Communication from the Commission to the European Parliament, the Council and the Court of Auditors - Annual accounts of the European Development Fund 2021
Date: 2022-06-23
Institutions: Directorate-General for Budget, European Commission
Subjects: European Development Fund, activity report, balance sheet, closing of accounts, consolidated account, implementation of the budget

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 23.6.2022  COM(2022) 321 final     Communication from the Commission to the European Parliament, the Council and the        Court of Auditors - Annual accounts of the European Development Fund 2021              
 
 
Annual accounts of the European Development Fund 2021 

CONTENTS 

CERTIFICATION OF THE ACCOUNTS ..................................................................... 2 

IMPLEMENTING AND ACCOUNTING FOR THE EDF RESOURCES ................................ 3 

FUNDS MANAGED BY THE EUROPEAN COMMISSION ............................................... 8 

FINANCIAL STATEMENTS OF THE EDF ......................................................................... 10 

FINANCIAL STATEMENTS OF THE EU TRUST FUNDS CONSOLIDATED IN EDF ................... 53 

FINANCIAL STATEMENTS OF THE BÊKOU EU TRUST FUND 2021 .................................... 54 

FINANCIAL STATEMENTS OF THE EUTF AFRICA 2021 ................................................... 62 

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE EU TRUST FUNDS .......... 71 

EDF REPORT ON FINANCIAL IMPLEMENTATION ............................................................ 76 

ANNUAL REPORT ON IMPLEMENTATION - FUNDS MANAGED BY THE EUROPEAN 
INVESTMENT BANK .......................................................................................... 94 

1 

 
 
 
 
 
Annual accounts of the European Development Fund 2021 

CERTIFICATION OF THE ACCOUNTS 

The  annual  accounts  of  the  European  Development  Fund  for  the  year  2021  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 of the 
European Development Fund 

2 

 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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. 

Up  until  2021,  the  European  Development  Fund  (hereinafter  referred  to  as  the  ‘EDF’)  was  the  main 
instrument  for  providing  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. 

Each EDF is concluded for a period of around five years and is governed by its own Financial Regulation, 
which requires the preparation of specific financial statements. In addition, these financial statements are 
aggregated  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 new text repealed 
the previous regulation 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. 

2.  HOW IS THE EDF FUNDED? 

The  Council  of  2  December  2013  adopted  the  Regulation  1311/2013  laying  down  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,  but  would  continue  to  be  funded  through  the 
existing intergovernmental 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. 

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Annual accounts of the European Development Fund 2021 

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 met at intergovernmental level and decided on an overall amount to 
be allocated to the fund and to oversee its implementation.  

The  Commission  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. 

EDF ACTIVITIES AFTER 31 DECEMBER 2020 

The  11th  EDF  has  reached  its  final  stage  as  the  sunset  clause  came  into  effect  on  31  December  2020. 
This clause sets a cut-off date for commitments meaning that as of 2021 no further financing agreements 
can be signed under the 11th EDF. However, specific contracts for the existing financing agreements will 
still  be  signed  until  31  December  2023  (and  even  later  for  audit  and  evaluation).  Furthermore,  the 
implementation  of  the  ongoing  projects  funded  by  the  European  Development  Fund  will  continue  until 
their final completion.   

In  the  context  of  the  new  Multi-Annual  Financial  Framework  2021-2027,  the  EU  cooperation  with  ACP 
countries  is  integrated  in the  Neighbourhood,  Development  and  International Cooperation  Instrument  –
Global Europe. Similarly, the cooperation with OCTs is now covered by the Overseas Association Decision 
(OAD).  This  means  that  while  up  to  2021  the  EDF  programmes  were  funded  by  the  voluntary 
contributions of EU Member States, as of 2021 development programmes will be funded through the EU 
budget. This also implies that the funding of development programmes are subject to the authorisation of 
the European Parliament and that the transactions have to comply with the EU financial regulations in the 
same way as other EU funded programmes.  

4. 

YEAR-END REPORTING 

4.1.  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).  These  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  by  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 and 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 

4 

 
 
Annual accounts of the European Development Fund 2021 

(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 
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. 

5.  AUDIT AND DISCHARGE 

5.1.  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. 

5.2.  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. 

5 

 
 
Annual accounts of the European Development Fund 2021 

HIGHLIGHTS OF FINANCIAL 
IMPLEMENTATION 2021 

10th and 11th EDF budget implementation 2008-2021

7.000

6.000

5.000

4.000

3.000

2.000

1.000

0

(1.000)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Commitments

Contracts

Payments

* Net amount, only 10th & 11th EDF 

Budget implementation 

The  year  2021  was  marked  by  two  events.  2021  was  the  first  year  following  the  sunset  clause  for  the 
11th EDF, which was reached on the 31st of December 2020. Therefore, in 2021 there were no further 
global commitments of projects under the 11th EDF. In addition, in 2021 the financial implementation for 
the  10th  and  11th  EDF  for  contracts  (individual  commitments:  EUR  2  118  million)  and  payments  (EUR 
3 393 million) was impacted by the prolonged COVID crisis. 

The total amount of gross payments for all EDFs (EUR 3 435 million) represents 91% of the target of EUR 
3  763  million  communicated  to  the  Member  States.  Due  to  the  prolonged  COVID  situation,  50%  of 
Delegations in Sub-Saharan Africa did not reach their minimum forecasted payment target (90%). Most 
noticeable  were  Madagascar,  that  almost  fully  closed  its  borders,  making  it  very  difficult  to  continue 
implementation  as  initially  foreseen;  Chad  and  Gambia  due  to  suspended  or  delayed  implementation; 
Ethiopia, Guinea Conakry, and Mali where political crises affected operations severely, with an important 
impact on forecasted budget  support  payments. In  the Pacific and in the Caribbean, COVID  restrictions 
also  affected  implementation.  In  Fiji  and  Haiti,  the  negative  collateral  effects,  emanating  from  the 
deterioration  of  the  economic,  social  and  political  situation,  had  a  devastating  impact  on  infrastructure 
project. 

Impact of the activities in the financial statements 

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

 

 

Pre-financing (see note 2.2): a decrease of EUR 101 million largely as a result of fewer advances 
paid  out  due  to  the  decrease  in  the  number  of  contracts  signed  (EUR  3  670  million  in  2020  vs 
EUR  2  118  million  in  2021).  This  decrease  was  mainly  driven  by  challenges  faced  due  to  the 
ongoing  COVID-19  pandemic  and  geopolitical  crises.  Consequently,  cash  and  cash  equivalents 
increased  by  EUR  266  million  as  a  result  of  this  significant  decrease  in  pre-financing  and  other 
payments (see note 2.5); 

The significantly lower number of open contracts at the end of 2021, caused both by the  scaling 
down of EDF and adverse impact of the on-going COVID-19 and geopolitical crises on signing of 
new contracts resulted in a substantial decrease of accrued charges by EUR 519 million (see note 
2.8).  

  Aid instruments expenses (see note 3.3): an overall decrease in aid instruments expenses of EUR 
1  743  million  is  a  combined  effect.  On  one  hand  the  challenging  conditions  related  to  the 

6 

 
 
 
Annual accounts of the European Development Fund 2021 

COVID-19  pandemic  and  unstable  geopolitical  situation  in  several  countries  hampered 
implementation of EDF activities in 2021. At the same time, the decrease of activities under the 
10th  and  previous  EDFꞌs  is  in  line  with  the  scaling  down  of  those  EDF  resulting  in  fewer  open 
contracts under these EDFs.  

Impact of the changes in EAR 11 in the financial statements 

On  1  January  2021,  as  a  result  of  changes  in  the  EU  accounting  rule  11  (see  note  1  on  Accounting 
Policies),  the  financial  assets  of  the  EDF  were  reclassified  from  financial  assets  available  for  sale  to 
financial  assets  at  fair  value  through  surplus  or  deficit  (FVSD).  In  both  cases  the  financial  assets  are 
measured at fair value: the carrying amounts are thus comparable. The corresponding amount of the fair 
value reserve has been transferred to the accumulated surplus/deficit. This reclassification did not have 
any impact on the net assets of the EDF (see statement of changes in net assets). 

7 

 
 
Annual accounts of the European Development Fund 2021 

EUROPEAN DEVELOPMENT FUND 
FINANCIAL YEAR 2021 

FUNDS MANAGED BY THE EUROPEAN 
COMMISSION 

8 

 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

CONTENTS 

FINANCIAL STATEMENTS OF THE EDF ................................................................ 10 

EDF BALANCE SHEET ................................................................................................ 11 

EDF STATEMENT OF FINANCIAL PERFORMANCE ........................................................... 12 

EDF CASHFLOW STATEMENT ..................................................................................... 13 

EDF STATEMENT OF CHANGES IN NET ASSETS ............................................................ 14 

BALANCE SHEET BY EDF ........................................................................................... 15 

STATEMENT OF FINANCIAL PERFORMANCE BY EDF ...................................................... 17 

STATEMENT OF CHANGES IN NET ASSETS BY EDF ....................................................... 18 

NOTES TO THE FINANCIAL STATEMENTS OF THE EDF ................................................... 20 

FINANCIAL STATEMENTS OF THE EU TRUST FUNDS CONSOLIDATED IN EDF ........... 53 

FINANCIAL STATEMENTS OF THE BÊKOU EU TRUST FUND 2021 ............................ 54 

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

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

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

FINANCIAL STATEMENTS OF THE EUTF AFRICA 2021 ........................................... 62 

BALANCE SHEET ...................................................................................................... 68 

STATEMENT OF FINANCIAL PERFORMANCE ................................................................. 69 

CASHFLOW STATEMENT ............................................................................................ 70 

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE EU TRUST FUNDS . 71 

CONSOLIDATED BALANCE SHEET ............................................................................... 72 

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE .......................................... 73 

CONSOLIDATED CASH FLOW STATEMENT ................................................................... 74 

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS ........................................... 75 

EDF REPORT ON FINANCIAL IMPLEMENTATION .................................................... 76 

9 

 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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. 

10 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

EDF BALANCE SHEET 

NON-CURRENT ASSETS 
Financial assets 
Pre-financing 
Trust Fund contributions 
Exchange receivables  

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  

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 

2.1 
2.2 
2.3 

2.2 
2.4 
2.5 

2.6 

2.7 
2.8 

2.9 
2.10 
2.10 

EUR million 
31.12.2021  31.12.2020 

 39 
 671 
 382 
 4 
1 096 

1 453 
 35 
 994 
2 481 
3 577 

 33 
 870 
 394 
 3 
1 300 

1 355 
 140 
 728 
2 223 
3 523 

 (7) 
 (7) 

 (2) 
 (2) 

 (501) 
(1 008) 
(1 509) 
(1 516) 

 (615) 
(1 527) 
(2 143) 
(2 145) 

2 061 

1 379 

– 
62 643 
2 252 
(59 860) 
(2 974) 
2 061 

 (5) 
58 986 
2 252 
(55 111) 
(4 744) 
1 379 

11 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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 

2021 

EUR million 
2020 

 27 
 27 

 (26) 
 74 
 48 
 75 

 92 
 92 

 6 
 37 
 43 
 135 

(2 864) 
 (19) 
 (20) 
 (145) 
(3 049) 

(4 607) 
 (53) 
 (21) 
 (197) 
(4 878) 

(2 974) 

(4 744) 

12 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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 financial liabilities 
Increase/(decrease) in payables 
Increase/(decrease) in accrued charges and deferred income 
Other non-cash movements 
Investing activities 
(Increase)/decrease in non-derivative financial assets at fair value through 
surplus or deficit*  
NET CASHFLOW 

Note 

EUR million 
2020 
(2 974)  (4 744) 

2021 

3 657 
 12 
 101 
 105 
 5 
 (114) 
 (519) 
– 

4 177 
 (127) 
 (29) 

 (17) 
 (17) 
 99 
 209 
 (3) 

 (7) 

 2 

 266 

 (452) 

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 

 266 
 728 
 994 

 (451) 
1 179 
 728 

*The 2020 figure relates to the (increase)/decrease in available for sale financial asset 

13 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EDF STATEMENT OF CHANGES IN NET ASSETS 

Annual accounts of the European Development Fund 2021 

Fund 
capital - 
active 
EDFs 
(A) 
 73 264 

  (223) 
– 
 73 041 

 73 041 
  (43) 
– 
 72 998 

Uncalled 
funds - 
active 
EDFs (B) 

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

Cumulative 
Reserves (D) 

 18 455 

 54 809 

 (55 111) 

 (4 400) 
– 
 14 055 

 14 055 
 (3 700) 
– 
 10 355 

 4 177 
– 
 58 986 

 58 986 
 3 657 
– 
 62 643 

– 
 (4 744) 
 (59 854) 
  (5) 
 (59 860) 
– 
 (2 974) 
 (62 834) 

Called fund 
capital from 
closed EDFs 
carried forward 
(E) 

EUR million 

Fair value 
reserve (F) 

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

 2 252 

– 
– 
 2 252 

 2 252 
– 
– 
 2 252 

  (2) 
  (3) 

  (5) 
  5 
– 

– 

 1 948 
  (3) 
 4 177 
 (4 744) 
 1 379 
  – 
 1 379 
 3 657 
 (2 974) 
 2 061 

BALANCE AS AT 31.12.2019 
Fair value movements 
Capital increase -  contributions 
Economic result of the year 
BALANCE AS AT 31.12.2020 
Impact of revised EAR 11 
BALANCE AS AT 01.01.2021 
Capital increase - contributions 
Economic result of the year 
BALANCE AS AT 31.12.2021 

14 

 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BALANCE SHEET BY EDF 

Annual accounts of the European Development Fund 2021 

Note 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

11th 
EDF 

Total 

Eighth 
EDF 

31.12.2021 

31.12.2020 
Ninth 
EDF 

10th 
EDF 

NON-CURRENT ASSETS 
Financial assets 
Pre-financing 
Trust Fund contributions 
Exchange receivables 

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  

2.7 
2.8 

TOTAL LIABILITIES 

NET ASSETS 
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 

2.9 

 EUR million 

Total 

 33 
 870 
 394 
 3 
 1 300 

11th 
EDF 

 35 
 575 
 355 
 3 
  969 

– 
– 
 31 
– 
  31 

 (2) 
 219 
 9 
– 
  226 

 41 
 452 
 341 
 4 
  839 

 39 
 671 
 382 
 4 
 1 096 

– 
– 
– 
– 
– 

– 
 3 
 29 
– 
  33 

 (2) 
 292 
 9 
– 
  299 

– 
– 
– 
– 
– 

– 

 14 

 353 

1 085 

1 453 

 0 

 9 

 341 

1 005 

1 355 

 180 

 (314) 

1 296 

(1 127) 

 35 

 181 

 (177) 

1 723 

(1 586) 

 140 

 181 
– 
  361 
  361 

 (316) 
– 
  (615) 
  (584) 

1 279 
– 
 2 928 
 3 154 

(1 144) 
 994 
  (192) 
  646 

– 
 994 
 2 481 
 3 577 

 181 
– 
  362 
  362 

 (246) 
– 
  (414) 
  (381) 

1 663 
– 

(1 598) 
 728 
 3 726   (1 451) 
  (483) 
 4 025 

– 
 728 
 2 223 
 3 523 

– 
– 

– 
– 
– 
– 

– 
– 

 (0) 
 (6) 
  (6) 
  (6) 

  361 
– 
12 164 

  (591) 
– 
10 492 

– 
– 

 (7) 
  (7) 

 (27) 
 (110) 

 (7) 
  (7) 
– 
 (501) 
 (473) 
(1 008) 
 (892) 
  (138)   (1 365)   (1 509) 
  (138)   (1 372)   (1 516) 
– 
 2 061 
– 
62 643 

  (725) 
- 
19 027 

 3 016 
- 
20 960 

– 
– 

– 
– 
– 
– 

– 
– 

– 
– 

 (2) 
  (2) 

 (2) 
  (2) 

 (1) 
 (67) 
  (67) 
  (67) 

 (62) 
 (217) 

 (554) 
(1 244) 
  (279)   (1 798) 
  (279)   (1 800) 

 (615) 
(1 527) 
 (2 143) 
 (2 145) 

  362 
– 
12 164 

  (448) 
– 
10 535 

 3 747   (2 282) 
 (4) 
15 327 

 (2) 
20 960 

 1 379 
 (5) 
58 986 

 627 

1 625 

– 

– 

2 252 

 627 

1 625 

– 

– 

2 252 

(2 512) 

2 018 

 101 

 394 

– 

(2 512) 

2 041 

 188 

 283 

- 

15 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

Note 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

11th 
EDF 

Total 

Eighth 
EDF 

31.12.2021 

31.12.2020 
Ninth 
EDF 

10th 
EDF 

11th 
EDF 

 EUR million 

Total 

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

(10 098)  (14 404)  (19 065)  (16 293)  (59 860)  (10 098)  (14 440)  (18 606)  (11 966) 

(55 111) 

 (1) 
  180 

 (6) 
  (274) 

 (260) 
 1 737 

(2 708) 
  419 

(2 974) 
 2 061 

- 
  181 

 36 
  (203) 

 (457) 
 2 084 

(4 324) 
  (683) 

(4 744) 
 1 379 

16 

 
 
 
 
 
 
 
 
 
STATEMENT OF FINANCIAL PERFORMANCE BY EDF 

Annual accounts of the European Development Fund 2021 

Note 

Eighth 
EDF 

Ninth 
EDF 

11th 
EDF 

Total 

Eighth 
EDF 

Ninth 
EDF 

2020 

10th 
EDF 

11th 
EDF 

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 

3.1 

3.2 

3.3 
3.4 
3.5 
3.6 

– 
– 

– 
– 
– 
– 

– 
– 
– 
- 
– 

 26 
  26 

 (4) 
 55 
 51 
  78 

 27 
  27 

 (1) 
  (1) 

 (26) 
 74 
 48 
  75 

– 
– 
– 
  (1) 

 69 
  69 

 1 
 18 
 19 
  88 

 19 
  19 

 1 
 13 
 13 
  32 

 5 
  5 

 5 
 5 
 10 
  15 

 34 
– 
 (3) 
 (9) 
  21 

 (7) 
– 
 7 
 (11) 

(2 864) 
 (19) 
 (20) 
 (145) 
  (12)    (252)   (2 785)   (3 049) 

(2 644) 
 (19) 
 (3) 
 (119) 

 (214) 
– 
 (23) 
 (16) 

– 
– 
 1 
– 
  1 

 (462) 
 (41) 
 (16) 
 (25) 

(4 179) 
 (12) 
 (4) 
 (162) 
  (545)   (4 356) 

(4 607) 
 (53) 
 (21) 
 (197) 
 (4 878) 

2021 
10th 
EDF 

 1 
  1 

 (22) 
 14 
 (8) 
  (7) 

– 
– 

 0 
5 
 5 
  5 

EUR million 

Total 

 92 
  92 

 6 
 37 
 43 
  135 

ECONOMIC RESULT OF THE YEAR 

- 

  (8)    (259)   (2 708)   (2 974) 

- 

  36 

  (457)   (4 324) 

 (4 744) 

17 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENT OF CHANGES IN NET ASSETS BY EDF 

Annual accounts of the European Development Fund 2021 

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 31.12.2019 
Transfers to/from the 10th EDF 
BALANCE AS AT 31.12.2020 
Transfers to/from the 10th EDF 
BALANCE AS AT 31.12.2021 

 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) 
 (2 510) 
 (2) 
 (2 512) 
– 
 (2 512) 

EUR million 

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

  183 
 (2) 
  181 
– 
  181 

Ninth EDF 

Fund 
capital - 
active 
EDFs (A) 

Uncalled 
funds - 
active EDFs 
(B) 

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

Cumulative 
Reserves (D) 

Called fund 
capital from 
closed EDFs 
carried 
forward (E) 

Called fund 
capital 
transfers 
between 
active EDFs 
(F) 

EUR million 

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

BALANCE AS AT 31.12.2019 
Transfers to/from the 10th EDF 
Transfers to/from the 10th EDF 
Refund to Member States 
Economic result of the year 
BALANCE AS AT 31.12.2020 
Capital increase - contributions 
Transfers to/from the 10th EDF 
Refund to Member States 
Economic result of the year 
BALANCE AS AT 31.12.2021 

 10 773 

 (223) 

 10 550 

 (43) 

  15 
– 

  15 
– 

 10 507 

  15 

 (14 440) 

 1 625 

 2 109 

 (69) 

 (14 440) 

 1 625 

 2 041 

 (6) 
 (14 410) 

 1 625 

 (23) 

– 
 2 018 

  53 
– 
 (69) 
 (223) 
– 
  (203) 
– 
 (23) 
 (43) 
 (6) 
  (274) 

 10 758 
– 
– 
 (223) 
– 
 10 535 
– 
– 
 (43) 
– 
 10 492 

18 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

10th EDF 

Fund capital - 
active EDFs 
(A) 

Uncalled 
funds - active 
EDFs (B) 

BALANCE AS AT 31.12.2019 
Transfers to/from the Eighth and 
Ninth EDF 
Transfers to/from the 11th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2020 
Impact of revised EAR 11 
BALANCE AS AT 01.01.2020 
Transfers to/from the Eighth and 
Ninth EDF 
Transfers to/from the 11th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2021 

 20 960 

 20 960 

 20 960 

 20 960 

– 

– 

– 

– 

Called fund 
capital - 
active EDFs 
(C) = (A)-(B) 
 20 960 

Cumulative 
Reserves (D) 

 (18 606) 

– 

– 
– 
 20 960 

 20 960 

– 

– 
– 
 20 960 

 (457) 
 (19 063) 
 (2) 
 (19 065) 

 (260) 
 (19 324) 

Called fund capital 
from closed EDFs 
carried forward 
(E) 

EUR million 

Fair value 
reserve (G) 

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

  265 

 71 

 (147) 

  188 

  188 

 23 

 (110) 

  101 

  (2) 
 2 
– 

– 

 2 618 

 71 

 (147) 
 (457) 
 2 084 
– 
 2 084 

 23 

 (110) 
 (260) 
 1 737 

EUR million 

11th EDF 

BALANCE AS AT 31.12.2019 
Fair value movements 
Capital increase - contributions 
Economic result of the year 
BALANCE AS AT 31.12.2020 
Impact of revised EAR 11 
BALANCE AS AT 01.01.2020 
Capital increase - contributions 
Economic result of the year 
BALANCE AS AT 31.12.2021 

Fund capital 
- active 
EDFs (A) 

Uncalled 
funds - active 
EDFs (B) 

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

Cumulative 
Reserves (D) 

 29 367 

 18 440 

 10 927 

 (11 966) 

(4 400) 

 29 367 

 14 040 

 29 367 

 14 040 
(3 700) 

 29 367 

 10 340 

4 400 
– 
 15 327 

 15 327 
3 700 
– 
 19 027 

(4 324) 
 (16 290) 
 (4) 
 (16 294) 

(2 708) 
 (19 002) 

Called fund 
capital 
transfers 
between active 
EDFs (F) 

Fair value 
reserve (G) 

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

  136 
– 
 147 
– 
  283 

  283 
 110 
– 
  394 

  (2) 
 (2) 

  (4) 
 4 
– 

– 

  (905) 
 (2) 
4 547 
(4 324) 
  (683) 
- 
  (683) 
3 810 
(2 708) 
  419 

19 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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.

20 

 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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 stakeholders.  

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

1.2.  BASIS OF PREPARATION 

1.2.1.  Reporting period 

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

1.2.2.  Currency and basis for conversion 

The  annual  accounts  are  presented  in  millions  of  euros,  the  euro  being  the  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 

31.12.2021 

31.12.2020 

Currency 

31.12.2021 

31.12.2020 

BGN 
CZK 
DKK 
GBP 
HRK 
HUF 

1.9558 
26.8580 
7.4364 
0.84028 
7.5156 
369.1900 

1.9558   
26.2420   
7.4409   
0.8990   
7.5519   
363.8900   

PLN 
RON 
SEK 
CHF 
JPY 
USD 

4.5969 
4.9490 
10.2503 
1.0331 
130.3800 
1.1326 

4.5597 
4.8683 
10.0343 
1.0802 
126.4900 
1.2271 

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, financial risk of accounts receivable and the amounts disclosed in the notes concerning 
financial  instruments,  impairment  allowance  for  financial  assets  at  amortised  cost  and  for  financial 
guarantee  contract  liabilities,  accrued  revenue  and  charges,  provisions,  degree  of  impairment  of 
intangible  assets  and  property,  plant  and  equipment,  net  realisable  value  of  inventories,  contingent 
assets and liabilities. Actual results could differ from those estimates.  

21 

 
 
 
Annual accounts of the European Development Fund 2021 

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

1.2.4.  Application of new and revised European Union Accounting Rules (EAR) 

Revised EAR effective for periods beginning on or after 1 January 2021 

In 2020, the Accounting Officer adopted the revised EAR 11 ‘Financial Instruments’, which is mandatorily 
effective as of 1 January 2021. The revised EAR 11 is based on the new IPSAS 41 ‘Financial Instruments’, 
the  amended  IPSAS  28  ‘Financial  Instruments:  Presentation’  and  the  amended  IPSAS  30  ‘Financial 
Instruments:  Disclosures’  which  were  issued  in  August  2018.  It  establishes  the  financial  reporting 
principles for financial assets and  financial  liabilities. In accordance  with the transition provisions of the 
revised EAR 11, the entity accounts for any changes from the initial application, on 1 January 2021. The 
revised  EAR  11  does  not  require  the  restatement  of  prior  periods.  As  a  result,  the  financial  assets, 
financial  liabilities,  exchange  receivables  and  interest  revenue/expense  as  at  31  December  2020 
presented in these accounts have been accounted for in accordance with the accounting policies as stated 
in the 2020 financial statements of the entity. 

Changes from the application of the revised EAR 11 

New classification and measurement principles for financial assets 

The  revised  EAR  11  introduces  a  principles-based  approach  to  the  classification  of  financial  assets  and 
requires the use of two criteria: the entity’s model for managing its financial assets and the contractual 
cash-flow characteristics of those assets. Depending on these criteria, financial assets are classified in the 
following categories:  ‘financial assets at amortised cost’ (AC), ‘financial assets at fair value through net 
assets/equity’ (FVNA), or ‘financial assets at fair value through surplus or deficit’ (FVSD). 

The application of the new criteria led to the reclassification of all equity investments and debt securities 
from ‘available for sale’ to FVSD. The related fair value reserve was reclassified – within  Net Assets – to 
accumulated surplus or deficit. 

New impairment model  

Whereas  the  previous  impairment  model  was  based  on  incurred  losses,  the  revised  EAR  11  has 
introduced a forward-looking impairment model based on expected credit losses (ECL) over the lifetime 
of the financial asset. The ECL takes into account possible default events and the evolution of the credit 
quality of the financial assets. The new impairment model applies to all financial assets measured at AC 
or at FVNA as well as to loan commitments and financial guarantee contracts. 

Financial guarantee accounting 

The  revised  EAR  11  requires  the  application  of  the  financial  guarantee  accounting  requirements  to  all 
financial guarantee contracts. The measurement of the financial guarantee liability relies on the fair value 
of the guarantee at initial recognition and the evolution of the expected credit losses from the guaranteed 
debts portfolio. 

1.3.  BALANCE SHEET

1.3.1. 

Financial assets 

Classification at initial recognition 

The  classification  of  the  financial  instruments  is  determined  at  initial  recognition.  Based  on  the 
management  model  and  the  asset  contractual  cash-flow  characteristics  the  financial  assets  can  be 
classified  in  three  categories:  Financial  assets  at  amortised  cost  (‘AC’),  financial  assets  at  fair  value 
through net assets/equity (‘FVNA’) or financial assets at fair value through surplus or deficit (‘FVSD’). 

22 

 
 
Annual accounts of the European Development Fund 2021 

(i)  Financial assets at amortised cost 

Financial assets at amortised cost are  non-derivative financial  assets that  meet  two conditions: (1) The 
entity  holds  them  in  order  to  collect  the  contractual  cash  flows.  (2)  On  specified  days,  there  are 
contractual cash flows that are solely payments of the principal and interest on the outstanding principal. 

This category comprises: 

  Cash and cash equivalents; 

 

 

Loans (including term deposits with original maturity of more than three months);  

Exchange receivables 

Financial assets at amortised cost are included in current assets, except for those with maturity of more 
than 12 months from the reporting date.  

(ii)  Financial assets at fair value through net assets/equity 

These  non-derivatives  financial  assets  have  contractual  cash  flows  that  represent  only  principal  and 
interest on the outstanding principal. In addition, the management model is to hold the financial assets 
both to collect contractual cash flows and to sell the financial assets.  

Assets  in  this  category  are  classified  as  current  assets,  if  they  are  expected  to  be  realised  within  12 
months from the reporting date. 

The entity does not hold such assets at 31 December 2021. 

(iii) Financial assets at fair value through surplus or deficit 

The  entity  classifies  derivatives  and  equity  investments  as  FVSD  because  the  contractual  cash  flows  do 
not represent only principal and interests on the principal. 

In  addition,  the  entity  classifies  the  debt  securities  it  holds  as  FVSD  because  the  portfolios  of  debt 
securities are managed and evaluated on a portfolio fair value basis. 

Assets  in  this  category  are  classified  as  current  assets,  if  they  are  expected  to  be  realised  within  12 
months from the reporting date. 

Initial recognition and measurement 

Purchases of financial assets at fair value through surplus or deficit are recognised on their trade-date – 
the date on which the entity commits to purchase the asset. Cash equivalents and loans are recognised 
when cash is deposited in a financial institution or advanced to borrowers. 

