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Cash-, Debt- and Guarantee Management

Report 2019

THE CASH, DEBT AND GUARANTEE MANAGEMENT REPORT 2019

Key figures

Amount in millions of euros as of 31 December 2018 2019

Breakdown by type of debt Consolidated debt 24,186.56 24,176.22 Direct debt 5,998.39 6,802.26

Debt instruments used (direct debt) Long term EMTN 5,631.50 6,331.50 Schuldschein 37.50 37.50 Bank loans (incl. municipal loans) 181.67 161.47 Other 70.80 64.28 Short term BCP 0.00 0.00 Current accounts 76.92 207.50

Characteristics of the Flemish Debt Rating awarded by the rating agency Moody’s Long-term rating Aa2 Aa2 Outlook Stable Stable

Net financing requirements 538.63 1,843.53 Debt ratio 43.62% 44.04% Debt level 4.16% 4.53%

Key figures of the direct debt portfolio Fixed interest rate 99% 97% Floating interest rate 1% 3% Average interest rate 1.40% 1.42% Average remaining term to maturity (in years) 15y 01m 15y 05m

Contents I. INTRODUCTION ...... 5 II. ECONOMIC ENVIRONMENT IN 2019 ...... 6 1. International context ...... 6 2. Economic situation in Belgium and Flanders ...... 8 3. Interest rate in 2019 ...... 8 4. Interest rate prospects ...... 10 III. CASH MANAGEMENT IN 2019 ...... 11 1. Overview ...... 11 2. The Net Financing Requirement (NFR) ...... 12 3. The cash pools of the Government of Flanders ...... 14 4. The Central Financing Unit (CFU) ...... 16 5. Investments ...... 18 IV. DEBT MANAGEMENT IN 2019 ...... 19 1. Overview ...... 19 2. Direct debt ...... 20 2.1 Long-term debt instruments...... 23 2.2 Short-term debt instruments ...... 27 2.3 Risk management ...... 29 2.4 Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders ...... 32 2.5 Revenue from internal financing ...... 39 3. Consolidated debt ...... 40 3.1 Overview of consolidated debt 2017-2019 ...... 40 3.2 Flemish consolidated gross debt in INA notification APR-20 ...... 42 3.3 Evolution of the consolidated gross debt in 2020 ...... 45 4. Debt standard ...... 46 4.1 Objective 1: maintain a favourable rating ...... 46 4.2 Objective 2: a positive net asset position ...... 46 5. Public-Private Partnership ...... 47 V. GUARANTEE MANAGEMENT IN 2019 ...... 48 1. Overview ...... 48 2. The risk is limited ...... 51 2.1 Executions and recoveries ...... 52

3. Some key components ...... 53 3.1 Guarantees to (local) authorities ...... 53 3.2 Social Housing ...... 53 3.3 VIPA ...... 54 3.4 Schools of Tomorrow ...... 54 3.5 Guarantees to large, medium and small enterprises ...... 55 VI. THE RATING OF THE FLEMISH COMMUNITY/REGION ...... 56 VII. APPENDICES ...... 57 1. Glossary of terms ...... 57 2. Overview of websites ...... 61

I. INTRODUCTION

In implementation of Article 104 of the Decree containing the Flemish Public Finance Codex of 29 March 2019, this report provides an overview of the cash, debt and guarantee management of the Government of Flanders during 2019. This report was finalized in May 2020.

The main highlights of this annual report for 2019 are:

• In 2019, the Government of Flanders placed 1 new benchmark (BM) on the international capital market: a sustainability bond of 750 million euros with a maturity of 25 years; this is the second sustainability bond after the one issued in 2018; • There was a continued focus on direct financing by the Government of Flanders for the consolidated entities Vlaamse Maatschappij voor Sociaal Wonen – VMSW (Flemish Social Housing Company), Vlaams Woningfonds – VWF (Flemish Housing Fund) and School Invest. • There was a limited reduction in consolidated debt; • There was a further reduction of the guaranteed debt level; • The Government of Flanders managed to maintain its good rating in 2019 thanks to its prudent financial and budgetary management.

II. ECONOMIC ENVIRONMENT IN 2019

1. International context

After the sharp slowdown in economic activity in the second half of 2018, the global economy remained rather sluggish in 2019. According to the IMF, the world economy grew by 2.9%, the lowest level since the financial crisis of 2008 and 2009. The slowdown was most pronounced in manufacturing industry, due to the trade war between the US and China, as well as sector-specific problems.

The trade war between the US and China escalated in 2019, culminating in August, when tariff increases followed one another in rapid succession. This situation created a great deal of uncertainty, which made business leaders more cautious and reduced their willingness to invest. As a result, the declining demand for investment goods led to a significant weakening of manufacturing industry.

Declining activity in manufacturing industry was also due to sector-specific problems, in particular in the automotive sector. In China, car sales collapsed due to the disappearance of certain tax advantages. In the euro area, especially in Germany, production was disrupted by new emission standards. In general, consumers also adopted a more ‘wait and see’ approach when buying cars, driven by new technology, regulations and mobility habits.

All this had a significant effect on the growth of world trade. Total imports and exports of goods and services decreased in 2019.

From September onwards, trade tensions ebbed away and hope for an agreement between the US and China increased, which was eventually reached in December. This led to greater optimism and the macroeconomic indicators pointed to a cautious revival in economic activity. Unfortunately, the spread of the coronavirus put an abrupt end to all that. The IMF currently expects the global economy to contract by 3% in 2020.

Figure 1: World economy growth at lowest level since Figure 2: Export growth (year-on-year) turned 2009 negative in 2019

6 25% 20% 5 15% 4 10%

3 5% 0% 2 -5% 1 -10%

-1

OESO België

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2000

Source: IMF Source: Refinitiv

The growth figures for 2019 in the main economic zones were therefore considerably lower than for 2018. In the United States, the economy grew by 2.3% in 2019, compared with 2.9% the year before. In addition to the uncertainty surrounding the trade war, the phaseout of the fiscal stimulus measures adopted in 2017 and 2018 also had a downward effect on the growth in 2019.

In China, growth fell from 6.6% in 2018 to 6.1% in 2019, the lowest level in 30 years. The trade war, as well as the planned debt reduction, affected the Chinese economy.

In the euro area, growth fell from 1.9% in 2018 to 1.2% in 2019. As a very open economy, the euro area is highly sensitive to trade tensions, caused by both the US-China trade war and the Brexit negotiations. The slowdown was also more pronounced in countries where the share of manufacturing in GDP is high. In Germany, where the share of manufacturing is around 20%, growth fell from 1.5% in 2018 to 0.6% in 2019. In Italy, which has been struggling with economic problems for some time, growth fell from 0.9% in 2018 to 0.3% in 2019.

Even though economic growth in 2019 was weaker than in 2018, the unemployment rate continued to fall in both the euro area (including Belgium) and the US. Unemployment in the US fell to 3.5%, a level not seen since the 1960s. The lower unemployment rates can be explained by the smaller increase, or even contraction, of the labour force.

There was little upward pressure on inflation in the US and the euro area. Although the unemployment rate was low and wage growth somewhat stronger, this was not translated into higher prices. The evolution of commodity prices also had a downward effect on inflation. In September 2019, after the attack on Saudi oil installations, the oil price rose sharply, briefly boosting inflation.

Figure 3: Unemployment fell slightly Figure 4: Upward pressure on prices was weak in 2019

11 04% 10 03% 9 03% 8 02% 7 02% 6 01% 5 01% 4 00% 3

Verenigde Staten Eurozone België VS België Eurozone

Source: Refinitiv Source: Refinitiv

2. Economic situation in Belgium and Flanders

Even though the global economy was weaker in 2019 and there were political tensions at federal level, the economy was surprisingly robust in Belgium. Economic activity grew by 1.4% in 2019, only 0.1 percentage point lower than in 2018.

Relatively strong domestic demand supported growth, offsetting the weaker export performance. Domestic demand was supported by robust job growth, while inflation fell. The Flemish labour market evolved very positively in 2019. There were, for example, approximately 8,000 fewer non-working job-seekers in 2019 compared with 2018. This boosted disposable incomes to such an extent that both private consumption and the savings ratio were able to increase further. Corporate investments also continued to grow strongly.

Moreover, the Belgian industry was more robust compared with that of our neighbouring countries. This has largely to do with the structure of the Belgian industry. Important sectors, such as chemicals or pharmaceuticals, which together generate one quarter of industrial added value, are less cyclical. Sectors that are more correlated with the world economy, such as the production of machinery and equipment, have a smaller share in the Belgian manufacturing industry.

The sector that experienced a real acceleration was the construction sector. Investment in housing rose sharply in 2019. The rise in disposable incomes and persistently low mortgage interest rates led to high investments in the construction and renovation of housing. The low yields and/or high volatility of financial assets also made property interesting for investors.

3. Interest rate in 2019

Weaker economic activity, along with falling inflation, led many central banks to conduct more loose monetary policies. In March 2019, the Federal Reserve announced that it would stop reducing its balance sheet in September. It also cut its policy interest rate three times by 25 basis points (July, September and October). In September, the ECB cut its deposit rate by 10 basis points to -0.50% and announced that asset purchases would restart as of November for a monthly amount of 20 billion euros. In November, Christine Lagarde took over from Mario Draghi.

In the US, long-term interest rates peaked in October 2018, but declined from November 2018 onwards, driven by weaker economic data. The bottom of 1.39% was reached in August. Afterwards, interest rates rose again somewhat, as there was optimism about an agreement between the US and China and as economic figures improved slightly.

In the euro area we see a similar pattern, but at a lower level. The German ten- year interest rate was already negative at the beginning of 2019, bottoming out

at -0.65% in August 2019. The Belgian ten-year interest rate was also negative at the time.

Figure 5: Fed and ECB policy rates Figure 6: Interest rates on 10-year government bonds

3 3,5 2,5 3 2 2,5 1,5 2 1 1,5 0,5 0 1 -0,5 0,5 -1 0 -0,5 -1 01/2018 07/2018 01/2019 07/2019 01/2020 Fed Funds target ECB depositofaciliteit Verenigde Staten Duitsland BelgIë

Source: Refinitiv Source: Refinitiv

4. Interest rate prospects

The corona crisis has forced monetary authorities to take unprecedented measures to support the financial system. The main objective of central banks was to safeguard lending to the real economy and ensure that interest rates remain low. The Fed and the ECB (as well as many other central banks) have done so with full conviction.

The Federal Reserve reacted first with conventional measures and with measures that were used during and after the 2008 financial crisis. For example, it cut its policy rate by 150 basis points in March, so that today it fluctuates between 0% and 0.25%. It also announced a new round of quantitative easing amounting to 700 billion dollars. These measures did not immediately remove tensions on the financial markets. Thus, the demand for dollars remained very high. The Fed therefore made it easier for other central banks to obtain dollars (via swap lines) and went a few steps further than the 2008 repertoire. On 23 March, it announced that its existing buy-back programme is unlimited, allowing it to support smooth market functioning and effective transmission of its monetary policy. The Fed also decided to buy corporate bonds. On 9 April, a further plan was drawn up, mainly involving credit lines for small and medium-sized enterprises and local authorities, worth 2,300 billion.

The ECB also took unprecedented measures. On 12 March, during a planned press conference, it decided to launch a new 120 billion euro temporary buy-back programme, additional long-term funding to support the financial system and improved terms of an existing liquidity-providing programme (TLTRO III) to support lending to the real economy. However, the situation evolved so rapidly that the ECB proposed new measures as early as 18 March. It announced a new 750 billion euro Pandemic Emergency Purchase Programme.

Central banks’ responses were swift and proportionate to the severity of the crisis. It is likely that the Fed and the ECB will be able to take additional measures if the situation deteriorates further. Of course, everything depends on how the corona crisis develops. The current central bank measures have supported the smooth functioning of the financial system. We can conclude that all these measures will keep market interest rates low for a long time to come. Even before the corona crisis, there were already structural factors that kept long-term interest rates low, and the interventions of recent weeks reinforce that prospect further.

III. CASH MANAGEMENT IN 2019

1. Overview

Table 1 shows both the monthly evolution of the Net Financing Requirement1 (NFR), the direct debt and the evolution of the current account.

