





12   Deferred income (in EUR’000)

The main components of deferred income are as follows:







 


31.12.2015


31.12.2014




Deferred interest subsidies


28 683 


30 750 




Deferred commissions on loans and receivables


642


560





Total deferred income




29 325 




31 310 





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

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







 


31.12.2015


31.12.2014




Net general administrative expenses payable to EIB


43 045 


38 348 




Other amounts payable to EIB


15


44




Interest subsidies and TA not yet disbursed owed to Member States


58 142 


30 432 





Total amounts owed to third parties




101 202 




68 824 





14   Other liabilities (in EUR’000)

The main components of other liabilities are as follows:







 


31.12.2015


31.12.2014




Loan repayments received in advance


1 826 


1 973 




Deferred income from interest subsidies


512


542




Financial guarantees


26


76





Total other liabilities




2 364 




2 591 





15   Member States Contribution called (in EUR’000)










Member States


Contribution to the Facility


Contribution to interest subsidies and technical assistance


Total contributed


Called and not paid (********)





Austria


56 921 


6 218 


63 139 


—




Belgium


84 164 


9 163 


93 327 


—




Bulgaria


140


140


280


—




Cyprus


90


90


180


—




Czech Republic


510


510


1 020 


—




Denmark


46 020 


5 075 


51 095 


—




Estonia


50


50


100


—




Finland


31 914 


3 597 


35 511 


—




France


519 401 


54 467 


573 868 


—




Germany


501 015 


54 066 


555 081 


—




Greece


27 183 


3 266 


30 449 


—




Hungary


550


550


1 100 


—




Ireland


13 663 


1 801 


15 464 


—




Italy


270 808 


30 879 


301 687 


—




Latvia


70


70


140


—




Lithuania


120


120


240


—




Luxembourg


6 235 


687


6 922 


—




Malta


30


30


60


—




Netherlands


112 225 


12 350 


124 575 


—




Poland


1 300 


1 300 


2 600 


—




Portugal


21 103 


2 544 


23 647 


—




Romania


370


370


740


—




Slovakia


210


210


420


—




Slovenia


180


180


360


—




Spain


127 979 


16 241 


144 220 


—




Sweden


58 896 


6 663 


65 559 


—




United Kingdom


275 853 


33 054 


308 907 


—





Total as at 31 December 2015




2 157 000 




243 691 




2 400 691 




—






Total as at 31 December 2014




2 057 000 




143 691 




2 200 691 




42 590 





16   Contingent liabilities and commitments (in EUR’000)








 


31.12.2015


31.12.2014






Commitments




 


 




Un-disbursed loans


1 189 564 


1 161 859 




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


298 355 


200 637 




Issued guarantees


798


2 298 




Interest subsidies and technical assistance


352 036 


285 239 






Contingent liabilities




 


 




Signed non-issued guarantees


10 000 


25 000 





Total contingent liabilities and commitments




1 850 753 




1 675 033 





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

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







 


From 01.01.2015


From 01.01.2014




 


to 31.12.2015


to 31.12.2014




Cash and cash equivalents


—


543




Held-to-maturity financial assets


4


276




Loans and receivables


86 305 


72 135 




Interest subsidies


4 076 


4 286 





Total interest and similar income




90 385 




77 240 





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







 


From 01.01.2015


From 01.01.2014




 


to 31.12.2015


to 31.12.2014




Derivative financial instruments


-1 525 


-1 522 




Cash and cash equivalents


- 31


—





Total interest and similar expenses




-1 556 




-1 522 





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

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







 


From 01.01.2015


From 01.01.2014




 


to 31.12.2015


to 31.12.2014




Fee and commission on loans and receivables


890


316




Fee and commission on financial guarantees


42


78




Other


—


769





Total fee and commission income




932




1 163 





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







 


From 01.01.2015


From 01.01.2014




 


to 31.12.2015


to 31.12.2014




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


- 63


- 37





Total fee and commission expenses




- 63




- 37





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

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







 


From 01.01.2015


From 01.01.2014




 


to 31.12.2015


to 31.12.2014




Net proceeds from available-for-sale financial assets


834


3 179 




Dividend income


33 044 


4 930 





Net realised gains on available-for-sale financial assets




33 878 




8 109 





20   General administrative expenses (in EUR’000)

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







 


From 01.01.2015


From 01.01.2014




 


to 31.12.2015


to 31.12.2014




Actual cost incurred by the EIB


-45 506 


-40 912 




Income from appraisal fees directly charged to clients of the Facility


2 461 


2 784 





Total general administrative expenses




-43 045 




-38 128 





Following the entry into 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.

Definition of Interests in structured entities:

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







Type of structured entity


Nature and purpose


Interest held by the Facility




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


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


Net disbursed amounts;
Interest income.




