COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS ANNUAL ACCOUNTS OF THE EUROPEAN DEVELOPMENT FUND FOR THE FINANCIAL YEAR 2023
Date: 2024-06-25
Institutions: Directorate-General for Budget, European Commission
Subjects: European Development Fund, activity report, balance sheet, closing of accounts, consolidated account, implementation of the budget

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 25.6.2024  COM(2024) 273 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS ANNUAL ACCOUNTS OF THE EUROPEAN DEVELOPMENT FUND FOR THE FINANCIAL YEAR 2023  
 
 
Annual accounts of the European Development Fund 2023 

CONTENTS 

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

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

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

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

FINANCIAL STATEMENTS OF THE EU TRUST FUNDS CONSOLIDATED IN EDF ................... 52 

FINANCIAL STATEMENTS OF THE BÊKOU EU TRUST FUND 2023 .................................... 53 

FINANCIAL STATEMENTS OF THE EUTF AFRICA 2023 ................................................... 61 

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE EU TRUST FUNDS .......... 69 

EDF REPORT ON FINANCIAL IMPLEMENTATION ............................................................ 74 

1 

 
 
 
 
Annual accounts of the European Development Fund 2023 

CERTIFICATION OF THE ACCOUNTS 

The  annual  accounts  of  the  European  Development  Fund  for  the  year  2023  have  been  prepared  in 
accordance with Title X of the Financial Regulation of the 11th European Development Fund and with the 
accounting principles, rules and methods set out in the notes to the financial statements. 

I  acknowledge  my  responsibility  for  the  preparation  and  presentation  of  the  annual  accounts  of  the 
European  Development  Fund  in  accordance  with  Article  18  of  the  Financial  Regulation  of  the  11th 
European Development Fund. 

I  have  obtained  from  the  authorising  officer  and  from  the  EIB,  who  guarantee  its  reliability,  all  the 
information  necessary  for  the  production  of  the  accounts  that  show  the  European  Development  Fund's 
assets and liabilities and the budgetary implementation. 

I hereby certify that based on this information, and on such checks as I deemed necessary to sign off the 
accounts, I have  a reasonable assurance  that the  accounts present a true and fair view of the financial 
position of the European Development Fund in all material aspects. 

Rosa ALDEA BUSQUETS 

Accounting Officer 

      19 June 2024 

2 

 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

IMPLEMENTING AND ACCOUNTING FOR 
THE EDF RESOURCES 

1.  BACKGROUND 

The European Union (hereinafter referred to as the ‘EU’) has cooperative relations with a large number of 
developing countries. The main objective is to promote economic, social and environmental development, 
with  the  primary  aim  of  reducing  and  eradicating  poverty  in  the  long-term  by  providing  beneficiary 
countries with development aid and  technical assistance. To achieve this, the EU  draws  up, jointly with 
the  partner  countries,  cooperation  strategies  and  mobilises  the  financial  resources  to  implement  them. 
These EU resources allocated to development cooperation come from three sources: 

- 
- 
- 

The EU budget; 
The European Development Fund; and 
The European Investment Bank. 

The  EDF  is  not  funded  by  the  EU  budget.  It  was  established  by  an  Internal  Agreement  of  the 
Representatives  of  the  Member  States,  sitting  within  the  Council,  and  is  managed  by  a  specific 
committee. The European Commission (hereinafter referred to as the ‘Commission’) is responsible for the 
financial  implementation  of  the  operations  carried  out  with  EDF  resources.  The  European  Investment 
Bank (hereinafter referred to as the ‘EIB’) manages the Investment Facility. 

The EDF is made up from individual EDFs. Each EDF is concluded for a period of around five years and is 
governed by its own Financial Regulation, which requires the preparation of specific financial statements. 
In  addition,  these  financial  statements  are  aggregated  so  as  to  provide  a  global  view  of  the  financial 
situation of the resources for which the Commission is responsible. 

Up until 2021, when the  11th European Development Fund reached its final stage as the sunset clause 
came into effect on 31 December 2020, the European Development Fund (hereinafter referred to as the 
‘EDF’) was the main instrument for providing aid for development cooperation to the African, Caribbean 
and  Pacific  (hereinafter  referred  to  as  the  ‘ACP’)  States  and  Overseas  Countries  and  Territories 
(hereinafter referred to as the ‘OCTs’). However, from 2021 onwards EU cooperation with ACP countries 
and OCTs is funded through the EU budget. 

Within  the  framework  of  the  ACP-EU  Partnership  Agreement,  the  Investment  Facility  was  established, 
managed  by  the  EIB,  and  used  to  support  private  sector  development  in  the  ACP  States  by  financing 
essentially – but not exclusively – private investments. The Facility is designed as a renewable fund, so 
that  loan  repayments  can  be  reinvested  in  other  operations,  thus  resulting  in  a  self-renewing  and 
financially  independent  facility.  As  the  Investment  Facility  is  not  managed  by  the  Commission,  it  is  not 
consolidated in the first part of the annual accounts – the financial statements of the EDF and the related 
report on financial implementation. The financial statements of the Investment Facility, prepared by the 
EIB,  are  included  as  a  separate  part  of  the  annual  accounts  (part  II)  to  provide  a  full  picture  of  the 
development aid of the EDF. 

2.  HOW IS THE EDF FUNDED? 

The  Council  of  2  December  2013  adopted  the  Regulation  1311/2013  laying  down  the  multiannual 
financial framework for 2014-2020. In this context, it was decided that geographical cooperation with the 
ACP  States  would  not  be  integrated  into  the  EU  budget  but  would  continue  to  be  funded  through  the 
existing intergovernmental EDF. 

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

3 

 
 
Annual accounts of the European Development Fund 2023 

The  EDF  resources  are  "ad  hoc"  contributions  from  the  EU  Member  States.  Approximately  every  five 
years, Member State representatives met at intergovernmental level and decided on an overall amount to 
be allocated to the fund and to oversee its implementation.  

The  Commission  manages  the  EDF  in  accordance  with  the  Union  policy  on  development  cooperation. 
Since  Member  States  have  their  own  development  and  aid  policies  in  parallel  to  the  Union  policy,  the 
Member States must coordinate their policies with the EU to ensure they are complementary. 

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

3. 

EDF ACTIVITIES AFTER 31 DECEMBER 2020 

While the 8th EDF was officially closed in 2021, with the closure of all contracts and financial decisions, 
this closure was not fully reflected in the 2021 accounts as several recovery orders, including litigations 
cases,  were  still  outstanding.  On  31  December  2022  the  EDF  had  net  assets  of  EUR  180  million.  The 
capital and reserves were used to cover the cumulated losses of the 8th EDF with the remaining balances 
being transferred to the 9th  EDF  in accordance  with the provisions of  Part  3 of the  financial  regulation1 
applicable to the 9th EDF. 

The  Commission  is  currently  working  towards  the  closure  of  the  9th  EDF.  Currently  there  are  still  10 
ongoing contracts that should, in principle, come to an end in 2024. These contracts, funded under the 
9th EDF, continue to be active and will reach their conclusion within the specified timeframe, contributing 
to the finalization of activities and projects associated with the 9th EDF. The full closure of the 9th EDF 
can  only  be  accomplished  once  all  contracts  come  to  an  end  and  following  the  completion  of  their 
evaluations and audits.  

The closure of the 10th EDF is progressing well with 96.1% of its contracts already closed. However, the 
operational and financial closure of the remaining ones will take some time. The financial closure requires 
the launch and completion of all necessary evaluations, audits and recoveries. 

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

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

4. 

YEAR-END REPORTING 

4.1.  ANNUAL ACCOUNTS 

In  accordance  with  Article  18(3)  of  the  EDF  Financial  Regulation,  the  EDF  financial  statements  are 
prepared  based  on  accrual-based  accounting  rules  that  themselves  are  based  on  International  Public 
Sector  Accounting  Standards  (IPSAS).  These  accounting  rules  adopted  by  the  Accounting  Officer  of  the 
Commission are applied by all the Institutions and bodies of the EU in order to establish a uniform set of 
rules for accounting, valuation and presentation of the accounts with a view to harmonising the process 
for  drawing  up  the  financial  statements.  These  EU  accounting  rules  are  also  applied  by  the  EDF  while 
taking into account the specific nature of its activities.  

1 OJ L 83, 1.4.2003, p. 27. 

4 

 
 
 
Annual accounts of the European Development Fund 2023 

The preparation of the EDF annual accounts is entrusted to the Commission's Accounting Officer who is 
the Accounting Officer of the EDF and ensures that the annual accounts of the EDF present a true and fair 
view of the financial position of the EDF. 

The annual accounts are presented as follows: 

Part I: Funds managed by the Commission 

(i)  Financial statements and explanatory notes of the EDF 

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

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

(iv)  Report on financial implementation of the EDF 

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

(i)  Financial statements of the Investment Facility 

The part 'Financial statements of the European trust funds consolidated in the EDF' includes the financial 
statements  of  the  two  trust  funds  created  under  the  EDF:  The  Bêkou  EU  Trust  Fund  (see  section 
'Financial  statements  of  the  Bêkou  EU  Trust  Fund')  and  the  EU  Trust  Fund  for  Africa  (see  section 
'Financial  statements  of  EU  Trust  Fund  for  Africa').  The  trust  funds  individual  financial  statements  are 
prepared  under  the  responsibility  of  the  Commission’s  Accounting  Officer  and  are  subject  to  external 
audit  carried  out  by  a  private  auditor.  The  trust  funds'  figures  included  in  these  annual  accounts  are 
provisional.  

The EDF annual accounts must be adopted by the Commission no later than 31 July of the year following 
the balance sheet date and presented to the European Parliament and to the Council for discharge. 

5.  AUDIT AND DISCHARGE 

5.1.  AUDIT 

The EDF annual accounts are audited by its external auditor, the European Court of Auditors (hereinafter 
referred to as the ‘ECA’), which draws up an annual report for the European Parliament and the Council. 

5.2.  DISCHARGE 

The  final  control  of  the  financial  implementation  of  the  EDF  resources  for  a  given  financial  year  is  the 
discharge.  Following  the  audit  and  finalisation  of  the  annual  accounts,  it  falls  to  the  Council  to 
recommend,  and  then  to  the  European  Parliament  to  decide,  whether  to  grant  discharge  to  the 
Commission for the financial implementation of the EDF resources for a given financial year. This decision 
is  based  on  a  review  of  the  accounts  and  the  annual  report  of  the  ECA  (which  includes  an  official 
statement of assurance) and replies of the Commission to questions and further information requests of 
the discharge authority. 

5 

 
 
Annual accounts of the European Development Fund 2023 

HIGHLIGHTS OF FINANCIAL 
IMPLEMENTATION 2023 

10th and 11th EDF budget implementation 2008-2023

7.000

6.000

5.000

4.000

3.000

2.000

1.000

0

(1.000)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Commitments

Contracts

Payments

* Net amount, only 10th & 11th EDF 

Budget implementation 

In  2023,  individual  commitments  and  net  payments  of  EUR  720  million  and  EUR  2,053  million, 
respectively, were made under the 10th and 11th EDF. The total amount of gross payments for the EDF 
amounted  to  EUR  2,103.48  million,  which  represents  105.17%  of  the  target  of  EUR  2,000  million 
communicated to the Member States. 

In 2022, the Council unanimously decided to reuse EUR 600 million of de-committed funds from the 10th 
and 11th EDF to finance actions addressing the food security crisis and economic shock in ACP countries 
following  Russia’s  war  of  aggression  against  Ukraine.  The  Commission  had  already  committed  this  EUR 
600 million and disbursed EUR 221 million in 2022, followed by EUR 87 million in 2023. 

Impact of the activities in the financial statements 

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

• 

Pre-financing (see note 2.2): a decrease of EUR 356 million largely as a result of fewer advances 
being paid out. This reduction is mainly due to the decline in the number of new contracts signed 
since 2021. In 2021, new contracts amounted to EUR 2 118 million, which noticeably decreased 
to EUR 853 million in 2022. In 2023, new contracts remained at this level, being EUR 860 million, 
as a result of the Council decision to redirect unused funds from the 10th and 11th EDF to aid ACP 
countries in response to Russia’s war of aggression againt Ukraine;  

•  Cash  and  Cash  equivalents  (see  note  2.5):  a  decrease  of  EUR  426  million  primarly  due  to  the 
reduction in contributions from donors, which decreased from EUR 2 500 million in 2022 to EUR 1 
800 million in 2023; 

•  Accrued Charges (see note 2.8): a decrease of EUR 147 million as a result of the decrease in the 
number of open contracts at the end of the year for which no cost claims were validated by year-
end; and 

•  Operating expenses (see note 3.4): an overall decrease in operating expenses of EUR 608 million 
mainly as a result of the decrease in expenses relating to programmeable aid, Intra ACP projects 
and contributions to the Trust Funds. Despite this, expenses relating to emergency aid increased 
as decommitted funds from the 10th and 11th EDF were reused to combat the negative effects of 
the Russian war of aggression against Ukraine in the ACP countries.   

6 

 
 
 
 
Annual accounts of the European Development Fund 2023 

EUROPEAN DEVELOPMENT FUND 
FINANCIAL YEAR 2023 

FUNDS MANAGED BY THE EUROPEAN 
COMMISSION 

7 

 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

CONTENTS 

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

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

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

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

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

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

STATEMENT OF FINANCIAL PERFORMANCE BY EDF ...................................................... 16 

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

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

FINANCIAL STATEMENTS OF THE EU TRUST FUNDS CONSOLIDATED IN EDF .......... 52 

FINANCIAL STATEMENTS OF THE BÊKOU EU TRUST FUND 2023 ........................... 53 

BALANCE SHEET ...................................................................................................... 58 

STATEMENT OF FINANCIAL PERFORMANCE ................................................................. 59 

CASHFLOW STATEMENT ............................................................................................ 60 

FINANCIAL STATEMENTS OF THE EUTF AFRICA 2023 .......................................... 61 

BALANCE SHEET ...................................................................................................... 66 

STATEMENT OF FINANCIAL PERFORMANCE ................................................................. 67 

CASHFLOW STATEMENT ............................................................................................ 68 

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE EU TRUST FUNDS . 69 

CONSOLIDATED BALANCE SHEET ............................................................................... 70 

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE .......................................... 71 

CONSOLIDATED CASH FLOW STATEMENT ................................................................... 72 

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS ........................................... 73 

EDF REPORT ON FINANCIAL IMPLEMENTATION .................................................. 74 

8 

 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

FINANCIAL STATEMENTS OF THE EDF 

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

9 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

EDF BALANCE SHEET 

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

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

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Financial liabilities 

CURRENT LIABILITIES 
Payables 
Accrued charges  

TOTAL LIABILITIES 

NET ASSETS 

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

Note 

EUR million 
31.12.2023  31.12.2022 

2.1 
2.2 
2.3 
2.4 

2.1 
2.2 
2.4 
2.5 

2.6 

2.7 
2.8 

2.9 
2.9 

 87 
 574 
 216 
 5 
 883 

 3 
 954 
 24 
 601 
1 583 
2 466 

 67 
 488 
 254 
 7 
 816 

 3 
1 396 
 27 
1 027 
2 454 
3 270 

 (5) 
 (5) 

 (7) 
 (7) 

 (391) 
 (984) 
(1 375) 
(1 380) 

 (426) 
(1 131) 
(1 558) 
(1 565) 

1 086 

1 705 

54 566 
2 252 
(53 484) 
(2 249) 
1 086 

65 100 
2 252 
(62 834) 
(2 813) 
1 705 

10 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

EDF STATEMENT OF FINANCIAL PERFORMANCE 

REVENUE 
Revenue from non-exchange transactions 
Recovery activities 

Revenue from exchange transactions 
Financial revenue 
Other revenue 

Total Revenue 
EXPENSES 

Implemented by other entities 
Aid instruments 
Co-financing expenses 
Finance costs 
Other expenses 
Total Expenses 

ECONOMIC RESULT OF THE YEAR 

Note 

2023 

EUR million 
2022 

3.1 

3.2 
3.2 

3.3 
3.4 
3.5 
3.6 
3.7 

 14 
 14 

 9 
 43 
 52 
 65 

 18 
 18 

 2 
 77 
 80 
 98 

 (3) 
(2 181) 
 (8) 
 (7) 
 (116) 
(2 315) 

 (1) 
(2 789) 
 4 
 (6) 
 (119) 
(2 911) 

(2 249) 

(2 813) 

11 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

EDF CASHFLOW STATEMENT 

Economic result of the year 
Operating activities 
Capital increase - contributions (net) 
(Increase)/decrease in trust funds contributions 
(Increase)/decrease in pre-financing 
(Increase)/decrease in exchange receivables and non-exchange recoverables 
Increase/(decrease) in provisions 
Increase/(decrease) in financial liabilities 
Increase/(decrease) in payables 
Increase/(decrease) in accrued charges and deferred income 
Other non-cash movements 
Investing activities 
(Increase)/decrease in non-derivative financial assets at fair value through 
surplus or deficit*  
NET CASHFLOW 

Note 

EUR 
million 
2022 
(2 249)  (2 813) 

2023 

1 630 
 37 
 356 
 4 
 2 
 (3) 
 (35) 
 (148) 
– 

2 458 
 128 
 239 

 5 
 1 
 (1) 
 (75) 
 123 
– 

 (20) 
 (426) 

 (31) 
 34 

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

2.5 
2.5 

 (426) 
1 027 
 601 

 34 
 994 
1 027 

12 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EDF STATEMENT OF CHANGES IN NET ASSETS 

Annual accounts of the European Development Fund 2023 

Fund 
capital - 
active 
EDFs (A) 

Uncalled 
funds - 
active 
EDFs (B) 

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

Cumulative 
Reserves (D) 

 72 998 
  (43) 
– 
 72 955 
  (185) 
 (12 164) 
– 
 60 607 

 10 355 
 (2 500) 
– 
 7 855 
 (1 815) 

– 
 6 040 

 62 643 
 2 457 
– 
 65 100 
 1 630 
 (12 164) 
– 
 54 566 

 (62 834) 
– 
 (2 813) 
 (65 647) 
– 
 12 164 
 (2 249) 
 (55 732) 

Called fund 
capital from 
closed EDFs 
carried forward 
(E) 

EUR million 

Fair value 
reserve (F) 

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

 2 252 
– 
– 
 2 252 
– 
– 
– 
 2 252 

– 

– 

– 

 2 061 
 2 457 
 (2 813) 
 1 705 
 1 630 
  (0) 
 (2 249) 
 1 086 

BALANCE AS AT 31.12.2021 
Capital increase -  contributions 
Economic result of the year 
BALANCE AS AT 31.12.2022 
Capital increase - contributions 
Closure of the 8th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2023 

13 

 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
BALANCE SHEET BY EDF 

Annual accounts of the European Development Fund 2023 

Note 

Eighth 
EDF 

Ninth 
EDF 

31.12.2023 

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

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

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Financial liabilities 

CURRENT LIABILITIES 
Payables 
Accrued charges  

TOTAL LIABILITIES 

2.1 
2.2 
2.3 
2.4 

2.1 
2.2 

2.4 

2.5 

2.6 

2.7 
2.8 

– 
– 
– 
– 
– 

– 
– 

– 

– 
– 
– 

– 

– 
– 

– 
– 
– 

– 

11th 
EDF 

 73 
 127 
 176 
 5 
  381 

 3 
 835 

 14 

Total 

 87 
 574 
 216 
 5 
  883 

 3 
 954 

 24 

Eighth 
EDF 

31.12.2022 
Ninth 
EDF 

10th 
EDF 

– 
– 
– 
– 
– 

– 
 – 

– 

– 
– 
 31 
– 
  31 

– 
 14 

– 

 (1) 
 221 
 9 
– 
  229 

– 
 427 

 10 

11th 
EDF 

 67 
 267 
 213 
 7 
  555 

 3 
 954 

 16 

 (226) 
 601 
 1 229 

– 
 601 
 1 583 

 180 
– 
  180 

 (369) 
– 
  (355) 

 803 
– 
 1 240 

 (612) 
1 027 
 1 389 

EUR million 

Total 

 67 
 488 
 254 
 7 
  816 

 3 
1 396 

 27 

– 
1 027 
 2 454 

10th 
EDF 

 14 
 447 
 9 
– 
  470 

– 
 113 

 10 

 426 
– 
  549 

– 
– 
 31 
– 
  31 

– 
 5 

– 

 (200) 
– 
  (195) 

  (163) 

 1 020 

 1 610 

 2 466 

  180 

  (324) 

 1 469 

 1 945 

 3 270 

– 
– 

– 
– 
– 

– 
– 

 (5) 
  (5) 

 (63) 
 (129) 
  (192) 

 (328) 
 (855) 
 (1 183) 

 (5) 
  (5) 
– 
 (391) 
 (984) 
 (1 375) 

– 

  (192) 

 (1 188) 

 (1 380) 

– 
– 

– 
– 
– 

– 

– 
– 

 (0) 
  (0) 

 (7) 
  (7) 

 (7) 
  (7) 

 (0) 
 (7) 
  (7) 

 (34) 
 (119) 
  (153) 

 (391) 
(1 006) 
 (1 397) 

 (426) 
(1 131) 
 (1 558) 

  (7) 

  (153) 

 (1 404) 

 (1 565) 

NET ASSETS 

– 

  (163) 

  827 

  422 

 1 086 

  180 

  (331) 

 1 315 

  541 

 1 705 

14 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Called fund capital - active EDFs 
Called fund capital from closed 
EDFs carried forward 
Called fund capital transfers 
between active EDFs 
Economic result carried forward 
from previous years 
Economic result of the year 

Note 

2.9 

2.9 

2.9 

Eighth 
EDF 
– 

– 

– 

– 

– 

Ninth 
EDF 
10 442 

2 252 

Annual accounts of the European Development Fund 2023 

31.12.2023 

10th 
EDF 
20 834 

11th 
EDF 
23 290 

Total 

54 566 

Eighth 
EDF 
12 164 

31.12.2022 
Ninth 
EDF 
10 450 

10th 
EDF 
20 960 

11th 
EDF 
21 527 

EUR million 

Total 

65 100 

– 

– 

2 252 

 627 

1 625 

– 

– 

2 252 

 (509) 

 (120) 

 628 

– 

(2 513) 

2 010 

 (38) 

 541 

- 

(12 350) 

(19 607) 

(21 527) 

(53 484) 

(10 098) 

(14 410) 

(19 325) 

(19 001) 

(62 834) 

 1 

 (280) 

(1 970) 

(2 249) 

– 

 (6) 

 (282) 

(2 526) 

(2 813) 

NET ASSETS 

– 

  (163) 

  827 

  422 

 1 086 

  180 

  (331) 

 1 315 

  541 

 1 705 

15 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENT OF FINANCIAL PERFORMANCE BY EDF 

Annual accounts of the European Development Fund 2023 

Note  Eighth 
EDF 

Ninth 
EDF 

11th 
EDF 

Total  Eighth 
EDF 

Ninth 
EDF 

2022 

10th 
EDF 

11th 
EDF 

EUR million 

Total 

REVENUE 
Revenue from non-exchange 
transactions 
Recovery activities 

Revenue from exchange transactions 
Financial revenue 
Other revenue 

Total revenue 
EXPENSES 
Implemented by other entities 
Aid instruments 
Co-financing expenses 
Finance costs 
Other expenses 
Total expenses 

ECONOMIC RESULT OF THE YEAR 

3.1 

3.2 
3.2 

3.3 
3.4 
3.5 
3.6 
3.7 

– 
– 

– 
– 
– 
– 

– 
– 
– 
– 
- 
– 

– 

2023 
10th 
EDF 

 2 
  2 

 (1) 
 4 
 4 
  5 

– 
– 

– 
2 
 2 
  2 

 12 
  12 

 10 
 37 
 46 
  58 

 14 
  14 

 9 
 43 
 52 
  65 

– 
 1 
– 
 1 
 (3) 

– 
 (276) 
– 
 (2) 
 (8) 

 (3) 
(2 181) 
 (8) 
 (7) 
 (116) 
  (1)    (286)   (2 028)   (2 315) 

 (3) 
(1 906) 
 (8) 
 (6) 
 (106) 

– 
– 

– 
– 
– 
– 

– 
– 
– 
 1 
– 
  1 

 (1) 
  (1) 

 (8) 
  (8) 

– 
 3 
 3 
  1 

 2 
 8 
 10 
  2 

 28 
  28 

 1 
 66 
 67 
  94 

 18 
  18 

 2 
 77 
 80 
  98 

– 
 (5) 
– 
 2 
 (5) 
  (7) 

– 
 (295) 
 22 
 (3) 
 (8) 

 (1) 
(2 489) 
 (18) 
 (5) 
 (107) 
  (284)   (2 620) 

 (1) 
(2 789) 
 4 
 (6) 
 (119) 
 (2 911) 

  1    (280)   (1 970)   (2 249) 

  1 

  (6) 

  (282)   (2 526) 

 (2 813) 

16 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENT OF CHANGES IN NET ASSETS BY EDF 

Annual accounts of the European Development Fund 2023 

Eighth EDF 

Fund capital 
- active 
EDFs (A) 

Uncalled funds 
- active EDFs 
(B) 

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

Cumulative 
Reserves (D) 

Called fund 
capital from 
closed EDFs 
carried 
forward (E) 

BALANCE AS AT 31.12.2021 
Transfers to/from the 10th EDF 
BALANCE AS AT 31.12.2022 
Closure of the 8th EDF 
BALANCE AS AT 31.12.2023 

 12 164 

 12 164 
(12 164) 
– 

– 

– 

– 

 12 164 
– 
 12 164 
(12 164) 
– 

 (10 098) 

  627 

 (10 098) 
10 098 
– 

  627 
 (627) 
– 

Called fund 
capital 
transfers 
between 
active EDFs 
(F) 
 (2 512) 
 (1) 
 (2 513) 
2 513 
– 

EUR million 

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

  181 
 (1) 
  180 
 (180) 
– 

EUR million 

Ninth EDF 

Fund 
capital - 
active 
EDFs (A) 

Uncalled 
funds - 
active EDFs 
(B) 

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

Cumulative 
Reserves (D) 

Called fund 
capital from 
closed EDFs 
carried 
forward (E) 

Called fund 
capital 
transfers 
between 
active 
EDFs (F) 

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

BALANCE AS AT 31.12.2021 
Transfers to/from the 10th EDF 
Transfers to/from the 10th EDF 
Refund to Member States 
Economic result of the year 
BALANCE AS AT 31.12.2022 
Capital increase - contributions 
Transfers to/from the 10th and 11th 
EDF 
Refund to Member States 
Closure of the 8th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2023 

 10 507 

 (43) 

 10 464 

 (22) 

  15 
– 

  15 
 (15) 

 10 442 

– 

 10 492 
– 
– 
 (43) 
– 
 10 450 
 15 
– 
 (22) 

– 
 10 442 

 (14 410) 

 1 625 

 2 018 

 (8) 

 (6) 
 (14 416) 

 1 625 

 2 010 

2 066 
 1 
 (12 348) 

 627 

 2 252 

 (4) 

(2 514) 
– 
  (509) 

  (274) 
– 
 (8) 
 (43) 
 (6) 
  (331) 
 15 
 (4) 
 (22) 
 179 
 1 
  (163) 

17 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

10th EDF 

BALANCE AS AT 31.12.2021 
Transfers to/from the Eighth and Ninth EDF 
Transfers to/from the 11th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2022 
Transfers to/from the Eighth and Ninth EDF 
Transfers to/from the 11th EDF 
Refund to Member States 
Economic result of the year 
BALANCE AS AT 31.12.2023 

Fund 
capital - 
active 
EDFs (A) 

 20 960 

 20 960 

 (126) 

 20 834 

Uncalled funds - 
active EDFs (B) 

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

Cumulative 
Reserves 
(D) 

EUR million   

Called fund 
capital from 
closed EDFs 
carried 
forward (E) 

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

– 

– 

– 
– 
– 
– 

 20 960 
– 
– 
– 
 20 960 
– 
– 
 (126) 
– 
 20 834 

 (19 324) 

 (282) 
 (19 606) 

 (280) 
 (19 886) 

  101 
 9 
 (148) 

  (38) 
 6 
 (87) 
– 
– 
  (120) 

 1 737   
 9   
 (148)   
 (282)   
 1 315   
 6   
 (87)   
 (126)   
 (280)   
  827   

EUR million 

11th EDF 

BALANCE AS AT 31.12.2021 
Capital increase - contributions 
Economic result of the year 
BALANCE AS AT 31.12.2022 
Capital increase - contributions 
Refund to Member States  
Economic result of the year 
BALANCE AS AT 31.12.2023 

Fund 
capital - 
active 
EDFs (A) 

 29 367 

 29 367 

 (36) 

Uncalled 
funds - active 
EDFs (B) 

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

Cumulative 
Reserves 
(D) 

Called fund 
capital from 
closed EDFs 
carried 
forward (E) 

Called fund 
capital 
transfers 
between 
active EDFs 
(F) 

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

 10 340 
(2 500) 

 7 840 
(1 800) 

 19 027 
2 500 
– 
 21 527 
1 800 
 (36) 
– 
 23 290 

 (19 002) 

(2 526) 
 (21 528) 

(1 970) 
 (23 498) 

– 

– 

– 

  394 
 148 
– 
  541 
 87 

– 
  628 

  419   
2 648   
(2 526)   
  541   
1 887   
 (36)   
(1 970)   
  422   

 29 331 

 6 040 

18 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

NOTES TO THE FINANCIAL STATEMENTS 
OF THE EDF 

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

19 

 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

1. 

SIGNIFICANT ACCOUNTING POLICIES 

1.1.  ACCOUNTING PRINCIPLES 

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

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

1.2.  BASIS OF PREPARATION 

1.2.1.  Reporting period 

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

1.2.2.  Currency and basis for conversion 

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

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

Euro exchange rates 

Currency 

31.12.2023 

31.12.2022 

Currency 

31.12.2023 

31.12.2022 

BGN 
CZK 
DKK 
GBP 
NOK 
HUF 

1.9558 
24.724 
7.4529 
0.86905 
11.2405 
382.8 

1.9558   
24.1160   
7.4365   
0.88693   
10.5138   
400.8700   

PLN 
RON 
SEK 
CHF 
JPY 
USD 

4.3395 
4.9756 
11.096 
0.926 
156.33 
1.105 

4.6808 
4.9495 
11.1218 
0.9847 
140.6600 
1.0666 

1.2.3.  Use of estimates 

In  accordance  with  IPSAS  and  generally  accepted  accounting  principles,  the  financial  statements 
necessarily  include  amounts  based  on  estimates  and  assumptions  by  management  based  on  the  most 
reliable information available. Significant estimates include, but are not limited to: amounts for employee 
benefit liabilities, financial risk of accounts receivable and the amounts disclosed in the notes concerning 
financial  instruments,  impairment  allowance  for  financial  assets  at  amortised  cost  and  for  financial 
guarantee  contract  liabilities,  accrued  revenue  and  charges,  provisions,  degree  of  impairment  of 
intangible  assets  and  property,  plant  and  equipment,  net  realisable  value  of  inventories,  contingent 
assets and liabilities. Actual results could differ from those estimates.  

20 

 
 
 
Annual accounts of the European Development Fund 2023 

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

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

New EAR which are effective for annual periods beginning on or after 1 January 2023 

There are no new EAR which became effective for annual periods beginning on or after 1 January 2023. 

New EAR adopted but not yet effective at 31 December 2023 

There are no new EAR adopted during 2023. 

1.3.  BALANCE SHEET 

1.3.1. 

Financial assets 

Classification at initial recognition 

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

(i)  Financial assets at amortised cost 

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

This category comprises: 

•  Cash and cash equivalents; 

• 

• 

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

Exchange receivables 

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

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

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

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

The entity does not hold such assets at year-end. 