Table 1: Net Financing Requirement, cash and debt position in 2019 (in thousands of euros)

Direct debt 2019 Current account 2019 (1) (2) (3a) (4) (5) (6) (7) NFR 2019 Repayments Withdrawals Direct debt Investment s / CFO direct debt Title situation at Transfers / Current account direct debt and Cash after III and BCP2 + end of ‘18 + CFO (ING + Belfius) BCP (incl. BVS) GFR4 BVS3 evolution ‘19 interest (5) + (6) acc. + (BVS) Situation at end of ‘18 6,896,653.91 -12,389.25 1,037,965.14

Jan-19 -1,317,609.99 -28,128.2 58,000.0 6,926,525.74 -249,773.01 -30,000.00 -279,773.01 Feb-19 -143,613.85 -58,564.4 58,500.0 6,926,461.37 -423,451.23 0.00 -423,451.24 Mar-19 319,363.85 -194,792.2 224,300.0 6,955,969.14 -74,579.61 -30,000.00 -104,579.61 Apr-19 -1,052,560.95 -80,908.8 830,500.0 7,705,560.34 -407,549.37 0.00 -407,549.37 May-19 702,857.85 -81,365.5 81,300.0 7,705,494.86 295,243.01 0.00 295,243.01 Jun-19 -478,603.43 -389,415.8 303,700.0 7,619,779.05 -269,076.24 35,000.00 -234,076.24 Jul-19 -669,244.55 -43,537.1 49,000.0 7,625,241.96 -897,857.87 -6,500.00 -904,357.87 Aug-19 498,870.90 -84,104.7 71,600.0 7,612,737.26 -417,991.68 12,500.00 -405,491.68 Sep-19 1,201,560.77 -206,907.3 188,100.0 7,593,929.93 777,261.76 12,500.00 789,761.76 Oct-19 -435,037.78 -34,696.1 89,100.0 7,648,333.83 409,127.88 -55,000.00 354,127.88 Nov-19 101,555.47 -183,808.8 111,200.0 7,575,725.05 383,074.58 72,500.00 455,574.58 Dec-19 -571,071.33 -158,072.6 185,800.0 7,603,452.46 -87,769.34 -38,000.00 -125,769.34

Total 2019 -1,843,533.04 -1,544,301.45 2,251,100.00

The Net Financing Requirement (NFR) amounted to -1,843.53 million euros in 2019.

1 The Net Financing Requirement (NFR) is the sum of the balance of the current transactions, the capital transactions and the treasury transactions. This is referred to as ‘net’ because debt repayments are not included in these transactions. In theory, the Net Financing Requirements correspond to the growth of the public debt. In practice, there are a number of other causes of changes in public debt (e.g. exchange rate differences or the assumption of certain debts). 2 BCP = Belgian Commercial Paper 3 BVS = Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders 4 GFR = Gross Financing Requirement, incl. debt repayments

In 2019, 750 million euros of LT debt was withdrawn through the EMTN programme via a sustainability benchmark issued in April. This debt withdrawal was necessary to enable the (further) direct financing of the VMSW5, VWF6 and School Invest (see also Chapter IV Debt management in 2019 for more details on debt withdrawals and internal financing).

At the end of 2019, the balance on the Ministry’s current account amounted to - 126 million euros.

2. The Net Financing Requirement (NFR)

Figure 7 shows, for the period 2017 – 2019, the monthly evolution of the accumulated Net Financing Requirement (NFR) for one year. It represents the accumulated surplus/deficit of cash receipts on cash expenditures, with the initial position being reset to zero each year for the sake of comparability.

The NFR of 2019 was worse than the NFR of 2018 and 2017. Nevertheless, for the months of January, April, July and October we see the annual recurring pattern. During these four months there is always a dip in the NFR as a result of the transfer of the grant tranches to the municipalities from the Municipalities Fund. As always, the annual low point of the NFR is in July.

Figure 7: Monthly evolution of accumulated NFR in 2017, 2018 and 2019 (in millions of euros)

For the sake of completeness, Table 2 provides more details on the (monthly) NFR figures for 2018 and 2019.

5 VMSW = Flemish Social Housing Company (Vlaamse Maatschappij voor Sociaal Wonen) 6 VWF = Flemish Housing Fund (Vlaams Woningfonds) 12

Table 2: The monthly evolution of the NFR in figures (in millions of euros)

JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 2018 NFR month -1,115 348 561 -988 665 -434 -452 860 1,055 -683 48 -403 NFR accumulated for the year -1,115 -767 -206 -1,194 -528 -963 -1,415 -555 500 -184 -136 -539 2019 NFR month -1,318 -144 319 -1,053 703 -479 -669 499 1,202 -435 102 -571 NFR accumulated for the year -1,318 -1,461 -1,142 -2,194 -1,492 -1,970 -2,639 -2,141 -939 -1,374 -1,272 -1,844 Differences 2018 - 2019 NFR month -202 -492 -241 -65 38 -45 -217 -361 147 248 54 -168

As in previous years, the result of the treasury transactions of the property tax (PT) surcharges, on behalf of the municipalities and provinces, continued to play an important role in the evolution of the NFR in 2019.

The treasury transactions of the PT surcharges consist of two main components: on the one hand, the revenues effectively generated by these surcharges and, on the other hand, the transfer of the budgeted revenues to the municipalities and provinces. This is done according to a fixed schedule in six equal monthly fixed tranches in the second half of the year.

The difference between the budgeted proceeds and the actual revenues will be refunded or reversed in the year following the assessment. As a result, the Flemish treasury result in the long term is not influenced by the receipt of the surcharges on behalf of the local authorities and the transfer of those surcharges to them. In the year of collection, however, it does affect the treasury result. After all, as a result of this approach, the Flemish Community has consciously assumed the financing risk of this collection, which it carries out on behalf of the local authorities.

Figure 8: The monthly treasury result of the property tax in favour of the local authorities on the Flemish treasury (in millions of euros)

3. The cash pools of the Government of Flanders

The Government of Flanders has placed its financial accounts into two cash pools, one for the ministries and one for the entities with legal personality. The cash pool of the Flemish entities with legal personality is also referred to as the Central Financing Unit (CFU). Pooling financial accounts has the great advantage that interest is calculated on the balance of the pooled accounts. This allows the Government of Flanders to optimise its cash management and its interest costs. A cash facility is linked to each cash pool. The Government of Flanders therefore has two cash facilities, or credit lines, at its disposal7.

Figure 9 illustrates the maximum amounts withdrawn monthly by the Government of Flanders on its credit lines. Those credit lines are used throughout the year. The credit line of the Flemish ministries fluctuates considerably throughout the year. The biggest movements on the account take place on the first and last business days of the month. On the first business day, the Government of Flanders receives its allocated amounts, grants and surcharges from the Federal Government. On the last business day of the month, the Government of Flanders pays the salaries of its civil servants and teaching staff. The regional taxes collected by the Flemish tax authorities are received each business day. The CFU’s credit line is much less volatile. Here, the aim is that the credit line fluctuates slightly below 0.

Figure 9: Evolution of the average cash position and of the most positive and negative balances of the Ministries and the CFU in 2019 (in millions of euros)

In addition to the range within which the Government of Flanders has worked on its credit lines, Figure 9 also provides insight into the average cash position level

7 Flemish ministries: maximum cash facility of 2.5 billion euros; CFU: maximum cash facility of 0.75 billion euros 14

(bars in the graph). The average cash position (FC + CFU) was positive each month.

At the beginning of 2019, the average cash position was heavily positive. This was partly due to the Decree on the optimisation of the management of the financial assets, through which 1.1 billion euros was invested in Flemish paper by 9 Flemish entities at the end of 2018. In April 2019, 750 million euros was raised on the capital market (see also Chapter IV Debt management in 2019), which meant that the average cash position continued to be positive in the following months.

4. The Central Financing Unit (CFU)

The Central Financing Unit (CFU) is a cash pool of all the accounts of the institutions of the Government of Flanders. Depending on their status, the institutions are obliged by Decree to join this cash pool (for example, internally privatised agencies with legal personality and externally privatised agencies under public law). The fact that they belong to the consolidation circle of the Government of Flanders is irrelevant. Some entities belonging to the perimeter of the Government of Flanders have in recent years asked to join the Central Financing Unit. In this way they can benefit from the advantageous pricing of the cashier’s contract and no longer have to worry about their cash position. The members of the CFU are, however, asked to help the cash position by passing on their planning for the coming weeks on a weekly basis.

The purpose for which the Central Financing Unit was set up is mainly to optimise interest costs and to mobilise any reserves. By centralising the cash surpluses that are built up at the various agencies in the common treasury, the Government of Flanders can limit its need for external financing. If it does not do so, some agencies and the Flemish ministries would have to borrow, while other agencies would be able to invest significant sums of money. The spread in interest rates between the invested and borrowed sums would be an additional cost for the Government of Flanders as a whole.

It is therefore not desirable to maintain large cash surpluses at the agencies. The influence of the agencies on the cash balance of the Flemish ministries is therefore limited to their overall needs. As a result, grants are only deposited into the financial accounts of members of the cash pool when this is dedicated by the cash position of the entire cash pool. However, from an accounting point of view, the agency may enter a receivable from the Flemish authorities as from the date of signature of the ministerial grant decision in favour of their agency.

The need for transfers is monitored via the above-mentioned cash estimates, which the participating entities are obliged to submit.

The payments for the years 2018 and 2019 are shown graphically below.

Figure 10: Overview of grant transfers to CFU entities in 2018 and 2019 (in millions of euros)

Total CFU payments through F&B amounted to 12.67 billion euros in 2019.

5. Investments

The Government of Flanders invests based on its cash forecasts. When the estimated average balance of its accounts is positive for a given period, the Financial Operations Unit weighs the interest conditions of risk-free investments against the holding of liquid assets on the account.

In 2019, the Government of Flanders had an average cash surplus in all months. The only way to invest that surplus safely was to look for short-term paper from the Federal Government or from other Regions and Communities. However, that paper had a negative interest rate, so it was decided not to invest and to keep the cash surplus on our current account, on which the interest rate was 0% (there is a cap on the negative interest rate if the current account’s balance is positive).

In addition, there is the financing of School Invest. School Invest issues short- term commercial paper (CP) to which the Government of Flanders subscribes. Technically speaking, this is an investment for the Government of Flanders. At the end of 2019, the Government of Flanders held 158.02 million euros of the CP, compared with 112.02 million euros at the end of 2018, an increase of 46 million euros. On 16 December 2017, the majority of School Invest’s CP, more precisely a total amount of 854.6 million euros, was converted into a long-term 24-year loan with a floating interest rate. In the course of 2019, 27.7 million euros of this loan was repaid in four quarterly payments, bringing the outstanding balance at 31 December 2019 to 799.9 million euros.

IV. DEBT MANAGEMENT IN 2019

1. Overview

The definitions of the term ‘debt of the Government of Flanders’ can be interpreted in various ways. A strict interpretation is direct debt. Wider interpretations take into account the financial debts of the consolidated institutions or even the guaranteed debt. Below is a schematic representation of these different interpretations of the word ‘debt’.

Figure 11: Schematic overview of debt

Consolidated debt Guaranteed debt Indirect debt Direct debt

PPP debt

Direct debt refers to the debt contracted by the Government of Flanders to cover a financing deficit. This debt therefore arises whenever the net financing requirement (see Chapter III. Cash management in 2019) is negative. Direct debt can also arise because the Government of Flanders takes over debts from a third party and explicitly recognises them by Decree as its own direct debt. The direct financing of the VWF, VMSW and School Invest also has an impact on the direct debt because the Government of Flanders takes on additional debts for this.

Indirect debt is debt not incurred by the Flemish Community or the Flemish Region itself, but by one of their agencies or public institutions, while the financial burden is borne by the Community or the Region.

Both debt categories belong to the consolidated debt of the Government of Flanders. Consolidated debt is the sum of the debts of all the entities belonging to the consolidation scope of the Government of Flanders, with mutual debts being discharged. In addition to direct and indirect debt, consolidated debt therefore includes all financial debts and, in exceptional cases, other debts of all entities belonging to the ‘Government of Flanders’ perimeter according to the ESA classification.

In addition to these financial debts on the balance sheet of the Government of Flanders and its entities, we distinguish two other debt categories: the guaranteed debt and the PPP debt. Guaranteed debt is debt of companies or institutions guaranteed by the government. This debt is not part of the actual government debt. The debt will only be a burden for the government if the debtor is unable to meet its obligations and the creditor then knocks on the government’s door. Many

19 of these loans are also part of the consolidated debt. PPP debt is debt contracted in the context of an investment through a Public-Private Partnership (PPP). These debts are sometimes guaranteed by the Government of Flanders and may also be included in the consolidated debt.

