Call for Expression of Interest to select Financial Intermediaries that will receive resources from the JEREMIE Holding Fund for Bulgaria to implement a JEREMIE funded financial instrument with an embedded risk sharing [1]
ref. Call 009-6
Validity of call: from 27/07/2012 (publication date) to 28/09/2012
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”).
As part of the Operational Programme “Development of the Competitiveness of the Bulgarian Economy 2007-2013” (hereinafter, “OP Competitiveness”) [2], 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. 1083/2006[3] (as amended, 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 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. 1828/2006[4] (hereinafter, as amended, “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 of an investment strategy and planning for the implementation of the JEREMIE initiative in Bulgaria.
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 are interested in receiving resources out of the JHF for the activities in respect of Operations (hereinafter “Financial Intermediaries”). Such activities shall be carried out in accordance with the contractual agreements to be entered into by the SPV 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.
It is to be noted that the full allocation of resources under this call is conditional upon the following: (i) The amendment to the OP Competitiveness providing for implementation of a funded product under Area of intervention 3.1 of the Priority Axis 3 is approved by the Commission and the subsequent transfer of resources to the JEREMIE Holding Fund. (ii) The agreements between EIF and the Republic of Bulgaria represented by (MEET) becoming effective; the agreements have been already signed by MEET and EIF, and approved by the Council of Ministers, but will become effective only upon ratification by the National Assembly of the Republic of Bulgaria. At the time of publication of the call it is expected that these two conditions precedent will be fulfilled before end of September 2012. |
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, which has to be a credit institution authorized to carry out business in Bulgaria under the applicable regulatory framework or joint ventures/consortia of such credit institutions; |
Deadline |
means 28/09/2012 (60 days from publication); |
Eligibility Criteria |
means the criteria with which the Expressions of Interest and the Applicants must comply with and which are listed in Annex 2 – Part II 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; |
Financial Instrument |
JEREMIE Funded Financial Instrument with a risk sharing element; |
JEREMIE |
means the initiative “Joint European Resources for Micro to Medium Enterprises” launched by the Commission and the 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 (the EIF); |
JHF |
means the SPV and the EIF as its advisor and operator under the Agreements; |
Operational Agreement |
means an agreement entered into between a Financial Intermediary and the EIF on behalf of the JHF 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 the EIF at the sole discretion of the EIF to assess the suitability of the Applicant and/or the proposed Financial Instrument according to the business standards of the 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 under Commission Recommendation 2003/361/EC and Small and Medium-Sized Enterprises Act of the Republic of Bulgaria; |
SPV |
means JEREMIE Bulgaria EAD, managed and operated by the EIF under the Agreements. |
2. Holding Fund manager
The sole entity operating the SPV, in accordance with the Agreements, shall be the European Investment Fund, 96 Boulevard Konrad Adenauer L-2968 Luxembourg.
General internet address of the JEREMIE Holding Fund manager (URL): www.eif.org.
Under the Agreements, the European Investment Fund 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 Instrument. 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 a financial engineering instrument briefly described in the table below (hereinafter, “Financial Instrument”). A Financial Instrument shall either be set up as an independent legal entity governed by agreements between the co-financing partners or shareholders or as a separate block of finance within a Financial Intermediary. As provided by Reg. 1828/2006, a separate block of finance shall be subject to specific implementation rules within the Financial Intermediary, stipulating, in particular, that separate accounts are kept which distinguish the JHF resources invested in the Financial Instrument, including those contributed by the Operational Programme, from those initially available in the Financial Intermediary.
It is planned to allocate out of the JHF an indicative initial amount of EUR 150 million to the Financial Instrument from the Operational Programme “Development of the Competitiveness of the Bulgarian Economy 2007-2013”.
See below the list of indicative allocation and the relevant Annex setting out the Selection Criteria and the description of the Financial Instrument.
