COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS Annual Accounts of the European Development Fund 2018
Date: 2019-06-26
Institutions: Directorate-General for Budget, European Commission
Subjects: European Development Fund, balance sheet, closing of accounts, consolidated account, financial situation, implementation of the budget

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 26.6.2019  COM(2019) 317 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS Annual Accounts of the European Development Fund 2018  
 
 
Annual Accounts of the  

European Development 

Fund 2018 

 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

CONTENTS 

CERTIFICATION OF THE ACCOUNTS .................................................................... 3 

IMPLEMENTING AND ACCOUNTING FOR THE EDF RESOURCES ................................ 4 

FUNDS MANAGED BY THE EUROPEAN COMMISSION .............................................. 7 

FINANCIAL STATEMENTS OF THE EDF .............................................................. 9 

FINANCIAL STATEMENTS OF THE EU TRUST FUNDS CONSOLIDATED IN EDF ........ 46 

FINAL ANNUAL ACCOUNTS OF THE BÊKOU EU TRUST FUND 2018 ...................... 47 

FINAL ANNUAL ACCOUNTS OF THE EUTF AFRICA 2018 ..................................... 55 

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE EU TRUST FUNDS
 ................................................................................................................ 63 

EDF REPORT ON FINANCIAL IMPLEMENTATION ................................................ 68 

ANNUAL REPORT ON IMPLEMENTATION - FUNDS MANAGED BY THE EUROPEAN 
INVESTMENT BANK ......................................................................................... 85 

2 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

CERTIFICATION OF THE ACCOUNTS 

The  annual  accounts  of  the  European  Development  Fund  for  the  year  2018  have  been  prepared  in 
accordance with Title X of the Financial Regulation of the 11th European Development Fund and with the 
accounting principles, rules and methods set out in the notes 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  18  of  the  Financial  Regulation  of  the  11th 
European Development Fund. 

I  have  obtained  from  the  authorising  officer  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. 

Rosa ALDEA BUSQUETS 

Accounting Officer 

June 2019

3 

 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

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 20131. It came into force on 1 March 2015.  

In  2018,  the  Council  adopted  the  Financial  Regulation  applicable  to  the  11th  EDF2.    This  repealed  the 
previous regulation in force and is applicable to operations financed from previous EDFs without prejudice 
to existing legal commitments.  This Regulation does not apply to the Investment Facility under previous 
EDFs.   

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. 

1 OJ L 210, 6.8.2013, p. 1. 
2 Council Regulation (EU) 2018/1877 of 26 November 2018 on the financial regulation applicable to the 11th European 
Development Fund, and repealing Regulation (EU) 2015/323 

4 

 
 
 
 
                                                 
 
Annual Accounts of the European Development Fund 2018 

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 Budget, the EDF is a fund operating on the basis 
of multiannuality. Each EDF establishes an overall fund to implement development cooperation during a 
period of usually five years. As resources are allocated on a multiannual basis, the allocated funds may 
be  used  over  the  period  of  the  EDF.  The  lack  of  budget  annuality  is  highlighted  in  the  budgetary 
reporting, where the budgetary implementation of the EDFs is measured against the total funds. 

The  EDF  resources  are  "ad  hoc"  contributions  from  the  EU  Member  States.  Approximately  every  five 
years,  Member  State  representatives  meet  at  intergovernmental  level  to  decide  on  an  overall  amount 
that will be allocated to the fund and to oversee its implementation. The Commission then manages the 
fund  in  accordance  with  the  Union  policy  on  development  cooperation.  Since  Member  States  have  their 
own  development  and  aid  policies  in  parallel  to  the  Union  policy,  the  Member  States  must  coordinate 
their policies with the EU to ensure they are complementary. 

In  addition  to  the  above  mentioned  contributions,  it  is  also  possible  for  Member  States  to  enter  into 
co-financing arrangements or to make voluntary financial contributions to the EDF. 

3. 

YEAR-END REPORTING 

3.1.  ANNUAL ACCOUNTS 

In  accordance  with  Articles  18(3)  of  the  EDF  Financial  Regulation,  the  EDF  financial  statements  are 
prepared  on  the  basis  of  accrual-based  accounting  rules  that  themselves  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.  These EU  accounting rules are also applied to the EDF 
while taking into account the specific nature of its activities.  

The preparation of the EDF annual accounts is entrusted  to the Commission's Accounting Officer who is 
the Accounting Officer of the EDF. She ensures that the annual accounts of EDF 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 and explanatory notes of the EDF 

(ii)  Financial statements of the EU trust funds consolidated in the EDF 

(iii)  Consolidated financial statements of EDF and the EU trust funds 

(iv)  Report on financial implementation of the EDF 

Part II: Annual report on implementation - Funds managed by the EIB 

(i)  Financial statements of the Investment Facility 

The  part  'Financial  statements  of  the  European  trust  funds  consolidated  in  the  EDF'  includes  financial 
statements  of  the  two  trust  funds  created  under  the  EDF:  The  Bêkou  EU  Trust  Fund  (see  section 
'Financial  statements  of  the  Bêkou  EU  Trust  Fund')  and  the  EU  Trust  Fund  for  Africa  (see  section 
'Financial  statements  of  EU  Trust  Fund  for  Africa').  The  trust  funds  individual  financial  statements  are 
prepared  under  the  responsibility  of  the  Commission’s  Accounting  Officer  and  are  subject  to  external 

5 

 
 
Annual Accounts of the European Development Fund 2018 

audit  carried  out  by  a  private  auditor.  The  trust  funds'  figures  included  in  these  annual  accounts  are 
provisional.  

The EDF annual accounts must be adopted by the Commission not later than 31 July of the subsequent 
year and presented to the European Parliament and to the Council for discharge. 

4.  AUDIT AND DISCHARGE 

4.1.  AUDIT 

The  EDF  annual  accounts  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  of  the  financial  implementation  of  the  EDF  resources  for  a  given  financial  year  is  the 
discharge. 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 to questions and further information requests. 

6 

 
 
Annual Accounts of the European Development Fund 2018 

EUROPEAN DEVELOPMENT FUND 
FINANCIAL YEAR 2018 

FUNDS MANAGED BY THE EUROPEAN 
COMMISSION 

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

7 

 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

CONTENTS 

FINANCIAL STATEMENTS OF THE EDF ................................................................. 9 

EDF BALANCE SHEET ................................................................................... 10 

EDF STATEMENT OF FINANCIAL PERFORMANCE ............................................... 11 

EDF CASHFLOW STATEMENT ......................................................................... 12 

EDF STATEMENT OF CHANGES IN NET ASSETS ................................................ 13 

BALANCE SHEET BY EDF ............................................................................... 14 

STATEMENT OF FINANCIAL PERFORMANCE BY EDF .......................................... 15 

STATEMENT OF CHANGES IN NET ASSETS BY EDF ........................................... 16 

NOTES TO THE FINANCIAL STATEMENTS OF THE EDF ....................................... 18 

FINANCIAL STATEMENTS OF THE EU TRUST FUNDS CONSOLIDATED IN EDF........... 46 

FINAL ANNUAL ACCOUNTS OF THE BÊKOU EU TRUST FUND 2018 ......................... 47 

BALANCE SHEET .......................................................................................... 51 

STATEMENT OF FINANCIAL PERFORMANCE ..................................................... 52 

CASHFLOW STATEMENT ............................................................................... 53 

STATEMENT OF CHANGES IN NET ASSETS ...................................................... 54 

FINAL ANNUAL ACCOUNTS OF THE EUTF AFRICA 2018 ........................................ 55 

BALANCE SHEET .......................................................................................... 59 

STATEMENT OF FINANCIAL PERFORMANCE ..................................................... 60 

CASHFLOW STATEMENT ............................................................................... 61 

STATEMENT OF CHANGES IN NET ASSETS ...................................................... 62 

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE EU TRUST FUNDS . 63 

CONSOLIDATED BALANCE SHEET .................................................................. 64 

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE .............................. 65 

CONSOLIDATED CASH FLOW STATEMENT ....................................................... 66 

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS ............................... 67 

EDF REPORT ON FINANCIAL IMPLEMENTATION ................................................... 68 

8 

 
 
 
 
Annual Accounts of the European Development Fund 2018 

FINANCIAL STATEMENTS OF THE EDF 

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

9 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

EDF BALANCE SHEET 

NON-CURRENT ASSETS 
Pre-financing 
Trust Fund contributions 

CURRENT ASSETS 
Pre-financing 
Exchange receivables and non-exchange recoverables 
Cash and cash equivalents  

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Provisions 
Financial liabilities 

CURRENT LIABILITIES 
Payables 
Accrued charges and deferred income 

TOTAL LIABILITIES 

NET ASSETS 

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

Note 

31.12.2018 

31.12.2017 

 EUR millions 

2.1 
2.2 

2.1 
2.3 
2.4 

2.5 
2.6 

2.7 
2.8 

2.9 
2.9 

 887 
 201 
1 088 

1 448 
 138 
 387 

1 973 
3 061 

– 
 (18) 
 (18) 

 582 
 163 
 745 

1 518 
 92 
 347 

1 958 
2 703 

 (4) 
 (14) 
 (18) 

 (241) 
(1 281) 

(1 523) 
(1 540) 

 (563) 
 (733) 

(1 296) 
(1 314) 

1 521 

1 389 

50 423 
2 252 
(47 037) 
(4 118) 
1 521 

46 173 
2 252 
(43 219) 
(3 818) 
1 389 

10 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

EDF STATEMENT OF FINANCIAL PERFORMANCE 

REVENUE 
Revenue from non-exchange transactions 
Recovery activities 

Revenue from exchange transactions 
Financial revenue 
Other revenue 

Total Revenue 

EXPENSES 
Aid instruments 
Co-financing expenses 
Finance costs 
Other expenses 

Total Expenses 

Note 

3.1 

3.2 

3.3 
3.4 
3.6 
3.7 

2018 

EUR millions 

2017 

 4 

 4 

 10 
 46 

 57 

 60 

(4 054) 
 17 
 7 
 (148) 

(4 178) 

 61 

 61 

 4 
 22 

 25 

 87 

(3 700) 
 (42) 
 (8) 
 (154) 

(3 904) 

ECONOMIC RESULT OF THE YEAR 

(4 118) 

(3 818) 

11 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

EDF CASHFLOW STATEMENT 

Note 

2018 
 (4 118) 

EUR millions 

2017 
 (3 818) 

4 250 
 (38) 
 (235) 
 (46) 

 (4) 
 3 
 (322) 
 548 

 40 

 40 

  347 

  387 

3 850 
 (66) 
 (319) 
  40 

– 
 8 
 14 
  (42) 

 (333) 

 (333) 

  680 

  347 

Economic result of the year 
Operating activities 
Capital increase - contributions (net) 
(Increase)/decrease in trust funds contributions 
(Increase)/decrease in pre-financing 
(Increase)/decrease in exchange receivables and    
non-exchange recoverables 
Increase/(decrease) in provisions 
Increase/(decrease) in financial liabilities 
Increase/(decrease) in payables 
Increase/(decrease) in accrued charges and deferred 
income 

NET CASHFLOW 

Net increase/(decrease) in cash and cash 
equivalents 
Cash and cash equivalents at the beginning of the 
year 
Cash and cash equivalents at year-end 

2.4 

2.4 

12 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EDF STATEMENT OF CHANGES IN NET ASSETS 

  Annual Accounts of the European Development Fund 2018 

Fund capital 
- active EDFs 
(A) 

Uncalled 
funds - 
active EDFs 
(B) 

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

Cumulative 
Reserves 
(D) 

BALANCE AS AT 31.12.2016 
Capital increase -  contributions 
Refund to Member States 
Economic result of the year 
BALANCE AS AT 31.12.2017 
Capital increase - contributions 
Economic result of the year 
BALANCE AS AT 31.12.2018 

73 464 
– 
 (200) 
– 
73 264 
– 
– 
73 264 

31 140 
(4 050) 
– 
– 
27 090 
(4 250) 
– 
22 840 

42 323 
4 050 
 (200) 
– 
46 173 
4 250 
– 
50 423 

(43 219) 
– 
– 
(3 818) 
(47 037) 
– 
(4 118) 
(51 155) 

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

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

1 357 
4 050 
 (200) 
(3 818) 
1 389 
4 250 
(4 118) 
1 521 

13 

 
 
 
 
 
 
 
 
 
 
 
BALANCE SHEET BY EDF 

  Annual Accounts of the European Development Fund 2018 

NON-CURRENT ASSETS 
Pre-financing 
Trust Fund contributions 

CURRENT ASSETS 
Pre-financing 
Exchange receivables and 
non-exchange recoverables 
Inter-EDF accounts 
Cash and cash equivalents 

TOTAL ASSETS* 

NON-CURRENT 
LIABILITIES 
Provisions 
Financial liabilities 

CURRENT LIABILITIES 
Payables 
Inter-EDF accounts 
Accrued charges and 
deferred income 

TOTAL LIABILITIES* 

NET ASSETS* 

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

Note 

31.12.2018 
Eighth EDF 

Ninth EDF 

10th EDF 

11th EDF 

Total 

31.12.2017 
Eighth EDF 

Ninth EDF 

10th EDF 

11th EDF 

Total 

 EUR millions 

2.1 
2.2 

2.1 
2.3 

2.3 
2.4 

2.5 
2.6 

2.7 
2.3 
2.8 

2.9 

2.9 

2.9 

– 
– 
– 

 0 
 1 

 183 
– 
 184 
 184 

– 
– 
– 

 (0) 
– 
 (0) 

 (0) 
 (0) 

 23 
– 
 23 

 19 
 65 

 111 
– 
 195 
 218 

– 
– 
– 

 (6) 
– 
 (83) 

 (89) 
 (89) 

 520 
– 
 520 

 445 
 36 

2 421 
– 
2 902 
3 422 

– 
 (1) 
 (1) 

 (125) 
– 
 (358) 

 344 
 201 
 546 

 984 
 36 

– 
 387 
1 407 
1 953 

– 
 (16) 
 (16) 

 (111) 
(2 715) 
 (840) 

 (482) 
 (484) 

(3 666) 
(3 682) 

 184 

 129 

2 938 

(1 729) 

12 164 

10 773 

20 960 

6 527 

 887 
 201 
1 088 
– 
1 448 
 138 

2 715 
 387 
4 689 
5 777 
– 
– 

– 
 (18) 
 (18) 
– 
 (241) 
(2 715) 
(1 281) 

(4 237) 
(4 255) 
– 
1 521 
– 
– 
50 423 

– 
– 
– 

 1 
 0 

 189 
– 
 190 
 190 

– 
– 
– 

 (0) 
– 
 (0) 

 (0) 
 (0) 

 32 
 86 
 118 

 40 
 64 

 88 
– 
 193 
 311 

– 
– 
– 

 (13) 
– 
 (76) 

 (89) 
 (89) 

 221 
– 
 221 

 867 
 17 

3 555 
– 
4 439 
4 660 

– 
 (7) 
 (7) 

 (133) 
– 
 (517) 

 330 
 77 
 407 

 610 
 11 

– 
 347 
 968 
1 375 

 (4) 
 (7) 
 (11) 

 (417) 
(3 833) 
 (140) 

 (650) 
 (657) 

(4 389) 
(4 401) 

 190 

 222 

4 003 

(3 025) 

12 164 

10 773 

20 960 

2 277 

 627 

1 625 

(2 509) 

2 137 

– 

 55 

– 

2 252 

 627 

1 625 

– 

– 

 317 

– 

(2 503) 

2 177 

 120 

 206 

 582 
 163 
 745 
– 
1 518 
 92 

3 832 
 347 
5 791 
6 536 
– 
– 

 (4) 
 (14) 
 (18) 
– 
 (563) 
(3 833) 
 (733) 

(5 128) 
(5 147) 
– 
1 389 
– 
– 
46 173 

2 252 

– 

(10 098) 

(14 352) 

(17 078) 

(5 508) 

(47 037) 

(10 098) 

(14 339) 

(15 812) 

(2 969) 

(43 219) 

 0 
 184 

 (53) 
 129 

(1 000) 
2 938 

(3 065) 
(1 729) 

(4 118) 
1 521 

 0 
 190 

 (13) 
 222 

(1 266) 
4 003 

(2 539) 
(3 025) 

(3 818) 
1 389 

* from total assets and liabilities, inter-EDF accounts should be deducted in order to reconcile them to the totals on the EDF Balance sheet 

14 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENT OF FINANCIAL PERFORMANCE BY EDF 

  Annual Accounts of the European Development Fund 2018 

Note 

Eighth EDF 

2018 
Ninth EDF 

10th EDF 

11th EDF 

Total 

Eighth EDF 

2017 
Ninth EDF 

10th EDF 

11th EDF 

Total 

EUR millions 

REVENUE 
Revenue from non-exchange 
transactions 
Recovery activities 

Revenue from exchange 
transactions 
Financial revenue 
Other revenue 

Total revenue 
EXPENSES 
Aid instruments 
Co-financing expenses 
Finance costs 
Other expenses 
Total expenses 

ECONOMIC RESULT OF THE 
YEAR 

3.1 

3.2 

3.3 
3.4 
3.6 
3.7 

 0 
 0 

 0 
 1 
 1 
 1 

 0 
– 
 0 
 (1) 
 (0) 

3 
 3 

2 
6 
 8 
 11 

 (59) 
– 
 1 
 (7) 
 (64) 

 (3) 
 (3) 

 8 
 27 
 35 
 32 

 4 
 4 

 1 
 12 
 13 
 17 

 4 
 4 

 10 
 46 
 57 
 60 

 (984) 
 18 
 5 
 (71) 
(1 031) 

(3 012) 
 (1) 
 1 
 (70) 
(3 082) 

(4 054) 
 17 
 7 
 (148) 
(4 178) 

 0 
 0 

 (0) 
 1 
 1 
 1 

 (0) 
– 
 1 
 (2) 
 (1) 

 5 
 5 

 (1) 
 5 
 4 
 9 

 (14) 
– 
 1 
 (9) 
 (22) 

 49 
 49 

 4 
 13 
 17 
 66 

 7 
 7 

 (0) 
 4 
 4 
 11 

 61 
 61 

 4 
 22 
 25 
 87 

(1 251) 
 (42) 
 (10) 
 (29) 
(1 332) 

(2 435) 
 (1) 
 (0) 
 (114) 
(2 549) 

(3 700) 
 (42) 
 (8) 
 (154) 
(3 904) 

 0 

 (53) 

(1 000) 

(3 065) 

(4 118) 

 0 

 (13) 

(1 266) 

(2 539) 

(3 818) 

15 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENT OF CHANGES IN NET ASSETS BY EDF 

  Annual Accounts of the European Development Fund 2018 

Eighth EDF 

BALANCE AS AT 31.12.2016 
Transfers to/from the 10th EDF 
Transfers to/from the 11th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2017 
Transfers to/from the 10th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2018 

Ninth EDF 

BALANCE AS AT 31.12.2016 
Refund to Member States 
Transfers to/from the 10th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2017 
Transfers to/from the 10th EDF 
Transfers to/from the 11th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2018 

Fund capital 
- active EDFs 
(A) 

Uncalled 
funds - 
active EDFs 
(B) 

12 164 

12 164 

12 164 

– 

– 

– 

Fund capital 
- active EDFs 
(A) 

Uncalled 
funds - 
active EDFs 
(B) 

10 973 
 (200) 

10 773 

10 773 

– 
– 

– 

– 

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

12 164 
– 
– 
– 
12 164 
– 
– 
12 164 

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

10 973 
 (200) 
– 
– 
10 773 
– 
– 
– 
10 773 

Cumulative 
Reserves 
(D) 

Called fund 
capital from 
closed EDFs 
carried 
forward (E) 

(10 098) 

 627 

Called 
fund 
capital 
transfers 
between 
active 
EDFs (F) 
(2 496) 
 (7) 
– 

 0 
(10 098) 

 0 
(10 098) 

 627 

 627 

(2 503) 
 (7) 
– 
(2 509) 

Cumulative 
Reserves 
(D) 

Called fund 
capital from 
closed EDFs 
carried 
forward (E) 

(14 339) 

1 625 

 (13) 
(14 352) 

 (53) 
(14 406) 

1 625 

1 625 

Called 
fund 
capital 
transfers 
between 
active 
EDFs (F) 
2 214 

 (37) 

2 177 
 (40) 
– 
– 
2 137 

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

 197 
 (7) 
– 
 0 
 190 
 (7) 
 0 
 184 

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

 472 
 (200) 
 (37) 
 (13) 
 222 
 (40) 
– 
 (53) 
 129 

16 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Annual Accounts of the European Development Fund 2018 

10th EDF 

Fund capital 
- active EDFs 
(A) 

Uncalled 
funds - 
active EDFs 
(B) 

BALANCE AS AT 31.12.2016 
Capital increase - contributions 
Transfers to/from the Eighth and Ninth EDF 
Transfers to/from the 11th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2017 
Transfers to/from the Eighth and Ninth EDF 
Transfers to/from the 11th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2018 

20 960 

1 773 
(1 773) 

20 960 

20 960 

– 

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

19 187 
1 773 
– 
– 
– 
20 960 
– 
– 
– 
20 960 

Cumulative 
Reserves 
(D) 

Called fund 
capital from 
closed EDFs 
carried 
forward (E) 

(15 812) 

(1 266) 
(17 078) 

(1 000) 
(18 077) 

– 

– 

– 

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) 

BALANCE AS AT 31.12.2016 
Capital increase - contributions 
Transfers to/from the Eighth, Ninth and 10th 
EDF 
Economic result of the year 
BALANCE AS AT 31.12.2017 
Capital increase - contributions 
Transfers to/from the Eighth, Ninth and 10th 
EDF 
Economic result of the year 
BALANCE AS AT 31.12.2018 

29 367 

29 367 
(2 277) 

29 367 

27 090 
(4 250) 

29 367 

22 840 

– 
2 277 
– 

– 
2 277 
4 250 
– 

– 
6 527 

(2 969) 

(2 539) 
(5 508) 

(3 065) 
(8 573) 

– 

– 

– 

– 

17 

Called 
fund 
capital 
transfers 
between 
active 
EDFs (F) 
 247 

 44 
 (171) 

 120 
 47 
 (112) 
– 
 55 

Called 
fund 
capital 
transfer
s 
between 
active 
EDFs (F) 
 35 
– 
 171 

– 
 206 
 112 
– 

– 
 317 

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

3 622 
1 773 
 44 
 (171) 
(1 266) 
4 003 
 47 
 (112) 
(1 000) 
2 938 

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

(2 934) 
2 277 
 171 

(2 539) 
(3 025) 
4 362 
– 

(3 065) 
(1 729) 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

NOTES TO THE FINANCIAL STATEMENTS 
OF THE EDF 

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

18 

 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

1. 

SIGNIFICANT ACCOUNTING POLICIES 

1.1.  ACCOUNTING PRINCIPLES 

The objective of financial statements is to provide information about the financial position, performance 
and cashflows of an entity that is useful to a wide range of users.  

The  overall  considerations  (or  accounting  principles)  to  be  followed  when  preparing  the  financial 
statements  are  laid  down  in  EU  Accounting  Rule  1  'Financial  Statements'  and  are  the  same  as  those 
described  in  IPSAS  1:  fair  presentation,  accrual  basis,  going  concern,  consistency  of  presentation, 
materiality,  aggregation,  offsetting  and  comparative  information.  The  qualitative  characteristics  of 
financial  reporting  are  relevance,  faithful  representation  (reliability),  understandability,  timeliness, 
comparability and verifiability. 

1.2.  BASIS OF PREPARATION 

1.2.1.  Reporting period 

Financial  statements  are  presented  annually.  The  accounting  year  begins  on  1  January  and  ends  on 
31 December.  

1.2.2.  Currency and basis for conversion 

The annual accounts are presented in millions of euros, the euro being the EDF's functional and reporting 
currency. Foreign currency transactions are translated into euros using the exchange rates prevailing at 
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign 
currency  transactions  and  from  the  re-translation  at  year-end  exchange  rates  of  monetary  assets  and 
liabilities  denominated  in  foreign  currencies  are  recognised  in  the  statement  of  financial  performance. 
Different conversion methods apply to property, plant and equipment and intangible assets, which retain 
their value in euros at the date when they were purchased. 

Year-end balances of monetary assets and liabilities denominated in foreign currencies are translated into 
euros on the basis of the European Central Bank (ECB) exchange rates applying on 31 December. 

Euro exchange rates 
Currency 
BGN 
CZK 
DKK 
GBP 
HRK 
HUF 

31.12.2018 
1.9558 
25.7240 
7.4673 
0.8945 
7.4125 
320.9800 

31.12.2017 
1.9558 
25.5350 
7.4449 
0.8872 
7.4400 
310.3300 

Currency 
PLN 
RON 
SEK 
CHF 
JPY 
USD 

31.12.2018 
4.3014 
4.6635 
10.2548 
1.1269 
125.8500 
1.145 

31.12.2017 
4.177 
4.6585 
9.8438 
1.1702 
135.01 
1.1993 

1.2.3.  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  accrued  and deferred 
revenue and charges, provisions, financial risk on accounts receivables, contingent assets and liabilities, 
and degree of impairment of assets. Actual results could differ from those estimates.  

Reasonable  estimates  are  an  essential  part  of  the  preparation  of  financial  statements  and  do  not 
undermine their reliability. An estimate may need revision if changes occur in the circumstances on which 
the estimate was based or as a result of new information or more experience. By its nature, the revision 
of  an  estimate  does  not  relate  to  prior  periods  and  is  not  the  correction  of  an  error.  The  effect  of  a 
change  in  accounting  estimate  shall  be  recognised  in  the  surplus  or  deficit  in  the  periods  in  which  it 
becomes known.  

19 

 
 
Annual Accounts of the European Development Fund 2018 

1.3.  BALANCE SHEET 

1.3.1. 

Financial assets 

Financial assets are classified in the following categories: financial assets at fair value through surplus or 
deficit; 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 surplus or deficit 

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. Loans and receivables include term deposits with 
the original maturity above three months. 

(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  period  of  time  the  entity  expects  to  hold  them,  which  is  usually  the  maturity  date. 
During this financial year, the entity did not hold any investments in this category. 

Initial recognition and measurement 

Purchases  and  sales  of  financial  assets  at  fair  value  through  surplus  or  deficit,  held-to-maturity  and 
available for sale are recognised on trade date - the date on which the entity commits to purchase or sell 
the asset. Cash equivalents and loans are recognised when cash is deposited in a financial institution or 
advanced to borrowers. Financial instruments are initially recognised at fair value. For all financial assets 
not carried at fair value through surplus or deficit transaction costs are added to the fair value at initial 
recognition. 

Financial instruments are derecognised when the rights to receive cashflows from the investments have 
expired or the entity has transferred substantially all risks and rewards of ownership to another party. 

Subsequent measurement 

Financial assets at fair value through surplus or deficit are subsequently carried at fair value with gains 
and losses arising from changes in the fair value being included in the statement of financial performance 
in the period in which they arise. 

Loans and receivables and held-to maturity investments are carried at amortised cost using the effective 
interest method. 

Available  for  sale  financial  assets  are  subsequently  carried  at  fair  value.  Gains  and  losses  arising  from 
changes in the fair value are recognised in the fair value reserve. Interest on available for sale financial 
assets  calculated  using  the  effective  interest  method  is  recognised  in  the  statement  of  financial 
performance.  

20 

 
 
Annual Accounts of the European Development Fund 2018 

The entity assesses at each balance sheet date whether there is objective evidence that a financial asset 
is  impaired  and  whether  an  impairment  loss  should  be  recorded  in  the  statement  of  financial 
performance.      

1.3.2. 

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 
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 expenditure, he 
has the obligation to return the pre-financing advance to the entity. The amount of the pre-financing may 
be reduced (wholly or partially) by the acceptance of eligible costs (which are recognised as expenses). 

Pre-financing is, on subsequent balance sheet dates, measured at the amount initially recognised on the 
balance sheet less eligible expenses (including estimated amounts where necessary) incurred during the 
period. 

1.3.3.  Receivables and recoverables 

As the EU accounting rules require a separate presentation of exchange and non-exchange transactions, 
for  the  purpose  of  drawing  up  the  accounts,  receivables  are  defined  as  stemming  from  exchange 
transactions and recoverables are defined as stemming from non-exchange transactions (when the entity 
receives value from another entity without directly giving approximately equal value in exchange). 

Receivables  from  exchange  transactions  meet  the  definition  of  financial  instruments  and  are  thus 
classified as loans and receivables and measured accordingly (see 1.3.1 above). 

Recoverables from non-exchange transactions are carried at original amount (adjusted for interests and 
penalties)  less  write-down  for  impairment.  A  write-down  for  impairment  is  established  when  there  is 
objective  evidence  that  the  entity  will  not  be  able  to  collect  all  amounts  due  according  to  the  original 
terms of the recoverables. 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. 

1.3.4.  Cash and cash equivalents 

Cash and cash equivalents are financial instruments and 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. 

1.3.5. 

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 expenditure 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). 

1.3.6. 

Payables 

Included  under  accounts  payable  are  both  amounts  related  to  exchange  transactions  such  as  the 
purchase of goods and services and to non-exchange transactions e.g. to cost claims from beneficiaries, 
grants or other EU funding.  

21 

 
 
Annual Accounts of the European Development Fund 2018 

Where grants or other funding are provided to the beneficiaries, the cost claims 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. 

1.3.7.  Accrued and deferred revenue and charges 

Transactions and events are recognised in the financial statements in the period to which they relate. 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  (e.g.  by  reference  to  a  contract),  an  accrued 
revenue 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. 

Expenses are also accounted for in the period to which they relate. At the end of the accounting period, 
accrued expenses are recognised based on an estimated amount of the transfer obligation of the period. 
The  calculation  of  accrued  expenses  is  done  in  accordance  with  detailed  operational  and  practical 
guidelines  issued  by  the  Accounting  Officer  which  aim  at  ensuring  that  the  financial  statements  provide 
a faithful representation of the economic and other phenomena they purport to represent. By analogy, if 
a payment has been made in advance for services or goods that have not yet been received, the expense 
will be deferred and recognised in the subsequent accounting period.  

