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

CHAPTER III U.K. EU GUARANTEE AND EU GUARANTEE FUND

Article 8 U.K. EU guarantee

The Union shall provide an irrevocable and unconditional guarantee to the EIB for financing and investment operations covered by this Regulation and by the EFSI Agreement (EU guarantee) where those operations:

(a)

are carried out within the Union; or

(b)

involve entities located or established in one or more Member States and extend to one or more third countries falling within the scope of the European Neighbourhood Policy, including the Strategic Partnership, the enlargement policy, the European Economic Area or the European Free Trade Association, or to an overseas country or territory as set out in Annex II to the TFEU, whether or not there is a partner in those third countries or overseas countries or territories.

The EU guarantee shall be granted as a guarantee on demand in respect of instruments referred to in Article 10.

Article 9 U.K. 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 EFSI Agreement.

[F1 2. The EU guarantee shall be granted for EIB financing and investment operations approved by the Investment Committee or for funding or guarantees to the EIF in order to conduct EIB financing and investment operations in accordance with Article 11(3).

The EIB shall, where appropriate, delegate the appraisal, selection and monitoring of small-scale sub-projects to financial intermediaries or approved eligible vehicles, in particular investment platforms and national promotional banks or institutions as a means to increase and facilitate the access to finance for small-scale projects. Notwithstanding the third subparagraph of paragraph 5 of this Article, the Investment Committee shall not retain the right to approve the use of the EU guarantee for sub-projects delegated to financial intermediaries or approved eligible vehicles where the EFSI contribution to such sub-projects is below EUR 3 000 000 . Where necessary, the Steering Board shall provide guidance on the procedure by which the Investment Committee is to decide on the use of the EU guarantee for sub-projects for which the EFSI contribution is equal to or above EUR 3 000 000 .

The operations concerned shall be consistent with Union policies and support any of the following general objectives:]

(a) research, development and innovation, in particular through:

(i)

projects that are in line with Horizon 2020;

(ii)

research infrastructures;

(iii)

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

(iv)

support to academia including collaboration with industry;

(v)

knowledge and technology transfer;

(b) development of the energy sector in accordance with the Energy Union priorities, including security of energy supply, and the 2020, 2030 and 2050 climate and energy frameworks, in particular through:

(i)

expansion of the use or supply of renewable energy;

(ii)

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

(iii)

development and modernisation of energy infrastructure (in particular interconnections, smart grids at distribution level, energy storage and synchronisation of networks);

(c) development of transport infrastructures, and equipment and innovative technologies for transport, in particular through:

(i)

projects and horizontal priorities eligible under Regulations (EU) No 1315/2013 and (EU) No 1316/2013;

(ii)

smart and sustainable urban mobility projects (targeting accessibility, reduction of greenhouse gas emissions, energy consumption and accidents);

(iii)

projects connecting nodes to TEN-T infrastructures;

(iv)

[F2 railway infrastructure, other rail projects, and maritime ports;]

(d) financial support through the EIF and the EIB to entities having up to 3 000 employees, with a particular focus on SMEs and small mid-cap companies, in particular through:

(i)

provision of working capital and investment;

(ii)

provision of risk financing from seed to expansion stages for SMEs, start-ups, small mid-cap companies and mid-cap companies, to ensure technological leadership in innovative and sustainable sectors;

(e) development and deployment of information and communication technologies, in particular through:

(i)

digital content;

(ia)

[F2 blockchain technology;

(ib)

internet of things;

(ic)

cybersecurity and network protection infrastructures;]

(ii)

digital services;

(iii)

telecommunications infrastructures of high speed;

(iv)

broadband network;

(f) environment and resource efficiency, in particular through:

(i)

projects and infrastructures in the field of environmental protection and management;

(ii)

strengthening of eco-system services;

(iii)

sustainable urban and rural development;

(iv)

climate change actions;

(g) human capital, culture and health, in particular through:

(i)

education and training;

(ii)

