EUROPEAN FINANCING PARTNERS S.A. is a private limited liability company established under the laws of the Grand Duchy of Luxembourg, and is owned by 14 shareholders.
The funding capacity of EFP is provided by the European Investment Bank (EIB) and by the following 12 EDFI members: BIO (Belgium), CDC (United Kingdom), COFIDES (Spain), DEG (Germany), FINNFUND (Finland), FMO (the Netherlands), IFU (Denmark), NORFUND (Norway), OeEB (Austria), PROPARCO (France), Sifem (Switzerland) and SWEDFUND (Sweden).
The operational structure of EFP is unique among the institutional investors, and is characterised by an efficient and fast track process with low administrative overheads. The operation of EFP is regulated by the Master Investment Agreement, which delegates full authority for investment decisions to the Investment Committee, which is composed of representatives from the institutions, which have committed funds to EFP.
Secretarial services are provided by the EDFI Secretariat in Brussels, while the statutory tasks are undertaken by a domiciliation agent in Luxembourg. The company is audited by PriceWaterhouseCoopers, appointed by the shareholders at the AGM, and by an internal audit committee, appointed by the Board of Directors.
A Promoting Partner – any one of the thirteen EDFI members being shareholders – may present funding proposals for projects located in the ACP states to the Investment Committee. Authorised Financial instruments are Senior Loans, Mezzanine Debt, Equity, Quasi-Equity and Guarantees. EFP will fund up to 75% of the total combined financing of EFP and the Promoting Partner. The minimum financing from EFP is €1 mln and the maximum is €25 mln per project.
The Investment Committee evaluates project proposals and grants approval in a two step process:
(1) Clearance In Principle followed by
(2) Final Approval
Once approved, the Investment Committee delegates authority to the Promoting Partner to undertake due diligence, establish the legal contracts and monitor the project company on behalf of EFP.
The investee company will sign a legal contract with the Promoting Partner only and will thus communicate and report only to the Promoting Partner. The Promoting Partner is responsible for the monitoring and communication to EFP and the underlying partners funding the operations. In May 2009, EFP was replenished with €230 mln, €100 mln provided by the EIB and €130 by the EDFI members.
An evaluation of EFP undertaken by the Operations Evaluation Department of the EIB in 2008/2009 concludes that “the EFP initiative is clearly in line with European development cooperation polices and with a number of joint statements on aid harmonisation put forward by the international community. It has also been a concrete step forward in implementing the Framework Agreement on financial co-operation and exchange of services signed by the European Partners in 2003. This evaluation has highlighted that, while sharing the common objectives of EFP, its members participate with their own institutional agendas: larger partners focus on financial leverage and risk sharing while smaller partners focus on the exchange of experience and best practices. These diverse strategic objectives are not only coherent with the objectives of the EFP, but greatly contribute to achieve them.Through its operation, the EFP has proved to be an effective and efficient instrument in strengthening co-operation among partners. Furthermore, overall the partners feel satisfied with the experience and provide concrete examples of reinforced co-operation.”