(1)

The economic and financial crisis has led to a lowering of the level of investments within the Union. Investment has fallen by approximately 15 % since its peak in 2007. The Union suffers in particular from a lack of investment as a consequence of market uncertainty regarding the economic future and the fiscal constraints on Member States. This lack of investment slows economic recovery and negatively affects job creation, long-term growth prospects and competitiveness.

(1)

The economic and financial crisis has led to a lowering of the level of investments within the Union. Investment has fallen by approximately 15 % since its peak in 2007 , affecting all European regions. The Union suffers in particular from a lack of investment as a consequence of market uncertainty regarding the economic future and the fiscal constraints on Member States. This lack of investment slows economic recovery and negatively affects job creation, long-term growth prospects and competitiveness. It therefore prevents the realisation of the EU2020 objectives for smart, sustainable and inclusive growth.

(2)

Comprehensive action is required to reverse the vicious circle created by a lack of investment. Structural reforms and fiscal responsibility are necessary preconditions for stimulating investment. Along with a renewed impetus towards investment financing, these preconditions can contribute to establishing a virtuous circle, where investment projects help support employment and demand and lead to a sustained increase in growth potential.

(2)

Comprehensive action is required to reverse the vicious circle created by a lack of investment. Structural reforms geared to combining sustainable growth, fiscal responsibility and more effective public action are necessary preconditions for stimulating long-term investment. Along with a renewed impetus towards investment financing, these preconditions can contribute to establishing a virtuous circle, where investment projects support employment and demand and lead to a sustained increase in growth potential.

(8)

The EFSI is part of a comprehensive approach to address uncertainty surrounding public and private investments. The strategy has three pillars: mobilising finance for investment, making investment reach the real economy and improving the investment environment in the Union.

(8)

The EFSI is part of a comprehensive approach to address uncertainty surrounding public and private investments. The strategy has three pillars: mobilising finance for investment, making investment reach the real economy and improving the investment environment in the Union. The strategy should be complementary to the objective of economic, social and territorial cohesion across the Union.

(10)

The purpose of the EFSI should be to help resolve the difficulties in financing and implementing productive investments in the Union and to ensure increased access to financing. It is intended that increased access to financing should be of particular benefit to small and medium enterprises. It is also appropriate to extend the benefit of such increased access to financing to mid-cap companies, which are companies having up to 3  000 employees. Overcoming Europe's current investment difficulties should contribute to strengthening the Union's economic, social and territorial cohesion.

(10)

The purpose of the EFSI should be to help resolve the difficulties in financing and implementing productive and strategic investments in the Union of economic and societal importance and to ensure increased access to financing. It is intended that increased access to financing should be of particular benefit to small and medium enterprises. It is also appropriate to extend the benefit of such increased access to financing to mid-cap companies, which are companies having up to 3  000 employees. In order to maximise access for SMEs and mid-cap companies to the proposed investments we need to avoid complexity and keep it simple.

(11)

The EFSI should support strategic investments with high economic value added contributing to achieving Union policy objectives.

(11)

The EFSI should support both large- and smaller-scale strategic investment contributing to achieving the European Union 's economic, social and territorial objectives under the Europe 2020 strategy for smart, sustainable and inclusive growth. The EFSI should complement the existing EU programmes, especially the European Structural and Investment Funds, and promote or accelerate higher risk projects capable of improving the overall efficacy of the Union economy and unleashing a momentum of added value creation for the European Union. The EFSI should pay special attention to more isolated and less developed regions so as not to further increase the investment gap as well as to encourage transnational cross-border investments. It should also give a greater say to local and regional authorities and focus on increasing their innovation capacity.

(14)

The EFSI should target projects delivering high societal and economic value. In particular, the EFSI should target projects that promote job creation, long-term growth and competitiveness. The EFSI should support a wide range of financial products, including equity, debt or guarantees, to best accommodate the needs of the individual project. This wide range of products should allow the EFSI to adapt to market needs whilst encouraging private investment in the projects. The EFSI should not be a substitute for private market finance but should instead catalyse private finance by addressing market failures so as to ensure the most effective and strategic use of public money. The requirement for consistency with State aid principles should contribute to such effective and strategic use.

