EN  EN EN 
 
  EUROPEAN COMMISSION 
Brussels, 19.10.2011 
SEC(2011) 1262 final 
 
  
COMMISSION STAFF WORKING DOCUMENT 
 
Accompanying the Regulation establishi ng the Connecting Europe Facility  
   
 
 
IMPACT ASSESSMENT  
  
{COM(2011) 665 final} 
{SEC(2011) 1263 final} 
 
       
 
   
This report commits only the Commission’s serv ices involved in its preparation and does not 
prejudge the final form of  any decision to be taken by the Commission.  
 
EN 2TABLE OF CONTENTS 
 
1. PROCEDURAL  ISSUES  AND  CONSULTATION  OF INTERESTED  PARTIES ... 3  
1.1. Organisation and timing............................................................................................. 3 
1.2. Consultation and expertise ......................................................................................... 3 1.3. Consultation of the Impact Assessment Board .......................................................... 4 
2. PROBLEM
 DEFINITION............................................................................................... 6  
2.1. Policy context............................................................................................................ .6  
2.1.1. Current EU framework for infrastructure financing .......................................... 6 
2.2. A renewed context for infrastr ucture financing in Europe....................................... 12 
2.3. The problem ............................................................................................................. 14  
2.4. Justification for EU action........................................................................................ 20 2.5. The Baseline: How would the problem evolve, all things being equal? .................. 22 
3. O
BJECTIVES ..................................................................................................................... 28  
3.1. Policy objectives ...................................................................................................... 29 
3.2. Possible trade-offs between the search for synergies and the objectives of the sector 
specific policy frameworks .................................................................................................. 31 
3.3. Coherence with other horizontal policies................................................................. 31 
4. POLICY OPTIONS ............................................................................................................. 32  
4.1. Identification of generic scenarios for investment leverage and project 
implementation................................................................................................................. .... 33 
4.2. Identification of policy options ................................................................................ 35 
5. ANALYSIS OF IMPACTS ..................................................................................................... 48  
5.1. Analysis of the impacts of the creation of the CEF.................................................. 48 
5.2. Analysis of the impacts of th e six retained policy options....................................... 51 
6. COMPARISON OF THE RETAINED POLICY OPTIONS ......................................................... 54  
7. MONITORING AND EVALUATION ..................................................................................... 57  
 
List of annexed documents 
Annex 1 – Summary of stakeholder consultations Annex 2 – Summary of ex-post studies and reviews Annex 3 – Impacts of CEF establishment Annex 4 –Financial instruments under CEF Annex 5 – Assessment of alternative polic y measures within CEF design options 
Annex 6 - Glossary
EN 3 
1. PROCEDURAL  ISSUES  AND  CONSULTATION  OF INTERESTED  PARTIES 
Lead DGs: DG MOVE, DG ENER, DG INFSO1 
WP reference:  2011/MOVE/019  Proposal to the European Parliament and the Council for a Regulation on the Connecting 
Europe Facility that will repla ce and repeal Regulation No 1159/2005
2 (covering the field of 
ICT) and Regulation No 680/20073 (covering the fields of energy and transport). 
1.1. Organisation and timing 
This Impact Assessment (IA) repo rt accompanies the proposal fo r the Regulation establishing 
the Connecting Europe Facility (CEF) that wi ll fund pre-identified transport, energy and 
Information and Communication Technology (ICT) pr iority infrastructures of EU interest. 
This new instrument was proposed by the Co mmission in its Communication "A Budget for 
Europe 2020 (hereinafter the MFF Communi cation), adopted on 29 June 2011, and its 
accompanying documents4.  The CEF Regulation forms part of  a package of legal instruments 
covering transport, energy and ICT, including al so the sector-specific policy frameworks for 
the three sectors concerned5 and the available financial instruments. 
This IA is a joint report that has been  drafted by DG MOVE, DG INFSO and DG ENER. DG 
ECFIN has had a significant contri bution to this report on the issue of financial instruments. 
The work on this joint IA report has started on 30 June 2011, immediately after the adoption by the Commission of the decision to establish a CEF, as part of its package of proposals put 
forward within the MFF Communication. An  Impact Assessment Steering Group (IASG)
 6 
has been set up and IASG members have been consulted three times between 30 June and 28 
July 2011.7  
1.2. Consultation and expertise  
With a view to preparing the ground for la ter policy developments, the Commission has 
launched various consultation exercises. The su mmaries of the stakeholder meetings and the 
contributions received during the preceding public consultation are available on the Commission website. A summary of the results of the stakeholder consultations is available in 
Annex 1 of this IA report.
8It should be noted however that  no stakeholder consultation was 
                                                 
1 DG ECFIN's contribution has focused particularly on financing instruments. 
2 Regulation (EC) No 1159/2005 of the European Parliament and of the Council of 6 July 2005 amending 
Council Regulation (EC) No 2236/95 laying down general rules for the granting of Community financial aid in 
the field of trans-European networks. 
3 Regulation (EC) No 680/2007 of the European Parliament and of the Council of 20 June 2007 laying down 
general rules for the granting of Community financial aid in the field of the trans-European transport and energy 
networks. 
4 COM(2011) 500 final and SEC(2011) 868. All documents are accessible at 
http://ec.europa.eu/budget/biblio/docum ents/fin_fwk1420/fin_fwk1420_en.cfm   
5 Legislative proposals laying down revised policy frameworks in the area of TEN-E, TEN-T and e-TEN 
respectively. 
6 Apart from the lead DGs, the following services participated: DG BUDG, DG ECFIN, DG COMP, DG 
REGIO, DG MARE, DG ENV, DG CLIMA, DG MARKT, DG RTD, DG ELARG, Commission SG, EEAS. 
7 The second consultation took place by means of written procedure. 
8 Other relevant documents in this context are Resour ce-efficient Europe flagship Initiative, And A Digital 
Agenda for Europe COM(2010)0245,  Reference to Transport White Paper SEC 0359/2011, Commission Staff 
Working Document accompanying the Commission Reco mmendation on regulated access to Next Generation 
EN 4specifically conducted on the particular i ssue of a common funding framework for TEN 
infrastructures. Nevertheless, the question was ad dressed to the stakeholde rs, in the context of 
options for improving coordination between the various Union funding instruments, within 
sectoral consultations concerni ng the revision of the specif ic sectoral policy and funding 
frameworks. In addition, a cross-sectoral consultation was conducte d, on the relevance and 
applicability of a new innovative approach to funding Europ ean infrastructure projects of 
public interest, the Europe 2020 Project Bonds Initiative. 
For the purposes of this impact assessment, the following issues raised during these 
stakeholder consultations are pa rticularly relevant and have been taken into  account in 
assessing the different possible act ions presented in this report: 
- There is a broad consensus emerging from the consultations on the f act that accelerating 
the development of infrastructure with Eu ropean added value requires not only an 
increased EU support, but also a better targ eted support on EU added value priorities. 
- Stakeholders called for a higher leverage of EU funding towards TEN policy objectives 
through for instance a greater coordination and synergies between different financial 
instruments, namely the Cohesion Fund and European Regional Development Fund 
(ERDF), the TEN programmes and the EIB's interventions. 
- Widening the portfolio of available financial instruments is seen by stakeholders as a 
means to better adjust support to  the particular need s of a project, to enable effective 
project structuring and to attract new investors.  
- Stakeholders expressed their concern about  the complexity generated by overlapping 
schemes or by lack of coordination at strate gic level. Beneficiaries/participants are 
confronted with different sets of rules, exceptions or specificities, albeit dealing with the 
same actor (the Commission) within the same  sector. This is repo rtedly confusing at 
times, and translates into obstacles to effective access and correct implementation. Administrative burden is also generated by the segmentation of IT tools for the 
submission of documents, by the duplication of  procedures for the application by the 
same beneficiary/participant to different ty pes of financing schemes, and the duplication 
of reporting obligations. 
1.3. Consultation of the Impact Assessment Board 
Following the submission of a draft report to  the Impact Assessment Board (IAB) on 1 
August 2011 and a hearing with the IAB on 31 August 2011, the IAB sent its opinion on 6
 
September 2011, asking DG MOVE to  make a series of improvements. To this end, the IAB 
made six recommendations that were addressed in  the final version of the IA report in the 
following manner: 
(1) The report should provid e more detail on the implem entation of the programme. 
The revised IA provides more detail with rega rd to the concrete form the CEF provisions 
would take, in each of the six po licy areas of intervention iden tified, for each of the options 
retained for in-depth assessmen t (Table 6 in section 4.2.2). A new Annex 5 has been drafted, 
which contains an assessment of the coherence of these various policy measures alternatives 
in options of minimal, maximal or variable in tegration with the established policy objectives 
as well as their effectiveness and efficiency in achieving the latter, in order to provide further 
(argumentative) background to the impact assess ment developed in the main body of the IA. 
                                                                                                                                                         
Access Networks (NGA), Communication on Energy Infrastructure Priorities to 2020 and beyond – A Blueprint 
for an integrated European energy network (COM (2010) 677. 
EN 5The argument in section  2.3 "Justification of EU action"  has also been developed to further 
explain the rationale for the CEF as a common fra mework covering three di stinct sectors. The 
argument in Annex 5 also seeks to highlight th e extent to which simplification of the TEN 
funding framework by harmonising sectoral rule s within the common CEF framework would 
be coherent, effective and efficient in achieving the identified policy objectives.   
(2) Present evaluation findings in a more consistent way. 
The revised report provides a better balanc ed presentation of evidence arising from 
stakeholder consultations and ex-post evaluatio ns, both in a streamlined section 2 "Problem 
definition" and in revised Annexes 2 and 3 providing summaries of the most relevant 
consultations and evaluations for the current IA exercise. The argument in Annex 5 draws on 
the findings of these consultations and eval uations when discussi ng the possibility of 
simplifying TEN funding rules by drawing on synerg ies across the sectors in the various areas 
of policy measures, i.e. the coherence, e ffectiveness and efficiency of the various 
simplification options in reaching the establis hed policy objectives. Besides obvious common 
characteristics of current sectoral approaches , one of the main possi bilities of drawing 
synergies across the sectors considered has b een that of drawing on  lessons learnt and 
successful practices in one field in order to im prove the quality of policy interventions in the 
others. The discussion in Annex 5 highlights also  why structural differences between the three 
policy fields do not allow further rule si mplification in certain policy areas.  
(3)Better demonstrate the investment needs and the financing gap 
The revised report provides further details with  regard to the underlying assumptions of the 
baseline scenario. It also provi des further details with regard  to the investment needs and 
financing gap in the three sect ors in a global sensitivity analys is (section 2.5.3), in the main 
body of the report as well as in a specifically developed Annex 4, which gives an overview of 
current financing volumes for in frastructure, highlights market  imperfections and points to 
financing gaps in the three sectors. The questio n of the relative role of  grants and financial 
instruments in the overall approach is al so addressed in more detail in Annex 4. 
(4) Describe the options on financ ing instruments in more detail 
The discussion in the new Annex 4 provides a detailed discussion on main modalities of 
potential future financial instruments and how they  relate to other funding  sources in the three 
sectors as well as to the Project Bonds Initi ative currently under deve lopment. A discussion 
on various levels for grants co-financing rates in the three sectors is  provided in Annex 5. 
 (5)Specify the economic impacts of policy options 
The revised report provides further discussion  with regard to the economic, social and 
environmental aspects of the establishment of the CEF.  
(6)Procedure and presentation 
Stakeholder views on the current programmes an d the proposed changes in their management 
have been better reflected in the argument developed in the revise d IA, and in particular in the 
discussion in Annex 5, that focuses on alternativ e policy measures within the various options 
for CEF design. Findings of ex-post reviews have also been more systematically reflected in 
section 2, in defining the problem. The latter section has also substantially streamlined, 
following the IAB recommendations.  
The revised IA report has addressed also the more detailed comments transmitted by the IAB 
to DG MOVE.  
EN 6 
2. PROBLEM  DEFINITION 
2.1. Policy context 
2.1.1.  Current EU framework for infrastructure financing 
Common legislative basis 
Treaty base. First introduced in the Maastricht Treaty (1992),  Articles 170 to 172 of the 
Treaty on the Functioning of the European Union (TFEU)  provide the legal base for the EU 
intervention supporting the establishment a nd development of trans-European networks 
(TEN) in the areas of transpor t, telecommunications and energy infrastructures. Accordingly, 
action by the Union shall aim at promoting the interconnection and inte roperability of, and 
access to, national networks, taking into account in particular the need to link islands, 
landlocked and peripheral regions with the cent ral regions of the Un ion. To this end, the 
Union may, among others, support projects of common interest supported by the Member 
States; the Union may also cont ribute, through the Cohesion Fund, to the financing of specific 
projects in Member States in the area of transport infrastructure.  
Secondary legislation. The Council Regulation 2236/95 of 18 September 1995 (hereinafter 
referred to as the 1995 Regulat ion) laid down the first gene ral rules for the granting of 
Community financial aid in the field of trans-European networks for transport, 
telecommunications and energy infrastructures. The Regulation defined the eligibility criteria 
(projects of common interests identified by the Guidelines referred to in the Treaty), the 
project selection criteri a and the forms of aid. The total am ount of Community aid could not 
exceed 10 % of the total investment cost.  
The 1995 Regulation was amended several times  with specific Regul ations taking into 
account the developments for the sectors covered a nd their intrinsic characte ristics, but also in 
order to refine the eligibility criteria and the level of co-financing acc ording to the type of 
projects.9 In 2005, Regulation No 1159/200510 amended the 1995 Regulation with specific 
modifications concerning the area of ICT. In  2007, a specific regula tion laying down general 
rules for the granting of Community  financial aid in the field of  the trans-European transport 
and energy networks was adopted (Regulati on No 680/2007), repealing the 1995 Regulation.  
Sector specific programmes 
Starting from this common legislative basis, dis tinct sets of sector-specific programmes  have 
been developed. Currently, there are several diffe rent sources of EU funding for infrastructure 
projects in the energy, transport and ICT sect ors, including funding from the ERDF and the 
Cohesion Fund. These are channelled through a numb er of distinct programmes with different 
                                                 
9 See for instance Regulation (EC) No 1655/1999, Regulation (EC) 788/2004, Regulation (EC) No 807/2004 and 
Regulation (EC) No 1159/2005 
10 Regulation (EC) No 1159/2005 of the European Parliament and of the Council of 6 July 2005 amending 
Council Regulation (EC) No 2236/95 laying down general rules for the granting of Community financial aid in 
the field of trans-European networks.  
EN 7forms and methods of financing, monitoring and evaluation mechanisms, and overlapping 
objectives but loosely (if) coordinated priorities,  resulting in different eligibility criteria even 
within a single sector. The current state of play  of EU funding for infras tructure in the three 
sectors is summarised in Table 1 below. 
EN 8 Table 1: EU funding of infras tructures in the 2007-2013 mult i-annual financial framework 
Sector Source/Programme Objectives Priorities/Eligibility criteria Budget 
2007-2013 
(€ million) Forms and methods of 
financing Monitoring and evaluation 
TEN-E Programme Developing energy 
projects that  contribute 
to the working of the 
single market, 
particularly of 
crossborder nature  Project of common interest 
and projects of European 
interest as identified in the 
TEN-E guidelines 155 Grants: 
- for studies (up to 
50% co-financing) 
- for works (up to 
10%) 
Interest rate rebate 
(never used) Member States undertake 
the technical monitoring and 
financial control of projects 
in close cooperation with 
the Commission  
Evaluation responsibilities 
shared by the Commission 
and Member States  
European Energy Programme 
for Recovery (EEPR) Investing in 
modernising Europe's 
energy infrastructure in 
response to the 
economic crisis in 
Europe TEN-E projects as specified in 
the EEPR Regulation11 2 36512 
(2009-
2010) Grants for works and 
project preparation: 
- up to 50%  Commission in charge of 
the evaluation of the 
progMember States may be 
requested to evaluate 
specific projects; 
Commission to report to 
other institutions  Energy 
(electricity 
and gas 
networks)  
Cohesion Fund and ERDF Increasing and 
improving the quality 
of investment in energy 
sector physical capital 
in order to improve 
conditions for growth 
and employment, speed 
up the convergence of 
the least-developed 
Member States and 
regions  Projects improving security of 
supply; gas and electricity 
interconnections in cases of 
identified market failure 1607 
(Funds 
allocated 
within 
financial 
perspective 
2007-
2013) Grant for works – up 
to 85% co-financing 
(but reduced in case of 
projects generating 
revenues) Monitoring by Member 
States 
Commission in charge of 
the evaluation of the 
programme  
                                                 
11 Regulation (EC) No 663/2009 of the European Parliament and of the Council of 13 July 2009 establishing a programme to aid econo mic recovery by granting Community 
financial assistance to proj ects in the field of energy  
12 The total budget of the EEPR programme i.e. €3.980 billion was divided into three sectors: gas and electricity infrastructure projects (€2.365 billion); offshore wind energy 
projects (€0.565 billion) and carbon capture and storage projects (€1.05 billion) 
EN 9  European Neighbourhood and 
Partnership Instrument (ENPI) 
Neighbourhood Investment Fa cConverging energy 
markets, Enhancing 
energy security, 
Supporting sustainable 
energy development, Various c.a. 25 Grants Shared responsibilities by 
the Commission and 
Member States 
TEN-T Programme Support TEN-T 
development Projects of common interest,  
of which list of 30 Priority 
Projects 
 8 043 Grants: 
- for studies (up to 
50% co-financing) 
- for priority projects: 
works (up to 20%); up 
to 30% for cross-
border sections; 
- for other projects of 
common interest: 
works: up to 10%. 
- ERTMS: up to 50% 
for both track-side and 
mobile equipemnt. 
- traffic management 
systems: up to 20% of 
eligible costs of works. 
Interest rate rebate 
(never used) Monitoring and evaluation 
is mainly undertaken by the 
TEN-T ExecMonitoring is 
undertaken by the Member 
states in cooperation with 
the Commission 
Commission may request 
beneficiary Member States 
to provide a specific 
evaluation of projects 
Commission is assisted in 
on monitoring aspects by 
the TEN-T Executive 
Agency  tive Agency 
*of which LGTT Encourage PPPs 
financed through user-
pay mechanisms The LGTT provides additional 
guarantees against traffic risk 
that facilitate and accelerate 
private sector investment in 
TEN-T projects. 500 TEN-T programme 
and EIB Action for 
growth initiative to 
cover risk. Capital 
contribution of €1 
billion (50% EU, 50% 
EIB) with estimated 
leverage of 25.  Transport 
*of which Marguerite Fund Support TEN-T, energy 
and renewables 
development Priorities: TEN-T, and other 
transport projects; 80 
(1500 Sponsors  
EN 10 climate change, meet energy 
targets, renewables  
Eligibility: transport & energy 
projects > €200million 
Renewables > €50million target of 
total 
capital 
invested 
with other 
investors) 
Cohesion Fund and ERDF Support transport  
infrastructure 
development in order to 
strengthen  the 
economic and social 
cohesion of the Union  Finances action on: 
- TEN-T, especially Priority 
Projects of European interest  
 43 000   
Marco Polo Encourage modal shift Ease road congestion and 
pollution / Companies with 
viable projects to shift freight 
from road to greener modes 450 Result oriented support 
(grant not loan) 
Commission DG 
MOVE and EACI  
      
CIP ICT PSP Stimulating smart 
sustainable and 
inclusive growth  Areas of public interest, 
including health and ageing, 
inclusion, energy efficiency, 
sustainable mobility, culture 
preservation and learning as 
well as efficient public 
administrations 730 Grants for consortia 
implementing: pilot 
projects, thematic 
networks, best practice 
networks. Continuous and systematic 
monitoring, interim 
evaluation, final evaluation 
two years after completion 
of the Programme. 
implementation  
Monitoring and evaluation 
is mainly undertaken by the 
Commission as a part of 
central programme 
management.  
reports, interim and final 
evaluations.  ICT 
Cohesion Fund and ERDF  Telephone 
infrastructures 
(including broadband 
networks)   2 300  Grants   
EN 11  ICT technologies, 
digital services and 
other measures   10 280  Grants   
Framework Programme7 
Information and 
Communication 
Technologies 
 Competitiveness of 
European industry, 
strengthening scientific 
and technology base, 
global leadership in 
ICT, product, service 
and process innovation 
and creativity, ICT 
benefits for Europe's 
citizens, businesses, 
industry and 
governments, reducing 
digital divide and social 
exclusion. Productivity and innovation, 
modernisation of public 
services, advances in science 
and technology 
ICT Technology Pillars 
Integration of Technologies: 
Applications Research: 
ICT for content, creativity and 
personal development 
ICT supporting businesses and 
industry 
ICT for trust and confidence 
 9700  
of which 
270 
contributed 
to RSFF Mainly Grants for 
consortia 
implementing r&D 
projects 
(from Cooperation 
programme,  
And ICT 
eInfrastructures 
(capacities 
programme)  Continuous and systematic 
monitoring, interim 
evaluation, final evaluation 
two years after completion 
of the Programme.  
Monitoring and evaluation 
is mainly undertaken by the 
Commission as a part of 
central programme 
management.  
 
Risk Sharing Finance Facility 
(RSFF) Improve access to debt 
financing for private 
companies or public 
institutions promoting 
activities in the field of 
RDI Support to a wide range of 
RDI activities, including 
research, experimental and 
pre-competitive development, 
feasibility studies and pilots.  
Projects to be financed by the 
EIB need to be technically, 
economically, financially and 
environmentally feasible 
according to the EIB's project 
evaluation criteria. 310  Corporate debt 
financing,  
Project financing, 
Mezzanine financing,  
Risk sharing lines of 
credit,  
Guarantees.  Monitoring and evaluation 
together with FP7.  
*Established by the European Commission in cooperation with EIB. EU support comes from within the TEN-T Programme budget.    
 
12  
2.2. A renewed context for infrastructure financing in Europe 
On 29 June 2011, the Commission adopted a packag e of legislative pro posals concerning the 
MFF and a Communication on 'A Budget fo r Europe 2020' (hereinafter 'the MFF 
Communication) which presents the policy rationale for the Un ion's finances for the years 
2014-2020. The proposed budget of the EU has been  designed to supp ort the Europe 2020 
growth strategy. Smart, sustaina ble and inclusive grow th is therefore th e leading theme for 
this proposal. To this end, the Communication fo cused on prioritising funding at the EU level 
on actions that provide true added value for EU citizens.  Programmes and instruments 
included in the MFF have been redesigned to ensure that their outputs and impacts push 
forward key policy priorities of the EU. In particular, th e MFF has been modernised by 
reallocating resources to prior ity areas such as pan-European infrastructure, research and 
innovation, education and culture, securing the EU's external bor ders and extern al relations 
policy priorities such as the EU's neighbourhood.13  
 As far as infrastructures are concerned, a consensus exists among stakeholders that, in a "business as usual" scenario, Europe might not  be able to mobilise in time the investments 
needed to modernise its infrastructure networ ks and plug missing links as defined in the 
Europe 2020 Strategy.  
In the wake of the financial crisis, Member  States' public budgets ar e struggling with the 
necessary fiscal consolidation. Capital expendit ure has often suffered substantial cuts, with 
spending for infrastructure inve stment projects suspended or de layed. At the same time, the 
prospects for stepping up investments from pr ivate sources are uncertain. The financing 
capacities of companies involved in infrastructu re projects, such as transmission system 
operators in the case of energy, are overstret ched. In many cases, companies are unable to 
raise substantial volumes of additional debt cap ital because they have reached borrowing 
ceilings or their investment grad e is no longer adequate. In addi tion to financing constraints, 
regulatory obstacles also delay or impede th e implementation of needed infrastructure 
projects.  Against this background, the cu rrent EU framework for infras tructure funding does not seem 
adequate to provide an effective response.  It is estimated that about €200 billion is need ed to complete the trans-European energy 
networks, €500 billion needs to be invested in the trans-European transport network, and 
between €181 and 273 250 billi on in ICT for the period 2014- 2020. While the market can and 
should deliver the bulk of the ne cessary investments, there is  a need to address market 
imperfections – to fill persistent gaps, rem ove bottlenecks and ensure  adequate cross-border 
connections. However, experience shows that na tional budgets will never give sufficiently 
high priority to multi-country, cross-border investments to equip the Single Market with the infrastructure it needs. This is one more example of the added value of the EU budget. It can secure funding for the pan-European projects that  connect the centre and the periphery to the 
benefit of all. 
                                                
 
13 Cross-cutting policy priorities, such  as environmental protection and the fight against climate change, are 
addressed as an integral part of all the main instrument s and interventions. To this end, the Commission intends 
to increase the proportion of climate related expenditure  across the EU budget to at least 20%, as an overall 
contribution of different policies. In this  context, attention will need to be paid to climate proofing, in particular 
of the transport infrastructure. 
 13 
However, EU funding is currently fragmented  among too many programmes. This prevents 
the full exploitation of synergies between progr ammes and sectors. ICT, energy and transport 
infrastructure all contribute to shaping smart networks, such as intelligent grids ensuring uninterrupted flexible availability of gas a nd electricity for consum ers or smart transport 
networks based on sensors to manage conge stion. Bringing the governance of programmes 
under a common framework leading to a multi-sect or and multi-country approach would also 
reduce risks and increase effectiven ess and efficiency of EU funding. 
 The budget available to individu al programmes is often not sizeable enough to meet the 
projected needs. Blending between EU funds and EIB loans have produced some results but 
could be further improved. There is also scope for expanding the use of risk sharing and 
project financing techniques th rough appropriate new rules and mechanisms, notably the 
equity and debt platforms foreseen in the genera l approach to the use of  financial instruments. 
Some of the described challenges  are of a regulatory and policy nature, but some others call 
into question the way in which the EU organise s infrastructure funding. Any future EU action 
in infrastructure financing should thus, as  a general objective, enhance support for 
infrastructure projects with high European va lue added and clear links with Europe 2020 and 
the Single Market, which the market alone woul d not deliver, by ensuring an appropriate mix 
of direct funding and market-based instrument s that reduce the commercial risks for private 
investors.  
In this context, and in the view to accelerate th e infrastructure developm ent that the EU needs, 
the Commission decided to propose the creation of a centrally managed funding facility _ the 
Connecting Europe Facility. As proposed in the MFF Communication
14, the CEF will fund 
"pre-identified projects in transport, energy and ICT priority infrastructures of EU interest, and both physical and information technology in frastructures, consistent with sustainable 
development criteria."  
The aim of the CEF will be to boost the pan Eur opean value of infrastruc ture projects. With € 
50 billion at its disposal, of which €10 billio n from the Cohesion Fund, it will fund transport, 
energy and ICT projects that bring more interconnectivity across Europe.
15 In addition, the 
CEF will provide financing for the infrastructure of EU interest (both on the Union's territory 
and outside the EU) that will need to c onnect with or pass through neighbourhood and pre-
accession countries.  
The CEF is designed to plug market gaps and co rrect coordination failur es, intervening where 
an incentive effect is demonstrated and to the ex tent necessary to trigge r market participation. 
It will offer opportunities for using innovative fina ncing tools to speed up  and secure greater 
investment than could be achieved only thr ough public funding. It will pr omote the use of EU 
project bonds and other financial instruments, offering an altern ative to the traditional grant 
funding and plugging financing gaps for strategic investments. A key advantage of financial 
instruments is that they create a stronger mu ltiplier effect for the EU budget compared to 
traditional instruments, by facilitating and attr acting other public and private financing to 
projects of EU interest. The multiplier effect of these instruments has an estimated range between 6 (for equity investme nt) and 20 (for risk-sharing instruments such as project bonds).
 
16 
 
                                                 
14 COM (2011) 500 pp. 14-15.  
15 An indicative preliminary list of such projects is provided in the MFF Communication (COM(2011) 500 part 
II). 
16 See, in this regard, the argument provided in Annex 4. 
 14Building on the experience of financial instrume nts under the current financial framework put 
in place in cooperation with th e EIB, such as the Loan Guarantee Instrument for trans-
European transport networks projects (h ereafter LGTT), the Commission proposes to 
implement a significant part of its interventions with in the CEF through financial instruments. 
In particular, the  Europe 2020 Project Bonds Initiative wi ll be used as a means of securing 
investment resources for infrastructure pr ojects of key strate gic European interest17. EU 
budget will therefore be used to support projects  by enhancing their credit rating, and thereby 
attracting funding from the EIB,  other financial institutions , and private capital market 
investors. The risk for the EU budget will be in  all cases strictly li mited to the budgetary 
contribution.18 
 
2.3. The problem 
The creation of the CEF along the defining lines proposed by the Commission in the MFF 
Communication will provide an overall framework for the financing of TEN infrastructures at EU level. The establishment of the facility is  aimed at aligning TEN infrastructures funding 
instruments in the three sectors concerned and, thereby, at contri buting to the simplification of 
sector specific rules, both within and across the sectors, within the constraints set by their 
respective policy frameworks.
19   
However, the MFF Communication di d not define the operating ru les of the CEF, rules which 
would enable the Union to create the invest ment conditions conducive to accelerating the 
development of the infrastructure the EU needs. 
Given that the decision about the proposal to create the CEF has already been  taken by the 
Commission, this IA will focus on procedural  and monitoring aspects of the CEF. The 
creation of the CEF and the associated problem will therefore not be further explored in this IA. 
At the same time, a transversal analysis of existing sector specific rules shows that, beyond 
pooling resources with in a common facility, there is room for further simplification of the EU 
TEN infrastructures funding rules, by exploiting the potential for synergies across the sectors. 
As highlighted by Table 1 above, there are curren tly several different so urces of EU funding 
for infrastructure projects in the energy, transport and ICT sect ors, including funding from the 
ERDF and the Cohesion Fund, and the mix of in struments constitute significantly differing 
sets from sector to sector. Within each s ector too, the EU budget support is channelled 
through a number of distinct programmes, with different eligibility and management rules, 
and overlapping objectives but loosely (if) coor dinated priorities. The heterogeneity of the 
current funding instruments, both across and with in each of the three infrastructure sectors, 
inevitably leads to overlaps, gaps in fundi ng and insufficient exploitation of synergies
20.The 
availability of different sour ces of funding within the same sectors also leads to "fund 
                                                 
17  For details see http://ec.europa.eu/economy_finance/consultation/index_en.htm.  
18 The project bonds' initiative would cover pre-identified transport, energy and ICT priority infrastructures as 
defined in the Connecting Europe Facility. As a single legal instrument, project binds would complement, rather 
than replace, the existing sources of proj ect financing throug h bank loans. The aim is to expand the investor base 
for private debt funding of projects from loan providers to bond investors. The rational behind the intrioduction 
fo project bonds is that infrastructure projects may face numerous risks due the possibilities of construction 
delays, payment delays etc. Investors react to risk and un certainty by not undertaking or investing in a project, by 
requiring a higher rate of return or by using insurance. Most infrastructure deals in Europe are structured to have 
a rating that is just above or just below investment grade. Many investors, on the other hand are limited to 
investment-grade bonds and want some cushion to ensure that a single downgrade does not force them to sell.  
19 The alternatives to the creation of the CEF are therefore not be explored in this IA. 
20 SEC(2011) 868, p. 16. 
 15shopping", where the same project proposal is so ught to be resubmitted if  not accepted within 
one of the programmes.21 
Synergies between sectors should therefore be expl ored and exploited furt her so as to simplify 
as much as possible the financing framew ork. The potential value added of exploiting 
synergies for accelerating th e implementation of TENs has long been acknowledged. Despite 
initiatives22 taken so far, the Communication "T rans-European Networks: Towards an 
integrated approach"23 listed examples of possible synergie s between various types of projects 
across the sectors24. 
Three main types of potential synergie s have been thus  identified: (1) procedural  – arising 
from the integrated planning of various infras tructure networks (coor dinated planning across 
modes and borders; single Strategic Environm ental Assessment, combined land acquisition, 
common consultation process for pack ages of infrastructure); (2) physical  – lower costs and 
impacts due to the combined construction of secti ons of infrastructure networks and structural 
works, both existing and new (bridges, tunnels, underpasses and the like) or higher efficiency 
of infrastructure as in the case of the deploymen t of smart  grids on energy networks, essential 
for decentralised energy production, and depl oyment of ICT services and broadband 
infrastructure in transport for intelligent traffic management; (3) financial  – the additional 
value or revenues that can be created and captu red by the infrastructure  provider or operator 
when sections of infrastructure networks are combined.25 However, no steps have ever been 
taken on the EU level to allow exploiting  synergies in terms of programming and 
disbursement of the EU financ ial aid or procedures (impact studies, planning and budgetary 
arrangements). In light of the above a nd drawing on ex post programme evaluations, 
stakeholder consultations a nd expert recommendations, th e Commission has identified two 
main policy areas in which, in defining the operational rules of the CEF, the Union can 
address market and regulatory gaps that cu rrently prevent EU funding from adequately 
supporting the development of infrastructures n eeded to achieve the objectives of the EU 
2020 Strategy. 
2.3.1.  Investment leverage: Existing pr ocedures, methods and forms for 
granting EU funding are not conducive to  sufficient investment leverage 
The results and recommendations of both ex-post analyses and stakeholder consultation have 
lead the Commission to the conclusion that, in sp ite of progress registered along the years, the 
impact of the use of EU budget st ill needs significant leveraging.26  Three main reasons for 
the continuing limited impact of EU  funding have been identified. 
(1) EU funding is insufficie ntly focussed on projects with a real EU added value 
Programming and project support appears to be not sufficiently tailored to ensure that the 
Union focuses its funding support to projects with  a real EU added value, namely cross-border 
projects, projects addressing bottl enecks or projects that bring EU wide benefits, including by 
using synergies of two of  the three sectors.  
                                                 
21 SEC(2011) 868, p. 78-79. 
22 Such as the establishment in 2005 of a Steering Comm ittee of Commissioners for the trans-European networks 
that considered questions of synergy between the networks, the methods of funding and their spread across the 
various Community financial instruments 
23 SEC(2007) 374} 
24 e.g. to interconnect electricity networks: laying high- voltage cables along the banks of canals and rivers, low-
voltage interconnections (2 x 25 kV) along high-speed railway lines, more systematic interconnections of 
underground high-voltage lines (300 to 700 kV) along transport network paths  
25 ECORYS, "Synergies between trans-European networks. Evaluations of potential areas for synergic impacts", 
Final report, 2006. 
26 COM(2010) 700, p. 20.  
 16For example, in the realm of TEN-T, the projects  that have registered most important delays 
are, in their majority, cross-bor der projects. More generally, th e fact that the TEN-T remains 
essentially fragmented, due to contin uing missing links, bottlenecks and limited 
interoperability of national networks, is par tly a question that needs remedy at the wider TEN-
T policy level, but also to an important extent  a question of improving the definition of the 
rules governing the EU financial support.27 With regard to TEN-E networks, the Commission 
also concluded that there is a need to narr ow the focus on a limited number of strategic 
projects demonstrati ng European priorities.28 Another example of an area with important EU 
added value but where EU funding has had ha rdly any impact is connecting the TEN 
infrastructures to neighbouring and third countri es' networks, in partic ular in the areas of 
energy and transport. However, in both ar eas, the TEN programmes under the current 
financial framework do not allow EU funding of projects outside the EU29 to support and 
match ENPI and IPA instruments.  
In short, EU funding in infrastructure does  not contribute in a satisfactory manner to 
accelerating strategic investment s inside and outside the EU. The absence of prioritised 
programming has been identified as one of the "weak links" in  the current funding framework 
in this respect,. Another may also be linked to  the fact that the concept/notion of EU added 
value has not yet been translated into clearly identified markers in the TEN policy frameworks.  
(2) Inadequate co-funding rates 
The insufficient focus on EU added value projects  is also closely linked to the fact that, in 
certain cases, co-funding rates remain inadequate to make a real difference. The way the co-
funding rates are set today does not trigger the investment needed because they do not 
correspond to project risks and ar e not proportionate to  their complexity a nd EU added value. 
This is particularly the case for kick starting complex projects on the TEN-E or the TEN-T, with high EU added value.
30For instance, despite progress achieved during the period 2007-
2013, the high percentage of cross-border proj ects experiencing significant delays in 
implementation, appears highly correlated with  the findings of ex-post evaluation reports 
highlighting that the seemingly higher co-funding rate of 30% for cross- border sections is, in 
practice, not higher than 21% in average. As  these difficult cross-bor der projects often run 
across several MFF, the final contribution from the TEN-T budget may be as low as 5 to 
                                                 
