EUROPEAN COMMISSION

Brussels, 29.5.2020

COM(2020) 403 final

2020/0108(COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

establishing the InvestEU Programme

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

For the Multiannual Financial Framework (MFF) 2021-2027, there is a need to provide an EU investment programme to cater for cross-cutting objectives in terms of simplification, flexibility, synergies and coherence across relevant EU policies. The considerations put forward in the Commission's Reflection Paper on the future of EU finances highlight the need "to do more with less" and leverage the EU budget at a time of budgetary constraints and massive investment needs. These needs have increased significantly because of the impact of the COVID19 pandemic on the European economy and the risk of an asymmetric recovery across the EU and within Member States.

This is why the Commission is withdrawing its earlier proposal presented in May 2018 for the InvestEU Programme 1 and is putting forward a new proposal to the European Parliament and the Council. This new proposal fully reflects the partial agreement already reached between the European Parliament and the Council in April 2019 2 . It increases the initially proposed financial envelope and amends the scope of the proposal to reflect the specific post-pandemic needs of the European economy. 

To respond to the economic and social crisis caused by the Covid-19 pandemic, the Commission’s 2018 InvestEU proposal needs to be amended to better suit the changed circumstances. The amendments to the partial agreement reached by the co-legislators consist in an increase of the financial envelope foreseen for the originally proposed InvestEU Programme to reflect the higher investment needs overall and an environment of increased risk. The new proposal also expands the scope of the InvestEU Programme. In order to cater to the future needs of the European economy and to secure or maintain strategic autonomy in key sectors, a new window is added to the programme. In order to meet the ambitious policy objectives of the Union, attracting private capital to finance investment remains essential while adjusting the approach towards more policy relevance. The InvestEU Programme will contribute towards meeting policy objectives of the Union, whenever the use of repayable investment support is appropriate.

The Covid-19 pandemic is a major shock to the global and Union economy. Due to the necessary containment measures, economic activity in the EU dropped significantly. The contraction in EU GDP in 2020 is expected to be around 7.5%, far deeper than during the financial crisis in 2009 and with inevitable adverse social effects. The outbreak of the pandemic has shown the interconnectivity of global supply chains and exposed some vulnerabilities, such as the over-reliance of strategic industries on non-diversified external supply sources. Such vulnerabilities need to be addressed, to improve the Union’s emergency response as well as the resilience of the entire economy, while maintaining its openness to competition and trade in line with its rules.

In the economic downturn, a strong response is needed at Union level, in particular to bolster the resilience of economic actors and thereby strengthen and maintain the autonomy of strategic sectors so as to secure the competitiveness of the European economy in the long run. This can only be achieved based on a strong Single Market and a level playing field. It is crucial that the economies of Member States hardest hit by the impact of the pandemic benefit from the support of programmes under the EU budget.

Furthermore, the Commission should be able to participate in a possible capital increase (in one or more rounds) of the European Investment Fund (EIF), which will play a key role in supporting the economic recovery through issuing guarantees, undertaking securitisation operations and supporting equity investments throughout the Union. A financial envelope of up to EUR 900 000 000 should be reserved in the Multiannual Financial Framework 2021-2027 for this purpose so that the Union, represented by the Commission, will be able to maintain its overall share in the EIF capital.

•Reasons and objectives 

The creation of the InvestEU Programme provides for a single EU investment support mechanism for internal action for the 2021-2027 MFF. The InvestEU Programme builds on the successful experience of the EFSI and the current financial instruments for internal policies. It will stand on four legs: (i) the InvestEU Fund providing for the EU guarantee; (ii) the InvestEU Advisory Hub providing in particular project development-related technical assistance; (iii) the InvestEU Portal providing an easily accessible data-base for promoting projects in search for financing; and (iv) blending operations.

The InvestEU Fund will be demand-driven in attracting private investment. It will foster in particular research, innovation, digitisation, sustainable infrastructure investment and support strategic companies but will also cater to the needs in the social sector and those of SMEs. Reaching also smaller and local projects will be important.

Crisis-related novelties

The current situation is detrimental to Union companies, as they can be negatively affected by factors outside their control and the control of national and Union-level authorities. As a result of the current Covid-19 outbreak Union companies can face liquidity risks that could lead to insolvency, but also a more systemic risk of asset devaluation that could result in weakening strategic parts of the Union industry. Moreover, to address the shortcoming experienced during the crisis due to disruption of supply chains, the Union industry should reinforce its capacity to cover wider parts of strategic value chains.

By identifying and addressing certain investment areas as ‘strategic’, the EU will push for the much-needed large-scale industrial transformation and secure an increased autonomy for the Union economy, in line with overarching policies such as the Strategy on shaping Europe’s digital future and the European Green Deal. Such long-term policy priorities should be combined with recovery measures taken in the wake of the Covid-19 outbreak. Targeted and ambitious action at Union level, allowing to make the full use of the potential of the Single Market, irrespective of the fiscal capacities of Member States to step in and support investment, will lead to a more competitive, more resilient and more secure Union in the future.

The primary focus of the strategic European investment window would be to support those final recipients established in a Member State and operating 4 in the Union whose activities are of strategic importance to the Union in particular in view of the green and digital transitions and of enhanced resilience in one of the following areas:

a)    critical healthcare provision, manufacturing and stockpiling of pharmaceuticals, medical devices and medical supplies, strengthening of health crisis response capacity and of the civil protection system;

b)    critical infrastructure, whether physical or virtual, including infrastructure elements identified as critical in the fields of energy, transport (including rail freight), environment, health, secure digital communication, 5G, internet of things, online service platforms, secure cloud computing, data processing or storage, payments and financial infrastructure, aerospace, defence, communications, media, education and training, electoral infrastructure and sensitive facilities, as well as land and real estate crucial for the use of such critical infrastructure;

c)    the provision of goods and services instrumental to the operation and maintenance of the critical infrastructure under point b);

d)    key enabling, transformative, green and digital technologies and game-changing innovations where the investment is strategically important for the Union’s industrial future, including:

i) artificial intelligence, blockchain, software, robotics, semiconductors, microprocessors, edge cloud technologies, high-performance computing, cybersecurity, quantum technologies, photonics, industrial biotechnology,

ii) renewable energy technologies, energy storage technologies including batteries, sustainable transport technologies (including renewal and retrofitting of mobile assets using these technologies), clean hydrogen and fuel cell applications, decarbonisation technologies for industry, carbon capture and storage, circular economy technologies,

iii) biomedicine, nanotechnologies, pharmaceuticals and advanced materials (like graphene);

e)    manufacturing facilities for mass production of Information Communication and Technology components and devices in the EU;

f)    supply and stockpiling of critical inputs to public actors, businesses or consumers in the Union, including energy, raw materials, engineered materials or food security having regard to resource efficiency and circularity in strategic value chains; and

g)    critical technologies and inputs for the security of the Union and its Member States (such as defence and space sectors and cybersecurity) and dual use items as defined in point 1 of Article 2 of Council Regulation (EC) No 428/2009.

The fifth window would bring value added compared to the original windows in the current context by focusing on recipients or projects because of their high European strategic importance, an aspect not accentuated under the other windows. For instance, these could include companies active in the targeted industries or SMEs participating in such supply chains by producing specific components. Such operations may often be inherently more risky in the post-Covid-19 environment as promoters are more exposed to increased demand- or supply-side risk.

Certain areas such as semiconductors (including microprocessors), data technologies, 5G and quantum technologies are of particular importance for security, trust and innovation. At the same time, they require massive investments to cover the full value chain of strategic inputs that are sometimes coming almost entirely from limited sources outside the EU, acquire and protect essential technological know-how, as well as to deploy and replace critical infrastructure to mitigate excessive dependency on non-EU suppliers.  

The fifth window would target both specific projects (e.g. supporting large consortia or public-private partnerships aimed at developing a specific technology and building critical infrastructure) and provide financing in a more diffused way, for instance by supporting the emergence of whole ecosystems of entrepreneurs active in the targeted sectors (e.g. innovative SMEs working on technologies of potential relevance to industrial biotechnology and pharmaceuticals). Furthermore, Important Projects of Common European Interest should be able to benefit from support under this window.

The additionality requirements under this window would differ from the additionality envisaged for the original InvestEU windows. For instance, the additionality of the support under the fifth window to large corporates would be in maintaining and developing their production within the Union or, where public order or security considerations so indicate, under the control of European investors and in scaling up the deployment of innovative technologies, rather than in purely risk-related considerations of the InvestEU support. This support would be complementary to that made available under the research, innovation and digitisation window that will focus on the upstream development of new strategic capacities. A particular synergy will also be ensured for follow-up investments in the scaling up of strategic EU start-ups and SMEs emerging from the European Innovation Council (EIC) of EU Research and Innovation Framework Programmes (Horizon Europe).

InvestEU Fund

The InvestEU Fund consists of an EU budget guarantee that will back the financial products provided by the implementing partners. It targets EU added-value projects and promotes a coherent approach to financing EU policy objectives. It offers an effective and efficient mix of EU financing tools for specific policy areas.

As a single investment scheme for internal Union policies, the InvestEU Programme is both a policy instrument and a delivery tool.

As a policy instrument, the InvestEU Programme's overall objective is to support the policy objectives of the Union by mobilising public and private investment within the EU, hereby addressing market failures and investment gaps that hamper the achievement of EU goals regarding sustainability, competitiveness and inclusive growth as well as strategic autonomy of the Union.

The purpose is to supply financing to economic actors with a risk profile that private financiers are not always able or willing to address in order to promote competitiveness of the EU economy, sustainable growth, convergence, social resilience, inclusiveness and the integration of capital markets in the EU in line with EU policy objectives in different sectors. Underpinned by an EU guarantee, the InvestEU Programme will contribute to the modernisation of the EU budget and increase the impact of the EU budget by "doing more with less". For economically viable projects with a revenue generating capacity, a more systemic use of a budgetary guarantee can help increasing the impact of public funds.

The InvestEU Programme should have the capacity to shape an EU strategy in tackling the still subdued investment activity in the Union accentuated by the crisis caused by the Covid-19 pandemic. By diversifying the sources of funding and promoting long term and sustainable finance, the InvestEU Programme will contribute to the integration of European capital markets, within the framework of the Capital Markets Union, and to the strengthening of the Single Market while also contributing to the implementation of the European Green Deal and the European Green Deal Investment Plan. It is an important tool to pursue the goals of the New Industrial Strategy for Europe. As an EU-wide resource pooling financial, market, technical and policy expertise, the InvestEU Programme should also be a catalyser for financial innovation at the service of policy objectives.

As a delivery tool, the InvestEU Fund aims to implement the EU budget through a budgetary guarantee more efficiently, achieving economies of scale, increasing the visibility of EU action and simplifying the reporting and accountability framework. The proposed structure has the objective of simplification, increased flexibility and removal of potential overlaps between seemingly similar EU support instruments.

In addition to the EU guarantee at Union level, the proposal foresees the possibility for the Member States to use part of the funds under shared management through a dedicated compartment in the EU guarantee under the InvestEU Fund in pursuit of the same objectives where market failures or sub-optimal investment situations are present at national or regional level.

The overall EU guarantee is proposed to amount to up to EUR 75 153 850 000 with a specifically dedicated part to the strategic European investment window of up to EUR 31 153 850 000.

InvestEU Advisory Hub and Portal

The InvestEU Advisory Hub will provide project development advisory support and accompanying measures throughout the investment cycle to foster the origination and development of projects and access to financing. The InvestEU Advisory Hub will be provided in the InvestEU Programme's policy areas and will also ensure a single point of access for project promoters and intermediaries. The InvestEU Advisory Hub will be complementary to technical assistance activities carried out under the shared management programmes. To make sure that the strategic European investment window and the other four windows can fully benefit from all features of the InvestEU Fund, the advisory component and other accompanying measures of the InvestEU Programme should be commensurate to the objectives of the proposal. The overall financial envelope, including the accompanying measures, should amount to up to EUR 724 733 000 to cater for the needs of the new window as well as the increasing needs of the other four windows under the current circumstances.

Finally, the InvestEU Portal will reinforce the visibility of investment opportunities in the Union and thus help project promoters in search of financing.

This proposal provides for a date of application as of 1 January 2021.

•Consistency with existing policy provisions

The proposal is fully aligned with existing policy provisions since the InvestEU Programme provides the EU guarantee in order to efficiently use EU budgetary funds when operations with revenue-generating capacity are financed in line with EU policy objectives. These include the Capital Markets Union, the Digital Single Market Strategy, the Clean Energy for All Europeans package, the EU Action Plan for the Circular Economy, the Low-Emission Mobility Strategy, the European Defence Action Plan and the Defence Fund, the Space Strategy for Europe, the European Pillar of Social Rights, the European Green Deal, the European Green Deal Investment Plan and the New Industrial Strategy for Europe. Within its scope of application, the InvestEU Fund supports from a financing perspective these mutually reinforcing strategies.

•Consistency with other Union policies

Blending with grant financing will ensure complementarity with other spending programmes.

The InvestEU Programme is also complementary to the European Structural and Investment Funds. In order to facilitate the deployment of certain Funds under shared management (European Regional Development Fund (ERDF), the European Social Fund+ (ESF+), the Cohesion Fund, the European Maritime and Fisheries Fund (EMFF) and the European Agriculture Fund for Rural Development (EAFRD)) through financial products, the Member States will have the possibility to rely on the InvestEU Programme. This is a major simplification compared to the current situation since only one set of rules will apply in this case.

The InvestEU Programme's actions should be used to address market failures or sub-optimal investment situations, in a proportionate manner, without duplicating or crowding out private financing and have a clear European added value. This will ensure consistency between the actions of the InvestEU Programme and EU State aid rules, avoiding undue distortions of competition in the internal market.

The Commission will develop in cooperation with implementing partners a sustainability proofing guidance, using appropriately the criteria established by [Regulation on establishment of a framework to facilitate sustainable investment] on the basis of which implementing partners will assess the environmental, climate and social impacts of the projects financed. Such guidance would support the policy objectives of the European Green Deal and provide that projects that undermine the climate, environmental and social objectives of the Union would not be supported under InvestEU. Moreover, targeted incentives could be considered for financial products dedicated to climate, environmental and social priorities that are difficult to achieve, for example under the SME window, and for which higher risks are identified that would justify such additional incentives.

The InvestEU Fund will also provide for a dedicated scheme to generate additional investment to the benefit of just transition regions (pillar 2 of the Just Transition Mechanism) in complementarity with the Just Transition Fund (pillar 1) and the public sector loan facility (pillar 3).

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis

The proposal is based on Article 173 (Industry) and the third paragraph of Article 175 (Economic, Social and Territorial Cohesion) of the Treaty on the Functioning of the European Union (TFEU).

In line with established jurisprudence, the legal basis is referred to reflect the main contents of the proposal. The procedures laid down for both Articles regarding the legal basis are the same (ordinary legislative procedure).

•Subsidiarity (for non-exclusive competence) 

The InvestEU Programme will cover investments and access to finance supporting EU policy priorities by addressing EU-wide market failures and investment gaps. It also supports the design, development and EU-wide market testing of innovative financial products, and the systems to spread them, for new or complex market failures and investment gaps.

The voluntary Member State compartment would allow addressing country specific market failures and investment gaps while drawing on financial products designed at central level, ensuring a more efficient geographical usage of resources, where this is warranted. It would allow Member States to implement part of their funds under the European Regional Development Fund (ERDF), the European Social Fund+ (ESF+), the Cohesion Fund, the European Maritime and Fisheries Fund (EMFF) and the European Agriculture Fund for Rural Development (EAFRD) through the InvestEU Fund.

The proposed structure with two compartments in each policy window allows an effective application of the subsidiarity principle. In addition, the two compartments within each window will share the same InvestEU Fund rules, which will allow a clearer and simpler framework for the use of different sources of EU funds.

•Proportionality

The EU long-term goals regarding sustainability, competitiveness, inclusive growth and strategic autonomy and resilience require significant investments in different policy areas. This includes, inter alia, new models relating to mobility, renewable energy, energy efficiency, natural capital, innovation, digitisation, skills, social infrastructure, circular economy, climate action, oceans, small businesses' creation and growth as well as strategic autonomy and resilience of the Union.

Renewed efforts are needed to tackle persisting market fragmentation and market failures caused by private investors' risk-averseness, the public sector's limited funding capacity and structural inefficiencies of the investment environment. Member States cannot sufficiently bridge those investment gaps alone.

An intervention at EU level ensures that a critical mass of resources can be leveraged so as to maximise the impact of investment on the ground. The proposal does not replace Member State investment but on the contrary it is complementary to such investments, by focusing in particular on support for projects that provide EU added value. In addition, the EU level provides for economies of scale in the use of innovative financial products by catalysing private investment in the whole EU and making best use of the European institutions and their expertise for that purpose. The EU intervention also provides access to a diversified portfolio of European projects, thereby catalysing private investment, and allows for the development of innovative financing solutions which can be scaled up or replicated, as appropriate, in all Member States.

Intervention at EU level is the only tool capable of effectively addressing investment needs linked to EU-wide policy objectives. In addition, structural reforms and an improved regulatory environment will continue to be necessary to address the remaining investment gaps in the period 2021-2027.

The proposal envisages support to companies, value chains and ecosystems that are of strategic importance and it reacts to vulnerabilities exposed by the Covid-19 pandemic. Mobilising private funds to support investment and recovery alongside public funds leverages budgetary resources.

It does not go beyond what is necessary to achieve the objectives pursued.

•Choice of the instrument

The purpose of the proposal is to provide a single instrument providing an EU budgetary guarantee to underpin financing and investment operations by the implementing partners in line with the conclusions of the Impact Assessment to build on the success of the EFSI and previous financial instruments while taking into account lessons learnt as regards, inter alia, the avoidance of fragmentation and possible overlaps. Therefore, a Regulation is proposed.

3.RESULTS OF RETROSPECTIVE EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

•Retrospective evaluations/fitness checks of existing legislation

The proposal builds on lessons learnt from evaluations of predecessor financial instruments and of the EFSI. In particular, an independent evaluation of the EFSI 6 was conducted in 2018 in addition to several other evaluations on the EFSI since its inception:

Main findings of these evaluations were summarised in the Commission Communication on the Investment Plan for Europe (COM (2016) 764) 11 .

All evaluations found that the EU Guarantee proved relevant and enabled the EIB to undertake riskier activities and introduce higher risk products to support a wider range of beneficiaries. The EFSI also proved a relevant tool to mobilise private capital. In terms of governance, the independent evaluation of 2018 pointed to the importance of the Investment Committee for the credibility of the scheme, the transparency of its decisions and the quality of the scoreboard, which was evaluated as a relevant tool that allows a consistent approach to project presentation and to summarise appraisal conclusions.

Based on signed operations, the EFSI has mobilised EUR 401 billion of investment by end-2019, corresponding to 80 % of the target. In terms of approved operations, by that time the volume was EUR 458 billion and corresponds to 92 % of the target. Mobilised investment from approved operations reached the EUR 315 billion target by mid-2018. The target of EUR 500 billion is expected to be reached.

The evaluations have noted some concentration in Member States with well-developed institutional capacities. However, if the investment mobilised is considered relative to Member States' Gross Domestic Product this concentration is much less pronounced. Nevertheless, in order to improve further the geographical balance, the EFSI 2.0 has strengthened the relevance of the European Investment Advisory Hub.

As of 31 December 2019, the actual multiplier effect of the EFSI is broadly in line with what had been assessed at the outset – an aggregate global multiplier of 15.66 achieved by end-2019 against a target of 15 at the end of the investment period. The EFSI has also been effective in mobilising private investments. Around 69 % of investment mobilised is from the private sector.

In terms of efficiency, the availability of the EU Guarantee proved to be an efficient tool to considerably increase the volume of riskier operations by the European Investment Bank. In particular, the EU Guarantee freezes less budgetary resources compared to financial instruments, as it requires prudent but limited provisioning compared to the level of financial engagement. It assumes a contingent liability and is consequently expected to achieve economies of scale that result in higher investment mobilised per euro spent. The evidence analysed as part of the independent evaluation in 2018 also clearly indicated that the size of the EU Guarantee under the EFSI was appropriate. It also found that the approach used for the modelling of the EFSI target rate was broadly adequate and in line with industry standards, but proposed some further developments.

A budgetary guarantee has also proven more cost-efficient for the EU budget, as it limits the payment of management fees to the implementing partner. In the case of the EFSI, the EU is even remunerated for the EU Guarantee provided under the Infrastructure and Innovation Window.

The 2016 independent evaluation stressed the need to better define and clarify the concept of additionality. Consequently, the EFSI 2.0 Regulation includes several measures which clarify the concept and the criteria and made the process more transparent.

The independent evaluation of 2018, which could only assess operations approved under the EFSI and therefore could not test the new EFSI 2.0 measures, confirmed the need to further clarify the concept of additionality and the definition of sub-optimal investment situations. In particular, it concluded that the EFSI operations are characterised by a higher level of risk as compared to standard (non-EFSI) operations by the European Investment Bank, as required by the EFSI Regulation. However, the various surveys and interviews indicated that under the Infrastructure and Innovation Window of the EFSI some crowding out may have occurred. They concluded that it would be important to avoid this situation under the InvestEU Programme.

The independent evaluation of 2018 also highlighted the non-financial added value of attracting new investors, providing demonstrations and market testing of new products and financing models, and support and adoption of higher operations standards by financial service providers.

The 2016 EIB evaluation and the independent evaluation of 2018 confirmed the initial disruption caused by the EFSI to other EU level financial instruments by offering similar financial products, in particular the debt instrument under the Connecting Europe Facility and part of the InnovFin, which were partly resolved by re-focusing existing instruments towards new market segments.

The proposal for the InvestEU Fund also builds on lessons learnt from evaluations of predecessor financial instruments spanning two decades (Connecting Europe Facility, Horizon 2020, COSME, etc., and instruments launched under earlier financial frameworks such as the Competitiveness and Innovation Framework Programme (CIP). In general, these evaluations confirm that financing gaps continue to exist in Europe in the sectors and policy areas covered by EU financial instruments and that EU-level investment support continues to be relevant and necessary in order to meet EU policy objectives. However, they also stress that the coherence between different EU-level financial instruments and other EU initiatives should be strengthened, that synergies with national and regional initiatives should be better exploited, and that overlaps exist among the current instruments. They point to a need for better coordination and design of investment support instruments to minimise potential overlaps. The expansion of activities has created a need to strengthen mechanisms for the overall coordination of actions, avoiding unnecessary proliferation and achieving greater synergies.

