Financial Instruments in Cohesion PolicyDG REGIO, Open Days, Brussels, October 2013

Financial Instruments for SMEs- A regional example

Financial Instruments in Support of Regional Policy 2007 - 2013

Three areas of support by Financial Instruments (Fis) through European Regional Development Fund (ERDF) and European Social Fund (ESF) (NOT Cohesion Fund):

• Enterprises, including SMEs & micro enterprises;• Sustainable urban development;• Energy Efficiency (EE) & Renewable Energy sector (RES) in the building

sector, including existing housing.

FEI Implementation progress in EU Member States (as of 31.12.2012):Fis for enterprises FIs for sustainable urban

development Fis for energy efficiency and renewable energies

EUR 10.47 bn of Structural Fund (SF) & national resources paid to 864 Fis

EUR 1.6 bn of SF and national resources paid to 56 Fis

EUR 444 million of SF and national resources paid to 20 Fis

Advantages of Fis vs. GrantsA Regional experience in 2007 – 2013 (Wielopolska)

• Investment instead of a non-refundable financing;• Recycling of funds and creation of sustainable mechanism of regional support • The leverage effect;• Support for projects carried out jointly by the public and private sectors (JESSICA initiative);• Benefits of professional Financial Institutions experience for the next financial

perspective 2013.

WROP

Financial instruments

JESSICA

Revitalisation of Urban Areas

Support for Business

Environment Institutions

JEREMIE

SMEs support

Grants85%

JEREMIE

9%

JESSICA6%

Financial Instruments in 2014 – 2020 expand across EU Programmes

Infrastructure

Horizon 2020Equity and Risk Sharing Instruments

Instruments under Structural and Cohesion Funds

EU level (central management)

National/regional instruments (shared management) Off-the shelf FIs Tailor made FIs

Significant higher amounts than currently!

Competitiveness & SME (COSME)

Equity & guarantees

Connecting Europe Facility (CEF)Risk sharing (e.g. project bonds) and

equity instruments

Social Change & Innovation

Creative EuropeGuarantee Facility

Erasmus for allGuarantee Facility

Shared Management with Member States (Common

Provisions Regulation)

Centrally managed by EU COM (Financial Regulation)

Research, Development

Innovation

Growth, Jobs and Social Cohesion

Financial Instruments for SMEsNational Vision (Scotland) for 2014 – 2020

I. Significant Increase in the use of Fis to address market failures;

II. Need for long term sustained intervention to underpin early stage markets;

III. Interventions at market level (versus interest groupings);

IV. Long term planning versus short term expectations;

V. Evergreen + long term sustainable funds.

What’s new in the 2014 – 2020 Financial Instruments?

I. Expansion to all thematic objectives & priorities foreseen by SF Operational Programmes (ERDF, ESF, Cohesion Fund, European Agriculture Fund for Rural Development (EAFRD), European Maritime Fisheries Fund (EMFF);

II. More implementation options for managing authorities:• Fis at national, regional, transnational or cross-border level (shared

management: Tailor made / Off the shelf);

• Contribution to EU level Fis under central management (ring-fencing);

III. Ex-ante assessment to be carried out before launch of Fis operation under the ESIF;

IV. Better combination of Fis & other forms of support;

V. Incentives regarding EU co-financing rates;

VI. Phased contributions to Financial Intermediaries;

VII. More detailed rules.

I. Finalization of Common Provisions Regulation (CPR);

II. Drafting of secondary legislation (envisaged Delegated Act and Implementing Act) on-going; adoption only after adoption of CPR;

III. Development of ready-to-use "off-the-shelf" instruments on-going (to be laid down in Implementing Act);

IV. Concept for a Technical Assistance (TA) platform for financial instruments in cohesion policy 2014-2020 to be developed.

Implications for the new EU Financial Instruments