Financial  assets  are  initially  measured  at  fair  value.  For  all  financial  assets  not  carried  at  fair  value 
through  surplus  or  deficit,  the  transactions  costs  are  added  to  the  fair  value  at  initial  recognition.  For 
financial assets carried at fair value through surplus or deficit the transaction costs are expensed in the 
statement of financial performance. 

The  fair  value  of  a  financial  asset  on  initial  recognition  is  normally  the  transaction  price  unless  the 
transaction is not at arm’s length i.e. at no or at nominal consideration for public policy purposes. In this 
case, the difference between the fair value of the financial instrument and the transaction price is a non-
exchange  component  which  is  recognised  as  an  expense  in  the  statement  of  financial  performance.  In 
this  case,  the  fair  value  of  a  financial  asset  is  derived  from  current  market  transactions  for  a  directly 
equivalent  instrument.  If  there  is  no  active  market  for  the  instrument,  the  fair  value  is  derived  from  a 
valuation technique that uses available data from observable markets.  

Subsequent measurement 

Financial  assets  at  amortised  cost  are  subsequently  measured  at  amortised  cost  using  the  effective 
interest method.  

23 

 
 
Annual accounts of the European Development Fund 2021 

Financial  assets  at  fair  value  through  surplus  or  deficit  are  subsequently  measured  at  fair  value.  Gains 
and  losses  from  changes  in  the  fair  value  (including  those  stemming  from  foreign  exchange  translation 
and any interests earned) are included in the statement of financial performance in the period in  which 
they arise. 

Fair value at subsequent measurement 

The fair values of quoted investments in active markets are based on current bid prices. If the market for 
a  financial  asset  is  not  active  (and  for  unlisted  securities  and  over-the–counter  derivatives),  the  EU 
establishes  a  fair  value  by  using  valuation  techniques.  These  include  the  use  of  recent  arm’s  length 
transactions,  reference  to  other  instruments  that  are  substantially  the  same,  discounted  cashflow 
analysis, option pricing models and other valuation techniques commonly used by market participants.  

Investments  in  venture  capital  funds  which  do  not  have  a  quoted  market  price  in  an  active  market  are 
valued at the attributable net asset value, which is considered as an equivalent of their fair value. 

Impairment of financial assets 

The  EU  recognises  and  measures  an  impairment  loss  for  expected  credit  losses  on  financial  assets  that 
are measured at amortised cost and at fair value through net assets/equity. 

The expected credit loss (ECL) is the present value of the difference between the contractual cash flows 
and  the  cash  flows  that  the  EU  expects  to  receive.  The  ECL  incorporates  reasonable  and  supportable 
information that is available without undue cost or effort at the reporting date. 

For  assets  at  amortised  cost,  the  asset’s  carrying  amount  is  reduced  by  the  amount  of  the  impairment 
loss which is recognised in the statement of financial performance. If, in a subsequent period, the amount 
of  the  impairment  loss  decreases,  the  previously  recognised  impairment  loss  is  reversed  through  the 
statement of financial performance. 

(a) 

Receivables 

The entity measures the impairment loss at the amount of lifetime ECL, using practical expedients (e.g. 
provision matrix).  

(b) 

Cash and cash equivalents 

The  entity  holds  cash  and  cash  equivalents  in  current  bank  accounts  and  term  deposits  of  up  to 
3 months.  The  cash  is  held  in  banks  with  very  high  credit  ratings,  thus  having  very  low  default 
probabilities. Given the short duration and low default probabilities, the expected credit losses from cash 
and  cash  equivalents  are  negligible.  As  a  result,  no  impairment  allowance  is  recognised  for  cash 
equivalents. 

(c) 

Loans  

The ECL is measured with a three stage model that takes into account probability weighted default events 
during  the  lifetime  of  the  financial  asset  and  the  evolution  of  credit  risk  since  the  origination  of  the 
financial asset. For loans, origination is the date of the irrevocable loan commitment 

If there is no significant increase in credit risk since origination (‘stage 1’), the impairment loss is the ECL 
from possible default events in the next 12 months from the reporting date (’12 months ECL’). If there is 
a significant increase in credit risk since origination (‘stage 2’) or if there is objective evidence of a credit 
impairment (‘stage 3’), the impairment loss equals the ECL from possible default events over the whole 
lifetime of the financial asset (‘lifetime ECL’) 

Derecognition 

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. 
Sales of financial assets through surplus or deficit are recognised on their trade-date. 

24 

 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

1.3.2. 

Pre-financing amounts 

Pre-financing is a payment intended to provide the beneficiary with a cash advance, i.e. a float. It may be 
split into a number of payments over a period defined in the particular contract, decision, agreement or 
basic legal act. The float or advance is either used for the purpose for which it was provided during the 
period defined in the agreement or it is repaid. If the beneficiary does not incur eligible expenditure, he 
has  the  obligation  to  return  the  pre-financing  advance  to  the  entity.  Thus,  as  the  entity  retains  control 
over the pre-financing and is entitled to a refund for the ineligible part, the amount is recognised 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. 

1.3.3.  Receivables and recoverables 

The  EU  accounting  rules  require  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 
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. The entity classified 
them as financial assets at amortised cost and measured them accordingly. 

Recoverables from non-exchange transactions are carried at fair value as at the date of acquisition less 
write-down for impairment. A write-down for impairment is established when there is objective evidence 
that  the  entity  will  not  be  able  to  collect  all  amounts  due  according  to  the  original  terms  of  the 
recoverables. The amount of the write-down is the difference  between the asset’s  carrying  amount and 
the  recoverable  amount.  The  amount  of  the  write-down  is  recognised  in  the  statement  of  financial 
performance. 

1.3.4.  Cash and cash equivalents 

Cash and cash equivalents are financial assets at amortised cost and include cash at hand, deposits held 
at  call  or  at  short  notice  with  banks,  and  other  short-term  highly  liquid  investments  with  original 
maturities of three months or less. 

1.3.5. 

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,  at  the  moment  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. The corresponding expenses are entered in the accounts when the supplies or services 
are delivered and accepted by the entity. 

1.3.6. 

Financial liabilities 

Financial liabilities are classified as financial liabilities carried at amortised cost, financial liabilities at fair 
value through surplus or deficit, or as financial guarantee contract liabilities. 

25 

 
 
Annual accounts of the European Development Fund 2021 

Financial  liabilities  at  amortised  cost  are  initially  recognised  at  fair  value  including  transaction  costs 
incurred  and  subsequently  carried  at  amortised  cost  using  the  effective  interest  method.  They  are 
derecognised from the statement of financial position if and only if the obligation is discharged, waived, 
cancelled or expired.  

Financial  liabilities  at  fair  value  through  surplus  or  deficit  include  derivatives  where  the  fair  value  is 
negative. Where the guarantee contract requires the entity to make payments in response to changes in 
financial instruments prices or foreign exchange rates, the guarantee contract is a derivative. They follow 
the same accounting treatment as financial assets at fair value through surplus or deficit. 

The entity recognises a financial guarantee contract liability when it enters into a contract that requires to 
make  specified  payments  to  reimburse  the  guarantee  holder  for  a  loss  it  incurs  because  a  specified 
debtor  fails  to  make  payment  when  due  in  accordance  with  the  original  or  modified  terms  of  a  debt 
instrument. Financial guarantee contract liabilities are initially recognised at fair value.  

The  subsequent  measurement  depends  on  the  evolution  of  the  credit  risk  exposure  from  the  financial 
guarantee.  If  there  is  no  significant  increase  in  credit  risk  (‘stage  1’),  financial  guarantee  liabilities  are 
measured at the higher of the 12 months expected credit losses and the amount initially recognised less, 
when  appropriate,  cumulative  amortisation.  If  there  is  a  significant  increase  in  credit  risk  (‘stage  2’), 
financial  guarantee  liabilities  are  measured  at  the  higher  of  the  lifetime  expected  credit  losses  and  the 
amount initially recognised less, when appropriate, cumulative amortisation.  

Financial liabilities are classified as non-current liabilities, except for maturities less than 12 months after 
the  balance  sheet  date.  Financial  guarantee  contracts  are  classified  as  current  liabilities  except  if  the 
entity has  an  unconditional right to defer the settlement  of  the  liability for at least twelve months after 
the reporting date.  

1.3.7.  Accrued and deferred revenue and charges 

Transactions and events are recognised in the financial statements in the period to which they relate. At 
year-end,  if  an  invoice  is  not  yet  issued  but  the  service  has  been  rendered,  or  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. These aim at ensuring that the financial statements provide a 
faithful representation of the economic and other phenomena they purport to represent. By analogy, if a 
payment has been made in advance for services or goods that have not yet been received, the expense 
will be deferred and recognised in the subsequent accounting period. 

1.4.  STATEMENT OF FINANCIAL PERFORMANCE 

1.4.1.  Revenue 

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

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

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.  For  the  EU  entities,  transfers  mostly  comprise  funds  received  from  the 

26 

 
 
Annual accounts of the European Development Fund 2021 

Commission  (e.g.  balancing  subsidy  to  the  traditional  agencies,  operating  subsidy  for  the  delegation 
agreements). 

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. 

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. 

(a) 

Interest revenue and expense 

Interest  revenue  and  expense  from  financial  assets  and  financial  liabilities  at  amortised  cost  are 
recognised  in  the  statement  of  financial  performance  using  the  effective  interest  method.  This  is  a 
method of calculating  the amortised  cost of  a financial asset or a financial liability and of allocating the 
interest revenue or interest expense over the relevant period. 

(b) 

Revenue from dividends 

Revenue  from  dividends  and  similar  distributions  is  recognised  when  the  right  to  receive  payment  is 
established. 

(c) 

Revenue and expense from financial assets at fair value through surplus or deficit 

This refers to the fair value gains (revenue) and fair value losses (expense) from these financial assets, 
including  those  stemming  from  foreign  exchange  translation.  For  interest-bearing  financial  assets,  this 
also includes interest. 

(d) 

Revenue from financial guarantee contracts 

The  revenue  from  financial  guarantee  contracts  (guarantee  premium)  is  recognised  over  the  time  the 
entity stands ready to compensate the holder of the financial guarantee contract for the credit loss it may 
incur. 

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 the incurring of liabilities that result in decreases in net assets. 
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. 

27 

 
 
Annual accounts of the European Development Fund 2021 

When a request for payment or cost claim is received and meets the recognition criteria, it is recognised 
as  an  expense  for  the  eligible  amount.  At  year-end,  incurred  eligible  expenses  due  to  the  beneficiaries 
but not yet reported are estimated and recorded as accrued expense. 

1.5.  CONTINGENT ASSETS AND LIABILITIES 

1.5.1.  Contingent assets  

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

1.5.2.  Contingent liabilities  

A contingent liability  is either a possible  obligation  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 where it is not probable that an outflow of resources embodying economic 
benefits or service potential will be required to settle the obligation.  

A contingent liability also arises in the rare circumstances where a present obligation exists but cannot be 
measured with sufficient reliability.  

Contingent  liabilities  are  not  recognised  in  the  accounts.  They  are  disclosed unless  the  possibility  of  an 
outflow of resources embodying economic benefits or service potential is remote. 

1.6.  FUND CAPITAL 

The EDF member states provide contributions to the Fund for the implementation of EDF programmes as 
laid down in the Internal Agreement of each EDF. According to the applicable legal basis the capital calls, 
i.e. the requests for funding for a given year N, are decided by a Council Decision in year N-1, with the 
funds to be received clearly assigned to specified future periods.  

The  contributions  meet  the  criteria  of  contribution  from  owners  (EAR  1)  and  are  thus  treated  as  fund 
capital in the EDF financial statements. The fund capital represents the total amount of contributions to 
be received from the EDF members states. As the uncalled fund capital is openly deducted from the total 
fund capital (see Statement of Changes in  Net Assets), only the called fund capital is recognised in the 
Balance Sheet.  

As the agreed contributions are assigned to specified reporting periods, with the EDF’s legal claim against 
the EDF member states arising only in these periods, any amounts received in advance are recognised as 
deferred capital contributions under payables rather than as called capital. 

1.7.  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 the economic result of the 
year is nil. 

28 

 
 
 
Annual accounts of the European Development Fund 2021 

2.  NOTES TO THE BALANCE SHEET 

ASSETS 

2.1.  FINANCIAL ASSETS 

A financial asset is any asset that is: 

(a) Cash;  

(b) An equity instrument of another entity;  

(c)  A  contractual  right:  to  receive  cash  or  another  financial  asset  from  another  entity;  or  to  exchange 
financial assets or financial liabilities with another entity under conditions that are potentially favourable 
to the entity; or 

(d) A contract that will or may be settled in the entity’s own equity instruments. 

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. 

The financial assets of the EDF comprise of financial assets at FVSD and loans and are as follows:   

Financial assets at fair value through surplus or deficit (FVSD)  
Available for sale financial assets 
Loans 
Total 

31.12.2021 
 38 
– 
 1 
  39 

EUR million 
31.12.2020 
– 
 32 
 1 
  33 

The EUR 38 million of financial assets at FVSD relate to equity investments in two main areas: Renewable 
sustainable energy via Climate Investor One, ElectriFI and GEEREF, and promoting inclusive smallholder 
and rural SME finance via the ABC FUND.  

EUR  1  million  relates  entirely  to  a  loan  given  to  ElectriFI  which  is  an  investment  facility  that  finances 
early-stage  and  small-sized  projects  focusing  on  electricity  access  and  generation  from  sustainable 
energy sources in emerging markets. It has a global scope, with a particular focus on sub-Saharan Africa. 

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. 

29 

 
 
 
Annual accounts of the European Development Fund 2021 

Non-current pre-financing 
Current pre-financing 
Total 

Note 

2.2.1 
2.2.2 

Eighth 
EDF 
– 
– 
– 

Ninth 
EDF 
– 
 14 
  14 

10th 
EDF 
 219 
 353 
  572 

11th 
EDF 
 452 
1 085 
 1 537 

EUR million 

31.12.2021  31.12.2020 

 671 
1 453 
 2 123 

 870 
1 355 
 2 225 

2021 marked the first year following the sunset clause of the 11th EDF. This meant that as of 1 January 
2021  no  further  global  commitments  could  be  made.  In  addition,  the  prolonged  COVID  crisis  made 
implementation  increasingly  difficult  for  several  delegations  in  particular  in  Madagascar,  Chad  and 
Gambia. This coupled with political crises in other areas such as Ethiopia, Guinea, Conakry and Mali, led 
to a decrease in the signature of individual commitments and thus to a decrease in pre-financing in the 
11th EDF from EUR 1 583 million in 2020 to EUR 1 537 million in 2021.  

The decrease of pre-financing in the 10th EDF from EUR 633 million in 2020 to EUR 572 million in 2021, 
is a consequence of the normal lifecycle of the EDF. As a result of the phasing out of the 10th EDF many 
contracts  were  completed  and  closed.  Consequently,  the  level  of  pre-financing  payments  made  to 
beneficiaries decreased while the clearing of pre-financing increased.  

In 2020, included under current pre-financing was an amount of EUR 3 million which are now classified as 
exchange receivables relating to financial instruments.  

2.2.1.  Non-current pre-financing by management mode 

31.12.2021 

EUR million 
31.12.2020 

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 

 72 
 8 
 15 
  95 

 230 
 278 
 12 
 40 
 14 
 1 
  575 
  671 

 139 
 8 
 25 
  171 

 266 
 343 
 28 
 49 
 11 
 1 
  698 
  870 

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

EUR million 
Eighth EDF  Ninth EDF  10th EDF  11th EDF  31.12.2021  31.12.2020 
5 097 
(3 742) 
 1 355 

4 717 
(3 632) 
 1 085 

5 711 
(4 258) 
 1 453 

 970 
 (617) 
  353 

 24 
 (10) 
  14 

– 
– 
– 

30 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

2.2.3.  Current pre-financing by management mode 

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 

31.12.2021 

EUR million 
31.12.2020 

 61 
 11 
 159 
  231 

 160 
 642 
 109 
 119 
 190 
 1 
 1 221 
 1 453 

 (40) 
 14 
 206 
  180 

 224 
 572 
 73 
 146 
 155 
 4 
 1 175 
 1 355 

2.2.4.  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. 

Guarantees for pre-financing 

31.12.2021 
 44 

EUR million 
31.12.2020 
 49 

The majority of pre-financing is paid under the indirect management mode. In this case, the beneficiary 
of the guarantee is not the EDF but the contracting authority. Even though the EDF is not the beneficiary, 
those guarantees secure its assets. In 2021, those guarantees amounted to EUR 764 million. 

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 
31.12.2020 

Contributions 
paid in 2021 

Allocation of TF's net 
expenses 2021 

Net contribution 
at 31.12.2021 

 385 
 9 
  394 

 627 
 7 
  634 

 (631) 
 (15) 
  (646) 

 381 
 1 
  382 

EUR million 

Africa 
Bêkou 
Total 

The decrease of contributions from EUR 800 million in 2020 to EUR 634 million in 2021 stems from the 
decrease  in  trust  funds  expenses  due  to  the  ongoing  COVID-19  pandemic  and  deteriorating  safety 
situations in several regions which hampered activities of the trust funds in 2021.  

31 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

2.4.  NON-EXCHANGE RECOVERABLES AND EXCHANGE 

RECEIVABLES 

Exchange  transactions  are  transactions  in  which  the  entity  receives  assets  or  services,  or  has  liabilities 
extinguished,  and  directly  gives  approximately  equal  value  (primarily  in  the  form  of  goods,  services  or 
use  of  assets)  to  the  other  party  in  exchange.  Non-exchange  transactions  are  transactions  in  which  an 
entity  either  receives  value  from  another  entity  without  directly  giving  approximately  equal  value  in 
exchange,  or  gives  value  to  another  entity  without  directly  receiving  approximately  equal  value  in 
exchange.  

Recoverables from non-exchange transactions 
Receivables from exchange transactions 
Total 

Note 
2.4.1 
2.4.2 

31.12.2021 
 26 
 9 
  35 

EUR million 
31.12.2020 
 48 
 92 
  140 

2.4.1.  Recoverables from non-exchange transactions 

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

Eighth 
EDF 
– 
– 
– 
– 
– 

Ninth 
EDF 
– 
 4 
 7 
 1 
 (9) 

10th 
EDF 
– 
 47 
 17 
 4 
 (51) 

– 

– 

– 

– 

  2 

  16 

11th 
EDF 
– 
 5 
 2 
 1 
 (5) 

 5 

  8 

EUR million 

31.12.2021  31.12.2020 

– 
 56 
 25 
 6 
 (66) 

 5 

  26 

– 
 61 
 27 
 4 
 (49) 

 4 

  48 

2.4.2.  Receivables from exchange transactions 

Accrued income 
Inter-EDF accounts 
Other 
Total 

Eighth 
EDF 
- 
 181 
– 

Ninth 
EDF 
- 
 (316) 
– 
  181    (316) 

10th 
EDF 
 (1) 
1 279 
– 

11th 
EDF 
- 
(1 144) 
 9 
 1 278   (1 136) 

EUR million 

31.12.2021  31.12.2020 

- 
– 
 9 
  9 

 88 
- 
 4 
  92 

The decrease in accrued income in 2021, is mainly due to the termination of the  debt relief project with 
the  World  Bank  for  which  an  amount  of  EUR  62.6  million  was  still  outstanding  at  the  end  of  2020  but 
which was regularised in 2021. In addition, accrued interest in 2020 also included EUR 18 million related 
to the Africa EU Infrastructure project. Upon further analysis, it resulted that the interest was not due to 
the EDF and therefore this interest was not collected in 2021 (see note 3.2).   

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. 

The  heading  “other”  comprises  two  financial  instrument  receivables;  a  receivable of  EUR  4  million  from 
the  Global  Energy  Efficiency  and  Renewable  Energy  Fund  (GEEREF)  and  another  receivable  of  EUR  4 
million from Climate Investor One.  

32 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

2.5.  CASH AND CASH EQUIVALENTS3 

Cash and cash equivalents are financial instruments and include cash at hand, deposits held at call or at 
short  notice  with  banks  (such  as  current  accounts  and  savings  accounts),  and  other  short-term  highly 
liquid investments with original maturities of three months or less. 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

11th 
EDF 

31.12.2021  31.12.2020 

EUR million 

Special accounts 
Central banks 

Current accounts 
Commercial banks 
Cash belonging to financial instruments 

Total 

– 
– 

– 
– 
– 
– 

– 
– 

– 
– 
– 
– 

– 
– 

– 
– 
– 
– 

 795 
  795 

 165 
 34 
  199 
  994 

 795 
  795 

 165 
 34 
  199 
  994 

 693 
  693 

 8 
 27 
  35 
  728 

The increase in cash and cash equivalents by EUR 266 million can be explained mainly by the decrease in 
payments  due  to  the  additional  challenges  brought  about  by  the  prolonged  COVID-19  pandemic  and 
various political crises. This is in line with the decrease in  expenses (see note 3.3) and the decrease in 
pre-financing  (see  note  2.2).  EDF  net  payments  amounted  to  EUR  3  323  million  in  2021  compared  to 
record high payments of EUR 4 605 million in 2020.  

As  in  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. 

Financial Provisions 

These provisions represent the estimated losses that will be incurred in relation to the guarantees given 
under  different  financial  instruments,  where  entrusted  entities  are  empowered  to  issue  guarantees  in 
their own name but on behalf of, and at the risk of, the EDF. The financial risk of the EDF linked to the 
guarantees  is  capped  and  financial  assets  are  gradually  provisioned  to  cover  for  the  future  guarantee 
calls. 

Financial guarantee liability 

Eighth 
EDF 
– 

Ninth 
EDF 
– 

10th 
EDF 
– 

11th 
EDF 
 1 

31.12.2021 

31.12.2020 

 1 

– 

EUR million 

The amount of EUR  1  million represent the  estimated loss  in relation to the guarantee given  under the 
Euritz financial instrument of EUR 8 million (see note 3.2.1). 

2.6.2.  Co-financing payables 

Co-financing  payables  represent  funds  received  by  the  EDF  in  respect  of  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.  

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. 

33 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Annual accounts of the European Development Fund 2021 

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. Current amounts are 
shown under note 2.7.2. 

Eighth 
EDF 
– 
– 
– 

Ninth 
EDF 
– 
– 
– 

10th 
EDF 
- 
 (3) 
  (3) 

11th 
EDF 
 6 
 38 
  44 

EUR million 
31.12.2021  31.12.2020 
 2 
 42 
  44 

 6 
 35 
  41 

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

2.7.  PAYABLES 

Payables  are  liabilities  to  pay  for  goods  or  services  that  have  been  received  or  supplied  and  -  unlike 
accrued charges - have already been invoiced or formally agreed with the supplier. Payables can relate to 
both exchange transactions (such as the purchase of goods and services) and non-exchange transactions 
(e.g. cost claims from beneficiaries of grants, pre-financing or other EU funding). 

Current payables 
Sundry payables 
Total 

Note 

2.7.1 
2.7.2 

Eighth 
EDF 
– 
– 
– 

Ninth 
EDF 
- 
– 
– 

10th 
EDF 
 33 
 (5) 
  27 

11th 
EDF 
 230 
 243 
  473 

EUR million 

31.12.2021  31.12.2020 

 263 
 238 
  501 

 345 
 270 
  615 

2.7.1. 

 Current payables 

Suppliers 
Member States 
Third states 
Public bodies 
Institutions and Agencies 
Other current payables 
Total 

Eighth 
EDF 
– 
– 
– 
– 
– 
– 
– 

Ninth 
EDF 
- 
– 
– 
- 
- 
- 
– 

10th 
EDF 
 25 
– 
– 
 (11) 
– 
 18 
 33 

EUR million 
31.12.2021  31.12.2020 
 141 
– 
 189 
 100 
– 
 (85) 
 345 

 72 
 3 
 158 
 51 
 4 
 (25) 
 263 

11th 
EDF 
 47 
3 
 158 
 61 
 4 
 (44) 
 230 

Payables  largely  comprise  cost  statements  received  by  the  EDF  in  respect  to  grants  provided  to  the 
beneficiaries.  They  are  recorded  at  the  moment  when  the  cost  statement  is  received  and  for  the  full 
amount  of  the  cost  statement.  Following  an  eligibility  check  only  the  eligible  amounts  are  paid  to  the 
beneficiaries.  At  the  year-end  the  outstanding  cost  claims  are  analysed  and  the  estimated  eligible 
amounts  related  to  those  cost  claims  are  recognised  in  the  statement  of  financial  performance.  The 
estimated non-eligible amounts are shown under other current payables. 

Included  under  payables  to  Third  States  is  an  amount  of  EUR  60  million  of  budget  support  to  Ethiopia, 
which has been suspended since November 2020 due to the situation in the country. 

The decrease in payables in particular to suppliers and third states is due to a decrease in invoices that 
have not yet been validated and paid before year-end.  

34 

 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

2.7.2.  Sundry payables 

Co-financing payables 
Deferred capital contributions 
Other sundry payables 
Total 

Note 

2.6.2 
2.7.2.1 

Eighth 
EDF 
– 
– 
– 
– 

Ninth 
EDF 
– 
– 
– 
– 

10th 
EDF 
 (3) 
– 
 (2) 
 (5) 

11th 
EDF 
 38 
 199 
 6 
 243 

EUR million 

31.12.2021  31.12.2020 

 35 
 199 
 4 
 238 

 42 
 223 
 5 
 270 

2.7.2.1.  Deferred capital contributions 

An amount of EUR 43 million of deferred capital contributions relate to a refund to Member States from 
decommitted  or  unused  funds  from  projects  under  the  Eighth  and  Ninth  EDF  (see  note  2.10.1).  The 
Member states agreed for the refund to be offset with the contributions from the 11th EDF during the first 
call for contributions in 2022. 

In  addition  to  the  refund,  an  amount  of  EUR  156  million  relate  to  the  1st  instalment  of  2022  paid  in 
advance  by  the  United  Kingdom.  According  to  Article  152  of  the  Withdrawal  Agreement,  the  United 
Kingdom remains party to the EDF until the closure of the 11th EDF and all previous unclosed EDFs, and 
assumes the same obligations as the Member States in this respect (see note 2.10.1). 

2.8.  ACCRUED CHARGES  

Accruals  are  liabilities  to  pay  for  goods  or  services  that  have  been  received  or  supplied  but  -  unlike 
payables - have not yet been invoiced or formally agreed with the supplier. The calculation of accruals is 
based on the open amount of budgetary commitments at year-end. The portion of the estimated accrued 
charges relating to pre-financing paid has been recorded as a reduction of the pre-financing amounts. 

Transactions and events are recognised in the financial statements in the period to which they relate. At 
year-end, if an invoice is issued but the services have not yet been rendered or the goods have not yet 
been delivered, the revenue will be deferred and recognised in the subsequent accounting period. 

Accrued charges 
Other accruals and deferrals 
Total 

Eighth 
EDF 
– 
– 
– 

Ninth 
EDF 
 6 
- 
  6 

10th 
EDF 
 110 
– 
  110 

11th 
EDF 
 891 
 1 
  892 

EUR million 

31.12.2021  31.12.2020 

1 007 
 1 
 1 008 

1 526 
 1 
 1 527 

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 that relates to pre-financing paid has 
been recorded as a reduction of the pre-financing amounts (see note 2.2 above). 

The decrease in accrued charges is mainly driven by the decrease of accrued charges under the 11th EDF 
(2020: EUR 1 244 million) and 10th EDF (2019: EUR 217 million). This is in line with the lifecycle of the 
EDF  and  the  underlying  number  of  open  contracts:  The  11th  EDF  implementation  peaked  in  2020  in 
response to the upcoming sunset clause on 31 December 2020. In addition, due to the challenges faced 
due to the ongoing COVID-19 pandemic as well as political crises in several areas, implementation of EDF 
activities was difficult which led to a decrease in the number of individual contracts signed  in 2021. As a 
result, at the end of 2021 there were significantly fewer open contracts for which the charges had to be 
estimated and accrued than in 2020 (see also note 2.2).  

35 

 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

NET ASSETS 

2.9.  FAIR VALUE RESERVE 

Fair value reserve 

31.12.2021 
– 

EUR million 
31.12.2020 
 5 

As  a  result  of  the  revision  of  EAR  11,  the  fair  value  reserve  has  been  transferred  to  the  accumulated 
surplus/deficit (see note 2.1). 

2.10.  FUND CAPITAL 

The EDF Member States provide contributions to the Fund for the implementation of EDF programmes as 
laid down in the Internal Agreement of each EDF. According to the applicable legal basis the capital calls, 
i.e. the requests for funding for a given year N, are decided by a Council Decision in year N-1, with the 
funds to be received clearly assigned to specified future periods.  

The  contributions  meet  the  criteria  of  contribution  from  owners  (EAR  1)  and  are  thus  treated  as  fund 
capital in the EDF financial  statements. The fund capital represents the total amount of contributions to 
be received from the EDF members states. As the uncalled fund capital is deducted from the total fund 
capital (see Statement of Changes in Net Assets), only the called fund capital is recognised in the Balance 
Sheet. 

As the agreed contributions are assigned to specified reporting periods, with the EDFꞌs legal claim against 
the EDF member states arising only in these periods, any amounts received in advance are recognised as 
deferred capital contributions under Payables rather than as called capital. 

