Draft general budget of the European Union for the financial year 2024 : working document. Part XI, Budgetary guarantees, common provisioning fund and contingent liabilities.
Date: 2023-12-11
Institutions: Directorate-General for Budget
Subjects: EU budget, budgetary expenditure, budgetary resources, draft budget (EU), drawing up of the EU budget, financial management, financial regulation, implementation of the budget, multiannual financial framework, operational expenditure (EU), programme budgeting

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DRAFT 
GENERAL 
BUDGET 
OF THE 
EUROPEAN 
UNION

Working Document Part XI 

#EUBudget

2024

FINANCIAL 
YEAR

Budgetary Guarantees, Common 
Provisioning Fund and Contingent Liabilities

COM(2023) 300 - June 2023

Budget
Budget
Budget

 
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EUROPEAN COMMISSION

DRAFT GENERAL BUDGET  
of the European Union 
for the ﬁnancial year 2024

Working Document 
Part XI  

2023

Directorate-General for Budget

 
Draft General Budget 
of the European Union 
for the Financial Year 2024 

Working document Part XI 

       Budgetary Guarantees, Common          
Provisioning Fund and Contingent Liabilities 

COM(2023) 300 - June 2023 

 
 
Draft Budget Working Documents 

The 2024 Draft Budget is accompanied by twelve ‘Working Documents’, as follows: 

Part I: Programme Performance Statements of operational expenditure 
Working  Document  I  contains,  pursuant  to  Article  41(3)(h)  of  the  Financial  Regulation,  the  Programme  Performance 
Statements,  which  provide  for  each  spending  programme  comprehensive  information  on  the  financial  implementation 
and progress in achieving the programme objectives as of the end 2022. 

Part II: Human Resources of the EU institutions and executive agencies 
Working Document II presents information on the human resources of the EU institutions and executive agencies, and in 
particular for the Commission, both for the establishment plans and for external personnel and across all headings of the 
multiannual  financial  framework.  Moreover,  pursuant  to  Article  41(3)(b)  of  the  Financial  Regulation,  it  provides  a 
summary table for the period 2021 – 2024 which shows the number of full-time equivalents for each category of staff 
and the related appropriations for all institutions and bodies referred to in Article 70 of the Financial Regulation. 

Part III: Bodies set up by the European Union having legal personality 
Working Document III presents detailed information relating to all decentralised agencies and Joint Undertakings, with a 
transparent presentation of revenue, expenditure and staff levels of various Union bodies, pursuant to Article 41(3)(c) of 
the Financial Regulation. 

Part IV: Pilot projects and preparatory actions 
Working  Document  IV  presents  information  on  all  pilot  projects  and  preparatory  actions  which  have  budget 
appropriations (commitments and/or payments) in the 2024 Draft Budget, pursuant to Article 41(3)(f) of the Financial 
Regulation. 

Part V: Budget implementation and assigned revenue 
Working  Document  V  presents  the  budget  implementation  forecast  for  2023,  information  on  assigned  revenue 
(implementation in 2022 and estimation for 2024) and a progress report on outstanding commitments (RAL) pursuant to 
Articles 41(3)(d) and 41(8) of the Financial Regulation. 

Part VI: Commission expenditure under the administrative heading of the multiannual financial framework 
Working  Document  VI  encompasses  administrative  expenditure  to  be  implemented  by  the  Commission  under  the 
administrative heading of the multiannual financial framework (heading 7) in accordance with Article 317 of the Treaty 
on  the  Functioning  of  the  European  Union,  as  well  as  the  budgets  of  the  Offices  (OP,  OLAF,  EPSO,  OIB,  OIL  and 
PMO), pursuant to Article 41(3)(e) of the Financial Regulation. 

Part VII: Commission buildings 
Working Document VII presents information on buildings under Section III - Commission, pursuant to Article 266(1) of 
the Financial Regulation. 

Part VIII: Expenditure related to the external action of the European Union 
Working Document VIII presents information on human resources and expenditure related to the external action of the 
European Union, pursuant to Article 41(10) and (11) of the Financial Regulation. 

Part IX: Funding to international organisations 
Working Document  IX presents funding  provided  to  international  organisations, across  all  MFF headings, pursuant  to 
Article 41(3)(g) of the Financial Regulation. 

Part X: Financial Instruments 
Working  Document  X  presents  the  use  made  of  financial  instruments,  pursuant  to  Article  41(4)  of  the  Financial 
Regulation. 

Part XI: Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities 
Working Document XI presents the implementation of Budgetary Guarantees, the Common Provisioning Fund and the 
assessment  of  the  sustainability  of  the contingent  liabilities  arising  from  budgetary guarantees  and  financial  assistance 
pursuant to Article 41(5) of the Financial Regulation. 

Part XII: Payment schedules  
Working  Document  XII  presents  summary  statements  of  the  schedule  of  payments  due  in  subsequent  years  to  meet 
budgetary commitments entered into in previous years, pursuant to Article 41(3)(i) of the Financial Regulation. 

 
 
TABLE OF CONTENTS 

Overview ................................................................................................................................................. 1 

Introduction ............................................................................................................................................. 6 

1. Budgetary Guarantees ....................................................................................................................... 10 

1.1 European Fund for Strategic Investments ................................................................................... 10 

1.1.1 Description ........................................................................................................................... 10 

1.1.2 Operational Performance ...................................................................................................... 15 

1.1.3 Financial Information ........................................................................................................... 18 

1.2 InvestEU ...................................................................................................................................... 25 

1.2.1 Description ........................................................................................................................... 25 

1.2.2 Operational Performance ...................................................................................................... 30 

1.2.3 Financial Information ........................................................................................................... 34 

1.3 European Fund for Sustainable Development ............................................................................. 39 

1.3.1 Description ........................................................................................................................... 39 

1.3.2 Operational Performance ...................................................................................................... 44 

1.3.3 Financial Information ........................................................................................................... 47 

1.4 External Lending Mandate .......................................................................................................... 55 

1.4.1 Description ........................................................................................................................... 55 

1.4.2 Operational Performance ...................................................................................................... 61 

1.4.3 Financial Information ........................................................................................................... 62 

1.5 European Fund for Sustainable Development Plus ..................................................................... 68 

1.5.1 Description ........................................................................................................................... 68 

1.5.2 Operational performance ...................................................................................................... 74 

1.5.3 Financial information ........................................................................................................... 77 

2 Common Provisioning Fund .............................................................................................................. 80 

2.1 Description .................................................................................................................................. 80 

2.1.1 Role of the CPF .................................................................................................................... 80 

2.1.2 Architecture of the CPF ........................................................................................................ 81 

 
 
2.2 Financial flows ............................................................................................................................ 82 

3. Assessment of contingent liabilities generated by budgetary guarantees and financial assistance ... 83 

3.1 Initial remarks.............................................................................................................................. 83 

3.2 Budgetary guarantees methodology ............................................................................................ 84 

Assumptions and particularities .................................................................................................... 84 

3.3 Analysis for budgetary guarantee programmes ........................................................................... 86 

3.3.1 EFSI ...................................................................................................................................... 86 

3.3.2 InvestEU ............................................................................................................................... 87 

3.3.3 EFSD .................................................................................................................................... 88 

3.3.4 EFSD+ .................................................................................................................................. 89 

3.3.5 ELM...................................................................................................................................... 91 

3.4 Financial assistance methodology ............................................................................................... 93 

3.5 Analysis for financial assistance programmes............................................................................. 93 

3.5.1 Macro-Financial Assistance (MFA) and Euratom Operations ............................................. 93 

3.5.2 Overview of EU exposures to Ukraine ................................................................................. 95 

3. Glossary ............................................................................................................................................. 96 

 
 
 
 
 
 
OVERVIEW 

The  present  report  has  three  chapters.  The  first  chapter  provides  an  analysis  of  the  budgetary 
guarantee  programmes  implemented  by  the  end  of  2022.  The  second  chapter  focuses  on  the 
evolution  of the  provisions held  in  the relevant  compartments  of the  Common Provisioning Fund 
(“CPF”) over the period 1 January 2022 to 31 December 2022. The third chapter assesses the EU 
budget’s  contingent  liabilities  arising  from  budgetary  guarantees  and  financial  assistance 
programmes (i.e. the Macro-Financial Assistance (“MFA”) loans and the non-EU Euratom loans). 

1.  Presentation of the budgetary guarantees and situation at end 2022: 

This includes the European Fund for Strategic Investments (“EFSI”), and the InvestEU programme 
supporting  investments  inside  the  European  Union1.  Alongside  the  internal  budgetary  guarantees, 
the  European  Fund  for  Sustainable  Development  (“EFSD”),  the  External  Lending  Mandate 
(“ELM”) and the European  Fund for Sustainable Development  Plus  (“EFSD+”),  the latter  part of 
the  ‘Neighbourhood,  Development  and  International  Cooperation  Instrument  -  Global  Europe’ 
(NDICI) support investments in third countries. 

•  Aggregation across the budgetary guarantee programmes is traditionally difficult given that 
the  five  guarantee  programmes  were  set  up  at  different  times  and  for  different  types  of 
investments.  They  also  span  different  Multiannual  Financial  Framework  (“MFF”)  periods. 
ELM  came  into  existence  in  1977.  EFSI  was  set  up  in  2015.  EFSD  was  created  in  2017 
(with the first guarantee agreement signed at the end of 2018) while EFSD+ and InvestEU 
have  only  become  operational  recently.  As  a  result,  each  budgetary  guarantee  is  now  at  a 
different  stage  of  implementation.  ELM  has  a  long  track  record  and  EFSI’s  constitution 
period ended in 2022 whereas the investment phase of InvestEU, EFSD and in particular of 
EFSD+ have started only very recently.  

•  The  five  budgetary  guarantee  programmes  vary  in  respect  of  fundamental  features.  They 
support different (e.g. debt/equity) products and use different implementation methods (one 
exclusive implementing partner vs open architecture with multiple implementing partners).  

The key differences can be illustrated as follows: 

-  ELM  offers  two  types  of  products  (mainly  direct  sovereign  lending  and  to  a  certain 

extent also private lending) and is operated on an exclusive basis by the EIB. 

-  EFSI is structured in two Windows (an Infrastructure and Innovation Window (“IIW”) 
and  an  SME  Window  ("SMEW”)  with  different  products  implemented  under  both 
Windows)  and  is  also  using  one  exclusive  implementing  partner,  namely  the  EIB 
Group.  

1   EFTA and Associated Countries may also be eligible. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 1 

 
 
 
 
 
 
-  EFSD is implemented by ten counterparts deploying different financial products with 
different  risk  levels  investing  in  five  key  sectors  i.e.  small  business  financing, 
sustainable  energy  and  connectivity,  local  currency  financing,  digitalisation,  and 
sustainable cities.  

-  New budgetary guarantees such as InvestEU and EFSD+2 built on this experience and 
have similar features (a larger number of implementing partners (“open architecture”) 
and a relatively broad variety of products). 

•  The  five  guarantee  programmes  have  a  different  geographical  focus  which  influences  the 
risks  which  they  bear.  EFSI  and  InvestEU  help  to  overcome  investment  gaps  within  the 
European  Union.  ELM,  EFSD  and  EFSD+  are  part  of  the  European  Union’s  external 
policies  and  entail  supporting  investment  in  third  countries  (with  ELM  and  EFSD+ 
Investment Window 1 mainly focusing on sovereign counterparts, while EFSD and EFSD+ 
Open Architecture mainly targeting private operations).  

This explains why the different guarantee programmes have different risk profiles, requiring 
different  provisioning rates. EFSI (with a maximum  guarantee  amount of  EUR 26 billion) 
has a target provisioning rate of 35%, InvestEU (with a maximum guarantee amount of EUR 
26.2  billion3)  has  a  target  provisioning  rate  of  40%.  The  corresponding  figure  for  EFSD 
(maximum  guarantee  amount  EUR  1.44  billion)  and  EFSD+  open  architecture  (guarantee 
amount  EUR  13  billion)  is  50%.  For  ELM  (maximum  guarantee  EUR  70.87  billion)4  and 
EFSD+  Investment  Window  1,  focussed  on  sovereign  counterparts  (maximum  guarantee 
amount EUR 26.7 billion) the target provisioning rate for the portfolio is 9%.  

• 

It  should  also  be  recalled  that  for  historical  reasons  the  ELM  provisioning  process  is 
different  than  that  of  EFSI,  InvestEU,  EFSD  and  EFSD+.  The  legacy  external  action 
compartment  of  the  Common  Provisioning  Fund  (the  former  Guarantee  Fund  for  External 
Actions  or  GFEA),  which  holds  the  provisions  for  ELM  (and  also  for  Macro-Financial 
the  other 
Assistance  and  non-EU  Euratom 
compartments are provisioned ex-ante in accordance with Article 211 of the 2018 Financial 
Regulation (FR)5. 

is  provisioned  ex-post,  while 

loans) 

2   To ensure a comprehensive and transparent overview of the EFSD+ guarantee, the report provides information on 
the EFSD+ EIB dedicated Windows in accordance with Art. 36 of the NDICI, and the EFSD+ Open Architecture 
implemented by other entrusted entities.    

3   This amount excludes EUR 258,745,039 contribution in the form of blending from sectoral financial instruments. 

4   This  amount  is  calculated  as  a  sum  of  the  respective  external  mandates’  authorised  ceilings  multiplied  by  the 
corresponding guarantee rates (i.e. for each mandate, the thickness of the portfolio-level first loss cover provided by 
the EU). 

5   Regulation (EU, Euratom) 2018/1046 of 18 July 2018 on the financial rules applicable to the general budget of the 

Union repealing Regulation (EC, Euratom) No 966/2012. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 2 

 
 
 
 
 
 
•  At  the  end  of  2022,  the  total  outstanding  risk  for  the  EU  budget  for  the  five  budgetary 
guarantees (based on operations signed) amounted  to EUR 62.3 billion6 (EUR 24.6 billion 
for EFSI, EUR 2.1 billion for InvestEU, EUR 0.5 billion for EFSD, EUR 0.004 billion for 
EFSD+  Open  Architecture,  EUR  4.5  billion  for  EFSD+  Investment  Window  1  and  EUR 
30.6 billion for ELM). 

•  The impact  of the budgetary  guarantees  in  terms of investment  can be summarised by the 

following:  

-  EFSI  supported  841,957  final  recipients  and  mobilised  financing  to  final  recipients  of 
more than EUR 396.6 billion. This in turn led to total investments of EUR 524.9 billion 
(approved amounts) and EUR 65 billion disbursed.   

-  As of the end of 2022, the InvestEU programme EUR 17.4 billion investment operations 
were approved, of which EUR 6.3 billion have already been signed and EUR 0.8 billion 
disbursed. This is expected to mobilise EUR 70 billion of total investments.  

-  Under EFSD and EFSD+, EUR 1.3 billion of disbursed operations have been recorded 
out of which EUR 1 billion from EFSD covering all the investment windows, while both 
programmes  also  played  a  crucial  role  in  the  financing  of  the  COVAX  programme 
which  contributed  to  the  manufacturing  and  distribution  of  Covid-19  vaccines  to 
developing countries.  

-  Under  EFSD+  Investment  Window  1,  the  European  Investment  Bank  (EIB)  already 

disbursed EUR 157.6 million of operations. 

-  The ELM programme allowed the EIB to disburse loans for in total EUR 66.0 billion (a 
figure  which  excludes  activities  in  countries  which  meanwhile  have  become  EU 
Member  States).  The  ELM  supported  668  final  recipients  and  estimates  are  that  ELM 
has  mobilised  final  recipients’  investments  of  EUR  132.1  billion  (reflecting  the  EIB’s 
rule  of  co-financing  up  to  50%  of  total  project  costs  and  again  excluding  activities  in 
countries which meanwhile have become EU Member States). 

2.  The level of provisioning of the budgetary guarantees.  

The  second  chapter  focuses  on  the  financial  situation  of  the  provisions  held  in  the  respective 
compartments of the Common Provisioning Fund with details on the different compartments (EFSI, 
InvestEU,  InvestEU  MS  compartments,  EFSD,  EFSD+,  GFEA  and  MFA  2021-2027).  The  CPF 
functions as a single portfolio and combines from an asset management perspective the provisions 
for the different budgetary guarantee and financial assistance programmes.  

The  CPF  started  operations  on  1  January  2021  when  the  EFSI  guarantee  fund  portfolio  was 
transferred to the CPF. In 2022, the CPF received EUR 3.26 billion in net contributions. As of 31 

6   For comparison, in 2021 the total risk for the EU budget based on operations signed was EUR 58.6 billion. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 3 

 
 
 
 
 
 
December 2022, the market value (i.e. the “net assets”) of the CPF amounted to EUR 14.39 billion. 
On 31 May 20237, the Commission published its second annual report of the CPF which includes 
detailed information on the CPF, in particular on its asset management aspects.   

3.  Assessment of adequacy of the provisioning: 

The third chapter assesses the EU budget’s contingent liabilities arising from budgetary guarantees 
and  financial  assistance  programmes  (i.e.  the  Macro-Financial  Assistance  loans  and  the  non-EU 
Euratom loans). The assessment is based on mathematical/statistical credit risk models, which help 
to  estimate  future  losses  resulting  from  budgetary  guarantees,  supplemented  by  expert  judgment. 
The  credit  risk  models  used  take  into  account  a  number  of  qualitative  and  quantitative  elements 
such as payment defaults, impairment assessment of loans, diversification effects etc. 

As  of  31  December  2022,  having  regard  the  analysis  of  the  adequacy  of  the  provisioning  for  the 
different  budgetary guarantees,  financial  assistance programmes (i.e. MFA) and Euratom loans as 
set out in this report, the Commission concludes that the available provisioning amounts are in line 
with  the  requirements  of  the  respective  Regulations.  On  this  basis,  it  is  concluded  that  the  EU 
budget’s liabilities arising from guarantee programmes and financial assistance are sustainable. 

For the individual guarantee funds, the conclusions are:  

-  EFSI  is  the  only  guarantee  fully  constituted  as  of  end-2022.  It  is  therefore  the  only 
budgetary  guarantee  for  which  the  Commission  has  to  perform  the  surplus/replenishment 
assessment  described  in  Article  213(4)  of  the  Financial  Regulation.  The  Commission 
concluded  this  year  that  for  EFSI  no  surplus/replenishment  actions  were  needed.  The  de 
facto  provisioning  rate  is  close  to  the  target  provision  of  35%  and  the  credit  risk  model 
confirmed  that  the  available  provision  is  still  sufficient  to  cover  estimated  losses  at  the 
desired confidence level (even though at product level a lower provisioning requirement for 
debt  products  is  compensated  by  a  higher  provisioning  requirement  for  equity  and  other 
products). 

-  EFSD is still in the ramp up-phase. Given that consideration, the de facto provisioning rate 
61.8%  seems  adequate  taking  into  account  the  number  of  operations  included  in  the 
portfolio. All operations benefitting from the EU guarantee have to be signed by the end of 
2024. 

-  The  GFEA,  which  holds  the  provisioning  for  pre  2021  MFA  loans,  ELM  and  Euratom, 
benefits from an ex-post replenishment mechanism. This replenishment will be implemented 
through the annual budgets for 2024 and 2025 bringing the provisioning rate back into line 
with the 9% level stipulated by the GFEA Regulation. 

7   COM(2023)288  final,  Report  from  the  Commission  to  the  European  Parliament  and  Council  on  the  common 

provisioning fund in 2022. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 4 

 
 
- 

InvestEU  and  EFSD+  are  still  in  the  ramp-up  phase  which  means  that  the  underlying 
portfolios  and  provisioning  are  not  fully  constituted  yet.  It  is  too  early  to  draw  any 
conclusions regarding the adequacy of the provisioning for these guarantees. 

-  MFA the analysis of the Authorising Officer confirmed that there are currently no elements 

to put into question the overall 9% target provisioning rate. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 5 

 
 
 
INTRODUCTION 

This  is  the  third  edition  of  the  report  under  Article  41(5)  of  the  Financial  Regulation.  This 
article requires the Commission to attach to the draft annual budget a staff working document 
with:  

- 
- 
- 

information on each EU budgetary guarantee; 
information on the Common Provisioning Fund; 
an assessment of the sustainability of contingent liabilities borne by the budget arising 
from budgetary guarantees and financial assistance. 

The Article 41(5) report follows this structure and has a dedicated section on each of the three 
topics mentioned above.  

As  for  the  section  on  contingent  liabilities,  the  Article  41(5)  report  will  assess  the 
provisioning  adequacy  of  the  Union’s  individual  guarantee  programmes  and  financial 
assistance programmes. A more consolidated aggregate assessment of the Union’s contingent 
exposures  - including  its unprovisioned exposures  -  will be  provided in  the (annual)  Article 
250 FR report.  

In  the  Article  250  FR  report,  the  Commission  is  obliged  to  provide  information  to  the 
European Parliament and to the Council on budgetary guarantees, the Common Provisioning 
Fund and contingent liabilities arising from budgetary guarantees or financial assistance. 

In the paragraphs below, a brief account  of  the  content of  each section will  be provided.  In 
particular, it will be explained how the different requirements of Article 41(5) FR are covered 
in the different sections. 

1.  Budgetary Guarantees  

This  section  will  cover  the  entire  implementation  period  from  the  launch  of  each  given 
budgetary  guarantee  until  31  December  of  the  reference  year  (i.e.  for  this  year’s  report,  the 
reference year is 2022).  

This  section  covers  five  budgetary  guarantees,  two  of  which  are  part  of  the  Commission’s 
internal  policy  actions  (EFSI  and  InvestEU),  while  the  other  three  fall  under  the 
Commission’s external policy actions (EFSD, EFSD+ and ELM).   

As per the relevant provisions of Article 41(5) FR, each individual budgetary are analysed and 
the results of that analysis are summarised in the three following parts: 

-  Part A: Description; 
-  Part B: Operational performance; 
-  Part C: Financial information.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 6 

 
 
 
Part A. Description 

Items  of  Article  41(5) 
covered: 

−  (a):  a  reference  to  the  budgetary  guarantee  and  its  basic  act, 
together with a general  description of the budgetary guarantee, 
its impact on the financial liabilities of the budget, its duration 
and the added value of Union support; 

−  (b): the counterparts for the budgetary guarantee, including any 

issues relating to the application of Article 155(2). 

Part B. Operational performance 

−  (c): the budgetary guarantee’s contribution to the achievement of 
the  objectives  of  the  budgetary  guarantee,  as  measured  by  the 
indicators  established, 
the 
geographical  diversification  and  the  mobilisation  of  private 
sector resources; 

including,  where  applicable, 

Items of Article 41(5) 
covered: 

−  (d):  information  on  operations  covered  by  the  budgetary 
guarantee  on  an  aggregated  basis  by  sectors,  countries  and 
instruments,  including,  where  applicable,  portfolios  and  support 
combined with other Union actions; 

−  (e): the amount transferred to recipients as well as an assessment 
of  the  leverage  effect  achieved  by  the  projects  supported  under 
the budgetary guarantee. 

Part C. Financial information  

Items  of  Article  41(5) 
covered: 

−  (d):  information  on  operations  covered  by  the  budgetary 
guarantee  on  an  aggregated  basis  by  sectors,  countries  and 
instruments, including, where applicable, portfolios and support 
combined with other Union actions; 

−  (f):  information  aggregated  on  the  same  basis  as  referred  to  in 
point  (d)  on  calls  on  the  budgetary  guarantee,  losses,  returns, 
amounts recovered and any other payments received. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 7 

 
2.  Common Provisioning Fund  

Article  212  of  the  Financial  Regulation  establishes  the  Common  Provisioning  Fund  to  hold 
the  provisions  made  to  cover  the  financial  liabilities  arising  from  budgetary  guarantees  and 
financial  assistance  programmes.  With  its  Communication  dated  26  February  20218,  the 
Commission informed that the CPF would enter into force in 2021, along with the new 2021-
2027 MFF.  

Therefore,  this  year’s  report  contains  a  full  section  on  the  CPF,  focusing  on  the  financial 
aspects related to the EFSI, InvestEU, EFSD, EFSD+ and the GFEA compartments. It should 
be recalled that on 31 May 2023, the Commission already published its second annual report 
of  the  CPF,  which  includes  already  information  on  the  CPF,  in  particular  on  its  asset 
management aspects.   

−  (g): 

information  about 

the 
performance  and  the  risk  of  the  common  provisioning  fund  at 
the end of the preceding calendar year; 

financial  management, 

the 

Items of Article 41(5) 
covered: 

−  (h): the effective provisioning rate of the common provisioning 
fund  and,  where  applicable,  the  subsequent  operations  in 
accordance with Article 213(4); 

−  (i): the financial flows in the common provisioning fund during 
the  preceding  calendar  year  as  well  as 
the  significant 
transactions and any  relevant  information  on the financial risk 
exposure of the Union. 

8  COM(2021)88  final,  Communication  from  the  Commission  to  the  European  Parliament  and  Council  on  the 
entry into operation of the Common Provisioning Fund, 26 February 2021. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 8 

 
 
 
 
 
 
 
3.  Contingent Liabilities  

This section of the report will assess the adequacy of the provisioning and its impact on the 
sustainability  of  individual  contingent  liabilities  generated  by  budgetary  guarantees  and 
financial  assistance  (i.e.  provisioned  contingent  liabilities).  As  already  explained  above,  a 
consolidated  analysis  (including  unprovisioned  contingent  liabilities)  will  be  made  in  the 
Commission’s Article 250 report. 

of  Article 

Items 
41(5) covered: 

−  (j):  Pursuant  to  Article  210(3)  FR,  an  assessment  of  the 
sustainability  of  contingent  liabilities  borne  by  the  budget 
arising from budgetary guarantees or financial assistance.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 9 

 
 
 
 
1.1 European Fund for Strategic Investments 

1. BUDGETARY GUARANTEES 

1.1 EUROPEAN FUND FOR STRATEGIC INVESTMENTS 

1.1.1 DESCRIPTION 

Identification/Reference to the basic act  

Regulation (EU) 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the 
European Fund for Strategic Investments, the European Investment Advisory Hub and the European 
Investment Project Portal and amending Regulations (EU) No 1291/2013 and (EU) No 1316/2013 – 
the European Fund for Strategic Investments (OJ L 169, 1.7.2015, p. 1).  

Maximum amount of budgetary guarantee 
(in EUR) 

of which signed with 
counterparts  

of which effective at 
31/12/2022 

26,000,000,000 

26,000,000,000 

26,000,000,000 

of which ceiling authorised in the legal basis 
(in EUR) 

Counterparts 

26,000,000,000 

of which from external contributions  
(in EUR) 

        European Investment Bank,  
       European Investment Fund  

0 

Budget Lines 

Article 02 02 99 12 (as from 2021) - Completion of the European Fund for Strategic Investments 
(EFSI) 

Cumulative to 
2022 

2023 

2024 

2025-
2027 

Total 

Budgetary commitment 
appropriations (in EUR) 

9,482,378,170 

128,000,000 

p.m. 

p.m. 

9,610,378,170 

of which from voted budget 

8,425,000,000 

p.m. 

p.m. 

p.m. 

8,425,000,000 

of which from internal 
assigned revenues 

of which from external 
assigned revenues 

Budgetary payment 
appropriations (in EUR) 

1,057,378,170 

128,000,000 

p.m. 

p.m. 

1,185,378,170 

N/A 

N/A  N/A 

N/A 

0 

9,482,378,170 

128,000,000 

p.m. 

p.m. 

9,610,378,170 

of which from voted budget 

8,425,000,000 

p.m. 

p.m. 

p.m. 

8,425,000,000 

of which from internal 
assigned revenues 

of which from external 
assigned revenues 

1,057,378,170 

128,000,000 

p.m. 

p.m. 

1,185,378,170 

N/A 

N/A  N/A 

N/A 

0 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 10 

 
 
 
 
 
 
 
1.1 European Fund for Strategic Investments 

General description 

The  European  Fund  for  Strategic  Investments  (“EFSI”)  aimed  to  boost  long-term  economic 
growth  and  competitiveness  in  the  European  Union  and  to  help  overcoming  the  investment 
gap in the EU.  

Jointly launched by the European Commission and the European Investment Bank Group in 
2015,  it  mobilises  private  and  public  investment  in  projects,  which  are  strategically 
important.  

EFSI was established by Regulation (EU) 2015/1017 of the European Parliament and of the 
Council  of  25  June  2015.  On  30  December  2017,  EFSI  was  extended  and  enhanced  by 
Regulation (EU) 2017/2396 of the European Parliament and of the Council of 13 December 
2017 (the “EFSI 2.0 Regulation”).  