[F1 cultural and creative industries, for which sector-specific financial mechanisms are to be authorised in interaction with the Creative Europe Programme established by Regulation (EU) No 1295/2013 of the European Parliament and of the Council (1) and the Cultural and Creative Sectors Guarantee Facility established pursuant to that Regulation, in order to provide fit-for-purpose loans for those industries;]

(iii)

innovative health solutions;

(iv)

new effective medicines;

(v)

[F1 social infrastructures, social services, social and solidarity economy;]

(vi)

tourism[F1 ;]

[F2 (h) sustainable agriculture, forestry, fishery, aquaculture and other elements of the wider bioeconomy;

(i) within the requirements of this Regulation for less developed regions and transition regions as listed respectively in Annexes I and II to Commission Implementing Decision 2014/99/EU (2) , other industry and services eligible for EIB support.]

[F2 While recognising the demand-driven nature of the EFSI, the EIB shall target that at least 40 % of EFSI financing under the infrastructure and innovation window support project components that contribute to climate action, in line with the commitments made at the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21). EFSI financing for SMEs and small mid-cap companies shall not be included in that computation. The EIB shall use its internationally agreed methodology to identify those climate action project components or cost shares. The Steering Board shall, where necessary, provide detailed guidance to that end.]

[F1 3. The investment period during which the EU guarantee may be granted for supporting financing and investment operations covered by this Regulation shall last until:

(a) 31 December 2020 , for EIB operations for which a contract between the EIB and the beneficiary or financial intermediary has been signed by 31 December 2022 ;

(b) 31 December 2020 , for EIF operations for which a contract between the EIF and the financial intermediary has been signed by 31 December 2022 .]

[F1 4. The EIB shall, where necessary and to the extent possible, cooperate with national promotional banks or institutions and investment platforms.]

5. The EIB shall use the EU guarantee for supporting investment platforms or funds and national promotional banks or institutions that invest in operations meeting the requirements of this Regulation (eligible vehicles), after approval by the Investment Committee.

The Steering Board shall specify policies, in accordance with Article 7(2), regarding eligible vehicles referred to in the first subparagraph of this paragraph. The Investment Committee shall evaluate the conformity of such vehicles and their specific instruments seeking support from the EFSI with the policies specified by the Steering Board.

[F1 The Investment Committee may decide to retain the right to approve new projects put forward by financial intermediaries or within approved eligible vehicles.]

6. In accordance with Article 17 of the EIB Statute, the EIB shall require that all its expenses relating to the EFSI are met by the beneficiaries of the financing and investment operations. Without prejudice to the second and third subparagraphs of this paragraph, no administrative expenditure or any other fees of the EIB for its financing and investment operations covered by this Regulation shall be met by the general budget of the Union.

The EIB may use the EU guarantee within a cumulated maximum limit corresponding to 1 % of the total outstanding EU guarantee obligations to cover expenses that would have been met by beneficiaries of the financing and investment operations but which have not been recovered as of the event of default.

In addition, the EIB may use the EU guarantee to meet the relevant share of any recovery costs, unless deducted from recovery proceeds, and any costs linked to liquidity management.

In the event that the EIB provides funding or guarantees to the EIF on behalf of the EFSI which are backed by the EU guarantee in accordance with Article 11(3), fees of the EIF may be met by the general budget of the Union to the extent that they are not deducted from the remuneration referred to in Article 4(2)(c)(ii) or from revenues, recoveries or other payments received by the EIF.

7. Member States may use any source of Union funding, including instruments under the European Structural and Investment Funds and the trans-European networks and industry policies, to contribute to the financing of eligible projects in which the EIB itself, or through the EIF, is investing with the support of the EU guarantee, provided that those projects comply with the eligibility criteria and the objectives and principles applicable under the legal framework of the relevant instruments and of the EFSI.

The Commission shall, as appropriate, provide guidance on combining the use of Union instruments with EIB financing under the EU guarantee, so as to ensure coordination, complementarity and synergies.

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 10 U.K. Eligible instruments

1. For the purposes of Article 9(2) and in accordance with Article 11, the EIB shall use the EU guarantee towards risk coverage for instruments referred to in paragraph 2 of this Article.

