Financial Instruments under the ESF State of Play & Implementation ESF Informal Technical Working Group Meeting 18-19 June 2014 Athens (Greece) Andrea Da Pozzo EMPL E1

Agenda State of play 2014-2020 Implementation 2007-2013 Legislative framework Guidance & advisory services Negotiations Implementation 2007-2013 FIs Ex-ante assessment

2014-2020 Legislative Framework for FIs CPR corrigenda EC is drafting corrigenda Delegated Act 480/2014 (Section II on Financial Instruments) Entry into force on 14 of May Implementing Acts (on the agenda of 25/06 COESIF) FIs - Modalities of transfer and management of programme resources and Reporting on implementation: Presented to COESIF 04/06/2014. Foreseen entry into force: early July Off-the-shelf financial instruments: Foreseen entry into force: early August FIs - Payment application model

2014-2020 Guidance and Advisory Services for FIs Short guide for managing authorities Revised version (including DG MARE contribution) sent to EGESIF members on 25/04/2014 Translation into other languages ongoing (FR & DE) Technical fiches Focus on technical fiches (e.g. working capital, combination of support) FI-TAP Financial and Administrative Framework Agreement (FAFA): COM & EIB signed Memorandum of Understanding (MoU): EIB & COM signatures by June Service Level Agreement (SLA): ESIF DGs Presentation to EGESIF on 30/04/2014 Moving to work programme finalisation

2014-2020 Negotiations for FIs Limited information on FIs available in programme documentation Partnership Agreements No legal basis for inclusion of information on FIs Exception: SME initiative which is not relevant for ESF Operational programmes Planned use of financial instruments: broad text Categories of expenditure - Forms of finance – indicative, but must be sensible (not small amounts for 'pour memoire') Ex-ante evaluation Reference to consideration of appropriate form of support

2014-2020 Issues arising from consultations 1) Terminology NOT financial engineering instrument, JEREMIE/JASMINE instrument, revolving/part-revolving instrument ….. use 'Financial Instrument' NOT gap assessments, capital market assessments …. Use 'ex-ante assessment' check carefully the term in your language version of the regulation to be sure AND WATCH OUT FOR: Repayable assistance (CPR 66-69) ≠ Financial instrument (CPR 37-46)

2014-2020 Issues arising from consultations 2) Pre-empting results of the ex-ante assessment Too much detail in partnership agreement and / or operational programme about: Amounts to be dedicated to FIs ok for forms of finance part as it's indicative, but specific amounts in OP text should be avoided unless ex-ante assessment is already completed Specific instrument to receive EU contribution e.g. existing national instrument, continuation of instrument from previous period Chosen financial intermediary Decisions about these and other points set out in CPR 37(2) can only be made after completion of the ex-ante assessment

2014-2020 Issues arising from consultations 3) Lack of coordinated approach at MS level Programmes with similar structures and addressing similar challenges… ….but with completely different approaches to financial instruments!

2007-2013 Implementation Preparation of 2013 annual summary report 30th of June: Regulatory deadline for submission of the AIR, including information on FEIs (Article 67(1) of the General Regulation) Updated reporting module on FEIs available in SFC Separate menu under the AIR for FEIs reporting MAs are reminded to encode data ASAP – and check ASAP! Cut-off date is 30th June 2014 1st October EC will provide a summary of data December report made public

FIs Ex-ante Assessment - Why? Aimed at ensuring sound evidence-based decision-making by the managing authorities in using FIs. The objective of the ex-ante assessment is to assess the rationale for a Financial Instrument (FI) against prevalent market failure or suboptimal investment and to ensure that the FI will contribute to the achievement of the Programme and ESIF objectives. It will also help to avoid overlaps and inconsistencies between instruments implemented at different levels.

FIs Ex-ante Assessment Ex-ante assessment to be carried out before launch of FIs operation under the ESIF: It is not the same as the ex-ante evaluation of OPs It is not part of the OPs Can be carried out by MAs or outsourced Administrative capacity, expertise and independence are key factors to consider Can be funded by OPs Technical Assistance

FIs Ex-ante Assessment Ex-ante assessment to be carried out before launch of FIs operation under the ESIF: Needs to cover each new or existing FIs (including contributions to EU level FIs), but work can be combined in one ex-ante assessment if more than one FI has to be launched at same time The same ex-ante assessment could be used to justify contributions from more than one ESI Fund to the same FI Can be performed in stages but must be completed before decision to make OP contribution to a FI Must be submitted to the programme's Monitoring Committee for information and its summary findings and conclusions must be published within 3 months after approval

FIs Ex-ante Assessment Article 37(2) of the Common Provisions Regulation (CPR) Analysis of market failures, suboptimal investment situations and investment needs Assessment of the added value of the FI Estimate of additional public and private resources to be potentially raised by the FI Assessment of lessons learned from similar instruments and ex-ante assessments carried out in the past Proposed investment strategy Specification of expected results Provisions allowing the ex-ante assessment to be reviewed and updated

FIs Ex-ante Assessment EC proposes: A methodology (not The Methodology) «Ex-ante Assessment Methodology for Financial Instruments in the 2014-2020 Programming Period» General methodology covering all thematic objectives (Vol. I) Additional specific guidance for: TO 3 enhancing the competitiveness of SMEs, including microcredit (Vol. III)

Thank you for your attention!