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

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

21 

 
 
Annual accounts of the European Development Fund 2023 

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

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

Initial recognition and measurement 

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

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

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

Subsequent measurement 

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

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

Fair value at subsequent measurement 

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

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

Impairment of financial assets 

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

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

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

(a)  Receivables 

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

22 

 
 
 
Annual accounts of the European Development Fund 2023 

(b)  Cash and cash equivalents 

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

(c) 

Loans  

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

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

De-recognition 

Financial instruments are derecognised when the rights to receive cash flows from the investments have 
expired  or  the  entity  has  transferred  substantially  all  risks  and  rewards  of  ownership  to  another  party. 
Sales of financial assets through surplus or deficit are recognised on their trade-date. 

1.3.2. 

Pre-financing amounts 

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

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

1.3.3.  Receivables and recoverables 

The  EU  accounting  rules  require  separate  presentation  of  exchange  and  non-exchange  transactions.  To 
distinguish  between  the  two  categories,  the  term  ‘receivable’  is  reserved  for  exchange  transactions, 
whereas  for  non-exchange  transactions,  i.e.  when  the  EU  receives  value  from  another  entity  without 
directly giving approximately equal value in exchange, the term ‘recoverables’ is used (e.g. recoverables 
from Member States related to own resources). 

Receivables from exchange transactions meet the definition of financial instruments. The entity classified 
them as financial assets at amortised cost and measured them accordingly. 

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

23 

 
 
 
 
 
Annual accounts of the European Development Fund 2023 

1.3.4.  Cash and cash equivalents 

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

1.3.5. 

Payables 

Included  under  accounts  payable  are  both  amounts  related  to  exchange  transactions  such  as  the 
purchase of goods and services, and to non-exchange transactions e.g. to cost claims from beneficiaries, 
grants or other EU funding, or pre-financing received (see note 1.4.1).  

Where grants or other funding are provided to the beneficiaries, the cost claims are recorded as payables 
for  the  requested  amount,  at  the  moment  when  the  cost  claim  is  received.  Upon  verification  and 
acceptance of the eligible costs, the payables are valued at the accepted and eligible amount. 

Payables  arising  from  the  purchase  of  goods  and  services  are  recognised  at  invoice  reception  for  the 
original amount. The corresponding expenses are entered in the accounts when the supplies or services 
are delivered and accepted by the entity. 

1.3.6. 

Financial liabilities 

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

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

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

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

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

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

1.3.7.  Accrued and deferred revenue and charges 

Transactions and events are recognised in the financial statements in the period to which they relate. At 
year-end,  if  an  invoice  is  not  yet  issued  but  the  service  has  been  rendered,  or  the  supplies  have  been 
delivered  by  the  entity  or  a  contractual  agreement  exists  (e.g.  by  reference  to  a  contract),  an  accrued 
revenue will be recognised in the financial statements. In addition, at year-end, if an invoice is issued but 
the services have not yet been rendered or the goods supplied have not yet been delivered, the revenue 
will be deferred and recognised in the subsequent accounting period. 

24 

 
 
Annual accounts of the European Development Fund 2023 

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

1.4.  STATEMENT OF FINANCIAL PERFORMANCE 

1.4.1.  Revenue 

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

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

Revenue from non-exchange transactions 

Revenue  from  non-exchange  transactions  are  taxes  and  transfers,  because  the  transferor  provides 
resources to the recipient entity, without the recipient entity providing approximately equal value directly 
in  exchange.  Transfers  are  inflows  of  future  economic  benefits  or  service  potential  from  non-exchange 
transactions,  other  than  taxes.  For  the  EU  entities,  transfers  mostly  comprise  funds  received  from  the 
Commission  (e.g.  balancing  subsidy  to  the  traditional  agencies,  operating  subsidy  for  the  delegation 
agreements). 

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

Revenue from exchange transactions 

Revenue  from  the  sale  of  goods  and  services  is  recognised  when  the  significant  risk  and  rewards  of 
ownership of the goods are transferred to the purchaser. Revenue associated with a transaction involving 
the provision of services is recognised by reference to the stage of completion of the transaction at the 
reporting date. 

(a) 

Interest revenue and expense 

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

(b)  Revenue from dividends 

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

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

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

25 

 
 
 
Annual accounts of the European Development Fund 2023 

(d)  Revenue from financial guarantee contracts 

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

1.4.2.  Expenses 

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

Expenses  from  exchange  transactions  arising  from  the  purchase  of  goods  and  services  are  recognised 
when  the  supplies  are  delivered  and  accepted  by  the  entity.  They  are  valued  at  the  original  invoice 
amount.  Furthermore,  at  the  balance  sheet  date  expenses  related  to  the  service  delivered  during  the 
period  for  which  an  invoice  has  not  yet  been  received  or  accepted  are  recognised  in  the  statement  of 
financial performance.  

Expenses from non-exchange transactions relate to transfers to beneficiaries and can be of three types: 
entitlements, transfers under agreement and discretionary grants, contributions and donations. Transfers 
are recognised as expenses in the period during which the events giving rise to the transfer occurred, as 
long as the nature of the transfer is allowed by regulation or an agreement has been signed authorising 
the transfer; any eligibility criteria have  been  met by  the beneficiary; and a reasonable estimate of the 
amount can be made. 

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

1.5.  CONTINGENT ASSETS AND LIABILITIES 

1.5.1.  Contingent assets  

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

1.5.2.  Contingent liabilities  

A contingent liability  is either a possible obligation of  which the existence will be confirmed only  by the 
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the 
entity; or a present obligation where it is not probable that an outflow of resources embodying economic 
benefits or service potential will be required to settle the obligation.  

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

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

1.6.  FUND CAPITAL 

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

26 

 
 
Annual accounts of the European Development Fund 2023 

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

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

1.7.  CO-FINANCING 

Co-financing  contributions  received  fulfil  the  criteria  of  revenues  from  non-exchange  transactions under 
conditions  and  they  are  presented  as  payables  to  Member  States,  non-Member  States  and  others.  The 
EDF  is  required  to  use  the  contributions  to  deliver  services  to  third  parties  or  is  otherwise  required  to 
return  the  assets  (the  contributions  received).  The  outstanding  payables  relating  to  co-financing 
agreements  represent  the  co-financing  contributions  received  less  the  expenses  incurred  related  to  the 
project. The effect on net assets is nil. 

Expenses  relating  to  co-financing  projects  are  recognised  as  they  are  incurred.  The  corresponding 
amount of contributions is recognised as operating revenue and the effect on the economic result of the 
year is nil. 

27 

 
 
 
Annual accounts of the European Development Fund 2023 

2.  NOTES TO THE BALANCE SHEET 

ASSETS 

2.1.  FINANCIAL ASSETS 

A financial asset is any asset that is: 

(a) Cash;  

(b) An equity instrument of another entity;  

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

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

Financial  assets  are  classified  in  the  following  categories:'financial  assets  at  amortised  costs',  ‘financial 
assets  at  fair  value  through  surplus  or  deficit’  and  ‘financial  assets  at  fair  value  through  net 
assets/equity'.  The  classification  of  the  financial  instruments  is  determined  at initial  recognition  and  re-
evaluated at each balance sheet date. 

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

Non-Current 

Financial assets at fair value through surplus or deficit (FVSD)  
Loans 

Current 

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

Total 

31.12.2023 

EUR million 
31.12.2022 

 70 
 16 
  87 

 3 
  3 
  89 

 61 
 5 
  67 

 3 
  3 
  69 

The EUR 70 million of financial assets at FVSD relate to equity investments in the following areas:  

•  Renewable sustainable energy via Climate Investor One, ElectriFI and GEEREF; 
Promoting inclusive smallholder and rural SME finance via the ABC FUND; 
• 
Financial inclusion in Uganda via the aBi Finance; and 
• 
•  Creating jobs and sustainable growth in Africa via the Boost Africa intitiative.  

The EUR  16  million of non-current loans concern two main  areas: sustainable agriculture via the AgriFI 
and electricity access and generation from sustainable energy sources via ElectriFI investment facility.  

EUR 3 million under  current financial  assets relates entirely to an equity investment under the ElectriFI 
financial  instrument  which  is  aimed  at  financing  early-stage  and  small-sized  projects  focusing  on 
electricity access and generation from sustainable energy sources in emerging markets with a particular 
focus on sub-Saharan Africa. 

2.2.  PRE-FINANCING 

Many  contracts  provide  for  payments  of  advances  before  the  commencement  of  works,  delivery  of 
supplies  or  the  provision of  services.  Sometimes  the  payment  schedules  of  contracts  foresee  payments 
based  on  progress  reports.  Pre-financing  is  normally  paid  in  the  currency  of  the  country  or  territory 
where the project is executed. 

28 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

The  timing  of  use  of  pre-financing  governs  whether  it  is  disclosed  as  a  current  or  a  non-current 
pre-financing.  The  use  is  defined  by  the  project's  underlying  agreement.  Any  use  due  within  twelve 
months after the reporting date are disclosed as current pre-financing. As many of the EDF projects are 
long-term in nature, it is necessary that the related advances are available for more than one year. Thus 
some pre-financing amounts are shown as non-current assets. 

Non-current pre-financing 
Current pre-financing 
Total 

Note 

2.2.1 
2.2.2 

Eighth 
EDF 
– 
– 
– 

Ninth 
EDF 
– 
 5 
  5 

10th 
EDF 
 447 
 113 
  560 

11th 
EDF 
 127 
 836 
  963 

EUR million 

31.12.2023  31.12.2022 

 574 
 954 
 1 529 

 488 
1 396 
 1 884 

The decrease in total pre-financing by EUR 356 million at 31 December 2023 can be largely explained by 
the  decrease  in  pre-financing  paid  out  to  beneficiaries  under  the  11th  EDF  which  fell  from  EUR  1  221 
million in 2022 to EUR 963 million in 2023. This is in line with the life cycle of the EDF and is also related 
to the evolution  of  the number of open contracts.  The 11th EDF  reached maturity as the sunset clause 
came into effect at the end of 2020. This, since 1 January 2021 no further financing agreements could be 
signed under the 11th EDF,  however  specific contracts  for the exsisting  agreements  can  still be signed. 
This led to a decrease in new contracts signed from EUR 2 118 million in 2021 to EUR 853 million in 2022 
and EUR 860 million in 2023. 

Pre-financing  from  the  10th  EDF  decreased  from  EUR  648  million  in  2022  to  EUR  560  million  in  2023, 
aligning with the normal trend observed in 2021 and consistent with the life cycle of the EDF.  

EUR 427 million of non-current pre-financing, relates to the open prefinancing for two contracts under the 
EU-Africa Infrastructure Trust Fund (AITF). The aim of this Trust Fund is to provide financial support with 
grants to infrastructure projects alongside long-term financing made available by Project Financiers. The 
provision  of  such  grant  funds  leverages  the  provision  of  long-term  financing  by  participating  finance 
institutions.  At  the  time  of  the  signature  of  the  contracts,  the  Trust  Fund’s  type  of  actions  were 
considered  as  adequately  covered  by  the  agreement  (no  template  was  yet  available  for  financial 
instruments,  nor  did  the  Regulation  mention  this  type  of  instrument).  Consequently,  payments  made 
under these agreements were registered as pre-financing and not as a financial instrument component.  
Due to the long-term nature of the operations implemented by the Trust Fund, the annual clearing of the 
AITF’s  old  pre-financing  is  very  limited  and  spreads  out  over  the  years.  Therefore,  to  better  reflect  the 
project conditions, the open pre-financing of EUR 427 million were reclassed to long term (see note 3.4). 

2.2.1.  Non-current pre-financing by management mode 

31.12.2023 

EUR million 
31.12.2022 

Direct Management 
Implemented by: 
Commission 
EU executive agencies 
EU delegations 

Indirect Management 
Implemented by : 
EIB and EIF 
International organisations 
Private law bodies with a public service mission 
Public law bodies 
Third countries 
EU bodies and Public Private Partnership 

Total 

 15 
 2 
 7 
  24 

 436 
 74 
 16 
 17 
 7 
– 
  550 
  574 

 11 
 10 
 7 
  28 

 181 
 221 
 16 
 25 
 16 
 1 
  460 
  488 

29 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

2.2.2.  Current pre-financing 

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

EUR million 
Eighth EDF  Ninth EDF  10th EDF  11th EDF  31.12.2023  31.12.2022 
5 616 
(4 220) 
 1 396 

4 150 
(3 314) 
  835 

4 906 
(3 952) 
  954 

 749 
 (636) 
  113 

 7 
 (2) 
  5 

– 
– 
– 

2.2.3.  Current pre-financing by management mode 

Direct Management 
Implemented by: 
Commission 
EU executive agencies 
EU delegations 

Indirect Management 
Implemented by : 
EIB and EIF 
International organisations 
Private law bodies with a public service mission 
Public law bodies 
Third countries 
EU bodies and Public Private Partnership 

Total 

31.12.2023 

EUR million 
31.12.2022 

 55 
 3 
 82 
  140 

 87 
 431 
 78 
 98 
 119 
 1 
  814 
  954 

 85 
 10 
 105 
  200 

 209 
 642 
 96 
 116 
 131 
 2 
 1 196 
 1 396 

2.2.4.  Guarantees received in respect of pre-financing 

Guarantees are held to secure pre-financing and are released when the final claim under a project is paid. 

Guarantees for pre-financing 

31.12.2023 
 32 

EUR million 
31.12.2022 
 37 

The  EUR  32  million  comprises  guarantees  intended  to  secure  pre-financing  paid  under  direct 
management,  with  the  EDF  being  the  beneficiary  of  the  guarantee.  However,  the  majority  of  pre-
financing is paid under the indirect management mode, where the beneficiary of the guarantee is not the 
EDF but the contracting authority. Even though the EDF is not the beneficiary, those guarantees secure 
its assets. In 2023, the total value of such guarantees amounted to EUR 426 million. 

2.3.  TRUST FUND CONTRIBUTIONS 

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

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

30 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

Net contribution at 
31.12.2022 

Contributions 
paid in 2023 

Allocation of TF's net 
expenses  2023 

Net contribution 
at 31.12.2023 

 243 
 11 
  254 

 231 
 43 
  274 

 (287) 
 (24) 
  (311) 

 186 
 30 
  216 

EUR million 

Africa 
Bêkou 
Total 

The decrease in contributions paid from EUR 330 million in 2022 to EUR 274 million in 2023 stems from 
the decline in Trust Funds expenses  due to the winding down of both Trust Funds.  At  the  end of 2021, 
the EUTF Africa and EUTF Bêkou had reached the peak of their activities as they reached the end of the 
contracting period. The winding down of the Trust Funds that started thereafter led to a decrease in the 
number of open contracts and thus a decrease in expenses. 

2.4.  EXCHANGE RECEIVABLES AND NON-EXCHANGE 

RECOVERABLES  

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

2.4.1.  Non-current exchange receivables 

As  at  31.12.2023,  EDF  has  EUR  5  million  of  long-term  exchange  receivables  comprising  mainly  of 
deferred charges arising from several financial instruments. 

2.4.2.  Current exchange receivables and non-exchange recoverables 

Recoverables from non-exchange transactions 
Receivables from exchange transactions 
Total 

Note 
2.4.2.1 
2.4.2.2 

31.12.2023 
 13 
 12 
  24 

EUR million 

31.12.2022 
 15 
 12 
  27 

2.4.2.1.  Recoverables from non-exchange transactions 

Customers 
Public bodies 
Third states 
Write down 
Total 

Eighth 
EDF 
– 
– 
– 
– 
– 

Ninth 
EDF 
 3 
 4 
 1 
 (7) 
  1 

10th 
EDF 
 44 
 13 
 4 
 (55) 
  7 

11th 
EDF 
 9 
 2 
 1 
 (6) 
  5 

EUR million 

31.12.2023  31.12.2022 

 55 
 19 
 6 
 (68) 
  13 

 56 
 19 
 7 
 (67) 
  15 

31 

 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

2.4.2.2.  Receivables from exchange transactions 

Accrued income 
Inter-EDF accounts 
Other 
Total 

Ninth 
Eighth 
EDF 
EDF 
- 
- 
 (200) 
– 
– 
– 
–    (200) 

10th 
EDF 
- 
 426 
 4 
  430 

11th 
EDF 
 1 
 (225) 
 7 
  (218) 

EUR million 

31.12.2023  31.12.2022 

 1 
– 
 11 
  12 

 1 
 1 
 10 
  12 

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

The heading “other” comprises mainly of receivables deriving from financial instruments. Out of the EUR 
11 million other receivables, an amount of EUR 4 million relates to a receivable from the Global Energy 
Efficiency and Renewable Energy Fund (GEEREF) and an amount of EUR 7 million relates to a receivable 
from Climate Investor One.   

2.5.  CASH AND CASH EQUIVALENTS2 

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

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

11th 
EDF 

31.12.2023  31.12.2022 

EUR million 

Special accounts 
Central banks 

Current accounts 
Commercial banks 
Cash belonging to financial instruments 

Total 

– 
– 

– 
– 
– 
– 

– 
– 

– 
– 
– 
– 

– 
– 

– 
– 
– 
– 

 341 
  341 

 193 
 67 
  260 
  601 

 341 
  341 

 193 
 67 
  260 
  601 

 835 
  835 

 161 
 31 
  192 
 1 027 

The decrease of EUR 426 million in cash and cash equivalents is mainly driven by the reduction in cash 
reserves held in central banks. This decline can be attributed to the decrease in called contributions which 
fell from EUR 2,500 million in 2022 to EUR 1,800 million in 2023. Additionally, Member States received a 
refund of EUR 43 million from the 9th EDF for the first instalment of 2023, while the UK requested that its 
contributions for the second and third instalments of 2023 amounting to EUR 154 million be  offset from 
their outstanding share in the 10th and 11th EDF (see note 2.9.1). 

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

2 In accordance with Article 53 of the Financial Regulation applicable to the 11th European Development Fund, the treasury is presented in the balance sheet of the 11th 
EDF. The nature of the various bank accounts is outlined in chapter 5, Financial Risk Management. 

32 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

LIABILITIES 

2.6.  FINANCIAL LIABILITIES 

A financial liability is any liability that is: 

(a) A contractual obligation: to deliver cash or another financial asset to  another entity; or to exchange 
financial  assets  or  financial  liabilities  with  another  entity  under  conditions  that  are  potentially 
unfavourable to the entity; or 

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

Financial  liabilities  are  classified  in  the  following  categories:  'financial  liabilities  at  fair  value  through 
surplus  or  deficit',  'other  financial liabilities  measured  at  amortised  cost'  or  financial  guarantee  contract 
liabilities. 

Non-Current 

Financial Provisions 
Financial guarantee liability 
Other Financial liabilities 
Co-financing payables  
Total 

2.6.1. 

Financial Provisions 

Note 

31.12.2023  31.12.2022 

EUR million 

2.2.62.6.1 
2.6.2 
2.6.3 
2.6.4 

3 
1 
 1 
1 
  5 

1 
1 
 2 
3 
 7 

These provisions represent the estimated credit losses that will be incurred in relation to the loans given 
under different financial instruments. 

Financial provisions 

– 

– 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

EUR million 

11th 
EDF 

– 

31.12.2023  31.12.2022 

 3 

 3 

 1 

The  amount  of  EUR  3  million  represents  the  estimated  loss  in  relation  to  the  loans  given  under  the 
following financial instruments: ElectriFI CW and ElectriFI CW II and AgriFI Regional ACP. 

2.6.2. 

Financial Guarantees 

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

Financial guarantee liability 

– 

– 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 
– 

11th 
EDF 
 1 

31.12.2023 

31.12.2022 

 1 

 1 

EUR million 

The amount of EUR 1 million represents the estimated loss in relation to the guarantee given under the 
Euritz financial instrument of EUR 11 million (see note 3.2.1). 

33 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

2.6.3.  Other Financial Liabilities 

Financial liabilities at fair value 
surplus and deficit 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

11th 
EDF 

31.12.2023 

31.12.2022 

– 

– 

– 

 1 

 1 

 2 

EUR million 

The  amount  of  EUR  1  million  relates  mainly  to  the  payables  arising  from  the  financial  instrument  ABI 
Finance. 

2.6.4.  Co-financing payables 

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

At  the  year-end  a  case-by-case  assessment  of  all  co-financing  payables  is  performed  and  all  amounts 
that are unlikely to be used in the following 12 months are considered non-current. Current amounts are 
shown under note 2.7.2. 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

11th 
EDF 

31.12.2023 

31.12.2022 

EUR million 

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

– 
– 
– 

– 
– 
– 

– 
 18 
  19 

 1 
 23 
  24 

 1 
 41 
  42 

 3 
 46 
  49 

2.7.  PAYABLES 

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

Current payables 
Sundry payables 
Total 

Note 

2.7.1 
2.7.2 

Eighth 
EDF 
– 
– 
– 

Ninth 
EDF 
- 
 0 
  0 

10th 
EDF 
 50 
 14 
  63 

11th 
EDF 
 210 
 118 
  328 

EUR million 

31.12.2023  31.12.2022 

 260 
 132 
  391 

 230 
 196 
  426 

2.7.1.  Current payables 

Suppliers 
Third states 
Public bodies 
Other current payables 
Total 

EUR million 

31.12.2023  31.12.2022 

 98 
 32 
 129 
– 
 260 

 63 
 126 
 41 
– 
 230 

11th 
EDF 

 89 
 29 
 110 
 (18) 
 210 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

 7 
 3 
 19 
 20 
 50 

– 
– 
– 
– 
– 

 2 
– 
– 
 (2) 
 – 

34 

 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

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

The  increase  in  payables  to  public  bodies  and  suppliers  is  due  to  a  higher  volume  of  invoices  received 
that  had  not  yet  been  paid  before  year-end.  Conversely,  payables  to  third  states  decreased  primarily 
because  an  invoice  totaling  EUR  60  million  for  budget  support  to  Ethiopia  was  cancelled  in  2023.  This 
invoice had been suspended since November 2020 due to the situation in the country. 

2.7.2.  Sundry payables 

Co-financing payables 
Deferred capital contributions 
Other sundry payables 
Total 

Note 

2.6.4 
2.7.2.1 

Eighth 
EDF 
– 
– 
– 
– 

Ninth 
EDF 
– 
– 
– 
– 

10th 
EDF 
 18 
– 
 (5) 
 14 

11th 
EDF 
 23 
 88 
 7 
 117 

EUR million 

31.12.2023  31.12.2022 

 41 
 88 
 3 
 132 

 46 
 147 
 2 
 196 

2.7.2.1.  Deferred capital contributions 

An amount of EUR 7.8 million of deferred capital contributions relates to a refund to Member States and 
the  United  Kingdom  from  decommitted  or  unused  funds  from  projects  under  the  Ninth  EDF  (see  note 
2.9.1).  The  Member  States  agreed  for  the  refund  to  be  offset  against  the  contributions  from  the  11th 
EDF during the first call for contributions in 2024. 

In  addition  to  the  refund,  an  amount  of  EUR  80  million  relates  to  the  1st  instalment  of  2024  paid  in 
advance by the United Kingdom. Out of this sum,  EUR 8 million was deducted from the UK's remaining 
share  of  unused  funds  from  the  10th  and  11th  EDFs.  According  to  Article  152  of  the  Withdrawal 
Agreement,  the  United  Kingdom  remains  party  to  the  EDF  until  the  closure  of  the  11th  EDF  and  all 
previous  unclosed  EDFs  and  assumes  the  same  obligations  as  the  Member  States  in  this  respect  (see 
note 2.9.1). 

2.8.  ACCRUED CHARGES  

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

Accrued charges 
Other accruals and deferrals 
Total 

Eighth 
EDF 
– 
– 
– 

Ninth 
EDF 
– 
– 
  – 

10th 
EDF 
 129 
– 
  129 

11th 
EDF 
 854 
 1 
  855 

EUR million 

31.12.2023  31.12.2022 

 983 
 1 
  984 

1 130 
 2 
 1 131 

Accrued  charges  comprise  estimated  operating  expenses  for  on-going  or  completed  contracts  without 
validated cost claims where the eligible expenses incurred by beneficiaries were estimated using the best 
available information at the time of preparing the financial statements. It is noted that information from 
large-scale  day-to-day  activities,  such  as  contract  extensions  signed  after  the  reporting  date,  is  not 
systematically considered, and the potential impact on the accrued charges cannot be reliably estimated. 
The portion of the estimated accrued charges that relates to pre-financing paid has been recorded as a 
reduction of the pre-financing amounts (see note 2.2). 

35 

 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

The  decrease  in  accrued  charges  of  EUR  147  million  is  explained  by  the  reduction  in  the  number  of 
contracts for which charges had to be estimated and accrued. This decrease is in line with the life cycle of 
the EDF and the underlying number of open contracts.  

NET ASSETS 

2.9.  FUND CAPITAL 

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

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

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

2.9.1.  Called fund capital – active EDFs 

Fund capital 
Uncalled fund capital 
Called fund capital 31.12.2022 
Fund capital 
Uncalled fund capital 
Called fund capital 31.12.2023 

Eighth EDF  Ninth EDF  10th EDF  11th EDF 
29 367 
(7 840) 
 21 527 
29 331 
(6 040) 
 23 290 

20 960 
- 
 20 960 
20 834 
- 
 20 834 

12 164 
– 
 12 164 
– 
– 
– 

10 464 
 (15) 
 10 450 
10 442 
– 
 10 442 

EUR million 
Total 
72 955 
(7 855) 
 65 100 
60 607 
(6 040) 
 54 566 

The  uncalled  funds  represent  amounts  not  yet  called  from  Member  States.  The  called  fund  capital 
represents the contributions which have been called by the EDF and transferred to the treasury accounts 
by the Member States (see below 2.9.2.). 

By means of Council Decision (EU) 2023/2586, the Member States' contributions set out in the Internal 
Agreements of the Eighth and Ninth EDF were reduced accordingly for an amount of EUR 7.8 million from 
funds  decommitted  under  the  Ninth  EDF.  Refunds  arising  from  this  reduction  have  been  compensated 
against  additional  calls  for  funds  under  the  11th  EDF.  In  fact,  the  refund  will  be  used  against  the  first 
instalment of 2024 (see note 2.7.2.1).  

While the United  Kingdom remains party to the EDF  until the closure of all programmes, in accordance 
with Article 153 of the Withdrawal Agreement, its share of uncommitted and decommitted funds from the 
Eighth,  Ninth  and  10th  EDF  cannot  be  reused.  In  2023,  the  UK  requested  that  its  second  and  third 
instalments for the year be compensated using its outstanding share in the reserve of the 10th and 11th 
EDFs. In addition, another 8 million was refunded to the UK towards its 1st instalment of 2024 (see note 
2.7.2.1). As a result, the fund capital of the 10th and 11th EDF was reduced by EUR 126 million and EUR 
36 million respectively.  

The closure of the 8th EDF effectively took place in 2021, with the completion of operational activities and 
closure  of  all  financing  decisions.  Despite  this,  the  closure  of  the  8th  EDF  had  not  been  completely 
reflected  in  the  2021  financial  statements.  The  aggregated  statement  of  changes  in  net  assets  reflects 
the closure of the 8th  EDF as a 2023 event.  In  2023, the  net  assets of  the 8th EDF, totalling EUR 180 
million, were transferred to the 9th EDF, thereby concluding the accounting closure of the 8th EDF. Any 
remaining balances from the called capital and reserves were utilized to cover the economic result from 
previous years, with the remaining amounts transferred to the 9th EDF according to the provisions of Part 
3 of the Financial Regulation applicable to the 9th EDF. 

36 

 
 
 
 
Annual accounts of the European Development Fund 2023 

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

Contributions 11th EDF 

% 

Uncalled capital 
31.12.2022 

Capital called 
in 2023 

EUR million 
Uncalled capital 
31.12.2023 

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

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

 188 
 255 
 17 
 18 
 9 
 63 
 155 
 7 
 118 
1 397 
1 614 
 118 
 48 
 74 
 982 
 9 
 14 
 20 
 3 
 375 
 157 
 94 
 56 
 29 
 18 
 622 
 230 
1 151 
7 840 

 (43) 
 (58) 
 (4) 
 (4) 
 (2) 
 (14) 
 (36) 
 (2) 
 (27) 
 (321) 
 (370) 
 (27) 
 (11) 
 (17) 
 (226) 
 (2) 
 (3) 
 (5) 
 (1) 
 (86) 
 (36) 
 (22) 
 (13) 
 (7) 
 (4) 
 (143) 
 (53) 
 (264) 
(1 800) 

 145 
 196 
 13 
 14 
 7 
 48 
 120 
 5 
 91 
1 076 
1 243 
 91 
 37 
 57 
 757 
 7 
 11 
 15 
 2 
 289 
 121 
 72 
 43 
 23 
 14 
 479 
 178 
 887 
6 040 

Since  the  capital  of  the  Eighth,  Ninth  and  10th  EDF  has  been  called  up  and  received  in  its  entirety  in 
previous  years,  in  2023,  an  amount  of  EUR  1  800  million  has  been  called  which  relates  entirely  to  the 
11th EDF. Called capital decreased from EUR 2 500 million in 2022 to EUR 1 800 million in 2023. 

2.9.3.  Called fund capital transfers between active EDFs 

Balance at 31.12.2021 
Transfer of amounts to the 10th EDF performance 
reserve from previous EDFs 
Transfer of amounts to the 11th EDF performance 
reserve from previous EDFs 
Balance at 31.12.2022 
Transfer of amounts to the 8th EDF performance 
reserve from previous EDFs 
Transfer of amounts to the 10th EDF performance 
reserve from previous EDFs 
Transfer of amounts to the 11th EDF performance 
reserve from previous EDFs 
Balance at 31.12.2023 

Eighth 
EDF 
 (2 512) 
 (1) 
– 
 (2 513) 
2 762 
 427 
 (676) 
– 

Ninth 
EDF 
 2 018 
 (8) 

10th 
EDF 
  101 
 9 
–   (148) 
 2 010    (38) 
(2 762) 
 (432) 
 676 

 6 
 (87) 
  (509)  (120) 

EUR million 

Total 

– 
– 
– 
– 
– 
– 
– 
– 

11th 
EDF 
  394 
– 
 148 
  541 
– 
– 
 87 
  628 

This heading includes the resources transferred between the active EDFs. 

37 

 
 
 
 
Annual accounts of the European Development Fund 2023 

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

While  the  8th  EDF  was  officially  closed  in  2021,  this  closure  was  not  reflected  in  the  2021  accounts.  In 
2023,  any  reserves  and  losses  from  previous  EDFs  were  transferred  to  the  9th  EDF  (see  note  2.9.1 
above). 

38 

 
 
Annual accounts of the European Development Fund 2023 

3.  NOTES  TO  THE  STATEMENT  OF  FINANCIAL 

PERFORMANCE 

REVENUE 

Revenue from non-exchange transactions 
Revenue from exchange transactions 
Total 

Note 
3.1 
3.2 

EUR million 

2023 
 14 
 52 
 65 

2022 
 18 
 80 
 98 

3.1.  REVENUE FROM NON-EXCHANGE TRANSACTIONS 

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

Recovery of expenses 
Co-financing revenue 
Total 

Note 

3.1.1 

Eighth 
EDF 
– 

– 
– 

Ninth 
EDF 
– 

– 
– 

10th 
EDF 
 1 
– 
  2 

11th 
EDF 
 4 
 8 
  12 

EUR million 

2023 

2022 

 6 
 8 
  14 

 17 
 (4) 
  18 

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

Direct Management 
Implemented by: 
Commission 
EU delegations 

Indirect Management 
Implemented by: 
Third countries 
Public law bodies 
International organisations 
Private law bodies with a public service mission 

Total 

3.1.1.  Co-financing revenue 

2023 

EUR million 
2022 

– 
 5 
 5 

 6 
– 
 3 
– 
 9 
  14 

 1 
 (3) 
 (2) 

 13 
 (3) 
 7 
 3 
 20 
  18 

The  co-financing  contributions  received  fulfil  the  criteria  of  revenues  from  non-exchange  transactions 
under  conditions  and  as  such  should  not  affect  the  statement  of  financial  performance  when  received. 
The  contributions  remain  under  liabilities  (see  note  2.6.4  &  2.7.2)  until  the  conditions  attached  to  the 
donated funds are met, i.e. eligible expenses are incurred (see note  3.5). The corresponding amount is 
then  recognised  in the  statement of  financial  performance  as  non-exchange  revenue  from  co-financing. 
Consequently, the effect on the economic result of the year is zero. 