27 See also the argument developed in the IA report  accompanying the revision of the TEN-T Guidelines, 
SEC(2011)1212. In this respect, the 2010 report from Court of Auditors on investments in rail infrastructure has concluded that, despite the progress achieved so far,  there is still room for improving the TEN-T call for 
proposals.  Special Report No 8, European Court of Auditors, “Improving transport performance on trans-
European rail axes: have EU rail infrast ructure investment been effective?” 
28 2010 Commission implementation report on the TEN-E networks 2007-2009, COM(2010) 203. 
29 As pointed out in the Report on the implementation of  the TEN-E (COM(2010) 203), EU strategic interests, 
related to large gas import infrastructure and the connecti on to upstream sources or electricity interconnections 
with third countries, lie well beyo nd EU borders. With regard to TEN-T, a 2009 TENCONNECT report also 
indicates that borders to the neighbouring countries , except Norway and Switzerland, constitute major time 
consumers for both passenger traffic and particularly freight transport (see document at http://ec.europa.eu/transport/wcm/infrastructure/studies/2009_12_ten_connect_final_report.pdf). The importance 
of developing connections outside the EU has been comprehensively discussed within a dedicated Expert Group 
(see report at http://ec.europa.eu/transport/infrastructure /ten-t-policy/review/e xpert-groups_en.htm
).  
30 Fort TEN-T, see in this respect the findings and reco mmendations in Steer Davies Gleeves, "Final Report" and 
of the "Final Report" of the TEN-T Review Expert Group 5, also summarised in Annex 2, as well as the input of 
stakeholders, as summarised in Annex 1, stakeholder consultation on the Green Paper "TEN-T: A policy review" (2009), answers to set of questions no. (2) For TEN-E, see for example COWI, Cambridge Econometrics and 
KEMA on "The revision of the trans-European energy network policy (TEN-E)   
 1710%.31 The Commission implementation report on the TEN-E networks32 reached the same 
conclusion: although the maximum co-financing rate is up to 50% for studies and 10% of 
eligible costs of works, it rare ly amounts to more than 0.01-1% of  the total investment cost of 
a project.33  
(3) Insufficient involvement of private investors in infrastructure financing 
Strategic projects of European interest re quire European start-up funding, which private 
investors cannot always shoulde r alone. In particular, the r ecord investment volumes in 
Europe's transport, energy, information and comm unication networks that will be needed over 
the next decade in order to underpin the Europe  2020 flagship actions, combined with the fact 
that government budgets face severe constraints, ma ke it crucial to foster  the participation of 
the private sector in the financi ng of infrastructure projects. Yet,  experience so far has shown 
that private investment in infrastructures has remained limited34. As noted in the 
Commission's consultation paper on the Europe 2020 Project Bonds Initiative, "the majority 
of infrastructure in the EU with a trans-European  dimension and interest is still financed from 
the public purse (EU, national and regional leve l) and only a small pa rt draws on private 
funding"35. 
On the other hand, institutional investors such  as pension funds, insurance companies and 
wealth funds are showing an increasing interest  for moving into infrastructure investment 
given its potential to match l ong-term assets and provide dive rsification. For instance, the 
stability provided by the regulated model in energy and natural monopoly situation in 
transport corresponds to pensi on funds’ investment profile, ch aracterized by relatively low 
rates of return – around 7%-8%36 – and long investment horizons . These investors are also 
becoming increasingly ready to inve st directly in infrastructure assets. This is new, as their 
exposure to infrastructure has trad itionally been via listed compan ies (such as utilities), or via 
real estate portfolios37. However, for such new classes of in vestors to invest, there need to be 
investment opportunities available, i.e. equity opened to participation and/or debt products. 
Hence, the need for new products, and possible enhancements, that would allow channelling 
the investment into the infrastructures of European importance. 
The obvious conclusion is that the EU infrastruc ture funding framework has not been able so 
far to create an environment sufficiently conduci ve to private investment  needed in each of 
the sectors. In addition to the insufficient focu s of EU financial support and the inadequate 
levels of co-funding rates for particularly comple x and risk laden projects, the insufficient use 
of financial instruments constitutes one of the main factors leading up to this situation. In 
energy, no financial instruments have been used so far at EU level. Given the investment 
challenge up to 2020 as well as the growing nu mber of complex and cross-border projects, 
                                                 
31 Steer Davies Gleeves. See also TEN-T EA, MAP mi d-term review and Assessment of TEN-T programme 
implementation. There is also a consensus among the stakeholders that co-funding rates need to be raised (see input to consultation on 2009 Green Paper, as summarised also in Annex 1).  
32 COM(2010) 203 
33In the field of ICT, direct funding of high speed broadband infrastructure aimed at meeting the targets set by 
the Digital Agenda for Europe constitutes an absolute novelty, so no co-funding rates have been existing so far.  
The definition of high speed broadband adopted in this impact assessment is the one in line with the DAE 
targets. So, it considers high speed broadband as any technology capable of delivering at least 30Mbps to the final users' premises.  
34 COM(2010) 700, p. 20.  
35 Abadie R. and S. Pagdadis "The global reality of public-private partnerships" in PwC Gridlines: Building 
Intelligent Infrastructures, June 2010. 
36 Compared to 10%-12% infrastructure funds typically offer their investors. Source: InfraNews, “How Real a 
Threat to Infra Funds is the Direct Investing Phenomenon?” 24 May 2011. 
37 OECD, "Pension Fund Investment in Infrastructure", Working Paper on Insurance and Private Pensions, 
January 2009. 
 18this lack of instruments that fa cilitate access to equity and/or de bt finance, reduce the cost of 
capital, adapt lending conditions or facilitate pr oject finance structurin g could be an obstacle 
to the development of certain projects of strate gic European importance, even if the majority 
of energy infrastructure projects will continue to be corporate financed and therefore not 
adapted to some of these instruments38.  
For transport and, to a lesser ex tent, digital infrastructures, a new generation of financial 
instruments have been put in place in the 2007- 2013 financial framework, in cooperation with 
the EIB, such as the Risk-Sharing Finance Facility (RSFF) under the 7th R&D Framework 
Programme, the Loan Guarantee Instrument for TEN-T projects (LGTT) or the Marguerite 
Fund.39 The Mid-Term Evaluation of the Risk-Sha ring Finance Facility praised the use of 
financial instruments in addition to grants  in funding ICT project s, and evaluated the 
intervention as highly efficient and effec tive, and "having dram atically expanded the 
financing".40 For transport, the mid-term evaluation report of the Loan Guarantee Instrument 
for Trans-European Transport Network Pr ojects (LGTT), while making a number of 
recommendations for further improvement, concl uded that the instrume nt was successfully 
used on a number of projects.41 In parallel since the 1990s na tional policies of many Member 
States have sought to increase pr ivate sector participation in th e financing and implementation 
of infrastructure projects by other compleme ntary means, notably through project finance. 
Nevertheless, overall, only around  10% of private sector infr astructure investment uses 
project finance, including public  private partne rships (PPP).  
As pointed out in the Report of the TEN-T  Expert Group 5, in times of public budget 
constraints and difficulties of the private sector to raise funds, "Europe needs to have a fresh 
look at the economics of cross-border invest ment and at innovative ways to ensure its 
financing."42 Availability of adequate financial in struments enabling guarantees and risk 
sharing arrangements would inde ed create the necessary c onditions to attract private 
investors. 
2.3.2.  Project implementation: Existing cond itions for a fast implementation of 
EU co-funded projects are not adequate 
As ex post evaluations and st akeholder consultations have highlighted, the set of rules 
concerning TEN programme implementation proce dures need to be further streamlined and 
strengthened in order to make sure that co-f unded infrastructure projects are implemented in 
the most efficient and effective way. This is particularly felt at three levels: 
(1) Application and project support 
                                                 
38 Commission Communication on the "Energy infrastructure priorities for 2020 and beyond – a blueprint for an 
integrated European energy network", COM(2010) 677.  
39 In the area of transport infrastructure, the following instruments have been used under the 2007-2013 financial 
framework: first, the Loan Guarantee Instrument for TEN-T Projects (LGTT) is a €1bn instrument managed 
jointly with the EIB, which supports PPP projects in case of revenue shortf all in the early stage of operation. 
Second, DG MOVE has set up jointly with the EIB the European PPP Expertise Centre (EPEC) in September 
2008. EPEC responds to public sector  needs by ensuring collaboration betw een the competent national "PPP task 
forces" to promote best practices to  encourage the development of PPPs. Third, the 2020 European Fund for 
energy, climate change and infrastructure, the so-called "Marguerite Fund", which is a pan-European equity 
fund, and was launched in 2010 with a target size of €1.5bn. 
40 Evaluation of the Risk-Sharing Finance Facility, Final draft of the independent group of experts, 31 July, 
2010. 
41 Cf. European Investment Bank, "Loan Guarantee Instrument for Trans-European Transport Network Projects 
Mid-Term Review", from 2008 to date, LGTT has been successfully used in six operations in France, Germany, Portugal and Spain, in the road and rail  sectors involving a total capital investment of more than EUR 10bn. 
42 Final report of the Expert Group 5, Funding Strategy and Financing Perspectives for the TEN-T 
 19Management of EU TEN infrastructures funding is currently fragmented across different EU 
support schemes. In transport, EU funding is fragmented between different EU instruments such the TEN-T Programme, the Cohesion Fund and ERDF. As ex-post evaluation reports 
and stakeholder consultation ha ve highlighted, the different policy objectives and set of 
implementation procedures do not allow the Co mmission to optimise the use of EU funding.
43 
Similarly, in the area of ICT, funding has be en fragmented in the current Multi-Annual 
Financial Framework between the CIP Program me, FP 7 and the regional policy funds.  
This leads to considerable administrative costs for project promoters when seeking 
information about and applying for EU funding. While calls for proposals have proved to be 
an effective tool for competitive tendering, synergies of the various funds were used only partially.  
 
(2) Monitoring & evaluation 
Monitoring and evaluation constitutes anothe r area where further improvements could be 
pursued. The generally limited development of  mechanisms to reward performance and 
penalise non-effective use of th e EU funds constitute another reason for suboptimal results of 
the use of EU funds. 
Mechanisms in place so far have mainly concentrated on penalties. And while provisions 
concerning penalties are necessa ry to ensure that funds gr anted from the EU budget are 
recovered and/or saved if they are not used fo r the purposes they have been contracted, a 
mechanism relying solely on penalties has s hown an important drawback. While providing a 
"stimulus" for project developers to ensure that funds are effectively used within the terms of 
the contract, it does not necessarily  ensure the effective (or timely ) realisation of the projects. 
From this perspective, a much  more efficient approach woul d include monitoring and support 
mechanisms to assist project developers to wards an effective and timely implementation.  
In this respect, the report on the implement ation of the European Energy Programme for 
Recovery (EEPR)
44 highlighted the importance of a well de veloped set of procedures in order 
to manage risk and closely monitor the progress made on projects.  In th e field of transport, 
the implementation of the TEN-T Programme  has been notably improved following the 
establishment in 2006 of the TEN-T Executive Agency (TEN-T EA), through a better follow-
up of the preparation and subs equent implementation of proj ects selected under the TEN-T 
calls for proposals. However, there too, improve ments in a number of aspects could enhance 
the effectiveness of the programme's implementation.45    
The ability of the Commission to redeploy fu nds to new projects through new competitive 
calls for proposals is an important element of discipline in the implementation of projects by 
the Member States and project promoters and en hances the effectivene ss of the programme by 
ensuring that other mature projects can get acc ess to funding. In sectors,  such as transport, 
already applying the 'use it or lose it' principl e, reports still conclude  that "the Commission 
should be able to use more effec tive project incentives (such as the 'use it or lose it' principle) 
to make sure that project promoters are feel ing more accountable for the EU grants given, 
including on Priority Projects".46 By contrast, when the responsi bility for EU funds allocation 
and management remains primarily with the Memb er States, as is the case of the Structural 
                                                 
43 See for example Steer Davies Gleaves . For the input of the stakeholder consultations, see summary presented 
in Annex 1.  
44 COM(2011) 217.   
45 Steer Davies Gleaves' provides a detailed assessment of  the TEN-T EA's performance and areas for further 
improvements.  
46 Steer Davies Gleeves, p. 93. 
 20funds, where the selection of projects is made at the beginning of the financial period and 
cannot be changed until its end, "a n unclear prioritisation of proj ects and dissemination of EU 
funds is experienced".47  
 
(3) Programme management 
The process of implementation of EU financia l support for TEN infrastructures development 
is currently managed differently in  the three sectors. In the fields  of energy and tr ansport, it is 
centrally managed, but within distinct structur es. While the TEN-E fund s are managed within 
the specialised Commission service (DG ENER), the management of the implementation of the TEN-T Programme, while sti ll the responsibility of the sp ecialised Commission service 
(DG MOVE), is managed with the substantia l support of the TEN-T EA, which manages the 
implementation of the entire pr ogramme life cycle. In the cas e of both TEN-E and TEN-T, the 
Commission is also assisted by a Committ ee on financial issues, and by European 
Coordinators, tasked with f acilitating and monitoring the implementation of particularly 
complex projects. In the field of ICT, broadba nd network infrastructure funding is an entirely 
new concept, hence no management st ructures is as yet in place.  
According to the Commission proposal in  the MFF Communication however, the new 
common facility shall be "centrally manage d by the Commission with the support of an 
executive agency (such as the current TEN -T agency) and financial intermediaries."
48 The 
challenge the Commission faces in establishing the CEF rules therefore is to create this joint 
central management structure starting from the distinct sectoral arrangements currently in 
place. 
Conclusion : The discussion presented above makes appa rent that the problem of developing 
the operational rules that will govern the use of EU funds under the CEF is twofold: (1) 
addressing the shortcomings highlighted by ex-p ost evaluations and stak eholder consultations 
with regard to TENs' programmes implementa tion so far, while (2) concentrating on the 
simplification of the current EU infrastruc ture funding framework rules by drawing on 
synergies across sectors. 
2.4. Justification for EU action 
The EU action on trans-European networks is  grounded in the Treaty.  Article 170 TFEU 
specifies: “The Union shall contribute to th e establishment and development of trans-
European networks in the areas of transport, telecommunications  and energy infrastructures”.  
The right for the EU to act in the field of infras tructure financing also derives from the Treaty. 
Article 171 (paragraph 1 indent 3)  TFEU provides that: "[i]n or der to achieve the objectives 
referred to in Article 170, the Union (…) may support projects of common interest supported 
by Member States, which are identified in the fra mework of the guidelines referred to in the 
first indent, particularly through feasibility studies, loan guarantees  or interest-rate subsidies". 
The Commission’s financing propo sals have to be approved by the Member States, who are 
responsible for the planning and construction of projects.  Furt hermore, the EU's competence 
in the area of energy is also enshrined in TFEU, Ar ticle 194. Energy transmission 
infrastructure (including an interconnected off-shore grid and smart grid infrastructure) has Trans-European or at least cros s-border nature or impacts.  
 
                                                
 
47 Ibid., p. 13. 
48 COM(2011)500, part II. 
 21In areas which do not fall within EU exclusive competence, EU action has to be justified. In 
the present case, it is therefore necessary that the subsidiarity pr inciple set out in Article 5 (3) 
of the Treaty on the European Union is resp ected. This involves assessing two aspects. 
(1) Firstly, it is important to be sure that th e objectives of the proposed action could not be 
achieved sufficiently by Member States in the framework of their national constitutional system, the so-called necessity test. In this respect, the Co mmission has already underscored 
the importance of employing the EU budget in order to "plug gaps left by the dynamics of national policy-making, most obviously addre ssing cross-border challenges in areas like 
infrastructure, mobility, territorial cohesion… - gaps which would otherwise damage the 
interest of the EU as a whole."
49 Large investments, from bot h the public and the private 
sectors, are needed to meet the infrastructure ch allenge. It is estimated that about €200 billion 
is needed to complete the trans-European en ergy networks at transmission level only, €500 
billion needs to be invested in the trans-Eur opean transport network, and over €250 billion in 
ICT for the period 2014-2020.50 While recognising th at the market can an d should deliver the 
bulk of the necessary investments, the Comm ission stressed in its MFF Communication the 
added value of the Union can bring in securing funding for the pan-European cross-border 
projects that connect the centre and th e periphery to the benefit of all.  
Experience has shown that Member States' predominantly national focus in planning 
infrastructures does not give sufficiently high priority to multi-country, cross-border investments to equip the Single Market with the infrastructu re it needs. In addition in the 
aftermath of the economic and financial crisis, the constraints on privat e and public sources of 
funding have cast an important degree of uncertainty on th e extent to which required 
investments would be met. "The costs for Europe  of not investing suffi ciently in its future 
network would be very high."
51 
Most affected are likely to be, in particular, th e projects with trans-European relevance, which 
require particularly high and long term investme nts, due to their inhe rent higher technical 
complexity as well as cross-border coordinatio n needs. While the EIB and other national or 
multilateral development banks have expanded the scale of their lending, to effectively fill the gap, complementary solutions have to be found, to unlock private capital and restore stable 
funding streams through the capital and banking  market. EU funds should accompany market 
dynamics, incentivising rather than crowding out  market participation in infrastructure 
funding. In particular, as both the Budget Review Communication
52 and the MFF 
Communication53 have pointed out, the EU budget would be  best placed to plug in gaps left 
by Member States. 
Yet, the current EU framework for infrastruc ture funding is not adequate to provide an 
effective response to the challe nge identified above. As highlight ed earlier in this report, 
funding of infrastructure remains fragment ed among sectors, among programmes and among 
                                                 
49 COM(2010)700, p. 5. It echoed the findings of the various ex-post evaluations, stakeholder consultations and 
expert analysis, that all converged in their assessment: member  states tend to give principal priority to projects of 
primary national relevance when planning and funding infrastructure. Yet, cross-border connections are essential 
if TENs are to become a reality and, no t least, in an optimal configuration, that carries highest EU added value 
for the Unions citizens. Cross-border services, intero perability and inter-connections need to be properly 
established, else there is a risk of market partitioning and creation of barriers to entry. See also the Impact 
Assessment Reports of revised TEN-T Guidelines, of revised TEN-E Guidelines, and of e-TEN Guidelines, 
respectively. 
50 For a more detailed break-down of financial needs per sector, see COM(2011)500. 
51 SEC(2011) 368, p. 78. 
52 SEC (2010) 700.  
53 COM(2011) 500, p. 1.  
 22financing instruments, preventi ng thereby the full exploitation of possible synergies between 
sectors, programmes and financi ng instruments and to reduce risks.54 
(2) Secondly, it has to be considered here wh ether and how the objectives of the policy 
initiative under consideration coul d be better achieved by action on the part of the EU, the so-
called test of European added value. The rati onale for a European action in the field of 
infrastructure financing stems from the trans-na tional nature of the identified problem. At the 
same time, the rationale for a common legisl ative basis for providi ng financial support in 
three distinct sectors with di fferent policy framework lies in the opportunity to exploit 
synergies across sectors, stemming from common i ssues with regard to the financing of the 
implementation of otherwise importantly vary ing policy objectives. The added value of a 
common framework would be three fold:  
o A common framework would lead to the si mplification of the EU legal framework 
concerning TEN infrastructures funding. It would also ensure  a coherent approach to 
EU project financing across the three sect ors. As highlighted earlier, the EU 
infrastructure financial framework is curre ntly fairly complex, due mainly to the 
number and heterogeneity of the existing EU legal texts. Simplification of rules is one 
of the keywords of the new approach propos ed by the Commission with regard to EU 
budgetary spending. 55  
o At the same time, a single EU infrastruc ture financial framework and fund would 
provide a coherent and transp arent approach to EU funding that would offer certainty 
and would thus have a huge potential to at tract more private sector financing. 
Financial instruments would be available in a centralised and coordinated manner, 
attracting and improving the effectiveness of the relationship with the private investors 
and the partner financial institutions.  
o In addition, the progressively increas ing interdependency between economic 
infrastructure projects, networ ks and sectors would enable the realisation of economies 
of scale. An integrated EU infrastructu re funding framework would allow exploiting 
cross-sector synergies at pr oject development and implementation level, enabling cost 
savings and/or more efficient e xploitation and higher returns.  
Last but not least, a common framework woul d allow lessons learne d and best practice 
sharing across sectors, enabling an enhanced eff ectiveness and efficiency of EU financing in 
all sectors. 
 
2.5. The Baseline: How would the problem evolve, all things being equal? 
The Commission has carried out an  analysis of possible future  developments for TEN funding 
policy in a scenario of unchanged policies, the so-called baseline scenario. The baseline 
scenario provides a benchmark for evaluating  new policy measures against developments 
under current trends and policies. 
The baseline scenario developed below foresees a continuation of the cu rrent policy, with the 
current mix of financial instruments that s upport EU action in the three policy areas. The 
baseline therefore reflects both achievements and deficiencies of  the policies already in place. 
The baseline scenario is a composed scenario co nsisting of the Reference scenario applied for 
                                                 
54 See also SEC(2011) 868, p. 79. 
55 See, for example, the Communications  on the Budget Review (COM(2010)700) and Smart Regulation (COM 
(2010) 543). The MFF Communication reiterate s Commission's commitment to this end. 
 23the Impact Assessment accompanying th e revision of the TEN-T guidelines56 and TEN-E 
guidelines57. It also consists of elements of the Reference scenario applied for the Impact 
Assessment accompanying the revision of the TEN-ICT guidelines.  
The time horizon for the baseline scenario developed below is 202058. The baseline is fully 
consistent with the time horizon of the EU2020 Strategy. 
2.5.1.  Common aspects 
The scenario of unchanged policies is first of all determined by the continuation of the 2007 – 
2013 financial period over 2014 – 2020. Therefore,  the budget allocated for the three sectors 
will remain stable, with similar provisions regard ing the availability of financial instruments. 
As noted in the composite Impact Assessment accompanying the MFF proposal, “EU spending programme rules and implementation time are often hard to rec oncile with the needs 
of private financing”. Therefore,  in spite of the experience a nd the successes in the use of 
financial instruments, their use and impact will remain marginal. 
Secondly, the implementation mechanisms will remain the same. Programming rules and 
management structures will follow the same approach, while taking into account the benefits of the revision undertaken  in the last years
59. Hence, according to the baseline, no synergies 
between sectors would be created in terms of implementation mechanisms. 
At the EU level funding instrume nts would remain fragmented as  described in Table 1 above. 
Moreover, at the general economic level, the cont ext for investments in infrastructure is likely 
to face constraints similar to the current ec onomic situation. With the growing pressure on 
public finance and overall economic and social  circumstances, public budgets, which are the 
most important source of financing for tran s-national infrastructure investments, should 
remain under pressure across Member States for reasons of fiscal cons olidation, which is 
likely to remain a priority. In parallel, in the wake of the economic and financial crisis, private 
sector investments and access to bank financing for project promoters is likely to remain 
difficult, due to capital and liquidity constrai nts faced by commercial banks (see also the 
sensitivity analysis below). Hence, investment le verage would remain weak  and there is a risk 
of a certain crowding out, which would not be conducive to kick starting projects of mainly 
EU added value. 
2.5.2.  Sector specific aspects 
In the field of energy infrastructure , business as usual would mean that Europe will not be 
able to deliver on its 2020 ambitious targets fo r climate and renewable energy in a cost and 
                                                 
56 For transport, the baseline scenario is therefore identical with the Refere nce scenario applied for the Impact 
Assessment accompanying the White Paper for transport (COM /2011/0144). The Reference scenario of the IA of 
White Paper builds on a modelling framework including PRIMES, TRANSTOOLS, PRIMES-TREMOVE 
transport model, TREMOVE and GEM-E3 models. For the TEN-T Guidelines Impact Assessment and more 
specifically the TEN-Connect studies, the TRANSTOOLS model was considered as most appropriate due to its 
infrastructure component. The assumptions used in the studies are identical with the assumptions of the White 
Paper. The models are based on a assumption of an average GDP growth of 1.7% per year for the period 2005-2030. 
57 The baseline scenario is based on the following models : a) the PRIMES model (using the results of GEME3, 
PROMETHEUS and GAINS modelling as inputs) for determining energy balances in 2020 and 2030; b) a specialized grid modelling framework developed by KEMA and Imperial College London for evaluating 
resulting infrastructure needs in the electricity and gas sector; c) for assessing infrastructure needs for CO2 
transport, two specialized analysis and modelling tools developed by ARUP and JRC. The PRIMES model is based on an average GDP growth of 1.7% per year for the period 2005-2030. 
58 In accordance to the White Paper for Transport an d the IA report accompanying the TEN-T Guidelines, the 
time horizon for the baseline scenario for transport is  2030/2050, with intermediate results for 2020.   
59 For instance, in the field of TEN-T, the role of the European Coordinators and the Open Method of 
Coordination will be continued. 
 24resource-efficient manner and will not be able to deploy by 2020 the networks needed for 
greater market integration, competitive energy choices and security of supply for energy consumers and business. Given the inve stment challenge of around €200 billion
60 in and the 
urgency, the existing regulatory framework is not  sure to deliver on EU infrastructure 
priorities. 61 Furthermore, even if there was more private debt and equity available on the 
market, more complex types of projects of Euro pean significance would st ill not be delivered. 
Without a step change in the way energy infras tructure of European significance is supported 
the Commission estimates that a significant share of the needed investment until 2020 will not be delivered on time under the existing framework. 
The continuation of the current TEN-E approach  to financing, with limited amounts of EU 
funding focussed on studies rather than works and no reiteration of the European Energy 
Programme for Recovery. As a re sult, projects of European si gnificance would continue to 
mainly receive EU grants for feasibility and front-end engineeri ng and design studies. 
Financial support for the construc tion of projects would remain very limited: An expected € 
55 million of the available funds of € 155 millio n would cover works expenses. In addition, 
EU allowed co-financing rates for works would c ontinue to be insufficient to address the risks 
of the projects, attract priv ate investors and boost the deployment and implementation of 
certain projects. Indeed, as demonstrated by the EEPR experience, for projects aiming at 
increasing security of supply, a co-financing rate of 50% or more can be necessary to unblock 
the project while the current TEN -E co-financing rate is cappe d at 10% of the construction 
costs . As a result, only invest ments with a sufficiently high di rect benefit for the investor(s) 
would be realised. No support would be av ailable under the TEN-E budget for projects 
outside the EU, which would continue to bene fit from various other EU programmes. The 
range of financial facilities av ailable through the EIB would not evolve (no specific financial 
instruments would be made available by the EI B and the lending volumes towards energy grid 
infrastructures would remain the same or possibly decrease). 
In conclusion, targ eted EU support to incentiv e and leverage private an d public investment for 
the deployment of  major EU energy infrastructu re priorities that would contribute to market 
integration, improving the EU’s security of s upply, connecting renewables or increasing the 
EU’s energy systems’ flexibility  will not be possible. Only investments with a sufficiently 
high direct and short-term comme rcial benefit for the investor (s) would be realised, which 
would be insufficient to meet the challenge ar ising from the step change in investments
62. 
The baseline scenario in the field of transport infrastructure  consists of the current TEN-T 
Guidelines and a TEN-T Programme, together with other sources of funding such as the 
Cohesion Fund and ERDF. According to the curre nt forecasts drawn up in cooperation with 
the Member States, the total investment cost of the 30 TEN-T Priority Projects will be 
realised by 2025, which would represent an accelerated implementation pace. The National transport plans currently discussed between th e Commission and the Member States in the 
Framework of the Open Method of Coordination have also been taken into account in this 
forecast. 
The Commission will continue its efforts to encourage Member States to coordinate their 
infrastructure policies, with a view to excha nging best practices and identifying obstacles to 
funding and solving cross-border co nstraints. In particular, th e Open Method of Coordination 
is expected to have a certain impact through fo stering transparency and up-to-date monitoring 
of project planning and implementation across Eu rope. Moreover, the Eu ropean Institutions 
                                                
 
60 More details on the investment needs and financial gaps is provided in box 1 below. 
61 Impact Assessment accompanying the document Regula tion laying down rules fo r the implementation of 
European energy infrastructur e priorities SEC (2011) XXX 
62 See also conclusions from the 2009 TEN-E Impl ementation Report (COM(2010)203 and SEC(2010)505) and 
SEC(2010)1396. 
 25and Member States will continue to rely on the work of the European Coordinators, taking 
care of 11 of the most difficult Prior ity Projects of the TEN-T network. 
The consequences of an 'unchanged policies' s cenario would be a slow implementation of the 
current Priority Projects, with a limited deve lopment of interoperabi lity and multimodality, 
hampering the functioning of the transport sy stem. The free movement of goods will remain 
constrained by the low level of infrastructural interconnectivity between the European markets, especially as concerns the peri pheral areas of Europe. The current market 
segmentation of the Internal Market will thus endure, limiting the choice for consumers and 
the size of market for enterprises, especially for small businesses. 
As regards ICT infrastructure, in the field of broadband, ba ndwidth demand from current 
applications alone, such as high-definition video, is projected to quickly saturate current broadband networks capacity if  no substantial upgrades are implemented. Broadband demand 
in the next ten years will not only be shaped by  the current set of app lications available, but 
will be determined by many new innovative app lications and services (e.g. high-definition 
tele-presence, cloud com puting, telemedicine and remote su rgery, remote learning (virtual 
campuses))  which would need expanded bandwidth to operate efficiently. 
Lack of EU support to the implementation of digital infrastructure services means that 
common technical specifications, pilot and test versions of th ese infrastructures already built 
up by past and current programmes like the CI P ICT PSP would probably cease to exist. It 
would also be more difficult to achieve pan-European interopera bility as member States do 
not have sufficient incentive to fund common di gital service infrastruc ture. Hence, benefits 
from cross-border positive exte rnalities could not be fully reaped and there would be a 
situation whereas some 
63Member States would seek individual solutions.  
Any European cross border service solutions in  support of the digital internal market would 
need EU support, in addition to national financial investments. 
2.5.3.  Global sensitivity analysis 
Considering the high degree of uncertainty su rrounding projections over a relatively long time 
horizon, especially for such complex systems as transport, energy and di gital infrastructures 
and networks, an evaluation is provided below fo r the possible impact of external factors on 
the assumptions underlying the baseline scenario, in addition to the sensitivity analyses that 
were carried out in the impact assessments of  the sector specific Guidelines in which the 
influence of external factors on macroeconomic assumptions are assessed64.  
First, the high degree of uncer tainty regarding budgetary constr aints at the Member States  
level needs to be taken into consideration. The development of extremely costly hard and soft 
infrastructure depends very much on the public and private resources available.  
Fiscal austerity and structural reforms in many EU countries will drive or have already driven 
public authorities to reassess their infrastructure investment programmes as well as those related to public priv ate partnerships (PPPs).
65 
                                                 
63 Investments in cross-border interoperability would have a positive knock-on effect at local level as Member 
States would replicate the model in deployment service interoperability within regions and municipalities. 
64 The impact of the macroeconomic e nvironment on the investments needs and the level of investments realised 
is studied in the Impact Assessment accompanying the s ector specific Impact Assessments, as well as, for 
Energy, in the IA accompanying the Communication Energy  infrastructure priorities for 2020 and beyond - A 
Blueprint for an integrated European energy network (SEC(2010)1395) 
65  For example, "in Portugal and Spain, stopping or postponing infrastructure projects by downscaling 
investment expenditures is one of the most important contributions on the expenditure side. In Spain, a reduction 
 26The economic downturn has slowed down companie s investment plans and infrastructure is 
not exception; due to a numbe r of  uncertainties as rega rds the economic/regulatory 
environment, reduction of agreed support under existing incentive schemes, scaling down of 
public investment programmes, taxation, impact of sovereign rating on  investor behaviour, 
etc). Finally, potential future liquidity shortages of financial institutions will have an impact 
on the availability of financing even  for healthy corporates and projects66. 
Moreover infrastructure projects  entail risk elements such as greenfield, new technologies, 
uncertain business case as regards future revenue flows, regiona l aspects including the 
influence of the sovereign crisis and cross-bo rder impact making the project development and 
implementation demanding and less attractive for pr ivate sector financiers  and investors. In 
addition, in case of private sector financi ng, depending on the se ctor, the project, the 
economic situation in the country or region as well as national regulations and the maturity of 
the financial/capital markets ther e can be a greater need for ei ther debt or equity support. 
Alike, as the risk-return profile of infrastructure projects change during the lifecycle (preparation and planning, construction and ra mp-up operations and subsequent operational 
period with more predictable revenue flow),  higher revenues from projects could free 
resources for further investment. 
However, in the baseline scenario describe d above, the level of investments does not only 
depend on future economic growth, fiscal constr aints in the Member States or access to 
financing for private investors. Most of the in frastructure projects need  major political support 
and long-term determination in order to be im plemented, including revised political selection 
of projects, revised implementation mechanisms or co-financing rates. For instance, projects 
that have no direct benefits for private invest ors or that are not suited for them due to their 
size for instance, such as a project aiming at ensuring a better security of supply or major 
cross-border transport project (such as a tunnel through the alps) are unlikely to happen even 
if the economic context were favourable. They re quire a radical change in the way projects 
are currently selected, co-financed and implemented. 
The extent to which these factors will affect the implementation of infrastructure projects 
resulting from the sector specific guidelines is uncertain. However, the degree of uncertainty 
will be reduced by the creation of the CEF with its strengthened and more targeted financial 
EU contribution. In sum, although there are consid erable uncertainties related to large scale 
EU infrastructure projects, the CEF would to  a certain extent counter-balance these and 
consequently reduce risks perceived by investors, thus increasing their incentives to invest in 
infrastructure projects. 
Lastly, the way projects of high EU added valu e are being selected and implemented has an 
impact on the level of investments. This quest ion is dealt with in the Impact Assessments 
accompanying the sector specific Guidelines. 
 
Box 1: Investments needs and financing gap 
 As part of the Baseline scenario, the Co mmission has identified investment needs and 
financing gaps for infrastructure and networks  in the field of energy, transport and digital 
                                                                                                                                                         
of 0.5% of GDP is planned between 2011 and 2013. In Portugal, cumulative savings on investments will amount 
to 1.2% of GDP by 2013. In Ireland and Slovenia, infras tructure spending will be reduced, respectively, by 1.6% 
of GDP from 2011-14 and 0.8% of GDP in 2010-13".  OECD, Restoring public finances, 2011. 
66 The impact of private financing and financing instrument for infrastructure on investment is studied in the 
Impact Assessment accompanying the pr oposal on the Europe 2020 Proj ect Bond Initiative p ilot phase 2012-
2013 
 27infrastructures. 
 Firstly, the figures for investment needs , based on a number of studi es, represent the level of 
investment needed in order to realise infras tructures and networks of high European Added 
value. These infrastructure have been selected  according to specific crite ria that are listed in 
the sector specific Guidelines. For instance, th ey consist: of missing links between the main 
axes of the national transport ne tworks; of electricity and gas transmission systems in order to 
complete the internal energy market and infrastructure improving security of supply; and of the pan-European digital service infrastructure. 
 The Commission estimated the total investment  needs between €1.5 tri llion and €2 trillion in 
total for the three sectors. Among those needs, only a fraction of it can realistically  be realised 
before 2020. The Commission has calculated that from now until 2020, €500 billion will be 
needed for the implementation of the Tr ans-European Transport Network (TEN-T) 
programme, of which €215 billion is for the remova l of the main bottlenecks in the so called 
transport "core network". In th e energy sector, public and private entities in the Member 
States will need to spend around €400 billion on distribution networks and smart grids, 
another €200 billion on transmission networks and storage as well as €500 billion to upgrade 
and build new generation capacity between now and 2020
67. Finally, up to €270 billion in 
capital investment is required to bring fast  and ultra-fast broadba nd to all households by 2020. 
Secondly, financing gap  represent the investment needs minus the capacity of the public and 
private sector to realise t hose investments. Even though th e bulk of the investment under 
Europe 2020 strategy can be de livered by markets and regulatory measures, some investments 
of high European added value are not going to be realis ed due to the nature  of the project (no 
direct commercial interest or  not a priority for national a nd regional public investments). 
Financing gap therefore refers to the investment s of high EU added value that are "at risk" (of 
not being realised). They can also be referre d to as part of the "market gap". Unlike the 
investment needs, which are not  dependent on economic uncerta inties, the financing gap can 
be reduced if the economic environment is fa vourable to private a nd public investments. 
 The three sectors are different in terms of fina ncing gap. In transport, the great majority of 
investments are made by the public sector; more over, most of the project with high EU added-
value such as cross-border connection would not be realis ed without the regulatory and 
financial contribution of the Union. No general figure can be given for transport due to the 
political nature of the cross-border projects. However, the Commission has identified that the 
removal of the main bottlenecks in the so called transport "core network" (with the highest 
EU Added Value) would amount to about € 215 billion. For each of the projects, there is a 
different co-funding rate or type of innovative instrument necessary in order to have the 
project being implemented. The Commission has de veloped different scen ario with different 
co-funding rates in order to calculate the amo unt of EU co-funding needed to remove the 
bottlenecks.  In the energy sector, the investments of high EU  added-value, mostly carried out by private 
investors, depend on the regulatory environment (and therefore of the regulatory measures to 
                                                                                                                                                         
67 Commission Staff Working Paper,  Energy infrastructure investment needs and financing requirements; 
SEC(2011) 755 final  
68 See Impact Assessment to the revised energy infrast ructure Guidelines and the Impact Assessment to the 
Communication "Energy infrastructure priorities for 2020 and beyond - A Blueprint for an integrated European 
energy network" COM(2010) 677 final 
69 See Impact Assessment to the INFSO Guidelines 
70 See also Annex 3 
 28be adopted by the Commission in the form of the Guidelines) and the possible contribution 
from the public sector. The Commission has id entified an amount of € 100 billion being at 
risk, including electricity  interconnectors, off-shore grids, el ectricity storage and smart grids, 
gas interconnectors and CO² transportation68. 
 As for telecommunications and broadband networ ks, an investment gap of up to €220bn has 
been identified. In order to attain a critical inve stment level it is likely that some degree of 
credit enhancement and/or other financial instruments will be needed to trigger the 
investment
69. 
 In view of the level of financing gap identifie d in the three sectors, the € 50 billion proposed 
under the Connecting Europe Facility only cover a small amount of these gaps. Moreover, the 
funds available under the CEF will be made av ailable primarily for projects with high 
European added value, often of cross-border nature, which are projects for which Member 
States and private investors ar e not willing to invest. Theref ore, the funds available under 
CEF will not crowd out ot her sources of funding
70. 
 
