COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS ON THE MANAGEMENT OF THE GUARANTEE FUND OF THE EUROPEAN FUND FOR STRATEGIC INVESTMENTS IN 2017
Date: 2018-05-28
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: European Investment Bank, European Investment Fund, financial control, fund (EU), investment, operation of the Institutions

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 28.5.2018  SWD(2018) 268 final  COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS ON THE MANAGEMENT OF THE GUARANTEE FUND OF THE EUROPEAN FUND FOR STRATEGIC INVESTMENTS IN 2017 {COM(2018) 345 final}  
 
 
Table of Contents 
1. 

INTRODUCTION .......................................................................................................................................... 2 

2.  EFSI OPERATIONS SUPPORTED BY THE EU GUARANTEE ................................................................ 2 

2.1  EIB OPERATIONS ............................................................................................................................... 2 

2.2  EIF OPERATIONS ............................................................................................................................... 2 

2.3  BREAKDOWN OF EFSI OPERATIONS BY SECTOR AND COUNTRY ........................................ 3 

3.  EFSI GF FINANCIAL STATEMENTS ......................................................................................................... 5 
4.  ASSET MANAGEMENT ............................................................................................................................... 7 

4.1  COMPOSITION OF THE PORTFOLIO .............................................................................................. 7 

4.2  KEY RISK CHARACTERISTICS OF THE PORTFOLIO .................................................................. 8 

1 

 
 
 
 
1.  INTRODUCTION 

This  Staff  Working  Document  (SWD)  accompanies  the  Report  on  the  Management  of  the 
European  Fund  for  Strategic  Investments  Guarantee  Fund  (EFSI  GF)  in  2017.  The  SWD 
provides further information and tables on (2) operations managed by EIB and EIF (signatures 
and  disbursed  amounts,  breakdown  by  sector  and  country),  (3)  financial  statements  and  (4) 
asset management. 

2.  EFSI OPERATIONS SUPPORTED BY THE EU GUARANTEE 

This section provides a breakdown of the EFSI operations supported by the EU guarantee in 
terms  of  number  of  operations,  investment  volume  (signature  and  investment  mobilised)  as 
well sector and country breakdown.  

2.1  EIB OPERATIONS 

As  of  end-2017,  EIB  had  signed  278  operations  in  27  Member  States.  The  total  signatures 
amount to EUR 27.4 billion which is expected to mobilise investments of EUR 131.4 billion. 
Half of the signed operations in terms of volume were in the energy (28%) and research sector 
(22%),  followed  by  the  provision  of  financial  support  to  SME’s  and  small  Mid-Cap 
companies (18%) and transport (14%). 

2.2  EIF OPERATIONS 

As  of  end-2017,  the  EIF  signed  328  operations  with  305  financial  intermediaries  in  28 
Member  States.  The  total  EIF  financing  of  EUR  10.0  billion  is  expected  to  mobilise 
investments  of  EUR  75.9  billion.  The  most  important  sectors  in  terms  of  amounts  were 
research and development (70%) and digital (17%). 

2 

 
 
2.3  BREAKDOWN OF EFSI OPERATIONS BY SECTOR AND 

COUNTRY 

Table 1:  Distribution  of  signed  EFSI  Infrastructure  and  Innovation  Window  ("IIW")  and 
Small and Medium Enterprises Window ("SMEW") operations by sector at the end 
of 2017 (EUR million). 

Note: Objective and subcategory as defined in Art.9 of EFSI Regulation. 

3 

Objective and subcategoryIIWSMEWTotal(EUR m)(EUR m)(EUR m)EFSI: research, development and innovation           5,920.77            7,010.60          12,931.37 EFSI:developmentoftheenergysectorinaccordancewiththeEnergy Union priorities           7,630.78                     -              7,630.78 EFSI:developmentoftransportinfrastructures,andequipmentandinnovative technologies for transport           3,793.56                     -              3,793.56 EFSI:financialsupportthroughtheEIFandtheEIBtoentitieshaving up to 3 000 employees           5,036.17              732.40            5,768.57 EFSI:developmentanddeploymentofinformationandcommunication technologies           2,090.44            1,679.80            3,770.24 EFSI: environment and resource efficiency           2,041.16                     -              2,041.16 EFSI: human capital, culture and health             899.42              575.60            1,475.02 Total         27,412.30            9,998.40          37,410.70 Signed operations 
 
 
 
Table 2: 
of 2017 (EUR million). 