2. Direct debt

At the end of 2019, direct debt amounted to 6,802.26 million euros. The 803.87 million euro increase in direct debt is partly due to the direct financing of the VMSW, VWF and School Invest (see Table 4 for more details) and a more negative current account of the Flemish Community.

The debt of the Flemish Community relating to the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders is not included in this table. Since it concerns institutions that belong to the consolidation perimeter of the Government of Flanders, this is considered as an internal debt by the INA and is not included in the outstanding direct debt (see IV.2.4 for further explanation about the decree).

Table 3: Evolution of the outstanding direct debt of the Flemish Community at the end of the year for the period 2017 – 2019 (in millions of euros)

31/12/2017 31/12/2018 31/12/2019 EMTN 4,836.50 5,631.50 6,331.50 Schuldschein 37.50 37.50 37.50 Municipal loans 0.00 89.17 77.38 Bank loans, Fish Market 2.25 2.03 1.79 Bank loans, Mun. Holding 92.91 90.48 82.30 Ex-FRGE 5.88 0.00 0.00 Leaseholds 26.16 25.17 23.80 Amoras 50.42 45.63 40.49 BCP/Treasury bills 0.00 0.00 0.00 Investments in European funds 0.00 0.00 0.00 Correction CFU account* 63.99 63.28 65.06 Negative position of MFC accounts 198.28 13.64 142.45 5,313.89 5,998.39 6,802.26

* Correction for non-S.1312 entities affiliated to the CFU. On 31/12/2019 these were UZ Gent, OPZ Rekem, OPZ Geel & Natuurinvest

The table below gives an overview of the direct financing operations in 2019 and the total amount outstanding at the end of 2019.

Table 4: Direct financing in 2019 and total amount outstanding (status as at 31/12/2019; in millions of euros)

Direct financing 2019* Total outstanding VMSW 1,100.00 3,916.29 VWF 230.00 873.10 School Invest 46.00 957.92 TOTAL 1,376.00 5,747.31 * Total amount

In terms of debt instruments used, the EMTN programme remains the most important instrument at 93%.

Figure 12: The importance of the various debt instruments in direct debt at the end of 2019

In 2019, a long-term (25-year) debt withdrawal of 750 million euros was opted for because the term of the direct financing is also (very) long. Table 5 summarises the terms of the direct long-term financing.

Table 5: Terms and amounts of direct financing 2019

Terms of direct financing Amount of LT direct financing 2019 (in years) 2019 (in millions of euros) VMSW 30.64 1,100.00 VWF 25.00 230.00 Average* 29.66 1,330.00 * Weighted average

Market interest rates in 2019 were much lower than in 2018, especially in the second half of the year. As a result, it was still financially very interesting to issue (very) long-term loans in 2019. Historically, these are very low and attractive long- term interest rates.

Figure 13: Market interest rates in 2018 and 2019 (10-year OLO yield; in %)

The appetite among investors was so great that a 750 million long-term EMTN issue over 25 years was easily placed at a coupon rate of 1.5% and a yield of 1.567% (= +24 bps versus OLO).

No private placements took place in 2019. The BCP programme was also discontinued in 2019 as there was no need for additional short-term financing. This was due to good budgetary and cash results, of which the latter was partly the result of the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders (see IV.3.3.4 for more information).

At the end of 2019, the balance on the Ministry’s current account amounted to - 142.45 million euros.

Each of the debt instruments is discussed in more detail below.

2.1 Long-term debt instruments

2.1.1 The EMTN programme

A second sustainability bond was issued in April 2019. This bond raised 750 million euros with a maturity of 25 years. This benchmark issue mainly serves to finance the expenditures of the VMSW, VWF and School Invest.

Sustainability bond

Sustainability bonds are issued to finance sustainable green investments or social investments. These are in line with the sustainable development objectives previously published by Flanders in the context of ‘Visie 2050’ and ‘Vizier 2030’. Such a bond is an important instrument in achieving those objectives.

In 2018, a framework was drawn up for the sustainability bond which was assessed by ‘Sustainalytics’, the appointed second-party opinion provider.

As indicated in the framework, the resources are used to increase the energy efficiency of buildings. In addition, affordable housing is financed and a portion of the funds is earmarked for the construction of schools, including some passive schools, as part of the DBFM Schools of Tomorrow. Finally, Flanders will also finance initiatives in the circular economy with these resources in the future. The allocation and impact report on the sustainability bond issued in 2019 will be published shortly.

The sustainability bond issued by the Flemish Community on 4 April 2019 was a success. This was a public issue with institutional investors for an amount of 750 million euros. The bond is set to mature on 11 April 2044 and has a coupon of 1.500% and a yield of 1.567%. A maturity of 25 years was chosen in order to optimally match the financing needs of the underlying assets and, in addition, to take advantage of long-term interest rates, which are still at historically low levels.

Private placements

There were no private placements in 2019.

Tables 6 and 7 respectively provide an overview of the benchmark issues in 2019 and the outstanding EMTN issues as at 31/12/2019.

Table 6: Benchmark issues in 2019 (in euros)

Outstanding Coupon Yield Start Maturity date amount Sustainability Benchmark Issue 750,000,000 1.500% 1.567% 11/04/2019 11/04/2044 TOTAL 750,000,000

Table 7: Outstanding EMTN issues (including private placements; status as at 31/12/2019; in euros)

Outstanding Coupon Maturity date amount EMTN 125,000,000 0.000% 01/02/2020 EMTN 30,000,000 3.650% 10/03/2020 EMTN 140,000,000 3.116% 18/08/2020 EMTN 133,500,000 0.854% 04/07/2022 EMTN 626,500,000 1.341% 12/06/2025 EMTN 750,000,000 0.375% 13/10/2026 EMTN 56,500,000 1.707% 20/11/2030 EMTN 140,000,000 1.007% 10/11/2031 EMTN Sustainability 500,000,000 1.375% 21/11/2033 EMTN 180,000,000 1.887% 12/06/2035 EMTN 800,000,000 1.000% 13/10/2036 EMTN 20,000,000 1.656% 23/02/2038 EMTN 30,000,000 1.603% 01/03/2038 EMTN 750,000,000 1.500% 12/07/2038 EMTN 10,000,000 1.392% 12/11/2041 EMTN 1,000,000,000 1.875% 02/06/2042 EMTN Sustainability 750,000,000 1.500% 11/04/2044 EMTN 35,000,000 2.317% 03/07/2045 EMTN 115,000,000 1.564% 12/11/2046 EMTN 60,000,000 1.863% 28/02/2048 EMTN 80,000,000 1.874% 28/03/2058 TOTAL 6,331,500,000

2.1.2 Schuldschein8

In 2019, no Schuldscheins were issued. The outstanding Schuldscheins can be found in Table 8.

8 This is a loan agreement under German law. 24

Table 8: Outstanding Schuldscheins (status as at 31/12/2019; in euros)

Outstanding Coupon Maturity date amount Schuldschein 17,500,000 1.007% 10/11/2031 Schuldschein 20,000,000 1.564% 12/11/2046 TOTAL 37,500,000

2.1.3 Bank loans

Municipal loans

Municipalities that submitted a joint proposal to merge with effect from 1 January 2019 to the Government of Flanders by 31 December 2017 at the latest, could benefit from a takeover of their debts by the Government of Flanders amounting to 500 euros of debt per inhabitant of the municipalities to be merged, with a maximum of 20 million euros per merger. As a result of the debt takeover, the Government of Flanders, as a new debtor, took over part of the outstanding debts of the former debtors (municipalities, autonomous municipal companies, public social welfare centres) and is obliged to repay the debt (capital repayments and interest) to the financial institutions.

These debt takeovers took place on 31 July 2018. A total of 15 municipalities were involved in 7 mergers. At the time of the takeover, the 220 acquired loans totalled 95.3 million euros. These are all loans with annual, half-yearly, quarterly and even monthly repayments and/or interest payments. There are no bullet loans.

Table 9 provides an overview of the (remaining) loans taken over. In 2019, 11,787,659.76 euros of capital was repaid, so that the outstanding debt as at 31 December 2019 amounts to 77,383,555.51 euros. In 2019, 2,857,138.87 euros in interest was also paid on these acquired municipal loans.

Table 9: Outstanding loans taken over as part of the voluntary merger of municipalities (status as at 31/12/2019; in euros)

Outstanding Average remaining time to Municipality Average interest rate amount maturity Aalter 12,569,294 3.50% 7 years and 5 months Deinze 18,816,881 4.67% 11 years and 7 months Kruisem 4,088,308 2.97% 5 years and 11 months Lievegem 11,597,257 4.58% 6 years and 7 months Oudsbergen 10,063,477 2.78% 7 years and 1 month Pelt 8,781,242 0.79% 3 years Puurs-Sint-Amands 11,467,096 3.58% 6 years and 2 months TOTAL 77,383,556

Municipal Holding Company [Gemeentelijke Holding]

The Municipal Holding Company went into voluntary liquidation at the beginning of December 2011. The Government of Flanders, together with the other regions, guaranteed loans from this holding company. Following the liquidation and its final settlement, the Government of Flanders analysed the guaranteed loans. After this analysis, it was decided not to disburse the guarantee – with the exception of a small part – but to take over the loans for a total amount of 222.6 million euros. At the time of voluntary liquidation, the interest rate of the acquired loans was in fact lower than the interest rate to which the Government of Flanders would borrow for similar terms. As a result, the long-term debt of the Government of Flanders increased.

The loans were incorporated into the direct debt of the Government of Flanders on 7 December 2011.

Table 10 provides an overview of the (remaining) loans taken over. In 2019, 8.2 million euros of capital was repaid, so that the outstanding debt as at 31 December 2019 amounts to 82.3 million euros.

Table 10: Outstanding loans taken over as part of the voluntary liquidation of the Municipal Holding Company (status as at 31/12/2019; in euros)

Interest Bank Nominal amount Maturity date rate Belfius 10,000,000 3.783% 20/07/2020 Belfius 15,000,000 3.656% 06/10/2020 BNP Paribas Fortis 25,000,000 4.065% 19/03/2021 Belfius 7,295,455 3.768% 15/12/2022 Belfius 25,000,000 4.455% 11/09/2026 TOTAL 82,295,455

Ostend Fish Market

In mid-2009, the Government of Flanders decided to approve the transfer of land from the city of Ostend to the Flemish Region and the acquisition of the properties by the Flemish Region in the context of the Ostend fish market. In exchange, the Flemish Region took over, among others, the outstanding debt of the city of Ostend concerning the management and exploitation of the land intended for fish market and port activities, as well as the land adjoining to the fishing port.

Specifically, on 1 January 2010, the Flemish Region took over the bank loans granted to the city of Ostend. This was done on the condition that the notarial deed concerning the ‘Agreement on the partial termination of the contract of 5-12 August 1912 regarding the fishing port of Ostend and termination of the right and leasehold granted on an administrative building’ between the City of Ostend, the

Flemish Region and the AGHO (Ostend Autonomous Municipal Port Company) was executed before 1 January 2010. The aim of this takeover was to relieve the city of Ostend of these debts towards the relevant credit institutions for the amount of the outstanding balance on 1 January 2010, i.e. 3,854,891.94 euros.

The loans were incorporated into the direct debt of the Government of Flanders on the date of the takeover.

Table 11 gives an overview of the (remaining) loans taken over from Ostend Fish Market (status as at 31/12/2019). In 2019, 0.2 million euros of capital was repaid, so that the outstanding debt as at 31 December 2019 amounts to 1.8 million euros.

Table 11: Outstanding loans taken over from Ostend Fish Market (status as at 31/12/2019; in euros)

Outstanding Bank Interest rate Maturity date amount Belfius 168,179 0.447% 01/07/2024 BNP Paribas Fortis 580,549 4.060% 31/03/2025 KBC 991,600 5.250% 15/01/2028 KBC 53,125 5.850% 15/10/2028 TOTAL 1,793,453

2.1.4 Paid and attributable interest

For 2019, the following interest amounts were charged and paid for EMTNs, Schuldscheins and bank loans (see Table 12).

Table 12: Overview of paid and attributable interest on EMTNs, Schuldscheins and bank loans in 2019 (in euros)

Attributable Paid EMTN & Schuldschein 83,239,456.10 75,124,702.00 Municipal loans 2,855,052.60 2,857,138.87 Bank loans (Fish Market and Municipal Holding 3,681,544.38 3,769,968.06 Company) Total 89,776,053.08 81,751,808.93

2.2 Short-term debt instruments

2.2.1 Bank credit line

In addition to the above-mentioned long-term debt instruments, the Government of Flanders makes intensive use of its credit line. This allows diversification through withdrawals at floating interest rates (i.e. EONIA; Euro OverNight Index Average), as long-term instruments are nowadays all concluded with a fixed interest rate. The Government of Flanders strives for a balance between maximum certainty

27 about the required interest budget and the utilization of the (often) lower short- term interest rates.

