Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2017/1601 establishing the European Fund for Sustainable Development (EFSD), the EFSD Guarantee and the EFSD Guarantee Fund
Date: 2020-05-28
Institutions: Directorate-General for International Cooperation and Development, European Commission
Subjects: Africa, EU aid, European Neighbourhood and Partnership Instrument, Western Balkans, economic recovery, epidemic, fund (EU), infectious disease, investment promotion, sustainable development

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   EUROPEAN COMMISSION  Brussels, 28.5.2020  COM(2020) 407 final 2020/0107 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2017/1601 establishing the European Fund for Sustainable Development (EFSD), the EFSD Guarantee and the EFSD Guarantee Fund   
EXPLANATORY MEMORANDUM 

CONTEXT OF THE PROPOSAL 

The  Coronavirus  disease  outbreak  (‘COVID-19’)  has  been  declared  as  a  pandemic  by  the 
World Health Organization (WHO) on 11 March 2020. Since then, countries across the world 
have adopted extraordinary measures to respond to and contain the outbreak. 

As a result of the pandemic, a sharp contraction of growth is predicted. The measures taken 
by the Member States and partner countries in response to the crisis have severely disrupted 
supply chains and production and have caused absences from the workplace. In addition, the 
provision  of  many  services  has  become  impossible  or  very  difficult.  At  the  same  time, 
consumer  demand  has  dropped.  The  measures  have  already  led  to  or  will  lead  to  severe 
deterioration of the financial situation of many businesses. 

The  COVID-19  pandemic  crisis  is  having  a  major  impact  on  societies  around  the  globe, 
starting with health systems, and moving to severe global social and economic consequences. 
The  response  strategy  of  the  Union  should  be  comprehensive,  coherent  and  integrated, 
tackling  both  the  public  health  and  the  socio-economic  challenges.  The  least  developed 
countries  are  the  most  vulnerable  to  COVID-19,  given  their  weak,  non-resilient  health 
systems  and  complex  socio-economic  and  governance  challenges.  It  is  already  evident  that 
COVID-19  will  have  a  major  impact  on  the  economic  and  macroeconomic  systems  in  our 
partner  countries.  Governments  will  be  challenged  to  sustain  macro-economic  stability  and 
maintain  fiscal  space  to  protect  the  most  vulnerable,  their  companies,  their  workers,  and 
continue providing basic social services. 

This exceptional situation calls for a coherent and unified approach at the level of the Union, 
valid  for  both  the  internal  and  external  dimension.  To  prevent  further  deterioration  of  the 
economy  and  to  boost  a  balanced,  unified  and  equal  recovery  of  the  economic  activity,  an 
exceptional  and  coordinated  programme  of  economic  support  should  be  put  in  place. 
Therefore, substantial amounts of public and private investment are needed to find innovative 
solutions,  energise  the  economy,  create  high-quality  jobs  and  invest  in  repairing  the 
immediate damage brought by the COVID-19 outbreak.  

In view of that the Commission proposes an ambitious package  including an increase in the 
ceilings  under 
the 
the  2014-2020  Multi-annual  Financial  Framework 
implementation  of  measures  within  the  Union  and  beyond  in  response  to  the  impact  of  the 
COVID-19 pandemic,  such as measures supporting affected businesses, cohesion  support to 
Member  States,  capacity  building  to  enhance  future  crisis  preparedness  and  other  relevant 
policy areas and related measures.  

to  enable 

It  is  proposed  that  those  measures  are  carried  out  under  specific  Union  instruments  and 
programmes  and  in  accordance  with  the  relevant  Union  acts  laying  down  rules  for  those 
instruments and programmes.  

It is therefore necessary to enable the implementation of those measures through the delivery 
mechanisms  under  Regulation  (EU)  2017/1601  establishing  the  European  Fund  for 
Sustainable Development (EFSD), the EFSD Guarantee and the EFSD Guarantee Fund. 

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2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

EU action is justified by Articles 209(1) and 212(2) of the Treaty on the Functioning of the 
European Union. 

• 

Subsidiarity and proportionality  

The  explanatory  memorandum  of  the  original  Commission  proposal  details  the  subsidiarity 
and  proportionality  considerations  applicable  to  the  European  Fund  for  Sustainable 
Development: COM(2016)586 – Proposal for a Regulation of the European Parliament and of 
the Council on the European Fund for Sustainable Development (EFSD) and establishing the 
EFSD Guarantee and the EFSD Guarantee Fund. 