1.4.  STATEMENT OF FINANCIAL PERFORMANCE 

1.4.1.  Revenue 

Revenue comprises gross inflows of economic benefits or service potential received and receivable by the 
entity,  which  represents  an  increase  in  net  assets,  other  than  increases  relating  to  contributions  from 
owners.  

Depending  on  the  nature  of  the  underlying  transactions  in  the  statement  of  financial  performance  it  is 
distinguished between:   

(i)  Revenue from non-exchange transactions 

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. The entity shall recognise an asset in respect of transfers when the entity controls the 
resources  as  a  result  of  a  past  event  (the  transfer)  and  expects  to  receive  future  economic  benefits  or 
service  potential  from  those  resources,  and  when  the  fair  value  can  be  reliably  measured.  An  inflow  of 
resources  from  a  non-exchange  transaction  recognised  as  an  asset  (i.e.  cash)  is  also  recognised  as 
revenue,  except  to  the  extent  that  the  entity  has  a  present  obligation  in  respect  of  that  transfer 
(condition), which needs to be satisfied before the revenue can be recognised. Until the condition is met 
the revenue is deferred and recognised as a liability (pre-financing received). 

(ii)  Revenue from exchange transactions 

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. 

22 

 
 
 
 
Annual Accounts of the European Development Fund 2018 

1.4.2.  Expenses 

Expenses are decreases in economic benefits or service potential during the reporting period in the form 
of  outflows  or  consumption  of  assets  or  incurrence  of  liabilities  that  result  in  decreases  in  net 
assets/equity.  They  include  both  the  expenses  from  exchange  transactions  and  expenses  from 
non-exchange transactions.  

Expenses  from  exchange  transactions  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. 
Furthermore,  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.  

Expenses from non-exchange transactions 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 an agreement 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. 

1.5.  CONTINGENT ASSETS AND LIABILITIES 

1.5.1.  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. 

1.5.2.  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. 

1.6.  CO-FINANCING 

Co-financing  contributions  received  fulfil  the  criteria  of  revenues  from  non-exchange  transactions  under 
conditions  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. 

23 

 
 
Annual Accounts of the European Development Fund 2018 

2.  NOTES TO THE BALANCE SHEET 

ASSETS

2.1.  PRE-FINANCING 

Many  contracts  provide  for  payments  of  advances  before  the  commencement  of  works,  delivery  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 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. 

Non-current pre-financing 
Current pre-financing 
Total 

Note 

2.1.1 
2.1.2 

Eighth 
EDF 

– 
 0 
 0 

Ninth 
EDF 
 23 
 19 
 42 

10th 
EDF 
 520 
 445 
 964 

11th 
EDF 
 344 
 984 
1 328 

EUR millions 

31.12.2018 

31.12.2017 

 887 
1 448 
2 335 

 582 
1 518 
2 100 

The increase in non-current pre-financing was mainly caused by the extension up to 2023 (with 7 years 
disbursement  period)  of  a  contract  that  was  supposed  to  end  in  2017.  In  2017  the  total  value  of  this 
contract had been expensed,  whereas after  the extension,  the non-current  pre-financing  was estimated 
at EUR 217 million.   

The decrease in current pre-financing was caused by a decrease in the pre-financing payments made (by 
10%) and an increase in the level of clearings (mainly in the 10th EDF). 

This decrease is in line with the lifecycle of the EDF. Many contracts have been cleared and completed in 
the 10th EDF: this can be seen in the drop of their number – from 3.4k in 2017 to 2.6k in 2018.   

At the same time the number of open contracts in the 11th EDF increased from 1.6k in 2017 to 2.3k in 
2018.  The  11th  EDF  started  in  2015  and  2018  was  thus  the  fourth  year  of  its  existence.  The  11th  EDF 
has reached maturity with regards to the implementation of adopted actions.  

2.1.1.  Non-current pre-financing 

Direct Management 
Implemented by: 
Commission 
EU executive agencies 
EU delegations 

Indirect Management 
Implemented by : 

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

Total 

24 

31.12.2018 
 188 

EUR millions 
31.12.2017 
 159 

 140 
 0 
 48 
 698 

 367 
 280 
 6 
 24 
 21 
 0 
– 

 887 

 105 
 6 
 48 
 423 

 166 
 189 
 11 
 37 
 20 
– 
 0 

 582 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

2.1.2.  Current pre-financing 

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

Eighth EDF  Ninth EDF 
 113 
 (94) 
 19 

 1 
 (1) 
 0 

10th EDF 
2 034 
(1 589) 
 445 

EUR millions 

11th EDF  31.12.2018  31.12.2017 
5 153 
(3 705) 
1 448 

5 288 
(3 770) 
1 518 

3 005 
(2 021) 
 984 

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

Indirect Management 
Implemented by : 

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

31.12.2018 
 280 

EUR millions 
31.12.2017 
 256 

 102 
 8 
 1 
 169 
1 169 

 100 
 658 
 78 
 124 
 208 
 0 
 0 

 86 
 10 
– 
 161 
1 262 

 345 
 563 
 59 
 108 
 186 
- 
 0 

Total 

1 448 

1 518 

2.1.3.  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  2018  the  guarantees  received  by  the  EDF  in  respect  of  pre-financing  amounted  to  EUR 79 
million (2017 EUR 54 million). 

The  majority  of  pre-financing  is  paid  under  the  indirect  management  mode.  In  this  case  the  beneficiary  of 
the guarantee is not the EDF but the contracting authority. Even though the EDF is not the beneficiary, those 
guarantees secure its assets. In 2018 those guarantees amounted to EUR 534 million.  

2.2.  TRUST FUND CONTRIBUTIONS 

This heading represents the amount paid as contributions to the EU Trust Fund for Africa and the Bêkou EU 
Trust Fund. The contributions are net of the costs incurred by the trust funds and attributable to the EDF. 

The trust fund contributions are implemented by the EDF under the direct management mode. 

Trust Funds 

Africa 
Bêkou 
Total 

Net 
contribution 
at 
31.12.2017 
 148 
 16 
 163 

Contributions 
paid in 2018 

 345 
– 
 345 

Allocation of 
TF's net 
expenses  
2018 

 (301) 
 (7) 
 (308) 

EUR millions 
Net 
contribution at 
31.12.2018 

 192 
 9 
 201 

25 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

2.3.  NON-EXCHANGE RECOVERABLES AND EXCHANGE 

RECEIVABLES 

Recoverables from non-exchange transactions 
Receivables from exchange transactions 
Total 

Note 
2.3.1 
2.3.2 

31.12.2018 
 37 
 101 
 138 

EUR millions 

31.12.2017 
 19 
 73 
 92 

2.3.1.  Recoverables from non-exchange transactions 

Member States 
Customers 
Public bodies 
Third states 
Write down 
Inter-company 
accounts with EU 
institutions 
Total 

Eighth EDF 

– 
 2 
 0 
 0 
 (2) 

– 

1 

Ninth EDF 
– 
 7 
 9 
 1 
 (15) 

10th EDF 
– 
 16 
 9 
 3 
 (10) 

11th EDF 
 5 
 1 
 7 
 0 
 (0) 

31.12.2018 
 5 
 26 
 25 
 5 
 (27) 

EUR millions 
31.12.2017 
 7 
 19 
 20 
 6 
 (34) 

– 

2 

– 

18 

 3 

16 

 3 

37 

 2 

19 

2.3.2.  Receivables from exchange transactions 

Accrued income 
Receivable from 
EU 
Inter-EDF 
accounts 
Total 

Eighth EDF 

 0 

– 

 183 

 183 

Ninth EDF 
 63 

10th EDF 
 18 

11th EDF 
 0 

31.12.2018 
 81 

– 

 111 

 174 

– 

 20 

2 421 

(2 715) 

2 439 

(2 695) 

 20 

 (0) 

 101 

EUR millions 
31.12.2017 
 74 

– 

 (0) 

 73 

Included under accrued income are amounts of accrued interest on pre-financing related to projects (EUR 
63 million) and on pre-financing related to the EU-Africa Trust Fund (EUR 18 million). 

The  receivable  from  the  EU  is  the  amount  that  was  transferred  to  the  trust  account  owned  by  the 
European Commission. 

For efficiency reasons, the single treasury covering all the EDFs is allocated to the 11th EDF; this leads to 
operations  between  the  various  EDFs,  which  are  balanced  out  in  the  inter-EDF  accounts  between  the 
various EDF balance sheets.  

Inter-EDF accounts are presented only in the individual EDFs. The total of inter-EDF accounts is nil. 

26 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

2.4.  CASH AND CASH EQUIVALENTS3 

Central banks 
Commercial banks 
Cash belonging to 
financial instruments 
Total 

Eighth EDF  Ninth EDF 

– 
– 

– 

– 

– 
– 

– 

– 

10th EDF 
– 
– 

– 

– 

11th EDF  31.12.2018  31.12.2017 

EUR millions 

 276 
 87 

 24 

 387 

 276 
 87 

 24 

 387 

 105 
 242 

– 

 347 

The total level of cash and cash equivalents remained stable. However, the structure of the cash position 
has  changed.  A  significant  decrease  (EUR 136 million)  was  observed  in  the UK’s  contribution  account  in 
the commercial bank Natwest. It was mainly because at the end of 2017 the UK paid the first instalment 
of its 2018 contribution of EUR 170 million. 
On  31.12.2018  more  cash  was  kept  in  the  central  banks,  in  order  to  limit  counterparty  risk  (see  note 
5.4). 

LIABILITIES 

2.5.  PROVISIONS 

Provisions 
Total 

Eighth EDF  Ninth EDF 
– 
– 

– 
– 

10th EDF 
– 
– 

11th EDF  31.12.2018  31.12.2017 

– 
– 

– 
– 

 4 
 4 

EUR millions 

The  provision  for  the  Centre  de  Development  (CDE)  has  been  released  as  the  court  cases  have  been 
finished and no additional costs should be incurred. 

2.6. 

 FINANCIAL LIABILITIES 

Co-financing - 
payables 
Total 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF  31.12.2018  31.12.2017 

EUR millions 

– 

– 

– 

– 

 1 

 1 

 16 

 16 

 18 

 18 

 14 

 14 

The change in the total co-financing liabilities is explained in note 2.7.2.1. 

2.7.  PAYABLES 

Current payables 
Sundry payables 
Total 

Note 
2.7.1 
2.7.2 

Eighth EDF  Ninth EDF 

10th EDF  11th EDF  31.12.2018  31.12.2017 

 0 
– 
 0 

 6 
– 
 6 

 80 
 45 
 125 

 88 
 23 
 111 

 173 
 68 
 241 

 361 
 202 
 563 

EUR 
millions 

3  In  accordance  with  Article  53  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. 

27 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
 
Annual Accounts of the European Development Fund 2018 

2.7.1. 

 Current payables 

Eighth EDF  Ninth EDF 

Suppliers 
Member States 
Third states 
Public bodies 
Other current payables 
Total 

 0 
– 
 0 
– 
 (0) 
 0 

 5 
– 
– 
 2 
 (2) 
 6 

10th EDF 
 65 
 0 
 6 
 10 
 (2) 
 80 

11th EDF  31.12.2018  31.12.2017 

EUR millions 

 32 
 1 
 31 
 30 
 (6) 
 88 

 102 
 1 
 37 
 43 
 (10) 
 173 

 133 
 12 
 146 
 83 
 (13) 
 361 

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.  Non-eligible  amounts  have 
been shown as other current payables. 

2.7.2.  Sundry payables 

Co-financing 
payables 
Deferred fund 
capital 
contributions 
Other sundry 
payables 
Total 

Note 
2.7.2.1 

2.7.2.2 

Eighth EDF  Ninth EDF  10th EDF  11th EDF  31.12.2018  31.12.2017 

– 

– 

– 

– 

– 

– 

– 

– 

 47 

– 

 (2) 

 45 

 21 

– 

 2 

 23 

 68 

– 

– 

 28 

 173 

 1 

 68 

 202 

EUR 
millions 

2.7.2.1.  Co-financing payables 

The breakdown of the non-current and current co-financing payables by Member State is summarised in 
the table below: 

28 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF  31.12.2018  31.12.2017 

EUR millions 

– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 

– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 

– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 

– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 

– 
 0 
– 
– 
– 
 1 
– 
– 
– 
 0 
– 
 0 
– 
 1 

– 
 4 
– 
 0 
– 
 21 
 1 
– 
 1 
0 
– 
 2 
 5 
 0 
 13 
 0 
 0 
– 
 47 
 48 

 1 
 2 
 1 
 3 
 1 
 1 
 1 
3 
 0 
– 
 2 
– 
 2 
 16 

 0 
 0 
 0 
 2 
 0 
 1 
– 
 0 
 1 
– 
 0 
– 
 1 
– 
 12 
– 
– 
 4 
 21 
 37 

 1 
 2 
 1 
 3 
 1 
 2 
 1 
3 
 0 
 0 
 2 
 0 
 2 
 18 

 0 
 4 
 0 
 3 
 0 
 22 
 1 
 0 
 2 
0 
 0 
 2 
 5 
 0 
 25 
 0 
 0 
 4 
 68 
 86 

– 
 2 
– 
 0 
– 
 4 
– 
– 
– 
 3 
 1 
 0 
 4 
 14 

– 
 3 
– 
 (0) 
– 
 12 
 0 
– 
 0 
– 
– 
 1 
 5 
 0 
 4 
 0 
 1 
 2 
 28 
 42 

Non-current co-
financing 
Austria 
Belgium 
Czech Republic 
Denmark 
Finland 
France 
Luxembourg 
Netherlands 
Portugal 
Sweden 
United Kingdom 
Australia 
USAID 

Current co-financing 
Austria 
Belgium 
Czech Republic 
Denmark 
Finland 
France 
Germany 
Luxembourg 
Netherlands 
Poland 
Portugal 
Spain 
Sweden 
Switzerland 
United Kingdom 
Canada 
Australia 
USAID 

Total 

The  total  non-current  and  current  co-financing  payables  increased  by  EUR  44  million  compared  to  the 
previous reporting period.  

During 2018, a total of EUR 28 million new co-financing contributions were received.  

The total co-financing payables increased by EUR 17 million in order to recognise revenue and expenses 
related to co-financed projects (see notes 3.1.1 and 3.4).  

2.7.2.2.  Deferred fund capital contributions 

United Kingdom 
Lithuania 
Total 

Eighth EDF  Ninth EDF 
– 
– 
– 

– 
– 
– 

10th EDF 
– 
– 
– 

11th EDF  31.12.2018  31.12.2017 

EUR millions 

– 
– 
– 

– 
– 
– 

 170 
 2 
 173 

This heading completely relates to Member States' 2018 contributions paid in advance. 

29 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

2.8.  ACCRUED CHARGES AND DEFERRED INCOME 

Accrued charges 
Other accruals and 
deferrals 
Total 

Eighth EDF 
 0 

Ninth EDF 
 83 

10th EDF 
 358 

11th EDF 
 838 

31.12.2018 
1 279 

– 

 0 

– 

 83 

– 

 3 

 3 

 358 

 840 

1 281 

EUR millions 
31.12.2017 
 730 

 3 

 733 

Accrued  charges  comprise  estimated  operating  expenses  for  on-going  or  completed  contracts  without 
validated cost claims where the 2018  eligible expenses incurred by  beneficiaries of  EDF were estimated 
using the best available information. The portion of the estimated accrued charges which relates to pre-
financing paid has been recorded as a reduction of the pre-financing amounts (see note 2.1). 

Accrued charges increased mainly in the 11th EDF (from EUR 140 million in 2017 to EUR 840 million in 
2018). This is in line with the increase in the number of contracts (from 1.6k in 2017 to 2.3k in 2018). 
The  11th  EDF  started  in  2015  and  2018  was  thus  the  fourth  year  of  its  existence.  The  11th  EDF  has 
reached maturity with regards to the implementation of adopted actions. 

NET ASSETS 

2.9.  FUND CAPITAL 

2.9.1.  Called fund capital – active EDFs 

Fund capital 
Uncalled fund capital 
Called fund capital 
31.12.2017 

Fund capital 
Uncalled fund capital 
Called fund capital 
31.12.2018 

Eighth EDF 
12 164 
– 
12 164 

Ninth EDF 
10 773 
– 
10 773 

10th EDF 
20 960 
– 
20 960 

11th EDF 
29 367 
(27 090) 
2 277 

EUR millions 
Total 
73 264 
(27 090) 
46 173 

12 164 
– 
12 164 

10 773 
– 
10 773 

20 960 
– 
20 960 

29 367 
(22 840) 
6 527 

73 264 
(22 840) 
50 423 

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 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 (see note 2.9.2 below). 

30 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

2.9.2.  Called and uncalled fund capital by Member State 

Contributions 11th EDF 

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

% 

2.40 
3.25 
0.22 
0.23 
0.11 
0.80 
1.98 
0.09 
1.51 
17.81 
20.58 
1.51 
0.61 
0.94 
12.53 
0.12 
0.18 
0.26 
0.04 
4.78 
2.01 
1.20 
0.72 
0.38 
0.22 
7.93 
2.94 
14.68 
100.00 

Uncalled 
capital 
31.12.2017 
 650 
 880 
 59 
 61 
 30 
 216 
 537 
 23 
 409 
4 826 
5 575 
 408 
 166 
 255 
3 394 
 31 
 49 
 69 
 10 
1 294 
 544 
 324 
 195 
 102 
 61 
2 149 
 796 
3 976 
27 090 

Capital 
called in 
2018 
 (102) 
 (138) 
 (9) 
 (10) 
 (5) 
 (34) 
 (84) 
 (4) 
 (64) 
 (757) 
 (875) 
 (64) 
 (26) 
 (40) 
 (533) 
 (5) 
 (8) 
 (11) 
 (2) 
 (203) 
 (85) 
 (51) 
 (31) 
 (16) 
 (10) 
 (337) 
 (125) 
 (624) 
(4 250) 

EUR millions 
Uncalled 
capital 
31.12.2018 
 548 
 742 
 50 
 51 
 25 
 182 
 452 
 20 
 345 
4 068 
4 700 
 344 
 140 
 215 
2 862 
 27 
 41 
 58 
 9 
1 091 
 458 
 273 
 164 
 86 
 51 
1 812 
 671 
3 353 
22 840 

In 2018 EUR 4 250 million has been called from the 11th EDF. At 31 December 2018 the capital of the 
Eighth, Ninth and 10th EDF has been called up and received in its entirety. 

2.9.3.  Called fund capital from closed EDFs carried forward 

Funds transferred from 
closed EDFs 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF  31.12.2018  31.12.2017 

 627 

1 625 

– 

– 

2 252 

2 252 

EUR millions 

This heading includes the resources transferred from closed EDFs to the Eighth and Ninth EDFs. 

31 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

2.9.4.  Called fund capital transfers between active EDFs 

Balance at 31.12.2016 
Transfer of decommitted 
amounts to the 10th EDF 
performance reserve from 
previous EDFs 
Transfer of decommitted 
amounts to the 11th EDF 
performance reserve from 
previous EDFs 
Balance at 31.12.2017 
Transfer of decommitted 
amounts to the 10th EDF 
performance reserve from 
previous EDFs 
Transfer of decommitted 
amounts to the 11th EDF 
performance reserve from 
previous EDFs 
Balance at 31.12.2018 

Eighth 
EDF 
(2 496) 
 (7) 

Ninth 
EDF 
2 214 
 (37) 

10th 
EDF 
 247 
 44 

11th 
EDF 
 35 
– 

– 

– 

 (171) 

 171 

(2 503) 
 (7) 

2 177 
 (40) 

 120 
 47 

 206 
– 

– 

– 

 (112) 

 112 

(2 509) 

2 137 

 55 

 317 

EUR millions 
Total 

– 
– 

– 

– 
– 

– 

– 

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.   

32 

 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

3.  NOTES  TO  THE  STATEMENT  OF  FINANCIAL 

PERFORMANCE 

REVENUE 

Revenue from non-exchange transactions 
Revenue from exchange transactions 
Total 

Note 
3.1 
3.2 

2018 
 4 
 57 
 60 

EUR millions 

2017 
 61 
 25 
 87 

3.1.  REVENUE FROM NON-EXCHANGE TRANSACTIONS 

Note  Eighth EDF  Ninth EDF  10th EDF 

11th EDF 

Recovery of expenses 
Recovery of STABEX 
funds 
Co-financing revenue 
Total 

3.1.1 

 0 
– 

– 
 0 

 3 
– 

– 
 3 

 14 
 0 

 (18) 
 (3) 

 3 
– 

 1 
 4 

Non-exchange revenue can be broken down by management mode as follows: 

Direct Management 
Implemented by: 
Commission 
EU delegations 

Indirect Management 
Implemented by : 

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

Total 

3.1.1.  Co-financing revenue 

2018 
 4 

 1 
 3 
 0 

 (13) 
 12 
 0 
 1 
 4 

2018 
 21 
 0 

 (17) 
 4 

EUR millions 
2017 

 19 
 0 

 42 
 61 

EUR millions 
2017 
 5 

 1 
 4 
 56 

 55 
 2 
 0 
 (1) 
 61 

The  co-financing  contributions  received  fulfil  the  criteria  of  revenues  from  non-exchange  transactions 
under  conditions  and  as  such  should  not  affect  the  statement  of  financial  performance.  The  received 
contributions  remain  under  liabilities  (see  note  2.7.2.1)  until  the  conditions  attached  to  the  donated 
funds  are  met,  i.e.  eligible  expenses  are  incurred  (see  note  3.4).  The  corresponding  amount  is  then 
recognised as non-exchange revenue from co-financing. Consequently the effect on the economic result 
of the year is nil. 

3.2.  REVENUE FROM EXCHANGE TRANSACTIONS 

Financial revenue 
Other revenue 
Total 
Financial revenue comprises interest from the Trust Funds and interest on pre-financing. 

 1 
 12 
 13 

 10 
 46 
 57 

Eighth EDF  Ninth EDF 
 2 
 6 
 8 

 0 
 1 
 1 

10th EDF 
 8 
 27 
 35 

11th EDF 

2018 

EUR millions 
2017 

 4 
 22 
 25 

Other income entirely relates to the realised and unrealised foreign exchange gains.  

33 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

EXPENSES 

3.3.  AID INSTRUMENTS 

Eighth EDF  Ninth EDF 
 1 

 (0) 

10th EDF 
 532 

11th EDF 
1 468 

2018 

2 001 

Programmable aid 
Macro-economic 
support 
Sectoral policy 
Intra ACP projects 
Emergency aid 
Other aid programmes 
related to former EDFs 
Institutional support 
Compensation export 
receipts 
Contributions to Trust 
Funds 
Total 

– 

– 
– 
– 

– 

– 

 0 

– 

 (0) 

 26 

 2 
 27 
 3 

 0 

– 

 (0) 

– 

 59 

– 

– 
 389 
 60 

– 

 3 

– 

– 

EUR millions 
2017 

2 150 

 21 

 (9) 
1 112 
 289 

 (1) 

 23 

 (1) 

– 

– 
 410 
 811 

– 

 15 

– 

 26 

 2 
 827 
 873 

 0 

 18 

 0 

 307 

 307 

 114 

 984 

3 012 

4 054 

3 700 

The  EDF  operating  expenditure  covers  various  aid  instruments  and  takes  different  forms,  depending  on 
how the money is paid out and managed. 

The  increase  in  overall  expenses  on  aid  instruments  is  mainly  in  the  11th  EDF.  This  is  in  line  with  the 
lifecycle of this EDF. The 11th EDF started in 2015 and 2018 was thus the fourth year of its existence. In 
2018 the 11th EDF reached maturity with regards to the implementation of adopted actions and thus the 
expenses  have  increased  compared  to  2017.  The  number  of  open  contracts  in  the  11th  EDF  increased 
from 1.6k in 2017 to 2.3k in 2018. 

This increase is in line with the increase in clearings of pre-financing and increase in accrued charges. 

The  sectoral  policy  expenses  were  negative  in  2017  due  to  reversal  of  an  invoice  that  was  incorrectly 
recorded in 2016. 

3.4.  CO-FINANCING EXPENSES 

Co-financing 

Eighth EDF  Ninth EDF 
– 

– 

10th EDF 
 (18) 

11th EDF 

2018 

EUR millions 
2017 

 1 

 (17) 

 42 

Included  under  this  heading  are  the  expenses  incurred  on  co-financing  projects  in  2018.  It  should  be 
noted  that  the  expenses  incurred  include  estimated  amounts  related  to  the  cut-off  exercise  (and 
consequently reversals of the estimated amounts related to last year). Because the reversals of the 2017 
estimated expenses (EUR 52 million) exceeded the expenses incurred in 2018 (EUR 36 million), the co-
financing expenses are negative for 2018. 

Corresponding negative revenue has been recognised in the statement of financial performance (see note 
3.1.1). 

34 

 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

3.5.  AID INSTRUMENTS AND CO-FINANCING EXPENSES BY 

MANAGEMENT TYPE 

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

Indirect Management 

Implemented by: 

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

Total 

3.6.  FINANCE COSTS 

2018 
1 750 

 122 
 31 
 594 
1 003 
2 287 

 44 
 920 
 114 
 231 
 977 
 1 
 0 

4 037 

Write-down of 
receivables 
Other financial 
expenses 
Total 

Eighth EDF  Ninth EDF 

10th EDF 

11th EDF 

2018 

 (0) 

– 

 (0) 

 (1) 

– 

 (1) 

 (5) 

– 

 (5) 

 (1) 

 (0) 

 (1) 

 (7) 

 (0) 

 (7) 

EUR millions 
2017 
1 447 

 122 
 26 
 89 
1 209 
2 295 

 48 
1 171 
 (20) 
 356 
 739 
– 
 0 

3 742 

EUR millions 
2017 

 9 

 (1) 

 8 

The heading write-down of receivables comprises the estimate of expenses on irrecoverable receivables. 
Because the estimate also includes reversals of the previous year's estimation, the overall expenses were 
negative in 2018 (from EUR 34 million in 2017 to EUR 27 million in 2018 – see note 2.3.1).  

3.7.  OTHER EXPENSES 

Administrative and IT 
expenses 
Provision for risks and 
charges 
Realised losses on 
trade debtors 
Exchange losses 
Total 

Eighth 
EDF 

Ninth EDF 

10th EDF 

11th EDF 

2018 

2017 

EUR millions 

 (0) 

 (0) 

– 

 0 

 0 
 1 

– 

 0 

 6 
 7 

 45 

– 

 0 

 26 
 71 

 67 

 (4) 

– 

 7 
 70 

 112 

 (4) 

 1 

 39 
 148 

 107 

– 

 3 

 44 
 154 

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. 

35 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

4. 

CONTINGENT  ASSETS  &  LIABILITIES  AND 
OTHER SIGNIFICANT DISCLOSURES 

4.1.  CONTINGENT ASSETS 

Performance 
guarantees 
Retention 
guarantees 
Total 

Eighth EDF 

Ninth EDF 

10th EDF 

11th EDF 

31.12.2018 

– 

– 

– 

 0 

 0 

 1 

 10 

 6 

 16 

 0 

– 

 0 

 11 

 7 

 17 

EUR millions 
31.12.2017 

 10 

 8 

 18 

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

Retention  guarantees  concern  only  works  contracts.  Typically  10 %  of  the  interim  payments  to 
beneficiaries are withheld to ensure that the contractors fulfil their 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. 

For contracts managed under the indirect mode, the guarantees belong to a contracting authority other 
than  the  EDF  and  they  are  therefore  not  recorded  by  the  EDF.  In  2018  those  guarantees  amounted  to 
EUR 501 million. 

4.2.  OTHER SIGNIFICANT DISCLOSURES 

4.2.1.  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  statement  of  financial  performance.  The  budgetary  RAL is  an  amount 
representing  the  commitments  for  which  payments  and/or  de-commitments  have  not  yet  been  made. 
This is the normal consequence of the existence of multi-annual programmes. 

Eighth EDF 

Ninth EDF 

10th EDF 

11th EDF 

31.12.2018 

EUR millions 
31.12.2017 

Outstanding 
commitments not 
yet expensed 
Total 

 0 

 0 

 88 

1 650 

8 009 

9 071 

8 508 

 88 

1 650 

8 009 

9 071 

8 508 

At 31 December 2018 the budgetary RAL totalled EUR 10 616 million (2017: EUR 9 745 million). 

4.2.2. 

The United Kingdom's withdrawal from the European Union 

Background 

On  23  June  2016  a  majority  of  the  citizens  of  the  United  Kingdom  who  voted  in  the  referendum  on 
membership  of  the  European  Union  voted  to  leave  the  EU.  On  29  March  2017  the  United  Kingdom 
formally  notified the European  Council  of  its intention  to leave the EU  and the European Atomic Energy 
Community (Euratom). In doing so it triggered Article 50 of the Treaty on European Union, which sets out 
the procedure for a Member State to withdraw from the Union. 

36 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

The negotiation process 

On  19  March  2018  the  Commission  published  a  draft  of  the  Withdrawal  Agreement  that  outlined  the 
progress made in the negotiations. In the financial settlement part of the Withdrawal Agreement, the EU 
and the UK translated the progress achieved in the first phase of negotiations into a legal text. 

A Joint Report was published on 14 November 2018 reporting agreement at negotiators’ level on the full 
text of the draft Withdrawal Agreement, and on an outline of the Political Declaration on the framework 
for the future relationship between the United Kingdom and the European Union. On the same day, this 
updated  and  agreed  draft  Withdrawal  Agreement  was  published,  in  which  the  UK  agreed  to  pay  all  its 
obligations under the current Multiannual Financial Framework (MFF) and previous financial perspectives 
as if it were still a Member State, including its share of the Union's liabilities and contingent liabilities. The 
UK government approved the draft Withdrawal Agreement on the 14 November and the European Council 
endorsed it on 25 November 2018. On 11 January 2019, the Council (Article 50) approved the decision 
on the conclusion of the Withdrawal Agreement and sent it to the European Parliament for its consent. On 
the request of the United Kingdom, in accordance with the procedure set in the Article 50 of the TFEU, on 
21 March 2019 the European Council agreed to extend the UK’s departure date to 22 May 2019, provided 
the Withdrawal Agreement was approved by the House of Commons by 29 March 2019 at the latest and 
to the 12 April 2019 if it was not the case (European Council Decision (EU) 2019/476 of 22 March 2019, 
OJ  L80  22.3.2019,  p.  1).  Subsequent  to  this,  the  House  of  Commons  did  not  approve  the  Withdrawal 
Agreement by 29 March 2019 and so, again on the request of the United Kingdom, on 10 April 2019 the 
European Council agreed to an extension to the UK’s departure until 31 October 2019 (European Council 
Decision (EU) 2019/584 of 11 April 2019, OJ L101 11.4.2019, p. 1). The withdrawal should take place on 
the first day of the month following the completion of the ratification procedures or on 1 November 2019, 
whichever is the earliest. The United Kingdom will remain a Member State until the new withdrawal date, 
with full rights and obligations in accordance with Article 50 TEU, and the United Kingdom has a right to 
revoke its notification at any time.  