In 2019, as in previous years, the use of the credit line generated a return. The current cashier’s contract provides that, in the event of a negative balance on the current account combined with a negative interest rate (EONIA), the bank must pay interest.

At the end of 2019, a total of 207.51 million euros of ‘debt’ was outstanding on the current accounts.

2.2.2 Belgian Commercial Paper

In addition to long-term external financing, the Government of Flanders has had a Belgian Commercial Paper (=BCP) programme since 2009. It was set up at the time to deal with temporary cash shortages. Through this programme, the Government of Flanders can issue short-term paper on the Belgian market. The programme was set up with a maximum of 1.5 billion euros outstanding at the same time.

The traders who are allowed to place Flemish short-term paper on the market are selected via a tendering procedure.

This BCP programme can not only be used to absorb temporary cash shortages, but also to diversify part of the debt portfolio into short-term interest rates.

The BCP programme was discontinued in 2019 as there was no need for additional short-term financing. This was due to good budgetary and cash results, of which the latter was partly the result of the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders (see IV.3.3.4 for more information).

2.2.3 Investment Fund for Local Authorities

The debit balance of the Investment Fund for Local Authorities was included in the direct debt by way of article 4 of the Decree of 22 June 2005 establishing provisions to guide the adjustment of the 2005 budget.

This debit balance arises because the then Dexia Bank N.V. finances, through a credit line, the drawing rights granted in the past that are linked to the Investment Fund for Local Authorities. The repayments to Dexia Bank N.V. can contractually be made by the Government of Flanders at the earliest on the first bank working day of the second month following the withdrawal.

The end date for regular withdrawals expired already several years ago. Withdrawal of funds by local authorities remains possible, however, if the delay is due to legal problems. There is still one file for which a withdrawal can take place (Kapelle-op-den-Bos file), but this has not happened yet.

2.3 Risk management

2.3.1 Repayment schedule

Figure 14 shows the repayment schedule of the outstanding direct debt and the debt in the context of the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders as at 31/12/2019.

Figure 14: Repayment schedule of direct debt (in millions of euros; status as at 31/12/2019)

In 2020, 3 private placements will be at maturity, representing a total of 295 million euros. There will also be 868 million euros of debt at maturity under the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders. In 2019, the majority of these internal financings were reinvested by the entities in Flemish debt securities. We also expect these maturing in 2020 to be reinvested. The maturity dates of the first months in 2020 confirm this suspicion. Furthermore, there are also some more limited repayments. These include the loans taken over from the Municipal Holding Company (27.43 million euros) and the Ostend Fish Market (0.24 million euros). Finally, there are also capital repayments of 9.30 million euros from the municipal loans. Together with the other repayments of 6.70 million euros, this brings the total repayments (excluding repayments under the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders) in 2020 to 338.67 million euros.

2.3.2 Fixed versus floating debt ratio

In order to determine the fixed vs. floating interest rate ratio between the debt products used, we only look at the debt instruments.

Table 13: Overview of the interest rate structure of the debt portfolio (amounts in millions of euros)

Amount (as at Amount (as at Instrument Structure % % 31/12/2018) 31/12/2019) EMTN Fixed 5,631.50 94% 6,331.50 93% Schuldschein Fixed 37.50 1% 37.50 1% Bank loans Fixed 92.49 2% 84.09 1% Other Fixed 70.81 1% 64.28 1% Municipal loans Fixed 79.78 1% 73.71 1% Total Fixed 5,912.08 99% 6,591.08 97% BCP Floating 0.00 0% 0.00 0% Current accounts Floating 76.92 1% 207.50 3% Municipal loans Floating 9.39 0% 3.67 0% Total Floating 86.31 1% 211.18 3%

5,998.39 6,802.26

The Flemish government always prefers to allocate its debt portfolio prudently. That is why in 2019 the focus was on (very) long-term financing on good terms.

In the past, it aimed for a debt mix of 80% fixed long-term interest rates compared with 20% floating rates (less than 1 year). As a result of the emphasis on very long-term fixed-rate financing in 2019, the debt mix at the end of 2019 was 97% fixed versus 3% floating.

2.3.3 Interest rate sensitivity of the debt

Tables 14 and 15 contain overviews of the main key figures for borrowings of direct debt.

The average interest rate rose slightly in 2019 and now stands at 1.22% (compared with 1.19% in 2018). Almost all investments by Flemish entities under the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders were placed at an interest rate of 0%. Without the latter, the average interest rate on the direct debt would be 1.42%, a slight increase of 0.02% compared with 2018.

The average remaining time to maturity has increased by 5 months and now amounts to 13 years and 4 months. Less than 20% of the investments (204.98 million euros) under the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders have a residual term

30 of more than 1 year at the end of 2019. Excluding these investments, direct debt at the end of 2019 has an average remaining term of 15 years and 5 months, an increase of 4 months compared with 2018.

Table 14: Summary of key figures for direct debt at the end of 2019 (EMTN, Schuldschein and bank loans)

Remaining debt balance (in millions of Average remaining time to Average interest rate* euros)* maturity* 6,530.47 1.42% 15 years and 5 months

* of the direct debt excluding current accounts, leaseholds & Amoras

Table 15: Summary of key figures for direct debt at the end of 2019 (EMTN, Schuldschein, bank loans and Decree on the optimisation of the management of the financial assets)

Remaining debt balance (in millions of Average remaining time to Average interest rate* euros)* maturity* 7,603.45 1.22% 13 years and 4 months

* of the direct debt excluding current accounts, leaseholds & Amoras

2.3.4 Hedging instruments

The Government of Flanders currently has easy access to the capital markets. After all, the Government of Flanders can borrow capital in euros to finance its direct debt for the maturity period of its choice and at the reference interest rate it wishes. As a result, taking into account its cautious strategy, the Government of Flanders does not need to hedge currencies or interest rates.

At the end of 2012, as a result of the reclassification of Diestsepoort, the Flemish Region took over the swaps entered into by PMV re Vinci with ING in the summer of 2008 to cover the (future) variation in the floating base rate for its outstanding loans. Under these swaps, the EURIBOR rate (6 months) is exchanged half-yearly for a fixed interest rate of 4.85% for a total amount of 40 million euros over a term of 20 years.

The impact of these ongoing interest rate hedges is passed on back-to-back to Diestsepoort NV so that the cost and risk remain with this company.

Of the 40 million euros, 16 million euros takes the form of a bullet loan. Capital repayments are foreseen for the remaining 24 million euros. At the end of 2019, this latter swap takes into account 15.99 million euros of capital. The final maturity date of both swaps is 15 October 2030.

2.4 Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders

On 1 October 2018, the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders entered into force. As a result, institutions belonging to the consolidation scope and that meet certain conditions (i.a. institutions that are at least 50 per cent owned by the Government of Flanders) are obliged to invest their surplus long-term liquidities in the Flemish Community. These institutions can also choose to invest their excess short-term liquidities in the Flemish Community, as long as they are unable to find more rewarding alternatives that more or less have the same rating as Flanders. Other institutions, such as university colleges and universities or the Flemish Parliament, can join on a voluntary basis.

The main purpose of this Decree is to reduce the consolidated debt position as a whole. By investing the temporarily available resources of one public entity in the debt of another public entity, the consolidated debt position of not only the borrowing public entity, but also of the consolidated Flemish debt as a whole, is reduced. The INA (Institute of National Accounts) will deduct these invested amounts from the total Flemish debt.

Investing in Flemish paper offers advantages for both the consolidated Government of Flanders and the investing and borrowing public entities. On the one hand, government entities can invest in financial instruments with a sustainable return and a strong rating. On the other hand, the borrowing public entities can reduce the issue costs and the investor base is expanded.

At the end of 2019, 1.3 billion euros had been invested in the Government of Flanders by 10 Flemish entities. The vast majority of the investments maturing in 2019 were reinvested, and there were also a number of new investments. As a result, there was an increase of 195 million euros compared with 2018. Table 16 gives an overview of the institutions that had Flemish debt securities in their portfolio at the end of 2019 and the amounts invested. It also provides a distinction between short-term investments (≤1 year) and long-term investments (>1 year).

Table 16: Investments under Decree (status as at 31/12/2019; in thousands of euros)

Institution Amount (in thousands of euros) ≤1 year >1 year De Rand 2,000 2,000 0 De Werkvennootschap 20,000 20,000 0 Diestse Poort 2,000 0 2,000 FWO 59,980 59,980 Gigarant 284,000 59,000 225,000 Lantis 389,000 100,000 289,000 PMV 117,000 117,000 0 VMH 71,000 36,000 35,000 VMSW* 248,813 248,813 0 VPM 118,000 118,000 0 TOTAL 1,311,793 700,813 610,980 (*) of which 238,813 thousand euros through 2 current accounts via the CFU.

De Rand In January 2019, 1 million euros reached maturity. That amount was reinvested. At the end of December, there was an additional investment of 1 million euros, bringing the total to 2 million euros for De Rand at the end of 2019.

Table 17: Investments Decree, De Rand (in euros)

Amount Start date Maturity date Interest rate 1,000,000 24/12/2018 24/01/2019 0.000% Outstanding amount as at 31/12/2018: 1 million euros 1,000,000 24/01/2019 25/02/2019 0.000% 1,000,000 25/02/2019 25/04/2019 0.000% 1,000,000 25/04/2019 26/08/2019 0.000% 1,000,000 26/08/2019 31/12/2019 0.000% 1,000,000 24/12/2019 30/06/2020 0.000% 1,000,000 31/12/2019 30/06/2020 0.000% Outstanding amount as at 31/12/2019: 2 million euros

De Werkvennootschap In 2019, De Werkvennootschap invested 20 million euros for 1 year.

Table 18: Investments Decree, De Werkvennootschap (in euros)

Amount Start date Maturity date Interest rate - - - - Outstanding amount as at 31/12/2018: 0 euros 20,000,000 19/03/2019 19/03/2020 0.000% Outstanding amount as at 31/12/2019: 20 million euros

Diestse Poort In 2019 no investment of Diestse Poort reached maturity, nor was any additional investment made in Flemish debt securities.

Table 19: Investments Decree, Diestse Poort (in euros)

Amount Start date Maturity date Interest rate 2,000,000 21/12/2018 21/12/2021 0.000% Outstanding amount as at 31/12/2018: 2 million euros - - - - Outstanding amount as at 31/12/2019: 2 million euros

FWO In 2019 no investments of FWO reached maturity, nor were additional investments made in Flemish debt securities.

Table 20: Investments Decree, FWO (in euros)

Amount Start date Maturity date Interest rate 32,000,000 21/12/2018 21/10/2020 0.000% 22,000,000 21/12/2018 21/10/2021 0.000% 3,700,000 21/12/2018 21/10/2022 0.000% 1,800,000 21/12/2018 21/10/2023 0.103% 480,000 21/12/2018 21/10/2024 0.340% Outstanding amount as at 31/12/2018: 59.98 million euros - - - - Outstanding amount as at 31/12/2019: 59.98 million euros

Gigarant Gigarant’s investments maturing in 2019 were all reinvested. In addition, in July (19 million euros), November (10 million euros) and December (25 million euros) additional funds were invested by Gigarant in Flemish debt securities.

Table 21: Investments Decree, Gigarant (in euros)

Amount Start date Maturity date Interest rate 40,000,000 19/12/2018 31/12/2019 0.000% 1,000,000 19/12/2018 31/12/2019 0.000% 35,000,000 19/12/2018 31/12/2020 0.000% 15,000,000 19/12/2018 31/12/2020 0.000% 50,000,000 19/12/2018 31/12/2021 0.000% 30,000,000 20/12/2018 28/02/2019 0.000% 7,500,000 20/12/2018 31/12/2019 0.000% 3,000,000 20/12/2018 31/12/2019 0.000% 33,500,000 20/12/2018 31/12/2019 0.000% 15,000,000 24/12/2018 31/12/2019 0.000% Outstanding amount as at 31/12/2018: 230 million euros 30,000,000 28/02/2019 30/04/2019 0.000% 30,000,000 30/04/2019 28/06/2019 0.000% 30,000,000 28/06/2019 30/08/2019 0.000% 19,000,000 29/07/2019 30/08/2019 0.000% 49,000,000 30/08/2019 31/03/2020 0.000% 10,000,000 11/11/2019 30/06/2020 0.000% 13,000,000 12/12/2019 30/12/2022 0.000% 12,000,000 24/12/2019 30/12/2022 0.000% 50,000,000 31/12/2019 30/06/2021 0.000% 50,000,000 31/12/2019 30/06/2022 0.000% Outstanding amount as at 31/12/2019: 284 million euros

Lantis The majority of Lantis’s investments maturing in 2019 were reinvested. 50 million euros of investments were not reinvested (investments with maturity dates in July, August, September and November). At the end of 2019, Lantis still held 389 million euros worth of Flemish debt securities compared with 439 million euros at the end of 2018.

