Communication from the Commission to the European Parliament, the Council and the Court of Auditors - Annual Accounts of the European Development Fund 2019
Date: 2020-06-26
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, 26.6.2020  COM(2020) 290 final  Communication from the Commission to the European Parliament, the Council and the Court of Auditors  Annual Accounts of the European Development Fund 2019  
 
 
Annual accounts of the 

European Development Fund 

Financial year 2019 

 
 
 
 
Annual accounts of the European Development Fund 2019 

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 ................... 47 

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 .......................................................................................... 86 

2 

 
 
 
 
 
Annual accounts of the European Development Fund 2019 

CERTIFICATION OF THE ACCOUNTS 

The  annual  accounts  of  the  European  Development  Fund  for  the  year  2019  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 

16 June 2020

3 

 
 
 
 
Annual accounts of the European Development Fund 2019 

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, 
managed  by  the  EIB,  and  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 2019 

2.  HOW IS THE EDF FUNDED? 

The European Council of 2 December 2013 adopted the multiannual 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 intergovernmental 
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  based  on 
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  based  on  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 the 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 2019 

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 no later than 31 July of the year following 
the balance sheet date and presented to the European Parliament and to the Council for discharge. 

4.  AUDIT AND DISCHARGE 

4.1.  AUDIT 

The EDF annual accounts are audited 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.  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 of 
the discharge authority. 

6 

 
 
Annual accounts of the European Development Fund 2019 

EUROPEAN DEVELOPMENT FUND 
FINANCIAL YEAR 2019 

FUNDS MANAGED BY THE EUROPEAN 
COMMISSION 

7 

 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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 ...................................................... 16 

STATEMENT OF CHANGES IN NET ASSETS BY EDF ....................................................... 17 

NOTES TO THE FINANCIAL STATEMENTS OF THE EDF ................................................... 19 

FINANCIAL STATEMENTS OF THE EU TRUST FUNDS CONSOLIDATED IN EDF ........... 47 

FINANCIAL STATEMENTS OF THE BÊKOU EU TRUST FUND 2019 .................................... 48 

FINANCIAL STATEMENTS OF THE EUTF AFRICA 2019 ................................................... 55 

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 2019 

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 below may appear not to add-up. 

9 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

EDF BALANCE SHEET 

NON-CURRENT ASSETS 
Financial 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 
Financial liabilities 

CURRENT LIABILITIES 
Payables 
Accrued charges and deferred income 

TOTAL LIABILITIES 

NET ASSETS 

FUNDS & RESERVES 
Fair value reserve 
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 

EUR million 
31.12.2019  31.12.2018 

2.1 
2.2 
2.3 

2.2 
2.4 
2.5 

2.6 

2.7 
2.8 

2.9 
2.10 
2.10 

 36 
 910 
 266 
1 213 

1 288 
 123 
1 179 
2 590 
3 803 

– 
 887 
 201 
1 088 

1 448 
 138 
 387 
1 973 
3 061 

 (19) 
 (19) 

 (18) 
 (18) 

 (516) 
(1 319) 
(1 835) 
(1 854) 

 (241) 
(1 281) 
(1 523) 
(1 540) 

1 948 

1 521 

 (2) 
54 809 
2 252 
(51 155) 
(3 956) 
1 948 

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

10 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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 

ECONOMIC RESULT OF THE YEAR 

Note 

3.1 

3.2 

3.3 
3.4 
3.5 
3.6 

2019 

EUR million 
2018 

 28 
 28 

 7 
 39 
 46 
 74 

 4 
 4 

 10 
 46 
 57 
 60 

(3 755) 
 (14) 
 (1) 
 (260) 
(4 030) 

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

(3 956) 

(4 118) 

11 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note 

EUR million 
2018 
(3 956)  (4 118) 

2019 

4 385 
 (65) 
 136 
 15 
– 
 2 
 275 
 37 
 (2) 

 (36) 
 792 

 792 
 387 
1 179 

4 250 
 (38) 
 (235) 

 (46) 
 (4) 
 3 
 (322) 
 548 
– 

– 
 40 

 40 
 347 
 387 

Annual accounts of the European Development Fund 2019 

EDF CASHFLOW STATEMENT 

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 
Other non-cash movements 
Investing activities 
(Increase)/decrease in available for sale financial assets  

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 

2.5 
2.5 

12 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EDF STATEMENT OF CHANGES IN NET ASSETS 

Annual accounts of the European Development Fund 2019 

Fund 
capital - 
active 
EDFs 
(A) 
 73 264 

– 
– 
 73 264 

– 
– 
 73 264 

Uncalled 
funds - 
active 
EDFs (B) 

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

Cumulative 
Reserves (D) 

 27 090 

 46 173 

 (47 037) 

 (4 250) 
– 
 22 840 

 (4 385) 
– 
 18 455 

 4 250 
– 
 50 423 

 4 385 
– 
 54 809 

– 
 (4 118) 
 (51 155) 

– 
 (3 956) 
 (55 111) 

Called fund 
capital from 
closed EDFs 
carried forward 
(E) 

Fair value 
reserve (F) 

EUR million 

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

 2 252 

– 
– 
 2 252 

– 
– 
 2 252 

– 

– 
  (2) 

  (2) 

 1 389 

 4 250 
 (4 118) 
 1 521 
  (2) 
 4 385 
 (3 956) 
 1 948 

BALANCE AS AT 31.12.2017 

Capital increase -  contributions 

Economic result of the year 
BALANCE AS AT 31.12.2018 
Fair value movements 
Capital increase - contributions 
Economic result of the year 
BALANCE AS AT 31.12.2019 

13 

 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
BALANCE SHEET BY EDF 

Annual accounts of the European Development Fund 2019 

Note 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

11th 
EDF 

Total 

Eighth 
EDF 

31.12.2019 

31.12.2018 
Ninth 
EDF 

10th 
EDF 

NON-CURRENT ASSETS 
Financial 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 

2.1 
2.2 
2.3 

2.2 

2.4 

2.5 

NON-CURRENT LIABILITIES 
Financial liabilities 

2.6 

CURRENT LIABILITIES 
Payables 
Accrued charges and deferred 
income 

2.7 

2.8 

TOTAL LIABILITIES 

– 
– 
– 
– 

– 
 6 
– 
  6 

– 
 325 
– 
  325 

 36 
 580 
 266 
  882 

 36 
 910 
 266 
 1 213 

– 
– 
– 
– 

– 
 23 
– 
  23 

– 
 520 
– 
  520 

 0 

 26 

 441 

 821 

1 288 

 0 

 19 

 445 

 984 

 183 

 121 

2 201 

(2 382) 

 123 

 183 

 176 

2 457 

(2 679) 

 182 
– 
  365 
  365 

 53 
– 
  201 
  207 

2 160 
– 

(2 395) 
1 179 
 4 801   (2 777) 
 5 127   (1 896) 

 (0) 
1 179 
 2 590 
 3 803 

 183 
– 
  367 
  367 

 111 
– 
  306 
  329 

2 421 
– 

(2 715) 
 387 
 5 323   (4 023) 
 5 843   (3 477) 

11th 
EDF 

– 
 344 
 201 
  546 

 EUR million 

Total 

– 
 887 
 201 
 1 088 

1 448 

 138 

 (0) 
 387 
 1 973 
 3 061 

– 
– 

– 

– 

– 
– 

– 
– 

 (1) 
  (1) 

 (18) 
  (18) 

 (5) 

 (108) 

 (404) 

 (19) 
  (19) 
– 
 (516) 

 (96) 

 (240) 

 (983) 

(1 319) 

– 
– 

 (0) 

 (0) 

– 
– 

 (1) 
  (1) 

 (16) 
  (16) 

 (18) 
  (18) 

 (6) 

 (125) 

 (111) 

 (241) 

 (83) 

 (358) 

 (840) 

(1 281) 

  (101) 
  (101) 

  (348)   (1 386)   (1 835) 
  (349)   (1 405)   (1 854) 
– 
 1 948 

 4 778   (3 300) 

  (0) 
  (0) 

  (89) 
  (89) 

  (482) 
  (484) 

  (951) 
  (967) 

 (1 522) 
 (1 540) 

  366 

  240 

 5 359   (4 444) 

 1 521 

NET ASSETS 

  365 

  106 

2.9 

Fair value reserves 
Called fund capital - active EDFs  2.10 
Called fund capital from closed 
EDFs carried forward 
Called fund capital transfers 
between active EDFs 

2.10 

2.10 

– 
12 164 

– 
10 758 

– 
20 960 

 (2) 
10 927 

 (2) 
54 809 

– 
12 164 

– 
10 773 

– 
20 960 

– 
6 527 

– 
50 423 

 627 

1 625 

– 

– 

2 252 

 627 

1 625 

– 

– 

2 252 

(2 510) 

2 109 

 265 

 136 

– 

(2 509) 

2 137 

 55 

 317 

– 

14 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

Note 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

11th 
EDF 

Total 

Eighth 
EDF 

31.12.2019 

31.12.2018 
Ninth 
EDF 

10th 
EDF 

11th 
EDF 

 EUR million 

Total 

Economic result carried forward 
from previous years 
Economic result of the year 

(10 098)  (14 406)  (18 077) 

(8 573)  (51 155)  (10 098)  (14 352)  (17 078) 

(5 508) 

(47 037) 

 (0) 

 (34) 

 (529) 

(3 393) 

(3 956) 

 0 

 (53) 

(1 000) 

(3 065) 

(4 118) 

NET ASSETS 

  183 

  53 

 2 618 

  (905) 

 1 948 

  184 

  129 

 2 938   (1 729) 

 1 521 

15 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENT OF FINANCIAL PERFORMANCE BY EDF 

Annual accounts of the European Development Fund 2019 

Note 

Eighth 
EDF 

Ninth 
EDF 

2019 
10th 
EDF 

11th 
EDF 

Total 

Eighth 
EDF 

Ninth 
EDF 

2018 

10th 
EDF 

11th 
EDF 

EUR million 

Total 

REVENUE 
Revenue from non-exchange 
transactions 
Recovery activities 

3.1 

Revenue from exchange transactions  3.2 
Financial revenue 
Other revenue 

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

3.3 
3.4 
3.5 
3.6 

 0 
  0 

 (0) 
 1 
 1 
  1 

 (0) 
– 
 (0) 
 (1) 
  (1) 

– 
  0 

– 
6 
 6 
  6 

 18 
  18 

 3 
 21 
 24 
  42 

 10 
  10 

 4 
 12 
 16 
  26 

 28 
  28 

 7 
 39 
 46 
  74 

 0 
  0 

 0 
 1 
 1 
  1 

 3 
  3 

 (3) 
  (3) 

 2 
 6 
 8 
  11 

 8 
 27 
 35 
  32 

 4 
  4 

 1 
 12 
 13 
  17 

 4 
  4 

 10 
 46 
 57 
  60 

 (35) 
– 
 2 
 (8) 

(3 755) 
 (14) 
 (1) 
 (260) 
  (40)    (571)   (3 418)   (4 030) 

(3 141) 
 (5) 
 (1) 
 (272) 

 (579) 
 (9) 
 (2) 
 20 

 0 
– 
 0 
 (1) 
  (0) 

 (59) 
– 
 1 
 (7) 

(3 012) 
 (984) 
 (1) 
 18 
 1 
 5 
 (70) 
 (71) 
  (64)   (1 031)   (3 082) 

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

ECONOMIC RESULT OF THE YEAR 

  (0) 

  (34)    (529)   (3 393)   (3 956) 

  0 

  (53)   (1 000)   (3 065) 

 (4 118) 

16 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENT OF CHANGES IN NET ASSETS BY EDF 

Annual accounts of the European Development Fund 2019 

Eighth EDF 

Fund capital 
- active 
EDFs (A) 

Uncalled funds 
- active EDFs 
(B) 

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

Cumulative 
Reserves (D) 

Called fund 
capital from 
closed EDFs 
carried 
forward (E) 

BALANCE AS AT 31.12.2017 
Transfers to/from the 10th EDF 
BALANCE AS AT 31.12.2018 
Transfers to/from the 10th EDF 
BALANCE AS AT 31.12.2019 

 12 164 

 12 164 

 12 164 

– 

– 

– 

 12 164 
– 
 12 164 
– 
 12 164 

 (10 098) 

  627 

 (10 098) 

  627 

 (10 098) 

  627 

Called fund 
capital 
transfers 
between 
active EDFs 
(F) 
 (2 503) 
 (7) 
 (2 509) 
 (1) 
 (2 510) 

EUR million 

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

  190 
 (7) 
  183 
 (1) 
  183 

Ninth EDF 

BALANCE AS AT 31.12.2017 
Transfers to/from the 10th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2018 
Capital increase - contributions 
Transfers to/from the 10th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2019 

Fund 
capital - 
active 
EDFs (A) 

Uncalled 
funds - 
active EDFs 
(B) 

 10 773 

– 

 10 773 

– 
 15 

 10 773 

  15 

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

Cumulative 
Reserves (D) 

Called fund 
capital from 
closed EDFs 
carried 
forward (E) 

 (14 352) 

 1 625 

Called fund 
capital 
transfers 
between 
active EDFs 
(F) 

 2 177 
 (40) 

 (53) 
 (14 406) 

 1 625 

 2 137 

 (34) 
 (14 440) 

 1 625 

 (27) 
– 
 2 109 

 10 773 
– 
– 
 10 773 
 (15) 
– 
– 
 10 758 

17 

EUR million 

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

  222 
 (40) 
 (53) 
  129 
 (15) 
 (27) 
 (34) 
  53 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

10th EDF 

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 
Transfers to/from the Eighth and 
Ninth EDF 
Transfers to/from the 11th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2019 

Fund capital - 
active EDFs 
(A) 

Uncalled 
funds - active 
EDFs (B) 

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

Cumulative 
Reserves (D) 

 20 960 

  0 

 20 960 

 (17 078) 

 20 960 

  0 

 20 960 

– 

– 

– 
– 
 20 960 

– 

– 
– 
 20 960 

(1 000) 
 (18 077) 

 (529) 
 (18 606) 

Called fund 
capital from 
closed EDFs 
carried forward 
(E) 

EUR million 

Called fund 
capital transfers 
between active 
EDFs (F) 

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

– 

– 

– 

  120 

 4 003 

 47 

 47 

 (112) 

  55 

 28 

 181 
– 
  265 

 (112) 
(1 000) 
 2 938 

 28 

 181 
 (529) 
 2 618 

EUR million 

11th EDF 

Fund 
capital - 
active 
EDFs (A) 

Uncalled 
funds - 
active EDFs 
(B) 

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

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 
Fair value movements 
Capital increase - contributions 
Economic result of the year 
BALANCE AS AT 31.12.2019 

 29 367 

 27 090 
(4 250) 

 29 367 

 22 840 

(4 400) 

 29 367 

 18 440 

 2 277 
4 250 

– 

– 
 6 527 

4 400 
– 
 10 927 

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

Cumulative 
Reserves 
(D) 

 (5 508) 

– 

– 

– 

(3 065) 
 (8 573) 

(3 393) 
 (11 966) 

18 

Called fund 
capital 
transfers 
between 
active EDFs 
(F) 

Fair value 
reserve (G) 

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

  206 
– 

 112 

– 
  317 

 (181) 
– 
  136 

– 

– 
 (2) 

  (2) 

 (3 025) 
4 250 

 112 

(3 065) 
 (1 729) 
 (2) 
4 219 
(3 393) 
  (905) 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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

19 

 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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  thousands  of  euros,  the  euro  being  the  EU’s  functional  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 

31.12.2019 

31.12.2018  Currency 

31.12.2019 

31.12.2018 

BGN 
CZK 
DKK 
GBP 
HRK 
HUF 

1.9558 
25.4080 
7.4715 
0.8508 
7.4395 
330.5300 

1.9558  PLN 
25.7240  RON 
7.4673  SEK 
0.8945  CHF 
7.4125  JPY 
320.9800  USD 

4.2568 
4.783 
10.4468 
1.0854 
121.9400 
1.1234 

4.3014 
4.6635 
10.2548 
1.1269 
125.8500 
1.145 

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: amounts for employee 
benefit  liabilities,  accrued  and  deferred  revenue  and  charges,  provisions,  financial  risk  on  accounts 
receivable,  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 

20 

 
 
Annual accounts of the European Development Fund 2019 

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.  

1.3.  BALANCE SHEET 

1.3.1. 

Intangible assets 

An  intangible  asset  is  an  identifiable  non-monetary  asset  without  physical  substance.  An  asset  is 
identifiable if it is either separable (i.e. it is capable of being separated or divided from the entity, e.g. by 
being  sold,  transferred,  licensed,  rented,  or  exchanged,  either  individually  or  together  with  a  related 
contract, identifiable asset or liability, regardless of whether the entity intends to do so), or arises from 
binding arrangements (including rights from contracts or other legal rights), regardless of whether those 
rights are transferable or separable from the entity or from other rights and obligations). 

Acquired  intangible  assets  are  stated  at  historical  cost  less  accumulated  amortisation  and  impairment 
losses.  Internally  developed  intangible  assets  are  capitalised  when  the  relevant  criteria  of  the  EU 
accounting  rules  are  met  and  the  expenses  relate  solely  to  the  development  phase  of  the  asset.  The 
capitalisable  costs  include  all  directly  attributable  costs  necessary  to  create,  produce,  and  prepare  the 
asset to be capable of operating in the manner intended by management. Costs associated with research 
activities,  non-capitalisable  development  costs  and  maintenance  costs  are  recognised  as  expenses  as 
incurred. 

Intangible assets are amortised on a straight-line basis over their estimated useful lives (3 to 11 years). 
The estimated useful lives of intangible assets depend on their specific economic lifetime or legal lifetime 
determined by an agreement. 

1.3.2. 

Property, plant and equipment 

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

Type of asset 
Buildings 
Plant and equipment 
Furniture and vehicles 
Computer hardware 
Other 

Straight line depreciation rate 
4 % to 10 % 
10 % to 25 % 
10 % to 25 % 
25 % to 33 % 
10 % to 33 % 

Gains  or  losses  on  disposals  are  determined  by  comparing  proceeds  less  selling  expenses  with  the 
carrying amount of the disposed asset and are included in the statement of financial performance. 

21 

 
 
Annual accounts of the European Development Fund 2019 

Leases 

A  lease  is  an  agreement  whereby  the  lessor  conveys  to  the lessee  in  return for  a  payment  or  series of 
payments the right to use an asset for an agreed period of time. Leases are classified as either finance 
leases or operating leases. 

Finance  leases  are  leases  where  substantially  all  the  risks  and  rewards  incidental  to  ownership  are 
transferred  to  the  lessee.  When  entering  a  finance  lease  as  a  lessee,  the  assets  acquired  under  the 
finance  lease  are  recognised  as  assets  and  the  associated  lease  obligations  as  liabilities  as  from  the 
commencement of the lease term. The assets and liabilities are recognised at amounts equal to the fair 
value  of  the  leased  property  or,  if  lower,  the  present  value  of  the  minimum  lease  payments,  each 
determined at the inception of the lease. Over the period of the lease term, the assets held under finance 
leases are depreciated over the shorter of the asset’s useful life and the lease term. The minimum lease 
payments  are  apportioned  between  the  finance  charge  (the  interest  element)  and  the  reduction  of  the 
outstanding liability (the capital element). The finance charge is allocated to each period during the lease 
term so as to produce a constant periodic rate of interest on the remaining balance of the liability, which 
is presented as current/non-current, as applicable. Contingent rents shall be charged as expenses in the 
period in which they are incurred.  

An operating lease is a lease other than a finance lease, i.e. a lease where the lessor retains substantially 
all  the  risks  and  rewards  incidental  to  ownership  of  an  asset.  When  entering  an  operating  lease  as  a 
lessee,  the  operating  lease  payments  are  recognised  as  an  expense  in  the  statement  of  financial 
performance on a straight-line basis over the lease term with neither a leased asset nor a leasing liability 
presented in the statement of financial position. 

1.3.3. 

Impairment of non-financial assets 

Assets  that  have  an  indefinite  useful  life  are  not  subject  to  amortisation/depreciation  and  are  tested 
annually for impairment. Assets that are  subject to  amortisation/depreciation are  tested for impairment 
whenever there is an indication at the reporting date that an asset may be impaired. An impairment loss 
is  recognised  for  the  amount  by  which  the  asset’s  carrying  amount  exceeds  its  recoverable  (service) 
amount. The recoverable (service) amount is the higher of an asset’s fair value less costs to sell and its 
value in use. 

Intangible assets and  property, plant and equipment  residual values and useful lives are  reviewed, and 
adjusted  if  appropriate,  at  least  once  per  year.  If  the  reasons  for  impairments  recognised  in  previous 
years no longer apply, the impairment losses are reversed accordingly. 

1.3.4. 

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  presented  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 

22 

 
 
 
Annual accounts of the European Development Fund 2019 

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  their  trade  date,  i.e.  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.  

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. 

1.3.5. 

Pre-financing amounts 

Pre-financing is a payment intended to provide the beneficiary with a cash advance, i.e. a float. It may be 
split into a number of payments over a period defined in the particular contract, decision, agreement or 
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.  Thus,  as  the  entity  retains  control 
over the pre-financing and is entitled to  a  refund  for the ineligible  part, the amount  is presented as an 
asset.  

Pre-financing  is  initially  recognised  on  the  balance  sheet  when  cash  is  transferred  to the  recipient.  It  is 
measured at the amount of the consideration given. In subsequent periods pre-financing is measured at 
the amount initially recognised on the balance sheet less eligible expenses (including estimated amounts 
where necessary) incurred during the period. 

1.3.6.  Receivables and recoverables 

The EU accounting rules require a separate presentation of exchange and non-exchange transactions. To 
distinguish  between  the  two  categories,  the  term  ‘receivable’  is  reserved  for  exchange  transactions, 
whereas  for  non-exchange  transactions,  i.e.  when  the  EU  receives  value  from  another  entity  without 

23 

 
 
Annual accounts of the European Development Fund 2019 

directly giving approximately equal value in exchange, the term ‘recoverables’ is used (e.g. recoverables 
from Member States related to own resources). 

Receivables  from  exchange  transactions  meet  the  definition  of  financial  instruments  and  are  thus 
classified as loans and receivables and measured accordingly (see 1.3.4 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. 

1.3.7.  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. 

1.3.8. 

Provisions 

Provisions  are  recognised  when  the  entity  has  a  present  legal  or  constructive  obligation  towards  third 
parties as a result of past events, it is more likely than not that an outflow of resources will be required 
to  settle  the  obligation,  and  the  amount  can  be  reliably  estimated.  Provisions  are  not  recognised  for 
future operating losses. The amount of the provision is the best estimate of the 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). 

Provisions for onerous contracts are measured at the present value of the lower of the expected cost of 
terminating the contract and the expected net cost of continuing with the contract. 

1.3.9. 

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, or pre-financing received (see note 1.4.1).  

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. 

1.3.10.  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 

24 

 
 
Annual accounts of the European Development Fund 2019 

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. 

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  the  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. 

25 

 
 
 
Annual accounts of the European Development Fund 2019 

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. A contingent liability is disclosed unless the possibility of an 
outflow of resources embodying economic benefits or service potential is remote. 

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. 

26 

 
 
 
Annual accounts of the European Development Fund 2019 

2.  NOTES TO THE BALANCE SHEET 

ASSETS 

2.1.  FINANCIAL ASSETS 

The  financial  assets  of  the  EDF  amounted  to  EUR  36  million  at  31  December  2019  (2018:  nil).  They 
comprise available for sale financial assets that are almost entirely investments in equity instruments. 

2.2.  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 
based  on  progress  reports.  Pre-financing  is  normally  paid  in  the  currency  of  the  country  or  territory 
where the project is executed. 