2. The following instruments shall be eligible for coverage by the EU guarantee:

[F1 (a) EIB loans, guarantees, counter-guarantees, capital market instruments, any other form of funding or credit enhancement instrument, including subordinated debt, equity or quasi-equity participations, including in favour of national promotional banks or institutions, investment platforms or funds;]

(b) EIB funding or guarantees to the EIF enabling it to undertake loans, guarantees, counter-guarantees, any other form of credit enhancement instrument, capital market instruments and equity or quasi-equity participations, including in favour of national promotional banks or institutions, investment platforms or funds;

(c) EIB guarantees to national promotional banks or institutions, investment platforms or funds under a counter-guarantee of the EU guarantee.

The instruments referred to in points (a) and (b) of the first subparagraph shall be granted, acquired or issued for the benefit of operations referred to in Article 8 that meet the requirements of this Regulation, where the EIB or EIF financing has been granted in accordance with a financing agreement or transaction signed or entered into by the EIB or the EIF which has not expired or been cancelled.

3. EIB guarantees granted to a national promotional bank or institution under the counter-guarantee of the EU guarantee shall, where appropriate, seek to achieve capital relief.

4. In its operations under this Regulation, the EIF may grant a guarantee to a national promotional bank or institution or an investment platform or invest in an investment platform.

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 11 U.K. Coverage and terms of the EU guarantee

[F1 1. The EU guarantee shall not, at any time, exceed EUR 26 000 000 000 , of which a part may be allocated for EIB funding or guarantees to the EIF in accordance with paragraph 3. Aggregate net payments from the general budget of the Union under the EU guarantee shall not exceed EUR 26 000 000 000 and not exceed EUR 16 000 000 000 before 6 July 2018 .]

2. The remuneration for risk-taking of a portfolio shall be allocated amongst contributors in proportion to their respective share in the risk-taking. The EU guarantee shall be eligible to provide either first loss guarantees on a portfolio basis or a full guarantee. The EU guarantee may be granted on a pari passu basis with other contributors.

[F1 3. Where the EIB provides funding or guarantees to the EIF in order to conduct EIB financing and investment operations, the EU guarantee shall provide for a full guarantee on such funding or guarantees up to an initial limit of EUR 6 500 000 000 , provided that an amount of at least EUR 4 000 000 000 of funding or guarantees is gradually provided by the EIB without coverage by the EU guarantee. Without prejudice to paragraph 1, the limit of EUR 6 500 000 000 may, where appropriate, be adjusted by the Steering Board up to a maximum of EUR 9 000 000 000 , without an obligation on the EIB to match the amounts above EUR 4 000 000 000 .]

4. Where the EIB calls on the EU guarantee in accordance with the EFSI Agreement, the Union shall pay on demand in accordance with the terms of that Agreement.

5. Where the Union makes a payment to the EIB upon a call on the EU guarantee, the Union shall be subrogated into the relevant rights of the EIB relating to any of its financing or investment operations covered by this Regulation and the EIB shall, on behalf of the Union, pursue the recovery of claims for the amounts paid and reimburse the Union from the sums recovered in accordance with the provisions and procedures referred to in Article 4(2)(c)(iv).

6. The EU guarantee shall be granted as a guarantee on demand in respect of the instruments referred to in Article 10 and shall cover:

[F1 (a) for debt instruments referred to in Article 10(2)(a):

(i)

the principal and all interest and amounts due to the EIB but not received by it in accordance with the terms of the financing operations until the event of default; for subordinated debt a deferral, reduction or required exit shall be considered to be an event of default;

(ii)

losses arising from fluctuations of currencies other than the euro in markets where possibilities for long-term hedging are limited;

(b) for equity or quasi-equity investments referred to in Article 10(2)(a), the amounts invested and their associated funding cost and losses arising from fluctuations of currencies other than the euro;]

(c) for operations referred to in Article 10(2)(b), the amounts used and their associated funding costs.

The EU guarantee shall also cover the amounts referred to in the second and third subparagraphs of Article 9(6).