As regards the COSME instruments offering support to SMEs which are crucial to the Union's future competitiveness, the evaluations show that these instruments are underpinned by a strong market failure rationale and being driven by the constraints in access to finance faced by SMEs. Especially start-ups, smaller SMEs and those lacking sufficient collateral are faced with persistent and structural market gaps for debt finance prevalent across the EU. The Court of Auditors found in a Special Report that the SME guarantee facility has had a positive impact on the growth of supported SMEs. In line with the Court's recommendations, some better targeting of beneficiaries and more coordination with national schemes is needed. 12  

Specifically regarding the InnovFin financial instruments under Horizon2020, the evaluations show that access to finance remains an essential issue in order to improve Europe's innovation performance. They confirm that InnovFin financial instruments have performed well against the backdrop of growing demand for risk finance in research and innovation, and made it possible for the European Investment Bank Group to cover new riskier segments. However, again, the need to strengthen synergies with other EU funding programmes is highlighted, as is the need to address remaining barriers in the context of helping innovative companies to grow from early stage to expansion. It was also pointed out that only a relatively small number of firms receiving grants under Horizon 2020 benefitted from financial instruments under Horizon 2020, which may hinder scaling up of innovative companies.

The InvestEU Fund will build upon these experiences and target research and innovation recipients (including innovative SMEs and mid-caps) in order to provide them with better access to finance at all stages of their development. It will exploit synergies between grant and market based financing by facilitating blending. In addition, the European Court of Auditors' audit on the guarantee facility recommended better targeting of beneficiaries at more innovative companies. By pooling expertise and resources, the InvestEU Fund will increasingly focus support on companies that engage in higher-risk innovation activities.

In the social area and regarding the Employment and Social Innovation (EaSI) Programme, there is empirical evidence that investments in social infrastructure, social enterprises producing goods ('tangibles') as well as social services, ideas and people ('intangibles') are crucially lacking in the Union, yet critical for its Member States to develop into a fair, inclusive and knowledge-based society.

Microfinance and social enterprises in Europe are still recent developments and part of an emerging market that is not yet fully developed. As highlighted by the EaSI mid-term evaluation conducted in 2017, the EaSI financial instruments have supported vulnerable persons and micro-enterprises and facilitated access to finance for social enterprises, thus having achieved significant social impact. The evaluation concluded that deploying the full potential shown by the results achieved so far justifies the continuity for investment support in the social field and need for additional firepower to be provided under the InvestEU Programme.

The impact assessment report regarding the InvestEU Programme includes a detailed summary of these evaluation results.

In January 2019, the European Court of Auditors published a Special report no 03/2019 on the European Fund for Strategic Investments. The report stated that EFSI has been effective in raising finance to support substantial additional investment in the EU. The report also identified some areas for improvement. Most of these were already mostly addressed by EFSI 2.0 Regulation, while others are addressed through the InvestEU legislative proposal.

In particular, InvestEU will enhance complementarity and avoid duplications and overlaps between different instruments. Moreover, InvestEU will further strengthen and clarify the criteria related to the assessment of additionality and to the estimation of investment mobilised in line with the requirements of the new Financial Regulation (EU 2018/1046).

Following the European Court of Auditors’ recommendation to improve the geographical spread, the EFSI Steering Board conducted a study in 2019 to analyse the root causes of the observed geographical spread and adopted measures to further improve the geographical balance while respecting the demand-driven nature of the EFSI.

In May 2020, the European Court of Auditors published a Special report no 12/2020 on the European Investment Advisory Hub (EIAH). The report concluded that the EIAH had not yet proven to be an effective tool for boosting investment in the EU as of end 2018. During the audit period, only few assignments were concluded to have had a significant impact on the supply of projects suitable for investment and that most of the EIAH assignments related to the early stages of the project investment cycle, so they may only have effects in the longer term.

The European Court of Auditors noted the high satisfaction of the beneficiaries for the tailored advisory services received through EIAH support and that most EIAH assignments were in high priority sectors and Member States. However, the European Court of Auditors found that the EIAH received few requests leading to fully-fledged advisory assignments compared to the available resources. Moreover, it needed a clearer strategy and better procedures for following up the investments resulting from EIAH assignments. Moreover, despite the EIAH’s efforts, cooperation with partners to improve geographical coverage developed slowly due to legal complexity and the NPBIs varying willingness and capacity to cooperate.

The InvestEU Advisory Hub will broadly address the recommendations made by the European Court of Auditors incorporating lessons learned from the EIAH, for example by

–further developing cooperation with NPBI’s to improve local presence and access to advisory services;

–setting priorities and specific criteria for assessing the value of advisory support and developing a performance monitoring framework;

–enhancing screening procedures for assessing the value of potential assignments, to maximise its contribution;

–assessing advisory needs and the likely demand for targeted advisory initiatives and for developing projects that could be supported under the InvestEU Fund guarantee.

 •Stakeholder consultations

The proposal is part of the package to counter the negative economic consequences of the Covid-19 pandemic and is a crisis measure. In view of the urgency to start providing support to European companies badly hit by the pandemic and the confinement measures it was not possible to carry out stakeholder consultations in relation to those elements that are new compared to the original Commission proposal of 2018.

For the other elements, the impact assessment relied on the Open Public Consultation (OPC) on EU funds in the area of investment, research & innovation, SMEs and the single market and in particular on the replies related to EU Support for Investment 13 .

This proposal takes into account the results of this OPC. In particular most respondents expressed a view that the current EU support for investment does not sufficiently address policy challenges like reducing unemployment, supporting social investment, facilitating the digital transition, facilitating access to finance in particular for SMEs, ensuring a clean and healthy environment and supporting industrial development.

The respondents stressed the importance of EU-wide policy challenges, among others, in areas like research, support for education and training, clean and healthy environment, and transition to low carbon and circular economy, and reducing unemployment.

Around 60 % of respondents to the OPC on Strategic infrastructure expressed a view that difficulty to access financial instruments is an obstacle that prevents the current programmes from successfully achieving policy objectives.

A vast majority of participants supported the identified steps that could help simplify and reduce administrative burdens. In particular, this included fewer, clearer and shorter rules, alignment of rules between EU funds as well as a stable but flexible framework between programming periods.

The proposal aims to address these results by strengthening the focus on Union policy priorities in the context of the support under the InvestEU Fund. The single set of rules established by the InvestEU Fund should address the issue of possible overlaps and in particular make it easier for final recipients to request support. The InvestEU Fund also has an in-built flexibility, allowing it to adjust to developing market situations and needs. The reporting requirements have also been harmonised.

•External expertise

An external evaluation was conducted in line with Article 18(6) of Regulation (EU) 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the European Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project Portal and amending Regulations (EU) No 1291/2013 and (EU) 1316/2013 – the European Fund for Strategic Investments 14 as explained under the sub-heading 'Retrospective evaluations/fitness checks of existing legislation' 15 .

•Impact assessment

The proposal is part of the package to counter the negative economic consequences of the Covid-19 pandemic and is a crisis measure. In view of the urgency to start providing support to European companies badly hit by the pandemic and the confinement measures it was not possible to conduct a formal impact assessment in relation to those elements that are new compared to the original Commission proposal of 2018.

For the other elements, the impact assessment 16 presented in the context of the original Commission proposal of 2018 examined in detail the main challenges for the next MFF, in particular the investment gaps and sub-optimal investment situations in different policy areas, like research and innovation, sustainable infrastructure, SME financing as well as social investment. It analysed and explained the choices for the proposed InvestEU Fund structure, its governance, objectives, target actions, financial products and final recipients. Where appropriate, the impact assessment described the considered alternative solutions and explained the reasoning for the proposed choices. This in particular related to the rationale for the creation of a single investment support instrument, the delivery mechanisms and the implementing partners, and for the proposed governance structure.

The impact assessment underlined that the current experience with EU financial instruments and the EFSI budgetary guarantee demonstrated a need for simplification, streamlining and better coordination of EU’s investment support instruments during the next MFF. Experience with the EFSI also had revealed significant benefits and efficiency gains inherent in using, where possible, a budgetary guarantee instead of traditional financial instruments.

The impact assessment identified the following main characteristics for the InvestEU Fund:

The range of interventions envisaged under the InvestEU Fund will be implemented through different products targeting different risks that would inherently require high, medium or low provisioning rates, depending on the type of guarantee coverage provided and the operations supported. The Commission will provide guidance and monitor the usage and the risks incurred under different products, so as to ensure that the overall portfolio is compatible with the provisioning rate laid down in the proposal.

On 27 April 2018, the Regulatory Scrutiny Board issued a positive opinion with reservations 17 . The Impact Assessment Staff Working Document 18 addresses the issues raised. The report now better explains the current overlaps between the EFSI and centrally managed financial instruments. It also clarifies how the potential overlaps will be avoided under the InvestEU Fund. Moreover, the choice of the proposed governance structure as well as the role of the different bodies are presented in more detail. This includes a comparison of the governance arrangements currently in use for the EFSI and the financial instruments with the one proposed under the InvestEU Fund. Additional clarifications on the assumptions for the foreseen level of risk and the provisioning rate have been added, including further explanations concerning the risk assessment function within the governance structure.

•Simplification

Sub-optimal investment situations are currently addressed through a heterogeneous and fragmented portfolio of EU financial instruments and the EFSI. This situation also leads to complexity for financial intermediaries and final recipients, who are confronted with different eligibility and reporting rules.

The aim of the InvestEU Fund is to simplify the EU investment support by establishing a single framework that helps to reduce the complexity. Due to a reduced number of agreements under a single set of rules, the InvestEU Fund will simplify the access to EU support for the final recipients, the governance and the management of investment support instruments.

Moreover, as the InvestEU Fund covers all investment support policy needs, it allows for the streamlining of and harmonisation of reporting requirements and performance indicators.

•Fundamental rights

The proposal does not have an impact on fundamental rights.

4.BUDGETARY IMPLICATIONS

In accordance with the Communication 19 of the Commission on the EU budget powering the recovery plan for Europe including a reinforced the Multi-Annual Financial Framework for the period 2021-2027, the budgetary framework (commitments in current prices) foreseen for the InvestEU Programme is EUR 33 524 733 000, including EUR 724 733 000 for project development assistance and other accompanying measures. The overall provisioning will amount to EUR 33 800 000 000, of which EUR 1 000 000 000 being covered by revenues, repayments and recoveries generated by existing financial instruments and the EFSI. Revenues and recoveries from the InvestEU Fund shall also provide additional contributions to provisioning. Out of the overall budgetary framework mentioned above, EUR 33 000 440 000 will be made available through the European Recovery Instrument based on empowerment provided in the new Own Resources Decision.

A legislative financial statement with further budgetary information is included.

5.OTHER ELEMENTS

•Implementation plans and monitoring, evaluation and reporting arrangements

The InvestEU Fund (the EU guarantee) will be implemented through indirect management. The Commission shall conclude the necessary guarantee agreements with the implementing partners. The InvestEU Advisory Hub will be implemented through indirect or direct management depending on the nature of the assistance. The InvestEU Portal will mainly be implemented through direct management.

The impact of the InvestEU Programme will be assessed through evaluations. Evaluations will be carried out in line with paragraphs 22 and 23 of the Interinstitutional Agreement of 13 April 2016 20 , where the three institutions confirmed that evaluations of existing legislation and policy should provide the basis for impact assessments of options for further action. The evaluations will assess the InvestEU Programme's effects on the ground based on the InvestEU Programme indicators/targets and a detailed analysis of the degree to which the InvestEU Programme can be deemed relevant, effective, efficient, provides enough EU added value and is coherent with other EU policies. They will include lessons learnt to identify any lacks/problems or any potential to further improve the actions or their results and to help maximise their exploitation/impact. Monitoring of performance will be measured against indicators laid down in the proposal. In addition to these core indicators, more detailed indicators will be included in the investment guidelines or in the guarantee agreements on the basis of the specific financial products to be deployed. Moreover, specific indicators will be developed for the InvestEU Advisory Hub and the InvestEU Portal.

Harmonised reporting will be requested from the implementing partners in line with the Financial Regulation.

•Detailed explanation of the specific provisions of the proposal

Chapter I – General provisions

The general provisions provide for the general and specific objectives of the InvestEU Programme which are subsequently reflected in the policy windows.

The financing and investment operations to be supported by the EU guarantee under the InvestEU Fund shall contribute to (i) the competitiveness of the Union, including research, innovation and digitisation; (ii) the growth and employment in the Union economy, its sustainability and its environmental and climate dimension contributing to the achievement of the Sustainable Development Goals and the objectives of the Paris climate agreement and to the creation of high-quality jobs; (iii) the social resilience and inclusiveness and innovativeness of the Union; (iv) the promotion of scientific and technological advance, of culture, education and training; (v) the integration of Union capital markets and the strengthening of the Single Market, including solutions addressing the fragmentation of the Union capital markets, diversifying sources of financing for Union enterprises and promoting sustainable finance; (vi) the promotion of economic, social and territorial cohesion by contributing to combatting the post crisis asymmetric recovery; or (vii) the recovery of the Union economy after the crisis caused by the Covid-19 pandemic, upholding and strengthening its strategic value chains, which often affect several Member States and regions, and maintaining and reinforcing activities of strategic importance to the Union in relation to critical infrastructure, technologies and inputs to businesses and consumers.

The size of the EU guarantee is proposed to be EUR 75 153 850 000 and the provisioning rate 45 %, i.e. EUR 33 800 000 000 is needed for the provisioning (both amounts in current prices). The indicative allocation of the EU guarantee between the policy windows is laid down in Annex I. However, the strategic European investment window has a dedicated EU guarantee allocation of up to EUR 31 153 850 000. The size of the provisioning is based on the type of financial products envisaged and the riskiness of the portfolios, taking into account the experience under the EFSI and former financial instruments.

A financial envelope of EUR 724 733 000 (in current prices) is proposed for the InvestEU Advisory Hub, the InvestEU Portal and accompanying measures. The size of the envelope is commensurate to the volume of the EU guarantee in order to facilitate smooth deployment of the available financing by providing adequate advisory support to, inter alia, project promoters.

It is also foreseen that third countries could be associated to financial products under the policy windows of the InvestEU Fund, except under the strategic European investment window, by providing their full participation in cash. This possibility is foreseen in particular to allow, where justified, for the continuation of existing arrangements, inter alia, in the area of research, or to foresee possibilities for support in relation to the accession processes. Member States wishing to use part of their funds under shared management through the InvestEU Fund may also contribute. These amounts come in addition to the EU guarantee of EUR 75 153 850 000 (in current prices).

Chapter II – InvestEU Fund

This Chapter identifies the five policy windows of the InvestEU Fund: (i) sustainable infrastructure; (ii) research, innovation and digitisation; (iii) SMEs; (iv) social investment and skills; (v) strategic European investment, and provides a detailed description of their scope.

It also defines the two compartments of the EU guarantee: (i) EU compartment; and (ii) Member State compartment, which will be composed of one sub-compartment per Member State which decides to contribute part of its funds under shared management into the InvestEU Fund.

The specific rules related to the Member State compartment foresee a contribution agreement between the Commission and the Member State concerned and define the main elements of the contribution, such as, for example, the size, provisioning rate and contingent liability. The Common Provisions Regulation and other relevant legal instruments will contain the necessary enabling provisions. Once the transfer to the InvestEU Fund takes place, the implementation of the Member State compartment will follow the rules of the InvestEU Fund. The Commission shall select the implementing partner based on a proposal by the Member State and sign the guarantee agreement with the Member State concerned.

The Commission proposal for the 2021-2027 MFF sets a more ambitious goal for climate mainstreaming across all EU programmes, with an overall target of 25 % of EU expenditure contributing to climate objectives. The contribution of the InvestEU Programme to the achievement of this overall target will be tracked through an EU climate tracking system. An ambitious separate target of at least 60 % has been set for investment meeting Union objectives on climate and environment under the sustainable infrastructure window. The Commission will present the information annually in the context of the annual draft budget.

To support the full use of the potential of the Invest EU Programme to contribute to climate objectives, the Commission will seek to identify relevant actions throughout the InvestEU Programme preparation, implementation, review and evaluation processes.

Chapter III – Partnership between the Commission and the European Investment Bank Group

A partnership between the Commission and the European Investment Bank Group is established. It covers in addition to the implementation of the 75 % of the EU guarantee, certain advisory tasks in relation to banking related aspects of the guarantee agreements, in particular in relation to financial risk, and in relation to the risk management of the portfolio. European Investment Bank Group will also play a central role in implementing advisory support under the InvestEU Advisory Hub. Moreover, it will advise the Commission and perform operational tasks in relation to the Hub.

The European Investment Bank Group shall take all necessary measures and precautions in order to avoid conflicts of interests with other implementing partners in connection to the tasks it performs to the Commission under the partnership.

Chapter IV – EU guarantee

The provisions relating to the EU guarantee and its deployment are set out in this Chapter. They include the irrevocable and on-demand character of the EU guarantee, the investment period, requirements for the eligible financing and investment operations and eligible types of financing. The sectors eligible for financing and investment operations are laid down more in detail in Annex II.

Moreover, this Chapter lays down the requirements for implementing partners – who, inter alia, have to pass the pillar-assessment in line with the Financial Regulation –, and for the guarantee agreements between the Commission and the implementing partners. Requirements related to the remuneration of the EU guarantee and the conditions for reducing the remuneration in duly justified cases are also included in this Chapter.

In selecting the implementing partners, the Commission will consider their capacity to fulfil the objectives of the InvestEU Fund and to contribute their own resources, to crowd-in private investors, to provide adequate geographic and sectorial coverage and contribute to new solutions to address market failures and sub-optimal investment situations. Given its role under the Treaties, its capacity to operate in all Member States and the existing experience under the current financial instruments and the EFSI, the European Investment Bank Group should remain a privileged implementing partner under the EU compartment. It will implement 75 % of the EU guarantee. National promotional banks or institutions can also become implementing partners. Moreover, it will be possible to have other international financial institutions as implementing partners, in particular when they present a comparative advantage in terms of specific expertise and experience in certain Member States. It should also be possible for other entities fulfilling the criteria laid down in the Financial Regulation to act as implementing partners.

It also includes the detailed coverage of the EU guarantee in function of the different nature of the financing that can be provided under it.

Chapter V – Governance

The InvestEU Fund will have an Advisory Board composed of (i) representatives of the implementing partners; (ii) representatives of the Member States; (iii) an expert appointed by the European Economic and Social Committee; and (iv) an expert appointed by the Committee of Regions. Its tasks include advising the Commission and the Steering Board on the design of financial products to be implemented under the InvestEU Fund and giving advice on market developments, market failures and sub-optimal investment situations as well as on market conditions. It also exchanges views on market developments and shares best practices.

A Steering Board is established to determine strategic and operational guidance, to adopt the risk methodological framework, to oversee the implementation of InvestEU, to be consulted on the shortlist of candidates for becoming members of the Investment Committee, to adopt the rules of procedure for the secretariat of the Investment Committee and adopt rules applicable to the operations with investment platforms.

The Steering Board is composed of four representatives of the Commission, three representatives of the European Investment Bank Group and two representatives of other implementing partners. In addition, the European Parliament is to appoint an expert as a non-voting member. A Commission representative shall be the chair.

The Commission performs a policy check on proposed financing or investment operations to verify that they are compliant with EU law before a proposal is submitted to the Investment Committee. As regards the European Investment Bank, it is proposed that its proposals do not undergo a policy check since they are submitted to the Commission within the framework of the procedure provided for in Article 19 of Protocol No 5. Only if the Commission delivers an unfavourable opinion in that context, a financing or investment operation is excluded from the coverage of the EU guarantee.

The investment committee approves the use of the EU guarantee for financing and investment operations. Its members will be external experts with expertise from the relevant sectors. The Committee will meet in five different configurations which correspond to the policy windows. Each configuration has six members out of which four are permanent members who take part in all configurations. The remaining two members are selected to take more specifically into account the areas covered by that particular policy window.

An independent secretariat is established to assist the Investment Committee. The secretariat will be administratively located at the Commission but it is answerable to the chair of the Investment Committee.

The Investment Committee will also take care of granting the EU guarantee to operations under the EFSI Regulation 21 .

A scoreboard is required in relation to all financing and investment operations to be submitted to the Investment Committee. It will ensure independent, transparent and harmonised assessment of the guarantee requests. It shall contain detailed information on the financing or investment operation in question concerning, inter alia, the contribution of the operation to Union policy objectives, additionality, description of the market failure or sub-optimal investment situation, investment impact and financial profile.

Chapter VI – InvestEU Advisory Hub

The InvestEU Advisory Hub will provide advisory support for the identification, preparation, development, structuring, procuring and implementation of projects, including related capacity building. It will be available for public and private project promoters as well as for financial and other intermediaries.

Chapter VII – InvestEU Portal

The InvestEU Portal will be established, building on the experience with the Project Portal under the Investment Plan for Europe. Systematic checks of the consistency of the projects with Union law and policies will be undertaken by the Commission. Moreover, implementing partners are obliged to consider those projects meeting the consistency requirements that fall within their scope of action. Its objective is to provide visibility on investable projects in the EU that are in search of funding. However, a project does not have to be posted on the Portal in order to benefit from EU funding. Similarly, a submission to the Portal does not mean that the project will in the end benefit from the EU guarantee.

Chapter VIII – Accountability, monitoring and reporting, evaluation and control

The Chairperson of the Steering Board may be requested to report to the European Parliament or to the Council or reply orally or in writing to questions by them.

This Chapter provides for regular monitoring and reporting while laying down the indicators against which performance will be measured in Annex III. Moreover, it contains provisions on audit and on OLAF's rights with regard to financing and investment operations in third countries.

Furthermore, it is proposed that the use of the EU guarantee will be evaluated through an interim and a final evaluation in line with the requirements of the Financial Regulation. The interim evaluation will have to consider certain specific features of the Regulation, such as the functioning of the modalities under the partnership between the Commission and the European Investment Bank Group, the allocation of the EU guarantee between the European Investment Bank Group and the other implementing partners, the implementation of the InvestEU Advisory Hub.

Chapter IX – Transparency and visibility

The provisions are included to ensure adequate transparency and visibility vis-à-vis the final recipients and the general public, respectively.

Chapter X – Transitional and final provisions

This final Chapter includes provisions in relation to the use of revenues, repayments and recovery from the predecessor programmes. A list of those programmes, in addition to the EFSI, is in Annex IV. This Chapter also lays down the procedure for the delegated acts.