The  timing  of  use  of  pre-financing  governs  whether  it  is  disclosed  as  a  current  or  a  non-current 
pre-financing.  The  use  is  defined  by  the  project's  underlying  agreement.  Any  use  due  within  twelve 
months after 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 

2.2.1 
2.2.2 

Eighth 
EDF 
– 
 0 
  0 

Ninth 
EDF 
 6 
 26 
  32 

10th 
EDF 
 325 
 441 
  766 

11th 
EDF 
 580 
 821 
 1 401 

EUR million 

31.12.2019  31.12.2018 

 910 
1 288 
 2 199 

 887 
1 448 
 2 335 

The  decrease  of  the  total  pre-financing  at  31  December  2019  is  mainly  explained  by  a  decrease  of 
pre-financing  of  the  10th  EDF  (2018:  EUR  964  million).  In  line  with  the  lifecycle  of  the  EDF,  many 
contracts related to the 10th EDF were completed and closed. The number of open contracts under this 
EDF  dropped  from  approximately  2  600  in  2018  to  circa  2  300  in  2019.  Consequently,  the  level  of 
pre-financing payments made to beneficiaries decreased while the clearing of pre-financing increased.  

This decrease was partially compensated by an increase of pre-financing related to 11th EDF (2018: EUR 
1  328  million).  The  11th  EDF  started  in  2015  and  in  2019  was  at  cruising  speed  concerning  the 
implementation of adopted actions. The number of open contracts increased from around 2 300 in 2018 
to 3 400 in 2019, which translated into an increase of total open pre-financing of EUR 73 million.  

27 

 
 
 
 
Annual accounts of the European Development Fund 2019 

2.2.1.  Non-current pre-financing 

31.12.2019 

EUR million 
31.12.2018 

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 

Total 

2.2.2.  Current pre-financing 

 190 
 6 
 49 
  244 

 313 
 291 
 22 
 22 
 17 
 1 
  665 
  910 

 140 
– 
 48 
  188 

 367 
 280 
 6 
 24 
 21 
– 
  698 
  887 

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

EUR million 
Eighth EDF  Ninth EDF  10th EDF  11th EDF  31.12.2019  31.12.2018 
5 153 
(3 705) 
 1 448 

3 288 
(2 467) 
  821 

1 627 
(1 186) 
  441 

5 030 
(3 742) 
 1 288 

 115 
 (89) 
  26 

 0 
– 
  0 

2.2.3.  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  2019,  the  guarantees  received  by  the  EDF  in  respect  of  pre-financing  decreased  to 
EUR 46 million (2018: EUR 79 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.  

2.3.  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. 

Net contribution at 
31.12.2018 

Contributions 
paid in 2019 

Allocation of TF's net 
expenses  2019 

Net contribution 
at 31.12.2019 

 193 
 9 
  201 

 600 
– 
  600 

 (530) 
 (5) 
  (535) 

 263 
 4 
  266 

EUR million 

Africa 
Bêkou 
Total 

28 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

2.4.  EXCHANGE RECEIVABLES AND NON-EXCHANGE 

RECOVERABLES  

Recoverables from non-exchange transactions 
Receivables from exchange transactions 
Total 

Note 
2.4.1 
2.4.2 

31.12.2019 
 32 
 91 
  123 

EUR million 
31.12.2018 
 37 
 101 
  138 

2.4.1.  Recoverables from non-exchange transactions 

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

Eight
h EDF 
– 
 1 
– 
 0 
 (2) 

Ninth 
EDF 
 0 
 4 
 9 
 2 
 (13) 

10th 
EDF 
– 
 17 
 11 
 4 
 (12) 

– 

– 

– 

  0 

  3 

  20 

11th 
EDF 
 1 
 4 
 1 
 0 
 (1) 

 4 

  9 

EUR million 

31.12.2019  31.12.2018 

 1 
 27 
 21 
 7 
 (27) 

 4 

  32 

 5 
 26 
 25 
 5 
 (27) 

 3 

  37 

2.4.2.  Receivables from exchange transactions 

Accrued income 
Receivable from EU 
Inter-EDF accounts 
Total 

Eighth 
EDF 
 1 
– 
 182 
  183 

Ninth 
EDF 
 65 
– 
 53 
  119 

10th 
EDF 
 21 
– 
2 160 

11th 
EDF 
 0 
 4 
(2 395) 
 2 181  (2 391) 

EUR million 
31.12.
2018 
 81 
 20 
 (0) 
  101 

31.12.
2019 
 88 
 4 
 (0) 
  91 

Included  under  accrued  income  are  amounts  of  accrued  interest  on  pre-financing  related  to  projects 
(EUR 65 million) and on pre-financing related to the EU-Africa Trust Fund (EUR 21 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 zero. 

29 

 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

2.5.  CASH AND CASH EQUIVALENTS3 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

11th 
EDF 

31.12.2019  31.12.2018 

EUR million 

Special accounts 
Central banks 

Current accounts 
Commercial banks 
Cash belonging to financial instruments 

Total 

– 
– 

– 
– 
– 
– 

– 
– 

– 
– 
– 
– 

– 
– 

– 
– 
– 
– 

 729 
  729 

 421 
 30 
  450 
 1 179 

 729 
  729 

 421 
 30 
  450 
 1 179 

 276 
  276 

 87 
 24 
  111 
  387 

The  increase  of  amounts  under  this  heading  of  EUR  792  million  can  be  explained  mainly  by  payment 
execution being lower than  forecast. EDF  payments  totalled EUR 3 910 million on 31 December 2019, 
compared  to  the  annual  target  of  EUR  4  400  million.  Two  key  reasons  for  this  differential  are  the 
suspension of the signature of the contract on Global Partnership for Education with the World Bank and 
the postponement of Budget Support payments for Chad, Haiti, and Benin. 

In  addition,  the  increase  under  Commercial  banks  relates  to  EUR  264  million  of  the  2020  capital 
contribution  received  from  the  UK  on  the  Natwest  bank  account  at  the  end  of  December  (see  note 
2.7.2.1) . 

Similar previous years and in order to limit counterparty risk more cash is kept in accounts with central 
banks than in the commercial banks (see note 5.1). 

LIABILITIES 

2.6.  FINANCIAL LIABILITIES 

2.6.1.  Co-financing payables 

Co-financing payables represent funds received by the EDF in respect to the co-financing agreements. 
The EDF is required to use these contributions to deliver agreed services to third parties and return the 
unused funds to the contributors. Timing of the use of the co-financing amounts determines whether it 
is disclosed as current or non-current.  

At the year end a case-by-case assessment  of  all co-financing payables is performed and all amounts 
that are unlikely to be used in the following 12 months are considered non-current. 

Non-current co-financing payables 
Current co-financing payables 
Total 

Eighth 
EDF 
– 
– 
– 

Ninth 
EDF 
– 
– 
– 

10th 
EDF 
 1 
 38 
  39 

11th 
EDF 
 18 
 31 
  50 

EUR million 
31.12.2019  31.12.2018 
 18 
 68 
  86 

 19 
 69 
  88 

The  increase  of  the  total  co-financing  payables  of  EUR  2.6  million  is  a  combined  effect  of  new 
co-financing  amounts  received  in  2019  (EUR  17  million)  and  expenses  incurred  in  respect  of 
co-financing projects (EUR 14.4 million). In line with the accounting  rules on co-financing, the incurred 
amounts did not have any impact on the result  of  the year because  they were recognised both in the 
co-financing expenses (note 3.4) and in the co-financing revenue (note 3.1.1).  

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. 

30 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Annual accounts of the European Development Fund 2019 

2.7.  PAYABLES 

Current payables 
Sundry payables 
Total 

Note 

2.7.1 
2.7.2 

Eighth 
EDF 
– 
– 
– 

Ninth 
EDF 
 5 
 (0) 
  5 

10th 
EDF 
 72 
 36 
  108 

11th 
EDF 
 106 
 298 
  404 

EUR million 

31.12.2019  31.12.2018 

 182 
 334 
  516 

 173 
 68 
  241 

2.7.1. 

 Current payables 

Suppliers 
Member States 
Third states 
Public bodies 
Other current payables 
Total 

Eighth 
EDF 
– 
– 
 0 
– 
 (0) 
– 

Ninth 
EDF 
 4 
 0 
– 
 2 
 (1) 
 5 

10th 
EDF 
 67 
 0 
 4 
 70 
 (70) 
 72 

11th 
EDF 
 27 
 2 
 74 
 20 
 (17) 
 106 

EUR million 

31.12.2019  31.12.2018 

 97 
 2 
 78 
 92 
 (88) 
 182 

 102 
 1 
 37 
 43 
 (10) 
 173 

Payables  include  cost  statements  received  by  the  EDF  relating  to  its  grant  giving  activity.  They  are 
recorded  for  the  amount  being  claimed  from  the  moment  the  payment  request  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 capital contributions 
Other sundry payables 
Total 

Note 

2.6.1 
2.7.2.1 

Eighth 
EDF 
– 
– 
– 
– 

Ninth 
EDF 
– 
– 
– 
– 

10th 
EDF 
 38 
– 
 (2) 
 36 

11th 
EDF 
 31 
 264 
 3 
 298 

EUR million 

31.12.2019  31.12.2018 

 69 
 264 
 1 
 334 

 68 
– 
 0 
 68 

2.7.2.1.  Deferred capital contributions 

At 31 December 2019, the entire amount of EUR 264 million relates to 2020 contribution of the UK paid 
to  the  EDF  at  the  end  of  December.  At  31  December  2018,  there  were  no  capital  contributions  paid  in 
advance.  

2.8.  ACCRUED CHARGES AND DEFERRED INCOME 

Accrued charges 
Other accruals and deferrals 
Total 

Eighth 
EDF 
– 
– 
– 

Ninth 
EDF 
 96 
– 
  96 

10th 
EDF 
 240 
 0 
  240 

11th 
EDF 
 982 
 1 
  983 

EUR million 

31.12.2019  31.12.2018 

1 318 
 1 
 1 319 

1 279 
 3 
 1 281 

31 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

Accrued  charges  comprise  estimated  operating  expenses  for  on-going  or  completed  contracts  without 
validated cost claims where the eligible expenses incurred by beneficiaries 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 2.2 above). 

The increase under  this  heading is a combined effect of an increase of accrued charges under the 11th 
EDF  (2018:  EUR  838  million)  and  a  decrease  of  accrued  charges  under  the  10th  EDF  (2018: 
EUR 358 million).  This  is  in  line  with  the  lifecycle  of  the  EDF  and  also  related  to  the  evolution  of  the 
number  of  open  contracts  under  these  EDFs:  The  11th  EDF  was  at  the  full  cruising  speed  in  2019  and 
there were thus significantly more open contracts at 31 December 2019 for which the charges had to be 
estimated  and  accrued.  Conversely,  many  contracts  were  completed  and  closed  under  the  10th  EDF  in 
2019, which resulted into a decrease of open contracts and less accrued charges under this EDF.  

NET ASSETS 

2.9.  FAIR VALUE RESERVE 

In accordance with the accounting rules, the adjustment to fair value of available for sale financial assets 
is accounted for through the fair value reserve. 

Included in fair value reserve 
Included in statement of financial performance 
Total 

2.10.  FUND CAPITAL 

2.10.1.  Called fund capital – active EDFs 

31.12.2019 
 (2) 
– 
 (2) 

EUR million 
31.12.2018 
– 
– 
– 

Fund capital 
Uncalled fund capital 
Called fund capital 31.12.2018 
Fund capital 
Uncalled fund capital 
Called fund capital 31.12.2019 

Eighth EDF  Ninth EDF  10th EDF  11th EDF 
29 367 
(22 840) 
 6 527 
29 367 
(18 440) 
 10 927 

20 960 
 (0) 
 20 960 
20 960 
 (0) 
 20 960 

12 164 
– 
 12 164 
12 164 
– 
 12 164 

10 773 
 (0) 
 10 773 
10 773 
 (15) 
 10 758 

EUR million 
Total 
73 264 
(22 840) 
 50 423 
73 264 
(18 455) 
 54 809 

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  amounts  not  yet 
called from Member States. The called fund capital represents the contributions, which have been called 
by the EDF and transferred to the treasury accounts by the Member States (see below 2.10.2.). 

32 

 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

2.10.2.  Called and uncalled fund capital by Member State 

Contributions 11th EDF 

% 

Uncalled capital 
31.12.2018 

Capital called 
in 2019 

EUR million 
Uncalled capital 
31.12.2019 

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 

 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 

 (105) 
 (143) 
 (10) 
 (10) 
 (5) 
 (35) 
 (87) 
 (4) 
 (66) 
 (784) 
 (906) 
 (66) 
 (27) 
 (41) 
 (551) 
 (5) 
 (8) 
 (11) 
 (2) 
 (210) 
 (88) 
 (53) 
 (32) 
 (17) 
 (10) 
 (349) 
 (129) 
 (646) 
(4 400) 

 442 
 599 
 40 
 42 
 21 
 147 
 365 
 16 
 278 
3 285 
3 795 
 278 
 113 
 173 
2 311 
 21 
 33 
 47 
 7 
 881 
 370 
 221 
 132 
 69 
 41 
1 463 
 542 
2 707 
18 440 

Since  the  capital  of  the  Eighth,  Ninth  and  10th  EDF  has  been  called  up  and  received  in  its  entirety  in 
previous  years,  in  2019,  an  amount  of  EUR  4  400  million  has  been  called  which  relates  entirely  to  the 
11th EDF. 

2.10.3.  Called fund capital from closed EDFs carried forward 

Funds transferred from closed EDFs 

Eighth 
EDF 
 627 

Ninth 
EDF 
1 625 

10th 
EDF 
– 

11th 
EDF 
– 

31.12.2019  31.12.2018 

2 252 

2 252 

EUR million 

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

33 

 
 
 
Annual accounts of the European Development Fund 2019 

2.10.4.  Called fund capital transfers between active 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 
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 31.12.2019 

Eighth 
EDF 
 (2 503) 

Ninth 
EDF 
 2 177 

10th 
EDF 
  120 

11th 
EDF 
  206 

 (7) 

 (40) 

 47 

– 

– 

–   (112) 

 112 

 (2 509) 

 2 137 

  55 

  317 

EUR million 

Total 

– 

 0 

– 

– 

 (1) 

 (27) 

 28 

– 

 (0) 

– 

– 

 181 

 (181) 

 (2 510) 

 2 109 

  265 

  136 

– 

– 

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. 

34 

 
 
 
Annual accounts of the European Development Fund 2019 

3.  NOTES  TO  THE  STATEMENT  OF  FINANCIAL 

PERFORMANCE 

REVENUE 

Revenue from non-exchange transactions 
Revenue from exchange transactions 
Total 

Note 
3.1 
3.2 

EUR million 
2018 
 4 
 57 
 60 

2019 
 28 
 46 
 74 

3.1.  REVENUE FROM NON-EXCHANGE TRANSACTIONS 

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

Note 

3.1.1 

Eighth 
EDF 
 0 
– 
– 
  0 

Ninth 
EDF 
 0 
– 
– 
  0 

10th 
EDF 
 9 
 0 
 9 
  18 

11th 
EDF 
 4 
– 
 5 
  10 

EUR million 

2019 

2018 

 13 
 0 
 14 
  28 

 21 
 0 
 (17) 
  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 
Private law bodies with a public service mission 

Total 

3.1.1.  Co-financing revenue 

2019 

EUR million 
2018 

 1 
 6 
 6 

 15 
 5 
 2 
 22 
  28 

 1 
 3 
 4 

 (13) 
 12 
 1 
– 
  4 

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  when  received. 
The  contributions  remain  under  liabilities  (see  note  2.6.1)  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  in  the  statement  of  financial  performance  as  non-exchange  revenue  from  co-financing. 
Consequently, the effect on the economic result of the year is zero. 

35 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

3.2.  REVENUE FROM EXCHANGE TRANSACTIONS 

Financial revenue 
Other revenue 
Total 

  Eighth EDF  Ninth EDF 
 (0) 
 6 
  6 

 (0) 
 1 
  1 

10th EDF 
 3 
 21 
  24 

11th EDF 
 4 
 12 
  16 

EUR million 
2018 
 10 
 46 
  57 

2019 
 7 
 39 
  46 

Financial  revenue  comprises  essentially  accrued  interest  on  overdue  recovery  orders  (EUR  6.6  million) 
and  interest  on  pre-financing.  Other  revenue  relates  in  its  entirety  foreign  exchange  gains.  The 
corresponding foreign exchange losses are recorded under other expenses (see note 3.6).  

EXPENSES 

3.3.  AID INSTRUMENTS 

Programmable aid 
Macro-economic support 
Sectoral policy 
Intra ACP projects 
Emergency aid 
Institutional support 
Contributions to Trust Funds 
Total 

Eighth EDF  Ninth EDF  10th EDF  11th EDF 
1 824 
– 
– 
 678 
 97 
 7 
 535 
 3 141 

 295 
– 
– 
 272 
 12 
 0 
– 
  579 

 (0) 
 29 
 0 
 2 
 4 
– 
– 
  35 

 0 
– 
– 
– 
– 
– 
– 
  0 

2019 
2 119 
 29 
 0 
 951 
 112 
 7 
 535 
 3 755 

EUR million 
2018 
2 001 
 26 
 2 
 827 
 873 
 18 
 307 
 4 054 

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

The  decrease  under  this  heading  is  a  combined  effect  of  an  increase  of  expenses  under  the  11th  EDF 
(2018: EUR 3 012 million) and a decrease of expenses under the 10th EDF (2018: EUR 984 million). This 
is in line with the lifecycle of the EDF and also related to the evolution of the number of open contracts 
under these EDFs: The 11th EDF was at the full cruising speed in 2019 and there were thus significantly 
more  open  contracts  at  31  December  2019  under  which  expenses  were  incurred.  Conversely,  many 
contracts  were  completed  and  closed  under  the  10th  EDF  in  2019,  which  resulted  into  less  expenses 
incurred under this EDF. 

As noted namely under the 11th EDF the structure of the aid instruments expenses changed compared to 
2018. Under this EDF the Emergency aid expensed significantly decreased (2018: EUR 811 million), while 
the  expenses  related  to  Programmable  aid,  Intra  ACP  project  and  Contributions  to  the  Trust  funds 
significantly  increased  (2018:  EUR  1  468  million,  resp.  EUR  410  million,  resp.  EUR  307  million 
respectively). 

3.4.  CO-FINANCING EXPENSES 

Co-financing 

  Eighth EDF  Ninth EDF 
– 
– 

10th EDF 
 9 

11th EDF 
 5 

2019 
 14 

EUR million 
2018 
 (17) 

Included  under  this  heading  are  the  expenses  incurred  on  co-financing  projects  in  2019.  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).   

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

36 

 
 
 
Annual accounts of the European Development Fund 2019 

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 

Total 

3.5.  FINANCE COSTS 

2019 

 86 
 (13) 
 483 
1 141 
1 697 

 145 
1 003 
 126 
 184 
 613 
 1 
2 073 
3 770 

EUR million 
2018 

 122 
 31 
 594 
1 003 
1 750 

 44 
 920 
 114 
 231 
 977 
 1 
2 287 
4 037 

Write-down of receivables 

EUR million 
Eighth EDF  Ninth EDF  10th EDF  11th EDF  2019  2018 
 (7) 

 (2) 

 2 

 0 

 1 

 1 

Included under this heading are the estimated expenses on irrecoverable amounts. 

3.6.  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 
 262 
– 
– 
– 
 1 
 2 
 9 
 6 
  272 
  8 

 (41) 
– 
 1 
 21 
  (20) 

– 
– 
– 
 1 
  1 

EUR million 
2019  2018 
 112 
 (4) 
 1 
 39 
  148 

 220 
– 
 3 
 37 
  260 

This  heading  includes  mainly  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. 

37 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

4. 

CONTINGENT  ASSETS  &  LIABILITIES  AND 
OTHER SIGNIFICANT DISCLOSURES 

4.1.  CONTINGENT ASSETS 

Performance guarantees 
Retention guarantees 
Total 

Eighth 
EDF 
– 
– 
– 

Ninth 
EDF 
 10 
 5 
  15 

10th 
EDF 
 5 
 4 
  8 

11th 
EDF 
 0 
– 
  0 

EUR million 

31.12.2019 

31.12.2018 

 15 
 9 
  24 

 11 
 7 
  17 

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  indirect  management,  the  guarantees  belong  to  a  contracting  authority 
other than the EDF and they are therefore not disclosed by the EDF.  

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 multiannual programmes. 

Outstanding commitments not yet 
expensed 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

11th 
EDF 

EUR million 

31.12.2019  31.12.2018 

(0) 

 42 

 576 

7 946 

8 564 

9 071 

At 31 December 2019 the budgetary RAL totalled EUR 10 270 million (2018: EUR 10 616 million). 

38 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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. 

(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. 

39 

 
 
5.2.  CURRENCY RISK 

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

Annual accounts of the European Development Fund 2019 

Financial assets 
Receivables and 
recoverables 
Cash and cash 
equivalents 

Financial liabilities 
Non-current financial 
liabilities 
Payables 

Total 

USD 

GBP 

DKK 

SEK 

EUR 

Other 

Total 

USD 

GBP 

DKK 

SEK 

EUR 

Other 

Total 

31.12.2019 

31.12.2018 

EUR million 

– 

 1 

  1 

– 

 (7) 
  (7) 
  (6) 

– 

– 

– 

– 

– 
– 
– 

– 

– 

– 

– 

– 
– 
– 

– 

– 

 115 

 8 

 123 

 63 

1 178 

– 

1 179 

 1 

– 

 1 293 

  8 

 1 302 

  64 

– 

 (19) 

– 

 (19) 

– 

– 
 (509) 
–    (528) 
  765 
– 

– 
 (516) 
–    (535) 
  767 

  8 

 (1) 
  (1) 
  63 

– 

 0 

  0 

– 

– 
– 
  0 

 0 

– 

  0 

– 

– 
– 
  0 

– 

– 

– 

 67 

 8 

 138 

 386 

– 

 387 

  453 

  8 

  525 

– 

 (18) 

– 

 (18) 

– 
 (218) 
–    (236) 
  217 
– 

 (22) 

 (241) 
  (22)    (259) 
  267 
  (14) 

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. 

40 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

5.3.  INTEREST RATE RISK 

The EDF does not borrow money and consequently 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 could be remunerated at rates lower than market rates. 

5.4.  CREDIT RISK (COUNTERPARTY RISK) 

Financial assets that are neither past due nor impaired: 

EUR million 

Total  Neither past due 
nor impaired 

Past due but not 
impaired 
1-5 
years 

< 1 
year 

> 5 
years 

Exchange receivables and non-exchange 
recoverables 
Total at 31.12.2019 
Exchange receivables and non-exchange 
recoverables 
Total at 31.12.2018 

 123 

  123 

 138 

  138 

Financial assets by risk category: 

 100 

  100 

 121 

  121 

 16 

  16 

 12 

  12 

 7 

  7 

 5 

  5 

– 

– 

– 

– 

EUR million 

Counterparties with external credit 
rating 
Prime and high grade 
Upper medium grade 
Lower medium grade 
Non- investment grade 

Counterparties without external 
credit rating 
Group 1 (debtors without defaults 
in the past) 
Group 2 (debtors with defaults in 
the past) 
Total 
Total 

  Receivables 

31.12.2019 
Cash 

Total  Receivables 

31.12.2018 
Cash 

 7 
– 
– 
– 
  7 

 958 
 220 
 1 
 0 
 1 179 

 965 
 220 
 1 
 0 
 1 186 

 5 
– 
– 
– 
  5 

 303 
 80 
 4 
 0 
  387 

Total 

 308 
 80 
 4 
 0 
  391 

 116 

 0 

 116 

 133 

– 

– 

– 

– 

 0 

– 

 134 

– 

  116 
  123 

  0 
 1 179 

  116 
 1 302 

  133 
  138 

  0 
  387 

  134 
  525 

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 

41 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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.  

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. Therefore 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  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 accepted in specific and duly justified circumstances.  

5.5.  LIQUIDITY RISK 

Maturity analysis of financial liabilities by remaining contractual maturity 

Financial liabilities 
Total at 31.12.2019 

Financial liabilities 
Total at 31.12.2018 

< 1 year 
516 

  516 

 241 

  241 

1-5 years 

2 
  6 

 7 
  7 

> 5 years 
 17 

  22 

 11 

  11 

EUR million 
Total 

 535 
  516 

 259 
  259 

Budget  principles  applied  to  the  EDF  ensure  that  overall  cash  resources  for  the  budgetary  period  are 
always sufficient for the execution of 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 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.