(14)

The EFSI should target projects delivering high societal and economic value added . In particular, the EFSI should target projects that promote job creation, long-term sustainable growth, innovation and competitiveness. A clear set of project selection criteria as well as procedures for the follow-up phase should be set up. The EFSI should support a wide range of financial products, including loans, equity, debt or guarantees, to best accommodate the needs of the individual project. This wide range of products should allow the EFSI to adapt to market needs whilst encouraging private investment in the projects. The EFSI should not be a substitute for private market finance but should instead catalyse private finance by addressing market failures so as to ensure the most effective and strategic use of public money and as a means of further strengthening the Union's economic, social and territorial cohesion . The requirement for consistency with State aid principles should contribute to such effective and strategic use.

(15)

The EFSI should target projects with a higher risk-return profile than existing EIB and Union instruments to ensure additionality over existing operations. The EFSI should finance projects across the Union, including in the countries most affected by the financial crisis. The EFSI should only be used where financing is not available from other sources on reasonable terms .

(15)

The EFSI should target projects with a higher risk-return profile than existing EIB and Union instruments to ensure additionality over existing operations. The EFSI should finance projects across the Union, including in the countries most affected by the financial crisis. The EFSI should only be used where financing is not available from other sources. The higher risk must be justified by the impact of the investment on job levels, the economies of territories, particularly those affected by economic change, the consequences for global trends in investment, innovation and the environment. These criteria will have to be adjusted when applications are being examined in order to promote a balanced distribution between sectors and geographical areas.

(16)

The EFSI should target investments that are expected to be economically and technically viable, which may entail a degree of appropriate risk, whilst still meeting the particular requirements for EFSI financing.

(16)

The EFSI should target investments that are expected to be economically and technically viable, which may entail a degree of appropriate risk which would be excessive for private investors without EFSI support , whilst still meeting the particular requirements for EFSI financing.

(20a)

The Member States may, if the relevant conditions are met, use other funding instruments and the European Structural and Investment Funds (ESIF) to contribute to the financing of eligible projects that are supported by the EU guarantee, in accordance with the objectives, guarantees and rules of the legal framework that applies to these Funds.

The flexibility of this approach should maximise synergies between EU instruments and the potential to attract investors to the areas of investment targeted by the EFSI. The ESIF and EFSI should be complementary, and crowding out should be avoided as far as possible.

(20b)

In particular, the EFSI could support investment platforms at the territorial level, which would guarantee coherent and integrated development strategies at regional level by playing the role of regional hubs capable of mobilising all available resources.

(21)

Provided that all relevant eligibility criteria are fulfilled, Member States may use European Structural Investment Funds to contribute to the financing of eligible projects that are supported by the EU guarantee. The flexibility of this approach should maximise synergies between EU instruments and the potential to attract investors to the areas of investment targeted by the EFSI.

(22)

In accordance with the Treaty on the Functioning of the European Union, Infrastructure and project investments supported under EFSI should be consistent with State aid rules. To that end, the Commission has announced that it will formulate a set of core principles, for the purpose of State aid assessments, which a project will have to meet to be eligible for support under the EFSI. If a project meets these criteria and receives support from the EFSI, the Commission has announced that any national complementary support will be assessed under a simplified and accelerated State aid assessment whereby the only additional issue to be verified by the Commission will be the proportionality of public support (absence of overcompensation). The Commission has also announced that it will provide further guidance on the set of core principles with a view to ensuring an efficient use of public funds.

(22)

In accordance with the Treaty on the Functioning of the European Union, Infrastructure and project investments supported under EFSI should be consistent with State aid rules. To that end, the Commission has announced that it will formulate a set of core principles, for the purpose of State aid assessments, which a project will have to meet to be eligible for support under the EFSI. If a project meets these criteria and receives support from the EFSI, the Commission has announced that any national complementary support will be assessed under a simplified and accelerated State aid assessment whereby the only additional issue to be verified by the Commission will be the proportionality of public support (absence of overcompensation). The Commission has also announced that it will provide further guidance on the set of core principles with a view to ensuring an efficient use of public funds.  On this basis, the Commission should undertake   to apply a simplified procedure, albeit in a uniform manner, where State aid rules apply to infrastructure financing.

(25)

The EIB should regularly evaluate activities supported by the EFSI with a view to assessing their relevance, performance and impact and to identifying aspects that could improve future activities. Such evaluations should contribute to accountability and analysis of sustainability.