It is foreseen that the Regulation applies as of 1 January 2021.

2020/0108 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

establishing the InvestEU Programme

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 173 and the third paragraph of Article 175 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee 22 ,

Having regard to the opinion of the Committee of the Regions 23 ,

Acting in accordance with the ordinary legislative procedure,

Whereas:

(1)The Covid-19 pandemic is a major shock to the global and Union economy. Due to the necessary containment measures, economic activity in the EU dropped significantly. The contraction in EU GDP in 2020 is expected to be around 7.5%, far deeper than during the financial crisis in 2009. The outbreak of the pandemic has shown the interconnectivity of global supply chains and exposed some vulnerabilities such as the over-reliance of strategic industries on non-diversified external supply sources. Such vulnerabilities need to be addressed, to improve the Union’s emergency response as well as the resilience of the entire economy, while maintaining its openness to competition and trade in line with its rules. Investment activity is expected to have dropped significantly. Even before the pandemic, while a recovery in investment-to-GDP ratios in the Union could be observed, it remained below what might be expected in a strong recovery and was insufficient to compensate for years of underinvestment following the 2009 crisis. More importantly, the current investment levels and forecasts do not cover the Union’s needs for structural investment to restart and sustain long-term growth in the face of technological change and global competitiveness, including for innovation, skills, infrastructure, small and medium-sized enterprises (SMEs) and the need to address key societal challenges such as sustainability or population ageing. Consequently, in order to achieve the Union's policy objectives and to support a swift, inclusive and healthy economic recovery, support is necessary to address market failures and sub-optimal investment situations and to reduce the investment gap in targeted sectors.

(2)Evaluations have underlined that the variety of financial instruments delivered under the 2014-2020 Multiannual Financial Framework period has led to some overlaps in their scope. That variety has also produced complexity for intermediaries and final recipients who were confronted with different eligibility and reporting rules. The absence of compatible rules also hampered the combination of several Union funds, although such combinations would have been beneficial in order to support projects in need of different types of funding. Therefore, a single fund, the InvestEU Fund, which builds on the experience of the European Fund for Strategic Investments (EFSI) set up under the Investment Plan for Europe, should be set up in order to provide more efficiently functioning support to final recipients by integrating and simplifying the financing offered under a single budgetary guarantee scheme, thereby improving the impact of Union support while reducing the cost to the Union payable from the budget.

(3)In the last years, the Union has adopted ambitious strategies to complete the Single Market and to stimulate sustainable and inclusive growth and jobs, such as 'Europe 2020 - A strategy for smart, sustainable and inclusive growth' of 3 March 2010, 'Action Plan on Building a Capital Markets Union' of 30 September 2015, 'A new European Agenda for Culture' of 22 May 2018, 'Clean Energy for all Europeans' of 30 November 2016, 'Closing the loop - An EU action plan for the Circular Economy' of 2 December 2015, 'A European Strategy for Low-Emission Mobility' of 20 July 2016, ‘European Defence Action Plan’ of 30 November 2016, 'Launching the European Defence Fund' of 7 June 2017, 'Space Strategy for Europe' of 26 October 2016, the Interinstitutional Proclamation on the European Pillar of Social Rights of 13 December 2017, the ‘European Green Deal’ of 11 December 2019, the ‘European Green Deal Investment Plan’ of 14 January 2020, the ‘Strong Social Europe for Just Transitions’ of 14 January 2020, the ‘Strategy for shaping Europe’s digital future’, the ‘Data Strategy’ and the ‘Artificial Intelligence Communication’ of 19 February 2020, ‘A New Industrial Strategy for Europe’ of 10 March 2020 and ‘SME Strategy for a sustainable and digital Europe’ of 10 March 2020. The InvestEU Fund should exploit and reinforce synergies between those mutually reinforcing strategies through providing support to investment and access to financing.

(4)At Union level, the European Semester of economic policy coordination is the framework to identify national reform priorities and monitor their implementation. Member States, where appropriate in cooperation with local and regional authorities, develop their own national multiannual investment strategies in support of those reform priorities. Those strategies should be presented alongside the yearly national reform programmes as a way of outlining and coordinating priority investment projects that are to be supported by national funding, Union funding, or both. Those strategies should also use Union funding in a coherent manner and maximise the added value of the financial support to be received notably from the European structural and investment funds, the Recovery and Resilience Facility and the InvestEU Programme.

(5)The InvestEU Fund should contribute to improving the competitiveness and socio-economic convergence and cohesion of the Union, including in the fields of innovation and digitisation, to the efficient use of resources in accordance with the circular economy, to the sustainability and inclusiveness of the Union's economic growth and to the social resilience and integration of the Union capital markets, including through solutions that address the fragmentation of Union capital markets and that diversify sources of financing for Union enterprises. To that end, the InvestEU Fund should support projects that are technically and economically viable by providing a framework for the use of debt, risk sharing and equity instruments backed up by a guarantee from the Union budget and by financial contributions from implementing partners as relevant. The InvestEU Fund should be demand-driven, while at the same time it should focus on providing strategic, long-term benefits in relation to key areas of Union policy which otherwise would not be funded or would be insufficiently funded, thereby contributing to meeting policy objectives of the Union. Support under the InvestEU Fund should cover a wide range of sectors and regions, but should avoid excessive sectoral or geographical concentration and should facilitate access of projects composed of partner entities in multiple regions across the EU.

(6)The cultural and creative sectors are key and fast growing sectors in the Union, generating both economic and cultural value from intellectual property and individual creativity. However, restrictions on social contacts put in place during the Covid-19 crisis had a significantly negative economic impact on these sectors. Moreover, the intangible nature of the assets in those sectors limits the access of SMEs and organisations from those sectors to private financing which is essential to be able to invest, scale up and compete at an international level. The InvestEU Programme should continue to facilitate access to finance for SMEs and organisations from the cultural and creative sectors. The cultural and creative, audiovisual and media sectors are essential for our cultural diversity and democracy in the digital age, and an intrinsic part of our sovereignty and autonomy, and strategic investments in audiovisual and media content and technology will determine the long-term capacity to produce and distribute content to wide audiences across national borders.

(7)With a view to fostering sustainable and inclusive growth, investment and employment, and thereby contributing to improved well-being, to fairer income distribution and to greater economic, social and territorial cohesion in the Union, the InvestEU Fund should support investments in tangible and intangible assets, including in cultural heritage. Projects funded by the InvestEU Fund should meet Union environmental and social standards, including standards on labour rights. Interventions through the InvestEU Fund should complement Union support delivered through grants.

(8)The Union endorsed the objectives set out in the United Nations 2030 Agenda for Sustainable Development (the "2030 Agenda"), its Sustainable Development Goals (SDGs) and the Paris Agreement adopted under the United Nations Framework Convention on Climate Change 24 ("Paris Agreement on Climate Change") as well as the Sendai Framework for Disaster Risk Reduction 2015-2030. To achieve those objectives, as well as those set out in the environmental policies of the Union, action pursuing sustainable development is to be stepped up significantly. Therefore, the principles of sustainable development should feature prominently in the design of the InvestEU Fund.

(9)The InvestEU Programme should contribute to building a sustainable finance system in the Union which supports the reorientation of private capital towards sustainable investments in accordance with the objectives set out in the communication of the Commission of 8 March 2018 ‘Action Plan: Financing Sustainable Growth’ and the communication of the Commission of 14 January 2020 on the European Green Deal Investment Plan.

(10)Reflecting the importance of tackling climate change in line with the Union's commitments to implement the Paris Agreement on Climate Change and the SDGs, the InvestEU Programme will contribute to mainstream climate actions and to the achievement of an overall target of 25 % of the Union budget expenditures supporting climate objectives. Actions under the InvestEU Programme are expected to contribute 30 % of the overall financial envelope of the InvestEU Programme to climate objectives. Relevant actions will be identified during the InvestEU Programme's preparation and implementation and reassessed in the context of the relevant evaluations and review processes. 

(11)The contribution of the InvestEU Fund to the achievement of the climate target will be tracked through a Union climate tracking system to be developed by the Commission in cooperation with potential implementing partners, appropriately using the criteria established by [Regulation on the establishment of a framework to facilitate sustainable investment 25 ] for determining whether an economic activity is environmentally sustainable. The InvestEU Programme should also contribute to the implementation of other dimensions of the SDGs.

(12)According to the 2018 Global Risks Report issued by the World Economic Forum, half of the ten most critical risks threatening the global economy relate to the environment. Such risks include the pollution of air, soil, inland waters and oceans, extreme weather events, biodiversity losses and failures of climate-change mitigation and adaptation. Environmental principles are strongly embedded in the Treaties and many of the Union's policies. Therefore, the mainstreaming of environmental objectives should be promoted in operations related to the InvestEU Fund. Environmental protection and the prevention and management of related risks should be integrated in the preparation and implementation of investments. The Union should also track its biodiversity-related and air pollution control-related expenditures in order to fulfil the reporting obligations under the Convention on Biological Diversity 26 and under Directive (EU) 2016/2284 of the European Parliament and of the Council 27 . Investment allocated to environmentally sustainability objectives should therefore be tracked using common methodologies that are consistent with methodologies developed under other Union programmes that apply to climate, biodiversity and air pollution management in order to allow the assessment of the individual and combined impact of investments on the key components of natural capital, including air, water, land and biodiversity.

(13)Investment projects that receive substantial Union support, in particular in the area of infrastructure, should be screened by the implementing partner to determine whether they have an environmental, climate or social impact. Investment projects that have such an impact should be subject to sustainability proofing in accordance with guidance that should be developed by the Commission in close cooperation with potential implementing partners under the InvestEU Programme. This guidance should appropriately use the criteria established by [Regulation on establishment of a framework to facilitate sustainable investment] for determining whether an economic activity is environmentally sustainable and consistent with the guidance developed for other programmes of the Union. Consistent with the principle of proportionality, such guidance should include adequate provisions for avoiding undue administrative burdens, and projects below a certain size as to be defined in the guidance should be excluded from the sustainability proofing. Where the implementing partner concludes that no sustainability proofing is to be carried out, it should provide a justification to the Investment Committee established for the InvestEU Fund. Operations that are inconsistent with the achievement of the climate objectives should not be eligible for support under this Regulation.

(14)Low infrastructure investment rates in the Union during the financial crisis and again during the Covid-19 crisis undermined the Union's ability to boost sustainable growth, competitiveness and convergence. It also creates risk of consolidating imbalances and impacts regions’ development long-term. Sizeable investments in Union infrastructure, in particular with regard to interconnection and energy efficiency and to creating a Single European Transport Area, are essential to meeting the Union's sustainability targets, including the Union’s commitments towards the SDGs, and the 2030 energy and climate targets. Accordingly, support from the InvestEU Fund should target investments into transport, energy, including energy efficiency and renewable energy sources and other safe and sustainable low-emission energy sources, environmental infrastructure, infrastructure related to climate action, maritime infrastructure and digital infrastructure. The InvestEU Programme should prioritise areas that are under-invested, and in which additional investment is required. To maximise the impact and added value of Union financing support, it is appropriate to promote a streamlined investment process that enables visibility of the project pipeline and maximises synergies across relevant Union programmes in areas such as transport, energy and digitisation. Bearing in mind threats to safety and security, investment projects receiving Union support should include measures for infrastructure resilience, including infrastructure maintenance and safety, and should take into account principles for the protection of citizens in public spaces. This should be complementary to the efforts made by other Union funds that provide support for security components of investments in public spaces, transport, energy and other critical infrastructure, such as the European Regional Development Fund.

(15)Where appropriate, the InvestEU Programme should contribute to the objectives of Directive (EU) 2018/2001 of the European Parliament and of the Council 28 and the Governance Regulation 29 , as well as promote energy efficiency in investment decisions.

(16)Genuine multimodality is an opportunity to create an efficient and environmentally friendly transport network that uses the maximum potential of all means of transport and generates synergy between them. The InvestEU Programme should support investments in multimodal transport hubs, which - in spite of their significant economic potential and business cases - carry a significant risk for private investors. The InvestEU Programme should also contribute to the development and deployment of Intelligent Transport Systems (ITS). The InvestEU Programme should help to boost efforts to design and apply technologies that help to improve the safety of vehicles and road infrastructure.

(17)The InvestEU Programme should contribute to Union policies concerning seas and oceans through the development of projects and enterprises in the area of the blue economy, and the Sustainable Blue Economy Finance Principles. This may include interventions in the area of maritime entrepreneurship and industry, an innovative and competitive maritime industry, as well as renewable marine energy and circular economy.

(18)Although the level of overall investment in the Union was increasing before the Covid-19 crisis, investment in higher-risk activities such as research and innovation was still inadequate and is now expected to have suffered a significant hit with the crisis. The resulting underinvestment in research and innovation is damaging to the industrial and economic competitiveness of the Union and the quality of life of its citizens. The InvestEU Fund should provide appropriate financial products to cover different stages of the innovation cycle and a wide range of stakeholders, in particular to allow the upscaling of and deployment of solutions at a commercial scale in the Union in order to make such solutions competitive on world markets and to promote Union excellence in sustainable technologies at a global level, in synergy with Horizon Europe, including the European Innovation Council. In that regard, the experience gained from the financial instruments, such as InnovFin – EU Finance for Innovators, deployed under Horizon 2020 to facilitate and accelerate access to finance for innovative businesses should serve as a strong basis to deliver this targeted support.

(19)Tourism is an important area for the Union economy and the sector, which experienced a particularly severe contraction as a result of COVID-19 pandemic. The InvestEU Programme should contribute to strengthening its long-term competitiveness by supporting operations promoting sustainable, innovative and digital tourism.

(20)A significant effort is urgently needed to invest in and boost the digital transformation and to distribute the benefits of it to all Union citizens and businesses. The strong policy framework of the Digital Single Market Strategy should now be matched by investment of a similar ambition, including in artificial intelligence in line with the Digital Europe programme.

(21)SMEs represent over 99 % of businesses in the Union and their economic value is significant and crucial. However, they face difficulties when accessing finance because of their perceived high risk and lack of sufficient collateral. Additional challenges arise from the need for SMEs and social economy enterprises to stay competitive by engaging in digitisation, internationalisation, transformation in a logic of circular economy, innovation activities and skilling up their workforce. Moreover, SMEs and social economy enterprises have access to a more limited set of financing sources than larger enterprises, because they typically do not issue bonds, and have only limited access to stock exchanges and large institutional investors. Innovative solutions such as the acquisition of a business or ownership stake in a business by employees are also increasingly common for SMEs and social economy enterprises. The difficulty in accessing finance is even greater for those SMEs whose activities focus on intangible assets. SMEs in the Union rely heavily on banks and on debt financing in the form of bank overdrafts, bank loans or leasing. Supporting SMEs that face the above challenges by making it easier for them to gain access to finance and by providing more diversified sources of funding is necessary to increase the ability of SMEs to finance their creation, growth, innovation and sustainable development, ensure their competitiveness and withstand economic shocks to make the economy and the financial system more resilient during economic downturns and to maintain SMEs’ ability to create jobs and social well-being. This Regulation is also complementary to the initiatives already undertaken in the context of the Capital Markets Union. The InvestEU Fund should therefore build on successful Union programmes such as the Programme for the Competitiveness of enterprises and SMEs (COSME) and should provide working capital and investment throughout the life cycle of a company, should provide financing for leasing transactions and should provide an opportunity to focus on specific, more targeted financial products. It should also maximise firepower of public/private fund vehicles, such as the SME IPO (Initial Public Offering) Fund, seeking to support SMEs through channelling both more private and public equity in particular in strategic companies.

(22)As set out in the Commission's Reflection paper on the social dimension of Europe of 26 April 2017, the Communication on European Pillar of Social Rights, the Union framework for the UN Convention on the Rights of Persons with Disabilities and the Communication on ‘Strong Social Europe for Just Transitions’ of 14 January 2020, building a more inclusive and fair Union is a key priority for the Union to tackle inequality and foster social inclusion policies in Europe. Inequality of opportunities affects in particular access to education, training, culture, employment, health and social services. Investment in the social, skills and human capital-related economy, as well as in the integration of vulnerable populations in the society, can enhance economic opportunities, especially if coordinated at Union level. The InvestEU Fund should be used to support investment in education and training, including the re-skilling and upskilling of workers, inter alia in regions depending on a carbon intensive economy and affected by the structural transition to a low-carbon economy. It should be used to support projects that generate positive social impacts and enhance social inclusion by helping to increase employment across all regions, in particular among the unskilled and long-term unemployed, and to improve the situation with regard to gender equality, equal opportunities, non-discrimination, accessibility, intergenerational solidarity, the health and social services sector, social housing, homelessness, digital inclusiveness, community development, the role and place of young people in society as well as vulnerable people, including third country nationals. The InvestEU Programme should also support European culture and creativity that has a social goal.

(23)To counter the negative effects of profound transformations of societies in the Union and of the labour market in the coming decade, it is necessary to invest in human capital, social infrastructure, microfinance, ethical and social enterprise finance and new social economy business models, including social impact investment and social outcomes contracting. The InvestEU Programme should strengthen nascent social market eco-system to increase the supply of and access to finance to micro- and social enterprises and social solidarity institutions, in order to meet the demand of those who need it the most. The report of the High-Level Task Force on Investing in Social Infrastructure in Europe of January 2018 entitled "Boosting Investment in Social Infrastructure in Europe" has identified a total investment gap of at least EUR 1.5 trillion in social infrastructure and services for the period between 2018 and 2030, including education, training, health and housing. This calls for support, including at the Union level. Therefore, the collective power of public, commercial and philanthropic capital, as well as support from foundations and from alternative types of finance providers such as ethical, social and sustainable actors, should be harnessed to support the development of the social market value chain and a more resilient Union.

(24)In the economic crisis caused by the Covid-19 pandemic, market allocation of resources is not fully efficient and perceived risk impairs private investment flow significantly. Under such circumstances, the key feature of the InvestEU Fund of de-risking economically viable projects to crowd in private finance is particularly valuable and should be reinforced, inter alia in order to counteract the risk of an asymmetric recovery. The InvestEU Programme should be able to provide crucial support to companies in the recovery phase and at the same time ensure a strong focus of investors on the Union’s medium- and long-term policy priorities such as the European Green Deal, the European Green Deal Investment Plan, the Strategy on shaping Europe’s digital future and the Strong Social Europe for Just Transitions. It should significantly increase the risk-taking capacity of the European Investment Bank (EIB) Group and national promotional banks and institutions and other implementing partners in support of economic recovery.

(25)The Covid-19 pandemic is a major shock to the global and Union economy. The contraction in EU GDP is expected to be far deeper than during the financial crisis in 2009 and adverse social effects will be inevitable. The outbreak of the pandemic has shown the need for strategic vulnerabilities to be addressed in order to improve the Union’s emergency response as well as the resilience of the entire economy. Only a resilient, inclusive and integrated European economy can preserve the Single Market and the level playing field also to the benefit of the hardest-hit Member States.

(26)The InvestEU Fund should operate through five policy windows that mirror the key Union policy priorities, namely: sustainable infrastructure; research, innovation and digitisation; SMEs; social investment and skills; and strategic European investment.

(27)Although the SME policy window should primarily focus on benefitting SMEs, small mid-cap companies should also be eligible under this policy window. Mid-cap companies should also be eligible for support under the other four policy windows.

(28)The primary focus of the strategic European investment window should be on support to those final recipients established in a Member State and operating in the Union  whose activities are of strategic importance to the Union in particular in view of the green and digital transitions and of enhanced resilience in areas of (i) critical healthcare provision, manufacturing and stockpiling of pharmaceuticals, medical devices and medical supplies, strengthening of health crisis response capacity and of the civil protection system, (ii) critical infrastructure, whether physical or virtual; (iii) provision of goods and services instrumental to the operation and maintenance of such infrastructure, (iv) key enabling, transformative, green and digital technologies and game-changing innovations where the investment is strategically important for the Union’s industrial future, including artificial intelligence, blockchain, software, robotics, semiconductors, microprocessors, edge cloud technologies, high-performance computing, cybersecurity, quantum technologies, photonics, industrial biotechnology, renewable energy technologies, energy storage technologies including batteries, sustainable transport technologies, clean hydrogen and fuel cell applications, decarbonisation technologies for industry, carbon capture and storage, circular economy technologies biomedicine, nanotechnologies, pharmaceuticals and advanced materials; (v) manufacturing facilities for mass production of Information Communication and Technology components and devices in the EU; (vi) supply and stockpiling of critical inputs to public actors, businesses or consumers in the Union; (vii) critical technologies and inputs for the security of the Union and its Member States, such as defence and space sectors and cybersecurity, and dual use items as defined in point 1 of Article 2 of Council Regulation (EC) No 428/2009. The final recipients should have their registered office in a Member State and they should be active in the Union in the sense that they have substantial activities in terms of staff, manufacturing, research and development or other business activities in the Union. Projects which contribute to diversification of strategic supply chains in the Single Market through operations in multiple locations across the EU should be able to benefit.

(29)The strategic European investment window should also target suppliers established and operating in the Union whose activities are of strategic importance to the Union and that would need long term investment or are covered by the Foreign Direct Investment Screening mechanism. In addition, important projects of common European interest should in particular be able to benefit from the strategic European investment window.

(30)The InvestEU should also provide support to financing to generate investment to the benefit of just transition regions.

(31)Each policy window should be composed of two compartments, that is to say an EU compartment and a Member State compartment. The EU compartment should address Union-wide or Member State specific market failures or sub-optimal investment situations in a proportionate manner. Operations supported should have a clear Union added value. The Member State compartment should give Member States as well as regional authorities via their Member State the possibility of contributing a share of their resources from the funds under shared management to the provisioning for the EU guarantee and of using the EU guarantee for financing or investment operations in order to address specific market failures or sub-optimal investment situations in their own territories, including in vulnerable and remote areas such as the outermost regions of the Union, as to be set out in the contribution agreement, in order to achieve objectives of the funds under shared management. Operations supported by the InvestEU Fund through either EU or Member State compartments should not duplicate or crowd out private financing or distort competition in the internal market.

