COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT THE COUNCIL AND THE COURT OF AUDITORS
Date: 2025-10-13
Institutions: Directorate-General for Budget, European Commission
Subjects: European Development Fund, balance sheet, closing of accounts, consolidated account, general budget (EU), implementation of the budget




C_202504948EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2025/4948


13.10.2025






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 2024

(C/2025/4948)


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 THE EDF
51








FINANCIAL STATEMENTS OF THE BÊKOU EU TRUST FUND 2024
52








FINANCIAL STATEMENTS OF THE EUTF AFRICA 2024
59








CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE EU TRUST FUNDS
66








EDF REPORT ON FINANCIAL IMPLEMENTATION
71




CERTIFICATION OF THE ACCOUNTS

The annual accounts of the European Development Fund for the year 2024 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 stateents.
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.



Beatriz SANZ REDRADO
               

Accounting Officer



                     24 June 2025
                  





IMPLEMENTING AND ACCOUNTING FOR THE EDF RESOURCES

1.   BACKGROUND

The European Union (‘the EU’) has cooperative relations with many developing countries. The main objective of these relations 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 these strategies. These EU resources allocated to development cooperation come from three sources:






—


the EU budget;










—


the European Development Fund (EDF); and










—


the European Investment Bank (EIB).




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 (‘the Commission’) is responsible for the financial implementation of the operations carried out with EDF resources. The EIB manages the Investment Facility.
The EDF is made up of individual EDFs, each of which is concluded for a period of around five years and is governed by its own Financial Regulation. This 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 EDF reached its final stage as the ‘sunset clause’ came into effect on 31 December 2020, the EDF was the main instrument for providing aid for development cooperation to the African Caribbean and Pacific (ACP) states and overseas countries and territories (‘OCTs’). However, since 2021 EU cooperation with ACP states and OCTs has been funded through the EU budget.
Under 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 mostly – but not exclusively – private investments. The Investment 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. Because 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’s 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 EDF’s 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 Regulation (EU Euratom) No 1311/2013 (1) 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 that operates based on multi-annuality. Each EDF sets up an overall fund to implement development cooperation typically for a period of five years. Because resources are allocated on a multiannual basis, the allocated funds may be used over the period of the EDF. The fact that budgets are set for a period of several years – rather than being set for a single year is highlighted in the budgetary reporting, where the budgetary implementation of the EDFs is measured against the total funds.
The EDF resources are ‘ad hoc’ contributions from the EU Member States. Approximately every five years, Member State representatives met at intergovernmental level and decided on an overall amount to be allocated to the fund and to oversee its implementation.
The Commission manages the EDF in accordance with the EU’s policy on development cooperation. Since Member States have their own development and aid policies in parallel to the EU policy, the Member States must coordinate their policies with the EU to ensure they are complementary.
In addition to the above mentioned contributions, it is also possible for Member States to enter into co-financing arrangements or to make voluntary financial contributions to the EDF.
3.   EDF ACTIVITIES AFTER 31 DECEMBER 2020
                        

The Commission is currently working towards the closure of the 9th EDF (which ran from 2000-2007) and which incorporated remaining balances transferred from the 8th EDF (which ran from 1995 to 2000) in accordance with the provisions of Part 3 of the financial regulation (2) applicable to the 9th EDF. Currently, there are still 8 ongoing contracts funded under the 9th EDF, which will reach their conclusion within the specified timeframe, contributing to the finalisation 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 (which ran from 2008 to 2013) is progressing well with 97,35 % of its contracts already closed. However the operational and financial closure of the remaining contracts will take some time. The financial closure requires the launch and completion of all necessary evaluations audits and recoveries.
The 11th EDF (which ran from 2014 to 2020) 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 decisions can be adopted under the 11th EDF. However the implementation of the ongoing projects funded by the 11th EDF will continue until their final completion.
Under the current Multiannual 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. This means that although 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 is subject to the authorisation of the European Parliament and that the transactions must comply with the EU’s 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 the International Public Sector Accounting Standards (IPSAS). These accounting rules adopted by the Accounting Officer of the Commission are applied by all the institutions and bodies of the EU in order to establish a uniform set of rules for accounting valuation and presentation of the accounts with a view to harmonising the process for drawing up the financial statements. These EU accounting rules are also applied by the EDF while taking into account the specific nature of its activities.
The preparation of the EDF’s 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 the 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 EU trust funds consolidated in the EDF’ includes the financial statements of the two trust funds created under the EDF: the EU Trust Fund Bêkou (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 two 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’s 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’s 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.

HIGHLIGHTS OF FINANCIAL IMPLEMENTATION 2024












*


Net amount only 10th & 11th EDF





Budget implementation

In 2024 individual net commitments of EUR 42 million were made under both the 10th EDF and 11th EDF. In 2024, net payments of EUR 1 345 million were also made under the 10th EDF and 11th EDF. The total amount of gross payments for the EDF in 2024 amounted to EUR 1 405,45 million which represents 99,68 % of the target of EUR 1 410 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 committed this EUR 600 million, in 2022 and disbursed EUR 392 million up until 2024.

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 287 million largely as a result of the winding down of the EDF and the resulting decrease in the number of new contracts. In 2024 new contracts amounted to EUR 300 million compared with EUR 860 million in 2023;










—


cash and cash equivalents (see note 2.5): a decrease of EUR 190 million primarly due to the reduction in contributions from donors which decreased from EUR 1 800 million in 2023 to EUR 1 200 million in 2024;










—


accrued charges (see note 2.8): a decrease of EUR 210 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










—


aid instruments (see note 3.4): an overall decrease of EUR 944 million mainly as a result of the decrease in expenses under the 11th EDF (EUR 1 906 million in 2023 to EUR 1 145 million in 2024). This trend aligns with the decreasing volume of new contracts signed since 2021.





FUNDS MANAGED BY THE EUROPEAN COMMISSION

CONTENTS





FINANCIAL STATEMENTS OF THE EDF
9








EDF BALANCE SHEET
10








EDF STATEMENT OF FINANCIAL PERFORMANCE
11








EDF CASHFLOW STATEMENT
11








EDF STATEMENT OF CHANGES IN NET ASSETS
13








BALANCE SHEET BY EDF
13








STATEMENT OF FINANCIAL PERFORMANCE BY EDF
15








STATEMENT OF CHANGES IN NET ASSETS BY EDF
16








NOTES TO THE FINANCIAL STATEMENTS OF THE EDF
19








FINANCIAL STATEMENTS OF THE EU TRUST FUNDS CONSOLIDATED IN EDF
51








FINANCIAL STATEMENTS OF THE BÊKOU EU TRUST FUND 2024
52








BALANCE SHEET
56








STATEMENT OF FINANCIAL PERFORMANCE
57








CASHFLOW STATEMENT
58








FINANCIAL STATEMENTS OF THE EUTF AFRICA 2024
59








BALANCE SHEET
64








STATEMENT OF FINANCIAL PERFORMANCE
65








CASHFLOW STATEMENT
65








CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE EU TRUST FUNDS
66








CONSOLIDATED BALANCE SHEET
67








CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE
68








CONSOLIDATED CASH FLOW STATEMENT
68








CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
70








EDF REPORT ON FINANCIAL IMPLEMENTATION
71




FINANCIAL STATEMENTS OF THE EDF
                   (3)


EDF BALANCE SHEET









EUR million




 


Note


31.12.2024


31.12.2023





NON-CURRENT ASSETS



 


 


 





Financial assets



2.1



128 




87 






Pre-financing



2.2



500 




574 






Trust Fund contributions



2.3



188 




216 






Exchange receivables



2.4



5 




5 





 


 



821 




883 






CURRENT ASSETS



 


 


 





Financial assets



2.1



5 




3 






Pre-financing



2.2



742 




954 






Exchange receivables and non-exchange recoverables



2.4



37 




24 






Cash and cash equivalents



2.5



411 




601 





 


 



1 194 




1 583 






TOTAL ASSETS



 



2 016 




2 466 





 


 


 


 





NON-CURRENT LIABILITIES



 


 


 





Financial liabilities



2.6



(1 )




(5 )





 


 



(1 )




(5 )






CURRENT LIABILITIES



 


 


 





Provisions



2.6


(2 )


(0 )





Payables



2.7



(256 )




(391 )






Accrued charges



2.8



(774 )




(984 )





 


 



(1 032 )




(1 375 )






TOTAL LIABILITIES



 



(1 032 )




(1 380 )





 


 


 


 





NET ASSETS



 



983 




1 086 





 


 


 


 





FUNDS & RESERVES



 


 


 





Called fund capital - active EDFs



2.9



55 704 




54 566 






Called fund capital from closed EDFs carried forward



2.9



2 252 




2 252 






Economic result carried forward from previous years



 



(55 733 )




(53 484 )






Economic result of the year



 



(1 240 )




(2 249 )






NET ASSETS



 



983 




1 086 






EDF STATEMENT OF FINANCIAL PERFORMANCE









EUR million




 


Note


2024


2023





REVENUE



 


 


 





Revenue from non-exchange transactions



 


 


 





Recovery activities



3.1



41 




14 





 


 



41 




14 






Revenue from exchange transactions



 


 


 





Financial revenue



3.2



19 




9 






Other revenue



3.2



71 




43 





 


 



90 




52 






Total Revenue



 



131 




65 






EXPENSES



 


 


 




 


 


 


 





Implemented by other entities



3.3



(4 )




(3 )






Aid instruments



3.4



(1 237 )




(2 181 )






Co-financing expenses



3.5



(17 )




(8 )






Finance costs



3.6



(3 )




(7 )






Other expenses



3.7



(110 )




(116 )






Total Expenses



 



(1 371 )




(2 315 )





 


 


 


 





ECONOMIC RESULT OF THE YEAR



 



(1 240 )




(2 249 )






EDF CASHFLOW STATEMENT









EUR million




 


Note


2024


2023





Economic result of the year



 



(1 240 )




(2 249 )






Operating activities



 


 


 





Capital increase - contributions (net)



 



1 138 




1 630 






(Increase)/decrease in trust funds contributions



 



28 




37 






(Increase)/decrease in pre-financing



 



287 




356 






(Increase)/decrease in exchange receivables and non-exchange recoverables



 



(12 )




4 






Increase/(decrease) in provisions



 



0 




2 






Increase/(decrease) in financial liabilities



 



(2 )




(3 )






Increase/(decrease) in payables



 



(136 )




(35 )






Increase/(decrease) in accrued charges and deferred income



 



(210 )




(148 )






Investing activities



 


 


 





(Increase)/decrease in non-derivative financial assets at fair value through surplus or deficit



 



(42 )




(20 )






NET CASHFLOW



 



(190 )




(426 )






Net increase/(decrease) in cash and cash equivalents



 



(190 )




(426 )






Cash and cash equivalents at the beginning of the year



2.5



601 




1 027 






Cash and cash equivalents at year-end



2.5



411 




601 






EDF STATEMENT OF CHANGES IN NET ASSETS












EUR million




 


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)


Total net assets (C)+(D)+(E)





BALANCE AS AT 31.12.2022




72 955 




7 855 




65 100 




(65 647 )




2 252 




1 705 






Capital increase - contributions




(185)




(1 815 )




1 630 



–


–



1 630 






Closure of the 8th EDF




(12 164 )



 



(12 164 )




12 164 



 


–





Economic result of the year



–


–


–



(2 249 )



–



(2 249 )






BALANCE AS AT 31.12.2023




60 607 




6 040 




54 566 




(55 732 )




2 252 




1 086 






Capital increase - contributions




(62)




(1 200 )




1 138 



–


–



1 138 






Economic result of the year



–


–


–



(1 240 )



–



(1 240 )






BALANCE AS AT 31.12.2024




60 544 




4 840 




55 704 




(56 973 )




2 252 




983






BALANCE SHEET BY EDF















EUR million




 


31.12.2024


31.12.2023




 


Note


Ninth
EDF


10th
EDF


11th
EDF


Total


Ninth
EDF


10th
EDF


11th
EDF


Total





NON-CURRENT ASSETS



 


 


 


 


 


 


 


 


 





Financial assets



2.1


–



14 




114 




128 



–



14 




73 




87 






Pre-financing



2.2


–



418 




82 




500 



–



447 




127 




574 






Trust Fund contributions



2.3



31 




9 




148 




188 




31 




9 




176 




216 






Exchange receivables



 


–


–



5 




5 



–


–



5 




5 





 


 



31 




441 




349 




821 




31 




470 




381 




883 






CURRENT ASSETS



 


 


 


 


 


 


 


 


 





Financial assets



2.1


–


–



5 




5 



–


–



3 




3 






Pre-financing



2.2



6 




81 




655 




742 




5 




113 




835 




954 






Exchange receivables and non-exchange recoverables



2.4


–



21 




16 




37 



–



10 




14 




24 






Inter-EDF accounts



 



(207 )




227 




(20 )



–



(200 )




426 




(226 )



–





Cash and cash equivalents



2.5


–


–



411 




411 



–


–



601 




601 





 


 



(201 )




329 




1 067 




1 194 




(195 )




549 




1 229 




1 583 






TOTAL ASSETS



 



(170 )




770 




1 415 




2 016 




(163 )




1 020 




1 610 




2 466 





 


 


 


 


 


 


 


 


 


 






NON-CURRENT LIABILITIES




 


 


 


 


 


 


 


 


 





Financial liabilities



2.6


–


–



6(1 )




(1 )



–


–



(5 )




(5 )





 


 


–


–



(1 )




(1 )



–


–



(5 )




(5 )






CURRENT LIABILITIES



 


 


 


 


–


 


 


 


 





Provisions



2.6


–


–



(2 )




(2 )



–


–



(0 )




(0 )






Payables



2.7


–



(25 )




(230 )




(256 )



–



(63 )




(328 )




(391 )






Accrued charges



2.8


–



(71 )




(703 )




(774 )



–



(129 )




(855 )




(984 )





 


 


–



(96 )




(935 )




(1 032 )



–



(192 )




(1 183 )




(1 375 )






TOTAL LIABILITIES



 


–



(96 )




(936 )




(1 032 )



–



(192 )




(1 188 )




(1 380 )





 


 


 


 


 


–


 


 


 


 





NET ASSETS



 



(170 )




674 




479 




983 




(163 )




827 




422 




1 086 





 


 


 


 


 


 


 


 


 


 





Called fund capital - active EDFs



2.9



10 435 




20 819 




24 449 




55 704 




10 442 




20 834 




23 290 




54 566 






Called fund capital from closed EDFs carried forward



2.9



2 252 



–


–



2 252 




2 252 



–


–



2 252 






Called fund capital transfers between active EDFs



2.9



(510 )




(187 )




696 



–



(509 )




(120 )




628 



-





Economic result carried forward from previous years



 



(12 348 )




(19 887 )




(23 497 )




(55 733 )




(12 350 )




(19 607 )




(21 527 )




(53 484 )






Economic result of the year



 


–



(72 )




(1 169 )




(1 240 )




1 




(280 )




(1 970 )




(2 249 )





 


 


 


 


 


 


 


 


 


 





NET ASSETS



 



(170 )




674 




479 




983 




(163 )




827 




422 




1 086 






STATEMENT OF FINANCIAL PERFORMANCE BY EDF















EUR million




 


 


2024


2023




 


Note


Ninth
EDF


10th
EDF


11th
EDF


Total


Ninth
EDF


10th EDF


11th
EDF


Total




 


 


 


 


 


 


 


 


 


 





REVENUE



 


 


 


 


 


 


 


 


 





Revenue from non-exchange transactions



 


 


 


 


 


 


 


 


 





Recovery activities



3.1



1 




28 




12 




41 



–



2 




12 




14 





 


 



1 




28 




12 




41 



–



2 




12 




14 






Revenue from exchange transactions



 


 


 


 


 


 


 


 


 





Financial revenue



3.2


–



1 




18 




19 



–



(1 )




10 




9 






Other revenue



3.2



2 




4 




65 




71 




2 




4 




37 




43 





 


 



2 




5 




83 




90 




2 




4 




46 




52 






Total revenue



 



3 




33 




95 




131 




2 




5 




58 




65 






EXPENSES



 


 


 


 


 


 


 


 


 





Implemented by other entities



3.3


–


–



(4 )




(4 )



–


–



(3 )




(3 )






Aid instruments



3.4



(2 )




(90 )




(1 145 )




(1 237 )




1 




(276 )




(1 906 )




(2 181 )






Co-financing expenses



3.5


–



(12 )




(5 )




(17 )



–


–



(8 )




(8 )






Finance costs



3.6


–



5 




(9 )




(3 )




1 




(2 )




(6 )




(7 )






Other expenses



3.7



(2 )




(7 )




(101 )




(110 )




(3 )




(8 )




(106 )




(116 )






Total expenses



 



(3 )




(104 )




(1 264 )




(1 371 )




(1 )




(286 )




(2 028 )




(2 315 )





 


 


 


 


 


 


 


 


 


 





ECONOMIC RESULT OF THE YEAR



 


–



(72 )




(1 169 )




(1 240 )




1 




(280 )




(1 970 )




(2 249 )






STATEMENT OF CHANGES IN NET ASSETS BY EDF













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 31.12.2022




10 464 




15 




10 450 




(14 416 )




1 625 




2 010 




(331 )






Transfers to/from the 10th EDF



–



(15 )




15 



–


–


–



15 






Transfers to/from the 10th and 11th EDF



–


–


–


–


–



(4 )




(4 )






Refund to Member States




(22 )



–



(22 )



–


–


–



(22 )






Closure of the 8th EDF



–


–


–



2 066 




627 




(2 514 )




179 






Economic result of the year



–


–


–



1 



–


–



1 






BALANCE AS AT 31.12.2023




10 442 



–



10 442 




(12 348 )




2 252 




(509 )




(163 )






Capital increase - contributions



–


–


–


–


–


–


–





Transfers to/from the 10th and 11th EDF



–


–


–


–


–



(1 )




(1 )






Refund to Member States




(6 )



–



(6 )



–


–


–



(6 )






Economic result of the year



–


–


–


 


–


–


 





BALANCE AS AT 31.12.2024




10 435 




1 




10 435 




(12 348 )




2 252 




(510 )




(170 )





















EUR million




10th 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 31.12.2022




20 960 



–



20 960 




(19 606 )



–



(38 )




1 315 






Transfers to/from the Eighth and Ninth EDF



–


–


–


–


–



6 




6 






Transfers to/from the 11th EDF



–


–


–


–


–



(87 )




(87 )






Refund to Member States




(126 )



–



(126 )



–


–


–



(126 )






Economic result of the year



–


–


–



(280 )



–


–



(280 )






BALANCE AS AT 31.12.2023




20 834 



–



20 834 




(19 886 )



–



(120 )




827 






Transfers to/from the Eighth and Ninth EDF



–


–


–


 


–



1 




1 






Transfers to/from the 11th EDF



–


–


–


 


–



(68 )




(68 )






Refund to Member States




(15 )



–



(15 )



 


–


–



(15 )






Economic result of the year



–


–


–



(72 )



–


–



(72 )






BALANCE AS AT 31.12.2024




20 819 



–



20 819 




(19 959 )



–



(187 )




674 




















EUR million




11th 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 31.12.2022




29 367 




7 840 




21 527 




(21 528 )



–



541 




541 






Capital increase - contributions



–



(1 800 )




1 800 



–


–



87 




1 887 






Refund to Member States




(36 )



–



(36 )



–


–


–



(36 )






Economic result of the year



–


–


–



(1 970 )



–


–



(1 970 )






BALANCE AS AT 31.12.2023




29 331 




6 040 




23 290 




(23 498 )



–



628 




422 






Capital increase - contributions



–



(1 200 )




1 200 



–


–



68 




1 268 






Refund to Member States




(41 )



–



(41 )



–


–


–



(41 )






Economic result of the year



–


–


–



(1 169 )



–


–



(1 169 )






BALANCE AS AT 31.12.2024




29 290 




4 840 




24 449 




(24 667 )



–



696 




479 






NOTES TO THE FINANCIAL STATEMENTS OF THE EDF
                      (4)

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 euro the euro being the EU’s functional currency. Foreign currency transactions are translated into euro 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 euro at the date when they were purchased.
Year-end balances of monetary assets and liabilities denominated in foreign currencies are translated into euro on the basis of the European Central Bank (ECB) exchange rates applying on 31 December.

Euro exchange rates












Currency


31.12.2024


31.12.2023


 


Currency


31.12.2024


31.12.2023





BGN




1,9558 



1,9558 


 



PLN




4,275 



4,3395 





CZK




25,185 



24,724 


 



RON




4,9743 



4,9756 





DKK




7,4578 



7,4529 


 



SEK




11,459 



11,096 





GBP




0,82918 



0,86905 


 



CHF




0,9412 



0,926 





NOK




11,795 



11,2405 


 



JPY




163,06 



156,33 





HUF




411,35 



382,8 


 



USD




1,0389 



1,105 




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.
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 2024
                        

There are no new EAR which became effective for annual periods beginning on or after 1 January 2024.

