### for the eu compartment , the eligible counterparts shall have expressed their interest and shall be able to cover financing and investment operations in at least three member states . the implementing partners may also cover together financing and investment operations in at least three member states by forming a group . ### for the eu compartment , the eligible counterparts that have expressed their interest shall be able to cover financing and investment operations in at least three member states , with the exception of blending operations as defined in article 2 , paragraph 1 , point . the implementing partners may also cover together financing and investment operations in at least three member states by forming a group .


### the eu guarantee for the purposes of the eu compartment referred to in point of article 8 shall be eur 38 000 000 000 . it shall be provisioned at the rate of 40 % . ### the eu guarantee for the purposes of the eu compartment referred to in point of article 8 shall be eur 38 000 000 000 , of which at least eur 28 500 000 000 shall be allocated to the eib group . it shall be provisioned at the rate of 35 % . the eib shall : - as an implementing partner grant access to its allocation of the eu guarantee for national and regional promotional banks ; - establish a structural dialogue with national and regional promotional banks for the development and implementation of financial instruments and projects ; - report annually to the european parliament on the functioning of the guarantee , the contribution to the objectives set out in article 3 , and its cooperation with national and regional actors . the commission shall assess the share given to the eib group at a midterm review no later than december 2024 and propose a change of up to 10 % , if necessary .


### the financing and investment operations may fall under one or more of the following areas : ### the financing and investment operations shall fall under one or more of the following areas :


### twice a year , the conclusions of the investment committee rejecting the use of the eu guarantee shall be transmitted to the european parliament and to the council , 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 the conclusions as well as the scoreboards relating to all those decisions . that submission shall be subject to strict confidentiality requirements .


### 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 ; ### 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 and / or by the implementing partners or private investors ;


### the investeu fund should contribute to improving the competitiveness of the union , including in the field of innovation and digitisation , the sustainability of the union ' s economic growth , the social resilience and inclusiveness and the integration of the union capital markets , including solutions addressing their fragmentation and diversifying sources of financing for the union enterprises . to that end , it should support projects that are technically and economically viable by providing a framework for the use of debt , risk sharing and equity instruments underpinned by a guarantee from the union ' s budget and by contributions from implementing partners . it should be demand - driven while support under the investeu fund should at the same time focus on contributing to meeting policy objectives of the union . ### the investeu fund should contribute to improving the competitiveness and socioeconomic convergence of the union , including in the field of innovation and digitisation , the sustainability of the union ' s economic growth , the social resilience and inclusiveness and the integration of the union capital markets , including solutions addressing their fragmentation and diversifying sources of financing for the union enterprises . to that end , it should support projects that are technically and economically viable by providing a framework tailor - made on the basis of the different regional needs in the eu for the use of debt , risk sharing and equity instruments underpinned by a guarantee from the union ' s budget and by contributions from implementing partners . it should be demand - driven while support under the investeu fund should at the same time focus on contributing to meeting policy objectives of the union .


### research , innovation and digitisation policy window : comprises research and innovation activities , transfer of research results to the market , demonstration and deployment of innovative solutions and support to scaling up of innovative companies other than smes as well as digitisation of union industry ; ### research , innovation and digitisation policy window : comprises research and innovation activities , knowledge transfer and transfer of research results to the market , demonstration and deployment of innovative solutions and support to scaling up of innovative companies and towards innovation clusters , as well as digitisation of union industry ;


### in addition , each implementing partner shall submit every six months a report to the commission on the financing and investment operations covered by this regulation , broken down by the eu compartment and the member state compartment by member state , as appropriate . 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 at the compartment , policy window and the investeu fund level . one of those reports shall contain the information the implementing partners shall provide in accordance with [ article 155 ] of the [ financial regulation ] . ### in addition , each implementing partner shall submit every six months a report to the european parliament and the commission on the financing and investment operations covered by this regulation , broken down by the eu compartment and the member state compartment by member state , as appropriate . 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 at the compartment , policy window and the investeu fund level . one of those reports shall contain the information the implementing partners shall provide in accordance with [ article 155 ] of the [ financial regulation ] .


### the investeu fund should support investments in tangible and intangible assets to foster growth , investment and employment , and thereby contributing to improved well - being and fairer income distribution in the union . intervention through the investeu fund should complement union support delivered through grants . ### the investeu fund should support investments in tangible and intangible assets to foster sustainable and inclusive growth based on an increasing total factor productivity rates , low cost investment and good quality of jobs , and thereby contributing to improved well - being and fairer income distribution and economic , social and territorial cohesion in the union . intervention through the investeu fund should complement and not replacement of union support delivered through grants .


### low infrastructure investment rates in the union during the financial crisis undermined the union ' s ability to boost sustainable growth , competitiveness and convergence . sizeable investments in the european infrastructure are fundamental to meet the union ' s sustainability targets , including the 2030 energy and climate targets . accordingly , support from the investeu fund should target investments into transport , energy , including energy efficiency and renewable energy , environmental , climate action , maritime and digital infrastructure . to maximise the impact and the value added of union financing support , it is appropriate to promote a streamlined investment process enabling visibility of the project pipeline and consistency across relevant union programmes . bearing in mind security threats , investment projects receiving union support 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 such as the european regional development fund providing support for security components of investments in public spaces , transport , energy and other critical infrastructure . ### low infrastructure investment rates in the union during the financial crisis undermined the union ' s ability to boost sustainable growth , competitiveness and convergence . sizeable investment in the european infrastructure , including interconnections and energy efficiency , is fundamental to meet the union ' s sustainability targets , including the 2030 energy and climate targets . accordingly , support from the investeu fund should target investment in transport , including the maintenance or upgrade of existing infrastructure assets with particular focus on safety and security assets , energy , including energy efficiency , energy interconnection and renewable energy , environmental , climate action , maritime and digital infrastructure . to maximise the impact and the value added of union financing support , it is appropriate to promote a streamlined investment process enabling visibility of the project pipeline and consistency across relevant union programmes . bearing in mind security threats and risk prevention , investment projects receiving union support 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 such as the european regional development fund providing support for security components of investments in public spaces , transport , energy and other critical infrastructure .


### small and medium - sized enterprises play a crucial role in the union . however , they face challenges when accessing finance because of their perceived high risk and lack of sufficient collateral . additional challenges arise from smes ' need to stay competitive by engaging in digitisation , internationalisation and innovation activities and skilling up their workforce . moreover , compared to larger enterprises , they have access to a more limited set of financing sources : they typically do not issue bonds , have only limited access to stock exchanges or large institutional investors . the challenge in accessing finance is even greater for those smes whose activities focus on intangible assets . smes in the union rely heavily on banks and debt financing in the form of bank overdrafts , bank loans or leasing . supporting smes that face the above challenges and providing more diversified sources of funding is necessary for increasing the ability of smes to finance their creation , growth and development , withstand economic downturns , and for making the economy and the financial system more resilient during economic downturn or shocks . this is also complementary to the initiatives already undertaken in the context of the capital markets union . the investeu fund should provide an opportunity to focus on specific , more targeted financial products . ### small and medium - sized enterprises play a crucial role in the union . however , they face challenges when accessing finance because of their perceived high risk and lack of sufficient collateral . additional challenges arise from smes ' need to stay competitive by engaging in digitisation , internationalisation , adjustment to circular economy principles and innovation activities and skilling up their workforce . moreover , compared to larger enterprises , they have access to a more limited set of financing sources : they typically do not issue bonds , have only limited access to stock exchanges or large institutional investors . the challenge in accessing finance is even greater for those smes whose activities focus on intangible assets . smes in the union rely heavily on banks and debt financing in the form of bank overdrafts , bank loans or leasing . supporting smes that face the above challenges and providing more diversified sources of funding is necessary for increasing the ability of smes to finance their creation , growth and development , withstand economic downturns , and for making the economy and the financial system more resilient during economic downturn or shocks . this is also complementary to the initiatives already undertaken in the context of the capital markets union . the investeu fund should provide an opportunity to focus on specific , more targeted financial products .