2.5.4.  Conclusions 
In the scenario of unchanged policies, notably with th e continuation of the 2007 – 2013 
approach as for the EU budget available for Eur opean infrastructure in  the field of energy, 
transport and ICT, the development of infrastruc ture of European Added Value is unlikely to 
happen by 2020. The involvement of the private s ector will remain limited, even on projects 
will long-term potential commercial interest. Major trans-European connections, including 
those with neighbouring countries, will remain mi ssing, particularly for projects facing major 
technical difficulties or limited commercial inte rest for project promoters. As a consequence, 
projects favouring s ecurity of energy suppl y (including those cro ssing EU borders) or 
connections to peripheral areas will not be implemented. 
This will have detrimental impacts71 at socio-economic level, with imperfect functioning of 
the internal market or limited job creation due to  sub-optimal infrastructure investments. In 
addition, the EU economic performance will not benefit from increased connectivity, 
accessibility and connections between neighbouring countries.  
The impacts on environmental and climate change objectives are also likely to be insignificant 
with the continuation of the current policies: the absence of development of new transport 
infrastructure favouring a modal shift to cleaner  modes of transport wi ll not be the expected 
positive impacts of these new infrastructures in  terms of reduction of CO2 emissions. Without 
the energy infrastructure enabling the integra tion of renewable energies across the EU 
network and smart grids, linking North and Sout h and isolated regions, the EU will not the 
able to meet its energy and climate target s in a cost and resource efficient manner. 
3. OBJECTIVES  
This section defines the general, specific and operational policy objectives of the proposed 
initiative, discusses possible trade-offs between the search for synergies and the objectives of the sector-specific policy frameworks and verifi es their consistency w ith other EU horizontal 
objectives. 
                                                
 
71 The economic, social and environmental impacts of the business-as-usual scenario will be further developed in 
section 5 of this document. 
 293.1. Policy objectives 
General objective As defined in the MFF Communicati on, the overarching objective of the CEF is to accelerate 
the infrastructure deve lopment that the EU needs to reac h the EU 2020 Strategy associated 
energy and climate change targets and, more generally, to achieve its future sustainable 
competitiveness.   
In order to meet this goal and in light of the problem identified in section 2 above, the general 
objective of the initiative accompanied by this IA is therefore to make the Connecting Europe 
Facility a success in operational terms by, i.e. to define operating rules governing the use of 
funds under the CEF that will optimally addre ss the problems identified in the two main 
policy areas of EU infrastruc ture while concentrating, in particular, on simplifying TEN 
infrastructure funding provisions cu rrently in place in the three se ctors. As highlighted in the 
MFF Communication, one of the major hall marks of the Commission in putting forward 
revised proposals for financial programmes and instruments is the simplification of, current 
sector specific rules. ,  
At the same time, since this initiative is developed within the larger context of the 
implementation of the EU budget over the 2014-2020 MFF, its aim is to contribute also to 
achieving the objectives set out by the Commission in its related policy documents: the "EU Budget Review" Communication and the MFF Communication. More specifically, the CEF 
operating rules will also need to follow the main principles for the future management of the 
EU funds: focusing on delivering key policy pr iorities - "directing resources where the 
rewards can come more quickly, more broadly and more strongly"; focusing on the EU added 
value - "plug gaps left by the dynamics of na tional policy-making, most obviously addressing 
cross-border challenges in areas like infrastructure, mobility, territorial cohesion…"; being results driven, with actio n "measured in terms of real impact, rather than in terms of the inputs 
involved"; delivering mutual bene fits across the European Union.
72  
 
Specific objectives (SO) 
In light of the above and in orde r to address the problem  identified earlier in this IA report, the 
general objective of this initiative, respectivel y putting in place optimal operating rules for the 
use of EU funds pooled within the CEF can be  translated into two specific objectives: 
SO 1:   Increase the leverage of EU funds by defining forms, methods and rules of 
financing to ensure maximal leverage of EU budget contribu tions in attracting 
public and private investments for projec ts with a European and Single Market 
dimension, in particular priority netw orks that must be implemented by 2020, 
and where European added value is most warranted including, where 
appropriate, those crossing the EU borders. 
SO 2 : Facilitate the timely delivery of EU co-funded projects by defining monitoring 
and evaluation mechanisms that reward  performance and penalise non-effective 
use of EU funds with a view to ensure  the effective and timely implementation 
of the projects supported. 
Operational objectives (OO) 
                                                 
72 COM(2010) 700 final, p. 4-6. 
 30These specific objectives can be translated in a number of  operational objectives :  
As regards investment leverage: 
• OO 1:  Define objectives and multi-level cr iteria for proposal evaluation in 
order to ensure that funding is channelled on  actions implementing 
projects with high EU added-value.  
• OO 2: Define co-funding maximum rates for EU support for projects 
according to priorities set in terms of EU added-value and risk/market 
failures faced by the projects. Allow flexible use of these rates, in order to maximise the leverage of EU funding contributions.  
• OO 3: Encourage the participation of speci alised infrastructure investors by 
means of rules for the use of market  based instruments, and by making 
available sufficient funds for support of innovative instruments.  
As regards programme implementation (programming and support): 
•    OO 4: Define rules for proposal selection in  order to ensure a competitive and 
transparent allocation of funds.   
• OO 5:  Establish a consistent framewor k for monitoring and evaluation to 
support decisions for continuing, di scontinuing or recalibrating EU 
funding support (i.e. the "use it or lose  it" principle, rules for ensuring 
that the competitive re-allocation of  funds is made on transparent and 
highly competitive bases).  
• OO 6:  Set up an adequate institutional structure for the centralised 
management of the programme. 
 Operational objectives have not been quantified because the specificities of the three sectors 
would not allow defining common quantitative targets in all cases. This is the case for instance for OO3. Indeed, it is not possible to define common target on the number of 
specialised investors to be i nvolved across the sect ors given the differe nt use and proportion 
of funding instruments between the sectors. Th e evaluation of achieveme nt of the objectives 
needs therefore to be assessed on a case by case basis on the basis of the tools defined in 
section 7 below.  
Table 2: Mapping problem,  drivers and objectives 
Problem  General objective 
The 2011 Communication did 
not define the operating rules 
of the CEF.   Establish optimal operating rules governing the use of funds under the 
CEF while exploiting as much as possible synergies between sector, 
particularly in the case of  cross-sectoral projects 
Policy areas (PA)  Specific and opera tional objectives 
PA1 Investment leverage  SO1 Define forms and methods of financing to ensure maximal leverage of 
EU budget contributions in attracting public and private investments 
for projects with a European and Single Market dimension, in 
particular priority networks that must be implemented by 2020, and 
where European added value is most warranted 
 Targeted funding OO1 Define objectives and multi-level criteria for proposal evaluation in 
order to ensure that funding is channelled on actions implementing 
projects with high EU added-value. 
 Co-funding rates OO2 Define co-funding maximum rates for EU support for projects 
 31according to priorities set in terms of  EU added-value and risks/market 
failures faced by prokects. Allow flexible use of these rates, in order to 
maximise the leverage of EU funding contributions. 
 Instruments OO3 Encourage the participation of specialised infrastructure investors by 
means of rules for the use of market based instruments, and by making 
available sufficient funds for support of innovative instruments. 
PA2 Programme 
implementation SO2 Define monitoring and evalua tion mechanisms that reward 
performance and penalise non-effective use of EU funds with a view to 
ensure the effective and timely  implementation of the projects 
supported. 
 Funding application and 
support  OO4 Define rules for proposal selection in order to ensure a competitive and 
transparent allocation of funds. 
 Monitoring and 
evaluation OO5 Establish a consistent framework for monitoring and evaluation to 
support decisions for continuing, discontinuing or recalibrating EU 
funding support (i.e. the "use it or lose it" principle, rules for ensuring 
that the competitive re-allocation of funds is made on transparent and 
highly competitive bases). 
 Programme 
management OO6 Set up an adequate institutional structure for the centralised 
management of the programme. 
 
3.2. Possible trade-offs between the search fo r synergies and the objectives of the 
sector specific policy frameworks 
The optimisation of CEF operating rules should take place taking into account two associated 
overarching policy goals of the EU, namely the sect or specific policy objec tives in the field of 
infrastructures as defined in Articles 170 and 171 of the TFEU fi rst indent and the 
simplification of the EU funding rules, notably derived from synergies between sectors, to 
which the Commission committed itself.73 The commitment of the Commission to pursue the 
goal of simplifying EU funding rules has been  reiterated in th e MFF Communication. 
These two policy goals may however lead to tr ade-offs when defining CEF optimal operating 
rules. Indeed, a complete harmonisation of CE F operating rules between the three sectors may 
induce inconsistencies in each s ector with its own policy object ives, leading in the end to a 
suboptimal use of EU funds by the CEF. 
Therefore, finding the appropriate  balance between coherence w ith sector polic y objectives 
and maximisation of synergies will be key in  defining CEF optimal operating rules. This 
appropriate balance only will en sure that CEF operating rules ar e optimal, i.e. that they are 
designed in such a way that a maxi mum value for money is attained. 
3.3. Coherence with other horizontal policies 
As indicated above, the proposed  initiative is fully consiste nt with the MFF Communication 
and its accompanying document. Besides, the EU 2020 strategy, the EU Budget Review, the 
Single Market Act74 and the MFF Communication have set the scene for the proposed 
                                                 
73 See, for example, the Communications on the Budget  Review (COM(2010)700) and Smart Regulation (COM 
(2010) 543). 
74The Single Market Act adopted by the Commission on 13th April 2011 sees European networks as one of the 
levers to unlock the growth and jobs potential of the Single Market and to reinforce citizens' confidence in its 
benefits. One of its twelve key actions is legislation fo r energy and transport infrastructure to identify and roll-
out projects of European interest, ensuring in termodality and interoperability (COM(2011) 607). 
 32initiative. Its general objective of defining optimal operating rules of the CEF are fully 
consistent with the objectives of the abov e-mentioned horizontal po licies as recalled in 
section 2 of this IA report. Th e Cohesion Fund and the ERDF will continue to be available for 
funding transport infrastructure, ICT and energy  distribution networks. More generally, this 
policy initiative will ensure that actions funde d under the CEF will be carried in conformity 
with the Union law, including as concerns market  distortions and state aid rules, and will take 
into account any relevant Union policies, such as, for example, the efforts to liberalise the 
markets in the three sectors concerned.  
 
4. POLICY OPTIONS  
As identified in section 2 of this report, the pr oblem that needs to be addressed in defining the 
CEF operational rules is to address the shortc omings highlighted by ex-post evaluations and 
stakeholder consultations with regard to TEN  financial programmes implementation so far 
(namely in the two main policy areas identified – investment leverage and programme implementation), while concentrating, in partic ular, on the simplification of the current EU 
infrastructure funding framework rules by drawing on synergies across sectors.  
Drawing on the recommendations of the same ex -post evaluations, stakeholder, as well as 
internal consultations, the Comm ission proceeded to the identific ation of a range of possible 
policy options that could addres s the problem identified earli er, and help to achieve the 
objectives set out in section 3 above of this IA report. This process of identification of the policy options has been developed on two paralle l tracks, which together will feed into the 
decision of the Commission with regard to the specific measures proposed in its policy 
initiative. 
A first track has had as starting point the central rationale underlying the Commission's 
decision to propose the establishment of a comm on TEN infrastructure f unding facility, i.e. to 
simplify the existing EU funding framework by draw ing on sectoral synergies. It has provided 
the main conceptual grid that guided the Co mmission in developing the main alternative 
policy options, starting from a range of policy s cenarios for each of the two main fields of 
policy intervention (investment leverage and programme implementation), corresponding to 
the three basic options for financial rules simplifi cation, i.e. of minimal, maximal and variable 
harmonisation of sectoral rules.   
A second track has had as starting point the need  to address the shortcomings, as highlighted 
by the ex-post reviews and stake holder consultations, of curren t sectoral provisions for each 
area of policy measures, within  both main policy fields of in tervention iden tified. Based on 
the recommendations of the same reviews and consultations, the Commission has considered, 
in a first instance, what could constitute the best option for addressing these shortcomings 
separately for each of the six policy measures id entified in each of the three sectors, making 
abstraction of the need to simply the rules acro ss the sectors. Starting from this "ideal" policy 
measures responses, the Commission has then cons idered the extent to which these responses 
overlap, or allow generalisation of  the successful experience in one sector to the other two, 
with regard to a certain area of policy measures.  This assessment, presented in detail in Annex 5, would later provided the basis for specifying the actual content of the policy options 
on distinct and/or common provisi ons between the three sectors,  depending on the outcome of 
the impact analysis of the main policy optio ns (as generated according to the degree of 
harmonisation) with regard to what woul d constitute the pref erred policy way(s) 
forwardassessing the effectiveness, efficien cy and coherence in addressing the policy 
objectives, as presented in section 6 below.  
                                                                                                                                                        
 
. 
 33 
4.1. Identification of generic scenarios fo r investment leverage and programme 
implementation 
Taking as starting point the cen tral rationale underlying the Commission's decision to propose 
the establishment of a common TEN infrastructure funding facility, i.e. to simplify the 
existing EU funding framework by drawing on sectoral synergies, a range of possible generic 
policy scenarios in each policy area (investment leverage and programme  implementation) has been developed. These scenarios are pr esented in the Tables 3 and 4 below. 
The potential added value of exploiting synergies for accelerating the implementation of 
TENs has long been acknowledged.
75 However, efforts to this end have been limited so far 
and the policy framework differences, stemming fr om sector specificities, have reinforced the 
tendency – natural in the first stages of developing a sector specific policy framework – to 
focus on specificities rather than on commonalities. 
With a view to explore further the synergies between the three sectors at the level of the 
operational rules of the CEF, the scenarios developed for each policy area (investment 
leverage and programme implementation) have b een designed in such a way that they explore 
three degrees of harmonisation across s ectors: minimal harmonisation, maximal 
harmonisation and 'à la carte' or variable harmon isation. Each policy scenario is composed of 
the corresponding component elements of the CEF identified in section 2 above. 
Three " investment leverage " scenarios (the L scenarios) have been envisaged (see Table 3 
below). As identified earlier, the scope of im proving the leverage of EU funding support can 
be done in three areas of policy measures, wh ich will give the CEF components/instruments: 
multi-level criteria for evaluati on the EU added-value of projec ts, level of co-funding rates, 
and the use of financial instruments. Three " programme implementation " scenarios (the I 
scenarios) have been elaborated followi ng the same methodology (see Table 4 below), along 
three further areas of policy measures: procedural  rules for organisation of calls and allocation 
of funds; monitoring instruments and rules for the implementation of the "use it or lose it 
principle", management structure.  
                                                 
75 On 20 July 2005, at the request of the Commission, a steering group was set up to examine the possible 
synergies between the trans-European networks along with methods of funding and potential distribution. It has established that synergies between the transport and telecommunications networks appear the most promising 
and ways of interconnecting the electricity networks were also worth exploring. See SEC(2007)135, "Trans-
European Networks: Towards an integrated approach". 
 
34  Table 3: Investment leverage scenarios 
Levels of harmonisation across sectors CEF components 
Minimal (LMin) Maximal (LMax) Variable (LVar) 
objectives and (multi-level) criteria for 
transparent evaluation of proposals 
according to their EU added-value Distinct objectives and criteria 
according to sectoral priorities Common objectives and criteria based 
on overall Europe 2020 Strategy and 
Budget for Europe 2020 priorities  Common objectives and criteria based on overall 
Europe 2020 Strategy & Budget priorities but 
adapted where necessary to better target sectoral 
priorities within overall priorities 
co-funding rates Distinct rates for each sector  and 
type of action Common rates for all sectors for each 
type of action Common rates for certain types of actions (studies 
for instance); specific rates for certain actions, 
depending on sectoral policy priorities 
financial instruments Distinct mix of instruments for 
each sector Common mix of instruments Distinct mix for each sector formed of: 
- a common set of equity and debt instruments; 
-different additional specific instruments 
 
Table 4: Project impl ementation scenarios 
Levels of harmonisation across sectors CEF components 
Minimal (I Min) Maximal (I Max) Variable (I Var) 
procedural rules for organisation of 
calls and allocation of funds Distinct calls procedures for each 
sector  Common calls procedures Common calls and procedures where possible to 
encourage actions that make use of  
a cross-sectoral synergie s such as smart grids 
(combining energy hardware and ICT software), 
transport & ICT services , bundling of energy, 
transport and ICT infrastructure, 
…and distinct sectoral calls and procedures where 
necessary to meet sector specific needs  
monitoring instruments and rules for 
the implementation of the "use or lose 
it" principle, including competitive 
funding re-allocations Distinct sets of monitoring 
instruments and "use it or lose it" 
rules for each sector Single set of monitoring instruments 
and "use it or lose it" rules  A core set of common/harmonised (??) monitoring 
instruments and "use it or lose it" rules with specific 
instruments and adapted/target rules to take into 
account sectoral characteristics 
(centralised) management structure 
(executive agency) Distinct management structure 
(executive agency) for each sector Single management structure 
(executive agency) Single executive agency as common management 
structure but with various degrees of delegation of 
tasks by the Commission services in each sector 
 354.2. Identification of policy options 
4.2.1.  Identification of (theoretically) possible alternative policy options 
As pointed out earlier, the ex-post review and consultation processes ma de apparent that a 
number of shortcomings in all policy areas, both with regard to investment leverage and to 
programme implementation would need to be addressed for the new TEN infrastructure 
financing framework to be a success.  
In light of this, the interaction between each of  the three scenarios envi saged for action at the 
level of investment leverage with each of the three scenarios envisaged for action at the level 
of programme implementation has been considered  within alternative policy options. In total, 
nine possible alternative policy options, constitu ting potentially viable policy alternatives for 
achieving the objectives identified in section 3 above, were thus initially generated. These 
nine policy options are pres ented in table 5 below. 
The resulting policy options cons ist of combinations of various degrees of harmonisation of 
investment leverage and of programme impl ementation, respectively. The range of options 
can be situated between two extremes: at the one extreme, mini mum harmonisation of 
investment leverage and programme implemen tation and at the other extreme, maximum 
investment leverage and programme implemen tation. In between the extremes, there are 
several intermediary options, which consist of combinations of minimum and maximum 
harmonisation levels as well as of variable harmonisation levels. To illustrate, the policy option characterised by minimum harmonisati on of investment leverage and programme 
implementation refers to a situation where se ctors would have specif ic rules and set-ups 
within the CEF. The policy option characte rised by maximum investment leverage and 
programme implementation refers to a situati on where sectors would have common rules and 
set-ups within the CEF. 
Intermediary policy options refer to a situati on whereby sectors would share certain rules and 
set-ups whereas other would remain distinct to the sectors. These options represent the large 
majority of the identified policy options. Whereas some of the intermediary policy options may be less efficient and effective for reasons of lack of coherence, other intermediary options may allow preserving sector specificiti es while harmonising all other aspects where 
possible synergies w ould be present. 
 
36  
Table 5: Identification of possible Policy Options 
Leverage 
ImplementationL Min L Max L Var 
I Min L Min – I Min  (Baseline under CEF) 
Distinct objectives  and criteria for 
evaluation of proposals' EU added-value 
according to sectoral priorities 
Distinct co-funding ra tes for each sector  
and type of action 
Distinct mix of financial instruments for 
each sector 
Distinct calls and selection procedures for 
each sector  
Distinct sets of monitoring instruments and 
"use it or lose it" rules for each sector 
Distinct management structure/executive 
agency for each sector L Max – I Min  
Common objectives and criteria for  
evaluation of proposals' EU added value 
EU added-value based on overall Europe 
2020 Strategy and Budget for Europe 
2020 priorities 
Common co-funding rates for all sectors 
for each type of actions 
Common mix of innovative instruments 
Distinct calls and selection procedures for 
each sector  
Distinct sets of monitoring instruments 
and "use it or lose it" rules for each sector 
Distinct management structure/executive 
agency for each sector  LVar – I Min  
Common objectives and criteria for evaluation of proposals' EU 
added value based on overall Europe 2020 Strategy & Budget 
priorities but adapted where necessa ry to better target sectoral 
priorities within overall priorities 
Common rates for certain types of actions (studies for instance),; 
specific rates for certain actions  depending on sectoral policy 
priorities  
Distinct mix of financial instruments for each sector formed of: 
- a common set of equity and debt instruments; 
-different additional specific instruments 
Distinct calls and selection pr ocedures for each sector  
Distinct sets of monitoring instruments and "use it or lose it" rules 
for each sector 
Distinct management structure/ executive agency for each sector  
I Max L Min – I Max  
Distinct criteria for evaluation of proposals' 
EU added-value according to sectoral 
priorities 
Distinct co-funding ra tes for each sector  
and type of action 
Distinct mix of financial instruments for 
each sector 
Common calls and procedures 
Single set of monitoring instruments and 
"use it or lose it" rules 
Single management structure (executive 
agency)  L Max – I Max  
Common objectives and criteria for 
evaluation of proposals' EU added-value 
based on overall Europe 2020 Strategy 
and Budget for Europe 2020 priorities 
Common co-funding rates for all sectors 
for each type of action 
Common mix of innovative instruments 
Common calls and procedures 
Single set of monitoring instruments and 
"use it or lose it" rules 
Single management structure (executive 
agency)  LVar – I Max 
Common objectives and criteria for evaluation of proposals' EU 
added value based on overall Europe 2020 Strategy & Budget 
priorities but adapted where necessa ry to better target sectoral 
priorities within overall priorities 
Common rates for certain types of actions (studies for instance); 
specific rates for certain actions  depending on sectoral policy 
priorities  
Distinct mix of financial instruments for each sector formed of: 
- a common set of equity and debt instruments; 
-different additional specific instruments 
Common calls and procedures 
Single set of monitoring instruments and "use it or lose it" rules 
Single management structure (executive agency) 
 37I Var L Min – I Var  
Distinct criteria for identifying EU added-
value of poroposals acco rding to sectoral 
priorities 
Distinct co-funding ra tes for each sector  
and type of actions 
Distinct mix of financial instruments for 
each sector 
Common calls and procedures where 
possible and distinct sectoral calls and 
procedures where necessary to meet sector 
specific needs  
A core set of common/harmonised  
monitoring instruments and "use it or lose 
it" rules with specific instruments and 
adapted/target rules to take into account 
sectoral characteristics 
Single executive agency as common 
management structure but with various 
degrees of delegation of tasks by the 
Commission services in each sector  L Max – I Var 
Common objectives and criteria for 
evaluation of proposals' EU added-value 
based on overall Europe 2020 Strategy 
and Budget for Europe 2020 priorities 
Common co-funding rates for all sectors 
for each type of actions 
Common mix of innovative instruments 
Common calls and procedures where 
possible and distinct sectoral calls and 
procedures where necessary to meet 
sector specific needs  
A core set of common/harmonised  
monitoring instruments and "use it or lose 
it" rules with specific instruments and 
adapted/target rules to take into account 
sectoral characteristics 
Single executive agency as common 
management structure but with various 
degrees of delegation of tasks by the 
Commission services in each sector  LVar – I Var  
Common objectives and criteria for evaluation of proposals' Eu 
added value based on overall Europe 2020 Strategy & Budget 
priorities but adapted where necessa ry to better target sectoral 
priorities within overall priorities 
Common rates for certain types of actions (studies for instance); 
specific rates for certain actions  depending on sectoral policy 
priorities 
Distinct mix of financial instruments  for each sector formed of: 
- a common set of equity and debt instruments; 
-different additional specific instruments 
Common calls and procedures where possible and distinct sectoral 
calls and procedures where necessary  to meet sector specific needs  
A core set of common/harmonised  monitoring instruments and "use 
it or lose it" rules with specific instruments and adapted/target rules 
to take into account sectoral characteristics 
Single executive agency as common management structure but with 
various degrees of delegation of tasks by the Commission services in 
each sector  
 
 384.2.2.  Pre-screening of envisage d alternative policy options76  
Due to the high number of the resulting (theoret ically) possible options , the nine scenario 
combinations have been submitted to an initial pr e-screening, in order to assess their internal 
coherence as policy options, on the one hand, and their capacity to ef fectively address the 
identified problem drivers and corresponding specific policy objectives, on the other. In 
addition, their coherence with the Commission' s aim of improving the effectiveness of the 
current financial framework by, inter alia, s implifying/harmonising to the extent possible 
current rules, has also been assessed. It became t hus apparent that three of the nine theoretical 
combinations would not constitu te viable policy options: two (L Max – I Min and L Min – I 
Max) for reasons of (lack of) compatibility between scenarios, i.e. for lack of internal 
coherence as policy options; and one other (L Min – I Min) for lack of effectiveness in 
attaining the objectives CEF has been established to reach. The reasoning leading up to this conclusion is presented briefly below.  
Maximising harmonisation of CEF instruments ai med at leveraging the impact of EU funding 
across the three sectors (L Max), while mainta ining distinct implementation instruments at 
sectoral level (I Min), would hardly reflect a coherent policy approach on the part of the 
Commission. For example, having a distinct set of monitoring instruments for each sector 
would not be justifiable/possible insofar as th e co-funding rates set and the mix of financial 
instruments used are identical for all sectors. Similarly, organising dist inct calls for proposals 
with distinct selection procedures, managed by separate executive agencies would contradict 
the logic of simplification of the policy framework applied at the level of the instruments concerning the leverage of funding.  
By the same token, maximising harmonisation acr oss sectors in terms of instruments of 
implementation (I Max) constitutes an effort of simplification and of exploiting potential synergies that would be offset by the lack of efforts in the same direction at the level of 
funding leverage instruments (L Min). Thus, a single set of instruments would likely prove 
inappropriate for monitoring dist inct sets of financial instruments or actions with likely 
importantly diverging co-funding rates. Similarly,  applying the same set of rules enforcing the 
"use it or lose it" principle for actions benefitting of distinct co-funding  rates would rather 
suggest short-sightedness or in flexibility on the pa rt of the Commissi on than capacity to 
streamline the approach to providing EU  support for TEN project development.  
Finally, maintaining a minimal level of ha rmonisation of instruments aimed at both 
leveraging the impact of EU funding and ensu ring an efficient implementation (L Min – I 
Min) would prove little effective in addressi ng the policy objectives set out. As pointed out 
earlier, the main difference between  this option and the baseline scenario is that it will mainly 
contribute to streamlining EU infrastructure fundi ng frameworks within sectors, but will fail 
to address the overarching objectives of simp lification across sectors and exploitation of 
synergies. For this reas on, it can be considered as a proxy baseline scenario, and it has been 
retained in this report in the assessment of  options' impacts that follows as the reference 
scenario. 
4.2.3.  Description of the policy options retained for in-depth assessment 
                                                
 
76 This section is completed by Annex 5. While this section aims at explaining the logical reasoning leading to 
the construction of policy options, Annex 5 aims at providing details on the implementation of these options. It 
therefore gives details on the choice of the multi-level criteria, co-funding rates, procedural rules for the 
allocation of funds and for the management of the fund. Details on innovative financing instruments are given in 
Annex 4. 
 39In light of the above pre-screen ing process, six scenario combin ations have been retained for 
in-depth assessment of impacts, as potentially viable policy options. Th e detailed description 
of the option is presented in Table 6 below. 
The assessment of impacts in section 6 is made  taking as reference the L Min – I Min option, 
or no harmonisation of rules, which consists in  keeping distinctive el ements for each sector 
under the umbrella of the CEF. Thus, with regard  to the leverage aspect , in this option each 
sector retains specific co-funding rates, mix of financial instruments and distinct criteria for 
selecting actions. As compared to the business-as-usual scenario, the difference lies in the revision and simplification of instruments and rule s within each sector in light of the findings 
and recommendations of ex-post and stakeholde r consultations, as well as the systematic 
introduction of financial inst ruments such as project bonds. 
With regard to implementation aspect, each  sector functions al ong specific selection 
procedures, monitoring instruments and management  structure. The main differences with the 
Business-as-usual are here again the revision an d simplification of rules within sectors, as 
well as the application of the "use it or loos e it" principle and the use of a centralised 
management structure.   
 40 Table 6: Presentation of retained policy options77 
Option LVar – I Min  Option L Max – I Max 
Investment Leverage  
(1) Common objectives  and 
criteria for proposal selection 
based on overall Europe 2020 
Strategy & Budget priorities…  
... but adapted where necessary 
to better target sectoral 
priorities within overall 
priorities 
Common award criteria  for 
proposal selection based on 
common objectives… 
 
 
 
 
… and adapted where necessary 
to better target sectoral 
priorities 
 
 
(2) Common grant co-funding 
rates  for certain types of  
 
-contribute to smart, sustainable and inclusive 
growth,  
- create an environment more conducive to 
private and public investment,  
 
- provide support for the achievement of 
specific objectives and priorities as 
established in the respective sectoral TEN 
Guidelines 
 
- cost-benefit assessment of impacts 
(economic, social, environmental) 
- maturity, and soundness of the 
implementation, of the action proposed 
-nature or urgency of the project based on 
needs to overcome speci fic financial obstacles 
and lack of market-finance 
- stimulating effect on public and private 
funding of the Union financial support 
- for e.g. transport, addressing cross-border 
sections and removal of bottlenecks  
- other specific criteria in the context of 
annual calls depending on specific sectoral 
priorities at a certain moment in time  
 
- studies: up to 50% of eligible costs Investment Leverage  
 
(1) Common objectives  and 
criteria for proposal selection 
based on overall Europe 2020 
Strategy & Budget priorities…  
  
 
 
(2) Common grant co-funding 
rates for all  types of actions..  
  
 
 
 
 
(3) Common mix of financial 
instruments  
 
 
 
 
 
  
 
-contribute to smart, sustai nable and inclusive growth,  
- create an environment more  conducive to private and 
public investment 
- common  set of priorities for proposal selection 
 
 
 
 
 
- studies: up to 50% of eligible costs 
- works: a general rate of up to 50%; increased to max 
80% for actions implementing established (common) 
priorities  
 
 
 
 
- investment funds with a focus on providing risk capital 
for project of common interest with EU capital 
participation; 
- loans or other risk-sharing based instruments, including 
project bonds, issued by a financial institution on its own 
resources with an EU contribution to the provisioning and 
capital allocation. 
- no sector-specific specialised financial instruments 
envisaged 
                                                 
77 The justification for the policy measures proposed in this table is provided in Annex 5. 
78 For all options envisaged, financial instruments are demand driv en and market based schemes which will be implemented by the E IB and the International Financial 
Institutions (IFIs) or national institutions. Therefore, they will be  used to address specific market needs in a cost effective  way, in line with the objectives of the programmes, 
and will not crowd out private financing as explained in Annex 4.  They will be targeted on projects that can benefit from an id entifiable revenue stream. Grants will aim at 
supporting projects and actions that cannot benefit from such revenue stream due to their nature. Grants and innovative financi ng instruments can be combined on a same 
project.  
 41 actions..   
 
 
 
 
 
 
 
 
 
 
 
 
 
(3) Mix of financial 
instruments78 for each sector 
consisting of 
- a common set of equity and 
debt instruments : 
 
 
-different additional specific 
instruments : 
 
 
Programme implementation  
(4) Distinct calls and selection 
procedures  for each sector  
 …but specific rates for certain actions 
depending on sectoral policy priorities 
-energy : a general rate of up to 50% of 
eligible costs; increased to max 80% for 
actions of particular importance for the 
regional or EU-wide security of supply 
- transport : a general rate of up to 20% of 
eligible costs; increased to max 30%  for 
actions addressing bottlenecks, to max 40% 
for actions concerning cross-border sections 
and to max 50% for actions concerning the 
European Rail Traffic Management System 
(ERTMS); for actions eligible for funds 
allocated from the Cohesi on Fund, rates of can 
be increased to max 75%. 
-ICT: for broadband networks actions, a rate 
of 20% of eligible costs; for generic services 
actions, a 75% rate of eligible costs; for 
actions in the field of applications, 50% of the 
eligible costs. 
 
- investment funds with a focus on providing 
risk capital for project of common interest 
with EU capital participation; 
- loans or other risk-sharing based 
instruments, including project bonds, issued 
by a financial institution on its own resources 
with an EU contribution to the provisioning 
and capital allocation. 
- specialised financial instruments developed 
according to sector and/or project  specific 
needs 
 
 
- energy : specific calls for annual work 
programmes, established according to sectoral 
priorities; continuation of current selection 
procedures, improved acco rding to results of   
 
 
 
 
Programme implementation  
(4) Common calls and 
procedures  
 
 
 
 
 
 
(5) Single set of monitoring 
instruments  and "use it or lose 
it" rules 
 
 
 
(6) Single management 
structure     
 
 
 
 
 
- common calls for both multi-annual and annual 
programmes with common application and selection 
procedures  
- developed by the Commission with the support of the 
TEN Executive Agency (EA) drawing on the experience 
and lessons learned  of the TEN-T EA and relevant 
sectoral experience, including results of ex-post and 
stakeholder consultations.  
 
- developed by the Commission with the support of the 
TEN EA on the basis of accumulated experience of the 
TEN-T EA and relevant sectoral experience, including 
results of ex-post and stakeholder consultations. 
- common "use it or lose it" rules will apply  
 
- single TEN Executive Agency managing the entire 
programme implementation cycle on behalf of the 
Commission in all three sectors concerned, on the model 
of the current TEN-T EA 
- European Coordinators for complex projects  
- TENtec database extended to hold information relevant 
for all TEN infrastructures 
 42  
 
 
 
 
 
 
 
 
(5) Distinct sets of monitoring 
instruments  and "use it or lose 
it" rules for each sector 
 
 
 
 
 
 
(6) Distinct management  
structure /executive agency for 
each sector 
 ex-post evaluations and stakeholder 
consultations 
- transport : specific calls for multi-annual 
and annual work programmes; continuation of 
current selection procedures, , improved 
according to results of  ex-post evaluations 
and stakeholder consultations 
- ICT: specific calls for annual work 
programmes, established according to sectoral 
priorities;  selection procedures developed 
according to experience acquired with other 
financial programmes in the field, and adapted 
to e-TEN requirements 
 
-energy : continuation of current monitoring  
procedures, improved acco rding to results of  
ex-post evaluations and stakeholder 
consultations  
-transport : continuation of current 
monitoring procedures, improved according to 
results of  ex-post evaluations and stakeholder 
consultations  
-ICT: continuation of current monitoring 
procedures, improved acco rding to results of  
ex-post evaluations and stakeholder 
consultations 
 
-energy : TEN-E Executive Agency 
-transport : TEN-T Executive Agency 
-ICT: e-TEN Executive Agency  
 
 
 43  
Option LVar – I Max  Option L Var – I Var 
Investment Leverage  
(1) Common objectives and 
criteria  for proposal evaluation 
based on overall Europe 2020 
Strategy & Budget priorities…  
... but adapted where necessary to 
better target sectoral priorities 
within overall priorities 
 
Common award criteria  for 
proposal evaluation based on 
common objectives… 
 
 
 
 
… and adapted where necessary to 
better target sectoral priorities 
 
 
(2) Common grant co-funding 
rates  for certain types of actions.   
…but specific rates for certain 
actions depending on sectoral 
policy priorities 
 
 
  
 
-contribute to smart, sustainable and inclusive 
growth,  
- create an environment more conducive to 
private and public investment,  
 
- provide support for the achievement of specific 
objectives and priorities as established in the 
respective sectoral TEN Guidelines 
 
- cost-benefit assessment of impacts (economic, 
social, environmental) 
- maturity, and soundness of the implementation, 
of the action proposed 
-nature or urgency of the project based on needs 
to overcome specific financial obstacles and lack 
of market-finance 
- stimulating effect on public and private 
funding of the Union financial support 
- for e.g. transport, addressing cross-border 
sections and removal of bottlenecks  
- other specific criteria in the context of annual 
calls depending on specific sectoral priorities at 
a certain moment in time  
 
- studies: up to 50% of eligible costs 
 
-energy : a general rate of up to 50% of eligible 
costs; increased to max 80% for actions of 
particular importance for the regional or EU-
wide security of supply 
- transport : a general rate of up to 20% of 
eligible costs; increased to max 30%  for actions 
addressing bottlenecks, to max 40% for actions 
concerning cross-border sections and to max Investment Leverage  
(1) Common objectives and 
criteria  for proposal evaluation 
based on overall Europe 2020 
Strategy & Budget priorities…  
... but adapted where necessary to 
better target sectoral priorities 
within overall priorities 
Common award criteria  for 
proposal evaluation based on 
common objectives… 
 
 
 
 
… and adapted where necessary to 
better target sectoral priorities 
 
 
 
 
(2) Common grant co-funding 
rates  for certain types of actions..  
…but specific rates for certain 
actions depending on sectoral 
policy priorities 
 
  
 
- contribute to smart, sustainable and inclusive 
growth,  
- create an environment more conducive to private 
and public investment,  
 
- provide support for the achievement of specific 
objectives and priorities as established in the 
respective sectoral TEN Guidelines 
 
- cost-benefit assessment of impacts (economic, 
social, environmental) 
- maturity, and soundness of the implementation, of 
the action proposed 
-nature or urgency of the project based on needs to 
overcome specific financial obstacles and lack of 
market-finance 
- stimulating effect on public and private funding of 
the Union financial support 
- for e.g. transport, addres sing cross-border sections 
and removal of bottlenecks  
- other specific criteria in the context of annual calls 
depending on specific sectoral priorities at a certain 
moment in time  
 
 
- studies: up to 50% of eligible costs 
 
-energy : a general rate of up to 50% of eligible costs; 
increased to max 80% for actions of particular 
importance for the regional or EU-wide security of 
supply 
- transport : a general rate of up to 20% of eligible 
costs; increased to max 30%  for actions addressing 
bottlenecks, to max 40% for actions concerning 
 44  
 
 
 
 
 
 
 
 
(3) Mix of financial instruments  
for each sector consisting of 
- a common set of equity and debt 
instruments : 
 
 
 
-different additional specific 
instruments : 
 
Programme implementation  
(4) Common calls and procedures  
 
 
 
 
 
(5) Single set of monitoring 
instruments  and "use it or lose it" 
rules 
 50% for actions concerning the European Rail 
Traffic Management System (ERTMS); for 
actions eligible for funds allocated from the 
Cohesion Fund, rates of can be increased to max 
75%. 
-ICT: for broadband networks actions, a rate of 
20% of eligible costs; for generic services 
actions, a 75% rate of eligible costs; for actions 
in the field of applications, 50% of the eligible 
costs. 
 
- investment funds with a focus on providing 
risk capital for project of common interest with 
EU capital participation; 
- loans or other risk-sharing based instruments, 
including project bonds, issued by a financial 
institution on its own resources with an EU 
contribution to the provisioning and capital 
allocation. 
- specialised financial instruments developed 
according to sector and/or  project  specific needs 
 
 
- common calls for both multi-annual and annual 
programmes with co mmon application and 
selection procedures  
- developed by the Commission with the support 
of the TEN Executive Agency (EA) drawing on 
the experience and lessons learned  of the TEN-
T EA and relevant sectoral experience, including 
results of ex-post and stakeholder consultations.  
- developed by the Commission with the support 
of the TEN EA on the basis of accumulated 
experience of the TEN-T EA and relevant 
sectoral experience, including results of ex-post 
and stakeholder consultations.  
 
