Legislation update - The new CPR and other key regulations
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Session moderator: Bruno Robino,
Head of fi-compass, European Investment Bank
Legislation update – The
new CPR and other key
regulations
Ieva Zālīte, Policy Officer, DG REGIO, European
Commission
Oana-Andreea Dordain, Deputy Head of Unit, DG REGIO,
European Commission
#ficompass
General principles of the Applicable law: Scope of FI and ERDF
Articles public procurement; scope of support Definitions
State aid
Programming: Combination:
assessment of market failures in one operation or
and investment needs, Ex-ante assessment two separate Implementation options
complementarities and streams of support
synergies, etc
Differentiated treatment of Eligibility:
Re-use of resources
Interest and other gains investors VAT, Guarantees, etc
returned
Continuation Management costs and
of the FIs across two fees: Reporting and publicity
Payments
consecutive periods • Direct award; or
• Competitive selection
2
Novelties in the CPR
Financial instruments (FIs) better integrated into the programming and implementation
process from the outset
Streamlined ex-ante assessment
Combination:
o In ONE FI operation: the grant shall be directly linked and necessary for the investment supported by the FI and
shall have a lower value than the investments supported by the financial product at FI level
o E.g. interest rate/guarantee fees subsidies, technical support, NEW!: “capital rebate”
Contribution from the Funds to InvestEU under ONE set of rules i.e. those of InvestEU
Management costs and fees
Possibility of continuation of FIs from one period to the subsequent one, including 2014-2020 –
procurement contracts to foresee this possibility
Payments from EC to MA:
o In case of FIs managed under the responsibility of the MA: NEW! First payment claim: advance of 30% of amounts
committed and paid to the FI; to be cleared no later than in the final accounting year and disclosed separately in the
appendix to the payment application; Subsequent payment claims: eligible expenditure
3
Change in the intervention rationale in post-2020
2014-2020 2021-2027
1 Programme - 1
Programme Art. 17(3) 2021-2027
: CPR
Ex-ante evaluation
Consider market failures, investment needs
Rationale for the form Market assessment and complementarity with other forms of
of support proposed support
Justification for the Justify the forms of support (incl. for grants)
forms of support Indicate, for each SO, the planned use of FIs
2
FI - Ex-ante assessment
2 FI - Ex-ante Art. 52(3) 2021-2027 CPR:
assessment minimum requirements
Market assessment
Amount of programme contribution to a FI
and expected leverage effect
Proposed Investment Proposed
Strategy Investment Strategy Financial products (incl. differ. treatment)
Target final recipients
Expected contribution to SO Indicative
amounts
4
Change in the intervention rationale in post-2020
2021-27
MA remains in Programme
charge of the
choice of the
methodology Market assessment
No more Justification for the
Guidance from forms of support
European
Commission
FI - Ex-ante Monitoring Committee will examine
assessment elements of the ex-ante assessment
Possible use of
2014-20 ex-ante Managerial tool to help MAs to:
assessment, Proposed - decide on the implementation of the
updated where Investment Strategy FI
necessary - set up FI, incl. ToRs to select fin.
inter.
5
Implementation options (Article 53)
Continuation of basic flexible implementation options
o management of FIs by the managing authority itself (Art. 53(1)) – only for loans and guarantees, no
MCF – the same as in 2014-2020, or
o management of FIs (by third parties) under the responsibility of the managing authority (Art. 53(2))
The terms and conditions of programme contributions to FIs are to be set out in the
funding agreements and strategy documents (Annex IX) 6
Combination - Articles 52(4) to (7)
Combination of
different forms of
support
In 2 different In 1 operation
streams with under FI rules –
own rules major change in
post-2020
Key principles of combination:
- The sum of all forms of support ≤ total
amount of the expenditure item
concerned
- Grants cannot be used to reimburse
support from FI
- FI cannot be used to pre-finance the
grants
- Separate records should be kept for each
source of support
7Combination in 2 separate streams of support - Article 52(4)
Invest EU
guaranteed
FI Combination in TWO separate operations:
loan E.g. loan
60
40 each form of support following its own rules
Combination of two streams of support is
done at final recipient level
Investment project 100
Combination at the level of final recipient with EU
level instruments possible!