39 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.2.  REVENUE FROM EXCHANGE TRANSACTIONS 

Financial revenue 
Other revenue 
Total 

  Eighth EDF  Ninth EDF 
– 
 – 
– 
 2 
  2 

– 

10th EDF 
 (1) 
 4 
  4 

11th EDF 
 10 
 37 
  46 

EUR million 
2022 
 3 
 77 
  80 

2023 
 9 
 43 
  52 

The  EUR  9  million  under  the  heading  financial  revenue  mainly  consists  of  accrued  interest  on  unpaid 
recovery orders, interest on pre-financing and revenue from financial instruments.  

Other revenue relates mainly to foreign exchange gains. The corresponding foreign exchange losses are 
recorded under other expenses (see note 3.7).  

EXPENSES 

3.3.  EXPENSES IMPLEMENTED BY OTHER ENTITIES 

Technical assistance expenses 

Eighth 
EDF 
– 

Ninth 
EDF 
– 

10th 
EDF 
– 

11th 
EDF 
 3 

EUR million 

2023 

2022 

 3 

 1 

The  amount  of  EUR  3  million  comprises  technical  assistance  expenses  incurred  by  several  financial 
instruments. 

3.4.  AID INSTRUMENTS 

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

Eighth 
EDF 

Ninth 
EDF 

– 
– 
– 
– 
– 
– 
– 
– 
– 

 – 
 7 
 (1) 
 – 
 (7) 
– 
– 
– 
  (1) 

10th 
EDF 

 33 
– 
– 
 128 
 113 
– 
 2 
– 
  276 

11th 
EDF 

 808 
– 
– 
 651 
 124 
 12 
– 
 311 
 1 906 

EUR million 

2023 

2022 

 841 
 7 
 (1) 
 779 
 230 
 12 
 2 
 311 
 2 181 

1 307 
 4 
– 
 896 
 118 
 6 
– 
 458 
 2 789 

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

In 2023, the decrease in operational expenditure by EUR 608 million was mainly driven by the decrease 
in expenses under the 11th EDF (EUR 2 489 million in 2022 to EUR 1 906 million in 2023). This decrease 
can be largely explained by the decrease in  expenses relating  to programmable aid, Intra ACP projects 
and the contributions to the Trust Funds (see note 2.3). Despite this, expenses relating to emergency aid 
increased by EUR 105 million. This increase follows the Council Decision of 12 July 2022 to reuse funds 
from the 10th and 11th EDF to finance actions addressing food security crisis and economic shock in ACP 
countries resulting from Russia’s war of aggression against Ukraine.  

The decrease in expenses relating to INTRA-ACP projects is explained by the reduction in accrued charges 
for two projects under the AITF. Since there is no regular implementation for these two projects and in 
the absence of a report, the open pre-financing has been reclassed to long term and no accrued charges 
have been calculated for these projects for 2023. However, the expenses related to INTRA-ACP projects 

40 

 
 
 
 
Annual accounts of the European Development Fund 2023 

have been impacted by the reversal of last year's accruals, which amounted to EUR 130 million (see note 
2.2). 

The changes in expenses under the 9th and 10th EDF are in line with the lifecycle of the EDF and is also 
related  to  the  evolution  of  the  number  of  open  contracts.  Many  contracts  were  completed  and  closed 
under these EDF’s in 2023, which resulted in less expenses incurred under those EDFs.  

The negative amount under the 9th EDF relating to the emergency aid programme is due to the reversal 
of the 2022 accruals for a contract that was decommitted in 2023.  

3.5.  CO-FINANCING EXPENSES 

Co-financing 

  Eighth EDF  Ninth EDF 
– 
– 

10th EDF 
– 

11th EDF 
 8 

2023 
 8 

EUR million 
2022 
 (4) 

Included  under  this  heading  are  the  expenses  incurred  on  co-financing  projects  in  2023.  It  should  be 
noted  that  the  expenses  incurred  include  estimated  amounts  related  to  the  cut-off  exercise  (and 
consequently reversals of the estimated amounts related to last year).  

In  2023,  co-financing  expenses  increased  by  EUR  12  million  mainly  because  in  2022,  co-financing 
expenses were unusually low. The decrease of co-financing expenses in 2022 was due to enhancements 
made  in  the  method  of  allocating  expenses  to  co-funding  donors,  which  now  take  into  account  the 
recovery of unduly paid amounts. 

In line with the accounting rules on co-financing, the incurred amounts did not have any impact on the 
EDF’s result of the year because they were recognised both in the co-financing expenses and in the co-
financing revenue (see also note 3.1.1).    

AID INSTRUMENTS AND CO-FINANCING EXPENSES BY MANAGEMENT TYPE 

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

Indirect Management 
Implemented by: 
EIB and EIF 
International organisations 
Private law bodies with a public service mission 
Public law bodies 
Third countries 
EU bodies with Public Private Partnership 

Total 

2023 

 50 
 16 
 290 
 235 
 591 

 (45) 
 994 
 201 
 147 
 297 
 3 
1 597 
2 189 

EUR million 
2022 

 70 
 6 
 431 
1 121 
1 628 

 39 
 (544) 
 325 
 99 
1 234 
 4 
1 157 
2 785 

41 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.6.  FINANCE COSTS 

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

Fee Subsidy 
Impairment losses from financial guarantees 
Total 

Eighth 
EDF 
– 
– 
– 
– 
- 

Ninth 
EDF 
 (1) 
– 
– 
– 
  (1) 

10th 
EDF 
 1 
 1 
– 
– 
  1 

11th 
EDF 
 2 
 2 
 1 
– 
  5 

EUR million 

2023  2022 

 2 
 3 
 1 
– 
  7 

 2 
 2 
 1 
 1 
  6 

Net impairment losses on loans and receivables comprise impairment losses on financial instruments and 
estimated  expenses  on  irrecoverable  amounts  arising  from  ageing  recovery  orders  (over  2  years), 
bankruptcies and waivers. 

The  EUR  3  million  of  financial  expenses  for  financial  assets  at  FVSD  relates  mainly  to  exchange 
differences, interest and fair value changes for several financial instruments.  

The  amount  of  EUR  1  million  under  the  heading  “fee  subsidy”  relates  to  expenses  incurred  under  the 
Kulima financial instrument. 

3.7.  OTHER EXPENSES 

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

Administrative and IT expenses 
Provision for risks and charges 
Realised losses on trade debtors 
Exchange losses 
Foreign exchange losses on 
Financial instruments 
Total 

– 
– 
– 
– 

– 

– 

  Eighth EDF  Ninth EDF  10th EDF  11th EDF 
 49 
- 
 2 
- 
– 
– 

 2 
– 
– 

EUR million 
2023  2022 
 56 
– 
 4 
 60 

 51 
 1 
– 

 62 

 1 

– 

 2 

– 

  3 

 5 

– 

  7 

 55 

 1 

  106 

  116 

  119 

The  heading  Administrative  and  IT  expenses  includes  amounts  that  are  based  on  the  EDF  internal 
agreement  with  the  Commission  to  cover  the  administrative  expenditure  incurred  by  both  the 
Headquarters and the Delegations in respect of managing the EDF programmes.  

The  increase  of  foreign  exchange  losses  is  mostly  due  to  the  increase  in  unrealised  losses  from  the 
revaluation of balances held in currencies at year-end. 

42 

 
 
 
 
 
Annual accounts of the European Development Fund 2023 

4. 

CONTINGENT  ASSETS  &  LIABILITIES  AND 
OTHER SIGNIFICANT DISCLOSURES 

4.1.  CONTINGENT ASSETS 

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

Prefinancing guarantees 
Performance guarantees 
Total 

Eighth 
EDF 
– 
– 
– 

Ninth 
EDF 
– 
– 
  – 

10th 
EDF 
 2 
– 
  2 

11th 
EDF 
 30 
– 
  30 

EUR million 

31.12.2023 

31.12.2022 

 32 
– 
  32 

 37 
 1 
  38 

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

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

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

4.2.  CONTINGENT LIABILITIES 

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

4.2.1.  Guarantees given 

Guarantees given 

  Eighth 
EDF 
– 

Ninth 
EDF 
– 

10th 
EDF 
– 

11th 
EDF 
 28 

31.12.2023 

EUR million 
31.12.2022 

 28 

 25 

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

The  amount  of  EUR  28  million  relates  to  guarantees  under  the  following  financial  instruments:  EUR  11 
million  under  the  EURITZ  financial  instrument,  EUR  10  million  under  the  KULIMA  FUND  and  another  7 
million under the ZAMBIA agriculture value chain facility. 

4.2.2. 

 Contingent liabilities relating to legal cases 

Pending legal Cases 

  Eighth 
EDF 
– 

Ninth 
EDF 
 – 

10th 
EDF 
– 

11th 
EDF 
 7 

31.12.2023 
 7 

EUR million 
31.12.2022 
 18 

At the end of 2023, there were only two pending cases, totalling EUR 7 million. During the year, two legal 
cases were closed for a total of EUR 11 million.  

43 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

4.3.  OTHER SIGNIFICANT DISCLOSURES 

4.3.1.  Outstanding commitments not yet expensed 

The  amount  disclosed  below  is  the  budgetary  RAL  ('Reste  à  Liquider')  less  related  amounts  that  have 
been included as expenses in  the  statement of financial performance. The budgetary RAL is an amount 
representing  the  commitments  for  which  payments  and/or  de-commitments  have  not  yet  been  made. 
This is the normal consequence of the existence of multiannual programmes. 

Outstanding commitments not yet 
expensed 

Eighth 
EDF 

Ninth 
EDF 

10th 
EDF 

11th 
EDF 

31.12.2023  31.12.2022 

– 

 16 

 216 

3 217 

3 449 

4 853 

EUR million 

The  decrease  in  the  RAL  is  largely  driven  by  the  decrease  in  budgetary  RAL  which  totalled  EUR  5  116 
million (2022: EUR 6 459 million). This is in line with the life cycle of the EDF and is also related to the 
evolution of the number of open contracts (see note 2.2).  

44 

 
 
 
Annual accounts of the European Development Fund 2023 

5. 

FINANCIAL RISK MANAGEMENT 

The following disclosures with regard to the financial risk management of the EDF relate to  the treasury 
operations carried out by the Commission on behalf of the EDF in order to implement its resources. 

5.1.  RISK  MANAGEMENT 

POLICIES  AND  HEDGING 

ACTIVITIES 

The  rules  and  principles  for  the  management  of  the  treasury  operations  are  laid  down  in  the  11th  EDF 
Financial Regulation and in the Internal Agreement. 

As a result of the above regulation, the following main principles apply: 

(a)  The EDF contributions are paid by Member States in special accounts opened with the bank of issue 
of each Member State or the financial institution designated by it. The amounts of the contributions 
shall remain in those special accounts until the payments of EDF need to be made. 

(b)  EDF contributions are paid by Member States in EUR, while the EDF's payments are denominated in 

EUR and in other currencies. 

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

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

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

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

45 

 
 
5.2.  CURRENCY RISK 

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

Annual accounts of the European Development Fund 2023 

Financial assets 

Financial assets at amortised cost 

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

Financial liabilities 
Financial guarantee liability and provisions 

Total 

31.12.2023 

31.12.2022 

USD 

EUR 

Other 

Total 

USD 

EUR 

Other 

Total 

EUR million 

 7 
 16 
 7 
 6 
  36 

– 
– 
  36 

 7 
 49 
 4 
 595 
  655 

 2 
  2 
  657 

 3 
 8 
– 
– 
  11 

 2 
  2 
  13 

 17 
 73 
 11 
 601 
  704 

 4 
  4 
  706 

– 
 14 
 6 
 7 
  27 

– 
– 
  27 

 6 
 42 
 4 
1 015 
 1 067 

 3 
  3 
 1 069 

– 
 9 
– 
 5 
  14 

– 
– 
– 

 6 
 65 
 10 
1 027 
 1 108 

 3 
  3 
 1 110 

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

46 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

5.3.  INTEREST RATE RISK 

The EDF does not borrow money and consequently it is not exposed to interest rate risk. 

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

Contributions to the EDF budget are credited by each Member State to a special account opened with the 
financial institution designed by it. To address the risk of  negative remuneration, which existed a couple 
of  years  ago,  cash  management  procedures  are  in  place  to  minimise  balances  kept  on  the  accounts 
concerned. In addition, in accordance with Council Regulation (EU) 2016/888, any negative remuneration 
on these accounts is borne by the relevant Member State. 

Overnight  balances  held  in  commercial  bank  accounts  are  remunerated  on  a  daily  basis.  The 
remuneration  of  balances  on  such  accounts  is  based  on  variable  market  rates  to  which  a  contractual 
margin (positive or negative) is applied. For most of the accounts, the interest calculation is linked to a 
market reference rate and is adjusted to reflect any fluctuations of this rate. As a result, no risk is taken 
by the EDF that its balances could be remunerated at rates lower than market rates. 

5.4.  CREDIT RISK (COUNTERPARTY RISK) 

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

Financial assets 

Loans  

Cash and cash equivalents 

Exchange receivables* 

Guarantees given  

Financial guarantee contracts 

Total at 31.12.2023 

* Excluding deferred charges 

Financial Instrument Loans: credit quality 

Credit rating 

Premium and high grade 

Upper medium grade 

Lower medium grade 
Non-investment grade and default 
grade 
Gross carrying amount 

Minus loss allowance 

Net carrying amount  

31.12.2023 

31.12.2022 

EUR million 

 16 

 601 

 11 

 14 

 642 

 6 

1 027 

 11 

– 

 12 

1 056 

EUR million 

31.12.2023 

Stage 1  

Stage 2  Stage 3 

POCI 

Total  

– 

– 

– 

  1 

  1 

1 

–   

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

  19 

 19 

 3 

 16 

– 

– 

– 

  18 

  18 

  2 

  16 

47 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

Cash and cash equivalents: credit quality 

Credit rating 

Premium and high grade 

Upper medium grade 

Lower medium grade 

Non-investment grade and default grade 

Gross carrying amount 

Minus loss allowance 

Net carrying amount  

Receivables: credit quality  

EUR million 

EUR million 

31.12.2023 

31.12.2022 

  514 

  77 

  11 

– 

 601 

- 

 601 

  724 

  299 

  4 

– 

1 027 

- 

1 027 

EUR million 

Gross carrying amount 

Minus loss allowance 

Net carrying amount  

31.12.2023 

Not due 

 11 

– 

 11 

Past due  
 0-30 
days 
– 

– 

– 

Past due  

31-90 days 

– 

– 

– 

Past 
due  
91 days 
- 1 year 
– 

– 

– 

Past 
due  
> 1 
year 
– 

– 

– 

Total 

 11 

– 

 11 

Financial assets at FVSD: credit quality  

In 2023 the financial assets at FVSD included in these financial statements relate to equity investments 
that are not subject to credit risk (see note 2.1).  

5.5.  LIQUIDITY RISK 

Maturity analysis of financial liabilities by remaining contractual maturity 
The finance liabilities and payables under this heading are disclosed by the carrying amounts from the 
Balance Sheet. 

Financial liabilities at 
31.12.2023 
Financial liabilities at 
31.12.2022 
Budget  principles  applied  to  the  EDF  ensure  that  overall  cash  resources  for  the  budgetary  period  are 
always sufficient for the execution of payments. Indeed the total Member States' contributions equal the 
overall amount of payment appropriations for the relevant budgetary period. 

< 1 year 
 391 
 426 

1-5 years  > 5 years 
– 
– 

 2 
 5 

EUR million 
Total 
 393 
 431 

Member States contributions to EDF, however, are paid in three instalments per year, while payments are 
subject to seasonality. 

In order to ensure that treasury resources are always sufficient to cover the payments to be executed in 
any given month, information on the treasury situation is regularly exchanged between the Commission's 
treasury and the relevant spending departments. 

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

48 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

6.  RELATED PARTY DISCLOSURES 

The related parties of the EDF are the Bêkou- and Africa EU Trust Funds and the European Commission. 
Transactions between these entities take place as part of the normal operations of the EDF and as this is 
the case, no specific disclosure requirements are necessary for these transactions in accordance with the 
EU accounting rules. 

The EDF has no separate management since it is managed by the Commission. The entitlements of the 
key  management  of  the  EU,  including  the  Commission,  have  been  disclosed  in  the  consolidated  annual 
accounts of the European Union under heading 7.2 "Key management entitlements".  

7. 

EVENTS AFTER THE BALANCE SHEET DATE 

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

49 

 
 
Annual accounts of the European Development Fund 2023 

8.  RECONCILIATION OF ECONOMIC RESULT AND 
BUDGET RESULT 

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

ECONOMIC RESULT OF THE YEAR 

Revenue 

Entitlements not affecting the budget result 

Entitlements established in current year but not yet collected 

Entitlements established in previous years and collected in current year 

Net effect of pre-financing 

Accrued revenue (net) 

Expenses 

Expenses of the current year not yet paid 

Expenses of previous years paid in the current year 

Net effect of pre-financing 

Accrued expenses (net) 

BUDGET RESULT OF THE YEAR  

EUR million 

2023 

2022 

 (2 249) 

 (2 813) 

 (11) 

 (2) 

 12 

 36 

 (5) 

 (3) 

 19 

 37 

 (54) 

 (82) 

 (55) 

 16 

 (349) 

 (408) 

 556 

 59 

 244 

 607 

 (2 056) 

 (2 387) 

8.1.  RECONCILING ITEMS - REVENUE 

The  budgetary  revenue  of  a  financial  year  corresponds  to  the  revenue  collected  from  entitlements 
established  in  the  course  of  the  year  and  amounts  collected  from  entitlements  established  in  previous 
years. 

The  entitlements  not  affecting  the  budget  result  are  recorded  in  the  economic  result  but  from  a 
budgetary perspective cannot be considered as revenues as the cashed amount is transferred to reserves 
and cannot be recommitted without a Council decision. 

The entitlements established in the current year but not yet collected are to be deducted from the 
economic  result  for  reconciliation  purposes,  as  they  do  not  form  part  of  budgetary  revenue.  On  the 
contrary,  the  entitlements  established  in  previous  years  and  collected  in  the  current  year  must 
be added to the economic result for reconciliation purposes. 

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

The net accrued revenue mainly consists of accruals made for year-end cut-off purposes. Only the net 
effect, i.e. the accrued revenue of the current year less the reversal of accrued revenue of the previous 
year, is taken into consideration. 

50 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

8.2.  RECONCILING ITEMS – EXPENDITURE 

Expenses  of  the  current  year  not  yet  paid  are  to  be  added  for  reconciliation  purposes  as  they  are 
included  in  the  economic  result  but  do  not  form  part  of  budgetary  expenditure.  On  the  contrary,  the 
expenses of previous years paid in the current year must be deducted from the economic result for 
reconciliation purposes  as they are  part  of  the current year's budgetary expenditure but have either no 
effect on the economic result or they decrease the expenses in case of corrections. 

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

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

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

51 

 
 
Annual accounts of the European Development Fund 2023 

FINANCIAL STATEMENTS OF THE EU 
TRUST FUNDS CONSOLIDATED IN EDF 

52 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

FINANCIAL STATEMENTS OF THE BÊKOU 
EU TRUST FUND 2023 

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

53 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

BACKGROUND INFORMATION  

General background on Union Trust Funds 

Establishment 

In accordance  with Articles 234 and 235 of the Financial Regulation applicable to the general budget of 
the  Union  (EU  FR)3  and  Article  35  of  the  Financial  Regulation  applicable  to  the  11th  European 
Development  Fund  (EDF  FR)4,  the  European  Commission  may  establish  Union  Trust  Funds  for  external 
actions (‘EU Trust Funds/EUTFs’). The Union Trust Funds are constituted under an agreement concluded 
with  other  donors  for  emergency  and  post-emergency  actions  necessary  to  react  to  a  crisis,  or  for 
thematic actions.  

Union  Trust  Funds  are  established  by  the  European  Commission  by  a  decision  after  consultation  or 
approval of the European Parliament  and the  Council. This decision includes the constitutive agreement 
with other donors.  

Union Trust Funds are only established and implemented subject to the following conditions: 

•  There is added value of the Union intervention: the objectives of Union Trust Funds, in particular 
by  reason  of  their  scale  or  potential  effects,  may  be  better  achieved  at  Union  level  than  at 
national level and the use of the existing financing instruments would not be sufficient to achieve 
policy objectives of the Union; 

•  Union Trust Funds bring clear political visibility for the Union and managerial advantages as well 
as  better  control  by  the  Union  of  risks  and  disbursements  of  the  Union  and  other  donors’ 
contributions; 

•  Union Trust Funds do not duplicate other existing funding channels or similar instruments without 

providing any additionality; 

•  The  objectives  of  Union  Trust  Funds  are  aligned  with  the  objectives  of  the  Union  instrument  or 

budgetary item from which they are funded. 

Current EU Trust Funds 

To date, the Commission has set up four EUTFs: 

• 

• 

• 

• 

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

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

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

The  EUTF  COLOMBIA,  which  supports  the  implementation  of  the  peace  agreement  in  the  early 
recovery and stabilisation post conflict. Established on 12 December 2016. 

Mission 

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

Main operational activities  

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

3 Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable 

to the general budget of the Union. 

4 Council regulation (EU) 2018/1877 of 26 November 2018 on the financial regulation applicable to the 11th European Development 

Fund, and repealing Regulation (EU) 2015/323. 

54 

 
 
Annual accounts of the European Development Fund 2023 

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

Governance 

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

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

Sources of financing 

The EUTF Bêkou is financed through contributions from donors.  

Annual accounts 

Basis for preparation 

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

Accounting Officer 

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

Composition of the annual accounts 

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

Process from provisional accounts to discharge 

The annual accounts are subject to independent external audit. The provisional annual accounts prepared 
by  the  Accounting  Officer  are  transmitted,  by  the  15th  of  February  of  the  following  year,  to  the 
Operational Committee who then transmits them to the audit company selected by the entity following a 
tender  procedure.  Following  the  audit,  the  Accounting  Officer  prepares  the  final  annual  accounts  and 
submits them to the Operational Committee for approval (Article 8.3.4(c)). 

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

55 

 
Annual accounts of the European Development Fund 2023 

Operational highlights 

Achievements of the year 

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

In 2023, the security situation in CAR was characterised by an increase in the number of incidents linked 
to clashes between the Central African Armed Forces (FACA) and the Coalition of Patriots for the Central 
African  Republic  (CPC),  but  the  number  of  deaths  associated  with  armed  violence  is  decreasing. 
Moreover,  the  majority  of  the  fighting  taking  place  in  the  outlying  regions  of  the  country  shows  a 
considerable reduction in violence against civilians.  

Politically,  a  new  Constitution  has  been  adopted  in  August  and  progress  has  been  made  in  the  fight 
against impunity advocated by President TOUADERA.   For  example, the Special Criminal Court arrested 
and sentenced for war crimes Abdoulaye HISSENE, a head of war and politician from the Central African 
Republic.  

In 2023, the destabilisation of neighbouring countries increased political and security tensions in the CAR. 
The conflict in Sudan has led to a massive influx of displaced persons in the VAKAGA prefecture. Finally, 
the  establishment  of  two  new  Chadian  armed  groups  in  the  far  north  of  the  CAR  increases  tensions 
between the two countries and causes population displacements.  

In this persistently volatile context, 3.4 million people were in need of humanitarian assistance in August 
2023,  representing  56  %  of  the  Central  African  population.  Although  worrying,  this  situation  is  stable 
compared  to  2022.  The  sectors  with  the  highest  number  of  people  in  need  in  2023  are  water,  hygiene 
and sanitation (WASH), food safety, health and protection. With conflicts moving away from the country’s 
main urban areas, the number of internally displaced persons (IDPs) in CAR continues to decrease for the 
third year in a row. It has thus reached its lowest level since 2016, with 489 000 displaced persons on 31 
August 2023 (down by 515 700 in 2022). 

Key achievements in specific focus areas 

Key  achievements  of  2023  presented  below  reflect  the  main  specific  objectives/areas  of  intervention  of 
the Trust Fund.  

In  the  area  of  access  to  services,  Trust  Fund  Bêkou  continued  its  support  to  Health  and  WASH 
sectors. 

In  2023,  an  additional  44 566  people  benefited  from  improved  access  to  water,  hygiene  and  sanitation 
services (EHA – indicator 1.1), bringing the total to 1 068 695 beneficiaries since the start of the Fund.  

During  2023,  55 289  medical  consultations  and  health  interventions  were  provided  (indicator  1.2),  a 
significant decrease compared to previous years due to the closure of projects associated with the third 
strand of the HEALTH programme at the end of 2022. Medical consultations accounted for 63 % of health 
interventions  provided  and  psychosocial  support  24 %.  It  should  be  noted  that  the  number  of 
consultations  and  interventions  related  to  maternal  and  child  health  and  vaccinations  dropped 
dramatically in 2023, although they had a constant proportion from one year to the next since the start 
of the HEALTH projects.  

In the area of social cohesion, most of the activities implemented with EUTF Bêkou’s support aimed to 
empower women and to combat gender-based violence (GBV), as well as to strengthen the media in the 
country. In 2023, 32 529 girls or women benefited from socio-economic empowerment activities in 13 of 
the country’s 20 prefectures (indicator 2.1) of which more than half of the beneficiaries (58 %) received 
economic  support,  30 %  received  socio-economic  support  and  12 %  social  support.  4 092  survivors  of 
the  GBV  were  supported  by  Bêkou  (indicator  2.2)  with  psychosocial  support,  medical  care,  legal 
assistance, delivery of dignity kits, etc.  

At  national  level,  technical  assistance  to  the  Ministry  of  Women,  Family  and  Child  Protection  (MPFFPE) 
and  to  the  relevant  sectoral  ministries  contributes  to  formalising,  strengthening  and  harmonising 
awareness-raising efforts on GBV. 

56 

 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

In the area of supporting economic and productive sectors’ recovery, EUTF Bêkou assisted both 
productive  and  subsistence-oriented  agriculture,  supporting  agricultural  groups  and  smallholders, 
fostering job creation (both labour-intensive work, vocational training, development of income-generating 
activities)  and  facilitating  access  to  financial  services  for  small  businesses  and  individuals.  In  2023, 
28 093  people  received  support  for  the  establishment  of  an  income-generating  activity  (indicator  3.4), 
representing 30 % of the total indicator since the start of the Fund. In addition, 5 551 small farmers were 
supported  to  increase  their  production  in  a  sustainable  manner  (indicator  3.3)  by  the  RELSUDE  ACTED 
and PAPEUR Rural projects in 2023. The PAPEUR Rural project continued to support the 35 cooperatives 
set up in previous years and in this context reached 5 498 additional co-operators with various types of 
assistance. 3 469 people benefited during the year from vocational training activities (indicator 3.6), an 
increase of 40 % compared to the previous year. The gradual finalisation of the rehabilitation activities of 
the training and train-the-trainers centres under DEVRUR II project, allowed the acceleration of training 
activities for beneficiaries in 2023. 

Budget and budget implementation 

By the end of 2023, the contributions to EUTF Bêkou amounted to over EUR 310 million. The Trust Fund 
finalised the commitments and contracting of all received contributions on 31 December 2021, with the 
exception  of  funds  reserved  for  monitoring,  evaluation,  audit  and  communication  that  can  still  be 
contracted after this date.  

Five  new  contracts  for  a  total  amount  of  EUR  128  303  were  contracted  in  2023.  These  contracts  were 
related to audit and communication activities. 

More than EUR 19 million was paid in 2023; total disbursements have reached more than EUR 283 million 
since the creation of the EUTF Bêkou.  

Impact of the activities in the financial statements 

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

• 

• 

Pre-financing: decreased by kEUR 7 420  as a result  of  the  winding  down of  the Trust  Fund  and 
the consequent decrease in the number of new contracts: in 2023 only 4 contracts were signed 
relating to audit, evaluation and communication activities for an amount of kEUR 111;  

Financial  liabilities:  increased  by  kEUR  18  449  mainly  due  to  the  fact  that  the  cashed 
contributions from the donors were higher than the net expenses allocated to donors; 

•  Operating  expenses:  increased  by  kEUR  4  027  as  a  result  of  the  increase  in  the  estimated 
expenses of 3 programmes: Reconstruction Relief and Rehabilitation, Basic Health care and Urban 
Development. 

57 

 
 
 
 
Annual accounts of the European Development Fund 2023 

BALANCE SHEET 

NON-CURRENT ASSETS 
Pre-financing 

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

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Financial liabilities 

CURRENT LIABILITIES 
Payables  
Accrued charges  

TOTAL LIABILITIES 

NET ASSETS 

31.12.2023 

 EUR '000 
31.12.2022 

– 
– 

 3 745 
 3 462 
 28 420 
 35 627 
 35 627 

  336 
  336 

 10 829 
 3 595 
 4 316 
 18 740 
 19 076 

 (31 001) 
 (31 001) 

 (12 552) 
 (12 552) 

– 
 (4 626) 
 (4 626) 
 (35 627) 

 (4 563) 
 (1 961) 
 (6 524) 
 (19 076) 

– 

– 

58 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

STATEMENT OF FINANCIAL PERFORMANCE 

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

Revenue from exchange transactions 
Financial revenue 

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

2023 

EUR '000 
2022 

 24 550 
  717 
 25 268 

  636 
  636 
 25 904 

 21 504 
  42 
 21 546 

  40 
  40 
 21 586 

 (24 278) 
– 
 (1 626) 
 (25 904) 
– 

 (20 251) 
  (12) 
 (1 323) 
 (21 586) 
– 

59 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

CASHFLOW STATEMENT 

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

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

2023 
– 
 7 420 
  132 
 18 450 
 (4 563) 
 2 665 
 24 104 

 24 104 
 4 316 
 28 420 

EUR '000 
2022 
– 
  811 
  851 
 9 385 
 1 716 
 (12 240) 
  524 

  524 
 3 792 
 4 316 

60 

 
 
 
 
 
 
 
 
 
  
Annual accounts of the European Development Fund 2023 

FINANCIAL STATEMENTS OF THE EUTF 
AFRICA 2023 

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

61 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

BACKGROUND INFORMATION ON THE EUTF AFRICA 

General background on Union Trust Funds 

Establishment 

In accordance  with Articles 234 and 235 of the Financial Regulation applicable to the general budget of 
the  Union  (EU  FR)5  and  Article  35  of  the  Financial  Regulation  applicable  to  the  11th  European 
Development  Fund  (EDF  FR)6,  the  European  Commission  may  establish  Union  Trust  Funds  for  external 
actions (‘EU Trust funds/EUTFs’).  The Union Trust Funds are constituted under an agreement concluded 
with  other  donors  for  emergency  and  post-emergency  actions  necessary  to  react  to  a  crisis,  or  for 
thematic actions.  

Union  Trust  Funds  are  established  by  the  European  Commission  by  a  decision  after  consultation  or 
approval of the European Parliament  and the  Council. This decision includes the constitutive agreement 
with other donors.  