Table 22: Investments Decree, Lantis (in euros)

Amount Start date Maturity date Interest rate 12,500,000 21/12/2018 21/01/2019 0.000% 12,500,000 21/12/2018 21/02/2019 0.000% 12,500,000 21/12/2018 21/03/2019 0.000% 12,500,000 21/12/2018 21/04/2019 0.000% 12,500,000 21/12/2018 21/05/2019 0.000% 12,500,000 21/12/2018 21/06/2019 0.000% 12,500,000 21/12/2018 21/07/2019 0.000% 12,500,000 28/12/2018 28/08/2019 0.000% 12,500,000 28/12/2018 28/09/2019 0.000% 12,500,000 28/12/2018 28/10/2019 0.000% 12,500,000 28/12/2018 28/11/2019 0.000% 12,500,000 28/12/2018 28/12/2019 0.000% 24,000,000 28/12/2018 28/01/2020 0.000% 24,000,000 28/12/2018 28/02/2020 0.000% 24,000,000 28/12/2018 28/03/2020 0.000% 24,000,000 28/12/2018 28/04/2020 0.000% 24,000,000 28/12/2018 28/05/2020 0.000% 24,000,000 31/12/2018 30/06/2020 0.000% 24,000,000 31/12/2018 31/07/2020 0.000% 24,000,000 31/12/2018 31/08/2020 0.000% 24,000,000 31/12/2018 30/09/2020 0.000% 24,000,000 31/12/2018 31/10/2020 0.000% 24,500,000 31/12/2018 30/11/2020 0.000% 24,500,000 31/12/2018 31/12/2020 0.000% Outstanding amount as at 31/12/2018: 439 million euros 12,500,000 21/01/2019 22/04/2019 0.000% 12,500,000 21/02/2019 21/05/2019 0.000% 12,500,000 21/03/2019 21/06/2019 0.000% 25,000,000 23/04/2019 23/04/2020 0.000% 12,500,000 21/05/2019 21/11/2019 0.000% 12,500,000 21/05/2019 21/05/2020 0.000% 12,500,000 21/06/2019 19/06/2020 0.000% 12,500,000 21/06/2019 19/06/2020 0.000% 12,500,000 28/10/2019 28/01/2020 0.000% 12,500,000 21/11/2019 21/02/2020 0.000% 12,500,000 28/12/2019 30/03/2020 0.000% Outstanding amount as at 31/12/2019: 389 million euros

PMV The majority of PMV’s investments maturing in 2019 were reinvested. At the end of 2019, PMV’s portfolio amounted to 117 million euros in Flemish debt securities, a decrease of 8 million euros compared with 2018 (125 million euros).

Table 23: Investments Decree, PMV (in euros)

Amount Start date Maturity date Interest rate 5,000,000 19/12/2018 15/02/2019 0.000% 10,000,000 19/12/2018 28/02/2019 0.000% 30,000,000 19/12/2018 15/03/2019 0.000% 16,300,000 19/12/2018 29/03/2019 0.000% 4,400,000 19/12/2018 30/09/2019 0.000% 3,700,000 19/12/2018 31/12/2019 0.000% 12,600,000 19/12/2018 31/12/2019 0.000% 16,600,000 20/12/2018 28/06/2019 0.000% 14,500,000 21/12/2018 18/01/2019 0.000% 11,900,000 21/12/2018 30/09/2019 0.000% Outstanding amount as at 31/12/2018: 125 million euros 14,500,000 18/01/2019 30/04/2019 0.000% 30,000,000 28/01/2019 31/07/2019 0.000% 5,000,000 15/02/2019 30/08/2019 0.000% 10,000,000 28/02/2019 31/05/2019 0.000% 30,000,000 15/03/2019 15/05/2019 0.000% 16,300,000 29/03/2019 15/05/2019 0.000% 14,500,000 30/04/2019 03/06/2019 0.000% 46,300,000 15/05/2019 03/06/2019 0.000% 10,000,000 31/05/2019 21/06/2019 0.000% 10,500,000 03/06/2019 21/06/2019 0.000% 14,500,000 03/06/2019 21/06/2019 0.000% 35,800,000 03/06/2019 24/06/2019 0.000% 35,800,000 24/06/2019 30/09/2019 0.000% 16,600,000 28/06/2019 30/08/2019 0.000% 30,000,000 31/07/2019 29/11/2019 0.000% 21,600,000 30/08/2019 31/10/2019 0.000% 4,400,000 30/09/2019 29/11/2019 0.000% 11,900,000 30/09/2019 29/11/2019 0.000% 35,800,000 30/09/2019 29/11/2019 0.000% 55,000,000 02/10/2019 29/11/2019 0.000% 21,600,000 31/10/2019 29/11/2019 0.000% 65,000,000 29/11/2019 28/02/2020 0.000% 23,700,000 29/11/2019 31/03/2020 0.000% 12,000,000 24/12/2019 20/01/2020 0.000% 16,300,000 31/12/2019 31/03/2020 0.000% Outstanding amount as at 31/12/2019: 117 million euros

VMH All of VMH’s investments maturing in 2019 were reinvested.

Table 24: Investments Decree, VMH (in euros)

Amount Start date Maturity date Interest rate 17,500,000 14/12/2018 29/03/2019 0.000% 17,500,000 14/12/2018 28/06/2019 0.000% 18,000,000 14/12/2018 30/09/2019 0.000% 18,000,000 14/12/2018 31/12/2019 0.000% Outstanding amount as at 31/12/2018: 71 million euros 17,500,000 29/03/2019 31/03/2020 0.000% 17,500,000 28/06/2019 30/06/2020 0.000% 18,000,000 30/09/2019 30/09/2020 0.000% 18,000,000 31/12/2019 31/12/2020 0.000% Outstanding amount as at 31/12/2019: 71 million euros

VMSW At the end of 2018, VMSW invested approximately 70 million euros via 2 current accounts of the CFU. In 2019, VMSW invested 10 million euros and 239 million euros via 2 current accounts of the CFU.

Table 25: Investments Decree, VMSW (in euros)

Amount Start date Maturity date Interest rate Current 70,334,650 31/12/2018 account 0.000% Outstanding amount as at 31/12/2018: 70.335 million euros 10,000,000 29/03/2019 29/04/2019 0.000% 10,000,000 29/04/2019 29/04/2020 0.000% Current 238,813,000 account 0.000% Outstanding amount as at 31/12/2019: 248.813 million euros

VPM All of VPM’s investments maturing in 2019 were reinvested.

Table 26: Investments Decree, VPM (in euros)

Amount Start date Maturity date Interest rate 8,000,000 21/12/2018 21/03/2019 0.000% 22,700,000 21/12/2018 21/03/2019 0.000% 35,000,000 21/12/2018 21/03/2019 0.000% 52,300,000 21/12/2018 21/03/2019 0.000% Outstanding amount as at 31/12/2018: 118 million euros 8,000,000 21/03/2019 21/06/2019 0.000% 22,700,000 21/03/2019 21/06/2019 0.000% 35,000,000 21/03/2019 21/06/2019 0.000%

52,300,000 21/03/2019 21/06/2019 0.000% 8,000,000 21/06/2019 23/09/2019 0.000% 22,700,000 21/06/2019 23/09/2019 0.000% 35,000,000 21/06/2019 23/09/2019 0.000% 52,300,000 21/06/2019 23/09/2019 0.000% 8,000,000 23/09/2019 23/01/2020 0.000% 22,700,000 23/09/2019 23/01/2020 0.000% 35,000,000 23/09/2019 23/01/2020 0.000% 52,300,000 23/09/2019 23/01/2020 0.000% Outstanding amount as at 31/12/2019: 118 million euros

2.5 Revenue from internal financing

Within the context of the internal financing provided in recent years to VMSW, VWF, School Invest and Diestse Poort, there are currently revenues coming in, as will be the case in the future. Therefore, for the direct debts contracted by the Government of Flanders, there are also underlying assets that generate income.

The table below shows the capital repayments that the Government of Flanders will receive.

Figure 15: Repayment schedule for internal financing (in millions of euros; status as at 31/12/2019)

3. Consolidated debt

3.1 Overview of consolidated debt 2017-2019

The consolidated gross debt of the Flemish government is composed in accordance with the Institute of National Accounts (INA).

The consolidated gross debt can be broken down into the following elements:

• the direct debt of the Flemish Ministries; • the indirect debt of the Flemish Ministries; • the negative balance of the global statement of current accounts within the Ministries of the Government of Flanders (according to the cash pooling system); • the overall balance (if negative) of the consolidated Flemish agencies within the Central Financing Unit (according to the cash pooling system); • a correction (if negative) for non-S.1312 entities affiliated to the CFU (currently 4 entities, namely UZ Gent, OPZ Rekem, OPZ Geel and Natuurinvest); • the financial debts of the institutions on the list of institutions to be consolidated S.1312 Government of Flanders; • the debt from consolidated PPP and alternatively funded subsidies.

On a consolidated level, loans between entities within the consolidation perimeter are excluded. Such loans are therefore immediately deducted from the institutions concerned.

The ‘List of public units’, published by the INA on its website (April 2020 version), is used to determine which entities belong and which do not belong to the consolidation perimeter.

Table 27 shows the consolidated gross debt of the Government of Flanders in the period 2017-2019.

Table 27: Evolution of the consolidated gross debt of the Government of Flanders in the period 2017-2019 broken down by entity (in millions of euros)

2017 2018 2019 Direct debt Fl. Comm. Min. (including negative current account 5,313.89 5,998.39 6,802.26 balance) Correction Flemish Community EMTN bonds held by Fl. Comm. -37.95 -32.60 -27.00 S.1312 entities Fl. Comm. S.1312 entities Agency for Integration and Civic Integration (Agentschap 2.08 1.88 Integratie en Inburgering) 1.70 Sport Vlaanderen Agency 1.30 1.13 0.95 BAM 120.73 104.63 88.54 Be-Dive 3.40 3.12 2.83 Flemish Waterways (Shipping Agency) (De Vlaamse Waterweg) 3.09 2.83 2.59 Domus Flandria 0.61 0.10 0.00 RCCs (EKMs) 595.41 568.54 600.90 EV ILVO 0.14 0.00 0.00

Greenville 1.52 3.79 2.58 The Waterschei Project 3.02 0.00 0.00 Child and Family (Kind en Gezin) (Opgroeien regie) 0.83 0.69 0.56 Lak Invest 31.49 30.72 21.68 PMV 0.00 0.00 4.15 PMV Re Vinci 5.07 4.61 0 Site kanaal 0.16 0.05 0.05 Flanders Development Site (Site Ontwikkeling Vlaanderen) 9.34 8.89 8.43 Universities and university colleges 517.40 590.43 579.90 VIB 4.78 4.13 3.46 VIPA 1,670.24 1,576.45 1,478.69 Vitare 0.70 0.88 0.88 VPM 30.00 0.00 0.00 VMSW 6,112.95 5,955.01 5,728.37 Flemish Public Transport Company - VVM De Lijn 151.59 180.41 164.74 VWF 2,705.57 2,555.08 2,399.80 Wandelaar Invest 61.81 55.31 47.95 Hospital infrastructure 4,647.26 4,350.92 4,099.46 AGION National Guarantee Fund 41.76 28.06 18.53 Agion (transitional period) 5.48 4.37 3.17 Agion (system from 1993) 327.46 347.65 362.70 PPP debts DBFM ‘Schools of Tomorrow’ 181.96 136.51 129.18 Brabo I 177.83 174.83 171.61 Livan I 95.89 93.57 91.04 Tongeren depots* 6.60 0.00 0.00 BOvZO depots* 35.24 0.00 0.00 Via invest Zaventem 55.98 54.88 53.73 R4 93.92 89.36 87.29 North South Kempen (Noord Zuid Kempen) 216.21 216.21 210.50 Cluster 2 depots* 53.84 0.00 0.00 Tourism - Youth Accommodation 4.71 4.71 5.57 Ostend depots* 0.00 0.00 0.00 Green electricity certificates 33.41 114.97 114.97 Accrued charges and deferred income relating to SFA 967.59 915.96 Total consolidated debt 23,286.72 24,198.12 24,177.74 Correction Fl. Comm. S.1312 entities partially holding promissory -12.35 -11.56 -1.52 notes from other Fl. Comm. S.1312 entities in their portfolio Total consolidated debt 23,274.37 24,186.56 24,176.22

* Since 2018 these debts (cf. the INA) have been added to the debt of De Lijn

The increase in direct debt is largely due to the direct financing of VMSW, VWF and School Invest, which replaced guaranteed bank loans. As a result, the consolidated debt of VMSW and VWF is decreasing and will continue to decrease in the future.