EFSI is one of the three pillars of the Investment Plan for Europe (also known as the "Juncker 
Plan”) that aimed to revive investment in strategic projects around the continent to ensure that 
money reaches the real economy. With the EFSI support through a budgetary guarantee, the 
EIB Group is providing funding for economically viable projects, especially for projects with 
a higher risk profile.  

The focus is on sectors of key importance for the European economy, including:   

•  Strategic infrastructure including digital, transport and energy;  
•  Education, research, development and innovation;  
•  Renewable energy and resource efficiency; and  
•  Support for small and mid-sized businesses.  

EFSI has two windows:   

• 

• 

the  Infrastructure  and  Innovation  Window  (“IIW”),  managed  by  the  EIB  and 
comprising four portfolios, and;  
the SME Window (“SMEW”), managed by the EIF and comprising 11 products.  

In  order  to  enhance  the  efficiency  of  the  EFSI  guarantee  and  to  increase  its  risk  bearing 
capacity,  a  combination  of  the  two  EFSI  Debt  Portfolios  with  InvestEU  Debt  1  and  Debt  2 
Portfolios became effective on 1 April 2022. To this end, losses, revenues and repayments are 
attributed pro-rata between the EFSI and the InvestEU guarantee. 

Implementation cycle  

EFSI provides a EUR 26 billion budgetary guarantee from the EU budget, complemented by 
EUR 7.5 billion own resources allocation of the  EIB. The total amount of EUR 33.5 billion 
aimed to unlock additional investment of at least EUR 500 billion as of 31 December 2020.  

In 2022, EFSI continued making progress towards the defined objectives, in particular on the 
climate target of 40%, on the investment mobilised as well as the impact on jobs and growth. 
As  of  31  December  2022,  EFSI  financing  approved  by  the  EIB  Group  led  to  a  total 
investment  value  of  EUR  524.9  billion.  In  terms  of  financing  signed,  the  total  mobilised 
investment is EUR 503.0 billion.   

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 11 

1.1 European Fund for Strategic Investments 

In order to cover the risks of the EU guarantee, the EFSI Guarantee Fund was established in 
2015. As of 1 January 2021, the assets of the EFSI Guarantee  Fund were transferred to  the 
EFSI  compartment  of  the  Common  Provisioning  Fund.  The  provisioning  rate  of  the  EFSI 
guarantee is set at 35% of the total amount of the obligations under the EU guarantee.  

As  of  31  December  2022,  the  cumulative  provisioning  committed  and  paid  under  EFSI 
amounted  to  EUR  9.482  billion,  out  of  which  EUR  8.425  billion  from  the  EU  budget  and 
EUR 1.057 billion from assigned revenues.   

The  Common  Provisioning  Fund  is  directly  managed  by  the  Commission  and  invested  in 
accordance  with  the  principle  of  sound  financial  management  and  following  appropriate 
prudential rules. The total assets (market value) of the EFSI compartment stood at EUR 8.464 
billion as of 31 December 2022.  

The EU guarantee under EFSI can be called to cover guarantee calls, restructuring losses and 
recovery  costs  for  debt-type  operations  and  value  adjustments,  funding  costs  and  recovery 
costs for equity-type operations.  

Although the cumulative amount of guarantee calls is modest at about EUR 184 million, an 
increase  in  the  number  and  volume  of  future  guarantee  calls  can  be  expected,  due  to  the 
current economic situation and the risk-sharing structure of certain financial products.   

Implementation arrangements 

EFSI is a budgetary guarantee implemented under indirect management by the EIB Group. To 
this  end,  an  agreement  on  the  management  of  the  EFSI  and  on  the  granting  of  the  EU 
guarantee was signed with the EIB on 22 July 2015.   

EFSI has two Windows:   

• 

the  Investment  and  Innovation  Window,  managed  by  the  EIB  and  comprising  four 
portfolios. As of 1 April 2022, the EFSI IIW Debt Standard Portfolio was combined 
with  the  InvestEU  D1  Portfolio,  whereas  the  EFSI  IIW  Debt  Hybrid  Portfolio  was 
combined with the InvestEU D2 Portfolio; 

• 

the SME Window, managed by the EIF and comprising 11 products.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 12 

 
 
 
 
Implementation diagram 

1.1 European Fund for Strategic Investments 

* Contributions from EIB own resources. 

Duration 

EFSI  was  set  up  in  July  2015  and  extended  in  2017  (by  the  EFSI  2.0  Regulation).  The 
investment  period  for  approval  of  operations  ended  on  31  December  2020,  but  contracts 
between the EIB/EIF and final recipients or financial intermediaries could be signed until 31 
December 2022.  

Given the long-term nature of support under EFSI, the EU guarantee coverage and operational 
monitoring will continue until all exposures and liabilities in relation to EFSI operations have 
been fully discharged. 

Added Value 

Since  the  2008  financial  crisis,  the  EU  has  been  suffering  from  low  levels  of  investment. 
Collective and coordinated efforts at European level were taken to put Europe on the path of 
economic recovery. The Investment Plan for Europe focused on making smarter use of new 
and  existing  financial  resources  (through  the  EFSI  guarantee),  providing  visibility  and 
technical  assistance  to  investment  projects  (through  the  European  Investment  Project  Portal 
and the European Investment Advisory Hub) and removing obstacles to investment.   

EFSI  is  the  first  pillar  of  the  Investment  Plan  for  Europe  and  aims  to  overcome  market 
failures by addressing market gaps and mobilising private investment.   

Action at the Union level allows for economies of scale in the use of the Union budget funds 
in  combination  with  the  EIB  Group  financing  by  catalysing  private  and  public  investment 
across the Union and making best use of expertise and knowledge. The multiplying effect and 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 13 

 
1.1 European Fund for Strategic Investments 

the impact on the ground is thus much higher than what could be achieved by an investment 
offensive in a single Member State or a group of Member States.  

The  demand-driven  nature  of  the  instrument,  i.e.  no  country-specific  nor  sectorial  project 
allocation,  provided  for  greater  attractiveness  for  investors  and  lower  aggregated  risks.  The 
investments supported under EFSI contribute to the Union programmes and policies and the 
targets and objectives of the Europe 2020 strategy for smart, sustainable and inclusive growth, 
quality job creation and economic, social and territorial cohesion. 

Application of Article 155.2 FR 

The  EFSI  Agreement  foresees  that  EIB  and  EIF  apply  their  respective  rules,  policies  and 
procedures, including the EIB Group Non Cooperative Jurisdictions Policy (“NCJ”) and the 
EIB  Group  Anti-Money  Laundering  and  Combating  Financing  of  Terrorism  Framework,  to 
address the requirements in respect of money laundering, terrorism financing, tax avoidance, 
tax fraud,  and tax evasion  contained in  Article 22 of the EFSI Regulation and to  reflect  the 
prohibition to enter into new or renewed operations with entities incorporated or established 
in jurisdictions listed under the relevant Union policy on non-cooperative jurisdictions or that 
are identified as high-risk third countries.  

None  of  the  signed  EFSI  Guaranteed  Operations  were  entered  into  with  Financial 
Intermediaries  incorporated  in  non-cooperative jurisdictions  listed  under  the  relevant  Union 
policy. Moreover,  the  compliance  with  Article  155.2  (b)  of  the  Financial  Regulation  is 
reported in the annual EIB EFSI report to the European Parliament and the Council.  

Support combined with other Union actions  

As  of  31  December  2022,  62  EFSI  operations  also  benefited  from  support  stemming  from 
shared  management  funds  (European  Structural  and  Investment  Funds  (“ESIF”))  and  other 
EU funds. Of these operations, 55 are under the IIW and 7 are under the SMEW. More details 
are available in the table below:  

IIW  

SMEW  

Aggregated  

EFSI operations co-financed with ESIF/other EU funds 

Number 
55 

7 

62 

Signed amount (EUR mn) 
4,883.95 

122.35 

5,006.31 

Under the SMEW, operations relate to investments into equity funds from EFSI. With respect 
to  the  Combinations  product,  for  the  portfolio  for  ESIF-EAFRD  Greece,  Portugal  and 
Nouvelle  Aquitaine,  the  EFSI  ECP  contribution  will  be  made  available  to  cover  defaulted 
amounts  after  the  first  loss  risk  cover  has  been  entirely  used-up,  as  further  specified  in  the 
relevant ECP mandate documentation.  

The  EFSI  top-up  (if  and  when  activated)  will  account  for  a  component  of  up  to  EUR  20 
million,  EUR  15  million  and  EUR  6  million  for  ESIF  Nouvelle  Aquitaine,  ESIF-EAFRD 
Greece, Portugal respectively.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 14 

   
In  addition  to  combinations  with  ESIF,  there  are  five  products  under  the  SMEW  where 
EFSI is combined with support from financial instruments from other programmes (COSME, 
InnovFin, EaSI and CCS).  

1.1 European Fund for Strategic Investments 

1.1.2 OPERATIONAL PERFORMANCE 

EFSI has significantly increased the volume of European  Investment  Bank Group financing 
and investment operations in priority areas. As of 31 December 2022, EFSI enabled the EIB 
Group to sign EUR 87.7 billion of riskier financing and investment operations.  

The  EIB  Group  signed  1  531 EFSI  projects  for  a  total  investment  mobilised  of  EUR  503.0 
billion (compared to EUR 524.9 billion investment mobilised based on approved operations): 
EUR  288.0  billion  for  Infrastructure  and  Innovation  Window  investments  (699  signed 
projects) and EUR 215.0 billion (832 signed projects) under the SME Window.   

In terms of the EFSI financing signed, EFSI has benefitted all Member States (and the UK). 
As of 31  December 2022, the top  beneficiary countries were  France,  Italy, Spain,  Germany 
and  Sweden.  However,  in  terms  of  financing  support  relative  to  GDP,  the  top  beneficiaries 
were Greece, Portugal, Spain, Estonia, and Bulgaria.  

EFSI was designed with an investment target and an associated target multiplier of 15x. The 
EUR  500  billion  target  of  investment  mobilised  is  to  be  delivered  based  on  an  overall 
combined  contribution  under  EFSI  from  the  EU  guarantee  and  the  EIB’s  own  resources  of 
EUR 33.5 billion. As of 31 December 2022, the multiplier was 16.1. 

EFSI  operations  were  structured  to  maximise,  where  possible,  the  mobilisation  of  private 
sector  capital.  Of  the  EUR  503  billion  of  total  investment  mobilised  under  EFSI,  EUR  363 
billion involve private sector resources, which represents about 72%.   

Key Figures (as at 31/12/2022) 

Total amount of operations signed by counterparts (in 
EUR) 

Total amount of operations disbursed (in EUR) 

Amount transferred to final recipients (in EUR)9 

Number of final recipients 

Investments made by final recipients 

Private sector resources mobilised 

Leverage (ratio) 

Multiplier effect (ratio) 

87,683,216,098 

64,960,558,293 

396,613,878,435 

841,957 

502,953,219,007 

362,638,133,708 

13 

16 

9 Amount that is expected to be transferred when all the signed amounts would be disbursed.   

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 15 

 
 
 
 
1.1 European Fund for Strategic Investments 

Geographical diversification 

As of 31 December 2022, operations were signed in the 27 EU Member States and the UK, 
with the largest amounts signed in France (EUR 14.6 billion), Italy (EUR 12 billion), Spain 
(EUR 11.6 billion), Germany (EUR 8 billion), Sweden, Poland, the Netherlands, Greece, and 
Portugal (circa EUR 3 billion each).  

However, in terms of the signed amounts relative to GDP, the top beneficiary countries were 
Greece, Portugal, Spain, Estonia and Bulgaria.  

Chart: Signed amounts – breakdown per country 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 16 

 
 
 
 
 
1.1 European Fund for Strategic Investments 

Sectoral diversification 

As of 31 December 2022, operations were signed across 9 different sectors for a total amount 
of EUR 87.7 billion. The largest signed amounts were in Research Development & Innovation 
(“RDI”)  (signed  operations  for  EUR  30.1  billion),  Energy  (signed  operations  for  EUR  14.3 
billion) and SME and mid-caps (signed operations signed for EUR 13.2 billion).  

Chart: Signed amounts – breakdown per sector 

Less developed 
regions
1%

Social
6%

Bioeconomy
1%

Environment and 
resource efficiency
5%

RDI
34%

Digital
10%

SMEs and mid-
caps
15%

Transport
11%

Energy
17%

Contribution to the achievement of the EFSI objectives 

The objective of EFSI to  mobilise EUR 500 billion investments by 2022 has been achieved 
and  exceeded  (i.e.  EUR  524.9  billion  investments  and  EUR  503  billion  in  respectively 
approved and signed amounts). This amount of investment is mobilised through 1531 signed 
operations implemented in 28 countries.  

In  total  43.3%  of  EFSI  financing  in  the  Infrastructure  and  Innovation  Window  supports 
project components that contribute to climate action. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 17 

 
 
 
 
1.1 European Fund for Strategic Investments 

1.1.3 FINANCIAL INFORMATION 

Financial information at the level of budgetary guarantee  

The  available  guarantee  under  EFSI,  after  deducting  guarantee  calls  and  other  expenses 
covered by the guarantee, amounted to EUR 25.8 billion at the end of 2022. It covers the EU 
risk  related  to  the  operations  signed  by  the  EIB  Group  up  to  EUR  24.6  billion  (EUR  18.3 
billion  for  the  IIW  (including  also  IIW  debt-type  operations  that  were  combined  with 
InvestEU D1 and D2 portfolios) and EUR 6.4 billion for SME window).  

The EU guarantee corresponding to outstanding EFSI operations disbursed by the EIB Group, 
(or by financial intermediaries in case of bank guarantee products) totals EUR 21 billion as of 
31 December 2022.  

Available guarantee signed 
with counterparts  

EU risk for operations signed 
by counterparts 

EU risk for operations signed 
by counterparts and disbursed 

all figures in EUR 

EU contingent and financial liability 

31/12/2022 

31/12/2021 

25,793,335,637 

25,825,743,277 

24,615,200,781 

24,730,243,147 

21,083,715,813 

20,358,056,678 

Under  the  EFSI  Agreement,  the  European  Union  is  entitled  to  a  remuneration  for  its 
guarantee.  Up  to  end  2022,  the  EU  has  received  EUR  1.43  billion  (out  of  which  EUR  382 
million in 2022) of revenues from the EIB, mainly from debt products, where the risk-related 
revenues  are  shared  between  the  European  Union  and  the  EIB  (commensurate  to  the  risk 
taken).  

The revenues  have  been partially used to  cover the guarantee calls, fees  and other expenses 
incurred under the guarantee under EFSI, while the remaining part has been recovered to the 
European  Union  budget  as  internal  assigned  revenues  and  used  for  the  constitution  of  the 
EFSI compartment of the CPF. 

all figures in EUR 

EU guarantee revenues 

2022 

Cumulative until 31-12-2022 

EU guarantee revenues 

381,810,282 

1,427,681,031 

To date, the guarantee covered calls of EUR 184 million, of which EUR 179 million related to 
defaulted operations and value adjustments for IIW portfolios and EUR 5 million to SMEW 
equity and/or quasi-equity operations (decrease in the fair value of investments).  Should the 
value of those investments increase in the future, the amount called  would be reimbursed to 
the European Union. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 18 

 
 
 
 
 
 
 
1.1 European Fund for Strategic Investments 

With respect to the defaulted operations, the EIB undertakes recovery proceedings on behalf 
of the European Union for as  long  as possible recovery proceedings are  expected  to  lead to 
recoveries which exceed the costs of the recovery proceedings. The recoveries received so far 
amounted to EUR 1.6 million.  

Guarantee calls and recoveries  

all figures in EUR 

2022 

Cumulative until 31-12-2022 

Guarantee calls 

Recoveries 

Net guarantee calls 

21,648,855 

0 

21,648,855 

183,939,668 

1,555,897 

182,383,771 

The  cumulative  fees  due  to  the  EIF  for  the  implementation  of  the  products  under  the  SME 
window  total  EUR 255.5  million,  which  were  mainly  covered  by  the  revenues  due  to  the 
European  Union  under  the  guarantee.  In  addition,  the  EU  has  incurred  EUR  32  million  of 
other expenses (recovery costs, funding costs, other) cumulative out of which EUR 13 million 
in 2022.  

all figures in EUR 

Expenses  

2022 

Cumulative until 31-12-
2022 

Fees to counterparts 

24,054,115 

255,457,987 

Other expenses (recovery costs, 
funding costs, other) 

12,960,931 

31,950,753 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 19 

 
 
 
 
 
 
 
 
 
 
Financial information at the level of product 

1.1 European Fund for Strategic Investments 

IIW Debt Standard, combined with 
InvestEU D1 Portfolio 

IIW Debt Hybrid, combined 
with InvestEU D2 Portfolio 

IIW Equity Standard  

Effective 

Yes 

Overview 

Yes 

Yes 

Counterpart 

European Investment Bank 

European Investment Bank 

European Investment Bank 

Products and counterparts include - 
direct lending to public sector, direct 
lending to corporates and project 
finance, intermediated lending, credit 
enhancement for project finance, risk-
sharing (partial delegation/de-linked), 
hybrid debt for regulated utilities. 

Description 

The EU covers 100% of the first loss 
piece (FLP), whereas the EIB retain 
the residual risk tranche (RRT). 

Products and counterparts 
include - risk-sharing (full 
delegation), debt funds, and 
structured products (ABS/loan 
substitutes/ credit 
enhancements)  

The EU covers 100% of the 
FLP, whereas the EIB retain 
the RRT. 

Products and counterparts 
include – infrastructure and 
climate equity funds, direct 
equity, co-investment with 
equity funds, debt funds, 
captive funds and/or 
Investment Platforms not 
sponsored by NPBs. 

The EU and the EIB cover 
pari passu (50%) in each 
equity-type operation 
included in the IIW Equity 
Standard Portfolio. 

all figures in 
EUR as of 
31/12/2022 

IIW Equity 
NPB  

Yes 

European 
Investment Bank 

Products and 
counterparts 
include – captive 
funds and/or 
Investment 
Platforms 
sponsored by 
NPBs, equity 
risk sharing with 
NPB 
involvement.  

The EU covers 
95% of the FLP, 
whereas the EIB 
retain 5% of the 
FLP and the 
RRT. 

Maximum 
guarantee 
signed with 
counterpart 

Operation 
type 

Risk-
sharing 
structure 

Cumulative 
operations 
signed by 
counterpart 

Cumulative 
operations 
disbursed 
by 
counterpart 

Available 
guarantee 
signed with 
counterpart 

EU risk for 
operations 
signed by 
counterpart 

EU risk for 
operations 
signed by 
counterpart 
and 
disbursed 

Cumulative 
guarantee 
calls 

Cumulative 
recoveries 

13,240,000,000 

2,000,000,000 

3,500,000,000 

510,000,000 

Debt, Guarantee 

Debt, Guarantee 

Equity 

Equity 

FLP - 100% (EU guarantee) 

FLP - 100% (EU guarantee) 

pari passu - 50% (EU 
Guarantee) & 50% (EIB)  

FLP - 95% (EU 
Guarantee) & 5% 
(EIB) 

47,849,169,348 

6,037,604,150 

6,426,617,256 

447,215,511 

39,357,486,169 

6,101,394,365 

4,375,955,995 

208,051,350 

EU contingent and financial liability  

13,147,475,857 

2,000,000,000 

3,401,310,723 

499,435,874 

13,147,475,857 

2,000,000,000 

2,697,779,415 

414,952,542 

13,147,475,857 

2,000,000,000 

1,705,483,821 

185,040,442 

Cumulative guarantee calls and recoveries  

88,406,422 

1,555,897 

0 

0 

81,015,928 

9,631,123 

0 

0 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 20 

 
 
 
 
 
  
 
 
 
1.1 European Fund for Strategic Investments 

86,850,524 

0 

81,015,928 

9,631,123 

The EU guarantee was called to cover 
one  defaulted  operation  in  2018.  In 
addition,  some  restructuring  losses 
and recovery costs for debt operations 
were 
covered. 
Regarding  the  defaulted  operation, 
EUR  18,6  million  were  recovered 
initially;  thus  reducing  the  amount  of 
the guarantee call. Subsequently, EUR 
recovered.  The 
1.6  million  was 
operation 
reported  as  a 
is  still 
subrogated. 

The EU guarantee was called 
to cover six defaulted 
operations (one in 2019, three 
in 2021 and two in 2022). In 
addition, it covered value 
adjustments, funding costs 
and recovery costs for equity 
operations. 

The EU 
guarantee was 
called to cover 
value 
adjustments and 
funding costs for 
equity NPB 
operations. 

Cumulative expenses  

0 

0 

0 

0 

Cumulative 
net 
guarantee 
calls 

Notes 

Fees to 
counterpart 

SMEW InnovFin SMEG 

SMEW COSME LGF 

SMEW EaSI 

SMEW CCS 

all figures in EUR as 
of 31/12/2022 

Effective 

Yes 

Overview 

Yes 

Counterpart 

European Investment Fund 

European Investment Fund 

The product is delivered in the 
form of a second loss 
enhancement of a portfolio of 
uncapped guarantees supporting 
lending provided by financial 
intermediaries to RDI-intensive 
SMEs and Small Mid-caps. The 
EU provides the FLP under the 
Horizon 2020 (InnovFin) financial 
instrument and, together with 
EFSI, provide a Junior Risk 
Tranche of 20%. The EIF takes 
Senior Risk Tranche of 80%. 
EFSI credit enhancement was 
introduced to increase the size of 
the Horizon 2020 debt financial 
instrument. 

The product is in form of a 
second loss enhancement 
provided by EIB (guaranteed 
by EFSI) of a portfolio of 
capped guarantees supporting 
lending provided by financial 
intermediaries to riskier 
SMEs.The EU COSME 
financial instrument provides 
the FLP. EFSI credit 
enhancement was introduced 
to increase the size of the 
COSME debt financial 
instrument. 

Yes 

Yes 

European Investment 
Fund 

European Investment 
Fund 

The instrument is 
provided in the form of 
capped guarantees 
covering portfolios of 
new financing made 
available by financial 
intermediaries for 
microfinance and to 
social enterprises. EU 
EaSI financial 
instrument and EFSI 
provide the FLP and 
second loss piece (SLP) 
respectively. EFSI 
credit enhancement 
increased the size of the 
EaSI financial 
instrument. 

The CCS aims at 
increasing the 
guarantee capacity in 
order to enhance 
financing provided 
by financial 
intermediaries to 
eligible final 
recipients in the 
cultural and creative 
sectors. EU CCS 
financial instrument 
and EFSI provide the 
FLP and SLP 
respectively. 

1,400,000,000 

1,484,000,000 

300,000,000 

130,000,000 

Guarantee 

SLP 

Guarantee 

Guarantee 

Guarantee 

SLP 

SLP 

SLP 

13,157,294,256 

2,462,381,719 

417,935,054 

242,535,229 

10,064,186,784 

2,115,227,788 

324,212,740 

165,657,618 

Available 

1,400,000,000 

1,484,000,000 

300,000,000 

130,000,000 

EU contingent and financial liability  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 21 

Description 

Maximum 
guarantee 
signed with 
counterpart 

Operation 
type 

Risk-sharing 
structure 

Cumulative 
operations 
signed by 
counterpart 

Cumulative 
operations 
disbursed by 
counterpart 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.1 European Fund for Strategic Investments 

1,400,000,000 

1,337,648,942 

299,904,326 

105,438,139 

1,400,000,000 

990,495,011 

206,182,011 

36,346,024 

Cumulative guarantee calls and recoveries  

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

There were amounts 
drawn for liquidity 
management purposes 
(e.g. non-euro hedging), 
which however did not 
reduce the available EU 
guarantee.  

Cumulative expenses  

46,625,000 

49,730,000 

11,305,000 

5,474,000 

guarantee 
signed with 
counterpart 

EU risk for 
operations 
signed by 
counterpart 

EU risk for 
operations 
signed by 
counterpart 
and 
disbursed 

Cumulative 
guarantee 
calls 

Cumulative 
recoveries 

Cumulative 
net guarantee 
calls 

Notes 

Fees to 
counterpart 

SMEW Equity Sub-window 1 

SMEW Equity Sub-window 2 

SMEW PC Sub-window 1 

all figures in EUR as 
of 31/12/2022 

SMEW PC Sub-
window 2  

Effective 

Yes 

Overview 

Yes 

Yes 

No 

Counterpart 

European Investment Fund 

European Investment Fund  

European Investment Fund 

The Product aims at enhancing 
financing provided by financial 
intermediaries to SMEs, Small 
Mid-caps, Social Sector 
Organizations and Social 
Enterprise in growth stage. The 
risk is shared on a pari passu 
basis with EIB providing 95% 
financing (guaranteed by EFSI) 
and the EIF providing 5% of 
financing on its own risk. 

The Product aims at enhancing 
financing provided by financial 
intermediaries to SMEs, Small 
Mid-caps, Social Sector 
Organizations and Social 
Enterprise in early stage. EU 
covers the Junior Tranche 
through InnovFIN Equity 
financial instrument which 
provides 45% of financing, 
whereas EFSI (26.5% of 
financing provided by EIB) and 
the European Investment Fund 
(28.5%) cover Senior Tranche. 

The purpose of the Private 
Credit for SMEs and Small 
Mid-caps Product (SMEW 
PC Product) is to increase the 
volume and diversity of 
alternative debt financing 
available to European SMEs 
and Small Mid-Caps. The 
SMEW PC Product aims at 
contributing to the policy 
objective of a Capital 
Markets Union. 

Sub-window 1 is in a form of 
equity. EFSI covers the FLP 
(30% of financing provided 
by EIB) and the EIF the SLP 
(70% of financing). 

European Investment 
Fund  

Sub-window 2 is a 
guarantee provided to 
investors into debt 
funds. 
 EFSI covers first loss 
piece (30%) and the 
European Investment 
Fund second loss piece 
(70%). 

With the 6th 
amendment of EFSI 
Agreement of April 
2020, the allocations 
for sub-window 2 were 
set at 0 EUR, meaning 
that the product is not 
active as of 31 
December 2020. 

Description 

Maximum 
guarantee 

2,320,000,000 

430,000,000 

250,000,000 

0 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 22 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.1 European Fund for Strategic Investments 

Equity 

Pari passu 

Equity 

Pari passu with Counterpart in 
Senior tranche 

Equity 

FLP 

Guarantee 

FLP 

2,256,273,462 

1,591,440,972 

771,650,000 

1,347,383,542 

423,581,179 

301,145,316 

EU contingent and financial liability  

2,315,113,183 

430,000,000 

250,000,000 

2,215,940,566 

423,581,179 

231,690,354 

909,532,521 

189,913,982 

231,690,354 

Cumulative guarantee calls and recoveries  

4,886,195 

0 

4,886,195 

0 

0 

0 

0 

0 

0 

Cumulative expenses  

113,814,140 

14,204,885 

0 

0 

0 

0 

0 

0 

0 

0 

0 

signed with 
counterpart 

Operation 
type 

Risk-
sharing 
structure 

Cumulative 
operations 
signed by 
counterpart 

Cumulative 
operations 
disbursed 
by 
counterpart 

Available 
guarantee 
signed with 
counterpart 

EU risk for 
operations 
signed by 
counterpart 

EU risk for 
operations 
signed by 
counterpart 
and 
disbursed 

Cumulative 
guarantee 
calls 

Cumulative 
recoveries 
Cumulative 
net 
guarantee 
calls 

Fees to 
counterpart 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 23 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.1 European Fund for Strategic Investments 

all figures in EUR as of 31/12/2022 

SMEW ECP 

SMEW ESCALAR 

SMEW Skill & Education 

Effective 

Counterpart 

Yes 

Yes 

Yes 

European Investment Fund 

European Investment Fund 

European Investment Fund  

Overview 

The EFSI Combination Product (SMEW 
ECP Product) is a dedicated financial 
instrument that supports capped and 
uncapped portfolio guarantee instruments 
in the agriculture sector and could be 
adapted to enhancing access to finance for 
final recipients in support of other specific 
policy objectives. The product combines 
resources of EFSI with Member State or 
Managing Authority resources coming 
from either structural funds or investments 
funds, national resources, regional 
resources, or any combination thereof. 
Resources other than EFSI take first loss 
piece, and EFSI takes second loss piece in 
the risk sharing structure. 