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

•  There is added value of the Union intervention: the objectives of Union Trust Funds, in particular 
by  reason  of  their  scale  or  potential  effects,  may  be  better  achieved  at  Union  level  than  at 
national level and the use of the existing financing instruments would not be sufficient to achieve 
policy objectives of the Union; 

•  Union Trust Funds bring clear political visibility for the Union and managerial advantages as well 
as  better  control  by  the  Union  of  risks  and  disbursements  of  the  Union  and  other  donors’ 
contributions; 

•  Union Trust Funds do not duplicate other existing funding channels or similar instruments without 

providing any additionality; 

•  The  objectives  of  Union  Trust  Funds  are  aligned  with  the  objectives  of  the  Union  instrument  or 

budgetary item from which they are funded. 

Current EU Trust Funds 

To date, the Commission has set up four EUTFs: 

• 

• 

• 

• 

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

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

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

The  EUTF  COLOMBIA,  which  supports  the  implementation  of  the  peace  agreement  in  the  early 
recovery and stabilisation post conflict. Established on 12 December 2016. 

Mission 

The  main  objectives  of  the  EUTF  Africa  are  to  support  all  aspects  of  stability  and  contribute  to  better 
migration management as well as addressing the root causes of destabilisation, forced displacement and 
irregular migration, in particular by promoting resilience, economic and equal opportunities, security and 
development and addressing human rights abuses. 

Main operational activities  

The Union Trust Fund pools together resources from different donors to finance an action on the basis of 
agreed  objectives.  EUTF  Africa  operates  in  three  main  geographic  areas,  namely  the  Sahel  region  and 
Lake  Chad  area,  the  Horn  of  Africa  and  the  North  of  Africa.  The  neighbouring  countries  of  the  eligible 
countries  may  benefit,  on  a  case  by  case  basis,  from  the  Trust  Fund's  projects.  The  Trust  Fund  is 

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

2015/323. 

62 

 
 
Annual accounts of the European Development Fund 2023 

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

Governance 

The  management  of  the  EUTF  Africa  is  ensured  by  the  European  Commission,  which  also  acts  as  the 
secretariat of its two governing bodies – the Trust Fund Board and the Operational Committee. The Trust 
Fund  Board  and  the  Operational  Committee  of  the  EUTF  Africa  are  composed  of  representatives  of  the 
donors  and  of  the  Commission,  as  well  as  representatives  of  non-contributing  EU  Member  States, 
authorities of eligible countries' and regional organisations as observers. The rules for the composition of 
the board and its internal rules are laid down in the constitutive agreement of the Union Trust Fund. 

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

Sources of financing 

The EUTF Africa is financed through contributions from donors.  

Basis for preparation 

The  legal  framework  and  the  deadlines  for  the  preparation  of  the  annual  accounts  are  set  by  the 
‘Agreement  establishing  the  European  Union  emergency  Trust  Fund  for  stability  and  addressing  root 
causes  of  irregular  migration  and  displaced  persons  in  Africa  and  its  internal  rules’  (‘Constitutive 
Agreement’).  As  per  this Constitutive  Agreement,  the  annual  accounts  are  prepared  in  accordance  with 
the  rules  adopted  by  the  Accounting  Officer  of  the  Commission  (EU  Accounting  Rules,  EAR),  which  are 
based on internationally accepted accounting standards for the public sector (IPSAS).  

Accounting Officer 

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

Composition of the annual accounts 

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

Process from provisional accounts to discharge 

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

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

63 

 
Annual accounts of the European Development Fund 2023 

Operational highlights 

Achievements of the year 

In line with the end of the contracting period on 31 December 2021, as of January 2022 the EUTF Africa 
has not funded any new financial commitments or budgetary top-ups. Financial commitments related to 
administrative activities such as audits, evaluations, monitoring and communication activities are the only 
ones  that  can  be  contracted.  The  EUTF  Africa  programmes  will  continue  being  implemented  up  to  end 
2025.  

In  the  course  of  2023,  the  EUTF  Africa  further  demonstrated  that  it  is  a  swift  and  effective 
implementation  tool,  facilitating  policy  dialogue  with  African  partner  countries,  applying  innovative 
approaches, and producing tangible results across the three regions (Sahel and Lake Chad, Horn of Africa 
and North of Africa).   

In  the  Horn  of  Africa  (HoA)  region,  the  continued  consequences  of  climate  change  persisted  in  2023. 
Severe  flooding  in  Somalia,  Kenya,  Ethiopia,  and  South  Sudan  killed  dozens  of  people  and  caused  the 
displacement of over 2 million people, while the food insecurity crisis deteriorated throughout the region. 
The economic, social and security challenges are high and unceasing, and the armed conflict erupting in 
Sudan in April 2023 has impacted the whole region. As a consequence, Sudan is now the country with the 
largest number of displaced people and the largest child displacement crisis in the world as per UNHCR. 
Nevertheless,  the  security  situation  in  Somalia  appears  to  be  cautiously  improving,  while  Kenya  and 
Djibouti continue their path towards stability despite the ongoing challenges.  

In  this  difficult  context,  the  EUTF  has  reported,  in  the  first  semester  of  2023,  the  highest  semestrial 
output on nutrition assistance since the beginning of the EUTF in HoA. Indeed, in these first six months, 
433 728 people have benefitted from the delivery of nutrition assistance from the EUTF, i.e. 15% of the 
total beneficiaries to date (2 833 594 people). This output level was reached notably through distribution 
of multiple micronutrient powder to children under five and through on-site school feeding in Sudan.  

Similarly,  the  EUTF  has  reported  this  semester  the  largest  biannual  output  of  assisted  or  protected 
migrants, refugees, returnees and internal displaced persons (mainly for Sudan), 103 436 people out of 
198 826 supported to date.   

The EUTF has also supported stabilisation and peacebuilding efforts in the region with a total of 65 369 
staff from state and non-state actors benefitting from capacity building activities on peace, security and 
governance related skills, including 2 392 new beneficiaries in the first semester of 2023. This year the 
outputs come in their majority from the Gambella region of Ethiopia and from South Sudan.  

The Sahel and Lake Chad region was confronted with numerous economic and humanitarian challenges in 
2023, such as inflation, decelerated economic growth, debt distress, food crisis, displacement, migration, 
security crisis, and violence.   

Investing in human capital was a major approach of the EUTF in supporting job creation in the region. In 
the  first  half  of  2023,  EUTF-funded  programmes  created  or  supported  11  087  jobs,  most  of  them  in 
Niger,  Guinea  and  Senegal.  Technical  and  vocational  education  and  training  (TVET)  and  skills 
development are key to improve labour productivity, and 23 266 people benefitted from TVET and skills 
development.  

Also  in  the  first  semester  of  2023,  EUTF  funded  activities  focused  on  raising  awareness  on  the  risks 
associated  with  irregular  migration,  reaching  2  943  412  people.  The  EUTF  supported  420  voluntary 
returns and the reintegration of 509 returning migrants. Since EUTF’s launch, 73 215 returning migrants 
have  benefitted  from  voluntary  return  assistance  and  91  642  from  reintegration  assistance  in  the  SLC 
region.  

In a very tense situation, with the security crisis in the region intensifying, in the first half of 2023 EUTF-
funded programmes trained 11 520 people on governance, conflict prevention, and human rights across 
the Sahel and Lake Chad region. A notable achievement of the semester was the training of 8 823 people 
in  Mali  to  support  the  referendum  process  which  led  to  the  adoption  of  a  new  Constitution  in  June.  In 
addition, 1 397 417 people participated in conflict prevention and human rights activities. Finally, EUTF-
funded  programmes  provided  10 034  pieces  of  equipment  to  civilian  institutions  and  security  forces,  to 
strengthen governance and security.  

64 

 
 
Annual accounts of the European Development Fund 2023 

While  still  impacted  by  the  consequences  of  the  Russian  war  of  aggression  against  Ukraine,  2023  was 
marked  by  several  unforeseen  crises  affecting  countries  in  the  North  of  Africa  and  their  neighbours, 
including  Sudan,  Niger  and  most  recently  the  Palestinian  territories,  leading  to  continued  political  and 
economic  downturn  in  the  region  as  well  as  further  tensions  and  migratory  movements.  In  2023, 
irregular border crossings on the Central Mediterranean route, from Tunisia and Libya to Italy and Malta, 
have increased by 50% in 2023 compared to 2022, with a total of 157 951 arrivals. Tunisia remains the 
top  country  of  departure  towards  Italy  (and  the  EU)  in  2023,  followed  by  Libya.  In  2023,  Guinea  and 
Tunisia  remained  the  primary  nationalities  of  arrival  to  Italy,  each  accounting  for  over  17,000  arrivals, 
followed by Cote d’Ivoire and Bangladesh. Similarly, pressure on the Western Mediterranean and Atlantic 
routes has substantially increased compared to the same period last year, with a total of 56 039 arrivals 
(+95% compared to 2022).   

Budget and budget implementation  

In 2023, no new programmes or budgetary top-ups took place in neither of the three regions of the EUTF  
Africa, in line with the end of the contracting period on 31 December 2021.  The total amount committed 
for operational and administrative expenditure since the beginning of the EUTF Africa amounts to EUR 5 
053.27 million. The amount of approved operational programmes since the beginning of the EUTF Africa 
amounts  to  EUR 1 810 million  for  the  Horn  of  Africa  region;  EUR 2  217.8 million  for  the  Sahel  and  Lake 
Chad region and EUR 907.3 million for the North of Africa region. 

28 new contracts for a total amount of EUR 5.08 million were contracted in 2023. These contracts were 
only  related  to  administrative  activities  (audit,  evaluation,  communication,  monitoring),  as  operational 
programmes or activities cannot be funded any longer since 31 December 2021.   

The payments in 2023 reached EUR 332.4 million, which was EUR 110 million lower than in 2022 (EUR 
442  million).  Payments  are  lower  in  2023  due  to  several  projects  reaching  the  end  of  their 
implementation period.  

Impact of the activities in the financial statements 

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

•  Pre-financing:  decreased by  kEUR  122  362 as a  result of  the winding down of the Trust  Fund 
and the consequential decrease in the number of new contracts: in 2023 only 28 contracts were 
signed relating to administrative  activities: audit,  evaluation, communication and monitoring for 
an amount of EUR 5.08 million; 

•  Financial liabilities: decreased by kEUR 70 236 mainly due to the fact that contributions cashed 

in the year were lower than the net expenses allocated to the donors;    

•  Operating expenses: decreased by kEUR 203 251 as a result of the winding down of the Trust 
Fund  which  led  to  a  decrease  in  the  number  of  open  contracts  and  thus  to  a  decrease  in 
expenses.  

65 

 
 
 
 
Annual accounts of the European Development Fund 2023 

BALANCE SHEET 

NON-CURRENT ASSETS 
Financial Assets 
Pre-financing 

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

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Financial liabilities 

CURRENT LIABILITIES 
Payables  
Accrued charges  

TOTAL LIABILITIES 

NET ASSETS 

31.12.2023 

 EUR '000 
31.12.2022 

 3 949 
 18 254 
 22 204 

 178 366 
 22 396 
 177 553 
 378 315 
 400 519 

 1 943 
 14 927 
 16 870 

 304 055 
 35 914 
 157 587 
 497 556 
 514 426 

 (264 555) 
 (264 555) 

 (334 791) 
 (334 791) 

 (14 261) 
 (121 704) 
 (135 965) 
 (400 519) 

 (30 975) 
 (148 660) 
 (179 635) 
 (514 426) 

– 

– 

66 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

STATEMENT OF FINANCIAL PERFORMANCE 

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

Revenue from exchange transactions 
Financial revenue 
Other exchange revenue 

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

2023 

EUR '000 
2022 

 408 274 
  179 
 408 453 

 605 739 
  754 
 606 493 

 4 865 
 13 446 
 18 311 
 426 764 

  251 
 18 902 
 19 152 
 625 645 

 (387 294) 
  (434) 
 (39 036) 
 (426 764) 
– 

 (590 545) 
  (643) 
 (34 457) 
 (625 645) 
– 

67 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

CASHFLOW STATEMENT 

Economic result of the year 
Operating activities 
(Increase)/decrease in pre-financing 
(Increase)/decrease in exchange receivables and non-exchange 
recoverables 
Increase/(decrease) in financial liabilities 
Increase/(decrease) in payables 
Increase/(decrease) in accrued charges  
Investing activities 
Increase/decrease in non-derivative financial assets at fair value through 
surplus or deficit 
NET CASHFLOW 

Net increase/(decrease) in cash and cash equivalents 

Cash and cash equivalents at the beginning of the year 

Cash and cash equivalents at year-end 

2023 
– 

 122 362 
 13 517 
 (70 236) 
 (16 715) 
 (26 956) 

EUR '000 
2022 
– 

 173 980 
 9 425 
 (190 739) 
 (22 168) 
 9 272 

 (2 007) 
 19 966 

 (1 943) 
 (22 172) 

 19 966 

 (22 172) 

 157 587 

 179 759 

 177 553 

 157 587 

68 

 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

CONSOLIDATED FINANCIAL STATEMENTS 
OF THE EDF AND THE EU TRUST FUNDS 

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

69 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

CONSOLIDATED BALANCE SHEET 

NON-CURRENT ASSETS 
Financial assets 
Pre-financing 
Exchange receivables 

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

TOTAL ASSETS 

NON-CURRENT LIABILITIES 
Financial liabilities 

CURRENT LIABILITIES 
Payables 
Accrued charges and deferred income 

TOTAL LIABILITIES 

NET ASSETS 

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

31.12.2023 

 EUR million 
31.12.2022 

 91 
 592 
 5 
 689 

 3 
1 137 
 50 
 807 
1 997 
 2 686 

 69 
 503 
 7 
 580 

 3 
1 711 
 66 
1 189 
2 970 
 3 550 

 (85) 
  (85) 

 (101) 
  (101) 

 (406) 
(1 110) 
(1 516) 
 (1 600) 

 (462) 
(1 282) 
(1 744) 
 (1 845) 

 1 086 

 1 705 

54 566 
2 252 
(53 484) 
(2 249) 
 1 086 

65 100 
2 252 
(62 834) 
(2 813) 
 1 705 

70 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE 

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

Revenue from exchange transactions 
Financial revenue 
Other revenue 

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

Total Expenses 

2023 

EUR million 
2022 

 15 
 122 
  136 

 14 
 56 
  70 
  207 

(1 870) 
 (3) 
 (412) 
 (8) 
 (7) 
 (157) 

 19 
 169 
  188 

 3 
 96 
  99 
  287 

(2 331) 
 (1) 
 (611) 
 4 
 (7) 
 (155) 

 (2 456) 

 (3 100) 

ECONOMIC RESULT OF THE YEAR 

 (2 249) 

 (2 813) 

71 

 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

CONSOLIDATED CASH FLOW STATEMENT 

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

Investing activities 
(Increase)/decrease in available for sale financial assets  

NET CASHFLOW 

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

2023 
 (2 249) 

EUR million 
2022 
 (2 813) 

1 630 
– 
 486 
 18 
 2 
 (18) 
 (56) 
 (172) 
– 

2 458 
– 
 414 

  16 
  1 
 (54) 
 (96) 

  120 
- 

 (22) 

  (33) 

  (382) 

  12 

 (382) 
 1 189 
  807 

 12 
 1 177 
 1 189 

72 

 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS 

Provisional annual accounts of the European Development Fund 2023 

Fund capital - 
active EDFs 
(A) 

 72 998 

 (43) 

– 
 72 955 
 (185) 
(12 164) 

Uncalled funds - 
active EDFs (B) 
 10 355 

(2 500) 

– 
 7 855 
(1 815) 

 60 607 

 6 040 

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

Cumulative 
Reserves (D) 

EUR million 

Called fund 
capital from 
closed EDFs 
carried 
forward (E) 

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

 62 643 

2 457 

– 
 65 100 
1 630 
(12 164) 
– 
 54 566 

 (62 834) 

 2 252 

– 

(2 813) 
 (65 647) 

12 164 
(2 249) 
 (55 733) 

– 

– 
 2 252 

 2 252 

 2 061 

2 457 

(2 813) 
 1 705 
1 630 
– 
(2 249) 
 1 086 

BALANCE AS AT 31.12.2021 

Capital increase -  contributions 

Economic result of the year 
BALANCE AS AT 31.12.2022 
Capital increase - contributions 
Closure of the 8th EDF 
Economic result of the year 
BALANCE AS AT 31.12.2023 

73 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

EDF REPORT ON FINANCIAL 
IMPLEMENTATION 

74 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

CONTENTS 

1. 

BACKGROUND ...................................................................................... 76 

1.1.  Previous EDFs ................................................................................................. 76 

1.2.  10th and 11th EDF .......................................................................................... 77 

2. 

FINANCIAL IMPLEMENTATION ................................................................. 78 

2.1.  Financial outturn ............................................................................................. 78 

2.2.  Resources ...................................................................................................... 82 

2.3.  Operational Expenditure and specific programmes ............................................... 83 

3. 

GLOSSARY ........................................................................................... 89 

75 

 
 
 
 
Annual accounts of the European Development Fund 2023 

1.  BACKGROUND 

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

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

The EDF is a fund operating based on multiannuality. Each EDF is concluded for a period of around five 
years  and  it  is  governed  by  its  own  Financial  Regulation.  The  Internal  Agreement  establishing  the  last 
EDF, the 11th EDF (2014-2020), came into force on 1 March 2015. As of 2021, the cooperation with the 
ACP countries is included in the Neighbourhood, Development and International Cooperation Instrument 
(NDICI). However, the ongoing projects, funded under the EDF, will continue their implementation, under 
the respective EDF legal basis. 

This report is produced in accordance with Article 39 of the Financial Regulation of 11th EDF7. It provides 
information on  the revenue and expenditure operations of  the EDF,  with the focus on important events 
that had a significant impact on the financial implementation of the year. 

Given that there are no ongoing operations under previous EDFs8, this report includes figures only for the 
10th and 11th EDF. 

1.1.  Previous EDFs 

6TH AND 7TH EDF 

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

In  accordance  with  article  1(2)(b)  of  the  Internal  Agreement  of  the  9th  EDF,  balances  and 
decommitments of previous EDFs have been transferred to the 9th EDF. 

8TH AND 9TH EDF 

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

All 8th EDF activities have been completed, all checks and controls have been performed, and all contracts 
and financial decisions are closed in the EDF accounts. All recovery orders, which were still open after the 
operational  closure,  were  cashed  or  waived  with  the  exception  of  10  recovery  orders    (including  6 
litigation  cases  followed  by  the  Legal  Service).  In  line  with  the  Commission’s  Decision  C(2003)19044, 
these ROs were transferred to the 9th EDF. 

The    closure    of  the  9th  EDF    is    progressing    well.  There  are  still  10  contracts  open,  out  of  which  6 
concern actions in Southern  Sudan (Council decision 2011/315/EU). These were decided  after  the 9th 
EDF sunset  clause and should, in principle, be closed during 2024. 

From 2015 to 2023, the Commission carried out five refunds of 8th/9thEDF credits for a total amount of 
EUR 1911.19 million. A balance  of  EUR 7.8 million was  refunded in  January  202410 in  the  context  of  
the payment of the 1st instalment of MS contributions to the EDF for the year 2024. 

7 COUNCIL REGULATION (EU) 2018/1877 
8 Except for operations in South-Sudan 
9 1.402,57 million Bridging facility (Council Decision 2015/0246), 200 million ( Council Decision 2017/1206), 223 million ( Council 
decision 2020/1708)m 43 million (Council Decision 2021/1941) and 42.5 million( (Council Decision 2022/2242) 

76 

 
 
 
Annual accounts of the European Development Fund 2023 

1.2.  10th and 11th EDF  

The ACP-EC Partnership Agreement was signed on 23 June 2000 in Cotonou by the Member States of the 
European Community and the States of Africa, the Caribbean and the Pacific (ACP States). It entered into 
force on 1 April 2003 (establishing the 9th EDF). The Cotonou Agreement was amended twice, firstly by 
the  agreement  signed  in  Luxembourg  on  25  June  2005  (establishing  the  10th  EDF),  secondly  by  the 
agreement signed in Ouagadougou on 22 June 2010 (establishing the 11th EDF). 

The  EU  Council  Decision  of  27  November  2001  (2001/822/EC)  on  the  association  of  the  overseas 
countries  and  territories  (OCT)  with  the  European  Union  entered  into  force  on  2  December  2001.  This 
Decision was amended on 19 March 2007 (Decision 2007/249/EC). 

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

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

•  EUR 21 966 million was allocated to the ACP countries;  

•  EUR 286 million to the OCT; and  

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

of the EDF.  

The amount for the ACP countries is divided as follows:  

•  EUR 17  766 million to national and regional indicative programmes;  

•  EUR 2 700 million to intra-ACP and intra-regional cooperation; and  

•  EUR 1 500 million to Investment Facilities.  

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

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

• 

• 

• 

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

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

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

10 COUNCIL DECISION (EU) 2023_2586 of 13 November 2023 

77 

 
 
 
 
 
Annual accounts of the European Development Fund 2023 

2. 

FINANCIAL IMPLEMENTATION 

2.1.  FINANCIAL OUTTURN 

EVOLUTION OF 10th EDF APPROPRIATIONS 

10th EDF 
EVOLUTION OF APPROPRIATIONS:  31 December 2023 
ANALYSIS OF CREDITS PER INSTRUMENT 

INSTRUMENT 

INITIAL 
APPROPRIATION 

INCREASES/DECREASES 
IN CUMULATIVE  
RESOURCES AT 
31 DECEMBER 2022 

(EUR million) 

Notes 

CURRENT 
LEVEL 
APPROPRIATION 

INCREASE 
OR 
DECREASE 
IN 
RESOURCES 
IN 2023 

Co-financing 

ACP 

Regular MS Contributions 

SUB TOTAL ACP 

Regular MS Contributions 

OCT 

SUB TOTAL OCT 

0 

21.326 

21.326 

0 

0 

202 

(526) 

(324) 

240 

240 

(95) 

(95) 

(0) 

(0) 

202 

20.705 

20.907 

239 

239 

TOTAL 10th EDF 

21.326 

(84) 

(96) 

21.146 

78 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

EVOLUTION OF 11th EDF APPROPRIATIONS 

11th EDF 
EVOLUTION OF APPROPRIATIONS:  31 December 2023 
ANALYSIS OF CREDITS PER INSTRUMENT 

INSTRUMENT 

INITIAL 
APPROPRIATION 

INCREASES/DECREASES 
IN CUMULATIVE  
RESOURCES AT 
31 DECEMBER 2022 

(EUR million) 

Notes 

CURRENT 
LEVEL 
APPROPRIATION 

INCREASE 
OR 
DECREASE 
IN 
RESOURCES 
IN 2023 

Co-financing 

ACP 

EC Internal SLA 

Regular MS Contributions 

SUB TOTAL ACP 

Co-financing 

EC Internal SLA 

OCT 

Regular MS Contributions 

SUB TOTAL OCT 

0 

0 

30.060 

30.060 

0 

0 

0 

0 

89 

1 

(822) 

(732) 

0 

0 

355 

355 

0 

(74) 

(4) 

89 

1 

29.164 

29.255 

0 

0 

351 

351 

TOTAL 11th EDF 

30.060 

(526) 

71 

29.605 

79 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

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

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2023 
CLASS OF AID 

ACP + PTOM - 10 th EDF 

CREDI
TS 

DECISIONS 
ANNU
AL 

AGGR
EG. 

(1) 

(2) 

% 

(2) : 
(1) 

ASSIGNED FUNDS 
ANNU
AL 

AGGR
EG. 

% 

(3) 

(3) : 
(2) 

(EUR million) 

PAYMENTS 
ANNU
AL 

AGGR
EG. 

(4) 

% 

(4) : 
(3) 

12.297 

12.288 

(36) 

100% 

12.264 

(19) 

100% 

12.199 

37 

99% 

1.965 

1.962 

(4) 

100% 

1.961 

(0) 

100% 

1.960 

1 

100% 

343 

527 

484 

526 

0 

141% 

(0) 

100% 

482 

526 

166 

100% 

0 

100% 

306 

522 

185 

175 

(3) 

95% 

175 

(0) 

100% 

173 

5 

11 

(0) 

110% 

91% 

5 

11 

(0) 

100% 

100% 

5 

11 

5 

12 

14 

74 

64% 

60 

(2) 

1 

1 

99% 

95% 

96% 

99% 

100% 

100% 

SUB TOTAL: INTRA-ACP ALLOCATIONS 

3.612 

3.596 

(22) 

100% 

3.572 

23 

99% 

3.384 

SUB TOTAL: REGIONAL ALLOCATIONS 

1.948 

1.792 

(18) 

92% 

1.768 

(10) 

99% 

1.692 

Regular MS Contributions 

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

SUB TOTAL: FOOD SECURITY 

SUB TOTAL: IMPLEMENTATION COSTS AND 
INTERESTS REVENUES 

Co-financing 

Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL 
ALLOCATIONS 
SUB TOTAL: IMPLEMENTATION COSTS AND 
INTERESTS REVENUES 

SUB TOTAL: INTRA-ACP ALLOCATIONS 

Non-mobilisable reserve 
SUB TOTAL: NON-MOBILISABLE RESERVE 
08/09TH EDF 

P
C
A

Regular MS Contributions 

Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL 
ALLOCATIONS 
SUB TOTAL: B ENVELOPE - NATIONAL 
ALLOCATIONS 
SUB TOTAL: IMPLEMENTATION COSTS AND 
INTERESTS REVENUES 

SUB TOTAL: REGIONAL ALLOCATIONS 

T
C
O

186 

186 

14 

5 

34 

14 

5 

34 

0 

0 

100% 

100% 

0 

100% 

100% 

182 

(1) 

98% 

172 

2 

95% 

14 

5 

34 

100% 

100% 

(0) 

99% 

14 

5 

34 

100% 

100% 

(0) 

100% 

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

21.146 

21.078 

(84) 

100
% 

20.999 

158 

100
% 

20.477 

175 

98% 

80 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

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

EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2023 
CLASS OF AID 

ACP + PTOM - 11 th EDF 

(EUR million) 

CREDI
TS 

DECISIONS 
ANNU
AL 

AGGR
EG. 

(1) 

(2) 

% 

(2) : 
(1) 

ASSIGNED FUNDS 
ANNU
AL 

AGGR
EG. 

% 

PAYMENTS 
ANNU
AL 

AGGR
EG. 

(3) 

(3) : 
(2) 

(4) 

% 

(4) : 
(3) 

Regular MS Contributions 

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

15.369 

15.329 

(92) 

100% 

14.723 

311 

96% 

12.124 

1.061 

82% 

1.060 

1.059 

(0) 

100% 

1.053 

13 

99% 

1.007 

SUB TOTAL: FOOD SECURITY 

112 

112 

0 

100% 

112 

91 

100% 

SUB TOTAL: IMPLEMENTATION COSTS AND 
INTERESTS REVENUES 

1.072 

1.066 

(1) 

99% 

1.062 

(0) 

100% 

41 

958 

SUB TOTAL: INTRA-ACP ALLOCATIONS 

4.004 

3.894 

(13) 

97% 

3.926 

104 

101% 

3.340 

SUB TOTAL: REGIONAL ALLOCATIONS 

7.253 

7.227 

(59) 

100% 

7.090 

44 

98% 

5.964 

27 

37 

48 

155 

512 

96% 

36% 

90% 

85% 

84% 

Co-financing 

Allocations 
SUB TOTAL: A ENVELOPE - NATIONAL 
ALLOCATIONS 
SUB TOTAL: IMPLEMENTATION COSTS AND 
INTERESTS REVENUES 

AC
P 

SUB TOTAL: INTRA-ACP ALLOCATIONS 

SUB TOTAL: REGIONAL ALLOCATIONS 

Non-mobilisable reserve 

Reserves 
SUB TOTAL: NON-MOBILISABLE RESERVE 10TH 
EDF 
SUB TOTAL: NON-MOBILISABLE RESERVE 11TH 
EDF 

EC Internal SLA 

Reserves 
SUB TOTAL: A ENVELOPE - NATIONAL 
ALLOCATIONS 

Regular MS Contributions 

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

SUB TOTAL: BRIDGING FACILITY 

SUB TOTAL: IMPLEMENTATION COSTS AND 
INTERESTS REVENUES 

SUB TOTAL: REGIONAL ALLOCATIONS 

OC
T 

Non-mobilisable reserve 

Reserves 
SUB TOTAL: NON-MOBILISABLE RESERVE 10TH 
EDF 
SUB TOTAL: NON-MOBILISABLE RESERVE 11TH 
EDF 

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

45 

4 

33 

6 

(1) 

99% 

100% 

100% 

75% 

0 

0 

45 

4 

33 

6 

0 

0 

100% 

100% 

(0) 

100% 

0 

100% 

40 

4 

28 

6 

14 

89% 

3 

0 

2 

100% 

85% 

100% 

46 

4 

33 

8 

128 

167 

1 

1 

52% 

1 

100% 

1 

100% 

211 

12 

7 

102 

(0) 

100% 

0 

100% 

(2) 

79% 

0 

100% 

194 

12 

6 

102 

0 

0 

92% 

100% 

(0) 

96% 

0 

100% 

193 

12 

6 

69 

1 

0 

100% 

99% 

1 

94% 

17 

67% 

211 

12 

0 

8 

102 

15 

1 

29.605 

29.106 

(168) 

98% 

28.368 

562 

97% 

23.791 

1.878 

84% 

81 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

2.2.  RESOURCES 

Nature of Resources 

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

Overview of contributions by Member State 

10th and 11th contribution to EDF by MS & United Kingdom  (in EUR million)
2011-2023

12.000,0

10.000,0

8.000,0

6.000,0

4.000,0

2.000,0

0,0

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

10th 11th
EDF called

10th 11th
EDF uncalled

82 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

2.3.  OPERATIONAL EXPENDITURE AND SPECIFIC 

PROGRAMMES  

Nature of Expenditure  

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

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

DECISIONS 

ASSIGNED FUNDS 

PAYMENTS 

CREDI
TS 

AGGR
EG. 

ANNU
AL 

(1) 

(2) 

% 

(2) : 
(1) 

AGGR
EG. 

(3) 

ANNU
AL 

% 

(3) : 
(2) 

AGGR
EG. 