(32)The Member State compartment should be specifically designed to allow the use of funds under shared management to provision a guarantee issued by the Union. That possibility would increase the value added of the EU guarantee by providing support under it to a wider range of financial recipients and projects and diversifying the means of achieving the objectives of the funds under shared management, while ensuring a consistent risk management of the contingent liabilities by implementing the EU guarantee under indirect management. The Union should guarantee the financing and investment operations provided for in the guarantee agreements concluded between the Commission and implementing partners under the Member State compartment. The funds under shared management should provide the provisioning for the guarantee, following a provisioning rate determined by the Commission and set out in the contribution agreement concluded with the Member State, based on the nature of the operations and the resulting expected losses. The Member State would assume losses above the expected losses by issuing a back-to-back guarantee in favour of the Union. Such arrangements should be concluded in a single contribution agreement with each Member State that voluntarily chooses such option. The contribution agreement should encompass the one or more specific guarantee agreements to be implemented within the Member State concerned on the basis of the rules of the InvestEU Fund, and any regional ring-fencing. The setting out of the provisioning rate on a case-by-case basis requires a derogation from Article 211(1) of Regulation (EU, Euratom) No 2018/1046 of the European Parliament and of the Council 30   (the Financial Regulation). This set-up provides also a single set of rules for budgetary guarantees supported by funds that are managed centrally or by funds under shared management, which would facilitate their combination.

(33)A partnership between the Commission and the EIB Group should be established, drawing on the relative strengths of each partner to ensure maximum policy impact, deployment efficiency, and appropriate budgetary and risk management oversight, which should support effective and inclusive direct access to the EU guarantee.

(34)In order to be able to channel support to the European economy through the European Investment Fund (EIF), the Commission should be in a position to participate in one or more possible capital increases of the EIF in order to allow it to continue supporting the European economy and its recovery. The Union should be able to maintain its overall share in the EIF capital, with due consideration of the financial implications. A sufficient financial envelope to this effect should be foreseen in the Multiannual Financial Framework for 2021-2027.

(35)The Commission should seek the views of other potential implementing partners along with the EIB Group on investment guidelines, the climate tracking system, the sustainability proofing guidance documents and common methodologies, as appropriate, with a view to ensuring inclusiveness and operationality until the governance bodies have been set up, after which the involvement of implementing partners should take place within the framework of the Advisory Board and the Steering Board of the InvestEU Programme.

(36)The InvestEU Fund should be open to contributions from third countries that are members of the European Free Trade Association, acceding countries, candidates and potential candidates, countries covered by the European Neighbourhood Policy and other countries, in accordance with the conditions laid down between the Union and those countries. This should allow continuing cooperating with the relevant countries, where appropriate, in particular in the fields of research and innovation as well as SMEs.

(37)This Regulation lays down a financial envelope for other measures of the InvestEU Programme than the provisioning of the EU guarantee, which is to constitute the prime reference amount, within the meaning of [reference to be updated as appropriate according to the new inter-institutional agreement: point 16 of the Proposal for an Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management as adopted by the said Institutions  31 ], for the European Parliament and the Council during the annual budgetary procedure.

(38)The EU guarantee of EUR 75 153 850 000 (current prices) at Union level is expected to mobilise more than EUR 1 000 000 000 000 of additional investment across the Union and should be indicatively allocated between the policy windows. However, the strategic European investment window should have a dedicated portion of the EU guarantee.

(39)On 18 April 2019, the Commission declared that without prejudice to the prerogatives of the Council in the implementation of the Stability and Growth Pact (SGP), one-off contributions by Member States, whether by a Member State or by national promotional banks classified in the general government sector or acting on behalf of a Member State, to thematic or multi-country investment platforms should in principle qualify as one-off measures within the meaning of Articles 5(1) and 9(1) of Council Regulation (EC) No 1466/97 32 and Article 3(4) of Council Regulation (EC) No 1467/97 33 . In addition, without prejudice to the prerogatives of the Council in the implementation of the SGP, the Commission declared it would consider to what extent the same treatment as for the EFSI in the context of the Commission communication on flexibility can be applied to the InvestEU Programme as the successor instrument to the EFSI with regard to one-off contributions provided by Member States in cash to finance an additional amount of the EU guarantee for the purposes of the Member State compartment.

(40)The EU guarantee underpinning the InvestEU Fund should be implemented indirectly by the Commission relying on implementing partners with outreach to financial intermediaries, where applicable, and final recipients. The selection of the implementing partners should be transparent and free from any conflict of interest. The Commission should conclude a guarantee agreement allocating guarantee capacity from the InvestEU Fund with each implementing partner to support its financing and investment operations that meet the InvestEU Fund eligibility criteria and contribute to meeting its objectives. The management of the risk related to the EU guarantee should not hamper direct access to the EU guarantee by the implementing partners. Once the EU guarantee is granted under the EU compartment to implementing partners, they should be fully responsible for the whole investment process and the due diligence related to the financing or investment operations. The InvestEU Fund should support projects that typically have a higher risk profile than the projects supported by the normal operations of the implementing partners and that could not have been carried out during the period in which the EU guarantee could be used, or could not have been carried out to the same extent, by other public or private sources without InvestEU support. However, specific conditions may apply to the additionality criterion in relation to the financing and investment operations under the strategic European investment window stemming from its objective.

(41)The InvestEU Fund should be provided with a governance structure, the function of which should be commensurate with its sole purpose of ensuring the appropriate use of the EU guarantee, in line with ensuring the political independence of investment decisions. That governance structure should be composed of an Advisory Board, a Steering Board and a fully independent Investment Committee. The overall composition of the governance structure should strive to achieve gender balance. The governance structure should not encroach upon or interfere with the decision-making of the EIB Group or other implementing partners, and should not be a substitute for their respective governing bodies.

(42)An Advisory Board consisting of representatives of the implementing partners, representatives of Member States, one expert appointed by the European Economic and Social Committee and one expert appointed by the Committee of the Regions should be established in order to exchange information and exchange views on the take-up of the financial products deployed under the InvestEU Fund and to discuss evolving needs and new products, including specific territorial market gaps.

(43)In order to be able to constitute the Advisory Board from the start, the Commission should appoint the representatives of the potential implementing partners for a temporary period of one year, thereafter the implementing partners having signed guarantee agreements would take over this responsibility.

(44)A Steering Board composed of representatives of the Commission, representatives of implementing partners and one non-voting expert appointed by the European Parliament should determine the strategic and operational guidance for the InvestEU Fund.

(45)The Commission should assess the compatibility of investment and financing operations submitted by the implementing partners with all Union law and policies. The decisions on financing and investment operations should ultimately be taken by an implementing partner.

(46)An Investment Committee composed of independent experts should conclude on the granting of the support from the EU guarantee to financing and investment operations fulfilling the eligibility criteria, thereby providing external expertise in investment assessments in relation to projects. The investment committee should have different configurations to cover different policy areas and sectors in the best way possible.

(47)The Investment Committee should become responsible as of its constitution also for granting the benefit of the EU guarantee for financing and investment operations under Regulation (EU) 2015/1017 in order to avoid parallel similar structures assessing proposals for the use of the EU guarantee.

(48)An independent secretariat hosted by the Commission and answerable to the chairperson of the Investment Committee should assist the investment committee.

(49)In selecting implementing partners for the deployment of the InvestEU Fund, the Commission should consider the counterparty's ability to fulfil the objectives of the InvestEU Fund and to contribute its own resources, in order to ensure adequate geographical coverage and diversification, to crowd in private investors and to provide sufficient risk diversification and solutions to address market failures and sub-optimal investment situations. Given its role under the Treaties, its capacity to operate in all Member States and the existing experience under the current financial instruments and the EFSI, the EIB Group should remain a privileged implementing partner under the InvestEU Fund's EU compartment. In addition to the EIB Group, national promotional banks or institutions should be able to offer a complementary financial product range, given that their experience and capabilities at national and regional level could be beneficial for the maximisation of the impact of public funds on the whole territory of the Union, and for ensuring a fair geographical balance of projects. The InvestEU Programme should be implemented in such a way as to promote a level playing field for smaller and younger promotional banks and institutions. Moreover, it should be possible for other international financial institutions to become implementing partners, in particular when they present a comparative advantage in terms of specific expertise and experience in certain Member States and when they present a Union majority of shareholding. It should also be possible for other entities fulfilling the criteria laid down in the Financial Regulation to become implementing partners.

(50)With a view to promoting improved geographic diversification, investment platforms may be established to combine the efforts and expertise of implementing partners with other national promotional banks or institutions that have limited experience in the use of financial instruments. Such structures should be encouraged, including with available support from the InvestEU Advisory Hub. It is appropriate to bring together co-investors, public authorities, experts, education, training and research institutions, relevant social partners and representatives of the civil society and other relevant actors at Union, at national and regional levels to promote the use of investment platforms in relevant sectors.

(51)The EU guarantee under the Member State compartment should be allocated to any implementing partner eligible in accordance with point (c) of Article 62(1) of the Financial Regulation, including national or regional promotional banks or institutions, the EIB, the European Investment Fund and other international financial institutions. When selecting implementing partners under the Member State compartment, the Commission should take into account the proposals made by each Member State, as reflected in the contribution agreement. In accordance with Article 154 of the Financial Regulation, the Commission is to carry out an assessment of the rules and procedures of the implementing partner to ascertain that they provide a level of protection of the financial interest of the Union equivalent to the one provided by the Commission.

(52)Financing and investment operations should ultimately be decided by the implementing partner in its own name, implemented in accordance with its internal rules, policies and procedures, and accounted for in its own financial statements or, where applicable, disclosed in the notes to the financial statements. Therefore, the Commission should exclusively account for any financial liability arising from the EU guarantee and should disclose the maximum guarantee amount, including all relevant information concerning the guarantee provided.

(53)Where appropriate, the InvestEU Fund should allow for the smooth, seamless and efficient blending of grants, financial instruments or both, funded by the Union budget or by other funds, such as the EU emissions trading system (ETS) Innovation Fund with the EU guarantee in situations where this is necessary to best underpin investments to address particular market failures or sub-optimal investment situations.

(54)Projects submitted by implementing partners for support under the InvestEU Programme, which include blending support under InvestEU Fund with support from other Union programmes, should as a whole be consistent with the objectives and eligibility criteria of the relevant other Union programmes. The use of the EU guarantee should be decided under the InvestEU Programme.

(55)The InvestEU Advisory Hub should support the development of a robust pipeline of investment projects in each policy window through advisory initiatives that are implemented by the EIB Group or other advisory partners, or are implemented directly by the Commission. The InvestEU Advisory Hub should promote geographic diversification with a view to contributing to the Union objectives of economic, social, and territorial cohesion and reducing regional disparities. The InvestEU Advisory Hub should pay particular attention to the aggregation of small-sized projects into larger portfolios. The Commission, the EIB Group and the other advisory partners should cooperate closely with a view to ensuring efficiency, synergies and effective geographic coverage of support across the Union, taking into account the expertise and local capacity of local implementing partners, as well as the European Investment Advisory Hub established under Regulation (EU) 2015/1017 of the European Parliament and of the Council 34 . In addition, the InvestEU Advisory Hub should provide a central entry point for project development assistance delivered under the InvestEU Advisory Hub to public authorities and for project promoters.

(56)The InvestEU Advisory Hub should be established by the Commission with the EIB Group as the main partner, building on the experience acquired through the European Investment Advisory Hub. The Commission should be responsible for the policy steer of the InvestEU Advisory Hub and for the management of the central entry point. The EIB Group should deliver advisory initiatives under the policy windows. In addition, the EIB Group should provide operational services to the Commission, including by providing input to the strategic and policy guidelines regarding advisory initiatives, mapping existing and emerging advisory initiatives, assessing advisory needs and advising the Commission on optimal ways to address these needs through existing or new advisory initiatives.

(57)In order to ensure a wide geographic outreach of the advisory services across the Union and to successfully leverage local knowledge about the InvestEU Fund, a local presence of the InvestEU Advisory Hub should be ensured, where needed, taking into account existing support schemes and the presence of local partners, with a view to provide tangible, proactive, tailor-made assistance on the ground. In order to facilitate the provision of advisory support at local level and to ensure efficiency, synergies and effective geographic coverage of support across the Union, the InvestEU Advisory Hub should cooperate with national promotional banks or institutions, and should benefit from and make use of their expertise.

(58)The InvestEU Advisory Hub should provide advisory support to small-sized projects and projects for start-ups, especially when start-ups seek to protect their research and innovation investments by obtaining intellectual property titles, such as patents, taking into account the existence of other services able to cover such actions and seeking synergies with those services.

(59)In the context of the InvestEU Fund, there is a need to provide support for project development and capacity building to develop the organisational capacities and market development activities needed to originate quality projects. Such support should also target financial intermediaries that are key to help small companies’ access financing and realise their full potential. Moreover, the aim of the advisory support is to create the conditions for the expansion of the potential number of eligible recipients in nascent market segments, in particular where the small size of individual projects considerably raises the transaction cost at the project level, such as for the social finance ecosystem, including philanthropic organisations, or for the cultural and creative sectors. The capacity-building support should be complementary and in addition to actions taken under other Union programmes that cover specific policy areas. An effort should also be made to support the capacity building of potential project promoters, in particular local organisations and authorities.

(60)The InvestEU Portal should be established to provide for an easily accessible and user-friendly project database to promote visibility of investment projects searching for financing with enhanced focus on the provision of a possible pipeline of investment projects, compatible with Union law and policies, to the implementing partners.

(61)In accordance with Regulation [European Union Recovery Instrument] and within the limits of resources allocated therein, recovery and resilience measures under the InvestEU should be carried out to address the unprecedented impact of the Covid-19 crisis. Such additional resources should be used in such a way as to ensure compliance with the time limits provided for in Regulation [EURI].

(62) Pursuant to paragraphs 22 and 23 of the Interinstitutional agreement for Better Law-Making of 13 April 2016 35 , there is a need to evaluate the InvestEU Programme on the basis of information collected through specific monitoring requirements, while avoiding overregulation and administrative burdens, in particular on Member States. These requirements, where appropriate, can include measurable indicators, as a basis for evaluating the effects of the InvestEU Programme on the ground.

(63)A solid monitoring framework that is based on output, outcome and impact indicators should be implemented to track progress towards the Union's objectives. In order to ensure accountability to the Union's citizens, the Commission should report annually to the European Parliament and the Council on the progress, impact and operations of the InvestEU Programme.

(64)Horizontal financial rules adopted by the European Parliament and the Council on the basis of Article 322 of the Treaty on the Functioning of the European Union (TFEU) apply to this Regulation. These rules are laid down in the Financial Regulation and determine in particular the procedure for establishing and implementing the budget through grants, procurement, prizes, indirect implementation, and provide for checks on the responsibility of financial actors. Rules adopted on the basis of Article 322 TFEU also concern the protection of the Union's budget in case of generalised deficiencies as regards the rule of law in the Member States, as the respect for the rule of law is an essential precondition for sound financial management and effective EU funding.

(65)The Financial Regulation applies to the InvestEU Programme. It lays down rules on the implementation of the Union budget, including the rules on budgetary guarantees.

(66)In accordance with the Financial Regulation, Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council 36 , Council Regulation (Euratom, EC) No 2988/95 37 , Council Regulation (Euratom, EC) No 2185/96 38 and Council Regulation (EU) 2017/1939 39 , the financial interests of the Union are to be protected through proportionate measures, including the prevention, detection, correction and investigation of irregularities, including fraud, the recovery of funds lost, wrongly paid or incorrectly used and, where appropriate, the imposition of administrative sanctions. In particular, in accordance with Regulation (EU, Euratom) No 883/2013 and Regulation (Euratom, EC) No 2185/96 the European Anti-Fraud Office (OLAF) may carry out administrative investigations, including on-the-spot checks and inspections, with a view to establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the Union. In accordance with Regulation (EU) 2017/1939, the European Public Prosecutor's Office (“the EPPO”) may investigate and prosecute offences against the Union’s financial interests as provided for in Directive (EU) 2017/1371 of the European Parliament and of the Council 40 . In accordance with the Financial Regulation, any person or entity receiving Union funds is to fully cooperate in the protection of the Union’s financial interests, to grant the necessary rights and access to the Commission, OLAF, the EPPO in respect of those Member States participating in enhanced cooperation pursuant to Regulation (EU) 2017/1939, and the European Court of Auditors and to ensure that any third parties involved in the implementation of Union funds grant equivalent rights.

(67)Third countries which are members of the European Economic Area (EEA) may participate in Union programmes in the framework of the cooperation established under the EEA agreement, which provides for the implementation of the programmes by a decision under that agreement. Third countries may also participate on the basis of other legal instruments. A specific provision should be introduced in this Regulation to grant the necessary rights for and access to the authorising officer responsible, the OLAF as well as the European Court of Auditors to comprehensively exert their respective competences.

(68)Pursuant to Article 83 of the [Proposal for a Council Decision on the Association of the Overseas Countries and Territories with the European Union including relations between the European Union on the one hand, and Greenland and the Kingdom of Denmark on the other ('Overseas Association Decision')] 41 , persons and entities established in the overseas countries and territories (OCTs) are eligible for funding subject to the rules and objectives of InvestEU Programme and possible arrangements applicable to the Member State to which the relevant overseas country or territory is linked.

(69)In order to supplement the non-essential elements of this Regulation with investment guidelines and with a scoreboard of indicators, to facilitate the prompt and flexible adaptation of the performance indicators and to adjust the provisioning rate, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of drawing-up the investment guidelines for the financing and investment operations under different policy windows, the scoreboard, the amendment of Annex III to this Regulation to review or complement the indicators and the adjustment of the provisioning rate. In line with the principle of proportionality, such investment guidelines should include adequate provisions to avoid undue administrative burden. It is of particular importance that the Commission carries out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States' experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

(70)The InvestEU Programme should address Union-wide and Member State specific market failures and sub-optimal investment situations and should provide for Union-wide market testing of innovative financial products and systems to spread them, for addressing new or complex market failures. Therefore, action at Union level is warranted,

HAVE ADOPTED THIS REGULATION:

CHAPTER I

GENERAL PROVISIONS

Article 1

Subject matter

1.This Regulation establishes the InvestEU Fund, which shall provide for an EU guarantee to support financing and investment operations carried out by the implementing partners that contribute to objectives of the Union’s internal policies.

2.This Regulation also establishes an advisory support mechanism to provide support for the development of investable projects and access to financing and to provide related capacity building assistance (the ‘InvestEU Advisory Hub’). It further establishes a database granting visibility to projects for which project promoters seek financing and which provides investors with information about investment opportunities (the ‘InvestEU Portal’).

3.This Regulation establishes the objectives of the InvestEU Programme, its budget and the amount of the EU guarantee for the period 2021 to 2027, the forms of Union funding and the rules for providing such funding.

Article 2

Definitions

1.    For the purposes of this Regulation, the following definitions apply:

(1)'InvestEU Programme' means the InvestEU Fund, the InvestEU Advisory Hub, the InvestEU Portal and blending operations, collectively;

(2)'EU guarantee' means an overall irrevocable, unconditional and on demand budgetary guarantee provided by the Union budget under which the budgetary guarantees in accordance with Article 219(1) of the Financial Regulation take effect through the entry into force of individual guarantee agreements with implementing partners;

(3)'policy window' means a targeted area for support by the EU guarantee as laid down in Article 7(1);

(4)'compartment' means a part of the EU guarantee defined in terms of the origin of the resources backing it;

(5)'blending operation' means an operation supported by the Union budget that combines non-repayable forms of support, repayable forms of support, or both, from the Union budget with repayable forms of support from development or other public finance institutions, or from commercial finance institutions and investors; for the purposes of this definition, Union programmes financed from sources other than the Union budget, such as the EU Emissions Trading System (ETS) Innovation Fund, may be assimilated to Union programmes financed by the Union budget;

(6)'EIB' means the European Investment Bank;

(7)'EIB Group' means the EIB, its subsidiaries and other entities established in accordance with Article 28(1) of Protocol No 5 on the Statute of the European Investment Bank, annexed to the Treaty on European Union and the TFEU (the EIB Statute);

(8)'financial contribution' means a contribution from an implementing partner in the form of own risk-taking capacity that is provided on a pari passu basis with the EU guarantee or in another form that allows an efficient implementation of the InvestEU Programme while ensuring appropriate alignment of interest;

(9)'contribution agreement' means a legal instrument whereby the Commission and one or more Member States specify the conditions of the EU guarantee under the Member State compartment, as laid down in Article 9;

(10)'financial product' means a financial mechanism or arrangement under the terms of which the implementing partner provides direct or intermediated financing to final recipients using any of the types of financing referred to in Article 15;

(11)'financing and/or investment operations' means operations to provide finance directly or indirectly to final recipients through financial products, carried out by an implementing partner in its own name, provided by the implementing partner in accordance with its internal rules, policies and procedures and accounted for in the implementing partner's financial statements or, where applicable, disclosed in the notes to those financial statements;

(12)'funds under shared management' means funds that provide for the possibility of allocating a portion of those funds to the provisioning for a budgetary guarantee under the Member State compartment of the InvestEU Fund, namely the European Regional Development Fund (ERDF), the European Social Fund Plus (ESF+), the Cohesion Fund, the European Maritime and Fisheries Fund (EMFF), the European Agriculture Fund for Rural Development (EAFRD) and the [Just Transition Fund (JTF)] 42 ;

(13)'guarantee agreement' means a legal instrument whereby the Commission and an implementing partner specify the conditions for proposing financing or investment operations in order for them to be granted the benefit of the EU guarantee, for providing the EU guarantee for those operations and for implementing them in accordance with the provisions of this Regulation;

(14)'implementing partner' means an eligible counterpart such as a financial institution or other financial intermediary with whom the Commission has concluded a guarantee agreement;

(15)‘Important Project of Common European Interest’ means a project that fulfils all the criteria laid down in Commission Communication on Criteria for the analysis of the compatibility with the internal market of State aid to promote the execution of important projects of common European interest (OJ C 188, 20.6.2014, p. 4) or any subsequent revision;

(16) 'InvestEU Advisory Hub' means the technical assistance defined in Article 24;

(17) 'advisory agreement’ means a legal instrument whereby the Commission and the advisory partner specify the conditions for the implementation of the InvestEU Advisory Hub;

(18)‘advisory initiative’ means technical assistance and advisory services that support investment, including capacity building activities, provided by advisory partners, by external service providers contracted by the Commission or by executive agencies;

(19)‘advisory partner’ means an eligible counterpart such as a financial institution or other entity with whom the Commission has concluded an advisory agreement for the purpose of implementing one or more advisory initiatives, other than advisory initiatives implemented through external service providers contracted by the Commission or by executive agencies;

(20)'InvestEU Portal' means the database defined in Article 25;

(21)‘investment guidelines’ means the guidelines established by a delegated act referred to in Article 7(7);

(22)‘investment platform’ means a special purpose vehicle, managed account, contract-based co-financing or risk-sharing arrangement or an arrangement established by any other means by which entities channel a financial contribution in order to finance a number of investment projects, and which may include:

(a)a national or sub-national platform that groups together several investment projects on the territory of a given Member State;

(b)a cross-border, multi-country, regional or macro-regional platform that groups together partners from several Member States, regions or third countries interested in investment projects in a given geographic area;

(c)a thematic platform that groups together investment projects in a given sector;

(23)'microfinance' means microfinance as defined in Article [2(11)] of Regulation [[ESF+] number];

(24)'national promotional bank or institution' or 'NPBI' means a legal entity that carries out financial activities on a professional basis which has been given mandate by a Member State or a Member State's entity at central, regional or local level to carry out development or promotional activities;

(25)'small and medium-sized enterprise' or 'SME' means a micro, small or medium-sized enterprise within the meaning of the Annex to Commission Recommendation 2003/361/EC 43 ;

(26)'small mid-cap company' means an entity that is not an SME and that employs up to 499 employees;

(27)'social enterprise' means a social enterprise as defined in Article [2(15)] of Regulation [[ESF+] number];

(28) 'third country' means a country that is not a Member State of the Union.

