Regulation (EU) 2015/1017 of the European Parliament and of the CouncilShow full title

CHAPTER II U.K. EUROPEAN FUND FOR STRATEGIC INVESTMENTS

Article 3 U.K. Purpose

The purpose of the EFSI shall be to support, in the Union, through the supply of risk-bearing capacity to the EIB, the following:

(a)

investments;

(b)

increased access to financing for entities having up to 3 000 employees, with a particular focus on SMEs and small mid-cap companies.

Article 4 U.K. Terms of the EFSI Agreement

1. The Commission shall conclude an agreement with the EIB on the management of the EFSI and on the granting of the EU guarantee, in accordance with the requirements of this Regulation.

2. The EFSI Agreement shall contain, in particular, provisions concerning:

(a) the establishment of the EFSI, including:

(i)

the establishment of the EFSI as a distinct, clearly identifiable and transparent facility and as a separate account managed by the EIB, the operations of which are clearly distinguished from other operations of the EIB;

(ii)

[F1 the amount, of no less than EUR 7 500 000 000 in guarantees or cash, and the terms of the financial contribution which is to be provided by the EIB through the EFSI;]

(iii)

the terms of the funding or the guarantees which are to be provided by the EIB through the EFSI to the EIF;

(iv)

[F1 the pricing of operations under the EU guarantee which is to be in line with the EIB’s pricing policy;]

(v)

[F2 the procedures to contribute, without prejudice to Protocol No 5 on the Statute of the European Investment Bank annexed to the TEU and to the TFEU and the EIB prerogatives set out therein, to a reduction of the financing cost of the operation borne by the beneficiary of the EIB financing under EFSI, in particular by modulating the remuneration of the EU guarantee, where necessary in particular in situations where stressed financial market conditions would prevent the realisation of a viable project or where necessary to facilitate the establishment of investment platforms or the funding of projects in sectors or areas experiencing a significant market failure or suboptimal investment situation, to the extent it does not significantly impact the necessary financing of the provisioning of the Guarantee Fund;]

(b) governance arrangements concerning the EFSI, in accordance with Article 7, without prejudice to Protocol No 5 on the Statute of the European Investment Bank annexed to the TEU and to the TFEU (the EIB Statute), including:

(i)

the composition and number of members of the Steering Board;

(ii)

a provision that a representative of the Commission is to chair the Steering Board meetings;

(iii)

[F1 a provision that the Steering Board is to take decisions in accordance with the procedure laid down in Article 7(3);]

(iv)

the procedure for the appointment of the Managing Director and of the Deputy Managing Director, their remuneration and working conditions, in accordance with the Staff Regulations of the EIB, the rules and procedures on their replacement in their functions and on accountability, without prejudice to this Regulation;

(v)

the procedure for the appointment and dismissal of the members of the Investment Committee, their remuneration and working conditions and the voting arrangements within the Investment Committee, specifying the quorum and allocating one vote to each member;

(vi)

the requirement that the Steering Board and the Investment Committee adopt their respective rules of procedure;

(vii)

the requirement that financing and investment operations covered by this Regulation are to be ultimately approved by the EIB governing bodies in accordance with the EIB Statute;

(viii)

provisions on avoidance and handling of possible conflicts of interest;

(c) the EU guarantee, which is to be an unconditional, irrevocable, first demand guarantee in favour of the EIB, including:

(i)

[F1 in accordance with Article 11, detailed rules on the provision of the EU guarantee, including its arrangements on coverage, its defined coverage of portfolios of specific types of instruments and the respective events triggering possible calls on the EU guarantee;]

(ii)

requirements that remuneration for risk-taking be allocated among contributors to the EFSI in proportion to their respective share in the risk-taking and that remuneration to the Union and payments on the EU guarantee are to be made in a timely manner and only after remuneration and losses from operations have been netted;

(iii)

in accordance with Article 9, requirements for the use of the EU guarantee, including the payment conditions, such as specific time frames, the interest to be paid on due amounts and the necessary liquidity arrangements;

(iv)

in accordance with Article 11(5), provisions and procedures relating to the recovery of claims that is to be entrusted to the EIB;