2.10.1.  Called fund capital – active EDFs 

Fund capital 
Uncalled fund capital 
Called fund capital 31.12.2020 
Fund capital 
Uncalled fund capital 
Called fund capital 31.12.2021 

Eighth EDF  Ninth EDF  10th EDF  11th EDF 
29 367 
(14 040) 
 15 327 
29 367 
(10 340) 
 19 027 

20 960 
- 
 20 960 
20 960 
- 
 20 960 

12 164 
– 
 12 164 
12 164 
– 
 12 164 

10 550 
 (15) 
 10 535 
10 507 
 (15) 
 10 492 

EUR million 
Total 
73 041 
(14 055) 
 58 986 
72 998 
(10 355) 
 62 643 

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.). 

By  means  of  Council  Decision  (EU)  2021/1941  the  Member  States'  contributions  set  out  in  the  Internal 
Agreements of the Eighth and Ninth EDF were reduced accordingly for an amount of EUR 43 million from 
funds decommitted under the Eighth and the Ninth EDF. As the funds decommitted under the Eighth EDF 
have  been  already  transferred  to  the  other  EDFs,  EUR  43  million  was  deducted  from  the  capital  of  the 
Ninth EDF. Refunds arising from this reduction have been compensated against additional call for funds 
under the 11th EDF. In fact, the refund will be used against the first instalment of 2022 which explains 
the EUR 43 million of deferred capital (see note 2.7.2.1).  

While the United Kingdom remains party to the EDF until the closure of all programs, in accordance with 
Article  153  of  the  Withdrawal  Agreement,  its  share  of  uncommitted  and  decommitted  funds  from  the 
Eighth, Ninth and 10th EDF cannot be reused. 

36 

 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

2.10.2.  Called and uncalled fund capital by Member States and the UK 

Contributions 11th EDF 

% 

Uncalled capital 
31.12.2020 

Capital called 
in 2021 

EUR million 
Uncalled capital 
31.12.2021 

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 

 337 
 456 
 31 
 32 
 16 
 112 
 278 
 12 
 212 
2 501 
2 889 
 212 
 86 
 132 
1 759 
 16 
 25 
 36 
 5 
 671 
 282 
 168 
 101 
 53 
 32 
1 114 
 413 
2 061 
14 040 

 (89) 
 (120) 
 (8) 
 (8) 
 (4) 
 (30) 
 (73) 
 (3) 
 (56) 
 (659) 
 (761) 
 (56) 
 (23) 
 (35) 
 (464) 
 (4) 
 (7) 
 (9) 
 (1) 
 (177) 
 (74) 
 (44) 
 (27) 
 (14) 
 (8) 
 (294) 
 (109) 
 (543) 
(3 700) 

 248 
 336 
 23 
 23 
 12 
 83 
 205 
 9 
 156 
1 842 
2 128 
 156 
 64 
 97 
1 296 
 12 
 19 
 26 
 4 
 494 
 208 
 124 
 74 
 39 
 23 
 820 
 304 
1 518 
10 340 

Since  the  capital  of  the  Eighth,  Ninth  and  10th  EDF  has  been  called  up  and  received  in  its  entirety  in 
previous  years,  in  2021,  an  amount  of  EUR  3  700  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 
– 

31.12.2021  31.12.2020 

2 252 

2 252 

EUR million 

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

37 

 
 
 
Annual accounts of the European Development Fund 2021 

2.10.4.  Called fund capital transfers between active EDFs 

Balance at 31.12.2019 
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 31.12.2020 
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 31.12.2021 

Eighth 
EDF 
 (2 510) 

Ninth 
EDF 
 2 109 

10th 
EDF 
  265 

11th 
EDF 
  136 

 (2) 

 (69) 

 71 

– 

– 

–   (147) 

 147 

 (2 512) 

 2 041 

  188 

  283 

– 

– 

 (23) 

 23 

– 

–   (110) 

 110 

 (2 512) 

 2 018 

  101 

  394 

EUR million 

Total 

– 

– 

– 

– 

– 

– 

– 

This heading includes the resources transferred between the active EDFs. 

Since the entry into force  of the Cotonou Agreement, all the unspent funds in  previous active EDFs are 
transferred to the most recently opened EDF after decommitment. The resources transferred from other 
EDFs  increase  the  appropriations  of  the  receiving  fund  and  reduce  the  appropriations  of  the  fund  of 
origin. Funds transferred to the performance reserve of the 10th and 11th EDFs can be committed only 
under specific conditions set out in the Internal Agreements. 

38 

 
 
 
Annual accounts of the European Development Fund 2021 

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 
2020 
 92 
 43 
 135 

2021 
 27 
 48 
 75 

3.1.  REVENUE FROM NON-EXCHANGE TRANSACTIONS 

Revenue from non-exchange transactions relates to transactions where the transferor provides resources 
to  the  recipient  entity  without  the  recipient  entity  providing  approximately  equal  value  directly  in 
exchange.    The  heading  mainly  includes  amounts  received  from  the  Commission  during  the  year  and 
recoveries of operational expenses. 

Recovery of expenses 
Co-financing revenue 
Total 

Note 

3.1.1 

Eighth 
EDF 
- 
– 
– 

Ninth 
EDF 
 1 
– 
  1 

10th 
EDF 
- 
- 
– 

11th 
EDF 
 7 
 19 
  26 

EUR million 

2021 

2020 

 8 
 19 
  27 

 39 
 53 
  92 

The overall revenue from non-exchange transactions decreased by EUR 65 million returning to a normal 
level following a significant increase in 2020 (2019: EUR 28 million). Year 2020, saw augmented activities 
across the EDF in response to the upcoming sunset clause on 31 December 2020 and led to an increase 
in the co-financing revenue.  

The decrease of the recovery  from  expenses  can be  largely explained by the fewer number of recovery 
orders issued in 2021 compared to 2020.  

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

Total 

3.1.1.  Co-financing revenue 

2021 

EUR million 
2020 

 1 
 7 
 8 

 27 
 (13) 
 3 
 2 
 19 
  27 

 2 
 11 
 13 

 42 
 13 
 17 
 7 
 79 
  92 

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  2.6.2  &  2.7.2)  until  the  conditions  attached  to  the 

39 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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. 

3.2.  REVENUE FROM EXCHANGE TRANSACTIONS 

The revenue from exchange transactions and events relates to following types of transactions: rendering 
of  services;  sale  of  goods;  and  the  use  by  others  of  entity  assets  yielding  interest,  royalties  and 
dividends. 

Financial revenue 
Other revenue 
Total 

  Eighth EDF  Ninth EDF 
- 
- 
 5 
- 
  5 
– 

10th EDF 
 (22) 
 14 
  (8) 

11th EDF 
 (4) 
 55 
  51 

EUR million 
2020 
 6 
 37 
  43 

2021 
 (26) 
 74 
  48 

The  financial  revenue  is  negative  because  last  year’s  estimated  revenue  were  higher  than  the  current 
year  estimated  amounts.  This  decrease  of  the  estimates  is  a  combined  effect.  Firstly,  upon  further 
analysis  it  was  concluded  that  interest  from  the  Africa  EU  Infrastructure  project  (EUR  18  million), 
included in the accrued financial revenue last year, forms part of the contributions to the trust fund and is 
not due to the EDF. Secondly, the accrued interest on late payments of recovery orders has decreased by 
EUR 8 million compared to last year.  

Other revenue relates mainly to foreign exchange gains. The corresponding foreign exchange losses are 
recorded under other expenses (see note 3.6).  

EXPENSES 

Included under this heading are expenses incurred in relation to operational activities. 

3.3.  AID INSTRUMENTS 

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

Eighth EDF  Ninth EDF  10th EDF  11th EDF 
1 268 
– 
 (2) 
 724 
 (6) 
 (1) 
 15 
 646 
 2 644 

 (19) 
– 
– 
 228 
 7 
– 
 (1) 
– 
  214 

 (4) 
 7 
 (2) 
- 
 6 
- 
– 
– 
  7 

– 
– 
– 
– 
– 
– 
– 
– 
– 

2021 
1 244 
 7 
 (5) 
 951 
 6 
 (1) 
 14 
 646 
 2 864 

EUR million 
2020 
2 889 
 (8) 
 3 
1 019 
 19 
- 
 13 
 673 
 4 607 

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

In  2021,  operational  expenditure  decreased  significantly  by  EUR  1  743  million  mainly  driven  by  the 
decrease  in  expenses  under  the  11th  EDF  (EUR  4  179  million  in  2020  to  EUR  2  644  million  in  2021) 
coupled with the decrease under the 10th EDF (EUR 462 million in 2020 to EUR 214 million in 2021). This 
decrease  is  a  combined  result  of  the  COVID-19  pandemic  and  political  crises  in  several  areas  which 
slowed  down  and  hampered  implementation  during  the  year  in  particular  in  the  delegations  (see  note 
2.4).  In  addition,  expenses  in  2020  were  exceptionally  high  for  the  11th  EDF:  the  upcoming  sunset 
clause on 31 December 2021, led to a heightened number of contracts and payments made.  

The changes in expenses under the 10th EDF are in line with the lifecycle of the EDF and is also related to 
the evolution of the number of open contracts. Many contracts were completed and closed under the 10th 

40 

 
 
 
Annual accounts of the European Development Fund 2021 

and  previous  EDF’s  in  2021,  which  resulted  in  less  expenses  incurred  under  those  EDF’s.  In  fact,  the 
number of open contracts for the 10th EDF at year-end were 33% lower than in 2020. 

Under the 11th EDF, the decrease in expenses comes mainly from the decrease in three areas;  
(1) Programmable aid (EUR 2 889 million in 2020 vs EUR 1 244 million in 2021);  
(2) Intra ACP projects (EUR 1 019 million in 2020 vs EUR 951 million in 2021); and  
(3) The contributions to the Trust funds (EUR 673 million in 2020 vs EUR 646 million in 2021).  

3.4.  CO-FINANCING EXPENSES 

Co-financing 

  Eighth EDF  Ninth EDF 
– 
– 

10th EDF 
- 

11th EDF 
 19 

2021 
 19 

EUR million 
2020 
 53 

Included  under  this  heading  are  the  expenses  incurred  on  co-financing  projects  in  2021.  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).   

As indicated above, 2020 marked an exceptional year due to the sunset clause being reached which led 
to  a  heightened  level  of  implementation.  The  amount  of  co-financing  in  2021  corresponds  more  to  the 
usual level of co-financing (2019: EUR 14 million) (see note 2.3). 

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 and in the co-financing 
revenue (note 3.1.1).    

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 

2021 

 168 
 4 
 (515) 
 658 
 315 

 113 
1 053 
 204 
 212 
 983 
 3 
2 568 
2 883 

EUR million 
2020 

 168 
 14 
 19 
1 969 
2 170 

 (67) 
1 268 
 243 
 248 
 795 
 2 
2 490 
4 660 

41 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

3.5.  FINANCE COSTS 

Net impairment losses on loans and receivables 
Loss on financial assets or liabilities at FVSD 

Write-down of recoverables 
Total 

Eighth 
EDF 
– 
– 
– 
- 

Ninth 
EDF 
– 
– 
 (7) 
  (7) 

10th 
EDF 
- 
- 
 23 
  23 

11th 
EDF 
 1 
 1 
 1 
  3 

EUR million 
2021  2020 
– 
– 
 21 
  21 

 1 
 1 
 17 
  20 

At 31 December 2021, the net unrealised impairment loss on loans was EUR 1 million.  

The  EUR  1  million  of  financial  expenses  for  financial  assets  at  FVSD  relate  mainly  to  exchange 
differences, interest and fair value changes in particular for the ABC FUND.  

The negative amount under the 9th EDF for the heading write-down of recoverables is mainly due to the 
reversal of last year’s closure bookings. In 2020 the estimated expenses on irrecoverable amounts arising 
from aging recovery orders (over 2 years), bankruptcies and waivers were higher than that in 2021. 

3.6.  OTHER EXPENSES 

Included  under  this  heading  are  expenses  of  administrative  nature  such  as  external  non  IT  services, 
operating leasing expenses, communications and publications, training costs etc. 

Administrative and IT expenses 
Realised losses on trade debtors 
Exchange losses 
Total 

  Eighth EDF  Ninth EDF  10th EDF  11th EDF 
 94 
- 
 0 
 6 
 25 
 5 
  119 
  11 

 4 
 0 
 11 
  16 

– 
- 
– 
– 

EUR million 
2021  2020 
 120 
 4 
 72 
  197 

 98 
 7 
 41 
  145 

The  heading  Administrative  and  IT  expenses  includes  amounts  that  are  based  on  the  EDF  internal 
agreement  with  the  Commission  to  cover  the  administrative  expenditure  incurred  by  both  the 
Headquarters and  the Delegations in respect to managing the EDF  programmes.  The so  called “support 
expenditure” relates mainly to expenses for preparation, follow-up, monitoring, and evaluation of projects 
as well as expenses for computer networks, technical assistance, financial management and forecasting 
etc. 

The decrease under this heading is a combined effect of the decrease in  administrative and IT expenses 
(2020:  EUR  120  million)  and  the  decrease  of  expenses  relating  to  exchange  losses  (2020:  EUR  72 
million).  

The  significant  decrease  of  foreign  exchange  losses  is  mostly  due  to  the  decrease  in  unrealised  losses 
from the revaluation of balances held in currencies at 31 December 2021. 

42 

 
 
 
 
Annual accounts of the European Development Fund 2021 

4. 

CONTINGENT  ASSETS  &  LIABILITIES  AND 
OTHER SIGNIFICANT DISCLOSURES 

4.1.  CONTINGENT ASSETS 

Contingent  assets  are  possible  assets  that  arise  from  past  events,  and  whose  existence  will  only  be 
confirmed  by  the  occurrence  or  non-occurrence  of  one  or  more  uncertain  future  events  that  are  not 
wholly within the control of the entity.  

Pre-financing guarantees 
Performance guarantees 
Retention guarantees 
Total 

  Eighth 
EDF 
– 
– 
– 
– 

Ninth 
EDF 
– 
 7 
 5 
  13 

10th 
EDF 
 3 
 3 
 3 
  6 

11th 
EDF 
- 
- 
- 
– 

31.12.2021 

EUR million 
31.12.2020 

 44 
 11 
 9 
  20 

 49 
 12 
 9 
  21 

Pre-financing guarantees  are  requested  in certain  cases  from  beneficiaries that are  not Member States, 
when making advance payments. 

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 (see note 2.2.4).  

4.2.  CONTINGENT LIABILITIES 

Contingent liabilities are either possible obligations that arise from past events and whose existence will 
only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly 
within  the  control  of  the  entity,  or  present  obligations  arising  from  past  events  where  the  outflow  of 
resources is not probable or the amount cannot be measured reliably. 

4.2.1.  Guarantees given 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

11th 
EDF 

31.12.2021 

31.12.2020 

EUR million 

Guarantees given 

– 

– 

– 

 (7) 

 (7) 

 (3) 

The  above  table  shows  the  extent  of  the  exposure  of  the  EDF  to  possible  future  payments  linked  to 
guarantees  given  to  the  EIB  group  or  other  financial  institutions.  The  amounts  are  presented  net  of 
financial provisions or financial liabilities recognised for those programmes.  

The amount of EUR 7 million relates entirely to a guarantee under the EURITZ financial instrument.  

43 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

4.3.  OTHER SIGNIFICANT DISCLOSURES 

4.3.1.  Outstanding commitments not yet expensed 

The  amount  disclosed  below  is  the  budgetary  RAL  ('Reste  à  Liquider')  less  related  amounts  that  have 
been included as expenses  in the 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 

31.12.2021  31.12.2020 

– 

 21 

 408 

5 926 

6 355 

7 224 

EUR million 

The  decrease  in  the  RAL  is  largely  driven  by  the  decrease  in  budgetary  RAL  which  totalled  EUR  7  993 
million  (2020:  EUR  9  286  million).  This  decrease  is  mostly  caused  by  the  fewer  number  of  individual 
commitments signed during the year as a result of new challenges faced which hampered implementation 
in particular in the delegations (see note 2.2).  

44 

 
 
 
Annual accounts of the European Development Fund 2021 

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. 

45 

 
 
Annual accounts of the European Development Fund 2021 

5.2.  CURRENCY RISK 

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

Financial assets 
Available for Sale Financial Assets 

Financial assets at FVSD* 
Receivables** 
Cash and cash equivalents 

Financial liabilities 
Payables*** 

Total 

USD 

– 
 8 
– 
 3 
  11 

– 
– 
  11 

31.12.2021 
EUR 

DKK 

Other 

Total 

USD 

31.12.2020 
EUR 

DKK 

Other 

Total 

EUR million 

– 
– 
– 
– 
– 

– 
– 
– 

– 
 30 
 8 
 991 
 1 029 

– 
– 
 1 029 

– 
– 
– 
– 
– 

– 
– 
– 

– 
 39 
 8 
 994 
 1 040 

– 
– 
 1 040 

 2 
– 
 65 
 2 
  69 

 31 
– 
 69 
 726 
  826 

– 
– 
– 

– 
– 
 6 
– 
  6 

 33 
– 
 140 
 728 
  901 

 (16) 
  (16) 
  53 

 (6) 
  (6) 
  (6) 

 (605) 
  (605) 
  221 

 10 
  10 
  16 

 (617) 
  (617) 
  284 

* As of 2021, reclassification of financial assets (in the scope of updated EAR11) 

** As of 2021, receivables exclude deferred charges and accrued income (no currency risk) and recoverables are not displayed (not in the scope of updated EAR11) 

*** As of 2021, payables are no longer disclosed as they are not exposing the EDF to significant currency risk (as vast majority is in EUR) 

46 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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) 

Maximum credit risk exposure: 

For financial assets, the reported amounts are net carrying amounts and represent the EDFs' exposure to 
credit risk at the end of the reporting period. 

Financial assets 
Loans  
Cash and cash equivalents 
Exchange receivables* 
Guarantees given  
Financial guarantee contracts 
Total at 31.12.2021 

* Excluding deferred charges 

Financial Instrument Loans: credit quality 

EUR million 
31.12.2021 

 1 
 994 
 8 

 8 
1 011 

EUR million 

Credit rating 
Premium and high grade 
Upper medium grade 
Lower medium grade 
Non-investment grade and default 
grade 
Gross carrying amount 
Minus loss allowance 
Net carrying amount  

31.12.2021 

Stage 1  

Stage 2  Stage 3 

POCI 

Total  

– 
– 
– 
– 
– 
– 
– 

– 
– 
– 
3 
  3 
2 
1 

– 
– 
– 
– 
– 
– 
– 

– 
– 
– 
  3 
 3 
 2 
 1 

– 
– 
– 
– 
– 
– 
– 

47 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

Cash and cash equivalents: credit quality 

Credit rating 
Premium and high grade 
Upper medium grade 
Lower medium grade 
Non-investment grade and default grade 
Gross carrying amount 
Minus loss allowance 
Net carrying amount  

Receivables: credit quality  

EUR million 
31.12.2021 

  751 
  241 
  2 
– 
 994 
- 
 994 

EUR million 

Gross carrying amount 

Minus loss allowance 

Net carrying amount  

31.12.2021 

Past due  

Not due 

 0-30 days 

 8 

– 

 8 

– 

– 

– 

Past 
due  
31-90 
days 
– 

Past 
due  
91 days 
- 1 year 
– 

– 

– 

– 

– 

Past 
due  
> 1 
year 
– 

– 

– 

Total 

 8 

– 

 8 

Based on the analysis of the exchange receivables and for the purposes of the transition to the updated 
EAR 11, there is no impairment adjustment to book on 01.01.2021 for the receivables recognized in the 
EDF annual accounts of 2021.  

Financial assets at FVSD: credit quality  

In 2021 the financial assets at FVSD included in these financial statements relate to equity investments 
that are not subject to credit risk (see note 2.1).  

Credit risk disclosures published in the 2020 annual accounts 

For information, the disclosures made for credit risk in the 2020 annual accounts were as follows: 

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 31.12.2020 

 140 

  140 

 124 

  124 

 7 

  7 

 9 

  9 

– 

– 

48 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

Financial assets by risk category: 

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 

5.5.  LIQUIDITY RISK 

31.12.2020 

Receivables 

Cash 

Total 

EUR million 

 9 
– 
– 
– 
  9 

 131 
– 
  131 
  140 

 372 
 211 
 145 
– 
  728 

– 
– 
– 
  728 

 381 
 211 
 145 
– 
  737 

 131 
– 
  131 
  868 

Maturity analysis of financial liabilities by remaining contractual maturity 

The  finance  liabilities  and  payables  under  this  heading  are  disclosed  by  the  carrying  amounts  from  the 
Balance Sheet. 

Financial liabilities at 
31.12.2021 
Financial liabilities at 
31.12.2020 

< 1 year 
 501 
 615 

1-5 years  > 5 years 
– 
– 

 6 

 2 

EUR million 
Total 
 508 
 617 

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. 

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". 

49 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

7. 

EVENTS AFTER THE BALANCE SHEET DATE 

Ukraine 

In accordance with EU accounting rule 19, Events after Reporting Date, the war in Ukraine, that began in 
February  2022  is  a  non-adjusting  event,  thus  not  requiring  any  adjustments  to  the  figures  reported  in 
these financial statements at 31 December 2021. For subsequent reporting periods, the war may affect 
the  recognition  and  measurement  of  some  assets  and  liabilities  on  the  balance  sheet  and  also  of  some 
revenue  and  expenses  recognised  in  the  statement  of  financial  performance.  Based  on  the  facts  and 
circumstances  at  the  time  of  preparation  of  these  financial  statements,  in  particular  the  evolving 
situation, the financial effect of the war in Ukraine on the EDF cannot be reliably estimated. 

At the date of transmission of these accounts, no other 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. 

50 

 
 
Annual accounts of the European Development Fund 2021 

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 reconcilable. 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 
Revenue decreasing consumption 
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) 
BUDGET RESULT OF THE YEAR  

8.1.  RECONCILING ITEMS - REVENUE 

2021 
 (2 974) 

EUR million 
2020 
 (4 744) 

– 
 (6) 
 20 
 13 
 (69) 
– 

 (2) 
 (23) 
 13 
 61 
 (33) 
– 

111 
 (741) 
 (295) 
539 
 (3 401) 

 119 
 (817) 
 (281) 
1 102 
 (4 604) 

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 
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. 

51 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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. 

52 

 
 
Annual accounts of the European Development Fund 2021 

FINANCIAL STATEMENTS OF THE EU 
TRUST FUNDS CONSOLIDATED IN EDF 

53 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

FINANCIAL STATEMENTS OF THE BÊKOU 
EU TRUST FUND 2021 

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. 

54 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

BACKGROUND INFORMATION ON THE BÊKOU EU TRUST 
FUND 

General background on Union Trust Funds 

Establishment 

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. 

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. 

Mission 

The EUTF Bêkou, was established, with the aim of  promoting the stabilisation and reconstruction of the 
Central  African  Republic  (CAR).  Its  main  objective,  as  set  out  in  the  Constitutive  Agreement,  is  “to 
provide consistent, targeted aid for the resilience of vulnerable groups and support for all aspects of the 
Central  African  Republic's  exit  from  the  crisis  and  reconstruction,  to  coordinate  actions  over  the  short, 
medium and long term and to help neighbouring countries cope with the consequences of the crisis”. 

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 

55 

 
                                                 
Annual accounts of the European Development Fund 2021 

Main operational activities  

The Union trust fund pools together resources from different donors to finance programmes on the basis 
of agreed objectives.  Since  its creation in  July  2014, the EUTF  Bêkou  has adopted 22 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. 

Governance 

The  management  of  the  EUTF  Bêkou  is  ensured  by  the  European  Commission,  which  also  acts  as  the 
secretariat of its two governing bodies – the Trust Fund Board and the Operational Board. The Trust Fund 
Board and the Operational Committee of the EUTF Bêkou are composed of representatives of the donors, 
of  the  Commission,  of  the  European  Parliament,  a  representative  of  the  Central  African  Republic’s 
authorities and observers. The rules for the composition of the board and its internal rules are laid down 
in the constitutive agreement of the Union trust fund. 

The  main  task  of  the  Board  is  to  establish  and  review  the  overall  strategy  of  the  trust  fund.  The 
Operational Board is responsible for the selection of the actions financed by the Fund and supervises their 
implementation. It also approves the annual accounts and the annual reports on the activities financed by 
the trust fund. 

Sources of financing 

The EUTF Bêkou is financed through contributions from donors.  

Annual accounts 

Basis for preparation 

The  legal  framework  and  the  deadlines  for  the  preparation  of  the  annual  accounts  are  set  by  the 
“Agreement establishing the European Union trust fund for the Central African Republic, “The Bêkou EU 
Trust Fund”, and  its internal  rules”  (“Constitutive Agreement”). As per  this Constitutive Agreement, the 
annual  accounts  are  prepared  in  accordance  with  the  rules  adopted  by  the  Accounting  Officer  of  the 
Commission  (EU  Accounting  Rules,  EAR),  which  are  based  on  internationally  accepted  accounting 
standards for the public sector (IPSAS).  

Accounting Officer 

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. 

Composition of the annual accounts 

The  annual  accounts  cover  the  period  from  1  January  to  31  December  and  comprise  the  financial 
statements and the reports on the implementation of the budget. While the financial statements and the 
complementary  notes  are  prepared  on  an  accrual  accounting  basis,  the  budget  implementation  reports 
are primarily based on movements of cash. 

Process from provisional accounts to discharge 

The annual accounts are subject to independent external audit. The provisional annual accounts prepared 
by  the  Accounting  Officer  are  transmitted,  by  the  15th  of  February  of  the  following  year,  to  the 
Operational Committee who then transmits them to the audit company selected by the entity following a 
tender  procedure.  Following  the  audit,  the  Accounting  Officer  prepares  the  final  annual  accounts  and 
submits them 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 
Development Fund. 

56 

 
Annual accounts of the European Development Fund 2021 

Operational highlights 

Achievements of the year 

The EU launched its first ever Trust Fund (EUTF), named Bêkou (meaning  hope in the Sango language), 
in July 2014 to assist the Central African Republic (CAR) and its population in the aftermath of the 2013 
crisis. The Bêkou EUTF aims to ensure access to basic services (mainly health and water and sanitation), 
support  rural  development  and  economic  recovery,  and  promote  reconciliation.  Since  its  creation,  the 
Bêkou EUTF has financed 22 programmes and has reached more than half of the country’s population). 

Despite  the  signature  of  a  peace  agreement  in  February  2019,  in  2021,  insecurity  soared  and 
humanitarian  needs  increased,  prompting  the  UN  Office  for  the  Coordination  of  Humanitarian  Affairs 
(OCHA)  to  speak  of  “a  humanitarian  emergency  not  seen  since  2015”.  It  is  in  this  complex  and  fragile 
context  that  the  Bêkou  EUTF  deployed  its  comparative  advantages  of  flexibility  and  adaptability  to 
changing circumstances. Additionally, the Bêkou  EUTF remained the main instrument building resilience 
for both the population and the State, in a true humanitarian – development – peace nexus approach. 

Operational highlights of the year 2021: 

In December 2020, the second and the last extension of the Bêkou EUTF, until 31 December 2021, was 
decided. The implementation of Bêkou EUTF projects in 2021 was affected by a sharp deterioration of the 
security  context.  Following  the  organisation  of  the  general  elections  in  December  2020,  a  coalition  of 
rebel groups contested the results and a violent conflict started spreading over the whole Central African 
territory.  While  the  situation  in  Bangui,  the  capital,  remained  less  dangerous,  the  conflict  caused 
important security issues and access restrictions for most of the Bêkou partners. 

Although the Bêkou EUTF adopted a programme supporting the deployment of civil protection in the CAR 
in  2020,  the  security  and  institutional  context  was  no  longer  deemed  favourable  enough  to  begin  the 
implementation  of  this  programme.  Consequently,  the  EUR  4  million  commitments  were  de-committed 
and re-engaged towards a programme dedicated to socio-economic development in the  South-East part 
of the country (RELSUDE). 

The  response  to  the  COVID-19  outbreak  continued  in  2021.  While  the  pandemic  had  a  less  significant 
impact on the operations of the EUTF this year, the sanitary measures in place coupled with the turmoil 
caused  by  the  ongoing  conflict  disrupted  the  still  very  fragile  institutions,  and  the  country  saw  a 
degradation of basic services. Fulfilling its role as bridge between relief and development, the Bêkou EUTF 
increased its provisions through the programmes Health III and WASH in continued support of vulnerable 
populations. 

By the end of 2021, Bêkou EUTF finalised the commitments and contracting of all received contributions, 
with the exception of funds reserved for monitoring, evaluation, audit and communication, which can still 
be contracted until the end of the EUTF implementation period on 31/12/2025. Additional efforts to avoid 
financing gaps were carried out during the year and the Operational Committee increased resources for 
the  following  sectors:  Water  &  Sanitation  (EUR  4.5  million),  Socio-Economic  Recovery  RELSUDE  (EUR 
5.38  million),  Reconciliation  II  (EUR  1.45  million),  Health  III  (EUR  0.34  million)  and  the  technical 
cooperation facility FATC II (EUR 1.23 million). 

Budget and budget implementation 

On  the  revenue  side,  by  the  end  of  2021,  pledges  by  EUTF  contributors  amounted  to  over  EUR  310 
million.  This  is  an  increase  of  EUR  1.89  million  compared  to  2020.  All  contribution  certificates  were 
received. 