(4) 

ANNU
AL 

% 

(4) : 
(3) 

IMPLEMENTATION COSTS AND INTERESTS 
REVENUES 10th  + 11th EDF 
OPERATIONAL IMPLEMENTATION   (A+B)  10th + 11th 
EDF 

1.620 

1.612 

(3) 

99,5% 

1.608 

(1) 

99,8% 

1.499 

53 

93,2% 

50.751 

50.184 

(252) 

98,9% 

49.367 

720 

98,4% 

44.268 

2.053 

89,7% 

Implementation rate (%) for the 10th and 11th EDF

102,0%

100,0%

98,0%

96,0%

94,0%

92,0%

90,0%

88,0%

86,0%

84,0%

Commitment rate

Contract rate

Payment rate

Administrative

Operational

83 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

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

EDF CUMULATIVE ACCOUNTS AT 31 DECEMBER 2023 BY COUNTRY % APPR 

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

10th + 11 th EDF 

Cumulative 2023 

General/administrative 
envelope/interests 

Reserve/Not distributed by country 

All ACP countries 

Angola 

Benin 

Botswana 

Burkina Faso 

Burundi 

Cameroon 

Cape Verde 

Comoros 

Congo (Brazzaville) 

Appropriations  Decisions 

1.624 

2.862 

4.486 

346 

735 

129 

1.614 

2.553 

4.167 

346 

732 

127 

1.302 

1.302 

569 

521 

145 

78 

163 

567 

520 

145 

77 

163 

Congo (Democratic Republic of) 

1.409 

1.407 

ACP 

Ivory Coast 

Djibouti 

Eritrea 

Ethiopia 

Gabon 

Gambia 

Ghana 

Guinea Bissau 

Guinea (Conakry) 

Mauritius 

Kenya 

Lesotho 

Liberia 

Madagascar 

Malawi 

Mali 

Mauritania 

Mozambique 

Namibia 

Niger 

Nigeria 

Uganda 

Central African Republic 

Rwanda 

Sao Tome and Principe 

Senegal 

Seychelles 

Sierra Leone 

Somalia 

Sudan 

South Sudan 

Eswatini (Swaziland) 

Tanzania 

Chad 

Togo 

705 

181 

215 

705 

181 

215 

1.604 

1.603 

33 

314 

787 

186 

502 

82 

863 

250 

488 

782 

1.020 

1.423 

344 

1.455 

188 

1.275 

1.101 

989 

610 

840 

56 

663 

23 

662 

900 

298 

91 

125 

33 

303 

786 

186 

502 

82 

863 

249 

487 

782 

1.020 

1.421 

344 

1.448 

188 

1.275 

1.100 

989 

610 

840 

56 

663 

23 

659 

898 

298 

91 

124 

1.172 

1.171 

936 

377 

936 

377 

84 

% of 
Appr 

99% 

89% 

93% 

100% 

100% 

98% 

100% 

100% 

100% 

100% 

99% 

100% 

100% 

100% 

100% 

100% 

100% 

99% 

96% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

99% 

100% 

100% 

100% 

99% 

100% 

100% 

100% 

Assigned 
funds 

1.615 

2.553 

4.168 

344 

720 

126 

% of 
Appr 

99% 

89% 

93% 

99% 

98% 

97% 

Payments 

1.494 

2.553 

4.047 

300 

679 

126 

1.297 

100% 

1.261 

564 

519 

144 

76 

159 

1.371 

701 

178 

215 

1.594 

32 

301 

782 

185 

494 

82 

855 

248 

443 

730 

970 

1.414 

341 

1.391 

178 

1.259 

99% 

100% 

100% 

98% 

98% 

97% 

100% 

98% 

100% 

99% 

97% 

96% 

99% 

100% 

98% 

100% 

99% 

99% 

91% 

93% 

95% 

99% 

99% 

96% 

95% 

99% 

1.097 

100% 

983 

609 

831 

54 

659 

23 

646 

895 

298 

91 

122 

1.161 

902 

375 

99% 

100% 

99% 

96% 

99% 

100% 

98% 

99% 

100% 

100% 

97% 

99% 

96% 

99% 

541 

482 

144 

72 

139 

1.219 

676 

156 

75 

1.400 

30 

277 

726 

175 

434 

82 

753 

197 

436 

591 

883 

1.230 

321 

1.124 

169 

1.247 

1.025 

834 

584 

816 

49 

620 

22 

597 

889 

298 

91 

108 

1.060 

794 

355 

% of 
Appr 

92% 

89% 

90% 

87% 

92% 

97% 

97% 

95% 

93% 

100% 

92% 

85% 

87% 

96% 

86% 

35% 

87% 

91% 

88% 

92% 

94% 

86% 

100% 

87% 

79% 

89% 

76% 

87% 

86% 

93% 

77% 

90% 

98% 

93% 

84% 

96% 

97% 

88% 

94% 

98% 

90% 

99% 

100% 

100% 

86% 

90% 

85% 

94% 

 
 
 
 
  
Annual accounts of the European Development Fund 2023 

830 

469 

830 

462 

* Total Africa 

28.235 

28.185 

Zambia 

Zimbabwe 

Antigua and Barbuda 

Barbados 

Belize 

Dominica 

Grenada 

Guyana 

Haïti 

Jamaica 

Dominican Republic 

Saint Lucia 

Saint Kitts and Nevis 

Saint Vincent and the Grenadines 

Suriname 

Trinidad and Tobago 

15 

22 

42 

41 

21 

79 

15 

22 

42 

41 

21 

79 

1.009 

1.002 

236 

283 

32 

8 

26 

27 

29 

236 

281 

32 

8 

26 

27 

28 

* Total Caribbean 

1.870 

1.861 

Fiji 

Cook Islands 

Solomon Islands 

Kiribati 

Marshall Island 

Micronesia 

Nauru 

Niue 

Palau 

Papua New Guinea 

Western Samoa 

Timor Leste 

Tonga 

Tuvalu 

Vanuatu 

* Total Pacific 

Intra ACP Allocations 

PALOP 

Southern Africa Region FED 10 

Central Africa region 

Eastern and Southern Africa region 

Western Africa Region 

Caribbean Region 

Pacific Region 

Reserve/Not distributed by region 

* Total regional cooperation ACP 

ACP 

Reserve/Not distributed by 
country/territory 

All OCT countries 

OCT 

Anguilla 

Falklands Islands 

Pitcairn Islands 

Turks and Caicos Islands 

British Virgin Islands 

Montserrat 

ACP 

48 

5 

68 

42 

17 

23 

4 

3 

5 

239 

67 

174 

28 

13 

55 

793 

8.097 

60 

137 

558 

3.092 

1.946 

539 

323 

0 

48 

5 

68 

42 

17 

23 

4 

3 

5 

239 

67 

171 

28 

13 

55 

789 

7.970 

60 

135 

554 

3.066 

1.943 

538 

321 

0 

14.752 

50.137 

14.587 

49.589 

12 

12 

27 

10 

5 

32 

2 

33 

30 

30 

28 

10 

5 

32 

2 

33 

85 

100% 

99% 

100% 

100% 

99% 

100% 

100% 

100% 

100% 

99% 

100% 

99% 

100% 

100% 

100% 

100% 

99% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

98% 

100% 

100% 

100% 

100% 

98% 

100% 

100% 

100% 

100% 

98% 

100% 

99% 

99% 

99% 

100% 

100% 

99% 

0 

99% 

99% 

39% 

39% 

99% 

100% 

100% 

100% 

100% 

100% 

784 

460 

27.703 

15 

22 

41 

40 

21 

77 

876 

233 

280 

32 

6 

26 

27 

28 

1.724 

48 

5 

68 

41 

17 

22 

4 

3 

4 

233 

67 

169 

28 

13 

54 

776 

7.973 

60 

135 

546 

2.973 

1.917 

526 

299 

0 

14.429 

48.801 

11 

11 

27 

10 

5 

32 

2 

33 

94% 

98% 

98% 

100% 

99% 

96% 

98% 

100% 

97% 

87% 

99% 

99% 

100% 

72% 

99% 

99% 

99% 

92% 

99% 

100% 

100% 

98% 

100% 

97% 

98% 

100% 

70% 

97% 

99% 

97% 

100% 

99% 

99% 

98% 

98% 

99% 

99% 

98% 

96% 

99% 

98% 

93% 

0 

98% 

97% 

38% 

38% 

99% 

100% 

100% 

100% 

98% 

100% 

648 

453 

25.192 

15 

21 

35 

40 

20 

77 

773 

222 

278 

31 

6 

22 

26 

24 

1.590 

48 

5 

61 

37 

16 

16 

4 

3 

4 

202 

67 

157 

28 

13 

49 

709 

6.988 

55 

132 

422 

2.383 

1.613 

397 

224 

0 

12.213 

43.750 

11 

11 

27 

10 

5 

32 

2 

33 

78% 

97% 

89% 

95% 

94% 

83% 

98% 

98% 

97% 

77% 

94% 

98% 

96% 

72% 

84% 

96% 

85% 

85% 

98% 

100% 

90% 

87% 

98% 

68% 

98% 

100% 

68% 

84% 

99% 

90% 

100% 

97% 

90% 

89% 

86% 

91% 

96% 

76% 

77% 

83% 

74% 

69% 

0 

83% 

87% 

36% 

36% 

99% 

100% 

100% 

100% 

93% 

100% 

 
 
  
  
  
  
  
  
  
  
  
Annual accounts of the European Development Fund 2023 

Saint Helena 

* Total British OCT 

Netherlands Antilles 

Netherlands Antilles - Bonaire 

Netherlands Antilles - Saba 
Netherlands Antilles - Sint-
Eustatius 

Aruba 

Sint Maarten 

* Total Dutch OCT 

Wallis and Futuna Islands 

Mayotte 

New Caledonia 

French Polynesia 

Saint Pierre and Miquelon 

* Total French OCT 

region 

* Total regional cooperation OCT 

OCT 

38 

147 

40 

4 

3 

2 

21 

14 

85 

39 

29 

50 

51 

47 

215 

137 

137 

614 

38 

146 

40 

4 

3 

2 

21 

14 

85 

39 

29 

50 

51 

47 

215 

137 

137 

595 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

97% 

38 

146 

23 

4 

3 

2 

21 

8 

61 

37 

29 

50 

49 

47 

212 

136 

136 

566 

100% 

100% 

56% 

98% 

100% 

100% 

99% 

55% 

72% 

95% 

100% 

100% 

97% 

100% 

98% 

99% 

99% 

92% 

38 

146 

20 

2 

3 

2 

21 

5 

54 

29 

29 

50 

49 

47 

204 

103 

103 

517 

100% 

100% 

51% 

56% 

100% 

100% 

96% 

33% 

63% 

75% 

100% 

100% 

97% 

100% 

95% 

75% 

75% 

84% 

TOTAL: 
ACP+OCT 

50.751 

50.184 

99% 

49.367 

97% 

44.268 

87% 

86 

 
 
  
  
  
  
  
 
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

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

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

Sector  
Social infrastructure and services 
110-Education 

120-Health 

130-Population policies/programmes and reproductive health 

140-Water and sanitation 

150-Government and civil society 

160-Other social infrastructure and services 

Social infrastructure and services TOTAL 

Economic infrastructure and services 
210-Transport and storage 

220-Communications 

230-Energy 

240-Banking and financial services 

250-Business and other services 

 Economic infrastructure and services TOTAL 

Production sectors 
310-Agriculture, forestry and fishing 

320-Industry, mineral resources and mining, construction 

330-Trade and tourism 

Production sectors TOTAL 

Multisector/Cross-cutting 
410-General environmental protection 

430-Other multisector 

Multisector/Cross-cutting TOTAL 

Commodity aid and general programme assistance 
510-General budget support 

520-Developmental food assistance 

Commodity aid and general programme assistance TOTAL 

Committed 

Contracted 

Paid 

(EUR million) 

        1.192,46  
        2.131,40  
           352,44  
           788,50  
        5.826,37  
           996,71  
        11.287,88  

                   1.132,83  
                   2.510,72  
                         50,31  
                      848,83  
                   6.047,02  
                   1.385,46  
                   11.975,17  

                      995,48  
                   2.263,73  
                         35,95  
                      547,53  
                   5.540,34  
                   1.611,09  
                   10.994,13  

        1.425,48  
           140,96  
        2.015,13  
              82,03  
           343,43  
          4.007,01  

                   2.055,09  
                      146,96  
                   1.943,06  
                      129,29  
                      324,93  
                     4.599,33  

                   1.083,29  
                      114,64  
                   1.220,76  
                         83,97  
                      223,51  
                     2.726,17  

        3.344,16  
           641,59  
           507,49  
          4.493,24  

                   3.105,92  
                      492,66  
                      436,11  
                     4.034,69  

                   2.351,62  
                      297,21  
                      272,06  
                     2.920,88  

           989,82  
        3.886,22  
          4.876,04  

                      841,85  
                   2.610,66  
                     3.452,51  

                      658,36  
                   1.685,71  
                     2.344,07  

        3.116,32  
           617,50  
          3.733,82  

                   3.165,05  
                      391,67  
                     3.556,73  

                   2.480,30  
                      367,06  
                     2.847,36  

Action relating to debt TOTAL 

           183,00  
             183,00  

                      183,00  
                        183,00  

                      183,00  
                        183,00  

Action relating to debt 
600-Action relating to debt 

Humanitarian aid 
720-Emergency response 

730-Reconstruction relief and rehabilitation 

740-Disaster preparedness 

Administrative costs of donors / Unallocated / Unspecified 
910-Administrative costs of donors 

Humanitarian aid TOTAL 

998-Unallocated / Unspecified 

N/A-Not Available 

Administrative costs of donors / Unallocated / Unspecified TOTAL 
 GRAND TOTAL OF 11TH EDF   

           746,19  
           137,83  
              72,79  
             956,81  

                      452,54  
                         65,05  
                      110,05  
                        627,64  

                      451,93  
                         42,29  
                         93,41  
                        587,63  

           995,52  
           183,74  
           260,50  
          1.439,76  
        30.977,56  

                      948,63  
                         56,05  
                           1,64  
                     1.006,32  
                   29.435,38  

                      857,45  
                         38,45  
                           1,21  
                        897,11  
                   23.500,34  

11   Gross amounts (i.e. excluding decommitments and recovery orders) 
Amounts in columns Committed, Contracted, Paid are colour weighted 

87 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

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

EUR million

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

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

EUR million

 12.000,00

 10.500,00

 9.000,00

 7.500,00

 6.000,00

 4.500,00

 3.000,00

 1.500,00

 -

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

2014

2015

2016

2017

2019

2020

2021

2022

2018
Financial Year

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

Social infrastructure and services

Economic infrastructure and services

Production sectors

Multisector/Cross-cutting

Commodity aid and general programme
assistance

Action relating to debt

Humanitarian aid

Other : Administrative costs of donors /
Unallocated / Unspecified

N/A-Not Available

Social infrastructure and services

Economic infrastructure and services

Production sectors

Multisector/Cross-cutting

Commodity aid and general programme
assistance

Humanitarian aid

Other : Administrative costs of donors /
Unallocated / Unspecified

N/A-Not Available

2014

2015

2016

2017

2018

2019
Financial Year

2020

2021

2022

2023

Action relating to debt

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

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Financial Year

88 

Social infrastructure and services

Economic infrastructure and services

Production sectors

Multisector/Cross-cutting

Commodity aid and general programme
assistance

Humanitarian aid

Other : Administrative costs of donors /
Unallocated / Unspecified

Action relating to debt

 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.  GLOSSARY 

Administrative appropriations 

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

Adopted budget 

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

Amending budget 

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

Appropriations 

Budget funding. 

The budget forecasts both commitments (legal pledges to provide finance) and payments (cash or bank 
transfers  to  the  beneficiaries).  Appropriations  for  commitments  and  payments  often  differ  — 
differentiated  appropriations  —  because  multiannual  programmes  and  projects  are  usually  fully 
committed  in  the  year  they  are  decided  and  are  paid  over  the  years  as  the  implementation  of  the 
programme and project progresses. 

Assigned revenue 

Revenue dedicated to finance specific items of expenditure. 

Budget result 

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

For agencies, the resulting amount will have to be reimbursed to the funding authority. 

Budget implementation 

Consumption of the budget through expenditure and revenue operations. 

Budget item / Budget line / Budget position 

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

Budgetary commitment 

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

Cancellation of appropriations 

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

Carryover of appropriations 

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

89 

 
 
 
Annual accounts of the European Development Fund 2023 

Commitment appropriations 

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

De-commitment 

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

Differentiated appropriations 

Differentiated  appropriations  are  used  to  finance  multiannual  operations;  they  cover,  for  the  current 
financial  year,  the  total  cost  of  the  legal  obligations  entered  into  for  operations  whose  implementation 
extends over more than one financial year. 

Economic result 

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

Entitlements established 

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

Exchange rate difference 

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

Expenditure 

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

Grants 

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

Lapsing appropriations 

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

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

Legal basis / basic act 

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

Legal commitment 

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

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

90 

 
 
Annual accounts of the European Development Fund 2023 

Non-differentiated appropriations 

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

Operational appropriations 

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

Outstanding commitments 

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

Payment appropriations 

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

RAL (Reste à liquider)  

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

Surplus 

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

Transfer between budget lines 

Transfers between budget lines imply the relocation of appropriations from one budget line to another, in 
the course  of the financial year,  and thereby  they  constitute an exception to the budgetary principle of 
specification.

91 

 
 
Annual accounts of the European Development Fund 2023 

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

92 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

EUROPEAN INVESTMENT BANK 

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

IN V E ST M ENT  F AC ILI TY  

FINANCIAL STATEMENTS 

AS AT 31 DECEMBER 2023 

(1)  Independent auditor’s report  

(2)  Statement of financial position 

(3)  Statement of profit or loss and other 

comprehensive income 

(4)  Statement of changes in contributors’ resources 

(5)  Statement of cash flows 

(6)  Notes to the financial statements 

ORG.: E 

CONFIDENTIAL 

93 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

STATEMENT OF FINANCIAL POSITION 
AS AT 31 DECEMBER 2023 
(in EUR’000) 

Notes 

31.12.2023 

31.12.2022 

ASSETS 

Cash and cash equivalents 

Amounts receivable from contributors 

Treasury financial assets 

Derivative financial instruments 

Loans and advances 

Shares and other variable yield securities 

Other assets 

Total assets 

LIABILITIES AND CONTRIBUTORS' RESOURCES 

LIABILITIES 

Deferred income 

Provisions for loan commitments 

Amounts owed to third parties 

Other liabilities 

5 

9/16 

10 

6 

7 

8 

11 

12 

13 

14 

15 

1,376,824 

85,321 

- 

55,765 

1,683,312 

820,713 

616 

1,451,970 

85,321 

73,003 

75,852 

1,849,786 

797,341 

950 

4,022,551 

4,334,223 

48,515 

19,038 

427,828 

3,338 

52,417 

16,583 

190,927 

2,419 

Total liabilities 

498,719 

262,346 

Contributors' resources 

16/17 

3,523,832 

4,071,877 

Total liabilities and contributors' resources 

4,022,551 

4,334,223 

94 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME  
FOR THE YEAR ENDED 31 DECEMBER 2023 
(in EUR’000) 

Notes 

From 01.01.2023 

From 01.01.2022 

to 31.12.2023 

to 31.12.2022 

Interest and similar income* 

Interest and similar expenses 

Net interest and similar income 

Fee and commission income 

Fee and commission expenses 

Net fee and commission income 

Fair value change of derivative financial instruments  

Net result on shares and other variable yield securities 

Net result on loans and advances measured at FVTPL 

Net foreign exchange result 

Net result on financial operations 

Change in impairment on loans and advances, net of reversals 

Change in provisions for loan commitments, net of reversals 

General administrative expenses 

Profit for the year 

Total comprehensive income profit for the year 

19 

19 

20 

20 

6 

21 

7 

22 

7.2 

13 

23 

148,336 

- 

148,336 

25 

-62 

-37 

-20,087 

-8,457 

-8,932 

-67,885 

-105,361 

9,055 

-2,470 

-29,655 

19,868 

19,868 

93,786 

-5,479 

88,307 

511 

-761 

-250 

94,680 

24,432 

-3,080 

-140,104 

-24,072 

8,562 

20 

-33,628 

38,939 

38,939 

* For the year ended 31 December 2023, Interest and similar income includes EUR 118.5 million (2022: EUR 85.8 million) calculated on 
assets held at amortised cost based on the effective interest method.  

95 

 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
  
 
 
  
 
 
 
  
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

STATEMENT OF CHANGES IN CONTRIBUTORS’ RESOURCES 
FOR THE YEAR ENDED 31 DECEMBER 2023 
(in EUR’000) 

Contribution 
called 

Contributions 
paid out 

Retained 
earnings 

Total  

At 1 January 2023 

Notes 

3,701,695 

Member States contributions called during the year 

Member States contributions paid out during the year 

16 

17 

Profit for the year 2023 

20,000 

- 

- 

- 

- 

-587,913 

370,182 

4,071,877 

- 

- 

20,000 

-587,913 

- 

19,868 

19,868 

Changes in contributors’ resources 

20,000 

-587,913 

19,868 

-548,045 

At 31 December 2023 

3,721,695 

-587,913 

390,050 

3,523,832 

At 1 January 2022 

Member States contribution called during the year 

Profit for the year 2022 

Changes in contributors’ resources 

At 31 December 2022 

Contribution 
called  

Contributions 
paid out 

Retained 
earnings  

Total  

3,471,695 

230,000 

- 

230,000 

3,701,695 

- 

- 

- 

- 

- 

331,243 

3,802,938 

- 

230,000 

38,939 

38,939 

38,939 

268,939 

370,182 

4,071,877 

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Annual accounts of the European Development Fund 2023 

STATEMENT OF CASH FLOWS 
FOR THE YEAR ENDED 31 DECEMBER 2023 
(in EUR’000) 

OPERATING ACTIVITIES 
Profit for the year 
Adjustments made for: 
Net result in fair value on shares and other variable yield securities 
Change in impairment on loans and advances, net of reversals 
Net result on loans and advances measured at FVTPL 
Change in accrued interest and amortised cost on loans and advances 
Net change in provisions for loan commitments, net of reversals 
Fair value changes on derivatives  
Change in accrued interest and amortised cost on treasury financial assets 
Change in deferred income 
Effect of exchange rate changes on loans   
Effect of exchange rate changes on shares and other variable yield securities 
Effect of exchange rate changes on cash held  
Profit / (Loss) on operating activities before changes in operating assets and liabilities 
Loan disbursements 
Repayments of loans 
Change in accrued interest on cash and cash equivalents 
Acquisition of treasury financial assets 
Maturities of treasury financial assets 
Increase in shares and other variable yield securities 
Net proceeds from shares and other variable yield securities 
Decrease in other assets 
Increase in other liabilities 
Increase / (Decrease) in amounts payable to the European Investment Bank 
Net cash flows (used in) / from operating activities 

FINANCING ACTIVITIES 
Contributions received from Member States  
Amounts received from Member States with regard to interest subsidies and technical 
assistance 
Amounts paid on behalf of Member States with regard to interest subsidies and technical 
assistance 
Contributions paid out on behalf of Member States 
Net cash flows from financing activities 
Net increase in cash and cash equivalents 
Summary statement of cash flows: 
Cash and cash equivalents at the beginning of financial year 
Net cash flows (used in) / from: 
Operating activities 
Financing activities 
Effects of exchange rate changes on cash and cash equivalents 
Cash and cash equivalents at the end of financial year 
Cash and cash equivalents are composed of: 
Cash in hand  
Term deposits (excluding accrued interest) 
Commercial papers 

Notes 

From 
01.01.2023 to 
31.12.2023 

From 
01.01.2022 to 
31.12.2022 

19,868 

38,939 

8 
7.2 
7 

10 

7.1 
8 

7 
7 
5 
10 
10 
8 

17 

5 
5 
5 

15,142 
-9,055 
8,932 
708 
2,455 
20,087 
-248 
-3,902 
86,765 
30,026 
-8,031 
162,747 
-207,237 
288,155 
4,039 
-348,523 
421,278 
-101,100 
39,246 
334 
919 
33,951 
293,809 

-9,271 
-8,562 
3,080 
2,291 
-19 
-94,680 
321 
3,985 
-53,747 
-25,463 
-12,006 
-155,132 
-260,493 
458,381 
1,822 
-920,290 
847,608 
-139,935 
90,219 
136 
86 
-58,093 
-135,691 

79,710 

238,450 

220,290 

61,450 

-77,050 

-587,913 
-364,963 
-71,154 

-60,619 

- 
239,281 
103,590 

1,450,589 

1,359,005 

293,809 
-364,963 
-8,031 
1,371,404 

146,494 
625,403 
599,507 
1,371,404 

-135,691 
239,281 
-12,006 
1,450,589 

328,079 
963,004 
159,506 
1,450,589 

97 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

Notes to the financial statements as at 31 December 2023 

1  General information 

The Investment Facility (“the Facility” or “IF”) has been established within the framework of the Cotonou Agreement (the “Agreement”) 
on co-operation and development assistance negotiated between the African, Caribbean and Pacific Group of States (the “ACP States”) 
and the European Union and its Member States on 23 June 2000, revised on 25 June 2005 and 22 June 2010. 

The Facility is not a separate legal entity and the European Investment Bank (“EIB” or “the Bank”) manages the contributions on behalf 
of the Member States (“Donors”) in accordance with the terms of the Agreement and acts as an administrator of the Facility. 

Financing under the Agreement is provided from EU Member States’ budgets. EU Member States contribute with the amounts allocated 
to finance the IF and grants for the financing of the interest subsidies as provided for under the multi-annual financial frameworks (First 
Financial Protocol covering the  period  2000  -  2007  and  referred  to  as the  9th  European  Development Fund  (EDF),  Second  Financial 
Protocol covering the period 2008 - 2013 and referred to as the 10th EDF and the Third Financial Protocol covering the period 2014 - 
2020 referred to as the 11th EDF). The EIB is entrusted with the management of: 

(iv)  the Facility, a EUR 3,685.5 million risk-bearing revolving fund geared to fostering private sector investment in ACP States of 

which EUR 48.5 million are allocated to Overseas Countries and territories (“OCT countries”); 

(v)  grants for the financing of interest subsidies worth max. EUR 1,220.85 million for ACP States and max. EUR 8.5 million for 

OCT countries. Up to 15% of these subsidies can be used to fund project-related technical assistance (“TA”). 

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

The EU and ACP sides agreed to amend the decision on transitional measures in order to extend the application of the provisions of the 
ACP-EU  Partnership  Agreement  until  31  December  2023,  or  until  the  entry  into  force  of  the  new  Agreement  or  the  provisional 
application between the Union and the ACP States of the new Agreement, whichever comes first (Decision No 2/2019 of the ACP EU 
Committee of Ambassadors to adopt transitional measures pursuant to Article 95(4) of the ACP EU Partnership Agreement which was 
subsequently  amended  by  the  Decision  No  3/2021  of  the  ACP-EU  Committee  of  Ambassadors  of  26  November  2021  to  amend,  the 
Decision No 970/2022 of the ACP-EU Committee of Ambassadors of 16 June 2022 and the Decision 2/2023 of the ACP-EU Committee 
of Ambassadors of 25 October 2023). 

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

The NDICI - Global Europe Regulation, which entered into force on 14 June 2021 (Regulation (EU) 2021/947 of 9 June 2021), provides 
the primary legal basis for EU assistance outside the EU in 2021-2027, and the governance for the Bank’s new institutional mandate for 
operations outside the European Union, including the ACP region. This includes the integration of the current extra-budgetary EDF into 
the  EU  budget.  The  NDICI  Regulation  provides  the  legal  basis  for  the  Commission  to  entrust  future  EU  mandates  to  the  EIB  for  its 
activity outside the EU. It will also provide the external investment framework for the Union to cooperate with partner institutions through 
grants or guarantees from the EU budget. 

Going  forward,  reflows  from  the  IF  shall  be  deployed  within  the  NDICI  framework  through  a  combination  of  a  dedicated  ACP  private 
sector  window  under  the  European  Fund  for  Sustainable  Development  (EFSD+)  and  a  Trust  Fund.  On  15  February  2023,  a  transfer 
agreement between the EIB and the European Commission was signed (“Transfer Agreement”). The purpose of this agreement is the 
transfer of the funds stemming from reflows, under the Facility, as they become available, in accordance with decision (EU) 2020/2233 
(“ACP  IF  Reflows”)  and  Decision  (EU)  2021/1764  (“OCT  IF  Reflows”,  and  together  with  ACP  IF  Reflows,  the  “Reflows”).  For  more 
details please refer to the Note 2.4.6 and Note 17. 

The present financial statements cover the period from 1 January 2023 to 31 December 2023. 

On  a  proposal  from  the  Management  Committee,  the  Board  of  Directors  adopted  the  Financial  Statements  on  21  March  2024  and 
authorised their submission to the Board of Governors for approval by 26 April 2024. 

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2  Material accounting policies 

2.1  Basis of preparation – Statement of compliance 

The  Facility’s  financial  statements  have  been  prepared  in  accordance  with  International  Financial  Reporting  Standards  (IFRS)  as 
adopted  by  the  European  Union.  The  financial  statements  as  at  31  December  2023  include  the  statement  of  financial  position,  the 
statement  of  profit  or  loss  and  other  comprehensive  income,  statement  of  changes  in  contributors’  resources,  the  statement  of  cash 
flows, and the notes. 

2.2  Significant accounting judgments, assumptions and estimates 

The  preparation  of  financial  statements  requires  to  make  estimates  and  assumptions  that  affect  reported  income,  expenses,  assets, 
liabilities and disclosure of contingent assets and liabilities. Use of available information and application of judgment are inherent in the 
formation of estimates. Actual results in the future could differ from such estimates and the differences may be material to the financial 
statements.  Estimates  and  underlying  assumptions  are  reviewed  on  an  ongoing  basis.  Revisions  estimates  are  recognized 
prospectively. 

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

▪ 

Fair value of financial instruments 

Where  the  fair  values  of  financial  instruments  recorded  on  the  balance  sheet  cannot  be  derived  from  active  markets,  they  are 
determined using a variety of valuation techniques that include the use of mathematical models. The input to these models is taken from 
observable  markets  where  possible,  but  where  this  is  not  feasible,  a  degree  of  judgment  is  required  in  establishing  fair  values.  The 
valuations  are  categorised  into  different  levels  in  the  fair  value  hierarchy  based  on  the  inputs  used  in  the  valuation  techniques  as 
described and disclosed in Notes 2.4.2 and 4. 

▪ 

Impairment losses on loans and advances 

The expected credit loss (”ECL”) measurement requires management to apply significant judgments, in particular, the assessment of a 
significant increase in credit risk since initial recognition, the incorporation of forward looking information and further the estimation of 
the amount and timing of future cash flows and collateral values when determining impairment losses. These estimates are driven by a 
number of factors, which can result in significant changes to the timing and amount of allowance for credit loss to be recognised (Note 
2.4.2). Relevant assumptions on the effects on impairment resulting from the general context of uncertainty and the turbulence which 
occurred in 2022 and carried on in 2023 are detailed under Note 2.4.2.2 and Note 3.2.3.7. 

▪ 

Valuation of unquoted equity investments 

Valuation of unquoted equity investments is normally based on one of the following:  

- 

- 

- 

- 

- 

recent arm’s length market transactions;  

current fair value of another instrument that is substantially the same;  

the expected cash flows discounted at current rates applicable for items with similar terms and risk characteristics;  

adjusted net assets method; or  

other valuation models. 

The determination of the cash flows and discount factors for unquoted equity investments requires significant estimation. The Facility 
calibrates the valuation techniques periodically and tests them for validity using either price from observable current market transactions 
in the same instrument or from other available observable market data. 

▪ 

Consolidation of entities in which the Facility holds interest  

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

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2.3  Changes in accounting standards 

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

New and amended standards adopted by the Facility 

The  following  new  standards  and  amendments  to  existing  standards,  became  effective  for  the  Facility’s  financial  statements  as  of  
1 January 2023: 

- 

- 

Amendments  to  IAS  1  Presentation  of  Financial  Statements  and  IFRS  Practice  Statement  2:  Disclosure  of  Accounting 
policies; 
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates; 

The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to materially 
affect the current or future periods. 

New standards, amendments, and interpretations not yet adopted by the Facility 

As at 31 December 2023, the following amendments to existing Standards had been issued but were not mandatory for annual reporting 
periods ending on 31 December 2023: 

Amendments  to  existing  Standards  endorsed  by  the  EU,  and  which  are  effective  for  annual  periods  beginning  on  or  after  1  January 
2024:  

Amendments  to  IAS  1  Presentation  of  Financial  Statements:  Classification  of  Liabilities  as  Current  or  Non-current  and  Non-current 
Liabilities with Covenants. 

Amendments to existing Standards not yet endorsed by the EU: 

- 
- 
- 

Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Supplier Finance Arrangements; 
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of exchangeability; 
Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale 
of Contribution of Assets between an Investor and its Associate or Joint Venture. 

