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DGCEC REPAYABLE CONTRIBUTIONS: A CASE STUDY TO DEMONSTRATE CCI VIABILITY
ICEC’s “Repayable Contributions (RCs)”ECIAAmsterdam, 27 November 2014
Mr. Alex Pi HernándezBusiness DevelopmentCatalan Institute for the Cultural Companies (ICEC)Directorate General for Creation and Cultural Companies Ministry of Culture, Government of Catalonia
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DGCEC REPAYABLE CONTRIBUTIONS: A CASE STUDY TO DEMONSTRATE CCI VIABILITY
The singularity of
Repayable Contributions (RCs)
RCs are a form of aid that seek to provide financial support to cultural companies so that they can move forward with their projects, provided these are market-oriented, that is, they are planned with economic objectives and are investment recovery-focused.
This financial instrument is based both on the idea of transparency and co-responsibility between the cultural company and the government funding the project, as it seeks to fund projects in an efficient way from the outset, and determine the amount the project really needs in the event of losses being incurred.
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DGCEC REPAYABLE CONTRIBUTIONS: A CASE STUDY TO DEMONSTRATE CCI VIABILITY
1. If the project is approved will get simultaneously a double financing: a loan -with no cost- and a subsidy.
2. In terms of valuation the key question is: will the project be able to reach the break even if they get this subsidy?
3. The overall public financing (repayable contribution=loan + subsidy) will reach a minimum of 30% and a maximum of 70% of the project budget
4. Depending on the sales performance during the exploitation period this contribution will either be paid back totally or partially by the beneficiary company
5. Variable guarantee percentages directly proportional to the risk of the company and the previous performance with prior repayable contributions
Repayable Contributions
How do RCs work?
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DGCEC REPAYABLE CONTRIBUTIONS: A CASE STUDY TO DEMONSTRATE CCI VIABILITY
Success of a key tool by the sector and for a new
return culture Analysis of RCs granted 2009-2013
Year Cases closed Granted Returned %
2009 24
Loan € 696.583 € 696.583 100%
Subsidy € 352.281 € 75.810,29 22%
TOTAL € 1.048.864 € 772.393,29 74%
2010 20
Loan € 1.176.942 € 1.176.942 100%
Subsidy € 430.594 € 340.184,86 79%
TOTAL € 1.607.536 € 1.517.126,86 94%
2011 18
Loan € 984.458 € 984.458 100%
Subsidy € 362.679 € 202.598,29 56%
TOTAL € 1.347.137 € 1.187.056,29 88%
2012 8
Loan € 673.400 € 673.400 100%
Subsidy € 254.863 € 239.286 94%
TOTAL € 928.263 € 912.686 98%
TOTAL 70
Loan € 3.531.383 € 3.531.383 100%
Subsidy € 1.400.417 € 857.879,44 61%
TOTAL € 4.931.800 € 4.389.262,44 89%
Repayable Contributions
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DGCEC REPAYABLE CONTRIBUTIONS: A CASE STUDY TO DEMONSTRATE CCI VIABILITY
The challenge of repayable contributions
RCs pave the way towards a change in philosophy from a subsidy culture to a funding and returns culture within Catalan cultural companies.
RCs help recover part of the subsidy granted at the outset, and therefore, feed those returns back into the Ministry budgets.
Repayable Contributions
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DGCEC REPAYABLE CONTRIBUTIONS: A CASE STUDY TO DEMONSTRATE CCI VIABILITY
The challenge of repayable contributions
RCs pave the way towards a change in philosophy from a subsidy culture to a funding and returns culture within Catalan cultural companies.
RCs help recover part of the subsidy granted at the outset, and therefore, feed those returns back into the Ministry budgets.
Repayable Contributions
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