With regard to the EDF 

The draft Withdrawal Agreement states that the United Kingdom shall remain party to the EDF until the 
closure  of  the  11th  EDF  and  all  previous  unclosed  EDFs,  and  shall  in  this  respect  assume  the  same 
obligations  as  the  Member  States  under  the  Internal  Agreement  by  which  it  was  set  up,  as  well  as  the 
obligations  resulting  from  previous  EDFs  until  their  closure.  It  may  participate,  as  observer,  without 
voting rights, in the EDF Committee.  

The draft Withdrawal Agreement also states that, where the  amounts from projects under the 10th EDF 
or  from  previous    EDFs  have  not  been  committed  or  have  been  decommitted  on  the  date  of  entry  into 
force  of  this  agreement,  the  United  Kingdom's  share  of  those  amounts  shall  not  be  reused.  The  same 
applies  to  the  United  Kingdom  share  of  funds  not  committed  or  decommitted  amounts  under  11th  EDF 
after 31 December 2020.  

At the time of the signature of these accounts, and in the absence of ratification by the United Kingdom, 
the  actual  departure  date  and  manner  of  the  departure  (with  or  without  agreement)  is  not  yet  known. 
Based on this current situation, there is no financial impact to be reported in the EDF financial statements 
as at 31 December 2018. 

37 

 
 
Annual Accounts of the European Development Fund 2018 

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: 

(a)  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. 

(b)  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. 

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

In addition to the special accounts, other bank accounts are opened by the Commission in the name of 
the  EDF,  with  financial  institutions  (central  banks  and  commercial  banks),  for  the  purpose  of  executing 
payments and receiving receipts other than the Member State contributions to the budget. 

Treasury  and  payment  operations  are  highly  automated  and  rely  on  modern  information  systems. 
Specific procedures are applied to guarantee system security and to ensure segregation of duties in line 
with the Financial Regulation, the Commission’s internal control standards, and audit principles. 

A  written  set  of  guidelines  and  procedures  regulate  the  management  of  the  treasury  and  payment 
operations with the objective of limiting operational and financial risk and ensuring an adequate level of 
control. They cover the different areas of operation, and compliance with the guidelines and procedures is 
checked regularly. 

38 

 
 
 
5.2.  CURRENCY RISK 

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

  Annual Accounts of the European Development Fund 2018 

USD 

GBP 

DKK 

SEK 

EUR 

Other 

Total 

USD 

GBP 

DKK 

SEK 

EUR 

Other 

Total 

31.12.2018 

31.12.2017 

EUR millions 

Financial assets 
Receivables and 
recoverables 
Cash and cash equivalents 
Total 
Financial liabilities 
Non-current financial 
liabilities 
Payables 
Total 
Total 

 63 

 1 

 64 

– 

 (1) 

 (1) 

 63 

– 

 0 

 0 

– 

– 

– 

 0 

 0 

– 

 0 

– 

– 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

 67 

 386 

 453 

 (18) 

 (218) 

 (236) 

 217 

 8 

– 

 8 

– 

 (22) 

 (22) 

 (14) 

 138 

 387 

 525 

 (18) 

 (241) 

 (259) 

 267 

 64 

 4 

 68 

– 

 0 

 0 

 68 

– 

 0 
 0 

– 

– 
– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 26 

 344 

 370 

 (14) 

 (533) 

 (547) 

 (177) 

 2 

– 

 2 

– 

 (30) 

 (30) 

 (28) 

 92 

 347 

 439 

 (14) 

 (563) 

 (577) 

 (138) 

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

39 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

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 in its different banks accounts. The Commission, on behalf of the 
EDF, has therefore put in place measures to ensure that interest earned regularly reflects market interest 
rates as well as their possible fluctuation. 

Contributions to the EDF budget are credited by each Member State to a special account opened with the 
financial institution designed by it. As the remuneration applied to some of these accounts may currently 
be  negative,  cash  management  procedures  are  in  place  to  minimise  balances  kept  on  the  accounts 
concerned. In addition, in accordance with Council Regulation (EU)2016/888, any negative remuneration 
on these accounts is borne by the relevant Member State. 

Overnight  balances  held  in  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 remunerated at rates lower than market rates. 

5.4.  CREDIT RISK (COUNTERPARTY RISK) 

Financial assets that are neither past due nor impaired: 

Total 

 138 

 138 
 92 

 92 

Neither 
past due 
nor 
impaired 

 121 

 121 
 92 

 92 

EUR millions 

Past due but not impaired 

< 1 year 
 12 

1-5 years 
 5 

> 5 years 
– 

 12 
 0 

 0 

 5 
– 

– 

– 
– 

– 

Exchange receivables and non-
exchange recoverables 
Total at 31.12.2018 
Exchange receivables and non-
exchange recoverables 
Total at 31.12.2017 

Financial assets by risk category: 

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

Receivables 

31.12.2018 
Cash 

Total 

Receivables 

31.12.2017 
Cash 

Total 

EUR millions 

 5 
– 
– 
– 
 5 

 133 

– 

 133 
 138 

 303 
 80 
 4 
 0 
 387 

 0 

– 

 0 
 387 

 308 
 80 
 4 
 0 
 391 

 134 

– 

 134 
 525 

 3 
 0 
 3 
 1 
 7 

 86 

– 

 86 
 92 

 103 
 240 
 4 
 0 
 347 

 0 

– 

 0 
 347 

 106 
 240 
 7 
 2 
 354 

 86 

– 

 86 
 440 

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 
20(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.  

40 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

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 calls for tender. 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 

Financial liabilities 
Total at 31.12.2018 
Financial liabilities 
Total at 31.12.2017 

< 1 year 
 241 
 241 
 563 
 563 

1-5 years 
 7 
 7 
 13 
 13 

> 5 years 
 11 
 11 
 1 
 1 

EUR millions 
Total 
 259 
 259 
 577 
 577 

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's 
treasury and the relevant spending departments. 

In addition to the above, in the context of the EDF's treasury operations, automated cash management 
tools ensure that sufficient liquidity is available on each of the EDF's bank accounts, on a daily basis. 

41 

 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

6.  RELATED PARTY DISCLOSURES 

The related parties of the EDF are the Bêkou- and Africa EU Trust Funds and the European Commission. 
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 7.2 "Key management entitlements". 

42 

 
 
Annual Accounts of the European Development Fund 2018 

7. 

EVENTS AFTER THE BALANCE SHEET DATE 

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

43 

 
 
 
Annual Accounts of the European Development Fund 2018 

8.  RECONCILIATION  OF  ECONOMIC  RESULT  AND 

BUDGET RESULT 

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

ECONOMIC RESULT OF THE YEAR 

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

2018 
(4 118) 

EUR millions 
2017 
(3 818) 

 (1) 
 (11) 

 11 

 36 
 (39) 
 (1) 

 115 
 (366) 
 (179) 
 484 

 (7) 
 (3) 

 29 

 57 
 (62) 
 (2) 

 19 
 (60) 
 (685) 
 373 

BUDGET RESULT OF THE YEAR  

(4 069) 

(4 158) 

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. 

44 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

The cash receipts from payment cancellations do not affect the economic result whereas they impact 
the budget result. 

The  net  effect  of  pre-financing  is  the  combination  of  the  new  pre-financing  amounts  paid  in  the 
current year (recognised as budgetary expenditure of the year) and the clearing of pre-financing paid in 
the  current  year  or  previous  years  through  the  acceptance  of  eligible  costs.  The  latter  represents  an 
expense in accrual terms but not in the budgetary accounts since the payment of the initial pre-financing 
had already been considered as a budgetary expenditure at the time of its payment. 

The net accrued expenses mainly consist of accruals made for year-end  cut-off purposes, i.e. eligible 
expenses incurred by beneficiaries of EDF funds but not yet reported to the EDF. Only the net effect, i.e. 
the accrued expenses of the current year less the reversal of accrued expenses of the previous year, is 
taken into consideration. 

45 

 
 
Annual Accounts of the European Development Fund 2018 

FINANCIAL STATEMENTS OF THE EU 
TRUST FUNDS CONSOLIDATED IN EDF 

46 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

FINAL ANNUAL ACCOUNTS OF THE BÊKOU 
EU TRUST FUND 2018 

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

47 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

BACKGROUND INFORMATION ON THE BÊKOU EU TRUST 
FUND 

General background on Union Trust Funds 

In accordance with Articles 234 and  235  of  the Financial  Regulation  applicable to the general budget  of 
the  Union  (EU  FR)4    and  Article  35  of  the  Financial  Regulation  applicable  to  the  11th  European 
Development  Fund  (EDF  FR)5  ,  the  European  Commission  may  establish  Union  trust  funds  for  external 
actions (‘Union trust funds’).  The Union trust funds are constituted under an agreement concluded with 
other  donors  for  emergency  and  post-emergency  actions  necessary  to  react  to  a  crisis,  or  for  thematic 
actions.  

Union  trust  funds  are  established  by  the  European  Commission  with  a  decission  after  consulting  or 
approval of the European Parliament and the Council. This decission includes the constitutive agreement 
with other donors. 

Union trust funds are only established and implemented subject to the following conditions: 

• 

• 

• 

• 

there  is  added  value  of  the  Union  intervention:  the  objectives  of  Union  trust  funds,  in 
particular by reason of their scale or potential effects, may be better achieved at Union level 
than at national level and the use of the existing financing instruments would not be sufficient 
to achieve policy objectives of the Union; 
Union  trust  funds  bring  clear  political  visibility  for  the  Union  and  managerial  advantages  as 
well as better control by the Union of risks and disbursements of the Union and other donors’ 
contributions; 
Union  trust  funds  do  not  duplicate  other  existing  funding  channels  or  similar  instruments 
without providing any additionality; 
the objectives of Union trust funds are aligned with the objectives of the Union instrument or 
budgetary item from which they are funded. 

A  board  chaired  by  the  Commission  is  established  for  each  Union  trust  fund  to  ensure  a  fair 
representation  of  the  donors  and  to  decide  upon  the  use  of  the  funds.  The  board  includes  a 
representative  of  each  non-contributing  Member  State  as  an  observer.  The  rules  for  the  composition of 
the board and its internal rules shall be laid down in the constitutive agreement of the Union trust fund. 

Union  trust  funds  are  established  for  a  limited  duration  as  determined  in  their  constitutive  agreement. 
That duration may be extended upon request of the board of the Union trust fund and upon presentation 
by the Commission of a report justifying the extension. The European Parliament and/or the Council may 
request the Commission to discontinue the appropriations for the Trust Fund or revise the constitutive act 
with a view to liquidate it. 

The accounting officer of the Commission serves as the accounting officer of the Union trust funds. The 
accounting officer is responsible for laying down accounting procedures and chart of accounts common to 
all  Union  trust  funds.  The  Commission’s  internal  auditor,  OLAF  and  the  Court  of  Auditors  exercise  the 
same powers over Union trust funds as they do in respect of other actions carried out by the Commission.  
The Union trust funds are also subject to an independent external audit every year. 

Current EU Trust Funds 

 To date, the Commission has set up four EUTFs: 

     -  The  BÊKOU  EUTF,  whose  objective  is  to  support  all  aspects  of  the  Central  African  Republic's  exit 
from crisis and its reconstruction efforts. Established on 15 July 2014; 

     -  The  MADAD  EUTF,  a  European  Union  Regional  Trust  Fund  in  response  to  the  Syrian  crisis. 
Established on 15 December 2014; 

4 Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial 
rules applicable to the general budget of the Union, 
5 Council regulation (EU) 2018/1877 of 26 November 2018 on the financial regulation applicable to the 11th European 
Development Fund, and repealing Regulation (EU) 2015/323 

48 

 
 
                                                 
 
Annual Accounts of the European Development Fund 2018 

     -  The  AFRICA  EUTF;  a  European  Union  Emergency  Trust  Fund  for  stability  and  addressing  root 
causes of irregular migration and displaced persons in Africa. Established on 12 November 2015; 

     - The COLOMBIA EUTF; to support the implementation of the peace agreement in the early recovery 
and stabilisation post conflict. Established on 12 December 2016. 

Further information is available on the websites of individual EUTFs: 

Bekou -  http://ec.europa.eu/europeaid/bekou-trust-fund-introduction_en 

Madad -  http://ec.europa.eu/enlargement/neighbourhood/countries/syria/madad/index_en.htm 

Africa -  http://ec.europa.eu/europeaid/regions/africa/eu-emergency-trust-fund-africa_en 

Colombia -http://ec.europa.eu/europeaid/eu-trust-fund-colombia_en  

The Bêkou Trust Fund 

The  first  multi-donor  EU  Trust  Fund  called  Bêkou,  which means  'hope'  in  Sango,  was  established  on 15 
July  2014,  by  the  Commission  (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 (CAR). It has been established for a maximum duration of 
60 months. The trust fund is managed from Brussels. 

The  Trust  Fund  Board  and  the  Operational  Committee  of  the  Bêkou  EU  Trust  Fund  are  composed  of 
representatives of the donors, of the Commission and observers.  

The Board adopts and reviews the strategy of the EUTF. The Board shall meet at least once a year. 

The  Operational  Committee  examines,  approves  and  supervises  the  implementation  of  the  actions 
financed by the Fund. The Committee also approves the annual accounts and the annual reports on the 
activities financed by the Trust Fund. 

Annual accounts of the Bêkou Trust Fund 

According  to  Article  8  of  the  Agreement  establishing  the  European  Union  Trust  Fund  for  the  Central 
African Republic, the 'Bêkou EU Trust Fund' and article 11.2.1 of the Constitutive agreement, the annual 
accounts comprise two parts: (1) The annual financial report prepared by the EUTF manager and (2) The 
annual financial statements prepared by the Commission's Accounting Officer, who is, based on the same 
article also the Accounting Officer of the trust fund. 

According  to  Article  8  of  the  Constitutive  agreement  the  financial  statements  shall  be  prepared  in 
accordance  with  the  accounting  rules  adopted  by  the  Commission's  Accounting  Officer  (EU  Accounting 
Rules, EAR) that are based on the International Public Sector Accounting Standards (IPSAS).  

The  annual  accounts  are  subject  to  independent  external  audit  and  the  final  annual  accounts  are 
submitted  by  the  EUTF  manager  and  the  Accounting  Officer  to  the  Operational  Committee  for  approval 
(Article 8.3.4(c)). 

49 

 
 
 
 
Annual Accounts of the European Development Fund 2018 

Highlights of the year 

The  Bêkou  EU  Trust  Fund  (Bêkou  EUTF)  aims  to  ensure  access  to  basic  services,  support  economic 
recovery and job creation, and promote social cohesion and reconciliation. Since its creation, the Bêkou 
EUTF has adopted 16 programmes and has reached more than 2 million beneficiaries. 

Despite  the  existence  of  a  democratically  elected  government  and  its  efforts  to  return  to  stability,  the 
security situation in the CAR remains volatile. It is in this complex and fragile context, where the Bêkou 
EUTF  takes  full  advantage  of  its  comparative  advantages  of  flexibility  and  adaptability  to  changing 
circumstances. Additionally, the Bêkou EUTF remains the only instrument building resilience for both the 
population and the state, in a true Linking Relief Rehabilitation and Development (LRRD) approach. 

Given  the  current  situation  in  CAR  and  in  view  of  the  expiration  of  the  Bêkou  EUTF  in  July  2019,  in 
November 2018, the EUTF Board formally requested an extension of 18 months, thus bringing the total 
duration  of  the  Bêkou  EUTF  from  60  months  to  78  months.  The  official  procedure,  which  includes  a 
consultation of the European Parliament and the Council, was launched in December 2018.  

The operational highlights of the 2018 are the following: 

 

 

 

The Bêkou EUTF adopted a new action for a total amount of EUR 35 million in the sector of health 
and increased by EUR 2 million each the budget of two already adopted actions in the sectors of 
economic recovery and promotion of social cohesion, dialogue and reconciliation. 

The  Bêkou  EUTF  Results  Framework  was  adopted,  responding  to  the  Court  of  Auditors’ 
recommendation on the identification of SMART objectives at a EUTF level. This strategic tool will 
better demonstrate the overall results of the Bêkou EUTF actions.   

The  Bêkou  EUTF  projects  were  marked  by  the  relative  stability  in  the  north-eastern  and  south-
western  parts  of  the  country  that  called  for  additional  interventions,  the  localised  conflicts  in 
Bangui and the hinterland, as well as the redeployment of public officials outside Bangui. 

On the financial side, by the end of 2018, pledges by EUTF contributors amounted to more than EUR 242 
million. This is an increase of EUR 6 million compared to 2017. Only EUR 5 million out of these EUR 242 
million remain to be certified. 

In terms of contracts, the Bêkou EUTF signed 30 new contracts in 2018 for a total amount of nearly EUR 
80  million  (representing  48%  of  the  total  amount  contracted  since  its  creation).  They  contribute  to  the 
implementation  of  its  programmes  in  the  sectors  of  health,  economic  recovery,  rural  resilience  and  job 
creation, water and sanitation, reconciliation and opening-up of regions.  

Last but not least, more than EUR 57 million (representing nearly 50% of the total amount paid since the 
creation  of  Bêkou  EUTF)  was  paid  in  2018  on  top  of  payments  made  during  previous  years;  total 
disbursements have nearly reached EUR 119 million since the creation of the Bêkou EUTF. 

In the financial statements,  the impact of  the above mentioned activities are most visible when looking 
at: 

 

Pre-financing:  an  increase  of  kEUR  24  839  resulting  from  the  high  number  of  new  contracts 
signed and advances paid out; 

  Cash  and  cash  equivalents:  a  decrease  of  kEUR  26  017  is  mainly  caused  by  the  increased 

payments of pre-financing, highlighted above; 

  Outstanding commitments not yet expensed: an increase from kEUR 25 310 to 54 645 kEUR due 

to the new contracts.  

50 

 
 
Annual Accounts of the European Development Fund 2018 

BALANCE SHEET 

NON-CURRENT ASSETS 
Pre-financing 

CURRENT ASSETS 
Pre-financing 
Exchange receivables and non-exchange recoverables 
Cash and cash equivalents  

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Financial liabilities 

CURRENT LIABILITIES 
Payables 
Accrued charges and deferred revenue 

TOTAL LIABILITIES 

NET ASSETS 

FUNDS & RESERVES 
Accumulated surplus 
Economic result of the year 
NET ASSETS 

31.12.2018 

31.12.2017 

 EUR '000 

 3 443 

 3 443 

 29 546 
 1 138 
 13 926 

 44 611 
 48 054 

 (42 737) 

 (42 737) 

  (918) 
 (4 399) 

 (5 317) 
 (48 054) 

– 

– 
– 
– 

  686 

  686 

 7 465 
  877 
 39 943 

 48 285 
 48 971 

 (44 720) 

 (44 720) 

  (716) 
 (3 536) 

 (4 252) 
 (48 971) 

– 

– 
– 
– 

51 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

STATEMENT OF FINANCIAL PERFORMANCE 

REVENUE 
Revenue from non-exchange transactions 
Revenue from donations 

Revenue from exchange transactions 
Financial revenue 

Total Revenue 

EXPENSES 
Operating expenses 
Other expenses 

Total Expenses 
ECONOMIC RESULT OF THE YEAR 

2018 

EUR '000 

2017 

 33 682 
 33 682 

 29 620 
 29 620 

  1 
  1 

  1 
  1 

 33 683 

 29 621 

 (32 825) 
  (858) 

 (33 683) 
– 

 (28 918) 
  (703) 

 (29 621) 
– 

52 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

CASHFLOW STATEMENT 

Economic result of the year 
Operating activities 
(Increase)/decrease in pre-financing 
(Increase)/decrease in exchange receivables and non-
exchange recoverables 
Increase/(decrease) in financial liabilities 
Increase/(decrease) in payables 
Increase/(decrease) in accrued charges and deferred 
revenue 

NET CASHFLOW 

Net increase/(decrease) in cash and cash equivalents 
Cash and cash equivalents at the beginning of the year 
Cash and cash equivalents at year-end 

2018 
– 

(24 839) 
 (261) 

(1 982) 
 202 
 863 

EUR '000 
2017 
– 

7 912 
 578 

(14 620) 
  716 
2 321 

(26 017) 

(3 092) 

(26 017) 
 39 943 
 13 926 

(3 092) 
 43 036 
 39 943 

53 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

STATEMENT OF CHANGES IN NET ASSETS 

Accumulated surplus/ 
(deficit) 

Economic result of 
the year 

BALANCE AS AT 31.12.2017 
Economic result of the year 
BALANCE AS AT 31.12.2018 

– 
– 
– 

– 
– 
– 

EUR '000 

Net assets 

– 
– 
– 

54 

 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

FINAL ANNUAL ACCOUNTS OF THE EUTF 
AFRICA 2018 

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

55 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

BACKGROUND INFORMATION ON THE EUTF FOR AFRICA 

General background on Union Trust Funds 

In accordance with Articles 234 and  235  of  the Financial  Regulation applicable to the general budget  of 
the  Union  (EU  FR)6  and  Article  35  of  the  Financial  Regulation  applicable  to  the  11th  European 
Development  Fund  (EDF  FR)7,  the  European  Commission  may  establish  Union  trust  funds  for  external 
actions (‘Union trust funds’).  The Union trust funds are constituted under an agreement concluded with 
other  donors  for  emergency  and  post-emergency  actions  necessary  to  react  to  a  crisis,  or  for  thematic 
actions.  

Union  trust  funds  are  established  by  the  European  Commission  with  a  decission  after  consulting  or 
approval of the European Parliament and the Council. This decission includes the constitutive agreement 
with other donors. 

Union trust funds are only established and implemented subject to the following conditions: 

• 

• 

• 

• 

there  is  added  value  of  the  Union  intervention:  the  objectives  of  Union  trust  funds,  in 
particular by reason of their scale or potential effects, may be better achieved at Union level 
than at national level and the use of the existing financing instruments would not be sufficient 
to achieve policy objectives of the Union; 
Union  trust  funds  bring  clear  political  visibility  for  the  Union  and  managerial  advantages  as 
well as better control by the Union of risks and disbursements of the Union and other donors’ 
contributions; 
Union  trust  funds  do  not  duplicate  other  existing  funding  channels  or  similar  instruments 
without providing any additionality; 
the objectives of Union trust funds are aligned with the objectives of the Union instrument or 
budgetary item from which they are funded. 

A  board  chaired  by  the  Commission  is  established  for  each  Union  trust  fund  to  ensure  a  fair 
representation  of  the  donors  and  to  decide  upon  the  use  of  the  funds.  The  board  includes  a 
representative  of  each  non-contributing  Member  State  as  an  observer.  The  rules  for  the  composition of 
the board and its internal rules shall be laid down in the constitutive agreement of the Union trust fund. 

Union  trust  funds  are  established  for  a  limited  duration  as  determined  in  their  constitutive  agreement. 
That duration may be extended upon request of the board of the Union trust fund and upon presentation 
by the Commission of a report justifying the extension. The European Parliament and/or the Council may 
request the Commission to discontinue the appropriations for the Trust Fund or revise the constitutive act 
with a view to liquidate it. 

The accounting officer of the Commission serves as the accounting officer of the Union trust funds. The 
accounting officer is responsible for laying down accounting procedures and chart of accounts common to 
all  Union  trust  funds.  The  Commission’s  internal  auditor,  OLAF  and  the  Court  of  Auditors  exercise  the 
same powers over Union trust funds as they do in respect of other actions carried out by the Commission.  
The Union trust funds are also subject to an independent external audit every year.  

Current EU Trust Funds 

 To date, the Commission has set up four EUTFs: 

     -  The  BÊKOU  EUTF,  whose  objective  is  to  support  all  aspects  of  the  Central  African  Republic's  exit 
from crisis and its reconstruction efforts. Established on 15 July 2014; 

     -  The  MADAD  EUTF,  a  European  Union  Regional  Trust  Fund  in  response  to  the  Syrian  crisis. 
Established on 15 December 2014; 

6 Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial 
rules applicable to the general budget of the Union 
7 Council regulation (EU) 2018/1877 of 26 November 2018 on the financial regulation applicable to the 11th European 
Development Fund, and repealing Regulation (EU) 2015/323 

56 

 
 
                                                 
 
Annual Accounts of the European Development Fund 2018 

     -  The  AFRICA  EUTF;  a  European  Union  Emergency  Trust  Fund  for  stability  and  addressing  root 
causes of irregular migration and displaced persons in Africa. Established on 12 November 2015; 

     - The COLOMBIA EUTF; to support the implementation of the peace agreement in the early recovery 
and stabilisation post conflict. Established on 12 December 2016. 

Further information is available on the websites of individual EUTFs: 

Bekou -  http://ec.europa.eu/europeaid/bekou-trust-fund-introduction_en 

Madad -  http://ec.europa.eu/enlargement/neighbourhood/countries/syria/madad/index_en.htm 

Africa -  http://ec.europa.eu/europeaid/regions/africa/eu-emergency-trust-fund-africa_en 

Colombia - http://ec.europa.eu/europeaid/eu-trust-fund-colombia_en 

The EUTF for Africa 

European Union Emergency Trust Fund for stability and addressing root causes of irregular migration and 
displaced  persons  in  Africa  ('EUTF  Africa')  was  launched  on  12  November  2015  during  the  Valletta 
Summit  on  Migration.  The  main  objectives  of  this  trust  fund  is  to  support  all  aspects  of  stability  and 
contribute  to  better  migration  management  as  well  as  addressing  the  root  causes  of  destabilisation, 
forced  displacement  and  irregular  migration,  in  particular  by  promoting  resilience,  economic  and  equal 
opportunities, security and development and addressing human rights abuses.  

The  trust  fund  operates  in  three  main  geographic  areas,  namely  the  Sahel  region  and  Lake  Chad  area, 
the  Horn  of  Africa  and  the  North  of  Africa  but  also  the  neighbouring  countries  of  the  eligible  countries 
may benefit, on a case by case basis, from the Trust fund's projects. The Trust Fund is established for a 
limited  period,  until  31  December  2020  in  order  to  provide  a  short  and  medium-term  response  to  the 
challenges of the regions. The trust fund is managed from Brussels. 

The Trust Fund Board and the Operational Committee of the EUTF Africa are composed of representatives 
of the donors and of the Commission, as well as representatives of non-contributing EU Member States, 
authorities of eligible countries' and regional organisations as observers.  

The Board establishes and reviews the strategy of the EUTF. The Board shall meet at least once a year. 

The  Operational  Committee  examines,  approves  and  supervises  the  implementation  of  the  actions 
financed by the Fund. The Committee also approves the annual accounts and the annual reports on the 
activities financed by the Trust Fund. 

Annual accounts of the EUTF for Africa 

According  to  Article  7  of  'The  agreement  establishing  the  European  Union  emergency  trust  fund  for 
stability and addressing root causes of irregular migration and displaced persons in Africa and its internal 
rules' ('Constitutive agreement') the annual accounts comprise two parts: (1) The annual financial report 
which is the responsibility of the EUTF manager and (2) The annual financial statements prepared by the 
EC Accounting Officer, who is, based on the same article, also the Accounting Officer of the trust fund. 

According  to  Article  8  of  the  Consitutive  agreement  the  financial  statements  shall  be  prepared  in 
accordance  with  the  accounting  rules  adopted  by  the  Commission's  Accounting  Officer  (EU  Accounting 
Rules, EAR) that are based on the International Public Sector Accounting Standards (IPSAS).  

The  annual  accounts  are  subject  to  independent  external  audit  and  the  final  annual  accounts  are 
submitted  by  the  EUTF  manager  and  the  Accounting  Officer  to  the  Operational  Committee  for  approval 
(Article 8.3.4(c)). 

57 

 
 
 
 
Annual Accounts of the European Development Fund 2018 

Highlights of the year 

As  of  31  December  2018,  resources  pledged  to  the  EUTF  Africa  amounted  to  approximately  EUR  4.2 
billion. This includes around EUR 3.7 billion from the European Development Fund (EDF) and EU financial 
instruments  including  the  Development  Cooperation  Instrument  (DCI),  the  European  Neighbourhood 
Instrument (ENI), the Asylum, Migration and Integration Fund (AMIF) and funding from the Directorate-
General for European Civil Protection and Humanitarian Aid Operations (DG ECHO), as well as EUR 489.5 
million from EU Member States and other donors (Switzerland and Norway). 

In the course of  2018,  the overall  resources of  the EUTF Africa increased  by  EUR  902  million, including 
new  pledges  of  EUR  674  million  from  the  EDF  and  EUR  117  million  from  EU  Budget.  The  EUTF  Africa 
received 24 new pledges from EU Member States and other donors amounting to  EUR 110 million (EUR 
49 million to the Sahel and Lake Chad window, EUR 47 million to the North of Africa window and EUR 14 
million to the Horn of Africa window). All pledges from EU Member States and other donors made in 2018 
plus an outstanding pledge of 2017 were certified by the end of 2018. The conclusions of the European 
Council of 28 June 2018 called on the EU and its Member States to provide additional funding to the EUTF 
Africa. As a follow-up, the Commission adopted on 6 July a decision to transfer EUR 500 million from the 
11th EDF reserve.  

With regards the state of implementation of the EUTF Africa in the year 2018, 45 new programmes were 
adopted  as  well  as  13  top-ups  across  the  three  regions  including  cross-window  programmes  (16  in  the 
Sahel/Lake Chad, 26 in the Horn of Africa and 9 in the North of Africa and 7 cross-window). This brings, 
as of the end of 2018, the total number of programmes approved by Operational committees to 187 for a 
total  of  EUR  3 590  million.  As  of  the  end  of  2018,  contracts  signed  with  implementing  partners  have 
reached  366,  for  an  overall  amount  of  EUR  2 461  million,  of  which  949.3  million  in  new  operational 
contracts  for  2018  only.  Modifications  to  old  contracts  bring  the  total  operational  contracted  amount  in 
2018  to  959.9  million.  The  contracting  rate  as  of  the  end  of  2018  has  improved  compared  to  the 
contracting  rate  as  of  the  end  of  2017  (69%  of  signed  contracts  over  approved  funding  as  opposed  to 
62.9%). 