 
 
 
 
 
 
 
 
(3) Mix of financial instruments  
for each sector consisting of 
- a common set of equity and debt 
instruments: 
 
 
-different additional specific 
instruments 
 
Programme implementation  
(4) Common calls and procedures  
where possible…  
 
 
 
…and distinct sectoral calls and 
procedures where necessary to 
meet sector specific needs  
 
(5) A core set of 
common/harmonised  monitoring cross-border sections and to max 50% for actions 
concerning the European Rail Traffic Management 
System (ERTMS); for actions eligible for funds 
allocated from the Cohesi on Fund, rates of can be 
increased to max 75%. 
-ICT: for broadband networks actions, a rate of 20% 
of eligible costs; for generic services actions, a 75% 
rate of eligible costs; for actions in the field of 
applications, 50% of the eligible costs. 
 
 
 
- investment funds with a focus on providing risk 
capital for project of common interest with EU 
capital participation; 
- loans or other risk-sharing based instruments, 
including project bonds, issued by a financial 
institution on its own resources with an EU 
contribution to the provisioning and capital 
allocation. 
- specialised financial instruments developed 
according to sector and/or  project  specific needs 
 
- common calls for both annual programmes with 
common application and selection procedures 
 - developed by the Commission with the support of 
the TEN Executive Agency (EA) drawing on the 
experience and lessons learned  of the TEN-T EA 
and relevant sectoral experience, including results of 
ex-post and stakeholder consultations.  
- distinct calls for multiannual programmes, targeting 
overall sectoral priorities 
 
- developed by the Commission with the support of 
the TEN EA on the basis of accumulated experience 
 45  
 
 
(6) Single management structure   - common "use it or lose it" rules will apply  
 
- single TEN Executive Agency managing the 
entire programme implementation cycle on 
behalf of the Commission in all three sectors 
concerned  instruments  and "use it or lose it" 
rules with specific instruments…  
 
…and adapted/target rules to take 
into account sectoral 
characteristics 
 
(6) Single executive agency as 
common management structure  
but with various degrees of 
delegation of tasks by the 
Commission services in each 
sector of the TEN-T EA and releva nt sectoral experience, 
including results of ex-post and stakeholder 
consultations. 
- common "use it or lose it" rules will apply  
- additional monitoring instruments can be developed 
in the context of the calls (both for the annual and 
multiannual work programmes) 
- single TEN Executive Agency assisting the 
Commission 
- the extent to which the programme implementation 
cycle is managed by the EA on behalf of the 
Commission is different in all three sectors 
concerned  (for e.g. in transport fully; in energy and 
ICT it will be decided following on further cost-
benefit analysis on how this management formula 
could serve sectoral specificities) 
- European Coordinators will continue to be used in 
transport and energy 
- TENtec database currently developed for TEN-T 
could be extended to all sectors  
 
Option LMin – I Var  Option L Max – I Var 
Investment Leverage  
 (1) Distinct objectives and criteria  
for identifying EU added-value of 
proposals according to sectoral 
priorities 
 
(2) Distinct grant co-funding rates  
for each sector and type of actions  
 
  
- provide support for the achievement of specific 
objectives and priorities as established in the 
respective sectoral TEN Guidelines 
 
-energy : a general rate of up to 50% of eligible 
costs for both works and studies; increased to 
max 80% for actions of particular importance 
for the regional or EU-wide security of supply 
- transport : a general rate of up to 50% for 
studies and 20% of eligible costs; increased to 
max 30% for actions addressing bottlenecks, to Investment Leverage  
(1) Common objectives  and 
criteria for proposal evaluation 
based on overall Europe 2020 
Strategy & Budget priorities…  
  
 
 
(2) Common grant co-funding 
rates for all  types of actions  
   
-contribute to smart, sustainable and inclusive 
growth,  
- create an environment more conducive to private 
and public investment 
- common  set of priorities for proposal selection 
 
 
- studies: up to 50% of eligible costs 
- works: a general rate of up to 50%; increased to 
max 80% for actions implementing established 
(common) priorities  
 46  
 
 
 
 
 
 
 
(3) Distinct mix of financial 
instruments  for each sector  
Programme implementation  
(4) Common calls and procedures  
where possible…  
 
 
 
 
 
…and distinct sectoral calls and 
procedures where necessary to 
meet sector specific needs  
 
 
(5) A core set of 
common/harmonised  monitoring 
instruments  and "use it or lose it" 
rules with specific instruments …  
 
…and adapted/target rules to take max 40% for actions concerning cross-border 
sections and to max 50% for actions concerning 
the European Rail Traffic Management System 
(ERTMS); for actions eligible for funds 
allocated from the Cohe sion Fund, rates of can 
be increased to max 75%. 
-ICT: up to 75% for support actions and studies; 
for broadband networks actions, a rate of 20% of 
eligible costs; for generic services actions, a 
75% rate of eligible costs; for actions in the field 
of applications, 50% of the eligible costs. 
- specialised financial instruments developed 
according to sector and/ or project  specific 
needs. 
 
- common calls for both annual programmes 
with common application and selection 
procedures 
 - developed by the Commission with the 
support of the TEN Executive Agency (EA) 
drawing on the experience and lessons learned  
of the TEN-T EA and relevant sectoral 
experience, including results of ex-post and 
stakeholder consultations.  
- distinct calls for multiannual programmes, 
targeting overall sectoral priorities 
 
- developed by the Commission with the support 
of the TEN EA on the basis of accumulated 
experience of the TEN-T EA and relevant 
sectoral experience, including results of ex-post 
and stakeholder consultations. 
- common "use it or lose it" rules will apply  
- additional monitoring instruments can be  
 
(3) Common mix of financial 
instruments  
 
 
 
 
 
Programme implementation  
(4) Common calls and procedures  
where possible…  
 
 
 
…and distinct sectoral calls and 
procedures where necessary to 
meet sector specific needs  
 
(5) A core set of 
common/harmonised  monitoring 
instruments  and "use it or lose it" 
rules with specific instruments…  
 
…and adapted/target rules to take 
into account sectoral 
characteristics 
 
 
(6) Single executive agency as 
common management structure  
but with various degrees of  
- investment funds with a focus on providing risk 
capital for project of common interest with EU 
capital participation; 
- loans or other risk-sharing based instruments, 
including project bonds, issued by a financial 
institution on its own resources with an EU 
contribution to the provisioning and capital 
allocation. 
- no sector-specific specia lised financial instruments 
envisaged 
 - common calls for both annual programmes with 
common application and selection procedures 
 - developed by the Commission with the support of 
the TEN Executive Agency (EA) drawing on the 
experience and lessons learned  of the TEN-T EA 
and relevant sectoral experience, including results of 
ex-post and stakeholder consultations.  
- distinct calls for multiannual programmes, targeting 
overall sectoral priorities 
 
- developed by the Commission with the support of 
the TEN EA on the basis of accumulated experience 
of the TEN-T EA and releva nt sectoral experience, 
including results of ex-post and stakeholder 
consultations.  
- common "use it or lose it" rules will apply  
- additional monitoring instruments can be developed 
in the context of the calls (both for the annual and 
multiannual work programmes) 
 
- single TEN Executive Agency assisting the 
Commission but  
 47 into account sectoral 
characteristics 
 
(6) Single executive agency as 
common management structure  
but with various degrees of 
delegation of tasks by the 
Commission services in each 
sector  developed in the context of the calls (both for 
the annual and multiannual work programmes) 
 
- single TEN Executive Agency assisting the 
Commission but  
- the extent to which the programme 
implementation cycle is managed by the EA on 
behalf of the Commission is different in all three 
sectors concerned  (for e. g. in transport fully; in 
energy and ICT it will be decided following on 
further cost-benefit analysis on how this 
management formula could serve sectoral 
specificities) 
- European Coordinators will continue to be 
used in transport and energy 
- TENtec database currently developed for TEN-
T could be extended to all sectors 
 delegation of tasks by the 
Commission services in each 
sector - the extent to which the programme implementation 
cycle is managed by the EA on behalf of the 
Commission is different in all three sectors 
concerned  (for e.g. in transport fully; in energy and 
ICT it will be decided following on further cost-
benefit analysis on how this management formula 
could serve sectoral specificities) 
- European Coordinators will continue to be used in 
transport and energy 
- TENtec database currently developed for TEN-T 
could be extended to all sectors 
 48 
ANALYSIS OF IMPACTS  
This section provides an assessment of impacts that is proportionate to the nature of the 
document proposed. The assessment of those impacts is mainly qualitative.  
The analysis of impacts presented below is surrounded by a significant degree of uncertainty 
stemming from the fact that the EU action in the field of infrastructure financing is triggered 
mainly by the Member States. Whereas some parameters such as the projects considered as being candidates for EU funding and appended to the MFF Communication can be foreseen 
with a reasonable degree of confidence, the evol ution of other key factors like the capacity of 
Member States to continue inve sting in infrastructures in time s of severe budget constraints or 
the appetite of private sector  over the concerned period of time incorporates a higher amount 
of uncertainty. This needs to be taken into account for the assessment of impacts presented below. 
This being said, the Commission has used a two- step approach for analysing the impacts of 
the envisaged policy options linked to the proposed  initiative. First, it has assessed the socio-
economic and environmental impacts of the cr eation of the CEF in comparison with the 
baseline presented in section 2 above. This assessment is available in Annex 1. In a second 
stage, it has analysed the impacts of the six proposed policy options within the framework set 
out by the CEF. The retained pol icy options of the CEF will be assessed on their own merits. 
This two-step approach is justified by the fact that, at the time this IA report is prepared, the 
Commission has already taken the decision to create the CEF w ith a budget of € 50 billion. In 
this context, as explained in section 4, the si x policy options assessed in this IA report have 
been set up under this framework. Therefore, the baseline scenario presen ted in section 2 of 
this IA, which corresponds to the existing funding framework, cannot be used as the benchmark against which the six policy options will be assessed. 
4.3. Analysis of the impacts of the creation of the CEF 
As detailed, in Annex 3 of th is IA, comparing the impacts of creating the CEF with the 
baseline scenario presented in section 2 above , taking into consideration the pre-conditions 
(budget, central management
79, the alignment of EU funding instruments within sectors 
including also market based instruments) of  the CEF included in all the retained policy 
options of the current Impact Assessment of th e CEF, it becomes evid ent that the CEF will 
contribute to significant se ctor impacts as well as to  overall socio-economic and 
environmental impacts. 
The investments in the three sectors under the CEF have to be taken into account in the 
framework of the policies detailed in the sector  specific Guidelines. The Impact Assessments 
accompanying those Guidelines provides details on sector specific impacts of each policies 
                                                 
79 In transport for instance, centralised management will better promote and ensure coherent implementation of 
(common) transport policy measures across Europe (e.g. w ith regards to charging, security, safety in tunnels, 
interoperability, etc.). It will also allow for almost 'real time' monitoring of projects/programme performance 
(beyond information on 'earmarked funds)'; this is importa nt in assessing evolving priorities (e.g. in the case of 
the European Economic Recovery Plan). 
 49and their required investments, while this  impact assessment focuses more on common 
features of a major increase in  infrastructure investments. 
Economic impacts 
The development of the infrastructure of high European added-value due to the investments 
co-financed by the CEF will contri bute to strengthening the Singl e Market.  The main positive 
effects will be on the free m ovement of goods and services, overcoming market segmentation, 
foster accessibility and territorial cohesion. 
As explained in the annex, deve lopment of high performing infr astructure can be act as a 
growth enabler for the whole European economy, beyond the sectors covered by the CEF. For 
instance, since broadband ne tworks serve as a General Purpose Technology enabler, 
infrastructure diffusion positively affects Tota l Factor Productivity, capital accumulation, and 
ultimately, GDP growth.80 . 
 In addition, the promotion of intelligent transport systems or smart grids should foster 
research and innovation for ne w technologies and create new business cases. Building  new 
transport, energy or broadband infrastructure  would have an important impact on the 
construction sector. Some infrastructure projects  like high-speed rail pr ovide several years of 
works for construction companies and related businesses. Finally, the improvement of the 
efficiency of the transport and energy systems and the reduction of pri ces and uncertainties in 
the delivery would improve the economic conditions for both transport businesses and enterprises heavily depending on transport for their activity. 
Consumers will be major beneficiaries of these i nvestments in several ways, with an increase 
choice: in the energy and transport sectors, investments will improve market integration and 
competition, leading to greater choice to c onsumers; with new broadband networks, more 
consumers will be able to purchase on-line, havi ng the possibility to choose cheaper products. 
Finally, as indicated above, current funding rule s have evolved not only in response to the 
need for accountability on how public money is spent but also to take account of previous 
problems. The result is a diversity and complexity that is difficult to implement and control. 
This complexity imposes a heavy administrativ e burden on beneficiaries as well as on the 
Commission and Member States , which can have the uninte nded effect of discouraging 
participation and delaying implementation. The cr eation of the CEF will contribute to simpler 
processes and alleviate administrative co sts by bringing the governance of various 
programmes in different policy fi elds under a common framework.  
Social impacts 
As shown in the annex, the acce leration of the development of  infrastructure of high EU 
added value will have major s hort and medium term impacts on job creation. J ob creation is 
primarily related to the construction works to im plement this increase level of infrastructure, 
but not only. Long-term induced job creation is difficu lt to calculate, but cases studies have 
shown the positive results of infrastructu re development on long-term job creation. 
According to the economic literature, infrastructure investments help boost economic growth, 
enhance trade and mobility of people and constitu te a highly effective engine of job creation. 
                                                
 
80As an example, a 10% increase in broadband household penetration delivers a boost to a country’s GDP  that 
ranges from 0.1 percent to 1.4 percent (Mobile Broadband for the Masses, McKinsey & Company, 2009). As a 
spillover, broadband-enabled smart grid services and de vices could result in over €850 billion in gross energy 
savings. This approach is expected to reduce end-use energy consumption in the USA in 2020 by roughly 23 per 
cent of projected demand (Davidson, Santorelli and Kamber, 2009). 
 50One recent study in the US showed that infras tructure investment spending creates about 
18,000 total jobs for every $1 billion in new inve stment spending, including direct, indirect 
and induced jobs81. Job creation is mainly related to in frastructure works, but it is also 
induced by the indirect economic effect of the use of the new infrastructure82.  
The development of the three infrastructures ne tworks will have also an important impact in 
term of accessibility and terr itorial cohesion. As explained in  the Fifth Cohesion Report, 
"regional competitiveness and development prospects are also affected by infrastructure endowment, such as transport or  telecommunication networks". 
The increase development of these networks will also have sector specific types of aspects; 
broadband infrastructure is for instance favouring qua lity of life thanks to the development of 
eServices and eHealth, better transport infrastruc ture is favouring transport safety, and more 
developed energy infrastructure favouring the security of supply and better access to energy 
for European households and enterprises. 
 
Environmental impacts 
As shown in the annex, the impacts of the increase development of infrastructure on the 
environment have two main aspects. On the one  side, this development may negatively affect 
land-use, the flora and the fauna where new su rrounding the new infrastr ucture. However, the 
compliance with existing EU legi slation (of which SEA directive
83, EIA directive84 Habitats 
directive85 and Water framework directive86) will be of primary importance to limit these 
adverse impacts. 
On the other, the development and design of  new infrastructures is essential for the 
implementation of less polluting life-style. Fo r instance, the development of smart energy 
grids will be crucial for the integration of rene wables in the energy market; for transport, the 
development of electrified railways, inland wate rways or electricity refuelling power stations 
along the roads will allow for the development of cleaner solutions for transport. Therefore, 
investing in new transport infrastructure in the framework of the revised Guidelines would 
contribute to further reduction in emissions thanks to their positive impact on congestion 
reduction, and as a result of induced modal shift.  However, new transport infrastructure would 
facilitate larger volumes of transport traffic fl ows, leading to an increase of energy and fuel 
consumption, the so-c alled rebound effect87. Hence, whether on bala nce the overall impact 
will be positive or negative wi ll depend on the extent to which cleaner vehicle technology is 
introduced. The reinforced coordination approach  to implementation foreseen in the revised 
TEN-T Guidelines would further contribute to  the reduction of vehicles emissions, as it 
enables better promotion of greener trans port solutions, for example by fostering the 
replacement of diesel locomotives by electri c ones and promoting cleaner road transport 
through technological innovation for both vehicles and the infrastructure. 
                                                 
81How Infrastructure Investments Support the U.S. Eco nomy: Employment, Productivity and Growth, Political 
Economy Research Institute, January 2009. 
82 More details on the temporary and long-term employment effects of infrastructure investments can be found in 
the TEN-T Guidelines impacts and in  the OECD 2002 report on the Impact of Transport Infrastructure 
Investment on Regional Development. 
83 Directive 2001/42/EC on the assessment of the effects of certain plans and programmes on the environment 
84 Directive 85/337/EEC on the asse ssment of the effects of certain p ublic and private projects on the 
environment 
85 Directive 92/43/EEC on the conservation of natural habitats and of wild fauna and flora 
86 Directive 2000/60/EC establishing a framework for the Community action in the field of water policy 
87 Rebound effects are indirect, second order effects of policy instruments, which are often unintended and 
have the potential to undermine the ultimate objective of the primary policy instrument 
 51As a general note for the three sectors, in these environmenta l issues, EU funding under the 
CEF cannot act in isolation, but  it can condition EU funding (in the general CEF framework 
as well as in the sector specific Guidelines) to the respect of envir onmental standards. The 
contribution of the development of infrastructure to the ‘20-20-20’ objectives will therefore be really important. 
 
Conclusions 
The Annex 3 and the Impact Assessments accompa nying the three sector specific Guidelines 
show the major positive environmental, soci al and economic impacts of an accelerated 
development of energy, transport and broadband  infrastructures on the basis of the revised 
policies defined in the Guidelines.  
These positive impacts of the accelerated develo pment of infrastructure through the creation 
of the CEF will be visible for all the policy op tions assessed in the below. Their order of 
magnitude will depend to a certain but limited extent on the effectiveness of the policy options to address the problem identified in part 2 of this document, the optimal operating 
rules of the CEF. However, it has to be bor ne in mind that the effects of defining the 
operational rules of the CEF are marginal when compared with the effects of investing € 50 
billion in energy, transport or digital infrastr ucture. While investing € 50billion in energy, 
transport and broadband infrastructures will lead to an important accelerated development of infrastructure of high EU added value, with the positive impacts described above and in the 
Annex 3, the impacts of the options described below will mainly focus on reduction of administrative costs and on variations for the leverage effects of EU funds.  
4.4. Analysis of the impacts of th e six retained policy options 
The following subsection will focus on the impacts of the retained Policy options selected in 
section 4 of the IA report on thei r capacity to enable the CEF to accelerate the development of 
infrastructures of EU interest. As explained in subsection 3.2 above, the optimal use of EU 
funds by the CEF, leading to an accelerated development of infrastructures of common 
interest, is achieved by solving the trade-off between the search for synergies between sectors 
and sector specific objectives. Therefore, the impacts of the policy options on those aspects 
will be assessed also. Finally, the impact of the various options on administrative burden will be analysed. 
4.4.1.  Option L Var – I Min  
For the leverage components, this options aims at adapting as closely as possible to the needs 
of each sector, while looking for synergies where possible. As for implementation, rules, procedures and management structures are distinct for each sector. 
By having co-funding rates and innovative instrume nts specific to the needs of each sector 
while also proposing common rates (for studies) and common se t of innovative instruments, 
the leverage of this option will be high, favouring the development of infr astructure with high 
EU added-value in each of the three sectors. Se ctor specific stakeholders in each sector will 
deal with simplified but adapted rules, while Member States and Institutional investors will deal with common criteria and gene ral funding rules. It will attr act private inve stors and allow 
Member States to adapt their funding to clea rer EU priorities. The adapted co-funding rates 
will also allow take into account the eligibil ity of Member States to the Cohesion Fund. 
On the implementation side, sector specific stake holders will benefit from the clarity of sector 
specific calls, selection procedures, monito ring instruments and management structure. 
 52Therefore, the policy targets of each sector (in line with the Europe 2020 Strategy) will be 
well taken into account. However, this structure will not allow using the potential synergies between sectors, therefore downgrading the added value of  the creation of the CEF. 
Moreover, the distinct management structure fo r each sector, as well as the distinct set of 
procedures and monitoring instruments will prev ent from benefiting from economies of scale 
at the level of administrative costs. With thr ee separate management structures and the level 
of funding proposed by the Commission in the MFF Communication, the administrative costs 
are likely to increase dramatically. 
4.4.2.  Option L Max – I Max  
This option goes for the maximal harmonisation between the three sectors, maximising the 
synergies under the CEF. Private investors w ill be interested in the simplified mix of 
innovative instruments. The single  set of calls, procedures, m onitoring instruments and rules 
as well as the single management structure wi ll lead to reduction in administrative costs, 
better visibility of the EU objectives for infras tructure investments and reduced administrative 
burdens for private investors as well  as for public funding authorities. 
However, the common co-funding rates for the 3 sectors will lead to a suboptimal use of EU 
funds. With the different configuration of the s ectors, the differences in  the sector specific 
objectives, different co-funding rates are needed to  finance projects in the most effective way. 
For instance, as demonstrated by the EEPR e xperience, for projects aiming at increasing 
security of supply, a co-financi ng rate of 50% or more can be necessary to unblock the 
project. In the field of transport, as de monstrated by the TEN-T Programme, cross-border 
projects do not require more than 30 to 40%  of EU co-funding. On the other end, while 
energy cross-border infrastructu res are mostly owned and run by private investors, the co-
funding rate needed is very different from tran sport projects such as a Base Tunnel for rail 
freight transport between two countries, which ca nnot be financed by the private sector due to 
low and uncertain rates of retur n. Therefore, this option will not  allow to fulfil the sectoral 
objectives of the policy covere d under the CEF, and is thus in contradiction with the 
reasoning behind the creation of the Facility.  
4.4.3.  Option L Max – I Var 
For the same reasons as for Option L Max – I Max above, this option will not allow to fulfil 
the sectoral objectives of the policy covered under  the CEF, and is thus in contradiction with 
the reasoning behind the creation of the Facility.  
4.4.4.  Option L Var – I Max 
For the leverage components, this option aims at  adapting as closely as possible to the needs 
of each sector, while looking for synergies wher e possible. As for implementation, the single 
set of calls, selection proce dures, monitoring instruments and rules as well as the single 
management structure will lead to reduction in ad ministrative costs, better visibility of the EU 
objectives for infrastructure investments a nd reduced administrative burden for private 
investors as well as for p ublic funding authorities. 
By having co-funding rates and innovative instrume nts specific to the needs of each sector 
while also proposing common rates (for studies) and common se t of innovative instruments, 
the leverage of this option will be high, favouring the development of infr astructure with high 
EU added-value in each of the three sectors. Se ctor specific stakeholders in each sector will 
deal with simplified but adapted rules, wh ile Member States, pr oject promoters and 
Institutional investors will deal with common crite ria and general funding rules. It will attract 
private investors and al low Member States project promoter s to adapt their funding to clearer 
 53EU priorities. The adapted co-funding rates will al so allow take into acc ount the eligibility of 
Member States to the Cohesion Fund. 
However, on the implementation side, the positive aspects of clarity of EU policy and 
reduction in the administrative cost and administ rative burden for investors will be offset by 
the difficulty to adapt the implementation proce dures and rules to the specificities of each 
sector and policies. Stakeholders in each sect or will be confronted with a new framework, 
which will not be tailor-made for their needs. With general common rules applying to distinct 
rates, mix of financial instruments and criteria  and budget priorities adapted to the needs of 
each sector, the project life cycle will be comp lex. With this somewhat distinct rules and 
instruments regarding leverage, but strictly  common rules for implementation, it will be 
difficult to prepare calls and defi ne monitoring procedures adapte d to the needs of  each sector 
and the specific objectives of each policy. It will therefore bring addi tional complexity for 
stakeholders and Member States that may be re luctant to participate in the calls, thus being 
counterproductive and unlikely to help  reach the Europe 2020 targets.  
 
4.4.5.  Option L Var – I Var  
This options aims at adapting as closely as po ssible to the needs of each sector, while looking 
for synergies where possible.  
As for implementation, cross-sectoral synerg ies will be reached by using common call and 
procedures for projects with a cross-sectoral dimension. Clar ity of the monitoring tools and 
instruments by having harmonised set of general rules, while keeping the possibility to adapt 
to sector specific needs. As for management, the single executive agency and its common management structure will optimise the administra tive costs while keeping a flexible structure 
adapted to the Commission needs for each of the policy area. The use of the executive agency will build on the structure and the successe s of the current TEN-T Executive Agency
88, not 
requiring the creation of a new European Agency. 
This flexible implementation architecture will allo w using the flexible approach to leverage of 
this option. By having co-funding rates and inno vative instruments speci fic to the needs of 
each sector while also proposing common rate s (for studies) and common set of innovative 
instruments, the leverage of this option will be high, favouring the development of 
infrastructure with high EU added-value in each of the three sector s. Sector specific 
stakeholders in each sector will deal with simp lified but adapted rules, while Member States, 
project promoters and Institutional investors will deal with common criteria and general funding rules. It will attract pr ivate investors and allow Member  States and project promoters 
to adapt their funding to cleare r EU priorities. The adapted co -funding rates will also allow 
take into account the elig ibility of Member States to the Cohesion Fund. 
This option is consistent with th e purpose of the creation of the CE F, since it will optimise the 
use of EU funding in each sector in order to accelerate the deployment of infrastructure of 
high EU added value, while using the synergies of the EU budget to pool funds, simplify rules 
and therefore attract investors. 
4.4.6.  Option L Min – I Var  
This option combines the same approach to  implementation as the one above with the 
minimum harmonised approach to the leverage area, with distinct co -funding rates, innovative 
instruments and criteria, therefore not using commonalities between sectors, in a way similar 
                                                
 
88 See the 2 report on the implementation of the TEN-T prog ramme by the Agency and th e report of the court of 
Auditor? 
 54to the Business-as-usual scenario. Thanks to the flexible approach to implementation, this 
option will benefit from synergies and economie s of scales for implementation. However the 
benefits will not be optimal since the feat ures present to generate synergies in the 
implementation area will be base d on leverage rules that are not  fostering those synergies. 
This option is likely to have a positive impact on the accelerated development of infrastructure of EU interest, bu t this impact will not be optimal. 
5. COMPARISON OF THE RETA INED POLICY OPTIONS  
The analysis in subsection 5.1 above has shown that the different degrees of harmonisation 
between sectors of CEF operating have clear implic ations in terms of impacts. The latter, that 
are assessed as net changes compared to the CEF baseline (the L min – I min), are 
summarised in table 6 below: 
 
  
Table 7:  Summary table of impacts of the retained policy options under the CEF 
Impact on OptionL 
Var – I 
Min  Option L 
Max – I 
Max  Option L 
Max – I 
Var Option L 
Var – I 
Max Option L 
Var – I 
Var  Option L 
Min – I 
Var  
Accelerated development of 
infrastructure of EU interest + - - + ++ + 
of which:       
Coherence with sector 
specific policy frameworks + - - = + + 
Degree of  synergies between 
sectors = ++ ++ ++ ++ = 
Reduction of administrative 
costs = ++ + ++ + + 
Legend:   –  : negative impact 
=  : no change 
+  : positive impact 
++ : very positive impact 
As discussed above, the options  including the Lmax component  would not have a positive 
impact on the accelerated development of the infr astructure since it would not be possible to 
find common rates and instrument s that would be adapted to th e needs of the sectors. As 
already described in section 2, although th e sectors have significant potential for 
harmonisation, the sectors are different, nota bly with respect to their use of funding 
instruments. The energy sector, for instance, is, to a large ex tent, revenue bearing, which, in 
contrast to the transport sector, requires different  levels of EU co-funding rates. Therefore, the 
use of funds for each sector would not be optim al, logically inducing a non-optimal use of the 
fund under the CEF. 
The option L Var – I Min would not lead to a reduction in administ rative burden and would 
allow looking for a certain level of synergies on  the leverage aspects only. Sectors specific 
needs would be well taken into account. The ove rall result on the accelerated development of 
infrastructure would be slightly positive co mpared to the Business-as-usual under the CEF 
 55The option Option L Var – I Max would lead to an important reduction in administrative costs 
and would maximise the synergies between sect ors. Regarding sector specific objectives, the 
impact would be positive on the leverage asp ects, but it may trigger difficulties on the 
implementing side for sector specific stakehol ders. The overall impact on the use of EU funds 
is therefore expected to be  only slightly positive on th e optimal use of EU funds. 
The Option L Var – I Var would lead to a certain  reduction in administra tive costs, highly 
facilitate the use of synergies between sector while keeping a flexible approach allowing for 
the optimal use of funds for each  sector. Therefore, the over all impact on the accelerated 
development of infrastructure would be high. 
Option L Min – I Var would lead to a certain redu ction in administrative costs. It would allow 
looking for a certain level of synergies on the implementing side only. Sector specific needs 
should be well taken into account. The overall  result on the accelerated development of 
infrastructure would be slightly positive comp ared to the Business-as-usual under the CEF. 
This section provides for an assessment of how the policy options will contribute to the 
realization of the policy objectives, as set in Se ction 3, in light of the following evaluation 
criteria: 
• effectiveness – the extent to which options achieve the objectives of the proposal; 
• efficiency – the extent to which objectives can be achieved at least cost; 
• coherence –  the extent to which policy options are likely to limit trade-offs across the 
assessed impacts. 
 
Effectiveness 
The following table gives a synthetic overview of the policy options’ effectiveness with 
regard to the specific policy objectives defined in section 3. From this table, it appears that 
Policy Options L Var – I Max and L Var – I Var score best on effectiveness. They offer indeed the most appropriate degree of harmon isation between sectors to meet the defined 
objectives. 
Table 8: Effectiveness of retained policy options in light of objectives 
Specific objectives Maximum investment leverage Effective and timely project 
implementation 
Option L Var – I Min  High Low 
Option L Max – I Max  Low Low 
Option L Max – I Var Low Low 
Option L Var – I Max Medium High 
Option L Var – I Var  High Medium 
Option L Min – I Var  Medium Medium 
As regards the specific objective linked to the inve stment leverage, as argued in more detail in 
the discussion in Annex 5, Options L Max – I Max and L Max – I Var have a low effectiveness since they do not ta ke into account the objectives of the sector related policy 
frameworks. Option L Var – I Max has a medium  effectiveness since the leverage aspects 
allow for a good balance between sector specific  needs and synergies, but sector specific 
needs may be affected on the implementation aspects. Option L Min – I Var has a medium 
effectiveness since sector specif ic needs are well taken into acc ount with a limited number of 
 56synergies that mainly derive from the impl ementation aspects. Option L Var – I min and 
Option L Var – I Var have a high effectivene ss on leverage due to the leverage aspects 
allowing for a good balance between sector sp ecific needs and synergies, which is not 
adversely affected by the implementation aspects.  
As regards the specific object ive linked to the project impl ementation, Options L Max – I 
Max and L Max – I Var have a low effectivenes s since with a low effectiveness on leverage, 
implementation aspects are of no use. Option L Min – I Var has a low effectiveness on 
implementation since possible synergies are not taken into account. Option L Var – I Max has 
a high effectiveness since it is maximising s ynergies on the implementation side while 
benefiting from the flexibilities on the leverage  aspects. Option L Var – I Var and Option L 
Min – I Var have a medium effectiveness sin ce synergies are partia lly taken into account 
while keeping flexibility for each sector. 
 
Efficiency 
As shown in  Table 6 above, the only option that does not lead to a reduc tion in administrative 
costs as compared to the Business-as-usual unde r CEF is option L Var – I Min. This option is 
thus the least efficient among the 4 options  selected according to effectiveness. 
Option L Var – I Max leads to a more important reduction in administrative costs compared to 
Options Option L Var – I Var and L Min – I Var, but is less effective than option L Var – I 
Var in addressing the main problem. 
In light of this, the most efficient pol icy option is clearly Option L Var – I Max. 
 
Coherence 
As highlighted in Table 6 above, Policy Option L Var – I Var ensures the achievement of the 
objectives with the lowest trade-offs across the assessed impacts. 
 
Conclusion 
In light of the above, Policy options L Var – I Min, L Max – I Max, L Max – I Var and L Min 
– I Var are discarded. In general terms, the anal ysis above shows that the policy options L Var 
- I Var and L Var – I Max are the most effectiv e policy options in mee ting the objective of 
defining optimal operating rules of the CEF that would allow to accelerate  the development of 
infrastructure of EU interest.  
While Policy option L Var – I Var would appear to  be the best option from the perspective of 
coherence, Policy option L Var – I Max woul d offer higher efficiency. A choice between 
these two policy options would imply solvi ng the trade-off between maximisation of 
synergies across sectors and maxi misation of coherence within each with its specific policy 
objectives. Indeed, whereas Policy option L Var – I Max is more ambitious in terms of 
harmonisation between sectors, it offers also le ss coherence for each sector with its specific 
policy objectives. 
For this reason, the present IA considers that both options are valid a nd that the trade-off 
referred to above has to be addresse d by the political decision makers. 
 576. MONITORING AND EVALUATION  
The Commission will properly evaluate and revi ew the Regulation 3 years after its adoption 
by the Commission. In addition, th e Commission will constantly monitor the effectiveness of 
the Regulation with the tools which are already av ailable, as illustrated in the table below.  
 58Table 9. Monitoring and evaluation  
Operational objectives Means Reporting tool and body (if 
applicable) 
Investment leverage 
OO1: Define co-fun ding maximum rates 
for EU support for projects according to 
priorities set in terms of EU added-value. 
Allow flexible use of these rates, in order to 
maximise the leverage of EU funding 
contributions. Rates set in the 
Regulation Annual report on the application of 
the rates by an executive Agency 
OO2:  Define multi-level criteria for 
project evaluation in order to ensure that 
funding is channelled on projects with high 
EU added-value. Definitions of 
EU added value 
as set in the 
Regulation, or 
reference to 
Guidelines Annual Report by an Agency, 
repartition by typology of projects 
defined in the Regulation 
OO3: Encourage the participation of 
specialised infrastructure investors by 
means of rules for the use of market based 
instruments, and by making available 
sufficient funds for support of innovative 
instruments. Rules set in the 
Regulation Annual EIB and an agency report 
on the effects of the individual 
instruments (number of projects 
and structure of financing) 
Project Implementation 
OO4: Define rules for project selection 
in order to ensure a competitive and 
transparent allocation of funds. Rules set in the 
Regulation Calls for Proposals 
Annual Report + TEN-days 
OO5: Establish a consistent framework 
for monitoring and evaluation to support 
decisions for continuing, discontinuing or 
recalibrating EU funding support (i.e. the 
"use it or lose it" principle, rules for 
ensuring that the competitive re-allocation 
of funds is made on transparent and highly 
competitive bases) Framework set in 
the Regulation Annual Report + TEN-days and 
mid-term public consultation Calls 
for Proposals 
Mid-term review 
OO6: Set up an adequate institutional 
structure for the centralised management 
of processes of evaluation, support and 
monitoring of projects. Management 
structure set in 
the Regulation External Evaluation report on the 
institutional structure 
 
The Commission will also develop performance i ndicators in order to assess the impacts of 
the Connecting Europe Facility on the policy ob jectives of the sector specific Guidelines. 
These indicators will come in addition to the performance indicators provided for in the sector specific Guidelines. The performance of the CEF will therefore be assessed against the 
following sector specific performance indicators: 
Table10: performance indicators 
Common overall objectives Contribution to smart, sustainable and inclusive growth, asessed 
according to relevant indicators un der the Europe 2020 Strategy. 
Impact of financial instruments offered, measured as investment 
encouraged by each of the instrument and average level of leverage 
attained. 
 59in the field of Transport: 
 - The number of actions successfully completed or on track to be 
completed within the established time-frame which have benefited 
from CEF grant support and/or financial instruments. 
- The number of new cross-border connections and removed 
bottlenecks effectively enabled with CEF support via grants and/or 
financial instruments. 
- Travel time, cost savings and increased safety (in terms of 
accidents reductions) registered on major transport routes where 
action concerning specific sections has benefitted of CEF grant 
and/or financial instruments support. 
- The share of actions receiving Unio n aid for studies that entered the 
construction phase. 
 
 
in the field of Energy: 
 - The share of actions receiving Unio n aid for studies that entered the 
construction phase; 
- The number of actions contributi ng to the EU’s energy and climate 
policy objectives effectively enabled with the help of grants and/or 
financial instruments;  
- The number of actions contributing to the integration of the internal 
energy market and the interoperability of the network effectively 
enabled with the help of grants and/or financial instruments; 
- The number of actions contributing to diversification, enhancing 
the regional or EU-wide security of supply and solidarity among 
Member States effectively enabled with the help of grants and/or 
financial instruments. 
•  
in the field of broadband 
and telecommunications: 
 - High speed broadband coverage, to be checked against the DAE 
targets of access to 30 Mb s for all citizens by 2020. 
- High speed broadband uptake, to be checked against the DAE 
target of 50% of citizens having subscriptions for above 100 Mbs by 
2020. 
- Implementation, availability and uptake of digital service 
infrastructures, as identified in the e-TEN Guidelines 
 
In addition to these indicators, common performan ce indicators will be developed, such as the 
number of projects effectivel y enabled, the share of private/public investment, the share of 
grants and Financial instruments compar ed to 2007 -2013, the total value of annual 
investments compared to 2007 -2013, the number of  projects using synergies. Finally, the 
impacts of financial instruments will be measur ed as investments encouraged by each of the 
instrument and the average level of leverage attained. 
 60ANNEX 1 
Summary of results of public consultations  
 
CROSS-SECTORAL CONSULTATIONS  
Europe 2020 Project Bonds Initiative (consultation period: 28 February – 2 May 2011)89 
The Europe 2020 Project Bond Initiative aims at boosting the funding of projects with long-
term revenue potential in line with the Europe 2020 policy priorities. Over the next decade, 
record investment volumes in Europe's tran sport, energy, information and communication 
networks will be needed in order to underpin  the Europe 2020 flagship actions. Developing 
smart, upgraded and fully interconnected infr astructures will foster the completion of the 
internal market. Preliminary es timates point to investment n eeds of €1.5 to 2 trillion for 
Trans-European Transport Networks, the ener gy sector and information and communication 
technologies. These needs, combined with th e fact that government  budgets face severe 
constraints, make it crucial to foster the particip ation of the private sect or in the financing of 
infrastructure projects.  
The objective of the Project Bonds initiative is to help  the private project companies to attract 
capital market funding from investors such as pension funds and insurance companies. The 
initiative has been identified in the Annual Gr owth Survey as a prior ity measure to enhance 
growth. The stakeholders were cons ulted on the following main questions: 
(1) Will the initiative attract pr ivate investment in transport, energy and ICT infrastructure? 
• 60% of stakeholders think th at the chosen mechanism is likely to attract private 
sector institutional investors to the sectors of transport, energy and ICT in particular 
(see the chart below). 16% expect it to depe nd on technical features of the mechanism 
(price, structure, attracted rating, etc.). 
• Large share of stakeholders  would also like to see the following sectors included:  
- Social infrastructure (25%) 
- Renewables (16%) 
- Water and waste (13% and 6% respectively) 
• 19% of respondents believe th at the guarantee would both facilitate and accelerate 
the conclusion of financing packages (see the chart below); while 22% say it would 
only facilitate (14%) or accelerate (8%).   
(2)Would the guarantee facilitate/accelerate   the conclusion of financing packages? 
• An absolute majority of stakeholders agree that minimum rating of A- is sufficient to 
attract investors. The view s on desirable minimum rating diverged as follows:  
- A/A- for bigger projects 
- BBB/BBB+ for smaller projects 
• Several investors stressed that they do not merely look at ratings , but also at the 
general legal framework of the jurisdicti on of the project, th e exact contractual 
arrangements as well as the quality of the financial package. 
• 50% of answers stated that a credit enhancement of 20% of outstanding senior bonds 
would be sufficient (10%) or would depe nd on other factors (40%) and should be 
                                                 
89 For the detailed stakeholder contributions and the consultation document see 
http://ec.europa.eu/economy_finance/consultation/index_en.htm 
 61decided in case-by-case basis. 5% of th e stakeholders believe that 20% credit 
enhancement would not be enough.  
• Effect on financing costs and maturities: 
- 50% of stakeholders expect lower fina ncial costs and (or) longer maturities 
- 20% of stakeholders expect it to depend on different factor s – regulation, guarantee and 
other fees, rating, etc. 
• Some sponsors are worried about negative carry as the full financing amount is 
drawdown at the outset rather than in phases as for a bank lo an. Some also feared that 
bond financing would prove less flexible.  
• 50% of stakeholders think a single entity acting as controlling creditor is essential  
33%) (especially during the c onclusion of the financial p ackage and the construction 
phase), beneficial (15%) or de pends on the project (3%). 10% would expect the EU or  
the EIB to serve as a controlling credito r. 11% of respondents do not see a single 
controlling creditor necessary. 
Additional messages from  the stakeholders: 
• Views on size of project appropriate for bond funding varied widely with quoted 
ticket sizes per investor varying from  EUR 20 million to EUR 100 million, which 
would translate into deal sizes ranging from EUR 50 to EUR 250 million, assuming a 
minimum of two investors. 
• Procurement process and its obstacles in terms of requiring fully funded and 
committed fixed price offers to a tight tim eline generally does not favour or even 
allow bond solutions. The process differs acr oss Member States, but in general the 
demand was that the procurement process should be more flexible to allow bond 
solutions with their different benchmark, volat ility of spread and timing requirements.  
• Regulatory issues: many investors cited Solvency II as a main obstacle to investing 
in longer-term, lower-rated assets as such bonds would attract higher capital charges, 
although some actors are of the view that  the regulation favours the longest-term 
assets, since capital charges increase no further beyond a certain point. A few banks 
were worried that depending on exact struct ure project bonds could be classified as 
asset-backed securities under Capital Requirements Directive , which would mean a 
higher risk weighting. 
 