The purpose of the SMEW 
European Scale-Up Action for 
Risk Capital (ESCALAR) Product 
is to improve the availability of 
financing to European Scale-ups. 
It is a flexible equity instrument 
whereby the ultimate objective  
is to increase the attractiveness of 
the asset class and catalyse private 
money flows towards the asset 
class  
It is financed by EFSI which 
invests in or alongside other 
equity funds in a share class that is 
characterised by lower risk and 
lower reward profile. 

The SMEW Skills and Education 
Product takes the form of a 
guarantee or a counter-guarantee 
extended to private or public 
financial intermediaries, 
which aims at providing finance 
for the benefit of the knowledge 
economy, education, training and 
skills transformation to facilitate a 
new wave of innovation and 
productivity. EFSI provides first 
loss piece and is the only risk 
taker. 

86,000,000 

Guarantee 

SLP 

98,774,964 

300,000,000 

Equity 

share class with lower risk-return 
profile 

50,000,000 

Guarantee 

FLP 

263,807,477 

42,485,762 

71,610,242  

99,000,000 

5,665,206 

EU contingent and financial liability  

86,000,000 

300,000,000 

50,000,000 

34,496,223 

263,807,476 

42,485,762 

10,306,831 

65,583,754 

5,665,206 

Cumulative guarantee calls and recoveries  

0 

0 

0 

0 

0 

0 

0 

0 

0 

There were amounts drawn for 
liquidity management purposes 
(e.g. non-euro hedging), which 
however did not reduce the 
available EU guarantee. 

Cumulative expenses  

2,000,000 

10,344,962 

1,960,000 

Description 

Maximum 
guarantee signed 
with counterpart 

Operation type 

Risk-sharing 
structure 

Cumulative 
operations signed 
by counterpart 

Cumulative 
operations 
disbursed by 
counterpart 

Available 
guarantee signed 
with counterpart 

EU risk for 
operations signed 
by counterpart 

EU risk for 
operations signed 
by counterpart 
and disbursed 

Cumulative 
guarantee calls 

Cumulative 
recoveries 

Cumulative net 
guarantee calls 

Notes 

Fees to 
counterpart 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 24 

 
 
 
 
 
1.2 InvestEU 

1.2 INVESTEU 

1.2.1 DESCRIPTION 

Identification/Reference to the basic act  

Regulation (EU) 2021/523 of the European Parliament and of the Council of 24 March 2021 
establishing the InvestEU Programme and amending Regulation (EU) 2015/1017 

Maximum amount of budgetary 
guarantee (in EUR) 

of which signed with 
counterparts  

of which effective of 
31/12/2022 

26,152,310,07310 

21,280,363,333 

21,280,363,333 

of which ceiling authorised in the 
legal basis (in EUR) 

Counterparts 

26,152,310,073 

of which from external 
contributions  
(in EUR) 

0 

Budget Lines 

01 03 08 

EIB, EIF, CDP Equity, EBRD, CEB, NIB, CDC 

Cumulative 
to 2022 

2023 

2024 

2025-2027 

Total11 

5,415,672,668 

2,759,742,000 

294,046,000 

1,112,138,000 

9,581,598,668 

1,685,682,000 

189,242,000 

140,546,000 

446,537,000 

2,462,007,000 

3,510,000,000 

2,420,000,000 

N/A 

0 

5,930,000,000 

115,600,000 

150,500,000 

153,500,000 

665,601,000 

1,085,201,000 

103,628,158 

p.m. 

p.m. 

0 

103,628,158 

Budgetary 
commitment 
appropriations 
(in EUR) 

of which from 
voted budget 

of which from 
NGEU 
of which from 
fines 

of which from 
internal assigned 

10   This  amount  does  not  include  blending  operations  otherwise  the  guarantee  capacity  equals  to  EUR 

26,411,055,112.  

11   EU compartment data only. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 25 

 
 
 
 
 
 
 
 
1.2 InvestEU 

762,510 

p.m. 

p.m. 

0 

762,510 

1,739,707,047 

1,300,000,000 

1,350,000,000 

4,106,660,357 

8,496,367,40412 

284,346,644 

100,000,000 

150,000,000 

1,927,660,357 

2,462,007,000 

1,351,000,000 

1,200,000,000 

1,200,000,000 

2,179,000,000 

5,930,000,000 

0 

0 

0 

103,628,158 

p.m. 

p.m. 

762,510 

p.m. 

p.m. 

0 

0 

0 

1,085,201,000 

103,628,158 

762,510 

revenues 

of which from 
external assigned 
revenues 
Budgetary 
payment 
appropriations 
(in EUR) 

of which from 
voted budget 

of which from 
NGEU 
of which from 
fines 
of which from 
internal assigned 
revenues 
of which from 
external assigned 
revenues 

General description 

The  InvestEU  programme  aims  to  ensure  an  additional  boost  to  investments  fostering 
recovery,  resilience,  green  growth  and  employment  in  the  EU  over  the  2021-2027  period. 
This  goal  will  be  achieved  by  mobilising  public  and  private  financing  sources,  in  order  to 
provide  long-term  funding  and  support  to  companies  and  projects  in  line  with  the  EU 
priorities in the current challenging economic and social context.  

The  InvestEU  programme  was  established  by  Regulation  (EU)  2021/523  of  the  European 
Parliament and of the Council of 24 March 2021 amending Regulation (EU) 2015/1017.  

Implementation cycle  

The InvestEU programme consists of: 

• 

the  InvestEU  Fund,  the  successor  of  the  European  Fund  for  Strategic  Investments 
(EFSI) and 13 other centrally-managed financial instruments. It operates through four 
policy  windows  that  address  market  failures  or  sub-optimal  investment  situations 
within their specific scope; 

12 This amount includes EUR 277.6 million of payment appropriations to be done after 2027.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 26 

 
 
1.2 InvestEU 

• 

• 

the  InvestEU  Advisory  Hub,  the  successor  of  the  European  Investment  Advisory 
Hub (EIAH) and 12 other centrally-managed advisory programmes and initiatives; and 
the InvestEU Portal, the successor of the European Investment Project Portal (EIPP). 

The  InvestEU  programme,  including  the  InvestEU  Fund,  is  a  demand-driven  instrument, 
responding to the investment and finance needs of public and private market participants. 

The  InvestEU  Fund  should  support  financing  and  investment  operations  with  a  higher  risk 
profile that require risk-sharing through the EU budget, in order to unlock additional private 
and public finance.  

The  InvestEU  programme  aims  at  contributing  to  the  necessary  conditions  for  the 
competitiveness  of  the  EU  economy  and  industry  (in  accordance  with  Article  173  of  the 
Treaty  on  the  Functioning  of  the  European  Union).  This  is  done  by  providing  financial 
products  designed  to  address  EU-wide  and  Member  State  specific  market  failures  and 
suboptimal  investment  situations,  which  cannot  be  sufficiently  achieved  by  the  Member 
States, but can better be realised at EU level. 

In  the  context  of  the  InvestEU  programme,  the  Commission  may  implement  blending 
operations (as also explained in Article 6 of the InvestEU Regulation) supported by different 
EU  programmes  and  funds.  In  accordance  with  Article  10  of  the  InvestEU  Regulation, 
Member  States  can  also  contribute  on  a  voluntary  basis  to  an  InvestEU  Member  State 
compartment with Recovery and Resilience Facility funds, structural and cohesion funds and 
also with Member State own contributions. 

For the provisioning of the EU guarantee implemented under the blending operations and also 
for  the  ones  related  to  the  InvestEU  Member  State  compartments,  separate  InvestEU 
compartments were created in the Common Provisioning Fund. 

InvestEU has the following specific objectives (policy windows): 

1.  supporting  financing  and  investment  operations  related  to  sustainable  infrastructure 

(Sustainable Infrastructure Window – SIW); 

2.  supporting  financing  and  investment  operations  related  to  research,  innovation  and 

digitisation (Research, Innovation and Digitization Window – RIDW); 

3.  increasing  access  to  and  the  availability  of  finance  for  small  and  medium-sized 
enterprises  (SMEs)  and  for  small  mid-cap  companies  and  enhancing  their  global 
competitiveness (SME Window – SMEW); and 

4.  increasing  access  to  and  the  availability  of  microfinance  and  finance  for  social 
enterprises,  to  support  financing  and  investment  operations  related  to  social 
investment, competences and skills, and to develop and consolidate social investment 
markets (Social Investments and Skills Window – SISW). 

Under  the  InvestEU  Fund,  the  EU  provides  funding  support  through  an  EU  budgetary 
guarantee of EUR 26.2  billion covering losses to the implementing partners. The budgetary 
guarantee is underpinned by an EU provisioning budget (including also EURI resources and 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 27 

 
 
 
 
 
1.2 InvestEU 

assigned  revenues  from  legacy  instruments)  of  EUR  10.46  billion,  which  translates  into  a 
target provisioning rate of 40%. 

Up to end 2022, EUR 5.4 billion was paid into the Common Provisioning Fund under the EU 
compartment,  from  which  future  calls  on  the  EU  guarantee  are  to  be  paid.  The  amount  of 
budgetary  commitments  include  EUR  1.8  billion  from  the  EU  general  budget,  EUR  3.51 
billion  from  Next  Generation  EU  and  EUR  103.6  million  internal  assigned  revenue  from 
predecessor financial instruments. 

Negotiations  with  various  Member  States  concerning  contributions  to  the  Member  State 
compartment  of  InvestEU  were  also  successfully  concluded  in  2022.  Five  contribution 
agreements  were  signed  with  Romania,  Bulgaria,  Greece,  Czechia  and  Finland.  For  the 
provisioning  of  the  EU  guarantee  implemented  under  the  InvestEU  Member  State 
compartment,  in  2022  CPF  compartments  for  Romania,  Greece,  Finland  and  Czechia  were 
already set up. 

In 2022, under the InvestEU Guarantee (Member State compartments of the CPF), EUR 112.5 
million was transferred as external assigned revenue from two Member States (Romania and 
Greece), according to the schedules laid down in the signed contribution agreements. Also, as 
set  out  in  the  adopted  partnership  agreements  and  signed  contribution  agreements,  the 
following  appropriations  were  transferred  in  2022  as  contributions  to  the  InvestEU  Fund: 
EUR 131.6 million from the European Regional Development Fund for three Member States 
(Bulgaria,  Czechia  and  Finland)  and  EUR  25  million  from  the  Cohesion  Fund  for  one 
Member State (Bulgaria). 

Implementation arrangements 

InvestEU  is  implemented  in  indirect  management  through  the  European  Investment  Bank 
(EIB)  Group  and  other  implementing  and  advisory  partners.  DG  Economic  and  Financial 
Affairs is the Authorising Officer in the Commission.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 28 

 
 
The programme is bringing together under one roof the multitude of EU financial instruments, 
budgetary  guarantees  and  advisory  services  available  to  support  investment  in  the  EU.  By 
providing a budgetary guarantee, InvestEU aims to make EU funding for investment projects 
in Europe simpler, more efficient and more flexible.  

1.2 InvestEU 

Implementation diagram 

Duration 

The investment period for the approval of operations will end on 31 December 2027, while 
contracts between the Implementing Partners and the final recipient or financial intermediary 
could be signed until 31 December 2028. 

Given  the  long-term  nature  of  support  under  the  InvestEU,  the  EU  guarantee  coverage  and 
operational monitoring will continue until all exposures and liabilities in relation to InvestEU 
operations have been fully discharged.  

Added Value 

The unprecedented domestic and global challenges that the world is currently facing have  a 
significant impact on the EU economy. To pave the way for a sustained and inclusive growth 
– while raising the EU’s global competitiveness, enhancing socio-economic convergence and 
the  cohesion  of  the  EU,  and  advancing  the  digital  and  green  transitions  –  the  EU  needs 
increased investment, including in innovation, digitisation, the efficient use of resources and 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 29 

 
 
 
 
 
 
1.2 InvestEU 

upgrading  of  skills  and  infrastructure.  This,  in  turn,  will  require  expanding  the  supply  and 
diversifying the sources of external funding for EU businesses. 

Intervention at EU level adds value by addressing market failures or sub-optimal investment 
situations (e.g., when, because of its public good nature, the full benefits of given investments 
cannot  be  captured  by  private  agents,  or  the  investment  produces  additional  advantages 
beyond  those  flowing  to  the  investing  company  or  operator).  The  EU  intervention  can  also 
help to reduce the investment gap in targeted sectors (e.g., in investments with a significant 
cross-border  dimension  or  in  sectors,  countries,  or  regions  where  risk  exceeds  levels  that 
private  financial  actors  are  able  or  willing  to  accept).  Finally,  an  EU-level  intervention  can 
ensure that a critical mass of resources can be leveraged to maximise the impact of investment 
on the ground. 

By supporting projects that provide EU added value, InvestEU is complementary to Member 
State  investments.  In  addition,  InvestEU  provides  for  economies  of  scale  in  the  use  of 
innovative financial products by catalysing private investment across the EU. 

Application of Article 155.2 FR 

The guarantee agreements with the EIB, EIF and other implementing partners state that they 
should apply their respective rules, policies and procedures, including anti-money laundering 
and counter terrorist financing frameworks, to address the requirements in respect of money 
laundering, terrorism financing, tax avoidance, tax fraud, tax evasion contained in Article 17 
of  the  InvestEU  Regulation  and  to  reflect  the  prohibition  to  enter  into  new  or  renewed 
operations  with  entities  incorporated  or  established  in  jurisdictions  listed  under  the  relevant 
Union  policy  on  non-cooperative  jurisdictions  or  that  are  identified  as  high-risk  third 
countries. 

None of the InvestEU Guaranteed Operations signed so far were entered into with Financial 
Intermediaries  incorporated  in  non-cooperative  jurisdictions  listed  under  the  relevant  Union 
policy. 

Support combined with other Union actions  

In  2022,  EUR  258.7  million  commitments  were  carried  out  under  blending  operations  that 
combine  InvestEU  support  with  support  provided  under  other  EU  programmes  (including 
Horizon Europe, Digital Europe, European Space Programme,  European Maritime Fisheries 
and Aquaculture Fund, and Creative Europe Media Programme), allocated to the EIB and the 
EIF  to  provide  first  loss  protection  to  specific  portfolios.  In  addition,  EUR  50  million  were 
allocated  to  the  EIB  for  non-repayable  transactions  under  the  ‘Green  Premium  Agreement’. 
During 2022, no operations using the blended support were signed. 

1.2.2 OPERATIONAL PERFORMANCE 

The guarantee agreement with the EIB and the EIF (representing a 75% share of the total EU 
budget  guarantee)  was  signed  in  March  2022.  Several  guarantee  agreements  with  other 
implementing partners (under which EUR 1.4 billion was committed) were also signed in the 
fourth  quarter  of  2022:  CDP  Equity  (from  Italy);  Council  of  Europe  Development  Bank 
(CEB); Nordic Investment Bank (NIB); European Bank for Reconstruction and Development 
Bank (EBRD) and Caisse des Dépôts et Consignations (CDC, from France).  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 30 

 
1.2 InvestEU 

As of 31 December 2022, only the EIB and the EIF had already operations approved by the 
Investment Committee and signed and therefore the financial data will only be presented for 
the EIB and the EIF.  

InvestEU has increased the volume of European Investment Bank (EIB) Group financing and 
investment operations in EU priority areas. As of 31 December 2022, InvestEU enabled the 
EIB Group to sign EUR 6.26 billion of riskier financing and investment operations.  

InvestEU  has  benefitted  21  Member  States  in  2022  which  marked  the  first  year  of  the 
implementation.  As  of  31  December  2022,  the  top  beneficiary  countries,  in  terms  of  the 
InvestEU financing signed were Spain, France, Germany and Finland. 

InvestEU  was  designed  with  an  investment  multiplier  of  14.2x  and  an  expected  investment 
mobilised of EUR 372 billion. As of 31 December 2022, the estimated investment mobilised 
in approved operations was EUR 70.0 billion.  

 Key Figures (as at 31/12/2022)13 

Total amount of operations signed by counterparts (in EUR) 

6,258,371,291 

Total amount of operations disbursed (in EUR) 

Amount transferred to final recipients (in EUR)14 

Number of final recipients  

Investments made by final recipients 

Private sector resources mobilised (in EUR) 

Leverage (ratio) 

Multiplier effect (ratio) 

808,362,394 

722,525,759 

28 

2,939,216,981 

1,586,864,354 

4.14 

11.69 

13 These figures are based on disbursed operations.  

14 In 2022, only EIB made disbursements to final recipients.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 31 

 
 
 
 
 
1.2 InvestEU 

Bulgaria 0,1%

Geographical diversification 

Chart: Signed amounts – breakdown per country 

Lithuania 0,9%

Croatia 0,8%

Czech Republic 0,7%

Romania 0,5%

Greece 0,7%

Estonia 0,6%

Spain 28,5%

Denmark 1,2%
Portugal 1,3%

The Netherlands 2,1%

Luxembourg 3,2%

Austria 2,6%

Ireland 3,1%

Sweden 3,3%

Poland 4,1%

Italy 4,5%

Belgium 4,8%

Finland
5,0%

Germany
6,1%

France 25,8%

As  of  31  December  2022,  operations  were  signed  in  the  21  EU  Member  States,  with  the 
largest  amounts  signed  in  Spain  (EUR  1.78  billion),  France  (EUR  1.61  billion),  Germany 
(EUR 384,8 million), Finland (EUR 315 million), Belgium (EUR 298.4 million), Italy (EUR 
279.5 million) and Poland (EUR 256 million).  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 32 

 
 
 
 
 
 
1.2 InvestEU 

Contribution to the achievement of the InvestEU objectives 

The  objective  of  InvestEU  to  mobilise  EUR  372 billion  investments  by  2027  is  on  track  as 
well as the EURI targets (i.e. EUR 70.0 billion investments in approved operations at the end 
of  2022).  This  amount  of  investment  is  mobilised  through  EUR  17.4  billion  approved 
operations15 implemented in 21 countries.  

As of 31 December 2022, operations were signed across the four policy windows for a total 
amount  of  EUR  6.26  billion.  The  largest  signed  amounts  were  in  the  SME  and  mid-caps 
window  (signed  operations  for  EUR  2.41  billion),  with  somewhat  more  modest  amounts  in 
the Sustainable Infrastructure window (signed operations for EUR 2.31 billion), the Research, 
Innovation, & Digitalisation window (signed operations for EUR 1.25 billion) and the Social 
Investment Skills window (signed operations for EUR 290.7 million). 

The EIB signed EUR 1.6 billion of operations under SMEW, EUR 628 million under RIDW 
and EUR 130 million under SISW. An amount of EUR 509.7 million is not yet allocated to 
any window/product. 

The  EIF  signed  EUR  1.8  billion  of  operations  under  SIW,  EUR  1.2  billion  under  joint 
SMEW/ RIDW financial product, EUR 685 million under SIW and 160 million under SISW. 
An amount of EUR 1.3 billion is not yet allocated to any window/product. 

Diversification by Window 

15 Including framework operations.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 33 

 
 
 
 
1.2 InvestEU 

1.2.3 FINANCIAL INFORMATION 

Financial information at the level of budgetary guarantee  

At the end of 2022, the  available guarantee  under  InvestEU,  after deducting guarantee calls 
and  other  expenses  covered  by  the  guarantee,  amounted  to  EUR  21.28  billion  out  of  which 
EUR 258.7 million in blending in the form of EU financial instruments.  

The  maximum  guarantee  amount  signed  with  the  EIB  is  EUR  8.6  billion  (for  the  InvestEU 
Fund) and an additional EUR 100 million from blending (committed in 2022). 

The  maximum  guarantee  amount  signed  with  the  EIF  is  EUR  11.1  billion  for  the  InvestEU 
Fund and an additional EUR 158.7 million from blending (committed in 2022). 

The  guarantee  covers  the  risk  related  to  the  already  signed  operations  of  the  EIB  Group, 
which currently amount to EUR 6.26 billion (the EU risk is limited to 2.1 billion). EU risk in 
the InvestEU operations disbursed by the EIB Group, (or by financial intermediaries in case 
of  bank  guarantee  products)  as  of  31 December  2022  total  EUR  324  million  (EUR  251.4 
million for the EIB and EUR 72.8 million for the EIF).  

EU contingent and financial liability 

31/12/2022 

31/12/2021 

all figures in EUR 

Available guarantee signed 
with counterparts  

EU risk for operations signed 
by counterparts 

EU risk for operations signed 
by counterparts and 
disbursed 

21,280,363,333 

2,107,685,441 

324,252,837 

N/A 

N/A 

N/A 

Under  the  InvestEU  Agreement,  the  European  Union  is  entitled  to  a  remuneration  for  its 
guarantee. In 2022, the EU has received EUR 2.7 million (of revenues from the EIB where the 
risk-related revenues are shared between the European Union and the EIB).   

The  revenues  have  been  partially  used  to  cover  the  guarantee  calls  and  other  expenses 
incurred under the guarantee under InvestEU, while the remaining part has been recovered to 
the European Union budget as internal assigned revenues and used for the constitution of the 
InvestEU compartment of the CPF. 

EU guarantee revenues 

EU guarantee revenues 

all figures in EUR 

2022 

2,763,405 

Cumulative until 31-12-2022 

2,763,405 

In 2022 the EIB, a call of EUR 70,470.34 in relation to the InvestEU share of the guarantee 
call under the D1 portfolio. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 34 

 
 
 
 
 
 
 
1.2 InvestEU 

For  the  EIF,  there  were  no  guarantee  calls  related  to  operations  covered  by  the  InvestEU 
guarantee. 

Guarantee calls 
Recoveries 
Net guarantee calls 

Guarantee calls and recoveries  

all figures in EUR 

2022 

70,470 
0 
70,470 

Cumulative until 31-12-2022 

70,470 
0 
70,470 

Expenses reported refer to the InvestEU share of the D1 portfolio. 

all figures in EUR 

Expenses  

2022 

Cumulative until 31-12-2022 

Fees to counterparts 

Other expenses (recovery 
costs, funding costs, other) 

9,245,734 

330,943 

9,245,734 

330,943 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 35 

 
 
 
 
 
 
 
 
 
 
Financial information at the level of product 

Guarantee Agreement EIB 

Guarantee Agreement EIF 

Guarantee Agreement CDP Equity 

all figures in EUR and as at 31/12/2022 

1.2 InvestEU 

Effective 

Counterpart 

Yes 

EIB 

Yes 

CDP Equity 

CDP Equity is the equity investment 
company of Cassa Depositi e Prestiti, 
with the mission of pursuing the equity 
strategy of the Group.  

CDP Equity will support investments 
dedicated to the development of the 
Italian Venture Capital sector in the 
research, innovation and digitisation 
policy window. 

Overview 

Yes 

EIF 

The European Investment Fund (EIF) 
supports Europe's SMEs by 
improving their access to finance by 
designing, promoting, and 
implementing equity and debt 
financing instruments targeting small 
business.  

The EIF investments under the 
InvestEU programme will cover EU 
projects operating in all InvestEU 
policy windows. 

EIF was allocated a total EU 
guarantee of EUR 11.2 billion 
(including EUR 159 million of 
blending). 

The European Investment Bank 
(EIB) is the long-term lending 
institution of the European Union 
owned by its Member States.  

The Bank’s investments under the 
InvestEU programme will cover EU 
projects operating in the following 
policy windows:  

- 

- 

- 

sustainable 
infrastructure;  
research, innovation and 
digitisation;  
social investment and 
skills. 

EIB was allocated a total EU 
guarantee of EUR 8.6 billion 
(including EUR 100 million of 
blending). 

8,658,232,554 

11,214,745,039 

312,000,000 

Debt-Type operations and Equity Type 
Operations which may include e 
instruments in the legal form of equity. 

Guarantee and Equity Operations 

SIW, RIDW, SISW 

SIW, RIDW, SMEW, SISW 

2,382,150,000 

3,876,221,291 

722,525,759 

85,836,636 

EU contingent and financial liability  

8,658,162,084 

463,095,024 

11,214,576,249 

1,644,590,417 

251,430,024 

72,822,813 

Cumulative guarantee calls and recoveries  

70,470 

0 

70,470 

0 

35,652 

0 

0 

0 

Cumulative expenses  

9,245,734 

295,291 

Equity 

RIDW 

0 

0 

312,000,000 

0 

0 

0 

0 

0 

0 

0 

Description 

Maximum guarantee 
signed with counterpart 

Operation type 

Investment window 

Cumulative operations 
signed by counterpart 

Cumulative operations 
disbursed by 
counterpart 

Available guarantee 
signed with counterpart  

EU risk for operations 
signed by counterpart 

EU risk for operations 
signed by counterpart 
and disbursed 

Cumulative guarantee 
calls 

Cumulative recoveries 
Cumulative net 
guarantee calls 

Fees to counterpart 

Other expenses 
cumulative over all 
mandates 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 36 

 
 
 
 
 
 
 
 
 
 
  
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
1.2 InvestEU 

all figures in EUR and as at 
31/12/2022 

  Guarantee Agreement EBRD 

Guarantee Agreement CEB 

Guarantee Agreement NIB 

Effective 

Counterpart 

Yes 

EBRD 

Description 

The European Bank for 
Reconstruction and 
Development (EBRD) will 
support investments in 
sustainable infrastructure and 
greener industry and services, 
research, innovation and 
digitisation as well as social 
housing.  

The geographical focus of the 
projects is in Bulgaria, Croatia, 
Czechia, Estonia, Greece, 
Hungary, Latvia, Lithuania, 
Poland, Romania, Slovak 
Republic and Slovenia. 

Overview 

Yes 

CEB 

The Council of Europe Development Bank 
(CEB) will support investments under the 
“social investment and skills” and 
“sustainable infrastructure” windows. This 
includes social, affordable and student 
housing; education, employment, and 
skills; health care, long-term care and 
social care; as well as clean and smart 
urban mobility, water and wastewater 
services, and flood protection. The 
portfolio will also support cross-cutting 
objectives such as gender equality and the 
inclusion of vulnerable groups, including 
persons with disabilities.  

Yes 

NIB 

The Nordic Investment Bank (NIB) 
will support investments under the 
“sustainable infrastructure” and the 
“research, innovation and 
digitisation” windows. This includes 
investments in clean energy, the 
modernisation and decarbonisation 
of industry, critical raw materials 
supply, sustainable transport, 
environmental protection, bio-
economy, digital connectivity and 
sustainable data infrastructure.  

The geographical focus of the 
projects is in Denmark, Estonia, 
Finland, Latvia, Lithuania, Poland 
and Sweden. 

Maximum guarantee 
signed with 
counterpart 

450,000,000 

159,125,000 

Operation type 

Debt Financing 

Investment window 

SIW, RIDW, SISW 

Debt Financing 

SIW, SISW 

114,000,000 

Debt Financing 

SIW, RIDW 

0 

0 

0 

0 

0 

0 

EU contingent and financial liability  

450,000,000 

159,125,000 

114,000,000 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Cumulative guarantee calls and recoveries  

0 

0 

0 

Cumulative expenses  

0 

0 

0 

0 

0 

0 

0 

0 

0 

Cumulative 
operations signed by 
counterpart 

Cumulative 
operations disbursed 
by counterpart 

Available guarantee 
signed with 
counterpart  

EU risk for 
operations signed by 
counterpart 

EU risk for 
operations signed by 
counterpart and 
disbursed 

Cumulative 
guarantee calls 

Cumulative 
recoveries 
Cumulative net 
guarantee calls 

Fees to counterpart 

Other expenses 
(recovery costs, 
funding costs, other) 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 37 

 
 
 
 
 
  
 
 
 
 
1.2 InvestEU 

Effective 
Counterpart 

Description 

all figures in EUR and as at 31/12/2022 

Guarantee Agreement CDC 

Yes 
Guarantee Agreement CDC 

Caisse des Dépôts et Consignations (CDC) will 
support investments under the “social investment and 
skills” and “sustainable infrastructure” windows. 
These include investments in the areas of 
rehabilitation and restoration of industrial wasteland, 
the development of data centres as well as investment 
in industrial infrastructure to the benefit of innovative 
companies in France.  

CDC was allocated a total EU guarantee of EUR 
372.5 million. 