### smes policy window : access to and availability of finance for smes and , in duly justified cases , for small mid - cap companies ; ### smes policy window : access to and availability of finance for smes and , in duly justified cases , for mid - cap companies ;


### in selecting implementing partners for the deployment of the investeu fund , the commission should consider the counterpart ' s capacity to fulfil the objectives of the investeu fund and contribute its own resources , in order to ensure adequate geographical coverage and diversification , to crowd - in private investors and to provide sufficient risk diversification as well as 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 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 regional level could be beneficial for the maximisation of the impact of public funds on the territory of the union . moreover , it should 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 . ### in selecting implementing partners for the deployment of the investeu fund , the commission should consider the counterpart ' s capacity to fulfil the objectives of the investeu fund and to contribute to it , in order to ensure adequate geographical coverage and diversification , to crowd - in private investors and to provide sufficient risk diversification as well as new solutions to address market failures and sub - optimal investment situations , and ensure economic , social and territorial cohesion . 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 , regional and local promotional banks or institutions should be able to offer a complementary financial product range given that their experience and capabilities at regional level could be beneficial for the maximisation of the impact of public funds on the territory of the union . moreover , it should 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 .


### as set out in the reflection paper on the social dimension of europe16 and the european pillar of social rights17 , building a more inclusive and fairer 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 and health . 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 , help increase employment , in particular among the unskilled and long - term unemployed , and improve the situation with regard to intergenerational solidarity , the health sector , 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 contribute to the support of european culture and creativity . to counter the profound transformations of societies in the union and of the labour market in the coming decade , it is necessary to invest in human capital , microfinance , 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 , increasing the supply of and access to finance to micro - and social enterprises , 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 europe18 has identified investment gaps in social infrastructure and services , including for education , training , health and housing , which call for support , including at the union level . therefore , the collective power of public , commercial and philanthropic capital , as well as support from foundations , should be harnessed to support the social market value chain development and a more resilient union . _________________ 16 com 206 . 17 com 250 . 18 published as european economy discussion paper 074 in january 2018 . ### as set out in the reflection paper on the social dimension of europe16 and the european pillar of social rights17 , and the eu framework for the un convention on the rights of persons with disabilities , building a more inclusive and fairer 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 , help increase employment , in particular among the unskilled and long - term unemployed , and improve the situation with regard to 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 contribute to the support of european culture and creativity . to counter the 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 , sustainable and social finance , microfinance , 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 , increasing the supply of and access to finance to micro - and social enterprises and social solidarity institutions , 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 europe18 has identified a total investment gap of at least eur 1 , 5 trillion for the period between 2018 and 2030 in social infrastructure and services , including for education , training , health and housing , which call for support , including at the union level . therefore , the collective power of public , commercial and philanthropic capital , as well as support from alternative types of financial providers such as ethical , social and sustainable actors , and from foundations , should be harnessed to support the social market value chain development and a more resilient union . _________________ 16 com 206 . 17 com 250 . 18 published as european economy discussion paper 074 in january 2018 .


### 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 article 13 shall be signed by 31 december 2028 . ### 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 . guarantee agreements between the eib and implementing partners , where applicable , shall be approved by 31 december 2027 . contracts between the implementing partner and the final recipient or the financial intermediary or other entity referred to in article 13 shall be approved by 31 december 2028 . for avoidance of doubt , such dates shall not apply for operations conducted between financial intermediaries and final recipients . 3 . where an implementing partner calls on the eu guarantee in accordance with a guarantee agreement or the investeu agreement , the union shall pay on demand in accordance with the terms of the agreement .


### in selecting implementing partners for the deployment of the investeu fund , the commission should consider the counterpart ' s capacity to fulfil the objectives of the investeu fund and contribute its own resources , in order to ensure adequate geographical coverage and diversification , to crowd - in private investors and to provide sufficient risk diversification as well as 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 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 regional level could be beneficial for the maximisation of the impact of public funds on the territory of the union . moreover , it should 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 . ### in selecting implementing partners for the deployment of the investeu fund , the relevant considerations should include the counterpart ' s capacity to fulfil the objectives of the investeu fund and to contribute its resources to the fund , in order to ensure adequate geographical coverage and diversification , to crowd - in private investors and to provide sufficient risk diversification as well as new solutions to address union - wide and / or member state specific 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 indirectly manage the eu guarantee for the eu compartment and the member state compartment . the implementing partners are as follows : the eib group under the eib window of the eu compartment the national promotional banks or institutions with whom a guarantee agreement is signed under the npbi window of the eu compartment . in line with its role in the treaties , the eib provides all strategic banking competences for the commission and other implementing partners . in addition to the eib group , national and regional promotional banks or institutions , where they are implementing partners , should be able to offer a complementary financial product range given that their experience and capabilities at regional level could be beneficial for the maximisation of the impact of public funds on the territory of the union .


### the commission should assess the compatibility of investment and financing operations submitted by the implementing partners with union law and policies whereas the decisions on financing and investment operations should ultimately be taken by an implementing partner . ### the steering board should set the strategic orientations of the investeu fund and the rules necessary for its functioning , and should set out the rules applicable to the operations with investment platforms .


### the investeu fund should support investments in tangible and intangible assets to foster growth , investment and employment , and thereby contributing to improved well - being and fairer income distribution in the union . intervention through the investeu fund should complement union support delivered through grants . ### the investeu fund should support investments in tangible and intangible assets to foster sustainable growth , investment and employment , and thereby contributing to improved well - being , environment and fairer income distribution in the union . intervention through the investeu fund should complement and not replace union support delivered through grants . investments should comply with the additionality requirement so that market failures or sub - optimal investment situations can be addressed and investments strive to create long - term high quality employment , public infrastructure and sustainable growth .


### each configuration of the investment committee shall be composed of six remunerated external experts . the experts shall be selected in accordance with [ article 237 ] of the [ financial regulation ] and be appointed by the commission for a fixed term of up to four years . their term shall be renewable but shall not exceed seven years in total . the commission may decide to renew the term of office of an incumbent member of the investment committee without availing itself of the procedure laid down in this paragraph . ### each configuration of the investment committee shall be composed of seven remunerated external experts . the experts shall be selected in accordance with [ article 237 ] of the [ financial regulation ] and be appointed by the commission for a fixed term of up to four years . their term shall be renewable but shall not exceed seven years in total . the commission may decide to renew the term of office of an incumbent member of the investment committee without availing itself of the procedure laid down in this paragraph .


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


### in order to ensure that interventions under the eu compartment of the investeu fund focus on market failures and sub - optimal investment situations at union level , but , at the same time , satisfy the objectives of best possible geographic outreach , the eu guarantee should be allocated to implementing partners , which alone or together with other implementing partners , can cover at least three member states . however , it is expected that around 75 % of the eu guarantee under the eu compartment would be allocated to implementing partner or partners that can offer financial products under the investeu fund in all member states . ### in order to ensure that interventions under the eu compartment of the investeu fund focus on market failures and sub - optimal investment situations at union level , but , at the same time , satisfy the objectives of best possible geographic outreach , the eu guarantee should be allocated to implementing partners , which alone or together with other implementing partners , can cover one or more member states . where the implementing partners cover more than one member state , the contractual responsibility of implementing partners should remain limited by their respective national mandates . with a view to promoting improved geographic diversification , dedicated regional investments platforms focussed on interested groups of member states may be established , combining the efforts and expertise of pillar assessed financial institutions with national promotional banks with limited experience in the use of financial instruments . such structures will be encouraged , including with available support from the investeu advisory hub . however , it is expected that at least 75 % of the eu guarantee under the eu compartment would be allocated to the eib group .