ENERGY INFRASTRUCTURE  
In November 2008 the Second Strategic Energy (SER 2) Review launched the Green Paper 
"Towards a secure, sustainable and competitive European energy network"90 and the 
process of revision of the TEN-E progra mme. The SER2 called for a new Energy 
Infrastructure and Security Instrument and suggest ed six flagship projects as examples of how 
European network projects might e volve in the future towards 2020.  
A first dedicated public consultation took place during 13/11/2008 - 31/03/2009 on the 
Green Paper. The Commission received 91 written replies to the Green Paper. 13 came from 
Member States (2 from a regional and a loca l government), 1 from regulators, 60 from the 
industry, 2 from academia and 13 from indivi dual citizens, NGOs and other organisations. 
The public consultation covered the future scope of the TEN-E , the selection process, the 
budget and financing instruments and the role of  the EU to foster cooperation, coordination 
and support in the energy networks area as well as the role of the internal energy market.  
                                                 
90 COM(2008)782  
 62Among respondents from the energy industry consensus emerged on the need for a 
fundamental review of the TEN-E, for the EU to better align the ener gy network policy and 
the EU energy and climate policy targets, to provide for a stable regulatory framework, 
coordination and raising public acceptance.  The respondents identified complicated 
administrative procedures, diverging regulatory regimes across local au thorities and national 
borders and local resistance as the main barriers.  The absence of a specific legal remit at EU 
level to mitigate these obstacles was acknowle dged. The role of the EU in facilitating 
infrastructure projects in third countries was welcomed, and the importance of external energy relations to infrastructure policies was reaffirmed.  
On the scope of the future TEN-E , the public consultation gave  large support to the six 
flagship projects identified by the Green Paper but respondents were diverging on the need to 
extend the scope to oil or CO2 networks.  
The public consultation concluded that EU support for projects  should continue to address 
both commercial and supply security goals and non-commercial goals, such as the integration 
of renewable energy sources, underground cabling of hi gh-voltage electricity wires to reduce 
visual impact of new interconnections. 
On the design of the future TEN-E , the consultation concluded that an alignment was 
needed with other financial sources (EIB , EBRD, Regional Funds) and respondents were 
strongly in favour of incr easing the budget of TEN. While  some respondents supported 
continuing the support by feasibility studies, wh ile others asked for broadening the scope of 
funding, e.g. with EU grants to  be awarded for construction, subject to budget increases. The 
value of the TEN-E label as a "door-opener" or "certifier" for other sources of finance 
strongly acknowledged and seen as a pos itive by-product of the instrument.  
Asked about the identification of projects of common interest  from a fixed list or a 
selection process, the majority  of respondents were in favour of an open system with all 
projects competing on an equal basis. The ro le of the European network for transmission 
system operators for gas and electricity (ENT SO-E and ENTSO-G) and the Union-wide ten-
year network development plan was consider ed as an important stepping stone for an 
enhanced investment planning fr om a European perspective.  
The crucial role of the European Coordinators  was supported and recognised by the 
majority of respondents. They found that the EU  should be more involve d in coordinating and 
facilitating dialogue and inform ation exchanges among Member States, market players and 
other stakeholders. Some respondents even propos ed a more direct role for the EU in the 
management of individual projects, e.g. through the appointment of European Coordinators.
91  
 After the adoption by the Commission of a " Communication on energy infrastructure 
priorities for 2020 and beyond " on 17 November 2010 (COM(2010)677), which outlined 
the challenges faced for the development of ad equate energy infrastructures across the EU, 
priority corridors for electricity, gas, oil and CO2 have been identified and a new strategy 
covering the planning and prioritis ation of energy infrastructures of European importance as 
                                                
 
91 The European Coordinators were used during the 2007-2009 for the first time. Four European coordinators 
were appointed on the 12 September 2007 by the Commission for duration of four years to monitor projects 
facing technical, political or financial difficulties. The "Priority Interconnection Plan" adopted by the Commission on 10 January 2007 in the framework of the so-called "energy package" and the Action Plan 
adopted by the European Council on 9 March 2007 had mentioned specifically the nomination of European 
Coordinators. In November 2008 the mandate of a European coordinator was extended to the planned 380kV-SalzburgleitungAnnual reports of the coordinators can be found at: 
http://ec.europa.eu/energy/infrastructure/tent_e/coordinators_en.htm 
 63well as specific measures to facilitate their implementati on through more efficient and 
transparent permit granting procedures and stak eholder involvement, im proved cost allocation 
across borders and an adequate environment for private and public investments, including 
financial incentives has been proposed. The Co mmission's priorities and approach were 
endorsed by the February 2011 European Council.  
A series of consultations and workshops on th e future TEN-E programme and the new design 
of a new instrument were launched in  spring 2011. Several ex changes between the 
Commission, European Network of  transmission system operato rs for gas and electricity 
(ENTSO-G and ENTSO-E), Council  of European Energy Regulators (CEER), the Agency for 
the Cooperation of Energy Regulators (ACER), national regulatory authorities and other 
stakeholders confirmed the step increase in investment need in case of infrastructure of European significance.   In the report by the  Commission to the 10 June 2010 TTE Council
92 the Commission 
presented a summary of the main views from stakeholders in the consultation process on 
November 2010 Communication and reported in fu rther details on the investment needs. 
According to a survey carried out by the C ouncil of European Energy Regulators (CEER) 
among national regulatory authorities (NRAs) in February/March 2011, total investment 
needs in national electricity  transmission for the same period were confirmed and estimated as 
being in the range of 96 to 143 bn €, of which 25-55 bn € for offs hore grids. Under the current 
work ongoing for the preparation of the 2012 10-year network development plan (TYNDP), the European Network of Transmission System  Operators in Electricity (ENTSO-E) sees 
roughly 100 bn € of investment needs for th e period up to 2020, excluding investments for 
offshore grids and maintenance and refurbishment of ageing assets. Nor does this number reflect the specific investment needs for smart grids at both transmission and distribution level 
and electricity storage, which could exceed 40 bn €
93.  
In gas , in the latest 10-year ne twork development plan (TYNDP), published in March 2011, 
the European Network of Transmission Syst em Operators in Gas (ENTSOG) foresees 
investments of at least 89 bn € until 2020, includ ing projects for which the Final Investment 
Decision (FID) has been taken94 and projects for which the FID has not been taken, although 
they are considered ne cessary for diversifica tion of supply routes/sou rces and security of 
supply inside EU. This is considerably more than the results of the CEER survey among its 
members, according to which total investment needs in transmission, LNG and storage95 
infrastructure are estimated between 51 and 59 bn € (about 40 for transmission, 8 for LNG, 5-
10 for storage). It should be noted that th e CEER survey covers only investments on EU 
territory.  
A consultation of the ENTSOs in electrici ty and gas, GIE, national regulators and 
financial institutions (notably the EIB)  was carried out in spring  2011 and provided further 
recommendations on the design of futu re EU financial instruments.  
ENTSO-E  carried out a survey among 41 European TSOs in 34 countries. Six main barriers 
to investments are considered by TSOs: social  acceptance, planning delays, few investment 
incentives (in particular for R&D and innovation), and the lack of  stable return  on investment 
                                                 
92 SEC(2011) 755 
93 SEC(2010)1395. 
94 The gas TYNDP produced by ENTSOG in February 2011 does not put costs on the various investment 
projects but gives only an overall cost estimate on investments on the basis of a non-exhaustive list of about 200 investment projects as coll ected from its members. 
95 The numbers for storage do not include investments for France and Germany.  
 64as well as the uncertainty about future regul atory regime change. Cr oss-border projects 
require a reinforcement of the national grids. Public funding should be  targeted to address 
specific project/country risks and with a comp etitive approach to the label and support. 
More detailed respons es were provided by: 
• Amprion (Germany) 
• Eirgrid (Ireland) 
• Elia (Belgium) 
• EMS (Serbia) 
• 50 hertz (Germany) 
• HTSO (Greece) 
• MAVIR (Hungary) 
• REE (Spain) 
• RTE (France) 
• Statnett (Norway) 
• Swissgrid (Switzerland) 
• Terna (Italy) 
• Transelectrica (Romania) 
 
Financing of infrastructure in the past 
For past investment mainly corporate financ ing was used and projects were implemented 
together with adjacent TSOs, investment expenditure being covered in the CAPEX of the TSOs concerned. Next to debt  and equity financing, aucti on revenues from cross-border 
capacity allocation are used to fully or pa rtially finance interc onnectors (only one TSO 
referred to this financing). Up front pre-construction investment s are mainly financed by 100% 
equity. Debt capital can hardly be attracted for this type of investment. Among the main 
constraints to investment, TSOs raised the following issues: 
− Time-lag in the remuneration of invested  capital during the cons truction phase (pre-
financing and start-up losses, of particular  importance when projects are delayed by 
permitting or acceptance problems) 
− Transmission fees do not cover all costs linked to the internal reinforcement of the grid 
linked to connection of new RES genera tion (shallow transmission fees, 1 TSO), 
− Lack of incentives for technology in novation and R&D or other risks,  
− Projects that will face particular challenges relate to offshore developments or submarine 
cables and for some countries interconnector investments. 
 
Recommendations for future  financing and EU support 
In the light of the new and urgent investment ch allenges, TSOs will need to attract equity and 
debt financing and new investors. Asked a bout the added value of EU support, TSOs 
recommend financial support to the construc tion phase. Some TSOs note that the most 
effective measure is to ensure sufficient rate of  returns for all projects and rate of return 
markups for projects of major importance and to align the RORs to the risks faced by project 
owners. 
The consultation of TSOs among ENTSO-G  included detailed responses by: 
• GAZ SYSTEM 
• Gasunie 
• National Grid 
• Thyssengas 
 65• GEOPLIN PLINOVODI 
• RAG 
• DESFA 
• ENGAS 
• GRTgaz 
• OMV 
• Wingas 
• Fluxys 
• FGSZ 
• NET4GAS 
 
Financing of infrastructure in the past 
 
Past investments were financed on the basis of corporate financing within  the structure of the 
parent company on the basis of equity and sh areholder loans complemented by EU direct 
grants and EIB loans. Depending on the degr ee of ownership unbundling and international 
expansion, the experience with credit ratings, co rporate bonds, project financing and direct 
exposure to capital markets differs widely. Pr oject financing was mainly used for new LNG 
terminals and new interconnectors in Western Europe.  Project bonds and project financing 
via special project vehicles are being examined for future investment by TSOs outside of the 
national network. The attractiv eness of these bonds will largely depend on the costs.  
 
Recommendations for future  financing and EU support 
ENTSOG Members underlined that  new gas projects aiming to  increase diversification, 
competition, market integration and security of supply, thus removing market Imperfections, 
will not come forward by relying on market (shippers) commitments alone. While volume risk is covered in regulated gas networks, fluc tuating utilization, the short-term tariff setting 
and capacity allocation do not fit to  the long-tem investment cycles. 
 
Future EU support should minimize investment l ead times and construction risks, reduce the 
administrative burden on project promoters, offe r coordinated political support to decrease 
country risks in geopolitically difficult regi ons, enhance cross-border cooperation and the 
coordination of open seasons. The EU should support should be target ed to the entire 
investment cycle including feas ibility and routing studies, envi ronmental impact assessments 
(EIA), land and building permit design as well as the construction of projects.  
 Cost allocation should be enhanced by multilatera l negotiations of investment projects at 
regional level between operato rs and regulators with st rategic guidance by ACER and 
ENTSOG. In practical terms, TSOs in the re spective Member States could book the capacities 
needed for security of supply and include these costs in thei r respective transmission tariffs. 
Other options include settlements through dir ect cash transfers between TSOs or through 
netting system using EU funds grante d to the Member States concerned. 
 While ENTSOG members unanimously call for in struments to make projects bankable along 
the long term investment cycle, they consider  various instruments de pending on the particular 
needs of the TSOs. These range from credit en hancement, to public/pri vate guarantees (for 
example through the EIB), European public priv ate investment funds, harmonized investment 
conditions and performance-relate d incentives as well as direct EU grants and a dedicated EU 
fund for infrastructure.  
 66 
Investment in regulated and non-regulated infrastr ucture in the gas sector requires a long-term 
commitment either by regulators or users. Gi ven the regulatory and ma rket trends towards 
short-term capacity, Gas Infrastructure Europe (GIE)  underlines that tariffs and investment 
regulation should give long-term signals for i nvestment. New financing instruments should be 
beneficial to all projects. Costs of stranded assets remain with consumer in the case of 
regulated networks. Risk profiles change as ga s TSOs are about to unbundle or restructure the 
ownership. Gas TSOs will need to invest in IT and human resources to handle the growing 
capacity and congestion management with short- and long-term products. Among the 
measures suggested by GIE are the following: 
− Cost-allocation mechanism is mentioned in cases, where the lack of user commitment 
could be substituted by cross-border compensation. 
− Adequate risk/reward ratios and tariff to en sure long-term signal and not only short-term 
low rates of return 
− Incentives for operators – performance-rela ted rewards for implementation of network 
development measures, independent of and on  top of the allowed revenues, including 
shortened amortization period in  order to limit risks.  GI E sees higher risks for cross-
border projects due to incons istent regulatory frameworks on two sides of the border and 
higher complexity. 
 
TRANSPORT INFRASTRUCTURE  
Green Paper:  "TEN-T: A policy review - Towards a better integrated trans-European 
transport network at the service of the common transport policy" (Consultation period: 
04/02/2009 – 30/04/2009)96 
With the Green Paper, the Commission initiated a broad review process of the trans-European 
transport network policy (TEN-T). It considered  future political and economical challenges 
such as the achievement of climate change objectives, further economic growth, economic and social cohesion as well as the strengthening of Europe's international role. 
The TEN-T Guidelines are linked with instrument s to facilitate the implementation of projects 
identified as being of common interest. These are a) various financial instruments based on 
the relevant legislation, including the TEN Fi nancial Regulation[5] and the Cohesion Fund, 
ERDF and loans from the European Investment  Bank, and b) non-financial instruments, such 
as coordination initiatives take n by the Commission. So far, th e instruments available have 
not been sufficient to deliver full completion of projects of common interest within the 
timeframe agreed in the Guidelines.  
Regarding the performance and options for im provement of the use of financial and non-
financial instruments, the Comm ission consulted the stakeholders  on the following sets of 
questions: 
(1) How can the financial needs of TEN-T as a w hole in the short, medium and long term be 
established? What form of fi nancing — public or private, Comm unity or national — best suits 
what aspects of TEN-T development? 
A high number of contributors suggested mee ting the financial needs of TEN-T through 
increased participation of users in the costs of construction and opera tion. Proposals suggested 
earmarking revenue by including transport sect ors in the EU ETS, the Eurovignette, EIB 
                                                
 
96 For the full summary and the detailed stakeholders contributions, a as well as the consultation document see 
http://eur-lex.europa.eu/LexUriServ/LexUri Serv.do?uri=COM:2009:0044:FIN:EN:PDF. 
 67loans, infrastructure charging or kerosene tax, the latter being proposed by only one 
contribution. The harmonisation of track access charging systems in the rail sector is deemed 
highly desirable by some respondents. The stru cturing and the multiannual contracting of 
track access charges would be needed to mobilise private funds.  
Regarding the involvement of the private sector, responses were fairly divided. Those 
advocating the involvement of private invest ment mainly pointed to insufficient public 
spending behaviour. Private investment would be an ideal supplement to public funds. One 
Member State was very much in favour of using private investment . Sharing knowledge and 
expertise in designing major transport projects or setting up and running PPPs. Private-sector 
involvement would be a useful method of deliv ering TENT projects. A clear scope and risk 
definition would be needed to attract private investment. One business organisation said that 
the contribution of private investment and privat e risk capital in terms of asset provision was 
not recognised in the Green Paper. Those sceptical about private involvement cited the 
inability of peripheral regions to attract private investment and the inexperience of several countries. Similarly, some argued th at PPPs were not suitable for a ll projects as if they were a 
‘passepartout’ but needed to be assessed on a case-by-case basis. PPPs may even raise the 
overall price of project, according to one respondent from the rail sector. Respondents 
sceptical about private-sector pa rticipation stated that private involvement within the rail 
sector would only be effective in a few specifi c projects, e.g. high-speed rail. One respondent 
suggested taking into account th e fact that socio-economic cost s and benefits often differed 
from a private investor’s evaluation. One Baltic Member State proposed that where 
infrastructure is based on business needs, a high  share of private involvement is possible and 
desirable. One local administration stated that shifting borderlines between infrastructure and 
vehicles increases the opportuni ties for PPP financing. An aviation research institute said that 
private-sector investment would be limited to business cases with marketability. In cases such 
as Galileo, where a long phase of preparation pr ecedes market penetration, private investment 
would be hard to attract. Project financing through Eurobonds remains controversial. Whereas 
some respondents view this possibility as in centive for strengthening the existing financial 
platforms, others argue that the EU woul d go beyond its mandate and escape parliamentary 
control. Issuance throug h Eurozone States woul d weaken the stability and growth pact. Such 
borrowing would benefit States with poor budgetary discipline. Respondents from the rail 
sector suggested addressing the difference in construction life cycle be tween road and rail 
projects. Road projects would usually need 2 to  3 years, whereas rail projects would typically 
need 6 to 8 years for completion. Thus, rail projects would often be impeded because they did not fit into the 7-year budget period of TEN-T.  
Other new ideas included: - Establishing a European infrastructure f und/supranational body to coordinate funding; 
- Devising a European scoreboard to record year by year the state of implementation of 
Priority Projects and the funds committed and di sbursed by Member States and the EU on 
each project. This tool would aim to fine t une investment from EU and Member States; 
- Taking into account the amounts of funds per capita that each  Member State has invested 
over the past years for evaluating eligibility a nd performance of future projects (a Member 
State proposal); 
- Distance-related charging s hould be avoided as this approach entails geographic 
discrimination, according to one business organisation. 
 68(2) What assistance can be given to Member St ates to help them fund and deliver projects 
under their responsibility? Should private-sector involvement in  infrastructure delivery be 
furtherencouraged? If so, how? 
Generally, a huge number of contributors prop osed increasing the rates of co-funding. One 
Member State asked for more flexibility rega rding the total amount of  support to projects. 
Similarly, a high number of contributors reite rated the need for combined funding from 
Cohesion, Structural, EIB, and TE N-T funds where possible to ma ximise the effect of overall 
Community funding. But combining cohesion, re gional, EIB funds with TEN-T funds was 
also criticised by some respondent s as this could blur the spec ific goals of each programme. A 
number of respondents were in favour of lo wering the administrative burden linked to the 
disbursement of TEN-T funds.  
One organisation suggested th at Community funding should only be disbursed when a 
Member State faces higher costs than other Me mber States. One regional administration and 
one Member State underlined the benefits of a credit with pr eferential interest rates and 
guarantees via commercial banks. 
One respondent suggested that the EU creat e a ‘sovereign European debt’ from which 
Member States could receive loans. The EU shou ld be more flexible towards MS with a ratio 
of debt: GDP over 60%. Some cont ributors proposed to generally improve instruments of the 
European Investment Bank. 
Others proposed to take on board only proj ects which are economically  feasible. A railway 
organisation suggested creating a European scoreboard to record  year by year the state of 
implementation of Priority Projects and the funds committed and disbursed by Member States 
and the EU on each project. One member stat e welcomed an exchange of knowledge and 
experience within NETLIPSE proj ect on managing large projects. 
Regarding private-sector participation, a numbe r of contributors made constructive proposals 
on how to encourage private involvement. One respondent from the private sector identified 
the lack of guarantee mechanisms and clear rules of risk shari ng under PPPs. In this context, 
one Member State wanted to encourage States to launch small-scale PPPs as pilot projects and 
to draft European standardised PPP guidelin es on experience, selection, negotiation and 
implementation in a European standardised  toolkit for PPPs. A business organisation 
suggested that projects could be  advised by private companies to make private financing more 
likely. One Member State proposed benefitting fr om leverage effects and mobilising private 
capital by launching PPP projects. More specifically, by increasi ng the rate of support from 
EU funds for PPPs, private inve stors could be attracted. A ra ilway organisation deemed PPP 
projects to be linked to long-te rm visibility and guarantees give n over return on  investments, 
which necessitates use of the user-pays principl e. Another respondent fr om the railway sector 
stated that the LGTT (Loan Guarantee for the Trans-European Transport Network) was very 
useful but should be adapted to  the complexity of rail PPPs. 
 
(3) What are the strengths and weaknesses of existing Community financial instruments, and 
are new ones needed (including ‘innovative’ instruments)? Ho w could the combined use of 
funds from various Community resources be streamlined to support TEN-T implementation? 
Respondents considered the fixed 7-year budge t, clear project elig ibility rules, higher 
subsidisation thresholds from Cohesion Fund  and Structural Fund s and the focus on 
prioritised transport infrastructure to be an advantage. The inability to combine financing 
from different funds was cited as a weakness (Remark from the EC: This is probably based on 
a misunderstanding of the rules, see the TEN-T financing regula tion EC/680/2007, Article 
 697(2) and Article 13(2b)) . In this respect, the co ncept of a one-stop shop for financing is cited 
in one contribution. As furthe r weaknesses were cited low TEN -T subsidisation thresholds 
and the fact that subsidies do not increase along with cost. A few respondents found the 
incentives for investment coordination between  neighbouring countries to be insufficient. 
Furthermore, some Member States pointed to problems in securing national funding by the 
beneficiary of the EU grant. One local administ ration believed that, in a ddition to the costs of 
infrastructure provision, variable costs (cost of infrastructure operation) should also be taken 
account of in the Cost-Benefit-Analysis. One re spondent from the rail industry believed that, 
while TEN-T budget prioritises th e rail sector, ERDF, cohesion and Member State funds seem 
to prioritise road transport; they therefore perceive a lack of complementarity and coordination. A railway undertaki ng stated that EIB loan rates do not appear to be enough of 
an incentive to create leverage. One regiona l administration deemed the consideration of 
peripheral regions under the CF and ERDF to be inadequate. Although two regional 
administrations saw no need for new financia l mechanisms, but instead suggested extending 
and reviewing current EIB mechanisms a nd easing and supporting PPP, many respondents 
made proposals for new financial instruments. An intermodal organisation proposed tax relief 
for investment completed in advance, a bonus scheme for projects resolving bottlenecks and 
penalties/bonuses/peer pressure for Member States lagging behind. A nother proposal was to 
divide funds between study rese arch phase and real infrastruc ture building. One environment-
related organisation proposed a system of ex-ant e certification of proj ects in view of their 
TEN-T status, which could be based on criteria such as the contribution to climate change 
objectives. In general, some respondents pr oposed creating new guarantee mechanisms. One 
railway undertaking proposed issuing ‘project  bonds’ with EIB guarantee of payment. 
Another new instrument could be a national ‘s ustainable transport fund’ funded by revenue 
from the internalisation of external costs of transport. Two citizens suggested that maximum 
funding thresholds should be fixed on a unit basis.  This would provide an incentive to build 
the cheapest infrastructure. One railway orga nisation deemed a PPP expertise centre (EPEC) 
to be a useful platform for exchange on PPP i ssues. One organisation from the road sector 
proposed establishing a PPP fund, managed by PPP experts, which would give higher value 
for money. This fund would allo cate support directly to PPP schemes. One organisation from 
the maritime sector suggested that  a strategic ‘corridor manageme nt body’ (or what is referred 
to as the ‘Governance body’ in the rail freight corridor proposal of the European Commission) 
would be best to manage or coordinate the allo cation of funds and grants according to a cost-
benefit analysis, with the Commission oversee ing. One regional administration thought that 
the various existing funds could be combined, which would allow a more efficient allocation 
of support (taking account of the objectives and the sector concerned). 
 
(4) How could existing non-financial instruments be impr oved and what new ones might be 
introduced? 
A common consensus seems to be to boost the role  of European Coordina tors as they have 
proven valuable in the past. On e local administration proposed assigning one coordinator to 
each TEN-T project. Other local administratio ns proposed choosing a single coordinator for 
two corridors when there is a crossing point. However, one Member State opposed more EC 
coordination; project delays would not be solv ed by stronger coordination. According to an 
intermodal association, the EC  should be directly involved, especially on cross-border 
projects, to make coordinato rs’ work more effective. One Member State proposed that 
Coordinators extend their mandate to the comprehensive network. One environmental 
organisation expressed the view that coordi nators could ensure that high-quality 
environmental impact assessments are conduct ed. Representatives of the railway sector 
 70recommended appointing a European manager for rail infrastructure. Co rridor coordination is 
largely viewed positively. However, one Member State opposed public financial support to such business-driven projects, as these projects should be able  to attract private investors 
instead. 
The Open Method of Coordination was deem ed useful as a govern ance approach by many 
contributors, as it helps to inform the public be tter on the progress of projects. Transparency 
of data, sharing best practices and establishi ng performance data were called for. Better 
accessibility of TEN-T and Natura 2000 GIS data and transparency of information on traffic 
data forecasts would also improve environmen tal assessments, according to an environmental 
organisation. One railway undertaking propos ed facilitating access to technical data 
describing technical and economic parameters  of TEN-T corridors. Progress reports on 
corridors or an observatory on implementa tion were desirable a ccording to a regional 
administration. The TEN-T-EA was proposed as a platform for best practice by the rail 
infrastructure industry. This would serve to increase communication on the progress made by 
different projects.  
Regarding new non-financial instruments, th e Commission’s proposal for benchmarking was 
largely supported. Several respondents pr oposed mandatory deadlines for project 
implementation to be imposed on Member States . Technical assistance, such as the JASPERS 
initiative, was also proposed. This could he lp the Commission to rank projects by their 
European value-added in view of recei ving Community funding. One Member State 
suggested that all projects of common interest should be subject  to a harmonised cost-benefit 
analysis. They indicated certain national CBA  and HEATCO guidelines as an appropriate 
basis for TEN-T wide application. According to one municipality, coordi nation at the level of 
urban regions should be given more attention. One intermoda l organisation proposed creating 
a new entity in charge of the priority ne twork. This entity would be responsible for 
supervising safety, security standards, traffic flow, in teroperability design etc. 
 
Commission Working Document: Consultation on the Future Trans-European 
Transport Network (Consultation period: 04/05/2010 – 15/09/2010)
97 
This consultation was based on a document draf ted following the input of the previous 
consultation, including as main elements the proposed planning methodology for the TEN-T 
and ideas on how to enhance the effectiven ess of instruments for TEN-T implementation. 
As a key issue for the revision of TEN-T guidelines and for the post-2013 multi-annual 
financial framework has been how to ensure the best possible use of the EU financial 
contribution in order better to achieve the objectives set out in the Guidelines, the 
Commission has consulted stakehol ders on the following aspects: 
In which way can the different sources of EU  expenditure be better coordinated and/or 
combined in order to accel erate the delivery of TEN-T projects and policy objectives? 
How can EU funding strategy coordinate and/or combine the different sources of EU and 
national funding and public  and private funding? 
Would the setting up of a European funding framework adequately address the 
implementation gap in the completion of TEN-T projects and policy objectives? 
The majority of contributors, especially at Me mber State and regional level, support better 
coordination between different financial instruments that fu nd TEN-T at Community level, 
                                                 
97 http://eur-lex.europa.eu/LexUriServ/LexU riServ.do?uri=COM:2 010:0212:FIN:EN:PDF 
 71namely Cohesion and Structural Funds (CSF) , research funding, the TEN-T programme and 
the EIB's interventions. However, there is litt le support for the idea of merging the TEN-T 
programme and the part of CSF funding transport investments in  a single fund. Some reject it 
as immature and putting transparency at risk, while some Member States emphasise the need 
to focus on the development needs of cohesion re gions. One Member state asks for clarifying 
the role and the goals of the different funding instruments available. One environmental 
organisation sees the possibility of a mergi ng the different funds as  a possible chance to 
achieve climate change goals and to assure grea ter coherence of the different projects. There  
s strong support among the respondents, including so me Member States, for the idea of an   
integrated financial framework, guiding invest ments in TEN-T across the different funding  
instruments. Such a framework could contribute to an optimisation of the use of EU funding 
and remove the confusion that is sometimes fe lt when it comes to EU  support. Moreover, a 
funding strategy should aim at be tter coordinating the availabl e sources of financing and 
concentrating available EU resources on project s of strategic importance and high European  
added value. The support for an integrated fina ncial framework goes often together with the 
emphasis on demonstrating stronger EU added valu e for projects financed with EU funds, i.e. 
focus on the Core Network on cross-border proj ects. The concept of EU added value should 
be objective, clear and transparent, with consider able attention paid to the cross-border aspect 
(at both internal and external borders). Ther e is support for maintain ing the option of co-
financing different parts of big infrastructure projects from different sources (e.g. CSF and  
TEN-T). Some support the idea of increased cofina ncing when the projects considered make a 
particular contribution to envi ronmental or innovation objectiv es. There is limited support for  
enerating additional sources for funding from in frastructure charges or revenues from  
mission trading schemes and earmarking them to be  reinvested by the Member States for their  
nfrastructure. However, some Member States su pport the reinvestment of  all revenues coming  
rom the application of Eurovignette in the tran sport field, while tolls and revenues generated  
y road transport should be entire ly earmarked to transport inve stments and not destined to  
ther purposes. Some local author ities are in favour of introd ucing congestion charging. Some  
ember States feel that user financing is also an  important way to generate revenue for national  
nfrastructure investments and at the same time internalise external costs caused by transport. 
Although, most Member States clearly point out that planning and implementation has to be 
done by them, some associations and European or ganisations prefer a ce ntralised approach led 
by the EU level.  
There is a wide range of diverse proposal s concerning the focus future funding should: 
• focus on cross-border sections or – in other contributions - on sections crossing natural 
barriers,  
• focus on projects of strategic importance and hi gh EU added value (e. g. projects  eing 
part of several TEN-T sections/ nodes and/ or connecting TEN-T with regional feeder 
and distribution networks), 
• focus on demand management projects, lik e road pricing schemes and traffic 
avoidance projects, 
• focus on low-carbon energy infrastructure and projects to improve transport 
efficiency, 
• focus on existing infrastructure and capacitie s (e. g. upgrades, maintenance) and less 
focus on building new infrastructure. 
A contributor from the private sector reminds  of possible distortion of competition effects 
which have to be checked in advance. Others are calling for an approach also including important sections of Trans-European axis wi thin a Member State, especially in transit 
 72countries. One proposal comments the different co st-benefit analysis and calls for a common 
approach for assessing them. One Member Stat e is also asking for funding possibilities for 
maintenance of existing routes.  
As regards the role of public-p rivate partnerships (PPP),  ont ributions are contrasted: some 
appreciate the "just-in-time, just-in-cost'' co ntribution to infrastructure investments and 
therefore propose the promotion of PPPs, wh ile others see private involvement in 
infrastructure development as problematic becaus e of the inherent risk s to be borne by public 
administrations (e. g. difficult negotiations to conclude contracts, po ssibly higher investments 
costs, financing risks). PPPs do not make extr a money available, but help spread out the 
payments over a longer period of time. Therefor e PPPs are seen as usef ul for very specific 
sections, but could neither be a systematic soluti on nor an alternative to the scarcity of public 
funds.  
One contributor proposes coordination and groupi ng of the EU funding fo r financing Priority 
Projects and calling for an adjustment of tim e horizons of the EU programmes and funding 
schemes to pay attention to the more long- term planning horizons and implementation 
horizons of the projects to gain s ecurity for planning and financing.  
 