At the date of authorisation of these financial statements none of the above listed Standards or amendments to existing Standards have 
been adopted early by the Facility and no Interpretations have been issued that are applicable and need to be taken into consideration 
by  the  Facility  at  either  reporting  date.  Management  anticipates  that  all  relevant  pronouncements  will  be  adopted  for  the  first  period 
beginning on or after the effective date of the pronouncement, and that there will be not any material impact on the Facility’s financial 
statements. 

2.4  Summary of material accounting policies 

The  statement  of  financial  position  represents  assets  and  liabilities  in  decreasing  order  of  liquidity  and  does  not  distinguish  between 
current and non-current items. 

2.4.1  

Foreign currency translation 

The  Facility  uses  the  Euro  (EUR)  for  presenting  its  financial  statements,  which  is  also  the  functional  currency.  Except  as  otherwise 
indicated, financial information presented in EUR has been rounded to the nearest thousand.  

Foreign currency transactions are translated, at the exchange rate prevailing on the date of the transaction.  

Monetary assets and liabilities denominated in currencies other than Euro are translated into Euro at the exchange rate prevailing at the 
statement of financial position date. The gain or loss arising from such translation is recorded in the statement of profit or loss and other 
comprehensive income. 

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

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

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2.4.2   

Financial assets other than derivatives 

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

Classification and measurement 

Financial assets  

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

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

Debt instruments are those instruments that meet the definition of a financial liability from the counterparty’s perspective, loans and debt 
securities including bonds, notes or certificates issued by structured entities, government or corporates. 

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

- 
- 

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

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

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

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

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

All other financial assets are classified as measured at FVTPL. 

Business model assessment 

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

- 

- 
- 

- 

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

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

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

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

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

The business model for the Impact Financing Envelope direct loan operations has been described and disclosed in Note 25. 

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

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

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

Derecognition 

The Facility derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or the rights to 
receive the contractual cash flow are transferred in a transaction in which either the Facility transfers the risks and rewards of ownership 
of the financial asset or it retains substantially all of the risks and rewards of ownership but does not retain control of the financial asset. 

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

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

Reclassification 

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

Modification  

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

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

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

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

Measurement of fair values of financial instruments 

Fair  value  is  the  price  that  would  be  received  to  sell  an  asset  or  paid  to  transfer  a  liability  in  an  orderly  transaction  between  market 
participants at the measurement date in the principal, or in its absence, the most advantageous market to which the Facility has access 
at that date.  

When applicable, the EIB on behalf of the Facility measures the fair value of an instrument using the quoted price in an active market for 
that instrument. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to 
provide pricing information on an on-going basis. 

Where the fair values of financial assets and financial liabilities recorded on the statement of financial position cannot be derived from 
active markets, they are determined using a variety of valuation techniques that include the use of mathematical models. The input to 
these  models  is  taken  from  observable  markets  where  possible,  but  where  this  is  not  feasible,  a  degree  of  judgement  is  required  in 
establishing fair values. The chosen valuation technique incorporates all the factors that market participants would take into account in 
pricing a transaction. 

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

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

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

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

The Facility measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the 
measurements: 

- 

- 

- 

Level 1: inputs that are unadjusted quoted market prices in active markets for identical instruments to which the Facility has 
access. 

Level 2: inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or indirectly 
(i.e. derived from prices). This category includes instruments valued using quoted market prices in active markets for similar 
instruments,  quoted  prices  for  identical  or  similar  instruments  in  markets  that  are  considered  less  than  active  or  other 
valuation techniques where all significant inputs are directly or indirectly observable from market data. 

Level 3: inputs that are not observable. This category includes all instruments where the valuation technique includes inputs 
not  based  on  observable  data  and  the  unobservable  inputs  have  a  significant  effect  on  the  instrument’s  valuation.  This 
category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable 
adjustments or assumptions are required to reflect differences between the instruments. 

The Facility recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change 
has occurred. 

Impairment on financial assets 

IFRS 9 is based on a forward-looking expected credit loss (“ECL”) model. The EIB has established a framework to calculate “expected 
credit  loss”  conditional  on  the  state  of  the  macro-economy.  It  involves  the  construction  of  point-in-time  (“PIT”)  credit  risk  parameters 
(Probability of default – “PD” and Loss given default – “ LGD”) based on a systematic factor (credit cycle) that is driven by the macro-
economy  and  projected via  macroeconomic forecasts  or scenarios.  The final  ECL  is  a  probability  weighted  average  of  the  respective 
macro-economic  scenario  ECLs.  This  forward-looking  impairment  model  is  applied  to  financial  assets  measured  at  AC,  to  financial 
guarantee contracts, as well as to off-balance sheet commitments.  

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

- 

- 

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

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

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

Purchased  or  originated  credit-impaired  assets  (“POCI”)  are  the  financial  assets  which  are,  from  the  moment  of  initial  recognition, 
deemed  to  be  classified  as  Stage  3.  For  POCI  financial  assets,  the  cumulative  changes  in  lifetime  ECL  since  initial  recognition  are 
recognised in the statement of profit or loss. 

The  Bank’s  assessment  of  the  IFRS9  staging  is  based  on  a  sequential  approach  which  is  using  counterparty  or  instrument  specific 
information  consistent  to  internal  guidelines  and  procedures,  notably  covering  early  warning  triggers,  internal  rating  (a  decrease  of  3 
notches  or  more  when  compared  to  the  historical  internal  rating  for  counterparties  which  current  internal  rating  is  below  investment 
grade) and arrears (more than 30 days past due). 

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The  EIB considers that  the  effects  on  impairment  resulting from  the  general  context  of  uncertainty  and  various  risks  building  up  as  a 
result of the Russian invasion of Ukraine are reflected within the existing forward-looking ECL model which is deemed sufficiently robust 
to factor in such extreme events. Notably, the respective impacts have been directly captured through the macroeconomic projections 
and the PD terms structures. 

The  EIB  considers  that  the  existing  forward-looking  ECL  model  is  deemed  sufficiently  robust  to  factor  in  extreme  economic  events, 
which  have  been  directly  captured  through  the  macroeconomic  projections  and  the  PD  terms  structures.  As  disclosed  under 
Note 3.2.3.8, the EIB applies expert judgement when assessing the credit risk of such counterparties. 

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

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

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

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

Measuring ECL – Inputs, Assumptions and Techniques 

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

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

- 
- 
- 

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

PIT Loss Given default (“LGD”), 

Exposure at default (“EAD”). 

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

Each credit rating is mapped to a specific PD that represents the likelihood of a counterpart defaulting on its financial obligation, either 
over the next 12 months, or over the remaining lifetime of the obligation. Hence, ratings are primary input into the determination of the 
PIT term structure of PD for exposures. The EIB collects performance and default information about the Facility’s credit risk exposures. 
The collected data are segmented by type of industry and by type of region. Different industries and regions reacting in a homogenous 
manner to credit cycles are analysed together. 

The EIB employs statistical models to analyse the data collected and generate estimates of the remaining lifetime PD of exposures and 
how these are expected to change because of the passage of time and given specific macro-economic scenarios.  

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

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

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

- 
- 

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

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

To  generate  macroeconomic  scenarios,  the  EIB  uses  a  macro  semi-structural  multi-country  and  multi-equation  model  of  the  global 
economy  with  country  specific  blocks.  The  central  /  baseline  scenario  is  designed  to  be  consistent  with  the  most  recent  European 
Commission  forecasts.  The  positive  and  negative  scenarios  are  designed  around  the  central  scenario  by  deploying  of  the  multi-
country/multi-equation  model.  The  scenarios  are  derived  by  shocking  the  GDP,  which  is  the  key  measure  of  economic  activity.  The 
shocks to real GDP are calibrated to replicate the observed volatility of the variable. Also expert judgment is applied, when appropriate, 
to refine the size and persistency of GDP shocks. As a result, shocks are determined together with a decay function to determine the 
impact of the shocks over time. Probabilities attached to each scenario are defined reflecting market (volatility) indicators and internally 
developed indicators/trackers deployed in a consistent manner over time to capture uncertainty. 

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

The  EAD  represents  the  expected  exposure  in  the  event  of  a  default  and  is  based  on  the  current  exposure  to  the  counterparty  and 
potential  changes  to  the  current  amount  allowed  under  the  contract  including  amortisation.  The  EAD  of  a  financial  asset  is  its  gross 
carrying amount. For lending commitments and financial guarantees, the EAD includes the amount drawn. 

2.4.2.1  Cash and cash equivalents 

The Facility defines cash and cash equivalents as current accounts, short-term deposits or commercial papers with original maturities of 
three months or less. Cash and cash equivalents are carried at AC in the statement of financial position. 

2.4.2.2  Treasury financial assets 

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

Those bonds and commercial papers are initially measured at cost, which is the fair value plus any directly attributable transaction cost. 
The  difference  between  entry  price  and  redemption  value  is  amortised  in  accordance  with  the  effective  interest  method  over  the 
remaining life of the instrument. 

2.4.2.3  Loans and advances 

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

Loans and advances include: 

- 

- 

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

Loans originated by the Facility are recognised in the assets of the Facility when cash is advanced to borrowers. Undisbursed parts of 
loans  are  recorded  in  the  off-balance  at  their  nominal  value.  Loans  passing  the  SPPI  test  are  initially  recorded  at  cost  (their  net 
disbursed amounts), which is the fair value of the cash given to originate the loan, including any transaction costs, and are subsequently 
measured at AC using the effective interest rate method. 

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

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The impairment policy on loans and advances is described under Note 2.4.2. 

Loans  and  advances  not  fulfilling  business  model  or  the  SPPI  criterion  are  mandatorily  measured  at  FVTPL.  The  fair  value 
measurement technique used is based on a discounted cash flow technique or liquidation value. 

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

2.4.2.4  Shares and other variable yield securities 

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

The  undrawn  but  committed  part  of  these  investments  is  recorded  as  consolidated  off-balance  sheet  commitments  at  their  nominal 
value. 

Measurement of fair values of financial instruments 

The fair value is determined by applying the aggregated net asset value (‘NAV’) method (thereby assuming that, despite the absence of 
readily ascertainable market value, NAV is the best estimate of the fair value). For unquoted investment, when the fair value cannot be 
derived from active markets, the fair value is determined by applying recognised valuation techniques (Note 4.2.1). 

The attributable NAV is adjusted for events occurring between the date of the latest available NAV and the balance sheet date to the 
extent that such adjustment is considered to be material by the Management Committee. Material adjustments are amended until the 
Board of Directors adopt the Financial Statements for the year. In that respect, following the general context of uncertainty, various risks 
building up as a result of the Russian invasion of Ukraine and the volatility observed in terms of performance, the Bank enhanced its 
valuation  techniques  to  estimate  any  adjustment  on  the  fair  value  of  the  equity  investments  for  the  NAVs  not  reported  by  the  fund 
managers at the reporting date of the Facility financial statements. 

For specific investments where NAVs cannot readily be determined, other guidelines for example the International Private Equity and 
Venture Capital Valuation (‘IPEV’) Guidelines, as published by the IPEV Board might be used and more detailed monitoring and review 
will be required. In accordance with this method, the funds are internally classified into three categories: 

- 

- 

- 

Category I – funds that have adopted the fair value requirements of IFRS 13 or IPEV Guidelines for which a specific review is 
performed to ensure that the NAV is a reliable estimate of fair value; 
Category II – funds that have adopted other valuation guidelines (such as the former 2001 EVCA) or standards that can be 
considered to be in line with IFRS 13, for which an equivalent NAV can be calculated; and 
Category III – funds that have not adopted the fair value requirements of IFRS 13 or any other valuation guidelines in line with 
IFRS 13. 

Significant influence assessment 

The participations acquired by the Facility typically represent investments in private equity or venture capital funds. According to industry 
practice,  such  investments  are  generally  investments  jointly  subscribed  by  a  number  of  investors,  none  of  whom  is  in  a  position  to 
individually influence the daily operations and the investment activity of such fund. As a consequence, any membership by an investor in 
a governing body of such fund does not in principle entitle such investor to influence the day-to-day operations of the fund. In addition, 
individual  investors  in  a  private  equity  or  a  venture  capital  fund  do  not  determine  policies  of  a  fund  such  as  distribution  policies  on 
dividends  or  other  distributions.  Such  decisions  are  typically  taken  by  the  management  of  a  fund  on  the  basis  of  the  shareholders 
agreement governing the rights and obligations of the management and all shareholders of the fund. The shareholders’ agreement also 
generally prevents individual investors from bilaterally executing material transactions with the fund, interchanging managerial personnel 
or obtaining privileged access to essential technical information. The Facility’s investments are executed in line with the above stated 
industry practice, ensuring that the Facility neither controls nor exercises any form of significant influence within the meaning of IFRS 10 
and IAS  28 over any of these investments, including those investments in which the Facility holds over 20 % of the voting rights. 

2.4.3  

 Financial guarantees 

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

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

The accounting policy for derivatives is disclosed under Note 2.4.5. 

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

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

- The amount of the loss allowance as determined under IFRS 9; and 

- The premium initially recognised less income recognised in accordance with the principles of IFRS 15. 

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

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

2.4.4  

Financial liabilities other than derivatives 

Classification and measurement 

Financial liabilities  

A financial liability is measured at amortised cost except for financial liabilities:  

- 

- 

are mandatorily measured at fair value through profit or loss (e.g. derivative liabilities); and 

that are designated as measured at fair value through profit or loss. 

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

2.4.5  

Derivative financial instruments 

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

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

In the normal course of its activity, the Facility may enter into swap contracts with a view to hedge specific lending operations or into 
currency forward contract with a view to hedge its currency positions, denominated in actively traded currencies other than the Euro, in 
order to offset any gain or loss caused by foreign exchange rate fluctuations. 

All  derivatives  are  measured  at  FVTPL  and  are  reported  as  derivative  financial  instruments.  Fair  values  are  derived  primarily  from 
discounted cash-flow models, option-pricing models and from third party quotes. 

Derivatives  are  recorded  at  fair  value  and  carried  as  assets  when  their  fair  value  is  positive  and  as  liabilities  when  their  fair  value  is 
negative.  Changes  in  the  fair  value  of  derivative  financial  instruments  are  shown  in  the  statement  of  profit  or  loss  and  other 
comprehensive income under “Fair value change of derivative financial instruments”. 

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

2.4.6  

Contributions 

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

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

- 

- 
- 

- 
- 

as defined in the contribution agreement, they entitle the Member States to decide on the utilisation of the Facility’s net assets 
in the events of the Facility’s liquidation; 

they are in the class of instruments that is subordinated to all other classes of instruments; 

all  financial  instruments  in  the  class  of  instruments  that  are  subordinated  to  all  other  classes  of  instruments  have  identical 
features; 

the instrument does not include any features that would require classification as a liability; and 

the total expected cash flows attributable to the instrument over its life are based substantially on the profit or loss, the change 
in the recognised net assets or the change in the fair value of the recognised and unrecognised net assets of the Facility over 
the life of the instrument. 

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

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Member States Contributions paid out represent Available Reflows paid out to the EC and the UK. As per the Transfer Agreement, as of 
year 2023 and until year 2027, not later than 31 March of each year, the EIB shall report, in writing, the amount of available ACP IF 
Reflows, and the amount of available OCT IF Reflows, accumulated respectively as of 31 December of the preceding year (the “Report 
on  Available  Reflows”).  The  Report  on  Available  Reflows  shall  distinguish  between  the  Reflows  that  are  to  be  transferred  to  the 
Commission (ACP and OCT Reflows), and the Reflows that are to be transferred to the United Kingdom (“UK”). Available Reflows are 
recognised in the statement of financial position when corresponding payment request is sent to the Facility. 

2.4.7  

Interest and similar income  

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

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

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

Commitment  fees  are  deferred  and  recognised  in  income  using  the  effective  interest  method  over  the  period  from  disbursement  to 
repayment of the related loan, and are presented in the statement of profit or loss and other comprehensive income within interest and 
similar income. 

2.4.8  

Interest subsidies and technical assistance 

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

The part of the Member States contributions allocated to the payment of interest subsidies and TA is not accounted for in the Facility’s 
contributors’  resources  but  is  classified  as  amounts  owed  to  third  parties.  The  Facility  operates  the  disbursement  to  the  final 
beneficiaries and then decreases the amounts owed to third parties. 

When  amounts  contributed  with  regard  to  interest  subsidies  and  TA  are  not  fully  granted,  they  are  reclassified  as  contribution  to  the 
Facility. 

2.4.9  

Interest income on cash and cash equivalents 

Interest income on cash and cash equivalents is recognised in the statement of profit or loss and other comprehensive income of the 
Facility on an accrual basis. 

2.4.10 

Fees, commissions and dividends 

Fees received in respect of services provided over a period of time are recognised as income as the services are provided, while fees 
that are earned on the execution of a significant act are recognised as income when the significant act has been completed. These fees 
are presented in the statement of profit or loss and other comprehensive income within fee and commission income.  

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

2.4.11 

Taxation 

The Protocol on the Privileges and Immunities of the European Union, appended to the treaty on the European Union and the treaty of 
the  functioning  of  the  European  Union,  stipulates  that  the  assets,  revenues  and  other  property  of  the  Institutions  of  the  Union  are 
exempt from all direct taxes. 

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3  Risk Management 

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

- 

- 

credit risk – the risk of loss resulting from client or counterparty default and arising on credit exposure in all forms, including 
settlement risk12; 
liquidity risk – the risk that an entity is not able to fund increases in assets and meet obligations as they come due, without 
incurring unacceptable losses; 

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

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

3.1  Risk management organisation 

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

The Risk Management Directorate of the EIB independently identifies, assesses, monitors and reports the risks to which the Facility is 
exposed. Within a framework whereby the segregation of duties is preserved, the Risk Management is independent of the Front Office 
and provides second opinion on all proposals made by the Front Office having risk implications.  

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

3.2  Credit risk 

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

3.2.1 

Credit risk policy 

In carrying out the credit analysis on loan counterparts, the EIB assesses the credit risk and expected loss with a view to quantify and 
price  the  risk.  The  EIB  has  developed  an  Internal  Rating  Methodology  (“IRM”)  to  determine  the  Internal  Ratings  of  its  credit-relevant 
borrower/guarantor  counterparts. The  methodology  is  based  on  a system  of scoring sheets tailored  for  each  major credit  counterpart 
type (e.g. Corporates, Financial Institutions, etc.). Taking into consideration both, Best Banking Practice applicable to the EIB and the 
principles set under the Basel International Capital Accord (Basel II), all counterparts that are material to the credit profile of a specific 
transaction are classified into internal rating categories using the IRM for the specific counterpart type. Each counterpart is assigned an 
Internal Rating reflecting its PD following an in-depth analysis of the counterpart’s business and financial risk profile and its country risk 
operating context. Expert adjustments are made when necessary under the consideration of the legal entities’ parental or government 
support, and the final rating allows for overrides to reflect information (e.g. market pricing) not considered in the scoring sheet. 

The credit assessment of project finance and other structured limited recourse operations uses credit risk tools relevant for the sector, 
focused mainly on cash flow availability and debt service capacity. These tools include the analysis of projects’ contractual framework, 
counterpart’s analysis and cash flow simulations. Similarly to corporates and financial institutions, each project is assigned an internal 
risk rating. Finally, Non-EU sovereigns are rated by the Economics Department based on a statistical model. 

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

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

In  order  to  mitigate credit  risk  the  EIB  uses,  where  appropriate  and  on  a  case  by case  basis, various  credit  enhancements  including 
amongst others counterparty or project related securities, guarantees and contractual clauses depending of the nature of the borrower 
and type of operation. 

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

12 Settlement risk is defined as the risk of potential losses due to transactions which remain unsettled after their due delivery date and/or due to transactions 
that  are  settled  later  than  the  applicable  market  standard.  Due  to  the  nature  of  the  Facility’s  operations,  the  most  relevant  instruments  affected  by 
settlement risk are those derivatives entered into by the Bank which imply an exchange of foreign currencies. Settlement risk management is covered in the 
Financial Risk Guidelines. 

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3.2.2 

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

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

Maximum exposure (in EUR’000) 

ASSETS 

Cash and cash equivalents 

Amounts receivable from contributors 

Treasury financial assets 

Derivative financial instruments 

Loans and advances 

Other assets 

Total  

Provisions for loan commitments 

OFF BALANCE SHEET 

Contingent liabilities 

- Issued Guarantees 

Commitments 

- Undisbursed loans 

- Non-issued guarantees 

Total off balance sheet 

Total credit exposure 

31.12.2023 

31.12.2022 

1,376,824 

85,321 

-  

55,765 

1,683,312 

616 

1,451,970 

85,321 

73,003 

75,852 

1,849,786 

950 

3,201,838 

3,536,882 

-19,038 

-16,583 

985 

-  

883,092 

46,764 

930,841 

1,671,851 

49,378 

1,721,229 

4,113,641 

5,241,528 

3.2.3 

Credit risk on loans and advances 

3.2.3.1  Credit risk measurement for loans and advances 

Loans  and  advances  or  guarantees  undertaken  by  the  Facility  benefit  from  a  comprehensive  risk  assessment  and  quantification  of 
expected  loss  estimates  that  are  reflected  in  a  Loan  Grading  (“LG”).  Operations  under  the  IFE  (as  described  in  Note  25),  with  the 
exception  of  intermediated  loans,  are  subject  to  the  general  Mandate  Risk  Principles  as  envisaged  in  the  EIB  credit  and  equity  risk 
guidelines. LGs are established according to generally accepted criteria, based on the quality of the borrower, the maturity of the loan, 
the guarantee and, where appropriate, the guarantor. 

The loan grading system comprises the methodologies, processes, databases and IT systems supporting the assessment of credit risk 
in lending operations and the quantification of expected loss estimates. It summarises a large amount of information with the purpose of 
offering a relative ranking of loans’ credit risks. LGs reflect the present value of the estimated level of the “expected loss”, this being the 
product of the PD of the main obligors, the EAD and the loss severity in the case of default. LGs are used for the following purposes: 

- 
- 
- 
- 

as an aid to a finer and more quantitative assessment of lending risks; 

as an indicator of credit risk variations for the purposes of prioritising monitoring efforts; 

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

as an input in risk-pricing decisions. 

The following factors enter into the determination of an LG: 

i) 

ii) 

iii) 

iv) 

v) 

vi) 

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

reviews  borrowers  and  assesses 

independently 

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

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

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

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

The  duration  of  the  loan  or,  more  generally,  the  cash-flows  of  the  loan:  all  else  being  equal,  the  longer  the  loan,  the 
higher the risk of incurring difficulties in the servicing of the loan. 

110 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

A  loan’s  expected  loss  is  computed  by  combining  the  five  elements  discussed  above.  Depending  on  the  level  of  this  loss,  a  loan  is 
assigned to one of the following LG classes listed below: 

“A”   Prime quality loans of which there are three sub-categories: 

“A0” comprising loans to or guaranteed by an EU Member State which have an expected loss of 0%.  

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

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

“B”   High quality loans: these represent an asset class with which the Bank feels comfortable, although a minor deterioration is not ruled 

out in the future. B+ and B- are used to denote the relative likelihood of the possibility of such deterioration occurring. 

“C”      Good  quality  loans:  an  example  could  be  unsecured  loans  to  solid  banks  and  corporates  with  a  7-year  bullet,  or  equivalent 

amortising, maturity at disbursement. 

“D”   This rating class represents the borderline between “acceptable quality” loans and those that have experienced some difficulties. 
This  watershed  in  loan  grading  is  more  precisely  determined  by  the  sub-classifications  D+  and  D-.  Loans  rated  D-  require 
heightened monitoring. 

“E”   This LG category includes loans with a risk profile greater than generally accepted. It also includes loans which in the course of 
their  lives  have  experienced  severe  problems  and  their  sliding  into  a  situation  of  loss  cannot  be  excluded.  For  this  reason,  the 
loans  are  subject  to  close  and  high  monitoring.  The  sub-classes  E+  and  E-  differentiate  the  intensity  of  this  special  monitoring 
process,  with  those  operations  graded  E-  being  in  a  position  where  there  is  a  strong  possibility  that  debt  service  cannot  be 
maintained on a timely basis and therefore some form of debt restructuring is required, possibly leading to an impairment loss. 

“F”    F (fail)  denotes  loans  representing  unacceptable  risks.  F-  graded  loans  can  only  arise  out  of  outstanding  transactions  that  have 
experienced, after signature, unforeseen, exceptional and dramatic adverse circumstances. All operations where there is a loss of 
principal to the Facility are graded F and a specific provision is applied. 

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

111 

 
 
 
 
 
 
 
 
 
 
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3.2.3.2  Analysis of lending credit risk exposure 

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

At 31.12.2023 

in EUR’000 

Financial institutions 

Corporates 

Public authorities 

States 

Total disbursed 

Undisbursed 

Total disbursed and 
undisbursed 

At 31.12.2022 

in EUR’000 

Financial institutions 

Corporates 

Public authorities 

States 

Total disbursed 

Undisbursed 

Total disbursed and 
undisbursed 

Guaranteed 

Other credit 
enhancements 

Not guaranteed 

Total 

% of Total 
disbursed 

54,290 

155,653 

15,138 

- 

225,081 

43,200 

268,281 

- 

- 

- 

- 

- 

- 

- 

952,740 

293,302 

- 

212,189 

1,007,030 

448,955 

15,138 

212,189 

1,458,231 

1,683,312 

820,854 

864,054 

2,279,085 

2,547,366 

60% 

27% 

1% 

13% 

100% 

Guaranteed 

Other credit 
enhancements 

Not guaranteed 

Total 

% of Total 
disbursed 

64,625 

182,460 

18,902 

- 

265,987 

149,506 

415,493 

- 

- 

- 

311 

311 

- 

311 

1,095,467 

1,160,092 

285,216 

218 

202,587 

1,583,488 

1,505,762 

467,676 

19,120 

202,898 

1,849,786 

1,655,268 

3,089,250 

3,505,054 

63% 

25% 

1% 

11% 

100% 

Portfolio Management and Monitoring Directorate is tasked with the responsibility of performing borrower and guarantor monitoring, as 
well as project-related financial and contractual monitoring. Thus, the creditworthiness of the Facility’s loans, borrowers and guarantors 
are continually monitored, at least annually but more frequently on an as-needed basis and as a function of credit events taking place. In 
particular, Portfolio Management and Monitoring Directorate reviews if contractual rights are met and, in case of a rating deterioration 
and/or contractual default, remedy action is taken. Mitigation measures are pursued, whenever necessary in accordance with the credit 
risk  guidelines. Also,  in case  of  renewals  of  bank  guarantees  received for  its  loans,  it  is  ensured  that  these  are  replaced  or  action  is 
taken in a timely manner. 

112 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.2.3.3  Credit quality analysis per type of borrower 

The tables below show the credit quality analysis of the Facility’s loan portfolio as at 31 December 2023 and 31 December 2022 by the 
Loan Grading applications, based on the exposure signed (disbursed and undisbursed): 

At 31.12.2023 

in EUR’000 

High Grade  

Standard 
Grade  

Min. Accept. 
Risk 

High Risk   No grading* 

Total   % of Total 

A to B-  

C  

D+  

D- and 
below 

Borrower 

Financial 
institutions 

Corporates 

270,520 

276,133 

268,648 

508,180 

- 

1,323,481 

51,505 

53 

564 

347,992 

194,441 

594,555 

Public authorities 

- 

15,138 

- 

- 

States 

50,858 

2,164 

12,907 

548,263 

- 

- 

15,138 

614,192 

52% 

23% 

1% 

24% 

Total 

372,883 

293,488 

282,119 

1,404,435 

194,441 

2,547,366 

100% 

*Loan operations measured at FVTPL. 

At 31.12.2022 

in EUR’000 

Borrower 

High Grade  

Standard 
Grade  

Min. Accept. 
Risk 

High Risk   No grading* 

Total   % of Total 

A to B-  

C  

D+  

D- and 
below 

Financial 
institutions 

Corporates 

Public institutions 

States 

293,458 

349,628 

103,133 

1,030,131 

- 

1,776,350 

96,413 

- 

51,976 

52,092 

18,902 

2,771 

- 

- 

703,374 

226,750 

1,078,629 

- 

218 

19,120 

8,363 

567,845 

- 

630,955 

50% 

31% 

1% 

18% 

Total 

441,847 

423,393 

111,496 

2,301,350 

226,968 

3,505,054 

100% 

*Loan operations measured at FVTPL. 