New EAR adopted but not yet effective at 31 December 2024
                        

There are no new EAR adopted during 2024.
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 31 December 2024.
(iii)   Financial assets at fair value through surplus or deficit

The entity classifies derivatives and equity investments as FVSD because the contractual cash flows do not represent only principal and interests on the principal.
In addition the entity classifies the debt securities it holds as FVSD because the portfolios of debt securities are managed and evaluated on a portfolio fair value basis.
Assets in this category are classified as current assets if they are expected to be realised within 12 months from the reporting date.

Initial recognition and measurement

Purchases of financial assets at fair value through surplus or deficit are recognised on their trade-date – the date on which the entity commits to purchase the asset. Cash equivalents and loans are recognised when cash is deposited in a financial institution or advanced to borrowers.
Financial assets are initially measured at fair value. For all financial assets not carried at fair value through surplus or deficit the transactions costs are added to the fair value at initial recognition. For financial assets carried at fair value through surplus or deficit the transaction costs are expensed in the statement of financial performance.
The fair value of a financial asset on initial recognition is normally the transaction price unless the transaction is not at arm’s length i.e. at no or at nominal consideration for public policy purposes. In this case the difference between the fair value of the financial instrument and the transaction price is a non-exchange component which is recognised as an expense in the statement of financial performance. In this case the fair value of a financial asset is derived from current market transactions for a directly equivalent instrument. If there is no active market for the instrument the fair value is derived from a valuation technique that uses available data from observable markets.

Subsequent measurement

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

Fair value at subsequent measurement

The fair values of quoted investments in active markets are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities and over-the–counter derivatives) the EU establishes a fair value by using valuation techniques. These include the use of recent arm’s length transactions reference to other instruments that are substantially the same discounted cashflow analysis option pricing models and other valuation techniques commonly used by market participants.
Investments in venture capital funds which do not have a quoted market price in an active market are valued at the attributable net asset value which is considered as an equivalent of their fair value.

Impairment of financial assets

The EU recognises and measures an impairment loss for expected credit losses on financial assets that are measured at amortised cost and at fair value through net assets/equity.
The expected credit loss (ECL) is the present value of the difference between the contractual cash flows and the cash flows that the EU expects to receive. The ECL incorporates reasonable and supportable information that is available without undue cost or effort at the reporting date.
For assets at amortised cost the asset’s carrying amount is reduced by the amount of the impairment loss which is recognised in the statement of financial performance. If in a subsequent period the amount of the impairment loss decreases the previously recognised impairment loss is reversed through the statement of financial performance.
(a)   Receivables

The entity measures the impairment loss at the amount of lifetime ECL using practical expedients (e.g. provision matrix).
(b)   Cash and cash equivalents

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

The ECL is measured with a three stage model that takes into account probability weighted default events during the lifetime of the financial asset and the evolution of credit risk since the origination of the financial asset. For loans origination is the date of the irrevocable loan commitment.
If there is no significant increase in credit risk since origination (‘stage 1’) the impairment loss is the ECL from possible default events in the next 12 months from the reporting date (‘12 months ECL’). If there is a significant increase in credit risk since origination (‘stage 2’) or if there is objective evidence of a credit impairment (‘stage 3’), the impairment loss equals the ECL from possible default events over the whole lifetime of the financial asset (‘lifetime ECL’).

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.
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.
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.
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.
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.
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:







EUR million




 


31.12.2024


31.12.2023





Non-current



 


 





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




112 




70 






Loans




16 




16 





 



128 




87 







Current




 


 





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



–



3 






Loans




5 



–




 



5 




3 





 


 


 





Total




132 




89 





The EUR 112 million of financial assets at FVSD relate to equity investments in the following areas:






—


Renewable sustainable energy via Climate Investor One ElectriFI and the Global Energy Efficiency and Renewable Energy Fund (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 and EUR 5 milllion of current loans concern two main areas: sustainable agriculture via the AgriFI and electricity access and generation from sustainable energy sources via the ElectriFI investment Facility.
2.2.   PRE-FINANCING

Many contracts provide for payments of advances before the commencement of works, delivery of supplies or the provision of services. Sometimes the payment schedules of contracts foresee payments based on progress reports. Pre-financing is normally paid in the currency of the country or territory where the project is executed.
The timing of use of pre-financing governs whether it is disclosed as a current or a non-current pre-financing. The use is defined by the project's underlying agreement. Any use due within twelve months after the reporting date are disclosed as current pre-financing. As many of the EDF projects are long-term in nature, it is necessary that the related advances are available for more than one year. Thus some pre-financing amounts are shown as non-current assets.











EUR million




 


Note


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Non-current pre-financing



2.2.1


–



418 




82 




500 




574 






Current pre-financing



2.2.2



6 




81 




655 




742 




954 






Total



 



6 




499 




737 




1 242 




1 529 





The decrease in total pre-financing by EUR 287 million at 31 December 2024 can be largely explained by the decrease in pre-financing paid out to beneficiaries under the 11th EDF which fell from EUR 963 million in 2023 to EUR 737 million in 2024. 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. Since 1 January 2021 no further financing agreements could be signed under the 11th EDF although specific contracts for the exsisting agreements could still be signed. As a result the volume of newly signed contracts steadily decreased from EUR 2 118 million in 2021 to EUR 853 million in 2022 and EUR 860 million in 2023 before dropping further to EUR 300 million in 2024.
Pre-financing from the 10th EDF decreased from EUR 560 million in 2023 to EUR 499 million in 2024, aligning with the normal trend and consistent with the life cycle of the EDF.
Out of the non-current pre-financing, EUR 393 million (EUR 427 million in 2023) relates to the open pre-financing 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 was 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, EUR 393 million of the open pre-financing was re-classed to long term while EUR 34 million corresponds to the expenses accrued at year-end.
2.2.1.   Non-current pre-financing by management mode








EUR million




 


31.12.2024


31.12.2023





Direct Management



 


 





Implemented by:



 


 





Commission



–



15 






EU executive agencies




1 




2 






EU delegations




2 




7 





 



3 




24 






Indirect Management



 


 





Implemented by:



 


 





EIB and EIF




402 




436 






International organisations




65 




74 






Private law bodies with a public service mission




7 




16 






Public law bodies




13 




17 






Third countries




10 




7 





 



497 




550 






Total




500 




574 





2.2.2.   Current pre-financing











EUR million




 


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Pre-financing (gross)




8




518 




3 237 




3 763 




4 906 






Cleared via cut-off




(2)




(438 )




(2 582 )




(3 022 )




(3 952 )






Total




6




81 




655 




742 




954 





2.2.3.   Current pre-financing by management mode








EUR million




 


31.12.2024


31.12.2023





Direct Management



 


 





Implemented by:



 


 





Commission




37 




55 






EU executive agencies




2 




3 






EU delegations




47 




82 





 



86 




140 







Indirect Management




 


 





Implemented by:



 


 





EIB and EIF




62 




87 






International organisations




388 




431 






Private law bodies with a public service mission




71 




78 






Public law bodies




77 




98 






Third countries




56 




119 






EU bodies and Public Private Partnership




1 




1 





 



655 




814 






Total




742 




954 





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.







EUR million




 


31.12.2024


31.12.2023





Guarantees for pre-financing




19 




32 





The EUR 19 million comprises guarantees intended to secure pre-financing paid under direct management with the EDF being the beneficiary of the guarantee (see note 4.1). However most of pre-financing is paid under the indirect management mode, where the beneficiary of the guarantee is not the EDF but the contracting authority. In 2024, the total value of such guarantees amounted to EUR 415 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.









EUR million




 


Net contribution at 31.12.2023


Contributions paid in 2024


Allocation of TF's net expenses 2024


Net contribution at 31.12.2024





Africa




186 




90 




(111 )




165 






Bêkou




30 



 



(7 )




23 






Total




216 




90 




(118 )




188 





The decrease in contributions paid from EUR 274 million in 2023 to EUR 90 million in 2024 stems from the decline in the 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 had 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 31.12.2024, the EDF had EUR 5 million of long-term exchange receivables comprising mainly, deferred charges arising from several financial instruments.
2.4.2.   Current non-exchange recoverables and exchange receivables









EUR million




 


Note


31.12.2024


31.12.2023





Recoverables from non-exchange transactions



2.4.2.1



24 




13 






Receivables from exchange transactions



2.4.2.2



12 




12 






Total



 



37 




24 





2.4.2.1.   Recoverables from non-exchange transactions











EUR million




 


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Customers




2 




40 




9 




52 




55 






Public bodies




4 




13 




2 




19 




19 






Third states



-



13 




3 




16 




6 






Write down




(6 )




(49 )




(7 )




(63 )




(68 )






Total



-



17 




6 




24 




13 





2.4.2.2.   Receivables from exchange transactions











EUR million




 


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Accrued income



-


-



2 




2 




1 






Inter-EDF accounts




(207 )




227 




(20 )



–


–





Other



–



4 




7 




11 




11 






Total




(207 )




231 




(11 )




12 




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 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 EQUIVALENTS (5)

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.










EUR million




 


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Special accounts



 


 


 


 


 





Central banks



–


–



285 




285 




341 





 


–


–



285 




285 




341 






Current accounts



 


 


 


 


 





Commercial banks



–


–



49 




49 




193 






Cash belonging to financial instruments



–


–



77 




77 




67 





 


–


–



126 




126 




260 






Total



–


–



411 




411 




601 





The decrease of EUR 190 million in cash and cash equivalents is mainly driven by the reduction in cash reserves held in central and commercial banks. This decline mostly results from payments made to cover expenses and advances exceeding the contributions received during the year. Notably called contributions fell from EUR 1 800 million in 2023 to EUR 1 200 million in 2024. Additionally, Member States received a refund of EUR 7,8 million from the 9th EDF for the first instalment of 2024, while the UK requested that its contributions for the second and third instalments of 2023 amounting to EUR 41 million be offset from their outstanding share in the 10th and 11th EDFs (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).

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.








EUR million




 


Note


31.12.2024


31.12.2023





Non-current



 


 


 





Financial provisions




2.6.1



–



3 






Financial guarantee liability




2.6.2




1 




1 






Other financial liabilities




2.6.3



–



1 






Co-financing payables



 


–



1 






Total



 



1 




5 





2.6.1.   Provisions

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










EUR million




 


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Non-current financial provisions



–


–


–


–



3 






Current financial provisions



–


–



2 




2 



-





Total



–


–



2 




2 




3 





The amount of EUR 2 million represents the estimated loss in relation to the loans given under the following financial instruments: ElectriFI CW and ElectriFI CW II AgriFI Tanzania and AgriFI Regional ACP.
2.6.2.   Financial guarantee liability

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.










EUR million




 


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Financial guarantee liability



–


–



1 




1 




1 





The amount of EUR 1 million represents the estimated loss in relation to the guarantee given under the Euritz financial instrument of EUR 9 million (see note 4.2.1).
2.6.3.   Other financial liabilities











EUR million




 


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Financial liabilities at fair value through surplus or deficit



–


–


–


–



1 





As at 31.12.2024 the total payables related to financial instruments amounted only to kEUR 25. This amount relates entirely to payables arising from ABC Fund.
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).











EUR million




 


Note


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Current payables



2.7.1


-



21 




130 




150 




260 






Sundry payables



2.7.2


-



5 




100 




105 




132 






Total



 


-



25 




230 




256 




391 





2.7.1.   Current payables











EUR million




 


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Suppliers



–



14 




41 




56 




98 






Third states



–


–



29 




29 




32 






Public bodies



–



6 




59 




66 




129 






Total



–



21 




130 




150 




260 





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 decrease in payables is attributed to a lower volume of invoices received that remained outstanding at year-end.
2.7.2.   Sundry payables












EUR million




 


Note


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Co-financing payables



2.7.2.1


–



5 




23 




28 




41 






Deferred capital contributions



2.7.2.2


–


–



64 




64 




88 






Other sundry payables



 


–



(1 )




13 




12 




3 






Total



 


–



5 




100 




105 




132 





2.7.2.1.   Co-financing payables

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











EUR million




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Current co-financing payables



–


–



5 




23 




28 




41 





2.7.2.2.   Deferred capital contributions

An amount of EUR 6,3 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 2025.
In addition to the refund an amount of EUR 58 million relates to the first instalment of 2025 paid in advance by the United Kingdom Portugal Hungary Lithuania Cyprus and Estonia. Of this amount, EUR 51 million was contributed entirely by the United Kingdom, with EUR 15 million 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.










EUR million




 


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Accrued charges



–



71 




703 




774 




983 






Other accruals and deferrals



–


–


–


–



1 






Total



–



71 




703 




774 




984 





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 of these activities 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).
The decrease in accrued charges of EUR 210 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










EUR million




 


Ninth EDF


10th EDF


11th EDF


Total





Fund capital




10 442 




20 834 




29 331 




60 607 






Uncalled fund capital



-


-



(6 040 )




(6 040 )






Called fund capital 31.12.2023




10 442 




20 834 




23 290 




54 566 






Fund capital




10 435 




20 819 




29 290 




60 544 






Uncalled fund capital



-


-



(4 840 )




(4 840 )






Called fund capital 31.12.2024




10 435 




20 819 




24 449 




55 704 





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) 2024/2906 (6) the Member States’ contributions set out in the Internal Agreements of the Eighth and Ninth EDF were reduced accordingly by an amount of EUR 6,3 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 2025 (see note 2.7.2).
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 Ninth and 10th EDF cannot be reused. In 2024 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 EUR 15 million was refunded to the UK towards its first instalment of 2025 (see note 2.7.2.1). As a result the fund capital of the 10th and 11th EDFs was reduced by EUR 15 million and EUR 41 million respectively.
2.9.2.   Called and uncalled fund capital by Member States and the UK










EUR million




Contributions 11th EDF


%


Uncalled capital 31.12.2023


Capital called in 2024


Uncalled capital 31.12.2024





Austria




2,40 




145 




(29 )




116 






Belgium




3,25 




196 




(39 )




157 






Bulgaria




0,22 




13 




(3 )




11 






Croatia




0,23 




14 




(3 )




11 






Cyprus




0,11 




7 




(1 )




5 






Czechia




0,80 




48 




(10 )




39 






Denmark




1,98 




120 




(24 )




96 






Estonia




0,09 




5 




(1 )




4 






Finland




1,51 




91 




(18 )




73 






France




17,81 




1 076 




(214 )




862 






Germany




20,58 




1 243 




(247 )




996 






Greece




1,51 




91 




(18 )




73 






Hungary




0,61 




37 




(7 )




30 






Ireland




0,94 




57 




(11 )




46 






Italy




12,53 




757 




(150 )




606 






Latvia




0,12 




7 




(1 )




6 






Lithuania




0,18 




11 




(2 )




9 






Luxembourg




0,26 




15 




(3 )




12 






Malta




0,04 




2 




(0 )




2 






Netherlands




4,78 




289 




(57 )




231 






Poland




2,01 




121 




(24 )




97 






Portugal




1,20 




72 




(14 )




58 






Romania




0,72 




43 




(9 )




35 






Slovakia




0,38 




23 




(5 )




18 






Slovenia




0,22 




14 




(3 )




11 






Spain




7,93 




479 




(95 )




384 






Sweden




2,94 




178 




(35 )




142 






United Kingdom




14,68 




887 




(176 )




710 






Total




100,00 




6 040 




(1 200 )




4 840 





Since the capital of the Ninth and 10th EDFs has been called up and received in its entirety in previous years in 2024 an amount of EUR 1 200 million has been called which relates entirely to the 11th EDF. Called capital decreased from EUR 1 800 million in 2023 to EUR 1 200 million in 2024.
2.9.3.   Called fund capital transfers between active EDFs











EUR million




 


Eighth EDF


Ninth EDF


10th EDF


11th EDF


Total





Balance at 31.12.2022




(2 513 )




2 010 




(38 )




541 



–





Transfer of amounts to the 8th EDF performance reserve from previous EDFs




2 762 




(2 762 )



–


–


–





Transfer of amounts to the 10th EDF performance reserve from previous EDFs




427 




(432 )




6 



–


–





Transfer of amounts to the 11th EDF performance reserve from previous EDFs




(676 )




676 




(87 )




87 



–





Balance at 31.12.2023



–



(509 )




(120 )




628 



–





Transfer of amounts to the 10th EDF performance reserve from previous EDFs



–



(1 )




1 



–


–





Transfer of amounts to the 11th EDF performance reserve from previous EDFs



–


–



(68 )




68 



–





Balance at 31.12.2024



–



(510 )




(187 )




696 



–




This heading includes the resources transferred between the active EDFs.
Since the entry into force of the Cotonou Agreement all the unspent funds in previous active EDFs are transferred to the most recently opened EDF after de-commitment. 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.
3.   NOTES TO THE STATEMENT OF FINANCIAL PERFORMANCE


REVENUE









EUR million




 


Note


2024


2023





Revenue from non-exchange transactions



3.1



41 




14 






Revenue from exchange transactions



3.2



90 




52 






Total



 



131 




65 





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.











EUR million




 


Note


Ninth EDF


10th EDF


11th EDF


2024


2023





Recovery of expenses



 



1 




16 




7 




24 




6 






Co-financing revenue



3.1.1


–



12 




5 




17 




8 






Total



 



1 




28 




12 




41 




14 





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







EUR million




 


2024


2023





Direct Management



 


 





Implemented by:



 


 





Commission




1 



–





Executive agencies




2 



–





EU delegations




4 




5 





 



7 




5 






Indirect Management



 


 





Implemented by:



 


 





Third countries




31 




6 






Public-law bodies



–


–





International organisations




3 




3 






Private-law bodies with a public service mission



–


–




 



34 




9 






Total




41 




14 





3.1.1.   Co-financing revenue

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 2.7.2 & 2.7.2.1) 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.
3.2.   REVENUE FROM EXCHANGE TRANSACTIONS











EUR million




 


Ninth EDF


10th EDF


11th EDF


2024


2023





Financial revenue



–



1 




18 




19 




9 






Other revenue




2 




4 




65 




71 




43 






Total




2 




5 




83 




90 




52 





The EUR 19 million under the heading ‘Financial revenue’ mainly consists of accrued interest on unpaid recovery orders interest on pre-financing interest generated on balances held with central and commerical banks 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











EUR million




 


Ninth EDF


10th EDF


11th EDF


2024


2023





Technical assistance expenses



–


–



4 




4 




3 





The amount of EUR 4 million comprises of expenses for technical assistance incurred by several financial instruments.
3.4.   AID INSTRUMENTS











EUR million




 


Ninth EDF


10th EDF


11th EDF


2024


2023





Programmable aid




2 




(13 )




641 




630 




841 






Macroeconomic support



–


–


–


–



7 






Sectoral policy



–


–


–


–



(1 )






Intra ACP projects



–



89 




408 




497 




779 






Emergency aid



–



12 




(25 )




(13 )




230 






Institutional support



–



2 




3 




4 




12 






Compensation Export Receipts



–


–


–


–



2 






Contributions to Trust Funds



–


–



118 




118 




311 






Total




2 




90 




1 145 




1 237 




2 181 





The EDF operational expenditure covers various aid instruments and takes different forms, depending on how the money is paid out and managed.
In 2024, operational expenditure decreased by EUR 944 million, primarily due to a significant reduction in expenses under the 11th EDF which fell from EUR 1 906 million in 2023 to EUR 1 145 million in 2024. This decline was observed across all programmes and is in line with the EDF lifecycle.
Similarly, the changes in expenses under the 9th and 10th EDFs align with the lifecycle of the EDF and the gradual closure of contracts. Many contracts under these EDF’s were completed and closed in 2024 resulting in lower expenses.
The negative amounts under the 10th and 11th EDFs relating to the programmable and emergency aid programmes are due to the reversal of the 2023 accruals that were higher than the actual expenses incurred in 2024. For the 11th EDF in particular the negative amounts relate to a contract with the World Bank which was initially set to end in December 2023 and was then extended to December 2025 during 2024. The Commission contributes to this Trust Fund using funds from both the Trust Fund Africa and the EDF. By applying the priority of consumption principle to pre-financing expenses incurred in 2024 were allocated to the Trust Fund Africa while the EDF funds are expected to be used in 2025.
In addition, expenses for programmable aid, emergency aid, and Intra-ACP projects were impacted by EUR 175 million as a result of the reversal of 2023 accruals related to four projects, including the contract with the World Bank. Based on updated implementation information received from the implementing partners which more accurately reflects the actual project progress, no accruals were recorded for these contracts in 2024.
3.5.   CO-FINANCING EXPENSES











EUR million




 


Ninth EDF


10th EDF


11th EDF


2024


2023





Co-financing



–



12 




5 




17 




8 





Included under this heading are the expenses incurred on co-financing projects in 2024. 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 line with the accounting rules on co-financing, the incurred amounts did not have any impact on the EDF’s result for 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








EUR million




 


2024


2023





Direct Management



 


 





Implemented by:



 


 





Commission




17 




50 






EU executive agencies




3 




16 






Trust Funds




118 




290 






EU delegations




148 




235 





 



286 




591 






Indirect Management



 


 





Implemented by:



 


 





EIB and EIF




84 




(45 )






International organisations




287 




994 






Private-law bodies with a public service mission




156 




201 






Public-law bodies




126 




147 






Third countries




314 




297 






EU bodies with Public Private Partnership



–



3 





 



967 




1 597 






Total




1 254 




2 189 





3.6.   FINANCE COSTS











EUR million




 


Ninth EDF


10th EDF


11th EDF


2024


2023





Net impairment losses on loans and receivables



–



(5)




4




(1)




2






Loss on financial assets or liabilities at FVSD



–


–



3




3




3






Fee subsidy



–


–



2




2




1






Total



–



(5)




9




3




7





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 2 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.