At the end of 2019, the consolidated debt amounted to 24,176.22 million euros. This represents a very limited decrease of 10.34 million euros compared with 2018.

The large increase in direct debt is fully offset by the decrease in the debts of the entities included in consolidation scope S1312 and the PPP debts and reclassified alternatively financed investment schemes.

The following entities hold ‘Flemish’ debt in portfolio as an investment (see line Correction Flemish Community EMTN bonds held by Fl. Comm. S.1312 entities), for which a correction line has been added in the above table:

• KU Leuven (16.4 million euros); • Flemish Parliament (5 million euros); • Flemish Social Protection Agency (5.6 million euros).

A final correction applied in the above table concerns the promissory notes amounting to 1.52 million euros of Lak Invest held by PMV.

3.2 Flemish consolidated gross debt in INA notification APR-20

In its notification of APR-20, the INA (= Institute of National Accounts) arrives at a Flemish contribution to the consolidated gross debt of 18,626.07 million euros (see Table 28).

The INA reports on the debt position of the various (Belgian) governments. On the one hand, there is the consolidated gross debt. On the other hand, there is the contribution to the Maastricht debt, which is lower because of inter- and intrasectoral debt corrections.

The concept of ‘Contribution to the Maastricht debt’ is used because the various governments sometimes hold debt instruments belonging to each other or to government institutions that belong to the same government or public sector. This corresponds to the consolidated gross debt of an entity minus the financial assets held of the other entities of a subsector (intrasectoral consolidation) and of the government’s other subsectors (intersectoral consolidation).

Table 28: Flemish consolidated debt in INA notification APR-20 (status as at 31/12/2019; in millions of euros)

Consolidated gross debt (‘Maastricht’) 31/12/2019

Fl. Com. - Consolidated gross debt 20,185.32 S1312 Maastricht debt Debts held by Fl. Com. issued by own S1312 entities9 1,030.21 S1312 Maastricht debt Debts held by Fl. Com. issued by other S1312 entities 23.14 Fl. Com. - Consolidated gross debt S1312 19,131.97 Debts held by Fl. Com. issued by other S13 sectors 505.90 S1312 Maastricht debt Fl. Com. - Contributions to the consolidated gross debt 18,626.07

9 The INA includes the debt of S1312 entities under the X/N system in the gross consolidated debt. This concerns SchoolInvest, Diestsepoort, the Flemish Community, Lakinvest, Sofico, the Brussels Region and the French Community. These debts are then deducted by the INA in order to arrive at an S1312 consolidated gross debt. The KSW Report does not include this debt in its consolidated debt as far as it concerns S1312 entities belonging to the consolidation scope of the Flemish Community. 42

The significant difference (5,550.15 million euros) from the figure in this report is due to the fact that:

• the INA does not include the item ‘Hospital infrastructure’ in the calculation (4,099.46 million euros); • the INA does not include the item ‘Accrued charges and deferred income relating to SFA’ in the calculation (915.96 million euros); • this report does not take into account the debt held issued by other S.13 sectors (505.90 million euros); • as far as the S.1312 entities are concerned, this report looks purely at the Flemish S.1312 entities. This means that only investments in purely Flemish S.1312 entities are taken into account, while the INA also takes into account, for example, investments in Walloon S.1312 entities (23.14 million euros); • the INA also includes long-term trade payables in the calculation of the consolidated debt, which is not included in the KSW Report calculation (- 1.22 million euros); • more recent and more accurate data were used in this report (6.90 million euros) (see also Table 30).

Table 29: Overview of differences (in millions of euros)

Consolidated gross debt (‘Maastricht’) 31/12/2019

Fl. Com. - Consolidated gross debt 20,185.32 S1312 Maastricht debt Debts held by Fl. Com. issued by other S1312 entities 1,053.35 S1312 Maastricht debt Fl. Com. - Consolidated gross debt S1312 19,131.97 Debts held by Fl. Com. issued by other S13 sectors 505.90 S1312 Maastricht debt Fl. Com. - Contributions to the consolidated gross debt 18,626.07

Corrections made to INA data for KSW Report 2019

The item ‘hospital financing’, which the INA does not count 4,099.46 The item ‘Accrued charges and deferred income relating to SFA’, which the INA does not count 915.96 Debts held issued by other S13 sectors 505.90 Debts held issued by non-Fl. Comm. S.1312 entities 23.14 Long-term trade payables that the INA counts, but the KSW Report does not -1.22 Use of more recent, more accurate data 6.90 Total corrections 5,550.15

Total consolidated debt in KSW Report 2019 24,176.22

Table 30: Overview of differences between INA and KSW Report (use of more recent, more accurate data) (in millions of euros)

INA KSW Report Difference Artevelde University College (Arteveldehogeschool) 17.21 18.89 1.68 Flemish Public Transport Company - De Lijn 138.42 144.4410 6.02 Flemish Waterways (De Vlaamse Waterweg) 2.31 2.59 0.28 Erasmus University College Brussels (Erasmushogeschool Brussel) 13.07 13.16 0.09 Community education (Gemeenschapsonderwijs) (GO!) 0.14 0.00 -0.14 University College West Flanders (Hogeschool West- Vlaanderen) 40.56 40.55 -0.01 Institute of Tropical Medicine (Instituut Tropische Geneeskunde) (ITG) 8.96 9.70 0.74 Child and Family (Kind en Gezin) (Opgroeien Regie) 0.69 0.56 -0.13 Lak Invest 29.95 21.68 -8.27 Livan I 91.05 91.04 -0.01 Ghent University 134.80 137.74 2.94 Flemish Association for Development Cooperation and Technical Assistance (Vlaamse Vereniging voor Ontwikkelingssamenwerking en Technische Bijstand) 4.52 0.00 -4.52 RCC Volkskrediet De Toren 50.32 58.95 8.63 Free University of Brussels (Vrije Universiteit Brussel) (VUB) 50.95 50.60 -0.35 Rounding differences -0.05 Total difference 6.90

The INA uses building blocks delivered at the beginning of 2020 for its calculations. The KSW Report uses data reported in the annual accounts at the end of March 2020. As the KSW Report has more recent data, differences may occur between the reported data from the INA and the data in the KSW Report.

The building block of Artevelde University College was incomplete, as a result of which 1.68 million euros was not reported by the INA.

7 million euros of debt was added by the Flemish Public Transport Company De Lijn, which had not yet been included in the building block and was therefore not reported by the INA.

Lak Invest has 8.27 million euros of outstanding debt with S.1312 entities that was wrongly counted by the INA.

For the Flemish Association for Development Cooperation and Technical Assistance, the INA includes the other debts, in contrast to the KSW Report.

RRC Volkskrediet De Toren had reported too little debt in the initial building block, as a result of which 8.63 million euros was not reported by the INA.

Tables 31 and 32 show the contribution to the consolidated gross debt (‘Maastricht’) of the various Belgian authorities for the period 2015-2019.

10 Table 27 shows 164.74 million euros: 144.44 million euros + 20.3 million euros of financial leasing. 44

Table 31: Contribution to the consolidated gross debt (‘Maastricht’; in millions of euros)11

2015 2016 2017 2018 2019 Federal Government & soc. security 364,260.38 369,483.32 373,165.89 377,406.19 382,906.96 Communities & Regions 48,843.49 57,839.78 57,165.88 58,356.92 61,170.60 Local authorities 24,072.00 24,004.00 23,496.00 23,298.00 23,083.00 TOTAL 437,175.87 451,327.10 453,827.77 459,061.11 467,160.56

Table 32: Contribution to the consolidated gross debt of federated entities (‘Maastricht’; in millions of euros)12

2015 2016 2017 2018 2019 Walloon Region 20,361.27 21,325.87 21,282.35 21,634.12 23,200.21 Brussels-Capital Region 3,893.47 3,829.60 4,145.78 4,679.33 5,556.85 Flemish Community 17,245.95 18,702.95 18,041.54 18,253.19 18,626.07 French-speaking Community 6,406.99 7,102.57 7,132.08 7,388.33 7,969.33 German-speaking Community 313.51 354.24 403.40 418.65 475.22 Joint Community Commission 12.36 -16.87 -42.84 -19.95 -0.53 French Community Commission 196.24 194.42 193.32 192.18 190.97 Flemish Community Commission -62.32 -79.18 -64.88 -53.26 -36.46 Interregional entities 476.01 6,426.18 6,075.12 5,864.33 5,188.94 TOTAL 48,843.49 57,839.78 57,165.88 58,356.92 61,170.60

3.3 Evolution of the consolidated gross debt in 2020

For more information on the evolution of the consolidated gross debt in 2020, please refer to the chapter on debt in the general notes to the 2020 budget review.

11 Source: NBB (National Bank of Belgium) 12 Source: NBB (National Bank of Belgium) 45

4. Debt standard

On 18 November 2016, the Government of Flanders decided to institute a new Flemish debt standard to keep the evolution of debt under control in the coming years. This Flemish debt standard was developed to pursue 2 objectives.

4.1 Objective 1: maintain a favourable rating

The Government of Flanders currently enjoys an AA rating from Fitch, compared with AA- for the Federal Government. In the future, efforts should be made to ensure that a favourable rating is maintained. As a result, higher interest costs compared with the prevailing market interest rate will be avoided. In order to secure this objective permanently, the consolidated debt, with the exception of hospital financing, must be limited to a maximum of 65% of current income according to the definition used by Moody’s,

In 2019 the debt ratio amounted to 44.04%13.

The debt ratio (in relation to Belgian GDP) amounted to 4.53% in 2019.

4.2 Objective 2: a positive net asset position

A positive net asset position means that the total value of marketable assets exceeds the consolidated debt excluding hospital financing.

At the end of 201814, the net asset position of the Government of Flanders amounted to 3.7 billion euros. This is 0.5 billion euros less compared with the end of 2017 (4.2 billion euros). In other words, the increase in assets was smaller than the increase in consolidated debt (excluding hospital financing). This can be fully explained by the settlement of the autonomy factor of 1 billion euros in 2018. Without this settlement, the increase in consolidated debt would have been less than the increase in assets.