113 

 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.2.3.4  Risk concentrations of loans and advances 

3.2.3.4.1 

Geographical analysis 

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

31.12.2023 

31.12.2022 

260,529 
248,823 
218,521 
121,126 
86,505 
84,331 
80,267 
72,036 
71,525 
66,947 
48,616 
35,546 
33,365 
29,803 
28,729 
26,425 
21,394 
16,768 
16,742 
15,138 
12,926 
9,644 
9,374 
9,287 
8,158 
6,575 
6,476 
6,453 
6,254 
5,142 
4,565 
4,389 
4,074 
2,342 
2,037 
1,838 
344 
177 
121 
- 

309,312 
338,790 
266,294 
107,988 
69,920 
93,509 
- 
82,735 
94,247 
56,729 
56,586 
23,147 
51,388 
36,772 
38,153 
31,684 
33,431 
25,879 
2,958 
18,902 
15,242 
10,976 
11,029 
- 
9,856 
8,521 
9,587 
1,515 
9,016 
7,094 
4,674 
4,767 
8,648 
2,811 
2,933 
3,118 
645 
525 
332 
73 

1,683,312 

1,849,786 

Country of borrower 

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

Total 

114 

 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.2.3.4.2 

Industry sector analysis 

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

Industry sector of borrower 

Financial Services 

Public Administration 

Electricity 

Chemicals 

Telecommunications 

Healthcare 

Business Services, IT and Media 

Pharmaceuticals and Medical Equipment 

Air and Maritime Transport Infrastructure 

Metals and Mining 

Investment Goods 

Waste Recuperation and Recycling 

Multi-Utilities 

Tertiary and other 

Total 

31.12.2023 

31.12.2022 

1,012,001 

1,160,133 

212,189 

187,701 

91,786 

60,182 

36,833 

33,638 

18,526 

15,138 

7,236 

4,103 

3,802 

177 

- 

202,898 

193,597 

108,652 

62,862 

36,833 

31,127 

12,388 

18,902 

8,415 

8,853 

4,577 

525 

24 

1,683,312 

1,849,786 

115 

 
 
 
 
Annual accounts of the European Development Fund 2023 

3.2.3.5  Credit risk exposure for each internal risk rating 

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

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

in EUR’000 

Loans and advances at AC 

Moody’s 
equiv. 
grade 

12-month 
ECL 

2023 

Lifetime 
ECL not 
credit-
impaired 

Lifetime 
ECL credit-
impaired 

FVTPL 

Total 

Internal Rating  1 -  minimal credit risk 

Aaa 

- 

47,534 

Internal Rating  2 - very low credit risk 

Internal Rating  3 - low credit risk 

Aa1 - Aa3 

A1 - A3 

72,051 

10,428 

- 

- 

- 

- 

- 

Internal Rating  4 - moderate credit risk 

Baa1 - Baa3 

33,439 

263,036 

3,802 

Internal Rating  5 - financially weak counterpart 

Ba1 - Ba3 

75,418 

- 

- 

Internal Rating  6 - high credit risk 

B1 - B3 

533,775 

206,438 

20,349 

Internal Rating  7 - very high credit risk 

below Caa1 

77,010 

246,682 

- 

- 

- 

- 

- 

- 

- 

- 

- 

47,534 

72,051 

10,428 

300,277 

75,418 

760,562 

323,692 

17,860 

Internal Rating  8 - counterpart in default 

below Caa1 
but in default 

Loans and advances at FVTPL 

- 

- 

- 

- 

17,860 

- 

182,080 

182,080 

Loss allowance and FV adjustment 

-10,964 

-24,674 

-14,976 

-55,976 

-106,590 

Carrying amount of loans and advances 

791,157 

739,016 

27,035 

126,104 

1,683,312 

Loan commitments 

Internal Rating  2 - very low credit risk 

Internal Rating  3 - low credit risk 

Aa1 - Aa3 

A1 - A3 

Internal Rating  4 - moderate credit risk 

Baa1 - Baa3 

Internal Rating  5 - financially weak counterpart 

Ba1 - Ba3 

86,796 

1,687 

10,000 

82,770 

Internal Rating  6 - high credit risk 

B1 - B3 

327,995 

Internal Rating  7 - very high credit risk 

below Caa1 

28,089 

- 

- 

- 

- 

45,990 

30,537 

- 

- 

- 

- 

- 

- 

Internal Rating  8 - counterpart in default 

below Caa1 
but in default 

- 

50,000 

111,000 

No internal rating* 

Loans and advances at FVTPL 

39,940 

- 

- 

- 

Loss allowance and FV adjustment 

-2,715 

-16,323 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

86,796 

1,687 

10,000 

82,770 

373,985 

58,626 

161,000 

39,940 

68,288 

68,288 

- 

-19,038 

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

574,562 

110,204 

111,000 

68,288 

864,054 

116 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

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

in EUR’000 

Moody’s 
equiv. grade 

12-month 
ECL 

2022 

Lifetime 
ECL not 
credit-
impaired 

Lifetime 
ECL credit-
impaired 

FVTPL 

Total 

Loans and advances at AC 

Internal Rating  1 -  minimal credit risk 

Aaa 

- 

56,320 

Internal Rating  2 - very low credit risk 

Aa1 - Aa3 

82,745 

Internal Rating  3 - low credit risk 

A1 - A3 

421 

Internal Rating  4 - moderate credit risk 

Baa1 - Baa3 

346,538 

Internal Rating  5 - financially weak counterpart 

Ba1 - Ba3 

82,126 

- 

- 

- 

- 

Internal Rating  6 - high credit risk 

B1 - B3 

679,725 

189,519 

Internal Rating  7 - very high credit risk 

below Caa1 

41,450 

273,167 

Internal Rating  8 - counterpart in default 

below Caa1 
but in default 

Loans and advances at FVTPL 

Loss allowance and FV adjustment 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

63,474 

- 

- 

- 

- 

- 

- 

- 

- 

56,320 

82,745 

421 

346,538 

82,126 

869,244 

314,617 

63,474 

- 

142,263 

142,263 

-11,370 

-28,817 

-21,303 

-46,472 

-107,962 

Carrying amount of loans and advances 

1,221,635 

490,189 

42,171 

95,791 

1,849,786 

Loan commitments 

Internal Rating  2 - very low credit risk 

Internal Rating  3 - low credit risk 

Aa1 - Aa3 

A1 - A3 

86,796 

316,707 

Internal Rating  4 - moderate credit risk 

Baa1 - Baa3 

109,095 

Internal Rating  5 - financially weak counterpart 

Ba1 - Ba3 

175,880 

- 

- 

- 

- 

Internal Rating  6 - high credit risk 

B1 - B3 

538,504 

50,000 

Internal Rating  7 - very high credit risk 

below Caa1 

62,966 

105,669 

- 

- 

- 

- 

- 

- 

Internal Rating  8 - counterpart in default 

below Caa1 
but in default 

No internal rating* 

Loans and advances at FVTPL 

Loss allowance and FV adjustment 

- 

44,982 

- 

- 

- 

- 

-4,834 

-11,749 

50,000 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

86,796 

316,707 

109,095 

175,880 

588,504 

168,635 

50,000 

44,982 

131,252 

131,252 

- 

-16,583 

Carrying amount of loan commitments 

1,330,096 

143,920 

50,000 

131,252 

1,655,268 

* Agency agreements for which there are no underlying counterparts at reporting date. 

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

117 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.2.3.6  Arrears on loans and impairments 

Amounts in arrears are identified, monitored and reported according to the procedures defined into the Bank wide “Finance Monitoring 
Guidelines and Procedures”. These procedures are in line with best banking practices and are adopted for all loans managed by the 
EIB. 

The monitoring process is structured in order to make sure that (i) potential arrears are detected and reported to the services in charge 
with  minimum  delay;  (ii)  critical  cases  are  promptly  escalated  to  the  right  operational  and  decision  level;  (iii)  regular  reporting  to  the 
Facility management is provided on the overall status. 

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

Carrying amount 

Lifetime ECL credit-impaired 

Gross amount 

Impairment-loss allowance 

Carrying amount of lifetime ECL credit-impaired 

Past due but not credit-impaired 

Past due comprises 

0-30 days 

30-90 days 

90-180 days 

more than 180 days 

Carrying amount past due but not credit-impaired 

Loans and advances 

Loans and advances 

31.12.2023 

1,683,312 

31.12.2022 

1,849,786 

17,860 

-14,976 

2,884 

- 

23 

315 

- 

338 

63,474 

-21,303 

42,171 

670 

118 

95 

25 

908 

Carrying amount neither past due nor credit-impaired 

1,680,090 

1,806,707 

Total carrying amount loans and advances 

1,683,312 

1,849,786 

118 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.2.3.7 

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

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

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

The scenarios are derived shocking GDP, which is the key measurement of economic activity. The shocks to real GDP are calibrated to 
replicate the past volatility of the variable. In addition, expert judgment is applied, when appropriate, to refine the size and persistency of 
GDP  shocks.  As  a  result,  shocks  are  determined  together  with  a  decay  function  to  determine  the  impact  of  the  shocks  over  time. 
Probabilities  attached to  each scenario  are  defined  reflecting  market  (volatility)  indicators  and  internally  developed  indicators/trackers 
consistently deployed over time to capture uncertainty. The weighting of positive and negative shocks depends on the balance of risks 
in  the  economy,  on  average  negative  and  positive shocks  EUR  -7,247  (2022:  EUR  -9,908)  and  EUR  6,007  (2022:  EUR  8,356)  were 
respectively applied on quarterly projections in the past exercise. 

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

(in EUR’000) 

Gross exposure 

Loss allowance 

(in EUR’000) 

Gross exposure 

Loss allowance 

2023 

Positive 

Baseline   

Negative   

2,258,365 

2,258,365 

2,258,365 

45,603 

51,610 

58,857 

2022 

Positive 

Baseline   

Negative   

3,229,247 

3,229,247 

3,229,247 

43,821 

52,177 

62,085 

3.2.3.8  Loan renegotiation and forbearance 

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

In the normal course of business, the deterioration of the loans in question would have been detected via the provisions of the Bank’s 
guidelines and procedures and would have been monitored before renegotiation. Once renegotiated, the EIB would continue to closely 
monitor  these  loans.  In  the  case  of  the  financial  instrument  would  be  credit-impaired  it  will  be  moved  to  Stage  3.  The  loan  will  be 
monitored regularly in line with the Bank’s framework.  

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

119 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.2.3.8 

Loan renegotiation and forbearance (continued) 

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

in EUR’000 

31.12.2023 

31.12.2022 

Number of contracts subject to forbearance practices 

Carrying values (incl. interest and amounts in arrears) 

ECL allowance recognised 

Interest income in respect of forborne contracts 

Performing 

Non-
Performing 

Performing 

Non-
Performing 

13 

112,554 

1,654 

8,594 

6 

46,432 

22,151 

1,776 

12 

144,399 

16,008 

7,745 

7 

45,497 

14,323 

2,280 

Forbearance measures 

in EUR’000 

31.12.2022 

Extension of 
maturities 

Deferral of 
capital and 
interest 

Financial institutions 

Corporates 

Total 

85,751 

104,145 

189,896 

- 

- 

- 

- 

- 

- 

Breach of 
material 
financial 
covenants 

12,275 

- 

12,275 

Other 

Contractual 
repayment, 
termination 
and/or write off 

31.12.2023 

- 

- 

- 

-29,671 

-13,514 

-43,185 

68,355 

90,631 

158,986 

3.2.4 

Credit risk on cash and cash equivalents 

Available  funds  are  invested  in  accordance  with  the  Facility’s  schedule  of  contractual  disbursement  obligations.  As  of  31  December 
2023, and 31 December 2022, investments were in the form of bank deposits, certificates of deposit and commercial papers.  

The authorized entities have a rating similar to the short-term and long-term ratings required for the EIB’s own treasury placements. In 
case of different ratings being granted by more than one credit rating agency, the lowest rating governs. The maximum authorized limit 
for each authorised bank is currently EUR 50,000,000 (fifty million euro). An exception to this rule has been granted to Societe Generale 
S. A.  where  the  Facility  has its  operational  cash  accounts. The  short-term  credit  limit for  Societe Generale  S.  A.  as  at  31  December 
2023 
and  
31 December 2022 amounts to EUR 110,000,000 (one hundred and ten million euro). The increased limit applies to the sum of the cash 
held at the operational cash accounts and the instruments issued by this counterpart and held by the treasury portfolio. 

All investments have been done with authorised entities with a maximum tenor of three months from value date. All credit exposure limit 
breaches have been reported to the mandators. As at 31 December 2023 and as at 31 December 2022 all term deposits, commercial 
papers  and  cash  in  hand  held  by  the  treasury  portfolio  of  the  Facility  had  a  minimum  rating  of  at  least  P-2  (Moody’s  equivalent)  at 
settlement day.  

The following table shows the situation of cash and cash equivalents including accrued interest (in EUR’000): 

Minimum short-term 
rating 

Minimum long-term 
rating 

(Moody’s term) 

(Moody’s term) 

P-1 

P-1 

P-1 

P-1 

P-1 

P-1 

P-2 

P-2 

Total 

Aaa 

Aa2 

Aa3 

A1 

A2 

A3 

A3 

Baa1 

3.2.5 

Credit risk on derivatives 

31.12.2023 

31.12.2022 

140,592 

29,951 

89,682 

360,831 

204,179 

346,275 

205,314 

- 

10% 

2% 

7% 

26% 

15% 

25% 

15% 

0% 

200,167 

24,955 

4,992 

300,627 

340,252 

491,224 

29,956 

59,797 

14% 

2% 

0% 

21% 

23% 

34% 

2% 

4% 

1,376,824 

100% 

1,451,970 

100% 

120 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.2.5.1  Credit risk policy of derivatives 

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

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

3.2.5.2  Credit risk measurement for derivatives 

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

The EIB measures the credit risk exposure related to swaps and derivatives transactions using the Current Unsecured Exposure and 
Potential  Future  Exposure  approach  for  reporting  and  limit  monitoring.  These  metrics  fully  include  the  derivatives  related  to  the 
Investment Facility. 

The  Facility  enters  into  foreign  exchange  short-term  currency  swaps  (“FX  swaps”)  contracts  in  order  to  hedge  currency  risk  on  loan 
disbursements in currencies other than EUR. FX swaps have a maturity of maximum three months and are regularly rolled-over. The 
notional amount of FX swaps stood at EUR 1,640.0 million as at 31 December 2023 against EUR 1,790.0 million as at 31 December 
2022.  The  fair  value  of  FX  swaps  amounts  to  EUR  45.8  million  as  at  31 December  2023  against  EUR 71.1  million  as  at 
31 December 2022. 

The Facility enters into cross currency swaps contracts in order to hedge currency risk on loan disbursements in currencies other than 
EUR.  Cross  currency  swaps  have  a  long-term  maturity.  The  notional  amount  of  FX  swaps  stood  at  EUR  43.3  million  as  at 
31 December 2023 against EUR 47.0 million as at 31 December 2022. The fair value of FX swaps amounts to EUR 10.0 million as at 
against  
31 December 
EUR 4.8 million as at 31 December 2022. 

2023 

3.2.6    Credit risk on treasury financial assets 

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

in EUR ‘000 
Minimum short-term 
rating 

Minimum long-term 
rating 

(Moody’s term) 

(Moody’s term) 

P-1 

P-1 

P-1 

P-2 

Total 

Aa2 

Aa3 

A3 

A3 

31.12.2023 

31.12.2022 

- 

- 

- 

- 

- 

0% 

0% 

0% 

0% 

0% 

32 974 

 4 

39 843 

 182 

73 003 

45% 

0% 

55% 

0% 

100% 

121 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
Annual accounts of the European Development Fund 2023 

3.3  Liquidity risk 

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

3.3.1 

Liquidity risk management 

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

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

To  further  minimize  the  liquidity  risk,  the  Facility  maintains  a  liquidity  reserve  sufficient  to  cover  at  any  PIT  forecasted  cash 
disbursements,  as  communicated  periodically  by  the  EIB’s  Lending  Department.  Funds  are  invested  on  the  money  market  and  bond 
markets  in  the  form  of  interbank  deposits  and  other  short-term  financial  instruments  by  taking  into  consideration  the  Facility’s  cash 
disbursement  obligations.  The  Facility’s  liquid  assets  are  managed  by  the  Bank’s  Treasury  Department  with  a  view  to  maintain 
appropriate liquidity to enable the Facility to meet its obligations. In line with the Council Decision 2020/2233, reflows from the ACP IF 
shall be deployed within the NDICI framework. However, the availability of those reflows to be transferred is conditional to sustaining an 
adequate level of liquidity under the IF.  

It is worth highlighting that capital is managed solely from a liquidity perspective, as described above. 

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

3.3.2 

Liquidity risk measurement 

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

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

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

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

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

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

Committed TA “gross nominal outflow” in the “Maturity profile of non-derivative financial liabilities” table refers to the total undisbursed 
portion of signed TA contracts. The disbursement time pattern is subject to a significant degree of uncertainty. Cash outflows classified 
in the “3 months or less” bucket represent the amount of outstanding invoices received by the reporting date.  

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

3.3.2 

Liquidity risk measurement (continued) 

122 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

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

Maturity profile of non-derivative financial liabilities 

in EUR’000 as at 31.12.2023 

 3 months 
or less 

More than 
3 months 
to 1 year 

More than 
1 year to 
5 years 

More than 
5 years 

Maturity 
Undefined 

Gross 
nominal 
outflow 

Outflows for committed but undisbursed loans 

49,019 

6,000 

Outflows for committed investment funds and share subscription 

Others (signed non-issued guarantees, issued guarantees) 

Outflows for committed interest subsidies 

Outflows for committed TA  

Total  

- 

- 

4,235 

849 

- 

- 

- 

- 

54,103 

6,000 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

828,073 

883,092 

297,534 

297,534 

47,749 

47,749 

343,282 

347,517 

25,343 

26,192 

1,541,981  1,602,084 

Maturity profile of non-derivative financial liabilities 

in EUR’000 as at 31.12.2022 

 3 months 
or less 

More than 
3 months 
to 1 year 

More than 
1 year to 
5 years 

More than 
5 years 

Maturity 
Undefined 

Gross 
nominal 
outflow 

Outflows for committed but undisbursed loans 

87,210 

21,208 

Outflows for committed investment funds and share subscription 

4,676 

Others (signed non-issued guarantees, issued guarantees) 

Outflows for committed interest subsidies 

Outflows for committed TA  

Total  

- 

- 

924 

- 

- 

- 

- 

92,810 

21,208 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1,563,433  1,671,851 

406,496 

411,172 

49,378 

49,378 

350,282 

350,282 

32,149 

33,073 

2,401,738  2,515,756 

Maturity profile of derivative financial liabilities 

in EUR’000 as at 31.12.2023 

CCS – Inflows 

CCS – Outflows 

 3 months or 
less 

More than 3 
months to 1 
year 

More than 1 
year to 5 
years 

More than 5 
years 

Gross 
nominal 
inflow/outflow 

192 

-90 

10,909 

-10,212 

32,186 

-23,783 

1,706 

-1,828 

44,993 

-35,913 

Short-term currency swaps – Inflows 

Short-term currency swaps – Outflows 

1,640,000 

-1,597,068 

- 

- 

- 

- 

- 

- 

1,640,000 

-1,597,068 

Total  

43,034 

697 

8,403 

-122 

52,012 

Maturity profile of derivative financial liabilities 

in EUR’000 as at 31.12.2022 

CCS and CCIRS – Inflows 

CCS and CCIRS – Outflows 

Short-term currency swaps – Inflows 

Short-term currency swaps – Outflows 

Total  

 3 months or 
less 

More than 3 
months to 1 
year 

More than 1 
year to 5 
years 

More than 5 
years 

Gross 
nominal 
inflow/outflow 

88 

-108 

9,474 

-11,965 

38,431 

-30,450 

1,790,000 

-1,724,227 

- 

- 

- 

- 

65,753 

-2,491 

7,981 

147 

-146 

- 

- 

1 

48,140 

-42,669 

1,790,000 

-1,724,227 

71,244 

123 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.3.3   

Long term financial assets and liabilities 

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

in EUR’000 

Financial assets: 

Loans and advances 

Shares and other variable yield securities 

Total  

Financial liabilities: 

Amount owed to third parties* 

Provisions for loan commitments 

31.12.2023 

31.12.2022 

1,755,831 

820,713 

2,576,544 

1,922,784 

797,341 

2,720,125 

389,116 

19,038 

136,867 

16,583 

Total  
153,450 
*  The  amounts  owed  to  third  parties  are  including  the  Interest  subsidies  and  TA  not  yet  disbursed  owed  to  Member  States,  where  the  maturity  is  mainly 
undefined. 

408,154 

3.4      Market risk 

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

3.4.1   

Interest rate risk 

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

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

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

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

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

To calculate  the  net  present value  of the micro  hedging swaps,  the  Facility  uses  the  EUR swap curve  for  cash  flows  denominated  in 
EUR and the USD swap curve for cash flows denominated in USD. 

124 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.4.2  

Interest rate risk (continued) 

As shown  in  the  following  table  the  net  present  value  of the  loan portfolio including  related  micro-hedging  swaps  as  at  31  December 
2023  would  decrease  by  EUR  491k  (as  at  31  December  2022:  decrease  by  EUR  500k)  if  all  relevant  interest  rates  curves  are 
simultaneously shifted upwards in parallel by 1 basis point. 

Basis point value 
in EUR’000 

Money 
Market 

Very Short  

Short 

Medium 

Long 

Extra Long  

Total 

As at 31.12.2023 

1 year 

2 to 3 years 

4 to 6 years 

7 to 11 years  12 to 20 years 

More than 20 
years 

Total sensitivity of 
loans and micro 
hedging swaps 

-39 

-97 

-153 

-153 

-47 

-2 

-491 

Basis point value 
in EUR’000 

Money 
Market 

Very Short  

Short 

Medium 

Long 

Extra Long  

Total 

As at 31.12.2022 

1 year 

2 to 3 years 

4 to 6 years 

7 to 11 years  12 to 20 years 

More than 20 
years 

Total sensitivity of 
loans and micro 
hedging swaps 

-34 

-98 

-154 

-162 

-50 

-2 

-500 

3.4.2 

Foreign exchange risk 

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

Given a reference accounting currency (EUR for the IF), the Facility is exposed to FX risk whenever there is a mismatch between assets 
and  liabilities  denominated  in  a  non-reference  accounting  currency.  FX  risk  also  includes the  effect of  changes  in  the value  of  future 
cash  flows  denominated  in  non-reference  accounting  currency,  e.g.  interest  and  dividend  payments,  due  to  fluctuations  in  exchange 
rates. 

3.4.2.1 

Foreign exchange risk and treasury assets 

The IF’s treasury assets are denominated in either EUR or USD. 

FX risk is hedged by means of FX cross currency spot or forward transactions, FX swaps or cross-currency swaps. The EIB’s Treasury 
Department  can,  where  deemed  necessary  and  appropriate,  use  any  other  instrument,  in  line  with  the  Bank’s  policy,  that  provide 
protection against market risks incurred in connection with the IF’s financial activities. 

3.4.2.2 

Foreign exchange risk and operations financed or guaranteed by the IF 

Member States’ IF contributions are received in EUR. The operations financed or guaranteed by the IF as well as interest subsidies can 
be denominated in EUR, USD or any other authorised currency. 

A foreign exchange risk exposure (against the EUR reference currency) arises whenever transactions denominated in currencies other 
than the EUR are left un-hedged. The IF’s foreign exchange risk hedging guidelines are set out below.  

3.4.2.2.1. 

Hedging of operations denominated in USD 

The  FX  risk  generated  by  IF  operations  denominated  in  USD  shall  be  covered  on  an  aggregated  basis  via  the  use  of  EUR/USD  FX 
swaps, rolled over and adjusted in terms of amount on a periodic basis. The use of FX swaps serves a dual purpose. On one side the 
necessary liquidity for new disbursements (loans and equity) is generated and on the other side an FX macro hedge is maintained. 

At the beginning of each period, the cash flows to be received or paid in USD during the next period shall be estimated on the basis of 
planned or expected reflows/disbursements. Subsequently, the maturing FX swaps shall be rolled over, their amount being adjusted to 
cover at least the USD liquidity needs projected over the next period.  

On a monthly basis, the USD FX position shall be hedged, if exceeding the relevant limits, by means of a spot or forward operation. 

Within  a  roll-over  period,  unexpected  USD  liquidity  deficits  shall  be  covered  by  means  of  ad  hoc  FX  swap  operations  while  liquidity 
surpluses shall either be invested in treasury assets or converted into EUR if occurred from an increase of the FX position.  

125 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.4.2.2.2. 

Hedging of operations denominated in currencies other than EUR or USD 

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

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

In  addition,  for  loans  denominated  in  currencies  other  than  EUR,  USD  or  currencies  for  which  hedging  through  cross-currency  swap 
contracts  is  not  possible,  the  IF  charges  an  additional  interest  component  called  “FX  premium”  to  mitigate  the  risk  of  potential  local 
currency depreciation. 

3.4.2.2.3 

Foreign exchange position (in EUR’000) 

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

The  foreign  exchange  position  is  presented  in  the  tables  below  in  accordance  with  the  IF’s  Risk  Policies  (as  described  in  the  IF’s 
financial  risk  framework).  The  FX  position  as  per  Risk  Policies  is  based  on  accounting  figures  and  defined  as  the  balance  between 
selected assets and liabilities. The assets and liabilities defined in the FX position as per Risk Policies are selected to ensure that the 
earnings will only be converted into the reporting currency (EUR) when received. 

The  fair  value  change  on  shares  and  other  variable  yield  securities  are  included  in  the  FX  position  as  per  Risk  Policies,  as  well  as 
impairments on loans and advances. Derivatives included in the FX position as per Risk Policies are considered at their nominal value 
instead of their fair value, in order to be aligned with the retained value of the assets, considered also at their nominal value adjusted by 
the impairment for loans. 

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

As at 31 December 2023 

Assets and liabilities 

Commitments and 
contingent liabilities 

Currencies 

USD 

Local currencies  
(under synthetic hedge)* 

KES 

TZS 

DOP 

UGX 

RWF 

Local currencies  
(not under synthetic hedge)* 

HTG, MUR, MZN, XOF, ZMW, 
BWP, JMD, NGN, ZAR 

Total non-EUR currencies 

EUR 

Total EUR and non-EUR 

FX position as per 
Risk Policies 

FX position excluded 
from Risk Policies 

Balance sheet FX 
position 

-194,166 

-16,111 

-210,277 

306,161 

87,829 

1,071 

16,663 

20,283 

55,837 

67,992 

55,509 

- 

55,509 

-4,832 

19 

122 

221 

367 

-1,136 

-21,350 

3,489,673 

3,468,323 

82,997 

1,090 

16,785 

20,504 

56,204 

66,856 

34,159 

3,489,673 

3,523,832 

- 

- 

- 

- 

- 

- 

306,161 

1,344,972 

1,651,133 

* See section 3.4.2.2.2 for explanations on synthetic hedge. 

126 

 
 
 
         
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

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

As at 31 December 2022 

Assets and liabilities 

Commitments and 
contingent liabilities 

Currencies 

USD 

Local currencies  
(under synthetic hedge)* 

KES 

TZS 

DOP 

UGX 

RWF 

Local currencies  
(not under synthetic hedge)* 

HTG, MUR, MZN, XOF, ZMW, 
BWP, JMD, NGN, ZAR 

Total non-EUR currencies 

EUR 

Total EUR and non-EUR 

FX position as per 
Risk Policies 

FX position excluded 
from Risk Policies 

Balance sheet FX 
position 

-318,423 

-11,114 

-329,537 

844,247 

129,513 

7,355 

24,533 

32,632 

75,037 

86,929 

37,576 

- 

37,576 

36,883 

123 

301 

489 

698 

-479 

26,901 

4,009,151 

4,036,052 

166,396 

7,478 

24,834 

33,121 

75,735 

86,450 

64,477 

4,009,151 

4,073,628 

- 

- 

- 

- 

- 

- 

844,247 

1,726,301 

2,570,548 

* See section 3.4.2.2.2 for explanations on synthetic hedge. 

3.4.2.3 

Foreign exchange sensitivity analysis 

As  at  31  December  2023  a  10  percent  depreciation  of  EUR  versus  all  non-EUR  currencies  would  result  in  an  increase  of  the 
contributors’ resources and profit amounting to EUR 2.9 million (31 December 2022: EUR 7.2 million). A 10 percent appreciation of the 
EUR 
all  
non-EUR currencies would result in a decrease of the contributors’ resources and profit amounting to EUR -2.4 million (31 December 
2022:  
EUR -5.9 million). 

versus 

127 

 
 
 
 
 
 
  
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

3.4.2.4 

Conversion rates 

The following conversion rates were used for establishing the balance sheet at 31 December 2023 and 31 December 2022: 

Non-EU currencies 

Botswana Pula (BWP) 

Dominican Republic Pesos (DOP) 

Fiji Dollars (FJD) 

Haitian Gourde (HTG) 

Jamaican Dollar (JMD) 

Kenya Shillings (KES) 

Mauritania Ouguiyas (MRU) 

Mauritius Rupees (MUR) 

Mozambican Metical (MZN) 

Nigerian Naira (NGN) 

Rwanda Francs (RWF) 

Tanzania Shillings (TZS) 

Uganda Shillings (UGX) 

United States Dollars (USD) 

Franc CFA Francs (XAF/XOF) 

South Africa Rand (ZAR) 

Zambia Kvacha (ZMW) 

3.4.3 

Equity price risk 

31 December 2023 

31 December 2022 

14.78 

64.08 

2.39 

143.68 

168.22 

173.20 

43.35 

48.56 

69.98 

975.04 

1,385.07 

2,772.53 

4,178.00 

1.11 

655.96 

20.35 

28.45 

13.59 

59.84 

2.32 

154.37 

161.59 

131.68 

39.04 

46.83 

67.54 

478.02 

1,132.20 

2,487.37 

3,965.00 

1.07 

655.96 

18.10 

19.28 

Equity  price  risk  refers  to  the  risk  that  the  fair  values  of  equity  investments  decrease  as  the  result  of  changes  in  the  levels  of  equity 
prices and/or the value of equity investments. 

The IF is exposed to equity price risk via its investments in direct equity and venture capital funds. 

The value of non-listed equity positions is not readily available for the purpose of monitoring and control on a continuous basis. For such 
positions, the best indications available include prices derived from any relevant valuation techniques. 

The effect on the Facility’s contributors’ resources (as a result of a change in the fair value of the equity instruments portfolio) due to a 
+/-10%  change  in  the  value  of  individual  direct  equity  and  venture  capital  investments,  with  all  other  variables  held  constant,  is  
EUR 82.1 million and EUR -82.1 million respectively as at 31 December 2023 (EUR 79.7 million and EUR -79.7 million respectively as 
at 31  December 2022). 

128 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

4 

Fair values of financial instruments 

4.1  Accounting classifications and fair values 

The  following tables  shows the  carrying  amounts  and fair values  of  financial  assets  and financial  liabilities,  including  their  levels  in  the  fair value  hierarchy. These  do not  include  fair value 
information for financial assets and financial liabilities measured at AC as the carrying amount is a reasonable approximation of fair value. 

At 31 December 2023 

Carrying amount 

Fair value 

in EUR’000 

Derivative 
financial 
instruments 

Shares and 
other 
variable 
yield 
securities 

Cash, loans 
and 
advances 

Treasury 
financial 
assets 

Other 
financial 
assets/liabil
ities 

Total 

Level 1 

Level 2 

Level 3 

Total 

- 

- 

- 

Financial assets mandatorily measured at 
FVTPL 

Derivative financial instruments  

55,765 

- 

Venture Capital Fund  

Direct Equity Investments 

Loans and advances 

- 

- 

- 

693,042 

127,671 

- 

124,323 

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

55,765 

820,713 

124,323 

Cash and cash equivalents 

Loans and advances 

Amounts receivable from contributors 

Treasury financial assets 

Other assets 

Total financial assets measured at AC 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1,376,824 

1,558,989 

85,321 

- 

- 

3,021,134 

Total financial assets  

55,765 

820,713 

3,145,457 

Financial liabilities at AC 

Provisions for loan commitments 

Amounts owed to third parties 

Other liabilities 

Total financial liabilities measured at AC 

Total financial liabilities 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

129 

- 

- 

- 

- 

- 

55,765 

- 

55,765 

- 

- 

- 

693,042 

693,042 

127,671 

127,671 

124,323 

124,323 

55,765 

945,036  1,000,801 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

616 

55,765 

693,042 

127,671 

124,323 

1,000,801 

1,376,824 

1,558,989 

85,321 

- 

616 

616 

3,021,750 

616 

4,022,551 

-19,038 

-19,038 

-427,828 

-427,828 

-3,338 

-3,338 

-450,204 

-450,204 

-450,204 

-450,204 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Annual accounts of the European Development Fund 2023 

4 

Fair values of financial instruments (continued) 

4.1  Accounting classifications and fair values (continued) 

As at 31 December 2022 

Carrying amount 

Fair value 

in EUR’000 

Derivative 
financial 
instruments 

Shares and 
other 
variable 
yield 
securities 

Cash, loans 
and 
advances 

Treasury 
financial 
assets 

Other 
financial 
assets/liabil
ities 

Total 

Level 1 

Level 2 

Level 3 

Total 

- 

- 

- 

Financial assets mandatorily measured at 
FVTPL 

Derivative financial instruments  

75,852 

- 

Venture Capital Fund  

Direct Equity Investment 

Loans and advances 

- 

- 

- 

684,564 

112,777 

- 

95,604 

Total financial assets mandatorily measured at 
FVTPL 

75,852 

797,341 

95,604 

Financial assets at AC 

Cash and cash equivalents 

Loans and advances 

Amounts receivable from contributors 

Treasury financial assets 

Other assets 

Total financial assets measured at AC 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1,451,970 

1,754,182 

85,321 

- 

- 

- 

- 

- 

- 

- 

75,852 

- 

75,852 

- 

- 

- 

684,564 

684,564 

112,777 

112,777 

95,604 

95,604 

75,852 

892,945 

968,797 

- 

- 

- 

- 

- 

- 

- 

- 

73,003 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

950 

75,852 

684,564 

112,777 

95,604 

968,797 

1,451,970 

1,754,182 

85,321 

73,003 

950 

3,291,473 

73,003 

950 

3,365,426 

Total financial assets 

75,852 

797,341 

3,387,077 

73,003 

950 

4,334,223 

Financial liabilities at AC 

Provisions for loan commitments 

Amounts owed to third parties 

Other liabilities 

Total financial liabilities measured at AC 

Total financial liabilities 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

-16,583 

-16,583 

-190,927 

-190,927 

-2,419 

-2,419 

-209,929 

-209,929 

-209,929 

-209,929 

- 

- 

- 

- 

- 

130 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Annual accounts of the European Development Fund 2023 

4.2           Measurement of fair values 

4.2.1 

Valuation techniques and significant unobservable inputs 

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

Relationship of 
unobservable inputs to 
fair value measurement 

Not applicable. 

longer 

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

for 

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

The  higher  the  discount 
rate 
fair 
value 

lower  the 

the 

Valuation technique 

Significant unobservable inputs 

Financial instruments carried at fair value 

Derivative 
financial 
instruments 

Venture 
Capital Fund 
(VCF) 

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

forward/interest 

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

Direct Equity 
Investment 

Adjusted net assets. 