42 

 
 
 
Annual accounts of the European Development Fund 2019 

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". 

43 

 
 
Annual accounts of the European Development Fund 2019 

7. 

EVENTS AFTER THE BALANCE SHEET DATE 

At  the  date  of  transmission  of  these  provisional  accounts,  apart  from  the  matter  highlighted  below,  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. 

Departure of United Kingdom from the European Union 

On 1 February 2020, the United Kingdom ceased to be a Member State of the European Union. Following 
the conclusion 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  (the  “Withdrawal 
Agreement”) between the two parties, the United Kingdom committed to pay all its obligations under the 
current MFF and previous financial perspectives as if it were still a Member State.  

The 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  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  transmission of these  provisional accounts, and based on the Withdrawal Agreement 
concluded and already in operation,  there is no  financial  impact  to be reported in the 2019 EDF  annual 
accounts. 

Coronavirus disease 2019 (COVID-19) 

During the first quarter of 2020, the coronavirus outbreak has had huge global impacts, including on the 
financial  markets  where  significant  falls  in  all  major  indices  have  occurred.  This  has  led  to  increased 
volatility in the value of financial instruments recorded at fair value, including those on the EDF’s balance 
sheet. As a non-adjusting event, the outbreak of the coronavirus does not require any adjustments to the 
figures  reported.  For  subsequent  reporting  periods,  COVID-19  will  likely  affect  the  recognition  and 
measurement  of  some  assets  and  liabilities  in  the  financial  statements.  Based  on  the  information 
available at the time of transmission of these provisional accounts, the financial effects of the coronavirus 
outbreak cannot be reliably estimated. 

44 

 
 
Annual accounts of the European Development Fund 2019 

8.  RECONCILIATION OF ECONOMIC RESULT AND 
BUDGET RESULT 

The economic result of the year is calculated based on 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 reconciliable. The 
table  below  shows  this  reconciliation,  highlighting  the  key  reconciling  amounts,  split  between  revenue 
and  expenditure  items.  The  notes  to  the  table  provide  additional  information  on  the  nature  of  the  key 
reconciling 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) 

2019 
 (3 956) 

EUR million 
2018 
 (4 118) 

– 
 (16) 
 23 
 53 
 (67) 
 (3) 

 107 
 (672) 
 (44) 
 719 

 (1) 
 (11) 
 11 
 36 
 (39) 
 (1) 

 115 
 (366) 
 (179) 
 484 

BUDGET RESULT OF THE YEAR  

 (3 856) 

 (4 069) 

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 line refers to clearing of pre-financing with amounts recovered from the 
beneficiaries.  These  cash  receipts  represent  budgetary  revenue  but  have  no  impact  on  the  economic 
result and must be thus added for reconciliation purposes. 

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 

45 

 
 
 
 
 
 
 
 
 
 
 
 
 
   
Annual accounts of the European Development Fund 2019 

reconciliation purposes  as they  are  part  of  the  current year's budgetary expenditure but have either no 
effect on the economic result or they decrease the expenses in case of corrections. 

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

46 

 
 
Annual accounts of the European Development Fund 2019 

FINANCIAL STATEMENTS OF THE EU 
TRUST FUNDS CONSOLIDATED IN EDF 

47 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

FINANCIAL STATEMENTS OF THE BÊKOU 
EU TRUST FUND 2019 

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

48 

 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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  (‘EU  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  by  a  decision  after  consultation  or 
approval of the European Parliament and the Council.  This decision 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 are 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 EUTF BÊKOU, 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  EUTF  MADAD,  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. 

49 

 
 
 
                                                 
Annual accounts of the European Development Fund 2019 

-   The  EUTF  AFRICA,  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  EUTF  COLOMBIA,  to  support  the  implementation  of  the  peace  agreement  in  the  early 

recovery and stabilisation post conflict. Established on 12 December 2016. 

The Bêkou EU 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 EU 
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.  In  May  2019  the  EU  approved  an  extension  of  the  EUTF  Bêkou  until  December  2020,  thus 
bringing its total duration to 78 months. 

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 meets 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 EU 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  which  is  the  responsibility  of  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)). 

The  annual  accounts  of  the  EUTF  Bêkou  are  consolidated  in  the  annual  accounts  of  the  European 
Developement Fund. 

Highlights of the year 

Since its creation in July 2014, the EUTF Bêkou has adopted 19 programmes and has reached more than 
2.5  million  beneficiaries.  The  programmes  are  to  assist  the  Central  African  Republic  (CAR)  and  its 
population in the aftermath of the 2013 crisis. More specifically, the  EUTF Bêkou aims to ensure access 
to basic services (mainly health, water and sanitation), support economic recovery and job creation, and 
promote social cohesion and reconciliation. 

Despite the presence of a democratically elected government and the signature of a peace agreement in 
February 2019, the security situation in the CAR remains volatile. It is in this complex and fragile context 
that  the  EUTF  Bêkou  deploys  its  comparative  advantages  of  flexibility  and  adaptability  to  changing 
circumstances. Additionally, the EUTF Bêkou remains the only instrument building resilience for both the 
population and the State, in a true LRRD (linking relief, rehabilitation and development) approach. 

In May 2019, given the current situation in CAR, the EU approved an extension of the EUTF Bêkou until 
December  2020,  thus  bringing  its  total  duration  from  60  months  to  78  months.  The  official  procedure, 
which included a consultation of the European Parliament and the Council, was launched in 2018 after the 
official request of the EUTF Board.  

Operational highlights of the year 2019 include: 

50 

 
 
 
 
Annual accounts of the European Development Fund 2019 

 

 

 

 

In  May,  in  the  wake  of  the  signature  of  the  Peace  Agreement,  the  EUTF  Bêkou  adopted  a  new 
multi-sectoral  action  to  support  the  socio-economic  recovery  in  the  South-East,  an  area 
previously inaccessible. This action aims to renew the social contract between the State and the 
population,  by  supporting  economic  recovery,  restoring  basic  health  and  water  and  sanitation 
services,  promoting  dialogue  and  social  cohesion,  and  strengthening  local  authorities  and  the 
redeployment of the State. Budget allocated: EUR 18 million.  

In October, the  EUTF Bêkou adopted a Programme supporting the promotion of entrepreneurship 
in  urban  and  rural  areas  for  a  total  amount  of  EUR  15  million.  A  new  Technical  and 
Communication  Assistance  Facility  was  also  adopted.  Moreover,  the  EUTF  Bêkou  increased  the 
budget of three on-going actions in the sectors of  health  (additional EUR 21.76  million), gender 
empowerment  (additional  EUR  0.5  million),  and  socio-economic  rehabilitation  (additional  EUR 
0.78 million). 

Following the extension of the EUTF Bêkou, the Operational Strategy 2019 – 2020 was adopted at 
the  November  Board.  It  identifies  three  broad  sectors  of  intervention  that  remain  pertinent  for 
the  EUTF:  i)  social  sectors  (mainly  health  and  water  and  sanitation);  ii)  actions  in  favour  of 
economic resilience and recovery; and iii) a reinforced support to the redeployment of the State 
and to reconciliation efforts.  

The    EUTF  Bêkou  projects  were  marked  by  the  volatile  security  context  (localised  conflicts  in 
Bangui  and  the  hinterland  followed  by  periods  of  relative  stability),  but  also  by  the  reinforced 
coordination among government, partners and humanitarian actors. 

On  the  financial  side,  at  the  end  of  2019  pledges  by  EUTF  contributors  amounted  to  nearly  EUR  296 
million.  This  is  an  increase  of  EUR  53  million  compared  to  2018.  EUR  31  million  out  of  these  EUR  295 
million are still to be certified. 

In terms of contracts, the EUTF Bêkou signed 11 new contracts in 2019 for a total amount of more than 
EUR 28 million. They contribute to the implementation of its programmes in the sectors of health, rural 
resilience and job creation, opening-up of regions and socio-economic recovery.  

Last  but  not  least,  nearly  EUR  32  million  was  paid  in  2019  on  top  of  payments  made  during  previous 
years; total disbursements have reached nearly EUR 151 million since the creation of the EUTF Bêkou. 

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

•  Pre-financing:  a  decrease  of  kEUR  11  405  due  to  the  expensing  of  amounts  open  at  end  2018 

during 2019 and less advances being paid out; 

•  Cash  and  cash  equivalents  :  an  increase  of  kEUR  3  506  (see  cashflow  statement)  is  mainly 

caused by the decreased payments of pre-financing; 

51 

 
 
Annual accounts of the European Development Fund 2019 

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 income 

TOTAL LIABILITIES 

NET ASSETS 

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

Note 

31.12.2019 

 EUR '000 
31.12.2018 

 3 273 
 3 273 

 18 312 
 1 853 
 17 432 
 37 597 
 40 870 

 3 443 
 3 443 

 29 546 
 1 138 
 13 926 
 44 611 
 48 054 

 (29 727) 
 (29 727) 

 (42 737) 
 (42 737) 

  (10) 
 (11 133) 
 (11 143) 
 (40 870) 

  (918) 
 (4 399) 
 (5 317) 
 (48 054) 

– 

– 
– 
– 
– 

– 

– 
– 
– 
– 

52 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

STATEMENT OF FINANCIAL PERFORMANCE 

REVENUE 
Revenue from non-exchange transactions 
Revenue from donations 
Recovery of expenses 

Revenue from exchange transactions 
Financial revenue 

Total revenue 
EXPENSES 
Operating expenses 
Other expenses 
Total expenses 
ECONOMIC RESULT OF THE YEAR 

Note 

2019 

 48 343 
  68 
 48 410 

  (2) 
  (2) 
 48 408 

EUR '000 
2018 

 33 682 
– 
 33 682 

  1 
  1 
 33 683 

 (47 620) 
  (789) 
 (48 408) 
– 

 (32 825) 
  (858) 
 (33 683) 
– 

53 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

CASHFLOW STATEMENT 

(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 & 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 

2019 
 11 405 
  (715) 
 (13 010) 
  (908) 
 6 734 
 3 506 

EUR '000 
2018 
 (24 839) 
  (261) 
 (1 982) 
  202 
  863 
 (26 017) 

 3 506 
 13 926 
 17 432 

 (26 017) 
 39 943 
 13 926 

54 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

FINANCIAL STATEMENTS OF THE EUTF 
AFRICA 2019 

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

55 

 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

BACKGROUND INFORMATION ON THE EUTF AFRICA 

General background on EU 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  by  a  decision  after  consultation  on 
approval of the European Parliament and the Council.  This decision 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 are 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  EUTF  BÊKOU,  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  EUTF  MADAD,  a  European  Union  Regional  Trust  Fund  in  response  to  the  Syrian  crisis. 
Established on 15 December 2014; 

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

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 2019 

The EUTF 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  are  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.  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 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  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 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)). 

Highlights of the year 

In  2019,  the  EU  Emergency  Trust  Fund  for  Africa  (EUTF)  further  demonstrated  itself  to  be  a  swift  and 
effective  implementation  tool.  It  facilitated  policy  dialogue  with  African  partner  countries,  applied 
innovative  approaches,  and  produced  tangible  results  across  the  three  regions  of  the  EUTF  (Sahel  and 
Lake  Chad,  Horn  of  Africa  and  North  of  Africa)  by  pooling  funding  and  expertise  from  a  wide  range  of 
stakeholders.  

The  EUTF  further  consolidated  its  achievements  in  partnership  with  EU  Member  States  development 
agencies,  UN  organisations,  NGOs  and  partner  countries,  with  the  approval  of  an  additional  36 
programmes  and  16  ‘top-ups’  across  the  three  regions  by  the  operational  committees  for  a  total  of 
EUR 851  million8.  This  brings  the  total  number  of  approved  programmes  to  223,  for  a  total  budget  of 
EUR 4.4 billion8. New contracts worth EUR 951 million were signed in 2019 with implementing partners, 
bringing  the  total  amount  of  signed  contracts  to  EUR  3.4  billion.  By  the  end  of  2019,  payments  had 
reached approximately EUR 2 billion. 

In 2019, the EUTF continued addressing the twin goals of fostering stability and handling the root causes 
of forced displacement  and  irregular migration in the  Sahel and Lake Chad, Horn of Africa and North of 
Africa  regions.  The  EUTF  continued  to  pursue  a  balanced  approach  in  addressing  the  challenges  of 
irregular  migration,  focusing  on  areas  of  mutual  interest  for  the  EU  and  Africa.  These  include  the  fight 

8 There is a time lag between the approval of programmes and ‘top-ups’ by Operational committees and the formal commitment in 
ABAC. At year-end, the total committed amount in 2019 was of EUR 722.7 million. 

57 

 
 
                                                 
Annual accounts of the European Development Fund 2019 

against smuggling of migrants and  trafficking of human beings, and the support to voluntary return to, 
and sustainable reintegration of migrants in, their country of origin. 

During  the  past  year,  the  EUTF  benefitted  from  additional  financial  pledges  of  EUR  486.6  million, 
including  EUR  101  million  from  EU  Member  States  and  other  donors.  As  a  result,  the  overall  resources 
pledged  to  the  EUTF  as  of  31  December  2019  amounted  to  almost  EUR  4.7  billion,  of  which 
EUR 590 million were pledged by EU Member States and other donors (Norway and Switzerland). 

The  EUTF  has  continued  working  in  solid  partnership  with  a  wide  range  of  implementing  partners 
(agencies from  Member States,  UN and international organisations, local and international NGOs) along 
the same lines as in 2018. 

The  EUTF  has  also  started  to  implement  the  recommendations  formulated  by  the  European  Court  of 
Auditors in its special report published at the  end of  2018.  In  particular,  the Commission has enhanced 
the  transparency  and  evidence-driven  approach  of  the  EUTF,  notably  by  adopting  a  risk  assessment 
framework and revising the operational frameworks of the three regions initially adopted in 2016. 

Throughout  the  year,  the  monitoring  and  learning  system  reports  on  the  Sahel  and  Lake  Chad  and  the 
Horn of Africa continued to show the tangible results achieved by the EUTF in different areas of work. The 
North of Africa region  set  up its monitoring  and  learning  framework to  steer  EUTF actions in the region 
and  ensure  accountability.  Its  first  report,  published  in  September  2019,  is  now  available  on  the  EUTF 
website together with the monitoring and learning system reports of the other two regions. 

During  the  year,  the  mid-term  evaluation  of  the  EUTF  progressed  well.  The  evaluation  team  selected 
around  50  programmes  for  review,  and  visited  four  countries  across  the  three  regions  (Senegal,  Niger, 
Ethiopia and Morocco), while relying on national consultants to visit and gather information on projects in 
Somalia and Libya. The final report of the mid-term evaluation is expected in April 2020. 

Accountability  and  transparency  have  been  improved  through  increased  communication,  all  this  in  a 
context  of  continued  fragility.  This  has  been  done  by  regularly  updating  the  EUTF  website,  publishing 
posts on social media and by organising communication events such as two photography exhibitions. 

The  Sahel  and  Lake  Chad  region  continued  to  face  humanitarian,  development,  environmental  and 
security  challenges,  and  in  particular  a  deteriorated  situation  in  Mali  and  Burkina  Faso.  Against  this 
background,  the  EUTF  has  approved  new  programmes  totalling  EUR 302.1 million8,  contributing  to  the 
stabilisation efforts in the region, which will reinforce the humanitarian-development-peace nexus. More 
than 70% of approved funding will contribute to strengthening resilience and improving governance and 
security  in  the  region.  More  than  20%  will  further  contribute  to  the  EUTF-IOM  Initiative  and  the 
Evacuation Transit Mechanism (ETM), which will support the most vulnerable migrants and refugees up to 
the  end  of  2020.  The  remaining  part  of  the  funding  will  contribute  to  boosting  green  employment  and 
enterprise. 

Despite positive political developments such as the rapprochement between Ethiopia and Eritrea, and the 
formation of a Transitional Civil Government in Sudan, the Horn of Africa region is still faced with several 
challenges (political, environmental, economic, etc.). Living conditions remain dire, and durable solutions 
for  refugee  and  displaced  people  remain  a  high  priority.  To  address  such  challenges,  the  EUTF  has 
approved  new  programmes  for  a  total  of  EUR  324.4  million8,  which  will  provide  further  support  to  the 
most vulnerable  populations,  including refugees and  internally displaced people. These  programmes will 
foster  political  and  economic  stability  and  improve  migration  management.  In  particular,  the  EUTF  has 
approved  five  new  programmes  providing  further  support to the  implementation of  the  Global  Compact 
on Refugees in the region. 

The  North  of  Africa  region  was  faced  with  challenges  requiring  a  comprehensive  EU  response  to  save 
lives, protect the most vulnerable, support host communities and provide opportunities for safe mobility. 
As a result, in 2019 the EUTF approved new actions including ‘top-ups’ for a total of EUR 224.8 million8. 
Four of these programmes will provide further support to Libya to: 

i. 

ii. 

iii. 

iv. 

Strengthen protection activities; 

Further improve social infrastructure;  

Build on community stabilisation activities; 

Enhance the resilience of local populations and migrants; 

58 

 
 
Annual accounts of the European Development Fund 2019 

v. 

Support  the  voluntary  humanitarian  return  of  stranded  migrants.  A  substantial  budget  support 
programme  will  support  Morocco  in  managing  its  borders  and  combating  the  smuggling  of 
migrants. 

Moreover, four regional programmes will help strengthen the resilience of people in need, support rights 
of refugees and asylum seekers, promote investments by the diaspora in countries of origin and further 
promote  labour  mobility  to  advance  legal  migration.  A  top-up  of  the  Technical  Cooperation  Facility  was 
also approved. 

In  the  balance  sheet,  the  increase  in  activities  of  the  trust  fund,  namely  the  signature  of  188  new 
contracts,  is  most  visible  when  looking  at  pre-financing,  which  increased  by  kEUR  157  912  due  to 
advances  paid out on these  new  contracts. In the statement of financial performance  the new activities 
had  the  highest  impact on  the  operating  expenses, that  increased  by  kEUR  201  322.  At  the  same  time 
there has been a substantial growth in revenue from donations (increase of kEUR 206 775 compared to 
2018) to support the increase in expenses. 

59 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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 income 

TOTAL LIABILITIES 

NET ASSETS 

FUNDS & RESERVES 

Contribution from Members 

Accumulated surplus 

Economic result of the year 

NET ASSETS 

Note 

31.12.2019 

 EUR '000 
31.12.2018 

 48 539 

 48 539 

 418 569 

 18 471 

 26 915 

 463 955 

 512 495 

 34 144 

 34 144 

 273 214 

 16 656 

 146 864 

 436 734 

 470 878 

 (384 411) 

 (369 999) 

 (384 411) 

 (369 999) 

 (25 969) 

 (102 114) 

 (12 733) 

 (88 146) 

 (128 083) 

 (100 879) 

 (512 495) 

 (470 878) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

60 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

STATEMENT OF FINANCIAL PERFORMANCE 

REVENUE 
Revenue from non-exchange transactions 
Recovery of expenses 
Revenue from donations 

Revenue from exchange transactions 
Financial revenue 
Other exchange revenue 

Total revenue 
EXPENSES 
Operating expenses 
Finance costs 
Other expenses 
Total expenses 
ECONOMIC RESULT OF THE YEAR 

Note 

2019 

EUR '000 
2018 

  467 
 774 090 
 774 557 

– 
 576 802 
 576 802 

  (7) 
 1 855 
 1 848 
 776 405 

  2 
  5 
  6 
 576 808 

 (755 904) 
  (9) 
 (20 492) 
 (776 405) 
– 

 (561 761) 
– 
 (15 047) 
 (576 808) 
– 

61 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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 & 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 

2019 
– 

EUR '000 
2018 
– 

 (159 750) 
 (1 815) 
 14 412 
 13 236 
 13 968 
 (119 949) 

 (57 110) 
 (13 636) 
 (26 713) 
 12 207 
 69 546 
 (15 706) 

 (119 949) 
 146 864 
 26 915 

 (15 706) 
 162 571 
 146 864 

62 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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 2019 

CONSOLIDATED BALANCE SHEET 

NON-CURRENT ASSETS 
Financial 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 income 

TOTAL LIABILITIES 

NET ASSETS 

FUNDS & RESERVES 
Fair value reserve 
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 

31.12.2019 

 EUR million 
31.12.2018 

 36 
 962 
 998 

1 725 
 143 
1 223 
3 092 
 4 090 

– 
 924 
 924 

1 751 
 156 
 548 
2 455 
 3 379 

 (167) 
  (167) 

 (229) 
  (229) 

 (542) 
(1 432) 
(1 974) 
 (2 141) 

 (255) 
(1 374) 
(1 629) 
 (1 857) 

 1 948 

 1 521 

 (2) 
54 809 
2 252 
(51 155) 
(3 956) 
 1 948 

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

64 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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 

ECONOMIC RESULT OF THE YEAR 

2019 

EUR million 
2018 

 28 
 287 
  316 

 7 
 41 
  48 
  364 

(3 220) 
 (804) 
 (14) 
 (1) 
 (282) 

 4 
 303 
  307 

 10 
 46 
  57 
  364 

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

 (4 320) 

 (4 482) 

 (3 956) 

 (4 118) 

65 

 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

CONSOLIDATED CASH FLOW STATEMENT 

Economic result of the year 
Operating activities 
Capital increase - 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 
Other non-cash movements 
Investing activities 
(Increase)/decrease in available for sale financial assets  

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 

2019 
(3 956) 

EUR million 
2018 
 (4 118) 

4 385 
 (12) 
 13 
– 
 (62) 
 288 
 58 
 (2) 

 (36) 

  676 

 676 
  548 
 1 223 

4 250 
 (317) 

  (60) 
 (4) 
 (63) 
 (309) 

  618 
– 

– 

  (2) 

 (2) 
  550 
  548 

66 

 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
  
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS 

Annual accounts of the European Development Fund 2019 

BALANCE AS AT 31.12.2017 

Capital increase -  contributions 

Economic result of the year 
BALANCE AS AT 31.12.2018 
Fair value movements 
Capital increase - contributions 
Economic result of the year 
BALANCE AS AT 31.12.2019 

Fund 
capital - 
active EDFs 
(A) 
 73 264 

– 
 73 264 

Uncalled 
funds - active 
EDFs (B) 

 27 090 

(4 250) 

– 
 22 840 

(4 385) 

 73 264 

 18 455 

Called fund 
capital - 
active EDFs 
(C) = (A)-(B) 
 46 173 

Cumulative 
Reserves (D) 

 (47 037) 

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

– 

(4 118) 
 (51 155) 

– 

– 
 2 252 

Fair value 
reserve (F) 

– 

– 
 (2) 

EUR million 

Total Net Assets 
(C)+(D)+(E)+(F) 
 1 389 

4 250 

(4 118) 
 1 521 
 (2) 
4 385 
(3 956) 
 1 948 

(3 956) 
 (55 111) 

 2 252 

  (2) 

4 250 

– 
 50 423 

4 385 
– 
 54 809 

67 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

EDF REPORT ON FINANCIAL 
IMPLEMENTATION 

68 

 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

INTRODUCTORY NOTE 

1. 

Previous EDFs 

As the 6th EDF was closed in 2006 and the 7th 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 9th EDF. 

As in past years, to ensure transparency in the presentation of the accounts for 2019, the tables set out 
separately  for  the  8th  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  9th  EDF,  balances  and 
decommitments  of  previous  EDFs  have  been  transferred to  the  9th  EDF,  and,  during  the life of  the 9th 
EDF, have been committed as 9th EDF funds. 

In 2019, the Commission successfully finalized a special exercise for the closure of the remaining projects 
under the 8th EDF. A final report on the financial implementation of the 8th EDF is available with these 
2019 annual accounts. The Commission aims to continue these efforts by closing the 9th EDF at 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 
2014-2020  in  accordance  with  the  revised  Cotonou  Agreement,  adopted  by  the  Representatives  of  the 
Governments of the Member States of  the  European Community on August 2013, entered into force on 
March 2015. 