• 

Choice of the instrument 

This  regulation  amends  Regulation  (EU)  2017/1601  of  the  European  Parliament  and  of  the 
Council of 26 September 2017 establishing the European Fund for Sustainable Development 
(EFSD), the EFSD Guarantee and the EFSD Guarantee Fund. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

The explanatory memorandum of the following initial Commission proposal details the public 
and stakeholders consultations carried out: COM (2016) 586.  

• 

Evaluations and impact assessments 

The  explanatory  memorandum  of  the  following  initial  Commission  proposal  details  the 
Evaluations and impact assessment carried out to support the proposal: COM(2016) 586.  

4. 

BUDGETARY IMPLICATIONS 

The Union will make available an additional amount of EUR 1 040 million  for the European 
Fund for Sustainable Development, increasing the EU guarantee by EUR 2 078 million and 
bringing the total Union guarantee ceiling to EUR 3 578 million.  

This proposal prolongs until 31 December 2021 the investment period during which the EFSD 
guarantee  agreements  for  supporting  financing  and  investment  operations  can  be  concluded 
with the eligible counterparts.  

More  details  on  the  budgetary  implications  are  provided  in  the  Legislative  Financial 
Statement. 

5. 

• 

OTHER ELEMENTS 

Detailed explanation of the specific provisions of the proposal 

The  legal  framework  consists  of  targeted  modifications  to  the  Regulation  (EU)  2017/1601 
establishing  the  European  Fund  for  Sustainable  Development  (EFSD),  the  EFSD  Guarantee 
and the EFSD Guarantee Fund. 

The main amendments introduced aim at:  

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– 

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Extending  the  geographic  scope  of  the  EFSD  to  the  beneficiaries  in  the  Western 
Balkans listed in Annex I of Regulation 231/20141 . 

Increasing the contribution to the European Fund for Sustainable Development from 
the  Union  budget  in  view  of  implementing  operations  in  response  of  the  impact  of 
the COVID-19 pandemic. 

Prolonging the investment period during which the EFSD guarantee agreements for 
supporting  financing  and  investment  operations  can  be  concluded  with  the  eligible 
counterparts. 

1 

Regulation  (EU)  No  231/2014  of  the  European  Parliament  and  of  the  Council  of  11  March  2014 
establishing an Instrument for Pre-accession Assistance (IPA II) (OJ L77, 15.3.2014, p.11). 

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2020/0107 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EU) 2017/1601 establishing the European Fund for Sustainable 
Development (EFSD), the EFSD Guarantee and the EFSD Guarantee Fund 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 209(1) and 212(2) thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

The  COVID-19  pandemic  crisis  is  having  a  major  impact  on  societies  around  the 
globe, starting with health systems, and moving to severe global social and economic 
consequences. The response strategy of the Union should be comprehensive, coherent 
and integrated, tackling both the public health and the socio-economic challenges both 
within the Union as well as in cooperation with its partner countries, notably in Africa, 
in  the  European  Neighbourhood  and  with  the  beneficiaries  in  the  Western  Balkans 
listed in Annex I to Regulation (EU) No 231/2014 of the European Parliament and of 
the Council2. The COVID-19 pandemic will have a major impact on the economic and 
macroeconomic  systems  in  partner  countries.  Governments  will  be  challenged  to 
sustain  macro-economic  stability  and  maintain  fiscal  space  to  protect  the  most 
vulnerable,  their  companies,  their  workers,  and  continue  providing  basic  health  care 
and social services. It is expected in particular that small and medium sized enterprises 
will run short of liquidity and working capital, putting millions of jobs at risk. Local 
currency  financing  is  likely  to  become  even  more  difficult  to  obtain,  while 
depreciating currencies make hard currency financing even riskier. Similar issues will 
affect renewable energy and other infrastructure projects financed by fee income. 

In addition to the necessary measures and their consequences that third countries need 
to take to tackle the COVID-19 pandemic, the socio-economic situation in the Western 
Balkans will be further aggravated by the challenges the Union itself is facing due to 
the  proximity  and  interdependency  of  those  countries  with  the  Union  economy  and 
their  economic  and  social  links  with  the  Union.  Therefore,  the  coverage  of  the 
European  Fund  for  Sustainable  Development  should  be  extended  to  the  Western 
Balkans  with  a  view  to  assist  them  in  a  sustainable  socio-economic  recovery  and 
resilience, re-establishing supply chains and sustaining macro-economic stability. 

2 

Regulation  (EU)  No  231/2014  of  the  European  Parliament  and  of  the  Council  of  11  mars  2014 
establishing an Instrument for Pre-Accession assistance (IPA II) (OJ L 77, 15.3.2014, p. 11). 