13 (Consolidated debt – hospital financing) / ESA revenues for 2019. The ESA revenue for 2019 (45,583.54 million euros) is a provisional figure. 14 There are no figures available yet on the net asset position for 2019. These figures will be published in the autumn of 2020. 46

5. Public-Private Partnership

Public-Private Partnerships are reported on extensively by the PPP Knowledge Centre. More information on alternative financing of Flemish public investments can be found at15: https://www.vlaamsparlement.be/parlementaire-documenten/parlementaire- initiatieven/1286327

15 This is a link to the 2018 report on alternative financing of Flemish public investments. No similar report was published in 2019. 47

V. GUARANTEE MANAGEMENT IN 2019

1. Overview

Table 33: Overview of outstanding guarantees (in millions of euros; status as at 31/12/2019)

2015 2016 2017 2018 2019 Guarantees to (local) authorities 740.41 635.05 486.35 338.98 207.81 Flemish Water Supply Company (De Watergroep) 193.27 200.15 187.02 159.90 147.78 EVA Flemish Public Transport Company De Lijn 64.36 48.50 35.02 24.09 12.84 Universities (social sector) 11.94 8.21 4.50 3.78 3.21 Ghent University Hospital (UZ Gent) 52.52 50.51 48.40 46.18 43.85 EVA Syntra Vlaanderen 0.85 0.65 0.44 0.23 0.14 City of Antwerp 307.25 213.19 110.91 0.00 0.00 City of Sint-Niklaas - Cross-Border Lease 55.71 57.54 50.58 52.97 0.00 City of Dendermonde – Cross-Border Lease 35.54 36.70 32.26 33.79 0.00 Municipality of Hamme – Cross-Border Lease 18.97 19.60 17.22 18.04 0.00 Guaranteed covered by assets 11,675.99 11,982.27 11,916.99 11,533.02 11,103.59 Social Housing 691.48 669.40 686.00 710.00 760.00 Domus Flandria 16.75 3.73 0.00 0.00 0.00 EVA VMSW (Flemish Social Housing Company) 4,704.90 4,523.43 4,340.23 4,149.91 3,952.18 Flemish Housing Fund cvba (Vlaams Woningfonds) 3,005.41 2,843.00 2,697.25 2,547.00 2,392.00 IVA AGIOn (Agency for Infrastructure in Education) 292.42 319.88 329.90 352.02 365.88 IVA VIPA (Agency for Infrastructure of Welfare Institutions) 2,423.00 2,377.26 2,321.26 2,188.00 2,046.02 Beheersmaatschappij Antwerpen Mobiel NV 152.42 136.38 120.34 104.19 88.26 Project Brabo 1 NV 109.18 119.69 118.30 116.20 116.20 Schools of Tomorrow (Scholen van Morgen) 171.83 828.41 1,142.62 1,204.61 1,221.96 Deurganckdok Lock 108.60 161.09 161.09 161.09 161.09 Economic guarantees 974.38 977.95 985.66 977.46 1,043.28 Waarborgbeheer nv 553.23 595.20 655.14 707.94 759.19 Gigarant nv 223.40 192.33 205.59 222.89 235.79 Flemish Agricultural Investment Fund – FAIF (Vlaams 38.16 28.27 22.33 17.62 15.82 Landbouwinvesteringsfonds – VLIF) Flemish Institute for Biotechnology – FIB (Vlaams Instituut 4.05 3.62 3.17 2.70 2.20 voor Biotechnologie – VIB) IMEC 32.25 37.47 31.93 26.31 21.48 Arkimedesfonds 116.90 118.83 67.50 0.00 0.00 iMinds 4.00 0.00 0.00 0.00 0.00 Constructiewerkhuizen G. Van Weynsberghe & Co NV 2.23 2.23 0.00 0.00 0.00 DAB Microfinancing Guarantee Fund (Waarborgfonds 0.12 0.00 0.00 0.00 0.00 Microfinanciering) Janssen Pharmaceutica NV 0.00 0.00 0.00 0.00 8.80 Rest 0.02 0.00 0.00 0.00 0.00 De Gezinsbond VZW 0.02 0.00 0.00 0.00 0.00 TOTAL 13,390.80 13,595.27 13,389.00 12,849.46 12,354.68

Table 33 provides an overview of the debt guaranteed by the Flemish Community/the Flemish Region. Total secured debt amounted to 12.355 billion euros at the end of 2019, a decrease of 494.8 million euros compared with 2018 (12.849 million euros). The secured debt is also expected to decrease further in the coming years.

The secured debt of Schools of Tomorrow grew by 17.35 million euros in 2019. This increase is more limited than in 2018, when there was an increase of 61.99 million euros to 1,204.61 million euros. This more modest increase is due to the fact that only a limited number of school buildings were delivered in 2019. In addition, the secured debt of VMSW (-197.7 million euros) and VWF (-155 million euros) decreased, as these entities have not taken up secured loans from banks or insurance companies since the start of the direct financing by the Flemish Region as from mid-2015. Furthermore, the secured debt of VIPA has also fallen by 142 million euros. The three cross-border leases of Sint-Niklaas, Dendermonde and Hamme were terminated early in 2019, reducing the secured debt to 0 (-104.8 million euros).

Janssen Pharmaceutica nv was granted a new guarantee in 2019 for the detection and extraction of geothermal heat, with a maximum guaranteed amount of 8,797,904 euros.

As a large part of the secured debt is already included in the consolidated debt, the total secured debt has been split into ‘consolidated secured debt’ and ‘non- consolidated secured debt’. As shown in Table 34, 10.595 billion euros of the secured debt is already included in the consolidated debt. Therefore, only a limited part, i.e. 1.760 billion euros (see Table 35), can be considered as purely secured debt. The large majority, namely 1.041 billion euros, has been allocated to the economic guarantees sector. The non-consolidated guaranteed debt has also fallen slightly.

Table 34: Consolidated secured debt (in millions of euros; status as at 31/12/2019)

2015 2016 2017 2018 2019 Guarantees to (local) authorities 128.82 107.22 87.92 74.05 59.89 EVA Flemish Public Transport Company De Lijn 64.36 48.50 35.02 24.09 12.84 Universities (social sector) 11.94 8.21 4.50 3.78 3.21 Ghent University Hospital (UZ Gent) 52.52 50.51 48.40 46.18 43.85 Guarantees covered by assets 10,990.94 11,288.92 11,265.64 10,923.22 10,532.72 Social Housing 691.48 669.40 686.00 710.00 760.00 Domus Flandria 16.75 3.73 0.00 0.00 0.00 EVA VMSW (Flemish Social Housing Company) 4,704.90 4,523.43 4,340.23 4,149.91 3,952.18 Flemish Housing Fund cvba (Vlaams Woningfonds) 3,005.41 2,843.00 2,697.25 2,547.00 2,392.00 IVA AGIOn (Agency for Infrastructure in Education) 292.42 319.88 329.90 352.02 365.88 IVA VIPA (Agency for Infrastructure of Welfare Institutions) 1,846.55 1,845.00 1,831.00 1,739.29 1,636.24 Beheersmaatschappij Antwerpen Mobiel NV 152.42 136.38 120.34 104.19 88.26 Project Brabo 1 NV 109.18 119.69 118.30 116.20 116.20 Schools of Tomorrow (Scholen van Morgen) 171.83 828.41 1,142.62 1,204.61 1,221.96 Economic guarantees 56.05 53.31 3.17 2.70 2.20 Flemish Institute for Biotechnology – FIB (Vlaams Instituut 4.05 3.62 3.17 2.70 2.20 voor Biotechnologie – VIB) Arkimedesfonds 48.00 49.69 0.00 0.00 0.00 iMinds (*) 4.00 0.00 0.00 0.00 0.00 TOTAL 11,175.81 11,449.45 11,356.73 10,999.97 10,594.81

* iMinds merged with IMEC in 2016

Table 35: Non-consolidated secured debt (in millions of euros; status as at 31/12/2019)

2015 2016 2017 2018 2019 Guarantees to (local) authorities 611.59 527.83 398.43 264.70 147.92 Flemish Water Supply Company (De Watergroep) 193.27 200.15 187.02 159.90 147.78 City of Antwerp 307.25 213.19 110.91 0.00 0.00 City of Sint-Niklaas – Cross-Border Lease 55.71 57.54 50.58 52.97 0.00 City of Dendermonde – Cross-Border Lease 35.54 36.70 32.26 33.79 0.00 Municipality of Hamme – Cross-Border Lease 18.97 19.60 17.22 18.04 0.00 EVA Syntra Vlaanderen 0.85 0.65 0.44 0.00 0.14 Guarantees covered by assets 685.05 693.35 651.35 610.25 570.87 Deurganckdok Lock 108.60 161.09 161.09 161.09 161.09 IVA VIPA (Agency for Infrastructure of Welfare Institutions) 576.45 532.26 490.26 449.16 409.78 Economic guarantees 918.29 924.64 982.49 974.76 1,041.08 IMEC 32.25 37.47 31.93 26.31 21.48 Waarborgbeheer nv 553.23 595.20 655.14 707.94 759.19 Gigarant nv 223.40 192.33 205.59 222.89 235.79 Flemish Agricultural Investment Fund – FAIF (Vlaams 38.16 28.27 22.33 17.62 15.82 Landbouwinvesteringsfonds – VLIF) DAB Microfinancing Guarantee Fund (Waarborgfonds 0.12 0.00 0.00 0.00 0.00 Microfinanciering) Constructiewerkhuizen G. Van Weynsberghe & Co NV 2.23 2.23 0.00 0.00 0.00 Arkimedesfonds 68.90 69.14 67.50 0.00 0.00 Janssen Pharmaceutica NV 0.00 0.00 0.00 0.00 8.80 Rest 0.02 0.00 0.00 0.00 0.00 De Gezinsbond VZW 0.02 0.00 0.00 0.00 0.00 TOTAL 2,214.95 2,145.82 2,032.27 1,849.71 1,759.87

2. The risk is limited

The executions in 2019 amounted to less than 0.2%16 (see also below) of the total outstanding guarantees and were mainly located at Waarborgbeheer NV, which was confronted with 20.87 million euros of executions. However, an annual provision is made in the budget for expected executions on the basis of standardised guarantee provision.

Since it is not always easy for Flemish companies to obtain credit from a bank, even with a good track record, PMV established two companies: Waarborgbeheer NV and Gigarant NV. The task of both companies is to grant guarantees. Guarantees reduce the risk for banks and create more credit facilities for companies.

Even after careful screening by Waarborgbeheer NV and Gigarant NV, it sometimes occurs that guarantees are enforced, which was only the case in 2019 for Waarborgbeheer NV.

Other executions occurred at VLIF (0.28 million euros), AGION (0.16 million euros) and Social Housing (0.20 million euros). In 2019, almost all executions occurred in the economic guarantees sector, which accounts for only 8% of the total Flemish secured debt. As illustrated in figure 16, most of the secured debt (90%) is guaranteed by assets.

Figure 16: Importance of the various categories of secured debt at the end of 2019

In conclusion, we can state that the secured debt in 2019 decreased compared with 2018. Executions in 2019 were largely confined to the economic guarantees sector. As this sector only accounts for a limited part of the total secured debt, the executions were comparatively very low and therefore the risk is very limited. Moreover, the amount of executions in 2019 was also considerably lower than in 2018 (see also below).

16 21.51 million euros of executions in 2019 51

2.1 Executions and recoveries

Executions in 2019 amounted to 21.51 million euros, compared with 57.37 million euros in 2018.

Although Waarborgbeheer NV succeeded in receiving 7.2 million euros in recoveries and another 6.3 million euros in guarantee premiums in 2019 , this was not sufficient to compensate for the executions amounting to 20.9 million euros (an execution rate of 2.75 per cent). Waarborgbeheer NV had a negative balance of 7.4 million euros in 2019. In most other sectors, however, the guarantee premiums and recoveries received were sufficient to cover the executions. However, this could not compensate for the negative balance of Waarborgbeheer NV. For all categories together, there was a negative balance of 2.8 million euros in 2019.

The following table illustrates the guarantee premiums, executions and recoveries in more detail.

Table 36: Overview of the cost of guarantees (in millions of euros)

Premiums Executions Recoveries Balance 2018 2019 2018 2019 2018 2019 2018 2019 Social housing (EKMs) 0.2 0.6 0.0 0.2 0.0 0.0 0.2 0.4 AGION 0.3 0.3 0.2 0.2 0.0 0.0 0.2 0.2 VLIF 0.0 0.0 0.3 0.3 0.0 0.0 -0.3 -0.3 Waarborgbeheer NV 5.8 6.3 12.8 20.9 9.9 7.2 2.9 -7.4 VIPA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Gigarant NV 4.0 3.7 0.0 0.0 0.0 0.0 4.0 3.7 Arkimedesfonds I 0.0 0.0 44.2 0.0 0.0 0.0 -44.2 0.0 Janssen Pharmaceutica nv 0.0 0.6 0.0 0.0 0.0 0.0 0.0 0.6 TOTAL 10.3 11.5 57.4 21.5 9.9 7.2 -37.2 -2.8

3. Some key components

3.1 Guarantees to (local) authorities

Although De Watergroep is a company, it is nevertheless classified under guarantees to (local) authorities. De Watergroep is the largest drinking water company in Flanders and is owned by local authorities and the Government of Flanders. That is why the debt guaranteed by the Flemish Community can be found under guarantees to (local) authorities. In 2019, De Watergroep did not take out a new loan with a regional guarantee.

The three cross-border leases of Sint-Niklaas, Dendermonde and Hamme were terminated early in 2019, reducing the secured debt to 0 (-104.8 million euros).

3.2 Social Housing

As a result of the direct financing of VMSW and VWF (since mid-2015), the secured debt of the social housing sector – of which VMSW and VWF are the main actors – continued to decrease in 2019.

The Approved Credit Companies (Erkende KredietMaatschappijen - EKMs) are still financed by secured bank loans. In the case of EKMs, both liabilities (funding of EKMs) and assets (loans from EKMs to private individuals) are guaranteed. However, assets are guaranteed up to a maximum of 20%.

More details on the provision of guarantees to the social housing sector can be found in Table 37.

