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Bulgaria: Call for Expression of Interest to select Financial Intermediaries that will receive resources from the JEREMIE Holding Fund to implement the First Loss Portfolio Guarantee Financial Instrument

  •  
    Date: 18 November 2010 - 17 January 2011

JER009

Ref.: Call for EoI No. JER-009/2010/2

Introduction

The JEREMIE initiative is a framework providing a series of coherent actions to promote increased access to finance for micro, small and medium-sized enterprises.

The JEREMIE initiative in Bulgaria is organised through the European Investment Fund (hereinafter, “EIF”), which operates and manages a Special Purpose Vehicle (hereinafter, “SPV”). EIF has established the SPV by contributing to it the JEREMIE funds allocated for the JEREMIE Initiative by the Republic of Bulgaria, utilising funds made available from the European Regional Development Fund (hereinafter, “ERDF”) and related public expenditure. The SPV is a company incorporated under the laws of the Republic of Bulgaria, and registered under the name “JEREMIE Bulgaria EAD”.  EIF holds the shares in the SPV in its name, but for the ultimate benefit, and on the account, of the Republic of Bulgaria, with an obligation to return such shares to the Republic of Bulgaria (and/or another entity designated by the Republic of Bulgaria) upon termination of the Agreements (as defined below). The SPV and EIF, as the SPV’s operator under the Agreements, constitute the JEREMIE Holding Fund (“JHF”). Further to the Holding Fund Agreement, as necessary, there will be further contractual arrangements between the SPV and EIF for the purposes of EIF issuing the First Loss Portfolio Guarantee.

As part of the Operational Programme “Development of the Competitiveness of the Bulgarian Economy 2007-2013” (hereinafter, “OP Competitiveness”) 1, the Government of Bulgaria has agreed to dedicate resources to the implementation of the JEREMIE initiative with EIF, in accordance with Article 44 of the Council Regulation (EC) No. 1083/20062 (hereinafter, “Reg. 1083/2006”) and in accordance with the provisions of the Funding Agreement (hereinafter, “Funding Agreement”) and Framework Agreement (hereinafter, “Framework Agreement”) entered into on 27 May 2009, and subsequently amended on 29 April 2010, between the Government of the Republic of Bulgaria (hereinafter, “GoB”) and EIF, and of the Holding Fund Agreement (hereinafter, “HF Agreement”) entered into on 23 July 2010 between the SPV and EIF (the Framework Agreement, the Funding Agreement and the HF Agreement, hereinafter, collectively the “Agreements”). Relevant rules for implementing Reg. 1083/2006 are set out in the Commission Regulation (EC) No. 1828/20063 (hereinafter, “Reg. 1828/2006”).

The cooperation between the GoB, EIF and the SPV is governed by the Agreements, which define the type of cooperation and the operational modalities of the JHF financing expenditure in respect of an operation, as this term is defined in Reg. 1083/2006 (hereinafter, “Operation”) comprising contributions to support financial engineering instruments. The Agreements also provide for an Investment Board with a consultative function in relation to the JHF activity; the members of which are appointed jointly by the GoB and EIF (hereinafter, “Investment Board”). EIF, in its capacity as operator of the SPV, acts on the basis of its usual business principles and an investment strategy and planning for the implementation of the JEREMIE initiative in Bulgaria.

The JEREMIE initiative is funded from the OP Competitiveness; Priority Axis 3 “Financial Resources for Developing Enterprises”; Area of Intervention 3.1 “Improvement of access to finance for SMEs through instruments of financial engineering”.

This Call for Expression of Interest targets financial engineering instruments referred to in Article 44 of Reg. 1083/2006 and is addressed to bodies or firms, whether public or private, which may be interested in receiving resources out of the JHF for the activities in respect of Operations (hereinafter “Financial Intermediaries”). Such activities for the implementation of the First Loss Portfolio Guarantee Instrument will be carried out in accordance with contractual agreements to be entered into between EIF and the selected Financial Intermediaries (hereinafter, “Operational Agreement(s)”).

The Financial Intermediaries should express their interest by completing and submitting an Expression of Interest, a template of which is attached hereto as Annex 1. 

1.     Definitions and Interpretation 

In this Call for Expression of Interest, capitalised terms and expressions shall have the meaning attributed to them below, unless otherwise defined above or the context requires otherwise: 

Applicant

means a Financial Intermediary applying to this Call for Expression of Interest;

Business Day

means a day during which EIF Luxembourg office is open, and banks are open for general business in Bulgaria and Luxembourg;

Deadline

means 17/01/2011;

Eligibility Criteria

means the criteria with which the Expressions of Interest and the Applicants shall comply with and which are listed in Annex 2 hereof;

Expression of Interest

means a proposal sent by an Applicant in response to this Call for Expression of Interest, within the Deadline, to be drafted in accordance with the template attached hereto as Annex 1;