In  the  course  of  2018,  the  EUTF  Africa  has  further  intensified  its  efforts  together  with  its  African  and 
European partners, to foster stability and contribute to improved migration management in the Sahel and 
Lake Chad, the Horn of Africa and the North of Africa regions. It continued addressing the root causes of 
destabilization,  forced  displacement  and  irregular  migration,  by  promoting  development  and  security. 
During its third year, the EUTF Africa has further demonstrated  its added-value as a swift  and  effective 
implementation  tool  which  facilitates  political  dialogue  with  partner  countries,  applies  innovative 
approaches  and  produces  concrete  results  by  pooling  together  funding  and  expertise  from  a  variety  of 
stakeholders.  

Through  the  EUTF  Africa,  over  5.3  million  vulnerable  people  benefitted  from  basic  services  and  food 
security  and  nutrition  programmes.  Over  150 000  people  were  reached  by  information  campaigns  on 
resilience-building  practices  and  basic  rights  and  96  000  migrants,  or  potential  migrants,  were  reached 
out  by  information  campaign  on  migration  and  risks  linked  to  irregular  migration.  Through  the  EU-IOM 
Initiative, the EUTF Africa has supported 42 628 vulnerable migrants voluntary returns mostly from Libya 
(18 329)  and  Niger  (17 226),  and  more  than  58 000  vulnerable  migrants  were  assisted  upon  return  to 
their country of origin. Through the Better Migration Management programme in the Horn of Africa alone, 
the  EUTF  Africa  has  already  assisted  almost  11  000  migrants  and  forcibly  displaced  people  and  has 
trained nearly 1 600 persons on migration management. 

In the financial statements, the impact of this increased activity and new contracts is most visible when 
looking at: 

 
 

 

Pre-financing: increased by kEUR 57 110 as advances on the new contracts were paid out; 
Payables and accrued charges: increased by kEUR 81 753 as more cost claims are processed but 
also more expenses must be accrued for; 
Expenses: increased from kEUR 279 299 in 2017 to kEUR 576 808 in 2018 as the Trust Fund is in 
its third year of existence and many more contracts are being implemented; 

  Outstanding  commitments  not  yet  expensed  increased  from  kEUR  926  139  to  kEUR 1  310  069 

due to the new contracts.  

58 

 
 
Annual Accounts of the European Development Fund 2018 

BALANCE SHEET 

NON-CURRENT ASSETS 
Pre-financing 

CURRENT ASSETS 
Pre-financing 
Exchange receivables and non-exchange recoverables 
Cash and cash equivalents  

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Financial liabilities 

CURRENT LIABILITIES 
Payables 
Accrued charges and deferred revenue 

TOTAL LIABILITIES 

NET ASSETS 

FUNDS & RESERVES 
Accumulated surplus 
Economic result of the year 
NET ASSETS 

31.12.2018 

31.12.2017 

 EUR '000 

 34 144 

 34 144 

 273 214 
 16 656 
 146 864 

 436 734 
 470 878 

 52 990 

 52 990 

 197 258 
 3 020 
 162 571 

 362 849 
 415 838 

 (369 999) 

 (396 713) 

 (369 999) 

 (396 713) 

 (12 733) 
 (88 146) 

 (100 879) 
 (470 878) 

  (526) 
 (18 600) 

 (19 126) 
 (415 838) 

– 

– 
– 
– 

– 

– 
– 
– 

59 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

STATEMENT OF FINANCIAL PERFORMANCE 

REVENUE 
Revenue from non-exchange transactions 
Revenue from donations 

Revenue from exchange transactions 
Financial revenue 
Other exchange revenue 

Total revenue 

EXPENSES 
Operating expenses 
Other expenses 

Total expenses 

ECONOMIC RESULT OF THE YEAR 

2018 

EUR '000 

2017 

 576 802 
 576 802 

 279 027 
 279 027 

  2 
  5 

  6 

  2 
  270 

  271 

 576 808 

 279 299 

 (561 761) 
 (15 047) 

 (271 669) 
 (7 630) 

 (576 808) 

 (279 299) 

– 

– 

60 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

CASHFLOW STATEMENT 

Economic result of the year 
Operating activities 
(Increase)/decrease in pre-financing 
(Increase)/decrease in exchange receivables and non-
exchange recoverables 
Increase/(decrease) in financial liabilities 
Increase/(decrease) in payables 
Increase/(decrease) in accrued charges and deferred 
revenue 

NET CASHFLOW 

Net increase/(decrease) in cash and cash equivalents 
Cash and cash equivalents at the beginning of the year 
Cash and cash equivalents at year-end 

2018 
– 

(57 110) 
(13 636) 

(26 713) 
12 207 
69 546 

EUR '000 
2017 
– 

(134 662) 
6 456 

258 211 
 (177) 
17 864 

(15 706) 

147 691 

(15 706) 
 162 571 
 146 864 

147 691 
 14 879 
 162 571 

61 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

STATEMENT OF CHANGES IN NET ASSETS 

Accumulated surplus/ 
(deficit) 

Economic result of 
the year 

BALANCE AS AT 31.12.2017 
Economic result of the year 
BALANCE AS AT 31.12.2018 

– 
– 
– 

– 
– 
– 

EUR '000 

Net assets 

– 
– 
– 

62 

 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

CONSOLIDATED FINANCIAL STATEMENTS 
OF THE EDF AND THE EU TRUST FUNDS 

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. 

63 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

CONSOLIDATED BALANCE SHEET 

NON-CURRENT ASSETS 
Pre-financing 

CURRENT ASSETS 
Pre-financing 
Exchange receivables and non-exchange recoverables 
Cash and cash equivalents  

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Provisions 
Financial liabilities 

CURRENT LIABILITIES 
Payables 
Accrued charges and deferred income 

TOTAL LIABILITIES 

NET ASSETS 

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

31.12.2018 

 EUR millions 
31.12.2017 

 924 
 924 

1 751 
 156 
 548 
2 455 
3 379 

– 
 (229) 
 (229) 

 (255) 
(1 374) 
(1 629) 
(1 858) 

 636 
 636 

1 723 
 96 
 550 
2 369 
3 005 

 (4) 
 (292) 
 (296) 

 (564) 
 (755) 
(1 319) 
(1 615) 

1 521 

1 389 

50 423 
2 252 
(47 037) 
(4 118) 
1 521 

46 173 
2 252 
(43 219) 
(3 818) 
1 389 

64 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE 

REVENUE 
Revenue from non-exchange transactions 
Recovery activities 
Revenue from trust funds donations 

Revenue from exchange transactions 
Financial revenue 
Other revenue 

Total Revenue 
EXPENSES 
Aid instruments 
Expenses implemented by trust funds 
Co-financing expenses 
Finance costs 
Other expenses 
Total Expenses 

2018 

 4 
 303 
 307 

 10 
 46 
 57 
 364 

(3 747) 
 (595) 
 17 
 7 
 (164) 
(4 482) 

EUR millions 
2017 

 61 
 194 
 255 

 4 
 22 
 26 
 281 

(3 585) 
 (301) 
 (42) 
 (8) 
 (162) 
(4 099) 

ECONOMIC RESULT OF THE YEAR 

(4 118) 

(3 818) 

65 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

CONSOLIDATED CASH FLOW STATEMENT 

Economic result of the year 
Operating activities 
Capital increase - contributions 
(Increase)/decrease in trust funds contributions 
(Increase)/decrease in pre-financing 
(Increase)/decrease in exchange receivables and non-
exchange recoverables 
Increase/(decrease) in financial liabilities 
Increase/(decrease) in payables 
Increase/(decrease) in accrued charges and deferred 
income 

NET CASHFLOW 

Net increase/(decrease) in cash and cash equivalents 
Cash and cash equivalents at the beginning of the year 
Cash and cash equivalents at year-end 

2018 
 (4 118) 

4 250 
 (0) 
 (317) 
 (60) 

 (63) 
 (309) 
 618 

 (2) 

 (2) 
  550 
  548 

EUR milions 
2017 
 (3 818) 

3 850 
– 
 (446) 
  47 

 186 
 15 
  (22) 

 (188) 

 (188) 
  738 
  550 

66 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS 

  Annual Accounts of the European Development Fund 2018 

Fund capital 
- active EDFs 
(A) 

Uncalled 
funds - 
active EDFs 
(B) 

73 464 

 (200) 
– 
73 264 

31 140 
(4 050) 

– 
27 090 
(4 250) 

73 264 

22 840 

Called fund 
capital - 
active EDFs 
(C) = (A)-
(B) 
42 323 
4 050 
 (200) 
– 
46 173 
4 250 
– 
50 423 

Cumulative 
Reserves (D) 

(43 219) 
– 

(3 818) 
(47 037) 

(4 118) 
(51 155) 

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

– 
2 252 

2 252 

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

1 357 
4 050 
 (200) 
(3 818) 
1 389 
4 250 
(4 118) 
1 521 

BALANCE AS AT 31.12.2016 
Capital increase -  contributions 
Refund to Member States 
Economic result of the year 
BALANCE AS AT 31.12.2017 
Capital increase - contributions 
Economic result of the year 
BALANCE AS AT 31.12.2018 

67 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

EDF REPORT ON FINANCIAL 
IMPLEMENTATION 

68 

 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

INTRODUCTORY NOTE 

1. 

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  and  to  ensure  transparency  in  the  presentation  of  the  accounts,  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. 

In 2018 the Commission launched a special exercise for the closure of the remaining contracts under the 
eighth and ninth EDF. A final report on the financial implementation of the eighth EDF should be available 
by the end of 2019 (and on the ninth EDF by the end of 2020). 

2. 

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 in August 2013, 
entered into force in 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 EUR 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 December 2018 

The  amounts  decommitted  from  projects  under  the  ninth  and  previous  EDFs  are  transferred  to  the 
performance reserve of the 10th EDF, with the exception of Stabex funds. 

The decommited funds from projects under the 10th EDF are transferred to the performance reserve of 
the 11th EDF. 

During 2018, all decommitted funds from previous EDFs were transferred to the respective reserves.  

69 

 
 
 
Annual Accounts of the European Development Fund 2018 

In  accordance  with  article  1.4  of  the  11th  EDF  Internal  Agreement  and  the  Council  Decision  of 
2 August 2016 (2016/1337), an amount of decommitted funds from the 10th EDF has been allocated for 
the  purpose  of  replenishing  the  African  Peace  Facility  for  the  period  2016-2018  up  to  a  maximum  of 
EUR 491 million and up to EUR 16 million for support of expenditure. 

Total available on non-mobilisable performance reserves  

Non-mobilisable reserve from decommitted funds under the eight and ninth 
EDF 

Non-mobilisable reserve from decommitted funds under the 10th EDF  

Total 

EDF Co-financing 

EUR millions 

31.12.2018 

157 

318 

475 

Under  the  10th  and  11th  EDF,  transfer  agreements  for  co-financing  projects  were  signed  and 
commitment  appropriations  were  opened  for  an  amount  of  EUR  241.9  million,  while  payment 
appropriations were opened for the cashed amounts totalling EUR 230.2 million.  

The situation of co-financing appropriations at 31 December 2018 is shown in the table below : 

Co-financing - A Envelope 
Co-financing - Intra ACP 

Co-financing – Administrative expenses 

Commitments 
appropriations 

EUR millions 

Payment appropriations 

211.5 
23.3 
7.1 

241.9 

200.0 
23.2 

7.0 

230.2 

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

70 

 
 
 
 
 
 
 
 
 
 
 
 
 
Table 1.1 

  Annual Accounts of the European Development Fund 2018 

8th EDF 
EVOLUTION OF APPROPRIATIONS:  31 December 2018 
ANALYSIS OF CREDITS PER INSTRUMENT 

INSTRUMENT 

INITIAL APPROPRIATION 

INCREASES/DECREASES IN 
CUMULATIVE  RESOURCES 
AT 31 DECEMBER 2017 

INCREASE OR DECREASE IN 
RESOURCES IN 2018 

Notes 

CURRENT LEVEL 
APPROPRIATION 

Lomé 

Regular MS Contributions 

       Aid for refugees 

       Emergency aid (Lomé) 

       Heavily indebted poor countries (Lomé) 

       Interest-rate subsidies 

       Risk capital 

       Stabex 

       Structural adjustment 

ACP  

       Sysmin 

       Total indicative programmes 

       Utilisation of interest income 

Cotonou 

Regular MS Contributions 

       A Envelope - National Allocations 

       B Envelope - National Allocations 

       Interests and other receipts 

ACP  

SUB TOTAL ACP  

Lomé 

Regular MS Contributions 

       Interest-rate subsidies 

       Risk capital 

OCT 

       Stabex 

       Sysmin 

       Total indicative programmes 

OCT 

SUB TOTAL OCT 

TOTAL 8th EDF 

12,967 

120 

140 

– 

370 

1,000 

1,800 

1,400 

575 

7,562 

– 

– 

– 

– 

– 

(3,278) 

(20) 

(4) 

1,060 

(301) 

15 

(1,077) 

97 

(474) 

(2,608) 

35 

650 

417 

233 

– 

(7) 

– 

(1) 

(3) 

(1) 

(3) 

(1) 

12,967 

(2,628) 

(7) 

– 

– 

– 

– 

– 

– 

– 

46 

1 

6 

1 

2 

35 

46 

12,967 

(2,582) 

(7)   

(1) 

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

71 

9,683 

1,060 

100  R
e
136 
g
u
l
a
r 
M
S

723 

69 

1,012 

1,497 

35 

101 

4,951 

C
o
n
t
r
i
b
650 
u
417  R
t
e
i
233 
g
o
u
n
l
s 
a
10,333   
r 
M
S

– 

2 

1 

35 

46 
C
o
1  R
n
e
6 
t
g
r
u
i
l
b
a
u
r 
t
M
i
S
46   
o
n
C
s 
o
10,379   
n
t
r
i
b
u
t
i
o
n
s 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
Table 1.2 

  Annual Accounts of the European Development Fund 2018 

9th EDF 
EVOLUTION OF APPROPRIATIONS:  31 December 2018 
ANALYSIS OF CREDITS PER INSTRUMENT 

INSTRUMENT 

INITIAL APPROPRIATION 

INCREASES/DECREASES IN 
CUMULATIVE  RESOURCES AT 
31 DECEMBER 2017 

INCREASE OR DECREASE IN 
RESOURCES IN 2018 

Notes 

CURRENT LEVEL 
APPROPRIATION 

(EUR million) 

Lomé 
Regular MS Contributions 
       Transfers from 6th EDF - Lomé 
       Transfers from 7th EDF - Lomé 
Cotonou 
Regular MS Contributions 
       A Envelope - National Allocations 
       B Envelope - National Allocations 
       CDE, CTA and Parliamentary Assembly 
       Implementation costs 
       Interests and other receipts 
       Other Intra-ACP allocations 
       Peace facility 
       Regional allocations 
       Special allocation R.D. Congo 
       Special allocation South Sudan 
       Special allocation Sudan 
       Voluntary contribution Peace facility 

SUB TOTAL ACP  
Lomé 
Regular MS Contributions 
       Transfers from 6th EDF - Lomé 
       Transfers from 7th EDF - Lomé 
Cotonou 
Regular MS Contributions 
       A Envelope - National Allocations 
       B Envelope - National Allocations 
       Regional allocations 
       Studies / Technical assistance OCT 

ACP  

ACP  

OCT 

OCT 

SUB TOTAL OCT 

TOTAL 9th EDF 

– 
– 
– 

8,919 
5,318 
2,108 
164 
125 
– 
300 
– 
904 
– 
– 
– 
– 

8,919 

– 
– 
– 

– 
– 
– 
– 
– 

– 

8,919 

669 
20 
649 

5,549 
3,306 
(898) 
(10) 
52 
63 
2,302 
354 
(139) 
105 
267 
110 
39 

6,219 

3 
– 
3 

289 
237 
4 
47 
1 

292 

6,511 

(1) 
(1) 

(1) 
(1) 

(1) 
(1) 
(1) 

(3) 
(2) 

(2) 
– 
(2) 

(36) 
(16) 
(2) 

(13) 
– 
(5) 

(38) 

(2) 
– 

(2) 

(1) 

(1) 

(2)   

(40)   

(1) 

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

(2) 

(3) 

Following Council Decision 2010/406/EU, 150 million was added from non-mobilisable performance reserve 10th EDF for Sudan (147 million to special allocation Sudan 
and 3 million to implementation costs) 
Following Council Decision 2011/315/EU, 200 million was added from non-mobilisable performance reserve 10th EDF for Sudan (194 million to special allocation South 
Sudan and 6 million to implementation costs) 

72 

668 

647 

14,433 

20  R
e
g
u
l
8,608  R
a
e
1,208 
r
g
154 
u
177 
M
l
63 
S
a
2,589 
r
353 
C
759 
o
M
105 
n
S
267 
t
110 
r
C
39 
i
o
b
n
15,100   
u
t
t
r
i
i
3 
o
b
–  R
n
u
e
3 
s 
t
g
i
u
287 
o
l
237  R
n
a
e
4 
s 
r
g
45 
u
1 
M
l
S
a
290   
r
C
o
M
15,390   
n
S
t
r
C
i
o
b
n
u
t
t
r
i
i
o
b
n
u
s 
t
i
o
n
s 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
Table 1.3 

  Annual Accounts of the European Development Fund 2018 

10th EDF 
EVOLUTION OF APPROPRIATIONS:  31 December 2018 
ANALYSIS OF CREDITS PER INSTRUMENT 

INSTRUMENT 

INITIAL APPROPRIATION 

INCREASES/DECREASES IN 
CUMULATIVE  RESOURCES AT 
31 DECEMBER 2017 

INCREASE OR DECREASE IN 
RESOURCES IN 2018 

Notes 

CURRENT LEVEL 
APPROPRIATION 

Regular MS Contributions 
       A Envelope - National Allocations 
       A Envelope reserve 
       B Envelope - National Allocations 
       B Envelope reserve 
       Implementation costs 
       Institutional and support expenditure 
       Interests and other receipts 
       Intra-ACP Reserve 
       National allocations Reserve A Envelope STABEX 
       NIP/RIP reserve 
       Non-mobilisable reserve 
       Other Intra-ACP allocations 
       Peace facility 
       Regional allocations 
       Regional allocations reserve 
Co-financing 
       A Envelope - National Allocations 
       Implementation costs 
       Other Intra-ACP allocations 
       Peace facility 

ACP  

ACP  

SUB TOTAL ACP  

Regular MS Contributions 
       A Envelope - National Allocations 
       A Envelope reserve 
       B Envelope - National Allocations 
       B Envelope reserve 
       National allocations Reserve A Envelope STABEX 
       Non-mobilisable reserve 
       Regional allocations 
       Regional allocations reserve 
       Studies / Technical assistance OCT 

SUB TOTAL OCT 

TOTAL 10th EDF 

OCT 

OCT 

(1) 

20,896 
– 
13,500 
– 
1,800 
430 
– 
– 
2,700 
– 
683 
– 
– 
– 
– 
1,783 
– 
– 
– 
– 
– 

20,896 

– 
– 
– 
– 
– 
– 
– 
– 
– 
– 

– 

20,896 

(87) 
13,100 
(13,500) 
2,004 
(1,800) 
15 
232 
85 
(2,700) 
– 
(683) 
86 
1,886 
1,014 
1,956 
(1,783) 
204 
187 
5 
12 
1 

117 

275 
192 
– 
15 
– 
– 
23 
40 
– 
5 

275 

392 

(65) 
(177) 

(4) 

– 
(1) 
(1) 

45 
(18) 
105 
(14) 

– 
– 
– 

(2) 

(2) 

(2) 
(2) 
(2) 

(2) 
(2) 

(2) 

(3) 
(3) 
(3) 
(3) 

(65)   

– 
(2) 

(2) 

2 

(2) 

–   

(65)   

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). 

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

(3)  For the cofinancings, the table only presents  the commitment appropriations 

73 

M
S

20,744 
12,922  R
e
g
u
l
a
r

– 
2,000 
– 
445 
230 
85 
– 
– 
– 
131 
1,868 
1,119 
C
1,942 
o
– 
n
204 
t
187  C
r
o
5 
i
-
12 
b
1 
f
u
i
t
20,948   
n
i
a
o
n
275 
n
c
190  R
s 
i
e
– 
n
g
15 
g 
– 
u
– 
l
25 
a
40 
r
– 
5 

M
S
275   

C
21,223   
o
n
t
r
i
b
u
t
i
o
n
s 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
Table 1.4 

  Annual Accounts of the European Development Fund 2018 

11th EDF 
EVOLUTION OF APPROPRIATIONS:  31 December 2018 
ANALYSIS OF CREDITS PER INSTRUMENT 

INSTRUMENT 

INITIAL APPROPRIATION 

INCREASES/DECREASES IN 
CUMULATIVE  RESOURCES 
AT 31 DECEMBER 2017 

INCREASE OR DECREASE IN 
RESOURCES IN 2018 

Notes 

CURRENT LEVEL 
APPROPRIATION 

(EUR million) 

Regular MS Contributions 
       A Envelope - National Allocations 
       B Envelope - National Allocations 
       B Envelope reserve 
       Implementation costs 
       Institutional and support expenditure 
       Interests and other receipts 
       Intra-ACP Reserve 
       National allocations Reserve A Envelope STABEX 
       NIP/RIP reserve 
       Non-mobilisable reserve 
       Other Intra-ACP allocations 
       Peace facility 
       Regional allocations 
Co-financing 
       A Envelope - National Allocations 
       Implementation costs 
       Peace facility 
       Regional allocations 
EC Internal SLA 
       A Envelope - National Allocations 

ACP  

ACP  

SUB TOTAL ACP  

Regular MS Contributions 
       A Envelope - National Allocations 
       B Envelope - National Allocations 
       NIP/RIP reserve 
       Non-mobilisable reserve 
       Regional allocations 
       Studies / Technical assistance OCT 
Co-financing 
       A Envelope - National Allocations 
EC Internal SLA 
       A Envelope - National Allocations 

OCT 

OCT 

SUB TOTAL OCT 

Regular MS Contributions 
       A Envelope - National Allocations 
       B Envelope - National Allocations 

SUB TOTAL  

TOTAL 11th EDF 

29,008 
– 
– 
– 
1,053 
– 
– 
3,590 
– 
24,365 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 

224 
15,540 
715 
– 
– 
246 
16 
(3,497) 
– 
(22,014) 
201 
2,251 
1,000 
5,766 
24 
22 
1 
1 
– 
1 
1 

29,008 

249   

– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 

– 

– 
– 
– 

– 

29,008 

358 
183 
– 
165 
5 
1 
5 
– 
– 
– 
– 

358   

6 
6 
– 

6   

614 

(1) 

(1) 

110 
(121) 
2 

– 
(24) 

(1,080) 
110 
449 

775 
13 
1 
1 
10 
2 

(9) 
13 
8 
(116) 
2 
80 
4 

11 
4 
7 

126   

(1) 

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

74 

29,342 
15,419  R
e
717 
g
– 
u
1,053 
l
246 
a
16 
r 
69 
M
– 
S
1,270 
311 
C
2,700 
o
1,000 
n
6,541 
t
38 
ri
23  C
b
o
2 
u
-
11 
ti
fi
2 
o
n
n
1 
a
s 
1  E
n
C
29,381   
c
i
I
350 
n
n
196  R
g 
t
e
8 
e
g
49 
r
u
7 
n
l
81 
a
a
9 
l 
r 
– 
S
M
–  C
L
S
o
– 
A 
-
–  E
C
fi
C
o
350   
n
n
a
I
17 
t
n
n
10  R
ri
c
t
e
7 
b
i
e
g
u
17   
n
r
u
ti
g 
n
l
o
29,747   
a
a
n
l 
r 
s 
S
M
L
S
A 
C
o
n
t
ri
b
u
ti
o
n

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

Table 2.1 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2018 
PROGRESS REPORT 

                                      ALLOCATION 

8 

9 

EDF 
10 

11 

TOTAL 

(EUR million) 

L
o
m
é 

C
o
t
o
n
o
u 

Sundry Income 

Total indicative programmes 

Total Non-Programmable Aid 

Transfers from other funds 
SUB TOTAL: REGULAR MS CONTRIBUTIONS 

A Envelope - National Allocations 

B Envelope - National Allocations 

Bridging facility 

CDE, CTA and Parliamentary Assembly 

Country reserve 

35 

4,986 

4,707 

9,728 

417 

233 

Implementation Costs and Interests Revenues 

– 

Intra-ACP allocations 

Intra-ACP Reserve 

National allocations Reserve A Envelope STABEX 

NIP/RIP reserve 

Non-mobilisable reserve 

Regional allocations 

Regional allocations reserve 
Special allocation R.D. Congo 

Special allocation South Sudan 

Special allocation Sudan 

Voluntary contribution Peace facility 
SUB TOTAL: REGULAR MS CONTRIBUTIONS 

650 

A Envelope - National Allocations 
SUB TOTAL: EC INTERNAL SLA 

A Envelope - National Allocations 

Implementation Costs and Interests Revenues 

Intra-ACP allocations 

Regional allocations 
SUB TOTAL: CO-FINANCING 

671 
671 

8,845 

1,213 

154 

240 

2,942 

804 

105 

267 

110 

39 
14,719 

35 

4,986 

4,707 

671 
10,399 

38,000 

4,193 
– 
154 
– 
1,853 

10,106 

69 
– 
1,320 

475 

9,408 
– 
105 

267 

110 

39 
66,097 

1 
1 

210 

7 

23 

2 
242 

13,113 

2,015 

– 
535 

3,218 
– 
– 
– 
156 

1,982 
– 

15,625 

732 
– 

– 
1,077 

3,946 

69 
– 
1,320 

318 

6,622 

21,019 

29,709 

1 
1 

23 

2 

11 

2 
38 

187 

5 

12 

204 

  TOTAL 

10,379 

15,390 

21,223 

29,747 

76,739 

75 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Annual Accounts of the European Development Fund 2018 

Decisions 

Total 
Assigned 
Funds 

Total 

Payments 

Total 

E
DF 
8 

9 

10 

11 

E
DF 
8 

9 

10 

11 

E
DF 
8 

9 

10 

11 

Aggregate Total 

At 31/12/2018 

% of allocation 

Cummulative 
Figures 
2008 

Annual Figures 
2009 

Annual Figures 
2010 

Annual Figures 
2011 

Annual Figures 
2012 

Annual Figures 
2013 

Annual Figures 
2014 

Annual Figures 
2015 

Annual Figures 
2016 

Annual Figures 
2017 

Annual Figures 
2018 

10,377 

15,357 

20,905 

100% 

100% 

99% 

23,359 
69,998 
Aggregate Total 

79% 

At 31/12/2018 

% of allocation 

10,375 

15,305 

20,361 

100% 

99% 

96% 

18,140 
64,182 
Aggregate Total 

61% 

At 31/12/2018 

% of allocation 

10,375 

15,187 

18,829 

9,175 
53,566 

100% 

99% 

89% 

31% 

10,786 

16,633 

4,766 

32,185 

(42) 

(54) 

3,501 

3,405 

(45) 

(116) 

2,349 

2,187 

(60) 

(9) 

3,118 

3,049 

(64) 

(297) 

3,524 

3,163 

(98) 

(72) 

4,131 

3,961 

(63) 

(381) 

(95) 

1,160 
621 

(12) 

(170) 

(156) 

5,372 
5,034 

(13) 

(104) 

(80) 

6,688 
6,491 

(9) 

(38) 

(5) 

5,807 
5,754 

(4) 

(33) 

(147) 

4,332 
4,147 

Cummulative 
Figures 
2008 

Annual Figures 
2009 

Annual Figures 
2010 

Annual Figures 
2011 

Annual Figures 
2012 

Annual Figures 
2013 

Annual Figures 
2014 

Annual Figures 
2015 

Annual Figures 
2016 

Annual Figures 
2017 

Annual Figures 
2018 

10,541 

14,209 

130 

24,881 

(42) 

997 

3,184 

4,140 

8 

476 

2,820 

3,304 

(13) 

9 

2,514 

2,509 

(46) 

(187) 

3,460 

3,226 

(11) 

(96) 

3,457 

3,350 

(37) 

(1) 

2,687 

731 
3,380 

(16) 

(52) 

783 

3,293 
4,008 

(6) 

(46) 

541 

3,745 
4,234 

(3) 

(20) 

550 

5,684 
6,211 

– 
16 

236 

4,687 
4,940 

Cummulative 
Figures 
2008 

Annual Figures 
2009 

Annual Figures 
2010 

Annual Figures 
2011 

Annual Figures 
2012 

Annual Figures 
2013 

Annual Figures 
2014 

Annual Figures 
2015 

Annual Figures 
2016 

Annual Figures 
2017 

Annual Figures 
2018 

9,930 

10,011 

90 

20,031 

152 

1,806 

1,111 

3,069 

158 

1,304 

1,772 

3,233 

90 

906 

1,879 

2,874 

15 

539 

2,655 

3,209 

18 

231 

2,718 

2,967 

16 

145 

2,760 

595 
3,516 

(3) 

43 

2,024 

1,024 
3,088 

– 
68 

1,466 

1,816 
3,350 

(1) 

111 

1,277 

2,770 
4,158 

– 
23 

1,076 

2,970 
4,069 

* Negative figures represent decommitments 

76 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 2.2 

Lomé 

Cotonou 

Annual Accounts of the European Development Fund 2018 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2018 
CLASS OF AID 

EDF 

(EUR million) 

8 

% 

9 

% 

(1) 

10 

% 

(1) 

11 

% 

(1) 

TOTAL 

Sundry Income 
Appropriations 
Decisions 
Assigned funds 
Payments 
Total indicative programmes 
Appropriations 
Decisions 
Assigned funds 
Payments 
Total Non-Programmable Aid 
Appropriations 
Decisions 
Assigned funds 
Payments 
Transfers from other funds 
Appropriations 
Decisions 
Assigned funds 
Payments 
Regular MS Contributions 