Maximum guarantee 
signed with 
counterpart 

372,500,000 

Operation type 

Intermediated Equity and Debt Financing 

Investment window 
Cumulative operations 
signed by counterpart 
Cumulative operations 
disbursed by 
counterpart 
Available guarantee 
signed with 
counterpart  
EU risk for operations 
signed by counterpart 
EU risk for operations 
signed by counterpart 
and disbursed 
Cumulative guarantee 
calls 

Cumulative recoveries 

Cumulative net 
guarantee calls 

Fees to counterpart 

Other expenses 
(recovery costs, 
funding costs, other) 

SIW, SISW 

0 

0 

372,500,000 

0 

0 

0 

0 

0 

0 

0 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 38 

 
 
 
  
 
 
 
 
 
1.3 European Fund for Sustainable Development 

1.3 EUROPEAN FUND FOR SUSTAINABLE DEVELOPMENT 

1.3.1 DESCRIPTION 

Identification/Reference to the basic act  

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

Maximum amount of budgetary guarantee (in 
EUR) 

1,548,968,935 

of which ceiling authorised in the legal basis (in 
EUR) 

1,500,000,000 

of which from external contributions  
(in EUR) 

48,968,935 

Budget Lines 

01 03 08 

Budgetary commitment 
appropriations (in EUR) 

Cumulative to 
2022 

399,718,935 

of which from voted budget 

350,000,000 

of which 
signed with 
counterparts  
1,548,700,000 

of which effective of 31/12/2022 

1,390,700,000 

Counterparts 

Agence Française de Développement (AFD), 
Agencia Española de Cooperación Internacional 
para el Desarrollo (AECID), Cassa Depositi e 
Prestiti (CDP), Compañía Española de Financiación 
del Desarrollo (COFIDES), European Bank for 
Reconstruction and Development (EBRD), 
European Investment Bank (EIB), International 
Finance Corporation (IFC), Kreditanstalt für 
Wiederaufbau (KfW), Nederlandse, Financierings-
Maatschappij voor Ontwikkelingslanden (FMO), 
PROPARCO  

2023 

2024 

2025-2027 

Total 

0 

0 

0 

0 

of which from internal assigned 
revenues 

of which from external 
assigned revenues 

750,000 

N/A 

N/A 

48,968,935 

N/A 

N/A 

Budgetary payment 
appropriations (in EUR) 

399,718,935 

of which from voted budget 

350,000,000 

0 

0 

0 

0 

of which from internal assigned 
revenues 

of which from external 
assigned revenues 

750,000 

N/A 

N/A 

48,968,935 

N/A 

N/A 

0 

0 

0 

0 

0 

0 

0 

0 

399,718,935 

350,000,000 

750,000 

48,968,935 

399,718,935 

350,000,000 

750,000 

48,968,935 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 39 

  
  
  
  
  
  
 
 
 
1.3 European Fund for Sustainable Development 

General description 

The European Commission has established the European Fund for Sustainable Development 
(“EFSD”) to support investments and increase access to financing, primarily in Africa and the 
Neighbourhood. 

The  investments  help  to  bridge  the  gap  between  the  financing  already  available  and  the 
financing  still  needed  to  meet  the  UN  Sustainable  Goals.  The  EFSD  Guarantee  serves  as  a 
risk  mitigation  mechanism  to  leverage  private  sector  financing  (whilst  avoiding  market 
distortions)  and  to  crowd-in  private  sector  funds.  The  EFSD  Guarantee  is  a  new  way  of 
financing development projects.  

The  EFSD  Guarantee  shares  the  risk  involved  in  investing,  so  that  development  banks  and 
private investors come in and lend to local entrepreneurs or finance development projects. By 
doing so, the EFSD Guarantee contributes to job creation and helps to boost economies. More 
jobs  and  higher  growth  make  countries  more  stable  and  prosperous.  Consequently,  by 
supporting investments, the EFSD Guarantee addresses specific socioeconomic root causes of 
migration,  including  irregular  migration,  and  contributes  to  the  sustainable  reintegration  of 
migrants  returning  to  their  countries  of  origin  and  to  the  strengthening  of  transit  and  host 
communities.  

The  EFSD  Guarantee  was  established  by  Regulation  (EU)  2017/1601  of  the  European 
Parliament  and  of  the  Council  of  26  September  2017  establishing  the  European  Fund  for 
Sustainable Development (EFSD), the EFSD Guarantee and the EFSD Guarantee Fund. 

Individual guarantee agreements focus on five key sectors: 

1.  small business financing; 
2.  sustainable energy and connectivity; 
3.  local currency financing; 
4.  digitalisation; 
5.  sustainable cities. 

Implementation cycle  

Following  the  Communication  from  the  Commission  in  September  2016  on  the  “External 
Investment  Plan”, 
the  European  Fund  for  Sustainable 
Development was adopted in September 2017.  

the  Regulation  establishing 

Immediately  after  the  Regulation  was  adopted,  the  Commission  and  Member  States 
established the EFSD Governance structure. In turn, discussions between Member States, the 
European  External  Action  Service  and  the  Commission  led  to  the  establishment  of  the 
‘investment windows’, which set sectoral priorities for the EFSD Guarantee. The Commission 
invited partner financial institutions to propose investment programmes to be covered by the 
EFSD Guarantee. 

The  response  by  the  financial  institutions  was  very  positive.  The  EFSD  was  heavily 
oversubscribed  i.e.  the  requests  from  the  financial  institutions  exceeded  the  capacity  of  the 
EFSD  Guarantee  by  over  EUR  2  billion.  The  Commission  received  46  proposals  from  12 
partner  institutions  for  a  total  value  of  more  than  EUR  3.5  billion.  From  a  performance 
assessment perspective, this is an indication that the instrument was well designed. The high 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 40 

1.3 European Fund for Sustainable Development 

number  of  requests  revealed  that  there  was  a  significant  market  gap  that  the  EFSD  is 
addressing.  

The EFSD Regulation set an ambitious target for contracting and aimed to end the contracting 
period  on  31  December  2020.  The  financial  structures  involved  required  significant 
negotiations  between  the  Commission,  the  partner  financial  institutions,  and  the  Guarantee 
Technical  Assessment  Group  (“GTAG”),  a  body  specialised  in  financial  risk  assessment 
established for EFSD. 

The  Commission  successfully  negotiated  the  first  guarantee  agreement,  the  NASIRA 
programme  with  the  Dutch  Development  Bank,  FMO,  at  the  end  of  2018.  Six  more 
agreements  followed in  2019, displaying  the  strong  growth  in  the capacity of EFSD to  turn 
proposals  into  signed  guarantee  agreements.  As  of  31  December  2020,  the  Commission 
exhausted  the  present  capacity  of  the  EFSD  Guarantee  after  having  signed  18  Guarantee 
Agreements with 10 partner institutions for a total guarantee amount of EUR 1.5 billion. All 
commitment and payment appropriations for  the year 2020 were fully exhausted. After this, 
partner financial institutions have four years to use the EFSD Guarantee in support of the EU 
policy priorities. 

Over  the  past  year,  there  was  an  increased  uptake  of  EFSD  in  our  partner  countries.  The 
implementation of the EFSD is increasing in both extent and magnitude. Operations signed by 
our  counterparts  increased  by  approximately  45%.  This  shows  steady  progress  of 
implementation towards achieving objectives. A similar increase in disbursed amounts shows 
that our partner financial institutions are signing deals with their counterparts on the ground, 
which  is  particularly  positive  considering  that  the  increase  in  disbursements  translates  into 
impact in our partner countries. Some countries and sectors, though eligible, are facing certain 
investment  bottlenecks  due  to  excessive  liquidity,  while  others  still  face  regulatory  barriers 
and difficult commercial contexts which lead to smaller pipelines for potential investment.   

One  of  the  Guarantees,  the  RECIDE  Guarantee  from  AECID,  the  Spanish  development 
agency,  was  cancelled  due  to  difficulties  in  developing  a  pipeline  within  the  required 
investment period. This period appeared too limited for the envisaged complex urban projects, 
particularly due to the impact of the COVID crisis on these kinds of investments. Despite this 
setback, this cancellation frees up risk capacity for some other EFSD guarantees, which can 
be  useful  given  the  need  for  additional  risk-taking  caused  by  the  deterioration  in  many 
markets following the Russian military aggression against Ukraine. 2022 saw the first call on 
the EFSD Guarantee, following  a small  default. That  being  said,  the fact that there was  this 
(relatively  small)  call  is  not  necessarily  a  negative  sign,  because  an  absence  of  calls  might 
suggest  a  too  prudent  investment  strategy  for  the  investments  under  EFSD  guarantee  –  in 
particular when this concerns a portfolio of loans with relatively short tenors, such as MSME 
financing.   

Several interesting transactions in North Africa and East Africa provided support to targeted 
groups like youth, women, and migrant entrepreneurs. Another transaction to support access 
to finance marks the first operation in Palestine for the EFSD Guarantee. 2022 also saw the 
EFSD Guarantee support Ukraine. A guarantee was provided to facilitate loans for emergency 
liquidity  following  the  onset  of  the  invasion  where  critical  power  generation  infrastructure 
was taken under the control of, or destroyed by, Russia’s invasion. The proceeds are used for 
working  capital  needs  related  to  daily  critical  operations  to  continue  a  stable  and  secure 
supply of electricity to people in Ukraine.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 41 

1.3 European Fund for Sustainable Development 

These  are  important  examples  of  how  the  EFSD  can  offer  opportunities  to  achieve  EU 
objectives  and  support  EU  partner  countries  even  in  more  vulnerable  segments  of  the 
economy  or  in  difficult  times.  Of  note,  part  of  the  guarantee  provided  by  the  EFSD  to  the 
COVAX facility was repaid with approximately EUR 130 million still outstanding. Support to 
the  COVAX  I  and  II facilities,  from  the  EFSD  and  EFSD+,  facilitated  the  distribution  of 
hundreds  of  millions  of  vaccine  doses  to  EU  partner  countries. The  implementation  of 
this programme  backed  by  the  EFSD  and  EFSD+  Guarantee  marks  a  particular  success  in 
2022.  

Implementation arrangements 

The  EFSD  Guarantee  is  implemented  by  the  eligible  counterparts  in  indirect  management. 
The approval process of individual guarantee agreement is a multi-stage process, culminating 
in a Commission Decision on each Proposed Investment Programme (PIP) to be supported by 
the EFSD Guarantee, based on both the information provided by the eligible counterparts in 
their application form and the recommendation of the Operational Boards.  

Following the adoption of  a  Commission  Decision, the Commission  proceeds to  conclude a 
guarantee  agreement  with  each  eligible  counterpart.  Each  EFSD  guarantee  agreement  is 
specifically designed to take into account both the specificities of the EFSD Guarantee and of 
the specific PIP. The financial structures involved require significant negotiations between the 
Commission,  the  partner  Financial  Institutions,  and  the  Guarantee  Technical  Assessment 
Group, a body specialised in financial risk assessment established for the EFSD Guarantee.  

All  eligible  counterparts  to  a  guarantee  agreement  must  be  pillar-assessed  entities.  At  the 
present stage, these entities are all public or private institutions with a public service mission. 
These  are mostly Member States’ national  development finance institutions and multilateral 
development  finance institutions.  At this moment,  no private entity  has been pillar assessed 
and therefore deemed an eligible counterpart to co-sign an EFSD guarantee agreement.    

As of 31 December 2021, the list of counterparts is the following: 

•  Agence Française de Développement (AFD) 
•  Agencia  Española  de  Cooperación  Internacional  para  el  Desarrollo  (AECID)  - 

cancelled 

•  Cassa Depositi e Prestiti (CDP) 
•  Compañía Española de Financiación del Desarrollo (COFIDES) 
•  European Bank for Reconstruction and Development (EBRD) 
•  European Investment Bank (EIB) 
• 
•  Kreditanstalt für Wiederaufbau (KfW) 
•  Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO) 
•  PROPARCO 

International Finance Corporation (IFC) 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 42 

 
 
1.3 European Fund for Sustainable Development 

Duration 

The  EFSD  Guarantee  was  established  by  Regulation  (EU)  2017/1601  of  the  European 
Parliament  and  of  the  Council  of  26  September  2017  establishing  the  European  Fund  for 
Sustainable Development (“EFSD”), the EFSD Guarantee and the EFSD Guarantee Fund. 

Pursuant to Article 8 of the EFSD Regulation, the investment period, during which guarantee 
agreements  for  supporting  investment  programmes  can  be  concluded  with  the  eligible 
counterparts, lasted until 31 December 2020. 

Eligible counterparts subsequently have four years as from the effective date of the guarantee 
agreement  to  conclude  agreements  for  underlying  operations  with  co-financing  partners, 
financial  intermediaries,  or  final  recipients.  The  duration  of  the  guarantees  extended  to 
eligible  counterparts  under  each  guarantee  agreement  should  as  a  general  rule  not  exceed 
fifteen years. 

Added value 

The  EFSD  Guarantee  uses  scarce  public  resources  in  an  innovative  way  to  mobilise  public 
and  private  investment,  thereby  creating  growth  and  employment  opportunities,  maximising 
additionality, delivering innovative products and crowding-in private sector funds.  

It is important to notice that the investment period has only recently approached the halfway 
point  and  the  duration  of  many  of  the  guarantees  is  over  ten  years.  The  innovative  EFSD 
Guarantee  will  be  used  to  reduce  the  risks for  investment  in  sustainable  development  in 
partner countries, thus helping mobilise investment, especially from private investors. EFSD 
should  allow  investors  and  private  companies,  in  particular  micro,  small  and  medium-sized 
enterprises  (MSMEs),  to  contribute  more  effectively  to  sustainable  development  in  partner 
countries.  EFSD  aims  to  address  market  failures  and  suboptimal  investment  situations  and 
encourage  private  sector  financing.  EFSD  should  also  foster  the  creation  of  decent  jobs, 
economic  opportunities  and  entrepreneurship,  equitable  access  to,  and  use  of,  natural 
resources.  

Application of Article 155.2 FR 

When implementing the EFSD guarantee agreements,  financial institutions are contractually 
obliged  to  comply  with  applicable  Union  law  and  agreed  international  and  Union  standards 
and, therefore, not  support actions that contribute to  money laundering, terrorism financing, 
tax avoidance, tax fraud or tax evasion. Financial institutions may not enter into agreements 
with  entities  established  in  jurisdictions  listed  under  the  relevant  Union  policy  on  non-
cooperative jurisdictions or that are identified as high-risk third countries pursuant to Article 
9(2)  of  Directive  (EU)  2015/849,  or  that  do  not  effectively  comply  with  Union  or 
internationally agreed tax standards on transparency and exchange of information. 

In addition, when concluding agreements with financial intermediaries, entities implementing 
EFSD  Guarantees  must  transpose  these  requirements  into  the  relevant  agreements.  The 
financial intermediaries are also obliged to report on the observance of these requirements.  

In the reporting period, financial institutions did not report any issues. 

Support combined with other Union actions  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 43 

   
1.3 European Fund for Sustainable Development 

In 2022, the EU contributed an additional EUR 2 million for Technical Assistance related to 
EFSD guarantees.  In general, EFSD Technical Assistance funds preparation of  a pipeline of 
bankable, high-quality projects that will attract private financing and building of capacities of 
local  financial  intermediaries  and  beneficiaries  to  structure  and  roll  out  investments  under 
EFSD.  In  some  cases,  technical  assistance  also  contributes  to  the  improvement  of  the 
investment  climate  –  enabling  governments  to  enact  reforms  to  make  their  countries more 
attractive places to invest in. With some Technical Assistance contracts cancelled as a result 
of cancelled  guarantees,  at  the  end  of  2022  the  total  amount  of  Technical  Assistance 
accompanying the EFSD guarantee agreements was approximately EUR 100 million.    

1.3.2 OPERATIONAL PERFORMANCE 

the  course  of  2022,  partner  financial 

In 
the 
implementation of the guarantee agreements signed under the EFSD. Many of the guarantee 
agreements  were  signed  towards  the  end  of  2020  and  have  only  now  reached  the  halfway 
point for their investment period and began implementation with their first inclusion notices 
arriving in 2021.   

institutions  continued  and 

increased 

The  RECIDE  Guarantee  had  to  be  cancelled  due  to  difficulties  faced  by  the  implementing 
partner.  

The Commission established an EFSD Results Measurement Framework which is used in the 
guarantee  agreements.  It  covers  three  levels:  (1)  the  EFSD  as  a  whole,  including  both  the 
EFSD  Guarantee  and  the  blending  operations;  (2)  the  Investment  Platforms  and  Investment 
Windows; (3) the investment programmes under the EFSD Guarantee and the projects under 
the blending operations.  The Commission  is responsible for monitoring and reporting under 
the first two levels, based on a set of pre-defined indicators. At programme and project level, 
the  reporting  on  expected  and  actual  operational  results  is  the  responsibility  of  the  lead 
financial institution. The list of indicators, the frequency and the reporting format are part of 
the guarantee agreements signed with the financial institutions.  

It  is  important  to  notice  that  the  investment  period  is  still  on-going  and  has  only  recently 
begun for several  agreements, and the duration of  many of the guarantees is over ten years. 
This  means that in practice the  implementing  partners  are  still in  the process  of  signing the 
underlying agreements.   

With  cumulative  disbursements  still  growing,  the  remaining  nine  guarantee  agreements 
excluding COVAX, which was not meant to leverage investments, let to an average leverage 
ratio of 1.47.  

The following table summarizes the key operational figures presented above: 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 44 

 
 
 
1.3 European Fund for Sustainable Development 

Key Figures (as at 31/12/2022) 

Total amount of operations signed by 
counterparts (in EUR) 

Total amount of operations disbursed (in EUR) 

Amount transferred to final recipients (in EUR) 

Number of final recipients  

Investments made by final recipients 

897,258,525 

685,537,560 

N/A 

N/A 

N/A 

Private sector resources mobilised (in EUR) 

1,252,614,873 

Leverage (ratio) 

Multiplier effect (ratio) 

 Geographical diversification 

1.47 

1.47 

As  of  31  December  2022,  EUR  400  million  of  the  EFSD  Guarantee  went  to  COVAX, 
including  EUR  265.1  million  from  other  PIPs  (62%)  to  Sub-Saharan  Africa  and  then  EUR 
382.8 million (26% out of the total operations signed) to the EU Neighbourhood.  

The  EIB  processed  the  full  disbursement  of  the  EUR  400  million  COVAX  Facility  on  31 
March 2021. As of December 2021, EUR 139.3 million vaccine doses were distributed to the 
47  approved  countries  under  the  COVAX  I  &  II  facilities,  for  a  total  value  of  EUR  680 
million. In terms of donation volumes from eligible donors, on 31 December 2022, Gavi (i.e. 
the  Global  Alliance  for  Vaccines)  counted  EUR  1.7  billion  in  AMC  (i.e.  Advance  Market 
Commitments)  donations  assigned  to  the  COVAX  facility,  that  will  be  gradually  utilised  to 
purchase additional doses over the coming months. 

Chart: EFSD geographical breakdown16 

EU 
Neighbourhood 
38%

Sub-Saharan 
Africa 
62%

16 EIB SME Access to Finance Initiative not yet allocated.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 45 

  
 
 
 
 
1.3 European Fund for Sustainable Development 

Sectoral diversification 

As of 31 December 2022, EUR 400.6 million went to MSMEs and Agribusiness (31% out of 
the  total  operations  signed)  EUR  46  million  (4%)  went  to  Sustainable  energy  and 
connectivity,  EUR  204  million  (16%)  to  sustainable  cities,  EUR  46  million  (4%)  went  to 
Digitalisation for development, EUR180.8 million went to local currency financing (14%) and 
EUR 400 million (31%) went to Health in relation to COVAX. 

Chart: EFSD sectorial diversification 

Sustainable energy and 
connectivity ; 4%

Sustainable cities; 16%

MSMEs and 
Agriculture; 31%

Health (COVAX); 
31%

Digital for 
development; 4%

Local currency 
financing; 14%

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 46 

 
 
 
1.3 European Fund for Sustainable Development 

1.3.3 FINANCIAL INFORMATION 

Financial information at the level of budgetary guarantee 

As of 31 December 2022, seventeen EFSD guarantee agreements were  signed and  effective 
with the total guarantee cover limit amounting at EUR 1.18 billion. The operations signed by 
the  counterparts  under  those  agreements  totalled  EUR  897.2 million,  with  the  EU  risk  for 
those operations capped at EUR 534.2 million. The EU risk related to the amounts disbursed 
by the counterparts amounted to EUR 446.1 million. Given that the programme is in the ramp 
up phase, the EU risk at the level of operations signed and disbursed is expected to increase in 
the coming years. 

Available guarantee signed with 
counterparts  

EU risk for operations signed by 
counterparts 

EU risk for operations signed by 
counterparts and disbursed 

EU guarantee revenues 

Guarantee calls 

Recoveries 

Net guarantee calls 

all figures in EUR 

EU contingent and financial liability 

31-12-2022 

31-12-2021 

1,176,016,341 

1,390,700,000 

534,233,207 

610,668,652 

446,132,493 

535,250,632 

EU guarantee revenues 

all figures in EUR 

2022 

1,248,765 

Cumulative until 31-12-
2022 
2,078,724 

Guarantee calls and recoveries  

all figures in EUR 

2022 

882,366 

0 

0 

Cumulative until 31-12-2022 

882,366 

0 
0 

Expenses  

all figures in EUR 

2022 

Cumulative until 31-12-2022 

Fees to counterparts 

Other expenses (recovery 
costs, funding costs, other) 

0 

0 

0 

0 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 47 

  
  
  
 
 
  
  
 
  
  
  
 
  
  
  
 
 
Financial information at the level of guarantee agreement 

1.3 European Fund for Sustainable Development 

Overview 

Effective 

Counterpart 

Description 

NASIRA Risk-Sharing 
Facility - Financing for 
underserved entrepreneurs 

Ventures Programme - 
Empowering entrepreneurs 
for sustainable development 

Archipelagos - One Platform for Africa - 
Supporting African SMEs throughout 
their lifecycle and developing capital 
markets 

Yes 

FMO 

Yes 

FMO 

Yes 

CDP 

NASIRA addresses the high 
risks, both perceived and real, 
involved in lending to 
entrepreneurs who currently 
have limited or no access to 
finance in countries 
neighbouring the EU and in 
Sub-Saharan Africa. It 
encourages local banks to 
lend to borrowers who would 
usually be considered too 
risky, such as migrants, 
women, young people or 
COVID-19 affected small and 
medium-sized enterprises 
(SMEs). With this guarantee, 
we are addressing the root 
causes of migration, 
including irregular migration. 
This guarantee will generate 
EUR 1.1 billion investment to 
provide affordable loans to 
these entrepreneurs. It does so 
by offering local financial 
institutions, such as banks 
and microfinance institutions, 
portfolio guarantees. These 
cover several loans and 
partially secure the repayment 
of the principal amount of the 
loan. 

VENTURES promotes 
sustainable development by: 
- enabling the development and 
growth of young companies; 
- contributing to healthy small 
local businesses. 
It is doing so by bringing scarce 
private investment to the 
venture sector, which are start-
ups and innovative firms with 
the potential for rapid growth 
but associated with a high risk. 
It will boost investment 
especially for innovative start-
ups that use digital solutions to 
improve or enable access to 
digital products and services for 
communities having no or 
limited access to either. 
The resulting investment will 
address some of the root causes 
of migration by creating jobs. It 
will also contribute to climate 
and environmental protection. 
The guarantee enables FMO, the 
Dutch development bank, to 
pursue direct and indirect 
investment for digital solutions. 

ARCHIPELAGOS – One Platform for 
Africa (ONE4A)- supports high-potential 
African small and medium-sized 
enterprises (SMEs) in reaching their next 
stage of growth by accelerating access to 
debt financing (notably by piloting 
innovative capital markets solutions) and 
enabling financing partners to share the risk 
of investing in projects. This will allow 
high-potential African SMEs to: 
- mobilise financing and scale up 
investments 
- drive enterprise development 
- create new jobs 
- generate sustainable economic growth 
- improve the quality of life in Africa. 
It will also strengthen Africa’s SME capital 
markets, making them effective 
intermediaries for mobilising resources for 
the private sector. This benefits in 
particular low-income countries with less 
developed capital markets. 
ONE4A spreads best business practices and 
know-how to SMEs. It also enables a 
smaller number of high-growth SMEs, 
currently perceived as too risky, to obtain 
funding from institutional investors. 

Maximum guarantee 
signed with counterpart 

100,000,000 

Operation type 

Portfolio guarantees 

Second loss 

239,034,370 

159,097,423 

40,000,000 

Layered Fund 

First loss 

46,004,640 

32,603,436 

EU contingent and financial liability  

100,000,000 

35,094,218 

40,000,000 

15,334,880 

19,053,737 

10.893.311,40 

Cumulative guarantee calls and recoveries  

0 

0 

0 

0 

0 

0 

0 

0 

Cumulative expenses  

0 

0 

30,000,000 

Portfolio guarantees 

First loss 

0 

0 

30,000,000 

0 

0 

0 

0 

0 

0 

0 

Risk-sharing structure 

Cumulative operations 
signed by counterpart 

Cumulative operations 
disbursed by counterpart 

Available guarantee signed 
with counterpart  

EU risk for operations 
signed by counterpart 

EU risk for operations 
signed by counterpart and 
disbursed 

Cumulative guarantee calls 

Cumulative recoveries 

Cumulative net guarantee 
calls 

Fees to counterpart 

Other expenses (recovery 
costs, funding costs, other) 
cumulative over all 
mandates 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 48 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.3 European Fund for Sustainable Development 

Framework to Scale-up 
Renewable Energy Investments - 
more clean power generation 
thanks to more certainty for 
investors 

Resilient City Development 
(RECIDE) - Making investment 
in urban infrastructure more 
compelling  

Overview 

Yes 

EBRD 

Cancelled 

AECID 

This guarantee supports renewable 
energy investments by addressing 
finance barriers to viable power 
projects and crowding-in private 
sector investment. As a result, it 
will: 
- unlock the countries’ renewable 
energy potential 
- promote wider renewable energy 
development 
- demonstrate how the private sector 
can play a role in meeting growing 
demand for power. This matters 
because public money is insufficient 
to cover the large-scale investment 
needed, and private investment can 
help make projects operate more 
efficiently. The EU guarantee 
provided to the European Bank for 
Reconstruction and Development 
(EBRD) is passed on to lenders, 
such as local commercial banks. 
This allows them to provide 
financing to projects alongside the 
EBRD’s own loans.  
By doing so, this guarantee enables 
the development of multiple private, 
renewable energy projects, which 
aim to significantly reduce CO2 
emissions and introduce a number of 
new private investors to the sector 
and countries, supporting its 
transition to a low-carbon economy. 

50,000,000 

Single project guarantees 

First loss, Pari Passu 

0 

0 

RECIDE was interned to help 
cities in Africa and the EU 
Southern Neighbourhood to 
develop public-private 
partnerships and share the risks 
with private investors in urban 
infrastructure. This will include 
investment in: 
- energy efficiency 
- flood protection 
- public transport 
- water and sanitation 
- solid waste management. 
The EU guarantee aims to protect 
private financiers and investors 
against certain government-
related risks in developing urban 
infrastructure, such as offtake 
risk. This is the risk of not being 
paid by utility companies (off 
takers) for the service or goods 
produced and sold. The EU 
guarantee:  
- reassures lenders that they’ll 
recover at least some of their 
investment in the event of losses  
- lowers the interest rate for 
borrowers  
- ensures that public-private 
partnership concessionaires will 
be paid as promised by 
government authorities. 

- 

- 

- 

- 

- 

EU contingent and financial liability  

50,000,000 

0 

0 

- 

- 

- 

Cumulative guarantee calls and recoveries  

0 

0 

0 

0 

0 

Cumulative expenses  

- 

- 

- 

- 

- 

Effective 

Counterpart 

Description 

Maximum guarantee signed 
with counterpart 

Operation type 

Risk-sharing structure 

Cumulative operations 
signed by counterpart 

Cumulative operations 
disbursed by counterpart 

Available guarantee signed 
with counterpart  

EU risk for operations 
signed by counterpart 

EU risk for operations 
signed by counterpart and 
disbursed 

Cumulative guarantee calls 

Cumulative recoveries 
Cumulative net guarantee 
calls 

Fees to counterpart 

Other expenses (recovery 
costs, funding costs, other) 

all figures in EUR and as at 
31/12/2022 

Africa Energy Guarantee Facility 

Yes 

KfW 

African Energy Guarantee Facility 
(AEGF) aims to contribute to the 
promotion of renewable energy 
solutions to meet growing demand, 
address bottlenecks to private 
investments and bridge the gap 
between real and perceived risks in 
the African energy market.  
The Facility boosts private 
investments in sustainable energy 
projects in Sub-Saharan Africa, 
both expanding access to clean 
energy and contributing to 
economic growth. It helps cut the 
region’s carbon emissions, increase 
energy efficiency and enables many 
more people to access energy. 