Loans at fair 
value (IFE) 

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

appropriate 

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

of 

cashflows 

in  estimation  and 
Curves  used 
discounting 
are 
calibrated  to  market  data,  and  the 
swaps in the portfolio have maturities 
that  do  not  exceed  the  longest  tenor 
available  in  the  inputs.  Therefore, 
there are no unobservable inputs. 

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

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

for 

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

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

131 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

4.2.1 

Valuation techniques and significant unobservable inputs (continued) 

Valuation technique 

Significant unobservable inputs 

Relationship of 
unobservable inputs 
to fair value 
measurement 

Financial instruments not carried at fair value 

Loans and 
advances 

Treasury 
financial 
assets 

Not applicable. 

Not applicable. 

Discounted cash flows: The valuation model uses 
contractual  cash  flows  that  are  conditional  upon 
the  non-occurrence  of  default  by  the  debtor  and 
do  not  take  into  account  any  collateral  values  or 
early  repayments’  scenarios.  To  obtain  the  Net 
Present  Value  (NPV)  of  the  loans,  the  model 
retained  discounts  the  contractual  cash  flows  of 
each  loan  using  an  adjusted  market  discount 
curve. The individual loan NPV is then adjusted to 
take  into  consideration  the  relevant  associated 
Expected  Loss.  The  results  are  then  summed  to 
obtain the fair value of loans and advances. 

Discounted cash flows. 

Not applicable. 

Not applicable. 

With the application of IFRS 13, valuation adjustments are included in the fair value of derivatives as at 31 December 2023 and 2022, 
namely: 

- 

- 

Credit valuation adjustments (CVA), reflecting counterparty credit risk on derivative transactions, amounting to EUR -6.1k as 
at 31 December 2023 and to EUR -6.1k as at 31 December 2022.  
Debit  valuation  adjustments  (DVA),  reflecting  own  credit  risk  on  derivative  transactions,  amounting  to  EUR  +7.2k  as  at  
31 December 2023 and EUR +7.2k as at 31 December 2022.  

4.2.2 

Transfers between Level 1 and 2 

The Facility’s policy is to recognise the transfers between Levels as of the date of the event or change in circumstances that caused the 
transfer. 

In 2023 and 2022 the Facility did not make transfers from Level 1 to 2 or Level 2 to 1 of the fair value hierarchy. 

132 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

4.2.3 

Level 3 fair values 

Reconciliation of Level 3 fair values 

The following tables present the changes in Level 3 instruments13 for the year ended 31 December 2023 and 31 December 2022: 

in EUR'000 

Balance as at 1 January 2023 

Gains or losses included in profit or loss: 

Derecognition of fair value adjustment due to sales 

Net fair value change on shares and other variable yield securities  

Total 

Disbursements 

Repayments 

Foreign exchange rates differences 

Balance as at 31 December 2023 

in EUR'000 

Balance as at 1 January 2022 

Gains or losses included in profit or loss: 

Derecognition of fair value adjustment due to sales 

Net fair value change on shares and other variable yield securities 

Total 

Disbursements 

Repayments 

Foreign exchange rates differences 

Balance as at 31 December 2022 

Shares and other 
variable yield 
securities 

797,341 

- 

-15,142 

-15,142 

101,100 

-32,560 

-30,026 

820,713 

Shares and other 
variable yield 
securities 

697,631 

99 

9,172 

9,271 

139,935 

-74,959 

25,463 

797,341 

In 2023 and 2022 the Facility did not make transfers out or to Level 3 of the fair value hierarchy. 

Sensitivity analysis 

The effects on the Facility’s contributors’ resources, and statement of profit or loss and other comprehensive income due to a +/- 10% 
change in the value of direct equity and venture capital investments, with all other variables held constant is EUR 82.1 million and EUR -
82.1 million, respectively as at 31 December 2023 (EUR 79.7 million and EUR -79.7 million, respectively as at 31 December 2022). 

13 Loans measured at FVTPL are presented in Note 7. 

133 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

5  Cash and cash equivalents 

The cash and cash equivalents are composed of: 

in EUR'000 

Cash in hand 

Term deposits 

Commercial papers 

Cash and cash equivalents in the cash flow statement 

Accrued interest  

Cash and cash equivalents in the statement of financial position 

6  Derivative financial instruments  

31.12.2023 

31.12.2022 

146,494 

625,403 

599,507 

1,371,404 

5,420 

1,376,824 

328,079 

963,004 

159,506 

1,450,589 

1,381 

1,451,970 

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

As at 31 December 2023 

in EUR'000 
Cross currency swaps 

FX swaps 

Total derivative financial instruments 

As at 31 December 2022 

in EUR'000 
Cross currency interest rate swaps 

FX swaps 

Total derivative financial instruments 

Fair Value 

Assets 

9,983 

45,782 

55,765 

Fair Value 

Assets 

4,778 

71,074 

75,852 

Liabilities 

Notional amount 

- 

- 

- 

43,250 

1,640,000 

1,683,250 

Liabilities 

Notional amount 

- 

- 

- 

47,033 

1,790,000 

1,837,033 

134 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total 

1,800,164 

166,573 

- 

-287,641 

- 

-85,638 

1,593,458 

-60,402 

-379 

3,827 

- 

5,607 

1,750 

-49,597 

1,543,861 

140,836 

40,664 

-514 

-2,877 

Annual accounts of the European Development Fund 2023 

7 

Loans and advances 

7.1 

 Loans and advances 

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

in EUR'000 
Nominal of loans at AC as at 1 January 2023 

Disbursements 

Write offs 

Repayments 

Interest capitalised 

Foreign exchange rates differences 

Nominal of loans at AC as at 31 December 2023 

Global loans*  Senior loans 

Subordinated 
loans 

1,236,887 

154,587 

- 

563,277 

11,986 

- 

-219,739 

-67,902 

- 

-73,614 

1,098,121 

- 

-12,024 

495,337 

Impairment - loss allowance as at 1 January 2023 

-37,604 

-22,798 

Net changes of the 12 month ECL  

Net changes of lifetime ECL not credit-impaired 

Lifetime ECL credit-impaired 

Reversal of lifetime ECL credit-impaired  

Foreign exchange rates differences 

-287 

-1,060 

- 

5,205 

1,348 

-92 

4,887 

- 

402 

402 

Impairment - loss allowance as at 31 December 2023 

-32,398 

-17,199 

Loans and advances at AC as at 31 December 2023 

1,065,723 

478,138 

Nominal of loans at FVTPL as at 1 January 2023 

Disbursements 

Repayments 

Foreign exchange rates differences 

1,080 

- 

- 

- 

72,923 

37,092 

-514 

-2,925 

66,833 

3,572 

- 

48 

Nominal of loans at FVTPL as at 31 December 2023 

1,080 

106,576 

70,453 

178,109 

Fair value adjustment as at 1 January 2023 

Net FV change 

Foreign exchange rates differences 

-1,080 

- 

- 

-26,420 

-8,941 

378 

-17,732 

9 

- 

-45,232 

-8,932 

378 

Fair value adjustment as at 31 December 2023 

-1,080 

-34,983 

-17,723 

-53,786 

Loans and advances at FVTPL as at 31 December 2023 

Amortised Cost 

Interest 

- 

-3,518 

11,560 

71,593 

-4,040 

10,876 

52,730 

124,323 

- 

250 

-7,558 

22,686 

Loans and advances as at 31 December 2023 

1,073,765 

556,567 

52,980 

1,683,312 

* Including agency agreements 

135 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

7  Loans and advances (continued) 

7.1    Loans and advances (continued) 

In EUR'000 

Nominal of loans at AC as at 1 January 2022 

Disbursements 

Repayments 

Foreign exchange rates differences 

Nominal of loans at AC as at 31 December 2022 

Global loans*  Senior loans 

Subordinated 
loans 

1,260,960 

186,211 

-246,403 

36,119 

1,236,887 

549,115 

68,638 

-74,267 

19,791 

563,277 

Impairment - loss allowance as at 1 January 2022 

-43,723 

-22,191 

Net changes of the 12 month ECL  

Net changes of lifetime ECL not credit-impaired 

Lifetime ECL credit-impaired 

Reversal of lifetime ECL credit-impaired  

Foreign exchange rates differences 

Impairment - loss allowance as at 31 December 2022 

-7,009 

4,305 

- 

11,082 

-2,259 

-37,604 

-750 

1,176 

-393 

151 

-791 

-22,798 

Loans and advances at AC as at 31 December 2022 

1,199,283 

540,479 

Total 

1,810,075 

254,849 

-320,670 

55,910 

1,800,164 

-65,914 

-7,759 

5,481 

-393 

11,233 

-3,050 

-60,402 

1,739,762 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Nominal of loans at FVTPL as at 1 January 2022 

Disbursements 

Repayments 

Foreign exchange rates differences 

Nominal of loans at FVTPL as at 31 December 2022 

Fair value adjustment as at 1 January 2022 

Net FV change 

Foreign exchange rates differences 

Fair value adjustment as at 31 December 2022 

Loans and advances at FVTPL as at 31 December 2022 

Amortised Cost 

Interest 

1,080 

- 

- 

- 

1,080 

-1,080 

- 

- 

-1,080 

- 

-3,450 

11,809 

70,936 

5,644 

-4,544 

887 

72,923 

-24,613 

-1,680 

-127 

-26,420 

46,503 

-3,718 

9,741 

200,000 

272,016 

- 

5,644 

-133,167 

-137,711 

- 

887 

66,833 

140,836 

-16,332 

-1,400 

- 

-17,732 

49,101 

- 

38 

-42,025 

-3,080 

-127 

-45,232 

95,604 

-7,168 

21,588 

Loans and advances as at 31 December 2022 

1,207,642 

593,005 

49,139 

1,849,786 

* Including agency agreements 

136 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

7.2 

Impairment on loans and advances – Loss allowances 

in EUR'000 

Loans and advances at AC 

Balance as at 1 January 2023 

Transfer to 12-month ECL 

Transfer to lifetime ECL not credit-impaired 

Net measurement of loss allowance 

New financial assets originated or purchased 

Financial assets that have been derecognised 

Foreign exchange rates differences* 

Balance as at 31 December 2023 

in EUR'000 

Loans and advances at AC 

Balance as at 1 January 2022 

Transfer to 12-month ECL 

Transfer to lifetime ECL not credit-impaired 

Transfer to lifetime ECL credit-impaired 

Net measurement of loss allowance 

New financial assets originated or purchased 

Financial assets that have been derecognised 

Foreign exchange rates differences* 

2023 

Lifetime ECL 

12-month ECL 

Lifetime ECL 
not credit-
impaired 

Lifetime ECL 
credit-impaired 

Total 

20,215 

60,402 

11,370 

869 

-927 

-993 

1,470 

-41 

-784 

28,817 

-4,217 

3,593 

-4,333 

1,188 

-57 

-317 

10,964 

24,674 

- 

- 

-2,873 

- 

-2,734 

-649 

13,959 

2022 

Lifetime ECL 

12-month ECL 

Lifetime ECL 
not credit-
impaired 

Lifetime ECL 
credit-impaired 

3,565 

2,293 

-489 

- 

4,101 

1,878 

-24 

46 

33,268 

-7,061 

3,160 

-617 

-2,472 

1,670 

-160 

1,029 

29,081 

- 

- 

393 

-6,045 

- 

-5,189 

1,975 

-3,348 

2,666 

-8,199 

2,658 

-2,832 

-1,750 

49,597 

Total 

65,914 

-4,768 

2,671 

-224 

-4,416 

3,548 

-5,373 

3,050 

60,402 
Balance as at 31 December 2022 
* Foreign exchange movements are excluded from the amounts reported in the Statement of Profit or Loss and Other Comprehensive Income as well as the 
Statement of Changes in Contributors' Resources. 

28,817 

11,370 

20,215 

137 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

8 

Shares and other variable yield securities 

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

in EUR'000 

Cost as at 1 January 2023 

Disbursements 

Repayments / sales 

Foreign exchange rates differences  

Cost as at 31 December 2023 

Unrealised gains and losses as at 1 January 2023 

Net change in unrealised gains and losses 

Derecognition of fair value adjustment due to equity swap 

Foreign exchange rates differences 

Unrealised gains and losses as at 31 December 2023 

Venture Capital 
Funds 

Direct Equity 
Investments 

580,534 

101,100 

-32,560 

-15,727 

633,347 

104,030 

-43,652 

- 

-683 

59,695 

81,711 

- 

- 

-8,256 

73,455 

31,066 

28,510 

- 

-5,360 

54,216 

Total 

662,245 

101,100 

-32,560 

-23,983 

706,802 

135,096 

-15,142 

- 

-6,043 

113,911 

Shares and other variable yield securities as at 31 December 2023 

693,042 

127,671 

820,713 

in EUR'000 

Cost as at 1 January 2022 

Disbursements 

Repayments / sales 

Equity swap 

Foreign exchange rates differences  

Cost as at 31 December 2022 

Unrealised gains and losses as at 1 January 2022 

Net change in unrealised gains and losses 

Derecognition of fair value adjustment due to sales 

Foreign exchange rates differences 

Unrealised gains and losses as at 31 December 2022 

Venture Capital 
Funds 

Direct Equity 
Investments 

493,161 

139,935 

-74,959 

- 

22,397 

580,534 

97,409 

4,149 

- 

2,472 

104,030 

77,478 

- 

- 

3,598 

635 

81,711 

29,583 

5,023 

-3,499 

-41 

31,066 

Total 

570,639 

139,935 

-74,959 

3,598 

23,032 

662,245 

126,992 

9,172 

-3,499 

2,431 

135,096 

Shares and other variable yield securities as at 31 December 2022 

684,564 

112,777 

797,341 

138 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

9  Amounts receivable from contributors 

The  amounts  of  EUR  85.3  million  (2022:  EUR  85.3  million)  receivable  from  contributors  are  entirely  composed  of  Member  States 
contributions called but not paid. 

10  Treasury financial assets 

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

73,003 

348,523 

-421,278 

-248 

- 

- 

- 

920,290 

-847,608 

247 

74 

73,003 

31.12.2023 

31.12.2022 

616 

- 

616 

940 

10 

950 

31.12.2023 

31.12.2022 

47,313 

1,202 

48,515 

51,498 

919 

52,417 

in EUR'000 

Balance as at 1 January 2023 

Acquisitions 

Maturities 

Change in amortisation of premium/discount 

Change in accrued interest  

Balance as at 31 December 2023 

in EUR'000 
Balance as at 1 January 2022 

Acquisitions 

Maturities  

Change in amortisation of premium/discount 

Change in accrued interest  

Balance as at 31 December 2022 

11  Other assets 

The main components of other assets are as follows: 

in EUR'000 

Amount receivable from the EIB 

Financial guarantees 

Total other assets 

12  Deferred income 

The main components of deferred income are as follows: 

in EUR'000 

Deferred interest subsidies 

Deferred commissions on loans and advances 

Total deferred income 

139 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

13  Provisions for loan commitments 

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

in EUR'000 

Loan commitments 

Balance as at 1 January 

Transfer to lifetime ECL not credit-impaired 

Net measurement of loss allowance 

New financial assets originated or purchased 

Financial assets that have been derecognised 

Foreign exchange rates differences  

Balance as at 31 December 

in EUR'000 

Loan commitments 

Balance as at 1 January 

Transfer to lifetime ECL not credit-impaired 

Net measurement of loss allowance 

New financial assets originated or purchased 

Financial assets that have been derecognised 

Foreign exchange rates differences  

Balance as at 31 December 

12-month ECL 

Lifetime ECL not 
credit-impaired 

Lifetime ECL 
credit-impaired 

2023 

4,825 

-163 

466 

-1,295 

-1,120 

2 

2,715 

11,758 

1,955 

8,206 

-1,461 

-4,118 

-17 

16,323 

- 

- 

- 

- 

- 

- 

- 

12-month ECL 

Lifetime ECL not 
credit-impaired 

Lifetime ECL 
credit-impaired 

2022 

1,693 

-302 

3,147 

428 

-142 

1 

4,825 

14,909 

4,687 

-6,797 

354 

-1,395 

- 

11,758 

- 

- 

- 

- 

- 

- 

- 

Total 

16,583 

1,792 

8,672 

-2,756 

-5,238 

-15 

19,038 

Total 

16,602 

4,385 

-3,650 

782 

-1,537 

1 

16,583 

14  Amounts owed to third parties  

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

in EUR'000 

Net general administrative expenses payable to the EIB 

Other amounts payable to the EIB 

Interest subsidies and TA not yet disbursed owed to Member States 

Total amounts owed to third parties 

15  Other liabilities 

The main components of other liabilities are as follows: 

in EUR'000 

Loan repayments received in advance  

Deferred income from interest subsidies 

Total other liabilities 

16  Member States Contribution called (in EUR’000) 

140 

31.12.2023 

31.12.2022 

29,655 

39,384 

358,789 

427,828 

33,628 

1,460 

155,839 

190,927 

31.12.2023 

31.12.2022 

2,727 

611 

3,338 

1,790 

629 

2,419 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

Member States 

Austria 

Belgium 

Bulgaria 

Croatia 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

United Kingdom 

Total as at 31 December 2023 

Contribution to 
the Facility 

94,677 

138,169 

2,660 

1,126 

1,566 

9,697 

77,279 

992 

55,115 

818,754 

823,467 

50,271 

9,230 

27,921 

470,233 

1,364 

2,248 

10,395 

526 

187,913 

24,591 

39,250 

7,734 

4,231 

3,137 

250,314 

102,760 

506,075 

3,721,695 

Contribution to 
interest subsidies 
and technical 
assistance 
20,161 

28,441 

1,361 

969 

750 

4,961 

16,633 

521 

12,364 

159,285 

173,107 

12,130 

4,295 

7,387 

104,875 

709 

1,138 

2,194 

253 

40,256 

12,537 

9,557 

4,200 

2,248 

1,507 

63,448 

23,561 

120,148 

828,996 

Total Contributed 

Called and not 
paid* 

114,838 

166,610 

4,021 

2,095 

2,316 

14,658 

93,912 

1,513 

67,479 

978,039 

996,574 

62,401 

13,525 

35,308 

575,108 

2,073 

3,386 

12,589 

779 

228,169 

37,128 

48,807 

11,934 

6,479 

4,644 

313,762 

126,321 

626,223 

4,550,691 

2,398 

3,249 

219 

225 

112 

797 

1,980 

86 

1,509 

17,813 

20,580 

1,507 

615 

940 

12,530 

116 

181 

255 

38 

4,777 

2,007 

1,197 

718 

376 

225 

7,932 

2,939 

- 

85,321 

Total as at 31 December 2022 
85,321 
*  On  15  November  2023,  the  Council  fixed  the  amount  of  financial  contributions  to  be  paid  by  each  Member  State  as  of  21  January  2024. 
As at 31 December 2023 EUR 85.3 million were not yet paid in.   

4,250,691 

3,701,695 

548,996 

141 

 
 
Annual accounts of the European Development Fund 2023 

17  Member States Contributions paid out 

in EUR'000 

European Commission 

ACP 

OCT 

Total 

UK 

Total 

Member States Contributions paid out  
as at 1 January 2023 

Reflows in relation to year 2021 

Reflows in relation to year 2022 

Member States Contributions paid out  
as at 31 December 2023 

- 

251,000 

236,883 

- 

7,000 

6,732 

- 

- 

- 

258,000 

243,615 

44,386 

41,912 

302,386 

285,527 

487,883 

13,732 

501,615 

86,298 

587,913 

As per the Transfer Agreement, as of year 2023 and until 31 December 2027, the Facility shall transfer annually to the EC the amount of 
available ACP IF Reflows and OCT IF Reflows. The indicative amount of the available ACP IF Reflows and OCT IF Reflows amounts to  
EUR 1,000 million and EUR 35 million respectively. In addition, the Facility shall transfer to the UK the amounts corresponding to the 
UK’s share of these available Reflows. The above table presents the Reflows already disbursed. 

18  Commitments and contingent liabilities  

in EUR'000 

Commitments 

Undisbursed loans 

Undisbursed commitment in respect of shares and other variable yield securities 

Issued guarantees 

Interest subsidies and technical assistance 

Contingent liabilities 

Signed non-issued guarantees 

31.12.2023 

31.12.2022 

883,092 

297,534 

985 

422,758 

1,671,851 

411,172 

- 

441,630 

46,764 

49,378 

Total commitments and contingent liabilities 

1,651,133 

2,574,031 

19 

Interest and similar income and expenses 

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

in EUR'000 

Cash and cash equivalents 

Loans and advances 

Interest subsidies 

Treasury financial assets 

Derivative financial instruments 

Total interest and similar income 

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

in EUR'000 

Derivative financial instruments 

Treasury financial assets 

Total interest and similar expenses 

142 

From 01.01.2023 

From 01.01.2022 

to 31.12.2023 

to 31.12.2022 

36,668 

95,137 

10,029 

3,584 

2,918 

1,999 

82,162 

9,625 

- 

- 

148,336 

93,786 

From 01.01. 2023  From 01.01. 2022 

to 31.12.2023 

to 31.12.2022 

- 

- 

- 

-5,080 

-399 

-5,479 

 
 
 
 
 
 
 
  
 
 
 
 
 
 
  
  
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

20  Fee and commission income and expenses  

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

in EUR'000 

Fee and commission on loans and advances 

Fee and commission on financial guarantees 

Total fee and commission income 

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

in EUR'000 

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

Total fee and commission expenses 

21  Net result on shares and other variable yield securities 

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

in EUR'000 

Net proceeds 

Dividend income 

Net fair value change 

Net result on shares and other variable yield securities 

22  Net foreign exchange results 

The main components of the net foreign exchange results are as follows: 

in EUR'000 

FX positions revaluation 

Cash and cash equivalents 

Derivative financial instruments 

Loans and advances 

Shares and other variable yield securities 

Other 

Total FX positions revaluation 

Realised results on FX swaps (cost of hedging) 

Net foreign exchange result 

23  General administrative expenses 

From 01.01.2023 

From 01.01.2022 

to 31.12.2023 

to 31.12.2022 

1 

24 

25 

42 

469 

511 

From 01.01.2023 

From 01.01.2022 

to 31.12.2023 

to 31.12.2022 

-62 

-62 

-761 

-761 

From 01.01.2023 

From 01.01.2022 

to 31.12.2023 

to 31.12.2022 

130 

6,555 

-15,142 

-8,457 

35 

15,225 

9,172 

24,432 

From 01.01.2023 
to 31.12.2023 

From 01.01.2022 
to 31.12.2022 

-123 

86,071 

-89,458 

-30,026 

3,479 
-30,057 

6,687 

-194,033 

50,951 

25,464 

-934 
-111,865 

-37,828 

-28,239 

-67,885 

-140,104 

General administrative expenses represent the actual costs incurred by the EIB for managing the Facility less income generated from 
standard appraisal fees directly charged by the EIB to clients of the Facility. 

As at 31 December 2023 total general administrative expense amounted to EUR -29.7 million (31 December 2022: EUR -33.6 million). 

143 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

24 

Involvement with unconsolidated structured entities (in EUR’000) 

Definition of a structured entity 

A structured entity is one that has been designed so that voting or similar rights are not the dominant factor in deciding, who controls 
the-entity. IFRS 12 observes that a structured entity often has some or all of the following features: 

- 
- 

- 
- 

Restricted activities; 
A  narrow  and  well-defined  objective,  such  as  to  effect  a  tax-efficient  lease,  carry  out  research  and  development  activities, 
provide a source of capital or funding to an entity or provide investment opportunities for investors by passing on risks and 
rewards associated with the assets of the structured entity to investors; 
Insufficient equity to permit the structured entity to finance its activities without subordinated financial support; 
Financing in the form of multiple contractually linked instruments to investors that create concentrations of credit or other risks 
(tranches). 

Unconsolidated structured entities 

The term 'unconsolidated structured entities' refers to all structured entities that are not controlled by the Facility and includes interests 
in structured entities that are not consolidated. 

Definition of Interests in structured entities: 

IFRS  12  defines  "interests"  broadly  to  include  any  contractual  or  non-contractual  involvement  that  exposes  the  reporting  entity  to 
variability in returns from the performance of the entity.   Examples of such interests include the holding of equity interests and other 
forms of involvement such as the provision of funding, liquidity support, credit enhancements, commitments and guarantees to the other 
entity. IFRS 12 states that a reporting entity does not necessarily have an interest in another entity solely because of a typical customer 
supplier relationship. 

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

Type of 
structured entity 

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

Venture 
operations 

capital 

Nature and purpose 

Interest held by the Facility 

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

Net disbursed amounts; 

Interest income. 

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

Investments  in  units/shares  issued 
by the venture capital entity; 

Dividends 
income. 

received  as  dividend 

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

Type of structured entity 

Caption 

Venture capital funds 

Total 

Shares and other variable yield 
securities 

31.12.2023 

31.12.2022 

Carrying 
amount  

Maximum 
exposure to 
loss 

Carrying 
amount  

Maximum 
exposure to 
loss  

693,042 

725,781 

684,564 

1,091,122 

693,042 

725,781 

684,564 

1,091,122 

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

144 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

25 

Impact financing envelope (in EUR’000) 

In June 2013 the ACP-EU Joint Ministerial Council approved the new financial protocol for the 11th European Development Fund (EDF), 
covering the period 2014-2020.  

A new EUR 500m endowment was agreed for the Investment Facility, the so called ‘impact financing envelope’ or “IFE”, enabling the 
Facility  to  support  projects  that  promise  a  particularly  high  development  impact  whilst  bearing  the  greater  risks  inherent  in  such 
investments.  This  envelope  presents  new  possibilities  for  enhancing  the  Facility’s  private  sector  lending  through  investments  in  the 
following instruments: 

Social impact equity funds - promoted by an emerging population of private equity fund managers who put the alleviation of social or 
environmental  issues  at  the core of  their funds'  investment strategy  but still target sustainability  at the  levels  of  both  the fund  and  its 
investee companies. 

Loans to financial intermediaries - (e.g. microfinance institutions, local banks and credit unions) operating in ACP countries in which 
the  EIB  cannot  consider  financing  -  in  particular  in  local  currency  -  under  the  existing  credit  risk  guidelines,  e.g.  due  to  either  high 
country  risks,  currency  volatility  or  lack  of  pricing  benchmarks.  The  main  objective  of  such  loans  is  to  fund  projects  with  a  high 
developmental impact, especially in the field of support to micro and small enterprises (MSEs) and agriculture, which generally do not 
qualify for IF financing. 

Risk  sharing  facilitating  instruments  -  which  take  the  form  of  first  loss  guarantees  ("first  loss  pieces")  that  facilitate  risk  sharing 
operations  of  the  EIB  with  local  financial  intermediaries  (mainly  commercial  banks)  for  the  benefit  of  underserved  SMEs  and  small 
projects  that  meet  the  Impact  Financing  Criteria  in  situations  where  a  market  gap  has  been  identified  in  relation  to  the  access  of 
SMEs/small projects to finance. The first loss pieces would be structured as a counter-guarantee in favour of senior guarantee tranches 
funded by the EIB - under the Investment Facility - and by other International Financial Institutions/Development Financial Institutions, 
thus generating a substantial leverage effect. 

Direct  financing  -  through  debt  (i.e.  loans)  or  equity  instruments  in  projects  with  sound  and  experienced  promoters  and  high 
developmental impacts, but that will, however, also entail higher expectations of losses and difficulties to recover the investment (equity 
type risk with higher than usual expectation of losses). The EIB applies strict selection and eligibility criteria for this instrument, as these 
projects, notwithstanding their high developmental impact, would not be able to meet acceptable financing criteria (i.e. low expectation 
of recovering the investment or offsetting the losses through interest rates /equity returns). 

The IFE also allows diversification into new sectors, such as health and education, agriculture and food security, and the development 
of new and innovative risk-sharing instruments. In 2016, the IFE financing capacity was increased to EUR 800 million by making the IFE 
partially revolving. 

From a financial and accounting perspective the IFE forms part of the IF portfolio and is accounted for in the overall IF annual financial 
statements.

145 

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

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

Annual accounts of the European Development Fund 2023 

Type of IFE investment 

Caption 

Measurement 

Loans to financial 
intermediaries 

Loans and advances  

AC 

Direct loan operations 

Loans and advances  

FVTPL 

Shares and other variable 
yield securities 

Shares and other variable 
yield securities 

FVTPL 

FVTPL 

Social impact equity funds 

Direct equity participations 

Risk sharing facilitating 
instruments 

Total 

Gross carrying 
amount as at 
31.12.2023 

Loss allowance / FV 
adj. amount as at 
31.12.2023 

Carrying amount 
as at 31.12.2023 

Undisbursed 
amount as at 
31.12.2023 

OFF BS ECL adj. 
amount as at 
31.12.2023 

73,423 

152,155 

110,572 

-1,522 

71,901 

7,749 

-334 

-58,759 

93,396 

68,288 

9,936 

120,508 

58,572 

58,889 

41,490 

100,379 

14 

Issued guarantees 

higher of approach* 

- 

- 

- 

44,264 

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

Type of IFE investment 

Caption 

Measurement 

Gross carrying 
amount as at 
31.12.2022 

Loss allowance/FV 
adj. amount as at  
31.12.2022 

Carrying amount 
as at 31.12.2022 

Undisbursed 
amount as at 
31.12.2022 

OFF BS ECL adj. 
amount as at 
31.12.2022 

395,039 

-8,855 

386,184 

178,887 

-334 

Loans to financial 
intermediaries 

Loans and advances  

AC 

Direct loan operations 

Loans and advances  

FVTPL 

Shares and other variable 
yield securities 

Shares and other variable 
yield securities 

FVTPL 

FVTPL 

Social impact equity funds 

Direct equity participations 

Risk sharing facilitating 
instruments 

Total 

79,778 

104,709 

94,385 

-3,454 

-45,224 

76,324 

59,485 

23,802 

118,187 

64,345 

67,215 

79,393 

59,429 

26,939 

86,368 

14 

Issued guarantees 

higher of approach* 

- 

- 

- 

46,878 

338,301 

2,063 

340,364 

257,845 

-632 

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

The EIB is applying the General Mandate Risk Principles to IFE direct loan operations (excluding Loans to financial intermediaries), as envisaged in the EIB’s Credit and Equity Risk Guidelines, 
and to monitor and report the risk associated with the IFE direct loan operations on the basis of their fair value. According to the methodology, the Bank performs a Qualitative Risk Assessment 
(QRA) aiming to assess the soundness of the investment rationale and plausible business viability of such operations.  

146 

- 

- 

- 

- 

-632 

- 

- 

- 

- 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Development Fund 2023 

26  Related party disclosures 

The  Facility  has  identified  EIB  as  a  related  party  in  the  context  of  IAS  24,  as  EIB  has  been  mandated  by  the  EU  Member  States  to 
manage the Facility in accordance with the provisions of the applicable legal framework, including the monitoring of its operations until 
full reimbursement and provides key management personnel services (EIB Management Committee and EIB Audit Committee). In this 
regard, EIB is entitled to recover its actual costs incurred for managing the Facility less income generated from standard appraisal fees 
directly charged by the EIB to clients of the Facility. For more details on the remuneration please refer to the Note 23. 

27  Subsequent events 

There  have  been  no  material  events  after  the  balance  sheet  date  that  would  require  adjustment  of,  or  disclosure  in,  the  financial 
statements as at 31 December 2023. 

In the context of the Russian invasion of Ukraine and its broader economic consequences, the Bank continues to monitor the situation 
closely notably as part of the subsequent event review. 

147