EUR million




 


Ninth EDF


10th EDF


11th EDF


2024


2023





Administrative and IT expenses



-



1 




42 




43 




51 






Provision for risks and charges



-


-


-


-



1 






Realised losses on trade debtors




1 




2 



-



4 



-





Exchange losses




1 




4 




59 




63 




62 






Foreign exchange losses on financial instruments



–


–



1 




1 




1 






Total




2 




7 




101 




110 




116 





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 when managing the EDF programmes.
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.










EUR million




 


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Pre-financing guarantees



–


–



19 




19 




32 






Total



–


–



19 




19 




32 





Pre-financing guarantees are requested in certain cases from beneficiaries that are not Member States when making advance payments.
At the end of 2024, pre-financing guarantees amounted to EUR 19 million compared with EUR 32 million in 2023. This is in line with the winding down of the EDF and the gradual closure of contracts.
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











EUR million




 


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Guarantees given



–


–



26 




26 




28 





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 to other financial institutions. The amounts are presented net of financial provisions or financial liabilities recognised for those programmes.
The amount of EUR 26 million relates to guarantees under the following financial instruments: EUR 9 million under the Euritz financial instrument, EUR 10 million under the KULIMA FUND and another EUR 7 million under the ZAMBIA agriculture value chain facility.
4.2.2.   Contingent liabilities relating to legal cases











EUR million




 


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Pending legal cases



–


–



7 




7 




7 





At the end of 2024 there were only two pending cases, totalling EUR 7 million.
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.










EUR million




 


Ninth EDF


10th EDF


11th EDF


31.12.2024


31.12.2023





Outstanding commitments not yet expensed




15 




166 




2 520 




2 701 




3 449 





The decrease in the RAL is largely driven by the decrease in budgetary RAL which totalled EUR 3 812 million at the end of 2024 (2023: EUR 5 116 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).
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. These guidelines and procedures cover the different areas of operation and compliance with the guidelines and procedures is checked regularly.
5.2.   CURRENCY RISK


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














EUR million




 


31.12.2024


31.12.2023




 


USD


EUR


Other


Total


USD


EUR


Other


Total





Financial assets



 


 


 


 


 


 


 


 





Financial assets at amortised cost




10 



4 


7 



21 




7 



7 


3 



17 






Financial assets at FVSD



42 


61 


9 



112 



16 


49 


8 



73 






Receivables




6 




5 



–



11 




7 




4 



–



11 






Cash and cash equivalents




11 




400 



–



411 




6 




595 



–



601 





 



69 




470 




16 




555 




36 




655 




11 




704 






Financial liabilities



 


 


 


 


 


 


 


 





Financial provisions and guarantee liability



–



3 



–



3 



–



2 




2 




4 





 


–



3 



–



3 



–



2 




2 




4 






Total




69 




473 




16 




558 




36 




657 




13 




706 





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.
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 designated 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 (7), 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 in 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 EDF’s exposure to credit risk at the end of the reporting period.







EUR million




 


31.12.2024


31.12.2023





Financial assets



 


 





Loans




21 




16 






Cash and cash equivalents




411 




601 






Exchange receivables
 (*1)




11 




11 






Guarantees given



 


 





Financial guarantee contracts




12 




14 






Total at 31.12.2024




454 




642 









Financial instrument loans: credit quality











EUR million




31.12.2024




 


Stage 1


Stage 2


Stage 3


POCI


Total





Credit rating



 


 


 


 


 





Premium and high grade



–


–


–


–


–





Upper medium grade



–


–


–


–


–





Lower medium grade



–


–


–


–


–





Non-investment grade and default grade




16 




6 




3 



–



25 






Gross carrying amount




16 




6 




3 



–



25 






Minus loss allowance




3 




1 



–


–


4 





Net carrying amount




13 




5 




3 



–



21 









Cash and cash equivalents: credit quality








EUR million




 


31.12.2024


31.12.2023




 


 


 





Credit rating



 


 





Premium and high grade




314 




514 






Upper medium grade




91 




77 






Lower medium grade




6 




11 






Non-investment grade and default grade



–


–





Gross carrying amount




411 




601 






Minus loss allowance



-


-





Net carrying amount




411 




601 









Receivables: credit quality












EUR million




31.12.2024




 


Not due


Past due 0-30
days


Past due 31-90
days


Past.
91 days - 1 year


Past.
> 1 year


Total





Gross carrying amount



11 


–


–


–


–



11 






Minus loss allowance



–


–


–


–


–


–





Net carrying amount




11 



–


–


–


–



11 






Financial assets at FVSD: credit quality

In 2024, 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.









EUR million




 


< 1 year


1-5 years


> 5 years


Total





Financial liabilities at 31.12.2024




256 



–


–



256 






Financial liabilities at 31.12.2023




391 




2 



–



393 





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.
However Member States’ contributions to the EDF are paid in three instalments per year while payments are subject to seasonality.
In order to ensure that treasury resources are always sufficient to cover the payments to be executed in any given month information on the treasury situation is regularly exchanged between the Commission's treasury and the relevant spending departments.
In addition to the above in the context of the EDF's treasury operations automated cash management tools ensure that sufficient liquidity is available on each of the EDF's bank accounts on a daily basis.
6.   RELATED PARTY DISCLOSURES

The related parties of the EDF are the EUTF Bêkou- and EUTF Africa EU Trust Funds and the European Commission. Transactions between these entities take place as part of the normal operations of the EDF, and therefore 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.
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.







EUR million




 


2024


2023





ECONOMIC RESULT OF THE YEAR




(1 240 )




(2 249 )






Revenue



 


 





Entitlements not affecting the budget result




(25 )




(11 )






Entitlements established in current year but not yet collected




(4 )




(2 )






Entitlements established in previous years and collected in current year




18 




12 






Net effect of pre-financing




38 




36 






Accrued revenue (net)




(98 )




(54 )







Expenses




 


 





Expenses of the current year not yet paid




65 




(55 )






Expenses of previous years paid in the current year




(176 )




(349 )






Net effect of pre-financing




1 147 




556 






Accrued expenses (net)




(1 071 )




59 






BUDGET RESULT OF THE YEAR




(1 345 )




(2 056 )





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. However 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 the 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 therefore be added for reconciliation purposes.
The net accrued revenue mainly consists of accruals made for year-end cut-off purposes. Only the net effect i.e. the accrued revenue of the current year less the reversal of accrued revenue of the previous year is taken into consideration.
8.2.   RECONCILING ITEMS – EXPENDITURE


Expenses of the current year not yet paid are to be added for reconciliation purposes as they are included in the economic result but do not form part of budget expenditure. However 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 budget expenditure but have either no effect on the economic result or they decrease the expenses in the event of corrections.
The cash receipts from payment cancellations do not affect the economic result although they do 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 budget 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 budget 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.

FINANCIAL STATEMENTS OF THE EU TRUST FUNDS CONSOLIDATED IN THE EDF


FINANCIAL STATEMENTS OF THE BÊKOU EU TRUST FUND 2024
                   (8)


BACKGROUND INFORMATION


General background on Union Trust Funds



Establishment


In accordance with Articles 238 and 239 of the Financial Regulation applicable to the general budget of the Union (EU FR) (9) and Article 35 of the Financial Regulation applicable to the 11th European Development Fund (EDF FR) (10), 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 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.

Operational highlights



Achievements of the year


The EU launched, in July 2014, its first ever Trust Fund (EUTF), named Bêkou (meaning hope in the Sango language) 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 water and sanitation) support rural development and economic recovery and promote reconciliation. Since its creation, the EUTF Bêkou has financed 22 programmes comprising 119 projects and has reached more than half of the country’s population.
The Central African Republic remains a fragile state from all points of view particularly in terms of governance and availability of local resources (human technical financial etc.) to meet the challenges of development.
The security situation is improving; the violence between armed forces is decreasing. Nevertheless the destabilisation of neighbouring countries increases instability in the country with the influx of Sudanese refugees in Central African. In October, Chad and Central African Republic concluded an agreement to protect together their common borders. Around 20 % of the CAR’s population are still displaced, therefore the need for humanitarian assistance remains high.
The economic situation is characterised by a drastic decline in government revenues in a context of weak growth. However, the dialogue with the International Monetary Fund (IMF) is nevertheless maintained.
Political life in 2025 will be marked by local and presidential elections that have repeatedly been postponed.
The management of the Bekou’s operations has been relocated to the Delegation to CAR but nevertheless the financial and contractual side is still centralised in Brussels.

Key achievements in specific focus areas

Key achievements of 2024 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 the Health and WASH sectors. In 2024 an additional 107 842 people benefited from improved access to water, hygiene and sanitation services (EHA – indicator 1.1) bringing the total to 1 177 587 beneficiaries since the start of the Fund. This was a 5 % overrun on the initial target.
The people having benefited from medical consultations and health interventions (indicator 1.2) during the year was low (53 264) due to the closure of projects associated with the third strand of the HEALTH programme. However with a total of beneficiaries of 9 132 811 for a target of 7 915 873, it is 15 % more than expected. The two last Health projects (RESULDE ALIMA and GENRE III IRC) terminated their activities this year.
The number of beneficiaries of literacy activities has increased significantly (+35 %) from 17 105 to 23 054 between 2023 and 2024, over the initial target.

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 2024 15 741 girls or women benefited from socio-economic empowerment activities, bringing the number of beneficiaries to 173 109 well above the original target (+380 %). 2 494 survivors of Gender-based violence (GBV) were supported by Bêkou (indicator 2.2) this year for a total of 16 769 on the planned 133 943. It represents a completion rate of only 13 %.
There were 36 870 more people who received support in the context of ‘
                     2.4 activity (civil peace-building post-conflict and/ or conflict prevention
                     ’ a total of 418 581 (+172 %) since the fund was created.

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.
This year there were few achievements for this objective as most projects are completed. There is still a 2 % increase (1 471) in people who received support for the establishment of an income-generating activity. 6 263 people benefited during the year from vocational training activities (indicator 3.6), an increase of 6 % compared to the previous year. 6 220 trained through the project DEVRUR II implemented by Enabel.
The PAPEUR Rural project (ITC) continued to support the 35 cooperatives set up in 2022.


Budget and budget implementation


By the end of 2024 the contributions to EUTF Bêkou amounted to over EUR 310 million, as in the previous year 2023, as well as EUR 2 million of other income from interest earned. 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.
More than EUR 7 million were paid to contractors in 2024; total disbursements have reached more than EUR 290 million since the creation of the EUTF Bêkou.
In 2024 11 contracts were ongoing for a total budget around EUR 81 million. Among them 8 operational projects and 1 for Technical Assistance.


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 1 126 as a result of the winding down of the Trust Fund and the consequent decrease in the number of new contracts: in 2024 only 5 contracts were signed relating to audit, evaluation and communication activities for an amount of kEUR 167;










—


Financial liabilities: decreased by kEUR 6 893 mainly due to the absence of cashed contributions during the year;










—


Operating expenses: decreased by kEUR 17 968 as a result of the ongoing winding down of the Trust Fund which led to a decrease in the number of open contracts and thus to a decrease in expenses.





BALANCE SHEET








EUR '000




 


31.12.2024


31.12.2023





NON-CURRENT ASSETS



 


 





Pre-financing



–


–




 


–


–





CURRENT ASSETS



 


 





Pre-financing




2 619 




3 745 






Exchange receivables and non-exchange recoverables




2 267 




3 462 






Cash and cash equivalents




23 465 




28 420 





 



28 350 




35 627 






TOTAL ASSETS




28 350 




35 627 






NON-CURRENT LIABILITIES



 


 





Financial liabilities




(24 108 )




(31 001 )





 



(24 108 )




(31 001 )






CURRENT LIABILITIES



 


 





Payables




(2 536 )



–





Accrued charges




(1 707 )




(4 626 )





 



(4 243 )




(4 626 )






TOTAL LIABILITIES




(28 350 )




(35 627 )






NET ASSETS



–


–





STATEMENT OF FINANCIAL PERFORMANCE








EUR '000




 


2024


2023





REVENUE



 


 





Revenue from non-exchange transactions



 


 





Revenue from donations




6 894 




24 550 






Recovery of expenses




183 




717 





 



7 076 




25 268 






Revenue from exchange transactions



 


 





Financial revenue




884 




636 





 



884 




636 






Total revenue




7 961 




25 904 






EXPENSES



 


 





Operating expenses




(6 310 )




(24 278 )






Finance costs




(166 )



–





Other expenses




(1 485 )




(1 626 )






Total expenses




(7 961 )




(25 904 )






ECONOMIC RESULT OF THE YEAR



–


–





CASHFLOW STATEMENT








EUR '000




 


2024


2023





Economic result of the year



–


–





(Increase)/decrease in pre-financing




1 126 




7 420 






(Increase)/decrease in exchange receivables and non-exchange recoverables




1 196 




132 






Increase/(decrease) in financial liabilities




(6 894 )




18 450 






Increase/(decrease) in payables




2 536 




(4 563 )






Increase/(decrease) in accrued charges




(2 919 )




2 665 






NET CASHFLOW




(4 955 )




24 104 






Net increase/(decrease) in cash and cash equivalents




(4 955 )




24 104 






Cash and cash equivalents at the beginning of the year




28 420 




4 316 






Cash and cash equivalents at year-end




23 465 




28 420 






FINANCIAL STATEMENTS OF THE EUTF AFRICA 2024
                   (11)


BACKGROUND INFORMATION ON THE EUTF AFRICA


General background on Union Trust Funds



Establishment


In accordance with Articles 238 and 239 of the Financial Regulation applicable to the general budget of the Union (EU FR) (12) and Article 35 of the Financial Regulation applicable to the 11th European Development Fund (EDF FR) (13), 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 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 15 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.

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 for 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 of 2025.
In the course of 2024, the EUTF for 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 September 2024, the European Court of Auditors (ECA) published a special audit report on the EUTF for Africa (14). The ECA acknowledged that the EUTF for Africa has developed a new approach for collecting information about the root causes of instability, irregular migration and displacements, identifying human rights risks in a volatile environment and reporting on the cumulative achievements of its actions. It also recognised that the EUTF has contributed to keeping migration high on the development and political agenda, and that EUTF projects have reported the delivery of many of the planned outputs and partially achieved their objectives.
In 2024, the Horn of Africa (HoA) region remains a highly unstable region facing multiple challenges relating to severe climate change impacts socio-economic and political hurdles and ongoing conflicts and security threats. In addition to the ongoing conflict in Sudan, internal strife in parts of Ethiopia and instability in Somalia persist, while the repercussions of the Red Sea crisis are exacerbating inflation and insecurity across the area. As of October 2024 Sudan is grappling with the world’s largest internal displacement crisis with a staggering 14 million people forced to flee their homes and to seek refuge within or outside the country. This mass displacement has had a far-reaching impact on neighbouring countries. Nonetheless, some positive developments can be identified as the accession of Somalia to the East Africa Community in February 2024, the IMF approval of the financial support for Ethiopia's economic reform programme and the decisive lead taken by Kenya on climate change adaptation and mitigation.
In this challenging context, the EUTF has reported significant progress in promoting economic and employment opportunities in the Horn of Africa. By June 2024, a total of 152 000 jobs have been created or supported, including 2 471 jobs in the first semester of 2024. Additionally, 24 091 micro, small, and medium enterprises have been created or supported, with 314 MSMEs added in 2024. EUTF programmes have also assisted around 750 000 individuals in developing income-generating activities. These efforts have been particularly successful in supporting refugees, with 12 349 refugees benefiting from job creation/supported and 85 593 assisted individuals with income-generating activities.
Likewise EUTF-funded projects have provided 11 million health-related services to households to date with 99 % being medical treatments. Improved access to health facilities has been achieved for 3,67 million people with roughly 59 000 benefiting in the first half of 2024. Notably the largest biannual output of WASH (water sanitation and hygiene) facilities since the inception of the EUTF has been achieved through the construction or rehabilitation of 1 303 facilities. Additionally, 3 million people have received nutrition assistance including 54 250 in the first half of 2024.
The EUTF made significant strides in improving migration management by providing critical assistance and protection to 3 256 migrants and displaced people in the first half of 2024 bringing its total support to nearly 195 000 individuals to date. Furthermore, in the first semester of 2024 the EUTF has also played a key role in supporting stabilisation and peacebuilding initiatives with a total of 30 162 individuals participating in conflict prevention and human rights promotion activities with a focus on South Sudan. This brings the total number of participants to 1,37 million, contributing to strengthened peace and political stability across the region.
In 2024, the Sahel and Lake Chad (SLC) region continued to be confronted with a growing political instability across the region security threats socio-economic challenges and intensified conflicts driving more people into food insecurity and forcibly displacement. Moreover the political divide in West Africa deepened further, as Burkina Faso Mali and Niger announced their withdrawal from the Economic Community of West African States (ECOWAS).
In the first half of 2024, conflicts in West Africa intensified particularly in the central Sahel countries and in Nigeria. This escalation was a key driver of forced displacement, affecting 10,1 million people (including both refugees and IDPs) across the 12 EUTF SLC countries.
Inflation and currency depreciation continued to affect a large share of the populations primarily the most vulnerable. From March to May 2024, 38 million people across West Africa faced acute food insecurity, a number that was expected to rise to 52 million during the 2024 lean season. Yet, in this challenging context, and notwithstanding the phasing out of the EUTF and hence the drastic decrease of its active projects, substantial results continued to be reported in the first semester of 2024. For instance, during the first half of 2024, 56 549 people benefitted from assistance to develop income generating activities (IGAs), out of a total of 831 945 supported to date, and 2 686 people benefitted from technical and vocational education and training (TVET) and/or skills development, for a total of 240 470.
Additionally peace-building activities also showed significant achievements, with 561 874 participants, bringing the total to 7,1 million, and 387 people were trained in migration management and protection, bringing the total to 20 953.
Not least in the same period EUTF-funded programmes supplied 136 313 people with food security-related assistance (3,6 million overall), and 125 910 people benefited from nutrition assistance (2,8 million overall).
In 2024, the North Africa (NoA) region continued to face complex geopolitical, socioeconomic, and environmental challenges, further shaping migratory patterns. Because of geopolitical instability, including the ongoing conflicts involving Israel, Lebanon and Sudan, the repercussions of Russia’s war of aggression against Ukraine, and the economic downturns, the pressure of irregular migration towards Europe has persisted. The North African countries remain important countries of origin, transit and destination of migrants, with some of them also hosting large refugee populations.
This year, 31 contracts were still implemented in NoA, representing a budget of EUR 301 million (or 33 % of the total commitment of the EUTF in the region). These interventions contributed to achieve tangible results in the North of Africa from June 2023 to May 2024. Despite the complex environment, our EUTF partners reported improving the access of 526 126 people to basic social services, delivering 95 863 basic social services and providing post-return assistance to 3 653 returning migrants. In addition, awareness raising efforts continued with 150 433 potential migrant, reached through information campaigns and 16 085 beneficiaries participating in conflict prevention and human rights activities. In the context of the EUTF support for employment and entrepreneurship, 2 073 new jobs were created, 577 MSMEs were supported, 3 893 participated in legal migration and mobility programs and 8 944 received professional training in the North of Africa region.


Budget and budget implementation


In 2024, no new program or budgetary top-up took place in any of the three regions of the EUTF for 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 for Africa amounts to EUR 5 060,13 million. The amount of approved operational programs 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.
23 new contracts for a total amount of EUR 1,8 million were contracted in 2024, considering net committed amount and no de-commitments. These contracts were only related to administrative activities (audit evaluation, communication and monitoring), as operational programmes or activities cannot be funded any longer since 31 December 2021.
The operational payments in 2024 reached EUR 162,96 million which was EUR 169,44 million lower than in 2023 (EUR 332,4 million) because several projects reached 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 64 731 as a result of the winding down of the Trust Fund and the consequential decrease in the number of new contracts: in 2024 only 23 contracts were signed relating to administrative activities for an amount of EUR 1,8 million;










—


Financial liabilities: decreased by kEUR 13 216 mainly due to the fact that contributions cashed in the year were lower than the net expenses allocated to the donors; and










—


Operating expenses: decreased by kEUR 225 425 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.