A Envelope - National Allocations 
Appropriations 
Decisions 
Assigned funds 
Payments 
B Envelope - National Allocations 
Appropriations 
Decisions 
Assigned funds 
Payments 
Bridging facility 
Appropriations 
Decisions 
Assigned funds 
Payments 
CDE, CTA and Parliamentary Assembly 
Appropriations 
Decisions 
Assigned funds 
Payments 
Implementation Costs and Interests 
Revenues 
Appropriations 
Decisions 
Assigned funds 
Payments 
Intra-ACP allocations 
Appropriations 
Decisions 
Assigned funds 
Payments 
Regional allocations 
Appropriations 
Decisions 
Assigned funds 
Payments 
Special allocation R.D. Congo 
Appropriations 
Decisions 
Assigned funds 
Payments 
Special allocation South Sudan 
Appropriations 
Decisions 
Assigned funds 
Payments 
Special allocation Sudan 
Appropriations 
Decisions 
Assigned funds 
Payments 
Voluntary contribution Peace facility 
Appropriations 
Decisions 
Assigned funds 
Payments 
Regular MS Contributions 

A Envelope - National Allocations 
Appropriations 
Decisions 
Assigned funds 
Payments 
Implementation Costs and Interests 
Revenues 
Appropriations 
Decisions 
Assigned funds 
Payments 
Intra-ACP allocations 
Appropriations 
Decisions 
Assigned funds 

35 
35  100% 
35  100% 
35  100% 

4,986 
4,986  100% 
4,986  100% 
4,985  100% 

4,707 
4,706  100% 
4,706  100% 
4,706  100% 

417 
417  100% 
417  100% 
417  100% 

233 
233  100% 
99% 
231 
99% 
231 

– 

671 
671  100% 
671  100% 
670  100% 

8,845 
8,837  100% 
8,825  100% 
99% 
8,799 

1,213 
1,213  100% 
1,209  100% 
99% 
1,203 

154 
154  100% 
154  100% 
154  100% 

240 
240  100% 
240  100% 
240  100% 

2,942 
2,940  100% 
2,931  100% 
99% 
2,922 

804 
801  100% 
98% 
789 
96% 
773 

105 
105  100% 
105  100% 
105  100% 

267 
266  100% 
95% 
253 
75% 
200 

110 
107 
105 
97 

39 
24 
24 
24 

97% 
95% 
88% 

62% 
62% 
62% 

13,113 
13,009 
12,663 
11,712 

2,015 
2,010 
1,990 
1,952 

99% 
97% 
89% 

100% 
99% 
97% 

535 
510 
508 
507 

3,218 
3,212 
3,151 
2,916 

1,982 
1,965 
1,855 
1,587 

95% 
95% 
95% 

100% 
98% 
91% 

99% 
94% 
80% 

15,625 
12,822 
9,387 
4,549 

732 
707 
704 
607 

– 

1,077 
715 
658 
613 

3,946 
3,249 
2,391 
1,843 

6,622 
5,840 
4,977 
1,561 

82% 
60% 
29% 

97% 
96% 
83% 

66% 
61% 
57% 

82% 
61% 
47% 

88% 
75% 
24% 

187 
183 
179 
143 

5 
5 
3 
2 

12 
11 
11 

98% 
95% 
76% 

100% 
62% 
40% 

92% 
91% 

23 
20 
20 
1 

2 
1 

11 
2 
2 

89% 
89% 
5% 

70% 

16% 
16% 

77 

% 

(1) 

100% 
100% 
100% 

100% 
100% 
100% 

100% 
100% 
100% 

100% 
100% 
100% 

92% 
82% 
67% 

99% 
99% 
95% 

35 
35 
35 
35 

4,986 
4,986 
4,986 
4,985 

4,707 
4,706 
4,706 
4,706 

671 
671 
671 
670 

38,000 
35,085 
31,292 
25,478 

4,193 
4,162 
4,134 
3,992 

– 

154 
154 
154 
154 

100% 
100% 
100% 

1,853 
1,464 
1,405 
1,359 

10,106 
9,401 
8,473 
7,681 

9,408 
8,605 
7,622 
3,921 

105 
105 
105 
105 

267 
266 
253 
200 

110 
107 
105 
97 

39 
24 
24 
24 

210 
203 
199 
144 

7 
7 
3 
2 

23 
13 
13 

79% 
76% 
73% 

93% 
84% 
76% 

91% 
81% 
42% 

100% 
100% 
100% 

100% 
95% 
75% 

97% 
95% 
88% 

62% 
62% 
62% 

97% 
95% 
69% 

92% 
46% 
29% 

56% 
55% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

Payments 
Regional allocations 
Appropriations 
Decisions 
Assigned funds 
Payments 
Co-financing 

A Envelope - National Allocations 
Appropriations 
Decisions 
Assigned funds 
Payments 
EC Internal SLA 

Appropriations 

Country reserve 

Intra-ACP Reserve 
National allocations Reserve A Envelope 
STABEX 
NIP/RIP reserve 

Cotonou 

Regional allocations reserve 
Mobilisable reserves 

Non-mobilisable reserve 
Non-mobilisable reserve 

Appropriations 

Decisions 

Assigned funds 
Payments 

TOTAL: ALL ALLOCATIONS 

(1) % of appropriations 

11 

89% 

8 

% 

9 

% 

(1) 

10 

% 

(1) 

– 

– 

– 

– 

– 

1 

2 
2 
2 

1 
1 
1 
1 

11 

– 

69 

– 

1,320 

11% 

12 

52% 

100% 
100% 

71% 
71% 
52% 

2 
2 
2 

1 
1 
1 
1 

100% 
100% 

71% 
71% 
52% 

% 

(1) 

TOTAL 

% 

(1) 

– 

69 

– 

1,320 

– 

156 

318 

475 

8 

% 

9 

% 

(1) 

10,379 

15,390 

10,377  100% 

15,357  100% 

10,375  100% 
10,375  100% 

15,305 
15,187 

99% 
99% 

10 

21,223 

20,905 

20,361 
18,829 

% 

(1) 

99% 

96% 
89% 

11 

29,747 

23,359 

18,140 
9,175 

% 

(1) 

79% 

61% 
31% 

TOTAL 

76,739 

69,998 

64,182 
53,566 

% 

(1) 

91% 

84% 
70% 

78 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 2.3 

  Annual Accounts of the European Development Fund 2018 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2018 
CLASS OF AID 
ACP + PTOM - 8 th EDF 

ACP  

Regular MS Contributions 
      Utilisation of interest income 
SUB TOTAL: SUNDRY INCOME 

      Total indicative programmes 
SUB TOTAL: TOTAL INDICATIVE PROGRAMMES 

      Aid for refugees 

      Emergency aid (Lomé) 

Lomé 

      Heavily indebted poor countries (Lomé) 

      Interest-rate subsidies 

      Risk capital 

      Stabex 

      Structural adjustment 

      Sysmin 
SUB TOTAL: TOTAL NON-PROGRAMMABLE AID 

ACP  

Regular MS Contributions 
      A Envelope - National Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS 

      B Envelope - National Allocations 

Cotonou 

      Compensation export earnings 
SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS 

      Interests and other receipts 
SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES 

TOTAL ACP     (A) 

OCT 

Regular MS Contributions 
      Total indicative programmes 
SUB TOTAL: TOTAL INDICATIVE PROGRAMMES 

      Interest-rate subsidies 

Lomé 

      Risk capital 

      Stabex 

      Sysmin 
SUB TOTAL: TOTAL NON-PROGRAMMABLE AID 

TOTAL OCT     

CREDITS 

(1) 

AGGREG. 
(2) 

DECISIONS 
ANNUAL 

ASSIGNED FUNDS 

% 
(2) : (1) 

AGGREG. 
(3) 

ANNUAL 

% 
(3) : (2) 

AGGREG. 
(4) 

PAYMENTS 
ANNUAL 

(EUR million) 

% 
(4) : (3) 

35 
35 

4,951 
4,951 

100 

136 

1,060 

69 

1,012 

723 

1,497 

101 
4,696 

417 
417 

233 
233 

100% 
100% 

100% 
100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 
100% 

100% 
100% 

100% 

(1) 
(1) 

(3) 
– 
– 

(3) 

– 
– 

35 
35 

4,950 
4,950 

100 

136 

1,060 

68 

1,012 

722 

1,497 

101 
4,695 

417 
417 

231 
231 

100% 
100% 

100% 
100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 
100% 

100% 
100% 

99% 
99% 

– 
– 

– 
– 

35 
35 

4,950 
4,950 

100 

136 

1,060 

68 

1,012 

722 

1,497 

101 
4,695 

417 
417 

231 
231 

100%  ACP  
100% 

– 
– 

– 
– 

100% 
100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 
100% 

100% 
100% 

100% 
100% 

35 
35 

4,951 
4,951 

100 

136 

1,060 

69 

1,012 

723 

1,497 

101 
4,697 

417 
417 

233 

233 

– 
– 

10,333 

10,332 

(4) 

100% 

10,330 

– 

100% 

10,329 

– 

100% 

35 
35 

1 

6 

1 

2 
10 

46 

35 
35 

1 

6 

1 

2 
10 

46 

100% 
100% 

100% 

100% 

100% 

100% 
100% 

100% 

35 
35 

1 

6 

1 

2 
10 

46 

100% 
100% 

100% 

100% 

100% 

100% 
100% 

100% 

35 
35 

1 

6 

1 

2 
10 

46 

100%  OCT 
100% 

100% 

100% 

100% 

100% 
100% 

100% 

TOTAL: ACP+OCT    (A+B) 

10,379 

10,377 

(4) 

100% 

10,375 

– 

100% 

10,375 

– 

100% 

79 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 2.4 

Lomé 

Cotonou 

Lomé 

Cotonou 

  Annual Accounts of the European Development Fund 2018 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2018 
CLASS OF AID 
ACP + PTOM - 9 th EDF 

CREDITS 

DECISIONS 

AGGREG.  ANNUAL 

(1) 

(2) 

ASSIGNED FUNDS 

% 
(2) : (1) 

AGGREG.  ANNUAL 

(3) 

% 
(3) : (2) 

PAYMENTS 

AGGREG.  ANNUAL 

(4) 

% 
(4) : (3) 

(EUR million) 

ACP  
Regular MS Contributions 
      Transfers from 6th EDF - Lomé 
      Transfers from 7th EDF - Lomé 
SUB TOTAL: TRANSFERS FROM OTHER FUNDS 
ACP  
Regular MS Contributions 
      A Envelope - National Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS 
      B Envelope - National Allocations 
      Compensation export earnings 
      Emergency aid 
      Heavily indebted poor countries 
SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS 
      CDE, CTA and Parliamentary Assembly 
SUB TOTAL: CDE, CTA AND PARLIAMENTARY ASSEMBLY 
      Implementation costs 
      Interests and other receipts 
SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES 
      Other Intra-ACP allocations 
      Peace facility 
SUB TOTAL: INTRA-ACP ALLOCATIONS 
      Regional allocations 
SUB TOTAL: REGIONAL ALLOCATIONS 
      Special allocation R.D. Congo 
SUB TOTAL: SPECIAL ALLOCATION R.D. CONGO 
      Special allocation South Sudan 
SUB TOTAL: SPECIAL ALLOCATION SOUTH SUDAN 
      Special allocation Sudan 
SUB TOTAL: SPECIAL ALLOCATION SUDAN 
      Voluntary contribution Peace facility 
SUB TOTAL: VOLUNTARY CONTRIBUTION PEACE FACILITY 
TOTAL: ACP     (A) 
OCT 
Regular MS Contributions 
      Transfers from 6th EDF - Lomé 
      Transfers from 7th EDF - Lomé 
SUB TOTAL: TRANSFERS FROM OTHER FUNDS 
OCT 
Regular MS Contributions 
      A Envelope - National Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS 
      B Envelope - National Allocations 
      Emergency aid 
SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS 
      Studies / Technical assistance OCT 
SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES 
      Regional allocations 
SUB TOTAL: REGIONAL ALLOCATIONS 
TOTAL: OCT     
TOTAL: ACP+OCT    (A+B) 

– 
– 
– 

(15) 
(15) 

– 
– 

– 

(1) 

(1) 
(9) 
– 
(9) 
(7) 
(7) 

– 
– 
(1) 
(1) 

(33) 

– 
– 
– 
(33) 

100% 
100% 
100% 

100% 
100% 

100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
97% 
97% 
62% 
62% 
100% 

100% 
100% 
100% 

100% 
100% 

100% 
100% 
100% 
100% 
100% 
100% 
100% 

20 
647 
668 

8,590 
8,590 

148 
1,045 
11 
1,204 
154 
154 
177 
63 
239 
2,577 
353 
2,931 
745 
745 
105 
105 
253 
253 
105 
105 
24 
24 
15,018 

– 
3 
3 

235 
235 

4 
4 
1 
1 
45 
45 
288 
15,305 

100% 
100% 
100% 

100% 
100% 

100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
99% 
99% 
100% 
100% 
95% 
95% 
98% 
98% 
100% 
100% 
100% 

100% 
100% 
100% 

99% 
99% 

100% 
100% 
100% 
100% 
99% 
99% 
99% 
100% 

20 
647 
667 

8,565 
8,565 

148 
1,040 
11 
1,198 
154 
154 
177 
63 
239 
2,568 
353 
2,922 
729 
729 
105 
105 
200 
200 
97 
97 
24 
24 
14,900 

– 
3 
3 

235 
235 

4 
4 
1 
1 
45 
45 
288 
15,187 

(9) 
(9) 

– 
– 

– 

– 

– 
(7) 

(7) 
(2) 
(2) 

35 
35 
– 
– 

17 

– 
– 
– 
16 

100%  ACP  
100% 
100% 

100% 
100% 

100% 
99% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
98% 
98% 
100% 
100% 
79% 
79% 
93% 
93% 
100% 
100% 
99% 

100%  OCT 
100% 
100% 

100% 
100% 

100% 
100% 
100% 
100% 
100% 
100% 
100% 
99% 

(1) 
(1) 

– 

– 

1 

1 
(1) 
(1) 

16 
16 
8 
8 

23 

– 
– 
– 
23 

20 
647 
668 

8,608 
8,608 
1,208 

1,208 
154 
154 
177 
63 
240 
2,589 
353 
2,942 
759 
759 
105 
105 
267 
267 
110 
110 
39 
39 
15,100 

– 
3 
3 

237 
237 
4 

4 
1 
1 
45 
45 
290 
15,390 

20 
647 
668 

8,600 
8,600 

148 
1,049 
11 
1,208 
154 
154 
177 
63 
239 
2,586 
353 
2,940 
756 
756 
105 
105 
266 
266 
107 
107 
24 
24 
15,067 

– 
3 
3 

237 
237 

4 
4 
1 
1 
45 
45 
290 
15,357 

80 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 2.5 

  Annual Accounts of the European Development Fund 2018 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2018 
CLASS OF AID 
ACP + PTOM - 10 th EDF 

CREDITS 

DECISIONS 

AGGREG.  ANNUAL 

(1) 

(2) 

ASSIGNED FUNDS 

% 
(2) : (1) 

AGGREG.  ANNUAL 

(3) 

% 
(3) : (2) 

PAYMENTS 

AGGREG.  ANNUAL 

(4) 

% 
(4) : (3) 

(EUR million) 

Regular MS Contributions 
Allocations 
      A Envelope - National Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS 
      B Envelope - National Allocations 
      Compensation export earnings 
      Emergency aid 
      Heavily indebted poor countries 
      Other chocs with budgetary impact 
SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS 
      Implementation costs 
      Interests and other receipts 
SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES 
      Institutional and support expenditure 
      Other Intra-ACP allocations 
      Peace facility 
SUB TOTAL: INTRA-ACP ALLOCATIONS 
      Regional allocations 
SUB TOTAL: REGIONAL ALLOCATIONS 
Co-financing 
Allocations 
      A Envelope - National Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS 
      Implementation costs 
SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES 
      Other Intra-ACP allocations 
      Peace facility 
SUB TOTAL: INTRA-ACP ALLOCATIONS 
Mobilisable reserves 
Reserves 
      A Envelope reserve 
      B Envelope reserve 
SUB TOTAL: COUNTRY RESERVE 
      Intra-ACP Reserve 
SUB TOTAL: INTRA-ACP RESERVE 
      National allocations Reserve A Envelope STABEX 
SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX 
      NIP/RIP reserve 
SUB TOTAL: NIP/RIP RESERVE 
      Regional allocations reserve 
SUB TOTAL: REGIONAL ALLOCATIONS RESERVE 
Non-mobilisable reserve 
Reserves 
      Non-mobilisable reserve 
SUB TOTAL: NON-MOBILISABLE RESERVE 
Regular MS Contributions 
Allocations 
      A Envelope - National Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS 
      B Envelope - National Allocations 
      Emergency aid 
      Other chocs with budgetary impact 
SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS 
      Studies / Technical assistance OCT 
SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES 
      Regional allocations 
SUB TOTAL: REGIONAL ALLOCATIONS 
Mobilisable reserves 

ACP  

OCT 

12,922 
12,922 
2,000 

2,000 
445 
85 
530 
230 
1,868 
1,119 
3,218 
1,942 
1,942 

187 
187 
5 
5 
12 
1 
12 

– 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 

131 
131 

190 
190 
15 

15 
5 
5 
40 
40 

12,820 
12,820 

(201) 
(201) 

99% 
99% 

12,482 
12,482 

203 
840 
49 
904 
1,995 
436 
68 
504 
229 
1,864 
1,119 
3,212 
1,926 
1,926 

183 
183 
5 
5 
11 
1 
11 

(1) 
(4) 
– 
(1) 
(6) 
4 
– 
4 
(3) 
(18) 
105 
85 
(24) 
(24) 

(1) 
(1) 
1 
1 
(1) 

(1) 

100% 
98% 
80% 
95% 
99% 
100% 
100% 
100% 
99% 
99% 

98% 
98% 
100% 
100% 
92% 
100% 
92% 

200 
831 
49 
896 
1,976 
436 
67 
503 
229 
1,823 
1,099 
3,151 
1,818 
1,818 

179 
179 
3 
3 
10 
1 
11 

5 
5 

2 
(5) 
– 
(1) 
(4) 
5 
– 
5 
(1) 
(4) 
227 
221 
(8) 
(8) 

– 
– 
1 
1 
– 

– 

97% 
97% 

99% 
99% 
100% 
99% 
99% 
100% 
98% 
100% 
100% 
98% 
98% 
98% 
94% 
94% 

97% 
97% 
62% 
62% 
99% 
99% 
99% 

11,568 
11,568 

586 

190 
813 
49 
886 
1,938 
435 
67 
502 
209 
1,683 
1,023 
2,916 
1,555 
1,555 

143 
143 
2 
2 
10 
1 
11 

93% 
586 

8 
23 

4 
34 
6 
– 
6 
(2) 
73 
209 
280 
144 
144 

12 
12 
1 
1 
– 

– 

ACP  

189 
189 

9 
6 
15 
5 
5 
39 
39 

(2) 
(2) 

– 

– 
– 
– 
(1) 
(1) 

99% 
99% 

98% 
100% 
100% 
98% 
98% 

182 
182 

8 
6 
14 
5 
5 
37 
37 

17 
17 

– 

– 
– 
– 
(1) 
(1) 

96% 
96% 

99% 
100% 
99% 
98% 
98% 
95% 
95% 

144 
144 

8 
6 
14 
5 
5 
32 
32 

13 

79% 
13 

OCT 

– 

– 
– 
– 
– 
– 

81 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Annual Accounts of the European Development Fund 2018 

Reserves 
      A Envelope reserve 
      B Envelope reserve 
SUB TOTAL: COUNTRY RESERVE 
      National allocations Reserve A Envelope STABEX 
SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX 
      Regional allocations reserve 
SUB TOTAL: REGIONAL ALLOCATIONS RESERVE 
Non-mobilisable reserve 
Reserves 
      Non-mobilisable reserve 
SUB TOTAL: NON-MOBILISABLE RESERVE 

– 
– 
– 
– 
– 
– 
– 

25 
25 

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

21,223 

20,905 

(147) 

99% 

20,361 

236 

97% 

18,829 

1,076 

92% 

82 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 2.6 

  Annual Accounts of the European Development Fund 2018 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2018 
CLASS OF AID 
ACP + PTOM - 11 th EDF 

CREDITS 

DECISIONS 

AGGREG.  ANNUAL 

(1) 

(2) 

ASSIGNED FUNDS 

% 
(2) : (1) 

AGGREG.  ANNUAL 

(3) 

% 
(3) : (2) 

PAYMENTS 

AGGREG.  ANNUAL 

(4) 

(EUR million) 

% 
(4) : (3) 

Regular MS Contributions 
Allocations 
      A Envelope - National Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS 

      B Envelope - National Allocations 
      Emergency aid 
      Other chocs with budgetary impact 
SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS 

      Bridging facility  
SUB TOTAL: BRIDGING FACILITY 

      Implementation costs 
      Interests and other receipts 
SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES 

      Institutional and support expenditure 
      Other Intra-ACP allocations 
      Peace facility 
SUB TOTAL: INTRA-ACP ALLOCATIONS 

      Regional allocations 
SUB TOTAL: REGIONAL ALLOCATIONS 
Co-financing 
Allocations 
      A Envelope - National Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS 

ACP  

      Implementation costs 
SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES 

      Peace facility 
SUB TOTAL: INTRA-ACP ALLOCATIONS 

      Regional allocations 
SUB TOTAL: REGIONAL ALLOCATIONS 
Mobilisable reserves 
Reserves 
      B Envelope reserve 
SUB TOTAL: COUNTRY RESERVE 

      Intra-ACP Reserve 
SUB TOTAL: INTRA-ACP RESERVE 

      National allocations Reserve A Envelope STABEX 
SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE STABEX 

      NIP/RIP reserve 
SUB TOTAL: NIP/RIP RESERVE 
Non-mobilisable reserve 
Reserves 
      Non-mobilisable reserve 
SUB TOTAL: NON-MOBILISABLE RESERVE 
EC Internal SLA 
Reserves 
      A Envelope - National Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS 

15,419 
15,419 

717 

717 

– 
– 

1,053 
16 
1,069 

246 
2,700 
1,000 
3,946 

6,541 
6,541 

23 
23 

2 
2 

11 
11 

2 
2 

– 
– 

69 
69 

– 
– 

1,270 
1,270 

311 
311 

1 
1 

12,634 
12,634 

1,743 
1,743 

82% 
82% 

592 
109 
701 

700 
10 
710 

133 
2,116 
1,000 
3,249 

5,803 
5,803 

20 
20 

1 
1 

2 
2 

2 
2 

2 

2 

162 
– 
162 

27 
871 
6 
905 

1,381 
1,381 

1 
1 

1 
1 

2 
2 

98% 

67% 
59% 
66% 

54% 
78% 
100% 
82% 

89% 
89% 

89% 
89% 

70% 
70% 

16% 
16% 

100% 
100% 

9,202 
9,202 

589 
109 
698 

646 
7 
653 

98 
1,347 
946 
2,391 

4,940 
4,940 

20 
20 

2 
2 

2 
2 

2,346 
2,346 

10 
– 
10 

157 
1 
157 

7 
537 
61 
604 

1,426 
1,426 

– 
– 

1 
1 

2 
2 

73% 
73% 

99% 
100% 
100% 

92% 
71% 
92% 

74% 
64% 
95% 
74% 

85% 
85% 

100% 
100% 

100% 
100% 

100% 
100% 

4,467 
4,467 

493 
109 
601 

603 
6 
609 

85 
899 
859 
1,843 

1,554 
1,554 

1 
1 

1 
1 

1,536 

49% 
1,536 

50 
80 
130 

148 
– 
148 

16 
408 
54 
478 

610 
610 

1 
1 

ACP  

1 
1 

71% 
71% 

1 
1 

100% 
100% 

1 
1 

83 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Annual Accounts of the European Development Fund 2018 

Regular MS Contributions 
Allocations 
      A Envelope - National Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS 

      B Envelope - National Allocations 
      Emergency aid 
      Other chocs with budgetary impact 
SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS 

      Bridging facility  
SUB TOTAL: BRIDGING FACILITY 

      Studies / Technical assistance OCT 
SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES 

OCT 

      Regional allocations 
SUB TOTAL: REGIONAL ALLOCATIONS 
Co-financing 
Allocations 
      A Envelope - National Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS 
Mobilisable reserves 
Reserves 
      NIP/RIP reserve 
SUB TOTAL: NIP/RIP RESERVE 
Non-mobilisable reserve 
Reserves 
      Non-mobilisable reserve 
SUB TOTAL: NON-MOBILISABLE RESERVE 
EC Internal SLA 
Reserves 
      A Envelope - National Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS 

Regular MS Contributions 
Allocations 
      A Envelope - National Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS 

      B Envelope - National Allocations 
SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS 

196 
196 

8 

8 

– 
– 
9 
9 

81 
81 

– 
– 

49 
49 

7 
7 

– 
– 

10 
10 

7 
7 

183 
183 

3 
3 
6 

5 
5 

37 
37 

92 
92 

3 
3 
6 

– 
– 

37 
37 

93% 
93% 

75% 

60% 
60% 

46% 
46% 

179 
179 

3 
3 
6 

5 
5 

37 
37 

97 
97 

3 
3 
6 

1 
1 

37 
37 

98% 
98% 

100% 
100% 
100% 

90% 
90% 

99% 
99% 

76 
76 

2 
3 
5 

3 
3 

7 
7 

50 

43% 
50 

2 
3 
5 

1 
1 

7 
7 

OCT 

6 
6 

60% 
60% 

6 
6 

– 
– 

98% 
98% 

6 
6 

4 

98% 
4 

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

29,747 

23,359 

4,332 

79% 

18,140 

4,687 

78% 

9,175 

2,970 

51% 

84 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

ANNUAL REPORT ON IMPLEMENTATION - 
FUNDS MANAGED BY THE EUROPEAN 
INVESTMENT BANK 

85 

 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

EUROPEAN INVESTMENT BANK 

CA/521/19 

14 March 2019 

Document 19/092 

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

IN VESTMENT  FAC IL IT Y  

FINANCIAL STATEMENTS 

AS AT 31 DECEMBER 2018 

  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 

86 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Annual Accounts of the European Development Fund 2018 

STATEMENT OF FINANCIAL POSITION 
AS AT 31 DECEMBER 2018 
(In EUR’000) 

Notes 

31.12.2018 

31.12.2017 

ASSETS 

Cash and cash equivalents 

Amounts receivable from contributions 

Treasury financial assets 

Derivative financial instruments 

Loans and advances 

Shares and other variable yield securities 

Other assets 

Total assets 

LIABILITIES AND CONTRIBUTORS' RESOURCES 

LIABILITIES 

Derivative financial instruments 

Deferred income 

Provisions for guarantees issued 

Provisions for loan commitments 

Amount owed to third parties 

Other liabilities 

5 

9/17 

10 

6 

7 

8 

11 

6 

12 

13 

14 

15 

16 

573,708 

100,000 

335,140 

9,873 

1,540,991 

567,292 

171 

549,101 

150,000 

144,382 

12,521 

1,666,725 

497,539 

4,385 

3,127,175 

3,024,653 

8,493 

33,764 

793 

23,822 

143,813 

2,493 

1,153 

25,802 

484 

- 

157,285 

2,462 

Total liabilities 

213,178 

187,186 

CONTRIBUTORS' RESOURCES 

Facility Member States Contribution called 

Fair value reserve (IAS 39) 

Retained earnings 

17 

2,697,000 

2,517,000 

- 

216,997 

125,816 

194,651 

Total contributors' resources 

2,913,997 

2,837,467 

Total liabilities and contributors' resources 

3,127,175 

3,024,653 

87 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Annual Accounts of the European Development Fund 2018 

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME  
FOR THE YEAR ENDED 31 DECEMBER 2018 
(In EUR’000) 

Notes 

From 01.01.2018 

From 01.01.2017 

to 31.12.2018 

to 31.12.2017 

Interest and similar income 

Interest and similar expenses 

Net interest and similar income 

Fee and commission income 

Fee and commission expenses 

Net fee and commission income 

Fair value change of derivative financial instruments  

Net result on shares and other variable yield securities (2017 AFS) 

Net result on loans and advances at FVTPL 

Net foreign exchange loss 

Net result on financial operations 

Change in impairment on loans and advances, net of reversal 

Change in provisions for guarantees 

Change in provisions for loan commitments 

Impairment on available-for-sale financial assets (IAS 39) 

General administrative expenses 

(Loss)/profit for the year 

Other comprehensive income: 

19 

19 

20 

20 

21 

21 

7 

13 

14 

8 

22 

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

Available-for-sale financial assets – Fair value reserve  (IAS 39) 

8 

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

2. Net amount transferred to profit or loss 

Total available-for-sale financial assets 

Total other comprehensive (loss) 

96,730 

-2,539 

101,406 

-2,671 

94,191 

98,735 

284 

-106 

178 

-9,987 

-10,179 

-702 

-32,436 

210 

-60 

150 

29,637 

2,711 

- 

-38,165 

-53,304 

-5,817 

-22,771 

-485 

-19,612 

- 

-47,799 

-10,721 

-65 

- 

-22,024 

-45,105 

-49,602 

15,153 

- 

- 

- 

- 

-31,034 

13,966 

-17,068 

-17,068 

Total comprehensive (loss) for the year 

-49,602 

-1,915 

(1) For the year ended 31 December 2018, interests and similar income include EUR 96.7 million calculated on assets held at amortised 
cost based on effective interest method. 