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(3) 

(4) 

(5) 

The Commission has at its disposal a powerful tool for mitigating investment risks, the 
European  Fund  for  Sustainable  Development  (‘EFSD’),  the  financing  arm  of  the 
External  Investment  Plan  launched  in  2017.  That  instrument,  currently  covering  the 
European Neighbourhood and Sub-Saharan Africa, is implemented in partnership with 
international  financial  institutions  and  development  and  finance  institutions  of  the 
Member States. Globally, the EFSD is one of the largest public guarantee programmes 
in support of private sector investment for development.  

Article 137(2) of the Agreement on the withdrawal  of the United Kingdom  of Great 
Britain  and  Northern  Ireland  from  the  European  Union  and  the  European  Atomic 
Energy  Community  provides  that  the  United  Kingdom  and  projects  located  in  the 
United Kingdom shall only be eligible in respect of financial operations guaranteed by 
the  Union  budget  under  the  European  Fund  for  Sustainable  Development  (EFSD) 
provided  that  those  financial  operations  were  approved  by  the  entities  and  bodies, 
including the EIB and the European Investment Fund (‘EIF’), or by persons entrusted 
with the implementation of part of those actions before the date of entry into force of 
the Withdrawal Agreement. Furthermore, Article 143(1) of the Withdrawal Agreement 
limits the liability of the United Kingdom for its share of the contingent liabilities of 
the Union to those contingent liabilities, which arise from financial operations decided 
by the Union before the date of the entry into force of the Withdrawal Agreement. Any 
contingent liability of the Union under this Regulation is subsequent to the date of the 
withdrawal of the United Kingdom from the Union. Therefore, this Regulation should 
not apply to and in the United Kingdom. 
Regulation  (EU)  2017/1601  of  the  European  Parliament  and  of  the  Council3  should 
therefore be amended accordingly, 

HAVE ADOPTED THIS REGULATION: 

Regulation (EU) 2017/1601 is amended as follows: 

Article 1 

(1) 

In Article 2, point 4 is replaced by the following:  

“(4)  ‘partner  country’  means  a  country  that  is  a  signatory  to  the  ACP-EU  Partnership 
Agreement, a country that is listed in Annex I to Regulation (EU) No 232/2014, a country that 
is  eligible for  geographic cooperation under Regulation  (EU) No 233/2014 of the European 
Parliament and of the Council, or a beneficiary in the Western Balkans listed in Annex I to 
Regulation (EU) No 231/2014*; 

______________ 

*Regulation (EU) No 231/2014 of the European Parliament and of the Council of 11 March 2014 establishing an 
Instrument for Pre-accession Assistance (IPA II) (OJ L77, 15.3.2014, p.11).”; 

(2) 

Article 3 is amended as follows: 

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Regulation  (EU)  2017/1601  of  the  European  Parliament  and  of  the  Council  of  26  September  2017 
establishing  the  European  Fund  for  Sustainable  Development  (EFSD),  the  EFSD  Guarantee  and  the 
EFSD Guarantee Fund (OJ L 249, 27.9.2017, p. 1). 

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(a) Paragraphs 1 and 2 are replaced by the following: 

“1. The purpose of the EFSD as an integrated financial package, supplying financing capacity 
in the form of grants, guarantees and other financial instruments to eligible counterparts, shall 
be to support investments and increased access to financing, primarily in Africa, the European 
Neighbourhood  and  the  Western  Balkans,  in  order  to  foster  sustainable  and  inclusive 
economic  and  social  development  and  promote  the  socio-economic  resilience  of  partner 
countries,  including,  where  appropriate,  in  the  context  of  the  European  Neighbourhood 
Policy,  EU  policy  towards  the  Western  Balkans  in  particular  in  the  context  of  the  EU 
enlargement policy, and the Partnership Framework with third countries under the European 
Agenda  on  Migration,  with  a  particular  focus  on  sustainable  and  inclusive  growth,  on  the 
creation  of  decent  jobs,  on  eliminating  inequalities  and  promoting  gender  equality  and  the 
empowerment of women and young people, on ensuring accessibility in line with Article 9 of 
the UN Convention on the Rights of Persons with Disabilities and on socioeconomic sectors 
and  micro,  small  and  medium-sized  enterprises,  while  maximising  additionality,  delivering 
innovative products and crowding in private sector funds. 