Distribution of signed EFSI IIW and SMEW operations by country at the end 

4 

CountryIIWSMEWTotal(EUR m)(EUR m)(EUR m)Austria             406.58              116.00              522.58 Belgium             735.22              182.50              917.72 Bulgaria             281.00                67.90              348.90 Croatia               61.62                66.20              127.82 Cyprus               35.00                10.00                45.00 Czech Republic               94.90              346.80              441.70 Denmark             319.61              171.10              490.71 Estonia               40.99                35.90                76.89 Finland             820.65                32.50              853.15 France           4,867.88            1,456.20            6,324.08 Germany           2,923.13              631.00            3,554.13 Greece           1,402.99              227.70            1,630.69 Hungary                    -                  73.30                73.30 Ireland             247.27              134.30              381.57 Italy           4,391.26            1,708.00            6,099.26 Latvia             109.00                18.50              127.50 Lithuania             204.21                29.10              233.31 Luxembourg               13.70                63.00                76.70 Malta                 5.00                  6.00                11.00 Netherlands             405.08              125.00              530.08 Poland           1,752.45                56.00            1,808.45 Portugal             743.83              623.40            1,367.23 Romania             196.00                51.90              247.90 Slovakia             442.27                25.20              467.47 Slovenia               51.00                  8.10                59.10 Spain           3,368.18              578.00            3,946.18 Sweden           1,259.45              160.10            1,419.55 United Kingdom           1,594.02              411.10            2,005.12 Multi-country (SMEW)                    -              2,540.50            2,540.50 Total EU-Countries         26,772.29            9,955.30          36,727.59 No. of Countries                    27                     28                     28 Regional - EU countries             640.01                     -                640.01 Non-EU                    -                  43.10                43.10 Total         27,412.30            9,998.40          37,410.70 Signed operations 
 
 
 
 
 
3.  EFSI GF FINANCIAL STATEMENTS 

BALANCE SHEET  

ASSETS  

31 December 2017  31 December 2016 

EUR 

EUR 

NON-CURRENT ASSETS 

3 070 600 996 

833 258 147 

Available for sale financial assets 

3 070 600 996 

833 258 147 

CURRENT ASSETS 

433 762 404 

186 696 779 

Available for sale financial assets 

343 757 854 

114 825 355 

Financial assets at fair value through surplus or deficit 

6 307 288 

475 241 

Short-term deposits (>3 months and ≤ 1 year) 
Including accrued negative interest 

39 991 422 

45 000 000 

Receivables (bond lending fees) 

8 456 

- 

Cash and cash equivalents 

Current accounts 

Cash equivalents (call-deposits incl. accrued interest) 

43 697 384 

18 683 831 

25 013 553 

26 396 182 

1 395 113 

25 001 069 

TOTAL ASSETS 

3 504 363 400 

1 019 954 926 

NET ASSETS AND LIABILITIES  

NET ASSETS 

31 December 2017  31 December 2016 

EUR 

EUR 

3 504 263 077 

1 018 968 395 

Contribution from EU Budget 

3 507 682 256 

1 018 037 889 

Fair value reserve 

Retained earnings 

Economic result of the year 

CURRENT LIABILITIES 

Financial liabilities at fair value through surplus or deficit 

Other payables 

Accrued charges 

(6 783 279) 

933 894 

2 430 206 

100 324 

- 

54 145 

46 179 

(3 388) 

- 

933 894 

986 531 

902 827 

83 704 

- 

TOTAL NET ASSETS AND LIABILITIES 

3 504 363 400 

1 019 954 926 

5 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENT OF FINANCIAL PERFORMANCE 

Revenue from operating activities 
Foreign exchange gains 

Expenses from operating activities 
Foreign exchange losses 

Other expenses from operating activities 
     Audit fees 
     IT cost 

RESULT FROM OPERATING ACTIVITIES 

Financial  revenue  

Interest revenue on: 
     Cash and cash equivalents 
     Available for sale assets 
Other interest revenue 

