ESIF FIs in 2014-2020
What projects can FIs fund?
FIs target investment projects which encourage smart, sustainable and inclusive growth and are able to repay the investment.
ESIF FIs can be developed for allocations from five EU funding sources:
- European Regional Development Fund (ERDF)
- Cohesion Fund (CF)
- European Agricultural Fund for Rural Development (EAFRD) and
- European Maritime and Fisheries Fund (EMFF)
- European Social Fund (ESF)
For FIs created under the first four Funds, the projects supported must generate income or revenue, or savings on future expenditure. For the European Social Fund (ESF), projects are funded on the basis of the final recipients' capacity to reimburse the loan.
Changes to FIs from 2007-2013
While Financial (Engineering) Instruments were also used in the 2007 – 2013 programming period, in the current Multiannual Financial Framework there are several changes that allow for more flexibility in FI implementation, among which:
- The extended scope to apply financial instruments. They now support all 11 Thematic Objectives which can be covered under a EU programme. Furthermore, there are now common provisions covering all five funds: ERDF, ESF, Cohesion Fund, EAFRD and EMFF.
- The requirement to carry out an ex-ante assessment at the level of the specific financial instrument before its implementation. In cooperation with the European Commission, the EIB Group has developed an ex-ante methodology (available here) to help Managing Authorities (MAs) conduct ex-ante assessments for implementing Financial Instruments. Previously, MAs were only required to conduct an ex-ante assessment for guarantee funds under the EARDF. For the ERDF and the ESF, gap analysis for enterprises and holding funds were previously voluntary.
- The diversified range of implementation options. Whereas previously MAs could only contribute to tailor-made FIs at national and regional level only, the new regulation foresees five types of FIs (at regional, national, cross-border, transnational or EU-level) implemented through an entrusted entity (EIB Group or other international financial institutions), a newly-created entity, direct implementation of loans and guarantees and contributions to EU-level instruments.