2.  The  EFSD  shall  be  guided  by  the  objectives  of  the  Union’s  external  action  as  set  out  in 
Article  21  TEU  and  of  Union  policy  in  the  field  of  development  cooperation  as  set  out  in 
Article  208  TFEU  and  the  internationally  agreed  development  effectiveness  principles.  The 
EFSD shall contribute to the achievement of the Sustainable Development Goals of the 2030 
Agenda,  in  particular  poverty  eradication,  and,  where  appropriate,  to  the  implementation  of 
the European Neighbourhood Policy and EU policy towards the Western Balkans in particular 
in the context of the EU enlargement policy, thus addressing both the COVID-19 pandemic 
and  the  specific  socioeconomic  root  causes  of  migration  and  fostering  sustainable 
reintegration of migrants returning to their countries of origin,  and strengthening transit and 
host communities.”; 

(b) Paragraph 4 is replaced by the following: 

“4.The  EFSD  shall  be  consistent  with  the  objectives  set  out  in  the  external  financing 
instruments  established  by  Regulations  (EU)  No  231/2014,  (EU)  No  232/2014,  (EU)  No 
233/2014  and  (EU)  2015/323  and  with  the  priorities  contained  in  national  or  regional 
programmes and strategy papers, where available.”; 

(3) 

In Article 5, paragraphs 2 and 3 are replaced by the following: 

the  Union’s  external  action,  development  policy, 

“2. The strategic board shall advise the Commission on the strategic orientation and priorities 
of EFSD Guarantee investments and contribute to their alignment with the guiding principles 
and  objectives  of 
the  European 
Neighbourhood  Policy  and  EU  policy  towards  the  Western  Balkans  in  particular  in  the 
context of the EU enlargement policy , as well as with the purpose of the EFSD as set out in 
Article 3. It shall also support the Commission in setting overall investment goals as regards 
the use of the EFSD Guarantee and monitor an appropriate and diversified geographical and 
thematic  coverage  for  investment  windows,  while  giving  special  attention  to  countries 
identified as experiencing fragility or conflict, Least Developed Countries (LDCs) and heavily 
indebted poor countries. 

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3. The strategic board shall also support overall coordination, complementarity and coherence 
between the regional investment platforms, between the three pillars of the EIP, between the 
EIP  and  the  Union’s  other  efforts  on  migration,  on  the  COVID-19  pandemic  and  on  the 
implementation  of  the  2030  Agenda,  as  well  as  with  the  relevant  Union  external  financing 
instruments and trust funds, and with the external lending mandate operations managed by the 
EIB,  including  the  EIB’s  Economic  Resilience  Initiative,  and  the  ACP  Investment  Facility, 
without prejudice to the EIB’s internal governance rules.”; 

(4) 

In Article 7, paragraph 2 is replaced by the following: 

“2.  The  EFSD  Guarantee  shall  support  financing  and  investment  operations  in  partner 
countries  in  Africa,  the  European  Neighbourhood  and  in  the  beneficiaries  in  the  Western 
Balkans listed in Annex I to Regulation (EU) No 231/2014.”; 

(5) 

Paragraph 2 of Article 8 is replaced by the following: 

“2.The  investment  period  during  which  the  EFSD  guarantee  agreements  for  supporting 
financing and investment operations can be concluded with the eligible counterparts shall last 
until 31 December 2021.”; 

______________ 

(6) 

In Article 9(1) , the introductory sentence and point (a) are replaced by the following: 

“1. The financing and investment operations eligible for support through the EFSD Guarantee 
in  accordance  with  the  purpose  of  the  EFSD  set  out  in  Article  3  shall  be  consistent  and 
aligned  with  Union  policies,  in  particular  the  Union’s  development  policy,  the  European 
Neighbourhood  Policy  and  EU  policy  towards  the  Western  Balkans  in  particular  in  the 
context  of  the  EU  enlargement  policy,  as  well  as  with  Union  and  international  support  to 
ensure complementarity with other initiatives and shall support the following objectives: 

(a)  contributing  to  sustainable  development  in  its  economic,  social  and  environmental 
dimensions,  and  to  the  implementation  of  the  2030  Agenda  and,  where  appropriate,  the 
European Neighbourhood Policy and EU policy towards the Western Balkans in particular in 
the  context  of  the  EU  enlargement  policy,  with  a  particular  focus  on  the  eradication  of 
poverty,  the  creation  of  decent  jobs,  economic  opportunities,  skills  and  entrepreneurship, 
promoting in particular gender equality and the empowerment of women and young people, 
while pursuing and strengthening the rule of law, good governance and human rights;”; 

(7) 

Article 12 is amended as follows: 

(a) Paragraph 1 is replaced by the following: 

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“1. Without prejudice to paragraph 2, the EFSD Guarantee shall not, at any time, exceed EUR 
3 578 000 000.”; 

(b) In paragraph 2, the fourth subparagraph is replaced by the following: 

“Aggregate  net  payments  from  the  general  budget  of  the  Union  under  the  EFSD  Guarantee 
shall  not  exceed  EUR  3  578  000  000.  Without  prejudice  to  paragraph  4,  payments  for 
guarantee calls shall be made, where necessary, by the contributing Member States or other 
contributors on pari passu basis with the Union.”; 

_____________________ 

(8) 

Article 15 is amended as follows: 

“Article 15 

Funding of the EFSD from the general budget of the Union 

A contribution of EUR 1 390 000 000 shall be provided by the general budget of the Union.” 