(25)

The EIB and the Commission should regularly evaluate activities supported by the EFSI with a view to assessing their relevance, performance and impact as well as their consistency and coordination with other Union policies and instruments, and in particular with the support from the European Structural and Investment Funds, and to identifying aspects that could improve future activities. Such evaluations should contribute to accountability and analysis of sustainability.

(25a)

The Advisory Committee monitors the financing policy of the EFSI, which submits a six-monthly summary of its activities to it. The Advisory Committee issues an opinion and draws up recommendations on eligibility criteria, theme-based and geographical distribution of investments and their additionality, as well as on their social and environmental impact. It is composed of equal numbers of representatives of the CoR and the European Economic and Social Committee (EESC).

(26)

Alongside the financing operations that will be conducted through the EFSI, a European Investment Advisory Hub (‘EIAH’) should be created. The EIAH should provide strengthened support for project development and preparation across the Union, by building on the expertise of the Commission, the EIB, national promotional banks and the managing authorities of the European Structural and Investment Funds. This should establish a single point of entry for questions related to technical assistance for investments within the Union.

(26)

Alongside the financing operations that will be conducted through the EFSI, a European Investment Advisory Hub (‘EIAH’) should be created. The EIAH should provide strengthened support for project development and preparation across the Union, by building on the expertise of the Commission, the EIB, national promotional banks and the managing authorities of the European Structural and Investment Funds. This should establish a single point of entry for questions related to technical assistance for investments within the Union. The EIAH should enable Member States and regions across the Union to benefit from free expertise so as to ensure fair access to EFSI financing. The regions could propose targeted initiatives to the EIAH to coordinate the technical assistance at regional or supra-regional level and thus optimise the available funds.

(29)

To partially finance the contribution from the Union budget , the available envelopes of the Horizon 2020 — the Framework Programme for Research and Innovation 2014-2020, provided by Regulation (EU) No 1291/2013 of the European Parliament and of the Council  (1) , and the Connecting Europe Facility, provided by Regulation (EU) No 1316/2013 of the European Parliament and of the Council  (2) , should be reduced. Those programmes serve purposes that are not replicated by the EFSI. However, the reduction of both programmes to finance the guarantee fund is expected to ensure a greater investment in certain areas of their respective mandates than is possible through the existing programmes. The EFSI should be able to leverage the EU guarantee to multiply the financial effect within those areas of research, development and innovation and transport, telecommunications and energy infrastructure compared to if the resources had been spent via grants within the planned Horizon 2020 and Connecting Europe Facility programmes. It is, therefore, appropriate to redirect part of the funding presently envisaged for those programmes to the benefit of EFSI.

(29)

The contribution from the Union budget will be progressively authorised by the European Parliament and the Council in the framework of the annual budgetary procedures up to 2020 . In particular, appropriations from the EU budget that are unspent at the end of the budgetary year should be systematically transferred to the guarantee fund. For this purpose, the budgetary authority should make use, where appropriate, of all available flexibility mechanisms and other relevant provisions under Council Regulation (EU, Euratom) No 1311/2013 .

(29a)

The budgets for the Horizon 2020 programme and Connecting Europe Facility should be reduced only after all options for flexibility under the European budget have been exhausted.

Should cuts in the budget for Horizon 2020 prove to be unavoidable, they should be designed to ensure that they do not jeopardise the full implementation of Horizon 2020 or undermine the particular importance of basic research. In this case, the ‘access to risk finance’ component should make a clear contribution to the financing of the EFSI. Where it is impossible to avoid using Horizon 2020 resources in connection with the fund, they should be used for their original purpose, and there should be opportunities for universities and research institutions to participate.

Reducing the budget for the Connecting Europe Facility will in no way affect the amount transferred from the Cohesion Fund and earmarked for transport projects in the Member States eligible for this fund.

(31)

Within the Union, there are a significant number of potentially viable projects that are not being financed due to a lack of certainty and transparency with respect to such projects. Often, this is because private investors are not aware of the projects or have insufficient information to make an assessment of the investment risks. The Commission and the EIB, with support from the Member States, should promote the creation of a transparent pipeline of current and future investment projects in the Union suitable for investment. This ‘project pipeline’ should ensure that information is made publicly available regarding investment projects on a regular and structured basis to ensure that investors have reliable information on which to base their investment decisions.