(d) in accordance with this Regulation, and in particular Articles 7(12) and 9(5) thereof, Annex II thereto, and any delegated act adopted pursuant to this Regulation, the arrangements for approval by the Investment Committee of the use of the EU guarantee for individual projects or for supporting investment platforms or funds, or national promotional banks or institutions;

(e) the procedures for the submission and approval of investment proposals for the use of the EU guarantee, including:

(i)

the procedure for the transmission of investment proposals to the Investment Committee;

(ii)

provisions on the information to be provided when submitting investment proposals to the Investment Committee;

(iii)

the requirement that the procedure for submission and approval of investment proposals for the use of the EU guarantee be without prejudice to the EIB decision-making rules laid down in the EIB Statute, and in particular Article 19 thereof;

(iv)

rules further detailing the transitional provisions which comply with Article 24 of this Regulation, and in particular the manner in which operations approved by the EIB during the period referred to in that Article are to be included under the EU guarantee coverage;

(f) the reporting, monitoring and accountability with regard to the EFSI, including:

(i)

in accordance with Article 16, the operational reporting obligations incumbent on the EIB, where appropriate in cooperation with the EIF;

(ii)

the financial reporting obligations with regard to the EFSI;

(iii)

in accordance with Articles 20 and 21, rules on auditing and fraud prevention;

(iv)

key performance indicators, in particular as regards the use of the EU guarantee, the fulfilment of the objectives and criteria laid down in Articles 6 and 9 and Annex II, the mobilisation of private capital, and the macro-economic impact of the EFSI, including its effect on supporting investment;

(g) evaluations of the functioning of the EFSI in accordance with Article 18;

(h) the communication and promotion strategy of the EFSI;

(i) the procedures and conditions for the amendment of the EFSI Agreement, upon the initiative of the Commission or of the EIB, including the obligation to report to the European Parliament and the Council on such amendment;

(j) any other administrative or organisational conditions necessary for the management of the EFSI in so far as they permit the proper use of the EU guarantee;

(k) the arrangements concerning the contributions by Member States to the EFSI in the form of guarantees or cash, and by other third parties only in the form of cash, that are not to confer upon those Member States or other third parties any right to participate in the decision-making and voting of the Steering Board.

3. The EFSI Agreement shall also provide that:

(a) EFSI activities conducted by the EIF are to be governed by the EIF governing bodies;

(b) EFSI activities conducted by the EIF are to be subject to reporting requirements in accordance with Article 16;

(c) remuneration attributable to the Union from financing and investment operations covered by this Regulation is to be provided following the deduction of payments due to calls on the EU guarantee and, subsequently, of costs in accordance with Article 9(6) and with the EIAH Agreement.

Textual Amendments

F1 Substituted by Regulation (EU) 2017/2396 of the European Parliament and of the Council of 13 December 2017 amending Regulations (EU) No 1316/2013 and (EU) 2015/1017 as regards the extension of the duration of the European Fund for Strategic Investments as well as the introduction of technical enhancements for that Fund and the European Investment Advisory Hub.

F2 Inserted by Regulation (EU) 2017/2396 of the European Parliament and of the Council of 13 December 2017 amending Regulations (EU) No 1316/2013 and (EU) 2015/1017 as regards the extension of the duration of the European Fund for Strategic Investments as well as the introduction of technical enhancements for that Fund and the European Investment Advisory Hub.

Article 5 U.K. Additionality

[F1 1. For the purposes of this Regulation, ‘ additionality ’ means support by the EFSI for operations which address market failures or sub-optimal investment situations and which could not have been carried out during the period in which the EU guarantee can be used, or not to the same extent, by the EIB, the EIF or under existing Union financial instruments, without EFSI support. Projects supported by the EFSI shall support the general objectives laid down in Article 9(2), shall strive to create employment and sustainable growth and shall typically have a higher risk profile than projects supported by normal EIB operations. Overall, the EFSI portfolio shall have a higher risk profile than the portfolio of investments supported by the EIB under its normal investment policies before the entry into force of this Regulation.

To better address market failures or sub-optimal investment situations, and to facilitate, in particular, the use of investment platforms for small-scale projects, thereby ensuring complementarity and thus avoiding crowding out participants in the same market, EIB special activities supported by the EFSI shall, as a preferred way and if duly justified:

(a) have features of subordination, including the taking of junior positions vis-à-vis other investors;

(b) participate in risk-sharing instruments;

(c) demonstrate cross-border characteristics;

(d) be exposed to specific risks; or

(e) have other aspects as further described in point (d) of Section 3 of Annex II.