(9) 

 The following Article 15a is inserted: 

“Article 15a 

Support measures 

The amount referred to in Article 15 may be used for technical and administrative assistance, 
such  as  preparatory,  monitoring,  control,  audit  and  evaluation  activities  including  corporate 
information technology systems.”. 

This Decision shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 2 

This Regulation shall be binding in its entirety and directly applicable in the Member States in 
accordance with the Treaties. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT 

CONTEXT OF THE PROPOSAL ............................................................................................. 1 

2. 

• 

• 

• 

3. 

• 

• 

4. 

5. 

• 

1. 

1.1. 

1.2. 

1.3. 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY ............................... 2 

Legal basis .................................................................................................................... 2 

Subsidiarity and proportionality ................................................................................... 2 

Choice of the instrument .............................................................................................. 2 

RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS 
AND IMPACT ASSESSMENTS ................................................................................ 2 

Stakeholder consultations ............................................................................................ 2 

Evaluations and impact assessments ............................................................................ 2 

BUDGETARY IMPLICATIONS ................................................................................ 2 

OTHER ELEMENTS .................................................................................................. 2 

Detailed explanation of the specific provisions of the proposal .................................. 2 

FRAMEWORK OF THE PROPOSAL/INITIATIVE ................................................. 3 

Title of the proposal/initiative ...................................................................................... 3 

Policy area(s) concerned .............................................................................................. 3 

ABB Activity: International economic and financial affairs The proposal/initiative 
relates to: ...................................................................................................................... 3 

1.4. 

Objective(s) .................................................................................................................. 3 

1.4.1.  General objective(s) ..................................................................................................... 3 

1.4.2.  Specific objective(s) ..................................................................................................... 3 

1.4.3.  Expected result(s) and impact ...................................................................................... 3 

1.4.4. 

Indicators of performance ............................................................................................ 3 

1.5. 

Grounds for the proposal/initiative .............................................................................. 4 

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative ............................................................ 4 

1.5.2.  Added value of Union involvement (it may result from different factors, e.g. 

coordination gains, legal certainty, greater effectiveness or complementarities). For 
the purposes of this point ‘added value of Union involvement’ is the value resulting 
from Union intervention which is additional to the value that would have been 
otherwise created by Member States alone. ................................................................. 4 

1.5.3.  Lessons learned from similar experiences in the past .................................................. 4 

1.5.4.  Compatibility with the Multiannual Financial Framework and possible synergies 

with other appropriate instruments............................................................................... 4 

1.5.5.  Assessment of the different available financing options, including scope for 

redeployment ................................................................................................................ 4 

1.6. 

1.7. 

Duration and financial impact of the proposal/initiative ............................................. 5 

Management mode(s) planned ..................................................................................... 5 

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2. 

3. 

3.1. 

MANAGEMENT MEASURES................................................................................... 7 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE .............. 7 

Heading(s) of the multiannual financial framework and expenditure budget line(s) 
affected ......................................................................................................................... 7 

3.2. 

Estimated financial impact of the proposal on appropriations ..................................... 8 

3.2.1.  Summary of estimated impact on operational appropriations...................................... 8 

3.2.2.  Summary of estimated impact on administrative appropriations ............................... 10 

3.2.3.  Compatibility with the current multiannual financial framework.............................. 12 

3.2.4.  Third-party contributions ........................................................................................... 12 

3.3. 

Estimated impact on revenue ..................................................................................... 13 

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LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative 

Proposal for amendment of 

REGULATION  (EU)  2017/1601  OF  THE  EUROPEAN  PARLIAMENT  AND  OF 
THE  COUNCIL  of  26  September  2017  establishing  the  European  Fund  for 
Sustainable  Development  (EFSD),  the  EFSD  Guarantee  and  the  EFSD  Guarantee 
Fund 

1.2. 

Policy area(s) concerned  

01 

1.3. 

ABB  Activity: 
proposal/initiative relates to:  

International 

economic 

and 

financial 

affairs  The 

 a new action  
 a new action following a pilot project/preparatory action4  

X the extension of an existing action  

X a merger or redirection of one or more actions towards another/a new action  

1.4. 

Objective(s) 

1.4.1.  General objective(s) 

This targeted amendment of the EFSD Regulation is proposed within the framework 
of the the response to the Covid-19 pandemic and its consequences. The amendment 
will also extend the geographical scope of the Regulation to the Western Balkans. 