Article 3

Objectives of the InvestEU Programme

1.The general objective of the InvestEU Programme is to support the policy objectives of the Union by means of financing and investment operations that contribute to:

(a)    the competitiveness of the Union, including research, innovation and digitisation;

(b)    growth and employment in the Union economy, the sustainability of the Union economy and its environmental and climate dimension contributing to the achievement of the SDGs and the objectives of the Paris Agreement on Climate Change and to the creation of high-quality jobs;

(c)    the social resilience, inclusiveness and innovativeness of the Union;

(d)    the promotion of scientific and technological advances, of culture, education and training;

(e)    the integration of Union capital markets and the strengthening of the Single Market, including solutions to address the fragmentation of Union capital markets, diversify sources of financing for Union enterprises and promote sustainable finance;

(f)    the promotion of economic, social and territorial cohesion; or

(g)    the sustainable and inclusive recovery of the Union economy after the crisis caused by the Covid-19 pandemic, upholding and strengthening its strategic value chains and maintaining and reinforcing activities of strategic importance to the Union in relation to critical infrastructure, transformative technologies, game-changing innovations and inputs to businesses and consumers.

2.The InvestEU Programme has the following specific objectives:

(a)    supporting financing and investment operations related to sustainable infrastructure in the areas referred to in point (a) of Article 7(1);

(b)    supporting financing and investment operations related to research, innovation and digitisation, including support for the scaling up of innovative companies and the rolling out of technologies to market, in the areas referred to in point (b) of Article 7(1);

(c)    increasing the access to and the availability of finance for SMEs and for small mid-cap companies and to enhance the global competitiveness of such SMEs;

(d)    increasing access to and the availability of microfinance and finance for social enterprises, to support financing and investment operations related to social investment, competences and skills, and to develop and consolidate social investment markets, in the areas referred to in point (d) of Article 7(1);

(e)    to support financing and investment operations in sectors referred to in point (e) of Article 7(1) in order to maintain and reinforce the strategic autonomy of the Union and of its economy.

Article 4

Budget and amount of the EU guarantee

1.The EU guarantee for the purposes of the EU compartment referred to in point (a) of Article 8(1) shall be EUR 75 153 850 000 (current prices). It shall be provisioned at the rate of 45 %. The amount referred to in point (a) of the first subparagraph of Article 34(3) shall be also taken into account for contributing to the provisioning resulting from this provisioning rate. 

An additional amount of the EU guarantee may be provided for the purposes of the Member State compartment referred to in point (b) of Article 8(1), subject to the allocation by Member States, pursuant to [Article 10(1)] of Regulation [[CPR] number] 44 and Article [75(1)] of Regulation [[CAP Strategic Plan] number] 45 , of the corresponding amounts.

An additional amount of the EU guarantee may also be provided in the form of cash by Member States for the purposes of the Member State compartment. Such amount shall constitute an external assigned revenue in accordance with the second sentence of Article 21(5) of the Financial Regulation.

The contributions from third countries referred to in Article 5 shall also increase the EU guarantee referred to in the first subparagraph, providing a provisioning in cash in full in accordance with Article 218(2) of the Financial Regulation.

2.An amount of EUR 31 153 850 000 (current prices) of the amount referred to in the first subparagraph of paragraph 1 shall be allocated for operations implementing measures referred to in Article 2 of Regulation [EURI] for the objectives referred to in point (e) of Article 3(2).

An amount of  EUR 41 500 000 000 (current prices) of the amount referred to in the first subparagraph of paragraph 1 shall be allocated for operations implementing measures referred to in Article 2 of Regulation [EURI] for the objectives referred to in points (a)-(d) of Article 3(2).

An amount of EUR 2 500 000 000 (current prices) of the amount referred to in the first subparagraph of paragraph 1 shall be allocated for the objectives referred to in points (a)-(d) of Article 3(2).

The amounts referred to in the first and second subparagraph shall only be available as of the date referred to in Article 4(3) of Regulation [EURI].

The indicative distribution of the EU guarantee for the purpose of the EU compartment is set out in Annex I to this Regulation. Where appropriate, the Commission may modify the amounts referred to in Annex I and increase the amount referred to in the first subparagraph by up to 15 % for each objective. The Commission shall inform the European Parliament and the Council of any such modification.

3.The financial envelope for the implementation of the measures provided in Chapters VI and VII shall be EUR 724 733 000 (current prices).

4.The amount referred to in paragraph 3 may also be used for technical and administrative assistance for the implementation of the InvestEU Programme, such as preparatory, monitoring, control, audit and evaluation activities, including for corporate information technology systems.

Article 5

Third countries associated to the InvestEU Fund

The EU compartment of the InvestEU Fund referred to in point (a) of Article 8(1) and each of the policy windows referred to in Article 7(1), except the strategic European investment window, may receive contributions from the following third countries for the purpose of participation in certain financial products pursuant to Article 218(2) of the Financial Regulation:

Article 6

Implementation and forms of Union funding

1.The EU guarantee shall be implemented in indirect management with bodies referred to in points (c)(ii), (c)(iii), (c)(v) and (c)(vi) of Article 62(1) of the Financial Regulation. Other forms of Union funding under this Regulation shall be implemented in direct or indirect management in accordance with the Financial Regulation, including grants implemented in accordance with Title VIII of the Financial Regulation and blending operations implemented in accordance with this Article as smoothly as possible, in a manner that ensures efficient and coherent support for Union policies.

2.Financing and investment operations covered by the EU guarantee which form part of the blending operation combining support under this Regulation with support provided under one or more other Union programmes or covered by the EU ETS Innovation Fund shall:

3.Blending operations that include a financial instrument that is fully financed by other Union programmes or by the EU ETS Innovation Fund without the use of the EU guarantee under this Regulation shall be consistent with the policy objectives and comply with the eligibility criteria set out in the rules of the Union programme under which the support is provided.

4.In accordance with Article 6(2), the non-repayable forms of support and financial instruments from the Union budget forming part of the blending operation referred to in paragraphs 2 and 3 of this Article shall be decided under the rules of the relevant Union programme and shall be implemented within the blending operation in accordance with this Regulation and with Title X of the Financial Regulation.

CHAPTER II

InvestEU Fund

Article 7

Policy windows

1.The InvestEU Fund shall operate through the following five policy windows that shall address market failures or sub-optimal investment situations within their specific scope:

(a)    a sustainable infrastructure policy window which comprises sustainable investment in the areas of transport, including multimodal transport, road safety, including in accordance with the Union objective of eliminating fatal road accidents and serious injuries by 2050, the renewal and maintenance of rail and road infrastructure, energy, in particular renewable energy, energy efficiency in accordance with the 2030 energy framework, buildings renovation projects focused on energy savings and the integration of buildings into a connected energy, storage, digital and transport systems, improving interconnection levels, digital connectivity and access, including in rural areas, supply and processing of raw materials, space, oceans, water, including inland waterways, waste management in accordance with the waste hierarchy and the circular economy, nature and other environment infrastructure, cultural heritage, tourism, equipment, mobile assets and the deployment of innovative technologies that contribute to the environmental or climate resilience or social sustainability objectives of the Union and that meet the environmental or social sustainability standards of the Union;

(b)    a research, innovation and digitisation policy window which comprises research, product development and innovation activities, the transfer of technologies and research results to the market to support market enablers and cooperation between enterprises, the demonstration and deployment of innovative solutions and support for the scaling up of innovative companies, as well as digitisation of Union industry;

(c)    an SME policy window which comprises access to and the availability of finance primarily for SMEs, including for innovative SMEs and SMEs operating in the cultural and creative sectors, as well as for small mid-cap companies;

(d)    a social investment and skills policy window, which comprises microfinance, social enterprise finance, social economy and measures to promote gender equality, skills, education, training and related services, social infrastructure, including health and educational infrastructure and social and student housing, social innovation, health and long-term care, inclusion and accessibility, cultural and creative activities with a social goal, and the integration of vulnerable people, including third country nationals;

(e)    a strategic European investment policy window which comprises strategic investment to support final recipients that are established in a Member State  and that operate in the Union, and whose activities are of strategic importance to the Union, in particular in view of the green and digital transitions and of enhanced resilience, in one of the following areas:

i)    critical healthcare provision, manufacturing and stockpiling of pharmaceuticals, medical devices and medical supplies, strengthening of health crisis response capacity and of the civil protection system;

ii)    critical infrastructure, whether physical or virtual, including infrastructure elements identified as critical in the fields of energy, transport, environment, health, secure digital communication, 5G, internet of things, online service platforms, secure cloud computing, data processing or storage, payments and financial infrastructure, aerospace, defence, communications, media, education and training, electoral infrastructure and sensitive facilities, as well as land and real estate crucial for the use of such critical infrastructure;

iii)    the provision of goods and services instrumental to the operation and maintenance of the critical infrastructure under point ii);

iv)    key enabling, transformative, green and digital technologies and game-changing innovations where the investment is strategically important for the Union’s industrial future, including

(a) artificial intelligence, blockchain, software, robotics, semiconductors, microprocessors, edge cloud technologies, high-performance computing, cybersecurity, quantum technologies, photonics, industrial biotechnology,

(b) renewable energy technologies, energy storage technologies including batteries, sustainable transport technologies, clean hydrogen and fuel cell applications, decarbonisation technologies for industry, carbon capture and storage, circular economy technologies,

(c) biomedicine, nanotechnologies, pharmaceuticals and advanced materials;

v)    manufacturing facilities for mass production of Information Communication and Technology components and devices in the EU;

vi)    supply and stockpiling of critical inputs to public actors, businesses or consumers in the EU, including energy or raw materials or food security, having regard to resource efficiency and circularity in strategic value chains;

vii)    critical technologies and inputs for the security of the Union and its Member States, such as defence and space sectors and cybersecurity, and dual use items as defined in point 1 of Article 2 of Council Regulation (EC) No 428/2009.

In addition, in the case of investments in space, defence and cybersecurity, and in specific types of projects with actual and direct security implications in critical sectors, the final recipients shall not be controlled by a third country or third country entities and shall have their executive management in the Union with a view to protect the security of the Union and its Member States.

The Steering Board shall set any necessary requirements relating to the control and executive management of final recipients for other areas under the strategic European investment window, and to the control of intermediaries under that window, in the light of any applicable public order or security considerations.

2.Where a financing or investment operation proposed to the Investment Committee referred to in Article 23 falls under more than one policy window, it shall be attributed to the policy window under which its main objective or the main objective of most of its sub-projects falls, unless the investment guidelines provide otherwise.

3.Financing and investment operations shall be screened to determine whether they have an environmental, climate or social impact. If those operations have such an impact they shall be subject to climate, environmental and social sustainability proofing with a view to minimising detrimental impacts and to maximising benefits to the climate, environment and social dimensions. For that purpose, project promoters that request financing shall provide adequate information based on the guidance referred to in paragraph 4. Projects below a certain size specified in the guidance shall be excluded from the proofing. Projects that are inconsistent with the climate objectives shall not be eligible for support under this Regulation. In case the implementing partner concludes that no sustainability proofing is to be carried out, it shall provide a justification to the Investment Committee.

4.The Commission shall develop sustainability guidance that, in accordance with Union environmental and social objectives and standards, allows to:

(a)as regards adaptation, ensure resilience to the potential adverse impacts of climate change through a climate vulnerability and risk assessment, including through relevant adaptation measures, and, as regards mitigation, integrate the cost of greenhouse gas emissions and the positive effects of climate mitigation measures in the cost-benefit analysis;

(b)account for the consolidated impact of projects in terms of the principal components of the natural capital relating to air, water, land and biodiversity;

(c)estimate the social impact of projects, including on gender equality, on the social inclusion of certain areas or populations and on the economic development of areas and sectors affected by structural challenges such as the need to decarbonise the economy;

(d)identify projects that are inconsistent with the achievement of climate objectives;

(e)provide implementing partners with guidance for the purpose of the screening provided for under paragraph 3.

5.Implementing partners shall provide the information necessary to allow the tracking of investment that contributes to meeting the Union objectives on climate and environment, on the basis of guidance to be provided by the Commission.

6.Implementing partners shall apply a target of at least 60 % of the investment under the sustainable infrastructure policy window contributing to meeting the Union objectives on climate and environment.

The Commission, together with implementing partners, shall seek to ensure that the part of the EU guarantee used for the sustainable infrastructure policy window is distributed with the aim of achieving a balance between the different areas referred to in point (a) of paragraph 1.

7.The Commission is empowered to adopt delegated acts in accordance with Article 33 in order to supplement this Regulation by defining the investment guidelines for each of the policy windows. The investment guidelines shall be prepared in close dialogue with the EIB Group and other potential implementing partners.

8.    For financing and investment operations under the strategic European investment window in defence and space sectors and in cybersecurity, the investment guidelines may set out limitations with respect to transfer and licensing of intellectual property rights to critical technologies and technologies instrumental to safeguarding the security of the Union and its Member States.

9.The Commission shall make the information on the application and interpretation of the investment guidelines available to the implementing partners, the Investment Committee and the advisory partners.

Article 8

Compartments

1.The policy windows referred to in Article 7(1) shall consist of an EU compartment and a Member State compartment. Those compartments shall address market failures or sub-optimal investment situations as follows:

(a)the EU compartment shall address any of the following situations:

(i)    market failures or sub-optimal investment situations related to Union policy priorities;

(ii)    Union-wide or Member State specific market failures or sub-optimal investment situations; or

(iii)    market failures or sub-optimal investment situations, which require the development of innovative financial solutions and market structures, in particular new or complex market failures or sub-optimal investment situations;

(b)the Member State compartment shall address specific market failures or sub-optimal investment situations in one or several regions or Member States to deliver the policy objectives of the contributing funds under shared management or of the additional amount provided by a Member State under the third subparagraph of Article 4(1), in particular to strengthen economic, social and territorial cohesion in the Union by addressing imbalances between its regions.

2.Where appropriate, the compartments referred to in paragraph 1 shall be used in a complementary manner to support a given financing or investment operation, including by combining support from both compartments.

Article 9

Specific provisions applicable to the Member State compartment

1.Amounts allocated by a Member State on a voluntary basis under Article [10(1)] of Regulation [[CPR] number] or Article [75(1)] of Regulation [[CAP Strategic Plan] number] shall be used for the provisioning for the part of the EU guarantee under the Member State compartment covering financing and investment operations in the Member State concerned or for the possible contribution from funds under shared management to the InvestEU Advisory Hub. Those amounts shall be used to contribute to the achievement of the policy objectives specified in the Partnership Agreement referred to in Article 7 of Regulation [[CPR] number], in the programmes or in the CAP Strategic Plan which contribute to InvestEU.

An additional amount allocated by a Member State under the third subparagraph of Article 4(1) shall be used for the provisioning for the part of the EU guarantee under the Member State compartment.

2.The establishment of the part of the EU guarantee under the Member State compartment shall be subject to the conclusion of a contribution agreement between a Member State and the Commission.

The fourth subparagraph of this paragraph and paragraph 5 of this Article shall not apply to the additional amount provided by a Member State under the third subparagraph of Article 4(1).

The provisions in this Article relating to amounts allocated under Article 10(1) of Regulation [CPR number] or Article 75(1) of Regulation [CAP Strategic Plan] are not applicable to a contribution agreement concerning an additional amount by a Member State, referred to in the third subparagraph of Article 4(1).

The Member State and the Commission shall conclude a contribution agreement or an amendment to it within four months following the Commission Decision approving the Partnership Agreement pursuant to Article 9(4) of Regulation [CPR] or the CAP Strategic Plan under Regulation [CAP] or simultaneously to the Commission Decision amending a programme according to Article 10 of Regulation [CPR] or a CAP Strategic Plan according to Article 107 of Regulation [CAP].

Two or more Member States may conclude a joint contribution agreement with the Commission.

By derogation from Article 211(1) of the Financial Regulation the provisioning rate of the EU guarantee under the Member State compartment shall be set at 40 % and may be adjusted downwards or upwards in each contribution agreement to take account of the risks attached to the financial products intended to be used.

3.The contribution agreement shall at least contain the following elements:

(a)    the overall amount of the part of the EU guarantee under the Member State compartment pertaining to the Member State, its provisioning rate, the amount of the contribution from funds under shared management, the constitution phase of the provisioning in accordance with an annual financial plan and the amount of the resulting contingent liability to be covered by a back-to-back guarantee provided by the Member State concerned;

(b)    the Member State strategy, consisting of the financial products and their minimum leverage, the geographical coverage, including regional coverage if necessary, types of projects, the investment period and, where applicable, the categories of final recipients and of eligible intermediaries;

(c)    the potential implementing partner or partners proposed in accordance with fourth subparagraph of Article 14(1) and the obligation of the Commission to inform the Member State concerned of the implementing partner or partners selected;

(d)    any contribution from funds under shared management to the InvestEU Advisory Hub;

(e)    the obligations to provide annual reports to the Member State, including reporting on the relevant indicators related to the policy objectives covered in the Partnership Agreement, programme or CAP Strategic Plan and referred to in the contribution agreement;

(f)    provisions on the remuneration for the part of the EU guarantee under the Member State compartment;

(g)    any combination with resources under the EU compartment in accordance with Article 8(2), including in a layered structure to achieve better risk coverage.

4.The contribution agreements shall be implemented by the Commission through guarantee agreements concluded with implementing partners in accordance with Article 16 and advisory agreements concluded with advisory partners in accordance with the second subparagraph of Article 24(1).

Where no guarantee agreement has been concluded within nine months from the conclusion of the contribution agreement, the contribution agreement shall be terminated or prolonged by mutual agreement. Where the amount of a contribution agreement has not been fully committed under one or more guarantee agreements within nine months from the conclusion of the contribution agreement, that amount shall be amended accordingly. The unused amount of provisioning attributable to amounts allocated by Member States under Article [10(1) of Regulation [[CPR]] or Article [75(1)] of Regulation [[CAP]] shall be re-used in accordance with [Article 10(5)] of Regulation [[CPR] number] and Article [75(5)] of Regulation [[CAP Strategic Plan] number]. The unused amount of provisioning attributable to amounts allocated by a Member State under the third subparagraph of Article 4(1) of this Regulation shall be paid back to the Member State.

Where a guarantee agreement has not been duly implemented within a period specified in Article [10(6)] of Regulation [[CPR] number] or in Article [75(6)] of Regulation [[CAP Strategic Plan] number], the contribution agreement shall be amended. The unused amount of provisioning attributable to amounts allocated by Member States under Article [10(1) of Regulation [[CPR]] or Article [75(1)] of Regulation [[CAP]] shall be re-used in accordance with [Article 10(6)] of Regulation [[CPR] number] and Article [75(6)] of Regulation [[CAP Strategic Plan] number]. The unused amount of provisioning attributable to amounts allocated by a Member State under the third subparagraph of Article 4(1) of this Regulation shall be paid back to the Member State.

5.The following rules shall apply to the provisioning for the part of the EU guarantee under the Member State compartment established by a contribution agreement.

(a)    After the constitution phase referred to in point (a) of paragraph 3 of this Article, any annual surplus of provisions, calculated by comparing the amount of provisions required by the provisioning rate set in the contribution agreement and the actual amount of provisions, shall be re-used pursuant to [Article 10(7)] of the [CPR] and to Article [75(7)] of the [[CAP Strategic Plan] number].

(b)    By way of derogation from Article 213(4) of the Financial Regulation, after the constitution phase referred to in point (a) of paragraph 3 of this Article, the provisioning shall not give rise to annual replenishments during the availability of that part of the EU guarantee under the Member State compartment.

(c)    The Commission shall immediately inform the Member State where the level of provisions for that part of the EU guarantee falls below 20 % of the initial provisioning as a result of calls on that part of the EU guarantee under the Member State compartment.

(d)    If the level of provisions for that part of the EU guarantee under the Member State compartment reaches 10 % of the initial provisioning, the Member State concerned shall provide up to 5 % of the initial provisioning to the common provisioning fund referred to in Article 212 of the Financial Regulation upon request by the Commission.