46,000,000 

Portfolio guarantees 

Second loss 

44,146,212 

1,082,177 

46,000,000 

46,000,000 

1,019,969 

0 

0 

0 

0 

0 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 49 

 
 
 
 
1.3 European Fund for Sustainable Development 

SME Access to Finance Initiative 

European Health Platform  

Overview 

all figures in EUR and as at 
31/12/2022 

EFSD municipal, infrastructure 
and industrial resilience 
programme 

Effective 

Counterpart 

Yes 

EIB 

Yes 

EIB 

Yes 

EBRD 

Description 

European Health Platform – this 
guarantee with the European 
Investment Bank (EIB) will reduce 
and remove financing constraints 
for accessing vaccines and health 
diagnostic services. It has two 
parts, which focus on improving: 
- access to future COVID-19 
vaccines in Africa and the EU 
Neighbourhood, 
- access and quality of health-
related diagnostic services for low-
income populations in Sub-Saharan 
Africa, particularly in rural areas. 

SME Access to Finance Initiative 
aims to increase financial inclusion 
in Sub-Saharan Africa and the EU 
Neighbourhood. The Initiative 
targets small and medium-sized 
enterprises (SMEs) as well as 
groups with limited or no access to 
finance, particularly: 
- start-ups; 
- women-led businesses; 
- businesses led by young people. 
The overriding goal is to address 
some of the root causes of 
migration. The Initiative will 
facilitate access to finance for local 
SMEs, especially for those who 
currently have no or limited access 
to finance. It will do so through 
partial portfolio guarantees. These 
will allow local banks to take on 
more risk and improve lending 
conditions by offering lower 
interest rates and/or reducing 
collateral requirements. 

EU Municipal, Infrastructure and 
Industrial Resilience Programme 
will bolster industrial, building, 
municipal and sustainable 
infrastructure investments to 
address the negative impact of the 
COVID-19 pandemic on 
businesses, assets and employment 
in the EU Southern and Eastern 
Neighbourhood. 
It will also support the transitioning 
to green, low-carbon and climate-
resilient economies by supporting 
investments in: 
- green city infrastructure 
- green logistic chains 
- energy efficiency 
- green technology transfers in 
industrial processes, commercial 
operations and buildings. 
The Programme will help improve 
infrastructure and municipal 
services, increase energy and water 
efficiency and create jobs in the EU 
Neighbourhood. 

Maximum guarantee 
signed with counterpart 

100,000,000 

458,000,000 

100,000,000 

Operation type 

Portfolio guarantees 

Risk-sharing Structure 

First loss 

Cumulative operations 
signed by counterpart 

Cumulative operations 
disbursed by counterpart 

193,750,000 

40,732,108 

Single project guarantees + full 
cover over bullet loan 

Other - COVAX part of this PIP 
features a full guarantee; non-
COVAX part-first loss 

400,000,000 

400,000,000 

Available guarantee signed 
with counterpart  

EU risk for operations 
signed by counterpart 

EU risk for operations 
signed by counterpart and 
disbursed 

Cumulative guarantee 
calls 

Cumulative recoveries 
Cumulative net guarantee 
calls 

Fees to counterpart 

Other expenses (recovery 
costs, funding costs, other) 

EU contingent and financial liability  

99,631,896 

30,631,896 

188,000,000 

130,000,000 

9,423,263 

130,000,000 

76.097.768 

Cumulative guarantee calls and recoveries  

882,366 

0 

882,366 

0 

0 

Cumulative expenses  

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Single project guarantees 

First loss 

187,707,320 

150,707,320 

100,000,000 

76.287.768 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 50 

 
 
 
 
1.3 European Fund for Sustainable Development 

all figures in EUR and as at 
31/12/2022 

AFD’s European Guarantee for 
Renewable Energy – Non-
Sovereign (EGRE NS) 

AgreenFI - Agricultural and 
Rural Finance Guarantee 
Programme with AfD 

InclusiFI 

Yes 

CPD 

Overview 

Yes 

AFD 

InclusiFI aims at financial inclusion 
driven by diasporas, leveraging 
private financing to foster inclusive 
and sustainable entrepreneurship and 
MSMEs growth. This guarantee 
increases the financing available for 
local entrepreneurs in Sub-Saharan 
and Northern Africa, who currently 
struggle to access the loans or capital 
they need to start or expand their 
businesses.  
It will particularly support small 
businesses led by women, young 
people and migrants. As a result, the 
Programme will help to reduce 
inequality and create jobs. 

European Guarantee for Renewable 
Energy (non-sovereign) with AFD 
will increase access to sustainable 
energy to meet growing energy 
demand in Sub-Saharan Africa and 
the EU Neighbourhood. It will 
reduce the offtake risk of energy 
projects, which is the risk of not 
getting paid for the energy 
produced. It will give investors 
more certainty and thus a bigger 
incentive to invest in or to finance a 
renewable energy project. The 
support for renewable energy 
projects will help partner countries’ 
economies become low-carbon and 
climate resilient. 

Yes 

AFD 

The Agricultural and Rural Finance 
Guarantee Programme (AgreenFi) 
addresses the high risks, both 
perceived and real, in lending to 
micro-, small and medium-sized 
enterprises (MSMEs) in Sub-
Saharan Africa and the EU 
Neighbourhood, who currently have 
no or limited access to finance. 
It will facilitate access to finance 
and/or make borrowing money 
more affordable in particular for 
small businesses operating in 
agriculture and located in rural 
areas. 

Effective 

Counterpart 

Description 

Maximum guarantee 
signed with counterpart 

Operation type 

60,000,000 

50,000,000 

91,500,000 

Combination: portfolio and single 
project guarantees 

Single project guarantees 

Single project guarantees 

Risk-sharing structure 

First and second loss 

First loss 

First and second loss 

Cumulative operations 
signed by counterpart 

Cumulative operations 
disbursed by 
counterpart 

Available guarantee 
signed with counterpart  

EU risk for operations 
signed by counterpart 

EU risk for operations 
signed by counterpart 
and disbursed 

Cumulative guarantee 
calls 

Cumulative recoveries 
Cumulative net 
guarantee calls 

Fees to counterpart 

Other expenses 
(recovery costs, funding 
costs, other) 

2,000,000 

2,000,000 

0 

0 

EU contingent and financial liability  

0 

0 

59,888,889 

50,000,000 

91,500,000 

888,889 

888,889 

0 

0 

Cumulative guarantee calls and recoveries  

0 

0 

0 

0 

0 

Cumulative expenses  

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 51 

 
 
 
 
 
 
 
 
1.3 European Fund for Sustainable Development 

all figures in EUR and as at 31/12/2022 

EU Market Creation Facility – TCX - Capacity 
Component 

EU Market Creation Facility – TCX - 
Pricing Component 

AgreenFI - Agricultural 
and Rural Finance 
Guarantee Programme 
with PROPARCO - 
COVID-19 response 

Effective 

Counterpart 

Yes 

PROPARCO 

Overview 

Yes 

KfW 

Yes 

KfW 

PROPARCO’s Covid 19 
Response Component to 
Agricultural and Rural 
Finance Guarantee 
Programme (AgreenFI) aims 
at catalysing investment and 
support for local agricultural 
businesses in riskier 
environments and aiming at 
improving liquidity and 
access to finance to 
smallholder farms and 
agri/rural micro, small and 
medium enterprises 
(MSMEs), especially those 
impacted by the COVID-19 
pandemic. 

TCX - Capacity Component - This guarantee addresses this 
excess demand for local currency financing. In many parts of 
Sub-Saharan Africa and the EU Neighbourhood the demand 
for borrowing money in local currency is higher than the 
market supply.  
In development finance, loans are typically denominated in 
USD, Euro or Japanese Yen. This causes serious problems to 
borrowers in the event of an external shock like the COVID-
19 pandemic, triggering a severe fall in the value of the local 
currency in which the borrowers earn their income. 
Solutions protecting against foreign exchange rate risk, so-
called hedging solutions, exist but they are often not readily 
available or look expensive. The guarantee aims to improve 
access to hedging solutions and thereby allow for the 
development of lending products that lift the exchange rate 
risk from the shoulders of the borrower.   

TCX - Pricing Component - aims at 
increasing access to local currency 
indexed borrowing to institutions based in 
Sub-Saharan Africa and the European 
Neighbourhood and to address short- and 
medium-term funding requirements 
triggered by the ongoing global health 
crisis. 
European Guarantee for Renewable 
Energy – Non Sovereign (EGRE NS) with 
CDP is aiming to improve certainty of 
payments for investors under offtake 
contracts in renewable energy projects in 
Africa and addressing the offtakers' non-
payment risk which is considered critical 
for the development of independent power 
producers. 

68,200,000 

145,000,000 

20,000,000 

Description 

Maximum 
guarantee signed 
with counterpart 

Operation type 

Portfolio guarantees 

Portfolio guarantees 

Portfolio guarantees 

Risk-sharing 
structure 

Cumulative 
operations 
signed by 
counterpart 

Cumulative 
operations 
disbursed by 
counterpart 

Available 
guarantee signed 
with counterpart 

EU risk for 
operations 
signed by 
counterpart 

EU risk for 
operations 
signed by 
counterpart and 
disbursed 

Cumulative 
guarantee calls 

Cumulative 
recoveries 

Cumulative net 
guarantee calls 

Fees to 
counterpart 

First and second loss 

Pari-passu 

34,992,790 

145,000,000 

First loss 

35,812,827 

33,752,790 

145,000,000 

35,812,827 

EU contingent and financial liability  

65,995,556 

145,000,000 

20,000,000 

34,995,556 

145,000,000 

20,000,000 

33,755,556 

145,000,000 

20,000,000 

0 

0 

0 

0 

Cumulative guarantee calls and recoveries  

0 

0 

0 

Cumulative expenses  

0 

0 

0 

0 

0 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 52 

 
 
 
 
Other expenses 
(recovery costs, 
funding costs, 
other) 

0 

0 

0 

1.3 European Fund for Sustainable Development 

CDP: European Guarantee for 
Renewable Energy – Non-
Sovereign (EGRE NS) 

Renewable Energy Support 
Programme 

Small Loan Guarantee 
Programme 

all figures as at 31/12/2022 

Yes 

CDP 

Overview 

Yes 

COFIDES  

European Guarantee for Renewable 
Energy – Non-Sovereign (EGRE NS) 
with CDP is aiming to improve 
certainty of payments for investors 
under offtake contracts in renewable 
energy projects in Africa and 
addressing the offtakers' non-
payment risk which is considered 
critical for the development of 
independent power producers. 

The Renewable Energy Support 
Programme for mainly rural areas 
of Sub-Saharan Africa will help to 
develop and finance renewable 
energy projects, which are not 
connected to the electricity 
distribution networks, so-called off-
grid and mini-grid projects. It 
targets rural and peri-urban areas in 
Sub-Saharan Africa and areas 
without access to energy. 

Effective 

Counterpart 

The Renewable Energy 
Support Programme for 
mainly rural areas of Sub-
Saharan Africa will help 
to develop and finance 
renewable energy 
projects, which are not 
connected to the 
electricity distribution 
networks, so-called off-
grid and mini-grid 
projects. It targets rural 
and peri-urban areas in 
Sub-Saharan Africa and 
areas without access to 
energy. 

Yes 

IFC 

The Small Loan Guarantee 
Programme to be implemented by 
the International Finance 
Corporation (IFC), encourages local 
banks and finance institutions in the 
EU Neighbourhood and in Africa to 
scale up lending to micro, small and 
medium enterprises (MSMEs). 
It especially targets businesses in 
agriculture, education, health, 
engaged in climate change activities, 
impacted by the COVID-19 
pandemic, including those led by 
women. To do so, the Programme 
will provide risk-sharing facilities 
along with advisory services to 
improve the availability of loan, 
guarantee and other financing 
facility products relevant for small 
businesses. 
This will help business owners 
particularly in low income, fragile 
and conflict-affected countries to 
access finance, grow and expand 
their businesses. It is expected that 
the implementation of the 
Programme would also boost 
economic growth, create jobs and 
reduce poverty in the partner 
countries. 

Maximum guarantee 
signed with counterpart 

12,000,000 

20,000,000 

58,000,000 

Operation type 

Single project guarantees 

Single project guarantees 

Portfolio guarantees 

Risk-sharing structure 

First loss 

Second loss 

First loss 

Cumulative operations 
signed by counterpart 

Cumulative operations 
disbursed by 
counterpart 

Available guarantee 
signed with counterpart  

EU risk for operations 
signed by counterpart 

EU risk for operations 
signed by counterpart 
and disbursed 

Cumulative guarantee 
calls 

Cumulative recoveries 
Cumulative net 

0 

0 

0 

0 

0 

0 

EU contingent and financial liability  

12,000,000 

20,000,000 

58,000,000 

0 

0 

0 

0 
0 

0 

0 

Cumulative guarantee calls and recoveries  

0 

0 
0 

0 

0 

0 

0 
0 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 53 

 
  
 
 
 
1.3 European Fund for Sustainable Development 

guarantee calls 

Fees to counterpart 

Other expenses 
(recovery costs, funding 
costs, other) 

0 

0 

Cumulative expenses  

0 

0 

0 

0 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 54 

1.4 External Lending Mandate  

1.4 EXTERNAL LENDING MANDATE 

1.4.1 DESCRIPTION  

Identification/reference to the basic act  

ELM 2014-2020: Decision No 466/2014/EU of the European Parliament and of the Council of 16 April 2014 granting an EU guarantee to the 
European Investment Bank against losses under financing operations supporting investments projects outside the Union; and Decision (EU) 
2018/412 of the European Parliament and of the Council of 14 March 2018 amending Decision No 466/2014/EU granting an EU guarantee to 
the European Investment Bank against losses under financing operations supporting investment projects outside the Union. 
ELM 2007-2014: Council Decision No 2006/1016/EC of 19 December 2006 granting a Community guarantee to the European Investment 
Bank against losses under loans and loan guarantees for projects outside the Community. 
ELM 2000-2007: Council Decision No 2000/24/EC of 22 December 1999 granting a Community guarantee to the European Investment Bank 
against losses under loans for projects outside the Community (Central and Eastern Europe, Mediterranean countries, Latin America and Asia 
and the Republic of South Africa). 
ELM Old Mandates and Financial Protocols before 2000 comprises many basic acts focused on specific geographical areas which are not 
listed here.  

Maximum amount of budgetary guarantee (in EUR) 

of which signed with counterparts  

70,869,500,000  

of which ceiling authorised in the legal basis (in EUR) 

70,869,500,000 

70,869,500,000  

Counterpart 

of which from external contributions (in EUR) 

European Investment Bank 

Budget Lines 

0 

Provisioning of the GFEA:  
2021-2027: 14 02 01 70 (part) - Provisioning of the legacy GFEA compartment of the CPF 
2014-2020: 01 03 06 - Provisioning of the Guarantee Fund for external actions 
2007-2013: 01 04 01 14 - Provisioning of the Guarantee Fund 
2000-2006: 01 04 01 13 - Reserve for loans and loan guarantees to and in non-member countries 
                    01 04 01 14 - Payments to the Guarantee Fund in respect of new operations 

Cumulative to 
2022 

2023 

2024 

2025* 

Total 

Budgetary commitment appropriations (in 
EUR) 

2,170,203,903 

315,846,900 

162,900,512 

36,000,000 

2,684,951,315 

of which from voted budget 

2,170,203,903 

315,846,900 

162,900,512 

36,000,000 

2,684,951,315 

of which from internal assigned revenues 

of which from external assigned revenues 

0 

0 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

0 

0 

Budgetary payment appropriations (in EUR) 

2,170,203,903 

315,846,900 

162,900,512 

36,000,000 

2,684,951,315 

of which from voted budget 

2,170,203,903 

315,846,900 

162,900,512 

36,000,000 

2,684,951,315 

of which from internal assigned revenues 

of which from external assigned revenues 

0 

0 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

0 

0 

*Indicative. To be further specified on the basis of end-2023 data, in accordance with the ex-post provisioning method set out in the GFEA 
Regulation.

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 55 

 
 
1.4 External Lending Mandate  

General description 

The ELM Decisions (i.e. pre-2000 Protocols and related legislative acts, Council Decision No 
2000/24/EC,  Council  Decision  No  2006/1016/EC  and  Decision  No  466/2014/EU  of  the 
European Parliament and of the Council, amended by Decision (EU) 2018/412) represent the 
legal  basis  for  the  Union  having  granted  to  the  European  Investment  Bank  (EIB)  a  set  of 
budgetary guarantees  for financing  operations carried out  outside the Union (hereinafter the 
“EU guarantee” or “External Lending Mandate”, “ELM”).  

The respective decisions lay down provisions to ensure that EIB financing under the ELM is 
consistent  with  corresponding  EU  assistance  policies,  programmes  and  instruments  in  the 
different regions. Under the ELM 2014-20, 64 countries outside the EU were eligible for EIB 
financing operations under the EU budgetary guarantee (following amendments introduced to 
the ELM Decision in 2018).   

Based  on  the  ELM  Decision  No  466/2014/EU,  the  Commission  concluded  a  Guarantee 
Agreement with the EIB in 2014. The maximum ceiling of the EIB financing operations under 
EU guarantee was set at EUR 30 billion, broken down into a fixed maximum ceiling of EUR 
27 billion and an optional additional amount of EUR 3 billion.   

The Guarantee Agreement  was amended and  restated in  2018  (Decision  (EU) 2018/412). In 
response  to  the  2015-2016  refugee  crisis,  this  amending  ELM  Decision  introduced  the 
Economic Resilience Initiative (ERI) to contribute to addressing the root causes of migration. 
A key component of the ERI was the expansion, in both quantitative and qualitative terms, of 
the  EIB  External  Lending  Mandate  to  enable  the  Bank  to  provide  additional  financing  to 
private-sector  beneficiaries,  with  a  view  to  crowding  in  private  investments  and  boosting 
long-term  investment. The maximum  ceiling  for the EIB financing  operations  under the EU 
guarantee for the 2014-20 mandate was therefore increased to EUR 32.3 billion.  

In  order  to  include  long-term  economic  resilience  as  an  additional  objective  of  the  ELM 
Decision, EUR 1.4 billion was earmarked for public sector investments addressing the needs 
of  refugees  and  host  communities  (within  the  general  mandate  of  EUR  30  billion),  and  a 
specific ‘ERI Private Mandate’ of EUR 2.3 billion (on top of the general mandate of EUR 30 
billion)  was  created  to  guarantee  private-sector  investments  supporting  long-term  economic 
resilience.  

A further amendment to  the ELM Guarantee Agreement was concluded in 2020 to  increase 
the  country  limit  for  Lebanon  within  the  ERI  Private  Mandate  (this  possibility  eventually 
remained unused) and one additional amendment was signed in 2021 to extend the duration of 
the  ELM  until  end  2021,  as  envisaged  by  Article  49  of  the  NDICI-Global  Europe 
Regulation.   

Since the amendment of the ELM Decision in 2018, the EU budget was able to guarantee EIB 
financing operations of up to EUR 32.3 billion (signed in 2014-2020, later extended until end-
2021). The EU liability under this guarantee is based on a portfolio cap.   

The portfolio cap is defined in Article 1(4) of the ELM Decision in a dynamic way: “The EU 
guarantee  shall  be  restricted  to  65%  of  the  aggregate  amount  disbursed  and  guaranteed 
under EIB financing operations, less amounts reimbursed, plus all related amounts”. As the 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 56 

 
overall  amounts  disbursed  and  repaid  are  constantly  changing,  the  65%  threshold  is  also 
constantly changing.  

1.4 External Lending Mandate 

Implementation cycle 

While  the  European  Parliament  and  the  Council  reached  a  political  agreement  on  the 
Regulation  establishing  the  ELM’s  successor  at  the  end  of  2020,  the  NDICI-Global  Europe 
Regulation was not  adopted by end-2020 and therefore the time period for signatures under 
the ELM as set out in the ELM Decision was “automatically” extended by six months, until 
the end of June 2021.  

As the NDICI Regulation was only adopted in June 2021 and in order to mitigate the risk of 
business  disruptions  in  ELM  regions,  the  NDICI-Global  Europe  Regulation  amended  the 
ELM Decision by providing:   

•  an  extension  of  the  investment  period  under  the  ELM  EU  Guarantee  until  31 

December 2021,  

•  enhanced  flexibility  for  additional  reallocations  between  and  within  the  (sub)-
regions under the original  overall lending  ceilings of EUR 32.3 billion by lifting 
the initial 20% limit, and  

•  a  deadline  extension  for  the  final  report  on  the  implementation  of  the  ELM 

decision to 31 December 2022.    

In  September  2021,  the  EIB  Board  of  Directors  decided  to  establish  a  new  branch,  “EIB 
Global”,  dedicated  to  EIB  activities  outside  the  EU,  aiming  at  improving  EIB  operations 
outside  the  European  Union  through  more  focus  on  development  and  more  impact  driven 
culture and incentives.  

Also  in  2021,  the  EIB  began  to  implement  the  Additionality  and  Impact  Measurement 
framework  (AIM),  replacing  the  previous  Results  Measurement  (ReM)  framework.  The 
Additionality  and  Impact  Measurement  framework  provides  a  comprehensive  basis  for 
measuring results and assessing each EIB project in terms of both its impact and additionality, 
in  line  with  international  best  practices. The  framework  follows  an  established  three-pillar 
logic that asks WHY an intervention by the EIB is needed, WHAT will be achieved by it, and 
HOW the EIB will make a difference.  

Implementation diagram as of 31 December 2022 (amounts refer to signed volumes of EIB 
financing  operations,  net  of  cancellations,  and  excluding  operations  in  countries  that  have 
meanwhile become EU Member States) 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 57 

1.4 External Lending Mandate 

Implementation arrangements 

ELM’s basic decision-making process is summarised in the chart below. The chart illustrates 
that  the  main  responsibility  for  design  and  implementation  of  operations  rests  with  the  EIB 
and  its  decision-making  bodies,  while  the  Commission  exercises  an  oversight  function 
through  the  so-called  ‘Article  19  procedure’,  whereby  the  Commission  checks  the 
compatibility  of  the  envisaged  ELM  financing  operations  with  EU  law  and  policies.  This 
Article 19 procedure takes place at a relatively early stage of the process, on the basis of the 
information provided by the EIB.17 

17   Typically, the Commission opinions on investment projects under preparation by the EIB are issued before 
the EIB proceeds to the stage of due diligence and detailed technical preparation. The consultation is usually 
based on fiches of approximately two pages provided by the EIB, which may be complemented by follow-
up questions from the Commission and answers by the EIB. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 58 

 
 
1.4 External Lending Mandate  

The External Lending Mandate with the EIB has been a feature of the external policy of the 
European Economic Community and subsequently the European Union since 1977. 

The rationale of the EU budgetary guarantee intrinsic to the ELM is that it enhances the risk 
bearing capacity of the EIB to undertake financing operations supporting the achievement of 
the EU’s external policy objectives.  

Duration 

The  first  guarantee  for  EIB’s  financing  operations  outside  the  then-European  Economic 
Community was put in place in 1977 and a number of such mandates has been provided to the 
EIB ever since.  

The last External Lending Mandate has covered the period 2014-2020 and was extended until 
end-2021  as  per  Article  49  of  the  NDICI  -  Global  Europe  Regulation  (Regulation  (EU) 
2021/947).  

Added value 

The EU budgetary guarantee provided to the EIB in the framework of the ELM has as main 
purpose to  support  EU policy objectives by  enhancing  the risk-bearing capacity of the EIB. 
Like that it enables the EIB to finance a number of operations outside the EU that without the 
budgetary  guarantee  would  not  be  undertaken  at  all,  or  only  on  terms  significantly  less 
favourable for the beneficiary countries.  In turn,  the financing  operations  undertaken by the 
EIB  thanks  to  the  EU  guarantee  are  expected  to  pursue  policy  objectives  of  the  EU  and  to 
fulfil a number of conditions established by the European Parliament and Council.  

Hence,  the  EIB  financing  operations  performed  in  the  framework  of  the  ELM  are  an 
important vehicle to pursue the objectives of the Union's external policy as laid down in the 
corresponding Decisions. Decision (EU) 2018/412  for instance explicitly  underlines that the 
added  value  of  the  ELM  rests  on  its  capacity  to  finance  operations  aiming  at  “reducing 
poverty  through  inclusive  growth  and  sustainable  economic,  environmental  and  social 
development”. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 59 

 
 
 
1.4 External Lending Mandate 

Application of Article 155.2 FR 

The ELM Decision No 466/2014/EU establishes requirements to ensure that ELM operations 
comply  with  applicable  international  and  EU  standards  on  the  prevention  of  money 
laundering,  the  fight  against  the  financing  of  terrorism,  taxation,  and  non-cooperative 
jurisdictions. 

Furthermore, the amended ELM Decision (EU) 2018/412 was reinforced with a reference to 
the fight against tax avoidance, going beyond earlier references to tax evasion and tax fraud.     

Article 5 of that Decision requires ELM operations to be consistent with the strategies of the 
beneficiary countries and Article 7 formulates requirements regarding EIB cooperation with 
other international or EU Member States’ financial institutions. 

The EIB also has an Anti-Money Laundering and Counter Terrorism Financing framework in 
place  (last  revised  in  December  2020).  That  framework  aims  to  prevent  the  EIB  Group,  its 
governing  bodies,  staff,  and  counterparties  from  being  associated  with  or  used  for  money 
laundering, financing of terrorism or other criminal activities. The EIB has in place a control 
framework  aligned  with  best  banking  practice  that  appropriately  manages  sanctions  risk  to 
limit the EIB’s exposure to risk from non-compliance with sanctions that apply to the EIB or 
EIB’s business. 

For the year 2022, the EIB did not report any cases related to the application of Article 155.2 
of the Financial Regulation.  

Support combined with other Union actions 

The ELM guarantee  can be combined with  grant  support.  To give an example, in  2022, the 
Neighbourhood  Investment  Platform  approved  a  project  to  provide  technical  assistance,  an 
investment  grant  (for  end-beneficiaries)  and  a  funded  guarantee  (intervening  at  the  level  of 
local  financial  intermediaries)  to  support  the  Palestine  SME  Covid-19  Sustainability 
Programme,  for  which  the  EIB  provides  a  loan  that  is  also  guaranteed  under  the  ELM.

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 60 

1.4 External Lending Mandate  

1.4.2 OPERATIONAL PERFORMANCE 

As at 31 December 2022, operations signed by the EIB under all ELM mandates amount to 
EUR  93.06  billion  (i.e.  EUR  80.76  billion  when  excluding  countries  that  have  meanwhile 
become  EU  Member  States)  and  the  total  amount  of  operations  disbursed  is  EUR  78.33 
billion (or EUR 66.03 billion when excluding EU Member States). It is also worth noting that 
there have been 668 final recipients on all ELM mandates.  

As regards the leverage  and multiplier, they take into account  that  the EU guarantee covers 
65% of EIB lending (for mandates 2007-13 and 2014-2020) and EIB on average covers 50% 
of project costs. The leverage of 1.5 is calculated as the amount signed by the EIB under all 
the mandates, divided by the amount of EU liability (65% on a portfolio-level  basis for  the 
2007-13  and  2014-20  mandates).  The  multiplier  effect  is  reported  at  double  the  leverage, 
reflecting the EIB’s 50% co-financing rule.  

However, it is important to note that the EU guarantee has already its built-in leverage as it is 
in  fact  provisioned  at  9%  of  outstanding  disbursed  exposure.  This  feature  of  the  guarantee 
significantly increases the effective implicit leverage from 1.5 to 17 and the multiplier from 3 
to  33.  However,  also  these  estimates  of  leverage  and  multiplier  need  to  be  treated  with 
caution, because the total amount provisioned for the legacy ELM portfolios is determined ex 
post,  in  line  with  the  replenishment  methodology  set  out  in  the  GFEA  Regulation 
480/2009/EU. 

The following table summarizes the key operational figures presented above: 

Key Figures (as of 31/12/2022) 

Total amount of operations signed by counterparts (in 
EUR) 

Total amount of operations disbursed (in EUR) 

Amount transferred to final recipients (in EUR) 

Number of final recipients 

Investments made by final recipients 

Private sector resources mobilised 

Leverage (ratio) 

Multiplier effect (ratio) 

80,758,571,244 

66,025,894,219 

66,025,894,219 

668 

132,051,788,438 

17,858,000,000 

1.5 

3 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 61 

 
 
  
 
1.4 External Lending Mandate  

Contribution to the achievement of the ELM objectives 

Given  that  no  additional  operations  have  been  signed  under  the  External  Lending  Mandate 
guarantee after 31 December 2021, reporting under indicators related to policy objectives (by 
geographical diversification and windows/sector) does not apply for 2022. 