JEREMIE

means the initiative “Joint European Resources for Micro to Medium Enterprises” launched by the Commission and EIF, as member of the European Investment Bank Group, in order to promote increased access to finance for the development of SMEs in the European Union;

EIB Group

The EIB Group consists of the European Investment Bank (EIB) and the European Investment Fund (EIF);

JHF

means the SPV and EIF as its advisor and operator under the Agreements;

Operational Agreement

means an agreement entered into between a Financial Intermediary and EIF regarding a financial instrument on the basis of this Call for Expression of Interest and the selection process;

Quality Assessment Criteria

means the quality assessment criteria applied by EIF at the sole discretion of EIF to assess the suitability of the Applicant and/or the proposed financial instrument according to the business standards of EIF and which are listed in Annex 2 hereof;

Selection Criteria

means the Eligibility Criteria and the Quality Assessment Criteria;

Small and Medium-sized Enterprises or SMEs

means micro, small and medium-sized enterprises as defined in the Commission Recommendation 2003/361/EC.

SPV

means JEREMIE Bulgaria EAD, managed and operated by EIF under the Agreements.

2.     JEREMIE Holding Fund 

The sole entity operating the SPV, in accordance with the Agreements, shall be European Investment Fund, 96 Boulevard Konrad Adenauer, L-2968 Luxembourg.

General internet address of the EIF (URL): www.eif.org

Under the Agreements, the EIF, which is appointed until the end of 2015, may be substituted in its role as operator of the SPV, and as the entity carrying out the JHF activity. In the event of such substitution, GoB, or the entity appointed by GoB to carry out the JHF activity, will assume the full discretion and responsibility to perform the tasks of the JHF and to implement the Operations in Bulgaria, and may take over the financial instruments. The Operational Agreements will provide for the possible substitution of the EIF, in order to allow the transfer of the Operational Agreements to the successor entity.

3.     Description of the activities expected from the selected Financial Intermediaries  

The selected Financial Intermediaries will have to implement the financial instrument briefly described in the table below (hereinafter, “Financial Instrument”) as provided for in Art. 44 of Reg. 1083/2006. The Financial Instrument shall be set up in accordance with Art. 43 of Reg. 1828/2006.

It is planned to allocate out of the JHF an amount up to EUR 74 million to the Financial Instrument.

See below list of indicative allocation and the relevant Annex setting out the Selection Criteria and the description of the Financial Instrument.  

Financial Instrument

Indicative capital allocation (EUR million)

Applicable Annexes

First Loss Portfolio Guarantee on a portfolio of loans to SMEs

Up to 74

Annex 2 (Financial Instrument: Description and Selection Criteria)

The indicative capital allocated to the Financial Instrument, as well as the amounts available for contribution by the JHF to the selected Financial Intermediary, may be changed as necessary, at EIF’s sole discretion, particularly if the funding available changes during the JHF implementation process or the demand for the Financial Instrument so requires. 

To be noted that joint ventures and/or consortiums can express their interest as long as they indicate/nominate one coordinating entity as a contractual counterpart for the EIF for the entire term of the Operational Agreement (in case of selection) and under the condition that all partners in the relevant joint venture or consortium are credit or financial institutions duly authorised to carry out such activities according to Bulgarian legislation. Such Applicants are required to submit one, joint Expression of Interest, in which the coordinating entity should be indicated.

4.     Expression of Interest  

A template for the Expression of Interest is attached hereto as Annex 1 and can also be found at the following internet address: www.eif.org. 

The Expression of Interest includes the Applicant’s identification, the project description, the supporting documents, the declaration of absence of conflict of interest and the statements regarding situations of exclusion. 

No later than 13/12/2010, the Applicants may request clarifications regarding the Call for Expression of Interest or the nature of the Financial Instrument. Such requests shall indicate the Call for Expression of Interest reference number and the name of the Applicant and shall be submitted in English via email to: 

Regional Business Development Unit
European Investment Fund
info.rbd@eif.org 

Requests for clarifications from Applicants shall not receive individual replies. Instead, answers to all requests for clarifications received within the relevant deadline will be published together in a clarification document to be posted on the website www.eif.org, at latest on 20/12/2010. 

EIF will, in principle, not contact any Applicant prior to the Deadline, unless it considers it necessary to clarify issues of a mere technical nature. However, should EIF discover any errors, inaccuracies, omissions or any other type of clerical defect in the text of the Call for Expression of Interest before the Deadline, EIF will correct the text and inform accordingly.

5.     Language  

The Expressions of Interest, including the submitted documents, shall be in English.

6.     Submission of Expression of Interest

The Expressions of Interest shall be submitted on or before the Deadline both by (i) e-mail and (ii) registered mail or professional courier service. The Expressions of Interest sent by registered mail or professional courier service shall consist of a closed single package, and shall contain the Expression of Interest, together with its attachments, in paper form and in removable electronic storage medium (e.g. CD-ROM). 

The Deadline for the submission of Expressions of Interest is 17/01/2011.

