Article 14 Management Costs and FeesF1

The Managing Authority shall remunerate the EIF for the EIF Activity through fees comprising (i) an administrative fee, (ii) an incentive fee, (iii) a Treasury Asset Management fee and (iv) a reserve fee to cover unforeseen expenditures (collectively, the ‘Management Costs and Fees’), as further specified in this Article.

The Management Costs and Fees shall be debited by the EIF from the Dedicated Window[s] Account[s] upon invoicing to, and review by, [to be contractually further specified] the Managing Authority and shall constitute the full compensation for the EIF for the EIF Activity. [Further conditions may be contractually specified if necessary]

The aggregate of the administrative fee and of the incentive fee shall in no case exceed 6 % of the MS Contribution Committed, except in duly justified circumstances. Subject to Articles 14.6 and 14.7, the incentive fee shall not be lower than one third of the aggregate of the administrative fee and the incentive fee.

In addition to the administrative and incentive fees, the Treasury Asset Management fee shall not exceed [1] % [or otherwise specified in the individual funding agreements] of the MS Contribution Committed. Furthermore, the reserve fee shall not exceed [0,5] % [or otherwise specified in the individual funding agreements] of the MS Contribution Committed.

The administrative fee shall constitute the entire compensation for administrative expenses incurred by the EIF in relation to the Dedicated Window[s], including, but not limited to: market research, marketing, product development, awareness-raising activities, negotiation, monitoring, adaptations to IT systems, legal costs, travel expenses, tax advice, bank charges, sub-contracting costs, accounting and reporting, monitoring and controls, the Secretariat, Evaluations (if any), internal and external audit, visibility and publicity. It shall take into account costs charged to Financial Intermediaries. [Further conditions may be contractually specified if necessary]

Subject to the ceilings set out in Article 14.3, the administrative fee shall be paid to the EIF in the following way:

1. (1)

   The first part of the administrative fee shall be linked to the establishment of the Dedicated Window[s] and shall be equal to [2] % of the MS Contribution Paid. This amount shall be paid to EIF at the signature of the first Operational Agreement. [such conditions shall be contractually further specified]

2. (2)

   The remaining part of the administrative fee shall be linked to the implementation, management, monitoring and winding down of the Dedicated Window[s] and shall be paid annually in arrears [Further conditions may be contractually specified if necessary].

The incentive fee shall reward the EIF for the achievement of financial and policy-related performance of the Dedicated Window[s].

Subject to the ceiling set out in Article 14.3, the incentive fee shall be paid to the EIF on the basis of achievement of performance indicators, notably the Leverage Effect achieved in accordance with the Milestones set out in Article 7. [Such conditions shall be contractually further specified]. The incentive fee shall be paid semi-annually in arrears.

The Treasury Asset Management fee shall be utilised for treasury management activities.

The reserve fee shall be utilised to cover unforeseen expenditures, e.g. litigation costs. Payment for unforeseen expenditures shall be subject to the prior approval by the Managing Authority. [Further conditions shall be contractually specified].

The Management Costs and Fees shall be covered in the first instance by Revenues and Repayments. If such Revenues and Repayments are insufficient, the shortfall shall be covered by the MS Contribution Paid in accordance with the rules set out in this Article. Notwithstanding the foregoing, the Managing Authority shall remunerate the EIF for the EIF Activity performed after 31 December 2023 through fees separate from the Management Costs and Fees further specified in this Funding Agreement. [Further conditions shall be contractually specified]