(31)

Within the Union, there are a significant number of potentially viable projects that are not being financed due to a lack of certainty and transparency with respect to such projects. Often, this is because private investors are not aware of the projects or have insufficient information to make an assessment of the investment risks. The Commission and the EIB, with support from the Member States and their local and regional authorities , should promote the creation of a transparent pipeline of current and future investment projects in the Union suitable for investment. This ‘project pipeline’ should ensure that information is made publicly available regarding investment projects on a regular and structured basis to ensure that investors have reliable information on which to base their investment decisions.

(31a)

If projects are to be included in the project pipeline for visibility reasons, it will be necessary to provide, in addition to information on the economic viability of the projects, information on compliance with social and environmental requirements and compatibility with the aims of the regional development strategies. A six-monthly summary report will be sent to the Advisory Committee.

(32)

Member States have also begun work at national level on establishing and promoting project pipelines for projects of national significance. The information prepared by the Commission and the EIB should provide links to the accompanying national project pipelines.

(32)

Member States have also begun work at national level on establishing and promoting project pipelines for projects of national , regional and local significance. This work has also been undertaken for cross-border projects involving cooperation between different Member States. Furthermore these Member States shall work together with local and regional authorities in line with the subsidiarity principle. The information prepared by the Commission and the EIB should provide links to the accompanying national and cross-border project pipelines. Regional and local authorities including regional innovation platforms, regional development agencies and management authorities of the European Structural and Investment Funds are a crucial source of information on current and future investment opportunities.

(34)

To ensure accountability to European citizens, the EIB should regularly report to the European Parliament and the Council on the progress and impact of the EFSI.

(34)

To ensure accountability to European citizens, the Commission and the EIB should regularly report to the European Committee of the Regions, the European Parliament and the Council on the progress and impact of the EFSI and its complementarity with other EU policies and instruments .

(1)

‘National promotional banks or institutions’ means legal entities carrying out a financial activity on a professional basis and upon which are conferred a public mandate by a Member State, whether at central, regional or local level, to carry out public development or promotional activities on a non-commercial basis, seeking to address market failures;

(2)

‘Investment platform’ shall be taken to mean a co-financing, risk sharing or other financial contribution mechanism established to finance a project or group of projects. An investment platform may be regional, national, cross-border or sectoral, whose aim is to ensure coherence with local and regional investment strategies and, if appropriate, the operational programmes of the European Structural and Investment Funds.

—

the EIB;

—

the Commission;

—

national promotional banks;

—

regional development banks and/or agencies;

—

managing authorities of the European Structural and Investment Funds.

(a)

development of infrastructure, including in the areas of transport, particularly in industrial centres ; energy, in particular energy interconnections; and digital infrastructure;

(a)

development of disaster-resilient infrastructure in the areas of transport; energy, in particular energy interconnections; and digital infrastructure;

(b)

investment in education and training, health, research and development, information and communications technology and innovation;

(b)

investment in education and training, health, research and development, digitisation of public services, digital applications and innovation;

(c)

expansion of renewable energy and energy and resource efficiency;

(c)

expansion of renewable energy and energy and resource efficiency;

(d)

infrastructure projects in the environmental, natural resources, urban development and social fields;

(d)

infrastructure projects in the environmental, natural resources, urban development and social fields;

(e)

providing financial support for the companies referred to in Article 1(1), including working capital risk financing.

(e)

providing financial support for the companies referred to in Article 1(1), including working capital risk financing.

1)

In Article 6, paragraphs 1, 2 and 3 are replaced by the following:

‘1.     The financial envelope for the implementation of Horizon 2020 is set at EUR 74  328,3 million in current prices, of which a maximum of EUR 71  966,9 million shall be allocated to activities under Title XIX TFEU.

The annual appropriations shall be authorised by the European Parliament and by the Council within the limits of the multiannual financial framework.

2.     The amount for activities under Title XIX TFEU shall be distributed among the priorities set out in Article 5(2) of this Regulation as follows:

The maximum overall amount for the Union financial contribution from Horizon 2020 to the specific objectives set out in Article 5(3) and to the non-nuclear direct actions of the JRC shall be as follows:

The indicative breakdown for the priorities and specific objectives set out in Article 5(2) and (3) is set out in Annex II.

3.     The EIT shall be financed through a maximum contribution from Horizon 2020 of EUR 2  361,4 million in current prices as set out in Annex II.’

2)

Annex II is replaced by the text in Annex I to this Regulation.