3) TEN-T Policy Review Expert Group 5: F unding Strategy and Financing Perspectives 
for the TEN-T (Final report 7.7.2010) 
 To support the Commission, six expert groups were  set up, consisting of external experts from 
various fields: infrastructure managers, infras tructure planners, natio nal, regional and local 
representatives, environmental experts, acad emia, etc. Expert Group 5 focuses on funding and 
financing. 
a) General comments of the Group 
The current TEN-T is not yet a network, at best the aggregati on of transport corridors. The 
experts called for greater co ordination between the Member States and the stakeholders 
involved in the de livery and the operating of TEN-T pr ojects. They also  pointed out the 
current weaknesses in designing and evaluating the projects. 
b) Greater appeal to the transport reve nues and internalisation of externalities 
- the huge constraints posed on public resources , worsened off by the financial crisis, 
which will durably limit the capacity of Me mber States to fund large projects; 
- the challenge to better take  into account European objec tives in terms of climate 
change, energy efficiency and innovation; 
- the need to adapt to the users requireme nts (the clients) a nd to increase the 
affordability and the profitability of the projects; 
- the insufficiently explored potential for a gr eater involvement of the private sector in 
the delivery of the TEN-T. 
 Greater appeal to user fee collection. Indeed  generating more revenues from transport 
activities – and ensuring that these revenues re main to their great extent in the transport 
sector, would significantly relieve national budge ts by covering at least the maintenance costs 
and the operating costs. 
 73Ultimately the Group agreed that earmarking could be a viable financing solution if applied at 
least on trans-European corridors. 
c) The EU funding issues: greater co ordination and focus on the added-value 
In order to connect national networks, the comp letion on cross-border se ctions are of vital 
importance, but it can only be achieved if th e Member States conc erned can coordinate 
themselves not only politically speaking but pr eferably on operational and financing terms 
too. 
The Group finally stated that the EU contri bution should be channelled to projects and 
programmes with the highest EU  added-value (EUAV). However the experts suggested that 
emphasis should also be equally given to the pr omotion of profitable pr ojects in line with the 
TEN-T policy in order to pace the completion of the network. 
d) The participation of the private sector 
The discussion focused mainly on Public Priv ate Partnerships (PPPs) and on the various 
opportunities to increase liquidity  in response to the crisis. 
To facilitate the participation of the private sector in the delivery of the TEN-T, the experts 
also stressed the usefulness of instruments wh ose object is to mitigate the risks and their 
associated costs, especially in the framewor k of availability-based PPPs. The Group suggested 
that these instruments could take the form of guarantees which could be called by the private 
partner on first demand. 
Some members also proposed to give furthe r considerations to bonds opportunities - in 
particular for the issuance of project bonds  for TEN-T projects, which could be bonds 
guaranteed by the EU budget to be sold di rectly on the intern ational markets. 
The infrastructure investments and the "real economy" 
(1) In line with the Europe 2020 Strategy and in  particular its ''resource efficient Europe'' 
flagship initiative, the Commi ssion should set infrastructure investments, in particular 
transport infrastructure, as a political priority to exit the crisis and to ensure growth for 
Europe. This priority should be reflected in the post-2014 Mu lti-annual Financ ial Framework 
(MFF). 
(2) The Group encourages the Commission to investigate further on the opportunity to 
deconsolidate some "productive investments" su ch as (transport) infrastructure from the 
government deficit with the objective to accel erate the exit of the crisis. Some temporary 
amendments to the Stability and Growth Pact could be envisaged. 
Project’s definition and project’s preparation 
(3) The TEN-T, and in particular the TEN-T  Core Network, should give more focus to 
(financially) affordable and profitable projects  (e.g. projects which can generate sufficient 
revenues to use more ef fectively public funding). 
(4) For the non profitable projec ts/programmes, due EU economi c and net social benefits 
(EUAV) should be demonstrated in line with the various EU policy objectives and the EU 
2020 Strategy. 
(5) The Commission should then provide a sta ndard framework for the assessment of the 
EUAV of TEN-T Projects, incl uding propositions for a harmoni zation of the Cost Benefit 
Analysis. 
(6) The fulfilment of a standard evaluation s hould be conditional to the allocation of TEN-T 
funding. 
 74(7) Only projects with due fi nancial profitability and/or with a positive EUAV should be 
considered for TEN-T funding. 
Improving efficiency in the implementation process and in the use of public capacity 
(8) The mandate of the European Coordinators  could comprise more  responsibilities as 
regards coordination. In particular with  a dedicated support from DG MOVE, the 
Coordinators could contribute  to the financial, the technical and/or the operational 
coordination of their corridor. This can include  participating in the elaboration, the checking 
and/or the endorsement of critical pieces relate d to the projects within the corridor, such as 
financial engineering, corrido r planning, technical issues, pricing, operation, etc.  
(9) TEN-T corridor bodies - for instance in the form of European Economic Interest Group 
(EEIG), could be set up under the approval of the Commission. They could be composed of 
infrastructure managers, representatives of th e Member States and op erators involved in the 
corridors. They could participate in the bottleneck definition (d eveloping a masterplan at the 
corridor level), pool nati onal and European resources and en sure operational coordination of 
the corridor. 
(10) TEN-T funding should become more cond itional to the pooling of national resources 
along the corridors of the forthc oming TEN-T Core Network so as to ensure completion of the 
projects/corridors. The conditionality can be reflected in the co-financing rate, by way of 
either incentives or full conditionality (no cofinancing if no pooling). 
User fee collection schemes and earmarking of the revenues 
(11) The Commission should fost er (potentially make compul sory) pricing the use of the 
infrastructure with earmarking of the revenu es on the TEN-T Core Network, and encourage 
its use for the secondary network. 
(12) The implementation of user fee collection could be reflected in the support rate by way 
of either incentives or full conditionality. 
(13) The Commission should review the conditions  attached to EU gr ants in the Cohesion 
area where a user fee collection is in place so as to ensure non discriminatory treatment. 
Eurovignette I & II: paving the way for a grea ter internalisation of external costs at the 
EU level 
(14) The implementation of Eurovi gnette should be set as a politic al priority by the European 
Commission. A first step would be to make its application compulsory on the TEN-T Core 
Network. 
(15) The Commission shoul d foster the use of cross-financ ing for the removal of critical 
bottlenecks within the TEN-T Co re Network. A list of TEN-T pr iority projects within the 
Core Network which should be subject to cross-financing could be defined. 
(16) Further investigation on the potential of positive externalities as surplus generation for 
funding should be considered. 
(17) The Commission could propose that part of the revenues generated by the internalisation 
of externalities could be transf erred to the EU level with the perspective of leveraging funds 
for further TEN-T operations. It could be save d into a dedicated fund managed either by the 
Commission or by the European Investment Bank (EIB) with specific goals as regards TEN-T 
implementation, for instance financing guarantees  for Public Private Partnership deals. 
Focus on the EU added-value (EUAV) 
 75(19) The TEN-T contribution should focus on investments with strong EUAV as defined in 
the TEN-T Core Network and in the TEN-T conceptual pillar. 
(20) The TEN-T funding should take into acc ount “quick wins” opportunity based on soft 
investments which can significantly improve the e fficiency of the network at lesser costs. 
Both horizontal measures and self-sustainable  programmes could apply as “quick wins”. 
Leverage of the EU contribution 
(21) The Commission should investigate further on the possibility to better coordinate the 
Cohesion and structural funds and the priority TEN-T investments, without prejudice to the 
objectives of the Cohesion policy. 
(22) The TEN-T policy should define Core Networ k Priority Investments (CNPIs) for the next 
Multi-annual Financial Framewor k (post 2014). These CNPIs w ould comprise a short list 
(max. 10)  of priority projects/programmes with in the TEN-T Core Network where the 
leverage effect of the EU contribution will be concentrated. It would typically concern the removal of major bottlenecks of the network. 
(23) Conversely, road or air projec ts outside the TEN-T Core Network
 should not be 
considered for TEN-T co-financing.  
(24) The Commission should consider the oppor tunity of revising the TEN-T co-financing 
rates. For instance for the CN PIs, the co-financing rates could go beyond 30% (up to 50%) of 
the eligible cost so as to ma ke a significant difference in the funding of genuine EU priorities. 
(25) A ratio of up to [-5% : +5%] could be  applied to the standard co-financing rates 
depending on performance criteria  such as: effective implementation of transport policy 
measures of EU significance (railway packag es, ERTMS, Eurovignette, etc.); absorption 
(quality of the evaluation, degr ee of preparation  and readiness of the projects); European 
coordination, generation and earmark ing of transport revenues; etc. 
The PPP market and the TEN-T projects 
(26) The Commission should support the continuati on of the European PPP Expertise Centre 
(EPEC) in the next Multi-annual Financial Framework. 
(27) The allocation of TEN-T grants could be ma de conditional to the ap plication of a ‘Public 
Sector Comparator’ (*). The TEN-T Executive Agency could provide assistance to the beneficiaries in this domain, including consider ations for a standard framework for the PSC. 
(28) DG MOVE with the support of the TE N-T Executive Agency and the European 
Investment Bank (EIB) could identify and asse ss TEN-T projects with PPP potential in order 
to form a PPP project pipeline.  
(29) With relation to (28), amongst the PPP project pipeline DG MOVE could select some 
projects to act as 'pil ot projects'. A project coordination team including staff from the EU 
Institutions could be set up to accompany the project and the benefici aries from the project 
preparation through, to  financial close. 
(30) The Commission should provide a standard fr amework to the blending  of EU Grants and 
(TEN-T) PPPs, considering both the C ohesion funds and the TEN-T budget. 
(31) The Commission could consider the us e of escrow accounts to contribute more 
effectively to PPP deals. 
(32) The Commission should cons ider putting on hold any change  regarding the accounting 
rules for PPP investments. In times of crisis, if  carefully used, PPPs could relieve pressure on 
public finance. The change currently envi saged in ESA 95 would result in bringing on-
 76balance sheet almost all PPP investments. Howeve r a clarification of th e existing rules could 
be helpful. 
Ideas on the future financing of the TEN-T 
(33) The Commission and the EIB should br oaden the scope of the current LGTT by 
enlarging its applicability for availability-based PPPs and extending the guarantee period to 
the whole duration of the PPP contract. 
(34) The Commission together with the EIB should investigate further on the guarantee 
mechanisms capable to be called on first demand, in particular for availability-based schemes. 
(35) In order to ensure more fl exibility as well as to be able to respond to the market needs on 
time, the TEN-T regulation could enhance its provision to risk sharing facility from 1% to 10% of the overall TEN-T budget 
(*). The funding of LGTT woul d be included in this 
envelope.  
(36) The creation of a financi ng instrument under the TEN-T re gulation should be associated 
to a pilot project in order to ensure right response of the mark et, with reasonable prospects as 
regards a potential project pipeline. If recommend ation (35) was to be adopted, the creation of 
a new risk sharing facility could intervene at any moment during th e next budgetary period. 
(37) Conversely if a financing instrument is not performing well, the TEN-T regulation could 
foresee conditions for the termin ation of the instrument befo re the end of the budgetary 
period. The refund of the TEN-T contribution would then be used for other financial 
transactions. 
 
Developing Capital Market initiatives fo r the TEN-T: the case of bond issuance 
 
(38) The Group encourages the Commission to inve stigate further on the f easibility of issuing 
E-bonds. Given the limited capacity of Member States to borrow on the market due to their current deficit and level of indebtment, this  solution - maybe temporary, could benefit to 
"productive investments" and acc elerate the exit of the crisis. 
(39) The EIB and the Commission should support the development of TEN-T project bonds, 
notably by providing credit enhancement facilities (guarantees).  
(40) DG MOVE, with the support of the TEN-T  Executive Agency and the EIB should assess 
the TEN-T project pipeline in  order to identify potential candidates for project bonds. 
 
BROADBAND AND DIGI TAL INFRASTRUCTURE
 
In the field of broadband rollout, numerous cons ultations with Member States, industry and 
social stakeholders have been carried out for individual initiatives in  the field of broadband 
infrastructure, digital services and their financing aspects such as: 
• In March 2011 Vice-President Kroes convened a "roundtable" of CEOs to request them to 
come forward with concrete proposals on  how to address the broadband investment 
challenge. The CEOs, from a broad range of co mpanies and stakeholders with an interest 
in broadband networks (including content providers, equipment ma kers, investors and 
telecoms operators), on 13th July submitted a paper summarising their common position.98 
                                                 
98http://europa.eu/rapid/pressReleasesAction.do?ref erence=MEMO/11/508 &format=HTML&aged=0&language
=EN&guiLanguage=en 
 77• The first Digital Agenda Assembly took pl ace in Brussels on 16t h and 17th June 2011. 
There were two workshops dedi cated to the rollout of broa dband, several more on digital 
services. Altogether, the Digital Agenda  Assembly was attended by more than 1,000 
participants.  
• For the use of the financial instruments, th e Mid-Term Evaluation of the Risk-Sharing 
Finance Facility, was completed by a gr oup of independent experts in July 2010, 
concluded that the use of Financial Instru ments in addition to grants as "having 
dramatically expanded the financing" of research and innovation efforts.  
• With the support of the EU, the EUTC (Europe an Utilities Telecom Council) is managing, 
since January 2009, ICT4SMARTDG an open virt ual forum where stakeholders in the 
telecommunications services sect or meet with stakeholders within the local distributed 
power generation sector, the ma nufacturers of local renewable sources and the distribution 
system operators. The objective is to create consensus on how to implement smart grids 
from the technical, financial and regulatory points of view.   
• Finally, DG INFSO is currently managing an ex pert group on synergy between electricity 
utilities and telecom operators. The aim of the group is to bring together these two sectors 
in order to identify synergies at infrastruc ture and services level for the deployment of 
Smart Grids.  The main conclusion of a recent (27 May 2011) workshop was that 
significant and sustained capital investment is required a nd that opportunities to use 
existing infrastructure exist, and collabora tion in the development and operation of new 
systems can be beneficial for both. 
As far as digital services are concerned consultations have taken place for Europeana 
multilingual services and Safer Internet, while su stainability studies are currently ongoing for 
STORK, PEPPOL, and digital libr aries. All these studies include  consultation and interviews 
with relevant stakeholders.
 78ANNEX 2 
Ex-post Evaluations  
CROSS-SECTORAL  
Commission Communication "Trans-European Networks: Towards an integrated 
approach" , COM(2007) 135 
The Communication is the outcome of the work  of a steering group constituted of five 
Commissioners, set up on 20 July 2005, at the re quest of the Commission, to examine the 
possible synergies between the trans-European networks along with methods of funding and 
potential distribution. It has established that synergies between the transport and 
telecommunications networks seem the most promising and ways of interconnecting the 
electricity networks ar e also worth exploring. 
The steering group also underlined the potential environmental benefits of integrating the 
TEN. In fact, the 30 priority pr ojects involving the trans-Europ ean transport network largely 
favour methods of transport which are more fuel -efficient and environmen tally-friendly, such 
as rail or water. Interconnections between the national energy networks and connections with 
renewable energy sources will also optimise the us e of available capacities in each Member 
State, thus reducing the environmental impact. 
The steering group recommended: c ontinuing research into syne rgies between the TENs with 
the aim of producing and circulating a manual of good practices, and de veloping synergies 
between the objectives of cohe sion policy and the priorities adopted in the TEN context; 
evaluating the need for alternativ e solutions for availability pa yments over several financial 
periods and making appropriate legislativ e proposals if necessary; monitoring the 
development of public-private partnerships an d promoting this type of funding; completing 
TEN priority projects on schedule while en suring the application of environmental law 
"Synergies between trans-European networ ks. Evaluations of potential areas for 
synergic impacts" , Final report, ECORYS, 2006.  
This study, undertaken at the re quest of the steering group on possible synergies between the 
trans-European networks, has identifi ed a range of examples of possible synergies  between 
various types of project s across the sectors:  
(1) procedural  – arising from the integrated planning of  various infrastructure networks (e.g. 
coordinated planning across modes and borders; single Strategic Environmental Assessment, 
combined land acquisition, common consultation pr ocess for packages of infrastructure);  
(2) physical  – either lower costs and impacts due to the combined construction of sections of 
infrastructure networks and structural works,  alongside both existing and new infrastructures 
such as bridges, tunn els, underpasses and the like (for e.g. laying high-voltage cables along 
the banks of canals and rivers, low-voltage interconnections (2 x 25 kV) along high-speed 
railway lines, more systematic interconnecti ons of underground high-volta ge lines (300 to 700 
kV) along transport network paths); or  higher efficiency of infrastr ucture as in th e case of the 
deployment of smart  grids on energy networks, essential for decentralised energy production, 
and deployment of ICT services and broadband infrastructure in transport for intelligent traffic management;  
(3) financial  – the additional value or revenues that  can be created and captured by the 
infrastructure provider or operator when sections  of infrastructure networks are combined.  
 79However, no steps have ever b een taken on the EU level to allow exploiting synergies in 
terms of programming and disbursement of th e EU financial aid or procedures (impact 
studies, planning and bu dgetary arrangements). 
 
ENERGY INFRASTRUCTURE  
The chapter on energy infrastructure summarizes the main conclusions from the most recent 
ex-post evaluations carried out between 2008 an d 2011 to provide an overview on the main 
recommendations for the revision of the TEN-E  programme. A comprehensive list of other 
studies and contributions is made available in addition.  
In 2007 the Commission Communication on the  Priority Interconnection Plan99 
concluded that with existing infr astructure investment, the EU would be able to construct a 
real single internal market. It would not be able to integrate the required increased production 
of electricity from renewable sources. It woul d continue paying higher  costs as a result of 
congestion and of maintaining inefficient capacity  in each of the insufficiently interconnected 
energy areas. The Plan suggested further acti on to provide support to key infrastructure 
undergoing significant difficulties by appointing Eu ropean coordinators to pursue identified 
priority projects, by planning of grids acco rding to consumer needs, by ensuring the 
acceleration of authorization procedures and by providing a clear framework for investment.   
The study by Ramboll and Mercados "TEN-E Priority Corridors for Energy 
Transmission" by the Commission DG Energy and Transport in 2008  provided an in-
depth analysis of the major interconnections a nd priority areas for bo th gas and electricity 
within the EU and to link the EU  with key external supplies.  
The 2010 Commission implementation report  on the TEN-E networks 2007-2009100 
concluded that there is a need to narrow the focus of TEN-E on a limited number of strategic 
projects demonstrating European pr iorities. It pointed out that EU strategic interests, related to 
large gas import infrastructure and the conn ection to upstream sources or electricity 
interconnections with third countries lie well beyond EU borders. Connecting TEN 
infrastructures to neighbouring and third countri es' networks, in partic ular in the areas of 
energy and transport, constitute an important dimension of TENs development in order to further leverage their EU added-value. Howe ver, in both areas, the TEN-E programme under 
the current financial framewor k does not allow EU funding of projects outside the EU to 
support and match ENPI and IPA instruments.  
The European Energy Programme for Recovery (EEPR)  has played an important role as 
driver and facilitator for pr oject implementation as acknowle dged on several occasions by 
mobilising infrastructure projec ts and mitigating disruptions of  supply with negative effects 
on citizens and the European economy. The report from the Commission to the Council 
and the European Parliament on the im plementation of the European Energy 
Programme  for Recovery
101 outlined the lessons learnt fr om the EEPR and evaluated its 
impact. The report highlighted th at the large-scale support fr om the EU side allowed the 
energy infrastructures to gain a truly Euro pean dimension and to  contribute to the 
implementation of the third internal market package and of the new Regulation No 994/2010 
on security of gas supply. EEPR he lped to improve the way the internal gas market works by 
providing for interconnections between western and eastern parts of the EU, in peripheral 
                                                 
99 COM(2006) 846 final 
100 COM(2010) 203 
101 COM/2011/0217 final 
 80Member States and in Central and East ern Europe, by progressively completing a 
bidirectional gas pipeline network and by bringing ‘energy islands’ closer.  
The EEPR also supported the extern al energy relations by illustra ting external suppliers such 
as Turkmenistan, Azerbaijan and Iraq the EU interest and support for the Southern corridor 
and Algeria for the Mediterranean corridor on  the interest of the European Union in 
diversification of energy suppl y routes. The electricity project s supported are lending strong 
impetus to completion of the internal market w ith the full participati on of all parts of the 
European Union and bringing major improvements to the security of su pply of the countries 
and regions concerned. The programme also helps to abolish bottlenecks and integrate 
‘energy islands’ such as the Baltic States, th e Iberian peninsula, Ir eland, Sicily and Malta. 
Several new interconnections are also very important for integrating renewable energy 
sources into the electricity system.  
In conclusion, the EEPR has speeded up implem entation of projects by financing specific 
action, such as technical, engi neering and environmental studi es, procurement of long-lead 
items (pipes, cables, converter stations, transf ormers, etc.) and construction work. Thanks to 
the programme, project promoters were able to secure additional funding from financial 
institutions. Moreover, EEPR support supported a nu mber of projects that  were facing serious 
permit granting delays to receive priority in the procedure from the national administrations. 
The European Energy Programme for Recovery  (EEPR) was a clear driver for timely 
implementation of infrastructure projects. It  provided an incentive to quickly agree on 
outstanding issues to all stakeholders involve d, national regulators, project promoters and 
Member States.  
In November 2010 the Commission Communication on the "Energy infrastructure 
priorities for 2020 and beyond – a blueprint for an integrated European energy 
network"102 identified investment needs and poten tial financing gaps for the horizon 2020. 
Until 2020, the investment challenge in the EU en ergy sector is expected to amount to around 
€1 trillion with €600 billion alone for transm ission and distribution networks. Some €140 
billion will need to be invested in high voltage  electricity transmission systems of European 
significance including storage and smart grid a pplications at transmission and distribution 
level. About €70 billion will be required for high pressure gas transmission pipelines (coming 
into the EU and between EU Member states),  storage, liquefied/compressed natural gas 
(LNG/CNG) terminals and reverse flow infrastructure103. It has been further estimated that 
projects worth €60 billion would be at risk of  not being delivered as needed by 2020 if the 
existing regulatory and financi ng framework did not improve.  
The October 2010 study by COWI, Cambridge Econometrics and KEMA  on " The 
revision of the trans-European energy network policy (TEN-E)"  provided input into this 
analysis of the future priorities and financing gaps.104  
In Spring 2011 Roland Berger  prepared two evaluation st udies for the Commission DG 
Energy on the structuring and financing of energy in frastructure projects, financing gaps 
and recommendations regarding the new TEN-E financial instrument  and on Permitting 
procedures for energy infrastructure proj ects in the EU: evaluation and legal 
recommendations  (Annex: Selection of good pr actices in Member States).105  
                                                 
102 COM(2010) 677  
103 SEC(2010)1395  
104 The study is available at: 
http://ec.europa.eu/energy/infrastructure/studies/doc/2010_11_ten_e_revision.pdf 
105  The studies are published at the following link: 
 http://ec.europa.eu/energy/infrastructure/studies/ten_e_en.htm 
 81According to the financing study prepared by Roland Berger, investment volumes for the 
2010-2020 period will, based on for ecasts by transmission system operators (TSOs), increase 
by 30% for gas and 70% for electricity compar ed to current levels. This confirms the 
Commission’s assessment that in electricity, annual investment will even have to double, 
compared to investment over the period 2000-2010106.  
On the basis of the analysis of the financing of energy transmissi on infrastructure projects  
over the past five years, Rola nd Berger highlighted the need to enhance the investment 
climate, increase capital market readiness of the energy networks, remove institutional 
barriers to enhance the privat e equity investment and st imulate unbundling and industry 
consolidation. With a view to mitigate the financing gaps and the design of a new TEN-E financial instrument, Roland Berger reco mmended market-based financing. As main 
condition for increased investment volumes to come forward by the market operators, Roland 
Berger suggested to strongly improve investme nt conditions through measures for projects 
with high priority for implementation, includi ng priority premiums for projects facing 
particularly high risks and to provide support for specific proj ect types through the inclusion 
of anticipatory investments in th e regulated asset base. On the design of the future EU support 
the study concluded that a further development of the TEN-E programme is needed with a 
continuous financial support by grants in co mbination with stronge r EIB support and new 
financial instruments and funds, like a Tran smission Infrastructure Fund (similar to 
Marguerite Fund). Roland Berger saw also a role for the EU to support TSOs to access 
corporate bond markets and to receive a cred it rating and support and mediation for complex 
cross-border projects and financial management. 
With regard to permit granting procedures , Roland Berger assessed permitting practices in 
13 Member States, identified best-practi ces and provided recommendations on policy 
measures to implement. Among the main r ecommendations Roland Berger considered the 
need to improve transparency and management of the processes by defi ning projects of public 
interest, by creating nationa l and European energy infras tructure supervision, by 
implementing and monitoring plans and by es tablishing time limits. The study also 
recommended that Member States should desi gnate one-stop shops with decision-making 
power where possible. Thirdly, the study sugge sted the need to optimise the permitting 
procedures by introducing mandatory scoping a nd by limiting recourse to a single level of 
jurisdiction. Further measures  to improve stakeholder in volvement and communication, 
including a communication strategy at  EU level, were suggested.  
Following a request from the Council,  the Commission presented, in a Staff Working 
Document
107 to the  June 2011 Energy Council , an analysis on (1) th e investment needs of 
European relevance in electricity  and gas infrastructures, (2) th e investments at risk of not 
being delivered due to various obstacles, and (3) the measures proposed to respond to the 
financing requirements and overcome the obst acles identified. The Commission approach has 
been subsequently supported by the Committee of the Regions108 and the European 
                                                 
106 The 2006 inquiry into the European Gas and Electricity Sectors underlined that "Amounts invested in 
cross-border infrastructure in Europe appear dramatically low. Only 200 million € yearly is invested in electricity grids with as main driver the incr ease of cross-border transmission capacity." 
107 SEC(2011) 755 
108 CoR 7/2011 rev. 2 – ENVE-V-010 
 82Parliament109. The latter also came out in favour of using the EU budget to promote the 
energy infrastructures110.  
 
List of ex-post evaluation and studies: 
"Adaptation and Mitigation Stra tegies (ADAM) – Supporting European Climate Policy", 
project funded by the European Commission, final report, June 2009. http://www.adamproject.eu/  
* Arup, "Feasibility of Europe-wide CO2 infrastr uctures", study for the European Commission 
DG Energy, 2010. 
* Boston Consulting Group "Electricity Storage:  Making Large-Scale Adoption of Wind and 
Solar Energies a Reality", study by Cornelius Piper and Holger Rubel, March 2010. 
CEER, "European Infrastructure Package: Inve stment needs and financing mechanisms – 
Financing Task Force conclusions",  Reference C11-FTF-02-01, 23 March 2011 
* Centro Elettrotecnico Sper imentale Italiano, Instituto de Investigación Tecnológica, 
Mercados Energeticos, Ramboll, "Energy In frastructure Costs and Investments between 
1996 and 2013 (medium-term) and further to  2023 (long-term) on the Trans-European 
Energy Network and its Connection to Neighbouring Regions with emphasis on investments on renewable energy sources and their integratio n into the Trans-European energy networks, 
including an Inventory of the Technical Stat us of the European Energy-Network for the 
Year 2003" (TEN-Energy-Invest), study for the European Commission DG Energy and 
Transport, October 2005. 
* COWI, Cambridge Econometrics and KEMA, "T he revision of the trans-European energy 
network policy (TEN-E)", impact assessm ent study for the European Commission DG 
Energy, October 2010. 
* ENTSO-E, "Ten-Year Networ k Development Plan", 2010. 
https://www.entsoe.eu/index.php?id=232 
* ENTSO-E, "System Adequacy Forecast 2010- 2025", 2009. https://www.entsoe.eu/resources/ 
publications/system-development/ 
ENTSOG, "Ten-Year Network Deve lopment Plan", February 2011. 
http://www.entsog.eu/publica tions/index_g_investment.html 
* European Commission, Joint Research Centre (J RC), "Evolution of size and cost of a trans-
European CO2 pipeline network", 2010. 
European Commission, "The implementation of the Trans-European Energy Networks in the 
period 2007-2009", report pursuant to Article 17 of Regulation (EC) 680/2007 and Articles 
9(2) and 15 of Decision 1364/2006/EC, COM(2010)203, May 2010. 
European Commission, "Annex to Report on th e implementation of the Trans-European 
Energy Networks in the period 2007-2009" , Commission Staff Working Document, 
SEC(2010)505, May 2010. 
                                                
 
109 European Parliament resolution of 5 July 2011 on energy infrastructure priorities for 2020 and beyond 
(2011/2034(INI)) 
110 European Parliament resolution of 8 June 2011 on Investing in the future: a new Multiannual Financial 
Framework (MFF) for a competitive, sustainabl e and inclusive Europe (2010/2211(INI)) 
 83European Commission, "Energy infrastructure priorities for 2020 and beyond – A Blueprint for 
an integrated European energy network", COM(2010)677, November 2010. 
European Commission, "Impart assessment on En ergy infrastructure priorities for 2020 and 
beyond – A Blueprint for an integrated Eur opean energy networ k", Commission Staff 
Working Document, SEC(2010)1396, November 2010. 
European Commission, "Smart Grids: from innovation to deploym ent", COM(2011)202, April 
2011. 
European Commission, “Energy Infrastructure I nvestment needs and financing requirements”, 
Commission Staff Work ing Document (SEC(2011)755 final), June 2011. 
European Commission, “2009-2010 Report on pr ogress in creating th e internal gas and 
electricity market”, Commissi on Staff Working Document, 2011. 
European Commission, “DG ENER  Staff Working Document: Re port on Progress in Creating 
the Internal Gas and Electricit y Market – Technical Annex”, 2011. 
European Parliament, "Energy Infrastructure Pr iorities", Directorate-General for Internal 
Policies, Policy Department Economic and Scientific Policy – Industry, Research and Energy, Briefing Paper, March 2011. 
* EWI, "Model-based Analysis of Infrastructure  Projects and Market Integration in Europe 
with Special Focus on Security of Supply S cenarios", University of Cologne, May 2010. 
* "EWIS – European Wind Integration Study ", final report, March 2010. http://www.wind-
integration.eu/ 
* High-Level Advisory Group on ICT for Smart El ectricity Distribution Networks: “ICT for a 
low carbon Economy – Smart Electricity Distribution Networks ”, supported by the 
European Commission, DG for Informa tion Society and Media, July 2009. 
* ILF, Purvin&Gertz, "Technical Aspects of Variable Use of Oil Pipelines coming into the EU 
from Third Countries", study for th e European Commission DG Energy, 2010. 
* OffshoreGrid study, various presenta tions and interim reports, July 2011. 
http://www.offshoregrid.eu/ 
* Ramboll Oil and Gas, "Study on natura l gas storage in the EU", October 2008. 
* Supponen, Matti, “Influence of national and company interest s on European electricity 
transmission investments”, PhD thesis fo r the Helsinki University of Technology, 2011. 
"REALISEGRID – Research, Me thodologies and Technologies fo r the effective development 
of pan-European key grid in frastructures to support the achievement of a reliable, 
competitive and sustainable electricity s upply", project supported by the European 
Commission, various reports and final confer ence, February 2011. http://realisegrid.rse-
web.it/default.asp 
Rebours, Y., M. Trotignon, V. Lavier, T. Derba nne, and F. Meslier, “How much electric 
interconnection capacities are needed within Western Eur ope?”, Conference on European 
Energy Markets (EEM), June 2010. 
Ramboll, Mercados, "TEN-E Priority Corrid ors for Energy Transmission", study for the 
European Commission DG Energy and Transport, 2008. 
CEER, "Energy Infrastructure Package – Draft Position Paper on Cost Allocation", Reference 
C11-IBP-30-03, 25 March 2011. 
 84ENTSO-E, "Overview of Transmission Tariffs  in Europe: Synthesis 2010", September 2010. 
Glachant, Jean-Michel, Haikel Kalfallah, “Identifying Benefits and Allocating Costs for Cross-
Border Electricity & Gas Infrastructure Proj ects”, European Commission and  Florence 
School of Regulation workshop conclusions, 4 May 2011 
Helm, Dieter, "Redefining the models for privat e sector investment in infrastructure – The 
RAB Model", 9th February 2011 presentation, Sl ides for the UK Infrastructure Summit. 
Helm, Dieter, and Tom Tindall, "T he evolution of infrastructure  and utility ownership and its 
implications, Oxford Review of Economic Policy, Volume 25, Number 3, 2009, pp.411–434. 
* KEMA, REKK, "Methodologies for Gas Transm ission Network Tariffs and Gas Balancing 
Fees in Europe", study fo r the European Commission DG Transport and Energy, December 
2009. 
Pelkmans, Jacques, Lionel Kapff, “Interconnect or Investment for a Well-fuctioning Internal 
Market: What EU regime of regulatory ince ntives?”, Bruges European Economic Research 
Papers, BEER n°18, 2010. 
Rious, Vincent, Jean-Michel Glachant, Philippe  Dessant, "Transmission network investment as 
an anticipation problem", EUI Work ing Paper RSCAS 2010/04, January 2010 
Roland Berger, "Study on the structuring and fina ncing of energy infrastructure projects, the 
financing gaps and recommendations regarding the new TEN-E financial instrument", study 
for the European Commission DG Energy, May 2011 (2011a). 
Observatoire Méditerranéen de l’Energie,  "Realisegrid – D3.6.2: Incentive schemes and 
regulation framework for transmission developm ent in Europe", final report, 29 April 2010. 
Rothschild, presentation at the Hungarian EU Council Presid ency / European Commission 
high-level energy infrastruc ture conference, May 2011. 
 
 TRANSPORT INFRASTRUCTURE
 
Loan Guarantee Instrument for TEN-T Projects – Mid-term Review, European 
Investment Bank, July 2011  
Findings . The LGTT has been successfully utilised in a number of traffic revenue-risk TEN-T 
PPP transactions from 2008 to date: six operatio ns in France, Germany, Portugal and Spain, in 
the road and rail sector s involving a total capit al investment of more than EUR 10bn. By  
improving the risk profile of the senior debt , the LGTT has enabled revenue risk TEN-T  
transactions to close even in recent adverse ma rket conditions. It has also generated a high 
multiplier effect/leverage on the risk capital committed by the EC/EIB to the LGTT. The LGTT has been incorporated into the financing of most eligible reve nue-risk TEN-T projects 
reaching financial close, while the current  LGTT pipeline involves a further capital 
investment of EUR 13bn. The posit ive market perception of the LGTT will also facilitate the 
market introduction of another joint EIB/EC credit enhancemen t instrument: the Europe 2020 
Project Bond Initiative .  
Recommendations 
 - In the context of the development of the Project Bond Initiative , which will apply from 
2011-2020, it is proposed that the LGTT be also devel oped further in order to align it with the 
 85Project Bond instruments and to allow the instru ment to profit from its established market 
credibility to credit enhance commercial bank senior debt. 
– Changes in the EC/EIB LGTT cooperation ag reement should be introduced, notably in 
order to align it to the Project Bond instrument s, to the extent allowed by the existing legal 
basis; 
– In addition, the scope of LGTT application should be extende d to credit enhance senior debt 
of projects to be refinanced early in the operating period (up to 5 years post construction); 
- The risk- and revenue-sharing mechanism should be aligned to follow the principles of the 
Project Bond Initiative to the extent possible.  
 
Mid-term evaluation of the TEN-T Programme (2007-2013) - final Report, Steer Davies 
Gleave111, March 2011  
Steer Davies Gleave was appointed to conduct a Mid-term evaluation of the trans-European 
Network transport Programme (2007-2013). The re port formulates over all conclusions and 
possible recommendations on the implementation of the TEN-T Programme with a view to 
providing input to the revision of  the TEN-T Programme and policy. 
Findings . The objectives  of the Programme are so general th at it makes any evaluation of the 
Programme successes difficult. The Programme ha s been the catalyst to a number of key 
pieces of transport infrastructure in Europe, and has been playing a part in the structuring of 
the transport network by allowi ng transport investments to be focussed. Its political leverage 
is high but its financial leverage is poor . The Programme has clearly made a positive 
contribution to the mobility needs of the European citizens and goods. However some aspects of the Programme need to be improved which requires a revision of the Guidelines and 
Regulation and of some internal as pects of the Programme practices. 
The Programme’s reporting requirements  are significant, with a system of doublechecks in 
place. Member States are required to undertake technical monitoring and financial control of 
projects in close cooperation with the Commission, and need to provide the Commission with 
a description of the co ntrol, management and monitoring systems set up to ensure that 
projects are successfully completed. This is al so the case with the selection procedures for 
TEN-T funding meaning that proj ects must be endorsed and a ssessed by the Member States 
first. This process increases the checks a nd scrutiny that project plans are put under. 
The political leverage  of the Programme is however much higher than its share of funding 
would otherwise suggest as recognised by all st akeholders. For Member States it is more 
difficult politically to cancel pr ojects once they have been selected in the TEN-T projects, so 
if projects as a part of nationa l austerity programmes have to be  losing national funding it is 
expected that those TEN-T projects will not be at the top of this list. For the private sector the 
“seal of endorsement” provided by the EC fundi ng of TEN-T projects is less likely to play a 
significant role in the decision to invest in projects, but it shows a stronger public 
commitment to these projects, meaning that the proj ect is less likely that some others to see its 
funding cancelled or postponed. 
The EU funding is fragmented  between the TEN-T Programme, the Cohesion and the 
Structural funds and the eval uation found that the Programme would benefit from a stronger 
                                                
 
111http://ec.europa.eu/transport/infras tructure/midterm_review/doc/final_report_v_to_commission_12_04_2011.
pdf 
 86partnership between DG REGI O and DG MOVE to achieve the EU transport policy 
objectives. 
Cross-border projects  are progressing slowly and are frag mented because of the lack of 
cooperation and coordination amongst Member States  but cross-border projects are some of 
the projects of the highest EU added value and therefore require continued and stronger 
Programme focus by considering a higher cofunding rate, or a specific allocation of the total 
budget to these projects. 
The sources of finance  for the trans-European transport network come from both the public 
and private sector but are largely geared to wards national and European Union financial 
instruments. First of all, this is because of the private sector’s  fundamental need to identify a 
revenue stream and understand the distributi on of risks (identification, mitigation and 
allocation). When the revenues are too low or the risks too high, the private sector will simply not be willing to invest and the burden of financing is reliant on national governments. Secondly, this is also because there are no clear  incentives for the public sector to consider 
using PPPs (if at all) at the ri ght time (i.e. from the start), except in a few countries. This 
explains why there has been a certain le vel of passivity with regards to PPPs. 
PPPs  are also lengthy and costly to arrange, usually  requiring contracts of 20-years or more in 
length, and also require additi onal skills and financial resour ces. It is recognised that PPP 
preparation is too time consuming and costly fo r small projects. Additi onally, it requires the 
projects to be well-prepared at the beginning of the budgetary period so that the procurement 
process can be completed before the end of the relevant financial period (e.g. 2007-2013)20. 
The 2008-2009 “credit crunch” has also increased the difficulty for the private sector to 
provide long-term borrowing, rais ing of debt, and refinancing. 
The structure of the Programme with the Multi-Annual Work Programme  receiving 
between 80 and 85% of the available fundi ng and the Annual Work Programme being 
allocated to the rest was found to be adequate, but some implementation issues need to be 
addressed: among them the MAP call calendar, the separation of mixed proposals into works 
or studies, any improvement in co st-benefits analysis and better in centives of project delivery. 
Project delivery should be be tter incentivised: The Commission should be able to use more 
effective project incentives  (such as the “use it or lose it ” rule) to make sure that project 
promoters are feeling more accountable for th e EU grants given, including on Priority 
Projects. 
The TEN-T Programme is a llocated through a competitive call for proposals  procedure and 
the award of funding is subject to on-going te chnical and financial mo nitoring of all funded 
projects by the TEN-T Executive Agency. The TEN-T Programme also benefits from a re-
distribution mechanism during the financial perspective. 
Since 2005, European Coordinators  have been appointed by the European Commission to 
focus attention on specific trans-European Priority  Projects that present severe difficulties and 
lag significantly behind in completion compared with their initial schedule. Currently there 
are 9 Coordinators who are monitoring 11 Prior ity Projects. Their mandates end in July 2013. 
One of the common features of these projects is that they involve several Member States, 
which renders coordination between  the project countries especia lly difficult and potentially 
hinders the speed of decision making. 
 Assessment of TEN-T Programme  Implementation, TEN-T EA, December 2010  
 87The assessment highlights areas that need im provement towards the better customization of 
procedures, on the one hand, and effective polic y implementation, on the other. A strategic 
reflection on the orientation of TEN-T policy and, at the same time, the structure of the TENT 
Programme, in conjunction with small-scal e adjustments at the level of operational 
management promise a further significant enhancement in terms of both efficiency and effectiveness. 
Of particular relevance was the need to addres s the issue of the overall financing of the TENT 
Programme. Under the current financial perspe ctive, the TEN-T Programme represents the 
smallest endowment to the TEN-T network ne xt to the funds made available through the 
ERDF and the Cohesion Fund in the form of gran ts, and the loans granted by the EIB. This is 
surprising considering that the TEN-T Programme is the one which encapsulates the essence 
of what represents EU added-value, which, afte r all, is what drives, or should drive, the 
development of the TEN-T network. That th e TEN-T Programme budget is not enough is 
shown by the low retention rates of proposals (d espite the evaluations) and the frequent 
failure to meet the maximum co-funding rate s as foreseen by the TEN-T Regulation. 
Improving the efficiency and effectiveness of the TEN-T Programme will be strongly facilitated by the increase of its budget during the next financial perspective. 
I t  i s  i m p o r t a n t  t o  m a k e  a n  e f f o r t  t o  a void excluding important pr ojects of high EU-added 
value from the selection procedure even if such  projects entail more risks. One way forward 
in this respect would be to introduce the ‘corri dor concept’ already at the proposal submission 
stage accompanied by respective agreements. This would accelerate the implementation of 
relevant Actions in addition to placing their real ization within a global perspective, so that 
technical, political and financial impedime nts can be more effectively addressed. 
Several project officers expressed concerns abou t budget overruns because these then result in 
reduction of the relative effectiveness of the EU  contribution—a problem in terms of leverage 
as well as for publicity purposes. 
A number of officials interviewe d were of the opinion that one way to improve the levels of 
national commitment to the TEN-T policy would be  by increasing the rate of co-financing of 
key projects. This would automatically also increase the Agency’s leverage in terms of 
monitoring and evaluation. 
One of the priorities of the annual programme  for the year 2010 has been to explore the 
potential for developing public-priva te partnerships or PPPs on Prio rity Projects or projects of 
common interest on the TEN-T network. 10 million has been earmarked for this purpose. This 
priority follows renewed attempts by the TEN-T  Programme to encourage the involvement of 
the private sector in the financ ing of transport infrastructure. 
Preparatory work is, however, needed, including p ilot activities for testing the readiness of the 
private sector to engage in the transport se ctor under various financ ial engineering models. 
This is what lies behind the feasibility studies to be supporte d under the 2010 annual 
programme. This idea deserves further elaborat ion and enhancement during the annual calls in 
2011 and 2012. 
Since its creation, the Agency has harnessed its working methods towards the optimisation of 
project monitoring and implementation mechanisms . This has included the careful preparation 
of high quality Commission Decision texts with detailed technical descriptions and accurate 
implementation timetables, in order to facili tate the monitoring of the actions. Besides 
specifying the type of action, th e co-financing rate and maximum EU contribution in absolute 
terms, the Decision specifies that actions w ill submit action status reports (ASR) and be 
monitored regulatory on the basis of their strategic action plans (SAP). 
 88 
Mid-Term Review of the 2007-2013 TEN-T Multi-Annual Work Programme- Project 
Portfolio (MAP Review), TEN-T EA, October 2010  
The budget for the MAP represented 80-85% of the total available EU bu dget for the granting 
of aid in the field of the TEN-T for the period 2007-2013 through the TEN-T Programme. The 
review covers 92 projects selected under the 2007 calls for proposals wh ich were launched to 
meet the objectives of the MAP. All projects were initially pl anned to be implemented during 
the 2007-2013 programming period. The 92 projects ac count for approximate ly two-thirds of 
the total TEN-T budget (€5.301 bil lion out of a total €8.013 billion) and 78% of the total 
MAP for the entire 2007-2013 period. The tota l budgeted cost of these projects is €32.647 
billion. Therefore, the TEN-T  budget accounts for approximately 16% of the projects’ 
budgeted costs. 
The report concluded that projects should be allowed to run th eir course with a cut-off date on 
31 December 2015, but subject to certain well-def ined conditions based on both political and 
technical/financial milestones. This allowed critical support to be  maintained without 
rewarding poor performance or requiring a dditional funding commitments. The review 
recommended the redirection of around €311 milli on which is to be re-injected into new 
annual/multi-annual calls unde r the current Programme. 
The overall outcome  of the MAP review can be summarised as follows: 
- Confirmation of EU support to the most critical and complex projects within the TEN-T; 
- Prolongation of the eligibility period for a maximum of two mo re years (to the end of 2015), 
subject to specific pol itical, technical and financial conditions; 
- Cancellation of projects  that have not started within the first two years afte r adoption of the 
Commission Decision; 
- A further increase in the expe cted leverage effect can be achieved if more resources are 
mobilised, notably private funding. 
The MAP review demonstrated that there is a positive correlation between higher co-funding 
rates  and better project performance. Moreover, the rate of co-financing is a key factor in 
generating sufficient EU leverage in several respects such as attrac ting private funding and 
supporting cross-border projects and, more gene rally, helping decision  makers to put the 
concerned projects higher on th eir respective national agendas. 
The MAP is designed to maximise the assurance of the continuity of TEN-T funding  for 
the current financial period. However, the re view highlighted the delay/budget variations 
experienced by some Member States and othe r involved authorities who require this 
assurance to be provided absolutely before launching their own pro cedures to commit their 
part of the budget. The absence of such guara ntees has been a recurrent problem which has 
contributed to projects being submitte d for funding at a premature stage. 
The ongoing financial crisis has had a mixed impa ct on the portfolio. Some projects benefited 
either from reduced market prices under incr eased competition or from additional funding as 
part of national recovery plan s, whereas the majority were a ffected by budgetary  cuts and will 
inevitably be delayed. 
The participation of the private sector  in financing the MAP project portfolio is not in 
evidence. The presence of Public-Private Pa rtnerships (PPP) is rather limited. The MAP 
portfolio includes only four pr ojects currently involvi ng Public-Private Partnership schemes. 
The grant for PPP schemes involving availability payment mechanisms, introduced as part of 
 89the current Programme, has not been utilised, in part due to the seven year limitation imposed 
by the Financial Regulations. 
 