FI Guarantee
Invest EU 10 RRF FI
guaranteed Allows for consistency and synergies with policy loan/grant E.g. loan
loan 60 40
60 Guaranteed
objectives delivered through various financial
loan granted by streams of support
a financial
intermediary
40 Combination with EU level instruments
Investment project 100
at the level of the FI (e.g. SME Initiative,
ESIF/EFSI) – Not possible under CPR
Investment project 100
but possible through a financial
contribution to InvestEU to ensure a single
set of rules 8Management costs and fees – Article 62(2)
Simplified rules for
management costs
and fees 1
Differentiated thresholds in case
of direct award of contract:
2 • holding funds,
The threshold is applied to • specific funds
programme contribution
disbursed to final recipients or
amount set aside for guarantee 3
contracts – final amount known at Performance-based with a
closure methodology to be defined by
4 the managing authority in case
of direct award and competitive
No thresholds in case of tender
competitive tender
5
9Management costs and fees – direct award of contract
Holding fund Holding fund Specific fund Specific fund
Sample text
5% 7% 7% 15%
If a guarantee or a loan If an equity fund Loans and guarantees Equity
fund operates in the operates in the
holding fund structure holding fund structure 10Eligibility for FIs Article 62(1a)
NEW! Continuation of the FIs across two consecutive periods (to replace
escrow accounts)
Conditions to be fulfilled
cumulatively:
Proposal aimed to cover
the following issues: - FI operation already approved
under one period and the financial
instrument implementation
Continuation of the existing FIs from continues in the subsequent
the current period to the next one period
and/or from post-2020 to the
subsequent one - The necessary legal and
financial agreements have been
Also for: interest rates & made to ensure the continuation
guarantee fees subsidies,
MCF for equity-based
instruments, - The eligible expenditure related
follow-on investments, etc. to one period is declared to the
Commission only during that
period
11Example: continuation – Article 62(1a)
FI OPERATION approved in programming period A and continues in
programming period B
End of eligibility of
programming period A
MA contributes programme resources of 150 (ERDF + MA contributes programme resources of 200 (ERDF +
national public) in programming period A national public) in programming period B
Co-investment facility: Equity fund manager selected in open competition to manage the volume of the fund of up to 600 with 20%
performance based MCF. In addition to programme resources of 350 it has to provide co-financing of minimum 1% with own
resources on each deal and attract co-financing of other investors 40%-60% on a deal by deal basis. The funding agreement sets
out the conditions that the fund may continue to provide investments in the subsequent programming period.
SME3 85 SME1 65 SME4 100 SME6 50
SME1 55
SME7 25
SME2 75 SME4 25 SME5 80
240 investment in FR + 48 MCF = 288 Eligible 320 investment in FR + 64 MCF = 384 Eligible
expenditure declared to the Commission in relation expenditure declared to the Commission in
to the programming period A relation to the programming period B
12Payments – Article 86
Example of liquidity levels for FI
120%
100% 0
10%
25%
80%
30%
60% 30%
30%
30% 100%
40% 30% 90%
30% 75%
30% 60%
20% 50%
35% 40%
30% 30%
12% 20%
0% 0%
Eligible expenditure incurred "Advance" in the 1st payment application
NEW! The 30% included in
the first payment application
is cleared no later than in
NEW approach to
Financial instruments (FI) In case of direct the final accounting year
submitting payment
specificities in payment implementation (Art. 86(1)): and also disclosed
applications in case of FIs
applications submitted by eligible expenditure incurred separately in the appendix
managed under the
MSs to the EC in line with Art. 62(1) to the payment application
responsibility of the MA
Art. 86(3) 13Publicity (Article 45) Reporting (Article 37)
• Ensure the visibility of the NEW! joint transmission of
Union funding and data on grants and FIs
among other Union
support instruments SIMPLIFIED! fewer reporting
requirements
• Provide coherent, effective A few FI specific data are collected:
and targeted information • Eligible expenditure by product;
to multiple audiences, • Amount of management costs and
including the media and fees declared as eligible expenditure;
the public • The amount, by type of financial
product, of private and public
resources mobilized in addition to the
• Statement that highlights Funds ;
the support from the
Funds on documents and
communication materials • Interest and other gains generated by
(inended for the public or support from the Funds to FIs, as referred
participants) to in Article 54;
• Resources returned attributable to
• Short, proportionate support from the Funds, as referred to in
description of the operation at Article 56
their official website/social • Total value of loans, equity or quasi-equity
media site, highlighting the investments in final recipients which were
Union support guaranteed with programme resources and
which were disbursed to final recipients 14#ficompass
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