EU guarantee
1. The EU guarantee shall be granted as an irrevocable, unconditional and on demand guarantee to the implementing partners in accordance with Article 219(1) of the Financial Regulation and implemented in indirect management in accordance with Title X of that Regulation.
2. The remuneration for the EU guarantee shall be linked to the characteristics and risk profile of the financial products, taking into account the nature of the underlying financing and investment operations and the fulfilment of the policy objectives targeted by the financial products.
Where duly justified by the nature of the policy objectives targeted by the financial product and the need for the financial products to be affordable to the targeted final recipients, the cost of the financing provided to the final recipient may be reduced or the terms of that financing may be improved, by reducing the remuneration for the EU guarantee, or, where necessary, by covering the outstanding administrative costs borne by the implementing partner through the Union budget, in particular:
(a)
where stressed financial market conditions would prevent the realisation of a financing or investment operation under market-based pricing; or
(b)
where necessary to catalyse financing and investment operations in sectors or areas experiencing a significant market failure or suboptimal investment situation or to facilitate the establishment of investment platforms.
The reduction of the remuneration for the EU guarantee or the coverage of the outstanding administrative costs borne by the implementing partner, referred to in the second subparagraph, may only be done to the extent that it does not significantly impact the provisioning for the EU guarantee.
The reduction of the remuneration for the EU guarantee shall fully benefit final recipients.
3. The condition set out in Article 219(4) of the Financial Regulation shall apply to each implementing partner on a portfolio basis.
4. 75 % of the EU guarantee under the EU compartment as referred to in the first subparagraph of Article 4(1), amounting to EUR 19 614 232 554, shall be granted to the EIB Group. The EIB Group shall provide an aggregate financial contribution amounting to EUR 4 903 558 139. That contribution shall be provided in a manner and form that facilitates the implementation of the InvestEU Fund and the achievement of the objectives set out in Article 15(2).
5. The remaining 25 % of the EU guarantee under the EU compartment shall be granted to other implementing partners, which shall also provide a financial contribution to be determined in the guarantee agreements.
6. Best efforts shall be made to ensure that, at the end of the investment period, a wide range of sectors and regions are covered and excessive sectoral or geographical concentration is avoided. Those efforts shall include incentives for smaller or less sophisticated national promotional banks and institutions that have a comparative advantage due to their local presence, knowledge and investment competencies. The Commission shall develop a coherent approach to support those efforts.
7. Support under the EU guarantee referred to in the first subparagraph of Article 4(2) of this Regulation shall be granted under the conditions set out in Article 3(6) of Regulation (EU) 2020/2094. In other cases, support under the EU guarantee may be granted for financing and investment operations covered by this Regulation for an investment period ending on 31 December 2027.
Contracts between the implementing partner and the final recipient or the financial intermediary or other entity referred to in point (a) of Article 16(1) under the EU guarantee referred to in the first subparagraph of Article 4(2) shall be signed at the latest one year after the approval of the relevant financing or investment operation by the implementing partner. In other cases, contracts between the implementing partner and the final recipient or the financial intermediary or other entity referred to in point (a) of Article 16(1) shall be signed by 31 December 2028.
Eligible financing and investment operations
1. The InvestEU Fund shall only support financing and investment operations that:
(a)
comply with the conditions set out in points (a) to (e) of Article 209(2) of the Financial Regulation, in particular regarding market failures, suboptimal investment situations and additionality as set out in points (a) and (b) of Article 209(2) of the Financial Regulation and in Annex V to this Regulation and, where appropriate, maximising private investment in accordance with point (d) of Article 209(2) of the Financial Regulation;
(b)
contribute to the Union policy objectives and fall within the scope of the areas eligible for financing and investment operations under the appropriate policy window in accordance with Annex II to this Regulation;
(c)
do not provide financial support to the excluded activities set out in Section B of Annex V to this Regulation; and
(d)
are consistent with the investment guidelines.
2. In addition to projects situated in the Union, or in an overseas country or territory linked to a Member State as set out in Annex II to the TFEU, the InvestEU Fund may support the following projects and operations through financing and investment operations:
(a)
projects involving entities located or established in one or more Member States that extend to one or more third countries, including acceding countries, candidate countries and potential candidates, countries falling within the scope of the European Neighbourhood Policy, the EEA or the EFTA, to an overseas country or territory as set out in Annex II to the TFEU, or to an associated third country, regardless of whether there is a partner in those third countries or overseas countries or territories;
(b)
financing and investment operations in third countries as referred to in Article 5 which have contributed to a specific financial product.