As described, at decision-level, EUR 13 million were committed through top-ups to existing actions under 
the Bêkou EUTF in 2021. They aimed at supporting the sectors of water and sanitation, socio-economic 
recovery, health, reconciliation and increased funding to the technical cooperation facility of the EUTF. As 
described  in  the  operational  highlights,  these  top-ups  covered  strategic  sectors  for  the  response  to  the 
changes in the socioeconomic and security situation in CAR, but also to support partners with a view to 
consolidate the sustainability of actions in the context of the transition from the Bêkou Trust Fund to the 
new Global Europe instrument. 

In terms of contracts, the  Bêkou  EUTF signed 7  new  contracts and 14 cost extension contract riders in 
2021 for a total amount of nearly EUR 35 million. The new contracts are contributing, for instance, to the 
implementation  of  technical  assistance  for  the  Ministry  of  Health  and  the  Ministry  of  Woman  Affairs,  to 
the  reconciliation  and  social  cohesion  programmes  through  a  project  dedicated  to  the  Central  African 

57 

 
Annual accounts of the European Development Fund 2021 

youth,  to  the  prevention  of  gender-based  violence,  and  to  the  economic  development  of  the  country 
through professionalisation and promotion of entrepreneurship in urban areas. 

Last but not least, more than EUR 36 million was paid in 2021; total disbursements have reached nearly 
EUR 233 million since the creation of the Bêkou EUTF. 

Impact of the activities in the financial statements 

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

  Operating  expenses:  which  have  decreased  by  kEUR  938;  however  expenses  relating  to 
reconstruction relief, urban development and management, vocational training and private sector 
development  increased  as  funds  from  civil  protection  were  redirected  towards  socio-economic 
development; 

 

 

Pre-financing:  decreased  by  kEUR  5  924  as  a  result  of  fewer  advances  being  paid  out  due  to 
lower value of new contracts signed (EUR 36 million of new contracts and contract amendments 
in 2021 compared to EUR 53 million in 2020); 

Financial  liabilities:  decreased  by  kEUR  14  671  mainly  due  to  the  fact  that  the  cashed 
contributions from  the donors are  not sufficient  to cover the yearly payment outflows. This also 
led to the reduction in cash and cash equivalents. 

58 

 
Annual accounts of the European Development Fund 2021 

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  

TOTAL LIABILITIES 

NET ASSETS 

31.12.2021 

 EUR '000 
31.12.2020 

  214 
  214 

 11 762 
 4 446 
 3 792 
 20 000 
 20 214 

 2 418 
 2 418 

 15 482 
 5 340 
 7 339 
 28 161 
 30 579 

 (3 167) 
 (3 167) 

 (17 838) 
 (17 838) 

 (2 847) 
 (14 200) 
 (17 047) 
 (20 214) 

  (795) 
 (11 947) 
 (12 741) 
 (30 579) 

– 

– 

59 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

STATEMENT OF FINANCIAL PERFORMANCE 

REVENUE 
Revenue from non-exchange transactions 
Revenue from donations 
Recovery of expenses 
Total revenue 
EXPENSES 
Operating expenses 
Finance costs 
Other expenses 
Total expenses 
ECONOMIC RESULT OF THE YEAR 

2021 

EUR '000 
2020 

 46 995 
– 
 46 995 

 47 889 
  115 
 48 004 

 (46 021) 
  (48) 
  (925) 
 (46 995) 
– 

 (46 959) 
  (68) 
  (978) 
 (48 004) 
– 

60 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

CASHFLOW STATEMENT 

Economic result of the year 
(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  
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 

2021 
– 
 5 924 
  894 
 (14 671) 
 2 052 
 2 254 
 (3 547) 

EUR '000 
2020 
– 
 3 685 
 (3 487) 
 (11 889) 
  784 
  814 
 (10 093) 

 (3 547) 
 7 339 
 3 792 

 (10 093) 
 17 432 
 7 339 

61 

 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

FINANCIAL STATEMENTS OF THE EUTF 
AFRICA 2021 

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. 

62 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

BACKGROUND INFORMATION ON THE EUTF AFRICA 

General background on Union Trust Funds 

Establishment 

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 (‘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. 

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. 

Mission 

The main objectives of the EUTF Africa 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. 

Main operational activities  

The Union trust fund pools together resources from different donors to finance an action on the basis of 
agreed objectives. EUTF Africa operates in three main geographic areas, namely the Sahel region and 

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. 

63 

 
 
                                                 
Annual accounts of the European Development Fund 2021 

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, in order to provide a short and medium-term response to the challenges 
of the regions. 

Governance 

The management of the EUTF Africa is ensured by the European Commission, which also acts as the 
secretariat of its two governing bodies – the Trust Fund Board and the Operational Board. 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 rules for the composition of the board and 
its internal rules are laid down in the constitutive agreement of the Union trust fund. 

The main task of the Board is to establish and review the overall strategy of the trust fund. The 
Operational Board is responsible for the selection of the actions financed by the Fund and supervises their 
implementation. It also approves the annual accounts and the annual reports on the activities financed by 
the trust fund. 

Sources of financing 

The EUTF Africa is financed through contributions from donors.  

Annual accounts 

Basis for preparation 

The legal framework and the deadlines for the preparation of the annual accounts are set by 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”). As per this Constitutive Agreement, the annual accounts are prepared in accordance with 
the rules adopted by the Accounting Officer of the Commission (EU Accounting Rules, EAR), which are 
based on internationally accepted accounting standards for the public sector (IPSAS). 

Accounting Officer 

Based on the Constitutive Agreement, the Accounting Officer of the Commission serves as the Accounting 
Officer of the Trust Fund.  

Composition of the annual accounts 

The annual accounts cover the period from 1 January to 31 December and comprise the financial 
statements and the reports on the implementation of the budget. While the financial statements and the 
complementary notes are prepared on an accrual accounting basis, the budget implementation reports 
are primarily based on movements of cash. 

Process from provisional accounts to discharge 

The annual accounts are subject to independent external audit. The provisional annual accounts prepared 
by the Accounting Officer are transmitted, by the 15th of February of the following year, to the 
Operational Committee who then transmits them to the audit company selected by the entity following a 
tender procedure. Following the audit, the Accounting Officer prepares the final annual accounts and 
submits them to the Operational Committee for approval. 

The annual accounts of the EUTF Africa are consolidated in the annual accounts of the European 
Development Fund. 

64 

 
 
 
 
Annual accounts of the European Development Fund 2021 

Operational highlights 

Achievements of the year 

The  year  2021  represented  the  last  year  during  which  the  EUTF  Africa  was  able  to  make  financial 
commitments  including  approval  of  new  actions  or  budgetary  top-ups  and  signing  of  new  contracts  or 
amendments to existing ones. As of 2022, EUTF Africa programmes will continue being implemented up 
to end of 2025. 

In  the  course  of  2021,  the  EUTF  Africa  further  demonstrated  that  it  is  a  swift  and  effective 
implementation  tool,  facilitating  policy  dialogue  with  African  partner  countries  across  the  three  regions, 
applying innovative approaches, and producing tangible results across the three regions (Sahel and Lake 
Chad, Horn of Africa and North of Africa). 

The  EUTF  Africa  further  consolidated  its  achievements  in  partnership  with  EU  Member  States 
development  agencies,  UN  organisations,  NGOs  and  partner  countries,  with  the  approval  of  few  new 
programmes and a very wide number of budgetary ‘top-ups’ across the three regions for a total of over 
EUR  242.6  million.  This  brings  the  total  number  of  approved  programmes  to  248  (to  which  should  be 
added  4  cross-window  programmes),  for  a  total  operational  budget  of  over  EUR  4  935.1  million.  New 
operational  contracts  worth  over  EUR  367  million  were  signed  in  2021  with  implementing  partners, 
bringing  the  total  amount  of  signed  contracts  to  over  EUR  4  918.  By  the  end  of  2021,  operational 
payments had reached approximately EUR 3 739 million. 

In 2021, the EUTF Africa 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  Africa  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  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 Africa received an additional EUR 3.5 million from an EU Member State. 
As  a  result,  the  overall  pledge  for  the  EUTF  Africa  as  of  31  December  2021  amounted  to  over  EUR  5 
061.7  million,  of  which  EUR  623.2  million  by  EU  Member  States  and  other  donors  (United  Kingdom, 
Norway and Switzerland). 

As  in  previous  years,  the  Monitoring  and  Learning  System  (MLS)  reports  (available  on  the  EUTF  Africa 
website)  on  the  Sahel  and  Lake  Chad  and  the  Horn  of  Africa  continued  to  show  the  tangible  results 
achieved by the EUTF Africa in different areas of work. The Monitoring & Learning system of the North of 
Africa region generated Monitoring  Reports (available  on the  EUTF  Africa  website), whose  purpose  is to 
analyse  how EUTF-funded programs are  contributing  to the strategic priorities of the EUTF Africa in the 
North of Africa region. 

Accountability and transparency have been improved through increased communications including regular 
updates  on  the  EUTF  Africa  website,  publishing  posts  on  social  media  and  organising  communication 
events. 

In  2021,  the  security  situation  of  the  Sahel  and  Lake  Chad  region  continued  to  deteriorate  as  banditry 
and  intercommunal  tensions  increased.  Violence  from  non-state  armed  groups  continued,  and  almost 
10,000  fatalities  were  recorded  in  over  3,600  violent  attacks  in  the  region.  Persisting  violence  and 
extreme  climate-related  events  led  to  further  mass  displacements.  Because  of  the  severe  climate 
conditions,  the  region  was  hit  also  by  droughts  and  floods,  causing  high  levels  of  food  insecurity. 
Moreover, measures taken by governments of the region to contain the spread of COVID-19 led to lower 
food productivity, drove inflation, and further constrained humanitarian assistance, exacerbating people’s 
vulnerability.  Against  this  background,  the  EUTF  Africa’s  Operational  Committee  approved  3  new 
programmes and 6 budgetary top-ups for a total of EUR 75.9 million (of which EUR 73.4 million of fresh 
funds, EUR 0.7 million of de-committed funds and EUR 1.8 million of recovered funds). In the course of 
the year, the EUTF Africa further produced concrete and visible results under the four strategic objectives 
while further pursuing its stabilization efforts. 

In  2021,  the  EUTF  Africa  maintained  its  comprehensive  approach  to  support all  aspects  of  stability  and 
resilience in the Horn of Africa region, while making the most of its flexibility to face the growing negative 
impact  of  the  COVID-19  pandemic.  Despite  the  aggravated  conflict  situation  in  the  region  and  the 
disruptions  caused  by  the  pandemic,  the  mobilisation  of  implementing  partners  has  allowed  to  reach 
important milestones on all four specific objectives of the EUTF Africa in line with the work accomplished 
in previous years. In 2021, one new programme and 22 budgetary top-ups were approved for a total of 

65 

 
Annual accounts of the European Development Fund 2021 

EUR 158.2 million. In order to maximise the use of EUTF Africa funding for operations prior to the end of 
the  contracting  period  on  31/12/2021,  a  total  of  EUR  136.7  million  of  unused  funds  from  existing 
programmes  were  de-committed  and  EUR  16.8  million  were  recovered  (mainly  from  funds  previously 
allocated  to  projects  in  Eritrea).  These  funds  were  re-committed  completely,  mainly  through  budgetary 
top-ups to other existing programmes. 

In 2021, the EUTF for  Africa continued to respond comprehensively to  challenges in the North of Africa 
region  to  save  lives,  protect  the  most  vulnerable,  support  host  communities,  provide  opportunities  for 
safe and organised mobility and tackle the consequences of the COVID-19 pandemic. The North of Africa 
window  continued  to  work  along  the  strategic  priorities  agreed  by  the  EUTF  Strategic  Board  including 
support  to  improve  migration  governance;  support  for  labour  migration  and  mobility;  protection  of 
vulnerable  migrants,  voluntary  return  and  sustainable  reintegration  as  well  as  community  stabilisation; 
and integrated border management. In 2021, no new actions were adopted but a number of budgetary 
top-ups  to  existing  actions  were  approved  for  a  total  of  EUR  8.55  million.  Moreover,  several  ongoing 
programmes  were  modified  to  de-commit  unused  funds  and  re-allocate  them  to  other  on-going 
programmes  with  identified  needs  so  the  new  commitments  net  of  de-committed/re-allocated  funds 
amount to EUR 7.45 million. 

Budget and budget implementation  

The total amount committed in 2021 amounted to EUR 112 million compared to EUR 740 million in 2020. 
The total net additional  amount  contracted in  2021 amounted to EUR 358 million compared to EUR 1.1 
billion in 2020. The payments in the reporting period reached EUR 748 million, which was EUR 304 million 
lower than in 2020. 

In  2021,  the  total  budget  implementation  in  terms  of  available  commitment  appropriations  used  by 
commitments reached 99.61 %. 

In 2021, the Sahel and Lake  Chad window approved three new programmes and six budgetary top-ups 
for a total of EUR 75.9 million (of which EUR 73.4 million were new funds). In order to maximize the use 
of EUTF for Africa funding for operations prior to the end of the contracting period on 31/12/2021, EUR 
0.7  million  were  de-committed  and  EUR  1.8  million  were  recovered,  of  which  the  total  amount  was  re-
committed through top-ups. 

The  Horn  of  Africa  approved  1  new  programme  and  22  budgetary  top-ups  for  a  total  of  EUR  158.2 
million.  In  order  to  maximise  the  use  of  EUTF  for  Africa  funding  for  operations  prior  to  the  end  of  the 
contracting period on 31.12.2021, EUR 136.7 million of unused funds from existing programmes were de-
committed  and  EUR  16.8  million  were  recovered,  of  which  the  total  amount  was  re-committed,  mainly 
through top-ups to other existing projects. 

In  the  North  of  Africa  region,  no  new  programmes  were  adopted  in  2021,  but  rather  a  number  of 
budgetary top-ups for a total amount of EUR 8.5 million. To maximise the use of EUTF for Africa funding 
for  operations  prior  to  the  end  of  the  contracting  period  on  31.12.2021,  EUR  1.1  million  were  de-
committed and re-committed to other programmes with identified needs. 

Since  31  December  2021  marked  the  end  of  the  contracting  period  for  operational  contracts  under  the 
EUTF  (with  the  exception  of  contracts  covering  admin  activities  such  as  evaluation,  audit  and 
communication),  the  three  windows  proceeded  to  de-  and  re-committing  these  funds;  they  were  then 
repurposed to address the needs of the vulnerable population. 

Response to COVID-19 

In 2021, the COVID-19 pandemic continued to have a profound impact on the countries benefitting from 
the EUTF Africa. Additional EUTF Africa funding was re-oriented to provide the necessary response to the 
COVID-19 across the three regions covered by the EUTF Africa. 

In the Sahel/Lake Chad, COVID-19 programming related to treatment, testing, and emergency response 
scaled  down  in  2021.  For  example,  98%  of  individuals  assisted  in  the  first  half  of  2021  were  provided 
with  support  that  was  not  primarily  medical  or  personal  protective  equipment,  such  as  prevention 
activities or socioeconomic mitigation measures. 

In the Horn of Africa, the COVID-19 pandemic had a significant negative impact on economic activities in 
the  region  including  on  household  income,  crop  and  livestock  production,  sales  and  food  prices.  It  also 
exacerbated existing risks and effects of irregular migration due to increased protection concerns such as 
abuse,  gender-based  violence,  exploitation,  trafficking,  smuggling  and  arbitrary  detention.  With  EUTF 

66 

 
Annual accounts of the European Development Fund 2021 

support, the number of people having improved access to COVID-19-related basic social benefits such as 
services and cash transfers rose significantly in the first semester of 2021. In 2021, there was  a shift in 
the  project  activities  from  mainly  being  focused  on  prevention  and  awareness-raising  campaigns  on 
COVID-19  in  2020  to  focusing  on  economic  support.  In  particular,  the  EUTF  Africa  delivered  close  to  6 
million COVID-19 supplies in 2021, either through the reallocation of funds to the COVID-19 response or 
through new programs. 

In  2021,  the  COVID-19  pandemic  had  also  adverse  effects  on  the  economies  of  the  North  of  Africa 
region,  exacerbating  existing  difficulties  of  vulnerable  populations  to  secure  livelihoods  and  increasing 
dependence  on  emergency  assistance.  The  window  mobilised  EUR  34.1  million,  which  benefited  almost 
195,000 vulnerable men, women and children across the region, with more than 500,000 units of COVID-
19-related supplies delivered to key laboratories and isolation units. 

Impact of the activities in the financial statements 

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

 

Pre-financing:  decreased by  kEUR 159  078 as a result of  fewer advances  being paid out due to 
the lower value of new contracts signed; 

  Operating expenses: remained rather stable with just a small decrease of kEUR 30 430. Despite 
the  deteriorating  security  situation  and  the  ongoing  COVID-19  pandemic,  the  trust  fund 
maintained  its  operations  in  particular  to  combat  the  negative  effects  of  the  pandemic  and 
towards fostering stability and handling the root causes of migration; 

 

Financial liabilities:  decreased by kEUR  23 142 mainly due to  the  fact that cashed contributions 
were not sufficient to cover the net expenses allocated to the donors. Despite this, cash and cash 
equivalents increased by kEUR 121 788 as the cashed contributions were higher than the yearly 
payment outflows. 

67 

 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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  

TOTAL LIABILITIES 

NET ASSETS 

31.12.2021 

 EUR '000 
31.12.2020 

 55 305 

 55 305 

 437 657 

 45 339 

 179 759 

 662 755 

 718 061 

 92 655 

 92 655 

 559 386 

 6 346 

 57 971 

 623 703 

 716 359 

 (525 530) 

 (546 379) 

 (525 530) 

 (546 379) 

 (53 143) 

 (139 388) 

 (45 377) 

 (124 602) 

 (192 531) 

 (169 979) 

 (718 061) 

 (716 359) 

– 

– 

68 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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 cost 
Other expenses 
Total expenses 
ECONOMIC RESULT OF THE YEAR 

2021 

EUR '000 
2020 

  16 
 871 456 
 871 472 

– 
 921 014 
 921 014 

  131 
 16 340 
 16 471 
 887 943 

– 
 2 883 
 2 883 
 923 897 

 (856 291) 
  (550) 
 (31 103) 
 (887 943) 
– 

 (889 014) 
  (518) 
 (34 365) 
 (923 897) 
– 

69 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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  
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 

2021 
– 

EUR '000 
2020 
– 

 159 078 
 (38 992) 
 (20 849) 
 7 765 
 14 786 
 121 788 

 (184 933) 
 12 125 
 161 968 
 19 408 
 22 488 
 31 056 

 121 788 
 57 971 
 179 759 

 31 056 
 26 915 
 57 971 

70 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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. 

71 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

CONSOLIDATED BALANCE SHEET 

NON-CURRENT ASSETS 
Financial assets 
Pre-financing* 
Exchange receivables 

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 

 EUR million 
31.12.2021  31.12.2020*  
* 

 39 
 726 
 4 
 770 

1 902 
 85 
1 177 
3 164 
 3 934 

 33 
 965 
 3 
1 002 

1 930 
 152 
 793 
2 875 
 3 877 

 (154) 
  (154) 

 (173) 
  (173) 

 (557) 
(1 162) 
(1 719) 
 (1 873) 

 (661) 
(1 664) 
(2 325) 
 (2 498) 

 2 061 

 1 379 

– 
62 643 
2 252 
(59 860) 
(2 974) 
 2 061 

 (5) 
58 986 
2 252 
(55 111) 
(4 744) 
 1 379 

*Due to a clerical error, the 2020 EDF Consolidated Financial Statements included a negative amount of EUR 2 million of Trust Funds 
contributions  that  was  erroneously  reported  on  the  balance  sheet.  In  the  2021  EDF  Consolidated  Financial  Statements  this  reporting 
error has been corrected and the 2020 balances shown in these statements are aligned with the trial balance.  

72 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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 

2021 

EUR million 
2020 

 27 
 272 
  300 

 (25) 
 90 
  64 
  364 

(2 218) 
 (902) 
 (19) 
 (21) 
 (178) 

 92 
 296 
  388 

 6 
 40 
  46 
  434 

(3 935) 
 (936) 
 (53) 
 (22) 
 (232) 

 (3 338) 

 (5 178) 

 (2 974) 

 (4 744) 

73 

 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

CONSOLIDATED CASH FLOW STATEMENT 

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

  *The 2020 figure relates to the (increase)/decrease in available for sale financial assets 

2021 
 (2 974) 

EUR million 
2020 
 (4 744) 

3 657 
– 
 266 
 66 
 (19) 
 (104) 
 (502) 
– 

4 177 

 (210) 

  (9) 
 6 
 119 

  232 
 (3) 

 (7) 

  2 

  384 

  (431) 

 384 
  793 
 1 177 

 (430) 
 1 223 
  793 

74 

 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS 

Annual accounts of the European Development Fund 2021 

Fund 
capital - 
active EDFs 
(A) 
 73 264 

Uncalled 
funds - active 
EDFs (B) 

 18 455 

Called fund 
capital - 
active EDFs 
(C) = (A)-(B) 
 54 809 

Cumulative 
Reserves (D) 

 (55 111) 

(223) 
– 
 73 041 
– 
 73 041 
(43) 

(4 400) 
– 
 14 055 
– 
 14 055 
(3 700) 

 72 998 

 10 355 

4 177 
– 
 58 986 
– 
 58 986 
3 657 
– 
 62 643 

– 
(4 744) 
 (59 854) 
 (5) 
 (59 860) 

(2 974) 
 (62 834) 

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

– 
– 
 2 252 

 2 252 

Fair value 
reserve (F) 

  (2) 

 (3) 

  (5) 
 5 
– 

 2 252 

– 

EUR million 

Total Net Assets 
(C)+(D)+(E)+(F) 
 1 948 

 (3) 

4 177 
(4 744) 
 1 379 

 1 379 
3 657 
(2 974) 
 2 061 

BALANCE AS AT 31.12.2019 

Fair value movements 

Capital increase -  contributions* 
Economic result of the year 
BALANCE AS AT 31.12.2020 
Impact of revised EAR  11 
Balances as at 01.01.2021 
Capital increase - contributions 
Economic result of the year 
BALANCE AS AT 31.12.2021 

*In 2020, the contributions and refund to Member States were reported on a separate line. In order to align the presentation with the EDF changes in net assets table these two lines have been merged. 

75 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

EDF REPORT ON FINANCIAL 
IMPLEMENTATION 

76 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

CONTENTS 

1. 

BACKGROUND ......................................................................................... 78 

1.1 

PREVIOUS EDFS .............................................................................................. 78 

1.2  10TH AND 11TH EDF ....................................................................................... 79 

2. 

FINANCIAL IMPLEMENTATION ................................................................... 80 

2.1 

FINANCIAL OUTTURN....................................................................................... 80 

2.2  REVENUE ....................................................................................................... 84 

2.3  OPERATIONAL EXPENDITURE AND SPECIFIC PROGRAMMES ................................. 85 

3. 

GLOSSARY .............................................................................................. 91 

77 

 
 
 
 
Annual accounts of the European Development Fund 2021 

1.  BACKGROUND 

Launched  in  1959,  the  European  Development  Fund  is  the  main  instrument  for  providing  EU  aid  for 
development cooperation to the African, Caribbean and Pacific (ACP) States and Overseas Countries and 
Territories (OCTs). Its primary objective is to reduce and ultimately eradicate poverty.  

The  EDF  is  established  by  an  Internal  Agreement  of  the  Representatives  of  the  Member  States  and 
managed  by  a  specific  committee.  The  EDF  resources  are  "ad  hoc"  contributions  from  the  EU  Member 
States, who decide on an overall amount that will be allocated to the fund (over a period of five years). 
In  addition  to  these  contributions,  it  is  also  possible  for  Member  States  to  enter  into  co-financing 
arrangements  or  to  make  voluntary  financial  contributions  to  the  EDF.  The  European  Commission  is 
responsible  for  the  financial  implementation  of  the  operations  carried  out  with  EDF  resources.  The 
European Investment Bank manages the Investment Facility.  

The EDF is a fund operating based on multiannuality. Each EDF is concluded for a  period of around five 
years  and  it  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.  

The Internal Agreement establishing the last EDF, the 11th EDF (2014-2020), came into force on 1 March 
2015. As of 2021, the cooperation with the ACP countries is included in the Neighbourhood, Development 
and  International  Cooperation  Instrument  (NDICI).  However,  the  ongoing  projects,  funded  under  the 
EDF, will continue their implementation under the respective EDF legal basis. 

This report is produced in accordance with Article 39 of the Financial Regulation of 11th EDF 8. It focuses 
on important events that had a significant impact on the financial implementation of year 2021.  

Given that there are no ongoing operations under previous EDFs9, this report includes figures only for the 
10th and 11th EDF (unless it is specifically mentioned otherwise). 

1.1  PREVIOUS EDFS 

6TH AND 7TH EDF 

The 6th EDF was closed in 2006 and the 7th EDF was closed in 2008.  

8TH AND 9TH EDF 

In  2019,  the  Commission  closed  the  remaining  outstanding  transactions  of  the  8th  EDF  projects.  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. 

The  year  2021  marked  the  financial  and  operational  closure  of  the  Eighth  EDF  for  a  total  amount  of 
expenditure of EUR 10 374 million. The Commission announced the closure of the 8th EDF to the Member 
States  in  the  Communication  that  was  presented  to  the  Council  in  October  2021.  The  closure  is  also 
reflected in the present report. 

All  8th  EDF  activities  have  been  completed,  all  checks  and  controls  have  been  performed,  and  all 
contracts  and  financial  decisions  are  closed  in  the  EDF  accounts.  All  recovery  orders,  which  were  still 
open  after  the  operational  closure,  were  cashed  or  waived  with  the  exception  of  10  recovery  orders 
(including  6  litigation  cases  followed  by  the  Legal  Service).  In  line  with  the  Commission’s  Decision 
C(2003)1904, these 13 ROs were transferred to the 9thEDF. 

The closure of the 9th  EDF is progressing  well  (9  financing decisions closed in 2021).  There are  still 16 
decisions  open.  However,  3  of  the  open  decisions  concern  actions  in  Southern  Sudan  (Council  decision 
2011/315/EU). These were decided after the 9th EDF sunset clause and should, in principle, be closed by 
2023. 

8 COUNCIL REGULATION (EU) 2018/1877 
9 Except for operations in South-Sudan 

78 

 
 
                                                 
Annual accounts of the European Development Fund 2021 

From 2015 to 2021, the Commission carried out three refunds of 8th/9thEDF credits for a total amount of 
EUR  1  826  million.  A  balance  of  EUR  43  million  was  refunded  in  January  2022  in  the  context  of  the 
payment of the 1st instalment of MS contributions to the EDF. 

1.2  10TH AND 11TH EDF  

The ACP-EC Partnership Agreement was 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). It entered into 
force on 1 April 2003 (establishing the 9th EDF). The Cotonou Agreement was amended twice, firstly by 
the  agreement  signed  in  Luxembourg  on  25  June  2005  (establishing  the  10th  EDF),  secondly  by  the 
agreement signed in Ouagadougou on 22 June 2010 (establishing the 11th EDF). 

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  multi-annual  financial  framework 
for  the  period  2014-2020  in  accordance  with  the  revised  Cotonou  Agreement,  adopted  by  the 
Representatives of the Governments of the Member States of the European Community on August 2013, 
entered into force on March 2015. 

Under  the  Cotonou  Agreement,  for  the  second  period  (2008-2013),  the  10th  EDF  an  overall  budget  of 
EUR 22 682 million. Of this amount,  

  EUR 21 966 million were allocated to the ACP countries,  

  EUR 286 million to the OCT and  

  EUR 430 million to the Commission as support expenditure for programming and implementation 

of the EDF.  

The amount for the ACP countries is divided accordingly:  

  EUR 17 766 million to national and regional indicative programmes,  

  EUR 2 700 million to intra-ACP and intra-regional cooperation and  

  EUR 1 500 million to Investment Facilities.  

Notably, an increased share of the budget is devoted to regional programmes, thereby emphasising the 
importance of regional economic integration  as the basic framework for national and local development. 
An innovation in the 10th EDF was the creation of ‘incentive amounts’ for each country. 

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. 

79 

 
 
 
 
Annual accounts of the European Development Fund 2021 

2. 