BALANCE SHEET








EUR '000




 


31.12.2024


31.12.2023





NON-CURRENT ASSETS



 


 





Financial Assets




3 950 




3 949 






Pre-financing



–



18 254 





 



3 950 




22 204 






CURRENT ASSETS



 


 





Pre-financing




131 889 




178 366 






Exchange receivables and non-exchange recoverables




24 314 




22 396 






Cash and cash equivalents




187 539 




177 553 





 



343 742 




378 315 






TOTAL ASSETS




347 691 




400 519 






NON-CURRENT LIABILITIES



 


 





Financial liabilities




(251 339 )




(264 555 )





 



(251 339 )




(264 555 )






CURRENT LIABILITIES



 


 





Payables




(13 774 )




(14 261 )






Accrued charges




(82 578 )




(121 704 )





 



(96 352 )




(135 965 )






TOTAL LIABILITIES




(347 691 )




(400 519 )






NET ASSETS



–


–





STATEMENT OF FINANCIAL PERFORMANCE








EUR '000




 


2024


2023





REVENUE



 


 





Revenue from non-exchange transactions



 


 





Revenue from donations




169 603 




408 274 






Recovery of expenses




245 




179 





 



169 848 




408 453 






Revenue from exchange transactions



 


 





Financial revenue




6 690 




4 865 






Other exchange revenue




13 551 




13 446 





 



20 240 




18 311 






Total revenue




190 089 




426 764 






EXPENSES



 


 





Operating expenses




(161 869 )




(387 294 )






Finance costs




(28 )




(434 )






Other expenses




(28 191 )




(39 036 )






Total expenses




(190 089 )




(426 764 )






ECONOMIC RESULT OF THE YEAR



–


–





CASHFLOW STATEMENT








EUR '000




 


2024


2023





Economic result of the year



–


–





Operating activities



 


 





(Increase)/decrease in pre-financing




64 732 




122 362 






(Increase)/decrease in exchange receivables and non-exchange recoverables




(1 917 )




13 517 






Increase/(decrease) in financial liabilities




(13 216 )




(70 236 )






Increase/(decrease) in payables




(486 )




(16 715 )






Increase/(decrease) in accrued charges




(39 126 )




(26 956 )






Investing activities



 


 





Increase/decrease in non-derivative financial assets at fair value through surplus or deficit



–



(2 007 )






NET CASHFLOW




9 986 




19 966 






Net increase/(decrease) in cash and cash equivalents




9 986 




19 966 






Cash and cash equivalents at the beginning of the year




177 553 




157 587 






Cash and cash equivalents at year-end




187 539 




177 553 






CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE EU TRUST FUNDS
                   (15)


CONSOLIDATED BALANCE SHEET








EUR million




 


31.12.2024


31.12.2023





NON-CURRENT ASSETS



 


 





Financial assets




131 




91 






Pre-financing




500 




592 






Exchange receivables




5 




5 





 



637 




689 






CURRENT ASSETS



 


 





Financial assets




5 




3 






Pre-financing




876 




1 137 






Exchange receivables and non-exchange recoverables




63 




50 






Cash and cash equivalents




622 




807 





 



1 566 




1 997 






TOTAL ASSETS




2 203 




2 686 






NON-CURRENT LIABILITIES



 


 





Financial liabilities




(88 )




(85 )





 



(88 )




(85 )






CURRENT LIABILITIES



 


 





Provisions




(2 )



–





Payables




(272 )




(406 )






Accrued charges and deferred income




(858 )




(1 110 )





 



(1 132 )




(1 516 )






TOTAL LIABILITIES




(1 220 )




(1 600 )





 


 


 





NET ASSETS




983 




1 086 






FUNDS & RESERVES



 


 





Called fund capital - active EDFs




55 704 




54 566 






Called fund capital from closed EDFs carried forward




2 252 




2 252 






Economic result carried forward from previous years




(55 733 )




(53 484 )






Economic result of the year




(1 240 )




(2 249 )






NET ASSETS




983 




1 086 






CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE








EUR million




 


2024


2023





REVENUE



 


 





Revenue from non-exchange transactions



 


 





Recovery activities




42 




15 






Revenue from trust funds donations




59 




122 





 



100 




136 






Revenue from exchange transactions



 


 





Financial revenue




26 




14 






Other revenue




85 




56 





 



111 




70 






Total Revenue




211 




207 






EXPENSES



 


 





Aid instruments




(1 119 )




(1 870 )






Expenses implemented by other entities




(4 )




(3 )






Expenses implemented by trust funds




(168 )




(412 )






Co-financing expenses




(17 )




(8 )






Finance costs




(3 )




(7 )






Other expenses




(140 )




(157 )






Total Expenses




(1 451 )




(2 456 )






ECONOMIC RESULT OF THE YEAR




(1 240 )




(2 249 )






CONSOLIDATED CASH FLOW STATEMENT








EUR million




 


2024


2023





Economic result of the year




(1 240 )




(2 249 )






Operating activities



 


 





Capital increase - contributions




1 138 




1 630 






(Increase)/decrease in pre-financing




352 




486 






(Increase)/decrease in exchange receivables and non-exchange recoverables




(13 )




18 






Increase/(decrease) in provisions




2 




2 






Increase/(decrease) in financial liabilities




3 




(18 )






Increase/(decrease) in payables




(134 )




(56 )






Increase/(decrease) in accrued charges and deferred income




(252 )




(172 )






Investing activities



 


 





(Increase)/decrease in non-derivative financial assets at fair value through surplus or deficit




(42 )




(22 )






NET CASHFLOW




(185 )




(382 )





Net increase/(decrease) in cash and cash equivalents


(185 )


(382 )




Cash and cash equivalents at the beginning of the year


807 


1 189 




Cash and cash equivalents at year-end


622 


807 





CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS












EUR million




 


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)


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





BALANCE AS AT 31.12.2022




72 955 




7 855 




65 100 




(65 647 )




2 252 




1 705 






Capital increase - contributions




(185 )




(1 815 )




1 630 



–


–



1 630 






Closure of the 8th EDF




(12 164 )



–



(12 164 )




12 164 



–


–





Economic result of the year



–


–


–



(2 249 )



–



(2 249 )






BALANCE AS AT 31.12.2023




60 607 




6 040 




54 566 




(55 733 )




2 252 




1 086 






Capital increase - contributions




(62 )




(1 200 )




1 138 



 


 



1 138 






Economic result of the year



 


 


–



(1 240 )



 



(1 240 )






BALANCE AS AT 31.12.2024




60 544 




4 840 




55 704 




(56 973 )




2 252 




983 






EDF REPORT ON FINANCIAL IMPLEMENTATION


CONTENTS








1.

BACKGROUND
73










1.1.

PREVIOUS EDFs
73










1.2.

10th AND 11th EDF
74










2.

FINANCIAL IMPLEMENTATION
75










2.1.

FINANCIAL OUTTURN
75










2.2.

RESOURCES
81










2.3.

OPERATIONAL EXPENDITURE AND SPECIFIC PROGRAMMES
81










3.

GLOSSARY
92



1.   BACKGROUND

Launched in 1959 the EDF 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 which 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 EIB 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 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. Since 2021, the cooperation with the ACP countries is included in the Neighbourhood, Development and International Cooperation Instrument (NDICI). However, projects that were already ongoing funded under the EDF, will continue to be implemented, under the respective EDF legal basis.
This report is produced in accordance with Article 39 of the Financial Regulation of 11th EDF (16). It provides information on the revenue and expenditure operations of the EDF, with the focus on important events that had a significant impact on financial implementation in 2024.
Given that there are no ongoing operations under previous EDFs (17) this report includes figures only for the 10th and 11th EDFs.
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 de-commitments of previous EDFs were transferred to the 9th EDF.

8th and 9th EDF

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 eight EDF to the Member States in a communication that was presented to the Council in October 2021.
All eight EDF activities have now been completed and all checks and controls have been performed. All contracts and financial decisions have also been closed in the EDF accounts. All recovery orders which were still open after the operational closure were cashed or waived with the exception of four recovery orders being followed by the Commission’s Legal Service. In line with Commission Decision C(2003)19044 these recovery orders were transferred to the ninth EDF.
The closure of the ninth EDF is progressing well. There are still 8 contracts open out of which 6 concern actions in Southern Sudan (Council Decision 2011/315/EU (18)). These actions were decided after the ninth EDF sunset clause and will reach their conclusion within the specified timeframe contributing to the finalisation of activities and projects associated with the ninth EDF. The full closure of the ninth EDF can only be accomplished once all contracts come to an end and following the completion of their evaluations and audits.
From 2015 to 2024 the Commission carried out six refunds of 8th/9thEDF credits for a total amount of EUR 1 918,9
                   (19) million. A balance of EUR 6.3 million was refunded in January 2025 (20) as part of the payment of the first instalment of Member State contributions to the EDF for the year 2025.
1.2.   10th AND 11th EDF

The ACP-EC Partnership Agreement (also known as the Cotonou Agreement) was signed on 23 June 2000 in Cotonou by the Member States of the European Community and the 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) and secondly by the agreement signed in Ouagadougou on 22 June 2010 (establishing the 11th EDF).
Council Decision 2001/822/EC of 27 November 2001,on the association of the overseas countries and territories (OCTs) with the European Community (‘Overseas Association Decision’) (21) entered into force on 2 December 2001. This Decision was amended on 19 March 2007 (Council Decision 2007/249/EC (22)).
The Internal Agreement on the financing of Community aid under the Multiannual 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 was allocated to the OCT; and










—


EUR 430 million was allocated 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 was 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 was 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 was managed by the European Commission.










—


EUR 364,5 million was allocated to the OCTs in accordance with Article 1.2(a) and Article 3.1 of the Internal Agreement of which 359,5 million was managed by the European Commission.










—


EUR 1 052,5 million was 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.




2.   FINANCIAL IMPLEMENTATION

2.1.   FINANCIAL OUTTURN


EVOLUTION OF 10th EDF APPROPRIATIONS


10th EDF


EVOLUTION OF APPROPRIATIONS: 31 December 2024
                     


ANALYSIS OF CREDITS PER INSTRUMENT












(EUR million)




INSTRUMENT


INITIAL APPROPRIATION


INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2023


INCREASE OR DECREASE IN RESOURCES IN 2024


Notes


CURRENT LEVEL APPROPRIATION





ACP





Co-financing






0 






202 




 


 




202 








Regular MS contributions






21 326 






(621 )






(89 )




 




20 616 







SUB TOTAL ACP




21 326 




(419 )




(89 )



 



20 818 






OCT





Regular MS contributions






0 






239 






(3 )




 




236 







SUB TOTAL OCT




0 




239 




(3 )



 



236 





 



TOTAL 10th EDF




21 326 




(180 )




(92 )



 



21 054 






EVOLUTION OF 11th EDF APPROPRIATIONS


11th EDF


EVOLUTION OF APPROPRIATIONS: 31 December 2024
                     


ANALYSIS OF CREDITS PER INSTRUMENT












(EUR million)




INSTRUMENT


INITIAL APPROPRIATION


INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2023


INCREASE OR DECREASE IN RESOURCES IN 2024


Notes


CURRENT LEVEL APPROPRIATION





ACP





Co-financing






0 






89 






2 




 




91 








EC internal SLA






0 






1 




 


 




1 








Regular MS contributions






30 060 






(896 )






41 




 




29 205 







SUB TOTAL ACP




30 060 




(805 )



 


 



29 297 






OCT





Co-financing






0 






0 




 


 




0 








EC internal SLA






0 






0 




 


 




0 








Regular MS contributions






0 






351 






3 




 




354 







SUB TOTAL OCT




0 




351 



 


 



354 





 



TOTAL 11th EDF



30 060 


(455 )


45 


 


29 651 





EVOLUTION OF COMMITMENTS ASSIGNED FUNDS AND PAYMENTS FOR 10TH EDF


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2024
                     


CLASS OF AID


ACP + PTOM - 10 th EDF

















(EUR million)




 


CREDITS


DECISIONS


ASSIGNED FUNDS


PAYMENTS




AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%




(1)


(2)


 


(2) : (1)


(3)


 


(3) : (2)


(4)


 


(4) : (3)




 



Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




 



Allocations



 


 


 


 


 


 


 


 


 


 





ACP



A Envelope - National Allocations


12 280 


12 268 


(20)


100  %


12 255 


(9)


100  %


12 201 


2


100  %





SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS




12 280 




12 268 




(20)




100  %




12 255 




(9)




100  %




12 201 




2




100  %






SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS




1 960 




1 960 




(2)




100  %




1 960 




(1)




100  %




1 960 




(1)




100  %






SUB TOTAL: FOOD SECURITY




343 




482 




(2)




141  %




483 




1




100  %




355 




49




74  %






SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




526 




526 



0



100  %




526 



0



100  %




522 



 



99  %






SUB TOTAL: INTRA-ACP ALLOCATIONS




3 582 




3 579 




(17)




100  %




3 561 




(12)




99  %




3 491 




108




98  %






SUB TOTAL: REGIONAL ALLOCATIONS




1 924 




1 763 




(29)




92  %




1 755 




(12)




100  %




1 695 




3




97  %






Co-financing



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 





SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS




185 




175 




(0)




95  %




175 




0




100  %




175 




2




100  %






SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




5 




5 



0



110  %




5 



0



100  %




5 



 



100  %






SUB TOTAL: INTRA-ACP ALLOCATIONS




12 




11 



 



91  %




11 



 



100  %




11 



 



100  %






Non-mobilisable reserve



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 





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




1 



 


 


 


 


 


 


 


 


 




 



Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




 



Allocations



 


 


 


 


 


 


 


 


 


 





OCT



A Envelope - National Allocations


182 


182 


(3)


100  %


180 


(2)


98  %


172 


0


96  %





SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS




182 




182 




(3)




100  %




180 




(2)




98  %




172 




0




96  %






SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS




14 




14 



 



100  %




14 



 



100  %




14 



 



100  %






SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




5 




5 



 



100  %




5 



 



100  %




5 



 



100  %






SUB TOTAL: REGIONAL ALLOCATIONS




34 




34 



0



100  %




34 



0



99  %




34 



 



100  %





 



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




21 054 




21 005 




(73)




100  %




20 964 




(35)




100  %




20 640 




163




98  %






EVOLUTION OF COMMITMENTS ASSIGNED FUNDS AND PAYMENTS FOR 11TH EDF


EDF AGGREGATED ACCOUNTS AT 31 DECEMBER 2024
               


CLASS OF AID


ACP + PTOM - 11 th EDF

















(EUR million)




 


CREDITS


DECISIONS


ASSIGNED FUNDS


PAYMENTS




AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%




(1)


(2)


 


(2) : (1)


(3)


 


(3) : (2)


(4)


 


(4) : (3)




 



Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




 



Allocations



 


 


 


 


 


 


 


 


 


 




ACP



SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS




15 218 




15 132 




(197)




99  %




14 803 




80




98  %




12 828 




704




87  %






SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS




1 056 




1 056 




(4)




100  %




1 052 




(1)




100  %




1 023 




15




97  %






SUB TOTAL: BRIDGING FACILITY




0 



 


 


 


 


 


 


 


 


 





SUB TOTAL: FOOD SECURITY




112 




112 



0



100  %




112 



0



100  %




42 




2




38  %






SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




1 075 




1 064 




(2)




99  %




1 060 




(2)




100  %




968 




10




91  %






SUB TOTAL: INTRA-ACP ALLOCATIONS




3 961 




3 859 




(35)




97  %




3 934 




8




102  %




3 515 




175




89  %






SUB TOTAL: REGIONAL ALLOCATIONS




7 213 




7 168 




(59)




99  %




7 082 




(8)




99  %




6 220 




256




88  %






Co-financing



 


 


 


 


 


 


 


 


 


 





Allocations



 


 


 


 


 


 


 


 


 


 





SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS




46 




45 




(0)




99  %




45 




(0)




100  %




43 




4




97  %






SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




4 




4 



 



100  %




4 



0



100  %




4 



 



100  %






SUB TOTAL: INTRA-ACP ALLOCATIONS




33 




33 




(0)




100  %




33 



0



100  %




29 




1




89  %






SUB TOTAL: REGIONAL ALLOCATIONS




10 




6 



 



60  %




6 



0



100  %




6 



 



100  %






Non-mobilisable reserve



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 





SUB TOTAL: NON-MOBILISABLE RESERVE 10TH EDF




193 



 


 


 


 


 


 


 


 


 





SUB TOTAL: NON-MOBILISABLE RESERVE 11TH EDF




376 



 


 


 


 


 


 


 


 


 





EC Internal SLA



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 





SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS




1 




1 



 



52  %




1 



 



100  %




1 



 



100  %





 



Regular MS Contributions



 


 


 


 


 


 


 


 


 


 




 



Allocations



 


 


 


 


 


 


 


 


 


 




OCT



SUB TOTAL: A ENVELOPE - NATIONAL ALLOCATIONS




211 




211 




(0)




100  %




194 



0



92  %




193 




0




100  %






SUB TOTAL: B ENVELOPE - NATIONAL ALLOCATIONS




12 




12 




(0)




99  %




12 




(0)




100  %




12 



 



100  %






SUB TOTAL: IMPLEMENTATION COSTS AND INTERESTS REVENUES




7 




7 



0



100  %




6 




(0)




95  %




6 




0




98  %






SUB TOTAL: REGIONAL ALLOCATIONS




102 




102 



0



100  %




102 




(0)




99  %




84 




15




83  %






Non-mobilisable reserve



 


 


 


 


 


 


 


 


 


 





Reserves



 


 


 


 


 


 


 


 


 


 





SUB TOTAL: NON-MOBILISABLE RESERVE 10TH EDF




19 



 


 


 


 


 


 


 


 


 





SUB TOTAL: NON-MOBILISABLE RESERVE 11TH EDF




3 



 


 


 


 


 


 


 


 


 




 



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




29 651 




28 809 




(297)




97  %




28 444 




77




99  %




24 973 




1 182 




88  %





2.2.   RESOURCES


Nature of revenue

The main resources of the EDF come from Member State contributions. Three times per year the European Commission and the EIB call on the Member States to contribute to the EDF. The amount of the contributions called each year reflects the amount of payment to be covered during the year.

Overview of contributions by Member State






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 amounts per nature of expenditure:
















 


OPERATIONAL IMPLEMENTATION IMPEMENTATION COSTS AND INTEREST REVENUES
(10th and 11th EDF)




CREDITS


DECISIONS


ASSIGNED FUNDS


PAYMENTS




AGGREG.


ANNUAL


%


AGGREG.


