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

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

3. 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

4. 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

5. 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

6. 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)

7. 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

8. 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!

9. 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

10. 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.

11. 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

12. 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

13. 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

14. FIs Ex-ante Assessment
EC proposes: A methodology (not The Methodology)
«Ex-ante Assessment Methodology for Financial Instruments in the 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)

15. Thank you for your attention!