1.4.2. 

Specific objective(s) 

Specific objective 

The  increased  guarantee  ceiling,  prolonged  investment  period  and  enlarged 
geographical  scope  shall  contribute  to  addressing  the  Covid-19  pandemic  and  its 
consequences. 

1.4.3.  Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

The amended Regulation should help  to  mobilise additional investments to  address 
the  Covid-19  pandemic and  its  consequences,  including  supporting  socio-economic 
recovery. 

1.4.4. 

Indicators of performance 

Specify the indicators for monitoring progress and achievements. 

A  common  and  minimum  set  of  indicators  that  reflect  project  outputs  and  intended 
outcomes has been defined for monitoring the implementation of the European Fund for 
Sustainable Development (EFSD) Guarantee. 

4 

As referred to in Article 58(2)(a) or (b) of the Financial Regulation. 

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1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative 

The investment period during which the EFSD guarantee agreements for supporting 
financing and investment operations can be concluded with the eligible counterparts 
shall last until 31 December 2021. 

1.5.2.  Added  value  of  Union  involvement  (it  may  result  from  different  factors,  e.g. 
coordination gains, legal certainty, greater effectiveness or complementarities). For 
the purposes of this point ‘added value of Union involvement’ is the value resulting 
from  Union  intervention  which  is  additional  to  the  value  that  would  have  been 
otherwise created by Member States alone. 

The present amendment  of the EFSD Regulation is proposed within the framework 
of the response to the Covid-19 pandemic and its consequences. Providing additional 
funds  to  the  EFSD  under  the  current  MFF,  thereby  increasing  its  capacity  to  grant 
guarantees in partner countries, facilitates a swift reply to the Covid-19 pandemic in 
these regions.  

This is in line with the global role, responsibility and values of the Union. 

1.5.3.  Lessons learned from similar experiences in the past 

The entire amount of the initial  EFSD  guarantee envelope (EUR 1.54 bn including 
contributions  from  third  parties)  has  been  allocated  to  28  guarantees.  These  are 
expected  to  leverage  EUR  17.5  bn  in  investments.  The  existing  pipeline  and 
discussions with partner financial institutions confirm that the EFSD has the potential 
to more than double its signed guarantee operations until the end of 2021. 

1.5.4.  Compatibility  with  the  Multiannual  Financial  Framework  and  possible  synergies 

with other appropriate instruments 

The  additional  guarantee  amount  is  financed  within  the  limits  of  the  Commission 
proposal for a raised ceiling of the current MFF. 

1.5.5.  Assessment  of  the  different  available  financing  options,  including  scope  for 

redeployment 

There  are  no  further  possibilities  of  redeployment  or  use  of  margins  or  special 
instrument  in  the  current  MFF.  The  additional  guarantee  amount  is  therefore 
financed  within  the  limits  of  the  Commission  proposal  for  a  raised  ceiling  of  the 
current MFF. 

EN 

4 

  EN 

 
1.6. 

Duration and financial impact of the proposal/initiative 

X limited duration  

–    in effect until 31/12/2020  

X Financial impact until 2021 included, with reference to the period during which 
guarantee agreements can be concluded with the eligible counterparts.  

 unlimited duration 

–  Implementation with a start-up period from YYYY to YYYY, 

–  followed by full-scale operation. 

1.7.  Management mode(s) planned5  

X  Direct  management  by  the  Commission  for  the  management  of  the  EFSD 
guarantee fund. 

–   by its departments, including by its staff in the Union delegations;  

–   by the executive agencies  

 Shared management with the Member States  

X  Indirect  management  by  entrusting  budget  implementation  tasks  to  (for  the 
Facilities and guarantees backed by the EFSD guarantee): 

–   third countries or the bodies they have designated; 

–  X international organisations and their agencies 

–  X the EIB and the European Investment Fund; 

–   bodies referred to in Articles 70 and 71 of the Financial Regulation; 

–  X public law bodies; 

–  X  bodies  governed  by  the  private  law  of  a  Member  State  that  provide  adequate 
financial guarantees, by derogation from Article 58(1)(c)(vii) of Regulation (EU) 
No 966/2012; 

–  X bodies governed by the private law of a Member State that are entrusted with 
the  implementation  of  a  public-private  partnership  and  that  provide  adequate 
financial guarantees; 

–  X bodies governed by the private law of a partner country that provide adequate 
financial guarantees, by derogation from Article 58(1)(c)(vii) of Regulation (EU) 
No 966/2012; 

– X bodies governed by private law with a public service mission to the extent that 
they provide adequate financial guarantees;  

– 

If more than one management mode is indicated, please provide details in the ‘Comments’ section. 