ANNUAL


%


AGGREG


ANNUAL


%




(1)


(2)


 


(2) : (1)


(3)


 


(3) : (2)


(4)


 


(4) : (3)





IMPLEMENTATION COSTS AND INTERESTS REVENUES 10th + 11th EDF




1 621 




1 610 




(2)




99,3  %




1 606 



(2)



99,8  %




1 509 




10




94,0  %






OPERATIONAL IMPLEMENTATION (A+B) 10th + 11th EDF




50 705 




49 815 




(370)




98,2  %




49 409 



42



99,2  %




45 612 




1 345 




92,3  %











Breakdown of committed contracted and paid amounts per region and country














EDF CUMULATIVE ACCOUNTS AT 31 DECEMBER 2024 BY COUNTRY % APPR




10th + 11 th EDF


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




Cumulative 2024


Appropriations


Decisions


% of Appr


Assigned funds


% of Appr


Payments


% of Appr





ACP




General/administrative envelope/interests




1 627 



1 612 


99  %


1 613 


99  %


1 506 


93  %





Reserve/Not distributed by country




3 123 



2 553 


82  %


2 553 


82  %


2 553 


82  %





All ACP countries




4 751 




4 165 




88  %




4 166 




88  %




4 059 




85  %






Angola




346 



346 


100  %


344 


99  %


321 


93  %





Benin




734 



732 


100  %


731 


99  %


692 


94  %





Botswana




126 



126 


100  %


126 


100  %


126 


99  %





Burkina Faso




1 296 



1 296 


100  %


1 294 


100  %


1 262 


97  %





Burundi




566 



566 


100  %


562 


99  %


546 


96  %





Cameroon




520 



520 


100  %


519 


100  %


489 


94  %





Cape Verde




144 



144 


100  %


144 


100  %


144 


100  %





Comoros




77 



77 


100  %


76 


98  %


73 


95  %





Congo (Brazzaville)




163 



163 


100  %


160 


98  %


144 


88  %





Congo (Democratic Republic of)




1 402 



1 400 


100  %


1 376 


98  %


1 274 


91  %





Ivory Coast




702 



702 


100  %


701 


100  %


681 


97  %





Djibouti




175 



175 


100  %


173 


99  %


164 


94  %





Eritrea




215 



215 


100  %


215 


100  %


165 


77  %





Ethiopia




1 598 



1 596 


100  %


1 592 


100  %


1 415 


89  %





Gabon




33 



33 


100  %


33 


99  %


31 


93  %





Gambia




302 



302 


100  %


301 


100  %


285 


94  %





Ghana




785 



785 


100  %


782 


100  %


737 


94  %





Guinea Bissau




186 



184 


99  %


182 


98  %


177 


95  %





Guinea (Conakry)




500 



500 


100  %


494 


99  %


441 


88  %





Mauritius




82 



82 


100  %


82 


100  %


82 


100  %





Kenya




859 



853 


99  %


850 


99  %


777 


90  %





Lesotho




249 



248 


99  %


247 


99  %


205 


82  %





Liberia




486 



485 


100  %


474 


97  %


451 


93  %





Madagascar




782 



779 


100  %


752 


96  %


631 


81  %





Malawi




1 018 



1 018 


100  %


1 009 


99  %


912 


90  %





Mali




1 395 



1 393 


100  %


1 387 


99  %


1 246 


89  %





Mauritania




343 



343 


100  %


341 


99  %


332 


97  %





Mozambique




1 451 



1 440 


99  %


1 410 


97  %


1 188 


82  %





Namibia




187 



187 


100  %


181 


97  %


173 


93  %





Niger




1 262 



1 262 


100  %


1 258 


100  %


1 250 


99  %





Nigeria




1 098 



1 088 


99  %


1 086 


99  %


1 037 


95  %





Uganda




982 



930 


95  %


923 


94  %


845 


86  %





Central African Republic




610 



609 


100  %


609 


100  %


592 


97  %





Rwanda




833 



831 


100  %


831 


100  %


823 


99  %





Sao Tome and Principe




55 



55 


99  %


53 


96  %


51 


91  %





Senegal




663 



663 


100  %


659 


99  %


632 


95  %





Seychelles




22 



22 


100  %


22 


100  %


22 


100  %





Sierra Leone




655 



655 


100  %


646 


99  %


617 


94  %





Somalia




898 



896 


100  %


894 


100  %


891 


99  %





Sudan




298 



298 


100  %


298 


100  %


298 


100  %





South Sudan




91 



91 


100  %


91 


100  %


91 


100  %





Eswatini (Swaziland)




123 



123 


100  %


121 


99  %


111 


91  %





Tanzania




1 171 



1 171 


100  %


1 162 


99  %


1 094 


93  %





Chad




935 



935 


100  %


913 


98  %


818 


87  %





Togo




376 



374 


99  %


372 


99  %


361 


96  %





Zambia




827 



826 


100  %


804 


97  %


709 


86  %





Zimbabwe




462 



461 


100  %


459 


99  %


457 


99  %





* Total Africa




28 086 



27 981 


100  %


27 739 


99  %


25 863 


92  %





Antigua and Barbuda




15 



15 


100  %


15 


100  %


15 


98  %





Barbados




22 



22 


100  %


22 


100  %


21 


95  %





Belize




42 



42 


100  %


41 


96  %


36 


85  %





Dominica




41 



40 


99  %


40 


99  %


40 


99  %





Grenada




21 



20 


99  %


20 


98  %


20 


98  %





Guyana




79 



79 


100  %


78 


99  %


77 


97  %





Haiti




997 



997 


100  %


910 


91  %


793 


80  %





Jamaica




235 



235 


100  %


233 


99  %


226 


96  %





Dominican Republic




281 



281 


100  %


279 


99  %


279 


99  %





Saint Lucia




32 



32 


100  %


32 


100  %


32 


100  %





Saint Kitts and Nevis




6 



6 


100  %


6 


99  %


6 


99  %





Saint Vincent and the Grenadines




26 



26 


99  %


26 


98  %


22 


83  %





Suriname




27 



27 


100  %


27 


99  %


26 


96  %





Trinidad and Tobago




28 



28 


100  %


28 


99  %


27 


94  %





* Total Caribbean




1 853 



1 852 


100  %


1 758 


95  %


1 619 


87  %





Fiji




48 



48 


100  %


48 


100  %


48 


100  %





Cook Islands




5 



5 


100  %


5 


100  %


5 


100  %





Solomon Islands




68 



66 


97  %


66 


96  %


62 


91  %





Kiribati




42 



42 


100  %


41 


99  %


39 


93  %





Marshall Islands




17 



17 


100  %


17 


100  %


17 


100  %





Micronesia




23 



23 


100  %


22 


97  %


18 


78  %





Nauru




4 



4 


100  %


4 


100  %


4 


100  %





Niue




3 



3 


100  %


3 


100  %


3 


100  %





Palau




5 



4 


70  %


4 


70  %


4 


70  %





Papua New Guinea




239 



239 


100  %


233 


97  %


215 


90  %





Western Samoa




67 



67 


100  %


67 


100  %


66 


100  %





Timor Leste




167 



167 


100  %


166 


99  %


159 


95  %





Tonga




28 



28 


100  %


28 


100  %


28 


100  %





Tuvalu




13 



13 


100  %


13 


100  %


13 


100  %





Vanuatu




55 



55 


100  %


54 


99  %


52 


94  %





* Total Pacific




783 



780 


100  %


771 


98  %


733 


94  %





Intra-ACP Allocations




8 025 



7 916 


99  %


7 970 


99  %


7 305 


91  %





PALOP




60 



59 


98  %


59 


98  %


58 


96  %





Southern Africa Region FED 10




129 



129 


100  %


129 


100  %


127 


98  %





Central Africa region




552 



547 


99  %


543 


98  %


438 


79  %





Eastern and Southern Africa region




3 059 



3 020 


99  %


2 970 


97  %


2 522 


82  %





Western Africa Region




1 936 



1 922 


99  %


1 911 


99  %


1 688 


87  %





Caribbean Region




536 



533 


99  %


526 


98  %


421 


79  %





Pacific Region




322 



318 


99  %


298 


93  %


244 


76  %





* Total regional cooperation ACP




14 619 



14 445 


99  %


14 406 


99  %


12 803 


88  %





ACP




50 091,33 




49 222,97 




98  %




48 839,57 




98  %




45 076,97 




90  %






OCT




Reserve/Not distributed by country/territory




33 



12 


35  %


11 


34  %


11 


34  %





All OCT countries




33 



12 


35  %


11 


34  %


11 


34  %





Anguilla




27 



27 


100  %


27 


100  %


27 


100  %





Falklands Islands




10 



10 


100  %


10 


100  %


10 


100  %





Pitcairn Islands




5 



5 


100  %


5 


100  %


5 


100  %





Turks and Caicos Islands




32 



32 


100  %


32 


100  %


32 


100  %





British Virgin Islands




2 



2 


93  %


2 


93  %


2 


93  %





Montserrat




33 



33 


100  %


33 


100  %


33 


100  %





Saint Helena




38 



38 


100  %


38 


100  %


38 


100  %





* Total British OCT




146 



146 


100  %


146 


100  %


146 


100  %





Netherlands Antilles




38 



38 


100  %


20 


54  %


20 


54  %





Netherlands Antilles - Bonaire




4 



4 


100  %


4 


98  %


4 


97  %





Netherlands Antilles - Saba




3 



3 


100  %


3 


100  %


3 


100  %





Netherlands Antilles - Sint-Eustatius




2 



2 


100  %


2 


100  %


2 


100  %





Aruba




21 



21 


100  %


21 


99  %


21 


98  %





Sint Maarten




14 



14 


100  %


13 


95  %


5 


38  %





* Total Dutch OCT




83 



83 


100  %


64 


78  %


56 


68  %





Wallis and Futuna Islands




39 



39 


100  %


37 


95  %


29 


76  %





Mayotte




29 



29 


100  %


29 


100  %


29 


100  %





New Caledonia




50 



50 


100  %


50 


100  %


50 


100  %





French Polynesia




50 



50 


100  %


49 


99  %


49 


99  %





Saint Pierre and Miquelon




47 



47 


100  %


47 


100  %


47 


100  %





* Total French OCT




214 



214 


100  %


212 


99  %


204 


95  %





region




137 



137 


100  %


136 


99  %


118 


86  %





* Total regional cooperation OCT




137 



137 


100  %


136 


99  %


118 


86  %





OCT




613,65 




591,78 




96  %




569,20 




93  %




535,44 




87  %






TOTAL: ACP+OCT



 



50 704,99 




49 814,76 




98  %




49 408,77 




97  %




45 612,40 




90  %






Breakdown of committed contracted and paid amounts by spending area for the 11th EDF


11TH EDF Breakdown of committed contracted and paid amount by spending area (DAC sector codes)
                         (23)









(EUR million)




Sector


Committed


Contracted


Paid





Social infrastructure and services



 


 


 




110-Education


1 192,46 


1 174,05 


1 034,15 




120-Health


2 131,40 


2 524,02 


2 338,24 




130-Population policies/programmes and reproductive health


352,44 


50,31 


43,25 




140-Water and sanitation


788,50 


858,32 


599,10 




150-Government and civil society


5 826,37 


6 058,19 


5 677,22 




160-Other social infrastructure and services


996,71 


1 401,86 


1 628,50 





Social infrastructure and services TOTAL



11 287,88 


12 066,75 


11 320,47 





Economic infrastructure and services



 


 


 




210-Transport and storage


1 425,48 


2 088,15 


1 213,63 




220-Communications


140,96 


147,40 


131,58 




230-Energy


2 015,13 


2 031,37 


1 375,46 




240-Banking and financial services


82,03 


131,71 


95,57 




250-Business and other services


343,43 


329,24 


259,09 





Economic infrastructure and services TOTAL



4 007,01 


4 727,87 


3 075,33 





Production sectors



 


 


 




310-Agriculture forestry and fishing


3 344,16 


3 154,32 


2 516,00 




320-Industry mineral resources and mining construction


641,58 


529,15 


347,51 




330-Trade and tourism


507,49 


437,30 


313,25 





Production sectors TOTAL



4 493,23 


4 120,77 


3 176,77 





Multisector/Cross-cutting



 


 


 




410-General environmental protection


989,82 


849,41 


717,86 




430-Other multisector


3 886,22 


2 625,43 


1 872,80 





Multisector/Cross-cutting TOTAL



4 876,04 


3 474,84 


2 590,66 





Commodity aid and general programme assistance



 


 


 




510-General budget support


3 116,32 


3 178,92 


2 506,33 




520-Developmental food assistance


617,50 


390,55 


364,26 





Commodity aid and general programme assistance TOTAL



3 733,82 


3 569,47 


2 870,59 




Action relating to debt


 


 


 




600-Action relating to debt


183,00 


183,00 


183,00 





Action relating to debt TOTAL



183,00 


183,00 


183,00 





Humanitarian aid



 


 


 




720-Emergency response


746,19 


452,54 


448,40 




730-Reconstruction relief and rehabilitation


137,83 


65,05 


42,30 




740-Disaster preparedness


72,79 


110,06 


100,54 





Humanitarian aid TOTAL



956,81 


627,65 


591,24 





Administrative costs of donors / Unallocated / Unspecified



 


 


 




910-Administrative costs of donors


995,52 


948,30 


858,64 




998-Unallocated / Unspecified


183,74 


59,87 


48,56 




N/A-Not Available


260,50 


1,57 


1,15 





Administrative costs of donors / Unallocated / Unspecified TOTAL



1 439,76 


1 009,75 


908,35 





GRAND TOTAL OF 11TH EDF




30 977,55 




29 780,11 




24 716,42 






Evolution of cumulative committed contracted and paid amounts by spending area for the 11th EDF
















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.

Budgetary commitment

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

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.

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.

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.

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.

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.

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


EUROPEAN INVESTMENT BANK

BOARD OF DIRECTORS

INVESTMENT FACILITY


FINANCIAL STATEMENTS


AS AT 31 DECEMBER 2024
                        








(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





STATEMENT OF FINANCIAL POSITION


AS AT 31 DECEMBER 2024
                     









(in EUR’000)




 


Notes


31.12.2024


31.12.2023





ASSETS



 


 


 




Cash and cash equivalents


5


1 638 604 


1 376 824 




Amounts receivable from contributors


9/16


7 482 


85 321 




Treasury financial assets


10


-


-




Derivative financial instruments


6


783 


55 765 




Loans and advances


7


1 498 048 


1 683 312 




Shares and other variable yield securities


8


834 621 


820 713 




Other assets


11


-


616 





Total assets



 



3 979 538 




4 022 551 






LIABILITIES AND CONTRIBUTORS' RESOURCES



 


 


 





LIABILITIES



 


 


 




Derivative financial instruments


6


39 210 


-




Deferred income


12


47 725 


48 515 




Provisions for loan commitments


13


18 320 


19 038 




Amounts owed to third parties


14


566 083 


427 828 




Other liabilities


15


3 289 


3 338 





Total liabilities



 



674 627 




498 719 






Contributors' resources



16/17



3 304 911 




3 523 832 






Total liabilities and contributors' resources



 



3 979 538 




4 022 551 






STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME


FOR THE YEAR ENDED 31 DECEMBER 2024
                     









(in EUR’000)




 


Notes


From 01.01.2024
to 31.12.2024


From 01.01.2023
to 31.12.2023




Interest and similar income (*2)



19


156 601 


148 336 




Interest and similar expenses


19


-1 805 


-





Net interest and similar income



 



154 796 




148 336 





Fee and commission income


20


20 


25 




Fee and commission expenses


20


- 212 


-62 





Net fee and commission income



 



- 192 




-37 





Fair value change of derivative financial instruments


6


-94 192 


-20 087 




Net result on shares and other variable yield securities


21


-34 096 


-8 457 




Net result on loans and advances measured at FVTPL


7


-5 436 


-8 932 




Net foreign exchange result


22


81 907 


-67 885 





Net result on financial operations



 



-51 817 




- 105 361 





Change in impairment on loans and advances net of reversals


7.2


12 145 


9 055 




Change in provisions for loan commitments net of reversals


13


718 


-2 470 




General administrative expenses


23


-24 794 


-29 655 





Profit for the year



 



90 856 




19 868 






Total comprehensive income profit for the year



 



90 856 




19 868 






STATEMENT OF CHANGES IN CONTRIBUTORS’ RESOURCES


FOR THE YEAR ENDED 31 DECEMBER 2024
                     











(in EUR’000)




 


Notes


Contribution called


Contributions paid out


Retained earnings


Total





At 1 January 2024



 



3 721 695 




- 587 913 




390 050 




3 523 832 





Member States contributions called during the year


16


-


-


-


-




Member States contributions paid out during the year


17


-


- 309 777 


-



- 309 777 





Profit for the year 2024


 


-


-


90 856 



90 856 






Changes in contributors’ resources



 


-



- 309 777 




90 856 




- 218 921 






At 31 December 2024



 



3 721 695 




- 897 690 




480 906 




3 304 911 





 


 


Contribution called


Contributions paid out


Retained earnings


Total





At 1 January 2023



 



3 701 695 



-



370 182 




4 071 877 





Member States contribution called during the year


 


20 000 


-


-



20 000 





Member States contributions paid out during the year


 


-


- 587 913 


-



- 587 913 





Profit for the year 2023


 


-


-


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 






STATEMENT OF CASH FLOWS


FOR THE YEAR ENDED 31 DECEMBER 2024
                     









(in EUR’000)




 


Notes


From 01.01.2024 to 31.12.2024


From 01.01.2023 to 31.12.2023





OPERATING ACTIVITIES



 


 


 





Profit for the year



 



90 856 




19 868 





Adjustments made for:


 


 


 




Net result on shares and other variable yield securities


 


52 265 


15 142 




Change in impairment on loans and advances net of reversals


7,2


-12 145 


-9 055 




Net result on loans and advances measured at FVTPL


7


5 436 


8 932 




Change in accrued interest and amortised cost on loans and advances


 


-2 229 


708 




Net change in provisions for loan commitments net of reversals


 


- 718 


2 455 




Fair value changes on derivatives


 


94 192 


20 087 




Change in accrued interest and amortised cost on treasury financial assets


10


-


- 248 




Change in deferred income


 


- 790 


-3 902 




Effect of exchange rate changes on loans


 


-78 744 


86 765 




Effect of exchange rate changes on shares and other variable yield securities


8


-23 199 


30 026 




Effect of exchange rate changes on cash held


 


-5 282 


-8 031 





(Loss) on operating activities before changes in operating assets and liabilities



 



119 642 




162 747 





Loan disbursements


7


- 101 394 


- 207 237 




Repayments of loans


7


371 568 


288 155 




Change in accrued interest on cash and cash equivalents


5


- 646 


4 039 




Acquisition of treasury financial assets


10


-


- 348 523 




Maturities of treasury financial assets


10


-


421 278 




Shares and other variable yield securities disbursements


8


-69 392 


- 101 100 




Net proceeds from shares and other variable yield securities


 


39 581 


39 246 




Decrease in other assets


 


616 


334 




Increase in other liabilities


 


-49 


919 




(Decrease) / Increase in amounts payable to the European Investment Bank


 


- 985 


33 951 





Net cash flows (used in) / from operating activities



 



358 941 




293 809 






FINANCING ACTIVITIES



 


 


 




Contributions received from Member States


 


-


79 710 




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


 


286 800 


220 290 




Amounts paid on behalf of Member States with regard to interest subsidies and technical assistance


 


-68 256 


-77 050 




Contributions paid out on behalf of Member States


17


- 309 777 


- 587 913 





Net cash flows from financing activities



 



-91 233 




- 364 963 






Net increase in cash and cash equivalents



 



267 708 




-71 154 






Summary statement of cash flows:



 


 


 





Cash and cash equivalents at the beginning of financial year



 



1 371 404 




1 450 589 






Net cash flows (used in) / from:



 


 


 




Operating activities


 


358 941 


293 809 




Financing activities


 


-91 233 


- 364 963 




Effects of exchange rate changes on cash and cash equivalents


 


-5 282 


-8 031 





Cash and cash equivalents at the end of financial year



 



1 633 830 




1 371 404 






Cash and cash equivalents are composed of:



 


 


 




Cash in hand


5


212 466 


146 494 




Term deposits (excluding accrued interest)


5


304 538 


625 403 




Commercial papers


5


1 116 826 


599 507 




 


 



1 633 830 




1 371 404 






Notes to the financial statements as at 31 December 2024
                  

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 Samoa Agreement, replacing the Cotonou Agreement as the new framework for cooperation between the European Union and the Organisation of African, Caribbean, and Pacific States (OACPS) (Council Decision (EU) 2023/2861 (24) of 20 July 2023 and Council Decision (EU) 2023/2862 of 28 December 2023), was signed on 15 November 2023 and entered into force on 1 January 2024. It succeeds the Cotonou Agreement, which had governed relations between the EU and ACP states since 2000. This transition ensures continuity of partnerships while addressing contemporary global challenges.
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.
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 Multiannual Financial Framework to be fully executed.
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 Multiannual 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:






(i)


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’);










(ii)


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 (EU) 2020/2233 of 23 December 2020 concerning the commitment of the funds stemming from reflows under the ACP Investment Facility from operations under the 9th 10th and 11th European Development Funds (25)).
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 Decision No 3/2021 of the ACP-EU Committee of Ambassadors (26) of 26 November 2021, Council Decision (EU) 2022/970 (27) of 16 June 2022 and Decision No 2/2023 of the ACP-EU Committee of Ambassadors (28) of 25 October 2023).
The NDICI - Global Europe Regulation, which entered into force on 14 June 2021 (Regulation (EU) 2021/947 of the European Parliament and of the Council (29) 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 Council Decision (EU) 2021/1764 (30) (‘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 2024 to 31 December 2024.
On a proposal from the Management Committee the Board of Directors adopted the Financial Statements on 21 March 2025 and authorised their submission to the Board of Governors for approval by 25 April 2025.
2   Material accounting policies

2.1   
Basis of preparation – Statement of compliance


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 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (‘IASB’) and adopted by the European union (hereinafter referred to as ‘IFRS Accounting Standards’). The financial statements as at 31 December 2024 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 2023 and carried on in 2024 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.
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 amendments to existing standards became effective for the Facility’s financial statements as of 1 January 2024:






—


Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Supplier Finance Arrangements;










—


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




The amendments listed above did not have any material impact on the Facility’s financial statements.

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

As at 31 December 2024, the following amendments to existing Standards had been issued but were not mandatory for annual reporting periods ending on 31 December 2024:
Amendments to existing Standards endorsed by the EU, and which are effective for annual periods beginning on or after 1 January 2025:






—


Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability.




New standards and amendments to existing Standards not yet endorsed by the EU:






—


Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7);










—


Annual Improvements Volume 11;










—


IFRS 18 Presentation and Disclosure in Financial Statements;










—


IFRS 19 Subsidiaries without Public Accountability: Disclosures;










—


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 the 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.
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.