1.4.3 FINANCIAL INFORMATION 

Financial information at the level of budgetary guarantee 

The  table  below  shows  the  extent  to  which  the  EU  budget  is  exposed  to  possible  future 
payments  linked  to  guarantees  given  to  the  EIB  under  ELM  mandates.  As  at  31 December 
2022,  the  amount  of  EU  liability  guarantee  on  outstanding  ELM  loans  disbursed  to  final 
recipients totalled EUR 20.9 billion. When taking into account operations signed by the EIB 
but  not  yet  disbursed  (concerning  mainly  the  2007-2014  and  2014-2020  mandates)  the  EU 
risk  extends  to  31  billion.  The  investment  period  of  the  ELM  was  prolonged  until  31 
December 2021 which was the last date for signature of new operations. 

Available guarantee signed with 
counterparts  

EU risk for operations signed by 
counterparts 

EU risk for operations signed by 
counterparts and disbursed 

EU contingent and financial liability 

31/12/2022 

31/12/2021 

all figures in EUR 

30,598,893,323 

33,025,553,632 

30,598,893,323 

33,025,553,632 

20,908,779,595 

20,834,521,314 

In 2022, a total of EUR 194.3 million of guarantee calls have been made by the EIB on the 
EU  guarantee  in  relation  to  operations  in  Syria,  Lebanon,  Ukraine,  Belarus  and  Russia 
including all called amounts (principal, interests, penalties and others), while EUR 6.2 million 
has been recovered. When the EU makes a payment under the EU guarantee, it is subrogated 
into the rights and remedies of the EIB. 

Recovery  actions  continued  for  Syria,  with  new  court  proceedings  launched  by  the  EIB  in 
July  2022.  With  respect  to  the  Lebanese  financial  sector,  recovery  actions  intensified  (with 
one restructuring  and two settlement agreements concluded, while working on closing other 
similar  deals),  which  required  some  bespoke  arrangements  to  be  agreed  with  the  European 
Commission.  Furthermore,  the  EIB  achieved  a  successful  recovery  of  subrogated  sums  that 
arose  on  loans  to  the  Lebanese  sovereign  (arrears  incurred  in  mid-2022  were  settled  in 
December 2022).  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 62 

 
 
 
 
 
  
The year 2022 also saw new recovery efforts undertaken with respect to arrears incurred by 
non-sovereign Ukrainian borrowers, a Belarusian bank as well as the Russian Federation.  

The main recovery actions undertaken in 2022 can be summarised as follows:  

1.4 External Lending Mandate 

Lebanon:   

Financial institutions:  

The  continuing  deterioration  of  the  country’s  situation  resulted  in  long  lasting  payment 
defaults  from  all  Lebanese  financial  institutions.  In  2021,  the  EIB  managed  to  secure  the 
payment of most contractual interest,  but  this became more challenging to  achieve in  2022. 
Due  to  the  still  declining  financial,  economic  and  political  context  in  Lebanon,  the  EIB’s 
discussions  with  the  borrowers  have  increasingly  focused  on  restructuring  or  exit  solutions 
(e.g.  settlements)  rather  than  intermediate  solutions  such  as  temporary  payment  deferrals. 
Hence, cash settlements have been sought with borrowers having the weakest liquidity among 
the  EIB’s  Lebanese  bank  borrowers  and  which  were  generally  in  breach  of  regulatory 
liquidity ratios (c. 33% of the EIB’s Lebanese bank portfolio). Long term restructurings have 
been pursued with banks which have the strongest liquidity positions and which are compliant 
with the regulatory liquidity ratios imposed by the Central Bank of Lebanon (c. 67% of the 
EIB’s Lebanese bank portfolio).  

On  21  December  2022,  the  2011  ELM  Guarantee  Agreement  (“2011  GA”)  was  amended, 
among  others,  to  allow  the  EIB  to  restructure  its  exposure  covered  under  the  agreement  in 
accordance with its rules, policies and procedures, and to cover the restructuring losses within 
the  scope  of  the  Guaranteed  Sums  (as  defined  under  the  2011  GA).  This  amendment 
addresses particularly the issues related to the Lebanese financial institutions covered by the 
Political Risk Guarantee under the 2011 GA and will ease future recovery actions undertaken 
by the EIB with regards to these exposures.  

Lebanese sovereign loans:  

With the economic crisis still unfolding, Lebanon’s foreign exchange reserves have become 
increasingly scarce. The shortage of hard currency led to the emergence of multiple unofficial 
exchange rates.   

In 2022, arrears occurred on sovereign debt while the explanation provided by the Ministry of 
Finance (MoF) was that the Central Bank was not giving them access to the foreign currency 
reserves  necessary  to  serve  the  sovereign  debt  of  the  MDBs/IFIs/DFIs.  With  the  EIB, 
Lebanon  missed  three  payments  due  in  June  and  July  2022  for  a  total  amount  of  EUR  10 
million under EIB loans covered by the Comprehensive Guarantee. Lebanon missed another 
payment  due  in  November  for  EUR  1.6  million.  The  EIB  called  the  EU  Guarantee  for  the 
amounts in arrears after having duly pre-notified the European Commission of the situation.  

In December 2022, the EIB recovered the amounts due under EIB loans for a total amount of 
EUR  11.6  million,  to  be  refunded  to  the  European  Commission.  Applicable  late  payment 
interest  has  been  charged  to  Lebanon  and  are  expected  to  be  paid  in  H1  2023  for  a  total 
amount  of  EUR  177  thousand.  Upon  receipt  of  this  late  payment  interest,  it  will  also  be 
refunded to the European Commission.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 63 

 
1.4 External Lending Mandate 

Syria:   

As Syria has continued being in payment default, and to preserve the claims for sums due in 
relation  to  instalments  which  started  to  be  payable  from  September  2017  onwards,  further 
legal  claims  in  respect  of  such  sums  had  to  be  brought  against  Syria  in  2022  before  the 
relevant limitation periods would elapse.   

Under  English  law,  a  claim  in  respect  of  an  instalment  due  in  September  2017  would  hit  a 
limitation bar six years later (i.e. in September 2023) whereas under French and Belgian law 
(to  which  the  EU  Budget  loans  are  subject),  the  limitation  bar  is  one  year  earlier  (i.e.  in 
September 2022).  

•  High Court of Justice in England:  

The EIB filed new civil claims against Syria, in its own name and on behalf of the European 
Union,  on  18  July  2022  in  relation  to  all  sums  owed  by  Syria  during  the  period  from 
September 2017 to June 2022. The EIB is expecting a confirmation by the Court that proper 
service  of  the  claims  has  been  made  upon  Syria  and  that  the  latter  has  not  filed  a  response 
with the court. When this is obtained, the EIB will apply for a summary judgement.  

•  General Court of the European Union:  

The EIB filed new civil claims against Syria, in its own name and on behalf of the European 
Union, on 22 July 2022 in relation to all sums owed by Syria during the period from August 
2017  to  June  2022.  On 15  November  2022,  it  was  confirmed  from  the  Registry  that  proper 
service had been performed by the Court on Syria and that it had not filed a defence within 
the required timeframe in relation to six out of eight cases. On 26 November 2022, the EIB 
presented a request to the court to provide a judgment by default for those six cases. For the 
remaining  two  cases,  the  service  by  registered  mail  failed  and  the  Court  will  attempt  to 
perform service with the assistance of a judicial officer (huissier de justice).  

Tunisia:  

The restructuring of the Aéroport Enfidha loan became effective end-February 2021.  

In  2022,  the  operating  and  financial  performance  of  the  borrower,  TAV  Tunisie  SA, 
continued  to  be  closely  linked  with  (i)  the  level  of  passenger  numbers  as  compared  to  pre-
COVID-19, (ii) the economic performance of Tunisia, and (iii) the perceived security in the 
country. The project therefore continued to be exposed to political, safety and market risks.  

Passenger traffic in  2022 remained at  approximately 40% of the pre-COVID 19 level.  As a 
result,  TAV  Tunisie  SA  found  itself  unable  to  pay  in  full  the  concession  fees  due  to  the 
Tunisian authorities under their concession agreement. TAV Tunisie SA attempted to engage 
with  the  Tunisian  authorities  with  a  view  to  agreeing  on  an  arrangement  to  deal  with  these 
arrears  as  well  as  to  reformulate  the  concession  fee  formula,  most  notably  by  removing  the 
minimum  guaranteed  payment  to  be  made  to  the  Tunisian  authorities.  Unfortunately,  no 
material progress was achieved by TAV over the course of 2022 in these negotiations.   

Despite the difficulties faced, TAV Tunisie SA made a repayment of EUR 0.8 million interest 
in June 2022 and a repayment of EUR 0.8 million interest and EUR 0.5 million principal in 
December 2022. Half of these amounts were retroceded as recoveries to the EC, in line with 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 64 

the bespoke agreement reached between the EIB and the Commission in 2018 on the sharing 
of losses and recoveries under this operation.   

1.4 External Lending Mandate 

Ukraine:  

The  EIB  had  to  start  recovery  efforts  with  several  non-sovereign  Ukrainian  borrowers  who 
were  unable  to  perform  their  payment  obligations  as  a  direct  consequence  of  Russia’s 
invasion of Ukraine.   

As  agreed  in  a  letter  signed  between  the  EIB  and  the  European  Commission  in  May-June 
2022, the Bank adopted a standstill approach consisting of refraining from any enforcement 
action  vis-à-vis  non-sovereign  Ukrainian  clients  in  the  event  of  non-payments  or  other 
defaults or events giving the EIB the right to accelerate.   

The  EIB  also  provided  waivers  in  respect  of  certain  covenants  or  for  certain  breaches  of 
covenants  in  the  finance  contracts,  while  reserving  its  rights  in  respect  of  the  payment 
default(s).  The  letters  of  intent  issued  to  the  Ukrainian  borrowers  stated  that  the  EIB  was 
prepared  to  work  with  clients  on  solutions  once  the  situation  stabilised  and  that  this  would 
include an openness to explore debt restructurings if a client’s inability to pay caused by the 
war was prolonged. Because the war had a lasting effect throughout 2022 on non-sovereign 
Ukrainian  borrowers,  complex  restructuring  discussions  with  the  EIB  started,  seeking 
significant concessions in compressed timelines to preserve value to avert formal insolvency 
procedures.  The  context  has  therefore  shifted  from  a  wait-and-see  approach  to  a  more 
proactive  restructuring  approach  for  some  of  the  non-sovereign  Ukrainian  clients.  The  EIB 
and  Commission  services  are  in  continuous  close  contacts  on  the  management  of  these 
financing operations, in the context of the EU’s overall support to Ukraine and its economy.  

The  EIB  also  deployed  specific  recovery  efforts  aiming  at  unblocking  settlement  channels 
with  respect  to  Russia  and  one  Belarusian  bank,  which  are  subject  to  EU  and  international 
sanctions. Russia is  currently in  arrears vis-à-vis the EIB for  approximately  EUR 4 million. 
Amounts owed to the EIB by Belarusian banks and covered by the ELM were settled in late 
2022 and early 2023.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 65 

 
 
1.4 External Lending Mandate 

Guarantee calls and recoveries  

all figures in EUR 

2022 

194,347,600 

6,149,464 

188,198,136 

Cumulative until 31-12-2022 

852,974,518 

9,592,481 

843,382,037 

Guarantee calls 

Recoveries* 

Net guarantee calls 

* The figure for 2022 includes only amounts refunded to the Commission in 2022 but does not include amounts recovered by the EIB in late 
2022, to be refunded to the Commission in 2023. 

The EIB remunerates the EU only for the budgetary guarantee under the ERI Private Mandate 
(up  to  EUR  2.3  billion)  introduced  in  2018.  In  accordance  with  the  ELM  Guarantee 
Agreement, the EIB passes on to the EU the risk-related revenues on these operations. EUR 
7.2 million of revenues have been received from EIB for the period Q1 to Q4 2022 and EUR 
28  million  is  the  total  amount  of  revenues  that  accrued  for  the  EU  under  the  ERI  Private 
Mandate cumulatively in 2019, 2020, 2021 and 2022. 

EU guarantee revenues 

all figures in EUR 

2022 

Cumulative until 31-12-2022 

EU guarantee revenues 

7,169,079 

28,075,903 

No fees have been paid to the EIB in relation to the EU guarantee under ELM mandate (other 
than for the asset management of the guarantee fund, until July 2021). Nevertheless, the EU 
has  reimbursed  the  EIB  for  the  costs  of  external  legal  services  linked  to  efforts  to  recover 
unpaid amounts. 

        all figures in EUR 

Expenses  

Cumulative until 31-12-2022 

0 

2,544,730 

2022 

0 

265,787 

Fees to counterparts 

Other expenses (recovery costs, 
funding costs, other) 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 66 

 
 
 
 
 
 
 
 
 
 
 
  
 
Financial information at the level of mandate18  

        all figures in EUR as of 31/12/2022 

ELM General Mandate 
2007-2013 

External Mandate 2000-
2006 

Old Mandates and 
Financial Protocols before 
2000 

ELM General 
Mandate 2014-2020 
(Guarantee 
Agreement 2014 
amended 2018) 
including ERI Private 
Mandate 2018-2020 
(2021 extended) 

Effective 

Counterpart 

Yes 

EIB 

Overview 

Yes 

EIB 

Yes 

EIB 

Yes 

EIB 

Description 

The EU budgetary guarantee provided in the framework of the ELM enhances the risk-bearing capacity of the EIB by limiting 
the EIB's risk exposure. In doing so, it enables the EIB to undertake investment operations in riskier environments outside the 
EU and to pursue policy objectives established by the European Parliament and Council.  
The amended ELM Decision defined the following high-level objectives: Local Private Sector Development, in particular 
support to SMEs; Development of Social and Economic Infrastructure, including transport, energy, environmental 
infrastructure, information and communication technology; Climate Change Mitigation and Adaptation; and the long-term 
Economic Resilience of refugees, migrants, host and transit communities and communities of origin as a strategic response to 
addressing root causes of migration.  
Regional Integration among countries, including in particular economic integration between Pre-Accession countries, 
Neighbourhood countries and the Union, shall be an underlying objective for EIB financing operations within areas covered 
by the general objectives. 

Maximum guarantee signed with 
counterpart 

20,995,000,000 

19,164,600,000 

13,039,000,000 

17,670,900,000 

Operation type 

Loans 

Loans 

Loans 

Loans 

Risk-sharing structure 

Cumulative operations signed by 
counterpart 

Cumulative operations disbursed 
by counterpart 

Available guarantee signed with 
counterpart 

EU risk for operations signed by 
counterpart 

EU risk for operations signed by 
counterpart and disbursed 

First Loss Piece (capped at 65% of the aggregate amount 
disbursed and guaranteed under EIB financing operations, 
less amounts reimbursed, plus all related amounts).  

First Loss Piece guarantee 
restricted to 65% of the 
aggregate amount of the 
credits opened, plus all 
related sums. The overall 
ceiling of the credits opened 
was EUR 18 410 million. 

Guarantee restricted to 70% 
75% and 100% of the 
aggregate amount of the 
authorized credits opened, 
depending on the mandates. 

31,002,972,781 

24,920,843,267 

15,170,831,006 

9,663,924,190 

17,755,477,411 

23,435,661,611 

15,170,831,006 

9,663,924,190 

EU contingent and financial liability  

18,129,829,676 

8,814,872,137 

3,463,679,425 

190,512,087 

18,129,829,676 

8,814,872,137 

3,463,679,425 

190,512,087 

9,446,657,449 

7,807,930,635 

3,463,679,425 

190,512,087 

Cumulative guarantee calls and recoveries  

Cumulative guarantee calls 

Cumulative recoveries 
Cumulative net guarantee calls 

181,507,757 

5,412,864 
176,094,892 

136,697,178 

2,030,270 
134,666,908 

395,775,597 

2,149,346 
393,626,251 

138,993,986 

0 
138,993,986 

Notes 

The cumulative amounts of calls made by the EIB on the EU guarantee relate to operations in Syria and Tunisia since 2012. 

Fees to counterpart 

0 

0 

0 

0 

Cumulative expenses  

Other expenses (recovery costs, 
funding costs, other) cumulative 
over all mandates 

2,544,730 

18   The numbers in this table include exposures to countries that in the meanwhile have become EU Member 

States. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 67 

 
 
 
 
 
 
 
1.5 European Fund for Sustainable Development Plus 

1.5 EUROPEAN FUND FOR SUSTAINABLE DEVELOPMENT PLUS 

1.5.1 DESCRIPTION 

European Fund for Sustainable Development Plus – Open Architecture 

Identification/Reference to the basic act  

Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing the Neighbourhood, 
Development and International Cooperation Instrument – Global Europe, amending and repealing Decision No 466/2014/EU 
of the European Parliament and of the Council and repealing Regulation (EU) 2017/1601 of the European Parliament and of 
the Council and Council Regulation (EC, Euratom) No 480/2009 

Budget lines 

14 020170.01 (NEAR) EFSD+;  
14 020170.01 (INTPA) EFSD+;  
15 02 02 03.01 (NEAR) EFSD+ 
Maximum amount of budgetary guarantee 

39,769,000,000  

Amount of guarantee agreements signed with counterparts 

     495,000,000  

Counterparts for the budgetary guarantee 
EIB, AFD, EBRD, EDFI 

Budgetary commitment appropriations 

of which from the voted budget 

of which from internal assigned revenues 
of which from externally assigned revenues 

Budgetary payment appropriations 

of which from the voted budget 

of which from external assigned revenues 
of which from internal assigned revenues 

Cumulative to 
2022 

2023 

2024-2027 

Total 

 3.393.104.329  

272.491.079  

5.261.564.072  

8.927.159.480  

 3.393.104.329  
N/A 
N/A 

272.491.079  
N/A 
N/A 

5.261.564.072  
N/A 
N/A 

8.927.159.480  
N/A 
N/A 

1.087.585.039  

762.521.855  

7.077.052.588  

8.927.159.480  

1.087.585.039  
N/A 
N/A 

762.521.855  
N/A 
N/A 

7.077.052.588  
N/A 
N/A 

8.927.159.480  
N/A 
N/A 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 68 

  
  
  
  
  
  
  
  
 
         
                  
        
        
        
                  
        
        
         
                  
        
        
         
                  
        
        
 
 
 
1.5 European Fund for Sustainable Development Plus 

European Fund for Sustainable Development Plus – Investment Window 1 

Identification/Reference to the basic act  

Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing the Neighbourhood, 
Development and International Cooperation Instrument – Global Europe, amending and repealing Decision No 466/2014/EU 
of the European Parliament and of the Council and repealing Regulation (EU) 2017/1601 of the European Parliament and of 
the Council and Council Regulation (EC, Euratom) No 480/2009. 
Budget lines 
0 

Maximum amount of budgetary guarantee 

26,725,000,000 

Amount of guarantee agreements signed with counterparts 

26,725,000,000 

Counterparts for the budgetary guarantee 

European Investment Bank 

General Description  

On 14 June 2021 the European Union adopted the Regulation establishing the Global Europe 
-  Neighbourhood,  Development  and  International  Cooperation  Instrument  (NDICI-Global 
Europe), which is proposed to be the main financial tool of the EU's international cooperation 
for the period of 2021-2027.  

It  consists  of  three  pillars:  geographic,  thematic  and  rapid  response,  complemented  by  an 
additional emerging challenges and priorities cushion.  

Following  the  successful  implementation  of  EFSD,  which  targeted  investments  in  Sub-
Saharan Africa and the EU Southern and Eastern Neighbourhood countries, a new European 
Fund for Sustainable Development Plus (EFSD+) is set up under Global Europe and given a 
wider scope. It is an integrated financial package supplying financing capacity in the form of 
grants,  technical  assistance,  financial  instruments,  budgetary  guarantees  and  blending 
operations  across  Sub-Saharan  Africa,  the  Neighbourhood  and  Enlargement  countries,  Asia 
and  the  Pacific,  and  the  Americas  and  the  Caribbean.  As  regards  the  guarantees  under  the 
EFSD+, they are covered by the broader External Action Guarantee (EAG), for a maximum 
amount of EUR 53.4 billion, which supports the EFSD+ guarantees, MFA and Euratom loans.   

In particular, the EFSD+ guarantee provided  for  in  the  Regulation  can be deployed through 
different modalities of support to investment, dividing between:  

• 

Investment with sovereign and non-commercial sub-sovereign counterparts, for which 
the EU provides guarantee coverage for operations undertaken through the European 
Investment Bank (EIB). Thus, the EIB is entrusted with the implementation of the so 
called “EFSD+ Investment Window 1”, which offers comprehensive risk cover for the 
above-referred  operations  (i.e.  with  sovereign  counterparts  and  non-commercial  sub-
sovereign counterparts), which should be EIB exclusive except for operations that the 
EIB cannot carry out or decides not to carry out.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 69 

  
  
  
  
  
  
  
  
 
 
1.5 European Fund for Sustainable Development Plus 

• 

Investment  involving  private entities  or commercial sub-sovereign  entities which  are 
financially and legally able to borrow without being backed by a sovereign entity. In 
this  case,  the  EU  guarantee  can  be  extended  to  a  wide  number  of  implementing 
partners,  including  the  EIB,  in  what  is  defined  as  the  “EFSD+  Open  Architecture” 
Window.  

More  specifically,  the  EFSD+  guarantee  capacity  amounts  to  a  maximum  of  EUR  39.8 
billion,  EUR  26.7  billion  allocated  to  EIB  dedicated  Investment  Window  1  and  EUR  13 
billion for the  Open Architecture. Under both  modalities, NDICI-Global  Europe defines  the 
key  guiding  principles  that  should  be  applied  in  the  implementation  of  the  initiative. 
According to Art. 31 of the Regulation, the EFSD+ shall:   

•  Foster  sustainable  and  inclusive  economic,  environmental  and  social  development, 
transition into sustainable value-added economy and a stable investment environment.   
•  Promote  socio-economic  and  environmental  resilience  in  partner  countries  with  a 

particular focus on the eradication of poverty.   

•  Contribute  to  the  reduction  of  socio-economic  inequalities,  sustainable  and  inclusive 
growth,  climate  change  adaptation  and  mitigation,  environmental  protection  and 
management, the creation of decent jobs on the basis of the core ILO labour standards, 
economic opportunities, skills and entrepreneurship, socio-economic sectors, including 
social  enterprises  and  cooperatives,  SMEs,  sustainable  connectivity,  the  support  to 
vulnerable  groups,  the  promotion  of  human  rights,  gender  equality  and  the 
empowerment  of  women  and  young  people,  as  well  as  addressing  specific  socio-
economic root causes of irregular migration and root causes of forced displacement.   
•  Attribute special attention to countries identified as experiencing fragility or conflict, 
Least  Developed  Countries  and  heavily  indebted  poor  countries,  including  by 
providing  support  for  institutional  capacity  building,  economic  governance  and 
technical assistance.   

Implementation Cycle  

The  European  Fund  for  Sustainable  Development  Plus  (EFSD+),  builds  on  the  European 
Fund for Sustainable Development (EFSD) as established by Regulation (EU) 2017/1601.  

As  defined  in  the  NDICI-Global  Europe  Regulation,  the  specific  allocation  of  funds  for 
EFSD+ operations is based on an exhaustive programming exercise, taking into consideration, 
inter  alia,  the  realities  and  needs  of  each  partner  country  and  region.  In  this  respect,  the 
EFSD+ Strategic Orientations 2021-2027, endorsed by the EFSD+ Strategic Board on its first 
meeting of 10 November 2021, established a set of guiding principles and strategic areas for 
investment to be supported by the EFSD+. In particular, the EFSD+ Investment Window 1, 
contributes  to  the  achievement  of  the  three  overarching  priorities  identified  in  the  EFSD+ 
Strategic Orientations 2021-2027, essentially through operations that have the nature of public 
goods (e.g., infrastructure projects):  

•  Green Deal: Climate investments in both adaptation and mitigations, following the "do 

no significant harm" principle for non-climate related investments.   

•  Global  Gateway:  Investments  in  infrastructure,  exchanging  goods  and  services,  and 
connecting  people  around  the  world.  In  particular,  investments  in  digital,  energy, 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 70 

1.5 European Fund for Sustainable Development Plus 

transport,  and  people-to-people  connectivity.  These  investments  will  adhere  to  the 
EU’s principles of a level playing field, transparency, and sustainability.  

• 

Jobs  and  Sustainable  and  Inclusive  Growth:  Investments  in  education,  health,  and 
social protection and inclusion.; All such investments will be designed to contribute to 
human development and inclusive growth.   

With  the  EFSD+  Strategic  Orientations  as  key  reference,  the  EIB  and  the  European 
Commission (EC) - on behalf of the EU - signed at the end of April 2022 the corresponding 
Window 1 Guarantee Agreement through which the EC supports through the EU guarantee up 
to EUR 26.7 billion of EIB financial operations to enable crucial public investments in sectors 
like  clean  energy,  digital  and  transport  infrastructure,  health,  and  education.  The  EIB  may 
sign the corresponding financing operations until the end of 2028. This Guarantee Agreement 
is the largest guarantee agreement to be signed in the framework of the EFSD+.  

The  Guarantee  Agreement  defines  the  financial  and  operational  arrangements  for  the 
deployment of the EU Guarantee cover for EIB sovereign and non-commercial sub sovereign 
operations that enter the EFSD+  Investment  Window 1.  It  also  includes the specification of 
new cooperation modalities between both institutions, EC and EIB, such as the “Three Steps 
Approval  process”  designed  to  develop  and  approve  operations  in  the  spirit  of  the  “policy 
first” approach of the NDICI - Global Europe Regulation.  

Through  this  process,  the  EC  provides  guidance  and  authorisation  to  the  EIB  so  that  it  can 
advance  in  the  development,  approval  and  subsequent  implementation  of  the  respective 
financing operations. 

The “upstream  coordination” represents  the first  stage in  the programming cycle,  where the 
EU,  EIB  and  National  Authorities  work  closely  to  identify  projects  and  programmes  that 
adequately  respond  to  policy  priorities  established  in  a  given  country.  The  “Article  19” 
consultation represents the second stage. It refers to a consultation process set out in the EIB 
Statute (Art. 19) by which the EC/European External Action Service have the opportunity to 
provide  an  opinion  on  each  envisaged  EIB  operation.  The  EFSD+  Eligibility  Assessment 
procedure represents  the third step and it is  undertaken after  completion of  appraisal by the 
EIB of the envisaged  financing  operations. The  EC’s role  at  this juncture is  to  assess if the 
operations  that  the  EIB  proposes  meet  the  eligibility  criteria  established  in  the  “NDICI  – 
Global  Europe” Regulation to  access  the EU comprehensive guarantee  cover of the EFSD+ 
Investment Window 1. 

In addition to the guarantee specifically reserved for the EIB, the EC will also provide under 
the EFSD+ open architecture up to EUR 13 billion guarantee cover until 2027. This is being 
deployed  by  a  range  of  implementing  partners,  i.e.  International  Financial  Institutions 
(including the EIB) and European development finance institutions aiming to mobilise private 
investments in support of our partner countries.  

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Initial indicative regional allocations of the EFSD+ Investment Window 1 Guarantee 

1.5 European Fund for Sustainable Development Plus 

Implementation arrangements  

The  EFSD+  Guarantee  is  being  implemented  by  the  eligible  counterparts  in  indirect 
management.  

On 29 April 2022, the EU and the EIB signed an EFSD+ Guarantee Agreement establishing 
the EU guarantee under  the EFSD+  Investment  Window 1, which is  an  investment  window 
providing  comprehensive  risk  cover  for  loans  to  sovereigns  and  non-commercial  sub-
sovereign counterparts, which is exclusive to the EIB. The portfolio risk cover is provided by 
the  EC  on  the  basis  of  a  65%  first  loss  piece,  thus  providing  a  substantial  risk  cover.  The 
EFSD+ Investment Window 1 is not remunerated.  

In the case of the Open Architecture Window, where the EIB is also eligible for implementing 
operations  with  commercial  sub-sovereign  counterparts  as  well  as  the  private  sector,  the 
approval  process  of  individual  guarantee  agreements  is  a  multi-stage  process,  which 
culminates in a Commission Decision on the Proposed Investment Programmes (PIPs) to be 
supported by the EFSD+ Guarantee, based on both  the information  provided by the eligible 
counterparts in their application forms and the recommendation of the Operational Boards.  