### the investeu fund should contribute to improving the competitiveness of the union , including in the field of innovation and digitisation , the sustainability of the union ' s economic growth , the social resilience and inclusiveness and the integration of the union capital markets , including solutions addressing their fragmentation and diversifying sources of financing for the union enterprises . to that end , it should support projects that are technically and economically viable by providing a framework for the use of debt , risk sharing and equity instruments underpinned by a guarantee from the union ' s budget and by contributions from implementing partners . it should be demand - driven while support under the investeu fund should at the same time focus on contributing to meeting policy objectives of the union . ### the investeu fund should contribute to improving the competitiveness of the union , including in the field of innovation and digitisation , scientific excellence , the sustainability of the union ' s economic growth , advancing technologies and innovations combatting climate change , the social resilience and inclusiveness and the integration of the union capital markets , including solutions addressing their fragmentation and diversifying sources of financing for the union enterprises . to that end , it should support projects that are technically and economically viable by providing a framework for the use of debt , risk sharing and equity instruments underpinned by a guarantee from the union ' s budget and by contributions from implementing partners . it should be demand - driven while support under the investeu fund should at the same time focus on contributing to meeting policy objectives of the union including providing strategic , long - term economic , societal and environmental benefits in key areas with a strong focus on greatly enhancing access to finance for smes .


### social investment and skills policy window : comprises microfinance , social enterprise finance and social economy ; skills , education , training and related services ; social infrastructure ; social innovation ; health and long - term care ; inclusion and accessibility ; cultural activities with a social goal ; integration of vulnerable people , including third country nationals . ### social investment window : comprises microfinance , social enterprise finance and social economy ; a just transition for workers , skills , education , training and related services ; social infrastructure ; health and long - term care with a particular focus on the poorer members of society ; and the integration of the most vulnerable people , including third country nationals legally residing in one of the member states of the eu .


### twice a year , the conclusions of the investment committee rejecting the use of the eu guarantee shall be transmitted to the european parliament and to the council , 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 the conclusions as well as the scoreboards relating to all those decisions . that submission shall be subject to strict confidentiality requirements .


### the investeu portal shall be established by the commission . it shall be an easily accessible and user - friendly project database , providing relevant information for each project . ### the investeu portal shall be established by the commission . it shall provide an easily accessible and user - friendly project database , giving more visibility to projects and allowing investors to identify investment opportunities in their sector or area of interest .


### in order to ensure that interventions under the eu compartment of the investeu fund focus on market failures and sub - optimal investment situations at union level , but , at the same time , satisfy the objectives of best possible geographic outreach , the eu guarantee should be allocated to implementing partners , which alone or together with other implementing partners , can cover at least three member states . however , it is expected that around 75 % of the eu guarantee under the eu compartment would be allocated to implementing partner or partners that can offer financial products under the investeu fund in all member states . ### in order to ensure that interventions under the eu compartment of the investeu fund focus on market failures and sub - optimal investment situations at union level , but , at the same time , satisfy the objectives of best possible geographic outreach and to avoid disproportionate benefit of member states with more capital market , the eu guarantee should be allocated to implementing partners , which alone or together with other implementing partners , can cover at least three member states . however , it is expected that around 75 % of the eu guarantee under the eu compartment would be allocated to implementing partner , such as eib , or partners that can offer financial products under the investeu fund in all member states .


### financing and investment operations under the sustainable infrastructure policy window referred to in point of paragraph shall be subject to climate , environmental and social sustainability proofing with a view to minimise detrimental impacts and maximise benefits on climate , environment and social dimension . for that purpose , promoters requesting financing shall provide adequate information based on guidance to be developed by the commission . projects below a certain size defined in the guidance shall be excluded from the proofing . ### financing and investment operations under the sustainable infrastructure policy window referred to in point of paragraph shall be subject to climate , environmental and social sustainability proofing with a view to minimising detrimental impacts , and maximising the benefits , in terms of climate , the environment , the efficient use of resources and the social dimension . for that purpose , promoters requesting financing shall provide adequate information based on guidance to be developed by the commission . projects below a certain size defined in the guidance shall be excluded from the proofing .


### conclusions of the investment committee approving the support of the eu guarantee to a financing or investment operation shall be publicly accessible and shall include the rationale for the approval . the publication shall not contain commercially sensitive information . ### conclusions of the investment committee approving the support of the eu guarantee to a financing or investment operation shall be publicly accessible and shall include the rationale for the approval . they shall also refer to the global assessment stemming from the scoreboard of indicators referred to in article 18 . where applicable , the investment committee shall include in the list of conclusions approving the support of the eu guarantee information on the operations , in particular their description , the identity of the promoters or financial intermediaries , and the objectives of the project . the publication shall not contain commercially sensitive information . in the case of commercially sensitive decisions , the investment committee shall make public such decisions and information concerning promoters or financial intermediaries at the date of closing of the relevant financing or any earlier date when commercial sensitivity ends .


### contribute to economic and social development , with particular focus on sustainability and job creation , thus addressing root causes of migration and contributing to sustainable reintegration of returned migrants in their countries of origin ; ### contribute to economic and social development , with particular focus on poverty eradication , sustainability and fostering decent employment , economic opportunities and entrepreneurship , promoting , in particular , gender equality and the empowerment of women and young people , thus addressing specific root causes of migration , enhancing resilience and contributing to the sustainable reintegration of migrants returned to their countries of origin , with due regard to the strengthening of the rule of law , good governance and human rights ;


### the purpose of the efsd as an integrated financial package shall be to support through the supply of financing capacity in the form of grants , guarantees and other financial instruments to eligible counterparts investments and increased access to financing starting in african and neighbourhood partner countries . ### the purpose of the efsd as an integrated financial package shall be to foster sustainable and inclusive economic and social development and promote socio - economic resilience of partner countries by supporting investments and increased access to financing through the supply of financing capacity in the form of grants , guarantees and other financial instruments to eligible counterparts investments and increased access to financing starting in african and neighbourhood partner countries , while maximising additionality , delivering innovative products and crowding in private sector funds .


### the eip should provide an integrated financial package to finance investments starting in regions of africa for countries that are signatories to the partnership agreement between the members of the african , caribbean and pacific group of states of the one part , and the european community and its member states , of the other part , signed in cotonou on 23 june 200022 and the neighbourhood countries , thereby creating growth and employment opportunities , maximising additionality , delivering innovative products , and crowding - in private sector funds . __________________ 22 oj l 317 , 15 . 12 . 2000 as last amended by oj l 287 , 4 . 11 . 2010 ### the european fund for sustainable development , as part of the eip , should provide an integrated financial package to finance and attract investments fostering sustainable and inclusive economic and social development and promoting the socio - economic resilience of partner countries , while maximising additionality , addressing market failures and sub - optimal investment situations , and crowding - in private sector funds . the efsd’s operations should be clearly distinct from , and complementary to , other support , in particular the external lending mandate operations managed by the european investment bank .


### the commission should report annually to the european parliament and the council on the financing and investment operations covered by the efsd guarantee with a view to ensuring accountability to the european citizens . the report should be made public in order to allow relevant stakeholders , including civil society , to express their views . the commission should also report annually to the european parliament and the council on the management of the efsd guarantee fund so that accountability and transparency are ensured . ### the commission must report annually to the european parliament and the council on the financing and investment operations covered by the efsd guarantee with a view to ensuring full accountability to the european citizens . the report must be made public in order to allow relevant stakeholders , including civil society , to express their views . the commission must also report annually to the european parliament and the council on the management of the efsd guarantee fund so that accountability and transparency are ensured .