CHAPTER III

PARTNERSHIP BETWEEN THE COMMISSION AND THE EIB GROUP

Article 10

Scope of the partnership

1.    The Commission and the EIB Group shall form a partnership under this Regulation with the objective of supporting the implementation of the InvestEU and fostering consistency, inclusivity, additionality, and efficient deployment. In accordance with this Regulation and as further specified in the agreements referred to in paragraph 3, the EIB Group:

(a)    shall implement the portion of the EU guarantee specified in Article 12(4);

(b)    shall support the implementation of the EU compartment of the InvestEU Fund, and, where applicable, the Member State compartment, in particular by:

(i)    contributing, together with potential implementing partners, to the investment guidelines in accordance with Article 7(7), contributing to the design of the scoreboard in accordance with Article 21 and contributing to other documents that set out the operational guidance of the InvestEU Fund;

(ii)    defining, together with the Commission and potential implementing partners, the risk methodology and risk mapping system that relate to the financing and investment operations of the implementing partners in order to allow such operations to be assessed on a common rating scale;

(iii)    at the request of the Commission and in agreement with the potential implementing partner concerned, carrying out an assessment of the systems of that potential implementing partner and providing targeted technical advice on those systems, where and to the extent required by the conclusions of the audit of the pillar assessment in view of the implementation of the financial products envisaged by that potential implementing partner;

(iv)    providing a non-binding opinion on the banking-related aspects, in particular on the financial risk and financial terms related to the portion of the EU guarantee to be allocated to the implementing partner, other than to the EIB Group, as defined in the guarantee agreement to be concluded with that implementing partner;

(v)    carrying out simulations and projections of the financial risk and remuneration of the aggregate portfolio on the basis of assumptions agreed with the Commission;

(vi)    measuring the financial risk of the aggregate portfolio and providing financial reports on the aggregate portfolio; and

(vii)    providing restructuring and recovery services as set out in the agreement referred to in point (b) of paragraph 3 to the Commission at the request of the Commission and in agreement with the implementing partner in accordance with point (g) of Article 16(2) where that implementing partner is no longer responsible for pursuing restructuring and recovery activities under the relevant guarantee agreement;

(c)    may provide capacity building as referred to in point (h) of Article 24(2) to a national promotional bank or institution and other services, in relation to the implementation of financial products supported by the EU guarantee if requested by that national promotional bank or institution;

(d)    shall, in relation to the InvestEU Advisory Hub:

(i)    be allocated an amount of up to EUR 525 000 000 for the advisory initiatives referred to in Article 24 and operational tasks referred to in point (ii) of this point (d) out of the financial envelope referred to in Article 4(3);

(ii)    advise the Commission and perform operational tasks set out in the agreement referred to in point (c) of paragraph 3, by:

–    providing support to the Commission in the design, the establishment and operation of the InvestEU Advisory Hub;

–    providing an assessment of requests for advisory support that the Commission does not consider to fall under existing advisory initiatives, with a view to supporting the allocation decision of the Commission in relation to advisory requests received under the central point of entry defined in point (a) of Article 24(2);

–    providing support to national promotional banks or institutions by providing capacity building referred to in point (h) of Article 24(2) in relation to the development of their advisory capabilities to enable them to participate in advisory initiatives, at the request of such banks or institutions;

–    at the request of the Commission and of a potential advisory partner, and subject to the agreement of the EIB Group, concluding on behalf of the Commission an agreement with the advisory partner for the delivery of advisory initiatives.

The EIB Group shall ensure that its tasks as referred to in point (d)(ii) of the first subparagraph are conducted entirely independently from its role as an advisory partner.

As appropriate, the Commission shall engage with the implementing partner on the basis of the findings of the opinion of the EIB Group referred to in point (b)(iv) of the first subparagraph of this paragraph. The Commission shall inform the EIB Group of the outcome of its decision making.

2.    The banking-related information transmitted to the EIB Group by the Commission in accordance with points (b)(ii), (b)(iv), (b)(v) and (b)(vi) of paragraph 1 shall be limited to information strictly necessary for the EIB Group to fulfil its obligations under those points. The Commission, in close dialogue with the EIB Group and potential implementing partners, shall define the nature and scope of that banking-related information, taking into account the requirements for the sound financial management of the EU guarantee, the legitimate interests of the implementing partner regarding commercially sensitive information and the needs of the EIB Group in meeting its obligations under those points.

3.    The terms of the partnership shall be laid down in agreements, including:

(a)    on the granting and implementation of the portion of the EU guarantee specified in Article 12(4):

(i)    a guarantee agreement between the Commission and the EIB Group; or

(ii)    separate guarantee agreements between the Commission and the EIB and its subsidiaries or other entities established in accordance with Article 28(1) of the EIB Statute, as applicable;

(b)    an agreement between the Commission and the EIB Group in relation to points (b) and (c) of paragraph 1;

(c)    an agreement between the Commission and the EIB Group in relation to the InvestEU Advisory Hub;

(d)    service agreements between the EIB Group and national promotional banks and institutions concerning capacity building and other services provided under point (c) of paragraph 1.

4.    Without prejudice to Articles 17(3) and 24(4) of this Regulation, the costs incurred by the EIB Group in the performance of tasks referred to in points (b) and (c) of paragraph 1 of this Article shall be in accordance with the terms of the agreement referred to in point (b) of paragraph 3 of this Article and may be covered from the repayments or revenues attributable to the EU guarantee, or from the provisioning, in accordance with Article 211(4) and (5) of the Financial Regulation, or may be charged to the financial envelope referred to in Article 4(3) of this Regulation, upon justification of those costs by the EIB Group, subject to an overall cap of EUR 10 000 000.

5.    The costs incurred by the EIB Group for the performance of the operational tasks referred to in point (d)(ii) of paragraph 1 shall be fully covered by and paid from the amount referred to in point (d)(i) of paragraph 1, upon justification of those costs by the EIB Group, subject to an overall cap of EUR 15 000 000.

Article 11

Conflicts of interest

1.    Within the framework of the partnership as referred to in Article 10, the EIB Group shall take all necessary measures and precautions to avoid conflicts of interest with other implementing partners, including by putting in place a dedicated and independent team for the tasks referred to in points (b)(iii) to (vi) of Article 10(1). That team shall be subject to strict confidentiality rules, which shall continue to apply to members of the team after they have left the team.

2.    The EIB Group and other implementing partners shall inform the Commission without delay of any situation that constitutes a conflict of interest or is likely to lead to a conflict of interest. In case of doubt, the Commission shall determine whether a conflict of interest exists and shall inform the EIB Group of its conclusion. In the event of a conflict of interest, the EIB Group shall take appropriate measures. The Steering Board shall be informed of those measures and their results.

3.    The EIB Group shall take the necessary precautions to avoid situations in which a conflict of interest could arise in the implementation of the InvestEU Advisory Hub, in particular in relation to its operational tasks in its role of supporting the Commission as referred to in point (d)(ii) of Article 10(1). In the event of a conflict of interest, the EIB Group shall take appropriate measures.

CHAPTER IV

EU guarantee

Article 12

EU guarantee

1.    The EU guarantee shall be granted as an irrevocable, unconditional and on demand guarantee to the implementing partners in accordance with Article 219(1) of the Financial Regulation and implemented in indirect management in accordance with Title X of that Regulation.

2.    The remuneration for the EU guarantee shall be linked to the characteristics and risk profile of the financial products, taking into account the nature of the underlying financing and investment operations and the fulfilment of the policy objectives targeted by the financial products.

Where duly justified by the nature of the policy objectives targeted by the financial product and the need for the financial products to be affordable to the targeted final recipients, the cost of the financing provided to the final recipient may be reduced or the terms of that financing may be improved, by adjusting the remuneration for the EU guarantee, or, where necessary, by covering the outstanding administrative costs borne by the implementing partner through the Union budget, in particular:

(a)    where stressed financial market conditions would prevent the realisation of a financing or investment operation under market-based pricing; or

(b)    where necessary to catalyse financing and investment operations in sectors or areas experiencing a significant market failure or sub-optimal investment situation or to facilitate the establishment of investment platforms,

to the extent that the reduction of the remuneration for the EU guarantee or the coverage of the outstanding administrative costs borne by the implementing partner does not significantly impact the provisioning for the EU guarantee.

The reduction of the remuneration for the EU guarantee shall fully benefit final recipients.

3.    The condition set out in Article 219(4) of the Financial Regulation shall apply to each implementing partner on a portfolio basis.

4.    75 % of the EU guarantee under the EU compartment as referred to in first subparagraph of Article 4(1), amounting to EUR 56 365 380 000, shall be granted to the EIB Group. The EIB Group shall provide an aggregate financial contribution amounting to EUR 9 418 270 000. This contribution shall be provided in a manner and form that facilitates the implementation of the InvestEU Fund and the achievement of the objectives set out in Article 14(2).

5.    The remaining 25 % of the EU guarantee under the EU compartment shall be granted to other implementing partners, which shall also provide a financial contribution to be determined in the guarantee agreements.

6.    Best efforts shall be made to ensure that, at the end of the investment period, a wide range of sectors and regions are covered and excessive sectoral or geographical concentration is avoided. Those efforts shall include incentives for smaller or less sophisticated NPBIs that have a comparative advantage due to their local presence, knowledge and investment competencies. The Commission shall develop a coherent approach to support these efforts.

7.     Support of the EU guarantee referred to in the first and second subparagraphs of Article 4(2) shall be granted under the conditions set out in Article 4(6) of Regulation [EURI]. In other cases, support of the EU guarantee may be granted for financing and investment operations covered by this Regulation for an investment period ending on 31 December 2027.

Contracts between the implementing partner and the final recipient or the financial intermediary or other entity referred to in point (a) of Article 15(1) under the EU guarantee referred to in the first and second subparagraphs of Article 4(2) shall be signed by one year after the approval of the relevant financing or investment operation by the implementing partner. In other cases, contracts between the implementing partner and the final recipient or the financial intermediary or other entity referred to in point (a) of Article 15(1) shall be signed by 31 December 2028.

Article 13

Eligible financing and investment operations

1.    The InvestEU Fund shall only support financing and investment operations that:

(a)    comply with the conditions set out in points (a) to (e) of Article 209(2) of the Financial Regulation, in particular regarding market failures, sub-optimal investment situations and additionality as set out in points (a) and (b) of Article 209(2) of the Financial Regulation and in Annex V to this Regulation and, where appropriate, maximising private investment in accordance with point (d) of Article 209(2) of the Financial Regulation;

(b)    contribute to the Union policy objectives and fall within the scope of the areas eligible for financing and investment operations under the appropriate policy window in accordance with Annex II to this Regulation;

(c)    do not provide financial support to the excluded activities set out in point B of Annex V to this Regulation; and

(d)    are consistent with the investment guidelines.

2.    In addition to projects situated in the Union, or in an overseas country or territory linked to a Member State as set out in Annex II to the TFEU, the InvestEU Fund may support the following projects and operations through financing and investment operations under other windows than the strategic European investment window:

(a)    projects involving entities located or established in one or more Member States that extend to one or more third countries, including acceding States, candidate countries and potential candidates, countries falling within the scope of the European Neighbourhood Policy, the EEA or the EFTA, to an overseas country or territory as set out in Annex II to the TFEU, or to an associated third country, regardless of whether there is a partner in those third countries or overseas countries or territories;

(b)    financing and investment operations in third countries as referred to in Article 5 which have contributed to a specific financial product.

3.    The InvestEU Fund may support financing and investment operations that provide finance to final recipients which are legal entities established in any of the following countries or territories:

(a)    a Member State or an overseas country or territory linked to a Member State as set out in Annex II to the TFEU;

(b)    a third country associated to the InvestEU Programme in accordance with Article 5;

(c)    a third country referred to in point (a) of paragraph 2, where applicable;

(d)    other third countries, where necessary for the financing of a project in a country or territory referred to in points (a), (b) or (c).

Notwithstanding the first subparagraph, under the strategic European investment window final recipients and intermediaries shall be legal entities fulfilling the requirements laid down in the introductory sentence and the second subparagraph, and in accordance with the third subparagraph, of point (e) of Article 7(1).

Article 14

Selection of implementing partners other than the EIB Group

1.    The Commission shall select implementing partners other than the EIB Group in accordance with Article 154 of the Financial Regulation.

Implementing partners may form a group. An implementing partner may be a member of one or more groups.

For the EU compartment, the eligible counterparties shall have expressed their interest in relation to the portion of the EU guarantee referred to in Article 12(5).

For the Member State compartment, the Member State concerned may propose one or more counterparties as implementing partners from among those counterparties that have expressed their interest. The Member State concerned may also propose the EIB Group as an implementing partner and, at its own expense, may contract the EIB Group to provide the services listed in Article 10.

Where the Member State concerned does not propose an implementing partner, the Commission shall proceed in accordance with the third subparagraph of this paragraph and shall select as implementing partners eligible counterparties that are able to cover the financing and investment operations in the geographical areas concerned.

2.    When selecting implementing partners, the Commission shall ensure that the portfolio of financial products under the InvestEU Fund meets the following objectives:

(a)    maximising the coverage of the objectives laid down in Article 3;

(b)    maximising the impact of the EU guarantee through the own resources committed by the implementing partner;

(c)    maximising, where appropriate, private investment;

(d)    promoting innovative financial and risk solutions to address market failures and sub-optimal investment situations;

(e)    achieving geographical diversification via gradual allocation of the EU guarantee, and to allow for the financing of smaller projects;

(f)    providing sufficient risk diversification.

3.    When selecting the implementing partners, the Commission shall also take into account:

(a)    the possible cost and remuneration to the Union budget;

(b)    the capacity of the implementing partner to implement thoroughly the requirements of Article 155(2) and (3) of the Financial Regulation related to tax avoidance, tax fraud, tax evasion, money laundering, terrorism financing and non-cooperative jurisdictions.

4.    National promotional banks or institutions may be selected as implementing partners, provided that they fulfil the requirements laid down in this Article.

Article 15

Eligible types of financing

1.    The EU guarantee may be used towards risk coverage for the following types of financing provided by the implementing partners:

(a)    loans, guarantees, counter-guarantees, capital market instruments, any other form of funding or credit enhancement, including subordinated debt, or equity or quasi-equity investments, provided directly or indirectly through financial intermediaries, funds, investment platforms or other vehicles to be channelled to final recipients;

(b)    funding or guarantees by an implementing partner to another financial institution enabling the latter to undertake financing referred to in point (a).

In order to be covered by the EU guarantee, the financing referred to in points (a) and (b) of the first subparagraph of this paragraph shall be granted, acquired or issued for the benefit of financing or investment operations referred to in Article 13(1), where the financing by the implementing partner was granted in accordance with a financing agreement or transaction signed or entered into by the implementing partner after the signature of the guarantee agreement and that has not expired or been cancelled.

2.    Financing and investment operations through funds or other intermediate structures shall be supported by the EU guarantee in accordance with provisions to be laid down in the investment guidelines, even if such structures invest a minority of their invested amounts outside the Union and in third countries referred to Article 13(2) or invest a minority of their invested amounts into assets other than those eligible under this Regulation.

The investment guidelines may set out further limitations as regards the proportion of amounts invested outside the Union in financing and investment operations through funds or other intermediate structures under the strategic European investment window, including potential clauses on exit from such investments.

Article 16

Guarantee agreements

1.    The Commission shall conclude a guarantee agreement with each implementing partner on the granting of the EU guarantee up to an amount to be determined by the Commission.

In the event that implementing partners form a group a single guarantee agreement shall be concluded between the Commission and each implementing partner within the group or with one implementing partner on behalf of the group.

2.    The guarantee agreement shall contain:

(a)    the amount and the terms of the financial contribution which is to be provided by the implementing partner;

(b)    the terms of the funding or the guarantees which are to be provided by the implementing partner to another legal entity participating in the implementation, whenever that is the case;

(c)    detailed rules on the provision of the EU guarantee in accordance with Article 18, including on the coverage of portfolios of specific types of instruments and the respective events that trigger possible calls on the EU guarantee;

(d)    the remuneration for risk-taking that is to be allocated in proportion to the respective share of the risk-taking of the Union and of the implementing partner or as adjusted in duly justified cases pursuant to Article 12(2);

(e)    the payment conditions;

(f)    the commitment of the implementing partner to accept the decisions by the Commission and the Investment Committee as regards the use of the EU guarantee for the benefit of a proposed financing or investment operation, without prejudice to the decision-making of the implementing partner in respect of the proposed operation without the EU guarantee;

(g)    provisions and procedures relating to the recovery of claims that is to be entrusted to the implementing partner;

(h)    financial and operational reporting and monitoring of the financing and investment operations under the EU guarantee;

(i)    key performance indicators, in particular as regards the use of the EU guarantee, the fulfilment of the objectives and criteria laid down in Articles 3, 7 and 13, and the mobilisation of private capital;

(j)    where applicable, provisions and procedures relating to blending operations;

(k)    other relevant provisions in compliance with the requirements of Article 155(2) and Title X of the Financial Regulation;

(l)    the existence of adequate mechanisms for addressing the potential concerns of private investors.

3.    A guarantee agreement shall also provide that remuneration attributable to the Union from financing and investment operations covered by this Regulation is to be provided after the deduction of payments due upon calls on the EU guarantee.

4.    In addition, a guarantee agreement shall provide that any amount due to the implementing partner that relates to the EU guarantee shall be deducted from the overall amount of remuneration, revenues and repayments due by the implementing partner to the Union from financing and investment operations covered by this Regulation. Where that amount is not sufficient to cover the amount due to the implementing partner in accordance with Article 17(3), the outstanding amount shall be drawn from the provisioning for the EU guarantee.

5.    Where the guarantee agreement is concluded under the Member State compartment, it may provide for the participation of representatives from the Member State or the regions concerned in the monitoring of the implementation of that guarantee agreement.

Article 17

Requirements for the use of the EU guarantee

1.    The granting of the EU guarantee shall be subject to the entry into force of the guarantee agreement with the relevant implementing partner.

2.    Financing and investment operations shall be covered by the EU guarantee only where they fulfil the criteria laid down in this Regulation and in the relevant investment guidelines, and where the Investment Committee has concluded that those operations fulfil the requirements for benefiting from the EU guarantee. The implementing partners shall remain responsible for ensuring that the financing and investment operations comply with this Regulation and the relevant investment guidelines.

3.    No administrative costs or fees related to the implementation of financing and investment operations under the EU guarantee shall be due to the implementing partner by the Commission unless the nature of the policy objectives targeted by the financial product to be implemented and the affordability for the targeted final recipients or the type of financing provided allow the implementing partner to duly justify to the Commission the need for an exception. The coverage of such costs by the Union budget shall be limited to the amount strictly required to implement the relevant financing and investment operations, and shall be provided only to the extent to which the costs are not covered by revenues received by the implementing partners from the financing and investment operations concerned. The fee arrangements shall be laid down in the guarantee agreement and shall comply with Article 16(4) and with point (g) of Article 209(2) of the Financial Regulation.

4.    In addition, the implementing partner may use the EU guarantee to meet the relevant share of any recovery costs in accordance with Article 16(4), unless those costs have been deducted from recovery proceeds.

Article 18

Coverage and terms of the EU guarantee

1.    Remuneration for risk-taking shall be allocated between the Union and an implementing partner in proportion to their respective share of the risk-taking with respect to a portfolio of financing and investment operations or, where relevant, with respect to individual financing and investment operations. The remuneration for the EU guarantee may be reduced in duly justified cases referred to in Article 12(2).

The implementing partner shall have appropriate exposure at its own risk to financing and investment operations supported by the EU guarantee, unless exceptionally the policy objectives targeted by the financial product to be implemented are of such nature that the implementing partner could not reasonably contribute its own risk-bearing capacity to it.

2.    The EU guarantee shall cover:

(a)    for debt products referred to in point (a) of Article 15(1):

(ii)    restructuring losses;

(b)    for equity or quasi-equity investments referred to in point (a) of Article 15(1): the amounts invested and the associated funding costs and losses arising from fluctuations of currencies other than the euro;

(c)    for funding or guarantees by an implementing partner to another financial institution in accordance with point (b) of Article 15(1): the amounts used and their associated funding costs.

For the purposes of point (a)(i) of the first subparagraph, for subordinated debt a deferral, reduction or required exit shall be considered to be an event of default.

3.    Where the Union makes a payment to the implementing partner as the result of a call on the EU guarantee, the Union shall be subrogated into the relevant rights of the implementing partner relating to any of its financing or investment operations covered by the EU guarantee, to the extent that those rights continue to exist.

The implementing partner shall pursue the recovery of claims for the subrogated amounts on behalf of the Union and shall reimburse the Union from the amounts recovered.

CHAPTER V

GOVERNANCE

Article 19

Advisory Board

1.    The Commission and the Steering Board established pursuant to Article 20 shall be advised by an Advisory Board.

2.    The Advisory Board shall strive to ensure gender balance and shall comprise:

(a)     one representative of each implementing partner;

(b)     one representative of each Member State;

(c)     one expert appointed by the European Economic and Social Committee;

(d)     one expert appointed by the Committee of the Regions.

3.    The Advisory Board shall be chaired by a representative of the Commission. The representative of the EIB Group shall be the vice-chair.

The Advisory Board shall meet regularly, at least twice a year, at the request of the Chairperson.

4.    The Advisory Board shall:

(a)    provide advice to the Commission and the Steering Board on the design of financial products to be deployed under this Regulation;

(b)    provide advice to the Commission and the Steering Board about market developments, market conditions, market failures and sub-optimal investment situations;

(c)    exchange views on market developments and share best practices.

5.    The Commission shall nominate the first Advisory Board members representing the implementing partners other than the EIB Group after consultation of potential implementing partners. Their term is limited to one year.

Article 20

Steering Board

2.    The Steering Board shall select a Chairperson from among the Commission representatives for a term of four years, renewable once. The Chairperson shall report biannually to the representatives of the Member States on the Advisory Board on the implementation and operation of the InvestEU Programme.

Detailed minutes of Steering Board meetings shall be published as soon as they have been approved by the Steering Board.

3.    The Steering Board shall:

(a)    provide strategic and operational guidance for the implementing partners, including guidance on the design of financial products and on other operating policies and procedures necessary for the operation of the InvestEU Fund;

(b)    adopt the risk methodological framework developed by the Commission in cooperation with the EIB Group and the other implementing partners;

(c)    oversee the implementation of the InvestEU Programme;

(d)    be consulted, reflecting the views of all its member, on the shortlist of candidates for the Investment Committee before their selection in accordance with Article 23(2);

(e)    adopt the rules of procedure of the secretariat to the Investment Committee referred to in Article 23(4).

(f)    adopt the rules applicable to the operations with investment platforms.

4.    The Steering Board shall use a consensual approach in its discussions, therefore taking the utmost possible account of the positions of all members. If the members cannot reach a consensus, decisions of the Steering Board shall be adopted by qualified majority of its voting members, consisting of at least seven votes.

Article 21

Scoreboard

1.    A scoreboard of indicators (the ‘Scoreboard’) shall be established to ensure that the Investment Committee is able to carry out an independent, transparent and harmonised assessment of requests for the use of the EU guarantee for financing or investment operations proposed by implementing partners.

2.    Implementing partners shall fill out the Scoreboard for their proposals for financing and investment operations.

3.    The Scoreboard shall cover the following elements:

(a)    a description of the proposed financing and investment operation;

(b)    how the proposed operation contributes to EU policy objectives;

(c)    a description of additionality;

(d)    description of the market failure or sub-optimal investment situation;

(e)    the financial and technical contribution by the implementing partner;

(f)    the impact of the investment ;

(g)    the financial profile of the financing or investment operation;

(h)    complementary indicators.