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 12 U.K. EU guarantee fund

1. An EU guarantee fund (guarantee fund) shall be established which shall constitute a liquidity cushion from which the EIB shall be paid in the event of a call on the EU guarantee.

2. The guarantee fund shall be endowed by:

(a) contributions from the general budget of the Union;

(b) returns on guarantee fund resources invested;

(c) amounts recovered from defaulting debtors in accordance with the recovery procedure laid down in the EFSI Agreement as provided for in Article 4(2)(c)(iv);

(d) revenues and any other payments received by the Union in accordance with the EFSI Agreement.

3. Endowments to the guarantee fund provided for in points (b), (c) and (d) of paragraph 2 of this Article shall constitute internal assigned revenue in accordance with Article 21(4) of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council(3).

4. The resources of the guarantee fund provided to it under paragraph 2 shall be directly managed by the Commission and invested in accordance with the principle of sound financial management and shall follow appropriate prudential rules.

[F1 5. Endowments to the guarantee fund referred to in paragraph 2 shall be used to reach an appropriate level (target amount) to reflect the total EU guarantee obligations. The target amount shall be set at 35 % of the total EU guarantee obligations.]

6. Following an assessment of the adequacy of the level of the guarantee fund in accordance with the report provided for in Article 16(6), the following payments shall be made:

(a) any surplus shall be paid to the general budget of the Union as internal assigned revenue in accordance with Article 21(4) of Regulation (EU, Euratom) No 966/2012 for any budget lines which may have been used as a source of redeployment to the guarantee fund;

(b) any replenishment of the guarantee fund shall be paid in annual tranches during a maximum period of three years starting in the year n+1.

[F1 7. From 1 July 2018 , if as a result of calls on the EU guarantee, the level of the guarantee fund falls below 50 % of the target amount, or it could fall below that level within a year according to a risk assessment by the Commission, the Commission shall submit a report on any exceptional measures that could be required.

8. After a call on the EU guarantee, endowments to the guarantee fund provided for in points (b) and (d) of paragraph 2 of this Article above the target amount shall be used within the limits of the investment period provided for in Article 9 to restore the EU guarantee to its full amount.

9. Endowments to the guarantee fund provided for in point (c) of paragraph 2 shall be used to restore the EU guarantee to its full amount.

10. In the event that the EU guarantee is fully restored to an amount of EUR 26 000 000 000 , any amount in the guarantee fund in excess of the target amount shall be paid to the general budget of the Union as internal assigned revenue in accordance with Article 21(4) of Regulation (EU, Euratom) No 966/2012 for any budget lines which could have been used as a source of redeployment to the guarantee fund.]

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 13 U.K. Financing of the guarantee fund from the general budget of the Union

Regulation (EU) No 1291/2013 and Regulation (EU) No 1316/2013 are amended as set out in Annex I to this Regulation.

If necessary, payment appropriations may be entered in the general budget of the Union beyond 2020 and up to and including the financial year 2023 to fulfil the obligations stemming from the second subparagraph of Article 12(5).

The annual appropriations from the general budget of the Union for provisioning the guarantee fund shall be authorised by the European Parliament and by the Council within the framework of the annual budgetary procedure in full compliance with Council Regulation (EU, Euratom) No 1311/2013(4).

(1)

[F1 Regulation (EU) No 1295/2013 of the European Parliament and of the Council of 11 December 2013 establishing the Creative Europe Programme (2014 to 2020) and repealing Decisions No 1718/2006/EC, No 1855/2006/EC and No 1041/2009/EC ( OJ L 347, 20.12.2013, p. 221 ).]

(2)

[F2 Commission Implementing Decision 2014/99/EU of 18 February 2014 setting out the list of regions eligible for funding from the European Regional Development Fund and the European Social Fund and of Member States eligible for funding from the Cohesion Fund for the period 2014-2020 ( OJ L 50, 20.2.2014, p. 22 ).]

(3)

Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1).

(4)

Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020 (OJ L 347, 20.12.2013, p. 884).

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.