Under  the  Cotonou  Agreement,  the  third  period  (2014-2020)  of  Community  aid  to  the  ACP  States  and 
OCTs is funded by the 11th EDF for an amount of EUR 30 506 million, of which: 

 

 

 

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

EUR 364.5 million is allocated to the OCTs in accordance with Article 1.2(a) and Article 3.1 of the 
Internal Agreement, of which 359.5 million is managed by the European Commission; 

EUR 1 052.5 million is for the Commission to finance the costs arising from the programming and 
implementation  of  11th  EDF  resources,  in  accordance  with  Article  1.2(a)  of  the  Internal 
Agreement. 

- Remaining funds on non-mobilisable performance reserves at 31/12/2019 

The  amounts  decommitted  from  projects  under  the  9th  and  previous  EDFs  are  transferred  to  the 
performance reserve of the 10th EDF, with the exception of Stabex funds. 

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

During 2019, all decommitted funds from previous EDFs were transferred to the respective reserves.  

In accordance  with article 1.4 of the 11th  EDF  Internal Agreement and the Council Decision of  15 April 
2019  (2019/640),  an  amount  of  decommitted  funds  from  the  10th  EDF  has  been  allocated  for  the 

69 

 
 
 
Annual accounts of the European Development Fund 2019 

purpose  of  replenishing  the  African  Peace  Facility  for  the  period  2019-2020  up  to  a  maximum  of  EUR 
445,860,000 of which EUR 14,860,000 is allocated for support of expenditure.  

Total available on non-mobilisable performance reserves at 31/12/2019 

non-mobilisable reserve from decommitted funds under the 8th, and 9th EDF 

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

Total available on non-mobilisable performance reserves at 
31/12/2019 

        EUR millions 

197.3 

142.6 

339.9 

Regarding  EDF  Co-financing  under  the  10th  and  11th  EDF,  transfer  agreements  for  co-financings  from 
Member  States  were  signed,  and  commitment  appropriations  were  opened  for  a  total  amount  of  EUR 
275.2 million. Payment appropriations were opened for the cashed amounts totalling EUR 258.4 million.  
The situation of co-financing appropriations at 31.12.2019 is shown in the table below :  

Commitments appropriations  Payment appropriations 

          EUR millions 

Co-financing - A Envelope 
Co-financing - Intra ACP 
Co-financing – Administrative 
expenses 

230.8 
36.2 
8.3 

275.2 

214.4 
36.2 

7.8 

258.4 

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 2019 

8th EDF 
EVOLUTION OF APPROPRIATIONS:  31 December 2019 
ANALYSIS OF CREDITS PER INSTRUMENT 

INSTRUMENT 

INITIAL APPROPRIATION 

INCREASES/DECREASES IN 
CUMULATIVE  RESOURCES 
AT 31 DECEMBER 2018 

INCREASE OR DECREASE IN 
RESOURCES IN 2019 

Notes 

CURRENT LEVEL 
APPROPRIATION 

(EUR million) 

Lomé 

Regular MS Contributions 

       Structural adjustment 

       Total indicative programmes 

SUB TOTAL ACP 

ACP 

ACP 

Lomé 

Regular MS Contributions 

       Aid for refugees 

       Emergency aid (Lomé) 
       Heavily indebted poor countries (Lomé) 

       Interest-rate subsidies 

       Risk capital 
       Stabex 

ACP  

       Structural adjustment 

       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 
       Stabex 
       Sysmin 
       Total indicative programmes 

OCT 

OCT 

SUB TOTAL OCT 

TOTAL 8th EDF 

– 
– 
– 

– 

12,967 

120 

140 
– 
370 

1,000 
1,800 

1,400 

575 
7,562 
– 

– 
– 
– 
– 

47 

18 

29 

47 

(3,332) 

(20) 

(4) 
1,060 

(301) 

12 
(1,077) 

79 

(474) 
(2,640) 

35 

650 

417 
233 
– 

(1)  *1 

– 

(1) 

47 

18 

29 

47 

9,635 

100 

136 
1,060 

69 

1,012 
723 

1,479 

101 
4,921 

35 

650 

417 
233 
– 

12,967 

(2,681) 

(1)  *1 

10,285 

– 
– 
– 
– 
– 
– 

– 

46 
1 
6 
1 
2 
35 

46 

46 
1 
6 
1 
2 
35 

46 

12,967 

(2,588) 

(1)  *1 

10,378 

*1decreases are decommitments transferred to the non-mobilisable performance reserve of the 10th EDF 

71 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
Table 1.2 

Annual accounts of the European Development Fund 2019 

9th EDF 
EVOLUTION OF APPROPRIATIONS:  31 December 2019 
ANALYSIS OF CREDITS PER INSTRUMENT 

INSTRUMENT 

INITIAL APPROPRIATION 

INCREASES/DECREASES IN 
CUMULATIVE  RESOURCES 
AT 31 DECEMBER 2018 

INCREASE OR DECREASE IN 
RESOURCES IN 2019 

Notes 

CURRENT LEVEL 
APPROPRIATION 

(EUR million) 

Lomé 

Regular MS Contributions 
       Transfers from 7th EDF - Lomé 
Cotonou 
Regular MS Contributions 
       A Envelope - National Allocations 
       B Envelope - National Allocations 

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 
       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 

SUB TOTAL OCT 
TOTAL 9th EDF 

ACP 

ACP 

ACP  

ACP  

OCT 

OCT 

– 
– 

50 
44 
6 

50 

667 
20 
647 

5,464 
3,246 
(905) 
(10) 
52 
63 
2,289 
353 
(145) 
105 
267 
110 
39 

6,131 

3 
– 
3 

287 
237 
4 
45 
1 

290 
6,471 

–  *1 

–  *1 

(41)  *1 
(10)  *1 
–  *1 

(1)  *1 

(5)  *1 

(11)  *1 

  *3 
  *2 
(15)  *4 

(42)  *1 *4 

(1)  *1 
–  *1 

–  *1 

(1)  *1 
(42)  *1 *4 

– 
– 

50 
44 
6 

50 

667 
20 
647 

14,342 
8,554 
1,203 
154 
177 
63 
2,584 
353 
749 
105 
267 
110 
24 

15,009 

3 
– 
3 

286 
236 
4 
45 
1 

289 
15,348 

– 
– 

– 
– 
– 

– 

– 
– 
– 

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

8,919 

– 
– 
– 

– 
– 
– 
– 
– 

– 
8,919 

72 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

*1 All decreases are decommitments transferred to the non-mobilisable performance reserve of the 10th EDF 
*2 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) 
*3 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) 
*4 All decreases of voluntary contribution are refund to donors 

73 

 
 
 
Table 1.3 

Annual accounts of the European Development Fund 2019 

10th EDF 
EVOLUTION OF APPROPRIATIONS:  31 December 2019 
ANALYSIS OF CREDITS PER INSTRUMENT 

INSTRUMENT 

INITIAL APPROPRIATION 

ACP 

ACP 

ACP  

ACP  

OCT 

Regular MS Contributions 
       A Envelope - National Allocations 
       B Envelope - National Allocations 
       National allocations Reserve A Envelope STABEX 

SUB TOTAL ACP 
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 

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 

OCT 

SUB TOTAL OCT 
TOTAL 10th EDF 

– 
– 
– 
– 

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

20,896 
– 
– 
– 
– 
– 
– 
– 
– 
– 
– 

– 
20,896 

INCREASES/DECREASES IN 
CUMULATIVE  RESOURCES 
AT 31 DECEMBER 2018 

66 
57 
9 
– 

66 
(19) 
12,865 
(13,500) 
1,991 
(1,800) 
15 
230 
85 
(2,700) 
– 
(683) 
131 
1,868 
1,119 
1,942 
(1,783) 
204 
187 
5 
12 
1 

186 
275 
190 
– 
15 
– 
– 
25 
40 
– 
5 

275 
527 

INCREASE OR DECREASE IN 
RESOURCES IN 2019 

Notes 

CURRENT LEVEL 
APPROPRIATION 

(EUR million) 

(1)  *2 
(1)  *2 

(1)  *2 
213  *2 *4 

(169)  *2 

(9)  *2 

15  *4 
(5)  *2 
(14)  *2 

–  *2 

40  *1 
(13)  *2 
408  *4 
(40)  *2 

(2)  *3 
(2)  *3 
–  *3 

211  *2 *4 
(4)  *2 
(4)  *2 

–  *2 

1  *1 
(1)  *2 

–  *2 

(4)  *2 
206  *2 *4 

65 
56 
9 
– 

65 
20,891 
12,696 
– 
1,983 
– 
460 
226 
71 
– 
– 
– 
171 
1,855 
1,527 
1,902 
– 
203 
185 
5 
12 
1 

21,093 
271 
187 
– 
15 
– 
– 
26 
39 
– 
5 

271 
21,430 

*1 Transfers in / from 8th and 9th EDF decommitments to the 10th EDF reserves 
*2 All decreases are decommitments transferred to the non-mobilisable performance reserve of the 11th EDF 
*3 For the cofinancings, the table only presents  the commitment appropriations 
*4 Following Council Decision 2017/xxx/EU, xxx million was added from non-mobilisable performance reserve 10th EDF for African Peace Facility. 

74 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 1.4 

Annual accounts of the European Development Fund 2019 

11th EDF 
EVOLUTION OF APPROPRIATIONS:  31 December 2019 
ANALYSIS OF CREDITS PER INSTRUMENT 

INCREASES/DECREASES IN 
CUMULATIVE  RESOURCES 
AT 31 DECEMBER 2018 

INCREASE OR DECREASE IN 
RESOURCES IN 2019 

Notes 

CURRENT LEVEL 
APPROPRIATION 

(EUR million) 

INSTRUMENT 

INITIAL APPROPRIATION 

ACP 

ACP 

ACP  

ACP  

OCT 

OCT 

Regular MS Contributions 
       A Envelope - National Allocations 
       B Envelope - National Allocations 
       National allocations Reserve A Envelope STABEX 
SUB TOTAL ACP 
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 
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 
SUB TOTAL OCT 
Regular MS Contributions 
       A Envelope - National Allocations 
       B Envelope - National Allocations 
SUB TOTAL  
TOTAL 11th EDF 

*1 Transfers in / from 10th EDF decommitments to the 10th EDF reserves 
*2 For the cofinancings, the table only presents  the commitment appropriations

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

75 

(179) 
213 
139 

(49) 
2 
(42) 

(731) 
(181)  *1 
91 

379 

35  *2 
19  *2 
1  *2 
13  *2 
2  *2 

5 

(18) 

5  *1 

18 

82 
65 
17 
– 
82   
253 
15,354 
700 
– 
– 
246 
16 
(3,521) 
– 
(23,095) 
311 
2,700 
1,000 
6,541 
38 
23 
2 
11 
2 
1 
1 
291   
350 
196 
8 
49 
7 
81 
9 
– 
– 
– 
– 
350   
17 
10 
7 
17   

740 

(139)   

82 
65 
17 
– 
82 
29,081 
15,567 
838 
– 
1,053 
197 
18 
27 
– 
540 
130 
2,791 
1,000 
6,920 
73 
42 
3 
24 
4 
1 
1 
29,155 
355 
196 
8 
32 
12 
99 
9 
– 
– 
– 
– 
355 
17 
10 
7 
17 
29,608 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

Table 2.1 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2019 
PROGRESS REPORT 

                                      ALLOCATION 

8 

9 

Sundry Income 

Total indicative programmes 

Total Non-Programmable Aid 

Transfers from other funds 

L
o
m
é 

SUB TOTAL: REGULAR MS CONTRIBUTIONS 

A Envelope - National Allocations 

B Envelope - National Allocations 

Bridging facility 

CDE, CTA and Parliamentary Assembly 

Country reserve 

35 

4,985 

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 

C
o
t
o
n
o
u 

Regional allocations reserve 

Special allocation R.D. Congo 

Special allocation South Sudan 

Special allocation Sudan 

Voluntary contribution Peace facility 

(EUR million) 

EDF 

10 

11 

TOTAL 

35 

4,985 

4,707 

670 

10,398 

12,939 

15,838 

38,029 

2,006 

870 

4,322 

– 

535 

3,608 

– 

– 

– 

197 

1,941 

– 

– 

– 

1,079 

3,988 

27 

– 

571 

142 

– 

154 

– 

1,855 

10,534 

27 

– 

571 

340 

7,018 

9,752 

– 

105 

267 

110 

24 

670 

670 

8,835 

1,213 

154 

240 

2,937 

793 

105 

267 

110 

24 

SUB TOTAL: REGULAR MS CONTRIBUTIONS 

650 

14,678 

21,227 

29,535 

66,089 

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 

1 

1 

42 

3 

24 

4 

73 

1 

1 

227 

8 

36 

4 

275 

185 

5 

12 

203 

  TOTAL 

10,378 

15,348 

21,430 

29,608 

76,764 

76 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 

At 31/12/2019 

% of allocation 

Aggregate Total 
RAL 

10,375 

15,335 

21,088 

26,511 
73,309 

1 

134 

1,803 

13,959 
15,896 

100% 

100% 

98% 

90% 

At 31/12/2019 

% of allocation 

Aggregate Total 
RAP 

10,374 

15,302 

20,310 

21,697 
67,683 

– 
100 

1,025 

9,144 
10,269 

Aggregate Total 

100% 

100% 

95% 

73% 

At 31/12/2019 

% of allocation 

10,374 

15,201 

19,285 

12,553 
57,414 

100% 

99% 

90% 

42% 

Annual accounts of the European Development Fund 2019 

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 

Annual 
Figures 
2019 

10,786 

16,633 

4,766 

32,185 
Cummulative 
Figures 
2008 

10,541 

14,209 

130 

24,881 
Cummulative 
Figures 
2008 

9,930 

10,011 

90 

20,031 

(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 

(2) 

(22) 

183 

3,153 
3,311 

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 

Annual 
Figures 
2019 

(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 

(1) 

(4) 

(51) 

3,557 
3,501 

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 

Annual 
Figures 
2019 

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 

– 
14 

456 

3,377 
3,847 

77 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

Table 2.2 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2019 
CLASS OF AID 

8 

% 

9 

% 
(1) 

EDF 

10 

% 
(1) 

11 

% 
(1) 

TOTAL 

% 
(1) 

(EUR million) 

35 
35 

35 
35 

4,985 
4,985 

4,985 
4,985 

4,707 
4,706 

4,706 
4,706 

417 
417 

417 
417 

233 
231 

231 
231 

– 

R
e
g
u
l
a
r

M
S

C
o
n
t
r
i
b
u
R
t
e
i
g
o
u
n
l
s 
a
r

M
S

C
o
n
t
r
i
b
u
t
i
o
n
s 

Sundry Income 

Appropriations 
Decisions 

Assigned funds 
Payments 
Total indicative 
programmes 
Appropriations 
Decisions 

Lomé 

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 

Cotonou 

100% 

100% 
100% 

100% 

100% 
100% 

100% 

100% 
100% 

100% 

100% 
100% 

99% 

99% 
99% 

670 
670 

670 
670 

8,835 
8,834 

8,822 
8,800 

1,213 
1,213 

1,209 
1,203 

154 
154 

154 
154 

240 
240 

240 
240 

2,937 
2,931 

2,924 
2,920 

793 
792 

786 
777 

105 
105 

105 
105 

267 
266 

263 
208 

110 
107 

78 

100% 

100% 
100% 

100% 

100% 
100% 

100% 

100% 
99% 

100% 

100% 
100% 

100% 

100% 
100% 

100% 

100% 
99% 

100% 

99% 
98% 

100% 

100% 
100% 

100% 

99% 
78% 

97% 

35 
35 

35 
35 

4,985 
4,985 

4,985 
4,985 

4,707 
4,706 

4,706 
4,706 

670 
670 

670 
670 

38,029 
36,545 

33,186 
27,477 

4,322 
4,301 

4,158 
4,042 

– 

100% 

100% 
100% 

100% 

100% 
100% 

100% 

100% 
100% 

100% 

100% 
100% 

96% 

87% 
72% 

100% 

96% 
94% 

154 
154 

154 
154 

100% 

100% 
100% 

12,939 
12,837 

12,621 
12,011 

2,006 
2,005 

1,984 
1,964 

15,838 
14,456 

11,325 
6,248 

99% 

98% 
93% 

100% 

99% 
98% 

870 
853 

734 
644 

– 

91% 

72% 
39% 

98% 

84% 
74% 

535 
514 

512 
512 

3,608 
3,600 

3,139 
2,973 

1,941 
1,935 

1,863 
1,658 

96% 

96% 
96% 

100% 

87% 
82% 

100% 

96% 
85% 

1,079 
871 

836 
779 

3,988 
3,524 

3,020 
2,256 

7,018 
6,748 

5,724 
2,604 

1,855 
1,625 

1,588 
1,531 

10,534 
10,054 

9,083 
8,149 

9,752 
9,475 

8,373 
5,040 

81% 

77% 
72% 

88% 

76% 
57% 

96% 

82% 
37% 

105 
105 

105 
105 

267 
266 

263 
208 

110 
107 

88% 

86% 
83% 

95% 

86% 
77% 

97% 

86% 
52% 

100% 

100% 
100% 

100% 

99% 
78% 

97% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

105 
101 

24 
24 

24 
24 

95% 
91% 

100% 

100% 
100% 

185 
181 

177 
152 

5 
5 

3 
3 

12 
11 

11 
11 

98% 

96% 
82% 

100% 

65% 
51% 

92% 

91% 
91% 

42 
31 

31 
2 

3 
3 

1 
– 

24 
23 

22 
17 

4 
2 

2 
2 

1 
1 

1 
1 

75% 

75% 
5% 

86% 

24% 
1% 

95% 

93% 
73% 

50% 

50% 
50% 

71% 

52% 
52% 

105 
101 

95% 
91% 

24 
24 

24 
24 

100% 

100% 
100% 

227 
212 

208 
154 

8 
8 

4 
3 

36 
34 

33 
29 

4 
2 

2 
2 

1 
1 

1 
1 

94% 

92% 
68% 

95% 

49% 
31% 

94% 

92% 
79% 

50% 

50% 
50% 

71% 

52% 
52% 

8 

% 

9 

% 
(1) 

10 

% 
(1) 

11 

% 
(1) 

TOTAL 

% 
(1) 

– 

– 

– 

– 

– 

– 

27 

– 

571 

197 

142 

– 

27 

– 

571 

– 

340 

8 

10,378 
10,375 

10,374 
10,374 

% 

9 

15,348 
15,335 

15,302 
15,201 

100% 

100% 
100% 

% 
(1) 

100% 

100% 
99% 

10 

21,630 
21,088 

20,310 
19,285 

% 
(1) 

97% 

94% 
89% 

11 

29,608 
26,511 

21,697 
12,553 

% 
(1) 

90% 

73% 
42% 

TOTAL 

76,964 
73,309 

67,683 
57,414 

% 
(1) 

95% 

88% 
75% 

C
o
-
f
i
n
a
n
c
i
n
g 

E
C

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 
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 
Regional allocations 
reserve 
Mobilisable reserves 

Non-mobilisable reserve 
Non-mobilisable reserve 

Appropriations 
Decisions 

Assigned funds 
Payments 

TOTAL: ALL 
ALLOCATIONS 

Cotonou 

I
n
t
e
r
M
n
o
a
b
l
i
l
S
i
L
s
A 
a
N
b
o
l
n
e
-
m
r
o
e
b
s
i
e
l
r
i
(1) % of appropriations 
v
s
e
a
s 
b
l
e

r
e
s
e
r
v
e 

79 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 2.3 

  ACP 
  Regular MS Contributions 
L
o
m
é 

      Total indicative programmes 
SUB TOTAL: TOTAL INDICATIVE PROGRAMMES 
      Structural adjustment 
SUB TOTAL: TOTAL NON-PROGRAMMABLE AID 

  TOTAL ACP     
  ACP  
  Regular MS Contributions 

L
o
m
é 

      Utilisation of interest income 
SUB TOTAL: SUNDRY INCOME 
      Total indicative programmes 
SUB TOTAL: TOTAL INDICATIVE PROGRAMMES 
      Aid for refugees 
      Emergency aid (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 
C
o
t
o
n
o
u 

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

L
o
m
é 

      Total indicative programmes 
SUB TOTAL: TOTAL INDICATIVE PROGRAMMES 
      Interest-rate subsidies 
      Risk capital 
      Stabex 
      Sysmin 
SUB TOTAL: TOTAL NON-PROGRAMMABLE AID 

  TOTAL OCT     

  TOTAL: ACP+OCT    (A+B) 

Table 2.4 

Annual accounts of the European Development Fund 2019 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2019 
CLASS OF AID 
ACP + PTOM - 8 th EDF 

CREDI
TS 
(1) 

DECISIONS 
ANNU
AL 

% 
(2) : (1) 

ASSIGNED FUNDS 
% 
ANNU
AL 
(3) : (2) 

AGGR
EG. 
(3) 

AGGR
EG. 
(2) 

AGGR
EG. 
(4) 

PAYMENTS 
ANNU
AL 

% 
(4) : (3) 

(EUR million) 

29 
29 
18 
18 
47 

35 
35 
4,921 
4,921 
100 
136 
1,060 
69 
1,012 
722 
1,479 
101 
4,678 

417 
417 

231 
231 

29 
29 
18 
18 
47 

35 
35 
4,921 
4,921 
100 
136 
1,060 
69 
1,012 
723 
1,479 
101 
4,679 

417 
417 
233 

233 
– 
– 

100% 
100% 
100% 
100% 
100% 

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

100% 
100% 

– 
– 

– 

– 

– 

– 
– 

(2) 
(2) 

99% 

29 
29 
18 
18 
47 

35 
35 
4,921 
4,921 
100 
136 
1,060 
68 
1,012 
722 
1,479 
101 
4,677 

417 
417 

231 
231 

100% 
100% 
100% 
100% 
100% 

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

100% 
100% 

100% 
100% 

– 
– 

– 
– 

– 
– 

29 
29 
18 
18 
47 

35 
35 
4,921 
4,921 
100 
136 
1,060 
68 
1,012 
722 
1,479 
101 
4,677 

417 
417 

231 
231 

– 
– 

100% 
100% 
100% 
100% 
100% 

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

100% 
100% 

100% 
100% 

10,285  10,282 

(2) 

100%  10,282 

(1) 

100%  10,282 

– 

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

10,378  10,375 

(2) 

100%  10,374 

(1) 

100%  10,374 

– 

100% 

80 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2019 
CLASS OF AID 
ACP + PTOM - 9 th EDF 

      Transfers from 7th EDF - Lomé 
SUB TOTAL: TRANSFERS FROM OTHER FUNDS 

  ACP 
  Regular MS Contributions 
L
o
m
  ACP 
é 
  Regular MS Contributions 
C
o
t
o
n
o
u 
  TOTAL: ACP     

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

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

      Transfers from 6th EDF - Lomé 
      Transfers from 7th EDF - Lomé 
SUB TOTAL: TRANSFERS FROM OTHER FUNDS 

  ACP  
  Regular MS Contributions 
L
o
m
é 
  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 

C
o
t
o
n
o
u 

      Voluntary contribution Peace facility 
SUB TOTAL: VOLUNTARY CONTRIBUTION PEACE FACILITY 

CREDI
TS 
(1) 

DECISIONS 
ANNU
AL 

% 
(2) : (1) 

ASSIGNED FUNDS 
ANNU
% 
AL 
(3) : (2) 

AGGR
EG. 
(3) 

PAYMENTS 
ANNU
AL 

% 
(4) : (3) 

AGGR
EG. 
(4) 

AGGR
EG. 
(2) 

(EUR million) 

– 
– 

44 
44 

6 

6 

50 

– 
– 

44 
44 

6 
6 

50 

100% 
100% 

100% 
100% 

100% 

100% 

– 
– 

44 
44 

6 
6 

50 

100% 
100% 

100% 
100% 

100% 
100% 

100% 

– 
– 

44 
44 

6 
6 

50 

20 
647 
667 

20 
647 
667 

100% 
100% 
100% 

– 
– 

20 
646 
667 

100% 
100% 
100% 

(1) 
(1) 

20 
646 
667 

8,554 
8,554 

1,203 

1,203 

154 
154 

177 
63 
239 

2,584 
353 
2,937 

749 
749 

105 
105 

267 
267 

110 
110 

24 
24 

8,553 
8,553 

148 
1,044 
11 
1,203 

154 
154 

177 
63 
239 

2,578 
353 
2,931 

748 
748 

105 
105 

266 
266 

107 
107 

24 
24 

(3) 
(3) 

100% 
100% 

8,543 
8,543 

(3) 
(3) 

100% 
100% 

8,521 
8,521 

– 

– 

(9) 

(9) 

(8) 
(8) 

(1) 
(1) 

– 
– 

100% 

100% 
100% 

100% 
100% 
100% 

100% 
100% 
100% 

100% 
100% 

100% 
100% 

100% 
100% 

97% 
97% 

100% 
100% 

148 
1,040 
11 
1,199 

154 
154 

177 
63 
239 

2,571 
353 
2,924 

741 
741 

105 
105 

263 
263 

105 
105 

24 
24 

– 

– 

(7) 

(7) 

(4) 
(4) 

10 
10 

(1) 
(1) 

100% 
100% 
100% 
100% 

100% 
100% 

100% 
100% 
100% 

100% 
100% 
100% 

99% 
99% 

100% 
100% 

99% 
99% 

98% 
98% 

100% 
100% 

148 
1,034 
11 
1,193 

154 
154 

177 
63 
239 

2,567 
353 
2,920 

732 
732 

105 
105 

208 
208 

101 
101 

24 
24 

100% 
100% 

100% 
100% 

100% 
100% 

100% 

100% 
100% 
100% 

100% 
100% 

100% 
99% 
100% 
100% 

100% 
100% 

100% 
100% 
100% 

100% 
100% 
100% 

99% 
99% 

100% 
100% 

79% 
79% 

96% 
96% 

100% 
100% 

– 
– 

1 
1 

– 

– 

(1) 

(1) 

4 
4 

8 
8 

3 
3 

  TOTAL: ACP     (A) 

15,009  14,996 

(21) 

100%  14,964 

(4) 

100%  14,864 

14 

99% 

      Transfers from 6th EDF - Lomé 
      Transfers from 7th EDF - Lomé 
SUB TOTAL: TRANSFERS FROM OTHER FUNDS 

  OCT 
  Regular MS Contributions 
L
o
m
é 
  OCT 
  Regular MS Contributions 

C
o
t
o
n
o
u 

      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) 
able 2.6 

– 
3 
3 

236 
236 

4 

4 

1 
1 

45 
45 

– 
3 
3 

236 
236 

4 
4 

1 
1 

45 
45 

100% 
100% 
100% 

– 
3 
3 

100% 
100% 
100% 

– 
3 
3 

100% 
100% 
100% 

– 
– 

100% 
100% 

235 
235 

– 
– 

99% 
99% 

235 
235 

– 
– 

100% 
100% 

100% 

100% 
100% 

100% 
100% 

– 
– 

4 
4 

1 
1 

45 
45 

100% 
100% 

100% 
100% 

100% 
100% 

4 
4 

1 
1 

45 
45 

100% 
100% 

100% 
100% 

100% 
100% 

289 

289 

(1) 

100% 

288 

– 

99% 

288 

– 

100% 

15,348  15,335 

(22) 

100%  15,302 

(4) 

100%  15,201 

14 

99% 

81 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2019 
CLASS OF AID 
ACP + PTOM - 10 th EDF 

CREDI
TS 
(1) 

DECISIONS 
ANNU
AL 

% 
(2) : (1) 

ASSIGNED FUNDS 
% 
ANNU
(3) : (2) 
AL 

AGGR
(3) 
EG. 