5 

Details of management modes and references to the Financial Regulation may be found on the 
BudgWeb site: 
https://myintracomm.ec.europa.eu/budgweb/EN/man/budgmanag/Pages/budgmanag.aspx  

EN 

5 

  EN 

                                                 
Comments  

The provisioning of and management of the EFSD Guarantee Fund will be implemented directly 
by  the  Commission,  whereas  the  instruments  covered  by  the  Guarantee  will  be  implemented  in 
indirect management.   

EN 

6 

  EN 

2. 

MANAGEMENT MEASURES  

The  measures 
the 
Commission’s 2017 proposal for the EFSD Regulation apply (COM(2016) 586 final), mutatis 
mutandis. 

the  Legislative  financial  statement  accompanying 

indicated 

in 

3. 

3.1. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

  Existing budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of  
expenditure 

Contribution  

Diff./Non-
diff.6 

from 
EFTA 
countries7 

from 
candidate 
countries8 

from third 
countries 

within the 
meaning of 
Article 21(2)(b) of 
the Financial 
Regulation  

Heading of 
multiannual 
financial 
framework 

4 

01 03 08 

Diff.  

YES 

YES 

YES 

NO 

  New budget lines requested  

In order of multiannual financial framework headings and budget lines. 

Heading of 
multiannual 
financial 
framework 

Number  

Budget line 

Type of 
expenditure 

Contribution  

Diff./Non-
diff. 

from 
EFTA 
countries 

from 
candidate 
countries 

from third 
countries 

within the 
meaning of 
Article 21(2)(b) of 
the Financial 
Regulation  

4 

01 01 04 01 

Non-diff 

NO 

NO 

NO 

NO 

6 
7 
8 

Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations. 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidates from the Western Balkans. 

EN 

7 

  EN 

 
 
                                                 
3.2. 

Estimated financial impact of the proposal on appropriations  

3.2.1. 

Summary of estimated impact on operational appropriations  

–    The proposal/initiative does not require the use of operational appropriations  

–  X The proposal/initiative requires the use of operational appropriations, as explained below: 

Heading of multiannual financial  
framework  

IV 

EUR million (to three decimal places) 

EFSD 

Operational expenditure 

2020 

TOTAL 

01 03 08 

Commitments 

Payments 

(1) 

(2) 

1 039,000 

1 039,000 

1 039, 000 

1 039,000 

Appropriations of an 
administrative nature financed 
from the envelope of specific 
programmes9 

01 01 04 0110 

Commitments = 
Payments 

(3) 

1,000 

1,000 

Total appropriations under 
Heading 4  

Commitments 

=(1)+(3) 

1 040,000 

1 040,000 

Payments 

=(2)+(3) 

1,000 

1 040,000 

9 
10   

Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research. 
It is estimated that EUR 1,5 million will be needed as administrative appropriations in 2021, which will be financed from and committed under the successor administrative budget 
lines – normally under the Neighbourhood, Development and International Cooperation Instrument as well as the Instrument for Pre-accession Assistance III, as currently proposed.  

EN 

8 

EN 

 
 
 
 
                                                 
 
 
 
 
 
 
 
 
 
 
Heading of multiannual financial  
framework  

5 

‘Administrative expenditure’ 

EUR million (to three decimal places) 

2020 

TOTAL 

Commission 

 Human resources11  
 Other administrative expenditure  

TOTAL COMMISSION 

Appropriations  

TOTAL appropriations 
under HEADING 5 
of the multiannual financial framework  

(Total  commitments  = 
Total payments) 

TOTAL appropriations  
under HEADINGS 1 to 5 
of the multiannual financial framework  

Commitments 

Payments 

EUR million (to three decimal places) 

2020 

TOTAL 

1 040,000 

1 040,000 

1 040,00 

1 040,000 

11 It is estimated that 0,8 million will be needed in 2021, to be financed under the 2021 budget. 

EN 

9 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
 
 
 
 
 
3.2.2. 

Summary of estimated impact on administrative appropriations  

–    The  proposal/initiative  does  not  require  the  use  of  appropriations  of  an 

administrative nature  

–  X  The proposal/initiative requires the use of appropriations of an administrative 

nature, as explained below: 

–  EUR million (to three decimal places) 

2020 

TOTAL 

–   

HEADING 5 
of the multiannual 
financial framework 

Human resources 

Other administrative 
expenditure 

Subtotal HEADING 5 
of the multiannual 
financial framework 

Outside HEADING 512 
of the multiannual 
financial framework 

Human resources 

Other expenditure  
of an administrative nature 

Subtotal  
outside HEADING 5 
of the multiannual 
financial framework 

1,00 

1,00 

TOTAL 

1,00 

The  appropriations  required  for  human  resources  and  other  expenditure  of  an  administrative  nature  will  be  met  by 
appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the 
DG,  together  if  necessary  with  any  additional  allocation  which  may  be  granted  to  the  managing  DG  under  the  annual 
allocation procedure and in the light of budgetary constraints.  