88 

 
 
  
 
 
 
 
 
 
 
 
 
  
 
 
 
  
 
 
  
 
 
 
  
 
 
 
 
  
 
 
 
  
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Annual Accounts of the European Development Fund 2018 

STATEMENT OF CHANGES IN CONTRIBUTORS’ RESOURCES 
FOR THE YEAR ENDED 31 DECEMBER 2018 
(In EUR’000) 

Contribution 
called 

Fair Value 
Reserve * 

Retained 
earnings * 

Total  

At 1 January 2018 

Notes 

2,517,000 

Member States contribution called during the year 

17 

Loss for the year 2018 

Changes in contributors’ resources 

At 31 December 2018 

At 1 January 2017 

180,000 

- 

180,000 

2,697,000 

- 

- 

- 

- 

- 

266,599 

2,783,599 

- 

180,000 

-49,602 

-49,602 

-49,602 

130,398 

216,997 

2,913,997 

Contribution 
called 

Fair value 
reserve  

Retained 
earnings  

Total  

2,377,000 

142,884 

179,498 

2,699,382 

Member States contribution called during the year 

17 

140,000 

Profit for the year 2017 

Total other comprehensive income for the year* 

- 

- 

- 

- 

- 

140,000 

15,153 

15,153 

-17,068 

- 

-17,068 

Changes in contributors’ resources 

140,000 

-17,068 

15,153 

138,085 

At 31 December 2017 

2,517,000 

125,816 

194,651 

2,837,467 

*As at 31 December 2017, the Facility had classified equity investments as available-for-sale, while from 1 January 2018, with the IFRS 9 
adoption, the Facility has reclassified equity investments to shares and other variable yield securities measured at FVTPL. The related fair 
value  reserve  of  EUR  125,816  thousands  as  at  31  December  2017  has  been  released  against  the  Facility’s  retained  earnings  as  an 
opening balance adjustment (Note 2.5). Additionally, EUR 49,712 thousands representing the ECL impairment recognised for performing, 
Stage 1 and Stage 2 operations of the debt lending portfolio, as well as EUR 4,156 thousands ECL provision for undisbursed exposures of 
performing, Stage 1 and Stage 2 operations of the debt portfolio were included in the Retained earnings 2018 opening balance. For detailed 
reconciliation please refer to note 2.5. 

89 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Annual Accounts of the European Development Fund 2018 

STATEMENT OF CASH FLOWS 
FOR THE YEAR ENDED 31 DECEMBER 2018 
(In EUR’000) 

OPERATING ACTIVITIES 

(Loss)/Profit for the financial year 
Adjustments made for  
Impairment on available-for-sale financial assets (IAS 39) 
Net result in fair value on shares and other variable yield securities 
Change in impairment on loans and advances, net of reversal 

Net result on loans and advances at FVTPL 
Change in accrued interest and amortised cost on loans and advances 
Net change in provisions for guarantees issued 
Net change in provisions for loan commitments 
Change in accrued interest and amortised cost on treasury financial assets 
Change in deferred income 
Effect of exchange rate changes on loans   
Effect of exchange rate changes on shares and other variable yield securities 
Effect of exchange rate changes on cash held  

Loss on operating activities before changes in operating assets and liabilities 
Loan disbursements 
Repayments of loans 
Change in accrued interest on cash and cash equivalents 
Fair value changes on derivatives  
(Decrease) in treasury financial assets 
Maturities of treasury financial assets 
(Decrease) in shares and other variable yield securities 
Repayments/sales of shares and other variable yield securities 
(Increase) in other assets 
(Decrease)/increase in other liabilities 
Increase in amounts payable to the European Investment Bank 

Net cash flows used in/from operating activities 

FINANCING ACTIVITIES 

Notes 

From 
01.01.2018 to 
31.12.2018 

From 
01.01.2017 to 
31.12.2017 

-49,602 

15,153 

8 

7 

7 
13 

10 

7 

7 
7 
5 

10 
10 
8 

- 
20,665 
22,771 
702 
-1,833 
309 
19,666 
-1,645 
7,962 
-44,927 
-17,300 
2,561 

-40,671 
-259,214 
354,855 
-178 
9,987 
-2,219,062 
2,026,659 
-95,434 
32,802 
-4,214 
31 
2,168 

22,024 
- 
10,721 
- 
-1,198 
-141 
- 
-398 
-481 
168,304 
-1,655 
-6,473 

205,856 
-368,662 
253,486 
63 
-29,637 
-1,084,149 
1,109,563 
-62,660 
44,568 
-4,040 
-84 
2,202 

-192,271 

66,506 

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

17 

230,000 
20,000 

76,395 
60,000 

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

Net cash flows from financing activities 

Net increase in cash and cash equivalents 
Summary statement of cash flows: 
Cash and cash equivalents at the beginning of financial year 
Net cash from: 
Operating activities 
Financing activities 
Effects of exchange rate changes on cash and cash equivalents 

Cash and cash equivalents at the end of financial year 
Cash and cash equivalents are composed of: 
Cash in hand  
Term deposits (excluding accrued interest) 
Commercial papers 

-35,641 

-21,026 

214,359 

22,088 

115,369 

181,875 

549,169 

360,821 

-192,271 
214,359 
2,561 

573,818 

51,936 
521,882 
- 

573,818 

66,506 
115,369 
6,473 

549,169 

166,445 
367,721 
15,003 

549,169 

5 
5 
5 

90 

 
 
  
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

Notes to the financial statements as at 31 December 2018 

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 9th European Development Fund (EDF), Second Financial Protocol 
covering the period 2008 - 2013 and referred to as the 10th EDF 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 present financial statements cover the period from 1 January 2018 to 31 December 2018. 

On a proposal from the Management Committee of EIB, the Board of Directors of EIB adopted the Financial Statements on 14 March 2019, 
and authorised their submission to the Board of Governors for approval by 26 April 2019. 

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 value 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 2.4.2 and 4. 

 

Impairment losses on loans and advances 

The  expected  credit  loss  (‘ECL’)  measurement  requires  management  to  apply  significant  judgments,  in  particular,  the  assessment  of  a 
significant  increase  in  credit  risk  since  initial  recognition,  the  incorporation  of  forward  looking  information  and  further  the  estimation  of  the 
amount and timing of future cash flows and collateral values when determining impairment losses. These estimates are driven by a number 
of factors, changes in which can result in significant changes to the timing and amount of allowance for credit loss to be recognized (Note 
2.4.2). 

91 

 
 
 
 
 
 
 
  
  
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

 

Valuation of unquoted equity investments 

Valuation of unquoted 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  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 equity investments (applicable before 1 January 2018) 

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 

IFRS 9 Financial Instruments 

The Facility has adopted IFRS 9 as issued by the IASB in July 2014 with a date of transition of 1st January 2018, which resulted in changes 
in accounting policies and adjustments to the amounts previously recognized in the financial statements. For more details refer to note 2.5. 

As permitted by the transitional provisions of IFRS 9, the Facility elected not to restate comparative periods. Any adjustment to the carrying 
amounts  of  financial  assets  and  liabilities  resulting  from  the  adoption  of  IFRS  9  were  recognized  in  the  reserve  fund  and  the  fair  value 
reserve as of 1st January 2018. Accordingly, the information presented for 2017 under the applicability does not reflect the requirements of 
IFRS 9 and therefore is not comparable to the information presented for 2018 under IFRS 9. 

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.  

The  Facility  adopted  the  standard  using  the  modified  retrospective  approach  which  means  that  the  cumulative  impact  of  the  adoption  is 
recognised in retained earnings as of 1 January 2018 and the comparatives were not restated. 

The application of IFRS 15, did not have a significant impact on the Facility’s financial statements. 

IFRIC 22 Foreign currency transactions and advance consideration 

The Interpretation clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or 
part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction 
is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If 
there are multiple payments or receipts in advance, then the entity must determine the date of the transactions for each payment or receipt of 
advance consideration.  

92 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

This Interpretation adoption had no material impact on the Facility’s financial statements. 

Annual Improvements to IFRSs 2014-2016 Cycle (Amendments to IAS 28) 

Amendments to IAS 28 Investments in Associates and Joint Ventures - Clarification that measuring investees at fair value through profit or 
loss is an investment-by-investment choice 

The amendments clarify that an entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an 
investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. If an entity 
that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, then it may, when applying 
the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment 
entity  associate’s  or  joint  venture’s  interests  in  subsidiaries.  This  election  is  made  separately  for  each  investment  entity  associate  or  joint 
venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognised; (b) the associate or joint 
venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent.  
The Facility does not use have investment in in joint ventures. Therefore, there is no impact on the Facility’s financial statements  

Standards issued but not yet adopted 

IFRS 16 Leases 

IFRS 16 was issued in January 2016 and replaces the current guidance of IAS 17. It will result in almost all leases being recognised on the 
balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the 
leased item) and a financial liability to pay rentals are recognised. The only exemptions are short-term and low-value leases. The accounting 
for lessors will not significantly change.  

IFRS  16  has  been  endorsed  by  the  EU  on  31  October  2017  and  is  effective  for annual  reporting  periods  beginning  on  or  after  1  January 
2019, with early adoption permitted if IFRS 15 is applied.  

The Facility expects that this change will have no material impact on the Facility`s financial statements. 

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 
statement  of  financial  position  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. 

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2.4.2  Financial assets other than derivatives 

Non-derivative financial instruments are initially recognised using the settlement date basis. 

Classification and measurement 

Financial assets - Policy applicable after 1 January 2018 

On initial recognition, a financial asset is classified as measured at amortized cost (“AC”), fair  value through other comprehensive income 
(“FVOCI”) or fair value through P&L (“FVTPL”) and a financial liability is classified as measured at AC or FVTPL. 

Under IFRS 9, classification starts with determining whether the financial asset shall be considered as a debt or equity instrument. IFRS 9 
refers to the definitions in IAS 32 Financial Instruments: Presentation. 

Debt  instruments  are  those  instruments  that  meet  the  definition  of  a  financial  liability  from  the  counterparty’s  perspective,  such  as  loans, 
government and corporate bonds. 

A debt instrument is classified at AC if it meets both of the following conditions and is not designated as at FVTPL: 

- 

- 

the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and 

the  contractual  terms  of  the  financial  asset  give  rise  on  specified  dates  to  cash  flows  that  are  solely  payments  of  principal  and  
interest on the principal amount outstanding (SPPI criteria). 

A debt instrument is classified at FVOCI only if it meets both of the following conditions and is not designated as at FVTPL: 

- 

- 

the  asset  is  held  within  a  business  model  whose  objective  is  achieved  by  both  collecting  contractual  cash  flows  and  selling 
financial assets, and 

the contractual terms of the financial asset give rise on specific dates to cash flows that are fulfilling the SPPI criteria. 

The above requirements should be applied to an entire financial asset, even if it contains an embedded derivative. 

Equity instruments are instruments that meet the definition of equity from the issuer’s perspective; that is, instruments that do not contain a 
contractual obligation to pay and that evidence a residual interest in the issuer’s net assets. Equity instruments are measured at FVTPL. 

On initial recognition of an equity investment that is not held for trading, the Facility may irrevocably elect to present subsequent changes in 
other comprehensive income. This election is made on an investment-by-investment basis.  

All other financial assets are classified as measured at FVTPL.  

Business model assessment 

The EIB, as a manager of the Facility, makes an assessment of the objective of a business model in which a debt instrument is held at a 
portfolio  level  because  this  best  reflects  the  way  the  business  is  managed  and  information  is  provided  to  management.  The  information 
considered includes: 

- 

- 

- 

- 

the  stated  policies  and  objectives  for  the  portfolio  and  the  operation  of  those  policies  in  practice.  In  particular,  whether 
management´s strategy focuses on earning contractual interest revenue, maintaining a particular interest rate profile, matching the 
duration of the financial assets to the duration of the liabilities that are funding those assets or realising cash flows through the sale 
of the assets; 

how the performance of the portfolio is evaluated and reported to the Facility’s management; 

the  risks  that  affect  the  performance  of  the  business  model  (and  the  financial  assets  held  within  that  business  model)  and  how 
those risks are managed; and 

the  frequency,  volume  and  timing  of  sales  in  prior  periods,  the  reasons  for  such  sales  and  its  expectation  about  future  sales 
activity.  

However,  information  about  sales  activity  is  not  considered  in  isolation,  but  as  part  of  an  overall  assessment  of  how  the  Facility  stated 
objective for managing the financial assets is achieved and how cash flows are realised. 

Solely payment of principal and interests (‘SPPI’) criteria 

For the purpose of this assessment, ‘principal’ is defined as the fair value of the debt instrument on initial recognition. ‘Interest’ is defined as 
consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of 
time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin. 

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In assessing whether the contractual cash flows  are solely payments of principal and interest, the contractual terms of the instrument are 
considered.  This  includes  assessing  whether  the  financial  asset  contains  a  contractual  term  that  could  change  the  timing  or  amount  of 
contractual cash flows such that it would not meet this condition. 

Financial assets - Policy applicable before 1 January 2018 

The Facility classified its financial assets into one of the following categories: 

- 

- 

- 

- 

Loans and receivables (‘L&R’), 

Held-to-maturity (‘HTM’), 

Available-for-sale (‘AFS’), 

at Fair Value through Profit or Loss (‘FVTPL’) 

Derecognition 

The  Facility  derecognises  a  financial  asset  when  the  contractual  rights  to  the  cash  flows  from  the  financial  asset  expire  or  it  transfers  the 
rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial 
asset are transferred or which the Facility neither transfers nor retains substantially all of the risks and rewards of ownership and it does not 
retain control of the financial asset.  

On derecognition of a financial asset or financial liability (Note 2.4.4), the difference between the carrying amount of the asset or liability (or 
the carrying amount allocated to the portion of the asset or liability derecognised) and the sum of (i) the consideration received or paid and 
(ii)  any  cumulative  gain  or  loss  that  had  been  recognised  in  other  comprehensive  income  is  recognised  in  profit  or  loss  except  for  the 
cumulative  gains  or  losses  recognised  in  other  comprehensive  income  for  equity  investments  measured  at  fair  value  through  other 
comprehensive income which are transferred to the reserve fund rather than profit or loss on disposal. 

Reclassification 

Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Facility changes its business model 
for managing financial assets. 

Measurement of fair values 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 statement of financial position 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. 

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. 

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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  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. 

Impairment on financial assets 

Impairment - policy applicable after 1 January 2018 

IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with a forward-looking ‘expected credit loss’ (‘’ECL’’) model. This will require judgement 
to determine the underlying variable (PD, LGD, EAD) used in order to assess how changes in economic and other factors affect ECLs, which 
will be determined on a probability-weighted basis. 

The new impairment model will apply  to financial assets measured at AC, to financial guarantee contracts, as well as to off-balance sheet 
commitments. 

Under IFRS 9, loss allowances will be measured on either of the following bases: 

- 

- 

12-month ECL’s: these are the ECLs that result from possible default events within the 12 months after the reporting date; and 

Lifetime ECLs: these are the ECLs that result from all possible default events over the expected life of a financial instrument. 

The  IFRS  9  Standard  sets  out  a  “three-stage”  model  for  impairment  based  on  changes  in  credit  quality  since  initial  recognition.  Financial 
instruments are classified in Stage 1 except for those instruments for which significant increase in credit risk (‘SICR’) since initial recognition 
is  identified.  This  includes  both  quantitative  and  qualitative  information  and  analysis,  based  on  the  Bank’s  expertise,  including  forward-
looking information.  

Purchased or originated credit-impaired assets (‘POCI’) are the financial assets with exception to initial recognition of the ECLs as the POCI 
assets  is  always  maintained  in  stage  3.  For  POCI  financial  assets,  the  cumulative  changes  in  lifetime  ECL  since  initial  recognition  are 
recognised in the statement of profit or loss. 

The Facility’s assessment of the Stage is based on a sequential approach which is consistent with the Credit Risk Guidelines  (‘CRG’) and 
the Financial Monitoring Guidelines and Procedures (‘FMGs’), notably covering watch list, internal rating and arrears.  

If significant increase in credit risk has occurred, the financial instrument is moved to Stage 2 but is not yet deemed to be credit-impaired. If 
the financial instrument is credit-impaired, the financial instrument is then moved to Stage 3. 

To  identify  Stage  3  exposures,  the  Facility  determines  whether  or  not  there  is  objective  evidence  of  default  event.  A  financial  asset  is 
considered to be in default when the borrower is unlikely to pay its credit obligations to the Facility in full, without recourse by the Facility or 
the borrower is past due more than 90 days on any material credit obligation to the Facility. 

In this respect, a financial asset is considered impaired when it is determined that it is probable that the Facility will not be able to collect all 
amounts due according to the original contractual terms or an equivalent value. Individual credit exposures are evaluated based upon the 
borrower’s  characteristics,  overall  financial  condition,  resources  and  payment  record,  the  prospects  for  support  from  any  financially 
responsible guarantors and, where applicable, the realisable value of any collateral. 

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All impaired claims are reviewed and analysed at least semi-annually. Any subsequent changes to the amounts and timing of the expected 
future cash flows compared to the prior estimates will result in a change in the provision for credit losses and be charged or credited to the 
income  statement.  An  allowance  for  impairment  is  reversed  only  when  the  credit  quality  has  improved  such  that  there  is  reasonable 
assurance of timely collection of principal and interest in accordance with the original contractual terms of the claim agreement. A write-off is 
made when all or part of a claim is deemed uncollectible or forgiven. Write-offs are charged against previously established impairments or 
directly to the income statement and reduce the principal amount of a claim. Recoveries in part or in full of amounts previously written off are 
credited to the income statement. 

Measuring ECL – Inputs, Assumptions and Techniques 

Lifetime ECL measurement applies to stage 2 and stage 3 assets, while 12-month ECL measurement applies to stage 1 assets.  

The expected credit losses were calculated based on the following variables: 

- 

- 

- 

Probability of default (PD), 

Loss Given default (LGD), 

Exposure at default (EAD). 

The probability of default represents the likelihood of a counterpart defaulting on its financial obligation, either over the next 12 months, or 
over the remaining lifetime of the obligation. PD is estimated at a certain date, which are calculated based on statistical rating models, and 
assessed using rating tools tailored to the various categories of counterparties and exposures.  

Ratings  are  primary  input  into  the  determination  of  the  term  structure  of  PD  for  exposures.  The  EIB  collects  performance  and  default 
information about the Facility’s credit risk exposures. The collected data are segmented by type of industry and by type of region. Different 
industries and regions reacting in a homogenous manner to credit cycles are analysed together. 

The EIB employs statistical models to analyse the data collected and generate estimates of the remaining lifetime PD of exposures and how 
these are expected to change as a result of the passage of time.  

The loss given default  represents the EIB’s expectation of the ratio of the loss on an exposure due to the default of a counterparty to the 
amount  outstanding  at  default.  Loss  given  default  can  be  also  defined  as  “1  -  Recovery  Rate”.  LGD  estimates  are  determined  mainly  by 
geography and by type of counterparty, with five main exposure classes: Sovereigns, Public Institutions, Financial Institutions, Corporate and 
Project Finance. LGD values can be further adjusted based on the product and contract specific features of the exposure. 

The  EIB  incorporates  forward-looking  information  into  both  its  assessment  of  whether  the  credit  risk  of  an  instrument  has  increased 
significantly since its initial recognition and its measurement of expected credit losses. 

Impairment - policy applicable before 1 January 2018 

The Facility assesses at each statement of financial position 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  statement  of  financial  position  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 

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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.  

2.4.2.1  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. Cash and cash equivalents are carried at AC in the statement of financial position. 

2.4.2.2  Treasury financial assets 

Treasury  financial  assets  were  presented  as  Held-to-maturity  financial  assets  in  the  Investment  Facility  Financial  Statements  as  at 
31  December 2017.  

Treasury financial assets comprise quoted and unquoted bonds with the intention of holding them to maturity, and commercial papers with 
original maturities of more than three months and are consequently classified at AC. 

Those bonds and commercial papers are initially measured at cost, which is the 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. 

2.4.2.3  Loans and advances 

Loans and advances were presented as loans and receivables in the Investment Facility Financial Statements as at 31 December 2017 and 
measured at amortised cost. 

Loans and advances include: 

- 

- 

 Loans and advances measured at AC 
Loans and advances mandatorily measured at FVTPL. 

Loans originated by the Facility are recognised in the assets of the Facility when cash is advanced to borrowers. Undisbursed parts of loans 
are recorded in the off-balance at their nominal value. 

Loans passing the SPPI test are initially recorded at cost (their 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 AC using the effective interest rate method. 

Loans not fulfilling the SPPI criterion are mandatorily measured at FVTPL. 

The fair value measurement technique used is based on a discounted cash flow technique. 

2.4.2.4  Shares and other variable yield securities 

Shares  and  other  variable  yield  securities  were  presented  as  available-for-sale  financial  assets  in  the  Investment  Facility  Financial 
Statements as at 31 December 2017. 

There are two types of equity investments at the Facility: (i) direct equity investments and (ii) venture capital funds. The  shares and other 
variable  yield  securities  are  initially  recognised  at  fair  value  plus  transactions  costs.  Subsequently  changes  in  fair  value,  including  foreign 
currency translation gains and losses, are recognised in the statement of profit or loss and other comprehensive income under the caption 
net result on shares and other variable yield securities. 

For  unquoted investment,  when  the fair value cannot be derived  from active markets, the fair value is determined  by applying  recognised 
valuation techniques (Note 4.2.1). 

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. 

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2.4.3   Financial guarantees 

Financial guarantee contracts are contracts that require the Facility to make specified payments to reimburse the holder for a loss it incurs 
because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. 

Under the existing rules, these guarantees do not meet the definition of an insurance contract (IFRS 4 Insurance Contracts). 

Policy applicable after 1 January 2018  

Financial  guarantees  are  accounted  for  under  IFRS  9  –  Financial  Instruments,  either  as  “Derivatives”  or  as  “Financial  Guarantees”, 
depending on their features and characteristics as defined by IFRS 9. 

The accounting policy for derivatives is disclosed under Note 2.4.5. 

Financial guarantees are initially recognised in the statement of financial position under “Provisions for guarantees issued” at fair value plus 
transaction  costs  that  are  directly  attributable  to  the  issuance  of  the  financial  guarantees.  At  initial  recognition  the  obligation  to  pay 
corresponds to the Net Present Value (NPV) of expected premium inflows or the initial expected loss. 

Subsequent to initial recognition, financial guarantees are measured at the higher of: 

- The amount of the loss allowance as determined under IFRS 9; and 
- The premium initially recognised less income recognised in accordance with the principles of IFRS 15. 

Any increase or decrease in the net liability (as measured per IFRS 9) relating to financial guarantees other than the payment of guarantee 
calls is recognised in the statement of profit or loss and other comprehensive income under “Change in provisions for guarantees”. 

The premium received is recognised in the statement of profit or loss and other comprehensive income in “Fee and commission income” on 
the basis of an amortisation schedule in accordance with IFRS 15 over the life of the financial guarantee. 

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. 

Policy applicable before 1 January 2018 

At  initial  recognition,  the  financial  guarantees  are  recognised  at  fair  value  corresponding  to  the  Net  Present  Value  (NPV)  of  expected 
premium  inflows  and  initial  expected  loss.  This  calculation  is  performed  at  the  starting  date  of  each  transaction  and  is  recognised  on  the 
statement of financial position 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 amount initially recognised less, where appropriate, cumulative amortisation recognised in accordance with IAS 18 Revenue 
  and 
-  the  best  estimate  of  expenditure  required  to  settle  any  present  financial  obligation  arising  as  a  result  of  the  guarantee,  in 
accordance 
  with IAS 37 Provisions, Contingent Liabilities and Contingent Assets. 

The best estimate of expenditure is determined in accordance with IAS 37. Financial guarantee provisions correspond to the cost of settling 
the obligation, which is the expected loss, estimated on the basis of all relevant factors and information existing at the statement of financial 
position date. 

When a financial guarantee operation measured under IAS 39 is derecognised and treated under IAS 37, its value previously recorded under 
“Other liabilities” is transferred to the caption “Provisions for guarantees issued” on the statement of financial position. 

The provision for financial guarantees (as measured per IAS 37) is recognised in the statement of profit or loss and other comprehensive 
income under “Change in provisions for guarantees”. 

2.4.4  Financial liabilities other than derivatives 

Classification and measurement 

Financial liabilities - Policy applicable after 1 January 2018 

A  financial  liability  is  measured  at  amortised  cost  except  for  financial  liabilities  that  meet  the  definition  of  held  for  trading  (e.g.  derivative 
liabilities). 

IFRS 9 largely retains the existing requirements in IAS 39 for the classification of financial liabilities and the Facility`s financial liabilities are 
measured at AC under IAS 39 and IFRS 9 as well. 

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Financial liabilities - Policy applicable before 1 January 2018 

The Facility classified its financial liabilities into one of the following categories 

-  measured at amortised cost (‘AC’), 
- 

at fair value through profit or loss (‘FVTPL’), and within this category as Held for trading (‘HFT’). 

Derecognition 

The Facility derecognises a financial liability when its contractual obligations are discharged, cancelled or expired.  

2.4.5  Derivative financial instruments 

Derivative financial instruments include cross currency swaps, cross currency interest rate swaps, short term currency swaps (“FX swaps”) 
and interest rate swaps. 

Derivative financial instruments are initially recognised using the trade date basis. 

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. 

All derivatives are measured at FVTPL 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”. 

Under IFRS 9, bifurcation requirements embedded derivatives have been eliminated for financial assets or financial liabilities and therefore, 
the hybrid contract is treated as a whole for classification of financial assets or financial liability accordingly. 

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. 

Contributions are classified and measured at AC in the financial statements. 

2.4.7  Interest and similar income  

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 in the statement of financial position (‘Loans and advances’) 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. 

Interest on the POCI loans is recorded in the statement of profit or loss and other comprehensive income (‘Interest and similar income’) and 
in the statement of financial position (‘Loans and advances’) on an accrual basis using the credit- adjusted  effective interest rate through the 
whole life of the loan, which is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the loan 
to the amortised cost of the loan. 

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. 

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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 shares and other variable yield securities are recognised when received and presented in the statement of profit or loss 
and other comprehensive income within net realised gains on shares and other variable yield securities. 

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. 

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2.5 Transition disclosures 

The following table shows the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 for the Facility’s assets and liabilities as at 1 January 2018. 

ASSETS in EUR '000 
Statement of financial position  
as at 31 December 2017 
1.  Cash and cash equivalents 

Measurement Category IAS 39 

L&R (Loans and receivables) 

Net carrying 
amount 
549,101  AC (Amortised Cost) 

Measurement category IFRS 9 

Net carrying 
amount 
549,101   1.  Cash and cash equivalents 

Statement of financial position  
as from 1 January 2018 

2.  Amounts receivable from 

L&R (Loans and receivables) 

150,000  AC (Amortised Cost) 

150,000   2.  Amounts receivable from 

contributors 

contributors 

3.  Held-to-maturity financial assets  HTM (Held to Maturity) 

144,382  AC (Amortised Cost) 

144,382   3.  Treasury financial assets 

4.  Derivative financial instruments 

5. 

Loans and receivables 

FVTPL (Fair Value Through Profit 
and loss) 
L&R (Loans and receivables) 

12,521  FVTPL (Fair Value Through Profit 

12,521   4.  Derivative financial instruments 

and loss) 
1,666,725  AC (Amortised Cost) 

1,615,589  5. 

Loans and advances 

6.  Available-for-sale financial 

AFS (Available for Sale) 

497,539  FVTPL (Fair Value Through Profit 

497,539   6.  Shares and other variable yield 

FVTPL (Fair Value Through Profit 
and loss) 

1,422  

assets 
7.  Other assets 

Total Assets 

LIABILITIES in EUR '000 
Statement of financial position  
as at 31 December 2017 

8.  Derivative financial instruments 

9.  Deferred income 
10.  Provisions for guarantees 

issued 

11.  Provisions for loan 
commitments 

L&R (Loans and receivables) 

4,385  AC (Amortised Cost) 

and loss) 

3,024,653 

securities 

4,385   7.  Other assets 

2,974,939  Total Assets 

Measurement Category IAS 39 

FVTPL (Fair Value Through Profit 
and loss) 
AC (Amortised Cost) 

Net carrying 
amount 

Measurement category IFRS 9 

Net carrying 
amount 

Statement of financial position  
as from 1 January 2018 

1,153  

FVTPL (Fair Value Through Profit 
and loss) 
25,802   AC (Amortised Cost) 

1,153   8.  Derivative financial instruments 

25,802   9.  Deferred income 

Financial guarantees 

484   Financial guarantees 

484  

10.  Provisions for guarantees 

issued 

AC (Amortised Cost) 

-  AC (Amortised Cost) 

12.  Amounts owed to third parties 

AC (Amortised Cost) 

13.  Other liabilities 

Total Liabilities 

AC (Amortised Cost) 

157,285   AC (Amortised Cost) 

2,462   AC (Amortised Cost) 

187,186  

14.  Contributors’ resources 

13.1. Member States Contribution 

called 

13.2. Fair value reserve 

13.3. Retained earnings 

Total Liabilities and Equity  

2,517,000  

125,816  

194,651  

   3,024,653  

102 

4,156 

11.  Provisions for loan 
commitments 
157,285   12.  Amounts owed to third parties 

2,462   13.  Other liabilities 

191,342   Total Liabilities 

14.  Contributors’ resources 

2,517,000   13.1. Member States Contribution 

called 

-     13.2. Fair value reserve 

266,597   13.3. Retained earnings 

2,974,939   Total Liabilities and Equity  

 
 
 
 
 
 
 
 
 
  
  
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Annual Accounts of the European Development Fund 2018 

The following table reconciles the carrying amounts of the Facility’s assets and liabilities from their previous measurement  category under 
IAS 39 to their new measurement categories upon transition to IFRS 9 on 1st January 2018. 

