The first call for proposals
under the Connecting Europe Facility (CEF) to help finance key
trans-European energy infrastructure projects is open. A total of €750
million will be made available for first priority projects mainly in the
gas and electricity sectors. These projects will address security of
supply issues and help bring an end to the energy isolation of some
Member States. They will also contribute to the completion of the
EU-wide internal energy market and to the integration of renewables to
the energy grid. The EU funding will accelerate investment in missing
cross-border links by leveraging the necessary private and public
funding.
European Energy Commissioner Günther Oettinger said: "This
is a crucial step. Such a huge amount of EU financial support will make
a solid difference. The current Ukraine crisis underlines the
importance of upgrading energy infrastructure and building missing
interconnections between Member States in order to enhance the energy
security in the EU. In general Member States can only help each other
with energy supplies, if they are well connected. Moreover, improving
the energy infrastructure is a prerequisite for completing the internal
energy market for the benefit of consumers and businesses in the EU."
Under the Connecting Europe
Facility a total of €5.85 billion has been allocated to trans-European
energy infrastructure for the period of 2014-2020.
In order to apply for a grant, a
project has to be included in the list of 'projects of common
interest'. The first list was adopted by the European Commission in
October 2013. It consists of some 250 key energy infrastructure projects
which, when completed, would each ensure significant benefits for at
least two Member States; enhance security of supply, contribute to
market integration and further competition as well as reduce CO2 emissions.
The grant money will be
available to finance studies and construction works. Whereas oil
infrastructure projects are excluded from any form of financial
assistance, grants for studies are available to all other projects of
common interest. This is also the case for grants for construction works
(except hydro-pumped storage projects). However, to be eligible for
grants for construction works a project has to fulfil strict criteria:
its cost-benefit analysis (CBA) has to show significant benefits for
security of supply, solidarity, or technological innovation. The project
must have received a cross-border cost allocation decision issued by
the competent national regulatory authorities or – in case they disagree
– by the Agency for the Cooperation of Energy Regulators (ACER).
According to its business plan the project has to be commercially not
viable and therefore reliant on EU funding to go ahead.
In general, the amount of EU support
cannot exceed 50 per cent of the eligible costs. In exceptional cases,
when a project will contribute significantly to the security of supply
or boost energy solidarity between Member States, the EU support can
amount to 75 per cent of the costs.
The application deadline for
proposals is 19 August 2014. The final decision on which projects will
get the CEF funding from the Commission will be taken by November 2014.
Background...
The legislative basis for this call for proposals is the Connecting Europe Facility Regulation which is in force since December 2013 and the rules on how this financial aid is granted are laid down in the Regulation
on guidelines for trans-European energy infrastructure which entered
into force in May 2013. From an overall budget of €33.2 billion covering
three sectors – transport, energy, telecommunications – energy accounts
for €5.85 billion in the period of 2014-2020. The bulk of these funds
are available for grants whereas a maximum of 10% is set aside for
financial instruments.
In a properly functioning
internal market investments should be driven by the market itself.
Sometimes the bulk of an investment needs to be made by companies in one
Member State while there are benefits across the border in another
Member State. In this case a decision on sharing the costs needs to be
taken by the competent regulatory authorities. This cross-border cost
allocation is, together with an adequate cost-benefit analysis of the
project, one of the key documents project promoters have to present when
applying for grants for works.
In addition to this call for
proposals for grants the Commission will, after a thorough assessment
later this year, identify the conditions under which money will be made
available to help set up innovative financial instruments like project
bonds for infrastructure projects. This will be done in cooperation with
the European Investment Bank.