3. The InvestEU Fund may support financing and investment operations that provide finance to final recipients which are legal entities established in any of the following countries or territories:
(a)
a Member State or an overseas country or territory linked to a Member State as set out in Annex II to the TFEU;
(b)
a third country associated to the InvestEU Programme in accordance with Article 5;
(c)
a third country referred to in point (a) of paragraph 2, where applicable;
(d)
other third countries, where necessary for the financing of a project in a country or territory referred to in points (a), (b) or (c).
Selection of implementing partners other than the EIB Group
1. The Commission shall select implementing partners other than the EIB Group in accordance with Article 154 of the Financial Regulation.
Implementing partners may form a group. An implementing partner may be a member of one or more groups.
For the EU compartment, the eligible counterparties shall have expressed their interest in relation to the portion of the EU guarantee referred to in Article 13(5).
For the Member State compartment, the Member State concerned may propose one or more counterparties as implementing partners from among those counterparties that have expressed their interest. The Member State concerned may also propose the EIB Group as an implementing partner and, at its own expense, may contract the EIB Group to provide the services listed in Article 11.
Where the Member State concerned does not propose an implementing partner, the Commission shall proceed in accordance with the third subparagraph of this paragraph and shall select as implementing partners eligible counterparties that are able to cover the financing and investment operations in the geographical areas concerned.
2. When selecting implementing partners, the Commission shall ensure that the portfolio of financial products under the InvestEU Fund meets the following objectives:
(a)
maximising the coverage of the objectives laid down in Article 3;
(b)
maximising the impact of the EU guarantee through the own resources committed by the implementing partner;
(c)
maximising, where appropriate, private investment;
(d)
promoting innovative financial and risk solutions to address market failures and suboptimal investment situations;
(e)
achieving geographical diversification via gradual allocation of the EU guarantee, and to allow for the financing of smaller projects;
(f)
providing sufficient risk diversification.
3. When selecting the implementing partners, the Commission shall also take into account:
(a)
the possible cost and remuneration to the Union budget;
(b)
the capacity of the implementing partner to implement thoroughly the requirements of Article 155(2) and (3) of the Financial Regulation related to tax avoidance, tax fraud, tax evasion, money laundering, terrorism financing and non-cooperative jurisdictions.
4. National promotional banks and institutions may be selected as implementing partners, provided that they fulfil the requirements laid down in this Article.
Eligible types of financing
1. The EU guarantee may be used towards risk coverage for the following types of financing provided by the implementing partners:
(a)
loans, guarantees, counter-guarantees, capital market instruments, any other form of funding or credit enhancement, including subordinated debt, or equity or quasi-equity investments, provided directly or indirectly through financial intermediaries, funds, investment platforms or other vehicles to be channelled to final recipients;
(b)
funding or guarantees by an implementing partner to another financial institution enabling the latter to undertake financing referred to in point (a).
In order to be covered by the EU guarantee, the financing referred to in points (a) and (b) of the first subparagraph of this paragraph shall be granted, acquired or issued for the benefit of financing and investment operations referred to in Article 14(1), where the financing by the implementing partner was granted in accordance with a financing agreement or transaction signed or entered into by the implementing partner after the signature of the guarantee agreement and that has not expired or been cancelled.
2. Financing and investment operations through funds or other intermediate structures shall be supported by the EU guarantee in accordance with provisions to be laid down in the investment guidelines, even if such structures invest a minority of their invested amounts outside the Union and in third countries referred to Article 14(2) or invest a minority of their invested amounts into assets other than those eligible under this Regulation.
Guarantee agreements
1. The Commission shall conclude a guarantee agreement with each implementing partner on the granting of the EU guarantee up to an amount to be determined by the Commission.
In the event that implementing partners form a group, a single guarantee agreement shall be concluded between the Commission and each implementing partner within the group or with one implementing partner on behalf of the group.
2. The guarantee agreement shall contain:
(a)
the amount and the terms of the financial contribution which is to be provided by the implementing partner;
(b)
the terms of the funding or the guarantees which are to be provided by the implementing partner to another legal entity participating in the implementation, whenever that is the case;
(c)
detailed rules on the provision of the EU guarantee in accordance with Article 19, including on the coverage of portfolios of specific types of instruments and the respective events that trigger possible calls on the EU guarantee;
(d)
the remuneration for risk-taking that is to be allocated in proportion to the respective share of the risk-taking of the Union and of the implementing partner or as reduced in duly justified cases pursuant to Article 13(2);
(e)
the payment conditions;
(f)
the commitment of the implementing partner to accept the decisions by the Commission and the Investment Committee as regards the use of the EU guarantee for the benefit of a proposed financing or investment operation, without prejudice to the decision-making of the implementing partner in respect of the proposed financing or investment operation without the EU guarantee;
(g)
provisions and procedures relating to the recovery of claims that is to be entrusted to the implementing partner;
(h)
financial and operational reporting and monitoring of the financing and investment operations under the EU guarantee;
(i)
key performance indicators, in particular as regards the use of the EU guarantee, the fulfilment of the objectives and criteria laid down in Articles 3, 8 and 14, and the mobilisation of private capital;
(j)
where applicable, provisions and procedures relating to blending operations;
(k)
other relevant provisions in compliance with the requirements of Article 155(2) and Title X of the Financial Regulation;
(l)
the existence of adequate mechanisms for addressing the potential concerns of private investors.