FINANCIAL IMPLEMENTATION 

2.1  FINANCIAL OUTTURN 

EVOLUTION OF 10th EDF APPROPRIATIONS 

10th EDF 
EVOLUTION OF APPROPRIATIONS:  31 December 2021 
ANALYSIS OF CREDITS PER INSTRUMENT 

INSTRUMENT 

INITIAL 
APPROPRIATION 

INCREASES/DECREASE
S IN CUMULATIVE  
RESOURCES AT 
31 DECEMBER 2020 

INCREASE OR 
DECREASE IN 
RESOURCES IN 
2021 

Note
s 

CURRENT LEVEL 
APPROPRIATION 

(EUR million) 

Regular MS Contributions 

A
C
P 
Co-financing 
   SUB TOTAL ACP 

O
C
T 

Regular MS Contributions 

SUB TOTAL OCT 

20.896 

0 

20.896 

0 

0 

TOTAL 10th EDF 

20.896 

(280) 

202 

(78) 

243 

243 

165 

(111) 

(111) 

(3) 

(3) 

20.505 

202 

20.707 

240 

240 

(113) 

20.947 

80 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
Annual accounts of the European Development Fund 2021 

EVOLUTION OF 11th EDF APPROPRIATIONS 

INSTRUMENT 

INITIAL 
APPROPRIATION 

INCREASES/DECREASES 
IN CUMULATIVE  
RESOURCES AT 
31 DECEMBER 2020 

INCREASE OR 
DECREASE IN 
RESOURCES IN 
2021 

Notes 

CURRENT LEVEL 
APPROPRIATION 

Regular MS Contributions 

29.008 

ACP 

Co-financing 

EC Internal SLA 

SUB TOTAL ACP 

Regular MS Contributions 

OCT 

Co-financing 

EC Internal SLA 

SUB TOTAL OCT 

0 

0 

29.008 

0 

0 

0 

0 

TOTAL 11th EDF 

29.008 

(190) 

75 

1 

(113) 

349 

0 

0 

349 

235 

197 

12 

0 

209 

4 

0 

0 

4 

29.015 

88 

1 

29.103 

353 

0 

0 

353 

213 

29.456 

81 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
Annual accounts of the European Development Fund 2021 

EVOLUTION OF COMMITMENTS, ASSIGNED FUNDS AND PAYMENTS FOR 10TH EDF 

Regular MS Contributions 
SUB TOTAL: A ENVELOPE - 
NATIONAL ALLOCATIONS 
SUB TOTAL: B ENVELOPE - 
NATIONAL ALLOCATIONS 
SUB TOTAL: IMPLEMENTATION 
COSTS AND INTERESTS 
REVENUES 
SUB TOTAL: INTRA-ACP 
ALLOCATIONS 
SUB TOTAL: REGIONAL 
ALLOCATIONS 

Co-financing 
SUB TOTAL: A ENVELOPE - 
NATIONAL ALLOCATIONS 
SUB TOTAL: IMPLEMENTATION 
COSTS AND INTERESTS 
REVENUES 
SUB TOTAL: INTRA-ACP 
ALLOCATIONS 

Non-mobilisable reserve 
SUB TOTAL: NON-MOBILISABLE 
RESERVE 

Regular MS Contributions 
SUB TOTAL: A ENVELOPE - 
NATIONAL ALLOCATIONS 
SUB TOTAL: B ENVELOPE - 
NATIONAL ALLOCATIONS 
SUB TOTAL: IMPLEMENTATION 
COSTS AND INTERESTS 
REVENUES 
SUB TOTAL: REGIONAL 
ALLOCATIONS 

Non-mobilisable reserve 
SUB TOTAL: NON-MOBILISABLE 
RESERVE 

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

AC
P 

OC
T 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2021 
CLASS OF AID 

ACP + PTOM - 10 th EDF 

CREDITS 

AGGREG. 

DECISIONS 
ANNUA
L 

(1) 

(2) 

ASSIGNED FUNDS 

% 

(2) : (1) 

AGGREG
. 
(3) 

ANNUA
L 

% 

(3) : (2) 

PAYMENTS 
ANNUA
L 

AGGREG
. 
(4) 

% 

(4) : (3) 

(EUR million) 

12.454 

12.392 

(108) 

100% 

12.334 

(49) 

100% 

12.143 

96 

98% 

1.979 

1.972 

(8) 

100% 

1.964 

(4) 

100% 

1.960 

5 

100% 

528 

526 

0 

100% 

526 

4 

100% 

522 

15 

99% 

3.684 

1.842 

3.655 

1.825 

(28) 

99% 

(26) 

99% 

3.552 

1.794 

93 

97% 

(13) 

98% 

3.239 

1.692 

165 

91% 

25 

94% 

185 

180 

(1) 

97% 

177 

5 

11 

(0) 

111% 

0 

91% 

186 

15 

5 

34 

(0) 

100% 

0 

100% 

100% 

(1) 

100% 

5 

11 

183 

14 

5 

34 

5 

12 

18 

186 

15 

5 

34 

0 

99% 

164 

0 

2 

0 

100% 

100% 

3 

0 

93% 

66% 

0 

100% 

2 

0 

92% 

100% 

100% 

(0) 

98% 

3 

11 

169 

14 

5 

33 

0 

98% 

(0) 

99% 

100% 

0 

99% 

20.947 

20.805 

(172) 

99% 

20.600 

33 

99% 

19.956 

311 

97% 

82 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
Annual accounts of the European Development Fund 2021 

EVOLUTION OF COMMITMENTS, ASSIGNED FUNDS AND PAYMENTS FOR 11TH EDF 

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2021 
CLASS OF AID 

ACP + PTOM - 11 th EDF 

CREDITS 

DECISIONS 

AGGREG.  ANNUAL  % 

ASSIGNED FUNDS 
AGGREG.  ANNUAL  % 

PAYMENTS 
AGGREG.  ANNUAL  % 

(1) 

(2) 

(2) : (1) 

(3) 

(3) : (2) 

(4) 

(4) : (3) 

(EUR million) 

15.538 

15.531 

(24) 

100% 

14.021 

928 

90% 

9.976 

1.644 

71% 

675 

(1) 

100% 

1.069 

3.908 

7.300 

46 

4 

33 

4 

(1) 

100% 

(4) 

97% 

4 

100% 

4 

0 

6 

0 

100% 

100% 

100% 

67% 

630 

1.063 

3.703 

6.991 

45 

4 

33 

4 

21 

93% 

190 

99% 

260 

95% 

593 

96% 

4 

3 

9 

0 

98% 

100% 

100% 

100% 

577 

856 

2.968 

4.926 

18 

0 

24 

4 

51 

53 

92% 

80% 

267 

80% 

955 

70% 

12 

40% 

10% 

1 

72% 

100% 

676 

1.071 

4.014 

7.317 

46 

4 

33 

6 

1 

(100) 

498 

1 

1 

0 

52% 

1 

100% 

1 

100% 

213 

12 

8 

103 

0 

0 

0 

100% 

100% 

100% 

(0) 

100% 

194 

12 

6 

102 

1 

2 

2 

3 

91% 

100% 

75% 

99% 

183 

12 

94% 

12 

5 

37 

4 

1 

99% 

77% 

12 

37% 

213 

12 

9 

103 

0 

17 

0 

29.456 

28.905 

(16) 

98% 

26.807 

2.015 

93% 

19.586 

3.012 

73% 

ACP 

Regular MS Contributions 
SUB TOTAL: A ENVELOPE - 
NATIONAL ALLOCATIONS 
SUB TOTAL: B ENVELOPE - 
NATIONAL ALLOCATIONS 
SUB TOTAL: IMPLEMENTATION 
COSTS AND INTERESTS REVENUES 
SUB TOTAL: INTRA-ACP 
ALLOCATIONS 
SUB TOTAL: REGIONAL 
ALLOCATIONS 

Co-financing 
SUB TOTAL: A ENVELOPE - 
NATIONAL ALLOCATIONS 
SUB TOTAL: IMPLEMENTATION 
COSTS AND INTERESTS REVENUES 
SUB TOTAL: INTRA-ACP 
ALLOCATIONS 
SUB TOTAL: REGIONAL 
ALLOCATIONS 

Mobilisable reserves 

SUB TOTAL: INTRA-ACP RESERVE 

SUB TOTAL: NIP/RIP RESERVE 

Non-mobilisable reserve 
SUB TOTAL: NON-MOBILISABLE 
RESERVE 

EC Internal SLA 
SUB TOTAL: A ENVELOPE - 
NATIONAL ALLOCATIONS 

Regular MS Contributions 
SUB TOTAL: A ENVELOPE - 
NATIONAL ALLOCATIONS 
SUB TOTAL: B ENVELOPE - 
NATIONAL ALLOCATIONS 
SUB TOTAL: IMPLEMENTATION 
COSTS AND INTERESTS REVENUES 
SUB TOTAL: REGIONAL 
ALLOCATIONS 

OCT 

Co-financing 
SUB TOTAL: A ENVELOPE - 
NATIONAL ALLOCATIONS 

Non-mobilisable reserve 
SUB TOTAL: NON-MOBILISABLE 
RESERVE 

EC Internal SLA 
SUB TOTAL: A ENVELOPE - 
NATIONAL ALLOCATIONS 

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

83 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

2.2  REVENUE  

Nature of Revenue  

The  main  revenue  of  the  EDF  is  the  Member  States  contributions.  Three  times  per  year,  the  European 
Commission  and  the  European  Investment  Bank  call  the  Member  States  to  contribute  to  the  EDF.  The 
amount  of  the  contributions  called  each  year  reflects  the  amount  of  payment  to  be  covered  during  the 
year.  

Overview of contributions by Member State 

10th and 11th contribution to EDF by MS  (in  EUR million)

12.000,0

10.000,0

8.000,0

6.000,0

4.000,0

2.000,0

0,0

DE FR UK IT SP NL BE SE AT DK PL FI GR PT IE CZ HU RO SK LU SI BG LT CY HR LV EE MT

10th 11th
EDF called

10th 11th
EDF uncalled

84 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

2.3  OPERATIONAL 
PROGRAMMES  

Nature of Expenditure  

EXPENDITURE 

AND 

SPECIFIC 

The amount available under the multiannual financial framework consists of 3% allocated to Commission 
for  support  expenditure  and  97%  allocated  to  the  implementation  of  EDF  projects.  Amounts  are  set  by 
each  Internal  Agreement  and  can  be  increased  by  voluntary  contributions  and  income  yielded  from 
operations. 

Breakdown of Committed, Contracted and Paid amount per nature of expenditure: 

CREDITS 

AGGREG.  ANNUAL 

% 

AGGREG.  ANNUAL 

% 

AGGREG.  ANNUAL 

% 

DECISIONS 

ASSIGNED FUNDS 

PAYMENTS 

IMPLEMENTATION COSTS AND 
INTERESTS REVENUES 
OPERATIONNAL 
IMPLEMENTATION 
TOTAL 10+11th EDF: ACP + 
OCT  (A+B) 

(1) 

(2) 

(2) : (1) 

(3) 

(3) : (2) 

(4) 

(4) : (3) 

1.621 

1.618 

(1) 

100% 

1.609 

200 

99% 

1.391 

69 

86% 

48.782 

48.093 

(187) 

99% 

45.798 

1.848 

94% 

38.151 

3.254 

78% 

50.403 

49.711 

(188) 

99% 

47.407 

2.048 

94% 

39.542 

3.323 

78% 

Implementation rate (%)

120%

100%

80%

60%

40%

20%

0%

Commitment rate

Contract rate

Payment rate

Administrative

Operational

85 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

Breakdown of committed, contracted and paid amount per region and country 

EDF CUMULATIVE ACCOUNTS AT 31 DECEMBER 2021 BY COUNTRY % APPR. 

10 + 11 th EDF 

TOTAL 10th and 11th EDF (EUR in million) 

Cumulative 2021 

Appropriations 

Decisions 

% of Appr. 

Assigned 
funds 

% of Appr. 

Payments 

% of Appr. 

General / enveloppe 
administrative/intér 

Réserve / Non réparti par pays 

All ACP countries 

Angola 

Bénin 

Botswana 

Burkina Faso 

Burundi 

Cameroun 

Cap Vert 

Comores 

Congo (Brazzaville) 

Congo (République 
démocratique du) 

Côte d'Ivoire 

Djibouti 

Erythrée 

Ethiopie 

Gabon 

Gambie 

Ghana 

ACP 

Guinée Bissau 

Guinée (Conakry) 

Ile Maurice 

Kenya 

Lesotho 

Libéria 

Madagascar 

Malawi 

Mali 

Mauritanie 

Mozambique 

Namibie 

Niger 

Nigeria 

Ouganda 

République centrafricaine 

Rwanda 

Sao Tomé-et-Principe 

Sénégal 

Seychelles 

Sierra Leone 

1.608 

2.969 

4.576 

348 

740 

130 

1.307 

572 

521 

147 

80 

163 

1.430 

710 

186 

215 

1.655 

35 

316 

793 

186 

504 

82 

874 

259 

495 

791 

1.025 

1.425 

347 

1.468 

189 

1.287 

1.160 

1.000 

624 

841 

56 

668 

23 

663 

1.604 

100% 

1.598 

99% 

1.381 

2.553 

4.157 

348 

737 

130 

1.306 

570 

521 

147 

79 

163 

86% 

91% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

2.553 

4.151 

335 

690 

128 

1.300 

546 

505 

146 

77 

153 

1.421 

99% 

1.327 

699 

170 

215 

1.579 

32 

309 

782 

185 

473 

82 

858 

245 

445 

714 

919 

1.389 

336 

1.180 

176 

1.263 

1.126 

965 

616 

827 

50 

638 

23 

621 

100% 

100% 

100% 

100% 

95% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

99% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

709 

186 

215 

1.652 

33 

315 

792 

186 

504 

82 

873 

258 

494 

790 

1.025 

1.424 

347 

1.462 

189 

1.285 

1.145 

1.000 

622 

841 

56 

667 

23 

663 

86 

86% 

91% 

96% 

93% 

98% 

99% 

95% 

97% 

100% 

96% 

94% 

93% 

98% 

92% 

100% 

95% 

91% 

98% 

99% 

100% 

94% 

100% 

98% 

95% 

90% 

90% 

90% 

98% 

97% 

80% 

94% 

98% 

97% 

97% 

99% 

98% 

89% 

96% 

99% 

94% 

2.202 

3.583 

276 

647 

122 

1.226 

466 

438 

145 

64 

102 

1.105 

633 

122 

35 

1.353 

28 

243 

697 

152 

401 

78 

648 

182 

399 

471 

805 

1.172 

288 

940 

159 

1.184 

987 

731 

495 

800 

41 

581 

21 

548 

86% 

74% 

78% 

79% 

87% 

94% 

94% 

81% 

84% 

99% 

80% 

62% 

77% 

89% 

66% 

16% 

82% 

80% 

77% 

88% 

82% 

80% 

94% 

74% 

70% 

81% 

60% 

79% 

82% 

83% 

64% 

85% 

92% 

85% 

73% 

79% 

95% 

73% 

87% 

93% 

83% 

 
 
 
 
  
  
Annual accounts of the European Development Fund 2021 

Somalie 

Swaziland 

Tanzanie 

Tchad 

Togo 

Zambie 

Zimbabwe 

903 

135 

1.176 

938 

378 

834 

472 

901 

128 

1.174 

936 

378 

834 

471 

* Total Africa 

28.150 

28.082 

Antigua et Barbuda 

Barbade 

Belize 

Dominique 

Grenade 

Guyane 

Haïti 

Jamaïque 

République Dominicaine 

Sainte-Lucie 

Saint Kitts et Nevis 

Saint-Vincent -et-les-
Grenadines 

Surinam 

Trinité et Tobago 

16 

22 

43 

41 

21 

81 

1.030 

243 

283 

32 

9 

27 

27 

29 

15 

22 

43 

41 

21 

81 

1.020 

240 

283 

32 

8 

27 

27 

29 

* Total Caribbean 

1.904 

1.889 

Fidji 

Iles Cook 

Iles Salomon 

Kiribati 

Marshall Island 

Micronésie 

Nauru 

Nioué 

Palau 

Papouasie-Nouvelle Guinée 

Samoa Occidentale 

Timor Leste 

Tonga 

Tuvalu 

Vanuatu 

* Total Pacific 

Intra ACP Allocations 

PALOP 

REGION AFRIQUE CENTRALE 

REGION AFRIQUE EST ET 
AUSTRALE 

Région Afrique Occidentale 

Région Caraïbes 

Région Pacifique 

49 

5 

69 

42 

17 

23 

4 

3 

5 

246 

67 

174 

28 

13 

55 

800 

7.744 

62 

555 

3.176 

1.958 

535 

326 

49 

5 

69 

42 

17 

23 

4 

3 

5 

244 

67 

174 

28 

13 

55 

799 

7.607 

61 

551 

1.943 

531 

324 

* Total regional cooperation 
ACP 

14.355 

14.182 

87 

100% 

95% 

100% 

100% 

100% 

100% 

100% 

100% 

99% 

100% 

100% 

100% 

100% 

100% 

99% 

99% 

100% 

100% 

92% 

98% 

100% 

99% 

99% 

100% 

99% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

98% 

98% 

99% 

898 

113 

1.108 

832 

374 

740 

465 

26.654 

15 

22 

35 

41 

21 

78 

890 

236 

277 

32 

8 

26 

27 

28 

1.735 

48 

5 

60 

42 

17 

23 

4 

3 

4 

228 

67 

172 

28 

13 

50 

764 

7.299 

59 

500 

99% 

99% 

99% 

99% 

1.903 

474 

277 

13.534 

3.166 

100% 

3.022 

99% 

84% 

94% 

89% 

99% 

89% 

99% 

95% 

99% 

99% 

82% 

99% 

99% 

96% 

86% 

97% 

98% 

100% 

91% 

97% 

97% 

99% 

91% 

99% 

99% 

88% 

99% 

99% 

97% 

99% 

99% 

69% 

93% 

100% 

99% 

99% 

99% 

91% 

95% 

94% 

95% 

90% 

95% 

97% 

89% 

85% 

94% 

872 

95 

945 

708 

332 

536 

435 

22.709 

14 

20 

28 

38 

20 

76 

736 

213 

268 

28 

6 

22 

20 

22 

1.511 

41 

5 

58 

26 

14 

10 

4 

3 

3 

155 

66 

138 

28 

12 

41 

605 

6.242 

50 

346 

2.116 

1.399 

323 

186 

10.662 

97% 

70% 

80% 

75% 

88% 

64% 

92% 

81% 

88% 

91% 

66% 

91% 

94% 

94% 

72% 

88% 

95% 

86% 

66% 

81% 

73% 

76% 

79% 

85% 

99% 

84% 

61% 

82% 

43% 

92% 

98% 

60% 

63% 

99% 

79% 

99% 

89% 

76% 

76% 

81% 

80% 

62% 

67% 

71% 

60% 

57% 

74% 

 
 
Annual accounts of the European Development Fund 2021 

ACP 

ACP 

49.785 

49.110 

99% 

46.838 

94% 

39.070 

78% 

Réserve / Non réparti par par 
pays/terri 

All OCT countries 

Anguilla 

Iles Falklands (Malouines) 

Iles Pitcairn 

Iles Turks-et-Caicos 

Iles Vierges britanniques 

Montserrat 

Sainte Hélène 

* Total British OCT 

Antilles néerlandaises 

Antilles néerlandaises - 
Bonaire 

OCT 

Antilles néerlandaises - Saba 

Antilles néerlandaises - Sint-
Eustatius 

Aruba 

Sint Maarten 

* Total Dutch OCT 

Iles Wallis et Futuna 

Mayotte 

Nouvelle-Calédonie 

Polynésie française 

Saint-Pierre-et-Miquelon 

* Total French OCT 

Réserve/non réparti par région 
* Total regional cooperation 
OCT 

OCT 

OCT 

31 

31 

28 

10 

5 

33 

2 

33 

38 

148 

41 

4 

4 

2 

21 

14 

86 

39 

29 

50 

51 

47 

215 

137 

137 

617 

14 

14 

28 

10 

5 

33 

2 

33 

38 

148 

41 

4 

4 

2 

21 

14 

86 

39 

29 

50 

51 

47 

215 

137 

137 

599 

44% 

44% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

97% 

11 

11 

27 

10 

5 

33 

2 

33 

38 

147 

23 

4 

3 

2 

21 

7 

61 

37 

29 

50 

50 

47 

212 

136 

136 

567 

37% 

37% 

99% 

98% 

100% 

100% 

98% 

100% 

100% 

100% 

57% 

91% 

97% 

97% 

99% 

51% 

71% 

95% 

100% 

100% 

98% 

100% 

99% 

99% 

99% 

92% 

10 

10 

27 

10 

5 

32 

2 

31 

35 

141 

19 

2 

3 

2 

18 

4 

49 

26 

29 

49 

49 

47 

199 

71 

71 

471 

32% 

32% 

99% 

98% 

100% 

97% 

90% 

94% 

94% 

96% 

46% 

55% 

97% 

97% 

84% 

31% 

57% 

66% 

100% 

98% 

96% 

100% 

93% 

52% 

52% 

76% 

TOTAL: ACP+OCT 

50.402 

49.709 

99% 

47.406 

94% 

39.540 

78% 

88 

 
 
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

Breakdown of Committed, Contracted and Paid amount by spending area for the 11th EDF  

11TH EDF Breakdown of committed, contracted and paid amount by spending area (DAC sector codes)10 

(EUR million) 

Committed 

Contracted 

Paid 

839,46 

2.073,28 

25,41 

365,94 

4.812,88 

1.299,56 

9.416,53 

742,39 

83,87 

836,02 

50,50 

123,41 

1.836,20 

1.839,53 

158,21 

203,21 

2.200,94 

481,09 

1.365,91 

1.847,01 

2.436,61 

347,06 

2.783,68 

91,50 

91,50 

437,98 

34,02 

78,89 

550,89 

777,47 

21,44 

1,15 

800,06 

19.526,81 

Sector  

Social infrastructure and services 

110-Education 

120-Health 

130-Population policies/programmes and reproductive health 

140-Water and sanitation 

150-Government and civil society 

160-Other social infrastructure and services 

1.192,46 

2.131,40 

352,44 

788,50 

5.909,31 

996,71 

Social infrastructure and services TOTAL 

11.370,82 

Economic infrastructure and services 

210-Transport and storage 

220-Communications 

230-Energy 

240-Banking and financial services 

250-Business and other services 

1.425,48 

140,96 

2.015,13 

93,93 

346,23 

 Economic infrastructure and services TOTAL 

4.021,71 

Production sectors 

310-Agriculture, forestry and fishing 

320-Industry, mineral resources and mining, construction 

330-Trade and tourism 

3.251,42 

644,39 

498,46 

Production sectors TOTAL 

4.394,26 

Multisector/Cross-cutting 

410-General environmental protection 

430-Other multisector 

Multisector/Cross-cutting TOTAL 

Commodity aid and general programme assistance 

510-General budget support 

520-Developmental food assistance 

989,44 

3.882,47 

4.871,91 

3.116,32 

614,50 

Commodity aid and general programme assistance TOTAL 

3.730,82 

Action relating to debt 

600-Action relating to debt 

Humanitarian aid 

720-Emergency response 

Action relating to debt TOTAL 

730-Reconstruction relief and rehabilitation 

740-Disaster preparedness 

Administrative costs of donors / Unallocated / Unspecified 

Humanitarian aid TOTAL 

910-Administrative costs of donors 

998-Unallocated / Unspecified 

N/A-Not Available 

91,50 

91,50 

746,19 

137,83 

72,79 

956,81 

982,02 

183,30 

260,50 

1.064,95 

2.419,57 

40,12 

728,46 

5.883,98 

1.448,73 

11.585,81 

1.933,76 

139,91 

1.752,16 

116,10 

276,47 

4.218,41 

2.823,53 

424,96 

419,71 

3.668,20 

821,21 

2.445,97 

3.267,18 

3.149,33 

385,77 

3.535,09 

91,50 

91,50 

460,11 

44,16 

109,06 

613,33 

968,04 

36,68 

1,57 

Administrative costs of donors / Unallocated / Unspecified TOTAL 

1.425,82 

 GRAND TOTAL OF 11TH EDF of committed, contracted and paid amount  

30.863,65 

1.006,29 

27.985,81 

10 Gross amounts (i.e. excluding decommitments and recovery orders) 

    Amounts in columns Committed, Contracted, Paid are colour weighted 

89 

 
 
 
 
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
 
 
 
 
 
 
  
                                                 
 
Annual accounts of the European Development Fund 2021 

Evolution of cumulative Committed, Contracted and Paid amount by spending area for the 11th 
EDF  

EUR million

Cumulative Committed amounts per year for each sector for the 11 EDF

 11.000,00
 10.000,00
 9.000,00
 8.000,00
 7.000,00
 6.000,00
 5.000,00
 4.000,00
 3.000,00
 2.000,00
 1.000,00
 -

EUR million

 12.000,00

 10.500,00

 9.000,00

 7.500,00

 6.000,00

 4.500,00

 3.000,00

 1.500,00

 -

EUR million

 9.000,00

 8.000,00

 7.000,00

 6.000,00

 5.000,00

 4.000,00

 3.000,00

 2.000,00

 1.000,00

 -

2014

2015

2016

2017

2018

2019

2020

2021

Financial Year

Cumulative Contracted amounts per year for each sector for the 11 EDF

2014

2015

2016

2017

2018

2019

2020

2021

Financial Year

Cumulative Paid amounts per year for each sector for the 11 EDF

2014

2015

2016

2017

2018

2019

2020

2021

Financial Year

90 

Social infrastructure and
services

Economic infrastructure and
services

Production sectors

Multisector/Cross-cutting

Commodity aid and general
programme assistance

Action relating to debt

Humanitarian aid

Other : Administrative costs of
donors / Unallocated /
Unspecified
N/A-Not Available

Social infrastructure and
services

Economic infrastructure
and services

Production sectors

Multisector/Cross-cutting

Commodity aid and general
programme assistance

Humanitarian aid

Other : Administrative costs
of donors / Unallocated /
Unspecified

N/A-Not Available

Action relating to debt

Social infrastructure
and services

Economic
infrastructure and
services

Production sectors

Multisector/Cross-
cutting

Commodity aid and
general programme
assistance

Humanitarian aid

Other : Administrative
costs of donors /
Unallocated /
Unspecified
Action relating to debt

 
 
 
 
Annual accounts of the European Development Fund 2021 

3.  GLOSSARY 

Administrative appropriations 

Appropriations to cover the running costs of the entities (staff, buildings, office equipment). 

Adopted budget 

Draft budget becomes the adopted budget as soon as approved by the budgetary authority. 

Amending budget 

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

Appropriations 

Budget funding. 

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

Assigned revenue 

Revenue dedicated to finance specific items of expenditure. 

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. 

Budget implementation 

Consumption of the budget through expenditure and revenue operations. 

Budget item / Budget line / Budget position 

Revenue and expenditure are shown in the budget structure 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 commitment 

Operation  by  which  the  authorising  officer  responsible  reserves  the  budget  appropriations  necessary  to 
cover for subsequent payments to honour legal commitments. 

Cancellation of appropriations 

Appropriations  which  have  not  been  used  by  the  end  of  the  financial  year  and  which  cannot  be  carried 
over, shall be cancelled.  

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. 

91 

 
 
 
Annual accounts of the European Development Fund 2021 

Commitment appropriations 

Commitment  appropriations  cover  the  total  value  of  legal  obligations  (contracts,  grant  agreements  or 
decisions) that could be signed in the current financial year. 

De-commitment 

Operation  whereby  the  authorising  officer  responsible  cancels  wholly  or  partly  the  reservation  of 
appropriations previously made by means of a budgetary commitment. 

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. 

Economic result 

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

Entitlements established 

Right to collect income from a debtor as recognised through the issuing of a recovery order.   

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 currencies at the date of 
the accounts. 

Expenditure 

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

Grants 

Direct financial contributions from the budget to third-party beneficiaries, engaged in activities that serve 
Union policies.   

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,  as  represented  by  an 
appropriation. 

For joint undertakings (and EIT), as specified in their 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 can be re-activated until financial year "N+3". 

Legal basis / basic act 

The  legal  act  adopted  by  the  legislative  authority  (usually  the  Council  and  European  Parliament) 
specifying the objective of a Union spending programme, the purpose of the appropriations, the rules for 
intervention, expiry date and the relevant financial rules to serve as a legal basis for the implementation 
of the spending programme.  

Legal commitment 

The act whereby the Authorising Officer enters into an obligation towards third parties which results in a 
charge for the Union budget.  

Common  forms  of  legal  commitments  are  contracts  in  the  case  of  procurement,  grant  agreements  and 
grant decisions.  

92 

 
 
Annual accounts of the European Development Fund 2021 

Non-differentiated appropriations 

Appropriations which meet annual needs and must therefore be committed during the budget year. Only 
amounts  qualifying  for  automatic  carryover  can  be  disbursed  in  the  following  year.  Non-differentiated 
appropriations which have not been used, i.e. committed, by the end of the year, are cancelled (unless, 
exceptionally,  permission  is  given  by  a  Commission  decision  for  a  non-automatic  carryover).  Non-
differentiated  appropriations  apply  to  administrative  expenditure  and  commitment  appropriations  equal 
payment appropriations. 

Operational appropriations 

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

Outstanding commitments 

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

Payment appropriations 

Payment  appropriations  cover  expenditure  due  in  the  current  year,  arising  from  legal  commitments 
entered in the current year and/or earlier years. 

RAL (Reste à liquider)  

Amount  remaining  to  be  paid  on  a  budgetary  commitment  at  a  given  moment.  Cf.  Outstanding 
commitments 

Surplus 

Positive difference between revenue and expenditure, which has to be returned to the funding authority. 
Cf. Budget result 

Transfer between budget lines 

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. 