FINANCIAL ASSETS 
in EUR '000 

Amortized Cost 

1. Cash and cash equivalents 
Opening balance under IAS 39 and closing 
balance under IFRS 9 
2. Amounts receivable from contributors 
Opening balance under IAS 39 and closing 
balance under IFRS 9 
3. Treasury financial assets 
Opening balance under IAS 39 and closing 
balance under IFRS 9 
4. Derivative financial instruments 
Opening balance under IAS 39 and closing 
balance under IFRS 9 
5.Loans and advances 
Opening balance under IAS 39 
Transfer from AC to FVTPL 
Remeasurement: ECL allowance 
Closing balance under IFRS 9 
7. Other assets 
Opening balance under IAS 39 and closing 
balance under IFRS 9 

IAS 39 carrying 
amount 

31.12.2017  Reclassifications  Remeasurements 

IFRS 9 carrying 
amount 
01.01.2018 

549,101  

150,000  

144,382  

12,521  

1,666,725  

-    
-    

1,666,725  

-    

-    

-    

-    

-    

-1,422 

-    

-1,422 

-    

549,101 

-    

150,000 

-    

144,382 

-    

-    
-    

-49,714 
-49,714 

12,521 

1,666,725 
-1,422 
-49,714 
1,615,589 

4,385  

-    

-    

4,385  

Total financial assets measured at amortized 
cost 

2,527,114 

-1,422 

-49,714 

2,475,978 

IAS 39 carrying 
amount 

31.12.2017  Reclassifications  Remeasurements 

IFRS 9 carrying 
amount 
01.01.2018 

Fair Value Through OCI / AFS  

6. Shares and other variable yield securities 
Opening balance under IAS 39 
Transfer from AFS to FVTPL 
Closing balance under IFRS 9 
Total financial assets measured at Fair Value 
Through OCI 

Fair Value Through Profit and Loss 

5.Loans and advances 
Opening balance under IAS 39 
Transfer from AC to FVTPL 
Remeasurement: ECL allowance 
Closing balance under IFRS 9 
6. Shares and other variable yield securities 
Opening balance under IAS 39 
Transfer from AFS to FVTPL 
Closing balance under IFRS 9 
Total financial assets measured at Fair Value 
Through Profit and Loss 

497,539 

-    

497,539 

-    

-497,539 
-497,539 

497,539 

-497,539 

-    
-    
 -    
-    

-    
-    
-    

-    

-    

1,422  

-    

1,422  

-    

497,539  
497,539  

498,961 

-    
-    
-    

-    

-    
-    
-    
-    

-    
-    
-    

-    

497,539 
-497,539 

-    

-    

-    

1,422  

-    

1,422  

-    

497,539  
497,539  

498,961 

Total financial assets  

3,024,653 

- 

-49,714 

2,974,939 

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Annual Accounts of the European Development Fund 2018 

FINANCIAL LIABILITIES 
in EUR '000 

Amortized Cost 

9. Deferred income 
Opening balance under IAS 39 and closing 
balance under IFRS 9 

10. Provisions for loan commitments 
Opening balance under IAS 39  
Remeasurement ECL allowance 
Closing balance under IFRS 9 
11. Amounts owed to third parties 
Opening balance under IAS 39 and closing 
balance under IFRS 9 
12. Other liabilities 
Opening balance under IAS 39 and closing 
balance under IFRS 9 

Total financial liabilities measured at 
amortised cost 

Fair Value Through Profit and Loss 

13. Derivative financial instruments 
Opening balance under IAS 39 and closing 
balance under IFRS 9 

14. Provisions for guarantees issued 
Opening balance under IAS 39 and closing 
balance under IFRS 9 
Remeasurement ECL allowance 
Closing balance under IFRS 9 

Total financial liabilities measured at Fair 
Value Through Profit and Loss 

IAS 39 carrying 
amount 

31.12.2017  Reclassifications  Remeasurements 

IFRS 9 carrying 
amount 
01.01.2018 

25,802  

                   -    

                -    

25,802  

-                              
-    

                   -    
                   -    
                   -    

                -    

4,156 
4,156 

4,156 
4,156 

157,285  

       -    

                -    

157,285  

2,462  

                   -    

- 

2,462  

185,549 

- 

4,156 

189,705 

1,153  

                   -    

                -    

1,153  

484  

-    

484  

                   -    
                   -    
                   -    

                -    
                -    
                -    

484  

-    

484  

1,637  

                   -    

-   

1,637  

Total financial liabilities 

187,186 

                   -    

                4,156 

191,342 

The following table analyses the impact of transition to IFRS 9 on the Facility’s Contributors’ resources as at 1 January 2018. The impact 
relates to the fair value reserve. There is no impact on other components of Contributors’ resources.  

in EUR '000 

Closing balance under IAS 39 (31 December 2017) 

Reclassification of shares and other variable-yield securities from AFS to FVTPL 

Opening balance under IFRS 9 (1 January 2018) 

Closing balance under IAS 39 (31 December 2017) 

Reclassification of shares and other variable-yield securities from AFS to FVTPL 

Recognition of ECL under IFRS 9 (loans and advances)  

Recognition of provisions under IFRS 9 (loan commitments)  

Opening balance under IFRS 9 (1 January 2018) 

Total changes in equity due to adopting IFRS 9 

104 

Fair value reserve 

125,816  

-125,816  

-    

Retained earnings 

194,651  

125,816  

-49,712  

-4,156 

266,599  

- 53,868  

 
 
 
 
 
 
 
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
 
 
 
 
                           
                       
 
 
 
 
                              
                          
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
 
 
Annual Accounts of the European Development Fund 2018 

The  following  table  reconciles  the  closing  impairment  allowance  measured  in  accordance  with  IAS  39  to  the  new  impairment  allowance 
measured in accordance with IFRS 9: 

in EUR '000 

01.01.2018 

31.12.2017 

Impairment allowance for 
1. Cash and cash equivalents at AC under 
IAS 39 and IFRS 9 

2. Treasury financial assets 

3.1 Loans and advances - Balance Sheet 
3.2 Loan commitments - Off Balance 
Sheet 

4. Financial guarantee contracts issued 
Total 

12-month 
ECL  
(stage 1) 

Lifetime ECL not 
credit-impaired 
(stage 2) 

Lifetime ECL 
credit-impaired 
(stage 3) 

      -    

                      -    

                     -    

-    

                           -    

                      -    

Total 

Total 

-    

-    

              -    

              -    

19,738  

         29,976  

      113,255   162,969  

113,255  

1,993  

        2,163  

                    -    

4,156  

           -    

-    

               484  

                    -    

484  

  484  

21,731  

                   32,623  

               113,255   167,609  

        113,739  

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Annual Accounts of the European Development Fund 2018 

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  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. 

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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) 

ASSETS 

Cash and cash equivalents 

Amounts receivable from contributors 

Treasury financial assets 

Derivative financial instruments 

Loans and advances 

Other assets 

Total assets 

31.12.2018 

31.12.2017 

573,708 

100,000 

335,140 

9,873 

549,101 

150,000 

144,382 

12,521 

1,540,991 

1,666,725 

171 

4,385 

2,559,883 

2,527,114 

Provisions for loan commitments 

-23,822 

-  

OFF BALANCE SHEET 

OFF BALANCE SHEET 

Contingent liabilities 

- Issued Guarantees 

Commitments 

- Undisbursed loans 

- Non-issued guarantees 

Total off balance sheet 

Total credit exposure 

1,553,668 

74,569 

1,283,931 

2,800 

2,840,399 

869,983 

7,682 

952,234 

5,376,460 

3,479,348 

3.2.3 

Credit risk on loans and advances  

3.2.3.1  Credit risk measurement for loans and advances  

Each and every loan or guarantee undertaken by the Facility benefits from a comprehensive risk assessment and quantification of expected 
loss  estimates  that  are  reflected  in  a  Loan  Grading  (“LG”).  Operations  under  the  IFE  (as  described  in  Note  24),  with  the  exception  of 
intermediated  loans,  are  not  subject  to  the  Credit  Risk  Policy  Guidelines  and  are  subject  to  a  different  procedure.  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. 

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The following factors enter into the determination of an LG: 

i) 

ii) 

iii) 

iv) 

v) 

vi) 

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

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

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

The  applicable  recovery  rate:  being  the  amount  assumed  to  be  recovered  following  a  default  by  the  relevant  counterpart 
expressed as a percentage of the relevant loan exposure 

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

The duration of the loan or, more generally, the cash-flows of the loan: 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 of which there are three sub-categories: 

“A0” comprising loans to or guaranteed by an EU Member State which have an expected loss of 0% (based on the Bank’s preferred 
creditor status and statutory protection which are deemed to assure a full recovery of the Bank’s assets upon maturity).  

“A+” comprising loans granted to (or guaranteed by) entities other than EU Member States in respect of which there is no expectation of 
deterioration in quality over their term. 

“A-“ includes those lending operations where there is some doubt about the maintenance of their current status but where any downside 
is expected to be 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. 

108 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

3.2.3.2  Analysis of lending credit risk exposure 

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

At 31.12.2018 

In EUR’000 

Banks 

Corporates 

Public institutions 

States 

Total disbursed  

Signed not disbursed  

At 31.12.2017 

In EUR’000 

Banks 

Corporates 

Public institutions 

States 

Total disbursed 

Signed not disbursed 

Guaranteed 

Other credit 
enhancements 

Not guaranteed 

Total 

% of Total 

88,263 

147,551 

29,182 

- 

264,996 

170,356 

- 

45,820 

- 

2,647 

48,467 

- 

856,484 

205,198 

- 

165,846 

1,227,528 

1,089,753 

944,747 

398,569 

29,182 

168,493 

1,540,991 

1,260,110 

61% 

26% 

2% 

11% 

100% 

Guaranteed 

Other credit 
enhancements 

Not guaranteed 

Total 

% of Total 

46,860 

145,914 

30,882 

- 

223,656 

89,597 

11,651 

59,462 

- 

3,218 

74,331 

919,216 

285,492 

- 

164,030 

977,727 

490,868 

30,882 

167,248 

59% 

29% 

2% 

10% 

1,368,738 

1,666,725 

100% 

- 

780,386 

869,983 

Transaction Management and Restructuring Directorate 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 Directorate 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. 

109 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
Annual Accounts of the European Development Fund 2018 

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 2018 and 31 December 2017 by the Loan 
Grading applications, based on the exposure signed (disbursed and un-disbursed): 

At 31.12.2018 

In EUR’000 

 High Grade  

 Standard 
Grade  

 Min. 
Accept. Risk 

 High Risk    No grading 

 Total   % of Total 

A to B-  

C  

D+  

 D- and 
below 

Borrower 

Banks 

232,467 

238,619 

349,756 

698,562 

- 

1,519,404 

Corporates 

103,845 

7,564 

744 

693,100 

50,000 

855,253 

Public institutions 

States 

- 

- 

- 

29,182 

2,994 

4,786 

7,681 

381,801 

- 

- 

32,176 

394,268 

54% 

31% 

1% 

14% 

Total 

336,312 

250,969 

387,363 

1,776,457 

50,000 

2,801,101 

100% 

At 31.12.2017 

In EUR’000 

 High Grade  

 Standard 
Grade  

 Min. 
Accept. Risk 

 High Risk    No grading 

 Total   % of Total 

A to B-  

C  

D+  

 D- and 
below 

Borrower 

Banks 

208,601 

187,225 

189,727 

870,913 

- 

1,456,466 

Corporates 

114,769 

8,018 

3,288 

533,382 

1,428 

660,885 

Public institutions 

States 

- 

- 

- 

- 

30,882 

- 

13,861 

374,614 

- 

- 

30,882 

388,475 

58% 

26% 

1% 

15% 

Total 

323,370 

195,243 

237,758 

1,778,909 

1,428 

2,536,708 

100% 

110 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
Annual Accounts of the European Development Fund 2018 

3.2.3.4  Risk concentrations of loans and advances  

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 

31.12.2018 

31.12.2017 

Kenya 

Nigeria 

Tanzania 

Uganda 

Burundi 

Barbados 

Egypt 

Jamaica 

Congo (Democratic Republic) 

Mauritius 

Ethiopia 

Dominican Republic 

Mauritania 

Ghana 

Togo 

Rwanda 

Malawi 

Regional-ACP 

New Caledonia 

Angola 

Cape Verde 

Senegal 

Zambia 

French Polynesia 

Cameroon 

Mozambique 

Cayman Islands 

Niger 

Botswana 

Seychelles 

Mali 

Haiti 

Burkina Faso 

Samoa 

Vanuatu 

Liberia 

Palau 

Micronesia 

South Africa 

Namibia 

Congo 

Tonga 

Total 

233,269 

172,515 

124,718 

81,766 

77,568 

74,638 

74,431 

72,165 

62,708 

55,564 

55,215 

54,326 

50,727 

39,246 

30,634 

28,704 

26,827 

24,335 

21,124 

20,651 

18,923 

18,330 

17,700 

17,453 

14,784 

14,719 

13,213 

9,655 

7,278 

4,786 

4,767 

4,748 

4,649 

3,986 

1,848 

1,153 

1,107 

759 

2 

- 

- 

- 

331,891 

230,042 

116,093 

169,869 

74,703 

25,124 

- 

85,728 

62,439 

26,598 

51,719 

61,326 

64,007 

49,895 

45,574 

38,555 

22,800 

751 

21,670 

14,850 

20,487 

13,881 

10,910 

17,235 

25,012 

19,212 

14,958 

5,631 

7,618 

5,036 

5,612 

6,006 

6,041 

5,100 

2,162 

1,553 

1,384 

868 

653 

1,971 

1,730 

31 

1,540,991 

1,666,725 

111 

 
 
 
 
  
Annual Accounts of the European Development Fund 2018 

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 

Tertiary and other 

Urban development, renovation and transport 

Electricity, coal and others 

Basic material and mining 

Materials processing, construction 

Roads and motorways 

Airports and air traffic management systems 

Telecommunications 

Chemicals, plastics and pharmaceuticals 

Food chain 

Waste recuperation 

Social infrastructure, education and health 

Oil, gas and petroleum 

Total 

31.12.2018 

31.12.2017 

957,602 

192,400 

181,317 

45,820 

33,144 

32,043 

29,182 

26,095 

20,436 

15,386 

7,564 

2 

- 

991,282 

194,101 

290,364 

59,462 

2,194 

40,960 

30,882 

20,310 

- 

15,586 

8,018 

1,100 

12,466 

1,540,991 

1,666,725 

112 

 
 
 
  
 
 
 
Annual Accounts of the European Development Fund 2018 

3.2.3.5  Credit risk exposure for each internal risk rating 

The Facility uses an internal rating methodology in line with the Internal ratings based approach under Basel III. The majority of the Facility’s 
counterparties  have been assigned an internal rating according to this methodology. The table below shows a  breakdown of the  Facility’s 
loan portfolio by the better of the borrower’s or guarantor’s internal ratings, where available. In cases where an internal rating is not available, 
the external rating has been used for this analysis. 

The  table  shows  both  the  exposures  signed  (disbursed  and  undisbursed)  and  the  risk-weighted  exposures,  based  on  an  internal 
methodology that the Facility uses for limit management. 

(in EUR '000) 

Loans and advances at AC 

12-month 
ECL 

Lifetime ECL 
not credit-
impaired 

Lifetime ECL 
credit-
impaired 

2018 

POCI 

FVTPL 

Total 

Internal Rating 1 -  minimal credit risk 

- 

90,875 

Internal Rating  2 - very low credit risk 

Internal Rating  3 - low credit risk 

Internal Rating  4 - moderate credit risk 

74,650 

17,804 

39,295 

- 

- 

18,783 

Internal Rating  5 - financially weak counterpart 

165,551 

- 

Internal Rating  6 - high credit risk 

834,194 

94,749 

Internal Rating  7 - very high credit risk 

75,057 

134,701 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

90,875 

74,650 

17,804 

58,078 

165,551 

928,943 

1,806 

211,564 

Internal Rating  8 - counterpart in default 

- 

- 

185,273 

3,588 

- 

188,861 

Loss allowance 

Carrying amount 

-22,023 

-27,342 

-143,092 

-1,794 

-1,084 

-195,335 

1,184,528 

311,766 

42,181 

1,794 

722 

1,540,991 

Loan commitments 

Internal Rating  1 -  minimal credit risk 

Internal Rating  2 - very low credit risk 

Internal Rating  3 - low credit risk 

Internal Rating  4 - moderate credit risk 

- 

102,092 

12,000 

12,463 

Internal Rating  5 - financially weak counterpart 

230,455 

- 

- 

- 

- 

- 

Internal Rating  6 - high credit risk 

Internal Rating  7 - very high credit risk 

Internal Rating  8 - counterpart in default 

No internal rating* 

Loss allowance 

Carrying amount 

567,573 

100,055 

- 

123,821 

22,467 

96,074 

- 

- 

-7,225 

-16,597 

- 

- 

- 

- 

- 

- 

- 

16,932 

- 

- 

1,141,234 

101,944 

16,932 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

102,092 

12,000 

12,463 

230,455 

590,040 

196,129 

16,932 

123,821 

-23,822 

1,260,110 

(*) agency agreements for which at reporting date there is no underlying counterparts 

The Facility continually monitors events affecting its borrowers and guarantors, especially banks. In particular, the Facility is assessing on a 
case-by-case basis its contractual rights in case of rating deterioration and is seeking mitigating measures. It is also closely following the 
renewals of bank guarantees received for its loans to ensure that these are replaced or action is taken in a timely manner if need be. 

113 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

3.2.3.6  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): 

Carrying amount 

Lifetime ECL credit- impaired 

Gross amount 

Impairment- loss allowance 

Carrying amount of lifetime ECL credit-impaired 

Past due but not credit- impaired 

Past due comprises 

0-30 days 

30-60 days 

60-90 days 

90-180 days 

more 180 days 

Carrying amount past due but not credit- impaired 

Loans and advances 

Loans and receivables 

31.12.2018 

1,540,991 

31.12.2017 

1,666,725 

188,861 

-144,886 

43,975 

136,827 

-106,203 

30,624 

804 

- 

- 

- 

1 

805 

1,227 

77 

31 

18 

1 

1,354 

Carrying amount neither past due nor credit- impaired 

1,496,211 

1,634,747 

Total carrying amount loans and advances 

1,540,991 

1,666,725 

114 

 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

3.2.3.7  Loan renegotiation and forbearance 

The Facility considers loans to be forborne if in response to adverse changes in the financial position of a borrower the Facility renegotiates 
the original terms of the contractual arrangements with this borrower affecting directly the future cash flows of the financial instrument, which 
may result in a loss to the Facility. However, the financial impact of restructuring activities is in general limited to impairment losses, if any, as 
financial neutrality is generally applied by the Facility and reflected in the renegotiated pricing conditions of the operations restructured.  

In the normal course of business, the Loan Grading (LG) of the loans in question would have deteriorated and the  loan would have been 
included  in  the  Watch  List  before  renegotiation.  Once  renegotiated,  the  Facility  will  continue  to  closely  monitor  these  loans.  If  the 
renegotiated payment terms will not recover the original carrying amount of the asset, it will be considered as impaired. The corresponding 
impairment  losses  will  be  calculated  based  on  the  forecasted  cash  flows  discounted  at  the  original  effective  interest  rate.  The  need  for 
impairment  for  all  loans  whose  LG  deteriorated  to  E-  is  assessed  regularly;  all  loans  with  a  LG  of  F  require  impairment.    Once  the  Loan 
Grading of a loan has improved sufficiently, it will be removed from the Watch List in line with the procedures of the Facility. 

Forbearance measures and practices undertaken by the Bank’s restructuring team during the reporting period includes extension of maturity, 
deferral  of  capital  only,  deferral  of  capital  and  interest  and  capitalisation  of  arrears.  Such  forbearance  measures  do  not  lead  to  the 
derecognition of the underlying operation unless the impact of the contractual changes on the net present value of the loan at the date of 
restructuring  is  considered  significant.  If  such  newly  recognised  financial  asset is credit-impaired,  it  would  meet  the  definition  of  the  POCI 
financial asset.  

Exposures subject to changes in contractual terms which do not affect future cash flows, such as collateral or other security  arrangements 
or the waiver of contractual rights under covenants, are not considered as forborne and hence those events are not considered as sufficient 
to indicate impairment on their own. 

Operations subject to forbearance measures are reported as such in the table below: 

In EUR’000 

Number of operations subject to forbearance practices 

Carrying values 

of which impaired 

Impairment recognised 

Interest income in respect of forborne operations 

Exposures written off (following the termination/sale of the operation) 

31.12.2018 

31.12.2017 

33 

280,720 

9,506 

86,334 

13,465 

- 

27 

136,973 

112,423 

107,256 

8,418 

9,395 

Forbearance measures 

In EUR’000 

31.12.2017 

Extension of 
maturities 

Deferral of 
capital only 

Deferral of 
capital and 
interest 

Other 

Contractual 
repayment and 
termination (1) 

31.12.2018 

Banks 

Corporates 

Total 

30,347 

106,626 

136,973 

- 

3,463 

3,463 

290 

- 

290 

5,654 

15,271 

20,925 

765 

143,261 

144,026 

-9,464 

-15,493 

-24,957 

27,592 

253,128 

280,720 

(1) Decreases are explained by repayments of capital occurred during the year on operations already considered as forborne as of 31 December 2018 and by termination of 

forborne measures during the year. 

115 

 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

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 2018 and 
31 December 2017, investments were in the form of bank deposits, certificates of deposit and commercial papers.  

The authorized entities have a rating similar to the short-term and long-term ratings required for the EIB’s own treasury placements. 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 is currently EUR 50,000,000 (fifty million euro). An exception to this rule has been granted to Societe Generale where the 
Facility has its operational cash accounts. The short term credit limit for Societe Generale as at 31 December 2018 and 31 December 2017 
amounts to EUR 110,000,000 (one hundred and ten million euro). The increased limit applies to the sum of the cash held at the operational 
cash accounts and the instruments issued by this counterpart and held by the treasury portfolio. 

All  investments  have  been  done  with  authorised  entities  with  a  maximum  tenor  of  three  months  from  value  date.  All  credit  exposure  limit 
breaches have been reported to the mandators. As at 31 December 2018 all term deposits, commercial papers and cash in hand held by the 
treasury portfolio of the Facility had a minimum rating of at least P-2 (Moody’s equivalent) at settlement day.  As at 31 December 2017 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 

(Moody’s term) 

(Moody’s term) 

P-1 

P-1 

P-1 

P-1 

P-2 

Total 

Aaa 

Aa3 

A1 

A2 

A3 

3.2.5 

Credit risk on derivatives 

3.2.5.1  Credit risk policy of derivatives 

31.12.2018 

31.12.2017 

71,914 

49,972 

199,938 

201,899 

49,985 

573,708 

13% 

9% 

34% 

35% 

9% 

49,616 

89,971 

143,080 

266,434 

- 

9% 

16% 

26% 

49% 

0% 

100% 

549,101 

100% 

The credit risk with respect to derivatives is represented by the loss which a given party would incur where the other counterparty to the deal 
would  be  unable  to  honour  its  contractual  obligations.  The  credit  risk  associated  with  derivatives  varies  according  to  a  number  of  factors 
(such as interest and exchange rates) and generally corresponds to only a small portion of their notional value. 

In the normal course of its activity, the Facility may enter into swap contracts with a view to hedge specific lending operations or into currency 
forward contracts, with a view to hedge its currency positions denominated in actively traded currencies other than the Euro. All the swaps 
are  executed  by  the  European  Investment  Bank  with  an  external  counterpart.  The  swaps  are  arranged  by  the  same  Master  Swap 
Agreements and Credit Support Annexes signed between the European Investment Bank and its external counterparts.  

3.2.5.2  Credit risk measurement for derivatives 

All the swaps executed by the European Investment Bank that are related to the Facility are treated within the same contractual framework 
and methodologies applied for the derivatives negotiated by the European Investment Bank for its own purposes. In particular, eligibility of 
swap  counterparts  is  determined  by  the  European  Investment  Bank  based  on  the  same  eligibility  conditions  applied  for  its  general  swap 
purposes. 

The  European  Investment  Bank  measures  the  credit  risk  exposure  related  to  swaps  and  derivatives  transactions  using  the  Net  Market 
Exposure (“NME”) and Potential Future Exposure (“PFE”) approach for reporting and limit monitoring. The NME and the PFE fully include the 
derivatives related to the Investment Facility. 

116 

 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
Annual Accounts of the European Development Fund 2018 

 

The following table shows the maturities of cross currency interest rate swaps, sub-divided according to their notional amount and fair 
value: 

Swap contracts at 31.12.2018 

less than 

1 year 

5 years 

more than 

Total 2018 

In EUR’000 

Notional amount 

Fair Value (i.e. net discounted value) 

1 year 

to 5 years 

to 10 years 

to 10 years 

- 

- 

5,245 

-325 

- 

- 

- 

- 

5,245 

-325 

Swap contracts at 31.12.2017 

less than 

1 year 

5 years 

more than 

Total 2017 

In EUR’000 

Notional amount 

Fair Value (i.e. net discounted value) 

1 year 

to 5 years 

to 10 years 

to 10 years 

- 

- 

8,098 

-955 

- 

- 

- 

- 

8,098 

-955 

 

 

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 1,460.6 million at 31 December 2018 against EUR 1,500.0 million at 31 December 2017. 
The fair value of FX swaps amounts to EUR 1.1 million at 31 December 2018 against EUR 12.0 million at 31 December 2017. 

The Facility enters into interest rate swap contracts in order to hedge the interest rate risk on loans disbursed. As at 31 December 2018 
there are two interest rate swaps outstanding with a notional amount of EUR 28.5 million (2017: EUR 31.7 million) and a fair value of 
EUR 0.7 million (2017: EUR 0.3 million). 

3.2.6 

Credit risk on treasury financial assets 

The following table shows the situation of the treasury portfolio entirely composed of commercial papers  issued by sub-sovereigns, banks 
and non-bank entities with remaining maturities of up to three months. EU Member States, their agencies, banks and non-bank entities are 
eligible issuers. The maximum authorized limit for each authorised issuer is EUR 50,000,000 (fifty million euro). Investments in medium and 
long-term bonds could also be eligible, according to the investment guidelines and depending on liquidity requirements: 

Minimum short-term 
rating 

Minimum long-term 
rating 

(Moody’s term) 

(Moody’s term) 

P-1 

P-1 

P-1 

P-1 

P-2 

P-2 

P-2 

NP 

Total 

Aa2 

Aa3 

A1 

A2 

A2 

A3 

Baa2 

Ba1 

31.12.2018 

31.12.2017 

80,041 

95,055 

15,005 

45 008 

50,015 

50,016 

- 

- 

24% 

29% 

4% 

13% 

15% 

15% 

0% 

0% 

335,140 

100% 

- 

- 

- 

- 

- 

- 

94,353 

50,029 

144,382 

0% 

0% 

0% 

0% 

0% 

0% 

65% 

35% 

100% 

117 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
  
   
Annual Accounts of the European Development Fund 2018 

3.3  Liquidity risk 

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

3.3.1  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. 

118 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

In  terms  of  derivative  financial  liabilities,  the  maturity  profile  represents  the  contractual  undiscounted  gross  cash  flows  of  swap  contracts 
including cross currency swaps (CCS), cross currency interest rate swaps (CCIRS), short term currency swaps and interest rate swaps. 

Maturity profile of non-derivative financial liabilities 

In EUR’000 as at 31.12.2018 

Outflows for committed but un-disbursed loans 

Outflows for committed investment funds and share subscription 

Others (signed non-issued guarantees, issued guarantees) 

Outflows for committed interest subsidies 

Outflows for committed TA  

Total  

 3 months 
or less 

More than 
3 months 
to 1 year 

More than 
1 year to 5 
years 

More than 
5 years 

Maturity 
Undefined 

Gross 
nominal 
outflow 

7,854 

2,023 

- 

- 

2,373 

12,250 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1,276,077 

1,283,931 

345,144 

347,167 

1,556,468 

1,556,468 

360,655 

360,655 

24,082 

26,455 

3,562,426 

3,574,676 

Maturity profile of non-derivative financial liabilities 

In EUR’000 as at 31.12.2017 

Outflows for committed but un-disbursed loans 

Outflows for committed investment funds and share subscription 

Others (signed non-issued guarantees, issued guarantees) 

Outflows for committed interest subsidies 

Outflows for committed TA  

Total  

 3 months 
or less 

More than 
3 months 
to 1 year 

More than 
1 year to 5 
years 

More than 
5 years 

Maturity 
Undefined 

Gross 
nominal 
outflow 

5,543 

5,039 

- 

1,245 

1,931 

13,758 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

864,440 

869,983 

316,656 

321,695 

82,251 

82,251 

286,066 

287,311 

24,720 

26,651 

1,574,133 

1,587,891 

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 31.12.2018 

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

Total  

5 

- 

1,460,608 

-1,465,498 

397 

- 

-4,488 

3,281 

-4,081 

- 

- 

1,171 

-1,340 

-969 

1,816 

-1,770 

- 

- 

3,473 

-3,030 

489 

- 

- 

- 

- 

204 

-175 

29 

5,102 

-5,851 

1,460,608 

-1,465,498 

5,245 

-4,545 

-4,939 

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 31.12.2017 

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

Total  

7 

- 

1,500,000 

-1,493,987 

355 

- 

6,375 

3,144 

-4,051 

- 

- 

1,102 

-1,502 

-1,307 

5,122 

-5,959 

- 

- 

4,138 

-3,782 

-482 

- 

- 

- 

- 

625 

-556 

69 

8,273 

-10,010 

1,500,000 

-1,493,987 

6,219 

-5,840 

4,655 

119 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

3.3.3  Long term financial assets and liabilities 

The  following  table  sets  out  the  carrying  amounts  of  non-derivative  financial  assets  and  financial  liabilities  expected  to  be  recovered  or 
settled more than 12 months after the reporting date. 

In EUR’000 

Financial assets: 

Loans and advances 

Shares and other variable yield securities 

Other assets 

Total  

Financial liabilities: 

Provisions for guarantees issued 

Amount owed to third parties 

Provisions for loan commitments 

Total  

3.4  Market risk 

31.12.2018 

31.12.2017 

1,666,232 

567,292 

171 

1,608,488 

497,539 

318 

2,233,695 

2,106,345 

793 

93,641 

23,822 

118,256 

549 

109,004 

- 

109,553 

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. 

120 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

As shown in the following table the net present value of the loan portfolio including related micro-hedging swaps as at 31 December 2018 
would  decrease  by  EUR  483k  (as  at  31  December  2017:  decrease  by  EUR  488k)  if  all  relevant  interest  rates  curves  are  simultaneously 
shifted upwards in parallel by 1 basis point. 

Basis point value 

Money 

Very Short  

Short 

Medium 

Long 

Extra Long  

Total 

In EUR’000 

Market 

As at 31.12.2018 

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 

-38 

-94 

-168 

-154 

-29 

- 

-483 

Basis point value 

Money 

Very Short  

Short 

Medium 

Long 

Extra Long  

Total 

In EUR’000 

Market 

As at 31.12.2017 

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 

-49 

-96 

-159 

-168 

-16 

- 

-488 

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. 

121 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

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. 

Policy applicable before 1 January 2018 

The  unrealised  gains/losses  and  impairment  on  available-for  sale  financial  assets  (IAS  39)  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. 