4.    The Commission is empowered to adopt delegated acts in accordance with Article 33 in order to supplement this Regulation by establishing additional elements of the Scoreboard, including detailed rules for the Scoreboard to be used by the implementing partners.

Article 22

Policy check

1.    The Commission shall conduct a check to confirm that the financing and investment operations proposed by the implementing partners other than the EIB comply with Union law and policies.

2.    In the case of EIB financing and investment operations within the scope of this Regulation, such operations shall not be covered by the EU guarantee where the Commission delivers an unfavourable opinion within the framework of the procedure provided for in Article 19 of the EIB Statute.

Article 23

Investment Committee

1.    A fully independent investment committee shall be established for the InvestEU Fund (the ‘Investment Committee’). The Investment Committee shall:

2.    The Investment Committee shall meet in five different configurations, corresponding to the five policy windows referred to in Article 7(1).

Each configuration of the Investment Committee shall be composed of six remunerated external experts. The experts shall be selected and shall be appointed by the Commission, at the recommendation of the Steering Board. The experts shall be appointed for a term of up to four years, renewable once. They shall be remunerated by the Union. The Commission, at the recommendation of the Steering Board, may decide to renew the term of office of an incumbent member of the Investment Committee without following the procedure laid down in this paragraph.

The experts shall have a high level of relevant market experience in project structuring and financing or financing of SMEs or corporates.

The composition of the Investment Committee shall ensure that it has a wide knowledge of the sectors covered by the policy windows referred to in Article 7(1) and a wide knowledge of the geographic markets in the Union, and shall ensure that the Investment Committee as a whole is gender-balanced.

Five members of the Investment Committee shall be permanent members of each of the five configurations of the Investment Committee. At least one of the permanent members shall have expertise in sustainable investment. In addition, each of the five configurations shall have two experts with experience in investment in sectors covered by the corresponding policy window. The Steering Board shall assign the Investment Committee members to the appropriate configuration or configurations. The Investment Committee shall elect a chairperson from among its permanent members.

3.    When participating in the activities of the Investment Committee, its members shall perform their duties impartially and in the sole interest of the InvestEU Fund. They shall not seek or take instructions from the implementing partners, the institutions of the Union, the Member States, or any other public or private body.

The curricula vitae and declarations of interest of each member of the Investment Committee shall be made public and constantly updated. Each member of the Investment Committee shall without delay communicate to the Commission and the Steering Board all information needed to confirm the absence of any conflict of interest on an ongoing basis.

The Steering Board may recommend to the Commission that it remove a member from his or her functions if that member does not comply with the requirements laid down in this paragraph or for other duly justified reasons.

4.    When acting in accordance with this Article, the Investment Committee shall be assisted by a secretariat. The secretariat shall be independent and answerable to the chairperson of the Investment Committee. The secretariat shall be administratively located in the Commission. The rules of procedure of the secretariat shall ensure the confidentiality of exchanges of information and documents between implementing partners and the respective governing bodies. The EIB Group may submit its proposals for financing and investment operations directly to the Investment Committee and shall notify them to the secretariat. 

The documentation to be provided by the implementing partners shall comprise a standardised request form, the Scoreboard referred to in Article 21 and any other document the Investment Committee considers relevant, in particular a description of the character of the market failure or sub-optimal investment situation and how it will be alleviated by the financing or investment operation, as well as a reliable assessment of the operation that demonstrates the additionality of the financing or investment operation. The secretariat shall check the completeness of the documentation provided by implementing partners other than the EIB Group. The Investment Committee may seek clarifications from the implementing partner concerned in relation to a proposal for an investment or financing operation, including by requesting the direct presence of a representative of the implementing partner concerned during the discussion of the aforementioned operation. Any project assessment conducted by an implementing partner shall not be binding on the Investment Committee for the purposes of granting a financing or investment operation coverage by the EU guarantee.

The Investment Committee shall use the Scoreboard referred to in Article 21 in its assessment and verification of the proposed financial and investment operations.

5.    Conclusions of the Investment Committee shall be adopted by simple majority of all members, provided that such simple majority includes at least one of the non-permanent members of the configuration relating to the policy window under which the proposal is made. In case of a draw, the chair of the Investment Committee shall have the casting vote.

Conclusions of the Investment Committee approving the coverage of the EU guarantee for a financing or investment operation shall be publicly accessible and shall include the rationale for the approval and information on the operation, in particular its description, the identity of the promoters or financial intermediaries, and the objectives of the operation. The conclusions shall also refer to the global assessment stemming from the Scoreboard.

The relevant Scoreboard shall be made publicly accessible after the signature of the financing or investment operation or sub-project, if applicable.

Information to be made publicly accessible under the second and third subparagraphs shall not contain commercially sensitive information or personal data that are not to be disclosed under the Union data protection rules. Commercially sensitive parts of the conclusions of the Investment Committee shall be forwarded by the Commission to the European Parliament and to the Council upon request subject to strict confidentiality requirements.

Twice a year, the Investment Committee shall submit to the European Parliament and to the Council a list of all conclusions of the Investment Committee in the preceding six months, as well as the published Scoreboards relating thereto. That submission shall include any decisions rejecting the use of the EU guarantee and shall be subject to strict confidentiality requirements.

Conclusions of the Investment Committee shall be made available in a timely manner to the implementing partner concerned by the secretariat of the Investment Committee.

The secretariat of the Investment Committee shall record all information related to proposals for financing and investment operations provided to the Investment Committee and the conclusions of the Investment Committee on those proposals in a central repository.

6.    Where the Investment Committee is requested to approve the use of the EU guarantee for a financing or investment operation that is a facility, programme or structure which has underlying sub-projects, that approval shall comprise those underlying sub-projects unless the Investment Committee decides to retain the right to approve them separately. The Investment Committee shall not have the right to separately approve sub-projects of a size below EUR 3 000 000.

7.    Where it deems it necessary, the Investment Committee may bring to the Commission any operational issue relating to the application or interpretation of the investment guidelines.

8.    From the date of its constitution, the Investment Committee shall also be in charge of approving the use of the EU guarantee under Regulation (EU) 2015/1017 for the remainder of the investment period under that Regulation. They shall be assessed in accordance with the criteria laid down in that Regulation. The configurations of the Investment Committee responsible for the sustainable infrastructure window and the strategic European investment window shall assess those proposals. Article 22 shall not apply to such submissions.

CHAPTER VI

InvestEU Advisory Hub

Article 24

InvestEU Advisory Hub

1.    The Commission shall establish the InvestEU Advisory Hub. The InvestEU Advisory Hub shall provide advisory support for the identification, preparation, development, structuring, procuring and implementation of investment projects, and for enhancing the capacity of project promoters and financial intermediaries to implement financing and investment operations. Such support may cover any stage of the life-cycle of a project or financing of a supported entity.

2.    The InvestEU Advisory Hub shall in particular:

(a)    provide a central point of entry, managed and hosted by the Commission,  for project development assistance under the InvestEU Advisory Hub for public authorities and for project promoters;

(b)    disseminate to public authorities and project promoters all available additional information regarding the investment guidelines, including information on their application or on the interpretation provided by the Commission;

(c)    where appropriate, assist project promoters in developing their projects so that they fulfil the objectives set out in Articles 3 and 7 and the eligibility criteria set out in Article 13, and facilitate the development of Important Projects of Common European Interest and aggregators for small-sized projects, including through investment platforms as referred to in point (f) of this paragraph, provided that such assistance does not prejudge the conclusions of the Investment Committee with respect to the coverage of the EU guarantee with respect to such projects;

(d)    support actions and leverage local knowledge to facilitate the use of InvestEU Fund support across the Union and contribute actively where possible to the objective of the sectorial and geographical diversification of the InvestEU Fund by supporting implementing partners in originating and developing potential financing and investment operations;

(e)    facilitate the establishment of collaborative platforms for peer-to-peer exchanges and the sharing of data, knowhow and best practices to support project pipeline and sector development;

(f)    provide proactive advisory support with respect to the establishment of investment platforms, including cross-border and macro-regional investment platforms and investment platforms that bundle small and medium-sized projects in one or more Member States by theme or by region;

(g)    support the use of blending with grants or financial instruments funded by the Union budget or by other sources in order to strengthen synergies and complementarities between Union instruments and to maximise the leverage and impact of the InvestEU Programme;

(h)    support capacity building actions to develop organisational capacities, skills and processes and to accelerate the investment readiness of organisations in order for public authorities and project promoters to build investment project pipelines, develop financing mechanisms and investment platforms and to manage projects and for financial intermediaries to implement financing and investment operations for the benefit of entities that face difficulties in obtaining access to finance, including through support for developing risk assessment capacity or sector specific knowledge;

(i)    providing advisory support for start-ups, especially when they seek to protect their research and innovation investments by obtaining intellectual property titles, such as patents.

3.    The InvestEU Advisory Hub shall be available to public and private project promoters, including SMEs and start-ups, to public authorities and to national promotional banks or institutions, financial and non-financial intermediaries.

4.    The Commission shall conclude an advisory agreement with each advisory partner on the implementation of one or more advisory initiatives. Fees may be charged for the services referred to in paragraph 2 to cover part of the costs for providing those services, except for services provided to public project promoters or non-profit institutions, which shall be free of charge where justified. Fees charged to SMEs for those services referred to in paragraph 2 shall be capped at one third of the cost of providing those services.

5.    In order to achieve the objective referred to in paragraph 1 and to facilitate the provision of advisory support, the InvestEU Advisory Hub shall build upon the expertise of the Commission, the EIB Group and the other advisory partners.

6.    Each advisory initiative shall incorporate a cost-sharing mechanism between the Commission and the advisory partner, except where the Commission agrees to cover all costs of the advisory initiative in a duly justified case where the specificities of the advisory initiative so require and the coherent and equitable treatment of advisory partners concerned is ensured.

7.    The InvestEU Advisory Hub shall have local presence where necessary. Local presence shall be established in particular in Member States or regions that face difficulties in developing projects under the InvestEU Fund. The InvestEU Advisory Hub shall assist in the transfer of knowledge to the regional and local level with a view to building up regional and local capacity and expertise to be able to provide advisory support referred to in paragraph 1, including support to implement and accommodate small-sized projects.

8.    In order to provide the advisory support referred in paragraph 1 and to facilitate the provision of that advisory support at local level, the InvestEU Advisory Hub shall cooperate where possible with and take advantage of the expertise of national promotional banks or institutions. Where appropriate, cooperation agreements with national promotional banks or institutions shall be concluded under the InvestEU Advisory Hub, with at least one national promotional bank or institution per Member State.

9.    The implementing partners shall, as appropriate, propose to project promoters applying for financing, including in particular small-sized projects, that they request the InvestEU Advisory Hub support for their projects, where appropriate, in order to enhance the preparation of their projects and to allow for the assessment of the possibility of bundling projects.

Where relevant, the implementing partners and advisory partners shall also inform the project promoters of the possibility of listing their projects on the InvestEU Portal referred to in Article 25.

CHAPTER VII

InvestEU Portal

Article 25

InvestEU Portal

1.    The Commission shall establish the InvestEU Portal. The InvestEU Portal shall be an easily accessible and user-friendly project database that provides relevant information for each project.

2.    The InvestEU Portal shall provide a channel for project promoters to bring projects for which they are seeking finance visible to investors. The inclusion of projects in the InvestEU Portal shall be without prejudice to decisions on the final projects selected for support under this Regulation, under any other instrument of the Union, or to decisions for public funding.

3.    Only projects that are compatible with Union law and policies shall be listed on the InvestEU Portal.

4.    The Commission shall transmit projects that meet the conditions set out in paragraph 3 to the relevant implementing partners. Where appropriate and where an advisory initiative exists, the Commission shall also transmit such projects to the InvestEU Advisory Hub.

5.    Implementing partners shall examine projects falling within their geographic and activity scope.

CHAPTER VIII

ACCOUNTABILITY, monitoring and reporting, evaluation and control

Article 26

Accountability

1.    At the request of the European Parliament or of the Council, the Chairperson of the Steering Board shall report on the performance of the InvestEU Fund to the requesting institution, including by participating in a hearing before the European Parliament.

2.    The Chairperson of the Steering Board shall reply orally or in writing to questions addressed to the InvestEU Fund by the European Parliament or by the Council within five weeks of their receipt.

Article 27

Monitoring and reporting

1.    Indicators for reporting on the progress of the InvestEU Programme towards the achievement of the general and specific objectives set out in Article 3 are set in Annex III.

2.    The performance reporting system shall ensure that data for monitoring implementation and results are collected in an efficient, effective and timely manner, and that those data allow for adequate risk and guarantee portfolio monitoring. To that end, proportionate reporting requirements shall be imposed on the implementing partners, the advisory partners and other recipients of Union funds, as appropriate.

3.    The Commission shall report on the implementation of the InvestEU Programme in accordance with Articles 241 and 250 of the Financial Regulation. In accordance with Article 41(5) of the Financial Regulation, the annual report shall provide information on the level of implementation of the Programme with respect to its objectives and performance indicators. For that purpose, each implementing partners shall provide on an annual basis the information necessary to allow the Commission to comply with its reporting obligations, including information on the operation of the EU guarantee.

4.    Every six months, each implementing partner shall submit a report to the Commission on the financing and investment operations covered by this Regulation, broken down by EU compartment and Member State compartment, as appropriate. Each implementing partner shall also submit information on the Member State compartment to the Member State whose compartment it implements. The report shall include an assessment of compliance with the requirements on the use of the EU guarantee and with the key performance indicators laid down in Annex III to this Regulation. The report shall also include operational, statistical, financial and accounting data on each financing and investment operation and an estimation of expected cash flows, at the level of compartment, policy window and the InvestEU Fund. Once a year, the report from the EIB Group and, where appropriate, from other implementing partners, shall also include information on barriers to investment encountered when carrying out financing and investment operations covered by this Regulation. The reports shall contain the information the implementing partners have to provide under point (a) of Article 155(1) of the Financial Regulation.

5.    To ensure the effective assessment of the progress of the InvestEU Programme towards the achievement of its objectives, the Commission is empowered to adopt delegated acts in accordance with Article 33 in order to amend this Regulation by reviewing or complementing the indicators set in Annex III where considered necessary and the provisions on the establishment of a monitoring and evaluation framework.

Article 28

Evaluation 

1.    Evaluations of the InvestEU Programme shall be carried out so that they feed into the decision-making process in a timely manner.

2.    By 30 September 2024, the Commission shall submit to the European Parliament and to the Council an independent interim evaluation report on the InvestEU Programme, in particular on the use of the EU guarantee, on the fulfilment of the EIB Group's obligations under points (b) and (c) of Article 10(1), on the allocation of the EU guarantee provided for in Article 12(4) and (5), on the implementation of the InvestEU Advisory Hub, on the budgetary allocation provided for in point (d)(i) of Article 10(1), and on Article 7(6). The evaluation shall in particular demonstrate how the inclusion of the implementing partners and advisory partners in the implementation of the InvestEU Programme has contributed to the reaching of InvestEU Programme targets as well as EU policy goals, especially with regard to value added, geographical and sectoral balance of the supported financing and investment operations. The evaluation shall also assess the application of sustainability proofing pursuant to Article 7(3) and the focus on SMEs reached under the SME policy window referred to in point (c) of Article 7(1).

3.    At the end of the implementation of the InvestEU Programme, but no later than four years after the end of the period specified in Article 1(3), the Commission shall submit to the European Parliament and to the Council an independent final evaluation report on the InvestEU Programme, in particular on the use of the EU guarantee.

4.    The Commission shall communicate the conclusions of the evaluations, accompanied by its observations, to the European Parliament, to the Council, to the European Economic and Social Committee and to the Committee of Regions.

5.    The implementing partners and advisory partners shall contribute to and provide the Commission with the information necessary to perform the evaluations referred to in paragraphs 2 and 3.

6.    In accordance with Article 211(1) of the Financial Regulation, every three years the Commission shall include in the annual report referred to in Article 250 of the Financial Regulation a review of the adequacy of the provisioning rate laid down in Article 4(1) of this Regulation with respect to the actual risk profile of the financing and investment operations covered by the EU guarantee. The Commission is empowered to adopt delegated acts in accordance with Article 33 of this Regulation in order to amend this Regulation by adjusting the provisioning rate laid down in Article 4(1) of this Regulation by up to 15 % on the basis of that review.

Article 29

Audits

Audits of the use of the Union funding carried out by persons or entities, including by persons or entities other than those mandated by Union institutions or bodies, shall form the basis of the overall assurance pursuant to Article 127 of the Financial Regulation.

Article 30

Protection of the financial interests of the Union

Where a third country participates in the InvestEU Programme by a decision under an international agreement or by virtue of any other legal instrument, the third country shall grant the necessary rights and access required for the authorising officer responsible, the European Anti-Fraud Office (OLAF), the European Court of Auditors to comprehensively exert their respective competences. In the case of OLAF, such rights shall include the right to carry out investigations, including on-the-spot checks and inspections, provided for in Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council concerning investigations conducted by the European Anti-Fraud Office (OLAF).

CHAPTER IX

TransParency and visibility 

Article 31

Information, communication and publicity

1.    Implementing partners and advisory partners shall acknowledge the origin and ensure the visibility of the Union funding (in particular when promoting the actions and their results), by providing coherent, effective and targeted information to multiple audiences, including the media and the public.

The application of the requirements under the first subparagraph to projects in the defence and space sectors shall be subject to respect for any confidentiality or secrecy obligations.

2.    The implementing partners and advisory partners shall inform the final recipients, including SMEs, of the existence of InvestEU Programme support, or oblige other financial intermediaries to inform such final recipients of that support, by making that information clearly visible in the relevant agreement providing InvestEU Programme support, particularly in the case of SMEs, in order to increase public awareness and improve visibility.

3.    The Commission shall implement information and communication actions relating to the InvestEU Programme and its actions and results. Financial resources allocated to the InvestEU Programme shall also contribute to the corporate communication of the political priorities of the Union, insofar as those priorities are related to the objectives referred to in Article 3.

CHAPTER X

TRANSITIONAL AND FINAL PROVISIONS

Article 32

Participation in a capital increase of the European Investment Fund

The Union shall subscribe shares in forthcoming capital increases of the European Investment Fund so that its relative share in the capital remains at current level. The subscription of the shares and the payment of up to EUR 900 000 000 of the paid-in part of the shares shall be carried out in accordance with the terms and conditions that shall be approved by the General Meeting of the Fund.

Article 33

Exercise of the delegation

1.    The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article. Where delegated acts concern activities to be carried out by or involving the EIB Group and other implementing partners, the Commission shall consult with the EIB Group and other potential implementing partners before preparing those delegated acts.

2.    The power to adopt delegated acts referred to in Articles 7(7), 21(4), 27(5) and 28(6) shall be conferred on the Commission until 31 December 2028. The Commission shall draw up a report in respect of the delegation of power not later than nine months before the end of the five-year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such extension not later than three months before the end of each period.

3.    The delegation of power referred to in Articles 7(7), 21(4), 27(5) and 28(6) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.

4.    Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making.

5.    As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

6.    A delegated act adopted pursuant to Articles 7(7), 21(4), 27(5) and 28(6) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council.

Article 34

Transitional provisions

1.    By derogation to the first and last subparagraphs of Article 209(3) of the Financial Regulation, revenues, repayments and recoveries from financial instruments established by programmes referred to in Annex IV to this Regulation may be used for the provisioning of the EU guarantee under this Regulation, taking into account Article [4] of Regulation [the public sector loan facility].

2.    By derogation to point (a) of Article 213(4) of the Financial Regulation, any surplus of provisions for the EU guarantee established by Regulation (EU) 2015/1017 may be used for the provisioning of the EU guarantee under this Regulation, taking into account Article [4] of [Regulation][the public sector loan facility].

3.     The amount of EUR 33 000 440 000 (current prices) referred to in point (i) of Article 3(2)(c) of Regulation [EURI] shall be used:

(a)for the provisioning of the EU guarantee under this Regulation with an amount of EUR 32 800 000 000 (current prices), in addition to the resources mentioned in the first subparagraph of Article 211(4) of the Financial Regulation,

(b)for the implementation of the measures provided in Chapters V and VI and the measures referred to in the second sentence of Article 2(2) of Regulation [EURI], subject to Article 4(4) and (8) of that Regulation, with an amount of EUR 200 440 000 (current prices).

This amount shall constitute an external assigned revenue in accordance with Article 21(5) of the Financial Regulation.

Article 35

Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

It shall apply from 1 January 2021.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

LEGISLATIVE FINANCIAL STATEMENT

Contents

1.FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1.Title of the proposal/initiative

1.2.Policy area(s) concerned (Programme cluster)

1.3.The proposal/initiative relates to:

1.4.Grounds for the proposal/initiative

1.4.1.Requirement(s) to be met in the short or long term including a detailed timeline for roll-out of the implementation of the initiative

1.4.2.Added value of Union involvement (it may result from different factors, e.g. coordination gains, legal certainty, greater effectiveness or complementarities). For the purposes of this point 'added value of Union involvement' is the value resulting from Union intervention which is additional to the value that would have been otherwise created by Member States alone.

1.4.3.Lessons learned from similar experiences in the past

1.4.4.Compatibility and possible synergy with other appropriate instruments

1.5.Duration and financial impact

1.6.Management mode(s) planned

2.MANAGEMENT MEASURES

2.1.Monitoring and reporting rules

2.2.Management and control system(s)

2.2.1.Justification of the management mode(s), the funding implementation mechanism(s), the payment modalities and the control strategy proposed

2.2.2.Information concerning the risks identified and the internal control system(s) set up to mitigate them

2.2.3.Estimation and justification of the cost-effectiveness of the controls (ratio of "control costs ÷ value of the related funds managed"), and assessment of the expected levels of risk of error (at payment & at closure)

2.3.Measures to prevent fraud and irregularities

3.ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE

3.1.Heading of the multiannual financial framework and new expenditure budget line(s) proposed

3.2.Estimated impact on expenditure

3.2.1.Summary of estimated impact on expenditure

3.2.2.Summary of estimated impact on appropriations of an administrative nature

3.3.Estimated impact on revenue

LEGISLATIVE FINANCIAL STATEMENT

1.FRAMEWORK OF THE PROPOSAL/INITIATIVE 

1.1.Title of the proposal/initiative 

1.2.Policy area(s) concerned (Programme cluster)

1.3.The proposal/initiative relates to: 

◻ a new action 

◻ a new action following a pilot project/preparatory action 46  

◻ the extension of an existing action 

x a merger or redirection of one or more actions towards another/a new action

1.4.Grounds for the proposal/initiative 

1.4.1.Requirement(s) to be met in the short or long term including a detailed timeline for roll-out of the implementation of the initiative

1.4.2.Added value of Union involvement (it may result from different factors, e.g. coordination gains, legal certainty, greater effectiveness or complementarities). For the purposes of this point 'added value of Union involvement' is the value resulting from Union intervention which is additional to the value that would have been otherwise created by Member States alone.