### moreover , the strategic board should support the commission in setting strategic guidance and overall investment goals . the strategic board should also support coordination and coherence between the regional platforms . this should ensure complementarity of the various instruments in external action . the strategic board should be co - chaired by the commission and the high representative of the union for foreign affairs and security policy to ensure consistency and coherence with union external policy objectives and partnership frameworks with third countries . ### the strategic board should be co - chaired by the commission and the high representative in order to ensure consistency and coherence with union external policy objectives , partnership frameworks with third countries and with the union ' s other efforts addressing the root causes of migration , as well as policy coherence for development .


### an assessment of the added value , the mobilisation of private sector resources , the estimated and actual outputs and the outcomes and impact of the financing and investment operations covered by the efsd guarantee on an aggregated basis , including the impact on employment creation ; ### an assessment of the additionality , the mobilisation of private sector resources , the estimated and actual outputs and the outcomes and impact of the financing and investment operations covered by the efsd guarantee on an aggregated basis , including the impact on decent job creation , climate change , the eradication of poverty and on the way in which the root causes of migration are addressed ;


### target socio - economic sectors , in particular infrastructure including sustainable energy , water , transport , information and communications technologies , environment , sustainable use of natural resources and blue growth , social infrastructure , human capital , in order to improve the socio - economic environment ; ### strengthen socio - economic sectors , in particular infrastructure including renewable and sustainable energy , water and waste , transport , information and communications technologies , environment , sustainable use of natural resources and blue growth , social infrastructure , human capital , in order to improve the socio - economic environment ;


### the strategic board shall be composed of representatives of the commission and of the high representative of the union for foreign affairs and security policy , of the member states and of the eib . the commission may invite other contributors to become members of the strategic board having regard where appropriate to the view of the board . partner countries and relevant regional organisations , the eligible counterparts and the european parliament may be given observer status , where appropriate . the strategic board shall be co - chaired by the commission and the high representative . ### the strategic board shall be composed of representatives of the commission and of the high representative of the union for foreign affairs and security policy , of the contributing member states and of the eib . the commission may invite other contributors to become members of the strategic board having regard where appropriate to the view of the board . the european parliament shall have observer status . observers designated by parliament shall have the right to contribute to the deliberations without the right to vote . partner countries and relevant regional organisations and the eligible counterparts may be given observer status , where appropriate . the strategic board shall be co - chaired by the commission and the high representative .


### at the request of the member states , the contributions made by them may be earmarked for the initiation of projects in specific regions , countries , sectors or investment windows . ### at the request of the member states and subject to approval by the strategic board , the contributions made by them may be earmarked for the initiation of projects in specific regions or existing investment windows .


### target socio - economic sectors , in particular infrastructure including sustainable energy , water , transport , information and communications technologies , environment , sustainable use of natural resources and blue growth , social infrastructure , human capital , in order to improve the socio - economic environment ; ### strengthen socio - economic sectors , in particular infrastructure including sustainable energy , water , transport , information and communications technologies , environment , sustainable use of natural resources and blue growth , social infrastructure , human capital , in order to improve the socio - economic environment ;


### the commission may define investment windows for specific regions or partner countries or for both , for specific sectors , for specific projects or for specific categories of final beneficiaries or for both to be funded by instruments referred to in article 9 to be covered by the efsd guarantee up to a fixed amount . all requests for financial support within investment windows shall be made to the commission . ### the commission shall define investment windows for specific regions or partner countries or for both , for specific sectors , for specific projects or for specific categories of final beneficiaries or for both to be funded by instruments referred to in article 9 to be covered by the efsd guarantee up to a fixed amount . the choice of investment windows shall be duly justified by an analysis of the market failure or sub - optimal investment situations . such analysis shall be carried out by the commission in cooperation with potentially eligible counterparts and stakeholders . investment windows shall be defined with a view to allocating a significant share of the efsd guarantee to fragile and conflict - affected countries , landlocked countries and least - developed countries .


### on a case by case basis the commission may allow combined financing from different union instruments . ### on a case by case basis the commission may allow combined financing from different union instruments to the extent that it is needed for the success of the investment project backed by the efsd .


### the union ' s ambitious external investment plan is needed to support investments starting in africa and the union ' s neighbourhood as a means to promote the sustainable development goals of the united nations 2030 agenda for sustainable development as well as the commitments under the recently revised european neighbourhood policy thus addressing root causes of migration . it should also contribute to the implementation of the paris agreement on climate change . ### the union ' s ambitious external investment plan is needed to support investments starting in africa and the union ' s neighbourhood as a means to promote the sustainable development goals of the united nations 2030 agenda for sustainable development , in particular poverty eradication , as well as the commitments under the recently revised european neighbourhood policy and the new partnership framework with third countries under the european agenda on migration thus addressing migratory pressures stemming from poverty , underdevelopment , inequality , demographic growth , lack of employment and economic opportunities as well as from climate change . it should also contribute to the implementation of the paris agreement on climate change .


### the eip should incorporate the union commitment under the addis ababa action agenda on financing for development . it should also allow european investors and private companies , including small and medium - sized enterprises , to participate more effectively to sustainable development in partner countries . ### the eip should incorporate the union commitment under the addis ababa action agenda on financing for development . it should also allow european investors and private companies , in particular small and medium - sized enterprises , to contribute more effectively to sustainable development in partner countries , with the emphasis very much on ' sustainable ' .


### by 31 december 2020 , the commission shall evaluate the functioning of the efsd . the commission shall submit its evaluation report to the european parliament and the council , containing an independent evaluation of the application of this regulation . this report shall be submitted without delay by the commission in the event that the approved financing and investment operations absorb in full the amount of the efsd guarantee available before 30 june 2020 . ### by 31 december 2019 , the commission shall evaluate the functioning of the efsd , its management and its effective contribution to the purpose and objectives of this regulation . the commission shall submit its evaluation report to the european parliament and the council , containing an independent evaluation of the application of this regulation accompanied by a reasoned proposal with a view to reviewing or amending this regulation , as appropriate , in particular with a view to extending the initial investment period referred to in article 7 . that evaluation report shall be accompanied by an opinion of the court of auditors .


### the strategic board shall be composed of representatives of the commission and of the high representative of the union for foreign affairs and security policy , of the member states and of the eib . the commission may invite other contributors to become members of the strategic board having regard where appropriate to the view of the board . partner countries and relevant regional organisations , the eligible counterparts and the european parliament may be given observer status , where appropriate . the strategic board shall be co - chaired by the commission and the high representative . ### the strategic board shall be composed of representatives of the commission and of the high representative , of the member states and of the eib . the commission may invite other contributors to become members of the strategic board having regard where appropriate to the view of the board . the european parliament shall have observer status . observers designated by the european parliament shall have the right to contribute to the deliberations without the right to vote . partner countries and relevant regional organisations and the eligible counterparts may be given observer status , where appropriate . the strategic board shall be co - chaired by the commission and the high representative .