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.
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 expert 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 expert 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 Early Warning Signals (‘EWS’), Non-performing exposures (‘NPE’) and forbearance guidelines and procedures.
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.
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.
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 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 maturities of more than three months and are consequently classified at AC.
Those bonds and commercial papers are initially measured at cost, which is the fair value plus any directly attributable transaction cost. The difference between entry price and redemption value is amortised in accordance with the effective interest method over the remaining life of the instrument.
2.4.2.3   Loans and advances

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






—


Loans and advances measured at AC










—


Loans and advances mandatorily measured at FVTPL.




Loans originated by the Facility are recognised in the assets of the Facility when cash is advanced to borrowers. Undisbursed parts of loans are recorded in the off-balance at their nominal value. Loans passing the SPPI test are initially recorded at cost (their net disbursed amounts), which is the fair value of the cash given to originate the loan, including any transaction costs, and are subsequently measured at AC using the effective interest rate method.
Debt securities are recognised in the assets of the Facility when cash is advanced to the issuer and can take the form of a contractually linked or single tranche debt instrument. Undisbursed parts of debt securities are recorded in the off-balance at their nominal value. Debt securities are initially measured at cost, which is the fair value plus any directly attributable transaction cost, and are subsequently measured at AC using the effective interest rate method. The difference between entry price and redemption value is amortised in accordance with the effective interest method over the remaining life of the instrument.
The impairment policy on loans and advances is described under Note 2.4.2.
Loans and advances not fulfilling 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.
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

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.
Member States Contributions paid out represent Available Reflows paid out to the EC and the UK. As per the Transfer Agreement, as of year 2024 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.
3   Risk Management

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






—


credit risk – the risk of loss resulting from client or counterparty default and arising on credit exposure in all forms, including settlement risk (31);










—


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 Group Risk and Compliance Directorate (GR&C) 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 GR&C 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 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 Capital Requirements Regulation (CRR), 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 model.
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.
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.
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.







(in EUR’000)




Maximum exposure


31.12.2024


31.12.2023





ASSETS



 


 




Cash and cash equivalents


1 638 604 


1 376 824 




Amounts receivable from contributors


7 482 


85 321 




Derivative financial instruments


783 


55 765 




Loans and advances


1 498 048 


1 683 312 




Other assets


-


616 





Total




3 144 917 




3 201 838 






Provisions for loan commitments




-18 320 




-19 038 






OFF BALANCE SHEET



 


 




Contingent liabilities


 


 










—


Issued Guarantees






-


985 




Commitments


 


 










—


Undisbursed loans






676 229 


883 092 










—


Non-issued guarantees






2 500 


46 764 





Total off balance sheet




678 729 




930 841 






Total credit exposure




3 805 326 




4 113 641 





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 type of guarantee and, where appropriate, the guarantor.
The loan grading system comprises the methodologies, processes, databases and IT systems supporting the assessment of credit risk in lending operations and the quantification of expected loss estimates. It summarises a large amount of information with the purpose of offering a relative ranking of loans’ credit risks. LGs reflect the present value of the estimated level of the ‘expected loss’, this being the product of the Probability of Default of the main obligors, the Exposure at Default 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 are used to determine an LG:






i)


The borrower’s creditworthiness: Risk Management independently reviews borrowers and assesses 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.










ii)


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.










iii)


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.










iv)


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.










v)


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










vi)


The duration of the loan or, more generally, the cash-flows of the loan: all else being equal the longer the loan, the higher the risk of incurring difficulties in the servicing of the loan.




A loan’s expected loss is computed by combining the six elements above. Depending on the level of the expected loss, a loan is assigned to one of the following LG classes listed below:






“A”


Prime quality loans:

                                 “A0” comprising EU sovereign "risks” that is loans granted to or fully explicitly and unconditionally guaranteed by Member States where no repayment difficulties are expected, i.e. expected loss of 0 % (based on the Bank’s preferred creditor status and statutory protection which are deemed to assure a full recovery of the Bank’s assets upon maturity) as well as loans with a comprehensive EU or MS guarantee.

                                 “A+” comprising loans granted to (or guaranteed by) entities other than EU Member States in respect of which there is no or only limited expectation of deterioration in quality over their term.










“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 "single-signature" (unsecured) loans to solid corporates (e.g. equivalent internal rating of Baa1/BBB+) with a reasonable maturity and adequate protective clauses.










“D”


This grading class represents (aside from loans initially approved at this level) the borderline exposure that have a risk profile generally accepted by the Bank. This watershed in loan grading is more precisely determined by the sub-classifications D+ and D-.










“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 unforeseen exceptional and dramatic adverse circumstances after signature. 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.
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:









(in EUR’000)




At 31.12.2024


Guaranteed


Not guaranteed


Total


% of Total disbursed




Financial institutions


45 015 


879 963 



924 978 




62  %





Corporates


164 680 


193 836 



358 516 




24  %





Public authorities


-


-


-



0  %





States


-


214 554 



214 554 




14  %






Total disbursed




209 695 




1 288 353 




1 498 048 




100  %






Undisbursed




42 259 




615 650 




657 909 



 





Total disbursed and undisbursed




251 954 




1 904 003 




2 155 957 



 
















(in EUR’000)




At 31.12.2023


Guaranteed


Not guaranteed


Total


% of Total disbursed




Financial institutions


54 290 


952 740 



1 007 030 




60  %





Corporates


155 653 


293 302 



448 955 




27  %





Public authorities


15 138 


-



15 138 




1  %





States


-


212 189 



212 189 




13  %






Total disbursed




225 081 




1 458 231 




1 683 312 




100  %






Undisbursed




43 200 




820 854 




864 054 



 





Total disbursed and undisbursed




268 281 




2 279 085 




2 547 366 



 




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.
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 2024 and 31 December 2023 by the Loan Grading applications based on the exposure signed (disbursed and undisbursed):













(in EUR’000)




At 31.12.2024


 


High Grade


Standard Grade


Min. Accept. Risk


High Risk


No grading (32)



Total


% of Total




A to B-


C


D+


D- and below


 


 


 




Borrower


Financial institutions


234 681 


299 526 


218 172 


387 621 


-



1 140 000 




53 %





 


Corporates


41 934 


3 318 


-


189 403 


195 031 



429 686 




20 %





 


Public authorities


-


-


-


-


-


-



0 %





 


States


51 820 


2 929 


22 375 


509 147 


-



586 271 




27 %






Total



 



328 435 




305 773 




240 547 




1 086 171 




195 031 




2 155 957 




100 %





 


 


 


 


 


 


 




















(in EUR’000)




At 31.12.2023


 


High Grade


Standard Grade


Min. Accept. Risk


High Risk


No grading (33)



Total


% of Total




 


 


A to B-


C


D+


D- and below


 


 


 




Borrower


Financial institutions


270 520 


276 133 


268 648 


508 180 


-



1 323 481 




52 %





 


Corporates


51 505 


53


564


347 992 


194 441 



594 555 




23 %





 


Public institutions


-


15 138 


-


-


-



15 138 




1 %





 


States


50 858 


2 164 


12 907 


548 263 


-



614 192 




24 %






Total



 



372 883 




293 488 




282 119 




1 404 435 




194 441 




2 547 366 




100 %





3.2.3.4   Risk concentrations of loans and advances

3.2.3.4.1   
Geographical analysis


Based on the country of borrower the Facility’s loan portfolio can be analysed by the following geographical regions:







(in EUR‘000)




Country of borrower


31.12.2024


31.12.2023




Kenya


246 455 


248 823 




Egypt


224 074 


260 529 




Nigeria


119 847 


218 521 




Ethiopia


117 954 


121 126 




Togo


91 324 


80 267 




Mauritius


86 850 


84 331 




Zambia


84 336 


66 947 




Regional-ACP


75 060 


86 505 




Barbados


67 426 


72 036 




Rwanda


67 061 


71 525 




Cameroon


58 577 


48 616 




Uganda


37 062 


33 365 




Zimbabwe


35 885 


35 546 




Congo (Democratic Republic)


23 820 


29 803 




New Caledonia


21 166 


26 425 




Senegal


18 052 


28 729 




Tanzania


16 233 


21 394 




Benin


16 208 


16 742 




Dominican Republic


11 006 


16 768 




Guinea


10 337 


12 926 




Madagascar


9 122 


9 287 




Mauritania


8 717 


9 374 




Ivory Coast


7 440 


9 644 




Mali


5 707 


8 158 




Eswatini


5 673 


6 453 




Cayman Islands


5 588 


6 575 




Seychelles


5 018 


2 037 




Saint Lucia


4 864 


4 565 




Malawi


3 586 


6 476 




Cape Verde


3 318 


6 254 




Mozambique


3 126 


5 142 




Burkina Faso


2 348 


4 389 




Micronesia


2 062 


2 342 




Ghana


1 304 


4 074 




French Polynesia


1 193 


1 838 




Samoa


198 


344 




Haiti


51 


121 




Jamaica


-


15 138 




Vanuatu


-


177 





Total




1 498 048 




1 683 312 





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


31.12.2024


31.12.2023




Financial Services


924 947 


1 012 001 




Public Administration


214 554 


212 189 




Electricity


170 632 


187 701 




Chemicals


81 046 


91 786 




Healthcare


36 833 


36 833 




Business Services IT and Media


33 926 


33 638 




Pharmaceuticals and Medical Equipment


13 227 


18 526 




Investment Goods


7 244 


4 103 




Metals and Mining


7 157 


7 236 




Regulated Networks


5 441 


-




Waste Recuperation and Recycling


3 041 


3 802 




Telecommunications


-


60 182 




Air and Maritime Transport Infrastructure


-


15 138 




Multi-Utilities


-


177 





Total




1 498 048 




1 683 312 





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)




 


2024




 


Moody’s equiv. grade


12-month ECL


Lifetime ECL not credit-impaired


Lifetime ECL credit-impaired


FVTPL


Total





Loans and advances at AC



 


 


 


 


 


 




Internal Rating 1 - minimal credit risk


Aaa


-


38 896 


-


-



38 896 





Internal Rating 2 - very low credit risk


Aa1 - Aa3


67 436 


-


-


-



67 436 





Internal Rating 3 - low credit risk


A1 - A3


10 501 


-


-


-



10 501 





Internal Rating 4 - moderate credit risk


Baa1 - Baa3


246 650 


-


3 041 


-



249 691 





Internal Rating 5 - financially weak counterpart


Ba1 - Ba3


66 050 


-


-


-



66 050 





Internal Rating 6 - high credit risk


B1 - B3


588 657 


29 996 


16 233 


-



634 886 





Internal Rating 7 - very high credit risk


below Caa1


74 924 


229 726 


-


-



304 650 





Internal Rating 8 - counterpart in default


below Caa1 but in default


-


-


22 307 


-



22 307 






Loans and advances at FVTPL



 


-


-


-



200 677 




200 677 






Loss allowance and FV adjustment



 



-9 675 




-12 576 




-12 431 




-62 364 




-97 046 






Carrying amount of loans and advances



 



1 044 543 




286 042 




29 150 




138 313 




1 498 048 






Loan commitments



 


 


 


 


 


 




Internal Rating 2 - very low credit risk


Aa1 - Aa3


86 796 


-


-


-



86 796 





Internal Rating 4 - moderate credit risk


Baa1 - Baa3


10 000 


-


-


-



10 000 





Internal Rating 5 - financially weak counterpart


Ba1 - Ba3


81 500 


-


-


-



81 500 





Internal Rating 6 - high credit risk


B1 - B3


20 000 


270 990 


-


-



290 990 





Internal Rating 7 - very high credit risk


below Caa1


12 500 


11 329 


-


-



23 829 





Internal Rating 8 - counterpart in default


below Caa1 but in default


-


-


111 000 


-



111 000 





No internal rating (34)



 


15 445 


-


-


-



15 445 






Loans and advances at FVTPL



 


-


-


-



56 669 




56 669 






Loss allowance and FV adjustment



 



-1 491 




-16 829 



-


-



-18 320 






Carrying amount of loan commitments



 



224 750 




265 490 




111 000 




56 669 




657 909 



















(in EUR’000)




 


2023




 


Moody’s equiv. grade


12-month ECL


Lifetime ECL not credit-impaired


Lifetime ECL credit-impaired


FVTPL


Total





Loans and advances at AC



 


 


 


 


 


 




Internal Rating 1 - minimal credit risk


Aaa


-


47 534 


-


-



47 534 





Internal Rating 2 - very low credit risk


Aa1 - Aa3


72 051 


-


-


-



72 051 





Internal Rating 3 - low credit risk


A1 - A3


10 428 


-


-


-



10 428 





Internal Rating 4 - moderate credit risk


Baa1 - Baa3


33 439 


263 036 


3 802 


-



300 277 





Internal Rating 5 - financially weak counterpart


Ba1 - Ba3


75 418 


-


-


-



75 418 





Internal Rating 6 - high credit risk


B1 - B3


533 775 


206 438 


20 349 


-



760 562 





Internal Rating 7 - very high credit risk


below Caa1


77 010 


246 682 


-


-



323 692 





Internal Rating 8 - counterpart in default


below Caa1 but in default


-


-


17 860 


-



17 860 






Loans and advances at FVTPL



 


-


-


-



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


Aa1 - Aa3


86 796 


-


-


-



86 796 





Internal Rating 3 - low credit risk


A1 - A3


1 687 


-


-


-



1 687 





Internal Rating 4 - moderate credit risk


Baa1 - Baa3


10 000 


-


-


-



10 000 





Internal Rating 5 - financially weak counterpart


Ba1 - Ba3


82 770 


-


-


-



82 770 





Internal Rating 6 - high credit risk


B1 - B3


327 995 


45 990 


-


-



373 985 





Internal Rating 7 - very high credit risk


below Caa1


28 089 


30 537 


-


-



58 626 





Internal Rating 8 - counterpart in default


below Caa1 but in default


-


50 000 


111 000 


-



161 000 





No internal rating (*3)



 


39 940 


-


-


-



39 940 






Loans and advances at FVTPL



 


-


-


-



68 288 




68 288 






Loss allowance and FV adjustment



 



-2 715 




-16 323 



-


-



-19 038 






Carrying amount of loan commitments



 



574 562 




110 204 




111 000 




68 288 




864 054 





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.
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)




 


Loans and advances


Loans and advances




31.12.2024


31.12.2023





Carrying amount




1 498 048 




1 683 312 






Lifetime ECL credit- impaired



 


 




Gross amount


22 307 


17 860 




Impairment- loss allowance


-12 431 


-14 976 





Carrying amount of lifetime ECL credit-impaired




9 876 




2 884 






Past due but not credit- impaired



 


 





Past due comprises



 


 




0-30 days


229 


-




30-90 days


26 


23 




90-180 days


-


315 




more than 180 days


25 


-





Carrying amount past due but not credit- impaired




280 




338 






Carrying amount neither past due nor credit- impaired




1 487 892 




1 680 090 






Total carrying amount loans and advances




1 498 048 




1 683 312 





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/tracker, consistently deployed over time to capture uncertainty. The weighting of positive and negative shocks depends on the balance of risks in the economy, negative and positive shocks with a probability of 40 % and 5 % respectively, were applied on quarterly projections in the last 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)




 


2024




Positive


Baseline


Negative




Gross exposure


1 851 153 


1 851 153 


1 851 153 




Loss allowance


28 883 


30 301 


31 819 















(in EUR’000)




 


2023




 


Positive


Baseline


Negative




Gross exposure


2 258 365 


2 258 365 


2 258 365 




Loss allowance


45 603 


51 610 


58 857 




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 waiver of material covenants and capitalisation of arrears.
Operations subject to forbearance measures are reported as such in the table below:









(in EUR’000)




 


31.12.2024


31.12.2023




 


Performing


Non-Performing


Performing


Non-Performing




Number of contracts subject to forbearance practices


3 


7 


13 


6 




Carrying values (incl. interest and amounts in arrears)


60 223 


35 718 


112 554 


46 432 




ECL allowance recognised


622 


11 156 


1 654 


22 151 




Interest income in respect of forborne contracts


3 353 


1 717 


8 594 


1 776 



















(in EUR’000)




 


 


 


Forbearance measures


 


 


 




 


31.12.2023


Extension of maturities


Deferral of capital and interest


Breach of material financial covenants


Other


Contractual repayment termination and/or write off


31.12.2024




Financial institutions


68 355 


-


-


10 472 


-


-56 445 


22 382 




Corporates


90 631 


-


-


-


-


-17 072 


73 559 





Total




158 986 



-


-



10 472 



-



-73 517 




95 941 





3.2.5   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 2024, and 31 December 2023, 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 2024 and 31 December 2023 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 2024 and as at 31 December 2023 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


31.12.2024


31.12.2023




(Moody’s term)


(Moody’s term)




P-1


Aaa


124 532 


8  %


140 592 


10  %




P-1


Aa1


173 639 


11  %


-


0  %




P-1


Aa2


-


0  %


29 951 


2  %




P-1


Aa3


149 239 


9  %


89 682 


7  %




P-1


A1


309 342 


19  %


360 831 


26  %




P-1


A2


280 035 


17  %


204 179 


15  %




P-1


A3


367 211 


22  %


346 275 


25  %




P-2


A3


154 829 


9  %


205 314 


15  %




P-2


Baa1


79 777 


5  %


-


0  %





Total




1 638 604 




100  %




1 376 824 




100  %





3.2.6   Credit risk on derivatives

3.2.6.1   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.
3.2.6.2   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 1 330,0 million as at 31 December 2024 against EUR 1 640,0 million as at 31 December 2023. The fair value of FX swaps amounts to EUR -38,9 million as at 31 December 2024 against EUR 45,8 million as at 31 December 2023.
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 33,1 million as at 31 December 2024 against EUR 43,3 million as at 31 December 2023. The fair value of FX swaps amounts to EUR 0,5 million as at 31 December 2024 against EUR 10,0 million as at 31 December 2023.
3.2.7   Credit risk on treasury financial assets

The treasury portfolio entirely composed of commercial papers issued by sub-sovereigns, banks and non-bank entities 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. There were no treasury financial assets as at 31 December 2023 and 31 December 2024.
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 further split into funding liquidity risk and market liquidity risk.
Funding liquidity risk is connected to the risk that an entity will not be able to refinance the asset side of its balance sheet and to meet payment obligations in full out of readily available liquidity resources. Market liquidity risk is the volatility observed in the economic value of or in the income derived from an entity’s positions due to its potential inability to execute a transaction serving to offset eliminate or reduce such outstanding positions at reasonable market prices.
3.3.1   Liquidity risk management

The Facility has been primarily funded by annual contributions from Member States as well as by reflows stemming from the Facility’s operations. In line with 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.
The Facility manages its funding liquidity risk primarily by planning its net liquidity needs. 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.
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 GR&C.
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 the form of undisbursed portions of 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. The reported ‘Outflows for committed interest subsidies’ represent only commitments related to these loans rather than the total amount of committed undisbursed interest subsidies. As in the case of loans their disbursement schedule is uncertain.
Committed TA ‘gross nominal outflow’ in the ‘Maturity profile of non-derivative financial liabilities’ table refers to the total undisbursed portion of signed TA contracts. The disbursement time pattern is subject to a significant degree of uncertainty. Cash outflows classified in the ‘3 months or less’ bucket represent the amount of outstanding invoices received by the reporting date.
Commitments for non-derivative financial liabilities for which there is no defined contractual maturity date are classified under ‘Maturity Undefined’. Commitments, for which there is a recorded cash disbursement request at the reporting date, are classified under the relevant time bucket.
In terms of derivative financial liabilities the maturity profile represents the contractual undiscounted gross cash flows of swap contracts including cross currency swaps (CCS), cross currency interest rate swaps (CCIRS), short-term currency swaps and interest rate swaps.