1.4.3.Lessons learned from similar experiences in the past

1.4.4.Compatibility and possible synergy with other appropriate instruments

1.5.Duration and financial impact 

x limited duration

–x    in effect from 01/01/2021to 31/12/2027

–Financial impact from 2021 to 2027 for commitment appropriations and from 2021 to 2030 for payment appropriations for the provisioning of the EU guarantee

◻ unlimited duration

–Implementation with a start-up period from YYYY to YYYY,

–followed by full-scale operation.

1.6.Management mode(s) planned 47  

x Direct management by the Commission

–x by its departments, including by its staff in the Union delegations;

–◻    by the executive agencies

◻ Shared management with the Member States

x Indirect management by entrusting budget implementation tasks to:

–◻ third countries or the bodies they have designated;

–x international organisations and their agencies (to be specified);

–x the EIB and the European Investment Fund;

–◻ bodies referred to in Articles 70 and 71 of the Financial Regulation;

–x public law bodies;

–x bodies governed by private law with a public service mission to the extent that they provide adequate financial guarantees;

–x bodies governed by the private law of a Member State that are entrusted with the implementation of a public-private partnership and that provide adequate financial guarantees;

–◻ persons entrusted with the implementation of specific actions in the CFSP pursuant to Title V of the TEU, and identified in the relevant basic act.

Comments

2.MANAGEMENT MEASURES 

2.1.Monitoring and reporting rules 

2.2.Management and control system(s) 

2.2.1.Justification of the management mode(s), the funding implementation mechanism(s), the payment modalities and the control strategy proposed

2.2.2.Information concerning the risks identified and the internal control system(s) set up to mitigate them

2.2.3.Estimation and justification of the cost-effectiveness of the controls (ratio of "control costs ÷ value of the related funds managed"), and assessment of the expected levels of risk of error (at payment & at closure) 

2.3.Measures to prevent fraud and irregularities 

3.ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE 

3.1.Heading of the multiannual financial framework and new expenditure budget line(s) proposed 

3.2.Estimated impact on expenditure 

3.2.1.Summary of estimated impact on expenditure 

EUR million (to three decimal places)

In addition to the financial envelope defined in the above tables, EUR 33 000,440 million (in current prices) will be available as external assigned revenues, within the meaning of Article 21(5) of the Financial Regulation as financing from the European Union Recovery Instrument. Out of this up to EUR 8,960 million may be dedicated to administrative expenditure, including external staff costs.

A specific amount of EUR 191 million will be needed to cover advisory services, technical assistance and other accompanying measures.

The indicative breakdown of the expenditure from external assigned revenue is as follows:

EUR million (to three decimal places)

EUR million (to three decimal places)

3.2.2.Summary of estimated impact on appropriations of an administrative nature

–◻    The proposal/initiative does not require the use of appropriations of an administrative nature

–x The proposal/initiative requires the use of appropriations of an administrative nature, as explained below:

EUR million (to three decimal places)

The appropriations required for human resources and other expenditure of an administrative nature will be met by appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.

3.2.2.1.Estimated requirements of human resources

–◻    The proposal/initiative does not require the use of human resources.

–x    The proposal/initiative requires the use of human resources, as explained below:

Estimate to be expressed in full time equivalent units

DG ECFIN/BUDG is the policy area or budget title concerned.

The human resources required will be met by staff from the DG who are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints. Additional external staff will be solely financed from assigned revenues.

Description of tasks to be carried out:

3.3.Estimated impact on revenue 

–◻    The proposal/initiative has no financial impact on revenue.

–x    The proposal/initiative has the following financial impact:

–◻    on own resources

–x    on other revenue

please indicate, if the revenue is assigned to expenditure lines x    

EUR million (to three decimal places)

According to Article 28(1) of the proposal, revenues, repayments and recoveries will be assigned to the following expenditure budget line: 02.02.02 Provisioning of the InvestEU Guarantee + 02.02.03 InvestEU Advisory Hub, Portal and accompanying measures.

Other remarks (e.g. method/formula used for calculating the impact on revenue or any other information): Assigned revenues from InvestEU will firstly be allocated to cover fees.

[These revenues do not concern revenues generated under the EURI Regulation proposal].

(1)    COM (2018)439.

(2)    2018/229 (COD).

(3)    COM(2020)102.

(4)    i.e. they  should have their registered office in a Member State and they should be active in the Union in the sense that they have substantial activities in terms of staff, manufacturing, research and development or other business activities in the Union.

(5)    COM(2020)102.

(6)    SWD(2018)316 final.

(7)    http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52016SC0297&from=EN

(8)    https://www.eca.europa.eu/Lists/News/NEWS1611_11/OP16_02_EN.pdf

(9)    http://www.eib.org/infocentre/publications/all/evaluation-of-the-functioning-of-the-efsi.htm

(10)    https://ec.europa.eu/commission/publications/independent-evaluation-investment-plan_en

(11)    http://ec.europa.eu/transparency/regdoc/rep/1/2016/EN/COM-2016-764-F1-EN-MAIN.PDF

(12)    https://www.eca.europa.eu/en/Pages/DocItem.aspx?did=44174

(13)    This was a subpart of the OPC on Investment, research and innovation, SMEs and single market.https://ec.europa.eu/info/consultations/public-consultation-eu-funds-area-investment-research-innovation-smes-and-single-market_en

(14)    OJ L 169, 1.7.2015, p. 1.

(15)    https://ec.europa.eu/info/sites/info/files/economy-finance/efsi_evaluation_-_final_report.pdf

(16)    SWD(2018) 314 final.

(17)     https://ec.europa.eu/transparency/regdoc/rep/2/2018/EN/SEC-2018-293-1-EN-MAIN-PART-1.PDF

(18)    SWD(2018)314 final.

(19)    COM(2020)442 final.

(20)    Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making of 13 April 2016 (OJ L 123, 12.5.2016, p. 1).

(21)    Regulation (EU) 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the European Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project Portal and amending Regulations (EU) No 1291/2013 and (EU) No 1316/2013 – the European Fund for Strategic Investments (OJ L 169, 1.7.2015, p. 1).

(22)    OJ C […], […], p. […].

(23)    OJ C […], […], p. […].

(24)

   OJ L 282, 19.10.2016, p. 4.

(25)    COM(2018)353.

(26)    OJ L 309, 13.12.1993, p. 3.

(27)    Directive (EU) 2016/2284 of the European Parliament and of the Council of 14 December 2016 on the reduction of national emissions of certain atmospheric pollutants, amending Directive 2003/35/EC and repealing Directive 2001/81/EC (OJ L 344, 17.12.2016, p. 1).

(28)    Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (OJ L 328, 21.12.2018, p. 82).

(29)    Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council (OJ L 328, 21.12.2018, p. 1).

(30)

   Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1).

(31)    COM(2018)323 final.

(32)    Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (OJ L 209, 2.8.1997, p.1).

(33)    Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure (OJ L 209, 2.8.1997, p. 6).

(34)    Regulation (EU) 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the European Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project Portal and amending Regulations (EU) No 1291/2013 and (EU) No 1316/2013 — the European Fund for Strategic Investments (OJ L 169, 1.7.2015, p.1).

(35)    OJ L 123, 12.5.2016, p. 1.

(36)    Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999 (OJ L248, 18.9.2013, p. 1).

(37)    Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests (OJ L 312, 23.12.1995, p. 1).

(38)    Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities' financial interests against fraud and other irregularities (OJ L 292, 15.11.1996, p. 2).

(39)    Council Regulation (EU) 2017/1939 of 12 October 2017 implementing enhanced cooperation on the establishment of the European Public Prosecutor’s Office (‘the EPPO’) (OJ L 283, 31.10.2017, p. 1).

(40)    Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union's financial interests by means of criminal law (OJ L 198, 28.7.2017, p. 29).

(41)    SEC(2018)310; SWD(2018)337.

(42)    COM(2020)22 final.

(43)    Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (OJ L 124, 20.5.2003, p. 36).

(44)    As referred to in Article 58(2)(a) or (b) of the Financial Regulation.

(45)    Details of management modes and references to the Financial Regulation may be found on the BudgWeb site: https://myintracomm.ec.europa.eu/budgweb/EN/man/budgmanag/Pages/budgmanag.aspx  

(46)    Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations.

(47)    EFTA: European Free Trade Association.

(48)    Candidate countries and, where applicable, potential candidates from the Western Balkans.

(49)    External assigned revenue

(50)      Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research.

(51)    AC= Contract Staff; AL = Local Staff; END = Seconded National Expert; INT = agency staff; JPD= Junior Professionals in Delegations.

(52)    Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines).

(53)    As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net amounts, i.e. gross amounts after deduction of 20 % for collection costs.

EUROPEAN COMMISSION

Brussels, 29.5.2020

COM(2020) 403 final

ANNEX

to the

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

establishing the InvestEU Programme

ANNEX II
Areas eligible for financing and investment operations

The financing and investment operations under other windows than the strategic European investment window may fall under one or more of the following areas:

The financing and investment operations under the strategic European investment window shall fall under the areas laid down in point (e) of Article 7(1). They may in particular include Important Projects of Common European Interest.

1.    The development of the energy sector in accordance with the Energy Union priorities, including security of energy supply, clean energy transition and the commitments taken under the 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change, in particular through:

(a)    the expansion of the generation, supply or use of clean and sustainable renewable and safe and sustainable other zero and low-emission energy sources and solutions;

(b)    energy efficiency and energy savings (with a focus on reducing demand through demand side management and the refurbishment of buildings);

(c)    the development, smartening and modernisation of sustainable energy infrastructure in particular, but not only transmission and distribution level, storage technologies, electricity interconnection between Member States and smart grids;

(d)    the development of innovative zero- and low-emission heat supply systems and the combined production of electricity and heat;

(e)    the production and supply of sustainable synthetic fuels from renewable/carbon-neutral sources and other safe and sustainable zero- and low-emission sources, biofuels, biomass and alternative fuels, including fuels for all modes of transport, in accordance with the objectives of Directive 2018/2001 of the European Parliament and of the Council 1  ; and

(f)    infrastructure for carbon capture, and storage in industrial processes, bioenergy plants and manufacturing facilities towards the energy transition.

2.    The development of sustainable and safe transport infrastructures and mobility solutions, equipment and innovative technologies in accordance with Union transport priorities and the commitments taken under the Paris Agreement on Climate Change, in particular through:

(a)    projects that support the development of the trans-European transport network (TEN-T) infrastructure, including infrastructure maintenance and safety, the urban nodes of TEN-T, maritime and inland ports, airports, multimodal terminals and the connection of such multimodal terminals to the TEN-T networks, and the telematic applications referred to in Regulation (EU) No 1315/2013 of the European Parliament and of the Council 2  ;

(b)    TEN-T infrastructure projects that make provision for the use of at least two different modes of transport, in particular multimodal freight terminals and passenger transport hubs;

(c)    smart and sustainable urban mobility projects that target low-emission urban transport modes, including inland waterway solutions and innovative mobility solutions, non-discriminatory accessibility, reduced air pollution and noise, energy consumption,  networks of smart cities, maintenance, and increasing safety levels and decreasing the frequency of accidents, including for cyclists and pedestrians);

(d)    supporting the renewal and retrofitting of transport mobile assets with the view of deploying low and zero-emission mobility solutions, including through the use of alternative fuels in vehicles of all transport modes;

(e)    railway infrastructure, other rail projects, inland waterway infrastructure, mass transit projects and maritime ports and motorways of the sea;

(f)    alternative fuel infrastructure for all modes of transport, including electric charging infrastructure;

(g)    other smart and sustainable mobility projects that target:

(i)    road safety;

(ii)    accessibility;

(iii)    emission reduction; or

(iv)    the development and deployment of new transport technologies and services such as services that relate to connected and autonomous modes of transport or integrated ticketing; and

(h)    projects to maintain or upgrade existing transport infrastructure, including motorways on the TEN-T where necessary to upgrade, maintain or improve road safety, to develop Intelligent Transport Systems (ITS) services or to guarantee infrastructure integrity and standards, to develop safe parking areas and facilities, recharging and refuelling stations for alternative fuels.

3.    Environment and resources, in particular with respect to:

(a)    water, including drinking water supply and sanitation, and network efficiency, leakage reduction, infrastructure for the collection and treatment of waste water, coastal infrastructure and other water-related green infrastructure;

(b)    waste management infrastructure;

(c)    projects and enterprises in the fields of environmental resource management and sustainable technologies;

(d)    the enhancement and restoration of eco systems and their services including through the enhancement of nature and biodiversity by means of green and blue infrastructure projects;

(e)    sustainable urban, rural and coastal development;

(f)    climate change actions, climate adaptation and mitigation, including natural hazard disaster risk reduction;

(g)    projects and enterprises that implement the circular economy by integrating resource efficiency aspects in the production and product life-cycle, including the sustainable supply of primary and secondary raw materials;

(h)    the decarbonisation of energy-intensive industries and the substantial reduction of emissions in such industries, including the demonstration of innovative low-emission technologies and their deployment;

(i)    the decarbonisation of the energy production and distribution chain by phasing out the use of coal and oil; and

(j)    projects that promote sustainable cultural heritage.

4.    The development of digital connectivity infrastructure, in particular through projects that support the deployment of very high capacity digital networks, 5G connectivity or that improve digital connectivity and access, particularly in rural areas and peripheral regions.

5.    Research, development and innovation, in particular through:

(a)    research and innovation projects that contribute to the objectives of Horizon Europe, including research infrastructure and support to academia;

(b)    corporate projects, including training and promoting the creation of clusters and business networks;

(c)    demonstration projects and programmes, as well as deployment of related infrastructures, technologies and processes;

(d)    collaborative research and innovation projects involving academia, research and innovation organisations and industry; public-private partnerships and civil society organisations;

(e)    knowledge and technology transfer;

(f)    research in the field of key enabling technologies (KETs) and their industrial applications, including new and advanced materials; and

(g)    new effective and accessible healthcare products, including pharmaceuticals, medical devices, diagnostics and advanced therapy medicinal products, new antimicrobials and innovative development process that avoid using animal testing.

6.    The development, deployment and scaling-up of digital technologies and services, especially digital technologies and services that contribute to the objectives of the Digital Europe programme, in particular through: 

(a)    artificial intelligence;

(b)    quantum technology;

(c)    cybersecurity and network protection infrastructures;

(d)    the internet of things;

(e)    blockchain and other distributed ledger technologies;

(f)    advanced digital skills;

(g)    robotics and automatisation;

(h)    photonics; and

(i)    other advanced digital technologies and services contributing to the digitisation of the Union industry and the integration of digital technologies, services and skills in the transport sector of the Union.

7.    Financial support to entities employing up to 499 employees, with a particular focus on SMEs, and small mid-cap companies, in particular through:

(a)    the provision of working capital and investment;

(b)    the provision of risk financing from seed to expansion stages to ensure technological leadership in innovative and sustainable sectors, including enhancing their digitisation and innovation capacity and to ensure their global competitiveness;

(c)    the provision of financing for the acquisition of a business by employees or participation in the ownership of a business by employees.

8.    Cultural and creative sectors, cultural heritage, media, the audio-visual sector, journalism and press, in particular through but not only the development of new technologies, the use of digital technologies and technological management of intellectual property rights.

9.    Tourism.

10.    The rehabilitation of industrial sites (including contaminated sites) and the restoration of such sites for sustainable use.

11.    Sustainable agriculture, forestry, fishery, aquaculture and other elements of the wider sustainable bioeconomy.

12.    Social investments, including those supporting the implementation of the European Pillar of Social Rights, in particular through:

(a)    microfinance, ethical, social enterprise finance and social economy;

(b)    demand for and the supply of skills;

(c)    education, training and related services, including for adults;

(d)    social infrastructure, in particular:

(i)    inclusive education and training, including early childhood education and care, and related educational infrastructure and facilities, alternative childcare, student housing and digital equipment, that are accessible for all;

(ii)    affordable social housing; 3

(iii)    health and long-term care, including clinics, hospitals, primary care, home services and community-based care;

(e)    social innovation, including innovative social solutions and schemes aimed at promoting social impacts and outcomes in the areas referred to in point 12;

(f)    cultural activities with a social objective;

(g)    measures to promote gender equality;

(h)    the integration of vulnerable people, including third country nationals;

(i)    innovative health solutions, including e-health, health services and new care models;

(j)    the inclusion of and accessibility for persons with disabilities.

13.    The development of the defence industry in order to contribute to the Union's strategic autonomy, in particular through support for:

(a)    the Union’s defence industry supply chain, in particular through financial support to SMEs and mid-caps;

(b)    companies participating in disruptive innovation projects in the defence sector and closely related dual-use technologies;

(c)    the defence sector supply chain when participating in collaborative defence research and development projects, including those supported by the European Defence Fund;

(d)    infrastructure for defence research and training.

14.    Space, in particular in relation to the development of the space sector in line with Space Strategy objectives:

(a)    to maximize the benefits for the Union society and economy;

(b)    to foster the competitiveness of space systems and technologies, addressing in particular vulnerability of supply chains;

(c)    to underpin space entrepreneurship, including downstream development;

(d)    to foster Union's autonomy for safe and secure access to space, including dual use aspects.

15.    Seas and oceans, through the development of projects and enterprises in the area of the blue economy, and the Sustainable Blue Economy Finance Principles, in particular through maritime entrepreneurship and industry, renewable marine energy and circular economy.

(1)    Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (OJ L 328, 21.12.2018, p. 82).

(2)    Regulation (EU) No 1315/2013 of the European Parliament and of the Council of 11 December 2013 on Union guidelines for the development of the trans-European transport network and repealing Decision No 661/2010/EU (OJ L 348, 20.12.2013, p.1).

(3)    Affordable social housing is to be understood as aimed at disadvantaged persons or socially less advantaged groups, who due to solvency constraints live in severe housing deprivation or are unable to obtain housing at market conditions.

EUROPEAN COMMISSION

Brussels, 29.5.2020

COM(2020) 403 final

ANNEX

to the

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

establishing the InvestEU Programme

ANNEX III
Key performance indicators

1. Volume of financing supported by the InvestEU Fund (broken down by policy window)

1.1 Volume of operations signed

1.2 Investment mobilised

1.3 Amount of private finance mobilised

1.4 Leverage and multiplier effect achieved

2. Geographical coverage of financing supported by the InvestEU Fund (broken down by policy window, country and region at the common classification of territorial units for statistics (NUTS) 2 level)

2.1 Number of countries (Member States and third countries) covered by operations

2.2 Number of regions covered by operations

2.3 Volume of operations per country (Member State and third country) and per region

3.  Impact of financing through the InvestEU Fund

3.1 Number of jobs created or supported

3.2 Investment supporting climate objectives and, where applicable, broken down by policy window

3.3 Investment supporting digitalisation

3.4. Investment supporting industrial transition

4. Sustainable infrastructure

4.1 Energy: Additional renewable and other safe and sustainable zero and low-emission energy generation capacity installed (in megawatts (MW))

4.2 Energy: Number of households, number of public and commercial premises with improved energy consumption classification

4.3 Energy: Estimated energy savings generated by the projects (in kilowatt-hours (kWh))

4.4 Energy: Annual green-house gas emissions reduced/avoided in tonnes of CO2 equivalent

4.5 Energy: Volume of investment in the development, smartening and modernisation of sustainable energy infrastructure

4.6 Digital: Additional households, enterprises or public buildings with broadband access of at least 100 Mbps upgradable to gigabit speed, or number of WIFI-hotspots created

4.7 Transport: Investment mobilised, in particular in TEN-T

– Number of cross-border and missing links projects (including projects relating to urban nodes, regional cross-border rail connections, multimodal platforms, maritime ports, inland ports, connections to airports and rail-road terminals of the TEN-T core and comprehensive network)

– Number of projects contributing to the digitalisation of transport, in particular through the deployment of European Rail Traffic Management System (ERTMS), River Information System (RIS), Intelligent Transportation System (ITS), vessel traffic monitoring and information system (VTMIS)/e-maritime services and Single European Sky ATM Research (SESAR)

– Number of alternative fuel supply points built or upgraded

– Number of projects contributing to the safety of transport

4.8 Environment: Investment contributing to the implementation of plans and programmes required by the Union environmental acquis relating to air quality, water, waste and nature

5. Research, innovation and digitisation

5.1 Contribution to the objective of 3 % of the Union's gross domestic product (GDP) invested in research, development and innovation

5.2 Number of enterprises supported by size carrying out research and innovation projects

6. SMEs

6.1 Number of enterprises supported by size (micro, small, medium-sized and small mid-cap companies)

6.2 Number of enterprises supported by stage (early, growth/expansion)

6.3 Number of enterprises supported by Member State and region at NUTS 2 level

6.4 Number of enterprises supported by sectors by statistical classification of economic activities in the European Union (NACE) code

6.5 Percentage of investment volume under the SME policy window directed towards SMEs

7. Social investment and skills

7.1 Social infrastructure: Capacity and access to supported social infrastructure by sector: housing, education, health, other

7.2 Microfinance and social enterprise finance:  Number of microfinance recipients and social enterprises supported

7.3 Skills: Number of individuals acquiring new skills or having their skills validated and certified: formal, education and training qualification

8. Strategic European investment

8.1 Number and volume of operations contributing to the provision of critical infrastructure, broken down by physical infrastructure and the associated goods and services, where applicable

8.2 Additional Capacity of critical infrastructure, broken down by areas, where applicable

8.3 Number and volume of operations contributing to the development of critical technologies and inputs for the security of the Union and its Member States, and dual use items

8.4 Number of enterprises supported by size developing and manufacturing critical technologies and inputs for the security of the Union and its Member States, and dual use items

8.5 Number and volume of operations contributing to the supply, manufacturing and stockpiling of critical inputs, including critical healthcare provisions

8.6 Additional critical inputs, including critical healthcare provisions, supported for supply, manufacturing and stockpiling, by type, where applicable

8.7 Number and volume of operations supporting key enabling and digital technologies that are strategically important for the Union’s industrial future.