Table 37: Total guarantee provision in the social housing sector (in millions of euros)

Social housing sector 2015 2016 2017 2018 2019 Social housing from EKM to private individuals (*) 145 125 130 125 125 Funding of EKM (*) 546 544 556 585 635 VMSW 4,705 4,523 4,340 4,150 3,952 VWF 3,005 2,843 2,697 2,547 2,392 Total new calculation 8,402 8,036 7,724 7,407 7,104 (*) Estimate

3.3 VIPA

Table 38 shows that the secured debt of VIPA has fallen to 2,046 million euros (compared with 2,188 million euros in 2018).

Table 38: Breakdown of the VIPA section into classic, alternative and facilitation guarantees (in millions of euros)

2017 2018 2019 Classic guarantee 490 449 410 Alternative guarantee 1,721 1,630 1,533

Facilitation guarantee 110 110 104

TOTAL 2,321 2,188 2,046

Welfare and Health Services can, under certain conditions, apply to VIPA for a subsidy for their infrastructure works. Under strict and selective conditions, certain sectors may also request a guarantee for their external financing.

VIPA has built up a buffer with the guarantee premiums paid. If a guarantee is called upon in the future, this can be covered without any problem.

In addition, VIPA has concluded a pari passu agreement with all financial institutions involved. This agreement provides that when the regional guarantee is attached to a loan, all the collateral held by a bank in relation to the guaranteed obligor is shared proportionally with VIPA.

No new ‘alternative guarantees’ will be provided in the context of the lump-sum payment of investment aid to residential care centres and hospitals. This item will therefore continue to decline in the future.

The substantial increase in the ‘Facilitation guarantee’ item in 2017 is due to loans that had already been guaranteed before 2017 under an agreement in principle, but whose guarantee position could not be included until 2017, as only by then the draw period for these loans had expired and the repayment tables could be provided.

In 2019, the draw period of the last loan under the facilitation guarantee expired, which means that from 2020 the facilitation guarantee will decrease year after year. Indeed, no new facilitation guarantee agreements will be granted.

3.4 Schools of Tomorrow

The Schools of Tomorrow project is a Public-Private Partnership (PPP) for the construction of 1.5 billion euros’ worth of schools. It concerns 182 specific projects, of which 163 were already in operation at the end of 2019, while 8 projects were still in the construction phase and 11 projects in the design phase.

The guarantee on the construction loan and the non-subsidised part of the availability fee comes into effect at the time of delivery. This guarantee is counterbalanced by the mortgage mandates of the availability fee and the construction loan.

3.5 Guarantees to large, medium and small enterprises

Flanders supports the financing of businesses through two subsidiaries of Flanders Holding Company (Participatiemaatschappij Vlaanderen - PMV): Waarborgbeheer NV and Gigarant NV. For guarantees up to 1.5 million euros, the generic guarantee scheme of Waarborgbeheer NV applies. Above this amount, Gigarant NV intervenes.

Waarborgbeheer NV provides guarantees of up to 1.5 million euros and for a maximum of 75% of the credit. The guarantee scheme is subject to the European rules on de minimis aid. To this end, Waarborgbeheer NV works closely with the banks within well-defined agreements. For example, a bank can decide to bring a credit under the guarantee scheme for up to 750,000 euros within its authorised budget and conditions. For risks in excess of 750,000 euros, the credit is also assessed by Waarborgbeheer NV and must be approved by the Flemish Minister for Economic Affairs. The supporting company pays a guarantee premium before the start of the guarantee. The premium is calculated according to the size and term of the guarantee. In the event of execution, the recovered amounts are divided pari passu between Waarborgbeheer NV and the financing bank.

Gigarant NV provides guarantees above 1.5 million euros to large companies and SMEs for up to 80% of the financing. The financial institutions on behalf of which a Gigarant guarantee is issued must also assume part of the risk of the financing. Gigarant NV always shares pro rata in the other collateral acquired by the financial institution for the financing in question. The company must pay an annual premium, payable in advance for the next 12 months, for as long as the guarantee runs. It must also make agreements on employment. The maximum term of the guarantee is 8 years. Provided that the regulatory conditions are met, Gigarant NV can, after thorough analysis, provide a guarantee of up to 10 million euros. Guarantees above this amount in any case require the approval of the Government of Flanders.

VI. THE RATING OF THE FLEMISH COMMUNITY/REGION

In the world of finance, the term ‘rating’ means the outcome of an assessment of creditworthiness. The rating is frequently used by capital market investors to obtain an indication of the financial strength of a (potential) borrower. The rating provides an estimate of the lender’s certainty that the borrower will be able to meet its obligations fully and on time. The level of the rating also serves as a guideline for the risk premium to be included in the return; the higher the rating, the lower the price.

The contract with Moody’s that expired on 29 February 2020 was retendered. Fitch emerged as the best rating agency in the public procurement process. The benchmark issues of recent years have also shown that having one rating is sufficient. The current contract with Fitch runs from 1 March 2020 to 29 February 2024.

In March 2020, Fitch awarded an ‘AA’ rating to Flanders. This is the highest rating of all Belgian regions and communities and is even one notch higher than the federal government, which has ‘AA-’. This is a rather unique situation: Flanders is 1 of the 6 regions in Europe to which Fitch awards a rating above the sovereign government. The other regions are Friuli-Venezia Giulia, Sardinia, Valle d'Aosta and Veneto from Italy and the Spanish Basque Country.

In April 2020, Fitch revised the outlook for Flanders from stable to negative and confirmed the rating at AA. The update of the forecast was the result of the update of Belgium’s forecast from stable to negative on 3 April 2020. Fitch states that Flanders should not be rated more than 1 notch above Belgium.

Table 39: Overview of ratings in 2018, 2019 and 2020 for Flanders

Rating agency Date Rating Moody’s 28/09/2018 Confirmation of Aa2 rating, stable outlook Moody’s 27/09/2019 Confirmation of Aa2 rating, stable outlook Fitch 06/03/2020 ‘AA’ rating, stable outlook Fitch 09/04/2020 ‘AA’ rating, negative outlook

Fitch’s report shows that, beyond a sound economy with indicators above the Belgian and European averages, Flanders is assessed as ‘Stronger’ on five of the six key risk factors (KRF), namely revenue robustness, revenue adjustability, expenditure sustainability, liabilities and liquidity robustness and liabilities and liquidity flexibility. Flanders scores ‘Midrange’ on expenditure adjustability.

VII. APPENDICES

1. Glossary of terms

Average interest rate

The average interest rate is calculated according to the interest rate base, annual act/act, by taking the weighted average of the individual interest rates as a function of the residual debt balance (RDB).

Average interest rate = Sum ( t(i) x RDB(i) ) / Sum of the RDBs t(i) is the interest rate applicable on the next maturity date for each product

Average remaining time to maturity

For the average remaining time to maturity, the weighted average is calculated of the remaining number of days until the end date of each capital repayment of each loan, taking into account the number of repayments until the maturity date.

Belgian Commercial Paper

The ‘Belgian Commercial Paper Programme’ (= BCP Programme) of the Flemish Community is a short-term financing instrument. The maturity varies from 1 day to 1 year. Under the programme, the Government of Flanders is able to issue treasury certificates, in materialised form, up to a maximum total amount of 1,500,000,000 euros.

Capital market

Market where medium- and long-term financial instruments are traded.

Consolidated debt

The sum of the debts of all the entities belonging to the consolidation scope of the Government of Flanders, with mutual debts being discharged.

DAB

Service with Autonomous Management (Dienst met Afzonderlijk Beheer)

Direct debt

A debt category that includes the financial instruments (loans, securities, leasing, cash facility, etc.), either issued or taken out by the Flemish Community or the Flemish Region, or contractually assumed by the Flemish Community or the Flemish Region.

EMTN

EMTN stands for Euro Medium Term Notes. Through the EMTN programme, the Government of Flanders is able to issue debt securities on the international financial markets for a maximum outstanding amount, currently 10 billion euros, and thus raise the necessary financial resources.

EURIBOR

Euro Interbank Offered Rate or the interest rate at which it is possible to borrow on the interbank market in Europe.

Financial Market

Capital market plus money market.

Guaranteed debt

The aggregate debt of legal entities under public law, established by or pursuant to a law or Decree and falling under the aegis of the Flemish Community or the Flemish Region, and of lower authorities, of which the outstanding capital is fully or partially guaranteed by the Flemish Community or the Flemish Region, either by way of a statement of guarantee or by means of a contractual commitment, excluding the indirect debt.

Indirect debt

Loan at a fixed rate of interest

Loan with an interest rate that remains unchanged until its expiry date.

Loan at a floating rate of interest

Medium-term or long-term loan with an interest rate that varies according to changes in a reference rate, which is usually the interest rate of the interbank market. The coupon is usually set every 6 months. A fixed margin or ‘spread’ may optionally be added to the interbank rate. This margin may be deducted from the interbank interest rate for very good debtors.

Margin

A generally fixed margin added to or subtracted from an interest rate that is used as a reference for a loan with a variable interest rate.

Money market

Market where financial transactions with a maturity of maximum one year are concluded.

Net Financing Requirement

The sum of the balance of the current transactions, the capital transactions and the treasury transactions. This is referred to as ‘net’ because debt repayments are not included in these transactions. However, the actual interest charges on government debt are included in the Net Financing Requirement. In theory, the Net Financing Requirement corresponds to the growth of the public debt. In practice, there are a number of other causes of changes in public debt (e.g. exchange rate differences or the assumption of certain debts).

OLO

Linear bond (Obligation Linéaire/Lineaire Obligatie): a long-term bond issued by the Federal Administration of the Treasury that has a fixed interest rate, maturity and redemption value. These bonds are dematerialised.

Rating

Practice of assessing a debtor’s creditworthiness. The most well-known rating agencies are ‘Standard & Poor’s’, ‘Moody’s’ and Fitch. They regularly assess the financial capacity of the Flemish Community.

Redemption

Any repayment that reduces or extinguishes a debt.

Refinancing

Repayment of a loan by taking out a new loan.

Remaining term to maturity

The remaining term to maturity is calculated as a function of the maturity date and today’s date, which results in the remaining time until the extinction of the debt. The average of those remaining terms to maturity as a function of the remaining debt balance is the remaining term to maturity.

Schuldschein

A Schuldschein is a loan agreement, not a security, in which the borrower promises to repay the lender a certain sum on a certain date for a certain fee. It is governed by German law, but its legal documentation is in line with that of the EMTN or OLOs. It is exempted by the same German law from the obligation to book this loan at market value (mark-to-market), which means that this loan instrument offers advantages, in particular to German investors.

Short-term debt

Debt with a maximum term of 1 year, whereby the proceeds of the loans are deposited in the resource budget. This debt may be repaid by means of contractual repayments in the form of annual appropriations for which credits are entered in the budget (Title 3).

Swap

Financial transaction whereby two parties undertake to exchange equal but opposite financial liabilities over a certain period of time. For the Government of Flanders, a swap can be based on the interest rate, the currency or both. These are called respectively interest rate swaps, currency swaps and cross-currency swaps.

Tendering procedure

System for placing an issue whereby prospective subscribers propose either an issue price or an interest rate, taking into account that all other terms and conditions of the loan are determined. All offers are ranked according to the interest rates or prices offered.

Treasury bills

Short-term securities issued by the Federal Treasury through a tender on the primary market. Three different types can be distinguished: certificates at three months, at six months and at twelve months. In addition, there is also a secondary market for treasury certificates. This market rests with the primary dealers, who ensure its effective and transparent operation, as well as its liquidity. As soon as the treasury certificates are entered in the National Bank’s X/N clearing system, anyone can subscribe to them (residents and non-residents, institutional investors, private individuals, etc.).

2. Overview of websites

http://financeflanders.be/ http://fin.vlaanderen.be http://www.vlaanderen.be/nl/publicaties http://www.serv.be/serv http://regionalestatistieken.vlaanderen.be/svr-publicaties http://www.pmv.eu/ http://www.pmv.eu/nl/financiering-voor-ondernemers/waarborgen/waarborgen- tot-15-miljoen-euro http://www.pmv.eu/nl/financiering-voor-ondernemers/waarborgen/waarborgen- boven-15-miljoen-euro http://www.vmsw.be http://www.vlaamswoningfonds.be/ http://www.vlaamswelzijnsverbond.be/intersectoraal/financieel- beleid/infrastructuur/vipa https://www.dewatergroep.be/ http://begrippendatabank.fenb.be/Begrippendatabank/default.aspx https://www.nbb.be/nl/statistieken/overheidsfinancien/methodologie

61 www.financeflanders.be