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Bruno Robino Senior Project Manager “JEREMIE”

“JEREMIE” implementation process from EIF. Bruno Robino Senior Project Manager “JEREMIE”. Brussels, 2 June 2008. Table of contents. EIF at a glance JEREMIE: The concept Phase 1: Evaluation Phase 2: Implementation Implementation process for EIF Status Quo : East, South, North.

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Bruno Robino Senior Project Manager “JEREMIE”

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  1. “JEREMIE” implementation process from EIF Bruno RobinoSenior Project Manager “JEREMIE” Brussels, 2 June 2008

  2. Table of contents EIF at a glance JEREMIE: The concept Phase 1: Evaluation Phase 2: Implementation Implementation process for EIF Status Quo : East, South, North

  3. EIF at a glance EU specialised financial institution for SMEs, acting through: Venture Capital (fund-of-funds), Guarantees for SME portfolios and financial engineering • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North Authorised capital: EUR 3bn EIB: 66 % EU: 25 % Fin. institutions: 9 % AAA (Standard & Poor’s)Aaa (Moody’s)AAA (Fitch) MDB status Geographic location Working in “enlarged” Union Breaking traditional finance boundaries: Turkey,Western Balkans, and South-Eastern Europe Continuing to diversify portfolio with furtherinvestments in NMS and Southern Europe Aaa-rated European institution with MDB status

  4. EIF: Resources and objectives, end-2007 BMWi - ERP • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North EUR 450m EUR 965m EUR 4bn Revolving EUR 1.1bn (CIP) Dahlia SICAR S.R. Up to EUR 1bn To be committed to venture capital funds and guarantees in the EU and Candidate Countries andgenerate good return on equity

  5. Under EIF management, end-April 2008 • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  6. JEREMIE: the concept • Initiative of DG REGIO: Lisbon Strategy, support to SMEs, development of Entrepreneurship through financial engineering • Shift from Grant approach to revolving instruments • The Holding Fund concept: new, is central in JEREMIE; will invest into financial intermediaries in the field of VC, guarantees, micro-credit, etc... • Tool-kit, 2008/2013+2 long term approach, flexibility, delegation to an expert • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  7. JEREMIE: the phases

  8. Phase 1: Evaluation • Evaluate market gaps in SME finance • Development of a methodology • By 2008, 45 evaluation studies done on request • With implementation recommendations, notably in terms of amounts and priorities • DG REGIO budget support • Market gaps useful for State Aid clearance • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  9. Map • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  10. Phase 2: Implementation • Value in JEREMIE concept • Who manages the Holding Fund once a Managing Authority decides to implement JEREMIE? • EIF • Or National institution (law) • Or Tender (service contract) • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  11. Designation of a JEREMIE Project Manager (coop. with Legal) Appointment of a local Law Firm(compliance EU regulation / national law) Develop Investment Strategy and Planning Draft Funding Agreement Cost Letter; Reporting and Monitoring tools Accord de siège at national level Staff requirement and recruitment --------------------------- signature ------------------------------------------------------- Opening of a Bank Account Treasury Management (EIB? Call?) Establishment of a Steering Committee / Investment Board EIF as Holding Fund Manager: Implementation Process (1) • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  12. Selection criteria of financial intermediaries Calls for expression of interest (first operations) Pre-selection of financial intermediaries Due diligence Conclusion of contracts with financial intermediaries Disbursement process (centralised) Monitoring, etc… EIF Procedures designed in collaboration with KPMG Implementation Process (2) • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  13. Legal issues: The donation to EIF Interpretation by EIF: donation of rights to manage Management “in the name and on behalf” Bank account vs SPVs Implementation • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North • EIF JEREMIE activity must be at cost: • Driven by donation concept • Calculated by EIF internal accounting department and auditable (internal/external auditors) • Updated annually