(in EUR’000)




Maturity profile of non-derivative financial liabilities


3 months or less


More than 3 months to 1 year


More than 1 year to 5 years


More than 5 years


Maturity Undefined


Gross nominal outflow




as at 31.12.2024




Outflows for committed but undisbursed loans


80 913 


20 208 


-


-


575 108 


676 229 




Outflows for committed investment funds and share subscription


4 190 


-


-


-


233 696 


237 886 




Others (signed non-issued guarantees issued guarantees)


-


-


-


-


2 500 


2 500 




Outflows for committed interest subsidies


-


-


-


-


334 754 


334 754 




Outflows for committed TA


1 859 


-


-


-


18 341 


20 200 





Total




86 962 




20 208 



-


-



1 164 399 




1 271 569 



















(in EUR’000)




Maturity profile of non-derivative financial liabilities


3 months or less


More than 3 months to 1 year


More than 1 year to 5 years


More than 5 years


Maturity Undefined


Gross nominal outflow




as at 31.12.2023




Outflows for committed but undisbursed loans


49 019 


6 000 


-


-


828 073 


883 092 




Outflows for committed investment funds and share subscription


-


-


-


-


297 534 


297 534 




Others (signed non-issued guarantees issued guarantees)


-


-


-


-


47 749 


47 749 




Outflows for committed interest subsidies


4 235 


-


-


-


343 282 


347 517 




Outflows for committed TA


849


-


-


-


25 343 


26 192 





Total




54 103 




6 000 



-


-



1 541 981 




1 602 084 


















(in EUR’000)




Maturity profile of non-derivative financial liabilities


3 months o(ir less


More thainn 3 months to 1 year


More than 1 year to 5 years


More than 5 years


Gross nominal inflow/outflow




as at 31.12.2024




CCS – Inflows


157 


10 405 


22 613 


832 


34 007 




CCS – Outflows


-87 


-12 310 


-24 852 


- 899 


-38 148 




Short-term currency swaps – Inflows


1 330 000 


-


-


-


1 330 000 




Short-term currency swaps – Outflows


-1 371 666 


-


-


-


-1 371 666 





Total




-41 596 




-1 905 




-2 239 




-67 




-45 807 


















(in EUR’000)




Maturity profile of derivative financial liabilities


3 months or less


More than 3 months to 1 year


More than 1 year to 5 years


More than 5 years


Gross nominal inflow/outflow




as at 31.12.2023




CCS and CCIRS – Inflows


192


10 909 


32 186 


1 706 


44 993 




CCS and CCIRS – Outflows


-90


-10 212 


-23 783 


-1 828 


-35 913 




Short-term currency swaps – Inflows


1 640 000 


-


-


-


1 640 000 




Short-term currency swaps – Outflows


-1 597 068 


-


-


-


-1 597 068 





Total




43 034 




697




8 403 




-122




52 012 





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)




 


31.12.2024


31.12.2023


 





Financial assets:



 


 


 




Loans and advances


1 551 776 


1 755 831 


 




Shares and other variable yield securities


834 621 


820 713 


 





Total




2 386 397 




2 576 544 



 





Financial liabilities:



 


 


 




Amount owed to third parties (*4)



534 569 


389 116 


 




Provisions for loan commitments


18 320 


19 038 


 





Total




552 889 




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 it does not have interest rate bearing.
The Facility measures on an annual basis, the sensitivity of its loan portfolio and micro hedging cross-currency 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 and hedging swaps cash flows denominated in EUR, the Facility uses the EURIBOR 3 month curve. The NPV of the loans’ cash flows denominated in non-EUR currencies is determined by using the EURIBOR 3 month curve adjusted with the cross-currency basis spread for the respective currency. 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.
As shown in the following table the net present value of the loan portfolio including related micro-hedging swaps as at 31 December 2024 would decrease by EUR 413k (as at 31 December 2023: decrease by EUR 491k) due to a 1 basis point increase in interest rates.












(in EUR’000)




Basis point value


Money
Market


Very Short


Short


Medium


Long


Extra Long


Total




As at 31.12.2024


1 year


2 to 3 years


4 to 6 years


7 to 11 years


12 to 20 years


21 years


 




Total sensitivity of loans and micro hedging swaps


-33 


-82 


- 126 


- 133 


-38 


-1 



-413




















(in EUR’000)




Basis point value


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


21 years


 




Total sensitivity of loans and micro hedging swaps


-39 


-97 


- 153 


- 153 


-47 


-2 



-491





3.4.2   Foreign exchange risk

Foreign exchange (‘FX’) risk is the risk to the economic value or to the income derived from the IF’s positions 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 currency mismatch between assets, liabilities and hedging instruments.
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 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.
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 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 IF’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 2024


Assets and liabilities


Commitments and contingent liabilities




Currencies


FX position as per Risk Policies


FX position excluded from Risk Policies


Balance sheet FX position


 





USD



-45 774 


-21 740 


-67 514 


235 603 





Local currencies


(under synthetic hedge)
 (*5)



 


 


 


 





TZS



-


-


-


-





DOP



10 884 


133 


11 017 


-




Local currencies
(not under synthetic hedge) (*5)



 


 


 


 





KES, RWF, UGX, HTG, MUR, MZN, XOF, ZMW, BWP, JMD, NGN, ZAR



225 877 


-3 763 


222 114 


-





Total non-EUR currencies




190 987 




-25 370 




165 617 




235 603 






EUR



 


3 139 294 


3 139 294 


1 043 860 





Total EUR and non-EUR




190 987 




3 113 924 




3 304 911 




1 279 463 

















As at 31 December 2023


Assets and liabilities


Commitments and contingent liabilities




Currencies


FX position as per Risk Policies


FX position excluded from Risk Policies


Balance sheet FX position


 





USD



- 194 166 


-16 111 


- 210 277 


306 161 





Local currencies


(under synthetic hedge)
 (*6)



 


 


 


 





KES



87 829 


-4 832 


82 997 


-





TZS



1 071 


19 


1 090 


-





DOP



16 663 


122 


16 785 


-





UGX



20 283 


221 


20 504 


-





RWF



55 837 


367 


56 204 


-




Local currencies
(not under synthetic hedge) (*6)



 


 


 


 





HTG, MUR, MZN, XOF, ZMW, BWP, JMD, NGN, ZAR



67 992 


-1 136 


66 856 


-





Total non-EUR currencies




55 509 




-21 350 




34 159 




306 161 






EUR



-


3 489 673 


3 489 673 


1 344 972 





Total EUR and non-EUR




55 509 




3 468 323 




3 523 832 




1 651 133 





3.4.2.3   Foreign exchange sensitivity analysis

As at 31 December 2024 a 10 % depreciation of EUR versus all non-EUR currencies would result in an increase of the contributors’ resources and profit amounting to EUR 18,4 million (31 December 2023: EUR 2,9 million). A 10 % appreciation of the EUR versus all non-EUR currencies would result in a decrease of the contributors’ resources and profit amounting to EUR -15,1 million (31 December 2023: EUR -2,4 million).
3.4.2.4   Conversion rates

The following conversion rates were used for establishing the balance sheet at 31 December 2024 and 31 December 2023:







 


31 December 2024


31 December 2023





Non-EU currencies



 


 




Botswana Pula (BWP)


14,49 


14,78 




Dominican Republic Pesos (DOP)


63,09 


64,08 




Fiji Dollars (FJD)


2,38 


2,39 




Haitian Gourde (HTG)


135,09 


143,68 




Jamaican Dollar (JMD)


161,15 


168,22 




Kenya Shillings (KES)


133,69 


173,20 




Mauritania Ouguiyas (MRU)


41,30 


43,35 




Mauritius Rupees (MUR)


48,56 


48,56 




Mozambican Metical (MZN)


65,65 


69,98 




Nigerian Naira (NGN)


1 591,68 


975,04 




Rwanda Francs (RWF)


1 419,85 


1 385,07 




Tanzania Shillings (TZS)


2 490,24 


2 772,53 




Uganda Shillings (UGX)


3 812,00 


4 178,00 




United States Dollars (USD)


1,04 


1,11 




Franc CFA Francs (XAF/XOF)


655,96 


655,96 




South Africa Rand (ZAR)


19,62 


20,35 




Zambia Kvacha (ZMW)


28,87 


28,45 




3.4.3   Equity price risk

Equity price risk refers to the risk that the fair values of equity investments decrease as the result of changes in the levels of equity prices and/or the value of equity investments.
The IF is exposed to equity price risk via its investments in direct equity and venture capital funds.
The value of non-listed equity positions is not readily available for the purpose of monitoring and control on a continuous basis. For such positions the best indications available include prices derived from any relevant valuation techniques.
The effect on the Facility’s contributors’ resources (as a result of a change in the fair value of the equity instruments portfolio) due to a +/-10 % change in the value of individual direct equity and venture capital investments with all other variables held constant is EUR 83,5 million and EUR -83,5 million respectively as at 31 December 2024 (EUR 82,1 million and EUR -82,1 million respectively as at 31 December 2023).
4   Fair values of financial instruments

4.1   
Accounting classifications and fair values


The following table shows the carrying amounts and fair values of financial assets and financial liabilities including their levels in the fair value hierarchy. These do not include fair value information for financial assets and financial liabilities measured at AC as the carrying amount is a reasonable approximation of fair value.
















(in EUR’000)




At 31 December 2024


Carrying amount


 


Fair value




 


Derivative financial instruments


Shares and other variable yield securities


Cash loans and advances


Treasury financial assets


Other financial assets/liabilities


Total


 


Level 1


Level 2


Level 3


Total





Financial assets mandatorily measured at FVTPL



 


 


 


 


 


 


 


 


 


 


 




Derivative financial instruments


783 


-


-


-


-



783 



 


-


783 


-



783 





Venture Capital Fund


-


655 817 


-


-


-



655 817 



 


-


-


655 817 



655 817 





Direct Equity Investments


-


178 804 


-


-


-



178 804 



 


-


-


178 804 



178 804 





Loans and advances


-


-


136 983 


-


-



136 983 



 


-


-


136 983 



136 983 






Total financial assets mandatorily measured at FVTPL




783 




834 621 




136 983 



-


-



972 387 



 


-



783 




971 604 




972 387 






Financial assets measured at AC



 


 


 


 


 


 


 


 


 


 


 




Cash and cash equivalents


-


-


1 638 604 


-


-



1 638 604 



 


 


 


 


 




Loans and advances


-


-


1 361 065 


-


-



1 361 065 



 


 


 


 


 




Amounts receivable from contributors


-


-


7 482 


-


-



7 482 



 


 


 


 


 




Treasury financial assets


-


-


-


-


-


-


 


 


 


 


 




Other assets


-


-


-


-


-


-


 


 


 


 


 





Total financial assets measured at AC



-


-



3 007 151 



-


-



3 007 151 



 


 


 


 


 





Total financial assets




783 




834 621 




3 144 134 



-


-



3 979 538 



 


 


 


 


 




 


 


 


 


 


 


 


 


 


 


 


 





Financial liabilities measured at FVTPL



 


 


 


 


 


 


 


 


 


 


 




Derivative financial instruments


-39 210 


-


-


-


-



-39 210 



 


-


-39 210 


-



-39 210 






Total financial liabilities measured at FVTPL




-39 210 



-


-


-


-



-39 210 



 


-



-39 210 



-



-39 210 






Financial liabilities at AC



 


 


 


 


 


 


 


 


 


 


 




Provisions for loan commitments


-


-


-


-


-18 320 



-18 320 



 


 


 


 


 




Amounts owed to third parties


-


-


-


-


- 566 083 



- 566 083 



 


 


 


 


 




Other liabilities


-


-


-


-


-3 289 



-3 289 



 


 


 


 


 





Total financial liabilities measured at AC



-


-


-


-



- 587 692 




- 587 692 



 


 


 


 


 





Total financial liabilities




-39 210 



-


-


-



- 587 692 




- 626 902 



 


 


 


 


 






















(in EUR’000)




As at 31 December 2023


Carrying amount


Fair value




 


Derivative financial instruments


Shares and other variable yield securities


Cash loans and advances


Treasury financial assets


Other financial assets/liabilities


Total


Level 1


Level 2


Level 3


Total





Financial assets mandatorily measured at FVTPL



 


 


 


 


 


 


 


 


 


 




Derivative financial instruments


55 765 


-


-


-


-



55 765 



-


55 765 


-



55 765 





Venture Capital Fund


-


693 042 


-


-


-



693 042 



-


-


693 042 



693 042 





Direct Equity Investment


-


127 671 


-


-


-



127 671 



-


-


127 671 



127 671 





Loans and advances


-


-


124 323 


-


-



124 323 



-


-


124 323 



124 323 






Total financial assets mandatorily measured at FVTPL




55 765 




820 713 




124 323 



-


-



1 000 801 



-



55 765 




945 036 




1 000 801 






Financial assets at AC



 


 


 


 


 


 


 


 


 


 




Cash and cash equivalents


-


-


1 376 824 


-


-



1 376 824 



 


 


 


 




Loans and advances


-


-


1 558 989 


-


-



1 558 989 



 


 


 


 




Amounts receivable from contributors


-


-


85 321 


-


-



85 321 



 


 


 


 




Treasury financial assets


-


-


-


-


-


-


 


 


 


 




Other assets


-


-


-


-


616 



616 



 


 


 


 





Total financial assets measured at AC



-


-



3 021 134 



-



616 




3 021 750 



 


 


 


 





Total financial assets




55 765 




820 713 




3 145 457 



-



616 




4 022 551 



 


 


 


 





Financial liabilities at AC



 


 


 


 


 


 


 


 


 


 




Provisions for loan commitments


-


-


-


-


-19 038 



-19 038 



 


 


 


 




Amounts owed to third parties


-


-


-


-


- 427 828 



- 427 828 



 


 


 


 




Other liabilities


-


-


-


-


-3 338 



-3 338 



 


 


 


 





Total financial liabilities measured at AC



-


-


-


-



- 450 204 




- 450 204 



 


 


 


 





Total financial liabilities



-


-


-


-



- 450 204 




- 450 204 



 


 


 


 




4.2   
Measurement of fair values


4.2.1   Valuation techniques and significant unobservable inputs

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








 


Valuation technique


Significant unobservable inputs


Relationship of unobservable inputs to fair value measurement





Financial instruments carried at fair value



 


 




 


 


 


 




Derivative financial instruments


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 forward/interest rates, discounted at a rate that reflects the credit risk of various counterparties.


Curves used in estimation and discounting of cashflows 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.


Not applicable.




 


 


 


 




Venture Capital Fund (VCF)


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 reporting, a subsequent event review procedure is performed and if necessary the reported NAV is adjusted.


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


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




 


 


 


 




Direct Equity (DE) Investment


Adjusted net assets.


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, capital increase, sale/change of control.


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




 


 


 


 




 


 


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


 




 


 


 


 




Loans at fair
value (IFE)


For going concern borrowers: Discounted cash flow using contractual/expected future cash flows discounted with appropriate 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.
For borrowers not going concern: Net assets approach (liquidation value approach).


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


The higher the discount rate, the lower the fair value















 


Valuation technique


Significant unobservable inputs


Relationship of unobservable inputs to fair value measurement





Financial instruments not carried at fair value



 


 




 


 


 


 




Loans and advances


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.


Not applicable.


Not applicable.




 


 


 


 




Treasury financial assets


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 2024 and 2023 namely:






—


Credit valuation adjustments (CVA) reflecting counterparty credit risk on derivative transactions amounting to EUR -2,8k as at 31 December 2024 and to EUR -6,1k as at 31 December 2023.










—


Debit valuation adjustments (DVA) reflecting own credit risk on derivative transactions amounting to EUR +3,6k as at 31 December 2024 and EUR +7,2k as at 31 December 2023.




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 2024 and 2023 the Facility did not make transfers from Level 1 to 2 or Level 2 to 1 of the fair value hierarchy.
4.2.3   Level 3 fair values


Reconciliation of Level 3 fair values

The following tables present the changes in Level 3 instruments (35) for the year ended 31 December 2024 and 31 December 2023:






(in EUR’000)




 


Shares and other variable yield securities





Balance as at 1 January 2024




820 713 






Gains or losses included in profit or loss:



 




Derecognition of fair value adjustment due to Sales / Exits


14 051 




Net fair value change on shares and other variable yield securities


-45 698 





Total




-31 647 





Disbursements


69 392 




Repayments


-21 413 




Sales / Exits


-25 623 




Foreign exchange rates differences


23 199 





Balance as at 31 December 2024




834 621 














(in EUR’000)




 


Shares and other variable yield securities





Balance as at 1 January 2023




797 341 






Gains or losses included in profit or loss:



 




Net fair value change on shares and other variable yield securities


-15 142 





Total




-15 142 





Disbursements


101 100 




Repayments


-32 560 




Foreign exchange rates differences


-30 026 





Balance as at 31 December 2023




820 713 






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 83,5 million and EUR – 83,5 million, respectively as at 31 December 2024 (EUR 82,1 million and EUR – 82,1 million respectively as at 31 December 2023).
5   Cash and cash equivalents

The cash and cash equivalents are composed of:







(in EUR’000)




 


31.12.2024


31.12.2023




Cash in hand


212 466 


146 494 




Term deposits


304 538 


625 403 




Commercial papers


1 116 826 


599 507 





Cash and cash equivalents in the cash flow statement




1 633 830 




1 371 404 





Accrued interest


4 774 


5 420 





Cash and cash equivalents in the statement of financial position




1 638 604 




1 376 824 





6   Derivative financial instruments

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








(in EUR’000)




As at 31 December 2024


Fair Value


Notional amount




 


Assets


Liabilities




Cross currency swaps


783 


- 268 


33 073 




FX swaps


-


-38 942 


1 330 000 





Total derivative financial instruments




783 




-39 210 




1 363 073 
















(in EUR’000)




As at 31 December 2023


Fair Value


Notional amount




 


Assets


Liabilities




Cross currency interest rate swaps


9 983 


-


43 250 




FX swaps


45 782 


-


1 640 000 





Total derivative financial instruments




55 765 



-



1 683 250 





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)




 


Global loans (*7)



Senior loans


Subordinated loans


Total





Nominal of loans at AC as at 1 January 2024




1 098 121 




495 337 



-



1 593 458 





Disbursements


68 519 


16 987 


-



85 506 





Write offs


-4 945 


-


-



-4 945 





Repayments


- 226 719 


- 141 664 


-



- 368 383 





Interest capitalised


-


-


-


-




Foreign exchange rates differences


60 352 


16 689 


-



77 041 






Nominal of loans at AC as at 31 December 2024




995 328 




387 349 



-



1 382 677 






Impairment - loss allowance as at 1 January 2024




-32 398 




-17 199 



-



-49 597 





Net changes of the 12 month ECL


2 081 


124 


-



2 205 





Net changes of lifetime ECL not credit-impaired


7 071 


5 567 


-



12 638 





Lifetime ECL credit-impaired


- 581 


-5 205 


-



-5 786 





Reversal of lifetime ECL credit-impaired


2 796 


292 


-



3 088 





Write offs


4 945 


-


-



4 945 





Foreign exchange rates differences


-1 300 


- 704 


-



-2 004 






Impairment - loss allowance as at 31 December 2024




-17 386 




-17 125 



-



-34 511 






Loans and advances at AC as at 31 December 2024




977 942 




370 224 



-



1 348 166 






Nominal of loans at FVTPL as at 1 January 2024




1 080 




106 576 




70 453 




178 109 





Disbursements


-


7 851 


8 037 



15 888 





Interest capitalised


-


1 675 


568 



2 243 





Repayments


-


-3 185 


-



-3 185 





Foreign exchange rates differences


-


3 771 


562 



4 333 






Nominal of loans at FVTPL as at 31 December 2024




1 080 




116 688 




79 620 




197 388 






Fair value adjustment as at 1 January 2024




-1 080 




-34 983 




-17 723 




-53 786 





Net FV change


-


1 724 


-7 160 



-5 436 





Foreign exchange rates differences


-


-1 136 


-47 



-1 183 






Fair value adjustment as at 31 December 2024




-1 080 




-34 395 




-24 930 




-60 405 






Loans and advances at FVTPL as at 31 December 2024



-



82 293 




54 690 




136 983 





Amortised Cost


-3 079 


-3 681 


-



-6 760 





Interest


10 766 


8 429 


464 



19 659 






Loans and advances as at 31 December 2024




985 629 




457 265 




55 154 




1 498 048 

















(in EUR’000)




 


Global loans (*8)



Senior loans


Subordinated loans


Total





Nominal of loans at AC as at 1 January 2023




1 236 887 




563 277 



-



1 800 164 





Disbursements


154 587 


11 986 


-



166 573 





Repayments


- 219 739 


-67 902 


-



- 287 641 





Foreign exchange rates differences


-73 614 


-12 024 


-



-85 638 






Nominal of loans at AC as at 31 December 2023




1 098 121 




495 337 



-



1 593 458 






Impairment - loss allowance as at 1 January 2023




-37 604 




-22 798 



-



-60 402 





Net changes of the 12 month ECL


- 287 


-92 


-



- 379 





Net changes of lifetime ECL not credit-impaired


-1 060 


4 887 


-



3 827 





Reversal of lifetime ECL credit-impaired


5 205 


402 


-



5 607 





Foreign exchange rates differences


1 348 


402 


-



1 750 






Impairment - loss allowance as at 31 December 2023




-32 398 




-17 199 



-



-49 597 






Loans and advances at AC as at 31 December 2023




1 065 723 




478 138 



-



1 543 861 






Nominal of loans at FVTPL as at 1 January 2023




1 080 




72 923 




66 833 




140 836 





Disbursements


-


37 092 


3 572 



40 664 





Repayments


-


- 514 


-



- 514 





Foreign exchange rates differences


-


-2 925 


48 



-2 877 






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




-1 080 




-26 420 




-17 732 




-45 232 





Net FV change


-


-8 941 


9 



-8 932 





Foreign exchange rates differences


-


378 


-



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



-



71 593 




52 730 




124 323 





Amortised Cost


-3 518 


-4 040 


-



-7 558 





Interest


11 560 


10 876 


250 



22 686 






Loans and advances as at 31 December 2023




1 073 765 




556 567 




52 980 




1 683 312 





7.2   
Impairment on loans and advances – Loss allowances











(in EUR’000)




 


2024




 


 


Lifetime ECL


 




 