Following  the  adoption  of  a  Commission  Decision,  the  EC  concludes  one  guarantee 
agreement for each of the PIPs, in line with the provisions set out in the NDICI-GE legal basis 
and  following  extensive  negotiations  between  the  partner  Financial  Institutions  and  the 
Commission,  including  the  Guarantee  Risk  Experts  Group  (GREG),  a  body  specialised  in 
financial risk assessment established for the EFSD+ Guarantee.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 72 

 
 
 
 
1.5 European Fund for Sustainable Development Plus 

Duration  

As part of the Global Europe - Neighbourhood, Development and International Cooperation 
Instrument (Global Europe) Regulation, the EFSD+ was established when the Global Europe 
Regulation  was  adopted  on  14  June  2021.  Pursuant  to  Article  31  of  the  Global  Europe 
Regulation,  guarantee  agreements  can  be  concluded  with  the  eligible  counterparts  until  31 
December 2027.  

The  corresponding  Guarantee  Agreement  with  the  EIB  for  Investment  Window  1  is 
operational since its signature on 29 April 2022.   

For guarantee agreements under the EFSD+ Open Architecture, once an agreement is signed, 
eligible counterparts subsequently have three years as from the effective date of the guarantee 
agreement  to  conclude  agreements  for  underlying  operations  with  co-financing  partners, 
financial  intermediaries  or  final  beneficiaries.  The  duration  of  these  guarantees  varies 
according to the sector, with MSME guarantee having a shorter duration, while infrastructure 
guarantees  having  potentially  longer  durations,  though  generally  durations  of  agreements 
should not exceed 15-20 years. 

Added Value  

The  EFSD+  Guarantee  uses  scarce  resources  in  an  innovative  way  to  mobilise  public  and 
private  investment,  thereby  creating  growth  and  employment  opportunities,  maximising 
additionality, delivering innovative products and crowding-in private sector funds.  

The EU budgetary guarantee provided in the framework of the EFSD+ Investment Window 1 
serves the main purpose of supporting EU policy objectives such as the Global Gateway, by 
enhancing  the  risk-bearing  capacity  of  the  EIB.  It  significantly  reduces  the  EIB's  risk 
exposure to a profile commensurate with the rules laid down by the EIB’s governing bodies. 
Thus, the EU guarantee under Investment Window 1 enables the EIB to undertake investment 
operations  in  riskier  environments  outside  the  EU  for  projects  that  offer  public  goods  and 
services to the population. In turn, the financing operations undertaken by the EIB thanks to 
the EU guarantee are expected to adequately address policy objectives and fulfil a number of 
conditions established by the European Parliament and Council.  

Hence,  the  EFSD+  Guarantee  is  used  to  reduce  the  risks  for  investment  in  sustainable 
development in partner countries, thus helping mobilise investment, which in the case of the 
Open Architecture, come especially, but not only, from the private sector. Thus, the EFSD+ 
allows  investors  including  private  companies,  in  particular  micro,  small  and  medium-sized 
enterprises  (MSMEs),  to  contribute  more  effectively  to  sustainable  development  in  partner 
countries by addressing market failures and suboptimal investment situations.  

Issues relating to the application of Article 155.2 FR  

When  implementing  EFSD+  guarantee  agreements  financial  institutions  are  contractually 
obliged  to  comply  with  applicable  Union  law  and  agreed  international  and  Union  standards 
and, therefore, not  support actions that contribute to  money laundering, terrorism financing, 
tax avoidance, tax fraud and tax evasion. Financial institutions may not enter into agreements 
with  entities  established  in  jurisdictions  listed  under  the  relevant  Union  policy  on  non-
cooperative jurisdictions or that are identified as high-risk third countries pursuant to Article 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 73 

1.5 European Fund for Sustainable Development Plus 

9(2)  of  Directive  (EU)  2015/849,  or  that  do  not  effectively  comply  with  Union  or 
internationally agreed tax standards on transparency and exchange of information.  

In particular, the Guarantee Agreement signed in April 2022 between the EIB and the EC for 
the implementation of the EFSD+ Investment Window 1 contains provisions committing the 
EIB to apply the corresponding rules and procedures to address the requirements in relation to 
money  laundering,  terrorism  financing,  tax  avoidance,  tax  fraud,  tax  evasion  contained  in 
Article 155(2)(a) of the Financial Regulation and to reflect the prohibition to enter into new or 
renewed operations  with  entities  incorporated or  established in  jurisdictions  listed under the 
relevant EU policy on non-cooperative jurisdictions.  

Furthermore, when concluding agreements not only with the EIB but also with other financial 
intermediaries,  entities  implementing  EFSD+  Guarantees  must  transpose  these  requirements 
into  the  relevant  agreements.  The  financial  intermediaries  are  also  obliged  to  report  on  the 
observance of these requirements.   

Currently, no issues were reported by the EIB or any other financial institutions. 

1.5.2 OPERATIONAL PERFORMANCE  

At the 1st Meeting of the EFSD+ Strategic Board on 10 November 2021, EU Member States 
together with the EU Commission, the EU External Action Service and the EIB approved the 
EFSD+ Strategic Orientations as main reference framework for the Guarantee Agreements to 
be  established  for  the  implementation  of  EFSD+.  Three  overarching  priorities  were  defined 
for all operations covered by the EU Guarantee, namely:  

1. 

2. 

3. 

Green Deal   

Global Gateway   

Jobs and Sustainable Inclusive Growth   

Concerning  the  EFSD+  Investment  Window  1,  the  Guarantee  Agreement  signed  builds  on 
those strategic priorities and the agreement aims to contribute to set in motion the Economic 
and  Investment  Plans,  which  will  support  the  EU's  relations  with  the  EU  Southern 
Neighbourhood,  the  Eastern  Partnership  countries  and  the  Western  Balkans,  aiming  to  spur 
the long-term economic recovery of these regions, support a green and digital transition and 
foster regional integration and convergence with the EU.  

Additionally,  it  also  stresses  the  importance  to  contribute  to  the  Global  Gateway  Africa-
Europe  Investment  Package,  which  aims  at  supporting  Africa  for  a  strong,  inclusive,  green 
and digital recovery and transformation; and at promoting ultimately stronger partnerships in 
the  Western  Balkans  and  Türkiye,  the  Neighbourhood,  Sub-Saharan  Africa,  Asia  and  the 
Pacific, and the Americas and the Caribbean.  

Concerning  EFSD+  Open  Architecture,  the  policy  orientations  set  out  the  following  six 
investment areas for which the Partner Financial Institutions have already submitted proposals 
to be covered by the EU guarantee:  

1. 

2. 

Micro, Small and Medium Enterprises (MSMEs)   

Connectivity: Energy, Transport and Digital  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 74 

1.5 European Fund for Sustainable Development Plus 

3. 

4. 

5. 

6. 

Sustainable Agriculture, Biodiversity, Forests and Water  

Sustainable Cities  

Sustainable Finance and Impact Investing   

Human Development  

Under the Open Architecture, several Guarantee Agreements have been signed in 2022. Five 
programmes  originally  planned  under  the  EFSD  but  postponed  due  to  the  Covid-19  crisis 
were endorsed by the EFSD and EFSD+ Operational Boards, and five guarantee agreements 
were  signed  in  2022  under  the  EFSD+:  EBRD  Financial  Inclusion  (up  to  EUR  115  million 
guarantee  cover),  EBRD  Digital  Platform  (up  to  EUR  35  million  guarantee  cover),  AFD 
Local  Governments  Access  to  Financing  Guarantee  Programme  -  CITYRIZ  (up  to  EUR  30 
million  guarantee  cover),  AFD  FISEA  PLUS  (up  to  EUR  35  million  guarantee  cover),  and 
EDFI MSME Platform (up to EUR 80 million guarantee cover).   

Part  of  the  EFSD+  was  quickly  and  exceptionally  mobilised  to  support  to  the  COVAX  II 
facility. The guarantee provided by the EFSD+ to the COVAX II facility was repaid. Support 
to the COVAX I and II facilities, from the EFSD and EFSD+, facilitated the distribution of 
hundreds  of  millions  of  vaccine  doses  to  our  partner  countries.  The  implementation  of  this 
programme backed by the EFSD and EFSD+ Guarantee marks a particular success for 2022. 

On  13  April  2022,  the  Commission  invited  International  Financial  Institutions  (IFIs)  and 
development  finance  institutions  (DFIs)  to  submit  proposed  investment  programmes  (PIPs) 
under  the  EFSD+  Open  Architecture,  with  deadline  for  submission  on  12  July  2022.  20 
IFIs/DFIs submitted 71 PIPs for a total of EUR 21.9 billion (which compares to a guarantee 
capacity allocated to the first round of EUR 5.95 billion).   

The  DG  INTPA  Technical  Assessment  Meeting  (TAM)  under  the  EFSD+  Guarantee  took 
place  on  25-27  October  2022  and  19  DFIs  presented  49  PIPs.  The  PIPs  were  assessed 
according  to  policy  alignment,  geographic  coverage,  additionality,  financial  structure,  and 
preliminary risk assessment.  

The EFSD+ Operational Board on 15-16 December 2022 gave a positive opinion on 40 DG 
INTPA-led PIPs from  20 DFIs  and made allocations  to  6 DG NEAR-led PIPs for a total  of 
guarantee  amount  of  EUR  6.05  billion  for  regions  under  DG  INTPA  responsibility.  In 
meetings  of  the  EFSD+  Operational  Board  for  the  Western  Balkans,  Neighbourhood  and 
Türkiye  on  5  December  2022  and  25  January  2023,  positive  opinions  were  issued  on  the 
allocation of EUR 2.4 billion to Proposed Investment Programmes covering enlargement and 
neighbourhood regions. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 75 

 
 
 
1.5 European Fund for Sustainable Development Plus 

Operational performance – Open Architecture 

Key Figures 

Total amount of operations signed by counterparts 

Total amount of operations disbursed 

Leverage  

Multiplier effect 

Amount transferred to final recipients 

Number of final recipients 

Investments made by final recipients 

Private sector resources mobilised 

Operational performance – Investment Window 1  

Key Figures 

Total amount of operations signed by counterparts 

Total amount of operations disbursed 

Leverage  

Multiplier effect 

Amount transferred to final recipients 

Number of final recipients 

Investments made by final recipients 

Private sector resources mobilised 

250,636,168 

200,000,000 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

4,510,529,474 

157,639,499 

1.53 

3.07 

157,639,499 

N/A 

315,278,998 

N/A 

Open Architecture   

EU guarantee revenues 

EU guarantee revenues 

all figures in EUR 

2022 

500,000 

Cumulative until 31-12-2022 

500,000 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 76 

 
  
 
 
  
  
 
 
 
  
 
 
 
1.5 European Fund for Sustainable Development Plus 

1.5.3 FINANCIAL INFORMATION   

Financial information at the level of mandate – Open Architecture 

Effective 

Counterpart 

Description 

all figures in EUR and as at 31/12/2022 

COVAX II 

CITIRYZ 

FISEA+ 

Y 

EIB 

Overview 

Y 

AFD 

Y 

AFD  

See description of COVAX II up in the 
main text. This guarantee with the 
European Investment Bank (EIB) 
followed the support provided to 
COVAX, supplying access to COVID-
19 vaccines in Africa and the EU 
Neighbourhood. 

Encourage the structuring of local loan 
markets for local governments by 
encouraging local private and public 
banks to improve their knowledge of 
these new clients and take the risk to 
lend, on longer maturities more adapted 
to the needs of local governments' 
investments. Eligible banks or local 
financial institutions in Africa provide 
loans to local governments benefiting 
from a partial guarantee extended by 
AFD. Such guarantee issued by AFD 
covers up to 50% on a pari passu basis of 
the loan. The programme is aimed at 
encouraging public and private banks to 
lend to cities in Africa for projects such 
as water sanitation and transport. 

Makes equity investments in businesses 
and investment funds operating in 
Africa in order to support social 
development goals. 

Maximum guarantee signed 
with counterpart 

Operation type 

200,000,000 

Bullet loan 

30,000,000 

35,000,000 

Line by line guarantee 

Portfolio guarantees 

Risk-sharing structure 

The EIB-Gavi COVAX II loan facility 
200m was signed and fully disbursed 
in 2021. 

90% of AFD's first loss exposure (being 
a 20% tranche) and 53% of AFD's 
second loss exposure (being the 
remaining 80% tranche) on a line-by-line 
basis for each AFD guarantee. 

Cumulative operations signed 
by counterpart 

Cumulative operations 
disbursed by counterpart 

Available guarantee signed 
with counterpart  

EU risk for operations signed 
by counterpart 

EU risk for operations signed 
by counterpart and disbursed 

Cumulative guarantee calls 

Cumulative recoveries 
Cumulative net guarantee calls 

Fees to counterpart 

Other expenses (recovery 
costs, funding costs, other) 
cumulative over all mandates 

200,000,000 

200,000,000 

0 

0 

EU contingent and financial liability  

0 

0 

0 

0 

0 
0 

0 

0 

30,000,000 

0 

0 

Cumulative guarantee calls and recoveries  

Cumulative expenses  

0 

0 
0 

0 

0 

Pari Passu 

0 

0 

35,000,000 

3,937,746 

0 

0 

0 
0 

0 

0 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 77 

 
 
 
 
 
 
 
 
 
Effective 

Counterpart 

Description 

1.5 European Fund for Sustainable Development Plus 

all figures in EUR and as at 
31/12/2022 

  Digital Transformation Platform 

Financial Inclusion 

MSME Platform 

Y 

EBRD 

Overview 

Y 

EBRD 

Y 

EDFI 

This guarantee programme is 
designed to achieving access to 
finance for projects and 
development in the digital 
economy. It will help in providing 
high quality and reliable broadband 
services while supporting the 
development of wireless networks 
as well as enabling the transition to 
digital economies. It tackles also 
underpinning government policy on 
economic growth and jobs and the 
development of digital solutions 
including the building of 
information society structures. 

This guarantee programme aims to 
reconcile supply and demand of 
MSME financing by reducing the 
financial risk associated with such 
financing and encouraging 
intermediaries to direct new 
lending towards those businesses 
who need it the most. The targeted 
groups include SMEs affected by 
Covid-19 and other crises 
affecting the solidity of the local 
financial systems as well as 
underserved or unserved target 
groups and sector. 

This Guarantee will enable our 
partner financial institutions to 
provide debt financing to financial 
institutions across Africa and the 
EU Neighbourhood providing 
financial services to SMEs. The 
goal of the financing is to provide 
longer-term financing that is largely 
unavailable to SMEs in these 
markets, as well as capacity 
building to both lending FIs and 
recipient SMEs.  

35,000,000 

115,000,000 

80,000,000 

Portfolio guarantee 

Guarantees and debt 

Line by line guarantees 

First loss 

46,698,422 

0 

First loss 

Pari passu 

0 

0 

0 

0 

EU contingent and financial liability  

115,000,000 

80,000,000 

35,000,000 

2,224,512 

0 

0 

0 

Cumulative guarantee calls and recoveries  

0 

0 

0 

0 

0 

Cumulative expenses  

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Maximum guarantee 
signed with counterpart 

Operation type 

Risk-sharing structure 

Cumulative operations 
signed by counterpart 

Cumulative operations 
disbursed by counterpart 

Available guarantee signed 
with counterpart  

EU risk for operations 
signed by counterpart 

EU risk for operations 
signed by counterpart and 
disbursed 

Cumulative guarantee calls 

Cumulative recoveries 

Cumulative net guarantee 
calls 

Fees to counterpart 

Other expenses (recovery 
costs, funding costs, other) 
cumulative over all 
mandates 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 78 

 
 
 
 
 
 
 
1.5 European Fund for Sustainable Development Plus 

Financial information at the level of mandate – Investment Window 1  

              all figures in EUR and as at 31/12/2022 

Effective 

Counterpart 

Description 

EFSD + Investment Window 1 

Overview 

Yes 

EIB 

The EU budgetary guarantee has the objective to enhance the risk-bearing capacity of the EIB by limiting 
the EIB's risk exposure. It therefore enables the Bank to undertake investment operations in riskier 
environments outside the EU to pursue policy objectives established by the EU legislator, i.e. the 
European Parliament and Council. 

Maximum guarantee 
signed with counterpart 

26,725,000,000 

Operation type 

Debt (sovereign and non-commercial sub-sovereign loans) 

Risk-sharing structure 

Cumulative operations 
signed by counterpart 

Cumulative operations 
disbursed by counterpart 

Available guarantee 
signed with counterpart  

EU risk for operations 
signed by counterpart 

EU risk for operations 
signed by counterpart 
and disbursed 

Cumulative guarantee 
calls 

Cumulative recoveries 

Cumulative net guarantee 
calls 

Fees to counterpart 

Other expenses (recovery 
costs, funding costs, 
other) cumulative over all 
mandates 

First Loss Piece covering 100% of all individual claims, subject to a portfolio-level cap of 65% of the 
aggregate amounts disbursed and guaranteed under EIB financing operations, less amounts reimbursed, 
plus all related amounts, and a further cap (Maximum EU FLP Amount) amounting at present to 65% of 
the Investment Window 1 ceiling and taking into account cumulative amounts called and cumulative 
amounts recovered. 

4,510,529,474   

157,639,499 

EU contingent and financial liability  

26,725,000,000 

4,508,931,860 

156,202,257 

Cumulative guarantee calls and recoveries  

Cumulative expenses  

0 

N/A 

- 

N/A 

N/A 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 79 

 
  
  
 
 
2.1 Description 

2 COMMON PROVISIONING FUND 

2.1 DESCRIPTION  

The  Common  Provisioning  Fund  (CPF)  entered  into  operation  in  2021,  along  with  the  new 
MFF for the period 2021-2027. Title X of the Financial Regulation entrusts the Commission 
as  financial  manager  of  the  CPF  with  as  responsibilities  the  setting  up  of  the  CPF,  the 
definition of its investment strategy and the oversight of its sound management. Pursuant to 
Article 214 of the Financial Regulation, the Commission shall report annually to the European 
Parliament and the Council on the CPF.  

The report under Article 214 FR, which focuses on the asset management aspects of the CPF, 
was adopted on 31 May 202319 and contained the following information:  

-  Key events related to the functioning of the CPF in 2022;  
-  Overview of calls on guarantees and transactions, as well as an update on the applied 

effective provisioning rate20;  

-  Portfolio’s  composition,  risk  profile  and  performance  in  2022,  presented  against  the 
benchmark, along with its environmental, social, and governance (ESG) profile;  
-  Description  of  the  market  environment  and  developments  that  shaped  the  fund’s 

performance in 2022; 

-  Results  of  actions  taken  by  the  Commission  to  ensure  value  protection  and  growth 
opportunities for the CPF over the longer term: a diversified investment universe and 
an enhanced, ESG-focused benchmark. 

Following the requirements g), h) and i) of article 41(5) of the Financial Regulation (FR), this 
chapter focuses mainly on the financial aspects of the CPF not already presented in the report 
under  Article  214  FR.  In  terms  of  timing,  it  covers  operations  from  1  January  2022  to  31 
December 2022.  

2.1.1 ROLE OF THE CPF 

The CPF holds the provisions protecting the EU budget against losses which may arise  as a 
result of financial instruments, budgetary guarantees or financial assistance for third countries 

19   COM(2023)288 final, Report from the Commission to the European Parliament and Council on the common 

provisioning fund in 2022. 

20   The  concept  of  effective  provisioning  rate  (EPR)  was  described  in  the  first  CPF  annual  report  for  2021. 
Following calculations based on the established methodology, the Commission proposed  in 2022  that the 
EPR  remained  at  100%  for  the  Draft  Budget  2023.  This  approach  was  confirmed  in  the  adopted  Annual 
Budget 2023. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 80 

 
 
2.1 Description 

as established by different EU legislative instruments.21 The CPF was constituted in January 
2021.  

The CPF is the capital reserve from which funds are drawn to meet,  fully and promptly, all 
required  outflows  and  guarantee  calls  (defaulting  operations)  stemming  from  the  financial 
instruments, budgetary guarantees and provisioned loan programmes.22 In order to serve as a 
reliable  buffer  for  these  calls,  the  CPF  is  managed  in  a  way  that  should,  at  least,  strive  for 
capital  preservation  over  its  investment  horizon.  It  is  divided  into  several  compartments, 
which correspond to the financial liabilities under the respective instruments and programmes.  

2.1.2 ARCHITECTURE OF THE CPF 

The CPF is created and functions as a single internal pooled portfolio with a single investment 
strategy,  separated  from  the  other  portfolios  managed  by  the  Commission.  Any  generated 
gains are reinvested. 

The  resources  of  the  CPF  are  accounted  for  in  compartments  for  the  purpose  of  tracing  the 
amounts relating to the various contributing instruments.23  

On 31 December 2022, the CPF was composed of fourteen compartments.  

Market  value  in  EUR  as  at  31 
December 2022 

Compartments opened in 2021 

EFSI  

GFEA24 

EFSD 

8,463,863,835.36 

2,466,536,435.38 

697,793,925.32 

21   Article 212 of the FR. 

22   CPF  underpins  the  system  of  various  forms  of  support  that  the  EU  will  provide  under  the  current  MFF, 
notably  InvestEU  and EFSD+.  The  CPF  also  accumulates  assets  of  legacy  contributing  instruments  under 
the previous MFFs (EFSI, EFSD, GFEA). 

23   According  to  Article  3  of  the  AMGs,  the  resources  of  the  CPF  are  allocated  into  compartments 

corresponding to each of the contributing instruments as outlined in Article 1 of the AMGs. 

24   Guarantee Fund for external actions (GFEA), holding the provisions for the external lending mandate (ELM), 

legacy (macro-financial assistance (MFA) and Euratom programmes). 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 81 

 
 
 
2.2 Financial flows 

InvestEU 

1,651,342,768.93 

Compartments opened in 2022 

EFSD+ 

1,066,911,767.96 

EFSD+ Post-2020 MFA 

Exceptional MFA Ukraine 

Post-2020 Euratom loans 

Repurposed ELM loans Ukraine 

InvestEU Guarantee Romania 

- 

- 

- 

- 

- 

InvestEU Guarantee Czechia  

13,457,062.53 

InvestEU Guarantee Finland 

17,419,930.38 

InvestEU Guarantee Greece 

- 

InvestEU Blending Operations 

17,760,000.00 

In 2022, it received EUR 3.26 billion net contributions. As of 31 December 2022 the market 
value  of  the  outstanding  shares  was  EUR  14.39  billion,  which  is  equal  to  the  value  of  net 
assets, making it by far the largest portfolio directly managed by the Commission. 

2.2 FINANCIAL FLOWS 

In  combining  provisions  from  different  contributing  instruments,  the  CPF  receives  inflows 
that are recognised in net assets as subscriptions to the respective compartment after the cash 
is  credited  on  the  CPF  bank  account  or  after  other  assets  have  been  transferred  to  the  CPF 
(contribution  in  kind).  Outflows  from  the  CPF  are  treated  as  redemptions  that  decrease  the 
amount of contribution in the respective compartment. Proceeds from the redemption are paid 
into an EU budget bank account to fund the payment of guarantee calls expected over the next 
months.  

Table 1 - Total subscriptions and redemptions for the respective compartments of CPF in 
2022. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 82 

 
Compartment as of 31 Dec 2022 

Contributions less 
redemptions in EUR in 2022 

3.1 Initial remarks 

EFSD 

EFSD+ 

EFSI 

GFEA 

InvestEU 

InvestEU - Czechia 

InvestEU - Finland 

InvestEU - Blending 

-25,000,000  

1,087,585,038  

713,177,297  

14,219,828  

1,416,259,379  

13,665,629  

17,689,916  

17,760,000  

Total CPF 

3,255,357,087  

3.  ASSESSMENT  OF  CONTINGENT  LIABILITIES  GENERATED  BY 
BUDGETARY GUARANTEES AND FINANCIAL ASSISTANCE 

3.1 INITIAL REMARKS  

Contingent  liabilities  are  potential  EU  financial  liabilities  that  may  arise  from  future  events 
whose occurrence is, at this stage, still uncertain but whose impact on the EU budget may be 
significant.  In  the  context  of  the  EU  budget,  contingent  liabilities  essentially  stem  from  the 
three following sources:  

1.  Exposures from budgetary guarantees:  

At this stage, this relates to guarantees provided under the EFSI, InvestEU, ELM, EFSD and 
EFSD+  programmes.  Under  all  budgetary  guarantee  instruments,  the  EU  (fully  or  partially) 
covers - as stipulated by the respective guarantee agreements - implementing partners’ losses 
resulting from payment defaults emanating from financing and investment operations (debt or 
equity).  

2.  Exposures  from  borrowing,  the  proceeds  of  which  are  used  to  provide  financial 
assistance to third countries (Macro-Financial Assistance (“MFA”) and Euratom):  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 83 

3.2 Budgetary guarantees methodology 

This type of contingent liabilities relates to exposures of the EU in relation to loans granted to 
a number of third countries. Such loans are financed via EU borrowing, where the EU remains 
liable versus end investors also when MFA or Euratom beneficiaries would not pay or would 
not pay in time.  

3.  Exposures  from  borrowing,  the  proceeds  of  which  fund  the  financial  assistance  to 
Member States (BoP, EFSM, Euratom, SURE, RRF loans under NGEU) and the 2023 
Ukrainian MFA+ programme25:  

Exposures  for  this  type  of  contingent  liability  are  not  provisioned  and  their  sustainability  is 
assessed and presented in the Article 250 FR report.  

The analysis performed in this Article 41(5) report focuses on the sustainability of contingent 
liabilities arising from provisioned instruments, i.e. the contingent liabilities stemming from 
budgetary guarantees and financial assistance to third countries.  

3.2 BUDGETARY GUARANTEES METHODOLOGY  

ASSUMPTIONS AND PARTICULARITIES  

Financial risk in relation to contingent liabilities for budgetary guarantees is - to a large extent 
-  assessed  on  the  basis  of  a  mathematical/statistical  credit  risk  models,  which  serve  as  an 
important  tool to  estimate future losses (and revenues) resulting  from  budgetary guarantees. 
For  debt  products  these  quantitative  models  support  the  assessments  performed  by  the 
Commission  services  in  charge  of  implementing  the  specific  programmes  and  complement 
their  analysis.  A  mathematical/statistical  credit  risk  model  uses  pragmatic  assumptions  to 
model  the  underlying  operations  and  then  estimates  expected  losses  and  the  uncertainty 
around  those  expected  loss  estimates  (in  other  words,  a  credit  risk  model  also  provides 
information on the probability to deplete the guarantee fund over the lifetime of the guarantee 
or on the probability to have a provisioning surplus). However, a credit risk model as such can 
only  provide  an  estimate  of  future  losses  on  the  underlying  operations  under  certain 
assumptions  and  it  cannot  be  excluded  that  actual  future  losses  will  deviate  from  these 
forecasts.  

For operations covered by the EU guarantee where (credit) risk cannot be modelled with the 
available  tools  and  where  risk  metrics  are  not  available,  the  Commission  estimates  relevant 
risk  metrics  on  the  basis  of  expert  judgment,  guided  by  historical  experience  with  the 
underlying instruments.  

Finally, it is worth mentioning that the Commission is further developing a unified credit risk 
model  to  be  used  for  the  credit  risk  in  budgetary  guarantees  across  the  board.  In  addition, 

25   See also Article 2(3) of Council Regulation 2020/2093 of 17 December 2020 laying down the multiannual 

financial framework for the years 2021 to 2027. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 84 

 
 
3.2 Budgetary guarantees methodology 

other methodologies that are currently used (e.g. for equity instruments) are also refined on a 
continuous  basis  in  order  to  incorporate  experience  built  up  over  the  years.  As  a  result,  the 
Commission  will  going  forward  further  fine-tune  its  approach  to  risk  assessment  and 
monitoring.  

Assessment of the adequate provisioning of the relevant compartment of the CPF 26  

A  first  risk  measure  that  is  analysed  is  the  “de  facto  provisioning  rate”  which  is  to  be 
compared  with  the  “target  provisioning  rate”  that  is  set  in  the  budgetary  guarantee  Basic 
Act.27 To make this analysis, the actual market value of the guarantee fund is compared with 
the total amount of (outstanding) signed guarantees. This comparison is performed based on 
year-end 2022 data and the respective figures are also projected for the next 5 years.  

When the projections show that “de facto provisioning rate” is not expected to significantly 
deviate  from  the  target  provisioning  rate,  the  current  and  future  provisioning  levels  of 
provisioning can be expected to be (and remain) in line with the initial target provisioning rate 
for the duration of the projection period.  