Without prejudice to the requirement to meet the definition of additionality as set out in the first subparagraph, the following elements are strong indications of additionality:

• projects that carry a risk corresponding to EIB special activities, as defined in Article 16 of the EIB Statute, especially if such projects present country-, sector- or region-specific risks, in particular those experienced in less developed regions and transition regions and/or if such projects present risks associated with innovation, in particular in growth-, sustainability- and productivity-enhancing unproven technologies,

• projects that consist of physical infrastructure, including e-infrastructure, linking two or more Member States or of the extension of such infrastructure or services linked to such infrastructure from one Member State to one or more Member States.]

2. In line with the investment guidelines laid down in Annex II, the Steering Board shall adjust the project mix as regards sectors and countries, on the basis of an ongoing monitoring of the developments of market conditions in the Member States and of the investment environment to help overcome market failures and sub-optimal investment situations including problems resulting from financial fragmentation. When carrying out that adjustment, the Steering Board shall avoid an approach which would be riskier than necessary.

Where the risk level so requires, EIB special activities shall be more broadly used under this Regulation than before the entry into force thereof. This shall in particular apply with respect to those Member States where EIB special activities have not been used or have been used only exceptionally before the entry into force of this Regulation, in order to allow for the implementation of additional operations and projects, as well as additional financing by the EIB and national promotional banks or institutions or investment platforms.

Textual Amendments

F1 Substituted by Regulation (EU) 2017/2396 of the European Parliament and of the Council of 13 December 2017 amending Regulations (EU) No 1316/2013 and (EU) 2015/1017 as regards the extension of the duration of the European Fund for Strategic Investments as well as the introduction of technical enhancements for that Fund and the European Investment Advisory Hub.

Article 6 U.K. Eligibility criteria for the use of the EU guarantee

1. [F1 The EFSI Agreement shall provide that the EFSI is to support projects which address market failures or sub-optimal investment situations and which:]

(a) are economically viable according to a cost-benefit analysis following Union standards, taking into account possible support from, and co-financing by, private and public partners to a project;

(b) are consistent with Union policies, including the objective of smart, sustainable and inclusive growth, quality job creation, and economic, social and territorial cohesion;

(c) provide additionality;

(d) maximise where possible the mobilisation of private sector capital; and

(e) are technically viable.

[F1 2. There shall be no restriction on the size of projects eligible for EFSI support for the operations conducted by the EIB or the EIF via financial intermediaries. In order to ensure that EFSI support also covers small-scale projects, the EIB and the EIF shall, where necessary and to the extent possible, extend cooperation with national promotional banks or institutions and support the possibilities provided, including through facilitating the creation of investment platforms.]

Textual Amendments

F1 Substituted by Regulation (EU) 2017/2396 of the European Parliament and of the Council of 13 December 2017 amending Regulations (EU) No 1316/2013 and (EU) 2015/1017 as regards the extension of the duration of the European Fund for Strategic Investments as well as the introduction of technical enhancements for that Fund and the European Investment Advisory Hub.

Article 7 U.K. Governance of the EFSI

1. When carrying out their tasks under this Regulation, the Steering Board, the Investment Committee and the Managing Director shall pursue only the objectives set out in this Regulation.

[F2 1a. All institutions and bodies involved in EFSI governing structures shall endeavour to ensure gender balance in relevant EFSI governing bodies.]

2. The EFSI Agreement shall provide that the EFSI is to be governed by a steering board, which, for the purpose of the use of the EU guarantee, is to determine, in conformity with the general objectives set out in Article 9(2):

(a) the strategic orientation of the EFSI, including the allocation of the EU guarantee within the infrastructure and innovation windows and any decision to be taken under Article 11(3) and Section 7(b) of Annex II;

(b) the operating policies and procedures necessary for the functioning of the EFSI;

(c) the rules applicable to the operations with investment platforms and national promotional banks or institutions;

(d) the risk profile of the EFSI.