93 

 
 
Annual accounts of the European Development Fund 2021 

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

94 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

EUROPEAN INVESTMENT BANK 

CA/551/22 

10 March 2022 

Document 22/071 

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

IN V E ST M ENT  F AC ILI T Y 

FINANCIAL STATEMENTS 

AS AT 31 DECEMBER 2021 

(1)  Statement of financial position 

(2)  Statement of profit or loss and other 

comprehensive income 

(3)  Statement of changes in contributors’ resources 

(4)  Statement of cash flows 

(5)  Notes to the financial statements 

(6)  Independent auditor’s report 

ORG.: E 

CONFIDENTIAL 

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Annual accounts of the European Development Fund 2021 

STATEMENT OF FINANCIAL POSITION 
AS AT 31 DECEMBER 2021 
(in EUR’000) 

Notes 

31.12.2021 

31.12.2020 

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 

Amounts owed to third parties 

Other liabilities 

Total liabilities 

CONTRIBUTORS' RESOURCES 

Facility Member States Contribution called 

Retained earnings 

5 

9/17 

10 

6 

7 

8 

11 

6 

12 

13 

14 

15 

16 

17 

1,358,564 

85,210 

- 

7 

1,986,281 

697,631 

1,086 

923,940 

68,908 

351,873 

33,584 

1,673,445 

526,810 

109 

4,128,779 

3,578,669 

18,835 

48,432 

- 

16,602 

239,639 

2,333 

642 

29,732 

851 

33,152 

152,378 

3,446 

325,841 

220,201 

3,471,695 

331,243 

3,221,695 

136,773 

Total contributors' resources 

3,802,938 

3,358,468 

Total liabilities and contributors' resources 

4,128,779 

3,578,669 

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Annual accounts of the European Development Fund 2021 

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME  
FOR THE YEAR ENDED 31 DECEMBER 2021 
(in EUR’000) 

Notes 

From 01.01.2021 

From 01.01.2020 

to 31.12.2021 

to 31.12.2020 

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 

Sale of loans and proceeds from recovery actions 

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 

19 

19 

20 

20 

21 

7 

7 

13 

14 

22 

86,456 

-10,436 

76,020 

2,219 

-175 

2,044 

-51,770 

123,627 

3,568 

- 

33,676 

84,783 

-5,250 

79,533 

353 

-225 

128 

18,949 

-46,717 

-29,621 

2,362 

-48,545 

109,101 

-103,572 

42,974 

851 

16,616 

-53,136 

-4,312 

-228 

3,715 

-58,527 

Profit / (loss) for the year 

194,470 

-83,263 

Total comprehensive income profit / (loss) for the year 

194,470 

-83,263 

* For the year ended 31 December 2021, Interest and similar income includes EUR 77.5 million (2020: EUR 77.9 million) calculated on 
assets held at amortised cost based on the effective interest method.  

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Annual accounts of the European Development Fund 2021 

STATEMENT OF CHANGES IN CONTRIBUTORS’ RESOURCES 
FOR THE YEAR ENDED 31 DECEMBER 2021 
(in EUR’000) 

At 1 January 2021 

Member States contribution called during the year 

Profit for the year 2021 

Changes in contributors’ resources 

Notes 

17 

Contribution 
called 

3,221,695 

250,000 

- 

250,000 

Retained 
earnings 

136,773 

- 

194,470 

194,470 

Total  

3,358,468 

250,000 

194,470 

444,470 

At 31 December 2021 

3,471,695 

331,243 

3,802,938 

At 1 January 2020 

Contribution 
called  

Retained 
earnings  

Total  

2,967,000 

220,036 

3,187,036 

Member States contribution called during the year 
Reallocation of 9th EDF Contribution to interest subsidies and 
technical assistance to Contributor’s resources 
(Loss) for the year 2020 

17 

17 

Changes in contributors’ resources 

209,614 

45,081 

- 

254,695 

- 

- 

-83,263 

-83,263 

209,614 

45,081 

-83,263 

171,432 

At 31 December 2020 

3,221,695 

136,773 

3,358,468 

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Annual accounts of the European Development Fund 2021 

STATEMENT OF CASH FLOWS 
FOR THE YEAR ENDED 31 DECEMBER 2021 
(in EUR’000) 

OPERATING ACTIVITIES 
Profit / (loss) for the 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 measured 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) / profit on operating activities before changes in operating assets and liabilities   
Loan disbursements 
Repayments of loans 
Sale of loans and proceeds from recovery actions 
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 
Increase in other assets 
(Increase) / Decrease in other liabilities 
Increase in amounts payable to the European Investment Bank 
Net cash flows in / (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 flows from / (used in): 
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 
01.01.2021 to 
31.12.2021 

From 
01.01.2020 to 
31.12.2020 

194,470 

-83,263 

8 
7 

7 
13 

10 

7 
8 

7 
7 

5 
10 
10 
8 

5 
5 
5 

-130,991 
-42,974 
-3,568 
6,462 
-851 
-16,550 
51,770 
-1,271 
18,700 
-84,893 
-27,230 
-9,875 
-46,801 
-515,212 
339,944 
- 
-304 
-2,333,691 
2,684,293 
-84,224 
77,749 
977 
1,113 
34,598 
158,442 

47,909 
4,312 
29,621 
-5,202 
228 
-4,117 
-18,949 
1,067 
-2,834 
90,878 
33,616 
9,233 
102,499 
-560,291 
276,101 
2,362 
66 
-2,710,009 
2,689,790 
-85,305 
85,477 
109 
-1,093 
8,543 
-191,751 

250,444 

227,035 

63,254 

60,387 

-27,337 

286,361 
444,803 

-18,807 

268,615 
76,864 

924,077 

837,980 

158,442 
286,361 
-9,875 
1,359,005 

434,064 
672,730 
252,211 
1,359,005 

-191,751 
268,615 
9,233 
924,077 

398,991 
380,000 
145,086 
924,077 

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Annual accounts of the European Development Fund 2021 

Notes to the financial statements as at 31 December 2021 

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: 

(iv)  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”); 

(v)  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”). 

The EU and ACP sides agreed to amend the decision on transitional measures in order to extend the application of the provisions of the 
ACP-EU  Partnership  Agreement  until  30  June  2022,  or  until  the  entry  into  force  of  the  new  Agreement  or  the  provisional  application 
between the Union and the ACP States of the new Agreement, whichever comes first (Decision No 3/2021 of the ACP-EU Committee of 
Ambassadors  of  26  November  2021  to  amend  Decision  No  3/2019  of  the  ACP  EU  Committee  of  Ambassadors  to  adopt  transitional 
measures pursuant to Article 95(4) of the ACP EU Partnership Agreement). 

The NDICI - Global Europe Regulation, which entered into force on 14 June 2021 (Regulation (EU) 2021/947 of 9 June 2021), provides 
the primary legal basis for EU assistance outside the EU in 2021-2027, and the governance for the Bank’s new institutional mandate for 
operations outside the European Union, including the ACP region. This includes the integration of the current extra-budgetary EDF into 
the  EU  budget.  The  NDICI  Regulation  provides  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. 

On 23 December 2020, the Council decided to extend the ACP Investment Facility commitment period by at least six months. Going 
forward,  reflows  from  the  ACP  IF  shall  be  deployed  within  the  NDICI  framework  through  a  combination  of  a  dedicated  ACP  private 
sector window under the European Fund for Sustainable Development (EFSD+) and a Trust Fund, both to be implemented by the EIB. 
The  ACP  Infrastructure  Package,  currently  secured  by  the  Investment  Facility  reflows  will  be  transferred  to  Dedicated  Investment 
Window 1 guarantee, in order to release the ACP Investment Facility reflows net of any prior Investment Facility commitments (in terms 
of approvals, signatures and guarantees). The ACP Infrastructure Package will be part of the EFSD+ guarantee agreement. 

Following, the extension of the Investment Facility commitment period, the Bank approved operations in line with its Mandate until 30 
June 2021 (Council Decision 2020/2233 of 23 December 2020 concerning the commitment of the funds stemming from reflows under 
the ACP Investment Facility from operations under the 9th, 10th and 11th European Development Funds - L 437/188, 28.12.2020). 

The financial statements have been prepared on a going concern basis, which assumes that the Investment Facility will be able to meet 
all monies payables under any operations. The duration of the Investment Facility is not determined. The 11th EDF Internal Agreement 
remains in force (pursuant to Article 14(3) thereof) so long as is necessary for all the operations financed under the ACP-EU Partnership 
Agreement, the Overseas Association Decision and the multi-annual financial framework to be fully executed. 

The present financial statements cover the period from 1 January 2021 to 31 December 2021. 

On  a  proposal  from  the  Management  Committee,  the  Board  of  Directors  adopted  the  Financial  Statements  on  10  March  2022  and 
authorised their submission to the Board of Governors for approval by 22 April 2022. 

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Annual accounts of the European Development Fund 2021 

2  Significant accounting policies 

2.1  Basis of preparation – Statement of compliance 

The  Facility’s  financial  statements  have  been  prepared  in  accordance  with  International  Financial  Reporting  Standards  (IFRS)  as 
adopted by the European Union.  

2.2  Significant accounting judgments and estimates 

The preparation of financial statements requires the use of accounting estimates. It also requires the Bank’s Management to exercise its 
judgment in the process of applying the Investment Facility’s accounting policies. The areas involving a higher degree of judgment or 
complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed hereafter. 

The most significant use of judgments and estimates are as follows: 

 

Measurement of fair value of financial instruments 

Fair values of financial assets (“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, which can result in significant changes to the timing and amount of allowance for credit loss to be recognized (Note 
2.4.2). Relevant assumptions on the effects on impairment resulting from COVID–19 are detailed under Note 2.4.2 and Note 3.2.3.7. 

 

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 EIB 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. 

 

Uncertainty arising from inter-bank offered rates (“IBOR”) reform 

For benchmark cessing to exist immediately after 30 June 2023, namely USD LIBOR, the Facility applies the International Accounting 
Standards Board (“IASB”) Phase 1 amendments related to the uncertainty. 

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Annual accounts of the European Development Fund 2021 

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 2021: 

Interest Rate Benchmark Reform – Phase 2 Amendments to IFRS 9 and IFRS 7 (IBOR reform Phase 2) 

These amendments, issued on 27 August 2020, concluded the IASB response to the ongoing reform of IBOR and other interest rate 
benchmarks. 

The  amendments  focus  on  the  effects  on  financial  statements  when  a  company  replaces  the  old  interest  rate  benchmark  with  an 
alternative benchmark rate as a result of the reform. They provide practical relief from certain requirements of the standards. 

In  particular,  those  reliefs  relate  to  modification  of  financial  instruments,  lease  contracts  or  hedge  relationships  when  a  benchmark 
interest rate in a contract is replaced with a new alternative benchmark rate.  

When the change to contractual cash flow of a financial instrument is the direct consequence of the interest rate benchmark reform and 
this change  is  performed  on  an  economically  equivalent  basis,  the Phase  2  amendments  provide  a practical  expedient to  update  the 
effective  interest  rate  to  reflect  the  change  without  derecognising  or  adjusting  the  carrying  amount  of  the  financial  instrument.  The 
amendments  also  provide  an  exception  to  use  a  revised  discount  rate  that  reflects  the change  in  interest  when  remeasuring  a  lease 
liability rate because of a modification required by the reform.  

Finally,  the  Phase  2  amendments  provide  a  series  of  reliefs  from  the  hedge  accounting  requirements  when  the  change  is  a  direct 
consequence of the reform and is performed on economically equivalent basis. In particular, a company will not have to discontinue its 
hedge accounting solely because it makes changes required by the reform.  

The adoption of the amendments to the standards was performed retrospectively with no impact on the opening balance. 

Standards issued but not yet adopted, affecting the Facility 

Annual improvements 2018-2020 cycle (amendments on IFRS 1 and IFRS 9) and narrow scope amendments to IFRS 3 and IAS 37 

Amendments to IFRS 3 “Business Combinations” – update a reference in IFRS 3 to the Conceptual Framework for Financial Reporting 
without changing the accounting requirements for business combinations. 

Amendments to IAS 37 “Provisions, contingent liabilities and contingent assets” - specify which costs an entity includes when assessing 
whether a contract will be loss-making. 

These  amendments  have  been  endorsed  by  the  EU  on  28  June  2021  and  are  effective  for  annual  periods  beginning  on  or  after 
1 January  2022.  

The Facility did not adopt these amendments earlier and does not expect them 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. 

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Annual accounts of the European Development Fund 2021 

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the 
dates  of  the  initial  transactions.  Non-monetary  items  measured  at  fair  value  in  a  foreign  currency  are  translated  using  the  exchange 
rates at the date when the fair value was determined. 

Exchange differences arising on the settlement of transactions at rates different from those at the date of the transaction, and unrealised 
foreign exchange differences on unsettled foreign currency monetary assets and liabilities, are recognised in the statement of profit or 
loss and other comprehensive income. 

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  amortised  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. 

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

Solely payment of principal and interests (“SPPI”) criteria 

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

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. 

In the context of IBOR reform, the Facility’s assessment of whether a change to an amortised cost financial instrument is substantial, is 
made  after  applying  the  practical  expedient  introduced  by  IBOR  reform  Phase  2.  As  per  the  amendments  issued  by  the  IASB,  the 
Facility does not derecognise a financial instrument, which contractual cash flows are modified as a direct consequence from the reform 
and the change is economically equivalent to the previous basis for determining the contractual cash flows (i.e., the basis immediately 
before the change).    

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”. 

A contractual modification is deemed substantial if the discounted present value of the cash flows under the revised terms (discounted 
using the original effective interest rate) is at least 10% different from the discounted present value of the remaining cash flows of the 
original financial asset. Qualitative factors such as a change in the currency on which the financial asset is denominated and conversion 
features are also considered. 

In the context of IBOR reform, the Facility’s assessment of whether a change to an amortised cost financial instrument is substantial, is 
made after applying the practical expedient introduced by IBOR reform Phase 2. The Facility updates the effective interest rate, without 
modifying  the  carrying  amount  of  the  financial  instrument  if  the  basis  for  determining  the  contractual  cash  flows  of  the  financial 
instrument, measured at amortised cost, changes as a direct consequence from the reform and if the change is economically equivalent 
to the previous basis (i.e., the basis immediately before the change). 

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. 

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These  valuation  techniques  may  include  net  present  value  and  discounted  cash  flow  models,  comparison  to  similar  instruments  for 
which  market  observable  prices  exist,  Black-Scholes  and  polynomial  option  pricing  models  and  other  valuation  models.  Assumptions 
and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads used in estimating discount rates, 
bond and equity prices, foreign currency exchange rates, equity and equity index prices and expected price volatilities and correlations. 

The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the 
asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date. 

The Bank 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 Bank uses its 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 is based on a forward-looking expected credit loss (“ECL”) model. The EIB has established a framework to calculate “expected 
credit  loss” conditional  on  the state  of  the macro-economy.  It  involves  the  construction  of  point-in-time  (“PIT””) credit  risk  parameters 
(Probability of default – “PD” and Loss given default – “ LGD”) based on a systematic factor (credit cycle) that is driven by the macro-
economy  and  projected  via macroeconomic forecasts  or scenarios.  The final  ECL  is  a  probability  weighted  average  of  the  respective 
macro-economic  scenario  ECLs.  This  forward-looking  impairment  model  is  applied  to  financial  assets  measured  at  AC,  to  financial 
guarantee contracts, as well as to off-balance sheet commitments.  

Under IFRS 9, loss allowances are  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 ECL’s: 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 Bank’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  (“FMGPs”),  notably  covering  early  warning  triggers,  Watch  List  (“WL”),  internal 
rating and arrears. 

In line with guidance issued by standard setters and market practises, the EIB considers that the application of COVID-19 short-term 
forbearance  measures  to  performing  counterparties,  aimed  at  addressing  the  adverse  systemic  economic  impact  of  the  COVID-19 

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pandemic, should  not  be considered  by  themselves  as  an  automatic trigger  to  conclude that  SICR  has  occurred.  As  disclosed  under 
Note 3.2.3.8, the EIB applies expert judgement when assessing the credit risk of such counterparties. 

The  EIB  considers  that  the  COVID-19  pandemic  effect  is  reflected  within  the  existing  forward-looking  ECL  model  which  is  deemed 
sufficiently  robust  to  factor  in  such  extreme  events.  Notably,  the  respective  impacts  have  been  directly  captured  through  the 
macroeconomic projections and the PD terms structures. 

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  Bank  determines  whether  or  not  there  is  objective  evidence  of  a  non-performing  exposure.  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. 

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: 

- 

- 

- 

Credit rating and PIT Probability of default (“PD”), 

PIT Loss Given default (“LGD”), 

Exposure at default (“EAD”). 

The  credit  rating  of  a  counterpart  is  determined  at  a  certain  date,  using  score-sheet  models  tailored  to  the  various  categories  of 
counterparties and exposures. 

Each credit rating is mapped to a specific PD that 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. Hence, ratings are primary input into the determination of the 
PIT 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 because of the passage of time and given specific macro-economic scenarios.  

The LGD 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. LGD can be also defined as “1 - Recovery Rate”. LGD estimates are determined mainly by geography and by 
type  of  counterparty,  with  five  main  exposure  classes:  Sovereigns,  Public  Institutions,  Financial  Institutions,  Corporate  and  Project 
Finance. LGD values can be further adjusted based on the product and contract specific features of the exposure. 

The  EIB  incorporates  PIT  and  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. 

For  the measurement  of ECL, the  EIB  has  developed  a  conditional modelling  approach,  called  the  PIT PD model,  for calculating  PD 
term structures involving: 

- 

- 

the definition of an economically reasonable link function between the credit cycle and macroeconomic variables, and 

a  set  of  three macro-economic scenarios  (one  baseline  and  two  scenarios  reflecting  downturn  and  upturn  in  the  economy) 
with multi-year potential realisation for the GDP and their associated likelihoods. 

To  generate  macroeconomic  scenarios,  the  EIB  uses  a  macro  semi-structural  multi-country  and  multi-equation  model  of  the  global 
economy  with  country  specific  blocks.  The  central  /  baseline  scenario  is  designed  to  be  consistent  with  the  most  recent  European 
Commission  forecasts.  The  positive  and  negative  scenarios  are  designed  around  the  central  scenario  by  deploying  of  the  multi-
country/multi-equation  model.  The  scenarios  are  derived  by  shocking  the  GDP,  which  is  the  key  measure  of  economic  activity.  The 
shocks to real GDP are calibrated to replicate the past volatility of the variable. Also expert judgment is applied, when appropriate, to 

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refine  the  size  and  persistency  of  GDP  shocks.  As  a  result,  shocks  are  determined  together  with  a  decay  function  to  determine  the 
impact of the shocks over time. Probabilities attached to each scenario are defined reflecting market (volatility) indicators and internally 
developed indicators/trackers deployed in a consistent manner over time to capture uncertainty. 

The  EIB’s  PIT  PD  and  PIT  LGD  models  use  the  same  projected  values  of  the  credit  cycle  as  the  main  input  under  different 
macroeconomic  scenarios.  The  credit  cycle  is  calculated  from  an  external  rating  agency’s  downgrade  rates  and  the  projections  of 
annual growth rates of real GDP as well as the spread between long and short-term interest rates. 

The  EAD  represents  the  expected  exposure  in  the  event  of  a  default  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. 

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. 

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. 

The impairment policy on loans and advances is described under 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 or liquidation value. 

For  the  impact  of  the  IBOR  reform  on  remeasurement  of  loans  and  advances  at  amortised  cost,  please  refer  to  the  dedicated 
paragraphs in Note 2.4.2 – Classification and Measurement / Modification. 

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 

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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. 

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. 

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.  

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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. 

The cash flows of derivatives were accordingly determined using the ISDA fallback rates in replacement of LIBOR benchmarks11. For 
the impact of the IBOR reform on the derivative instruments, please refer to the Note 6. 

2.4.6   

Contributions 

Contributions  from  Member  States  are  recognised  as  receivables  in  the  statement  of  financial  position  on  the  date  of  the  Council 
Decision fixing the financial contribution to be paid by the Member States to the Facility. 

The Member States contributions meet the following conditions and are consequently classified as equity: 

- 

- 
- 

- 
- 

as defined in the contribution agreement, they entitle the Member States to decide on the utilisation of the Facility’s net assets 
in the events of the Facility’s liquidation; 
they are in the class of instruments that is subordinated to all other classes of instruments; 
all  financial  instruments  in  the  class  of  instruments  that  are  subordinated  to  all  other  classes  of  instruments  have  identical 
features; 
the instrument does not include any features that would require classification as a liability; and 
the total expected cash flows attributable to the instrument over its life are based substantially on the profit or loss, the change 
in the recognised net assets or the change in the fair value of the recognised and unrecognised net assets of the Facility over 
the life of the instrument. 

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

2.4.7   

Interest and similar income  

Interest on loans originated by the Facility is recorded in the statement of profit or loss and other comprehensive income (‘Interest and 
similar income’) and in the statement of financial position (‘Loans and advances’) on an accrual basis using the effective interest rate, 
which  is  the  rate  that  exactly  discounts  estimated  future  cash  payments  or  receipts  through  the  expected  life  of  the  loan  to  the  net 
carrying amount of the loan. Once the recorded value of a loan has been reduced due to impairment, interest income continues to be 
recognised using the original effective interest rate applied to the new carrying amount. 

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

Interest  subsidies  received  for  the  Facility’s  resources  are  deferred  and  recognised  as  an  adjustment  to  the  effective  yield,  being 
recorded under “Interest and similar income” in the income statement over the period from disbursement to repayment of the subsidised 
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. 

11 Cash flows referenced to USD LIBOR are defined using the LIBOR benchmarks when the USD LIBOR settings are not yet terminated.   

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2.4.8   

Interest subsidies and technical assistance 

As part of its activity, the Facility manages interest subsidies and technical assistance (“TA”) 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. 

3  Risk Management 

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

- 

- 

credit risk – the risk of loss resulting from client or counterparty default and arising on credit exposure in all forms, including 
settlement risk; 
liquidity risk – the risk that an entity is not able to fund increases in assets and meet obligations as they come due, without 
incurring unacceptable losses; 

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

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

3.1  Risk management organisation 

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

The Risk Management Directorate of the EIB independently identifies, assesses, monitors and reports the risks to which the Facility is 
exposed. Within a framework whereby the segregation of duties is preserved, the Risk Management is independent of the Front Office.  

At EIB level, the Group Chief Risk Officer (“GCRO”) reports on Group Risks to the EIB Management Committee under the oversight of 
the MC member in charge of risk. The GCRO has direct access to the Risk Policy Committee and can write directly to and communicate 
with the EIB Board of Directors on any matter of his/her field of attribution. 

3.2  Credit risk 

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

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3.2.1 

Credit risk policy 

In carrying out the credit analysis on loan counterparts, the EIB assesses the credit risk and expected loss with a view to quantify and 
price  the  risk.  The  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, Financial Institutions, etc.). Taking into consideration both, Best Banking Practice applicable to the EIB 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 PD following an in-depth analysis of the counterpart’s business and financial risk profile and its country risk 
operating context. Expert adjustments are made when necessary under the consideration of the legal entities’ parental or government 
support, and the final rating allows for overrides to reflect information (e.g. market pricing) not considered in the scoring sheet. 

The credit assessment of project finance and other structured limited recourse operations uses 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. Finally, Non-EU sovereigns are rated by the Economics Department based on a statistical model. 

All Internal Ratings are monitored over loan life, and periodically updated.  

Specific transaction-level and counterpart size limits are applicable to non-sovereign operations, as relevant. Counterpart limits are set 
at consolidated group exposure level, where applicable. Such limits typically reflect, amongst others, the size of counterparts own funds. 

In order to mitigate credit risk the EIB uses, where appropriate and on a case by case basis, various credit enhancements which are: 

- 

- 

Counterparty or project related securities (e.g. pledge over the shares; pledge over the assets; assignment of rights; pledge 
over the accounts); or/and 

guarantees, generally provided by the sponsor of the financed project (e.g. completion guarantees, first demand guarantees) 
or bank guarantees. 

The Facility does not use any credit derivatives to mitigate credit risk. 

3.2.2 

Maximum exposure to credit risk without taking into account any collateral and other credit enhancements 

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

Maximum exposure (in EUR’000) 

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 

Contingent liabilities 

- Issued Guarantees 

Commitments 

- Undisbursed loans 

- Non-issued guarantees 

Total off balance sheet 

Total credit exposure 

111 

31.12.2021 

31.12.2020 

1,358,564 

85,210 

-  

7 

923,940 

68,908 

351,873 

33,584 

1,986,281 

1,673,445 

1,086 

109 

3,431,148 

3,051,859 

-16,602 

-33,152 

1,499,675 

998,560 

1,677,411 

256,299 

3,433,385 

1,722,618 

554,686 

3,275,864 

6,847,931 

6,294,571 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

3.2.3 

Credit risk on loans and advances 

3.2.3.1  Credit risk measurement for loans and advances 

Loans  and  advances  or  guarantees  undertaken  by  the  Facility  benefit  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 PD of the main obligors, the EAD 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 an indicator of credit risk variations for the purposes of prioritising monitoring efforts; 

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

as a benchmark for calculating the annual additions to the General loan reserve; and 

as an input in risk-pricing decisions. 

The following factors enter into the determination of an LG: 

i) 

ii) 

iii) 

iv) 

v) 

vi) 

their 
The  borrower’s  creditworthiness:  Risk  Management 
creditworthiness  based  on  internal  methodologies  and  external  data.  In  line  with  the  Basel  III  Internal  Ratings  Based 
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 LG. 

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%.  

“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. 

112 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

“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  internal  loan  grading  based  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 below the one at approval. 

The table in section 3.2.3.3 shows the credit quality analysis of the Facility’s loan portfolio based on the various LG classes as described 
above. 

3.2.3.2  Analysis of lending credit risk exposure 

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

At 31.12.2021 

in EUR’000 

Financial institutions 

Corporates 

Public authorities 

States 

Total disbursed 

Undisbursed 

Total disbursed and 
undisbursed 

At 31.12.2020 

in EUR’000 

Financial institutions 

Corporates 

Public authorities 

States 

Total disbursed 

Undisbursed 

Total disbursed and 
undisbursed 

Guaranteed 

Other credit 
enhancements 

Not guaranteed 

Total 

% of Total 
disbursed 

74,086 

211,067 

20,776 

- 

305,929 

193,663 

499,592 

- 

- 

- 

917 

917 

- 

917 

1,115,656 

1,189,742 

368,877 

664 

194,238 

1,679,435 

1,467,146 

579,944 

21,440 

195,155 

1,986,281 

1,660,809 

3,146,581 

3,647,090 

60% 

29% 

1% 

10% 

100% 

- 

- 

Guaranteed 

Other credit 
enhancements 

Not guaranteed 

Total 

% of Total 
disbursed 

87,269 

203,772 

21,866 

- 

312,907 

196,692 

509,599 

- 

27,026 

- 

1,506 

28,532 

- 

963,366 

177,321 

1,057 

190,262 

1,332,006 

1,492,774 

1,050,635 

408,119 

22,923 

191,768 

1,673,445 

1,689,466 

28,532 

2,824,780 

3,362,911 

64% 

24% 

1% 

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. 