“Improving transport performance on tr ans-European rail axes: have EU rail 
infrastructure investment been effective?”112, Special Report No 8, European Court of 
Auditors, October 2010  
The report observed that 19 (of the 30) TEN-T Pr iority Projects defined in 2004 relate to 
railways. The Court examined in detail 8 of th e rail axes covered by the Priority Projects 
involving a sample of 21 specific sections in 8 Member States covering 8.6 billion euros of 
EU investment up to 2006. The re port identified that overall tr ansport volumes in Europe are 
expected to continue rising in the next d ecades, however, Europe’s railways would account 
for only a small part of this growth. 
Whereas, the audit recognised that the concentr ation of TEN-T co-financing at cross-border 
locations has improved since 2006 where the Eu ropean co-ordinators have had a positive 
influence in concentrating and facilitating developments on the Priority Projects, much remains to be achieved such as the identification of bottlenecks could be improved as could then selection and approval procedures at the Commission. 
Project cost escalations did not  have a direct impact on the EU budget because the investment 
by the EU was limited to the amounts initially gran ted. However, they should be considered in 
the light of the large scale investment needs on  the Priority Projects, and the fact that the 
attraction of private sector investment has be en recognised as being increasingly important. 
The risk of project cost escala tions can exacerbate concerns re garding low rates of return and 
therefore represent a disincentive  for private sector investors. 
Co-financed projects in respect of works typica lly address the constructi on of certain parts or 
technical elements of a section of the Priority Projects. Projects are se lected on a competitive 
basis following the assessment o f proposals submitted by Member State authorities. Proposal 
evaluation procedures culminate in a ranking of projects with EU co-financing being allocated 
to the projects evaluated as the best. DG Mob ility and Transport is responsible for TEN -T 
policy. Organising the evaluation procedure is on e of the tasks recently delegated to the TEN-
T Executive Agency. 
Recommendations : 
- build on the roles played to date  by the European co-ordinators; 
- make sure that procedures for approvi ng projects under Cohesi on Policy are robust; 
- ensure that decisions about th e targeting of TEN-T funds are supported by robust analysis of 
important bottlenecks; 
- improve the quality of co st-benefit analysis for TEN-T selection procedures; 
- take the lead in facilitating the excha nge of knowledge and ex perience about rail 
infrastructure development amongst project promoters. 
In summary, the audit report recognised that  through co-financing the development of rail 
infrastructure, the EU has contributed to prov iding new possibilities for trans-European rail 
transport but value for EU money could be improved. 
                                                 
112http://www.europarl.europa.eu/document/activities/cont/201012/20101208ATT08208/20101208ATT08208E
N.pdf 
 90Funding Strategy and Financing Perspectiv es for the TEN-T, Final Report, Expert 
Group 5, July 2010  113 
Findings & Recommendations. . The Group has shed light on some general trends with 
relation to the financing of TEN -T projects, in particular: th e huge constraints posed on public 
resources, worsened off by the financial crisis, which will durably limit the capacity of Member States to fund large pr ojects; the challenge to better take into account European 
objectives in terms of climate change, energy e fficiency and innovation; the need to adapt to 
the users requirements (the clients) and to increa se the affordability and the profitability of the 
projects; the insufficiently explored potential for a greater involvement of the private sector in the delivery of the TEN-T. As TEN-T projects are genera lly complex which require le ngthy preparation, they entail 
mobilising national and regional capacities, which is often difficult: the expertise and the capacities needed to develop complex projects are scarce, especially in the convergence 
regions, and generally channelled to na tional or regional priorities. Greater coordination  
between the Member States, especially for the im plementation of transnational links, is key to 
success. In order to connect national networks, the completion on cross-border sections are of 
vital importance, but it can only be achieved if  the Member States concerned can coordinate 
themselves not only politically speaking but pr eferably on operational and financing terms 
too. 
 
A proposal was made to bring closer the Cohesion policy’s funding mechanisms  with the 
TEN-T policy. The Group was not able to reach a full consensu s on this idea: some experts 
remained of the opinion that the two policies have to stay fully apart since, according to them, 
they diverge both in their ra tionale and in thei r objectives. Other me mbers though, outlined 
that the two EU policies could sh are some priorities on the basi s of the TEN-T and that there 
could be a room for further thinking in order to concentrate EU contribution. Everybody 
agreed though that any proposal should not pr ejudice to the Cohesion policy and that it should 
ensure that the convergence objectiv e remains of greater importance. 
 
The EU contribution should be channelled to projects and programmes with the highest EU 
added-value  (EUAV). Considerations for the defi nition of this EUAV were put for 
discussion and a majority of experts agreed that  it should focus on initiatives which have an 
important net economic and social EU benefits (i .e. which benefits to the Union as such) and 
which will not likely to be implement withou t a strong EU support. Typically this would 
mainly concern cross-border projects, the railways, the inland waterways and the maritime transportation, as well as horizontal measures aiming at strengthening th e efficiency of the 
network (interoperability, safety, traffic mana gement, research and innovation…). However 
the experts suggested that em phasis should also be equally given to the promotion of 
profitable projects in line with the TEN-T po licy in order to pace the completion of the 
network.  
All experts agreed on the potential gains that can result from PPPs , but they insisted that this 
procurement scheme has to be applied on specif ic projects, basically the ones which aim at 
solving actual capacity/demand problems hence the most financially feasible. They argued 
PPPs should be partnerships, where the private sector can be given enough flexibility under a 
clear legal framework so as to bring efficienci es to a project. Given the current crisis, the 
possibility to deconsolidate the PPP investme nts (under certain conditions) from the deficit 
                                                
 
113 The report was developed in the context of the TEN-T Policy review process, started in 2009. Experts’ 
contributions, participants’ presentations and the minutes of the individual meetings can be consulted at the following website: http://ec.europa.eu/transport/infrastructure/te nt_policy_review/expert_groups/expert_group_5_en.htm
. 
 
 91can also represent a powerful asset to the exit strategy even though it cannot represent the 
main reason to have appeal to  PPPs. All in all, the Group poi nted out that the use of PPPs 
should be given more systematic consideration - wherever adapted to the project, and public 
authorities should be supported in better deal ing with innovative procurement and financing 
schemes. 
 
To facilitate the participation of the private sector in the delivery of the TEN-T, the experts also stressed the usefulness of instruments wh ose object is to mitigate the risks and their 
associated costs, especially in the framewor k of availability-based PPPs. The Group suggested 
that these instruments could take the form of guarantees which could be called by the private 
partner on first demand. 
 
Some members also proposed to give furthe r considerations to bonds opportunities - in 
particular for the issuance of project bonds  for TEN-T projects, which could be bonds 
guaranteed by the EU budget to be sold di rectly on the intern ational markets. 
 
"TEN-T Progress Report, Implementa tion of the Priority Projects " and the "Priority 
Projects 2010: a detailed analysis", European Commission, June 2010   
Findings.  The report concludes that tr ansport infrastructu re has been historically designed to 
serve national rather than European goals and cr oss border links constitu te bottlenecks that are 
likely to become increasingly costly as  the EU economy continues integrating. 
During the next financial perspectives (2014-2020), numerous cross-border sections  will be 
in construction or completed. Therefore, the de cisions for concentratin g financing here, and 
the obvious need to continue to do so, will be  an essential centrepiece for linking up national 
networks into a European network and thereby c ontributing directly to the realisation of the 
internal market, reaping the bene fits of years of investment. 
Financing  continues to be a problem as the economies  of the Baltic states continue to pass 
through difficult times (see below) and it is increasingly difficult for governments in the 
region to finance major capital works schemes such  as the “Rail Baltica”. This is why it will 
remain important in the next few years to look into how best to levera ge the money that is 
available. 
While operations  are of great relevance and constitu te the ultimate goal, they do not 
constitute the primary objective of TEN-T funding: on the one hand, because there are 
funding schemes better adapted to fund private sector operations (maritime, ports or other) 
such as the Marco Polo scheme; on the other hand, because before any operations may start 
the infrastructure needs to be in place. A ccordingly, TEN-T concentrates on the development 
of infrastructure which also is highly time consuming - on average it takes 10 years from 
preliminary studies to operation. 
PPPs  will be structured on the basis of a DB O (Design, Build and Operate) + Maintain 
scheme, but the operation will be limited to the availability of the network and the service (it is therefore mostly linked to maintenance) . In order to guarantee good coordination at 
interfaces and provide incentives for an adequate  development of services, a +/-2% bonus for 
the concessionaire is linked to  the actual traffic flows. 
 
 92Position Paper of the European Coordi nators on the future of TEN-T Policy , 6th October 
2009 
The European Coordinators have been appointed  to follow projects that present severe 
difficulties and lag significantly behind in comp letion compared with their initial schedule. 
One of the common features of these projects is that they involve several Member States, 
which renders coordination between the project  countries especially difficult and stunts 
progress on the terrain. Most of the projects are rail projec ts, but the Danube and Seine – 
Scheldt projects and the Motorways of the Sea ar e at least as challenging. The main issue at 
stake for the Coordinators is to ensure that  with their efforts of  coordination, they can 
contribute to giving Europe the opportunity to endow it with the infrastr ucture it needs to 
sustain the internal market. The Coordinators' vision is one of enabling a door-to-door 
logistics chain that is economica lly and environmentally efficient. 
Despite the differences in the nature of the c oordinated projects, their experiences during their 
first mandate (2005-2009) has led to common views on objectives of TEN-T policy and on 
financing and governance of TEN-T projects. 
Regarding the present financial perspectives 2007-2013, the EU has made an important effort 
to concentrate its investments on the Priority  Projects and in particular on cross-border 
sections, bottlenecks and access rout es to both such sections. This increased the leverage 
effect of the TEN-T budget. The multi-annua l call for proposals 2007-2013 proved the needs 
of project promoters. For Priority Projects alone, the proposals received for the multi-annual 
program 2007-2013 represented a tota l investment of more than EUR 55 billion, and a total 
requested Community contribution of EUR 11.5 billion. The EU budget available for 
multiannual funding for the Priority Proj ects was limited to EUR 5.1 billion. 
Recommendations : 
- Put the European economic and environmental interest first; 
- Take full account of the interests of an enla rged European Union and to put the European 
internal market at the service of Europe's place on the global market; 
- Take a fresh look at financing difficulties of infrastructure projects and change decision 
makers' mindsets from too much attention for th e short to medium term to taking full account 
of the interest of the long term sustainability of the European internal market; - Ensure the mobilisation of enough financial le verage to complete the planned projects and 
ensuring that all financial instruments and all EU  funds available for transport infrastructure 
are used in a coordinated manner to reach this goal; - Involve all relevant stakeholders in infrastruc tural projects at an early stage so as to avoid 
costly oversights and delays; - Ensure coherence between the comprehens ive project approach and EU co funding; 
- Look at transport and transpor t modes as part of one logist ical chain that  can ensure 
seamless door-to-door transport and to improve  the quality of service of all modes; 
- Include intermodal nodes in the TEN-T network in order to improve, where necessary with 
financial support, the intermodality of the network; - Direct European co-financing w ith priority to investments en abling each mode to form an 
optimal link in the logistics chain; - Urgently tackle the lack of  interoperability along many Eur opean transport networks and 
remove main bottlenecks, notab ly at cross border sections; 
- Ensure regulatory stability for the market and enforce current European and national legislation; - Better coordinate policy a nd enforcement efforts throughout the different layers of public 
administration. 
 93Evaluation of the Marco Polo Programme 2003 – 2010, Europe Economics, April 2011 
Marco Polo Programme (both MP I and MPII) is curre ntly the only funding instrument in the 
freight transport services se ctor, which occur at the sc ale of the EU and beyond. The 
programme has been established114 for the period 2003 – 2006 (MPI) and 2007 – 2013 (MPII) 
in order to reduce road  congestion and to improve the en vironmental performance of the 
freight transport within the European Union and to enhance inter-modality while contributing 
to an efficient and sustaina ble transport system . Budget of the programme amounted to €102 
million for MP I, and for MP II it has been raised to €450 million. 
Findings . The evaluation points out uni que and important features of the programme such as 
its transparency, the almost numerical precision  with which results are being measured and 
quantified and the direct relationship between EU funding and the results obtained . Also, 
the analyses confirm the devolve d management of the programme115 has strengthened its 
implementation and allowed the Commission to concentrate on policy issues. However, the programme has also suffered from a number of flaws inherent in its design , which have 
come to the surface during the course of their implementation, and particularly so under the 
strain of the economic crisis. 
Nevertheless, the evaluators unde rline it is important  that a successor to the Marco Polo 
programme is introduced since this is currently  the only European financial instrument that 
allows significant means to be devoted to the improvement of environmental efficiency for 
freight transport, a reduction in greenhouse gas emissions and reduced congestion on 
European road networks. However, this does not necessarily mean that the focus needs remain 
on start-up aid to support modal shift. 
Recommendations  
The evaluation's findings suggest that there is a clear argument  that modifications to the 
programme are required if a successor to th e programme is to be introduced. Several 
potentially complementary options have b een recommended and the main ones are: 
(1) Improve synergies with the new TEN-T po licy where the new instrument supporting 
transport services could potentially operate  within the revised framework of TEN-T, 
within the framework of a broader cohe rent multi-modal TEN-T network which is 
implemented through “corridor” approaches; 
(2) Focusing on promotion of innovation, efficien cy and sustainability as requirements to 
bring about modal shift: support to investment s and actions which lower the emissions of 
CO2 of freight transport (and asso ciated other external costs); 
(3) Expanding the scope of the programme toward s supporting sustainabl e urban freight and 
logistics; 
(4) Expanding the range of support instruments: de part from supporting the start-up of actions 
directed to shifting freight transport o ff the road and implement other financial 
instruments such as loans, subsidised loans or guarantees, which would help finance the 
needed investments; 
                                                
 
114 Regulation (EC) No. 1382/2003 of the European Parliament and of the Council of 22 July 2003 on granting of 
Community financial assistance to improve the environm ental performance of the freight transport system 
(“Marco Polo Programme”), OJ L 196, 02.08.2003, p 1 and Regulation (EC) No. 1692/2006 of the European 
Parliament and of the Council of 24 October 2006 esta blishing the second “Marco  Polo” programme for the 
granting of Community financial assistance to improve the environmental performance of the freight transport system (“Marco Polo II”), OJ L 328, 24.11.2006, p 1 
115 in 2008, to the Executive Agency for Competitiveness and Innovation (EACI)  
 94Measures supporting sustainable and ef ficient freight tr ansport services  under Connecting 
Europe Facility in the new EU  budgetary perspective 2014 – 2020 
The proposed measures would be implemen ted under the broader framework of TEN-T 
programme and would target sustainable and effi cient freight transport solutions that use the 
infrastructure of TEN-T comprehensive netw ork and contribute to reducing carbon dioxide 
emissions (including actions focusing on shifti ng road freight to more sustainable and 
efficient transport modes over 300 km). The measures will be delivered through a mix of grants, risk sharing instrument s (credit enhancement measures facilitating access to finance in 
particular for SMEs) and instruments combining grants with loans. (1) Improving sustainable use of transport infrastructure; 
(2) Improving sustainability and environmental e fficiency of multi-modal transport service 
operations (including urban fr eight delivery),  enhancing cooperation between transport 
service providers; 
(3) Improving the technical interoperability and deployment of eco-innovative transport 
services or of new combinations of  proven existing transport services; 
(4) Development and deployment of ITS and tr affic management systems, including the 
establishment of relevant govern ance structures and services; 
(5) Stimulating resource and carbon efficiency and improving sustainability of individual 
transport modes, notably in the fields of vehicle traction, technological improvements of 
the existing fleets/facilities, driving/steaming, systems and operations planning, resource 
sharing and cooperation; 
(6) Education and training: development of human  resources for efficient management of 
supply chains; 
(7) Horizontal measures: analysing, providing info rmation and monitoring related to markets, 
awareness raising, fleet characteristics and performance, administrative requirements and 
human resources 
Implementation of the above mentioned measures sh all be consistent with the state-of-the-art 
technological developments and deployments, notably aiming at: 
(1) Enabling the decarbonisation of transport through tr ansition to alternative transportation 
technologies; 
(2) Improving operation, accessibility, interoperabi lity, multimodality, and efficiency of the 
network; 
(3) Supporting the infrastructure-vehicle in terface and on-board equipment, which 
encompasses all required telematics; 
Promoting measures to reduce external costs,  such as pollution of any kind including noise, 
congestion, health damage; 
 
Ex-post/Final evaluation of the Trans- European Transport Network Multiannual 
Indicative Programme 2001- 2006 Final Report, Deloitte consulting SCRL
116, European 
Commission  November 2007  
Findings.  According to the study, the downside was the tendency of mature projects with high 
national commitment to self-select. These were frequently projects wh ich would often have 
proceeded in any event, though not necessarily qu ite as fast. The report concluded that the 
Commission could reduce the rate of funding  for such projects and still retain political 
leverage, while at the same time freeing funds for projects where the European interest is 
greater than the national interest. These are ty pically cross-border projects in the broadest 
                                                 
116 http://ec.europa.eu/trans port/evaluations/doc/2007_tent_t_mip_ex_post.pdf 
 95sense of the word. This recommendation formed  a key component of the revised financial 
regulations where greater emphasis is place on cross-border funding. 
Also, the report identified that the MIP was not effective in achieving its objective of 
encouraging public-private partnerships . It sited the instability of the management 
procedures over the life of the MIP that affected the effectiveness, efficiency and relevance of 
the programme. Minimising the administrative burden and the need to demand accountability 
and transparency were also key recommendations. Nevertheless, the report did conclude that 
the MIP funding did go to projects which ha d a socio-economic impact, particularly at 
national level. 
Recommendations   
Regarding objectives and funding rates : 
- The primary objective of the MIP should be to  fund projects of high European interest, 
which will fill missing links or eliminate bottlenecks; - the rate at which studies for projects of high European interest and low national interest is 
funded be increased; - the rates at which investment projects are funded be modified, with projects of high 
European interest and low national commitment being eligible for grants of 30% and other 
projects be restricted to grants of 5% of total eligible cost; 
- the TEN-T coordinators be asked to define wh ich are the projects of high European interest 
and low national commitment. 
Regarding PPPs : 
- Encouragement of Public-Private  Partnerships (PPP) should c ontinue to be an objective, 
and; - the European Commission should collect a nd disseminate in a structured manner 
information on best practice in transport infras tructure PPP or other instruments designed in 
order to facilitate access to priv ate sources of financi ng, such as the EIB lo an guarantee or the 
risk capital facility; - the financing rate be increased for studies on the suitability of invest ment projects for PPP; 
- the financing rate be 30% for any project financed by a PPP. 
Regarding procedures : 
- A revision of the MIP Framework Decision in  order to redistribute funds likely to be 
underutilised be made automatic after four year s, and that any other revisions be announced 
six months in advance. 
 
Other studies or documents quoted or referred to   
Atkins Management Consultancy, "Assessm ent on a Communication from the European 
Commission designed to promot e the development of a rail freight-orientated network", 
December 2006 
Deloitte consulting SCRL, "Ex-post/Final ev aluation of the Trans-European Transport 
Network Multiannual Indicative Programme 2001-2006", Final Report, November 2007 
ECORYS Transport Consultants, "Ex-ante ev aluation and Impact Assessment of the TEN-T 
Multiannual Programme 2007-2013", 22 October 2007  
European Commission, "White Paper: Roadma p to a Single European Transport Area – 
Towards a competitive and resource efficien t transport system", COM/2011/0144, 28 March 
2011 
 96European Commission, "Staff Wo rking Document: Accompanying the White Paper - Roadmap 
to a Single European Transport Area – Towa rds a competitive and resource efficient 
transport system", SEC/2011/0391, 28 March 2011 
European Commission, "Impact Assessment: Acco mpanying the White Paper - Roadmap to a 
Single European Transport Area – Towards a competitive and resource efficient transport 
system", SEC(2011) 0358, 28 March 2011 
European Commission, "The New Trans-Europ ean Transport Network Policy Planning and 
implementation issues", Staff Worki ng Document, SEC(2011) 101, 19 January 2011 
European Commission, DG MOVE, "TEN-T Priori ty Projects 2010: A Detailed analysis", 
December 2010  
European Commission, “Consultation on the Fu ture Trans-European Transport Network 
Policy”, Staff Working Document, COM(2010) 212 , 4 May 2010 
European Commission, "TEN-T policy review: background papers", Staff Working Document, 
SEC(2010) 613, 11 June 2010. 
European Commission, DG MOVE, "Drawing up th e EU Core network", TEN-T Days Final 
report, Zaragoza, June 2010 
European Commission, "TEN-T: A policy review - Towards a better integr ated trans-European 
transport network at the service of the comm on transport policy", Green Paper, COM(2009) 
44 , 4 February 2009 
European Parliament, "The Impact of Trans-European Networks on Cohesion and 
Employment", June 2006 
 
 
BROADBAND AND DIGI TAL INFRASTRUCTURE  
 Conclusion of ex-post evaluation studies: 
The conclusions from the limited set of evaluati ons of existing instrume nts in the area of 
broadband and service infrastr uctures are as follows: 
• A programme from the previous period, the e-TEN
117 (2001-2006), supported deployment 
of trans-European e-services in the public interest. The programme covered the following 
themes: eGovernment, eHealth, eInclusion, eL earning, and services for SMEs. The e-TEN 
program evaluation118 indicated that the programme made considerable progress in 
involving stakeholders from New Member  States, SMEs and public bodies. It was 
concluded, that their particip ation strongly favoured the furt her deployment and uptake of 
project outputs at a pan-European level and the competitive health of markets for these 
and related services. 
• The final evaluation119 of the Safer Internet Plus Pr ogramme (2005-2008) concluded that 
the programme contributed to achieving a safe r Internet through a range of interventions 
and produced a significant impact and influence. The programme has managed to 
                                                 
117 http://ec.europa.eu/information_society/ac tivities/eten/library/abou t/intro/index_en.htm 
118 http://ec.europa.eu/dgs/information_society/evaluation/studies/s2006_02/index_en.htm 
119 http://ec.europa.eu/information_society/activities/sip/docs/prog_evaluation/report_sip_en_2005_2008.pdf 
 97successfully ensure that the th emes and actions are relevant to the dynamic social and 
technological environment within which it operates.  
• The report on the final evaluation of the eC ontentplus programme found that Europeana 
contributed to creating better conditions fo r accessing, using, re-using and exploiting 
digital material.  
• The Interim Evaluation of the Ambien t-Assisted Living Joint Programme120 concluded 
that the market for ICT for the elderly is very  fragmented. In order to  scale up successful 
solutions, with the aim of improving quality of life and saving care costs, what is needed 
is systems integration of services and t echnology. Technology deployment clearly relies 
on the availability of appropriate infrastruc tures, both physically (broadband availability) 
and in terms of cross-boarde r public and private services. 
• For the use of the financial instruments, th e Mid-Term Evaluation of the Risk-Sharing 
Finance Facility, completed by a group of independent experts in July 2010, 121  praised 
the use of Financial Instruments in addition to grants, and evaluated the intervention as 
highly efficient and effective, and "havi ng dramatically expanded the financing".  
• A 2006 ISTAG report points out that Europe has a major opportunity to take advantage of 
the paradigm shift in the content industry brought by broadband networks and strengthen 
its position in the digital media sector. The report states “Europe has major technology 
assets here: a strong broadband infrastructure, leadership in mobile  communications, and a 
good position in broadcast-multicast convergen ce are all key building blocks through 
which to capitalise on the potential of  rich-content and related services”122. 
• The Second Interim Evaluation of the 7th Framework Programme repor ted that  the strong 
push for innovation implemented in FP7 refl ects the evolution in European policy 
thinking and the effects of the technology and market trends  in the global ICT sector, 
While industry participants perceived high comm ercial risks for their research activities, 
especially the research stakeholders consider ed the technical risks more limited than in 
FP6. These stakeholders pointed out that too much reliance on i ndustry input for the 
definition of the research priorities might  lead to a focus on ‘tomorrow’ and not 
sufficiently on ‘the day after tomorrow’. 
 In conclusion, the limited number of evaluations available show that the interventions in areas 
of network and service infrastructures have b een beneficial to Europe as a whole. The 
interventions have been enhanced by the lesso ns learned from the previous programmes and 
have the potential to produce stronger impact s and considerable European added value. 
Nevertheless, as the evaluations show, there have been some difficulties in harnessing the whole potential, for example in ab sorption of the structural funds
123. 
 
                                                 
120 Unlocking Innovation in Ageing Well. Interim Evaluation of the Ambient Assisted Living Joint Programme, 
December 2010. 
121 http://ec.europa.eu/research/e valuations/index_en.cfm?pg=rsff 
122 “Shaping Europe’s Future through ICT”, Report from the Information Society Technologies Advisory Group 
(ISTAG), 2006 
123 See for example: Nagy, G., Fekó, A., Kulisiewicz T., (2011). The role of broadband developments in the 
Eastern EU Member States. Jaksa R. (ed.), International Center for Economic Growth (ICEG EC). OISTU 
Report, JRC-IPTS, Sevilla, (Forthcoming)  
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 104ANNEX 3 
ASSESSMENT OF IMPACTS OF CREATING THE CEF 
1. INTRODUCTION  
As a complement to the analysis of impacts presented in Part 5 of the Impact Assessment 
Report, the purpose of this Annex is to assess the impacts of creating the Connecting Europe 
Facility (CEF). It will do so by discussing a nd comparing the impacts of creating the Creating 
the CEF against the Reference scenario124.  
The Impact Assessment Report has, following a pre-screening, retained several options 
pertaining to the functioning of the CEF, which will be assessed and compared in the Impact 
Assessment Report.  
In this annex, the preconditions of the CEF, cont ained in all of the reta ined options mentioned 
above, will be preliminarily asse ssed against the Reference scenar io with a view to isolating 
the impacts of creating the CEF, which are e xpected to be significant compared to the 
Reference scenario.  
This preliminary assessment will allow focussi ng Part 5 of the CEF IA on the comparison 
between the retained options of  the CEF on the basis of their own merits, without having to 
artificially isolate the impact stemming from  the creation of the CEF compared to the 
Reference scenario. 
The pre-conditions of the CEF are: The amou nt of € 50 bn (see table below detailed the 
amount and comparing with the reference scenar io), the alignment of EU funding instruments 
within sectors including also market based in struments, and a more centralised management 
of the CEF125. 
 
Reference scenario CEF 
- € 155 million for Energy 
 - € 9.1 billion for energy priority 
infrastructure 
- € 8 billion for TEN-T and € 43 billion for 
transport projects in Cohesion countries 
 - € 21.7 billion + € 10 billion earmarked for 
Cohesion countries for Transport Core 
Network under the rules of the CEF. (€ 24 
Billion for transport projects in the Cohesion 
fund) 
- € 2300 million for ICT physical 
infrastructure through cohesion funds - € 9.2 billion for ICT projects 
It this combination of market-b ased and direct fina ncial support made available at EU level 
that can provide the flexibility and tailor made support to address specific project risks 
necessary for the different network industries.  
                                                 
124 The reference scenario is detaile d in section 2.4 of the CEF IA 
125 See Chapter 4 of he Impact Assessment Report for a thorough description of the policy options 
 105Sector/CEF Transport Energy ICT 
Grants Grants to support 
construction costs 
and preparatory 
studies Grants to support 
construction costs 
and preparatory 
studies  Grants to support 
construction costs 
and preparatory 
studies 
Risk sharing 
instruments Project bond credit 
enhancement or 
guarantees (of LGTT 
type)  Project bond credit 
enhancement or 
guarantees (up to 5% 
of energy envelope) Project bond credit 
enhancement or 
guarantees 
Risk capital 
instruments Equity support or 
seed capital (of 
Marguerite type) Equity support or 
seed capital  Equity support or 
seed capital 
 
The following provides an assessmen t of the economic, social a nd environmental impacts that 
are proportionate to the nature  and purpose of the Impact Asse ssment. The analysis of these 
impacts is derived from a qualitative analysis and originates from Commission working documents and impacts assessments produced by the three lead Directorate Generals involved 
in the work of this Impact Assessment. 
2. ECONOMIC IMPACTS  
The economic impacts of creati ng the CEF compared to the Re ference scenario are assessed 
in two steps. First of all, the creation of the CEF itself, and more so by determining optimal rules for the functioning of the CEF, is likel y to have major impacts on industries. Secondly, 
the network effects induced by th e massive investments will e ngender important externalities 
for the European economy as a whole. 
The main difference between the impacts of cr eating the CEF and the reference scenario will 
be derived from the level of investments triggered by the new f unding available in the 
Connecting Europe Facility. 
2.1. Impacts on the level of investments 
With € 50 billion to be spent in the developmen t of cross-border infrastructures and services, 
the EU budget available for infrastructure wi ll undergo a major increase . A possible risk in 
this regard would be a crowding out of other investments sources  in infrastructure, such as 
local and national public funding and private investments.  
This risk has to be seen against the prelimin ary estimation of the Commi ssion of  investment 
needs of between €1.5 trillion a nd €2 trillion in total for the three sectors. From now until 
2020, €550 billion will be needed for the implem entation of the Trans-European Transport 
Network (TEN-T) programme, of which €215 b illion is for the removal of the main 
bottlenecks in the so called tr ansport "core network". In the energy sector, public and private 
entities in the Member States will need to spend around €400 billion on distribution networks 
and smart grids, another €200 billion on transm ission networks and storage as well as €500 
billion to upgrade and build new generation capacity between now a nd 2020. Finally, between 
 106€180-270 billion in capital investment is required to  bring fast and ultra-fast broadband to all 
households by 2020. 
In total, the € 50 billion proposed under the Connecting Europe Facility only cover a small 
amount of the investments needs identified. Fo r instance, the € 31.7 billion allocated to 
transport represent less than 15% of the invest ments needs identified for the removal of the 
main bottlenecks only. Moreover, the funds ava ilable under the CEF will be made available 
primarily for projects with high European adde d value, often of cros s-border nature, which 
are projects for which Member States and pr ivate investors are not willing to invest.  
Therefore, the funds available under CEF will not  crowd out other sources of funding. On the 
contrary, they are likely to favour the crow ding in of investments by attracting investors 
towards new projects. There are two reasons for this: 
Firstly, the increase in the available budget for in frastructure will allow the EU to provide co-
funding to an identified pipeline of project s of high EU added value (energy priority 
corridors, transport core networ k corridors and broadband infr astructure corridors). These 
projects were not financed by me mber states and local authorit ies in the previous period due 
to the high costs and because of the predominan t European dimension of these projects. For 
instance, some of the projects  have higher regional than na tional expected benefits and 
therefore are not commercially viab le or a priority fo r national funding. This  is, for instance, 
the case of a gas storage or L NG terminal serving the needs of several Member States or of 
interconnection projects where costs are allocated asymmetri cally between participating 
countries. This is also the case for a project su ch as the Brenner Base Tunnel between Austria 
and Italy, which would not have been impl emented without the support of EU funding. 
Secondly, the availability of new innovative financing instruments, including EU project 
bonds, in order to attract private debt and equity  capital, would allow fo r the pooling of assets 
to improve the risk profile and lower the costs of  financing for future infrastructure portfolios. 
With a growing number of complex and cross-bor der projects of European importance, well 
designed equity or debt instrument s would be likely to assist pr ivate investors in facilitating 
access to equity and/or debt finance, reducing th e cost of capital, ad apting lending conditions 
to better match project cash flows and facilitat ing project finance structuring through standard 
equity and debt instruments. It is also essential to note that such form of support would come 
at a lower expense to the pub lic budget (higher leverage)126. 
Therefore, the important increase of EU fundi ng will contribute to an even more important 
increase of the financing coming from other sour ces, especially from th e private sector. With 
a better alignment of the sector al funding instruments with the pol icies, and with an increased 
use of innovative financing, th e leverage of EU funding will be improved. In the field of 
trans-European Network, the TEN-T program me allowed to finance € 41.619 billion of 
projects with €7.081 billion of funding (on proj ects selected for funding on the period 2007 -
2009)127. On the side of innovative financial inst ruments, € 400 millions  of LGTT financing 
has contributed to € 1 0.584 billion of projects128, with a multiplying effect of 26.5. By 
                                                 
126  Market based/innovative instrume nts are characterised by a higher le verage (in comparison to grants) 
and their potential to generate revenue for the body that provides them (unlike grants, they do not come 
for free) 
 
127 Figures from the TEN-T Executive Agency implementation report 
128 LGTT mid-term review, EIB, July 2011 
 107applying the same leverage effect to the € 21.7 billion allocated to tr ansport through the CEF 
(not including the € 10 billion earmarked in the Cohesion fund for Cohesion countries), the 
level of investments triggered by the CEF in the field of transport would amount to about 
€150 billion. The leverage effect is however likely to be higher due to the new innovative 
financial instruments, co-funding rates and implementation tools. 
The increase of EU funding for infrastructu re with high European Added Value will 
accelerate the development of energy, transport a nd digital infrastructure across Europe. This 
accelerated implementation of the “bac kbone of the European Single Market”129 will have 
major impacts on the industry using these infras tructures, but also on the European economy 
taken as a whole130. 
The Europe 2020 strategy underlines also that meeting the energy and climate goals could 
result in € 60 billion less in oil and gas im ports by 2020 of financial savings and benefits for 
energy security.  
2.2. Impacts on the industry 
As identified in the problem definition, in the reference scenario market failures prevent key 
infrastructure of high EU added value to be  realised, such as cross-border connections, 
hindering the completion of the European Single Market.  
The creation of the CEF however is likely to ac celerated the implementation of infrastructure 
and create network effects to the benefits of the users. 
2.2.1.  impacts on the energy sector 
Concerning  electricity, the deployment of infrast ructure to meet our energy and climate 
targets will allow for the large-scale deploymen t of renewable energies, the optimisation of 
transmission at EU level rather than only at na tional rather than EU level, thus leading to 
greater cost and resource efficiency. It will al so help realising complex projects such as 
offshore grids and cross-border interconnectors. Transmission bo ttlenecks and will therefore 
be reduced, as well as the price differences between Member States, thanks to a better 
integration in a single electricity market. Th e new infrastructure will also foster the 
implementation of smart grids, leading to a better integration of an increasing share of renewables and an increased integration and op eration of grids at Eu ropean-level. In the 
longer term, smart grids will also contribute to  price reductions on the electricity market by 
increasing transparency of supply and de mand, hence reducing congestions, optimising 
system flows and providing the information n eeded for dynamic pricing. The French regulator 
CRE has estimated that with the implementa tion of smart metering the supplier switch 
capability for households will increase by a factor of 10 (50% instead of 5%). 
As for gas, the development of the necessary North-South interconnections in the priority 
corridors in Central West and Eastern Europe will strengthen the resilience of the gas network, improve market integrat ion and competition, leading to greater choice to consumers, 
                                                
 
129 Single Market act (COM (2011) 0206 
130 Networks and smart grids are esse ntial to achieve the targets by 2020. Economic benefits from greater 
integration of the European energy market are estimated at 0.6% to 0.8% GDP. Meeting the EU's objective of 
20% of renewable sources of energy alone implies a job creation potential of more than 600 000 jobs in the EU. Delivering on the 20% energy efficiency target over 1 million new jobs and new energy services would be 
created. 
 108decrease the probability of supply shorta ges or supply disruptio ns and enhance the 
possibilities to mitigate actual supply disrupti ons, in a context of decreasing domestic 
production (all over Europe) and higher import dependency. Linking isolated regions, like the 
Baltics to the EU gas market, will decrease the dependency from only a few or a single 
source. The development of a new Southern gas corridor will boost diversification of sources, 
routes and suppliers.    
Concerning CO2 transporta tion, EU funding under the CE F would allow significant 
investment in networks and gi ve rise to a coordinated deve lopment of the infrastructure, 
fostering market integration which will help reducing energy prices in the long term. Under 
the reference scenario, the absence of suffic ient transportation capacity and lack of 
interconnection between CO2 produc ing sites in one Member Stat e and CO2 storage sites in 
another Member State would slow down the commercial deployment of CCS technologies, 
again maintaining higher CO2 emissions. 
 