[F1 3. The Steering Board shall comprise five members: three appointed by the Commission, one by the EIB and one expert appointed as a non-voting member by the European Parliament. That expert shall not seek or take instructions from Union institutions, bodies, offices or agencies, from any Member State government or from any other public or private body, and shall act in full independence. The expert shall perform his or her duties impartially and in the interest of the EFSI.

The Steering Board shall elect a Chairperson from among its voting members for a fixed term of three years, renewable once. The Steering Board shall discuss and take the utmost possible account of the positions of all members. If the members cannot converge in their position, the Steering Board shall take its decisions by unanimous vote among its voting members. The minutes of Steering Board meetings shall provide a substantive account of the positions of all members.

The detailed minutes of Steering Board meetings shall be published as soon as they have been approved by the Steering Board. The European Parliament shall be immediately notified of their publication.]

The Steering Board shall regularly organise a consultation of relevant stakeholders - in particular co-investors, public authorities, experts, education, training and research institutions, the relevant social partners and representatives of civil society - on the orientation and implementation of the investment policy carried out by the EIB under this Regulation.

The instruments used by the EIF for carrying out operations covered by this Regulation shall be approved jointly by the Steering Board and the Managing Director, after consulting the Investment Committee.

4. Member States and other third parties may - subject in the case of other third parties to the agreement of the Steering Board - contribute to the EFSI in the form of guarantees or cash as regards Member States, and only in the form of cash as regards other third parties. Neither Member States nor other third parties shall be granted membership of the Steering Board, nor shall they be granted a role in the appointment of other EFSI staff including members of the Investment Committee, nor shall they have any right concerning other aspects of governance of the EFSI as set out in this Regulation.

5. The EFSI Agreement shall provide that the EFSI is to have a managing director, who is to be responsible for the day-to-day management of the EFSI and the preparation and chairing of meetings of the Investment Committee referred to in paragraph 6.

[F1 The Managing Director shall be assisted by a deputy managing director. The Managing Director and the Deputy Managing Director shall participate in the meetings of the Steering Board as observers. The Managing Director shall report every quarter on the activities of the EFSI to the Steering Board.]

6. Following an open and transparent selection process in line with EIB procedures, the Steering Board shall select a candidate for each of the positions of Managing Director and Deputy Managing Director.

The European Parliament and the Council shall be kept duly informed in a timely manner at all stages of the selection procedure, subject to strict confidentiality requirements. That applies regardless of the conclusion of the agreement between the European Parliament and the EIB referred to in Article 17(5).

The European Parliament shall organise as rapidly as possible, and at the latest within four weeks from the communication of the name of a selected candidate, a hearing with the candidate for each position.

Following the approval from the European Parliament, the Managing Director and the Deputy Managing Director shall be appointed by the President of the EIB for a fixed term of three years, renewable once.

7. The EFSI Agreement shall provide that the EFSI is to have an investment committee, which is to be responsible for examining potential projects in line with the EFSI investment policies and for approving the support of the EU guarantee for EIB operations for projects that comply with the requirements of Articles 6 and 9, irrespective of the geographic location, in accordance with Article 8, of such projects. Furthermore, the Investment Committee shall be the competent body for approving operations with investment platforms and national promotional banks or institutions.

8. The Investment Committee shall be composed of eight independent experts and the Managing Director. The experts of the Investment Committee shall, following an open and transparent selection procedure, be appointed by the Steering Board for a fixed term of up to three years. Their term shall be renewable but shall not exceed six years in total. The independent experts shall have a high level of relevant market experience in project structuring and project financing, as well as micro- and macro-economic expertise.

When appointing the experts of the Investment Committee, the Steering Board shall ensure that the composition of the Investment Committee is diversified, so as to ensure that it has a wide knowledge of the sectors referred to in Article 9 and of the geographic markets in the Union.

The composition of the Investment Committee shall be gender-balanced. The Steering Board shall strive to select experts having experience in investment in one or more of the following fields:

(a) research, development and innovation;

(b) transport infrastructures and innovative technologies for transport;

(c) energy infrastructures, energy efficiency and renewable energy;

(d) information and communication technologies infrastructures;

[F1 (e) climate action, environmental protection and management;]

(f) education and training;

(g) health and medicine;

(h) SMEs;

(i) cultural and creative industries;

(j) urban mobility;

(k) social infrastructures and the social and solidarity economy[F1 ;]

[F2 (l) sustainable agriculture, forestry, fishery, aquaculture and other elements of the wider bioeconomy.]