### provide finance in favour of micro - , small - and medium - sized enterprises with a particular focus on private sector development ; ### support private sector development , with a particular focus on local companies and micro , small and medium - sized enterprises ;


### provide financial instruments aimed at addressing the bottlenecks to private investments , including first loss guarantees to portfolios guarantees to private sector projects such as loan guarantees for small and medium - sized enterprises and guarantees for specific risks for infrastructure projects and other risk capital ; ### address bottlenecks to private investments by providing financial instruments , including first loss guarantees to portfolios guarantees to private sector projects such as loan guarantees for small and medium - sized enterprises and guarantees for specific risks for infrastructure projects and other risk capital ; financial instruments provided may include be denominated in local currencies of partner countries ;


### in their financing and investment operations , the eligible counterparts shall not support any activities carried out for illegal purposes , including money laundering , terrorist financing , organised crime , tax fraud and tax evasion , corruption , and fraud affecting the financial interests of the union . the eligible counterparts shall not participate in any financing or investment operation through a vehicle located in a non - cooperative jurisdiction , in accordance with its policy towards weakly regulated or non - cooperative jurisdictions based on policies of the union , the organisation for economic co - operation and development or the financial action task force . ### in their financing and investment operations , the eligible counterparts shall not support any activities carried out for illegal purposes , including money laundering , terrorist financing , organised crime , tax fraud and tax evasion , corruption , and fraud affecting the financial interests of the union . in particular , the eligible counterparts shall neither participate in any financing or investment operation through a vehicle located in a jurisdiction that does not cooperate with the union in relation to the application of the internationally agreed tax standards on transparency and the exchange of information nor maintain business relations with entities established in such a jurisdiction . in their financing and investment operations covered by this regulation , the eligible counterparts shall not make use of or engage in tax avoidance structures , in particular aggressive tax planning schemes , or practices that do not comply with union tax good governance principles , as set out in union law , including commission recommendations and communications . when concluding agreements with financial intermediaries , the eligible counterparts shall transpose the requirements referred to in this paragraph in the relevant contracts and shall request country - by - country reporting concerning their observance .


### the eip should provide an integrated financial package to finance investments starting in regions of africa for countries that are signatories to the partnership agreement between the members of the african , caribbean and pacific group of states of the one part , and the european community and its member states , of the other part , signed in cotonou on 23 june 200022 and the neighbourhood countries , thereby creating growth and employment opportunities , maximising additionality , delivering innovative products , and crowding - in private sector funds . __________________ 22 oj l 317 , 15 . 12 . 2000 as last amended by oj l 287 , 4 . 11 . 2010 ### the european fund for sustainable development , as part of the eip , should provide an integrated financial package to finance and attract investments fostering sustainable and inclusive economic and social development and promoting the socio - economic resilience of partner countries , while maximising additionality , addressing market failures and sub - optimal investment situations , and crowding - in private sector funds . the efsd’s operations should be clearly distinct from , and complementary to , other support , in particular the external lending mandate operations managed by the european investment bank .


### by 31 december 2020 , the commission shall evaluate the functioning of the efsd . the commission shall submit its evaluation report to the european parliament and the council , containing an independent evaluation of the application of this regulation . this report shall be submitted without delay by the commission in the event that the approved financing and investment operations absorb in full the amount of the efsd guarantee available before 30 june 2020 . ### by 31 december 2019 , the commission shall evaluate the functioning of the efsd and its effective contribution to the purpose and objectives of this regulation . the commission shall submit its evaluation report to the european parliament and the council , containing an independent evaluation of the application of this regulation , accompanied by a reasoned proposal with a view to reviewing or amending this regulation , as appropriate , in particular with a view to extending the initial investment period referred to in article 7 .


### maximise the mobilisation of private sector capital . ### maximise , wherever relevant , the mobilisation of private sector capital ;


### ' additionality ' means the principle ensuring that the efsd guarantee support may not be aimed at replacing the support of a member state , private funding or another union financial intervention , as well as that it is aimed at addressing market failures and avoiding crowding out other public or private investments . ### ' additionality ' means the principle ensuring that the efsd contributes to sustainable development by operations which address market failures or sub - optimal investment situations and which could not have been carried out or could not have been carried out to the same extent without efsd support . efsd operations may not be aimed at replacing the support of a member state , private funding or another union financial intervention and shall avoid crowding out other public or private investments . projects supported by the efsd shall typically have a higher risk profile than the portfolio of investments supported by the eligible counterparts under their normal investment policies before the entry into force of this regulation .


### the purpose of the efsd as an integrated financial package shall be to support through the supply of financing capacity in the form of grants , guarantees and other financial instruments to eligible counterparts investments and increased access to financing starting in african and neighbourhood partner countries . ### the purpose of the efsd as an integrated financial package shall be to foster sustainable and inclusive economic and social development and promote socio - economic resilience of partner countries by supporting investments and increased access to financing through the supply of financing capacity in the form of grants , guarantees and other financial instruments to eligible counterparts investments and increased access to financing starting in african and neighbourhood partner countries , while maximising additionality , delivering innovative products and crowding in private sector funds .


### the efsd shall contribute to the achievement of the sustainable development goals of the 2030 agenda with a particular focus on sustainable growth , job creation , socio - economic sectors and on the support to micro , small and medium sized enterprises , thus addressing root causes of migration and contributing to sustainable reintegration of returned migrants in their countries of origin while maximising additionality , delivering innovative products and crowding in private sector funds . ### the efsd shall contribute to the achievement of the sustainable development goals of the 2030 agenda and be guided by the objectives set out in article 21 of the treaty on european union and article 208 tfeu and the internationally agreed development effectiveness principles , thus contributing to the union ' s development and neighbourhood policies and the new partnership framework with third countries under the european agenda on migration , with a particular focus on poverty eradication , long - term sustainable and inclusive growth , job creation , socio - economic sectors and on the support to micro , small and medium sized enterprises . in so doing , the efsd shall , inter alia , contribute to addressing the specific socio - economic root causes of migration and foster sustainable reintegration of migrants returning to their countries of origin or transit , as well as strengthen resilience of host communities .


### the commission should report annually to the european parliament and the council on the financing and investment operations covered by the efsd guarantee with a view to ensuring accountability to the european citizens . the report should be made public in order to allow relevant stakeholders , including civil society , to express their views . the commission should also report annually to the european parliament and the council on the management of the efsd guarantee fund so that accountability and transparency are ensured . ### the commission must report annually to the european parliament and the council on the financing and investment operations covered by the efsd guarantee with a view to ensuring full accountability to the european citizens . the report must be made public in order to allow relevant stakeholders , including civil society , to express their views . the commission must also report annually to the european parliament and the council on the management of the efsd guarantee fund so that accountability and transparency are ensured .


### provide financial instruments aimed at addressing the bottlenecks to private investments , including first loss guarantees to portfolios guarantees to private sector projects such as loan guarantees for small and medium - sized enterprises and guarantees for specific risks for infrastructure projects and other risk capital ; ### address bottlenecks to private investments by providing financial instruments , including first loss guarantees to portfolios guarantees to private sector projects such as loan guarantees for small and medium - sized enterprises and guarantees for specific risks for infrastructure projects and other risk capital ;


### it shall provide strategic guidance and support the commission in setting overall investment goals as regards the use of the efsd guarantee . the strategic board shall also support overall coordination and coherence between the regional investment platforms and with the external lending mandate operations managed by the eib , including the eib resilience initiative . ### the strategic board shall provide strategic guidance and support the commission in setting overall investment goals as regard the use of the efsd guarantee , as well as in monitoring an appropriate and diversified geographical and thematic coverage for investment windows , while giving special attention to least developed countries and fragile states . it shall make sure that the efsd operations support the strategic priorities of union external action and development policy , and in particular its guiding principles and objectives as referred to article 21 teu and 208 tfeu respectively .


### it shall provide strategic guidance and support the commission in setting overall investment goals as regards the use of the efsd guarantee . the strategic board shall also support overall coordination and coherence between the regional investment platforms and with the external lending mandate operations managed by the eib , including the eib resilience initiative . ### 1 a . the strategic board shall provide strategic guidance and support the commission in setting overall investment goals as regards the use of the efsd guarantee , as well as in monitoring an appropriate and diversified geographical and thematic coverage for investment windows , while giving special attention to least developed countries . it shall make sure that the efsd operations support the strategic priorities of union external action and development policy and , in particular , its guiding principles and objectives as provided for in article 21 teu and article 208 tfeu respectively . 1 b . the strategic board shall also support overall coordination , complementarity and coherence between the regional investment platforms , between the three pillars of the eip , between the eip and the union ' s other long - term and short - term efforts on migration , as well as with union external financing instruments and trust funds , with the external lending mandate operations managed by the eib , including the eib resilience initiative and the acp investment facility .