Assessment  of  the  riskiness  of  the  guaranteed  operations  as  compared  to  the  ex-ante  risk 
bearing capacity of the Commission for a programme  

A second risk measure relates to the confidence in the hypothesis that the current provisioning 
(i.e. the amount available in the guarantee fund evaluated at market value) will be adequate to 
cover the losses of the programme (net of guarantee revenues and recoveries) over a certain 
time  period.  The  analysis  presented  below  will  principally  look  at  the  lifetime  estimates28, 
which  then  allows  to  compare  with  the  initial  pre-defined  risk  bearing  capacity  of  the 
programme.29 This risk metric will therefore assess whether the target provisioning rate is still 
adequate to cover estimated losses at the desired confidence level.  

26   According to Article 3 of the Asset Management Guidelines (AMGs), the resources of the CPF are allocated 
into  compartments  corresponding  to  each  of  the  contributing  instruments  as  outlined  in  Article  1  of  the 
AMGs. 

27   This risk measure needs to be interpreted with caution in case the programme is not fully up and running yet 

and/or the provisioning has not yet been constituted in full. 

28 Where applicable also the estimate for the 5-year time horizon will be mentioned for information purposes. 

29 Expressed as the confidence level that provisioning would be sufficient to cover the net losses over the lifetime 

of the programme. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 85 

 
3.3 Analysis for budgetary guarantee programmes 

3.3 ANALYSIS FOR BUDGETARY GUARANTEE PROGRAMMES  

3.3.1 EFSI  

Assumptions and particularities  

The EFSI guarantee  consists  of two  windows (“Infrastructure and  Innovation Window”  and 
“SME Window”), under which both debt and equity products are implemented. For the IIW 
debt operations, the Commission is supported by the “TAU” (Technical Assistance Unit from 
EIB)  30 for the credit risk assessments. For the equity operations included in the IIW and for 
the  debt  and  equity  operations  of  the  SMEW,  the  Commission’s  risk  metric  estimates  are 
based on expert judgment.  

Assessment of the adequate provisioning of the EFSI CPF compartment  

The EFSI Regulation31 - in its Article 12(5) - has set the target provisioning rate at 35%.  

At  31  December  2022,  the  EFSI  CPF  compartment32  held  provisions  worth  EUR 
8,570,691,859. This figure needs to be compared with the “Total available Guarantee amount 
signed  with  Counterparts”  outstanding  (which  is  defined  as  the  ‘ceiling  in  the  guarantee 
agreements signed and effective minus all net payments that reduce the guarantee cap minus 
‘released guarantees’). At 31 December 2022, this figure amounted to EUR 24,615,200,781.33  

When the available provisioning is divided by the total available guarantee amount as defined 
above, the de facto provisioning rate is 34.8%, slightly lower than the target provisioning rate 
of 35%. However, no replenishment is needed in light of expected revenues in the course of 
2023.34  

Moreover,  the  valuation  losses  that  the  EFSI  CPF  compartment  recorded  in  2022  are  to  a 
large  extent  unrealised  in  nature  and  the  yield-to-maturity  of  the  portfolio  is  now  strongly 
positive (in excess of 3%).35  

30 In accordance with the Partnership Agreement signed with the EIB in May 2022, the provisioning rate of EFSI 
(and InvestEU) debt operations is calculated with input from  the TAU. This estimated provisioning rate is 
related to the combined EFSI IIW debt portfolio (standard and hybrid) with the InvestEU debt portfolios. 

31 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02015R1017-20210101&from=EN  

32   Including  the  cash  buffer  held  at  the  Commission’s  central  treasury  to  deal  with  short  term  expected 

guarantee calls and an amount of EUR 61 million on a fiduciary account. 

33   Which compares to the maximum legislative guarantee ceiling of EUR 26.0 billion. 

34   For information, in 2022, revenues amounted to EUR 382 million. 

35   Unrealised losses in the EFSI CPF compartment amounted to EUR 877 million. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 86 

 
3.3 Analysis for budgetary guarantee programmes 

Assessment  of  the  riskiness  of  the  guaranteed  operations  as  compared  to  the  ex-ante  risk 
appetite of the Commission for this programme  

When  assessing  whether  the  target  provisioning  rate  is  still  adequate,  the  required 
provisioning  for  the  underlying  products  was  assessed.  The  EFSI  implementation  period 
ended as of 31 December 2022 and therefore no additional operations can be signed. 

The results of the risk analysis conducted based on a credit risk model for IIW debt operations 
and  on  expert  judgment  for  equity  and  SMEW  debt  products,  indicate  a  Value-At-Risk36 
amount  of  EUR  8,977,800,000  at  a  95%  lifetime  confidence  level  (p.m.  the  guarantee  is 
expected to remain in place for more than 20 years). This amount is broadly in line with the 
market value of the EFSI CPF compartment (EUR 8,570,691,859). It is noteworthy that the 
underlying provisioning dynamics reveal a shift towards less provisioning needs for debt-type 
products and towards more provisioning needs for equity-type products (due to recent trends 
in the interest rates given that the guarantee is also used to cover funding costs). 

3.3.2 INVESTEU 

At 31 December 2022, seven implementing partners had signed guarantee agreements under 
InvestEU  for  a  total  amount  of  EUR  17.4  billion  of  EU  guarantee.  However,  only  EIB  and 
EIF  (representing  a  75%  share  of  the  total  EU  budget  guarantee)  have  started  the 
implementation  of  the  guarantee  for  a  total  amount  of  EUR  2.1  billion  guarantee  usage 
corresponding to around 6.3 bn signatures.  

The  InvestEU  guarantee  is  underpinned  by  EU  budgetary  provisions  (including  also  EURI 
resources and assigned revenues from legacy instruments) of EUR 10.46 billion, with a target 
provisioning rate of 40%.37  

In 2021 and 2022, the Commission made the first provisioning payments to the relevant CPF 
compartment for a total amount of EUR 1,651,342,768.38 Further provisioning payments are 
foreseen in the remainder of the constitution phase.  

More extensive reporting on provisioning of the InvestEU guaranteed operations as compared 
to the ex-ante risk appetite will start as of next year.  

36   The Value-at-Risk (VAR) can be defined as the portfolio loss level which, statistically, over a certain time 

horizon will not be exceeded with a certain confidence level. 

37   See Art. 4 of Regulation (EU) 2021/523 of the European Parliament and of the Council of 24 March 2021 

amending Regulation (EU) 2015/1017. 

38   Market value of the relevant CPF compartment at 31/12/2022 which includes EUR 65.7 million unrealized 

losses. 

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3.3 Analysis for budgetary guarantee programmes 

3.3.3 EFSD  

Assumptions and particularities  

The  EFSD  is  a  budgetary  guarantee  where  the  underlying  activities  are  still  in  the  ramp-up 
phase; many underlying operations can still be signed and implemented.  

Meanwhile, the provisions of the EFSD  CPF compartment have  already  been constituted in 
full.  It  should  also  be  noted  that  the  EFSD  CPF  compartment  also  benefitted  from  external 
contributions  from  the  Bill  and  Melinda  Gates  Foundation  (USD  50  million)  and  from 
contributions of a number of Member States (EUR 10 million). As of August 2021, the EFSD 
GF  has  been  transferred  to  the  CPF  and  since  then  it  constitutes  a  separate  compartment 
thereof.  

In spite of still being in the ramp up phase, the amount of outstanding liabilities of the EFSD 
guarantee  decreased  in  2022.  The  reason  is  the  COVAX  programme  where  a  EUR  270 
million underlying loan was repaid without the guarantee being triggered.39 A remaining EUR 
130 million COVAX exposure is still outstanding with a high probability of being  called in 
the short to medium term.  

Assessment of the adequate provisioning of the EFSD CPF compartment  

The EFSD Regulation40 has set the target provisioning rate at 50%. At 31 December 2022, the 
EFSD CPF  compartment  held  EUR  728,175,822 of provisioning. This  is to  be compared to 
the  “total  available  guarantee  amount  signed  with  counterparts”  (i.e.  the  ‘ceiling  in  the 
guarantee agreements signed and effective minus all net payments that reduce the guarantee 
cap  minus  guarantee  released’)  of  EUR  1,178,220,785  at  31  December  2022.  When  the 
available  provisioning  is  divided  by  the  total  available  guarantee,  the  de  facto  provisioning 
rate  is  61.8%.  As  already  explained  above,  the  EFSD  CPF  compartment  has  been  fully 
constituted  and  no  new  significant  provisioning  inflows41  are  foreseen  until  the  end  of  the 
investment  period  (end-2024).  To  note  that  the  EFSD  CPF  compartment  in  2022  recorded 
valuation losses (~ EUR 75 million) which are to a large extent unrealised in nature and that 
the yield-to-maturity of the portfolio is now strongly positive (in excess of 3%). 

Assessment  of  the  riskiness  of  the  guaranteed  operations  as  compared  to  the  ex-ante  risk 
appetite of the Commission for this programme  

The  EFSD  is  still  in  the  ramp-up  phase,  therefore  it  is  appropriate  to  look  at  the  full  set  of 
operations  that  is  expected  to  be  covered  under  the  individual  guarantee  agreements  rather 

39   COVAX is the vaccines pillar of the Access to COVID-19 Tools (ACT) Accelerator. 

40   https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017R1601&from=EN, Article 14(5) 

41   A limited amount of recoveries or fee revenue could be expected. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 88 

 
3.3 Analysis for budgetary guarantee programmes 

than to  the operations  that  have already been signed by the counterparts  as  at  31 December 
2022.  

The results of the risk analysis performed on the internal credit risk model42 indicate a lifetime 
Value-At-Risk43 amount of EUR 766,824,213 at the desired 90% confidence level (p.m. the 
guarantee is expected to remain in place for more than 20 years).44 This amount is somewhat 
higher  than  the  market  value  of  the  EFSD  CPF  compartment  as  of  end  2022  (EUR 
728,175,822)  where  the  EFSD  CPF  compartment  has  reported  total  unrealised  valuation 
losses of ± EUR 75 million.  

3.3.4 EFSD+  

EFSD+  is  the  instrument  for  external  guarantees  in  this  MFF  period  and  can  broadly  be 
considered  as  the  successor  instrument  of  ELM  (EFSD+  Investment  Window  1)  and  EFSD 
(the other EFSD+ Windows). 

A.  EFSD+ Investment Window 1  

On 29 April 2022, the EU and the EIB signed an EFSD+ Guarantee Agreement establishing 
the EU guarantee under  the EFSD+  Investment  Window 1, which is  an  investment  window 
providing  comprehensive  risk  cover  for  loans  to  sovereigns  and  non-commercial  sub-
sovereign counterparts, with the EIB being the exclusive implementing partner. The EFSD+ 
Investment  Window  1  guarantee  is  a  65%  first  loss  portfolio  guarantee.  On  the  back  of  the 
substantial  risk  cover  provided  by  the  EC,  which  is  not  remunerated,  EFSD+  Investment 
Window 1 is deployed without risk pricing.  

The  EU  budgetary  guarantee  provided  under  EFSD+  Investment  Window  1  has  as  main 
purpose to support EU policy objectives (such as the Global Gateway) and enhances the risk-
bearing  capacity  of  the  EIB.  It  significantly  limits  the  EIB's  risk  exposure  to  a  profile 
commensurate with the rules laid down by EIB’s governing bodies.  

B.  EFSD+ Open Architecture  

In  the  EFSD+  Open  Architecture,  the  policy  orientations  set  out  six  investment  areas  for 
which Partner Financial Institutions have already submitted proposals. 

42   The analysis is performed on “Total amount of EU risk for operations signed with Counterparts”, defined 
as  ‘the  exposure  of  the  EU  guarantee  in  terms  of  operations  that  are  covered  (e.g.  in  EFSD  through 
inclusion notices) and still active’. 

43   The Value-at-Risk (VAR) can be defined as the portfolio loss level which, statistically, over a certain time 

horizon will not be exceeded with a certain confidence level. 

44   If the same exercise is done over a time horizon of 5 years, a Value-At-Risk level of 635,809,855 EUR is 

obtained. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 89 

 
3.3 Analysis for budgetary guarantee programmes 

At  31  December  2022,  EFSD+  had  already  signed  six  guarantee  agreements  with  4 
implementing partners for a total amount of EUR 495 million. The EFSD+ portfolio contains 
one  signed  and  disbursed  amounts  for  EIB-COVAX  II  for  an  amount  of  EUR  200  million, 
one  within  AFD-FISEA+  for  EUR  3.9  million  and  one  with  EBRD-Digital  Transformation 
Platform EUR 2.2 million.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 90 

 
 
3.3 Analysis for budgetary guarantee programmes 

Provisioning 

As far as the Common Provisioning Fund is concerned, pursuant to Article 31 of the NDICI 
Regulation45, the target  provisioning  rate is  between 9% and 50% depending on the type of 
operations.  

The Regulation also  establishes that a maximum amount of EUR 10 billion from the Union 
budget may be used to provision the External Action Guarantee. The value of the EFSD+ CPF 
compartment by the end of 2022 amounted to EUR 1,066,911,768.  

Formal reporting on provisioning and riskiness of the guaranteed operations as compared to 
the ex-ante risk appetite will start as of next year.  

3.3.5 ELM  

Assumptions and particularities  

The  ELM  portfolio  consists  of  several  mandates  (two  mandates  under  the  2014-2020  MFF, 
established by one European Parliament and Council Decision, which have been extended to 
end 2021 plus other “legacy” mandates dating back from earlier MFF periods). All underlying 
operations relate to debt products, most of them with governments as counterparties. There is 
also  a  limited  number  of  private  entities’  exposures  (i.e.  the  ERI46  Private Mandate  and  the 
political  risk  guarantee  under  the  general  mandate).  Some  operations  only  benefit  from 
‘political  risk  cover’  (approximately  6.6%  of  the  outstanding  disbursed  portfolio  as  of  end-
2022) whereas most of them benefit from a ‘comprehensive risk cover’.  

For  the  purpose  of  the  present  analysis,  political  risk  has  been  treated  as  if  it  were 
comprehensive risk, which is a conservative assumption.  

For many years, the provisioning for the ELM was held in the Guarantee Fund for External 
Actions (GFEA), which also held the provisioning for MFA and non-EU Euratom loans. As 
of August 2021, this Guarantee Fund has been transferred to the Common Provisioning Fund 
(CPF)  and  constitutes  a  separate  compartment  thereof.  In  principle,  the  provisioning  is 
fungible between ELM, MFA and non-EU Euratom loans.  

45   Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing the 
Neighbourhood,  Development  and  International  Cooperation  Instrument  –  Global  Europe,  amending  and 
repealing  Decision  No  466/2014/EU  of  the  European  Parliament  and  of  the  Council  and  repealing 
Regulation  (EU)  2017/1601  of  the  European  Parliament  and  of  the  Council  and  Council  Regulation  (EC, 
Euratom) No 480/2009 (Text with EEA relevance). 

46   Economic  Resilience  Initiative,  supported  under  the  ELM  2014-20  further  on  the  basis  of  Decision  (EU) 

2018/412, amending the original Decision No 466/2014/EU. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 91 

 
3.3 Analysis for budgetary guarantee programmes 

Assessment of the adequate provisioning of the GFEA 
At  31  December  2022,  the  GFEA  CPF  compartment47  stood  at  EUR  2,709,844,436.  This 
results in a de facto provisioning rate of 7.0%. However, it should be noted that, in line with 
Art. 5 and Art. 6 of the GFEA Regulation48, additional provisioning has already been foreseen 
in  the  EU  draft  budget,  using  a  smoothing  mechanism,  so  as  to  approach  the  target 
provisioning rate of 9%  as defined in  Article 3 of that Regulation.  The current  value of the 
GFEA  compartment  also  takes  into  account  unrealised  valuation  losses49  and  further 
provisioning  for  ELM  exposures  towards  Ukraine  will  be  ringfenced  in  a  new  CPF 
compartment (cf infra). 

When the assets to be held in the GFEA CPF compartment are projected over the next 5 years 
further  provisioning  replenishment  until  2027  are  not  excluded.  Using  the  replenishment 
mechanism of the GFEA Regulation, the corresponding amounts will depend on the calls that 
will be made on the ELM guarantee and for Euratom and/or MFA loans in the following years 
and  the  net  evolution  of  disbursements/reimbursements  as  the  instruments  covered  by  the 
GFEA  are  in  a  phasing-out  stage.  In  any  case,  such  annual  provisioning  replenishments  are 
not abnormal for the GFEA compartment.  

For  the  sake  of  completeness,  it  should  be  noted  that  the  GFEA  compartment  of  the  CPF 
follows  a  slightly  different  logic  than  e.g.  the  EFSI  or  the  EFSD  compartments.  Indeed, 
historically  no  ex-ante  risk  appetite  in  the  form  of  a  confidence  level  has  been  set  for  the 
provisioning to which the current de facto one could be compared.  

Assessment of the adequate provisioning of the ELM  

For the purpose of this analysis, the assumption is that the available provisioning for ELM is 
identical to the pro-rata part of its CPF compartment (with as allocation key the size of ELM 
outstanding disbursed liabilities as compared to total GFEA outstanding disbursed liabilities).  

At 31 December 2022, the ELM pro-rata part of the GFEA compartment50 amounted to EUR 
2,118,601,769.  This  figure  is  to  be  compared  with  the  “total  available  guaranteed  amount 
signed  with  Counterparts  and  disbursed”  (i.e.  the  ‘amounts  in  the  guarantee  agreements 
signed, disbursed and  effective minus all net  payments that reduce the guarantee cap minus 

47   Including the cash buffer held at the central treasury and excluding provisioning replenishments planned to 

be paid into the GFEA compartment during 2023 and 2024. 

48   COUNCIL REGULATION (EC, EURATOM) No 480/2009 of 25 May 2009 establishing a Guarantee Fund 

for external actions.  
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02009R0480-20180408&from=EN  

49   That stand at EUR 251 million.   

50   Including the cash buffer held at the central treasury and excluding provisioning replenishments planned to 
be sourced from the 2021 EU budget but only committed and paid into the GFEA compartment during 2022. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 92 

 
 
 
3.4 Financial assistance methodology 

guarantee released’) of EUR 30,357,294,89751 at 31 December 2022. By comparing those two 
figures, the de facto provisioning rate is 7.0%.  

Assessment  of  the  riskiness  of  the  guaranteed  operations  as  compared  to  the  ex-ante  risk 
appetite of the Commission for this programme 

The ELM programme, across its several mandates, has been experiencing a deterioration in its 
main  credit  risk  metrics.  The  amounts  of  defaulting  disbursed  operations  increased  which 
triggered  a  higher  number  of  guarantee  calls  (EUR  194  million  called  by  EIB  throughout 
2022).  

The results of the risk analysis  performed on the internal risk model  52 indicate a Value-At-
Risk amount of EUR 3,863,044,953 at the 90% confidence level over the full lifetime of the 
guarantee. This exceeds the corresponding provisioning in the CPF compartment (cf supra). It 
should however be kept in mind that, as already mentioned above, the GFEA compartment is 
topped  up  on  a  yearly  basis  in  case  the  provisioning  falls  below  9%  of  the  outstanding 
disbursed amounts guaranteed. In this regard, it should be recalled that the ELM consists of 
amortising loans with long repayment periods, where losses tend to crystallise in a non-abrupt 
manner. Furthermore, the provisioning for repurposed loans to support Ukraine53 is set at 70% 
and will be paid into a ring-fenced provisioning compartment over the coming years. 

Finally, it should also be mentioned that the Commission – for this older guarantee - has not 
defined an ex-ante risk appetite in the form of a confidence level of the provisioning for the 
lifetime of the operations.  

3.4 FINANCIAL ASSISTANCE METHODOLOGY  

At  present,  the  Commission  is  developing  its  credit  risk  modelling  capacities  for  sovereign 
exposures.  For  the  time  being,  the  analysis  below  is  in  essence  based  on  expert  judgment 
taking  into  account  a  number  of  qualitative  and  quantitative  elements  such  as  payment 
defaults and diversification effects etc. 

3.5 ANALYSIS FOR FINANCIAL ASSISTANCE PROGRAMMES 

3.5.1 MACRO-FINANCIAL ASSISTANCE (MFA) AND EURATOM OPERATIONS  

The  Macro-Financial  Assistance  (“MFA”)  programmes  represent  the  bulk  of  the  financial 
assistance  programmes  with  total  MFA  loans  at  the  end  of  2022  amounting  to  EUR  14.96 

51   The EUR 1.054 bn of disbursements to Ukraine have been included. This Ukraine exposure will be backed 

from a separate compartment (at the rate of 70%). 

52   The analysis is performed on “Total amount of EU risk for operations signed with Counterparts”, defined as 
‘the exposure of the EU guarantee in terms of operations that are covered and still active.’. It has to be noted 
that the output of the modelling becomes less reliable in case of big, concentrated positions. 

53   EUR 1.6 billion out of which EUR 1 billion disbursed at end-2022. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 93 

 
3.5 Analysis for financial assistance programmes 

billion. Euratom loans to non-Member States (EUR 300 million at the end of 2022) represent 
the remainder of the financial assistance programmes. 

The  MFA  and  Euratom  loans  are  housed  in  different  compartments  of  the  Common 
Provisioning Fund.  

- 

- 

- 

the legacy exposures (EUR 7.7 billion of MFAs and EUR 300 million of Euratom 
loans) are part of the GFEA compartment; 
the new MFA loans (EUR 1.2 billion) committed in 2022 are in the EFSD+ Post-
2020 MFA; 
the exceptional MFA loans to Ukraine of EUR 6 billion (Exceptional MFA I and 
MFA  II)  are  in  a  newly  created  separate  compartment  given  their  special  set-up. 
Pro memoria, for this exceptional MFA loans package to Ukraine, a coverage rate 
of  70%  is  foreseen:  9%  paid-in  provisioning  from  the  EU  budget  and  61%  of 
callable guarantees from Member States. 

DG  ECFIN  –  in  its  capacity  of  Authorizing  Officer  of  MFA  loans  -  analysed  in  detail  the 
economic  situation  of  the  MFA  beneficiaries.  When  making  this  assessment,  DG  ECFIN 
distinguished between countries in the Eastern Neighbourhood, the Southern Neighbourhood 
and the Western Balkans. This analysis concluded that in 2022 most countries reported a solid 
post-COVID  recovery  but  Russia’s  war  of  aggression  against  Ukraine  in  2022  has  sizeably 
increased economic uncertainty, aggravated the energy crisis and contributed to high food and 
energy inflation in the region. 

The analysis of the Authorising Officer confirmed that there are currently no elements to put 
into question the overall 9% target provisioning rate 54 (which is also set in the NDICI Global 
Europe Regulation)55, based on several arguments including in particular:  

-  Absence  of  payment  default  in  the  reporting  year  2022,  and  none  in  previous  years 

either;  

-  The geographical exposure of MFA loans; 

-  The MFA programmes’ direct link to and contingency on an existing disbursing IMF 
programme  (with  the  exception  of  the  three  2022  Ukrainian  operations),  and 
satisfactory  track  record  on  its  implementation,  which  should  ensure  the  financial 
viability of the third country and, thus, the eventual repayment of the Union funds; 

-  The fact that the maturities of the loans related to the countries benefitting from MFA 

are reasonably well-spread over the current MFF and the subsequent ones. 

54   Article  31(5)  of  the  NDICI  Global  Europe  Regulation  also  refers  to  a  9%  provisioning  rate  for  macro-

financial assistance. 

55   Mutatis mutandis, the same argumentation also applies for the Euratom exposures to non-Member States. 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 94 

 
3.5 Analysis for financial assistance programmes 

3.5.2 OVERVIEW OF EU EXPOSURES TO UKRAINE 

EU financial support to Ukraine has continued in 2023. At the date of 31 May 2023 Ukraine 
has received additional  EUR  7.5  billion disbursed from the EUR 18 billion  MFA+ package 
adopted by the European Parliament and the Council on 14 December 2022. At the time of 
writing,  the  direct  exposures  to  Ukraine  amounted  to  EUR  19.4  billion,  of  which  EUR  4.7 
billion (legacy MFA and Euratom loans) backed by the GFEA compartment, EUR 1.2 billion 
(Emergency MFA) by the EFSD+ Post-2020 MFA, EUR 6 billion (Exceptional MFA I and II) 
by the exceptional MFA compartment, and EUR 7.5 billion (MFA+ loans) by the EU budget 
‘headroom’ which implies no provisioning in the CPF. At the same time, at the end of 2022, 
the  portfolio  covered  under  the  ELM  Mandate  also  contained  legacy  disbursed  Ukrainian 
loans  of  EUR  2.5  billion.  Additional  EUR  1.1  billion  of  ELM  exposures  (the  so  called 
‘repurposed  loans’)  were  backed  by  a  dedicated  compartment  of  the  CPF  (with  a  70% 
applicable  provisioning  rate).  Finally,  an  amount  of  EUR  120  million  was  outstanding  with 
regard to operations carried out under the EFSD guarantee.  

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 95 

 
 
3. GLOSSARY 

ABS 

Asset Backed Security 

AECID 

Agencia Española de Cooperación Internacional para el Desarrollo 

AEGF  

African Energy Guarantee Facility  

AFD  

Agence Française de Développement  

AgreenFi  

Agricultural and Rural Finance Guarantee Programme  

AIP 

BoP 

CCS 

African Investment Platform  

Balance of Payment 

Cultural and Creative Sector 

CDP  

Cassa Depositi e Prestiti  

COFIDES  

Compañía Española de Financiación del Desarrollo  

COSME 

The EU programme for the Competitiveness of SMEs 

COVAX 

COVID-19 Vaccines Global Access 

CPF 

Common Provisioning Fund 

DFI(s) 

Development Financial Institution(s) 

EaSI 

EU Programme for Employment and Social Innovation 

EBRD 

European Bank for Reconstruction and Development 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 96 

 
 
3.5 Analysis for financial assistance programmes 

EC 

ECP 

EEAS 

EFSD 

EFSI 

European Commission 

European Climate Platform 

European External Action Service 

European Fund for Sustainable Development 

European Fund for Strategic Investments 

EFSI GF 

Guarantee Fund of the European Fund for Strategic Investments 

EFSM 

European Financial Stabilisation Mechanism 

EGRE NS 

European Guarantee for Renewable Energy (Non-Sovereign) 

EIB 

EIF 

ELM 

ERI 

European Investment Bank 

European Investment Fund 

External Lending Mandate 

Economic Resilience Initiative 

ERI TA 

Economic Resilience Initiative Technical Assistance 

ESIF 

European Structural and Investment Funds 

ESIF-EAFRD 

European Structural  and Investment  Funds -  European Agricultural 
Fund for Rural Development 

EU 

EUR 

European Union 

Euro 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 97 

3.5 Analysis for financial assistance programmes 

EURATOM 

European Atomic Energy Community 

EURIBOR 

Euro Interbank Offered Rate 

FI 

FLP 

FMO 

FR 

GDP  

Financial Instrument 

First Loss Piece  

De Nederlandse Financierings-maatschappij voor 
Ontwikkelingslanden 

Financial Regulation  

Gross Domestic Product 

GFEA 

Guarantee Fund for External Actions 

GREG 

Guarantee Risk Experts Group 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 98 

GTAG 

Guarantee Technical Assessment Group 

IFC 

IIW 

International Finance Corporation 

Infrastructure and Innovation Window 

InclusiFI 

The EU Programme for Financial Inclusion  

InnovFin 

EU Finance for innovators 

KfW 

LGF 

MFA 

MFF 

Kreditanstalt für Wiederaufbau  

Loan Guarantee Facility 

Macro-Financial Assistance 

Multiannual Financial Framework 

MSME 

Micro-, Small and Medium-sized Enterprises 

NDICI 

Neighbourhood,  Development  and 
Instrument 

International  Cooperation 

NGEU 

NextGenerationEU 

NIP 

NPB 

PC 

PIP 

RDI 

Neighbourhood Investment Platform 

National Promotional Bank 

Private Credit 

Proposed Investment Programme 

Research, Development and Innovation 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 99 

 
3.5 Analysis for financial assistance programmes 

RECIDE 

Resilient City Development 

RRF 

RRT 

SLP 

SME 

Recovery and Resilience Facility 

Residual Risk Tranche 

Second Loss Piece 

Small and Medium-sized Enterprise 

SMEG 

Small and Medium-Sized Enterprise Guarantee 

SMEW 

Small and Medium-sized Enterprise Window 

SURE 

Support to Mitigate Unemployment Risks in an Emergency 

TA 

UN 

Technical Assistance 

United Nations 

USD 

United States Dollar 

Budgetary Guarantees, Common Provisioning Fund and Contingent Liabilities / 100 

 
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