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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    Halfway through the 2014-2020 EU budget period, the amount of European Structural and Investment Funds channelled through financial instruments already exceeds the amount invested via such instruments in the 2007-2013 period. New data published today shows that by the end of 2017, the amount of EU funds invested via financial instruments reached nearly €18.8 billion, an increase of over €5 billion compared to the previous year.

    Commissioner for Regional Policy Corina Creţu said: “In line with the objectives of the Juncker Plan, at the beginning of the mandate we committed to make smarter use of EU resources and EU funds investments via financial instruments. These instruments, such as guarantees and equities, have proven to maximise the impact of each euro we invest on the ground. I am very glad to see that we delivered on this commitment halfway through the current EU budget period; this is very promising for the success of the post 2020 Cohesion Policy."

    The largest share of funding (56%) has been assigned to support for small and medium companies, followed by investments in the shift towards a low-carbon economy, mainly in energy efficiency (16%) and in research, development and innovation (16%).

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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.

ESIF and EFSI complementarities

  • European Structural and Investment Funds and European Fund for Strategic Investments complementarities: Ensuring coordination, synergies and complementarity en pdf

Documents

  • Financial instruments under the European Structural and Investment Funds: Summaries of the data on the progress made in financing and implementing the financial instruments for the programming period 2014-2020 in accordance with Article 46 of Regulation (EU) No 1303/2013 of the European Parliament and of the Council
    • Situation as at 31 December 2015 pdf English
    • Situation as at 31 December 2016 pdf English
    • Situation as at 31 December 2017 pdf English
  • 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
  • Review of the Role of the EIB Group in European Cohesion Policy en pdf
  • 'EC regulatory guidance and manuals are available on www.fi-compass.eu/resources

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Contact

European Commission - DG Regional Policy
Unit B3 - Financial Instruments and relations with International Financial Institutions
Avenue de Beaulieu 5
B-1160 Brussels
Tel: 32 2 29 59332
Fax: +32 2 292 0904
REGIO-B3-FINANCIAL-INSTRUMENTS@ec.europa.eu