PAYMENTS 
ANNU
AL 

% 
(4) : (3) 

AGGR
(4) 
EG. 

AGGR
(2) 
EG. 

(EUR million) 

  Regular MS Contributions 
  Allocations 

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

A
C
P 

      B Envelope - National Allocations 
      Other chocs with budgetary impact 
SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS 
Mobilisable reserves 
Reserves 
      National allocations Reserve A Envelope STABEX 
SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE 
STABEX 

  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 

A
C
P

      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 

O
C
T 

      Studies / Technical assistance OCT 
SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS 
REVENUES 
      Regional allocations 
SUB TOTAL: REGIONAL ALLOCATIONS 
Mobilisable reserves 
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 

56 
56 

9 
9 

(1) 
(1) 

100% 
100% 

100% 

56 
56 

9 
9 

– 
– 

99% 
99% 

100% 
100% 

56 
56 

9 
9 

– 
– 

100% 
100% 

100% 
100% 

12,594 
12,594 

(168) 
(168) 

99% 
99% 

12,384 
12,384 

(42) 
(42) 

98% 
98% 

11,798 
11,798 

286 
286 

95% 
95% 

202 
835 
49 
895 
1,981 

440 
68 
509 

226 
1,848 
1,527 
3,600 

1,896 
1,896 

181 
181 

5 
5 

11 
1 
11 

(1) 
(4) 
– 
– 
(5) 

4 
– 
4 

(3) 
(17) 
408 
388 

(30) 
(30) 

(2) 
(2) 

– 
– 

– 
– 
– 

100% 

96% 
96% 
96% 

100% 
100% 
100% 
100% 

100% 
100% 

98% 
98% 

100% 
100% 

92% 
99% 
92% 

197 
829 
49 
887 
1,961 

440 
67 
507 

226 
1,826 
1,087 
3,139 

1,827 
1,827 

177 
177 

3 
3 

10 
1 
11 

(4) 
(2) 

– 
(6) 

4 
– 
4 

(3) 
2 
(12) 
(13) 

8 
8 

(1) 
(1) 

– 
– 

– 

– 

97% 
99% 
100% 
99% 
99% 

100% 
98% 
100% 

100% 
99% 
71% 
87% 

96% 
96% 

98% 
98% 

65% 
65% 

99% 
100% 
99% 

191 
821 
49 
880 
1,941 

440 
67 
507 

209 
1,726 
1,038 
2,973 

1,625 
1,625 

152 
152 

3 
3 

10 
1 
11 

– 
8 

3 
11 

5 
– 
5 

– 
43 
15 
58 

70 
70 

9 
9 

1 
1 

– 

– 

97% 
99% 
100% 
99% 
99% 

100% 
100% 
100% 

93% 
95% 
95% 
95% 

89% 
89% 

86% 
86% 

78% 
78% 

100% 
100% 
100% 

187 
187 

(2) 
(2) 

100% 
100% 

182 
182 

9 
6 
15 

5 
5 

39 
39 

– 

– 

– 
– 

– 
– 

100% 

100% 
100% 

100% 
100% 

8 
6 
14 

5 
5 

36 
36 

– 
– 

– 

– 

(1) 
(1) 

97% 
97% 

99% 
100% 
99% 

100% 
100% 

93% 
93% 

157 
157 

13 
13 

87% 
87% 

8 
6 
14 

5 
5 

34 
34 

1 

1 

2 
2 

99% 
100% 
99% 

100% 
100% 

94% 
94% 

56 
56 

9 

9 

– 
– 

12,696 
12,696 

1,983 

1,983 

460 
71 
530 

226 
1,855 
1,527 
3,608 

1,902 
1,902 

185 
185 

5 
5 

12 
1 
12 

– 
– 
– 

– 
– 

– 
– 

– 
– 

– 
– 

171 
171 

187 
187 

15 

15 

5 
5 

39 
39 

– 
– 
– 

– 
– 

– 
– 

82 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

Non-mobilisable reserve 
Reserves 
      Non-mobilisable reserve 
SUB TOTAL: NON-MOBILISABLE RESERVE 

26 
26 

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

21,430  21,088 

183 

97%  20,310 

(51) 

96%  19,285 

456 

95% 

Table 2.6

83 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2019 
CLASS OF AID 
ACP + PTOM - 11 th EDF 

CREDI
TS 
(1) 

DECISIONS 
ANNU
AL 

% 
(2) : (1) 

ASSIGNED FUNDS 
% 
ANNU
(3) : (2) 
AL 

AGGR
(3) 
EG. 

AGGR
(2) 
EG. 

(EUR million) 

PAYMENTS 
ANNU
AL 

% 
(4) : (3) 

AGGR
(4) 
EG. 

  Regular MS Contributions 
  Allocations 

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

A
C
P 

      B Envelope - National Allocations 
      Emergency aid 
SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS 
Mobilisable reserves 
Reserves 
      National allocations Reserve A Envelope STABEX 
SUB TOTAL: NATIONAL ALLOCATIONS RESERVE A ENVELOPE 
STABEX 

  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 

      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 

A
C
P

      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 

  Regular MS Contributions 
  Allocations 

O
C
T 

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

65 
65 

17 
17 

– 
– 

100% 
100% 

100% 

64 
64 

17 
17 

5 
5 

98% 
98% 

100% 
100% 

45 
45 

17 
17 

18 
18 

70% 
70% 

100% 
100% 

14,186 
14,186 

1,617 
1,617 

91% 
91% 

11,063 
11,063 

1,920 
1,920 

78% 
78% 

6,077 
6,077 

1,637 
1,637 

55% 
55% 

712 
109 
821 

855 
9 
864 

127 
2,397 
1,000 
3,524 
6,649 
6,649 

31 
31 

3 
3 

23 
23 
2 
2 

137 
– 
137 

155 
– 
154 

(6) 
281 
– 
275 
846 
846 

11 
11 

1 
1 

21 
21 

600 
109 
709 

824 
8 
832 

103 
1,938 
980 
3,020 
5,644 
5,644 

31 
31 

1 
1 

22 
22 
2 
2 

98% 

81% 
51% 
81% 

64% 
86% 
100% 
88% 
96% 
96% 

75% 
75% 

86% 
86% 

95% 
95% 
50% 
50% 

29 
– 
29 

84% 
100% 
86% 

511 
109 
620 

35 
– 
35 

85% 
100% 
87% 

177 
1 
178 

5 
591 
34 
630 
704 
704 

11 
11 

1 
1 

20 
20 
– 
– 

96% 
85% 
96% 

81% 
81% 
98% 
86% 
85% 
85% 

100% 
100% 

28% 
28% 

98% 
98% 
100% 
100% 

769 
7 
775 

95 
1,279 
881 
2,256 
2,591 
2,591 

2 
2 
– 
– 
17 
17 
2 
2 

166 
– 
166 

10 
380 
22 
413 
1,038 
1,038 

1 
1 
– 
– 
16 
16 
2 
2 

93% 
85% 
93% 

93% 
66% 
90% 
75% 
46% 
46% 

6% 
6% 

3% 
3% 

78% 
78% 
100% 
100% 

1 
1 

– 
– 

71% 
71% 

1 
1 

– 
– 

73% 
73% 

1 
1 

100% 
100% 

196 
196 

5 
3 
8 

7 
7 
99 
99 

13 
13 

2 

2 

2 
2 
62 
62 

100% 
100% 

192 
192 

5 
3 
8 

5 
5 
80 
80 

100% 

84% 
84% 
100% 
100% 

13 
13 

2 

2 

– 
– 
43 
43 

98% 
98% 

99% 
100% 
99% 

65% 
65% 
81% 
81% 

120 
120 

44 
44 

63% 
63% 

4 
3 
7 

4 
4 
13 
13 

2 

2 

1 
1 
5 
5 

78% 
100% 
87% 

87% 
87% 
16% 
16% 

65 
65 

17 

17 

– 
– 

15,567 
15,567 

838 

838 
– 
– 
1,053 
18 
1,071 

197 
2,791 
1,000 
3,988 
6,920 
6,920 

42 
42 

3 
3 

24 
24 
4 
4 

– 
– 
27 
27 
– 
– 
540 
540 

130 
130 

1 
1 

196 
196 
8 

8 
– 
– 
9 
9 
99 
99 

– 
– 

84 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

      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 
      Emergency aid 
SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS 

32 
32 

12 
12 

– 
– 

10 
10 

7 

7 

10 
10 

7 
7 

4 
4 

7 
7 

100% 
100% 

100% 

6 
6 

– 
– 

59% 
59% 

6 
6 

– 
– 

99% 
99% 

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

29,608  26,511 

3,153 

90%  21,697 

3,557 

82%  12,553 

3,377 

58% 

85 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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

86 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

EUROPEAN INVESTMENT BANK  

CA/531/20 
12 March 2020 

Document 20/108 

BO AR D  O F  D IR E CT O RS  

IN V E ST M ENT  F AC ILI T Y  
FIN AN C I AL   ST AT EM E NT S  
AS   AT   3 1  DE C EM BE R  2 0 19  

a)  Statement of financial position 

b)  Statement of profit or loss and other comprehensive income 

c)  Statement of changes in contributors’ resources 

d)  Statement of cash flows 

e)  Notes to the financial statements 

87 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

STATEMENT OF FINANCIAL POSITION 
AS AT 31 DECEMBER 2019 
(In EUR’000) 

Notes 

31.12.2019 

31.12.2018 

ASSETS 

Cash and cash equivalents 

Amounts receivable from contributors 

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 

Total liabilities 

CONTRIBUTORS' RESOURCES 

Facility Member States Contribution called 

Retained earnings 

Total contributors' resources 

5 

9/17 

10 

6 

7 

8 

11 

6 

12 

13 

14 

15 

16 

17 

837,777 

86,330 

330,587 

14,184 

1,518,675 

619,928 

- 

573,708 

100,000 

335,140 

9,873 

1,540,991 

567,292 

171 

3,407,481 

3,127,175 

191 

32,566 

628 

37,269 

147,438 

2,353 

8,493 

33,764 

793 

23,822 

143,813 

2,493 

220,445 

213,178 

2,967,000 

220,036 

2,697,000 

216,997 

3,187,036 

2,913,997 

Total liabilities and contributors' resources 

3,407,481 

3,127,175 

88 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME  
FOR THE YEAR ENDED 31 DECEMBER 2019 
(In EUR’000) 

Notes 

From 01.01.2019 

From 01.01.2018 

to 31.12.2019 

to 31.12.2018 

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 

Net result on loans and advances measured at FVTPL 

Net result on sale of loans 

Net foreign exchange result 

Net result on financial operations 

Change in impairment on loans and advances, net of reversals 

Change in provisions for guarantees, net of reversals 

Change in provisions for loan commitments, net of reversals 

General administrative expenses 

Profit / (Loss) for the year 

 Other comprehensive income 

19 

19 

20 

20 

21 

7 

7 

7 

13 

14 

22 

93,923 

-2,948 

96,730 

-2,539 

90,975 

94,191 

4,438 

-721 

3,717 

12,611 

9,904 

-8,331 

2,064 

-61,998 

284 

-106 

178 

-9,987 

-10,179 

-702 

- 

-32,436 

-45,750 

-53,304 

17,243 

107 

-13,244 

-50,009 

-22,771 

-485 

-19,612 

-47,799 

3,039 

-49,602 

- 

- 

Total comprehensive income profit / (loss) for the year 

3,039 

-49,602 

*  For  the  year  ended  31  December  2019,  interest  and  similar  income  included  EUR  93.9 million  (2018:  EUR  96.7 million)  calculated  on 
assets held at amortised cost based on effective interest method.  

89 

 
 
  
 
 
 
 
 
 
 
 
  
 
 
 
  
 
 
  
 
 
 
  
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

STATEMENT OF CHANGES IN CONTRIBUTORS’ RESOURCES 
FOR THE YEAR ENDED 31 DECEMBER 2019 
(In EUR’000) 

At 1 January 2019 

Notes 

2,697,000 

216,997 

2,913,997 

Contribution 
called 

Retained 
earnings 

Total  

Member States contribution called during the year 

17 

270,000 

- 

270,000 

Profit for the year 2019 

- 

3,039 

3,039 

Changes in contributors’ resources 

270,000 

3,039 

273,039 

At 31 December 2019 

2,967,000 

220,036 

3,187,036 

At 1 January 2018 

Contribution 
called  

Retained 
earnings  

Total  

2,517,000 

266,599 

2,783,599 

Member States contribution called during the year 

180,000 

- 

180,000 

Loss for the year 2018 

- 

-49,602 

-49,602 

Changes in contributors’ resources 

180,000 

-49,602 

130,398 

At 31 December 2018 

2,697,000 

216,997 

2,913,997 

90 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

STATEMENT OF CASH FLOWS 
FOR THE YEAR ENDED 31 DECEMBER 2019 
(In EUR’000) 

OPERATING ACTIVITIES 
Profit / (Loss) for the financial year 
Adjustments made for  
Net result in fair value on shares and other variable yield securities 
Change in impairment on loans and advances, net of reversals 
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 of reversals 
Net change in provisions for loan commitments, net of reversals 
Fair value changes on derivatives  
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 
Sale of loans 
Change in accrued interest on cash and cash equivalents 
(Increase) in treasury financial assets 
Maturities of treasury financial assets 
(Increase) in shares and other variable yield securities 
Net proceeds from shares and other variable yield securities 
(Decrease) in other assets 
Increase in other liabilities 
Increase in amounts payable to the European Investment Bank 
Net cash flows used in operating activities 

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

Notes 

From 01.01.2019 
to 31.12.2019 

From 01.01.2018 
to 31.12.2018 

3,039 

-49,602 

8 
7 

7 
13 

10 

7 
8 

7 
7 

5 
10 
10 
8 

5 
5 
5 

-8,629 
-17,243 
8,331 
-5,087 
-107 
13,447 
-12,611 
331 
-1,198 
-17,752 
-6,812 
2,369 

-41,922 

-311,185 
355,078 
2,194 
-93 
-2,948,021 
2,952,905 
-106,943 
71,024 
-171 
140 
2,187 
-24,807 

284,820 

30,000 

-28,220 

286,600 
261,793 

20,665 
22,771 
702 
-1,833 
309 
19,666 
9,987 
-1,645 
7,962 
-44,927 
-17,300 
2,561 

-30,684 

-259,214 
354,855 
- 
-178 
-2,219,062 
2,026,659 
-95,434 
32,802 
-4,214 
31 
2,168 
-192,271 

230,000 

20,000 

-35,641 

214,359 
22,088 

573,818 

549,169 

-24,937 
286,730 
2,369 
837,980 

72,166 
622,991 
142,823 
837,980 

-192,271 
214,359 
2,561 
573,818 

51,936 
521,882 
- 
573,818 

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Notes to the financial statements as at 31 December 2019 

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 States 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 States 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”). 

Transitional arrangements that would allow EIB financing to carry on operations in ACP region until the end of 2020 have been agreed 
on the EU and ACP sides (Decision N° 3/2019 of the ACP-EU Committee of Ambassadors of 17 December 2019 to adopt transitional 
measures pursuant to Article 95(4) of the ACP-EU Partnership Agreement). The Bank will continue approving operations in line with its 
Mandate until the end  of 2020,  which is the end of the commitment period for the use of IF revolving funds specified under the 11th 
EDF. 

In  June  2018,  the  Commission  also  published  the  budget  proposal  for  the  external  action  of  the  EU  for  the  period  2021-2027,  the 
regulation establishing the Neighbourhood, Development and International Cooperation Instrument (“NDICI”). An important aspect of the 
proposal is the simplification of its funding architecture, bringing together nine separate instruments and funds, as well as the integration 
of the current extra-budgetary EDF into the EU budget. The NDICI Regulation will provide the legal basis for the Commission to entrust 
future  EU mandates  to  the  EIB  for  its  activity  outside  the  EU. It  will  also  provide  the  external  investment  framework  for  the  Union  to 
cooperate  with  partner  institutions  through  grants  or  guarantees  from  the  EU  budget.  NDICI  negotiations  are  still  on-going  Without 
prejudice to a Council decision, the EIB and the EC are in talks about a proposal to continue the use of the IF reflows for an agreed 
number of years. 

The present financial statements cover the period from 1 January 2019 to 31 December 2019. 

On  a  proposal  from  the  Management  Committee  of  EIB,  the  Board  of  Directors  of  EIB  adopted  the  Financial  Statements  on  12 
March 2020, and authorised their submission to the Board of Governors for approval by 24 April 2020. 

2 

Significant accounting policies 

2 
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 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: 

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 

Measurement of fair value of financial instruments 

Fair values of financial assets (“FA”) and financial liabilities (“FL”) 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). 

 

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. 

 

Consolidation of entities in which the Facility holds interest  

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

2.3  Changes in accounting policies 

Except for the changes below, the Facility has consistently applied the accounting policies set out in Note 2.4 to all periods presented in 
these financial statements. The Facility has adopted the following new standards and amendments to standards. 

Standards adopted 

The  following  interpretations  as  well  as  the  amendments  to  and  revision  of  existing  standards  became  effective  for  the  Facility`s 
financial statements as of 1 January 2019: 

IFRS 16 Leases 

IFRS  16  became  effective  for  annual  reporting  periods  beginning  on  or  after  1  January  2019  and  replaces  the  existing  guidance  of 
IAS   17.  It  results  in  almost  all  leases  are  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 not changed significantly.  

This change had no material impact on the Facility`s financial statements. 

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Prepayment Features with Negative Compensation - Amendments to IFRS 9 

The amendments clarify, that a financial asset passes the Solely Payments of Principal and Interest (‘SPPI’) criterion, regardless of the 
event  or  circumstance  that  causes  the  early  termination  of  the  contract  and  irrespective  of  which  party  pays  or  receives  reasonable 
compensation for the early termination of the contract. The basis for conclusions to the amendments clarified that the early termination 
can  result  from  a  contractual  term  or  from  an  event  outside  the  control  of  the  parties  to  the  contract,  such  as  a  change  in  law  or 
regulation leading to the early termination of the contract. 

The adoption of the amendments had no material impacts on the Facility’s financial statements. 

Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)  

The amendments clarify that an entity applies IFRS 9 to long-term interests in an associate or joint venture to which the equity method is 
not applied but that, in substance, form part of the net investment in the associate or joint venture (long-term interests). This clarification 
is relevant because it implies that the expected credit loss model in IFRS 9 applies to such long-term interests. 

The amendments also clarify that, in applying IFRS 9, an entity does not take account of any losses of the associate or joint venture, or 
any  impairment  losses  on  the  net  investment,  recognised  as  adjustments  to  the  net  investment  in  the  associate  or  joint  venture  that 
arise from applying IAS 28 Investments in Associates and Joint Ventures. 

The amendments had no material impact on the Facility’s financial statements. 

Plan Amendment, Curtailment or Settlement (Amendments to IAS 19)  

The amendments specify that when a plan amendment, curtailment or settlement occurs during the annual reporting period, an entity is 
required to: 

- 

- 

Determine current service cost for the remainder of the period after the plan amendment, curtailment or settlement, using the 
actuarial assumptions used to remeasure the net defined benefit liability reflecting the benefits offered under the plan and the 
plan assets after that event 

Determine  net  interest  for  the  remainder  of  the  period  after  the  plan  amendment,  curtailment  or  settlement  using:  the  net 
defined benefit liability reflecting the benefits offered under the plan and the plan assets after that event; and the discount rate 
used to remeasure that net defined benefit liability  

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

Annual Improvements to IFRSs 2015–2017 Cycle (Amendments to IFRS 3, IFRS 11) 

These amendments had no impact on the Facility`s financial statements as there is no transaction where joint control is obtained. 

Standards issued but not yet adopted 

Definition  of  Material  -  Amendments  to  IAS  1  'Presentation  of  financial  statements'  and  lAS  8    'Accounting  policies,  changes  in 
accounting estimates and errors' Effective for annual periods beginning on or after 1 January 2020. 

The  amendments  clarify  the  definition  of  ‘material’  and  align  the  definition  used  in  the  Conceptual  Framework  and  the  standards 
themselves. 

The  amended  definition  states  that  'Information  is  material  if  omitting,  misstating  or  obscuring  it  could  reasonably  be  expected  to 
influence  decisions  that  the  primary  users  of  general  purpose  financial  statements  make  on  the  basis  of  those  financial  statements, 
which provide financial information about a specific reporting entity.' 

The  amendment  also  clarifies  the  meaning  of  'primary  users  of  general  purpose  financial  statements'  to  whom  those  financial 
statements  are  directed,  by  defining  them  as  'existing  and  potential  investors,  lenders  and  other  creditors'  that  must  rely  on  general 
purpose financial statements for much of the financial information they need. 

The amendments are effective for annual periods beginning on or after 1 January 2020. The Facility did not adopt these amendments 
early and does not expect it to have a significant impact on the Facility’s financial statements. 