  14. JEREMIE Achievements: 6 mandates expected in 2008 Other JEREMIE linked activities under development: EIB leverage finance for HFs (e.g. Wales) EIB treasury management (e.g. Romania, Greece) Advisory services (e.g. NW Spanish regions, Lombardy) STATUS Quo: East, South, North • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  15. Status Quo: CEECsRomania • Achievements • Funding Agreement signed in Feb 2008 • Initial allocation EUR100m (expected 35% VC, 65% Gtees) • Procurement of custodian bank finalised • Treasury agreement under negotiation with EIB • EIF Bucharest Office opened (EIB Group) • To be completed • Appoint staff to EIF Bucharest Office • Prepare term sheets for financial engineering instruments (based on Implementation Proposal) • First operation: guarantee (expected Q3 2008) • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  16. Status Quo: CEECsBulgaria & Slovakia • Bulgaria • Expected EIF HF manager for an initial tranche ofEUR 200m • Funding Agreement in negotiation with MA • Target signature: Q3 2008 • Slovakia • Expected EIF HF manager for an initial tranche ofEUR 210m • Legal issues to be clarified • Target signature: Q3 2008 • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  17. Status Quo: CEECsMember States considering EIF’s involvement • Poland (Regional Level) • Regional approach to debt instruments • 5 letters of intent received from Regions • Mandate in Eastern Poland under discussion • Regional gap reports under preparation • On-going discussions with MA on EIF’s role • Czech Republic • OP makes provisions for HF in VC area (allocation EUR 72m) • MA to decide on EIF’s role • Slovenia • Evaluation studies under preparation • Potential implementation structures being assessed • MA to decide on EIF’s involvement and type of resources to be used in HF • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  18. Status Quo: Member States which decided not to involve EIF • Hungary • National HF managed by a spin-off from MDB (Hungarian Development Bank) • Allocation: EUR 700m • Potential advisory role of EIF: to be discussed • Poland (National Level) • National HF in VC area (allocation EUR 182m) • Potential advisory role of EIF: to be discussed • Germany, Austria, Finland, Belgium, The Netherlands, Luxembourg • No HF approach foreseen • Regional approach towards Structural Funds • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  19. 18 national or regional evaluation studies completed: Cyprus, Greece, Malta, Italy, Spain, Portugal 2 Italian regions, 10 Spanish regions Letters of Intent, Memoranda of Understanding,Funding Agreements 3 LoI (Marche, Canary Islands, Malta) 6 MoU (Greece, 2 Lombardy, Portugal, Galicia, Cyprus) 1 FA (Greece) Ancillary Advisory Services NW regions of Spain, Comunidad Valenciana Status Quo: Southern Member StatesFrom Cyprus to Portugal • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  20. 1st Funding Agreement signed (26.06.2007) EIF HF manager for an initial tranche of EUR 100m Achievements Agreement on Terms and Conditions (Cost Letterto be signed soon) Agreement on products to be launched as a priority (micro-credit for start-ups and for established SMEs) EIF personnel working in Athens since signature(2 persons) Set up of EIF local office in Athens To be completed IB i.e. Steering committee to be nominated (MEF) EUR 100m to be received (MEF) Selection of custodian Bank (EIF) Launch products (EIF) Status Quo: Southern Member StatesGreece • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  21. Issues Scepticism from central government on JEREMIE, thus on EIF as well + political instability not helpful. Achievements Evaluation studies completed at national level + 2 regions Marche: EIF HF manager for an initial tranche ofEUR 10m, negotiation of FA underway, agreement on financial engineering products Lombardy: EIF expected to provide advisory services to Finlombarda Strong interest from Campania, Basilicata, Sardegna, Toscana, Abruzzo, Emilia-Romagna, Piemonte EIF local presence in Rome at EIB offices To be completed FA agreement with Marche Agreement with Lombardy/ Finlombarda Status Quo: Southern Member StatesItaly • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  22. Issues Limited interest at central level but compelling need from regions, particularly on advisory services. Achievements Evaluation studies completed at national level + 10 regions LoI from Canary Island, MoU from Galicia Andalucia: negotiation underway for FA in collaboration with local development agency: ‘IDEA’ Formal request from NW regions for advisory services To be completed Canary Islands: provision of business plan (underway) Andalucia: finalise negotiation Status Quo: Southern Member StatesSpain • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  23. Cyprus Evaluation studies completed MoU signed; FA negotiation underway with EIF HF manager for an initial tranche of EUR 10m Advisory services: request to set up a National Guarantee Scheme Malta Evaluation studies completed Formal requested to adopt JEREMIE with EIF FA negotiation underway (slow) with EIF HF manager for an initial tranche of EUR 5m Portugal Despite MoU signed, limited interest from National Authorities Status Quo: Southern Member StatesCyprus, Malta, Portugal • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  24. 13 regional evaluation studies(8 completed, 5 under finalisation) 2 MoU signed : Auvergne (cancelled) & Guadeloupe Other regions interested: Languedoc-Roussillon, Corse, Guyane, Champagne-Ardenne, Basse-Normandie Potentially up to EUR 100m in aggregate under management ERDF sums allocated by the French State to 26 regions. The French State (Intérieur, Finance) plays a supervisory role, but ERDF management is done at regional level. Status Quo: France • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  25. SMEs subsidy/grant culture still very strong e.g. Italy and Spain; Political factors influencing JEREMIE (political elections = back to square 1,Prefecture Govern. vs Admin. Régionale. Potential to increase JHF size depending on success on first tranche: e.g. Greece, Cyprus; Expected snow-ball effect at regional level e.g. Italy, France and Spain; Small national budget, but strong political enthusiasm: e.g. Cyprus, Malta; EIF advisory services in terms of institutional building. Comments / Issues • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  26. 9 national/regional evaluation studiescompleted N. Ireland, England, Wales, Scotland, Denmark, Sweden, Latvia, Lithuania and Estonia Economies differ widely; ERDF funds vary significantly Western Europe and Scandinavia Smaller ERDF amounts; High National Contributions Strongly established local institutions Newer Member States (Baltics) Larger ERDF amounts; less developed institutions Status Quo: Northern BeltFrom Ireland across to Baltics • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  27. EIF and JEREMIE in NMS seen to provide significant added value with transition possibility Latvia Prime Minister has driven decision process High level commitment from Lithuanian MoE JEREMIE HF with EIB Loan but managed by experienced local Agency seen positively in more developed economies Wales; Yorkshire, North East … EIB Loan seen as high value-added product EIF acting as potential advisor Status Quo: Northern BeltComments / Issues • EIF at a glance • JEREMIE: The Concept • Phase 1: Evaluation • Phase 2: Implementation • Implementation process for EIF • Status Quo: East, South, North

  28. European Investment Fund Bruno Robino Senior Project Manager “JEREMIE” 43, avenue J. F. Kennedy L-2968 Luxembourg Tel.: (+352) 42 66 88 1 Fax: (+352) 42 66 88 200 www.eif.org Contact

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