3. A guarantee agreement shall also provide that remuneration attributable to the Union from financing and investment operations covered by this Regulation is to be provided after the deduction of payments due upon calls on the EU guarantee.
4. In addition, a guarantee agreement shall provide that any amount due to the implementing partner that relates to the EU guarantee shall be deducted from the overall amount of remuneration, revenues and repayments due by the implementing partner to the Union from financing and investment operations covered by this Regulation. Where that amount is not sufficient to cover the amount due to the implementing partner in accordance with Article 18(3), the outstanding amount shall be drawn from the provisioning for the EU guarantee.
5. Where the guarantee agreement is concluded under the Member State compartment, it may provide for the participation of representatives from the Member State or the regions concerned in the monitoring of the implementation of that guarantee agreement.
Requirements for the use of the EU guarantee
1. The granting of the EU guarantee shall be subject to the entry into force of the guarantee agreement with the relevant implementing partner.
2. Financing and investment operations shall be covered by the EU guarantee only where they fulfil the criteria laid down in this Regulation and in the relevant investment guidelines, and where the Investment Committee has concluded that those operations fulfil the requirements for benefiting from the EU guarantee. The implementing partners shall remain responsible for ensuring that the financing and investment operations comply with this Regulation and the relevant investment guidelines.
3. No administrative costs or fees related to the implementation of financing and investment operations under the EU guarantee shall be due to the implementing partner by the Commission unless the nature of the policy objectives targeted by the financial product to be implemented and the affordability for the targeted final recipients or the type of financing provided allow the implementing partner to duly justify to the Commission the need for an exception. The coverage of such costs by the Union budget shall be limited to the amount strictly required to implement the relevant financing and investment operations, and shall be provided only to the extent to which the costs are not covered by revenues received by the implementing partners from the financing and investment operations concerned. The fee arrangements shall be laid down in the guarantee agreement and shall comply with Article 17(4) of this Regulation and with point (g) of Article 209(2) of the Financial Regulation.
4. In addition, the implementing partner may use the EU guarantee to meet the relevant share of any recovery costs in accordance with Article 17(4), unless those costs have been deducted from recovery proceeds.
Coverage and terms of the EU guarantee
1. Remuneration for risk-taking shall be allocated between the Union and an implementing partner in proportion to their respective share of the risk-taking with respect to a portfolio of financing and investment operations or, where relevant, with respect to individual financing and investment operations. The remuneration for the EU guarantee may be reduced in duly justified cases referred to in Article 13(2).
The implementing partner shall have appropriate exposure at its own risk to financing and investment operations supported by the EU guarantee, unless exceptionally the policy objectives targeted by the financial product to be implemented are of such nature that the implementing partner could not reasonably contribute its own risk-bearing capacity to it.
2. The EU guarantee shall cover:
(a)
for debt products referred to in point (a) of Article 16(1):
(i)
the principal and all interest and amounts due to the implementing partner but not received by it in accordance with the terms of the financing operations prior to the event of default;
(ii)
restructuring losses;
(iii)
losses arising from fluctuations of currencies other than the euro in markets where possibilities for long-term hedging are limited;
(b)
for equity or quasi-equity investments referred to in point (a) of Article 16(1): the amounts invested and the associated funding costs and losses arising from fluctuations of currencies other than the euro;
(c)
for funding or guarantees by an implementing partner to another financial institution in accordance with point (b) of Article 16(1): the amounts used and their associated funding costs.
For the purposes of point (a)(i) of the first subparagraph, for subordinated debt a deferral, reduction or required exit shall be considered to be an event of default.
3. Where the Union makes a payment to the implementing partner as the result of a call on the EU guarantee, the Union shall be subrogated into the relevant rights of the implementing partner relating to any of its financing or investment operations covered by the EU guarantee, to the extent that those rights continue to exist.
The implementing partner shall pursue the recovery of claims for the subrogated amounts on behalf of the Union and shall reimburse the Union from the amounts recovered.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