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Interest Rate Benchmark Reform - Amendments to IFRS 9, IAS 39 and IFRS 7 

In September 2019, the IASB issued amendments to IFRS 9, IAS 39 and IFRS 7, which provide temporary reliefs that would enable 
hedge  accounting  to continue  during  the  period  of  uncertainty  before  the  replacement  of  an  existing  interest  rate  benchmark  with  an 
alternative nearly risk-free interest rate (a RFR). 

The amendments to IFRS 9 include a number of reliefs, which apply to all hedging relationships that are directly affected by the interest 
rate benchmark reform. The first three reliefs provide for:  

- 

- 

- 

The assessment of whether a forecast transaction (or component thereof) is highly probable; 

Assessing when to reclassify the amount in the cash flow hedge reserve to profit and loss; 

The assessment of the economic relationship between the hedged item and the hedging instrument. 

For each of these reliefs, it is assumed that the benchmark on which the hedged cash flows are based are not altered as a result of 
IBOR reform. 

The fourth relief provides that, a non-contractually specified risk component only needs to be separately identifiable need at initial hedge 
designation and not on ongoing basis.  

Application  of  the  reliefs  is  mandatory  and  the  reliefs  continue  indefinitely  in  the  absence  of  any  of  the  events  described  in  the 
amendments.  

The amendments also introduce specific disclosure requirements for hedging relationships to which the reliefs are applied. 

The amendments are effective for annual periods beginning on or after 1 January 2020. The Facility did not adopt these amendments 
early and the Bank established a cross-services IBOR working group to assess the impact and manage its transition.  

Amendments to References to Conceptual Framework in IFRS Standards – effective 1 January 2020. 

The  revised  Conceptual  Framework  sets  out  a  comprehensive  set  of  concepts  for  financial  reporting,  standard  setting,  guidance  for 
preparers  in  developing  consistent  accounting  policies  and  assistance  to  others  in  their  efforts  to  understand  and  interpret  the 
standards. 

The revised Conceptual Framework for Financial Reporting is not a standard, and none of the concepts override those in any standard 
or any requirements in a standard, but mainly has the purpose to assist the Board in developing standards, to help preparers develop 
consistent  accounting  policies  if  there  is  no  applicable  standard  in  place  and  to  assist  all  parties  to  understand  and  interpret  the 
standards. 

The Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities 
and clarifies some important concepts. Conceptual Framework, it is effective for annual periods beginning on or after 1 January 2020. 

The Facility did not adopt the revised Conceptual Framework early and does not expect it to have a significant 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. 

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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. 

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  

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, loans and debt 
securities including bonds, notes or certificates issued by structured entities, government or corporates. 

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. 

The business model for the Impact Financing Envelope direct loan operations has been changed as described and disclosed in Note 7 
and Note 24. 

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

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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. 

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. 

Derecognition 

The Facility derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or the rights to 
receive the contractual cash flow are transferred in a transaction in which either the Facility transfers the risks and rewards of ownership 
of the financial asset or it retains substantially all of the risks and rewards of ownership but 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. 

Modification  

A  financial  asset  measured  at  amortised  cost  is  considered  modified  when  its  contractual  cash  flows  are  renegotiated  or  otherwise 
modified. Renegotiation or modification may or may not lead to derecognition of the old and recognition of the new financial instrument. 

A  substantial  contractual  modification  on  the  cash  flows  of  a  financial  asset  measured  at  amortised  cost  which  results  in  the 
derecognition  of  the  financial  asset,  leads  to  the  recognition  of  the  new  financial  asset  at  its  fair  value,  and  the  recording  of  the 
modification gain or loss impact in the consolidated income statement under “Result on financial operations”. 

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. 

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The Facility uses widely recognised valuation models for determining the fair value of common and more simple financial instruments, 
like interest rate and currency swaps that use only observable market data and require limited management judgement and estimation. 
Observable prices and model inputs are usually available in the market for listed debt and equity securities, exchange traded derivatives 
and simple over the counter derivatives like interest rate swaps. Availability of observable market prices and model inputs reduces the 
need  for  management  judgement  and  estimation  and  also  reduces  the  uncertainty  associated  with  determination  of  fair  values. 
Availability of observable market prices and inputs varies depending on the products and markets and is prone to changes based on 
specific events and general conditions in the financial markets. 

For more complex instruments, the Facility uses own valuation models, which are developed from recognised valuation models. Some 
or all of the significant inputs into these models may not be observable in the market, and are derived from market prices or rates or are 
estimated  based  on  assumptions.  Example  of  instruments  involving  significant  unobservable  inputs  includes  certain  loans  and 
guarantees for which there is no active market. Valuation models that employ significant unobservable inputs require a higher degree of 
management judgement and estimation in the determination of fair value. Management judgement and estimation are usually required 
for  selection  of  the  appropriate  valuation  model  to  be  used,  determination  of  expected  future  cash  flows  on  the  financial  instrument 
being valued, determination of probability or counterparty default and prepayments and selection of appropriate discount rates. 

The Facility 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 

IFRS  9  forward-looking  ‘expected  credit  loss’  (‘’ECL’’)  impairment  model  apply  to  financial  assets  measured  at  AC,  to  financial 
guarantee  contracts,  as  well  as  to  off-balance  sheet  commitments.  This  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. 

Under IFRS 9, loss allowances is 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  which  are,  from  the  moment  of  initial  recognition, 
deemed  to  be  classified  as  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 EAD represents the expected exposure in the event of a default EAD and is based on the current exposure to the counterparty and 
potential  changes  to  the  current  amount  allowed  under  the  contract  including  amortisation.  The  EAD  of  a  financial  asset  is  its  gross 
carrying amount. For lending commitments and financial guarantees, the EAD includes the amount drawn, as well as potential future 
amounts that may be drawn under the contract. 

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. 

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 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. 

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2.4.2.3  Loans and advances 

The loan and advances portfolio may consist of debt instruments such as loans and debt securities including bonds, notes or certificates 
issued by structured entities with the intention of holding them to maturity and to collect the contractual cash flows.  

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. 

Debt securities are recognised in the assets of the Facility when cash is advanced to the issuer and can take the form of a contractually 
linked  or  single  tranche  debt  instrument.  Undisbursed  parts  of  debt  securities  are  recorded  in  the  off-balance  at  their  nominal  value. 
Debt securities are initially measured at cost, which is the fair value plus any directly attributable transaction cost, and are subsequently 
measured  at  AC  using  the  effective  interest  rate  method.  The  difference  between  entry  price  and  redemption  value  is  amortised  in 
accordance with the effective interest method over the remaining life of the instrument. 

Impairment policy on loans and advances is described under the note 2.4.2. 

Loans and advances 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 

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. 

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). 

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. 

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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. 

2.4.4 

  Financial liabilities other than derivatives 

Classification and measurement 

Financial liabilities  

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

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 regarding 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. 

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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. 

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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1 

3 

Risk Management 

3 
2 
particular the primary risks associated with its use of financial instruments. These are: 

This  note  presents  information  about  the  Facility’s  exposure  to  and  its management  and  control  of credit  and  financial  risks,  in 

3 

- 

- 

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. 

4 
3.1  Risk management organisation 

The EIB adapts the IF`s risk management framework on an ongoing basis. 

5 
4 

5 
The Risk Management Directorate 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 Directorate is independent of the 
Front Office. 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 EIB’s Management Committee and the 
Board of Directors. 

3.2  Credit risk 
5.1 

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 
1 

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 

2 
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  

Provisions for loan commitments 

OFF BALANCE SHEET 

OFF BALANCE SHEET 

Contingent liabilities 

- Issued Guarantees 

Commitments 

- Undisbursed loans 

- Non-issued guarantees 

Total off balance sheet 

Total credit exposure 

31.12.2019 

31.12.2018 

837,777 

86,330 

330,587 

14,184 

573,708 

100,000 

335,140 

9,873 

1,518,675 

1,540,991 

-  

171 

2,787,553 

2,559,883 

-37,269 

-23,822 

200,013 

2,800 

1,357,320 

1,359,818 

2,917,151 

1,283,932 

1,553,668 

2,840,400 

5,667,435 

5,376,461 

3.2.3 
1 

Credit risk on loans and advances 

3.2.3.1  Credit risk measurement for loans and advances 
2 

Loans  and  advances  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 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 
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. 

reviews  borrowers  and  assesses 

independently 

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. 

3 

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 

4 
described above. 

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3.2.3.2  Analysis of lending credit risk exposure 
1 

The following table shows the maximum exposure (net carrying amount) to credit risk on loans and advances signed (disbursed 

2 
and undisbursed) by nature of borrower taking into account guarantees provided by guarantors: 

3 

At 31.12.2019 

In EUR’000 

Banks 

Corporates 

Public institutions 

States 

Total disbursed 

Undisbursed 

Total disbursed and 
undisbursed 

At 31.12.2018 

In EUR’000 

Banks 

Corporates 

Public institutions 

States 

Total disbursed 

Undisbursed 

Total disbursed and 
undisbursed 

Guaranteed 

Other credit 
enhancements 

Not guaranteed 

Total 

% of Total 
disbursed 

111,806 

190,006 

26,908 

- 

328,720 

191,191 

519,911 

- 

36,704 

- 

2,085 

38,789 

- 

803,861 

172,082 

1,686 

173,537 

1,151,166 

1,128,860 

915,667 

398,792 

28,594 

175,622 

1,518,675 

1,320,051 

38,789 

2,280,026 

2,838,726 

60% 

26% 

2% 

12% 

100% 

Guaranteed 

Other credit 
enhancements 

Not guaranteed 

Total 

% of Total 
disbursed 

88,263 

147,551 

29,182 

- 

264,996 

170,356 

435,352 

- 

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 

48,467 

2,317,281 

2,801,101 

61% 

26% 

2% 

11% 

100% 

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. 

106 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
Annual accounts of the European Development Fund 2019 

3.2.3.3  Credit quality analysis per type of borrower 
1 

The tables below show the credit quality analysis of the Facility’s loan portfolio as at 31 December 2019 and 31 December 2018 

2 
by the Loan Grading applications, based on the exposure signed (disbursed and undisbursed): 

3 

At 31.12.2019 

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 

234,072 

219,467 

335,841 

817,894 

- 

1,607,274 

Corporates 

100,115 

Public institutions 

States 

- 

- 

49,458 

26,908 

6,285 

- 

- 

524,532 

95,925 

770,030 

- 

1,686 

28,594 

4,486 

422,057 

- 

432,828 

57% 

27% 

1% 

15% 

Total 
* Loan operations measured at FVTPL 

334,187 

302,118 

340,327 

1,764,483 

97,611 

2,838,726 

100% 

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% 

107 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

3.2.3.4  Risk concentrations of loans and advances 
1 

3.2.3.4.1 
2 

Geographical analysis 

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

3 

4 

31.12.2019 

31.12.2018 

230,837 
179,499 
101,316 
96,640 
96,014 
75,342 
66,754 
64,882 
62,005 
49,139 
48,839 
45,393 
43,980 
43,036 
42,750 
33,436 
32,238 
31,635 
21,800 
20,399 
19,269 
18,022 
17,226 
14,674 
12,709 
12,556 
12,203 
5,399 
4,234 
4,201 
3,345 
3,036 
1,861 
1,527 
1,004 
768 
648 
59 
- 
- 

233,269 
172,515 
74,431 
124,718 
133,132 
74,638 
62,708 
81,766 
55,215 
50,727 
28,704 
54,326 
21,124 
17,700 
18,330 
72,165 
14,784 
39,246 
26,827 
- 
20,651 
30,634 
18,923 
24,335 
14,719 
17,453 
13,213 
9,655 
4,767 
4,786 
4,748 
3,986 
4,649 
1,848 
7,278 
1,107 
759 
- 
1,153 
2 

1,518,675 

1,540,991 

Country of borrower 

Kenya 
Nigeria 
Egypt 
Tanzania 
Mauritius 
Barbados 
Congo (Democratic Republic) 
Uganda 
Ethiopia 
Mauritania 
Rwanda 
Dominican Republic 
New Caledonia 
Zambia 
Senegal 
Jamaica 
Cameroon 
Ghana 
Malawi 
Guinea 
Angola 
Togo 
Cape Verde 
Regional-ACP 
Mozambique 
French Polynesia 
Cayman Islands 
Niger 
Mali 
Seychelles 
Haiti 
Samoa 
Burkina Faso 
Vanuatu 
Botswana 
Palau 
Micronesia 
Benin 
Liberia 
South Africa 

Total 

108 

 
 
 
 
  
Annual accounts of the European Development Fund 2019 

3.2.3.4.2 
1 

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 ”Tertiary and other” (in EUR’000): 

Industry sector of borrower 

Tertiary and other 

Electricity, coal and others 

Urban development, renovation and transport 

Chemicals, plastics and pharmaceuticals 

Basic material and mining 

Airports and air traffic management systems 

Telecommunications 

Food chain 

Waste recuperation 

Investment goods, Consumer durables 

Materials processing, construction 

Roads and motorways 

Social infrastructure, education and health 

Total 

31.12.2019 

31.12.2018 

932,901 

226,314 

195,042 

51,865 

44,746 

26,908 

21,546 

8,355 

6,812 

4,186 

- 

- 

- 

957,602 

181,317 

192,400 

20,436 

45,820 

29,182 

26,095 

15,386 

7,564 

- 

33,144 

32,043 

2 

1,518,675 

1,540,991 

109 

 
 
 
  
 
 
Annual accounts of the European Development Fund 2019 

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 

Moody’s 
equiv. 
grade 

12-month 
ECL 

Lifetime ECL 
not credit-
impaired 

Lifetime 
ECL credit-
impaired 

2019 

POCI 

FVTPL 

Total 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

82,211 

75,352 

5,399 

76,834 

198,400 

868,020 

224,587 

136,749 

37,366 

37,366 

-16,236 

-186,243 

21,130  1,518,675 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

102,092 

12,000 

61,461 

323,080 

531,849 

119,211 

51,377 

79,669 

76,581 

76,581 

- 

-37,269 

76,581  1,320,051 

- 

- 

- 

- 

- 

- 

- 

Internal Rating 1 -  minimal credit risk  Aaa 

- 

82,211 

Internal Rating  2 - very low credit risk  Aa1 - Aa3 

Internal Rating  3 - low credit risk 
Internal Rating  4 - moderate credit 
risk 
Internal Rating  5 - financially weak 
counterpart 

A1 - A3 

75,352 

5,399 

- 

- 

Baa1 - Baa3 

60,385 

16,449 

Ba1 - Ba3 

192,201 

6,199 

Internal Rating  6 - high credit risk 

B1 - B3 

708,162 

159,858 

Internal Rating  7 - very high credit risk  below Caa1 

79,411 

145,176 

Internal Rating  8 - counterpart in 
default 

Loans and advances at FVTPL 

below Caa1 
but in 
default 

- 

- 

- 

- 

136,749 

- 

Loss allowance and FV adjustment 

-17,191 

-38,509 

-114,307 

Carrying amount of loans and 
advances 

Loan commitments 

1,103,719 

371,384 

22,442 

Internal Rating  1 -  minimal credit risk  Aaa 

- 

Internal Rating  2 - very low credit risk  Aa1 - Aa3 

102,092 

Internal Rating  3 - low credit risk 
Internal Rating  4 - moderate credit 
risk 
Internal Rating  5 - financially weak 
counterpart 

A1 - A3 

12,000 

Baa1 - Baa3 

61,461 

Ba1 - Ba3 

323,080 

- 

- 

- 

- 

- 

Internal Rating  6 - high credit risk 

B1 - B3 

405,773 

126,076 

Internal Rating  7 - very high credit risk  below Caa1 
below Caa1 
but in 
default 

Internal Rating  8 - counterpart in 
default 

No internal rating* 

Loans and advances at FVTPL 

14,883 

104,328 

- 

79,669 

- 

- 

- 

- 

Loss allowance and FV adjustment 

-3,943 

-33,326 

Carrying amount of loan 
commitments 
* Agency agreements for which at reporting date there is no underlying counterparts. 

995,015 

197,078 

- 

- 

- 

- 

- 

- 

- 

51,377 

- 

- 

- 

51,377 

110 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

3.2.3.5  Credit risk exposure for each internal risk rating (continued) 

In EUR’000 

Loans and advances at AC 

Moody’s 
equiv. 
grade 

12-month 
ECL 

Lifetime ECL 
not credit-
impaired 

Lifetime 
ECL credit-
impaired 

2018 

POCI 

FVTPL 

Total 

Internal Rating 1 -  minimal credit risk  Aaa 

- 

90,875 

Internal Rating  2 - very low credit risk  Aa1 - Aa3 

Internal Rating  3 - low credit risk 
Internal Rating  4 - moderate credit 
risk 
Internal Rating  5 - financially weak 
counterpart 

A1 - A3 

74,650 

17,804 

- 

- 

Baa1 - Baa3 

39,295 

18,783 

Ba1 - Ba3 

165,551 

- 

Internal Rating  6 - high credit risk 

B1 - B3 

834,194 

94,749 

Internal Rating  7 - very high credit risk  below Caa1 
below Caa1 
but in 
default 

Internal Rating  8 - counterpart in 
default 

Loans and advances at FVTPL 

75,057 

134,701 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

185,273 

3,588 

- 

- 

- 

- 

- 

- 

- 

- 

90,875 

74,650 

17,804 

58,078 

165,551 

928,943 

209,758 

188,861 

- 

- 

1,806 

1,806 

Loss allowance and FV adjustment   

-22,023 

-27,342 

-143,092 

-1,794 

-1,084 

-195,335 

Carrying amount of loans and 
advances 

1,184,528 

311,766 

42,181 

1,794 

722 

1,540,991 

Loan commitments 

Internal Rating  2 - very low credit risk  Aa1 - Aa3 

102,092 

Internal Rating  3 - low credit risk 
Internal Rating  4 - moderate credit 
risk 
Internal Rating  5 - financially weak 
counterpart 

A1 - A3 

12,000 

Baa1 - Baa3 

12,463 

Ba1 - Ba3 

230,455 

Internal Rating  6 - high credit risk 

B1 - B3 

Internal Rating  7 - very high credit risk  below Caa1 
below Caa1 
but in 
default 

Internal Rating  8 - counterpart in 
default 

No internal rating*  

567,573 

100,055 

- 

123,821 

- 

- 

- 

- 

22,467 

96,074 

- 

- 

Loss allowance and FV adjustment   

-7,225 

-16,597 

Carrying amount of loan 
commitments 
* Agency agreements for which at reporting date there is no underlying counterparts. 

1,141,234 

101,944 

- 

- 

- 

- 

- 

- 

16,932 

- 

- 

16,932 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

102,092 

12,000 

12,463 

230,455 

590,040 

196,129 

16,932 

123,821 

-23,822 

1,260,110 

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. 

111 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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): 

Loans and advances 

Loans and advances 

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 

31.12.2019 

1,518,675 

136,749 

-114,307 

22,442 

61 

924 

- 

135 

26 

1,146 

31.12.2018 

1,540,991 

188,861 

-144,886 

43,975 

804 

- 

- 

- 

1 

805 

Carrying amount neither past due nor credit- impaired 

1,495,087 

1,496,211 

Total carrying amount loans and advances 

1,518,675 

1,540,991 

112 

 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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 (incl. interest and amounts in arrears) 

ECL allowance recognised 

Impairment recognised 

Interest income in respect of forborne operations 

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

31.12.2019 

31.12.2018 

28 

33 

245,534 

280,720 

7,916 

57,321 

8,985 

280 

9,506 

86,334 

13,465 

- 

In EUR’000 

31.12.2018 

Extension of 
maturities 

Deferral of 
capital only 

Breach of 
material 
financial 
covenants 

Forbearance measures 

Banks 

Corporates 

Total 

27,592 

253,128 

280,720 

0 

134 

134 

97 

0 

97 

33,524 

0 

33,524 

Contractual 
repayment 
and 
termination* 

-10,252 

-59,196 

-69,448 

Other 

507 

0 

507 

31.12.2019 

51,468 

194,066 

245,534 

*  Decreases  are  explained  by  repayments  of  capital  occurred  during  the  year  on  operations  already  considered  as  forborne  as  of 
31 December 2019 and by termination of forborne measures during the year. 

113 

 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

3.2.3 

Credit risk on cash and cash equivalents 

1 
Available  funds  are  invested  in  accordance  with  the  Facility’s  schedule  of  contractual  disbursement  obligations.  As  of  31 
December 2019 and 31 December 2018, investments were in the form of bank deposits, certificates of deposit and commercial papers.  

2 

The  authorized  entities  have  a  rating  similar  to  the  short-term  and  long-term  ratings  required  for  the  EIB’s  own  treasury 
3 
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 2019 and 31 December 2018 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. 

4 

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 2019 and 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.  

5 

6 

7 

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) 

31.12.2019 

31.12.2018 

P-1 

P-1 

P-1 

P-1 

P-1 

P-1 

P-2 

Total 

3.2.5 
1 

Aaa 

Aa2 

Aa3 

A1 

A2 

A3 

A3 

Credit risk on derivatives 

98,945 

67,799 

89,983 

213,914 

212,199 

104,944 

49,993 

837,777 

12% 

8% 

11% 

26% 

25% 

12% 

6% 

100% 

71,914 

- 

49,972 

199,938 

201,899 

- 

49,985 

573,708 

13% 

0% 

9% 

34% 

35% 

0% 

9% 

100% 

3.2.5.1  Credit risk policy of derivatives 
2 

3 
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. 

4 

5 
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  EIB  with  an  external  counterpart.  The  swaps  are  arranged  by  the  same  Master  Swap 
Agreements and Credit Support Annexes signed between the EIB and its external counterparts.  

6 
3.2.5.2  Credit risk measurement for derivatives 
7 

8 
All  the  swaps  executed  by  the  EIB  that  are  related  to  the  Facility  are  treated  within  the  same  contractual  framework  and 
methodologies  applied  for  the  derivatives  negotiated  by  the  EIB  for  its  own  purposes.  In  particular,  eligibility  of  swap  counterparts  is 
determined by the EIB based on the same eligibility conditions applied for its general swap purposes. 

9 

10 
The EIB 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. 

11 

114 

 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
Annual accounts of the European Development Fund 2019 

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

 

1 

Swap contracts as at 31.12.2019 

less than 

1 year 

5 years 

more than 

Total 2019 

In EUR’000 

Notional amount 

Fair Value (i.e. net discounted value) 

1 year 

to 5 years 

to 10 years 

 10 years 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Swap contracts as 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 

1 year 

to 5 years 

to 10 years 

10 years 

- 

- 

5,245 

-325 

- 

- 

- 

- 

5,245 

-325 

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  1,545.0  million  as  at  31  December  2019  against  EUR  1,460.6  million  as  at  
31 December 2018. The fair value of FX swaps amounts to EUR 14.1 million as at 31 December 2019 against EUR 1.1 million as 
at  
31 December 2018. 

2 

The  Facility  enters  into  interest  rate  swap  contracts  in  order  to  hedge  the  interest  rate  risk  on  loans  disbursed.  As  at  
31  December  2019, there  are  two  interest  rate swaps  outstanding  with  a  notional  amount  of  EUR 24.2 million  (2018: EUR  28.5 
million) and a fair value of EUR -0.1 million (2018: EUR 0.7 million). 

 

 

3 

3.2.4 
1 

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: 

2 

Minimum short-term 
rating 

Minimum long-term 
rating 

(Moody’s term) 

(Moody’s term) 

P-1 

P-1 

P-1 

P-1 

P-1 

P-2 

P-2 

P-2 

P-2 

Total 

Aa1 

Aa2 

Aa3 

A1 

A2 

A2 

A3 

Baa1 

Baa3 

31.12.2019 

31.12.2018 

50,046 

19,997 

50,025 

55,050 

- 

- 

85,027 

30,433 

40,009 

330,587 

15% 

6% 

15% 

17% 

0% 

0% 

26% 

9% 

12% 

- 

80,041 

95,055 

15,005 

45,008 

50,015 

50,016 

- 

- 

0% 

24% 

29% 

4% 

13% 

15% 

15% 

0% 

0% 

100% 

335,140 

100% 

115 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
  
 
 
   
Annual accounts of the European Development Fund 2019 

3.3  Liquidity risk 
1 

Liquidity  risk  refers  to  an  entity’s  ability  to  fund  increases  in  assets  and  meet  obligations  as  they  come  due,  without  incurring 
2 
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. 