113 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

3.2.3.3  Credit quality analysis per type of borrower 

The tables below show the credit quality analysis of the Facility’s loan portfolio as at 31 December 2021 and 31 December 2020 by the 
Loan Grading applications, based on the exposure signed (disbursed and undisbursed): 

At 31.12.2021 

in EUR’000 

Borrower 

High Grade  

Standard 
Grade  

Min. 
Accept. 
Risk 

A to B-  

C  

D+  

High Risk   No grading* 

Total   % of Total 

D- and 
below 

Financial 
institutions 
Corporates 

Public authorities 

States 

285,924 

109,219 

443,921 

1,130,146 

- 

1,969,210 

108,621 

- 

917 

49,059 

20,776 

2,529 

12,253 

532,735 

315,011 

1,017,679 

- 

- 

664 

21,440 

3,360 

631,955 

- 

638,761 

54% 

28% 

1% 

17% 

Total 

395,462 

181,583 

459,534 

2,294,836 

315,675 

3,647,090 

100% 

*Loan operations measured at FVTPL 

At 31.12.2020 

in EUR’000 

High Grade  

Standard 
Grade  

Min. 
Accept. 
Risk 

A to B-  

C  

D+  

High Risk   No grading* 

Total   % of Total 

D- and 
below 

Borrower 

Financial institutions 

290,565 

90,445 

475,331 

815,120 

- 

1,671,461 

Corporates 

118,990 

Public institutions 

States 

- 

- 

46,861 

21,866 

4,865 

14,433 

512,142 

313,762 

1,006,188 

- 

- 

1,057 

22,923 

3,926 

653,548 

- 

662,339 

50% 

30% 

1% 

19% 

Total 

409,555 

164,037 

493,690 

1,980,810 

314,819 

3,362,911 

100% 

*Loan operations measured at FVTPL 

114 

 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

3.2.3.4  Risk concentrations of loans and advances 

3.2.3.4.1 

Geographical analysis 

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

Country of borrower 

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

Total 

31.12.2021 

31.12.2020 

345,810 
321,069 
237,992 
208,795 
101,446 
96,391 
85,058 
64,169 
61,033 
52,345 
48,766 
46,423 
42,968 
42,097 
37,098 
20,776 
19,076 
18,972 
15,835 
14,898 
14,708 
12,253 
12,120 
11,921 
11,718 
9,107 
8,692 
5,783 
4,023 
3,581 
2,872 
2,529 
1,792 
1,208 
1,182 
909 
866 
- 
- 

319,040 
195,917 
236,149 
37,497 
76,419 
92,346 
75,037 
59,114 
61,869 
42,553 
56,527 
60,058 
32,850 
36,749 
41,224 
23,411 
30,741 
18,534 
21,249 
17,349 
- 
14,654 
12,918 
38,131 
14,952 
10,775 
8,027 
8,783 
3,932 
1,267 
3,073 
3,359 
- 
2,617 
2,243 
1,898 
1,200 
10,625 
358 

1,986,281 

1,673,445 

115 

 
 
 
 
Annual accounts of the European Development Fund 2021 

3.2.3.4.2 

Industry sector analysis 

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

Industry sector of borrower 

Financial Services 

Electricity 

Public Administration 

Healthcare 

Chemicals 

Business Services, IT and Media 

Air and Maritime Transport Infrastructure 

Pharmaceuticals and Medical Equipment 

Telecommunications 

Investment Goods 

Metals and Mining 

Waste Recuperation and Recycling 

Tertiary and other 

Multi-Utilities 

Building Materials and Construction 

Agriculture and Food Chain 

Total 

31.12.2021 

31.12.2020 

1,190,407 

1,030,121 

211,761 

195,154 

170,000 

111,251 

34,306 

20,776 

13,684 

12,253 

9,269 

8,667 

5,326 

2,561 

866 

- 

- 

192,599 

191,768 

- 

89,495 

26,638 

21,866 

11,709 

14,964 

11,531 

34,292 

6,063 

24,761 

1,200 

14,433 

2,005 

1,986,281 

1,673,445 

116 

 
 
 
Annual accounts of the European Development Fund 2021 

3.2.3.5  Credit risk exposure for each internal risk rating 

The  EIB  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 

2021 

POCI 

FVTPL 

Total 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

64,876 

85,059 

1,056 

46,507 

447,588 

794,603 

314,148 

69,180 

272,917 

272,917 

-42,651 

-109,653 

230,266 

1,986,281 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

86,796 

87,000 

61,060 

173,963 

795,790 

213,737 

10,000 

157,034 

92,031 

92,031 

- 

-16,602 

92,031 

1,660,809 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Internal Rating 1 -  minimal credit risk  Aaa 

- 

64,876 

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 

85,059 

1,056 

Baa1 - Baa3 

46,507 

Ba1 - Ba3 

435,300 

12,288 

Internal Rating  6 - high credit risk 

B1 - B3 

556,705 

237,898 

Internal Rating  7 - very high credit risk  below Caa1 

55,928 

258,220 

Internal Rating  8 - counterpart in 
default 

Loans and advances at FVTPL 

below Caa1 
but in 
default 

- 

- 

- 

- 

69,180 

- 

Loss allowance and FV adjustment 

-3,565 

-33,268 

-30,169 

Carrying amount of loans and 
advances 

1,176,990 

540,014 

39,011 

Loan commitments 
Internal Rating  1 -  minimal credit risk  Aaa 

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 

Baa1 - Baa3 

61,060 

Ba1 - Ba3 

173,963 

- 

86,796 

87,000 

Internal Rating  6 - high credit risk 

B1 - B3 

777,195 

18,595 

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

Internal Rating  8 - counterpart in 
default 

45,955 

167,782 

- 

- 

10,000 

No internal rating* 

Loans and advances at FVTPL 

129,669 

27,365 

- 

- 

Loss allowance and FV adjustment 

-1,693 

-14,909 

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

1,359,945 

198,833 

- 

- 

- 

10,000 

117 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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

in EUR’000 

Moody’s 
equiv. 
grade 

12-month 
ECL 

Lifetime 
ECL not 
credit-
impaired 

Lifetime 
ECL credit-
impaired 

2020 

POCI 

FVTPL 

Total 

Loans and advances at AC 

Internal Rating 1 -  minimal credit risk  Aaa 

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 
Baa1 - 
Baa3 

Ba1 - Ba3 

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 

Loans and advances at FVTPL 

- 

73,545 

75,048 

2,087 

- 

- 

54,412 

6,087 

392,787 

19,761 

- 

- 

- 

- 

- 

581,607 

193,877 

32,032 

70,495 

177,919 

1,493 

- 

- 

5,693 

45,000 

- 

- 

Loss allowance and FV adjustment 

-16,389 

-43,976 

-44,538 

Carrying amount of loans and 
advances 

1,160,047 

432,906 

33,987 

Loan commitments 

Internal Rating  2 - very low credit risk  Aa1 - Aa3 

Internal Rating  3 - low credit risk 

Internal Rating  4 - moderate credit risk 

A1 - A3 
Baa1 - 
Baa3 

Internal Rating  5 - financially weak 
counterpart 

Ba1 - Ba3 

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 

95,067 

87,000 

57,282 

152,264 

- 

- 

- 

- 

675,365 

8,964 

72,500 

110,331 

- 

- 

- 

- 

- 

- 

- 

- 

38,497 

No internal rating* 

Loans and advances at FVTPL 

129,669 

27,365 

- 

- 

Loss allowance and FV adjustment 

-6,817 

-26,335 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

73,545 

75,048 

2,087 

60,499 

412,548 

807,516 

249,907 

50,693 

92,436 

92,436 

-45,931 

-150,834 

46,505 

1,673,445 

- 

- 

- 

- 

- 

- 

- 

- 

95,067 

87,000 

57,282 

152,264 

684,329 

182,831 

38,497 

157,034 

268,314 

268,314 

- 

-33,152 

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

1,262,330 

120,325 

38,497 

- 

268,314 

1,689,466 

The EIB continually monitors events affecting its borrowers and guarantors, especially banks. In particular, the EIB 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. 

118 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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  the 
Facility management is provided on the overall status. 

The arrears and impairments on loans and advances can be analysed as follows (in EUR’000): 

Carrying amount 

Lifetime ECL credit- impaired 

Gross amount 

Impairment- loss allowance 

Carrying amount of lifetime ECL credit-impaired 

Past due but not credit- impaired 

Past due comprises 

0-30 days 

30-60 days 

60-90 days 

90-180 days 

more than 180 days 

Carrying amount past due but not credit- impaired 

Loans and advances 

Loans and advances 

31.12.2021 

1,986,281 

31.12.2020 

1,673,445 

69,180 

-30,169 

39,011 

2,334 

9 

- 

- 

- 

2,343 

45,000 

-44,538 

462 

2,008 

- 

- 

174 

- 

2,182 

Carrying amount neither past due nor credit- impaired 

1,944,927 

1,670,801 

Total carrying amount loans and advances 

1,986,281 

1,673,445 

119 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

3.2.3.7 

Sensitivity on ECL to future economic conditions (in EUR’000) 

The  ECL  is  sensitive  to  judgments  and  assumptions  made  regarding  formulation  of  forward-looking  scenarios.  The  EIB  performs  a 
sensitivity analysis on the ECL recognised on material classes of its assets. 

The forecasts of future economic conditions (via macroeconomic scenarios) are inputs to forecasting model producing conditional risk 
parameters, which are an input to loss allowance calculation. 

The scenarios are derived shocking GDP, which is the key measurement of economic activity. The shocks to real GDP are calibrated to 
replicate the past volatility of the variable. In addition, expert judgment is applied, when appropriate, to refine the size and persistency of 
GDP  shocks.  As  a  result,  shocks  are  determined  together  with  a  decay  function  to  determine  the  impact  of  the  shocks  over  time. 
Probabilities  attached to  each scenario  are  defined  reflecting market  (volatility)  indicators  and  internally  developed  indicators/trackers 
consistently deployed over time to capture uncertainty. The weighting of positive and negative shocks depends on the balance of risks 
in  the  economy,  on  average  negative  and  positive  shocks  EUR  -15,250  (2020:  EUR  -20,533)  and  EUR  11,780  (2020:  EUR  17,658) 
were respectively applied on quarterly projections in the past exercise. 

The table below shows the loss allowance on loans and advances under Stage 1 and 2. Each forward-looking scenario (e.g. baseline, 
positive and negative) was weighted 100% instead of applying scenario probability weights across the three scenarios. 

(in EUR’000) 

Gross exposure 

Loss allowance 

(in EUR’000) 

Gross exposure 

Loss allowance 

2021 

Positive 

Baseline   

Negative   

3,319,800 

3,319,800 

3,319,800 

37,862 

49,642 

64,892 

2020 

Positive 

Baseline   

Negative   

3,063,652 

3,063,652 

3,063,652 

70,645 

88,303 

108,836 

3.2.3.8  Loan renegotiation and forbearance 

The  EIB  considers  loans  to  be  forborne  loans  (i.e.  loans,  debt  securities  and  loan  commitments)  in  respect  of  which  forbearance 
measures have been extended. Forbearance measures consist of “concessions” that the EIB decides to make towards an obligor who is 
considered unable to comply with the contractual debt service terms and conditions due to its financial difficulties, in order to enable the 
obligor to service the debt or to refinance, totally or partially, the contract. Exposures shall be treated as forborne if a concession has 
been made, irrespective of whether any amount is past-due, or the exposure is classified as defaulted. Exposures shall not be treated 
as forborne when the obligor is not in financial difficulties. 

In the normal course of business, the LG of the loans in question would have deteriorated, the loans would have been included in the 
Watch  List  before  renegotiation  and  the  financial  instrument  would  move  from  Stage  1  to  Stage  2  in  the  three-stage  model  for 
impairment.  Once  renegotiated,  the  EIB  would  continue  to  closely  monitor  these  loans  and  the  financial  instrument  would  be  credit 
impaired and moved to Stage 3. If subsequently the LG of a loan improves sufficiently, the loan would be removed from the Watch List 
in line with the EIB’s procedures. 

As  part  of  its  response  to  the  economic  effects  of  the  COVID-19  pandemic,  the  Bank  has  decided  to  make  a  number  of  supportive 
measures  available  to  its  clients  in  certain  circumstances,  which  include,  among  other  things,  (i)  the  temporary  easing  (including 
waivers)  of  financial  covenants  and  other  key  clauses,  (ii)  the  re-profiling  of  cash  flows  by  setting  new  repayment  schedules  or  the 
temporary  standstill  of  repayment  obligations  and  (iii)  certain  other  complementary  supportive  measures,  such  as  the  signing  of  new 
contracts,  accelerating  loan  disbursements  and  increasing  amounts  lent  to  borrowers.  The  Bank  is  assessing  requests  for  such 
measures  on  a  case-by-case  basis  within  the  limits  of  certain  specific  conditions.  These  measures  are  intended  to  be  extended  to 
clients  who  are  temporarily  affected  by  the  economic  effects  of the  COVID-19  pandemic  but  who  are  not  experiencing  any  structural 
financial difficulties or solvency issues and are considered to be a going concern at the time of granting such measures. If, as a result of 
the assessment, a client does not meet these requirements or the Facility identifies risks for the long-term sustainability of the client’s 
business model, it will consider any other appropriate measures and, if necessary, follow the EIB’s standard restructuring processes. 

Forbearance  measures  and  practices  undertaken  by  the  EIB  during  the  reporting  period  include,  but  are  not  limited  to,  extension  of 
maturities, deferral of capital only, deferral of capital and interest, breach of material covenants and capitalisation of arrears. 

120 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

3.2.3.8 

Loan renegotiation and forbearance (continued) 

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

in EUR’000 

31.12.2021 

31.12.2020 

Performing 

Non-
Performing 

Performing 

Non-
Performing 

Number of contracts subject to forbearance practices 

16 

9 

12 

Carrying values (incl. interest and amounts in arrears) 

210,553 

58,742 

169,274 

ECL allowance recognised 

Interest income in respect of forborne contracts 

16,124 

11,583 

20,475 

19,311 

3,563 

7,729 

14 

58,748 

28,934 

5,099 

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

- 

- 

- 

49,472 

in EUR’000 

31.12.2020 

Forbearance measures 

Extension of 
maturities 

Deferral of 
capital and 
interest 

Breach of 
material 
financial 
covenants 

Other 

Contractua
l 
repayment, 
termination 
and/or 
write off 

31.12.2021 

Financial 
institutions 

Corporates 

Total 

90,525 

137,497 

228,022 

- 

-690 

-690 

- 

- 

- 

61,942 

4,920 

-8,061 

149,326 

-13,752 

48,190 

- 

-3,086 

119,969 

4,920 

-11,147 

269,295 

3.2.4 

Credit risk on cash and cash equivalents 

Available  funds  are  invested  in  accordance  with  the  Facility’s  schedule  of  contractual  disbursement  obligations.  As  of  31  December 
2021, and 31 December 2020, investments were in the form of bank deposits, certificates of deposit and commercial papers.  

The authorized entities have a rating similar to the short-term and long-term ratings required for the EIB’s own treasury placements. In 
case of different ratings being granted by more than one credit rating agency, the lowest rating governs. The maximum authorized limit 
for each authorised bank is currently EUR 50,000,000 (fifty million euro). An exception to this rule has been granted to Societe Generale 
where  the  Facility  has  its  operational  cash  accounts.  The  short-term  credit  limit  for  Societe  Generale  as  at  31  December  2021  and 
31 December 2020 amounts to EUR 110,000,000 (one hundred and ten million euro). The increased limit applies to the sum of the cash 
held at the operational cash accounts and the instruments issued by this counterpart and held by the treasury portfolio. 

All investments have been done with authorised entities with a maximum tenor of three months from value date. All credit exposure limit 
breaches have been reported to the mandators. As at 31 December 2021 and as at 31 December 2020 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.  

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) 

31.12.2021 

31.12.2020 

P-1 

P-1 

P-1 

P-1 

P-1 

P-1 

P-2 

Total 

Aaa 

Aa2 

Aa3 

A1 

A2 

A3 

A3 

299,814 

160,066 

67,036 

82,730 

199,879 

444,064 

104,975 

22% 

12% 

5% 

6% 

15% 

32% 

8% 

49,988 

25,022 

130,024 

99,969 

119,972 

498,965 

- 

5% 

3% 

14% 

11% 

13% 

54% 

- 

1,358,564 

100% 

923,940 

100% 

3.2.5 

Credit risk on derivatives 

121 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

3.2.5.1  Credit risk policy of derivatives 

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

In the normal course of its activity, the Facility may enter into swap contracts with a view to hedge specific lending operations or into 
currency forward contracts, with a view to hedge its currency positions denominated in actively traded currencies other than the Euro. 
All the swaps are executed by the 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.  

3.2.5.2  Credit risk measurement for derivatives 

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. 

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. 

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 1,530.0 million as at 31 December 2021 against EUR 1,480.0 million as at 31 December 
2020.  The  fair  value  of  FX  swaps  amounts  to  EUR  -16.3  million  as  at  31 December  2021  against  EUR 33.6  million  as  at 
31 December 2020. 

The Facility enters into cross currency swaps contracts in order to hedge currency risk on loan disbursements in currencies other than 
EUR.  Cross  currency  swaps  have  a  long-term  maturity.  The  notional  amount  of  FX  swaps  stood  at  EUR  51.9  million  as  at 
31 December 2021  and  the  fair  value  of FX  swaps  amounts to  EUR  -2.6 million  as  at  31 December  2021  against  31 December 2020 
when there was no cross currency swap. 

The Facility enters into interest rate swap contracts in order to hedge the interest rate risk on loans disbursed. As at 31 December 2021 
interest rate swaps were unwind. Outstanding notional amount of EUR 0.0 million (2020: EUR 17.7 million) and a fair value of EUR 0.0 
million (2020: EUR -0.6 million). 

3.2.6  Credit risk on treasury financial assets 

The  following  table  shows  the  situation  of  the  treasury  portfolio  entirely  composed  of  commercial  papers  issued  by  sub-sovereigns, 
banks  and  non-bank  entities  original  maturity  of  more  than  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 depending on liquidity requirements: 

in EUR ‘000 
Minimum short-term 
rating 

Minimum long-term 
rating 

(Moody’s term) 

(Moody’s term) 

31.12.2021 

31.12.2020 

P-1 

P-1 

P-1 

P-1 

P-1 

P-2 

P-2 

Total 

Aa1 

Aa2 

Aa3 

Aaa 

A2 

Baa1 

Baa3 

0% 

0% 

0% 

0% 

0% 

0% 

0% 

0% 

50,006 

50,040 

50,016 

51,705 

50,058 

50,035 

50,013 

14% 

14% 

14% 

15% 

15% 

14% 

14% 

351,873 

100% 

- 

- 

- 

- 

- 

- 

- 

- 

122 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
Annual accounts of the European Development Fund 2021 

3.3  Liquidity risk 

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

3.3.1 

Liquidity risk management 

The  Facility  is  primarily  funded  by  annual  contributions  from  Member  States  as  well  as  by  reflows  stemming  from  the  Facility’s 
operations. The Facility manages its funding liquidity risk primarily by planning its net liquidity needs and the required Member States 
annual contributions. 

In order to calculate Member States’ annual contributions, disbursement patterns of the existing and pipelined portfolio is analysed and 
followed up throughout the year. Special events, such as early reimbursements, sales of shares or default cases are taken into account 
to correct annual liquidity requirements.  

To  further  minimize  the  liquidity  risk,  the  Facility  maintains  a  liquidity  reserve  sufficient  to  cover  at  any  PIT  forecasted  cash 
disbursements,  as  communicated  periodically  by  the  EIB’s  Lending  Department.  Funds  are  invested  on  the  money  market  and  bond 
markets  in  the  form  of  interbank  deposits  and  other  short-term  financial  instruments  by  taking  into  consideration  the  Facility’s  cash 
disbursement  obligations.  The  Facility’s  liquid  assets  are  managed  by  the  Bank’s  Treasury  Department  with  a  view  to  maintain 
appropriate liquidity to enable the Facility to meet its obligations.    

In  accordance  with  the  principle  of  segregation  of  duties  between  the  Front  and  Back  Office,  settlement  operations  related  to  the 
investment of these assets are under the responsibility of the EIB’s Planning and Settlement of Operations Department. Furthermore, 
the authorisation of counterparts and limits for treasury investments, as well as the monitoring of such limits, are the responsibility of the 
Bank’s Risk Management Directorate.  

3.3.2 

Liquidity risk measurement 

The  tables  in  this  section  analyse  the  financial  liabilities  of  the  Facility  by  maturity  on  the  basis  of  the  period  remaining  between  the 
balance sheet date and the contractual maturity date (based on undiscounted cash flows). 

In terms of non-derivative financial liabilities, the Facility holds commitments in form of 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.  

Loans under the IF have a disbursement deadline. However, disbursements are made at times and in amounts reflecting the progress 
of  underlying  investment  projects.  Moreover,  the  IF’s  loans  are  transactions  performed  in  a  relatively  volatile  operating  environment, 
hence their disbursement schedule is subject to a significant degree of uncertainty.  

Capital investments become due when and as soon as equity fund managers issue valid calls for capital, reflecting the progress in their 
investment activities. The drawdown period is usually of 3 years, with frequent prolongation by one or two years. Some disbursement 
commitments  usually  survive  the  end  of  the  drawdown  period  until  full  disposal  of  the  fund’s  underlying  investments,  as  the  fund’s 
liquidity may be insufficient from time to time to meet payment obligations arising in respect of fees or other expenses.  

Guarantees are not subject to specific disbursement commitments unless a guarantee is called. The amount of guarantees outstanding 
is reduced alongside the repayment schedule of guaranteed loans. 

Committed  interest  subsidies’ cash  outflows  occur  in  the case  of  subsidized  loans  financed  by  the Bank’s  own  resources. Therefore, 
reported  outflows  represent  only  commitments  related  to  these  loans  rather  than  the  total  amount  of  committed  undisbursed  interest 
subsidies. As in the case of loans, their disbursement schedule is uncertain.   

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

Commitments for non-derivative financial liabilities for which there is no defined contractual maturity date are classified under “Maturity 
Undefined”.  Commitments,  for  which  there  is  a  recorded  cash  disbursement  request  at  the  reporting  date,  are  classified  under  the 
relevant time bucket. 

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

3.3.2 

Liquidity risk measurement (continued) 

123 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

Maturity profile of non-derivative financial liabilities 

in EUR’000 as at 31.12.2021 

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  

 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 

- 

6,322 

- 
- 
1,519 

7,841 

- 

- 

- 
- 
- 

- 

- 

- 

- 
- 
- 

- 

- 

- 

- 
- 
- 

- 

1,677,411  1,677,411 

466,678 

473,000 

1,755,974  1,755,974 
379,620 
39,136 

379,620 
37,617 

4,317,300  4,325,141 

Maturity profile of non-derivative financial liabilities 

in EUR’000 as at 31.12.2020 

 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 

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  

199,006 

1,043 

- 
18,494 
2,504 
221,047 

- 

- 

- 
- 
- 
- 

- 

- 

- 
- 
- 
- 

- 

- 

- 
- 
- 
- 

1,523,612  1,722,618 

377,303 

378,347 

1,553,246  1,553,246 
374,885 
45,533 
3,853,581  4,074,629 

356,391 
43,029 

Maturity profile of derivative financial liabilities 

in EUR’000 as at 31.12.2021 

CCS – Inflows 
CCS – Outflows 
Short-term currency swaps – Inflows 
Short-term currency 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 

82 
-115 
1,530,000 
-1,547,698 

-17,731 

3,340 
-8,470 
- 
- 

-5,130 

34,870 
-47,250 
- 
- 

-12,380 

9,394 
-10,329 
- 
- 

47,686 
-66,164 
1,530,000 
-1,547,698 

-935 

-36,176 

Maturity profile of derivative financial liabilities 

in EUR’000 as at 31.12.2020 

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 

1,480,000 
-1,448,077 
147 
- 

32,070 

- 
- 
394 
-815 

-421 

- 
- 
775 
-1,142 

-367 

- 
- 
- 
- 

- 

1,480,000 
-1,448,077 
1,316 
-1,957 

31,282 

124 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

3.3.3  Long term financial assets and liabilities 

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

in EUR’000 

Financial assets: 

Loans and advances 

Shares and other variable yield securities 

Other assets 

Total  

Financial liabilities: 

Provisions for guarantees issued 

Amount owed to third parties* 

Provisions for loan commitments 

31.12.2021 

31.12.2020 

2,074,642 

697,631 

1,086 

1,812,807 

526,810 

109 

2,773,359 

2,339,726 

- 

179,593 

16,602 

851 

81,371 

33,152 

Total  
* 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. 

196,195 

115,374 

3.4      Market risk 

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

3.4.1  Interest rate risk 

Interest rate risk arises from the volatility in the economic value of, or in the income derived from, interest rate bearing positions due to 
adverse movements in interest rates.  

The Facility is not directly impacted by the fluctuation of its economic value or to pricing mismatches between different assets, liabilities 
and hedge instruments because (i) it does not have any direct borrowing costs or interest rate bearing liabilities and (ii) it accepts the 
impact of interest rate fluctuations on the revenues from its investments. 

The Facility measures the sensitivity of its loan portfolio and micro hedging swaps to interest rate fluctuations via a Basis Point Value 
(“BPV“) calculation. 

The BPV measures the gain or loss in the net present value of the relevant portfolio, due to a 1 basis point (0.01%) increase in interest 
rates tenors ranging within a specified time bucket “money market – up to one year”, “very short – 2 to 3 years”, “short – 4 to 6 years”, 
“medium – 7 to 11 years”, “long – 12 to 20 years” or “extra-long – more than 21 years”. 

To  determine  the  net  present  value  (“NPV“)  of  the  loans’  cash  flows  denominated  in  EUR,  the  Facility  uses  the  EUR  3  month  swap 
curve. The NPV of the loans’ cash flows denominated in non-EUR currencies is determined by using the EUR 3 month swap plus the 
cross currency swap basis. For those non-EUR currencies for which a reliable and sufficiently complete discount curve is not available, 
either the EUR or USD discount curve is used instead. 

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. 

125 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

As shown  in  the  following  table  the  net  present  value  of the  loan portfolio including  related micro-hedging  swaps  as  at  31  December 
2021  would  decrease  by  EUR  769k  (as  at  31  December  2020:  decrease  by  EUR  697k)  if  all  relevant  interest  rates  curves  are 
simultaneously shifted upwards in parallel by 1 basis point. 

Basis point value 

Money 

in EUR’000 

Market 

Very Short  

Short 

Medium 

Long 

Extra Long  

Total 

As at 31.12.2021 

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 

-46 

-120 

-371 

-218 

-14 

- 

-769 

Basis point value 

Money 

in EUR’000 

Market 

Very Short  

Short 

Medium 

Long 

Extra Long  

Total 

As at 31.12.2020 

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 

IBOR Reform: 

-45 

-113 

-313 

-215 

-11 

- 

-697 

Nature and extend of Risk and Risk Management  

Interest rate benchmarks, such as the London InterBank Offered Rate (‘LIBOR’) are widely used in financial contracts. In recent years, 
confidence in their reliability and robustness has been undermined, and regulators across the globe have been pushing for a reform of 
interest rate benchmarks. The global transition to alternative interest rate benchmark rates is one of the most challenging reforms to be 
undertaken in the financial markets. 

In February 2018, the Bank’s Assets & Liabilities Committee (ALCO) set up a dedicated sub-ALCO working group on IBORs, the IBOR 
Working Group to proactively follow and monitor the developments related to the transition to alternative interest rates.   
The objectives of the IBOR Working Group included closely monitoring the developments related to the interest rate benchmark reform, 
evaluating  the  extent  to  which  the  transition  to  the  alternative  rates  advanced.  It  covered,  among  others,  the  progress  on  contracts 
amendments, bilateral negotiations with clients, IT systems and applications updates, introduction of fallback language in new contracts, 
regular monitoring of the exposure to IBORs per currency and asset class.  
The  progress  in  the  implementation  of  the  established  workplan  has  been  regularly  monitored  and  discussed  at  the  ALCO,  and 
periodically reported to the Bank’s Senior Management. 

The main risks to which the Facility has been exposed as a result of IBOR reform are operational. For example, updating of systems 
that use IBOR curves and revision of operational controls related to the reform and regulatory risks, the renegotiation of loan contracts 
through  bilateral  negotiation  with  customers,  updating  of  contractual  terms,  adjustments  to  settlement  and  payment  infrastructures. 
Financial risk is predominantly limited to interest rate risk. 

The risks did not result in a change of the Facility’s risk management strategy. 

Exposure per financial instruments class and transition status 

As part of its lending, the Facility is mainly exposed to the IBOR Reform on Floating Rates Loans denominated in USD. Floating rates 
assets are generally reported at amortised cost in the Facility’s statement of financial position. In addition, the Facility uses derivative 
instruments  to  micro  hedge  fixed  rates  loans  and  borrowings  operations  as  well  as  for  monitoring  its  global  interest  rate  and  foreign 
exchange positions.  

Derivatives are the largest asset class directly exposed to IBOR rate as their corresponding cash flows are referenced to IBOR rate (i.e., 
floating interest rate).  

As  at  31  December  2021,  through  the  application  of  the  ISDA  fallback  protocol,  the  Facility  has  migrated  the  whole  portfolio  of  its 
derivatives referring to LIBORs that will cease to exist immediately after 30 June 2023 respectively. For the impact of the IBOR reform 
on the derivative instruments, please refer to the Note 6. 
Loans are the second largest asset class directly exposed to IBOR rate as their corresponding cash flows are referenced to IBOR rate 
(i.e., floating interest rate). 

Since 1 July 2020, the Bank has implemented and has been applying the updated EIB fallback language in all new loan contracts; a 
revised fallback language was introduced in Q2 2021. 

The  Bank  set  up  a  task  force,  which  focused  on  reaching  out  to  clients  with  contracts  referencing  USD  LIBOR,  in  order  to  raise 
awareness, introduce fallback language wherever possible and generally understand clients’ preferences. 

3.4.2 

Foreign exchange risk 

Foreign exchange (“FX”) risk for the IF is the risk of loss in earnings or economic value due to adverse movements of FX rates. 

126 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
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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. 

3.4.2.2.2. 

Hedging of operations denominated in currencies other than EUR or USD 

IF  operations  denominated  in  currencies  other  than  EUR  and  USD  shall  be  hedged  through  cross-currency  swap  contracts  with  the 
same financial profile as the underlying Loan, provided that a swap market is operational. 

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

3.4.2.2.3 

Foreign exchange position (in EUR’000) 

The tables of this note show the Facility’s foreign exchange position. 

The  foreign  exchange  position  is  presented  in  the  tables  below  in  accordance  with  the  IF’s  Risk  Policies  (as  described  in  the  IF’s 
financial  risk  framework).  The  FX  position  as  per  Risk  Policies  is  based  on  accounting  figures  and  defined  as  the  balance  between 
selected assets and liabilities. The assets and liabilities defined in the FX position as per Risk Policies are selected 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”. 

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As at 31 December 2021 

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 

-130,383 

-29,399 

-159,782 

756,190 

90,567 

16,478 

18,783 

36,935 

49,667 

7,138 

333 

301 

978 

365 

97,705 

16,811 

19,084 

37,913 

50,032 

96,450 

-517 

95,933 

- 

- 

- 

- 

- 

- 

- 

Total non-EUR currencies 

178,497 

-20,801 

157,696 

756,190 

EUR 

- 

3,645,241 

3,645,241 

628,913 

Total EUR and non-EUR 

178,497 

3,624,440 

3,802,937 

1,385,103 

* See section 3.4.2.2.2 for explanations on synthetic hedge. 

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Annual accounts of the European Development Fund 2021 

3.4.2.2.3 Foreign exchange position (in EUR’000) (continued) 

As at 31 December 2020 

Assets and liabilities 

Commitments and 
contingent liabilities 

FX position as per 
Risk Policies 

FX position excluded 
from Risk Policies 

Balance sheet FX 
position 

-117,144 

-51,893 

-169,037 

479,103 

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 

23,439 

27,302 

14,538 

44,997 

44,523 

-960 

272 

320 

572 

-872 

98,509 

-1,512 

22,479 

27,574 

14,858 

45,569 

43,651 

96,997 

82,091 

- 

- 

- 

- 

- 

- 

479,103 

Total non-EUR currencies 

136,164 

-54,073 

EUR 

- 

3,276,377 

3,276,377 

1,661,939 

Total EUR and non-EUR 

136,164 

3,222,304 

3,358,468 

2,141,042 

* See section 3.4.2.2.2 for explanations on synthetic hedge. 