Financial Instrument |
Indicative initial capital allocation (millions EUR) |
Applicable Annexes |
JEREMIE funded financial instrument |
150 |
Annex 2 (Financial Instrument: Description and Selection Criteria) |
Financial Intermediaries shall clearly express their interest for a contribution (in terms of amount requested) and may express their interest for a contribution up to the amount allocated by the JHF to the Financial Instrument.
Overall, the indicative initial 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 consortia can express their interest as long as (i) each of the joint venture or consortia members is a credit institution authorised to carry out business in Bulgaria under the applicable regulatory framework, (ii) they indicate/nominate one coordinating entity as a contractual counterpart of JHF for the entire term of the Operational Agreement (in case of selection), and (iii) all members of the joint venture or consortia assume joint and several liability for all applicable obligations. Such Applicants are required to submit one, joint Expression of Interest.
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 addresses: www.eif.org, http://www.opcompetitiveness.bg/.
The Expression of Interest includes the Applicant’s identification form, the project proposal, the supporting documents, the declaration of absence of conflict of interest and the statements regarding situations of exclusion.
Until no later than 24/08/2012, the Applicants may request clarifications regarding the Call for Expression of Interest or the nature of the Financial Instrument. Such requests must 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 no later than 31/08/2012.
The 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 the 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, the EIF will correct the text and inform the Applicant 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 (no more than 10 megabytes per email) 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, USB Memory Stick).
The Deadline for the submission of Expressions of Interest is 28/09/2012.
The Deadline applies (i) in case of e-mails to the reception by the 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-009/6) 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-009/6) - 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 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 the EIF via e-mail, which shall state the following:
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, the 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, according to the Selection Criteria.
The 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 the EIF, in limited cases if deemed necessary, from requesting and receiving 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 and which have been providing the additional information requested to pre-selected applicants as per Appendix 2 within the deadline determined in such request from EIF will go through the EIF selection process based on the Quality Assessment Criteria in a two-step approach, with the first constituting a desk-based analysis (Quality Assessment Criteria from 2.1 to 2.4) and the second being a due diligence process (Quality Assessment Criteria 2.5 and 2.6).
Following desk-based analysis, the Applicant(s) not preselected for due diligence process will be informed accordingly. The further selection based on the Quality Assessment Criteria, and the due diligence process if any, follows the standard procedures and guidelines applied by the EIF to its business. The evaluation of proposals at this phase will be conducted under competitive terms and one or more Applicants may be selected. To be noted that in the context of the evaluation procedure, the EIF may take negotiation positions, which view specifically at the improvement of the access to finance for the benefit of the final beneficiary SMEs.
If, for any reason, an Operational Agreement is not signed with an Applicant initially selected, the EIF reserves the right to consider increasing the amount negotiated with (an)other Applicant(s) initially selected (in case more than one is selected).
Applicants who are not considered for contractual negotiations may constitute a reserve list, with a validity of maximum one year following notification.
During this period of time and in case the EIF does not proceed further with any of the selected Applicant(s) for contractual negotiations or if additional funding is made available, the EIF reserves itself the right to revert back to the Applicants included in the reserve list and initiate contractual negotiations with any of them, taking into consideration the results of the evaluation and the ranking formed.
In any phase of the selection process, the 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 and/or SPV to enter into such Operational Agreements 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, which will be dealt within the framework and in accordance with the EIB Group Complaints Mechanism Policy (further information can be found on http://www.eib.org/about/cr/complaints/reporting/index.htm).
8. Operational Provisions
ANNEXES
Annex 1. Template of Expression of Interest [PDF] [Word]
Annex 2. JEREMIE funded financial instrument: Description and Selection Criteria (.pdf)
[1] The specifications of the product under this Call are in line with the selection criteria of a Funded Risk Sharing Financial Instrument as presented and approved by the Monitoring Committee of the Operational Programme Competitivenss under the indicative operation 3.1.4 – “support for risk-sharing instruments” on 08 June 2012.
[2] OP Competitiveness approved by the European Commission Decision C (2007) 4500 of 26 September 2007.
[3] 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).
[4] 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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