3.2 
3.3.1   
3 

Liquidity risk management 

4 
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 its net liquidity needs and the required Member States 
annual contributions. 

5 

6 
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.  

7 

8 
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.    

9 

10 
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.  

11 

3.3.2   
12 

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 

13 
the balance sheet date and the contractual maturity date (based on undiscounted cash flows). 

14 

15 
In terms of non-derivative financial liabilities, the Facility holds commitments in form of undisbursed portions of the credit under 
signed loan agreements, of undisbursed portions of signed capital subscription/investment agreements, of loan guarantees granted, or 
of committed interest subsidies and TA.  

16 

17 
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.  

18 

19  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.  

20 

21  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. 

22 

23  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 undisbursed 
interest subsidies. As in the case of loans, their disbursement schedule is uncertain.   

24 

25  Committed  TA  “gross  nominal  outflow”  in  the  “Maturity  profile  of  non-derivative  financial  liabilities”  table  refers  to  the  total 
undisbursed  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.  

26 

27  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. 

28 

116 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

29 
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. 

30 

Maturity profile of non-derivative financial liabilities 

 3 months 
or less 

More than 
3 months 
to 1 year 

More than 
1 year to 5 
years 

More than 
5 years 

Maturity 
Undefined 

Gross 
nominal 
outflow 

In EUR’000 as at 31.12.2019 

Outflows for committed but undisbursed 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  

33,038 

369 

- 
- 
3,898 

37,305 

- 

- 

- 
- 
- 

- 

- 

- 

- 
- 
- 

- 

- 

- 

- 
- 
- 

- 

1,324,282 

1,357,320 

405,551 

405,920 

1,559,831 
350,678 
21,166 

1,559,831 
350,678 
25,064 

3,661,508 

3,698,813 

Maturity profile of non-derivative financial liabilities 

 3 months 
or less 

More than 
3 months 
to 1 year 

More than 
1 year to 5 
years 

More than 
5 years 

Maturity 
Undefined 

Gross 
nominal 
outflow 

In EUR’000 as at 31.12.2018 

Outflows for committed but undisbursed 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  

7,854 

2,023 

- 
- 
2,373 
12,250 

- 

- 

- 
- 
- 
- 

- 

- 

- 
- 
- 
- 

- 

- 

- 
- 
- 
- 

1,276,078 

1,283,932 

345,144 

347,167 

1,556,468 
360,655 
24,082 
3,562,427 

1,556,468 
360,655 
26,455 
3,574,677 

Maturity profile of derivative financial liabilities 

In EUR’000 as at 31.12.2019 

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  

Maturity profile of derivative financial liabilities 

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  

 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 

- 
- 
1,545,000 
-1,535,571 
310 
- 

9,739 

- 
- 
- 
- 
820 
-1,128 

-308 

- 
- 
- 
- 
2,045 
-2,138 

-93 

- 
- 
- 
- 

- 

- 
- 
1,545,000 
-1,535,571 
3,175 
-3,266 

9,338 

 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 

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 

117 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

3.3.3   
4 

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 

5 
recovered or settled more than 12 months after the reporting date. 

6 

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  

31.12.2019 

31.12.2018 

1,636,520 

619,928 

- 

1,666,232 

567,292 

171 

2,256,448 

2,233,695 

628 

93,531 

37,269 

131,428 

793 

93,641 

23,822 

118,256 

* The amounts owed to third parties are including the Interest subsidies and TA not yet disbursed owed to Member States, where the 
maturity is mainly undefined.   

3.4  Market risk 
4 

Market risk represents the risk that changes in market prices and rates, such as interest rates, equity prices and foreign exchange 

5 
rates will affect an entity’s income or the value of its holdings in financial instruments. 

6 
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. 

118 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

As shown in the following table the net present value of the loan  portfolio including related micro-hedging swaps as at 31 December 
2019  would  decrease  by  EUR  533k  (as  at  31  December  2018:  decrease  by  EUR  483k)  if  all  relevant  interest  rates  curves  are 
simultaneously shifted upwards in parallel by 1 basis point. 

Basis point value 

In EUR’000 

Money 

Market 

Very Short  

Short 

Medium 

Long 

Extra Long  

Total 

As at 31.12.2019 

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 

-42 

-99 

-172 

-163 

-57 

- 

-533 

Basis point value 

In EUR’000 

Money 

Market 

Very Short  

Short 

Medium 

Long 

Extra Long  

Total 

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 

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. 

3.4.2 
4 

5 

6 

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 in either 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 EUR/USD  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 hedge 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. 

119 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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)”. 

7 

3.4.2.2.3. 

Foreign exchange position (in EUR’000) 
4 

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 to ensure that the 
earnings will only be converted into the reporting currency (EUR) when received. 

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. 

In  the  tables  below,  the  remaining  part  of  the  assets  and  liabilities,  which  includes mainly  interest  accruals  on  loans,  derivatives  and 
subsidies, are presented under “FX position excluded from Risk Policies”. 

As at 31 December 2019 

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 

FX position as per 
Risk Policies 

FX position excluded 
from Risk Policies 

Balance sheet FX 
position 

-103,746 

-56,632 

-160,378 

637,693 

29,472 

48,092 

25,383 

37,132 

30,766 

464 

354 

602 

574 

47 

29,936 

48,446 

25,985 

37,706 

30,813 

99,864 

-530 

99,334 

- 

- 

- 

- 

- 

- 

Total non-EUR currencies 

166,963 

-55,121 

111,842 

637,693 

EUR 

- 

3,075,194 

3,075,194 

2,741,023 

Total EUR and non-EUR 

166,963 

3,020,073 

3,187,036 

3,378,716 

* See section 3.4.2.2.2 for explanations on synthetic hedge. 

120 

 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

As at 31 December 2018 

Assets and liabilities 

Commitments and 
contingent liabilities 

FX position as per 
Risk Policies 

FX position excluded 
from Risk Policies 

Balance sheet FX 
position 

-157,177 

-52,111 

-209,288 

600,271 

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 

35,806 

71,195 

35,311 

45,731 

24,176 

252 

814 

821 

769 

17 

74,265 

-432 

36,058 

72,009 

36,132 

46,500 

24,193 

73,833 

79,437 

- 

- 

- 

- 

- 

- 

600,271 

Total non-EUR currencies 

129,307 

-49,870 

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. 

3.4.2.3 

Foreign exchange sensitivity analysis 

As  at  31  December  2019,  a  10  percent  depreciation  of  EUR  versus    all  non  EUR  currencies    would  result  in  an    increase    of  the 
contributors’  resources  amounting  to  EUR  14.0  million  (31  December  2018:  EUR 8.8  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 11.4 million (31 December 
2018: EUR 7.2 million).  

3.4.2.4 

Conversion rates 

The following conversion rates were used for establishing the balance sheet at 31 December 2019 and 31 December 2018: 

31 December 2019 

31 December 2018 

Non-EU currencies 

Botswana Pula (BWP) 

Dominican Republic Pesos (DOP) 

Fiji Dollars (FJD) 

Haitian Gourde (HTG) 

Jamaican Dollar (JMD) 

Kenya Shillings (KES) 

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) 

11.8376 

59.3644 

2.4045 

100.99 

147.6966 

113.63 

42.2135 

40.63 

68.64 

343.45 

1051.12 

2573.66 

4108 

1.1234 

655.957 

15.7773 

15.7894 

12.2038 

57.4037 

2.4104 

86.92 

144.081 

116.24 

41.1660 

39.05 

70.14 

351.05 

1020.10 

2624.33 

4239 

1.145 

655.957 

16.4594 

13.6077 

121 

 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

3.4.3 
12 

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 effect 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 62.0 million and EUR -62.0 million respectively as at 31 December 2019 (EUR 56.7 million and EUR -56.7 million respectively as 
at  
31 December 2018). 

1 

4 

Fair values of financial instruments 

4.1  Accounting classifications and fair values 

2 
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 2019 

Carrying amount 

Fair value 

In EUR’000 

Financial assets mandatorily 
measured at FVTPL 
Derivative financial instruments  

Venture Capital Fund  

Direct Equity Investment 

Loans and advances 
Total financial assets 
mandatorily measured at FVTPL 
Financial assets measured at AC 

Cash and cash equivalents 

Loans and advances 

Amounts receivable from 
contributors 

Treasury financial assets 

Other assets 
Total financial assets measured 
at AC 
Total financial assets  

Financial liabilities measured at 
FVTPL 
Derivative financial instruments 
Total financial liabilities 
measured at FVTPL 
Financial liability measured at 
AC: 
Provisions for guarantees issued 

Provisions for loan commitments 

Amounts owed to third parties 

Other liabilities 
Total financial liabilities 
measured at AC 

- 

- 

- 

- 

- 

- 

- 

- 

Derivati
ve 
financia
l 
instrum
ents 

Shares 
and 
other 
variable 
yield 
securiti
es 

Cash, 
loans 
and 
advance
s 

Treasur
y 
financia
l assets 

Other 
financial 
liabilitie
s 

Total 

 Level 1  Level 2  Level 3 

Total 

14,184 

- 

-  504,694 

-  115,234 

- 

- 

- 

- 

- 

21,702 

14,184  619,928 

21,702 

- 

- 

- 

- 

- 

14,184 

-  14,184 

504,694 

362 

115,234 

  15,255 

21,702 

- 

655,814 

  15,617  35,886 

- 

-  99,979 

504,33
2 

-  14,184 
504,69
4 
115,23
4 
-  21,702  21,702 
655,81
4 

604,31
1 

- 

- 

- 

- 

- 

- 

- 

- 

- 
1,699,0
57 

- 

330,18
0 
- 
2,029,2
37 

-191 

-191 

- 

837,777 

-  1,496,973 

86,330 

- 

- 

- 

-  330,587 

- 

- 

- 

- 

- 

- 

- 

- 

- 

837,777 

-  1,496,973 

- 

- 

- 

86,330 

330,587 

- 

- 

- 

- 

- 
1,699,0
57 

- 

144,09
7 
- 
144,09
7 

186,08
3 
- 
1,885,1
40 

-  2,421,080  330,587 

-  2,751,667 

14,184  619,928  2,442,782  330,587 

-  3,407487 

-191 

-191 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

122 

- 

- 

- 

- 

- 

- 

-191 

-191 

- 

- 

-191 

-191 

-628 

-628 

-37,269 

-37,269 

-  -147,438 

-147,438 

- 

-2,353 

-2,353 

-  -187,688 

-187,688 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Annual accounts of the European Development Fund 2019 

Total financial liabilities 

-191 

- 

- 

-  -187,688 

-187,879 

123 

 
 
  
 
 
 
- 

- 

- 

- 

- 

- 

- 

- 

Annual accounts of the European Development Fund 2019 

4 

Fair values of financial instruments (continued) 

4.1  Accounting classifications and fair values (continued) 

As at 31 December 2018 

Carrying amount 

Fair value 

In EUR’000 

Derivati
ve 
financial 
instrum
ents 

Shares 
and 
other 
variable 
yield 
securiti
es 

Cash, 
loans 
and 
receivabl
es 

Treasur
y 
financia
l assets 

Other 
financial 
liabilitie
s 

Total 

  Level 1  Level 2  Level 3 

Total 

Financial assets mandatorily 
measured at FVTPL 

Derivative financial instruments  

9,873 

- 

Venture Capital Funds 

Direct Equity Investments 

-  467,152 

-  100,140 

- 

- 

- 

Loans and advances 

- 

- 

 720 

9,873  567,292 

720 

- 

- 

- 

- 

- 

9,873 

467,152 

- 

- 

9,873 

- 

- 
467,15
2 

100,140 

  16,675 

-  83,465 

9,873 
467,15
2 
100,14
0 

 720 

- 

720 

- 

720 

577,885 

  16,675  10,593 

550,61
7 

577,88
5 

Total financial assets 
mandatorily measured at 
FVTPL 
Financial assets measured at 
AC 

Cash and cash equivalents 

Loans and advances 

Amounts receivable from 
contributors 

Treasury financial assets 

Other assets 

Total financial assets 
measured at AC 

- 

573,708 

-  1,540,271 

100,000 

- 

- 

- 

-  335,140 

171 

- 

- 

- 

- 

- 

- 

- 

- 

573,708 

-  1,540,271 

- 

- 

- 

100,000 

335,140 

171 

- 

- 

- 

1,760,5
76 

- 

191,47
5 
- 

145,06
1 
- 

191,47
5 

1,905,6
37 

- 

- 

- 

- 

- 

- 

- 

- 

1,760,5
76 

- 

336,53
6 
- 

2,097,1
12 

-  2,214,150  335,140 

-  2,549,290 

Total financial assets  

9,873  567,292  2,214,870  335,140 

-  3,127,175 

Financial liabilities measured 
at FVTPL 

Derivative financial instruments 

-8,493 

Total financial liabilities 
measured at FVTPL 
Financial liabilities measured 
at AC: 
Provisions for guarantees 
issued 
Provisions for loan 
commitments 

Amounts owed to third parties 

Other liabilities 

Total financial liabilities 
measured at AC 

-8,493 

- 

- 

- 

- 

- 

Total financial liabilities  

-8,493 

4.2  Measurement of fair values 

4.1   

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

-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 

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: 

Financial instruments carried at fair value 

Valuation technique 

Significant unobservable inputs 

Relationship of 
unobservable inputs to 
fair value measurement 

Derivative 
financial 

Discounted  cash  flow:  Future  cash  flows  are 
estimated  based  on  forward  exchange/interest 

Not applicable. 

Not applicable. 

124 

 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
longer 

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

for 

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

The  higher  the  discount 
rate 
fair 
lower 
value. 

the 

the 

Annual accounts of the European Development Fund 2019 

instruments 

Venture 
Capital Fund 
(VCF) 

rates  (from  observable  forward  exchange  rates 
and  yield  curves  at  the  end  of  the  reporting 
rates, 
period)  and  contract 
discounted at a rate that reflects the credit risk of 
various counterparties. 

forward/interest 

Adjusted  net  assets  method:  The  fair  value  is 
the  Facility’s 
determined  by  applying  either 
percentage ownership in the underlying vehicle to 
the  net  asset  value  reflected  in  the  most  recent 
report  adjusted 
flows  or,  where 
for  cash 
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. 

Loans at fair 
value (IFE) 

For  going  concern  borrowers:  Discounted  cash 
flow using contractual/expected future cash flows 
discounted  with 
risk-adjusted 
discount rate that captures the risk inherent to the 
loan  (including  credit  risk  of  the  borrower).  The 
discount  rate  is  compared/assessed  with  any 
relevant market benchmark.  

appropriate 

For borrowers not going concern: Net assets 
approach (liquidation value approach). 

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 assets, additional liabilities 
incurred,  market  changes  or  other 
economic condition changes. 

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 

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

Components  of  the  discount  rate  to 
reflect  the  credit  risk  of  borrower 
compared 
the  risk-free  market 
rates. 

to 

125 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

4.2  4.2.1  Valuation techniques and significant unobservable inputs (continued) 

Financial instruments not carried at fair value 

Valuation technique 

Significant unobservable inputs 

Relationship of 
unobservable inputs to 
fair value measurement 

Loans and 
advances 

Treasury 
financial 
assets 

Not applicable. 

Not applicable. 

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. 

Discounted cash flows. 

Not applicable. 

Not applicable. 

With  the  application  of  IFRS  13,  valuation  adjustments  are  included  in  the  fair  value  of  derivatives  as  at  31  December  2019  and  
31 December 2018, namely: 

- 

- 

Credit valuation adjustments (CVA), reflecting counterparty credit risk on derivative transactions, amounting to EUR -32.8k as 
at  
31 December 2019 and to EUR -37.4k  as at 31 December 2018.  
Debit  valuation  adjustments  (DVA),  reflecting  own  credit  risk  on  derivative  transactions,  amounting  to  EUR  +28.7k  as  at  
31 December 2019 and EUR +15.1k as at 31 December 2018.  

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 2019 and 2018, the Facility did not make transfers from Level 1 to 2 or Level 2 to 1 of the fair value hierarchy. 

126 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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 2019 and 31 December 2018: 

In EUR'000 

Balance as at 1 January 2019 

Gains or losses included in profit or loss: 

- net realised result on shares and other variable yield securities 

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

Total 

Disbursements 

Repayments 

Foreign exchange rates differences 

Balance as at 31 December 2019 

In EUR'000 

Balance as at 1 January 2018 

Gains or losses included in profit or loss: 

- net realised result on shares and other variable yield securities 

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

Total 

Disbursements 

Repayments 

Foreign exchange rates differences 

Balance as at 31 December 2018 

In 2019 and 2018, the Facility did not make transfers out or to Level 3 of the fair value hierarchy. 

Shares and other 
variable yield 
securities 

550,617 

1,708 

17,666 

19,374 

106,943 

-79,435 

6,812 

604,311 

Shares and other 
variable yield 
securities 

473,081 

-10,622 

-13,411 

-24,033 

95,434 

-11,165 

17,300 

550,617 

127 

 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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 cash flow statement 

Accrued interest  

Cash and cash equivalents in the statement of financial position 

1 

2 

6 

Derivative financial instruments  

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

31.12.2019 

31.12.2018 

72,166 

622,991 

142,823 

837,980 

-203 

837,777 

51,936 

521,882 

- 

573,818 

-110 

573,708 

As at 31 December 2019 

In EUR'000 
Cross currency swaps 

Interest rate swaps 

FX swaps 

Total derivative financial instruments 

As at 31 December 2018 

In EUR'000 
Cross currency interest rate swaps 

Interest rate swaps 

FX swaps 

Total derivative financial instruments 

Fair Value 

Notional amount 

Assets 

Liabilities 

- 

99 

14,085 

14,184 

- 

-191 

- 

-191 

- 

24,181 

1,545,000 

1,569,181 

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 

128 

 
 
 
  
 
 
  
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

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 ECL IFRS 9 impairment 
model.  

In EUR'000 

Nominal of loans at AC as at 1 January 2019 

Disbursements 

Write offs 

Repayments 

Sale of loans 

Business model change (IFE)** 

Foreign exchange rates differences 

Nominal of loans at AC as at 31 December 2019 

Senior loans 

Subordinated 
loans 

POCI 

Total 

60,717 

3,588 

1,708,946 

Global 
loans* 

1,051,317 

164,308 

-2 

593,324 

123,416 

-278 

-206,517 

-113,100 

-34,496 

-2,591 

- 

15,041 

1,021,556 

- 

-10,062 

4,064 

597,364 

- 

- 

1,493 

27,714 

- 

- 

- 

- 

- 

- 

-3,588 

- 

- 

287,724 

-280 

-354,113 

-2,591 

-13,650 

20,598 

1,646,634 

Impairment – loss allowance as at 1 January 2019 

-103,868 

-49,609 

-29,360 

-1,794 

-184,631 

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  

Sale of loans 

Business model change (IFE)** 

Write offs 

Foreign exchange rates differences 

Impairment – loss allowance as at 31 December 2019 

5,164 

-15,558 

-4,397 

21,811 

2,591 

- 

2 

-1,911 

-96,166 

-86 

2,559 

-47 

5,592 

- 

5,031 

278 

-368 

- 

2,205 

- 

- 

- 

- 

- 

-559 

-36,650 

-27,714 

Loans and advances at AC as at 31 December 2019 

925,390 

560,714 

Nominal of loans at FVTPL as at 1 January 2019 

Disbursements 

Business model change (IFE)** 

Repayments 

Write offs 

Foreign exchange rates differences 

1,800 

- 

- 

-720 

- 

- 

- 

23,461 

13,650 

-245 

- 

-8 

Nominal of loans at FVTPL as at 31 December 2019 

1,080 

36,858 

Fair value adjustment as at 1 January 2019 

Net FV change 

Business model change (IFE)** 

-1,080 

- 

- 

- 

-8,331 

-6,825 

Fair value adjustment as at 31 December 2019 

-1,080 

-15,156 

Loans and advances at FVTPL as at 31 December 2019 

Amortised Cost 

Interest 

- 

-3,545 

10,451 

21,702 

-4,950 

8,903 

Loans and advances as at 31 December 2019 

932,296 

-586,369 

* Including agency agreements. 
** For details, please refer to Note 24. 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

10 

- 

10 

- 

- 

- 

- 

- 

1,794 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

5,078 

-10,794 

-4,444 

27,403 

2,591 

6,825 

280 

-2,838 

-160,530 

1,486,104 

1,800 

23,461 

13,650 

-965 

- 

-8 

37,938 

-1,080 

-8,331 

-6,825 

-16,236 

21,702 

-8,485 

19,354 

1,518,675 

129 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

3 

7 

Loans and advances (continued) 

7.1 Loans and advances (continued) 

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 

-4,548 

- 

- 

37,026 

11,503 

Nominal of loans at AC as at 31 December 2018 

1,051,317 

593,324 

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 

- 

- 

Foreign exchange rates differences 

-2,639 

-1,336 

Impairment – loss allowance as at 1 January 2018 

-103,868 

-49,609 

- 

-1,794 

8,480 

37,678 

3,588 

259,214 

- 

- 

- 

- 

- 

-354,855 

- 

51,248 

3,588 

1,708,946 

- 

- 

- 

- 

- 

- 

-155,539 

-1,565 

3,420 

-72,998 

48,372 

- 

-6,321 

-1,794 

-184,631 

- 

2,719 

60,717 

- 

-2,146 

- 

-2,346 

-29,360 

Loans and advances at 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 

Fair value adjustment as at 31 December 2018 

- 

- 

- 

- 

1,800 

-378 

-702 

-1,080 

Loans and advances at FVTPL as at 31 December 2018 

720 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Amortised Cost 

Interest 

Loans and advances as at 31 December 2018 
* Including agency agreements. 

-3,550 

12,330 

-3,109 

9,243 

956,949 

549,849 

11 

1,031 

32,399 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1,800 

- 

- 

- 

- 

1,800 

-378 

-702 

-1,080 

720 

-6,648 

22,604 

1,794 

1,540,991 

130 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

7.2 Impairment on loans and advances – Loss allowances, net of reversals 

In EUR'000 

12-month ECL 

Loans and advances at AC 

Balance as at 1 January 2019 

Transfer to 12-month ECL 

Transfer to lifetime ECL not credit-impaired 

Transfer to lifetime ECL credit-impaired 

Sale of loans 

Business model change (IFE)* 

Financial assets that have been derecognised 

Write-offs 

Foreign exchange rates differences  

Balance as at 31 December 2019 
* For details, please refer to Note 24. 

2019 

Lifetime ECL 
not credit-
impaired 

Lifetime ECL 
credit-impaired 

POCI 

Total 

27,342 

133,472 

1,794 

184,631 

22,023 

3,952 

-4,005 

- 

- 

- 

-129 

- 

247 

- 

25,150 

-46 

- 

-10 

-10,049 

- 

371 

- 

- 

- 

-2,591 

-5,031 

- 

-280 

2,221 

17,191 

38,509 

104,830 

- 

- 

- 

- 

-1,794 

- 

- 

- 

- 

3,952 

21,145 

-46 

-2,591 

-6,835 

-10,178 

-280 

2,839 

160,530 

POCI 

Total 

2018 

Lifetime ECL 
not credit-
impaired 

Lifetime ECL 
credit-impaired 

29,975 

105,826 

- 

-2,633 

- 

- 

- 

27,646 

133,472 

1,794 

1,794 

- 

- 

- 

155,539 

2,285 

-2,633 

29,440 

184,631 

In EUR'000 

12-month ECL 

Loans and advances at AC 

Balance as at 1 January 2018 

Transfer to 12-month ECL 

Transfer to lifetime ECL not credit-impaired 

Transfer to lifetime ECL credit-impaired 

19,738 

2,285 

- 

- 

Balance as at 31 December 2018 

22,023 

27,342 

131 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

4 

8 

Shares and other variable yield securities 

The following table show reconciliation from the opening to the closing balance of the Equity investments:  

In EUR'000 

Cost as at 1 January 2019 

Disbursements 

Repayments / sales 

Foreign exchange rates differences  

Cost as at 31 December 2019 

Unrealised gains and losses as at 1 January 2019 

Net change in unrealised gains and losses 

Foreign exchange rates differences 

Unrealised gains and losses as at 31 December 2019 

Venture Capital 
Funds 

Direct Equity 
Investments 

Total 

421,593 

90,972 

-56,387 

6,126 

462,304 

45,559 

-3,488 

319 

42,390 

93,214 

514,807 

15,971 

-13,361 

281 

106,943 

-69,748 

6,407 

96,105 

558,409 

6,926 

12,117* 

86 

52,485 

8,629 

405 

19,129 

61,519 

Shares and other variable yield securities as at 31 December 2019 

504,694 

115,234 

619,928 

* Includes misstatement in relation to the fair valuation performed as at 31 December 2018 in an amount of EUR’000 5,853, which was 
corrected in 2019. Excluding this, the net change in unrealised gains and losses would amount to EUR’000 17,970 for the financial year 
2019. 