### moreover , the strategic board should support the commission in setting strategic guidance and overall investment goals . the strategic board should also support coordination and coherence between the regional platforms . this should ensure complementarity of the various instruments in external action . the strategic board should be co - chaired by the commission and the high representative of the union for foreign affairs and security policy to ensure consistency and coherence with union external policy objectives and partnership frameworks with third countries . ### the strategic board should be co - chaired by the commission and the high representative in order to ensure consistency and coherence with union external policy objectives , partnership frameworks with third countries and with the union ' s other efforts addressing the root causes of migration , as well as policy coherence for development .


### in accordance with its transparency policies and general union principles on access to documents and information , the eligible counterparts shall make publicly available on their websites information relating to all financing and investment operations covered by the efsd guarantee under this regulation , relating in particular to the manner in which those operations contribute to the requirements of this regulation . ### in accordance with its transparency policies and union rules on access to documents and information , the eligible counterparts shall proactively and systematically make publicly available on their websites information relating to all financing and investment operations covered by the efsd guarantee under this regulation , relating in particular to the manner in which those operations contribute to the requirements of this regulation .


### by 31 december 2020 , the commission shall evaluate the functioning of the efsd . the commission shall submit its evaluation report to the european parliament and the council , containing an independent evaluation of the application of this regulation . this report shall be submitted without delay by the commission in the event that the approved financing and investment operations absorb in full the amount of the efsd guarantee available before 30 june 2020 . ### by 31 december 2019 , the commission shall evaluate the functioning of the efsd , its management and its effective contribution to the purpose and objectives of this regulation . the commission shall submit its evaluation report to the european parliament and the council , containing an independent evaluation of the application of this regulation accompanied by a reasoned proposal with a view to reviewing or amending this regulation , as appropriate , in particular with a view to extending the initial investment period referred to in article 7 . that evaluation report shall be accompanied by an opinion of the court of auditors .


### the financing and investment operations eligible for support through the efsd guarantee shall be consistent and aligned with union policies , in particular development and neighbourhood policies of the union , the partner countries ' strategies and policies and aim at supporting the following general objectives : ### the financing and investment operations eligible for support through the efsd guarantee shall be in line with the purpose of the efsd as provided for in article 3 . those financing and investment operations shall be consistent and aligned with union policies , in particular development and neighbourhood policies of the union , as well as the partner countries ' strategies and policies and support the following objectives :


### provide finance in favour of micro - , small - and medium - sized enterprises with a particular focus on private sector development ; ### support private sector development , with a particular focus on local companies and micro , small and medium - sized enterprises ;


### the amount of own resources that the counterpart is ready to mobilise for the investment window . ### the amount of own resources as well as private sector co - financing that the counterpart is ready to mobilise for the investment window .


### contribute to economic and social development , with particular focus on sustainability and job creation , thus addressing root causes of migration and contributing to sustainable reintegration of returned migrants in their countries of origin ; ### contribute to economic and social development , with particular focus on poverty eradication , sustainability and fostering decent employment , economic opportunities and entrepreneurship , promoting , in particular , gender equality and the empowerment of women and young people , thus addressing specific root causes of migration , enhancing resilience and contributing to the sustainable reintegration of migrants returned to their countries of origin , with due regard to the strengthening of the rule of law , good governance and human rights ;


### in the management of the efsd the commission shall be assisted by a strategic board . ### in the management of the efsd the commission shall be advised by a strategic board .


### the management of the efsd shall be ensured by the commission . ### the management of the efsd shall be ensured by the commission . the commission shall work in close cooperation with the eib and with the other eligible counterparts as regards the operational management of the efsd guarantee . to that end , a technical working group shall be put in place . an agreement shall be concluded with the eib specifying the conditions of their cooperation in the management of the efsd , in consultation with other eligible counterparts .


### the commission shall inform the european parliament and the council about the contributions confirmed . ### the commission shall inform the european parliament and the council without delay about the contributions confirmed .


### target socio - economic sectors , in particular infrastructure including sustainable energy , water , transport , information and communications technologies , environment , sustainable use of natural resources and blue growth , social infrastructure , human capital , in order to improve the socio - economic environment ; ### strengthen a number of socio - economic sectors , in particular infrastructure including renewable energy , water , transport , information and communications technologies , environment , sustainable use of natural resources and blue growth , social infrastructure , human capital and education and lifelong learning , in order to improve the socio - economic environment ;


### the maximum period allowed for eligible counterparts to conclude agreements with financial intermediaries or final beneficiaries shall be four years after the conclusion of the relevant guarantee agreement . ### the maximum period allowed for eligible counterparts to conclude agreements with co - financing private sector partners , financial intermediaries or final beneficiaries shall be four years after the conclusion of the relevant guarantee agreement .


### the eip should incorporate the union commitment under the addis ababa action agenda on financing for development . it should also allow european investors and private companies , including small and medium - sized enterprises , to participate more effectively to sustainable development in partner countries . ### the eip should incorporate the union commitment under the addis ababa action agenda on financing for development , the principles of development effectiveness as well as policy coherence for development as stipulated by article 208 of the treaty on the functioning of the european union . it should also allow investors and private companies , including small and medium - sized enterprises , to contribute more effectively to sustainable development in partner countries .


### the strategic board shall be composed of representatives of the commission and of the high representative of the union for foreign affairs and security policy , of the member states and of the eib . the commission may invite other contributors to become members of the strategic board having regard where appropriate to the view of the board . partner countries and relevant regional organisations , the eligible counterparts and the european parliament may be given observer status , where appropriate . the strategic board shall be co - chaired by the commission and the high representative . ### the strategic board shall be composed of representatives of the commission and of the high representative , of the member states and of the eib . the commission may invite other contributors to become members of the strategic board having regard where appropriate to the view of the board . the european parliament shall have observer status . observers designated by the european parliament shall have the right to contribute to the deliberations without the right to vote . partner countries and relevant regional organisations and the eligible counterparts may be given observer status , where appropriate . the strategic board shall be co - chaired by the commission and the high representative .


### the efsd shall contribute to the achievement of the sustainable development goals of the 2030 agenda with a particular focus on sustainable growth , job creation , socio - economic sectors and on the support to micro , small and medium sized enterprises , thus addressing root causes of migration and contributing to sustainable reintegration of returned migrants in their countries of origin while maximising additionality , delivering innovative products and crowding in private sector funds . ### the efsd shall contribute to the achievement of the sustainable development goals of the 2030 agenda and be guided by the objectives set out in article 21 of the treaty on european union and article 208 tfeu and the internationally agreed development effectiveness principles , thus contributing to the union ' s development and neighbourhood policies and the new partnership framework with third countries under the european agenda on migration , with a particular focus on poverty eradication , long - term sustainable and inclusive growth , job creation , socio - economic sectors and on the support to micro , small and medium sized enterprises . in so doing , the efsd shall , inter alia , contribute to addressing the specific socio - economic root causes of migration and foster sustainable reintegration of migrants returning to their countries of origin or transit , as well as strengthen resilience of host communities .


### the commission may define investment windows for specific regions or partner countries or for both , for specific sectors , for specific projects or for specific categories of final beneficiaries or for both to be funded by instruments referred to in article 9 to be covered by the efsd guarantee up to a fixed amount . all requests for financial support within investment windows shall be made to the commission . ### the commission shall define investment windows for specific regions or partner countries or for both , for specific sectors , for specific projects or for specific categories of final beneficiaries or for both to be funded by instruments referred to in article 9 to be covered by the efsd guarantee up to a fixed amount . the choice of investment windows shall be duly justified by an analysis of the market failure or sub - optimal investment situations . such analysis shall be carried out by the commission in cooperation with potentially eligible counterparts and stakeholders . investment windows shall be defined with a view to allocating a significant share of the efsd guarantee to fragile and conflict - affected countries , landlocked countries and least - developed countries .