12-month ECL


Lifetime ECL not credit-impaired


Lifetime ECL credit-impaired


Total





Loans and advances at AC



 


 


 


 





Balance as at 1 January 2024




10 964 




24 674 




13 959 




49 597 





Transfer to 12-month ECL


2 271 


-9 511 


-



-7 240 





Transfer to lifetime ECL not credit-impaired


- 288 


948 


-



660 





Transfer to lifetime ECL credit-impaired


-


-1 428 


5 786 



4 358 





Net measurement of loss allowance


-3 160 


-2 394 


-3 088 



-8 642 





New financial assets originated or purchased


-


-


-


-




Financial assets that have been derecognised


-1 028 


- 253 


-



-1 281 





Write offs


-


-


-4 945 



-4 945 





Foreign exchange rates differences*


916 


540 


548 



2 004 






Balance as at 31 December 2024




9 675 




12 576 




12 260 




34 511 

















(in EUR’000)




 


2023




 


 


Lifetime ECL


 




 


12-month ECL


Lifetime ECL not credit-impaired


Lifetime ECL credit-impaired


Total





Loans and advances at AC



 


 


 


 





Balance as at 1 January 2023




11 370 




28 817 




20 215 




60 402 





Transfer to 12-month ECL


869 


-4 217 


-



-3 348 





Transfer to lifetime ECL not credit-impaired


- 927 


3 593 


-



2 666 





Net measurement of loss allowance


- 993 


-4 333 


-2 873 



-8 199 





New financial assets originated or purchased


1 470 


1 188 


-



2 658 





Financial assets that have been derecognised


-41 


-57 


-2 734 



-2 832 





Foreign exchange rates differences (36)



- 784 


- 317 


- 649 



-1 750 






Balance as at 31 December 2023




10 964 




24 674 




13 959 




49 597 





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)




 


Venture Capital Funds


Direct Equity Investments


Total





Cost as at 1 January 2024




633 347 




73 455 




706 802 





Reclassification (37)



-25 059 


25 059 


-




Disbursements


69 392 


-


69 392 




Repayments


-21 181 


- 232 


-21 413 




Sales / Exits


-22 992 


-2 631 


-25 623 




Foreign exchange rates differences


30 374 


-1 816 


28 558 





Cost as at 31 December 2024




663 881 




93 835 




757 716 






Unrealised gains and losses as at 1 January 2024




59 695 




54 216 




113 911 





Reclassification (37)



- 395 


395 


-




Net change in unrealised gains and losses


-77 795 


32 097 


-45 698 




Derecognition of fair value adjustment due to Sales / Exits


11 202 


2 849 


14 051 




Foreign exchange rates differences


- 771 


-4 588 


-5 359 





Unrealised gains and losses as at 31 December 2024




-8 064 




84 969 




76 905 






Shares and other variable yield securities as at 31 December 2024




655 817 




178 804 




834 621 
















(in EUR’000)




 


Venture Capital Funds


Direct Equity Investments


Total





Cost as at 1 January 2023




580 534 




81 711 




662 245 





Disbursements


101 100 


-


101 100 




Repayments / sales


-32 560 


-


-32 560 




Foreign exchange rates differences


-15 727 


-8 256 


-23 983 





Cost as at 31 December 2023




633 347 




73 455 




706 802 






Unrealised gains and losses as at 1 January 2023




104 030 




31 066 




135 096 





Net change in unrealised gains and losses


-43 652 


28 510 


-15 142 




Foreign exchange rates differences


- 683 


-5 360 


-6 043 





Unrealised gains and losses as at 31 December 2023




59 695 




54 216 




113 911 






Shares and other variable yield securities as at 31 December 2023




693 042 




127 671 




820 713 





9   Amounts receivable from contributors

The amounts of EUR 7,5 million (2023: 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:






(in EUR’000)





Balance as at 1 January 2024



-




Acquisitions


-




Maturities


-




Change in amortisation of premium/discount


-




Change in accrued interest


-





Balance as at 31 December 2024



-













(in EUR’000)





Balance as at 1 January 2023




73 003 





Acquisitions


348 523 




Maturities


- 421 278 




Change in amortisation of premium/discount


-248




Change in accrued interest


-





Balance as at 31 December 2023



-




11   Other assets

The main components of other assets are as follows:







(in EUR’000)




 


31.12.2024


31.12.2023




Amount receivable from the EIB


-


616 




Financial guarantees


-


-





Total other assets



-



616 





12   Deferred income

The main components of deferred income are as follows:







(in EUR’000)




 


31.12.2024


31.12.2023




Deferred interest subsidies


46 461 


47 923 




Deferred commissions on loans and advances


1 264 


1 202 





Total deferred income




47 725 




49 125 





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)




 


2024




 


12-month ECL


Lifetime ECL not credit-impaired


Lifetime ECL credit-impaired


Total





Loan commitments



 


 


 


 





Balance as at 1 January




2 715 




16 323 



-



19 038 





Transfer to 12-month ECL


13 


- 279 


-



- 266 





Transfer to lifetime ECL not credit-impaired


- 853 


15 386 


-



14 533 





Net measurement of loss allowance


761 


-1 330 


-



- 569 





Financial assets that have been derecognised


-1 145 


-13 271 


-



-14 416 






Balance as at 31 December




1 491 




16 829 



-



18 320 

















(in EUR’000)




 


2023




 


12-month ECL


Lifetime ECL not credit-impaired


Lifetime ECL credit-impaired


Total





Loans commitments



 


 


 


 





Balance as at 1 January




4 825 




11 758 



-



16 583 





Transfer to lifetime ECL not credit-impaired


- 163 


1 955 


-



1 792 





Net measurement of loss allowance


466 


8 206 


-



8 672 





New financial assets originated or purchased


-1 295 


-1 461 


-



-2 756 





Financial assets that have been derecognised


-1 120 


-4 118 


-



-5 238 





Foreign exchange rates differences


2 


-17 


-



-15 






Balance as at 31 December




2 715 




16 323 



-



19 038 





14   Amounts owed to third parties

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







(in EUR’000)




 


31.12.2024


31.12.2023




Net general administrative expenses payable to the EIB


24 794 


29 655 




Other amounts payable to the EIB


43 260 


39 384 




Interest subsidies and TA not yet disbursed owed to Member States


498 029 


358 789 





Total amounts owed to third parties




566 083 




427 828 





15   Other liabilities

The main components of other liabilities are as follows:







(in EUR’000)




 


31.12.2024


31.12.2023




Loan repayments received in advance


3 289 


2 727 




Deferred income from interest subsidies


-


611 





Total other liabilities




3 289 




3 338 





16   Member States Contribution called










(in EUR’000)




Member States


Contribution to the Facility


Contribution to interest subsidies and technical assistance


Total Contributed


Called and not paid (*9)





Austria


94 677 


45 267 


139 944 


216 




Belgium


138 169 


26 952 


165 121 


292 




Bulgaria


2 660 


28 898 


31 558 


20 




Croatia


1 126 


173 578 


174 704 


20 




Cyprus


1 566 


4 528 


6 094 


-




Czech Republic


9 697 


3 028 


12 725 


72 




Denmark


77 279 


5 108 


82 387 


178 




Estonia


992 


5 141 


6 133 


-




Finland


55 115 


66 602 


121 717 


136 




France


818 754 


196 514 


1 015 268 


1 603 




Germany


823 467 


43 762 


867 229 


1 852 




Greece


50 271 


3 672 


53 943 


135 




Hungary


9 230 


2 422 


11 652 


-




Ireland


27 921 


18 598 


46 519 


85 




Italy


470 233 


38 318 


508 551 


1 128 




Latvia


1 364 


7 630 


8 994 


10 




Lithuania


2 248 


105 253 


107 501 


-




Luxembourg


10 395 


1 242 


11 637 


23 




Malta


526 


2 273 


2 799 


3 




Netherlands


187 913 


10 236 


198 149 


430 




Poland


24 591 


16 732 


41 323 


181 




Portugal


39 250 


12 058 


51 308 


-




Romania


7 734 


5 701 


13 435 


65 




Slovakia


4 231 


2 293 


6 524 


34 




Slovenia


3 137 


2 717 


5 854 


20 




Spain


250 314 


28 943 


279 257 


714 




Sweden


102 760 


29 704 


132 464 


265 




United Kingdom


506 075 


150 826 


656 901 


-





Total as at 31 December 2024




3 721 695 




1 037 996 




4 759 691 




7 482 






Total as at 31 December 2023




3 721 695 




828 996 




4 550 691 




85 321 





17   Member States Contributions paid out











(in EUR’000)




 


European Commission


UK


Total




ACP


OCT


Total




Reflows in relation to year 2021


251 000 


7 000 



258 000 



44 386 



302 386 





Reflows in relation to year 2022


236 883 


6 732 



243 615 



41 912 



285 527 





Reflows in relation to year 2023


257 152 


7 154 



264 306 



45 471 



309 777 






Member States Contributions paid out as at 31 December 2024




745 035 




20 886 




765 921 




131 769 




897 690 






Member States Contributions paid out as at 31 December 2023




487 883 




13 732 




501 615 




86 298 




587 913 





As per the Transfer Agreement as of year 2024 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)




 


31.12.2024


31.12.2023






Commitments




 


 




Undisbursed loans


676 229 


883 092 




Undisbursed commitment in respect of shares and other variable yield securities


237 886 


297 534 




Issued guarantees


-


985 




Interest subsidies and technical assistance


362 848 


422 758 






Contingent liabilities




 


 




Signed non-issued guarantees


2 500 


46 764 





Total commitments and contingent liabilities




1 279 463 




1 651 133 





19   Interest and similar income and expenses

The main components of interest and similar income are as follows:







(in EUR’000)




 


From 01.01.2024
to 31.12.2024


From 01.01.2023
to 31.12.2023




Cash and cash equivalents


56 083 


36 668 




Loans and advances


90 034 


95 137 




Interest subsidies


10 484 


10 029 




Treasury financial assets


-


3 584 




Derivative financial instruments


-


2 918 





Total interest and similar income




156 601 




148 336 





The main components of interest and similar expenses are as follows:







(in EUR’000)




 


From 01.01. 2024


From 01.01. 2023




 


to 31.12.2024


to 31.12.2023




Derivative financial instruments


-1 805 


-





Total interest and similar expenses




-1 805 



-




20   Fee and commission income and expenses

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







(in EUR’000)




 


From 01.01.2024
to 31.12.2024


From 01.01.2023
to 31.12.2023




Fee and commission on loans and advances


-


1 




Fee and commission on financial guarantees


20 


24 





Total fee and commission income




20 




25 





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







(in EUR’000)




 


From 01.01.2024
to 31.12.2024


From 01.01.2023
to 31.12.2023




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


- 212 


-62 





Total fee and commission expenses




- 212 




-62 





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)




 


From 01.01.2024
to 31.12.2024


From 01.01.2023
to 31.12.2023




Net proceeds


-4 946 


130 




Dividend income


16 548 


6 555 




Net fair value change


-45 698 


-15 142 





Net result on shares and other variable yield securities




-34 096 




-8 457 





22   Net foreign exchange results

The main components of the net foreign exchange results are as follows:







(in EUR’000)




 


From 01.01.2024 to 31.12.2024


From 01.01.2023 to 31.12.2023





FX positions revaluation



 


 




Cash and cash equivalents


6 821 


- 123 




Derivative financial instruments


- 773 


86 071 




Loans and advances


78 744 


-89 458 




Shares and other variable yield securities


23 199 


-30 026 




Other


-2 231 


3 479 





Total FX positions revaluation




105 760 




-30 057 






Realised results on FX swaps (cost of hedging)




-23 853 




-37 828 






Net foreign exchange result




81 907 




-67 885 





23   General administrative expenses

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 2024 total general administrative expense amounted to EUR -24,8 million (31 December 2023: EUR -29,7 million)
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


Nature and purpose


Interest held by the Facility




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


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


Net disbursed amounts;
Interest income.




Venture capital operations


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


Investments in units/shares issued by the venture capital entity;
Dividends received as dividend income.




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










 


 


31.12.2024


31.12.2023




Type of structured entity


Caption


Carrying amount


Maximum exposure to loss


Carrying amount


Maximum exposure to loss




Venture capital funds


Shares and other variable yield securities


655 817 


667 832 


693 042 


725 781 





Total



 



655 817 




667 832 




693 042 




725 781 





No support is provided to structured entities by the Facility beyond the respective financing.
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.
The following table represents the carrying amounts and the committed but undisbursed amounts per type of asset:












Type of IFE investment


Caption


Measurement


Gross carrying amount as at 31.12.2024


Loss allowance / FV adj. amount as at 31.12.2024


Carrying amount as at 31.12.2024


Undisbursed amount as at 31.12.2024


OFF BS ECL adj. amount as at 31.12.2024




Loans to financial intermediaries


Loans and advances


AC


59 209 


-


59 209 


5 000 


- 225 




Direct loan operations


Loans and advances


FVTPL


158 880 


-


158 880 


56 669 


-




Social impact equity funds


Shares and other variable yield securities


FVTPL


134 595 


-1 559 


133 036 


34 686 


-




Direct equity participations


Shares and other variable yield securities


FVTPL


59 843 


61 686 


121 529 


14 


-





Total



 


 



412 527 




60 127 




472 654 




96 369 




- 225 











(*)


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























Type of IFE investment


Caption


Measurement


Gross carrying amount as at 31.12.2023


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




Loans to financial intermediaries


Loans and advances


AC


73 423 


-1 522 


71 901 


7 749 


- 334 




Direct loan operations


Loans and advances


FVTPL


152 155 


-58 759 


93 396 


68 288 


-




Social impact equity funds


Shares and other variable yield securities


FVTPL


110 572 


9 936 


120 508 


58 572 


-




Direct equity participations


Shares and other variable yield securities


FVTPL


58 889 


41 490 


100 379 


14 


-




Risk sharing facilitating instruments


Issued guarantees


higher of approach (*10)



-


-


-


44 264 


-





Total



 


 



395 039 




-8 855 




386 184 




178 887 




- 334 





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.
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, the 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

In the context of the current geopolitical and economic environment the Entity continues to monitor the situation closely notably as part of the subsequent event review.
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 2024.


(1)  Council Regulation (EU Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020 (OJ L 347 20.12.2013 p. 884, ELI: http://data.europa.eu/eli/reg/2013/1311/oj).

(2)  
            OJ L 83 1.4.2003 p. 27.

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

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

(5)  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.

(6)  Council Decision (EU) 2024/2906 of 14 November 2024 on the financial contributions to be paid by the parties to the European Development Fund to finance that fund specifying the ceiling for 2026 the annual amount for 2025 the amount of the first instalment for 2025 and an indicative non-binding forecast for the expected annual amounts of contributions for the years 2027 and 2028 (OJ L 2024/2906 19.11.2024 ELI: http://data.europa.eu/eli/dec/2024/2906/oj).

(7)  Council Regulation (EU) 2016/888 of 6 June 2016 amending Regulation (EU) 2015/323 on the financial regulation applicable to the 11th European Development Fund as regards payment of the instalments (OJ L 149 7.6.2016 p. 1, ELI: http://data.europa.eu/eli/reg/2016/888/oj).

(*1)  
            Excluding deferred charges


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

(9)  Regulation (EU Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union (OJ L 2024/2509 26.9.2024 ELI: http://data.europa.eu/eli/reg/2024/2509/oj).

(10)  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 (OJ L 307 3.12.2018 p. 1 ELI: http://data.europa.eu/eli/reg/2018/1877/oj).

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

(12)  Regulation (EU Euratom) 2024/2509.

(13)  Council Regulation (EU) 2018/1877.

(14)  Special report 17/2024 https://www.eca.europa.eu/en/publications/SR-2024-17.

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

(16)  Regulation (EU) 2018/1877.

(17)  Except for operations in South Sudan.

(18)  Council Decision 2011/315/EU of 23 May 2011 concerning the allocation of funds decommitted from projects under the ninth and previous European Development Funds for development cooperation in Southern Sudan (OJ L 142 28.5.2011 p. 61, ELI: http://data.europa.eu/eli/dec/2011/315/oj).

(19)  
            1 402,57 million bridging facility (Council Decision (EU) 2015/0246), EUR 200 million (Council Decision (EU) 2017/1206), EUR 223 million (Council Decision (EU) 2020/1708), EUR 43 million (Council Decision (EU) 2021/1941), EUR 42,5 million (Council Decision (EU) 2022/2242) and EUR 7,8 million (Council Decision (EU) 2023/2586).

(20)  Decision (EU) 2024/2906.

(21)  
            OJ L 314 30.11.2001 p. 1 ELI: http://data.europa.eu/eli/dec/2001/822(1)/oj.

(22)  Council Decision 2007/249/EC of 19 March 2007 amending Decision 2001/822/EC on the association of the overseas countries and territories with the European Community (OJ L 109 26.4.2007, p. 33, ELI: http://data.europa.eu/eli/dec/2007/249/oj).

(23)  Gross amounts (i.e. excluding de-commitments and recovery orders).

(*2)  For the year ended 31 December 2024 Interest and similar income includes EUR 144,3 million (2023: EUR 118,5 million) calculated on assets held at amortised cost based on the effective interest method.

(24)  Council Decision (EU) 2023/2861 of 20 July 2023 on the signing, on behalf of the European Union, and provisional application of the Partnership Agreement between the European Union and its Member States, of the one part, and the Members of the Organisation of African, Caribbean and Pacific States, of the other part (OJ L, 2023/2861, 28.12.2023, ELI: http://data.europa.eu/eli/dec/2023/2861/oj).

(25)  
            OJ L 437, 28.12.2020, p. 188, ELI: http://data.europa.eu/eli/dec/2020/2233/oj.

(26)  Decision No 3/2021 of the ACP-EU Committee of Ambassadors of 26 November 2021 to amend Decision No 3/2019 of the ACP-EU Committee of Ambassadors to adopt transitional measures pursuant to Article 95(4) of the ACP-EU Partnership Agreement [2021/2175] (OJ L 441, 9.12.2021, p. 3, ELI: http://data.europa.eu/eli/dec/2021/2175/oj).

(27)  Council Decision (EU) 2022/970 of 16 June 2022 on the position to be taken on behalf of the European Union within the ACP-EU Committee of Ambassadors as regards the amendment of Decision No 3/2019 of the ACP-EU Committee of Ambassadors to adopt transitional measures pursuant to Article 95(4) of the ACP-EU Partnership Agreement (OJ L 166, 22.6.2022, p. 145, ELI: http://data.europa.eu/eli/dec/2022/970/oj).

(28)  Decision No 2/2023 of the ACP-EU Committee of Ambassadors of 25 October 2023 to amend Decision No 3/2019 of the ACP-EU Committee of Ambassadors to adopt transitional measures pursuant to Article 95(4) of the ACP-EU Partnership Agreement [2023/2453] (OJ L, 2023/2453, 31.10.2023, ELI: http://data.europa.eu/eli/dec/2023/2453/oj).

(29)  Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing the Neighbourhood, Development and International Cooperation Instrument – Global Europe, amending and repealing Decision No 466/2014/EU of the European Parliament and of the Council and repealing Regulation (EU) 2017/1601 of the European Parliament and of the Council and Council Regulation (EC, Euratom) No 480/2009 (OJ L 209, 14.6.2021, p. 1, ELI: http://data.europa.eu/eli/reg/2021/947/oj).

(30)  Council Decision (EU) 2021/1764 of 5 October 2021 on the association of the Overseas Countries and Territories with the European Union including relations between the European Union on the one hand, and Greenland and the Kingdom of Denmark on the other (Decision on the Overseas Association, including Greenland) (OJ L 355, 7.10.2021, p. 6, ELI: http://data.europa.eu/eli/dec/2021/1764/oj).

(31)  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 Facilty’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.

(32)  Loan operations measured at FVTPL.

(33)  Loan operations measured at FVTPL.

(34)  Agency agreements for which there are no underlying counterparts at reporting date.

(*3)  Agency agreements for which there are no underlying counterparts at reporting date.

(*4)  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.

(*5)  See section 3.4.2.2.2 for explanations on synthetic hedge. Following the 2024 review of the synthetic hedging strategy, KES, UGX and RWF have been removed from the scope of the synthetic hedging.

(*6)  See section 3.4.2.2.2 for explanations on synthetic hedge.

(35)  Loans measured at FVTPL are presented in Note 7.

(*7)  Including agency agreements

(*8)  Including agency agreements

(36)  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.

(37)  The Facility has changed the way an investment is classified as a VCF or as a DE in line with newly implemented Valuation Operation Manual.

(*9)  On 14 November 2024, the Council fixed the amount of financial contributions to be paid by each Member State as of 21 January 2025. As at 31 December 2024 EUR 7,5 million were not yet paid in.

(*10)  For details please refer to section subsequent measurement of Note 2.4.3.


ELI: http://data.europa.eu/eli/C/2025/4948/oj
ISSN 1977-091X (electronic edition)