Realised gains on sale of AFS assets 

Other financial income - fair value changes of derivatives 

Bond lending income 

Miscellaneous income 

Financial expenses  

Interest expenses on cash and cash equivalents 

Realised losses on sale of AFS assets 

Other financial expenses - fair value changes of derivatives 
ddefderdderivatives 
Custody fees and other financial expenses 

FINANCIAL RESULT 

ECONOMIC RESULT OF THE YEAR 

2017 
EUR 

2016 
EUR 

22 721 597 

22 721 597 

(60 846 316) 

(60 742 759) 

(103 557) 

(15 000) 

(88 557) 

(38 124 719) 

968 645 

968 645 

(757 198) 

(681 319) 

(75 879) 

(33 500) 

(42 379) 

211 447 

51 393 189 

1 666 328 

6 435 843 

53 004 

6 382 100 

739 

4 135 733 

40 754 819 

66 794 

- 

(10 838 265) 

(63 603) 

(386 120) 

329 309 

1 389 

327 434 

486 

861 762 

475 241 

- 

16 

(943 881) 

(2 039) 

- 

(10 139 884) 

(902 827) 

(248 658) 

40 554 924 

2 430 206 

(39 015) 

722 447 

933 894 

6 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.  ASSET MANAGEMENT 

The  following  sections  provide  some  further  details  on  the  (a)  composition  of  the  portfolio 
and (b) key risk characteristics of the portfolio. 

4.1  COMPOSITION OF THE PORTFOLIO 

The EFSI GF portfolio at the year-end is well diversified in terms of asset classes and rating 
categories. In addition, it is diversified in non-euro denominated securities (USD) in the form 
of  an  allocation  to  US  Treasuries  and  other  issuers  (e.g.  Supranational,  other  Sovereigns  or 
Agencies) issuing in USD (about 18% of the portfolio). The currency risk is hedged. 

As shown in the Figure, over 46.8% of the market value of the portfolio is invested in AAA 
securities and the rest is well distributed across the whole spectrum of the investment-grade 
scale. The AAA category includes for example securities issued by the US Government and 
covered bonds issued by several financial institutions.  

In  terms  of  main  asset  classes,  42.5%  of  the  portfolio  is  invested  in  Government  securities, 
21.5%  in  sub-sovereigns,  supra-nationals  and  agencies  (SSA)  and  25.5%  in  covered  bonds 
while only 10.5% in bonds issued by corporates and financial institutions (other than covered 
bonds). 

FIGURE: PORTFOLIO EXPOSURE BY ASSET CLASS AND RATING 

46,8% 

AAA

AA+

AA

AA-

A+

A

A-

BBB+

BBB

BBB-

BB+

2,7% 

4,5% 

2,7% 

0,6% 

8,0% 

9,0% 

7,9% 

9,1% 

8,8% 

0%

10%

20%

30%

40%

50%

60%

Sovereign Core
Covered

SSA
Corporates

Sovereign Periphery
Non-EUR exposures

7 

 
 
 
 
 
4.2  KEY RISK CHARACTERISTICS OF THE PORTFOLIO 

Market Risk 

Market risk is, inter alia, assessed by way of calculating the duration1 of the portfolio. 

At the end of December 2017, the portfolio had a duration of 3.47 years.  

Currency risk and hedging activities 

USD  investments  represented  18%  of  the  portfolio  market  value  at  the  end  of  2017.  The 
currency risk of USD-denominated investments was hedged via forward contracts.  

Credit Risk 

The credit quality of the EFSI GF portfolio is high with an average rating of A-, suggesting a 
low default probability (0.07% at 1-year). 

Liquidity characteristics of the portfolio 

About 16% of the portfolio consists of bonds with a maturity below 1-year, floating rate notes 
and  short-term  money  market  instruments  which  provide  a  further  liquidity  buffer  for  the 
portfolio. 

1   Duration figures refer to 'modified duration' which measures the price sensitivity of a bond to interest rate 

movements. 

8