Financial Instruments in Cohesion Policy

Financial instruments represent a resource-efficient way of deploying cohesion policy resources in pursuit of the Europe 2020 Strategy objectives. Targeting projects with potential economic viability, financial instruments provide support for investments by way of loans, guarantees, equity and other risk-bearing mechanisms, possibly combined with technical support, interest rate subsidies or guarantee fee subsidies within the same operation.

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Besides the obvious advantages of recycling funds over the long term, financial instruments help to mobilise additional public or private co-investments in order to address market failures in line with Europe 2020 and cohesion policy priorities. Their delivery structures entail additional expertise and know-how, which helps to increase the efficiency and effectiveness of public resource allocation. Moreover, these instruments provide a variety of incentives to better performance, including greater financial discipline at the level of supported projects.

Financial instruments have been used for delivering investments for Structural Funds since the 1994-1999 programming period. Their relative importance has increased during the programming period 2007-2013 and they now represent around 5 % of total European Regional Development Fund (ERDF) resources. In the light of the current economic situation and the increasing scarcity of public resources, financial instruments are expected to play an even stronger role in cohesion policy in the 2014-2020 programming period.

Documents

  • Reporting Instructions for the Financial Engineering Instruments (AIR 2014) en pdf
  • fi-compass is designed to meet the needs of ESIF managing authorities, EaSI microfinance providers and other interested parties, by providing practical know-how and learning tools on financial instruments.
  • Financial instruments in ESIF programmes 2014-2020 - A short reference guide for Managing Authorities en pdf
  • Ex-ante assessment methodology for financial instruments in the 2014-2020 programming period
    • General methodology covering all thematic objectives - Quick reference guide en pdf
    • General methodology covering all thematic objectives - Volume I en pdf
    • Strengthening research, technological development and innovation (Thematic objective 1) - Volume II en pdf
    • Enhancing the competitiveness of SME, including agriculture, microcredit and fisheries (Thematic objective 3) - Volume III en pdf
    • Supporting the shift towards low-carbon economy (Thematic objective 4) - Volume IV en pdf
    • Financial instruments for urban and territorial development - Volume V en pdf
    • Ex-ante assessment methodologies for FIs – Training for Managing authorities – June 2014 en pdf