In EUR'000 

Cost as at 1 January 2018 

Disbursements 

Repayments / sales 

Foreign exchange rates differences  

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  

Unrealised gains and losses as at 31 December 2018 

Venture Capital 
Funds 

Direct Equity 
Investments 

356,086 

73,250 

-21,681 

13,938 

421,593 

64,018 

-20,493 

2,034 

45,559 

Total 

426,396 

95,434 

-22,316 

15,293 

70,310 

22,184 

-635 

1,355 

93,214 

514,807 

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 

132 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

5 

9 

Amounts receivable from contributors  

The amounts of EUR’000 86,330 receivable from contributors are entirely composed of Member States contribution called but not paid. 

6 

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:   

In EUR'000 

Balance as at 1 January 2019 

Acquisitions 

Maturities 

Change in amortisation of premium/discount 

Change in accrued interest  

Balance as at 31 December 2019 

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 

7 

11 

Other assets 

The main components of other assets are as follows: 

In EUR'000 

Financial guarantees 

Total other assets 

8 

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 

335,140 

2,948,021 

-2,952,905 

-93 

424 

330,587 

144,382 

2,219,062 

-2,026,659 

149 

-1,794 

335,140 

31.12.2019 

31.12.2018 

- 

- 

171 

171 

31.12.2019 

31.12.2018 

32,085 

481 

32,566 

32,658 

1,106 

33,764 

133 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
Annual accounts of the European Development Fund 2019 

9 

13 

Provisions for guarantees issued, net of reversals 

The  following  tables  show  reconciliation  from the  opening  to  the closing  balance  of the  provision  for  financial  guarantees  under  ECL 
IFRS 9 model: 

In EUR'000 

Guarantees issued  

Balance as 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 as at 31 December  

In EUR'000 

Guarantees issued  

Balance as 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 as at 31 December 

12-month ECL 

Lifetime ECL not 
credit-impaired 

Lifetime ECL 
credit-impaired 

2019 

94 

534 

- 

- 

- 

- 

- 

- 

628 

699 

- 

- 

- 

-588 

-53 

-71 

13 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

12-month ECL 

Lifetime ECL not 
credit-impaired 

Lifetime ECL 
credit-impaired 

2018 

- 

94 

- 

- 

- 

- 

- 

- 

94 

484 

- 

391 

- 

- 

- 

-128 

-48 

699 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total 

793 

534 

- 

- 

-588 

-53 

-71 

13 

628 

Total 

484 

94 

391 

- 

- 

- 

-128 

-48 

793 

134 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

Provisions for loan commitments, net of reversals 

10  14 

11 

The  following  table  shows  reconciliation  from  the  opening  to  the  closing  balance  of  the  loss  allowance  for  undisbursed  loans  (loan 
commitments) under ECL IFRS 9 model: 

In EUR'000 

Loans commitments 

Balance as at 1 January 

Transfer to 12-month ECL 

Transfer to lifetime ECL not credit-impaired 

Transfer to lifetime ECL credit-impaired 

Net measurement of loss allowance 

Business model change (IFE)** 

Financial assets that have been derecognised 

Foreign exchange rates differences  

Balance as at 31 December 

12-month ECL 

Lifetime ECL not 
credit-impaired  

Lifetime ECL 
credit-impaired 

2019 

7,225 

1,669 

-836 

- 

696 

-2,974 

-1,960 

123 

3,943 

16,597 

9,983 

15,138* 

- 

773 

-1,387 

-7,858 

80 

33,326 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total 

23,822 

11,652 

14,302 

- 

1,469 

-4,361 

-9,818 

203 

37,269 

* The methodology for the estimation of provisions for loan commitments as at 31 December 2019 was changed for the Stage 2 loan 
commitments, and such as the Facility did not apply the Credit Conversion Factors in the calculation. This change resulted an additional 
ECL in amount of EUR 7.7 million. 
** For details, please refer to Note 24. 

In EUR'000 

Loans commitments 

Balance as 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  

Balance as at 31 December 

12-month ECL 

Lifetime ECL not 
credit-impaired 

Lifetime ECL 
credit-impaired 

2018 

1,993 

5,192 

- 

- 

40 

2,163 

- 

14,420 

- 

14 

7,225 

16,597 

- 

- 

- 

- 

- 

- 

Total 

4,156 

5,192 

14,420 

- 

54 

23,822 

12 

13  15 

14 

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 

15  16 

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 guarantee calls 

Total other liabilities 

135 

31.12.2019 

31.12.2018 

50,009 

31 

97,398 

147,438 

47,799 

54 

95,960 

143,813 

31.12.2019 

31.12.2018 

1,961 

339 

53 

2,353 

2,124 

369 

- 

2,493 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
  
17  17 

18 

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 

Annual accounts of the European Development Fund 2019 

Member States Contribution called (in EUR’000) 

Contribution to 
the Facility 

Contribution to 
interest subsidies 
and technical 
assistance 

Total 
contributed 

Called and not 
paid* 

76,442 

112,757 

1,274 

819 

4,641 

62,220 

455 

43,821 

677,756 

667,065 

39,090 

5,005 

21,034 

374,974 

637 

1,092 

8,422 

273 

151,510 

11,830 

30,418 

3,367 

1,911 

1,638 

191,564 

81,090 

395,895 

2,967,000 

2,697,000 

9,592 

14,105 

336 

216 

1,224 

7,875 

120 

5,655 

81,837 

82,766 

5,324 

1,320 

3,075 

48,883 

168 

288 

1,065 

72 

19,140 

3,120 

4,154 

888 

504 

432 

27,231 

10,499 

53,802 

383,691 

353,691 

86,034 

126,862 

1,610 

1,035 

5,865 

70,095 

575 

49,476 

759,593 

749,831 

44,414 

6,325 

24,109 

423,857 

805 

1,380 

9,487 

345 

170,650 

14,950 

34,572 

4,255 

2,415 

2,070 

218,795 

91,589 

449,697 

3,350,691 

3,050,691 

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 

2,300 

370 

210 

180 

7,850 

2,740 

- 

86,330 

100,000 

United Kingdom 

Total as at 31 December 2019 

Total as at 31 December 2018 

* On 24 October 2019, the Council fixed the amount of financial contributions to be paid by each Member State by 21 January 2020. As 
at  
31 December 2019, EUR 86,330 were not paid in.  

136 

 
 
  
 
 
Annual accounts of the European Development Fund 2019 

19  18 

Commitments and contingent liabilities 

In EUR'000 

Commitments 

Undisbursed loans 

Undisbursed commitment in respect of shares and other variable yield securities 

Issued guarantees 

Interest subsidies and technical assistance 

Contingent liabilities 

Signed non-issued guarantees 

31.12.2019 

31.12.2018 

1,357,320 

1,283,931 

405,920 

200,013 

455,671 

347,167 

2,800 

457,328 

1,359,818 

1,553,668 

Total commitments and contingent liabilities 

3,778,742 

3,644,894 

20  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 

21 

22  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: 

From 01.01.2019 
to 31.12.2019 
89,244 

From 01.01.2018 
to 31.12.2018 
92,506 

4,679 

93,923 

4,224 

96,730 

From 01.01.2019 
to 31.12.2019 
-261 

From 01.01.2018 
to 31.12.2018 
-563 

-722 

-1,965 

-2,948 

-654 

-1,322 

-2,539 

From 01.01.2019 
to 31.12.2019 
4,399 

From 01.01.2018 
to 31.12.2018 
107 

39 

- 

4,438 

170 

7 

284 

In EUR'000 

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

Total fee and commission expenses 

From 01.01.2019 
to 31.12.2019 
-721 

From 01.01.2018 
to 31.12.2018 
-106 

-721 

-106 

137 

 
 
  
 
 
 
  
  
 
  
 
 
  
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

23  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 realised result on shares and other variable yield securities 

Dividend income 

Net fair value change 

Net result on shares and other variable yield securities 

24 

25  22 

General administrative expenses 

From 01.01.2019 
to 31.12.2019 
-133 

From 01.01.2018 
to 31.12.2018 
3,166 

1,408 

8,629 

9,904 

7,320 

-20,665 

-10,179 

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. 

The main components of general administrative expenses are as follows: 

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 01.01.2019 
to 31.12.2019 
-52,982 

From 01.01.2018 
to 31.12.2018 
-50,021 

2,973 

-50,009 

2,222 

-47,799 

138 

 
 
 
  
 
 
 
 
Annual accounts of the European Development Fund 2019 

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 undisbursed commitments.  

Type of structured entity 

Caption 

Venture capital funds 

Total 

Shares and other variable yield 
securities 

Carrying 
amount at 
31.12.2019 

Carrying 
amount at 
31.12.2018 

Maximum 
exposure to 
loss at 
31.12.2019 

Maximum 
exposure to 
loss at 
31.12.2018 

504,332 

504,332 

467,152 

467,152 

834,955 

834,955 

797,775 

797,775 

139 

 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
Annual accounts of the European Development Fund 2019 

26  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  is  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  take  the  form  of  first  loss  guarantees  ("first  loss  pieces")  that  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  (i.e.  loans)  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 applies 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 also allows 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.

140 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

27 

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

Type of IFE 
investment 

Caption 

Measurement 

Social impact 
equity funds 

Loans to financial 
intermediaries 
Risk sharing 
facilitating 
instruments 

Direct equity 
participations 

Direct loan 
operations 
Total 

Shares and other 
variable yield 
securities 
Loans and 
advances  

FVTPL 

AC 

Issued guarantees 

higher of 
approach* 

Shares and other 
variable yield 
securities 
Loans and 
advances  

FVTPL 

FVTPL 

Gross 
carrying 
amount as 
at 
31.12.2019 

Loss 
allowance/F
V adj. 
amount as 
at 
31.12.2019 

Carrying 
amount as 
at 
31.12.2019 

Undisburse
d amount 
as at 
31.12.2019 

OFF BS 
ECL adj. 
amount as 
at 
31.12.2019 

33,417 

-3,175 

30,242 

66,840 

- 

22,347 

-354 

21,993 

42,400 

-1,251 

- 

- 

- 

47,331 

-50 

58,643 

19,626 

78,269 

14 

37,136 

-15,156 

21,980 

75,700 

- 

- 

151,543 

941 

152,484 

232,285 

-1,301 

* For details, please refer to section subsequent measurement of Note 
2.4.3.  

Type of IFE 
investment 

Social impact 
equity funds 

Loans to financial 
intermediaries 
Risk sharing 
facilitating 
instruments 

Direct equity 
participations 

Direct loan 
operations 
Total 

Caption 

Measurement 

Carrying 
amount as 
at 
31.12.2018 

Undisburse
d amount 
as at 
31.12.2018 

Shares and other 
variable yield 
securities 
Loans and 
advances  

FVTPL 

19,134 

53,672  

AC 

29,566 

24,700  

Issued guarantees 

higher of 
approach* 

Shares and other 
variable yield 
securities 
Loans and 
advances  

FVTPL 

AC 

-786 

43,668  

53,183 

1,014  

6,711 

114,629  

107,808 

237,683 

* For details, please refer to section subsequent measurement of Note 
2.4.3. 
Starting from 1st January 2019, the management decided to apply the General Mandate Risk Principles to IFE direct loan operations 
(excluding Loans to financial intermediaries), as envisaged in the EIB’s Credit and Equity Risk Guidelines, and to monitor and report 
the risk associated with the IFE direct loan operations on the basis of their fair value. 

According to the new methodology, the Bank performs Qualitative Risk Assessment (QRA) aiming to assess the soundness of the 
investment  rationale  and  plausible  business  viability  of  such  operations.  In  this  context,  IFE  direct  loan  operations  are  reclassified 
from loans measured at amortised cost to loans measured at fair value.  

The change of the business model requires prospective change of the portfolio from the reclassification date. Therefore, the  change 
has  no  effect  on  prior  years.  The  effect  on  the  current  year  Statement  of  profit  and  loss  and  other  comprehensive  income  is 
recognised under the caption “Change in provisions for loan commitments” in amount of EUR 4.4million. 

28  25 

Subsequent events 

There have been no material post balance sheet events which could require disclosure or adjustment to the 31 December 2019 financial 
statements.

141 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2019 

3.  GLOSSARY 

ABAC 

This is the name given to the Commission’s accounting system, which since 2005 has been enriched by 
accrual accounting rules. Apart from the cash-based budget accounts, the Commission produces accrual-
based  accounts  which  recognise  revenue  when  earned,  rather  than  when  collected.  Expenses  are 
recognised  when  incurred  rather  than  when  paid.  This  contrasts  with  cash  basis  budgetary  accounting 
that recognises transactions and other events only when cash is received or paid. 

Accounting 

The  act  of  recording  and  reporting  financial  transactions,  including  the  creation  of  the  transaction,  its 
recognition, processing, and summarisation in the financial statements. 

Accounting Officer 

The role, powers and responsibilities of the accounting officer are set out in the Financial Regulation: 

 

 

 

 

 

 

 

 

 

proper implementation of payments, 

collection of revenue, 

recovery of amounts and offsetting, 

keeping, preparing and presenting the accounts, 

laying down the accounting rules and methods and the chart of accounts, 

laying  down  and  validating  the  accounting  systems  and  validating  systems  laid  down  by  the 
authorising officer to supply or justify accounting information (local systems), 

treasury management, 

designation of the Imprest Administrators, 

opening and closing bank accounts in the name of the Institution. 

Administrative appropriations 

Administrative  appropriations  cover  the  running  costs  of  the  Institutions  and  entities  (staff,  buildings, 
office equipment). 

Adjustment 

Amending budget or transfer of funds from one budget item to another. 

Adopted budget 

Draft budget becomes the adopted budget as soon as approved by the Budgetary Authority. 

Cf. Budget  

Agencies 

EU  bodies  having  a  distinct  legal  personality,  and  to  whom  budget  implementing  powers  may  be 
delegated under strict conditions. They are subject to a distinct discharge from the discharge authority. 

Amending budget 

Decision adopted during the budget year to amend (increase, decrease, transfer) aspects of the adopted 
budget of that year. 

Annuality 

The budgetary principle  according to which expenditure and revenue  is programmed and authorised for 
one year, starting on 1 January and ending on 31 December. 

Appropriations 

Budget funding. 

The  budget  forecasts  both  commitments  (legal  pledges  to  provide  finance,  provided  that  certain 
conditions  are  fulfilled)  and  payments  (cash  or  bank  transfers  to  the  beneficiaries).  Appropriations  for 
commitments  and  payments  often  differ  —  differentiated  appropriations  —  because  multiannual 

142 

 
 
Annual accounts of the European Development Fund 2019 

programmes and projects are usually fully committed in the year they are decided and are paid over the 
years as the implementation of the programme and project progresses. Non-differentiated appropriations 
apply to administrative expenditure and commitment appropriations equal payment appropriations. 

Assigned revenue External/Internal 

Dedicated revenue received to finance specific items of expenditure. 

Main sources of external assigned revenue are financial contributions from third countries to programmes 
financed by the Union. 

Main sources of internal assigned revenue are revenue from third parties in respect of goods, services or 
work supplied at their request, revenue arising from the repayment of amounts wrongly paid and revenue 
from the sale of publications and films, including those on an electronic medium. 

The complete list of items constituting assigned revenue is given in the Financial Regulation Art. 21. 

Authorising Officer by Delegation (AOD) 

The AOD is responsible in each entity for authorising revenue and expenditure operations in accordance 
with the principles of sound financial management and for ensuring that the requirements of legality and 
regularity are complied with. 

The  AOD  is  responsible  for  taking  all  financial  decision  concerning  actions  under  his/her  responsibility. 
Particularly, he/she must take decisions to implement the budget based on his/her risk analysis. 

Budget 

Annual financial plan, drawn up according to budgetary principles, that provides forecasts and authorises, 
for  each  financial  year,  an  estimate  of  future  costs  and  revenue  and  expenditures  and  their  detailed 
description and justification, the latter included in budgetary remarks. 

Budget result 

The  difference  between  income  received  and  amounts  paid,  including  adjustments  for  carry-overs, 
cancellations and exchange rate differences.  

For agencies, the resulting amount will have to be reimbursed to the funding authority as provided in the 
Financial Regulation for agencies. 

Budget implementation 

Consumption of the budget through expenditure and revenue operations. 

Budget item / Budget line / Budget position 

As  far  as  the  budget  structure  is  concerned,  revenue  and  expenditure  are  shown  in  the  budget  in 
accordance with a binding nomenclature, which reflects the nature and purpose of each item, as imposed 
by  the  budgetary  authority.  The  individual  headings  (title,  chapter,  article  or  item)  provide  a  formal 
description of the nomenclature. 

Budgetary authority 

Institutions  with  decisional  powers  on  budgetary  matters:  for  the  EU  institutions,  the  European 
Parliament and the Council of Ministers. 

For the agencies and joint undertakings, their board is the budgetary authority. 

Budgetary commitment 

A budgetary commitment is a reservation of appropriations to cover for subsequent expenses. 

Cancellation of appropriations 

Unused appropriations that may no longer be used. 

Carryover of appropriations 

Exception to the principle of annuality in so far as appropriations that could not be used in a given budget 
year may, under strict conditions, be exceptionally carried over for use during the following year. 

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Annual accounts of the European Development Fund 2019 

Commitment appropriations 

Commitment  appropriations 
(contracts,  grant 
agreements/decisions)  that  could  be  signed  in  the  current  financial  year.  Financial  Regulation  Art.  7: 
Commitment  appropriations  cover  the  total  cost  in  the  current  financial  year  of  legal  obligations 
(contracts, grant agreements/decisions) entered into for operations extending over more than one year. 

legal  obligations 

cost  of 

cover 

total 

the 

De-commitment 

Cancellation of a reservation of appropriations. 

Differentiated appropriations 

Differentiated  appropriations  are  used  to  finance  multiannual  operations;  they  cover,  for  the  current 
financial  year,  the  total  cost  of  the  legal  obligations  entered  into  for  operations  whose  implementation 
extends over more than one financial year. Financial Regulation Art. 7:  Differentiated appropriations are 
entered  for  multiannual  operations.  They  consist  of  commitment  appropriations  and  payment 
appropriations. 

Earmarked revenue 

Revenue  earmarked  for  a  specific  purpose,  such  as  income  from  foundations,  subsidies,  gifts  and 
bequests, including the earmarked revenue specific to each institution. 

Cf. Assigned revenue  

Economic result 

Impact on the balance sheet of expenditure and revenue based on accrual accounting rules. 

Entitlements established 

Entitlements are recovery orders that the European Union must establish for collecting income. 

Exchange rate difference 

The  difference  resulting  from  currency  exchange  rates  applied  to  the  transactions  concerning  countries 
outside the euro area, or from the revaluation of assets and liabilities in foreign currency at the closure. 

Expenditure 

Term used to describe spending the budget from all types of funds sources. 

Financial regulation (FR) 

Adopted through the ordinary legislative procedure after consulting the European Court of Auditors, this 
regulation  lays  down  the  rules  for  the  establishment  and  implementation  of  the  general  budget  of  the 
European Union. 

For reference, Regulation (EU, Euratom) No 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 

Funds Source 

Type of appropriations  

Grants 

Direct  financial  contributions,  by  way  of  donation,  from  the  budget  in  order  to  finance  either  an  action 
intended to help achieve an objective part of an EU policy or the functioning of a body, which pursues an 
aim of general European interest or has an objective forming part of an EU policy. 

Implementation 

Cf. Budget implementation  

Income 

Cf. Revenue  

Joint Undertakings (JUs) 

144 

 
 
Annual accounts of the European Development Fund 2019 

A legal EU-body established under the Treaty on the Functioning of the European Union. The term can be 
used  to  describe  any  collaborative  structure  proposed  for  the  "efficient  execution  of  Union  research, 
technological development and demonstration programmes". 

Lapsing appropriations 

Unused appropriations to be cancelled at the end of the financial year. Lapsing means the cancellation of 
all or part of the authorisation to make expenditures and/or incur liabilities, which is represented by an 
appropriation. 

Only  for  joint  undertakings,  as  specified  in  theirs  Financial  Rules,  any  unused  appropriations  may  be 
entered in the estimate of revenue and expenditure of up to the following three financial years (the so-
called "N+3" rule). Hence, lapsing appropriations for JUs could be re-activated until financial year "N+3". 

Legal base (basic act) 

The legal base or basis is, as a general rule, a law based on an article in the Treaty on the Functioning of 
the  European  Union  giving  competence  to  the  Community  for  a  specific  policy  area  and  setting  out  the 
conditions for fulfilling that competence including budget implementation. Certain articles from the treaty 
authorise  the  Commission  to  undertake  certain  actions,  which  imply  spending,  without  there  being  a 
further legal act. 

Legal commitment 

A legal commitment establishes a legal obligation towards third parties. 

Non-differentiated appropriations 

Non-differentiated appropriations are for operations of an annual nature. (Financial Regulation Art. 9). In 
the  EU  Budget,  non-differentiated  appropriations  apply  to  administrative  expenditure,  for  agricultural 
market support and direct payments. 

Operational appropriations 

Operational appropriations finance the different policies, mainly in the form of grants or procurement. 

Outstanding commitment 

Outstanding  commitments  (or  RAL,  from  the  French  ‘reste  à  liquider’)  are  defined  as  the  amount  of 
appropriations committed that have not yet been paid or legal commitments having not fully given rise to 
liquidation  by  payments.  They  stem  directly  from  the  existence  of  multiannual  programmes  and  the 
dissociation between commitment and payment appropriations. 

Outturn 

Cf. Budget result  

Payment 

A payment is a disbursement to honour legal obligations. 

Payment appropriations 

Payment  appropriations  cover  expenditure  due  in  the  current  year,  arising  from  legal  commitments 
entered in the current year and/or earlier years (Financial Regulation Art. 7). 

RAL 

Sum of outstanding commitments. Cf. Outstanding commitments  

Recovery 

The  recovery  order  is  the  procedure  by  which  the  Authorising  officer  by  Delegation  (AOD)  registers  an 
entitlement by the Commission in order to retrieve the amount, which is due. The entitlement is the right 
that the Commission has to claim the sum, which is due by a debtor, usually a beneficiary. 

Result 

Cf. Budget result  

Revenue 

Term used to describe income from all sources financing the budget. 

Rules of application 

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Annual accounts of the European Development Fund 2019 

Detailed  rules  for  the  implementation  of  the  financial  regulation.  They  are  set  out  in  a  Commission 
regulation  adopted  after  consulting  all  institutions  and  cannot  alter  the  financial  regulation  upon  which 
they depend. 

Surplus 

Positive difference between revenue and expenditure (Cf. Budget result) which has to be returned to the 
funding authority as provided in the Financial Regulation. 

Transfer 

Transfers between budget lines imply the relocation of appropriations from one budget line to another, in 
the  course  of  the  financial  year,  and  thereby they  constitute  an  exception  to the  budgetary  principle  of 
specification. However, they are  expressly  authorised by the Treaty on  the Functioning of the European 
Union  under  the  conditions  laid  down  in  the  Financial  Regulation.  The  Financial  Regulation  identifies 
different  types  of  transfers  depending  on  whether  they  are  between  or  within  budget  titles,  chapters, 
articles or headings and require different levels of authorisation. 

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