Policy applicable after 1 January 2018 

The  fair  value  change  on  shares  and  other  variable  yield  securities  are  included  in  the  FX  position  as  per  Risk  Policies,  as  well  as 
impairments  on  loans  and  advances.  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. 

122 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

In  the  tables  below  is  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 2018 

Assets and liabilities 

Commitments and 
contingent liabilities 

Currencies 

USD 

Local currencies  
(under synthetic hedge)* 

KES 

TZS 

DOP 

UGX 

RWF 

Local currencies  
(not under synthetic hedge)* 
HTG, MUR, MZN, XOF, ZMW, 
BWP, JMD, NGN, ZAR 

Total non-EUR currencies 

FX position as per 
Risk Policies 

FX position excluded 
from Risk Policies 

Balance sheet FX 
position 

-157,177 

-52,111 

-209,288 

600,271 

35,806 

71,195 

35,311 

45,731 

24,176 

74,265 

129,307 

252 

814 

821 

769 

17 

-432 

-49,870 

36,058 

72,009 

36,132 

46,500 

24,193 

73,833 

79,437 

- 

- 

- 

- 

- 

- 

600,271 

EUR 

- 

2,834,560 

2,834,560 

3,044,623 

Total EUR and non-EUR 

129,307 

2,784,690 

2,913,997 

3,644,894 

* See section 3.4.2.2.2 for explanations on synthetic hedge. 

123 

 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

At 31 December 2017 

Assets and liabilities 

Commitments and 
contingent liabilities 

Currencies 

USD 

Local currencies  
(under synthetic hedge)* 

KES 

TZS 

DOP 

UGX 

RWF 

Local currencies  
(not under synthetic hedge)* 
HTG, MUR, MZN, XOF, ZMW, 
BWP 

Total non-EUR currencies 

FX position as per 
Risk Policies 

FX position excluded 
from Risk Policies 

Balance sheet FX 
position 

-206,535 

6,087 

-200,448 

377,994 

88,532 

98,722 

37,785 

52,653 

32,714 

30,802 

134,673 

2,854 

1,820 

1,494 

1,505 

354 

183 

14,297 

91,386 

100,542 

39,279 

54,158 

33,068 

30,985 

148,970 

- 

- 

- 

- 

- 

- 

377,994 

EUR 

- 

2,688,497 

2,688,497 

1,278,511 

Total EUR and non-EUR 

134,673 

2,702,794 

2,837,467 

1,656,505 

3.4.2.3 

Foreign exchange sensitivity analysis 

As at 31 December 2018 a 10 percent depreciation of EUR versus all non EUR currencies would result in an increase of the contributors’ 
resources amounting to EUR 8.8 million (31 December 2017: EUR 16.6 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 7.2 million (31 December 2017: EUR 13.6 million). 

124 

 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
  
 
 
Annual Accounts of the European Development Fund 2018 

3.4.2.4 

Conversion rates 

The following conversion rates were used for establishing the balance sheet at 31 December 2018 and 31 December 2017: 

31 December 2018 

31 December 2017 

Non-EU currencies 

Botswana Pula (BWP) 

Dominican Republic Pesos (DOP) 

Fiji Dollars (FJD) 

Haitian Gourde (HTG) 

Jamaican Dollar (JMD) 

Kenya Shillings (KES) 

Mauritania Ouguiyas (MRO)* 

Mauritania Ouguiyas (MRU)* 

Mauritius Rupees (MUR) 

Mozambican Metical (MZN) 

Nigerian Naira (NGN) 

Rwanda Francs (RWF) 

Tanzania Shillings (TZS) 

Uganda Shillings (UGX) 

United States Dollars (USD) 

Franc CFA Francs (XAF/XOF) 

South Africa Rand (ZAR) 

Zambia Kvacha (ZMW) 

12.2038 

57.4037 

2.4104 

86.92 

144.081 

116.24 

- 

41.166 

39.05 

70.14 

351.05 

1020.1 

2624.33 

4239 

1.145 

655.957 

16.4594 

13.6077 

11.7512 

57.1465 

2.4186 

75.69 

148.7032 

123.7 

422.36 

- 

40.07 

70.09 

367.44 

1003.37 

2681.78 

4357 

1.1993 

655.957 

14.8054 

11.965 

(*) The MRU was introduced as at 1 January 2018, replacing the old MRO at a rate of 1 MRU = 10 MRO 

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 equity instruments 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  56.7 
million respectively EUR -56.7 million as at 31 December 2018 (EUR 49.8 million respectively EUR -49.8 million as at 31 December 2017). 

125 

 
 
 
  
 
 
 
 
 
 
 
 
4 

Fair values of financial instruments 

4.1  Accounting classifications and fair values 

Annual Accounts of the European Development Fund 2018 

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 2018 

Carrying amount 

Fair value 

Held for 
trading 

Shares and 
other 
variable 
yield 
securities 

Cash, loans 
and advances 

Treasury 
financial 
assets 

Other 
financial 
liabilities 

Total 

Level 1 

Level 2 

Level 3 

Total 

In EUR’000 

Financial assets mandatorily measured at 
FVTPL 

Derivative financial instruments  

Venture Capital Fund  

Direct Equity Investment 

Loans and advances 

Total  

Financial assets at AC 

Cash and cash equivalents 

Loans and advances 

Amounts receivable from contributors 

Treasury financial assets 

Other assets 

Total  

9,873 

- 

- 

- 

- 

467,152 

100,140 

- 

9,873 

567,292 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

720 

720 

573,708 

1,540,271 

100,000 

- 

- 

- 

- 

- 

- 

- 

- 

- 

335,140 

171 

- 

2,214,150 

335,140 

Total financial assets 

9,873 

567,292 

2,214,870 

335,140 

Financial liabilities mandatorily measured at 
FVTPL 

Derivative financial instruments 

Total  

Financial liabilities at AC: 

Provisions for guarantees issued 

Provisions for loan commitments 

Amounts owed to third parties 

Other liabilities 

Total  

-8,493 

-8,493 

- 

- 

- 

- 

- 

Total financial liabilities 

-8,493 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

126 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

9,873 

467,152 

100,140 

720 

- 

- 

16,675 

9,873 

- 

9,873 

- 

- 

467,152 

467,152 

83,465 

100,140 

- 

720 

- 

720 

577,885 

16,675 

10,593 

550,617 

577,885 

573,708 

1,540,271 

100,000 

- 

- 

-  1,760,576 

- 

- 

335,140 

191,475 

145,061 

171 

- 

- 

- 

- 

-  1,760,576 

- 

- 

- 

- 

336,536 

- 

2,549,290 

191,475  1,905,637 

-  2,097,112 

3,127,175 

-8,493 

-8,493 

- 

- 

-8,493 

-8,493 

- 

- 

-8,493 

-8,493 

-793 

-793 

-23,822 

-23,822 

-143,813 

-143,813 

-2,493 

-2,493 

-170,921 

-170,921 

-170,921 

-179,414 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Annual Accounts of the European Development Fund 2018 

4 

Fair values of financial instruments (continued) 

4.1  Accounting classifications and fair values (continued) 

At 31 December 2017 

Carrying amount 

Fair value 

Held for 
trading 

Available-
for-sale 

Cash, loans 
and 
receivables 

Held to 
maturity 

Other 
financial 
liabilities 

Total 

Level 1 

Level 2  Level 3 

Total 

In EUR’000 

In EUR’000 

Derivative financial instruments  

Venture Capital Funds 

Direct Equity Investments 

Total  

Financial assets not carried at fair value: 

Cash and cash equivalents 

Loans and receivables 

Amounts receivable from contributors 

Bonds 

Other assets 

Total  

12,521 

- 

- 

- 

420,104 

77,435 

12,521 

497,539 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

549,101 

1,666,725 

150,000 

- 

- 

- 

- 

- 

- 

- 

- 

144,382 

4,385 

- 

2,370,211 

144,382 

Total financial assets 

12,521 

497,539 

2,370,211 

144,382 

Financial liabilities carried at fair value: 

Derivative financial instruments 

Total  

Financial liabilities not carried at fair value: 

Provisions for guarantees issued 

Amounts owed to third parties 

Other liabilities 

Total  

-1,153 

-1,153 

- 

- 

- 

- 

Total financial liabilities 

-1,153 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

127 

- 

- 

12,521 

- 

12,521 

-  420,104 

420,104 

24,458 

-  52,977 

77,435 

24,458 

12,521  473,081 

510,060 

- 

- 

-  1,852,507 

- 

144,382 

- 

- 

144,382  1,852,507 

- 

- 

- 

- 

- 

- 

- 

- 

1,852,507 

- 

144,382 

1,996,889 

-1,153 

-1,153 

-1,153 

-1,153 

- 

- 

-1,153 

-1,153 

12,521 

420,104 

77,435 

510,060 

549,101 

1,666,725 

150,000 

144,382 

4,385 

2,514,593 

3,024,653 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

-484 

-484 

-157,285 

-157,285 

-2,462 

-2,462 

-160,231 

-160,231 

-160,231 

-161,384 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

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 

Not applicable. 

Not applicable. 

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

longer 

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

for 

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, 
increase, 
capital 
sale/change of control. 

for 

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

longer 

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

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

Not applicable. 

Not applicable. 

Financial instruments carried at fair value 

Derivative 
financial 
instruments 

Venture 
Capital Fund 
(VCF) 

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 
rates, 
discounted at a rate that reflects the credit risk of 
various counterparties. 

forward/interest 

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 
review 
reporting,  a  subsequent  event 
procedure  is  performed  and  if  necessary  the 
reported NAV is adjusted. 

Direct Equity 
Investment 

Adjusted net assets. 

Financial instruments not carried at fair value 

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 
advances. 

Loans and 
advances 

Treasury 
financial 
assets 

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  2018  and  2017, 
namely: 

128 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

- 

- 

Credit valuation adjustments (CVA), reflecting counterparty credit risk on derivative transactions, amounting to EUR -37.4k as 
at 31  December 2018 and to EUR -38k as at 31 December 2017.  
Debit  valuation  adjustments  (DVA),  reflecting  own  credit  risk  on  derivative  transactions,  amounting  to  EUR  +15.1k  as  at  
31 December 2018 and EUR +29.5k as at 31 December 2017.  

4.2.2 

Transfers between Level 1 and 2 

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. 

In 2018 and 2017 the Facility did not make transfers from Level 1 to 2 or Level 2 to 1 of the fair value hierarchy. 

4.2.3 

Level 3 fair values 

Reconciliation of Level 3 fair values 

The following tables present the changes in Level 3 instruments for the year ended 31 December 2018 and 31 December 2017: 

In EUR'000 

Balance at 1 January 2018 

Gains or losses included in profit or loss: 

- net realised gains on shares and other variable yield securities 

- net fair value change on shares and other variable yield securities  

Total 

Disbursements 

Repayments 

Write offs 

Balance at 31 December 2018 

In EUR'000 

Balance at 1 January 2017 

Gains or losses included in profit or loss: 

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

- impairment on available-for-sale financial assets  

Total 

Gains or losses included in other comprehensive income: 

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

Total 

Disbursements 

Repayments 

Write offs 

Balance at 31 December 2017 

In 2018 and 2017 the Facility did not make transfers out or to Level 3 of the fair value hierarchy. 

Shares and other 
variable yield 
securities 

473,081 

-10,622 

-13,411 

-24,033 

95,434 

-11,165 

17,300 

550,617 

Available-for-sale 
financial assets 

494,004 

2,711 

-22,024 

-19,313 

-17,592 

-17,592 

62,660 

-44,568 

-2,110 

473,081 

129 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

5  Cash and cash equivalents 

The cash and cash equivalents are composed of: 

In EUR'000 
Cash in hand 

Term deposits 

Commercial papers 

Cash and cash equivalents in the statement of financial position 

Accrued interest  

Cash and cash equivalents in the cash flow statement 

6  Derivative financial instruments  

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

31.12.2018 

31.12.2017 

51,936 

521,882 

- 

573,818 

-110 

573,708 

166,445 

367,653 

15,003 

549,101 

68 

549,169 

At 31 December 2018 

In EUR'000 

Cross currency interest rate swaps 

Interest rate swaps 

FX swaps 

Total derivative financial instruments 

At 31 December 2017 

In EUR'000 

Cross currency interest rate swaps 

Interest rate swaps 

FX swaps 

Total derivative financial instruments 

Fair Value 

Notional amount 

Assets 

Liabilities 

340 

654 

8,879 

9,873 

-665 

- 

-7,828 

-8,493 

5,245 

28,470 

1,460,608 

1,494,323 

Fair Value 

Notional amount 

Assets 

Liabilities 

149 

393 

11,979 

12,521 

-1,105 

-48 

- 

-1,153 

8,098 

31,711 

1,500,000 

1,539,809 

130 

 
 
 
  
 
 
  
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

7 

Loans and advances 

7.1  Loans and advances 
The  following  table  show  reconciliation  from  the  opening  to  the  closing  balance  of  the  loans  and  advances  with  new  ECL  IFRS 9 
impairment model. Comparative impairment amounts for 2017 represent allowance account for credit losses and reflect measurement 
under IAS 39. 

In EUR'000 

Global 
loans(*) 

Senior loans 

Subordinated 
loans 

POCI 

Total 

Nominal of loans at AC as at 1 January 2018 

1,003,294 

687,499 

62,546 

- 

1,753,339 

Disbursements 

Write offs 

Repayments 

Interest capitalised 

Foreign exchange rates differences 

203,352 

52,274 

- 

- 

-192,355 

-157,952 

- 

- 

37,026 

11,503 

- 

- 

-4,548 

- 

2,719 

3,588 

259,214 

- 

- 

- 

- 

- 

-354,855 

- 

51,248 

Nominal of loans at AC as at 31 December 2018 

1,051,317 

593,324 

60,717 

3,588 

1,708,946 

Impairment – loss allowance as at 1 January 2018 

-35,082 

-57,911 

-62,546 

Net changes of the 12 month ECL  

Net changes of lifetime ECL not credit-impaired 

Lifetime ECL credit-impaired 

Reversal of lifetime ECL credit-impaired  

Write offs 

-1,853 

4,696 

-71,204 

2,214 

- 

288 

870 

- 

- 

-2,146 

- 

-1,794 

8,480 

37,678 

- 

- 

Foreign exchange rates differences 

-2,639 

-1,336 

-2,346 

- 

- 

- 

- 

- 

- 

-155,539 

-1,565 

3,420 

-72,998 

48,372 

- 

-6,321 

Impairment – loss allowance as at 31 December 2018 

-103,868 

-49,609 

-29,360 

-1,794 

-184,631 

Loans and advances AC as at 31 December 2018 

947,449 

543,715 

31,357 

1,794 

1,524,315 

Nominal of loans at FVTPL as at 1 January 2018 

1,800 

Disbursements 

Repayments 

Write offs 

Foreign exchange rates differences  

Nominal of loans at FVTPL as at 31 December 2018 

Fair value adjustment as at 1 January 2018 

Net FV change 

Foreign exchange rates differences 

Fair value adjustment as at 31 December 2018 

Loans and advances at FVTPL as at 31 December 2018 

- 

- 

- 

- 

1,800 

-378 

-702 

- 

-1,080 

720 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Amortised Cost 

Interest 

-3,550 

12,330 

-3,109 

9,243 

11 

1,031 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1,800 

- 

- 

- 

- 

1,800 

-378 

-702 

- 

-1,080 

720 

-6,648 

22,604 

Loans and advances as at 31 December 2018 

956,949 

549,849 

32,399 

1,794 

1,540,991 

131 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

7  Loans and advances (continued) 

7.1 Loans and advances (continued) 

In EUR'000 

Global loans(*) 

Senior loans 

Nominal as at 1 January 2017 

Disbursements 

Write offs 

Repayments 

Foreign exchange rates differences 

Nominal as at 31 December 2017 

Impairment as at 1 January 2017 

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

Write offs 

Reversal of impairment 

Foreign exchange rates differences 

994,527 

305,059 

-3,257 

-162,361 

-128,874 

1,005,094 

-18,185 

-5,105 

3,257 

2,204 

914 

764,339 

63,603 

-6,138 

-91,125 

-43,180 

687,499 

-28,294 

-11,572 

6,138 

3,752 

3,234 

Impairment as at 31 December 2017 

-16,915 

-26,742 

Amortised Cost 

Interest 

Loans and receivables as at 31 December 2017 

-3,802 

15,122 

999,499 

-3,408 

9,877 

667,226 

(*) including agency agreements 

7.2 Impairment on loans and advances – Loss allowances 

Subordinated 
loans 

Total 

71,563 

1,830,429 

- 

- 

- 

-9,017 

62,546 

368,662 

-9,395 

-253,486 

-181,071 

1,755,139 

-71,161 

-117,640 

- 

- 

- 

8,615 

-62,546 

- 

- 

- 

-16,677 

9,395 

5,956 

12,763 

-106,203 

-7,210 

24,999 

1,666,725 

In EUR'000 

Loans and advances at AC 

Balance at 1 January 2018 

Transfer to 12-month ECL 

Transfer to lifetime ECL not credit-impaired 

Transfer to lifetime ECL credit-impaired 

Financial assets that have been derecognised 

Write-offs 

12-month ECL 

2018 

Lifetime ECL 
not credit-
impaired 

Lifetime ECL 
credit-impaired 

POCI 

Total 

19,738 

2,285 

- 

- 

- 

- 

29,975 

- 

-2,633 

- 

- 

- 

105,826 

- 

- 

- 

- 

- 

27,646 

1,794 

- 

- 

- 

- 

155,539 

2,285 

-2,633 

29,440 

- 

- 

Balance at 31 December 2018 

22,023 

27,342 

133,472 

1,794 

184,631 

132 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

8  Shares and other variable yield securities 

The following table show reconciliation from the opening to the closing balance of the Equity investments with new measurement policy 
under  IFRS   9.  Comparative  amounts  for  2017  represent  measurement  under  IAS  39  when  equity  instruments  were  classified  under 
available-for-sale portfolio:  

In EUR'000 

Cost as at 1 January 2018 

Disbursements 

Repayments / sales 

Foreign exchange rates differences on repayments / sales 

Cost as at 31 December 2018 

Unrealised gains and losses as at 1 January 2018 

Net change in unrealised gains and losses 

Foreign exchange rates differences on unrealised gains and losses 

Unrealised gains and losses as at 31 December 2018 

Venture Capital 
Funds 

Direct Equity 
Investments 

Total 

356,086 

70,310 

426,396 

73,250 

-21,681 

13,938 

22,184 

-635 

1,355 

95,434 

-22,316 

15,293 

421,593 

93,214 

514,807 

64,018 

-20,493 

2,034 

45,559 

7,125 

-172 

-27 

6,926 

71,143 

-20,665 

2,007 

52,485 

Shares and other variable yield securities as at 31 December 2018 

467,152 

100,140 

567,292 

In EUR'000 

Cost as at 1 January 2017 

Disbursements 

Repayments / sales 

Write offs 

Foreign exchange rates differences on repayments / sales 

Venture Capital 
Funds 

Direct Equity 
Investments 

Total 

331,253 

62,660 

-38,990 

-437 

1,600 

72,636 

403,889 

- 

-708 

-1,673 

55 

62,660 

-39,698 

-2,110 

1,655 

Cost as at 31 December 2017 

356,086 

70,310 

426,396 

Unrealised gains and losses as at 1 January 2017 

Net change in unrealised gains and losses 

Unrealised gains and losses as at 31 December 2017 

Impairment as at 1 January 2017 

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

Write offs 

Impairment as at 31 December 2017 

129,427 

-20,930 

108,497 

13,457 

142,884 

-1,008 

-21,938 

12,449 

120,946 

-22,892 

-6,997 

-29,889 

-22,024 

437 

-44,479 

- 

-22,024 

1,673 

-5,324 

2,110 

-49,803 

Available-for-sale financial assets as at 31 December 2017 

420,104 

77,435 

497,539 

133 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

9  Amounts receivable from contributors (in EUR’000) 

The amounts of EUR 100,000 receivable from contributors are entirely composed of Member States contribution called but not paid. 

10  Treasury financial assets 

The treasury 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 treasury portfolio:  

144,382 

2,219,062 

-2,026,659 

149 

-1,794 

335,140 

169,398 

1,084,149 

-1,109,563 

-59 

457 

144,382 

31.12.2018 

31.12.2017 

- 

171 

171 

4,117 

268 

4,385 

31.12.2018 

31.12.2017 

32,658 

1,106 

33,764 

24,895 

907 

25,802 

In EUR'000 

Balance as at 1 January 2018 

Acquisitions 

Maturities 

Change in amortisation of premium/discount 

Change in accrued interest  

Balance as at 31 December 2018 

In EUR'000 
Balance as at 1 January 2017 

Acquisitions 

Maturities  

Change in amortisation of premium/discount 

Change in accrued interest  

Balance as at 31 December 2017 

11  Other assets 

The main components of other assets are as follows: 

In EUR'000 

Amount receivable from EIB 

Financial guarantees 

Total other assets 

12    Deferred income 

The main components of deferred income are as follows: 

In EUR'000 

Deferred interest subsidies 

Deferred commissions on loans and advances 

Total deferred income 

134 

 
 
 
  
 
 
 
 
 
 
 
 
  
 
 
  
Annual Accounts of the European Development Fund 2018 

13  Provisions for guarantees issued 

The following tables show reconciliation from the opening to the closing balance of the provision for financial guarantees under new ECL 
IFRS  9 model. Comparative amounts for 2017 represent the  provision for guarantees issued that has been recognized under IAS 39 
as there is objective evidence that the Facility will have to incur a loss in respect of guarantees granted. 

12-month ECL 

Lifetime ECL not 
credit-impaired 

Lifetime ECL 
credit-impaired 

2018 

Total 

484 

94 

391 

- 

- 

- 

-128 

-48 

793 

Total 

4,156 

5,192 

14,420 

- 

54 

23,822 

- 

- 

- 

- 

- 

- 

- 

- 

- 

2017 

625 

65 

-206 

- 

484 

- 

- 

- 

- 

- 

- 

In EUR'000 

Guarantees issued  

Balance at 1 January 

Transfer to 12-month ECL 

Transfer to lifetime ECL not credit-impaired 

Transfer to lifetime ECL credit-impaired 

Guarantees that have been derecognised 

Guarantee calls 

Amortisation of upfront fees 

Foreign exchange rates differences 

Balance at 31 December 

- 

94 

- 

- 

- 

- 

- 

- 

94 

484 

- 

391 

- 

- 

- 

-128 

-48 

699 

Balance at 1 January 

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

Utilised 

Transfer from "Other liabilities", financial guarantees  

Balance at 31 December 

14  Provisions for loan commitments 

In EUR'000 

Loans commitments 

Balance at 1 January 

Transfer to 12-month ECL 

Transfer to lifetime ECL not credit-impaired 

Transfer to lifetime ECL credit-impaired 

Foreign exchange rates differences 

1,993 

5,192 

- 

- 

40 

2,163 

- 

14,420 

- 

14 

Balance at 31 December 

7,225 

16,597 

135 

The  following  table  shows  reconciliation  from  the  opening  to  the  closing  balance  of  the  loss  allowance  for  undisbursed  loans  (loan 
commitments) under new ECL IFRS 9 model. Comparative amounts for 2017 represent allowance account for credit losses and reflect 
measurement under IAS 39. 

12-month ECL 

Lifetime ECL not 
credit-impaired 

Lifetime ECL 
credit-impaired 

2018 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

15  Amounts owed to third parties  

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

In EUR'000 

Net general administrative expenses payable to EIB 

Other amounts payable to EIB 

Interest subsidies and TA not yet disbursed owed to Member States 

Total amounts owed to third parties 

16  Other liabilities 

The main components of other liabilities are as follows: 

In EUR'000 

Loan repayments received in advance  

Deferred income from interest subsidies 

Financial guarantees 

Total other liabilities 

31.12.2018 

31.12.2017 

47,799 

54 

95,960 

143,813 

45,105 

580 

111,600 

157,285 

31.12.2018 

31.12.2017 

2,124 

369 

- 

2,493 

1,986 

436 

40 

2,462 

136 

 
 
 
  
 
 
  
 
 
 
Annual Accounts of the European Development Fund 2018 

17  Member States Contribution called (in EUR’000) 

Member States 

Austria 

Belgium 

Bulgaria 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

United Kingdom 

Total as at 31 December 2018 

Total as at 31 December 2017 

Contribution to 
the Facility 

Contribution to 
interest subsidies 
and technical 
assistance 

Total 
contributed 

Called and not 
paid 

69,935 

103,226 

896 

576 

3,264 

56,820 

320 

39,852 

624,971 

611,715 

35,121 

3,520 

18,577 

340,252 

448 

768 

7,693 

192 

138,415 

8,320 

27,313 

2,368 

1,344 

1,152 

170,369 

73,692 

355,881 

2,697,000 

2,517,000 

8,869 

13,046 

294 

189 

1,071 

7,275 

105 

5,214 

75,972 

76,616 

4,883 

1,155 

2,802 

45,025 

147 

252 

984 

63 

17,685 

2,730 

3,809 

777 

441 

378 

24,876 

9,677 

49,356 

353,691 

333,691 

78,804 

116,272 

1,190 

765 

4,335 

64,095 

425 

45,066 

700,943 

688,331 

40,004 

4,675 

21,379 

385,277 

595 

1,020 

8,677 

255 

156,100 

11,050 

31,122 

3,145 

1,785 

1,530 

195,245 

83,369 

405,237 

3,050,691 

2,850,691 

2,410 

3,530 

140 

90 

510 

2,000 

50 

1,470 

19,550 

20,500 

1,470 

550 

910 

12,860 

70 

120 

270 

30 

4,850 

1,300 

1,150 

370 

210 

180 

7,850 

2,740 

14,820 

100,000 

150,000 

On 12 November 2018, the Council fixed the amount of financial contributions to be paid by each Member State by 21 January 2019. As 
at 31 December 2018 EUR 100,000 were not paid in.  

137 

 
 
  
 
Annual Accounts of the European Development Fund 2018 

18  Contingent liabilities and commitments  

In EUR'000 

Commitments 

Un-disbursed loans 

Un-disbursed commitment in respect of shares and other variable yield securities 

Issued guarantees 

Interest subsidies and technical assistance 

Contingent liabilities 

Signed non-issued guarantees 

31.12.2018 

31.12.2017 

1,283,931 

347,167 

2,800 

457,328 

869,983 

321,695 

7,682 

382,576 

1,553,668 

74,569 

Total contingent liabilities and commitments 

3,644,894 

1,656,505 

19 

Interest and similar income and expenses 

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

In EUR'000 

Loans and advances 

Interest subsidies 

Total interest and similar income 

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

In EUR'000 

Derivative financial instruments 

Cash and cash equivalents 

Treasury financial assets 

Total interest and similar expense 

From 01.01.2018 

From 01.01.2017 

to 31.12.2018 

to 31.12.2017 

92,506 

4,224 

96,730 

97,440 

3,966 

101,406 

From 01.01.2018 

From 01.01.2017 

to 31.12.2018 

to 31.12.2017 

-563 

-654 

-1,322 

-2,539 

-980 

-1,037 

-654 

-2,671 

138 

 
 
  
 
 
 
  
  
 
  
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Annual Accounts of the European Development Fund 2018 

20  Fee and commission income and expenses  

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

In EUR'000 

Fee and commission on loans and advances 

Fee and commission on financial guarantees 

Other 

Total fee and commission income 

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

In EUR'000 

Commission paid to third parties with regard to shares and other variable yield securities 

Total fee and commission expenses 

From 01.01.2018 

From 01.01.2017 

to 31.12.2018 

to 31.12.2017 

107 

170 

7 

284 

- 

209 

1 

210 

From 01.01.2018 

From 01.01.2017 

to 31.12.2018 

to 31.12.2017 

-106 

-106 

-60 

-60 

21   Net result on shares and other variable yield securities 

The main components of net realised gains on shares and other variable yield securities are as follows: 

In EUR'000 

Net proceeds from shares and other variable yield securities 

Dividend income 

Net fair value change 

Net result on shares and other variable yield securities 

22  General administrative expenses 

From 01.01.2018 

From 01.01.2017 

to 31.12.2018 

to 31.12.2017 

3,166 

7,320 

-20,665 

-10,179 

1,030 

1,681 

- 

2,711 

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. 

In EUR'000 

Actual cost incurred by the EIB 

Income from appraisal fees directly charged to clients of the Facility 

Total general administrative expenses 

From 01.01.2018 

From 01.01.2017 

to 31.12.2018 

to 31.12.2017 

-50,021 

2,222 

-47,799 

-48,285 

3,180 

-45,105 

139 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
  
 
 
 
  
 
Annual Accounts of the European Development Fund 2018 

23 

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 

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

Venture capital 
operations 

Nature and purpose 

Interest held by the Facility 

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

Net disbursed amounts; 

Interest income. 

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 
income. 

received  as  dividend 

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 

Venture capital funds 

Total 

Shares and other variable yield 
securities 

Carrying 
amount at 
31.12.2018 

Carrying 
amount at 
31.12.2017 

Maximum 
exposure to 
loss at 
31.12.2018 

Maximum 
exposure to 
loss at 
31.12.2017 

467,152 

420,104 

797,775 

737,661 

467,152 

420,104 

797,775 

737,661 

140 

 
 
 
 
 
 
 
 
 
 
 
  
 
Annual Accounts of the European Development Fund 2018 

24 

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. 

The following table represents the carrying amounts and the committed, but undisbursed amounts, per type of asset: 

Type of IFE investment 

Caption 

Social impact equity funds 

Shares and other variable yield 
securities 

Carrying 
amount at 
31.12.2018 

Carrying 
amount at 
31.12.2017 

Undisbursed 
amount at 
31.12.2018 

Undisbursed 
amount at 
31.12.2017 

19,134 

7,839 

53,672 

51,720 

Loans to financial 
intermediaries 

Risk sharing facilitating 
instruments 

Loans and advances  

36,277 

30,804 

139,329 

44,017 

Issued guarantees 

-786 

-296 

43,668 

64,569 

Direct financing – equity 
participations 

Shares and other variable yield 
securities 

Total 

53,183 

107,808 

42,981 

81,328 

1,014 

4,014 

237,683 

164,320 

25  Subsequent events 

There have been no material post balance sheet events which could require disclosure or adjustment to the 31 December 2018 financial 
statements. 

141