The Deadline applies (i) in case of e-mails, to the date of receipt of the same by EIF and (ii) in case of registered mail or professional courier service, to the date of dispatch proven by the post office stamp or a dispatch receipt.

The Expressions of Interest shall indicate the reference number of the Call (No. JER-009/2) and the name of the Applicant and shall be sent to the following address: 

Postal Address:

European Investment Fund
Attention: Regional Business Development Unit
96 Boulevard Konrad Adenauer
L-2968 Luxembourg
LUXEMBOURG

The outer envelope (package) shall indicate the following:
“Expression of Interest - Reference number of the Call (No. JER-009/2) – Not to be opened by the reception – To be passed without opening to Regional Business Development Unit”).  

E-mail Address:

Attention: Regional Business Development Unit
info.rbd@eif.org 

Prior to the Deadline and in the same manner as specified above, the Applicants may change or amend their Expressions of Interest by clearly indicating the parts to be changed or amended.

Prior to or after the Deadline and in the same manner as specified above, the Applicants may withdraw their Expressions of Interest. 

After the Deadline, an acknowledgement of receipt will be sent to the relevant Applicants by EIF via e-mail, which shall state the following:

  • Unique proposal identifier (Expression of Interest number);
  • Reference number of the Call for Expression of Interest;
  • Confirmation that the Expression of Interest was received before the Deadline.

The acknowledgement of receipt shall not be construed as a declaration of completeness of the Expression of Interest and the documents submitted therewith, nor any kind of assessment of the same. 

7.     Selection process  

When selecting Financial Intermediaries, EIF is committed to respect fundamental principles, such as:

i) equal treatment,

ii) non-discrimination,

iii) confidentiality, and

iv) transparency. 

The Expressions of Interest will be examined by the EIF, on a comparative basis, using professional analysis and judgment, taking into account the Selection Criteria. 

EIF will reject those Expressions of Interest, which do not comply with the Eligibility Criteria. Financial Intermediaries, whose application is rejected because of non-compliance with any of the elements reflected in the statements regarding situations of exclusion (Appendices 4 and 5 to Annex 1 hereto), may not present themselves for consideration in subsequent Calls for the Expression of Interest unless it is specifically evidenced that the reason for the exclusion no longer exists.

The expiration of the Deadline shall not prevent EIF, in limited cases and if deemed necessary, from requesting from Applicants clarifications on issues of a mere technical or formal nature, provided that such clarifications shall neither provide an opportunity to the respective Applicants to unduly improve their applications nor otherwise distort the competition between the Applicants.

Applicants who are not excluded according to the Eligibility Criteria will go through the EIF selection process based on the Quality Assessment Criteria. The further selection based on the Quality Assessment Criteria, and the due diligence process if any, follows the standard procedures and guidelines applied by EIF to its business. The evaluation of proposals at this phase will be conducted under competitive terms and it is envisaged to select one or more Applicants.

At any phase of the selection process, EIF reserves itself full discretion to consider Financial Intermediaries and no Applicant has any claim or other right or may expect to be ultimately selected for financial support by the JHF. Any negotiation of terms and conditions of Operational Agreements by no means entails any obligation for the EIF to enter into such Operational Agreement with the relevant Financial Intermediaries.

Financial Intermediaries which do not receive contributions from the JHF are informed accordingly; the reasons for their Expression of Interest being rejected will be clearly communicated to them upon request.

Those Applicants, whose Expression of Interest is rejected, shall have the right to submit a written complaint by e-mail and registered mail or professional courier service, to the same address used for the submission of the Expressions of Interest above, within thirty (30) days from receipt of the letter of rejection. Any complaints will be dealt within the framework and in accordance with the EIB Group complaints policy (for further info please click on the link or visit www.eib.org). 

8.     Operational Provisions 

The Financial Intermediaries, with which Operational Agreements will be eventually signed, shall be required to comply with the EIF Anti-Fraud policy, available on the website of EIF (www.eif.org), and with the relevant monitoring, reporting, publicity and auditing obligations required by the EU regulations applicable to ERDF, and by the Funding Agreement. Such obligations are briefly described in the relevant Financial Instrument description documents, and will be prescribed in the relevant Operational Agreement.

ANNEXES

Annex 1. Expression of Interest ; (.doc)

Annex 2. First Loss Portfolio Guarantee Financial Instrument: Description and Selection Criteria ; (doc)

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1 OP Competitiveness approved by the European Commission Decision C (2007) 4500 of 26 September 2007.

2 Council Regulation (EC) No. 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No. 1260/1999 (Official Journal of the European Union L210 of 31.07.2006).

3 Commission Regulation (EC) No 1828/2006 of 8 December 2006 setting out rules for the implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund (Official Journal of the European Union L371 of 27.12.2006), as amended from time to time, including by Commission Regulation (EC) No 846/2009 of 1 September 2009 amending Regulation (EC) No 1828/2006 setting out rules for the implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund (Official Journal of the European Union L250 of 23.09.2009).

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