### by 31 december 2020 , the commission shall evaluate the functioning of the efsd . the commission shall submit its evaluation report to the european parliament and the council , containing an independent evaluation of the application of this regulation . this report shall be submitted without delay by the commission in the event that the approved financing and investment operations absorb in full the amount of the efsd guarantee available before 30 june 2020 . ### by 31 december 2019 , the commission shall evaluate the functioning of the efsd and its effective contribution to the purpose and objectives of this regulation . the commission shall submit its evaluation report to the european parliament and the council , containing an independent evaluation of the application of this regulation , accompanied by a reasoned proposal with a view to reviewing or amending this regulation , as appropriate , in particular with a view to extending the initial investment period referred to in article 7 .


### ' additionality ' means the principle ensuring that the efsd guarantee support may not be aimed at replacing the support of a member state , private funding or another union financial intervention , as well as that it is aimed at addressing market failures and avoiding crowding out other public or private investments . ### ' additionality ' means the principle ensuring that the efsd contributes to sustainable development by operations which address market failures or sub - optimal investment situations and which could not have been carried out or could not have been carried out to the same extent without efsd support . efsd operations may not be aimed at replacing the support of a member state , private funding or another union financial intervention and shall avoid crowding out other public or private investments . projects supported by the efsd shall typically have a higher risk profile than the portfolio of investments supported by the eligible counterparts under their normal investment policies before the entry into force of this regulation .


### in accordance with its transparency policies and general union principles on access to documents and information , the eligible counterparts shall make publicly available on their websites information relating to all financing and investment operations covered by the efsd guarantee under this regulation , relating in particular to the manner in which those operations contribute to the requirements of this regulation . ### in accordance with its transparency policies and general union rules on access to documents and information , the eligible counterparts shall proactively and systematically make publicly available on their websites information relating to all financing and investment operations covered by the efsd guarantee under this regulation , relating in particular to the manner in which those operations contribute to the requirements of this regulation . where possible , such information shall be broken down at project level and include information on the ultimate beneficiaries , taking into account the protection of confidential and commercially sensitive information .


### in their financing and investment operations , the eligible counterparts shall not support any activities carried out for illegal purposes , including money laundering , terrorist financing , organised crime , tax fraud and tax evasion , corruption , and fraud affecting the financial interests of the union . the eligible counterparts shall not participate in any financing or investment operation through a vehicle located in a non - cooperative jurisdiction , in accordance with its policy towards weakly regulated or non - cooperative jurisdictions based on policies of the union , the organisation for economic co - operation and development or the financial action task force . ### in their financing and investment operations , the eligible counterparts shall not support any activities carried out for illegal purposes , including money laundering , terrorist financing , organised crime , tax fraud and tax evasion , corruption , and fraud affecting the financial interests of the union . in particular , the eligible counterparts shall neither participate in any financing or investment operation through a vehicle located in a jurisdiction that does not cooperate with the union in relation to the application of the internationally agreed tax standards on transparency and the exchange of information nor maintain business relations with entities established in such a jurisdiction . in their financing and investment operations covered by this regulation , the eligible counterparts shall not make use of or engage in tax avoidance structures , in particular aggressive tax planning schemes , or practices that do not comply with union tax good governance principles , as set out in union law , including commission recommendations and communications . when concluding agreements with financial intermediaries , the eligible counterparts shall transpose the requirements referred to in this paragraph in the relevant contracts and shall request country - by - country reporting concerning their observance .


### the internationally agreed ipcc guidelines state that emissions from the combustion of biomass can be accounted as zero in the energy sector with the condition that these emissions are accounted for in the lulucf sector . in the eu , emissions from biomass combustion are accounted as zero pursuant to article 38 of regulation no . 601 / 2012 and the provisions set out in regulation no . 525 / 2013 , hence consistency with the ipcc guidelines would only be ensured if these emissions should be covered accurately under this regulation . ### the internationally agreed ipcc guidelines state that emissions from the combustion of biomass can be accounted as zero in the energy sector with the condition that these emissions are accounted for in the lulucf sector . in the eu , emissions from biomass combustion are accounted as zero pursuant to article 38 of regulation no . 601 / 2012 and the provisions set out in regulation no . 525 / 2013 , hence consistency with the ipcc guidelines would only be ensured if these emissions should be covered accurately under this regulation . such accounting in relation to emissions does not seek to impede the use of sustainable biomass for energy purposes .


### the commission shall review the national forestry accounting plans and technical corrections and assess the extent to which the proposed new or corrected forest reference levels have been determined in accordance with the principles and requirements set out in paragraphs and as well as article 5 . to the extent that this is required in order to ensure compliance with the principles and requirements set out in paragraphs and as well as article 5 , the commission may recalculate the proposed new or corrected forest reference levels . ### at specified in annex 4 , the commission shall carry out a technical assessment of the national forestry accounting plans submitted by member states and of any technical corrections or adjustments , with a view to assessing the extent to which the proposed new or corrected forest reference levels have been determined in accordance with the principles and requirements set out in paragraphs and as well as article 5 . the commission shall draw up reports summarising the findings and making recommendations .


### the power to adopt delegated acts referred to in article 3 , 5 , 8 , 10 and 13 shall be conferred on the commission for an indeterminate period of time from the [ date of entry into force ] . ### the power to adopt delegated acts referred to in article 3 , 5 , 8 , 9 , 10 and 13 shall be conferred on the commission for an indeterminate period of time from the [ date of entry into force ] .


### natural disturbances , such as wildfires , insect and disease infestations , extreme weather events and geological disturbances that are beyond the control of , and not materially influenced by , a member state , may result in greenhouse gas emissions of a temporary nature in the lulucf sector , or may cause the reversal of previous removals . as reversal can also be the result of management decisions , such as decisions to harvest or plant trees , this regulation should ensure that human - induced reversals of removals are always accurately reflected in lulucf accounts . moreover , this regulation should provide member states with a limited possibility to exclude emissions resulting from disturbances that are beyond their control from their lulucf accounts . however , the manner in which member states apply those provisions should not lead to undue under - accounting . ### natural disturbances , such as wildfires , insect and disease infestations , extreme weather events and geological disturbances that are beyond the control of , and not materially influenced by , a member state , may result in greenhouse gas emissions of a temporary nature in the lulucf sector , or may cause the reversal of previous removals . as reversal can also be the result of management decisions , such as decisions to harvest or plant trees , this regulation should ensure that human - induced reversals of removals are always accurately reflected in lulucf accounts . moreover , this regulation should provide member states with a possibility to exclude emissions resulting from disturbances that are beyond their control from their lulucf accounts . however , the manner in which member states apply those provisions should not lead to undue under - accounting .


### this regulation should be reviewed as of 2024 and every 5 years thereafter in order to assess its overall functioning . this review can also be informed by the results of the global stocktake of the paris agreement . ### in the light of the 2018 facilitative dialogue , the commission shall report to the european parliament and to the council by 28 february 2019 on the adequacy of the level of ambition of this regulation . this regulation should be reviewed as of 2023 and every 3 years thereafter in order to assess its overall functioning . this review can also be informed by the results of the global stocktake of the paris agreement .


### the lulucf sector can contribute to climate change mitigation in several ways , in particular by reducing emissions , and maintaining and enhancing sinks and carbon stocks . in order for measures aiming in particular at increasing carbon sequestration to be effective , the long - term stability and adaptability of carbon pools is essential . ### in combating climate change , the challenge is to reduce current co2 levels in the atmosphere . the lulucf sector can contribute to climate change mitigation in several ways , in particular by reducing emissions , and maintaining and enhancing sinks and carbon stocks . the bioeconomy and bioenergy are therefore an indispensable path towards green growth . in order for measures aiming in particular at increasing carbon sequestration to be effective , the long - term stability and adaptability of carbon pools is essential .