3.2.2.1.  Estimated requirements of human resources  

–   The proposal/initiative does not require the use of human resources.  

–  X  The  proposal/initiative  requires  the  use  of  human  resources,  as  explained 

below: 

–  Estimate to be expressed in full time equivalent units 

12 

Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU programmes 
and/or actions (former ‘BA’ lines), indirect research, direct research. 

EN 

10 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
2020 

 Establishment plan posts (officials and temporary staff) 

XX 01 01 01 (Headquarters and Commission’s Representation Offices) 

XX 01 01 02 (Delegations) 

XX 01 05 01/11/21 (Indirect research) 

10 01 05 01/11 (Direct research) 

 External staff (in Full Time Equivalent unit: FTE)13 

XX 01 02 01 (AC, END, INT from the ‘global envelope’)14 

XX 01 02 02 (AC, AL, END, INT and JPD in the delegations) 

01 01 04 01 15 

- at Headquarters 

- in Delegations  

XX 01 05 02/12/22 (AC, END, INT - Indirect research) 

10 01 05 02/12 (AC, END, INT - Direct research) 

Other : 

TOTAL 

XX is the policy area or budget title concerned. 

The human resources required will be met by staff from the DG who are already assigned to management of the 
action  and/or  have  been  redeployed  within  the  DG,  together  if  necessary  with  any  additional  allocation  which 
may  be  granted  to  the  managing  DG  under  the  annual  allocation  procedure  and  in  the  light  of  budgetary 
constraints. 

Description of tasks to be carried out: 

Officials and temporary staff 

External staff 

Operational  and  financial  management  of  the  European  Fund  for  Sustainable 
Development as well as communication and visibility  
Operational  and  financial  management  of  the  European  Fund  for  Sustainable 
Development as well as communication and visibility  

13 

14  

15 

AC  =  Contract  Staff;  AL  =  Local  Staff;  END  =  Seconded  National  Expert;  INT  =  agency  staff; 
JPD = Junior Professionals in Delegations.  
It  is  estimated  that  10  contract  agents  in  headquarters  will  be  financed  under  the  global  envelope  in 
2021. 
Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines). It is estimated 
that  10  contract  agents  in  delegations  will  be  financed  in  2021  under  the  successor  administrative 
budget  lines  –  normally  under  the  Neighbourhood,  Development  and  International  Cooperation 
Instrument as well as the Instrument for Pre-accession Assistance III, as currently proposed. 

EN 

11 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3.  Compatibility with the current multiannual financial framework  

The proposal/initiative: 

–    can be fully financed within the relevant heading of the Multiannual Financial 

Framework (MFF). 

–    requires use of the unallocated margin under the relevant heading of the MFF 

and/or use of the special instruments as defined in the MFF Regulation. 

Explain  what  is  required,  specifying  the  headings  and  budget  lines  concerned,  the  corresponding 
amounts, and the instruments proposed to be used. 

–  X  requires a revision of the MFF. 

 The additional funding is financed within the Commission’s proposal for revision of the current MFF. 

3.2.4.  Third-party contributions  

The proposal/initiative: 

–  X  does not provide for co-financing by third parties 

–    provides for the co-financing by third parties estimated below: 

Appropriations in EUR million (to three decimal places) 

Year 
N16 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as necessary 
to show the duration of the 
impact (see point 1.6) 

Total 

Specify  the  co-financing 
body  

TOTAL appropriations 
co-financed  

16 

Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the 
expected first year of implementation (for instance: 2021). The same for the following years. 

EN 

12 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.3. 

Estimated impact on revenue  

–  X  The proposal/initiative has no financial impact on revenue. 

–    The proposal/initiative has the following financial impact: 

–   on own resources  

–   on other revenue 

– 

please indicate, if the revenue is assigned to expenditure lines  

Appropriations 
available for 
the current 
financial year 

Budget revenue line: 

Article …………. 

    EUR million (to three decimal places) 

Impact of the proposal/initiative17 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as necessary to show 
the duration of the impact (see point 1.6) 

For assigned revenue, specify the budget expenditure line(s) affected. 

Other  remarks  (e.g.  method/formula  used  for  calculating  the  impact  on  revenue  or  any  other 
information). 

17 

As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net 
amounts, i.e. gross amounts after deduction of 20 % for collection costs. 

EN 

13 

  EN