9. When participating in the activities of the Investment Committee, its members shall perform their duties impartially and in the interests of the EFSI. When implementing the investment guidelines set out in Annex II and taking decisions on the use of the EU guarantee, they shall not seek or take instructions from the EIB, the institutions of the Union, Member States, or any other public or private body. Without prejudice to the provision of analytical, logistical and administrative support by the staff of the EIB to the Investment Committee, adequate organisational arrangements shall be established and maintained to ensure the operational independence of the Investment Committee. Any project assessment conducted by EIB staff shall not be binding on the Investment Committee for the purposes of granting the EU guarantee.

10. CVs and declarations of interest of each member of the Investment Committee shall be made public and constantly updated. [F1 Each member of the Investment Committee shall communicate without delay to the Steering Board, the Managing Director and the Deputy Managing Director all information needed to check, on an ongoing basis, the absence of any conflict of interest.]

11. Following a request from the Steering Board, the contract of any member of the Investment Committee who breaches the obligations set out in paragraphs 9 and 10 shall be terminated, in accordance with applicable employment and labour law rules. [F2 The Managing Director shall be responsible for informing the Steering Board of any such breach that comes to his or her knowledge and be responsible for proposing and following up on appropriate action. The Managing Director shall exercise his or her duty of care regarding potential conflicts of interest of any member of the Investment Committee.]

12. The Investment Committee shall decide on the use of the EU guarantee in accordance with this Regulation, including the investment guidelines set out in Annex II.

Decisions of the Investment Committee shall be taken by simple majority. [F1 Decisions approving the use of the EU guarantee shall be public and accessible, and shall include the rationale for the decision, with particular focus on compliance with the additionality criterion. They shall also refer to the global assessment stemming from the scoreboard of indicators referred to in paragraph 14. The publication shall not contain commercially sensitive information. In reaching its decision, the Investment Committee shall be supported by the documentation provided by the EIB.

The scoreboard, which is a tool for the Investment Committee to prioritise the use of the EU guarantee for operations that display higher scores and added value, shall be publicly available after the signature of a project. The publication shall not contain commercially sensitive information.

Commercially sensitive parts of the decisions of the Investment Committee shall be forwarded by the EIB to the European Parliament upon request subject to strict confidentiality requirements.]

[F1 Twice a year, the EIB shall submit to the European Parliament, to the Council and to the Commission a list of all decisions of the Investment Committee as well as the scoreboards relating to all those decisions. That submission shall be subject to strict confidentiality requirements.]

13. The Commission shall be empowered to adopt delegated acts in accordance with Article 23 to amend the non-essential elements of Sections 6 to 8 of the investment guidelines laid down in Annex II to this Regulation, without deleting any of those Sections altogether. Such delegated acts shall be prepared in close dialogue with the EIB.

[F1 14. The Commission shall be empowered to adopt delegated acts in accordance with Article 23(1) to (3) and (5) to supplement this Regulation by establishing a scoreboard of indicators to be used by the Investment Committee to ensure an independent and transparent assessment of the potential and actual use of the EU guarantee. Such delegated acts shall be prepared in close dialogue with the EIB.

The Steering Board shall, as part of the strategic orientation of the EFSI, establish a minimum score for each pillar in the scoreboard with a view to enhancing the assessment of projects.

The Steering Board may, upon request from the EIB, allow the Investment Committee to examine a project whose score in any of the pillars is below the minimum score when the global assessment contained in the scoreboard concludes that the operation related to that project would either address a significant market failure or present a high level of additionality.]

Textual Amendments

F1 Substituted by Regulation (EU) 2017/2396 of the European Parliament and of the Council of 13 December 2017 amending Regulations (EU) No 1316/2013 and (EU) 2015/1017 as regards the extension of the duration of the European Fund for Strategic Investments as well as the introduction of technical enhancements for that Fund and the European Investment Advisory Hub.

F2 Inserted by Regulation (EU) 2017/2396 of the European Parliament and of the Council of 13 December 2017 amending Regulations (EU) No 1316/2013 and (EU) 2015/1017 as regards the extension of the duration of the European Fund for Strategic Investments as well as the introduction of technical enhancements for that Fund and the European Investment Advisory Hub.