### reference levels should ensure a robust and credible accounting , to guarantee that emissions and removals resulting from biomass use are properly accounted for ; ### reference levels should ensure a robust and credible accounting , to guarantee that emissions and removals resulting from managed forest land use are properly accounted for and that emissions are balanced towards removals ;


### the commission shall report to the european parliament and to the council by 28 february 2024 and every five years thereafter on the operation of this regulation , its contribution to the eu ' s overall 2030 greenhouse gas emission reduction target and its contribution to the goals of the paris agreement , and may make proposals if appropriate . ### in the light of the 2018 facilitative dialogue , the commission shall report to the european parliament and to the council by 28 february 2019 on the adequacy of the level of ambition of this regulation . the commission shall report to the european parliament and to the council by 28 february 2023 and every three years thereafter on the operation of this regulation , its contribution to the eu ' s overall 2030 greenhouse gas emission reduction target and its contribution to the goals of the paris agreement , and shall make proposals .


### in order to provide for the appropriate accounting of transactions under this regulation , including the use of flexibilities and tracking compliance , the power to adopt acts in accordance with article 290 of the treaty on the functioning of the european union should be delegated to the commission in respect of the technical adaptation of definitions , values , lists of greenhouse gases and carbon pools , the update of reference levels , the accounting of transactions and the revision of methodology and information requirements . these measures shall take into account the provisions in commission regulation no 389 / 2013 establishing a union registry . the necessary provisions should be contained in a single legal instrument combining the accounting provisions pursuant to directive 2003 / 87 / ec , regulation no 525 / 2013 , regulation [ ] on binding annual greenhouse gas emission reductions by member states from 2021 to 2030 for a resilient energy union and this regulation . it is of particular importance that the commission carry out appropriate consultations during its preparatory work , including at expert level conducted in accordance with the principles laid down in the inter - institutional agreement on better law - making of 13 april 2016 . in particular , to ensure equal participation in the preparation of delegated acts , the european parliament and council receive all documents at the same time as member states ' experts , and their experts have systematic access to meetings of commission expert groups dealing with the preparation of delegated acts . ### in order to provide for the appropriate accounting of transactions under this regulation , including the use of flexibilities and tracking compliance , the power to adopt acts in accordance with article 290 of the treaty on the functioning of the european union should be delegated to the commission in respect of the technical adaptation of definitions , values , lists of greenhouse gases and carbon pools , the accounting of transactions , the revision of methodology on the basis of the most recent adopted ipcc methodologies and unfccc guidance and information requirements . these measures shall take into account the provisions in commission regulation no 389 / 2013 establishing a union registry . the necessary provisions should be contained in a single legal instrument combining the accounting provisions pursuant to directive 2003 / 87 / ec , regulation no 525 / 2013 , regulation no . . . / . . . on binding annual greenhouse gas emission reductions by member states from 2021 to 2030 for a resilient energy union and this regulation . it is of particular importance that the commission carry out appropriate consultations during its preparatory work , including at expert level conducted in accordance with the principles laid down in the inter - institutional agreement on better law - making of 13 april 2016 . in particular , to ensure equal participation in the preparation of delegated acts , the european parliament and council receive all documents at the same time as member states ' experts , and their experts have systematic access to meetings of commission expert groups dealing with the preparation of delegated acts .


### the paris agreement , inter alia , sets out a long - term goal in line with the objective to keep the global temperature increase well below 2°c above pre - industrial levels and to pursue efforts to keep it to 1 . 5°c above pre - industrial levels . in order to achieve this goal , the parties should prepare , communicate and maintain successive nationally determined contributions . the paris agreement replaces the approach taken under the 1997 kyoto protocol which will not be continued beyond 2020 . the paris agreement also calls for a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century , and invites parties to take action to conserve and enhance , as appropriate , sinks and reservoirs of greenhouse gases , including forests . ### the paris agreement , inter alia , sets out a long - term goal in line with the objective to keep the global temperature increase well below 2°c above pre - industrial levels and to pursue efforts to keep it to 1 . 5°c above pre - industrial levels . it also aims to increase the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development , in a manner that does not threaten food production . in order to achieve the purpose of the paris agreement , the parties should prepare , communicate and maintain successive nationally determined contributions . the paris agreement replaces the approach taken under the 1997 kyoto protocol which will not be continued beyond 2020 . the paris agreement also calls for a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century , and invites parties to take action to conserve and enhance , as appropriate , sinks and reservoirs of greenhouse gases , including forests .


### on 10 june 2016 the commission presented the proposal for the eu to ratify the paris agreement . this legislative proposal forms part of the implementation of the union ' s commitment to economy - wide emission reductions as confirmed in the intended nationally determined reduction commitment of the union and its member states submitted to the secretariat of the united nations framework convention on climate change on 6 march 2015 . 10 __________________ 10 http : / / www4 . unfccc . int / submissions / indc / submission%20pages / submissions . aspx ### the council ratified the paris agreement on 5 october 2016 , following the consent given by the european parliament on 4 october 2016 . the paris agreement entered into force on 4 november 2016 and aims at keeping the increase in global temperature to well below 2°c above pre - industrial levels and to pursue efforts to limit the temperature increase to 1 . 5°c above pre - industrial levels , in a manner that does not threaten food production and food security . the agreement also emphasises the role of sustainable forest management in reaching the target of balancing emissions and removals . this legislative proposal forms part of the implementation of the union ' s commitment to economy - wide emission reductions as confirmed in the intended nationally determined reduction commitment of the union and its member states submitted to the secretariat of the united nations framework convention on climate change on 6 march 2015 . 10 __________________ 10 http : / / www4 . unfccc . int / submissions / indc / submission%20pages / submissions . aspx


### the commission shall report to the european parliament and to the council by 28 february 2024 and every five years thereafter on the operation of this regulation , its contribution to the eu ' s overall 2030 greenhouse gas emission reduction target and its contribution to the goals of the paris agreement , and may make proposals if appropriate . ### the commission shall review the ambition of this proposal after the 2018 facilitative dialogue . it shall report to the european parliament and to the council by 28 february 2024 and every two years thereafter on the operation of this regulation , its contribution to the eu ' s overall 2030 greenhouse gas emission reduction target and its contribution to the long - term goals of the paris agreement , and may make proposals if appropriate .


### for the period from 2021 to 2025 and from 2026 to 2030 , taking into account the flexibilities provided for in article 11 , each member state shall ensure that emissions do not exceed removals , calculated as the sum of total emissions and removals on their territory in the land accounting categories referred to in article 2 combined , as accounted in accordance with this regulation . ### for the period from 2021 to 2025 and from 2026 to 2030 , taking into account the flexibilities provided for in article 11 , each member state shall ensure that emissions do not exceed removals , calculated as the sum of total emissions and removals on their territory in the land accounting categories and other categories referred to in article 2 combined , as accounted in accordance with this regulation . during the first review , as stipulated in article 15 , the commission shall review the above rule in accordance with relevant decisions adopted by bodies of the unfccc or of the paris agreement .


### each member state shall prepare and maintain accounts that accurately reflect the emissions and removals resulting from the land accounting categories referred to in article 2 . member states shall ensure the accuracy , completeness , consistency , comparability and transparency of their accounts and of other data provided under this regulation . member states shall denote emissions by a positive sign and removals by a negative sign . ### each member state shall prepare and maintain accounts that accurately reflect the emissions and removals resulting from the land accounting categories and other categories referred to in article 2 using the reporting guidance adopted by the cop for the period 2021 - 2030 . member states shall ensure the accuracy , completeness , consistency , comparability and transparency of their accounts and of other data provided under this regulation . member states shall denote emissions by a positive sign and removals by a negative sign .