3.4.2.3 

Foreign exchange sensitivity analysis 

As  at  31  December  2021  a  10  percent  depreciation  of  EUR  versus  all  non  EUR  currencies  would  result  in  an  increase  of  the 
contributors’  resources  amounting  to  EUR  17.5  million  (31  December  2020:  EUR 9.1  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 -14.3 million (31 December 
2020: EUR -7.5 million). 

129 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

3.4.2.4 

Conversion rates 

The following conversion rates were used for establishing the balance sheet at 31 December 2021 and 31 December 2020: 

31 December 2021 

31 December 2020 

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) 

3.4.3 

Equity price risk 

13.27 

64.83 

2.36 

113.16 

173.48 

128.26 

40.99 

49.30 

71.70 

467.07 

1,162.53 

2,610.48 

4,027.00 

1.13 

655.96 

18.06 

18.88 

13.20 

71.27 

2.46 

87.33 

172.10 

133.80 

44.14 

48.52 

91.02 

466.78 

1,210.77 

2,838.58 

4,474.00 

1.23 

655.96 

18.02 

25.93 

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 69.8 million and EUR -69.8 million respectively as at 31 December 2021 (EUR 52.7 million and EUR -52.7 million respectively as 
at 31  December 2020). 

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Fair values of financial instruments 

4 
4.1  Accounting classifications and fair values 

        The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. These do not include fair value information for financial assets 

and financial liabilities not carried at fair value if the carrying amount is a reasonable approximation of fair value. 

At 31 December 2021 

Carrying amount 

Fair value 

Derivative 
financial 
instruments 

Shares and 
other 
variable 
yield 
securities 

Cash, 
loans and 
advances 

Treasury 
financial 
assets 

Other 
financial 
assets/liabi
lities 

Total 

Level 1 

Level 2 

Level 3 

Total 

in EUR’000 

Financial assets mandatorily measured at 
FVTPL 

Derivative financial instruments  

Venture Capital Fund  

Direct Equity Investments 

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 

7 

- 

- 

- 

7 

- 

- 

- 

- 

- 

- 

- 

590,570 

107,061 

- 

- 

- 

- 

229,991 

697,631 

229,991 

- 

- 

- 

- 

- 

- 

1,358,564 

1,756,290 

85,210 

- 

- 

3,200,064 

Total financial assets  

7 

697,631 

3,430,055 

Financial liabilities measured at FVTPL 

Derivative financial instruments 

Total financial liabilities measured at FVTPL 

-18,835 

-18,835 

Financial liabilities at AC 

Provisions for guarantees issued 

Provisions for loan commitments 

Amounts owed to third parties 

Other liabilities 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

7 

- 

- 

- 

- 

7 

590,570 

590,570 

107,061 

107,061 

229,991 

229,991 

7 

927,622 

927,629 

252,080 

- 

252,080 

-  1,918,979 

-  1,918,979 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

-  2,171,059 

-  2,171,059 

- 

- 

-18,835 

-18,835 

- 

- 

-18,835 

-18,835 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

7 

590,570 

107,061 

229,991 

927,629 

1,358,564 

1,756,290 

85,210 

- 

1,086 

1,086 

1,086 

3,201,150 

1,086 

4,128,779 

- 

- 

- 

-18,835 

-18,835 

- 

-16,602 

-16,602 

-239,639 

-239,639 

-2,333 

-2,333 

131 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Annual accounts of the European Development Fund 2021 

Total financial liabilities measured at AC 

Total financial liabilities 

- 

-18,835 

- 

- 

- 

- 

- 

- 

-258,574 

-258,574 

-258,574 

-277,409 

Fair values of financial instruments (continued) 

4 
4.1  Accounting classifications and fair values (continued) 

As at 31 December 2020 

Carrying amount 

Fair value 

in EUR’000 

Derivative 
financial 
instruments 

Shares and 
other 
variable 
yield 
securities 

Cash, 
loans and 
advances 

Treasury 
financial 
assets 

Other 
financial 
assets/liabi
lities 

Total 

Level 1 

Level 2 

Level 3 

Total 

Financial assets mandatorily measured at 
FVTPL 

Derivative financial instruments  

33,584 

- 

Venture Capital Fund  

Direct Equity Investment 

Loans and advances 

- 

- 

- 

437,142 

89,668 

- 

47,309 

Total financial assets mandatorily measured 
at FVTPL 

33,584 

526,810 

47,309 

Financial assets at AC 

Cash and cash equivalents 

Loans and advances 

Amounts receivable from contributors 

Treasury financial assets 

Other assets 

Total financial assets measured at AC 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

923,940 

1,626,136 

68,908 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

351,873 

- 

- 

- 

- 

- 

- 

- 

- 

- 

33,584 

437,142 

89,668 

47,309 

607,703 

923,940 

1,626,136 

68,908 

- 

- 

351,873 

300,174 

50,032 

- 

109 

109 

- 

- 

- 

- 

- 

- 

350,206 

- 

2,618,984 

351,873 

109 

2,970,966 

300,174  1,807,625 

-  2,107,799 

- 

- 

- 

- 

- 

- 

33,584 

- 

33,584 

- 

- 

- 

437,142 

437,142 

89,668 

89,668 

47,309 

47,309 

33,584 

574,119 

607,703 

- 

- 

- 

-  1,757,593 

-  1,757,593 

Total financial assets 

33,584 

526,810 

2,666,293 

351,873 

109 

3,578,669 

Financial liabilities mandatorily measured at 
FVTPL 

Derivative financial instruments 

Total financial liabilities measured at FVTPL 

Financial liabilities at AC 

Provisions for guarantees issued 

Provisions for loan commitments 

Amounts owed to third parties 

-642 

-642 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

-642 

-642 

- 

- 

-642 

-642 

- 

- 

-642 

-642 

-851 

-851 

-33,152 

-33,152 

-152,378 

-152,378 

132 

 
 
  
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Other liabilities 

Total financial liabilities measured at AC 

Total financial liabilities 

- 

- 

-642 

- 

- 

- 

- 

- 

- 

- 

- 

- 

-3,446 

-3,446 

-189,827 

-189,827 

-189,827 

-190,469 

Annual accounts of the European Development Fund 2021 

133 

 
 
  
 
 
 
  
 
 
 
  
 
 
 
Annual accounts of the European Development Fund 2021 

4.2           Measurement of fair values 

4.2.1 

Valuation techniques and significant unobservable inputs 

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

Valuation technique 

Significant unobservable inputs 

Relationship of 
unobservable inputs to 
fair value measurement 

Financial instruments carried at fair value 

Derivative 
financial 
instruments 

Venture 
Capital Fund 
(VCF) 

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

forward/interest 

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

Direct Equity 
Investment 

Adjusted net assets. 

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). 

Not applicable. 

Not applicable. 

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

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

for 

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

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

longer 

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

for 

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

The  higher  the  discount 
rate 
fair 
lower 
value 

the 

the 

134 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

4.2.1 

Valuation techniques and significant unobservable inputs (continued) 

Valuation technique 

Significant unobservable inputs 

Relationship of 
unobservable inputs 
to fair value 
measurement 

Financial instruments not carried at fair value 

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 2021 and 2020, 
namely: 

- 

- 

Credit valuation adjustments (CVA), reflecting counterparty credit risk on derivative transactions, amounting to EUR -167.8k 
as at 31 December 2021 and to EUR -34.3k as at 31 December 2020.  
Debit  valuation  adjustments  (DVA),  reflecting  own  credit  risk  on  derivative  transactions,  amounting  to  EUR  +2.7k  as  at  
31 December 2021 and EUR +21.8k as at 31 December 2020. 

135 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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 2021 and 2020 the Facility did not make transfers from Level 1 to 2 or Level 2 to 1 of the fair value hierarchy. 

4.2.3 

Level 3 fair values 

Reconciliation of Level 3 fair values 

The following tables present the changes in Level 3 instruments for the year ended 31 December 2021 and 31 December 2020: 

in EUR'000 

Balance as at 1 January 2021 

Gains or losses included in profit or loss: 

Derecognition of fair value adjustment due to sales 

Net fair value change on shares and other variable yield securities  

Total 

Disbursements 

Repayments 

Foreign exchange rates differences 

Balance as at 31 December 2021 

in EUR'000 

Balance as at 1 January 2020 

Gains or losses included in profit or loss: 

Derecognition of fair value adjustment due to sales 

Net fair value change on shares and other variable yield securities 

Total 

Disbursements 

Repayments 

Foreign exchange rates differences 

Balance as at 31 December 2020 

In 2021 and 2020 the Facility did not make transfers out or to Level 3 of the fair value hierarchy. 

Shares and other 
variable yield 
securities 

526,810 

13,489 

117,502 

130,991 

84,224 

-71,624 

27,230 

697,631 

Shares and other 
variable yield 
securities 

604,311 

-15,632 

-47,909 

-63,541 

85,305 

-65,649 

-33,616 

526,810 

136 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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 

6  Derivative financial instruments  

31.12.2021 

31.12.2020 

434,064 

672,730 

252,211 

1,359,005 

-441 

1,358,564 

398,991 

380,000 

145,086 

924,077 

-137 

923,940 

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

As at 31 December 2021 

in EUR'000 
Cross currency swaps 

FX swaps 

Total derivative financial instruments 

As at 31 December 2020 

in EUR'000 
Interest rate swaps 

FX swaps 

Total derivative financial instruments 

Fair Value 

Assets 

Liabilities 

Notional amount 

7 

- 

7 

-2,568 

-16,267 

-18,835 

51,865 

1,530,000 

1,581,865 

Fair Value 

Assets 

Liabilities 

Notional amount 

- 

33,584 

33,584 

-642 

- 

-642 

17,710 

1,480,000 

1,497,710 

As a result of the IBOR  reform, in 2021 minimal one-time valuation difference occurred from the change in benchmark cash flows and 
discount curve to be used in amount of EUR 883. 

137 

 
 
 
 
 
 
 
 
 
 
 
 
 
Global 
loans* 

Senior 
loans 

Subordinated 
loans 

POCI 

Total 

Annual accounts of the European Development Fund 2021 

7 

Loans and advances 

7.1 

 Loans and advances 

The following table shows the reconciliation from the opening to the closing balance of loans and advances: 

in EUR'000 
Nominal of loans at AC as at 1 January 2021 

Disbursements 

Write offs 

Repayments 

Interest capitalised 

Foreign exchange rates differences 

Nominal of loans at AC as at 31 December 2021 

1,151,398 

572,864 

274,020 

62,869 

- 

- 

-225,990 

-113,215 

- 

- 

61,532 

26,597 

1,260,960 

549,115 

Impairment - loss allowance as at 1 January 2021 

-68,243 

-35,550 

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  

Foreign exchange rates differences 

6,509 

6,327 

-249 

15,875 

-3,942 

6,836 

6,045 

-742 

2,373 

-1,153 

Impairment - loss allowance as at 31 December 2021 

-43,723 

-22,191 

Loans and advances at AC as at 31 December 2021 

1,217,237 

526,924 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Nominal of loans at FVTPL as at 1 January 2021 

1,080 

61,493 

Disbursements 

Repayments 

Foreign exchange rates differences 

- 

- 

- 

8,323 

-739 

1,859 

30,000 

170,000 

- 

- 

Nominal of loans at FVTPL as at 31 December 2021 

1,080 

70,936 

200,000 

Fair value adjustment as at 1 January 2021 

-1,080 

-25,893 

Net FV change 

Foreign exchange rates differences 

- 

- 

1,609 

-329 

-18,291 

1,959 

- 

Fair value adjustment as at 31 December 2021 

-1,080 

-24,613 

-16,332 

Loans and advances at FVTPL as at 31 December 2021 

- 

46,323 

183,668 

Amortised Cost 

Interest 

-3,151 

10,295 

-3,736 

8,686 

- 

35 

Loans and advances as at 31 December 2021 

1,224,381 

578,197 

183,703 

* Including agency agreements 

138 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1,724,262 

336,889 

- 

-339,205 

- 

88,129 

1,810,075 

-103,793 

13,345 

12,372 

-991 

18,248 

-5,095 

-65,914 

- 

1,744,161 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

92,573 

178,323 

-739 

1,859 

272,016 

-45,264 

3,568 

-329 

-42,025 

229,991 

-6,887 

19,016 

1,986,281 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

Loans and advances (continued) 

7 
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 2020 

1,021,556 

597,364 

27,714 

Disbursements 

Write offs 

Repayments 

Foreign exchange rates differences 

433,466 

-15,170 

-214,018 

-74,436 

67,762 

-2,268 

-60,571 

-29,423 

Nominal of loans at AC as at 31 December 2020 

1,151,398 

572,864 

- 

-27,905 

- 

191 

- 

Impairment - loss allowance as at 1 January 2020 

-96,166 

-36,650 

-27,714 

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 

Foreign exchange rates differences 

-1,344 

-5,888 

-12,373 

19,565 

15,170 

12,793 

-2,531 

-3,628 

- 

1,887 

2,268 

3,104 

Impairment - loss allowance as at 31 December 2020 

-68,243 

-35,550 

Loans and advances at AC as at 31 December 2020 

1,083,155 

537,314 

Nominal of loans at FVTPL as at 1 January 2020 

1,080 

Disbursements 

Repayments 

Foreign exchange rates differences 

- 

- 

- 

Nominal of loans at FVTPL as at 31 December 2020 

1,080 

36,858 

29,063 

-1,512 

-2,916 

61,493 

- 

- 

- 

- 

27,905 

-191 

- 

- 

- 

30,000 

- 

- 

30,000 

Fair value adjustment as at 1 January 2020 

-1,080 

-15,156 

- 

Net FV change 

Foreign exchange rates differences 

- 

- 

-11,330 

-18,291 

593 

- 

Fair value adjustment as at 31 December 2020 

-1,080 

-25,893 

-18,291 

Loans and advances at FVTPL as at 31 December 2020 

- 

35,600 

11,709 

Amortised Cost 

Interest 

-3,578 

7,325 

-5,100 

7,020 

- 

- 

Loans and advances as at 31 December 2020 

1,086,902 

574,834 

11,709 

* Including agency agreements 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1,646,634 

501,228 

-45,343 

-274,589 

-103,668 

1,724,262 

-160,530 

-3,875 

-9,516 

-12,373 

21,452 

45,343 

15,706 

-103,793 

- 

1,620,469 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

37,938 

59,063 

-1,512 

-2,916 

92,573 

-16,236 

-29,621 

593 

-45,264 

47,309 

-8,678 

14,345 

1,673,445 

139 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

7.2   Impairment on loans and advances – Loss allowances 

in EUR'000 

Loans and advances at AC 

Balance as at 1 January 2021 

Transfer to 12-month ECL 

Transfer to lifetime ECL not credit-impaired 

Transfer to lifetime ECL credit-impaired 

Net measurement of loss allowance 

New financial assets originated or purchased 

Financial assets that have been derecognised 

Foreign exchange rates differences  

Balance as at 31 December 2021 

2021 

Lifetime ECL 

12-month ECL 

Lifetime ECL 
not credit-
impaired 

Lifetime ECL 
credit-impaired 

POCI 

Total 

16,389 

43,976 

43,428 

- 

-5,008 

- 

-8,480 

504 

-361 

521 

3,565 

- 

-1,019 

-77 

-8,912 

1,039 

-3,405 

1,666 

33,268 

- 

- 

249 

-15,309 

- 

-2,195 

2,908 

29,081 

2020 

Lifetime ECL 

- 

- 

- 

- 

- 

- 

- 

- 

- 

103,793 

- 

-6,027 

172 

-32,701 

1,543 

-5,961 

5,095 

65,914 

in EUR'000 

Loans and advances at AC 

Balance as at 1 January 2020 

Transfer to 12-month ECL 

Transfer to lifetime ECL not credit-impaired 

Transfer to lifetime ECL credit-impaired 

Net measurement of loss allowance 

New financial assets originated or purchased 

Financial assets that have been derecognised 

Write offs 

Foreign exchange rates differences  

Balance as at 31 December 2020 

12-month ECL 

Lifetime ECL 
not credit-
impaired 

Lifetime ECL 
credit-impaired 

POCI 

Total 

17,191 

38,509 

104,830 

96 

-770 

-127 

3,200 

2,278 

-802 

- 

-4,677 

16,389 

-167 

3,439 

-54 

2,950 

3,001 

347 

- 

-4,049 

43,976 

- 

-6,080 

7,170 

-6,554 

1,352 

-4,967 

-45,343 

-6,980 

43,428 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

160,530 

-71 

-3,411 

6,989 

-404 

6,631 

-5,422 

-45,343 

-15,706 

103,793 

140 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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 2021 

Disbursements 

Repayments / sales 

Foreign exchange rates differences  

Cost as at 31 December 2021 

Unrealised gains and losses as at 1 January 2021 

Net change in unrealised gains and losses 

Derecognition of fair value adjustment due to sales 

Foreign exchange rates differences 

Unrealised gains and losses as at 31 December 2021 

Venture Capital 
Funds 

Direct Equity 
Investments 

452,161 

84,224 

-71,624 

28,400 

493,161 

-15,019 

101,418 

13,489 

-2,479 

97,409 

76,258 

- 

- 

1,220 

77,478 

13,410 

16,084 

- 

89 

29,583 

Total 

528,419 

84,224 

-71,624 

29,620 

570,639 

-1,609 

117,502 

13,489 

-2,390 

126,992 

Shares and other variable yield securities as at 31 December 2021 

590,570 

107,061 

697,631 

in EUR'000 

Cost as at 1 January 2020 

Disbursements 

Repayments / sales 

Foreign exchange rates differences  

Cost as at 31 December 2020 

Unrealised gains and losses as at 1 January 2020 

Net change in unrealised gains and losses 

Derecognition of fair value adjustment due to sales 

Foreign exchange rates differences 

Unrealised gains and losses as at 31 December 2020 

Venture Capital 
Funds 

Direct Equity 
Investments 

462,304 

85,305 

-66,011 

-29,437 

452,161 

42,390 

-45,079 

-15,632 

3,302 

-15,019 

101,424 

- 

-18,274 

-6,892 

76,258 

13,810 

-2,830 

3,019 

-589 

13,410 

Total 

563,728 

85,305 

-84,285 

-36,329 

528,419 

56,200 

-47,909 

-12,613 

2,713 

-1,609 

Shares and other variable yield securities as at 31 December 2020 

437,142 

89,668 

526,810 

141 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

9  Amounts receivable from contributors 

The  amounts  of  EUR  85.2m  (2020:  EUR  68.9m)  receivable  from  contributors  are  entirely  composed  of  Member  States  contribution 
called but not paid. 

10  Treasury financial assets 

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

in EUR'000 

Balance as at 1 January 2021 

Acquisitions 

Maturities 

Change in amortisation of premium/discount 

Change in accrued interest  

Balance as at 31 December 2021 

in EUR'000 
Balance as at 1 January 2020 

Acquisitions 

Maturities  

Change in amortisation of premium/discount 

Change in accrued interest  

Balance as at 31 December 2020 

11  Other assets 

The main components of other assets are as follows: 

in EUR'000 

Amount receivable from the EIB 

Financial guarantees 

Total other assets 

12  Deferred income 

The main components of deferred income are as follows: 

in EUR'000 

Deferred interest subsidies 

Deferred commissions on loans and advances 

Total deferred income 

351,873 

2,333,691 

-2,684,293 

301 

-1,572 

- 

330,587 

2,710,009 

-2,689,790 

-208 

1,275 

351,873 

31.12.2021 

31.12.2020 

877 

209 

1,086 

- 

109 

109 

31.12.2021 

31.12.2020 

47,981 

451 

48,432 

28,788 

944 

29,732 

142 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

13  Provisions for guarantees issued, net of reversals 

The following tables show the reconciliation from the opening to the closing balance of the provision for financial guarantees. 

in EUR'000 

12-month ECL 

2021 

Lifetime ECL 
not credit-
impaired 

Lifetime ECL 
credit-impaired 

Guarantees issued  

Balance as at 1 January 

Net measurement of loss allowance 

Balance as at 31 December  

in EUR'000 

Guarantees issued  

Balance as at 1 January 

Net measurement of loss allowance 

Foreign exchange rates differences 

Balance as at 31 December 

851 

-851 

- 

- 

- 

- 

- 

- 

- 

2020 

12-month ECL 

Lifetime ECL 
not credit-
impaired 

Lifetime ECL 
credit-impaired 

Total 

628 

228 

-5 

851 

- 

- 

- 

- 

- 

- 

- 

- 

Total 

851 

-851 

- 

628 

228 

-5 

851 

143 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

14  Provisions for loan commitments 

The following tables show the reconciliation from the opening to the closing balance of the loss allowance for undisbursed loans (loan 
commitments): 

in EUR'000 

Loans commitments 

Balance as at 1 January 

Net measurement of loss allowance 

New financial assets originated or purchased 

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 

2021 

6,817 

-4,089 

869 

-1,942 

38 

1,693 

26,335 

-7,013 

3,015 

-7,456 

28 

14,909 

- 

- 

- 

- 

- 

- 

in EUR'000 

Loans commitments 

Balance as at 1 January 

Transfer to 12-month ECL 

Net measurement of loss allowance 

New financial assets originated or purchased 

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 

2020 

3,943 

181 

388 

3,885 

-1,157 

-423 

6,817 

33,326 

- 

-5,932 

2,773 

-3,853 

21 

26,335 

- 

- 

- 

- 

- 

- 

- 

Total 

33,152 

-11,102 

3,884 

-9,398 

66 

16,602 

Total 

37,269 

181 

-5,544 

6,658 

-5,010 

-402 

33,152 

15  Amounts owed to third parties  

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

in EUR'000 

Net general administrative expenses payable to the EIB 

Other amounts payable to the EIB 

Interest subsidies and TA not yet disbursed owed to Member States 

Total amounts owed to third parties 

31.12.2021 

31.12.2020 

53,136 

40,045 

146,458 

239,639 

58,527 

56 

93,795 

152,378 

144 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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 

Total other liabilities 

17  Member States Contribution called (in EUR’000) 

31.12.2021 

31.12.2020 

1,793 

540 

2,333 

3,166 

280 

3,446 

Member States 

Austria 

Belgium 

Bulgaria 

Croatia  

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

United Kingdom 

Contribution to 
the Facility 

Contribution to 
interest subsidies 
and technical 
assistance 

Total Contributed 

Called and not 
paid* 

88,683 

130,046 

2,113 

563 

1,287 

7,704 

72,328 

776 

51,342 

774,222 

772,017 

46,503 

7,694 

25,571 

438,908 

1,074 

1,796 

9,757 

431 

175,971 

19,573 

36,258 

5,938 

3,291 

2,576 

230,483 

95,412 

469,378 

11,770 

17,069 

596 

180 

359 

2,170 

9,702 

219 

7,083 

96,940 

101,078 

6,854 

2,144 

4,097 

61,020 

303 

505 

1,301 

120 

23,537 

5,511 

5,368 

1,686 

932 

721 

35,684 

13,274 

68,773 

100,453 

147,115 

2,709 

743 

1,646 

9,874 

82,030 

995 

58,425 

871,162 

873,095 

53,357 

9,838 

29,668 

499,928 

1,377 

2,301 

11,058 

551 

199,508 

25,084 

41,626 

7,624 

4,223 

3,297 

266,167 

108,686 

538,151 

2,398 

3,249 

219 

225 

- 

797 

1,980 

86 

1,509 

17,814 

20,580 

1,507 

615 

940 

12,530 

116 

181 

255 

38 

4,777 

2,007 

1,197 

718 

376 

225 

7,932 

2,939 

- 

85,210 

Total as at 31 December 2021 

3,471,695 

478,996 

3,950,691 

Total as at 31 December 2020 
68,908 
3,221,695 
* On 09 November 2021, the Council fixed the amount of financial contributions to be paid by each Member State by 21 January 2022. 
As at 31 December 2021 EUR 85.2m were not paid in.   

3,620,692 

398,996 

145 

 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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 

31.12.2021 

31.12.2020 

1,677,411 

473,000 

1,499,675 

478,011 

1,722,618 

378,347 

998,560 

483,897 

256,299 

554,686 

Total commitments and contingent liabilities 

4,384,396 

4,138,108 

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 expenses 

20  Fee and commission income and expenses  

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

in EUR'000 

Fee and commission on loans and advances 

Fee and commission on financial guarantees 

Other 

Total fee and commission income 

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

in EUR'000 

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

Total fee and commission expenses 

From 01.01.2021  From 01.01.2020 

to 31.12.2021 

to 31.12.2020 

80,395 

6,061 

86,456 

80,252 

4,531 

84,783 

From 01.01.2021  From 01.01.2020 

to 31.12.2021 

to 31.12.2020 

-4,800 

-3,598 

-2,038 

-10,436 

-541 

-2,961 

-1,748 

-5,250 

From 01.01.2021  From 01.01.2020 

to 31.12.2021 

to 31.12.2020 

1,702 

517 

- 

2,219 

141 

211 

1 

353 

From 01.01.2021  From 01.01.2020 

to 31.12.2021 

to 31.12.2020 

-175 

-175 

-225 

-225 

146 

 
 
 
 
 
 
  
  
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

21   Net result on shares and other variable yield securities 

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

in EUR'000 

Net proceeds 

Dividend income 

Net fair value change 

Net result on shares and other variable yield securities 

22  General administrative expenses 

From 01.01.2021  From 01.01.2020 

to 31.12.2021 

to 31.12.2020 

4,310 

1,815 

117,502 

123,627 

-3,069 

4,261 

-47,909 

-46,717 

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 01.01.2021  From 01.01.2020 

to 31.12.2021 

to 31.12.2020 

-55,924 

2,788 

-53,136 

-61,470 

2,943 

-58,527 

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. 

147 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

The table below describes the types of structured entities that the Facility does not consolidate but in which it holds an interest. 

Type 

of 

Nature and purpose 

Interest held by the Facility 

structured 
entity 

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

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

Net disbursed amounts; 

Interest income. 

Venture 

capital 

operations 

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

Investments  in  units/shares  issued 

by the venture capital entity; 

Dividends 

received  as  dividend 

income. 

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

Type of structured entity 

Caption 

Venture capital funds 

Total 

Shares and other variable 
yield securities 

Carrying 
amount at 
31.12.2021 

Carrying 
amount at 
31.12.2020 

Maximum 
exposure to 
loss at 
31.12.2021 

Maximum 
exposure to 
loss at 
31.12.2020 

590,570 

437,142 

590,570 

437,142 

590,570 

437,142 

590,570 

437,142 

No support is provided to structured entities by the Facility beyond the respective financing.  

148 

 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

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  presents  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.  In  2016,  the  IFE  financing  capacity  was  increased  to  EUR  800m  by  making  the  IFE 
partially revolving. 

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.

149 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2021 

24  Impact financing envelope (in EUR’000) (continued) 

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

Type of IFE 
investment 

Loans to financial 
intermediaries 
Direct loan 
operations 

Social impact equity 
funds 

Direct equity 
participations 

Risk sharing 
facilitating 
instruments 
Total 

Caption 

Measurement 

Gross 
carrying 
amount as 
at 
31.12.2021 

Loss 
allowance / 
FV adj. 
amount as at 
31.12.2021 

Carrying 
amount as 
at 
31.12.2021 

Undisburs
ed amount 
as at 
31.12.2021 

OFF BS ECL 
adj. amount 
as at 
31.12.2021 

Loans and advances   AC 

68,228 

-1,981 

66,247 

29,272 

-242 

Loans and advances   FVTPL 

101,840 

-41,403 

60,437 

92,031 

Shares and other 
variable yield 
securities 
Shares and other 
variable yield 
securities 

FVTPL 

61,611 

9,866 

71,477 

106,675 

FVTPL 

58,523 

23,608 

82,131 

14 

Issued guarantees 

higher of 
approach* 

- 

- 

- 

44,146 

- 

- 

- 

- 

290,202 

-9,910 

280,292 

272,138 

-242 

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

Type of IFE 
investment 

Loans to financial 
intermediaries 
Direct loan 
operations 

Social impact equity 
funds 

Direct equity 
participations 

Risk sharing 
facilitating 
instruments 
Total 

Caption 

Measurement 

Gross 
carrying 
amount as 
at 
31.12.2020 

Loss 
allowance/FV 
adj. amount 
as at  
31.12.2020 

Carrying 
amount as 
at 
31.12.2020 

Undisburs
ed amount 
as at 
31.12.2020 

OFF BS ECL 
adj. amount 
as at 
31.12.2020 

Loans and advances   AC 

49,522 

-1,839 

47,683 

26,954 

-199 

Loans and advances   FVTPL 

91,186 

-44,681 

46,505 

98,314 

Shares and other 
variable yield 
securities 
Shares and other 
variable yield 
securities 

FVTPL 

41,885 

-4,778 

37,107 

73,362 

FVTPL 

57,395 

9,195 

66,590 

14 

Issued guarantees 

higher of 
approach* 

- 

- 

- 

40,746 

- 

- 

- 

- 

239,988 

-42,103 

197,885 

239,390 

-199 

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

The EIB is applying 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 methodology, the Bank performs a Qualitative Risk Assessment (QRA) aiming 
to assess the soundness of the investment rationale and plausible business viability of such operations.  

150 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25  Subsequent events 

In  the  context  of  the  COVID-19  pandemic,  the  IF  continues  to  monitor  the  situation  closely  notably  as  part  of  the  subsequent  event 
review.  It  is  considered  that  there  have  been  no  material  events  after  the  balance  sheet  date  that  would  require  adjustment  of,  or 
disclosure in, the financial statements as at 31 December 2021. 

151