Venture capital operations


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


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




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










Type of structured entity


Caption


Carrying amount at 31.12.2015


Carrying amount at 31.12.2014


Maximum exposure to loss at 31.12.2015


Maximum exposure to loss at 31.12.2014




Project finance operations


Loans and receivables


—


7 225 


—


7 225 




Venture capital funds


Available-for-sale financial assets


396 203 


385 245 


645 833 


555 629 





Total



 



396 203 




392 470 




645 833 




562 854 





23   Impact financing envelope (in EUR’000)

In June 2013 the ACP-EU Joint Ministerial Council approved the new financial protocol for the 11th European Development Fund (EDF), covering the period 2014-2020.
A new EUR 500m endowment was agreed for the Investment Facility, the so called ‘impact financing envelope’ or ‘IFE’, enabling the Facility to support projects that promise a particularly high development impact whilst bearing the greater risks inherent in such investments. This envelope will present new possibilities for enhancing the Facility’s private sector lending through investments in the following instruments:

Social impact equity funds — promoted by an emerging population of private equity fund managers who put the alleviation of social or environmental issues at the core of their funds' investment strategy but still target sustainability at the levels of both the fund and its investee companies.

Loans to financial intermediaries — (e.g. microfinance institutions, local banks and credit unions) operating in ACP countries in which the EIB cannot consider financing — in particular in local currency — under the existing credit risk guidelines, e.g. due to either high country risks, currency volatility or lack of pricing benchmarks. The main objective of such loans will be to fund projects with a high developmental impact, especially in the field of support to micro and small enterprises (MSEs) and agriculture, which generally do not qualify for IF financing.

Risk sharing facilitating instruments — which will take the form of first loss guarantees (‘first loss pieces’) that will facilitate risk sharing operations of the EIB with local financial intermediaries (mainly commercial banks) for the benefit of underserved SMEs and small projects that meet the Impact Financing Criteria in situations where a market gap has been identified in relation to the access of SMEs/small projects to finance. The first loss pieces would be structured as a counter-guarantee in favour of senior guarantee tranches funded by the EIB — under the Investment Facility — and by other International Financial Institutions/Development Financial Institutions, thus generating a substantial leverage effect.

Direct financing — through debt or equity instruments in projects with sound and experienced promoters and high developmental impacts, but that will, however, also entail higher expectations of losses and difficulties to recover the investment (equity type risk with higher than usual expectation of losses). The EIB will apply strict selection and eligibility criteria for this instrument, as these projects, notwithstanding their high developmental impact, would not be able to meet acceptable financing criteria (i.e. low expectation of recovering the investment or offsetting the losses through interest rates/equity returns).
The IFE will also allow diversification into new sectors, such as health and education, agriculture and food security, and the development of new and innovative risk-sharing instruments.
From a financial and accounting perspective the IFE forms part of the IF portfolio and is accounted for in the overall IF annual financial statements, but with a special tracking of the operations.
The following table represents the carrying amounts and the committed, but undisbursed amounts, per type of asset:










Type of IFE investment


Caption


Carrying amount at 31.12.2015


Carrying amount at 31.12.2014


Undisbursed amount at 31.12.2015


Undisbursed amount at 31.12.2014




Social impact equity funds


Available-for-sale financial assets


2 257 


—


16 927 


8 237 




Loans to financial intermediaries


Loans and receivables


—


—


10 000 


—




Risk sharing facilitating instruments


Issued guarantees


—


—


—


—




Direct financing — equity participations


Available-for-sale financial assets


—


—


40 000 


—





Total



 



2 257 




—




66 927 




8 237 





24   Subsequent events

There have been no material post balance sheet events which could require disclosure or adjustment to the 31 December 2015 financial statements.


(1)  OJ L 210, 6.8.2013, p. 1.

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

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

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

(5)  Council Regulation (EU) 2015/323 of 2 March 2015 on the financial regulation applicable to the 11th European Development Fund. OJ L 58, 3.3.2015, p. 17–38.

(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.

(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.

(1)  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)  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.

(*)  Current receivables excluding receivables relating to ordinary contributions.


(**)  Current liabilities excluding liabilities relating to ordinary contributions.


(9)  In accordance with Article 59 of the Financial Regulation applicable to the 11th European Development Fund, the treasury is presented in the balance sheet of the 11th EDF.

(10)  In accordance with Article 59 of the Financial Regulation applicable to the 11th European Development Fund, 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.

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

(11)  OJ L 156, 29.5.1998, p. 3-106.

(2)  Council decision 2013/759/EU of 12/12/13

(12)  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.

(3)  Net expenses are the expenses incurred by the trust fund, including estimated amounts when necessary, net of the income generated by the activities of the trust fund.

(13)  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.

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

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

(6)  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)

(7)  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)

(8)  Transfer in decommitments from projects of the 9th and previous EDF's to the non mobilisable performance reserve for 377 million less transfer out of reserves to South Sudan for 200 million (to 9th EDF). Year 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).

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

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

(11)  % of appropriations

(****)  See section 3.4.2.2.2 for explanations on synthetic hedge.

(*****)  See section 3.4.2.2.2 for explanations on synthetic hedge.

(******)  including agency agreements

(*******)  including agency agreements

(********)  On 10 November 2014, the Council fixed the amount of financial contributions to be paid by each Member State by 21 January 2015. As at 31 December 2014 EUR 42 590 were not paid in.