2.2.2.  impact on transport 
The accelerated implementation of  the trans-European transport Core Network corridors will 
favour more adequate transport infrastructure coverage of the Uni on, modal-shift and co-
modality. It should thus support a concentratio n of trans-national tr affic and long-distance 
flows – both for freight and passengers – and, as  a result, a higher resource efficiency of 
infrastructure use. Innovative information and ma nagement systems, that will form part of the 
network, would provide support fo r logistic functions, inter-moda l integration and sustainable 
operation in order to establish competitive door-to-door (or, at least, terminal-to-terminal) 
transport chains, according to the needs of the users. The efficiency of the whole transport 
system would be, as a result, improved, with an  important reduction of congestion and travel 
times. 
As explained in the OECD 2002 report on the Impact of Trans port Infrastructure Investment 
on Regional development, the principle underlying th e assessment of benefits associated with 
travel time is that transport system users’ economic decisions regarding the location of their homes, businesses, mode choice or route foll owed to get to a specific destination and 
behaviour in traffic, reflect thei r valuation of travel time. Time  savings are benefits resulting 
from an improvement in the efficiency of th e transport system (shor tened routes, increased 
traffic fluidity, better access to connection serv ices, etc.). For freight carriers, time savings 
will take the form of money savi ngs given that reductions in trav el time reduce hourly costs of 
transport services (e.g. drivers’ wages, insura nce, etc.) for shippers. For consignees, travel 
time savings may be converted into reduced i nventory costs. On the other hand, for passenger 
transportation, travel time savings norm ally bring no direct monetary reward. 
More efficient infrastructure in isolation ma y give rise to rebound ef fects. Therefore, as 
concluded in the recent Transport White Paper a nd its Impact Assessment, infrastructure in 
combination with other measures, notably pr icing and taxation, are required to reach the 
overall target of the transpor t sector of reducing CO2 emi ssions by 60% compared to 1990 
levels. 
2.2.3.  impacts on digital users 
 109Broadband infrastructure supports the developmen t of ICT services a nd is a general purpose 
technology. The benefits from the roll out of fa st broadband will theref ore not be limited to a 
single category of stakeholders, but will spill ov er to the European economy and society. The 
externalities mentioned in relation to the Digital single Market can be applied to investment in 
broadband as well. Further externalities releva nt for broadband investment may refer to: 
- Economic Efficiency: transaction costs of economic ope rators are reduced by broadband. 
This makes it easier to conduct online business and attract fo reign investments to certain 
locations131, the effect of this can spill over othe r geographical areas. Broadband development 
is already supporting a wide a nd increasing number of dedicat ed business, government and 
leisure applications and services. Bringing broadband to new areas means expanding the 
market for e-Commerce (which is a European one): more consumers will be able to purchase on-line, thus enlarging the market base, with a final impact on GDP
132.  
- Network Externality: the more users that benefit fr om high-speed broadband, the more 
visible and effective are the above impacts. The benefits of broa dband extend across many 
different social groups in many different ways, reinforcing each other. These supplementary 
gains extend well-beyond the telecommunications  sector. Technological progress in remote 
care, which directly lowers health care cost s, postpones or elim inates the need for 
institutionalised care, and makes it possible to  increase workforce participation from home. 
As an example, if more people are connected  through broadband to th e network, the network 
effect will decrease the average cost of eHealth  infrastructure, shortening payback times of 
investment. 
The results from investment in broadband are certainly worth the cos t: a study from Booz & 
Co. (2009) found that a ten per cent higher broadband penetration in any year is correlated 
with a 1.5 per cent increase in labour pr oductivity over the following five years133. 
2.2.4.  Administrative burden 
The alignment of the EU funding instruments on the policy priority set for each sector is a 
major feature of the Connecting Europe Faci lity. It will greatly simplify the funding 
framework for stakeholders when applying for EU  funds for their projects of high European 
added value. 
In the field of transport for instance, the pr ojects aiming at developing parts of the Core 
Network Corridors will ask for funding under on e single EU budget heading, not depending 
whether the project would be situated in countries covere d by Cohesion funds or not.  
Also a more centralised management134, which is envisaged by CEF, will reduce the 
administrative burden at the EU level by ensuri ng a simplified institutional architecture.  
                                                 
131 In October 2008, the Irish Management Institute (IMI), together with the National Irish Bank, published the results of its 
tenth survey of multinational companies located in Ireland. Compared to three years ago, the strategic importance of 
broadband availability moved up twelve posit ions in the ranking from 18th to 6th. 
132 According to estimates of McKinsey & Company 132 a 10% increase in broa dband household penetration delivers a boost 
to a country’s GDP that ranges from 0.1 percent to 1.4 percent 
133 Roman Friedrich, Karim Sa bbagh, Bahjat El-Darwiche, and Milind Si ngh (2009): Digital Highways. The Role of 
Government in 21st Century Infrastructure. Booz & Company. 
134 Centralised management will also better promote and ensure coherent implementation of (common) transport 
policy measures across Europe (e.g. with regards to chargi ng, security, safety in tunnels, interoperability, etc.). 
Centralised management will allow for almost 'real time' monitoring of projects/programme performance 
 1102.3. General economic impacts 
2.3.1.  Support to the Single Market 
A truly integrated Single Mark et, as the Monti Report indicated135, would not be possible 
without a seamless connection be tween all its component parts. Roads and other transport 
connections, electricity grids and broadband netw orks are vital for a functioning, integrated 
economic area and for its social and terr itorial cohesion. The development of the 
infrastructure of high European added-value wi ll have positive effects on the free movement 
of goods and services, market segmentati on, accessibility, and territorial cohesion. 
The single market is generally considered one of the main European achievements of the last 
50 years. In the European single market fr eedom of movement of the production factors 
translates into better re source allocation a nd ultimately increases tota l factor productivity. As 
explained in the Single Market Act, energy, tr ansport and broadband infr astructure networks 
are essential for the Single Market. Transport a nd broadband networks increase the level of 
interconnectivity between the European market s for most households and enterprises that 
have access to it. "Europe's energy infrastruc ture is the central ne rvous system of our 
economy"136. 
For instance, the rationale for European action in the making of the Eu ropean digital single 
market can be summarised by the positive extern alities that a single market has on all the 
Member States, and not only in those wh ere certain policy m easures are taken.  
Some examples of positive externalities are:  - The Innovation Diffusion Externality New and more innovative services emerge that will 
benefit a growing number of users, thus ultimat ely improving the overall quality of life. From 
the infrastructure side, broadba nd coverage and penetration rate s correlate positively with the 
“e-Readiness” of a given count ry, or the capacity of a nati on’s consumers, businesses and 
government(s) to reap the full benefits of the Information Society
137. 
- Competition externality:  a digital Single market means th at business and digital content 
creators are exposed to a much higher level of  competition than in a national digital market. 
As some of the stakeholders may successfu lly oppose resistance at the national level, 
European action is deemed to be more effective to prevent market fragmentation. In a European digital single market eCommerce can be exploited to the full and most competitive 
companies will be the ones benefiting the most from it. They will experience a rise in 
customers and will be able to exploit better economies of scale. Consumers will benefit as 
they will have the possibility to choose cheaper products. 
- Specialisation:  the clustering of production factors wi ll trigger in the long run further 
specialisation of the EU industry into worl dwide competitive clusters. Economies of scope 
will also occur in this case. 
                                                                                                                                                        
 
(beyond information on 'earmarked funds)'; this is importa nt in assessing evolving priorities (e.g. in the case of 
the European Economic Recovery Plan). 
135 " A new Strategy for the Single Market at the service of Europe's economy and society ". Report by Mario Monti to 
the President of the European Co mmission, 9 May 2010, page 64-65. 
136 COM (2010) 277 final, Communicati on "Energy infrastructure priorities for 2020 and beyond - A Blueprint 
for an integrated European energy network" 
137 A positive correlation is evident with  the “2009 e-Readiness Rankings” compiled by The Economist’s Intelligence Unit 
(EIU) 
 1112.3.2.  Economic Growth 
High performing infrastructure can be growth enabler by enhancing the functioning of the 
European Single market. According to econo mic literature, investment in network 
infrastructure can boost long-term economic growth138. However, it has to be borne in mind 
that not all studies converged towards this conclusi on, since some are inconclusive139. This 
Impact Assessment assumed that infrastructure investment can have a positive effect on growth that goes beyond the effect of the capita l stock, due to economies of scale, the 
existence of network externalities and competition enhancing effects.
140 Studies have shown 
that relatively large improvements in infrastructu re (and accessibility) ca n translate into gains 
in economic performance, though limited.141  
Each infrastructure network sector brings its won contribution to the European economic 
growth. For instance, Europe's future eco nomic growth and stab ility depend on the 
availability of appropriate en ergy infrastructure ensuring the achievement of the EU energy 
and climate goals, cost-efficient functioning of the internal energy market and security of 
supply. 
In parallel, since ICT infrastructure serves  as a General Purpos e Technology enabler, 
infrastructure diffusion positively affects Tota l Factor Productivity, capital accumulation, and 
ultimately, GDP growth. This mechanism of tran smission is not only limited to region where 
broadband is deployed. Productivity and competitiv eness gains spread out from the personal 
to the corporate and country levels. Schumpete rian cycles of creativ e destruction may be 
triggered by innovations coming from  formerly unconnected regions.  
For instance, the effectiveness of eGovernment se rvices can bring a lot to the economy. As an 
example, the eGEP project reports have documented through economic modelling and case 
studies, the both actual and potential effi ciency gains (Codagnone and Boccardelli 2006; 
Corsi et al 2006). These reports142 illustrate the contribution that the full take-up of 
eGovernment can make to GDP growth  and to private sector productivity143. 
This argument is similar for transport network, since a more integrated and efficient transport 
system enabling the free movement of pe ople and goods across th e EU and with its 
neighbours is expected to cont ribute to economic growth, as  it would allow for a more 
efficient use of resources. The EU economy sh ould also benefit from the increase in the 
capacity and performance of the infrastructure resulting from the elimination of bottlenecks 
and addition of missing links.  
Moreover, the building of new tr ansport, energy or broadband infrastructure would have an 
important impact on the construction sector; some in frastructure projects like high-speed rail 
provide several years of works for building comp anies and related businesses. In addition, the 
                                                 
138 See for example the World Bank Report—Connecting to Compete 2010 Trade Logistics in the Global 
Economy  -The Logistical Performance Index and its Indicators 
139 See for instance the following summary of studies: 
http://www.dtu.dk/upload/institutter/dtu%20transport/r apporter/rap_7_2010_infrastruktur%20og%20danmarks%
20internationale%20konkurrenceevne.pdf 
140Infrastructure and Growth: Empirical Evidence , OECD Economics Department Working Paper No. 685, 
March 2009 
141 As shown by the ECORYS report, using the SASI model. 
142 See eGEP final deliverab le – Economic Model p.6 
http://82.187.13.175/eGEP/Stati c/E_Interim.asp?ST=0&page=1 
 112promotion of intelligent transport systems or smart grids should foster research and 
innovation for new technologies and create new business cases. Finally, the improvement of 
the efficiency of the transport and energy systems and the reduction of prices and 
uncertainties in the delivery would improve the economic conditions for both transport businesses and enterprises heavily depe nding on transport for their activity. 
3. SOCIAL IMPACTS  
The social impacts of the accelerated development of infrastructure are wide and vary from 
sector to sector. However, many common aspects can be found for job creation or 
accessibility and territorial cohesion. 
3.1. Employment and jobs 
According to the economic literature, infrastructure investments help boost economic growth, 
enhance trade and mobility of people and constitu te a highly effective engine of job creation. 
One recent study in the US showed that infras tructure investment spending creates about 
18,000 total jobs for every $1 billion in new inve stment spending, including direct, indirect 
and induced jobs144. Job creation is mainly related to infrastructure works, but it is also 
induced by the indirect economic effect of the use of the new infrastructure. Indeed, more 
investment creates the need for more employme nt in a first phase, notably in construction, 
mechanical engineering and business services. This in turn leads to higher incomes and 
household spending. Multiplier effects contribute in  a second phase to increased employment 
in consumer sectors such as retail, even if these effects can be delayed in time.  
The TEN-T guidelines Impact Assessment as well as the Impact Assessment accompanying 
the Communication "Energy infrastructure pr iorities for 2020 and beyond - A Blueprint for an 
integrated European energy network" have sh own important direct an d indirect impact of 
large investments in infrastructure. For instan ce, the E3ME model used  for the energy sector 
has calculated that the option leading to € 201.5 billion of investments in energy infrastructures would lead to a GDP increase of  0.9 points compared to the Business-as-usual 
scenario and to the creation of 774.000 ex tra jobs over the period 2011 - 2020. The TEN-T 
Guidelines Impact Assessment has shown that  an Option in which € 215 billion would be 
invested in European transport infrastructure with high added-value would lead to the creation 
of a minimum of 2.92 million jobs, i.e 899.000 more  than with a business-as-usual scenario 
with € 150 billion of investment s. Long-term job creation is ve ry difficult to calculate, but 
case studies in the field of transport men tioned by the OECD 2020 Report on the Impact of 
Transport Infrastructure Investment on Regiona l Development have shown the positive results 
of infrastructure development on long-term job creation. However, in the absence of clear 
parameters explaining these results, the impact of the proposed policy options on long-term employment effect cannot be compared for the purpose of this document. 
                                                                                                                                                        
 
143 An online procedure to register a new company that takes 2 weeks rather than the previous 2 to 3 months was introduced 
by the Danish Commerce and Companies Agency: http://www.eogs.dk/sw21252.asp 
144How Infrastructure Investments Support the U.S. Economy: Employment, Productivity and Growth, Political 
Economy Research Institute, January 2009. 
 1133.2. Accessibility and territorial cohesion 
The three infrastructures networ ks have an important impact in term of accessibility and 
territorial cohesion. As explaine d in the Fifth Cohesion Report, "regional competitiveness and 
development prospects are also affected by in frastructure endowment, such as transport or 
telecommunication networks. As indicated by many studies, the provision of public 
infrastructure has a positive and large effect on productivity and growth".  
Improved transport links between regions and c ountries facilitate access to EU-wide markets, 
which is likely to create new opportunities for growth. The Cohesion Repor t also explain that 
Access to high-speed ICT networ ks is increasingly considered  to be a key factor of 
competitiveness, as determining the capacity to compete in, and benefit from, the global market. It is also a major de terminant of the facility to adopt new technologies, which is 
central to the growth of less developed regions. At the same time, it is critical to the 
development of eservices, whether public or priv ate. Access to the energy system is also of 
course essential for the de velopment of businesses.  
As an example, in the TENconnect II study cal culating the impacts of the development of 
different transport infrastructure scenarios, th e comparison of the Business-As-Usual scenario 
(seen on the map below as PP) with the pr oposed CORE network (which represent an 
accelerated pace of investments with a focus on project of highest EU added-value) for 
Accessibility is given in the following map—hen ce the 'added value' of the CORE over-and-
above the currently programmed, fragmented network is shown.  
 114
 
Figure 1: Comparison of BAU with the proposed  CORE network for accessibility (horizon 2030) 
 
It should be noted here that funding would c ontinue for the Comprehensive Network through 
the Cohesion and Structural Funds (CSF), whic h would target projects of a national and/or 
regional interest. The impacts shown here in clude investment triggered by EU funding 
coming from the CEF but also EU funding fr om the Cohesion and Structural Funds. 
3.3. (some examples of ) Sector specific aspects 
3.3.1.  Quality of life due to eServices 
An improved coverage of the broadband network will lead in the development of eServices, 
of both public and private nature, that will enhance the citizens' quality of life. 
Increase in quality of life due to  access to eGovernment services.  The development of 
broadband also has downstream effects on public services. The European public sector holds 
enormous amounts of knowledge that needs to  be more easily accessible. The use of E-
government procedures has demonstrated an ability to generate savings for European 
companies through the reduction of administrativ e burdens. In addition, savings derived from 
the possibility of using broadband for in formation sharing among public services 
 115(eAdministration) have been even four times higher than savings at the interfaces between 
public administration and users. Other examples include, eSolutions, such as standardised and 
shared registration systems and data bases, e-portals to provide access to public services, 
digitalisation of financial ma nagement and tax administrati on, which all offer significant 
scope for efficiency savings.  
Increase in quality of life and side economic effects . Higher quality of life of European 
citizens is linked to the provision of these eSer vices. As an example the provision of eHealth 
services will not only reduce costs for acute hospitals, but there wi ll be positive economic 
effects due to the monetary value of QALY145 from prolonged life; or to the reduction in loss 
of productivity due to illness. eHealth also has a great potential in terms of fostering 
independent living which increase s quality of life for the elderl y but also generates savings 
compared to hospitalisation146. 
3.3.2.  Transport Safety 
For transport, investing in the infrastructure  does not only mean investments in the hard 
infrastructure, but also invest ments in the various modal intelligent transport systems (ITS) 
projects, such as European Railways Traffi c Management System (ERTMS), the Single 
European Sky Air Traffic Management Resear ch (SESAR), Vessel Traffic Management and 
River Information Services.  
As demonstrated by the evalua tion of the EasyWay project147, the coordinated deployment of 
ITS services on the trans-European road networ k) can have significant positive impacts. Thus, 
within the frame of EasyWay I, this has lead to injury accident savings of between 10% and 
20%, depending on the particular application, rising to approximately 60% on some safety 
critical roads sections.  
The results of the deployment of dynamic tra ffic and network management services in 
particular, successfully deployed by  European road operators to tackle disrupted traffic flows 
on strategic and critical secti ons of the TEN-T, have proved si gnificant on thos e parts of the 
network that suffer greater conge stion and accident rates. Positive impacts include increased 
capacity rates of up to 9% a nd a reduction in accidents of typically between 20% and 30%, 
but as high as 63% on part icular safety critical sections of the TEN-T. 
Therefore, the accelerated deployment of ITS (esp ecially for roads, where most of the hard 
infrastructure is built, but where ITS largely needs to be developed) will le ad to an increase in 
road safety. 
3.3.3.  Consumer access to energy 
The social impacts on consumers related to  the disruption of en ergy supplies can be 
significant148. When Russian supplies via Ukra ine were disrupted between 6th and 20th 
January 2009, EU Member States were depriv ed of 20% of their gas supplies (30% of 
                                                 
145 Quality Adjusted Life Years 
146 The Scottish West Lothian council independent living progra mme has succeeded in ensuring that elderly couples with 
severe impairments stay in their ow n homes. They have thus saved the public budget £84,000 on an annual basis. The 
standardisation of such services (through adequate institutiona l change and regulation) could produce important savings for 
the public budget. 
147 EasyWay – Synthesis of Project Evaluation Results 2007-2009, 15 February 2011.  
148 Supply disruptions happened in the light of political disturbances in tr ansit countries or transit disputes (e.g. for supplies 
from Russia through Ukraine or Belarus) but also due to technica l disruptions of production facilities or political situation i n 
producing countries, like e.g. the disruption of ga s supplies via Greenstream  (Libya-Italy) in 2011.   
 116imports) with important economic repercussions . The crisis affected a majority of EU 
Member States and non-EU countries in Centra l East and South-East Europe directly and 
indirectly, left households in th e cold for almost 2 weeks and also caused an estimated total 
economic damage of 1.6 billion Euros. The Ja nuary 2009 crisis put at evidence the lack of 
interconnection between the West ern and Central Eastern Member States of the EU. It is 
crucial that the internal gas market is sufficiently interconnected to meet any disruption of imports at any time and transport the gas to where it is needed.  
An accelerated investment in energy infrastr ucture, with better connections to producing 
countries and better inte rconnections between Member states , would not result only in lower 
prices for consumers as shown above, but would al so ensure that the risks of disruptions is 
reduced to a minimum. 
4. ENVIRONMENTAL IMPACTS  
The environmental impacts of infrastructure  are complex. On the one side, and it is 
particularly true for transport and energy, the building of new infrastructure may have adverse 
impacts on the land-use, on the flora and the fa una surrounding the new infrastructure. On the 
other, the development and design of new infrastructures is essential for the implementation of less polluting life-style. For instance, the deve lopment of smart energy grids will be crucial 
for the integration of renewables in the energy market; for transport, the development of electrified railways, inland waterways or electr icity refuelling power st ations along the roads 
will allow for the development of cleaner solutions for transport. 
On these issues, EU funding canno t act in isolation, but  it can do a lot, by  conditioning the EU 
funding with the highest environmental requir ements, which are of high EU added value, 
since Sustainable Growth is one of the main policy targets of the EU.  
4.1. impacts on land-use, flora and fauna 
As explained in the Impact Assessment of th e Transport White Paper, the greatest impact on 
other environmental resources would be caused by an increase in land use for infrastructure, 
generating increased pressure on biodiversity and ecosystem serv ices, due to direct damage 
linked to construction, habitat fragmentation and degradation, and disturbance. The situation 
is similar for energy, and in a more lim ited manner for broadband infrastructure. 
It must be noted here that, in accordance with existing EU legislation (mainly SEA 
directive
149, EIA directive150 Habitats directive151 and Water framework directive152) the 
Business-as-Usual scenario as well as the implementation of the CEF include the assessment of the strategic environmental impact at th e level of relevant pl ans and programmes by 
Member States, as well as the assessment of environmental effects at the level of individual 
projects of common interest. 
Major transport infrastructure projects may pos e serious threats to biodiversity and Natura 
2000 areas which were designated to protect the most endangered European species and 
habitat types. The negative impacts from tr ansport projects might result from physical 
                                                
 
149 Directive 2001/42/EC on the assessment of the effect s of certain plans and pr ogrammes on the environment 
150 Directive 85/337/EEC on the assessment of the effect s of certain public and private projects on the 
environment 
151 Directive 92/43/EEC on the conservation of natural habitats and of wild fauna and flora 
152 Directive 2000/60/EC establishing a framework for the Community action in the field of water policy  
 117reduction of natural habitats, landscape frag mentation, migration barriers, collision of 
vehicles with animals, emissions of noise and air pollutants, changes to the water regime and 
others. It is therefore necessary that all proj ects undertaken as part of  the TEN-Ts prove full 
compliance with EU environmental legislatio n, including Birds and Habitats Directives, 
before they are given a green  light for implementation.  
In order to enforce the environmental legislati on, Energy infrastructure projects might have to 
change their technology choice (e.g. from ove rhead line to underground cable or special 
measures for gas pipelines in order to be able to cross Natura 2000 sites; direct current instead 
of alternating current to reduce the size of power poles). Others  would have to change their 
routing or to adopt measures in order to prevent and mitigate the possible adverse effects on the environment or, if not possible, to compen sate negative impacts, in particular on the 
conservation objectives and inte grity of Natura 2000 sites, fo r example through investing in 
green infrastructure
153. 
4.2. impacts on climate change 
The limited negative impact of infrastructure bu ilding on land-use, flora and fauna has to be 
put in perspective with the huge positive impact  of infrastructure investments on Climate 
change. This point is valid for the three sectors. 
4.2.1.  Sector specific aspects 
For the energy  sector, according to the Reference scenario, non-delivery on the EU 
infrastructure priorities would limit the possibi lities to inject electricity from renewable154 
sources into the grid to reach final custom ers, hindering the achievement of the 20% 
renewable target and preventing CO2 emission re ductions, with the rela ted consequences on 
the climate and the environment155. The investments triggered by the funding under the 
Connecting Europe Facility will  have an important impact on this. The construction of 
electricity lines enables the large-scale deploym ent of renewable energies, with its positive 
impacts in terms of reduction of CO2 emissions.  
Similarly, the development of transportati on capacity and interconn ections between CO2 
producing sites in one Member State and CO2 st orage sites in another Member State would 
accelerate the uptake of CCS technologies, loweri ng CO2 emissions. In the Business-as-usual 
scenario, gas supply shortages or disruption due to lack of infrastructure or alternative sources 
(such as LNG or CNG) would on the one ha nd lower CO2 emissions under the Reference 
scenario, as less gas is consumed. On the ot her hand however, one can realistically assume 
                                                 
153 http://ec.europa.eu/environment/n ature/ecosystems/index_en.htm   
154 Concerning renewables, given the difficulties a nd shortcomings identified above for offshore grid 
development, it is estimated that a significant share of the 32 bn€ of investments needed for offshore connection 
infrastructure by 2020 will not be realised. As demons trated by KEMA and confir med by ENTSO-E, reaching 
the 20% renewables target in 2020 will therefore be im possible, given the important contribution expected from 
offshore wind (over 12% of total renewable electricity production in 2020 or about 20% of the additional 
renewables capacity to be installed between today and 2020). Concerning emissions, the Smart 2020 study 
estimates that global emissions could be reduced by 15% thanks to smart grids, mainly through their contribution to energy efficiency. 
155 This environmental impact analysis  is confirmed at the macro-level: cumulated CO2 emissions for the EU 
between 2010 and 2030 under the PRIMES baseline scenario (corresponding to BAU) are projected to be about 2,500 millions tons or over 3% higher than under the Reference scenario, where all necessary infrastructure is 
supposed to be operational. 
 118that gas would be replaced by other more emitting fossil fuels, typically oil or coal. The 
overall effect of insufficient gas infrastructure  can be assumed to be higher CO2 emissions. 
The development of new European Gas corridors (Projects 5 to 8 in the preliminary list of 
Priority Energy Corridors annexed to the MFF Communication) will reverse the trend. 
As for broadband  infrastructure, few studies can quan tify the particular benefits for the 
environment of high speed broadband.  The qualitat ive benefits that can be identified are, 
nevertheless: greater use of telecommuting, smar t grids and smart buildings which all benefit 
form enhanced deployment of high speed  broadband. In addition, broadband and on-board 
computers in lorries may allow logistics managers  to better coordinate and utilise trucks and 
enhance loads carried. Some quantifications156 have been made for the reduction in 
greenhouse gas emission in the US. The enha nced adoption and use of broadband could 
achieve a net reduction of one billion tons157 of greenhouse gas over 10 years.  If converted 
into energy saved this would constitute 11 per cent of annual U.S. oil imports. Again for the US, studies show
158 that use of smart grids may save  between 60 million and 480 million US 
tons of carbon emissions per year.  
In the field of transport , according to the bu siness-as-usual scenario of the Commission 
Communication "A Roadmap fo r moving to a competitive lo w carbon economy in 2050", EU 
transport's GHG emissions will increase by 60% to 70% in 2050 in comparison to the 1990 levels. In addition, a 50% reduction of emissions  in other sectors compared to 1990 would 
increase transport's share in total emissions  from 20% (current state) to 50% by 2050. The 
impact of the development of new infrastructu re on emissions and climate change depends on 
the modal shift induced by the development of infr astructure to alternative modes of transport 
and by the rebound effect (the  increase in traffic indu ced by the creation of new 
infrastructure), especially for road transport. 
By developing high-speed rail infrastructure, th ese services can replace flight services on 
medium distance, as it was the case for th e Bruxelles – Paris – London High Speed rail, part 
of Priority Project number 2.  
Increased use of renewable energy sources to power vehicles would be facilitated by the 
development of supporting infrastructure, such  as electrified railways and power supply 
stations (e.g. electricity /battery and hydrogen) along the road infrastructure.  Increased use of 
biofuels is also important for the further decarb onisation of transport, mostly in aviation and 
waterborne transport, where electri fication is not really an option.
159 
Energy efficiency is the other major contributo r to the decarbonisation of transport, as the 
technology scenario from the Impact Asse ssment on “Low-carbon economy 2050 roadmap" 
shows.160 Transport infrastructure can contribute to  increased energy efficiency of the 
transport system by reducing congestion, encouraging modal shift and co-modality towards more energy efficient transport modes/solutions
161 as well as supporting the development of 
innovative transport solutions. Nevertheless, as pointed out above, the impact of greener/more 
efficient infrastructure developm ent depends to an important exte nt also on external factors, 
                                                 
156 Fuhr and Pociask, 2007; Davidson, Santorelli and Kamber, 2009  
157 One US ton is approximately 907kg, so 1billion US tons would represent just over 900 billion kg. 
158 Davidson, Santorelli and Kamber, 2009  
159 Impact Assessment accompanying the “Low-carbon  economy 2050 roadmap", SEC(2011) 288 final.  
160 SEC(2011) 288 final 
 119such as the growth of th e share of renewable energy used to produce electricity162 and the 
rhythm of development and adoption of new technologies.163   
Whilst it is difficult to quantify impacts and co mpare effects on the local environment with 
the contribution of energy, tran sport and broadband infrastructure  to the prevention of climate 
change, it is expected that the overall balance of impacts is positive. In addition, the fight of 
climate change has positive effects on the preservation of biodiversity, as global warming could extinct certain species not adapted to higher temperatures. 
4.3. Impacts on polluting emissions 
The reasoning is similar for polluting emissions . Investing in modern infrastructures and 
combining it with other types of measures  (especially in the case of transport
164) and using the 
potential synergies between the sectors (such as  Intelligent transport systems for Roads and 
smart grids) will allow for the reducing of pollu ting emissions such as local air pollutants and 
noise. 
5. CONCLUSION  
Comparing the impacts of creating the CEF with the Reference scenario, taking into 
consideration the pre-conditions (see above) of the CEF included in all the retained policy 
options of the current Impact Assessment of th e CEF, it becomes evid ent that the CEF will 
contribute to significant se ctor benefits as well as to overall socio-economic and 
environmental benefits. 
The preliminary comparison has clearly made the case for the CEF. The Impact Assessment 
of the CEF will, on this basis, compare the retained options on their own merits, without 
risking any undue influence on impacts of the di fferent amounts of funding available in the 
CEF and in the Reference scenario.
                                                                                                                                                         
161 For instance by promoting electrified high-speed rail for passenger transport instead of aviation or by 
promoting electrified rail freight transport instead of road transport. 
162 The pathways for the decarbonisation of power generation will be analysed in the forthcoming Energy 
roadmap 2050. 
163 For instance, the average energy e fficiency of passenger cars in 1990 was 43.9 toe/Mpkm. By 2050,  this 
improves to 23.9 in the reference scenario and it is  further reduced to 13.6 toe/Mpkm in the Effective 
Technology scenario. This is achieved through gradual efficiency improvements of internal combustion engines and subsequently gradual hybridisation leading eventually to high penetration rates for electric propulsion 
vehicles (such as for example plug -in hybrids and el ectric vehicles). 
164 See impact Assessment accompanying the TEN-T Guidelines Proposal 
 120ANNEX 4 
 
Financial instruments under CEF165 
6. INTRODUCTION  
A common framework 
enhances economies of scale. The progressively increasing in terdependency between economic 
infrastructure projects, networ ks and sectors provides a good 
ground for the creation of an integr ated EU infrastructure funding 
framework which will enable economies of scale and a coherent approach as regards the financing of projects.  
Connecting Europe 
Facility is a 
transparent strategy 
which… 
 
 
 … provides certainty 
and… 
  
 
… has a huge 
potential to attract 
more private sector 
financing with… The Connecting Europe Facility provides the longe r-term plan 
ensuring that the EU priority pr ojects in energy, transport and ICT 
are developed and implemented in a timely and effective manner. A comprehensive strategy of prioritised opportunities of transport, energy and ICT projects, as proposed by the Commission on 29 
June 2011
166, has significant potential to attract more private sector 
financing and at the same time help to complete the internal market. The strategy including th e selection of projects is 
transparent thus ensuring a high level of certainty for all stakeholders. Within this strategy the setting of policy priorities, 
regulations, incentive schemes,  close co-ordination between 
stakeholders, information and awar eness campaigns are required to 
establish the overall framework conditions for infrastructure 
investments enforcing behavioural  changes amongst stakeholders 
and accelerating the pace of inte rvention. Grants and financial 
instruments, each of which under a di stinct set of financial rules, 
would be available in a centra lised and co-ordinated manner. 
… financial 
instruments… 
  
 
 … to be validated by a 
thorough assessment 
prior to their launch. Financial instruments are needed to reduce specific barriers that 
prevent the flow of debt and equ ity finance. Their main objective 
is to attract and facilitate private sector finance in the projects. At the same time, increased investment activity in infrastructure projects with the help of new initiatives stimulate the global 
development of post-crisis financia l markets, enhance the pace of 
the economic recovery and promote growth. 
This document gives an overview of  current financing volumes for 
infrastructure, highlights market imperfections, points to financing gaps and assesses the main modalities of potential future financial instruments for equity and debt . Thorough ex-ante assessment is 
required including negotiations with financial institutions such as the EIB in the next 12-18 months before any concrete and fully-fledged proposal can be made. 
 
                                                
 
165 This Annex consist of extracts of a document prepared by the Commission (DG ECFIN) in the context of the 
discussion on financing instruments for the CEF. 
166 COM(2011)500 A budget for Europe 2020 and the relevant Commission staff working papers. 
 1217. FINANCING OF INFRASTRUCTURE PROJECTS  
7.1. Financing volumes  
Public budgets fund 
EUR 120 billion per 
year which together… As regards financing of infrastr ucture investments, annual public 
sector financing amounts to around 1% of GDP, or around EUR 120 billion, which is also the a nnual average amount of the EU 
budget. Out of this, around 85% or EUR 95 billion is only in the transport sector, the remainder focu sing on the social sector such 
as schools and hospitals.  
…with the stimulus 
packages is no longer 
sustainable. While many governments have stepped in with stimulus packages  
for infrastructure projects, firs t, some of them are only of a 
temporary nature, second, this is  not a long-term sustainable way 
to support infrastructure and thir d, this support is no longer sound 
due to the significant deficits and sovereign debt levels. 
Multilateral and 
development banks are capital 
constrained.  Multilateral banks, state owned fi nancial institutions and export 
credit agencies will continue to play an important role in the 
provision of finance to infrastructu re projects. In addition, they are 
also an important source of skills for due diligence and expertise on deal structuring and procuremen t. However, these institutions 
might not have the capacity to continue the recent levels of 
activity. Below as an example an  overview of EIB's financing 
activity showing a scaling down of  financing volumes from 2011 
onwards due to capital considerations. 
EIB financing for transport and en ergy infrastructure (achieved in 
2010 and forecast 2011-2013) in EUR billion:  
 2010 2011 2012 2013 
TENs 11.0 9.8 8.6 8.5 
Environmental protection and 
sustainable communities 15.6 15.3 14.1 14.2 
Energy (of which 5.6 
renewables and 1.7 energy efficiency in 2010) 13.6 10.8 9.5 9.3 
Overall lending volume in 
EU27 (signatures) 62.9 54.5 53.3 52.5 
Total lending volume of the 
EIB (signatures) 71.8 63.1 61.7 60.7 
 
Projects guaranteed 
by credit agencies remain a niche 
activity.  Export Credit Agencies (ECAs) are quasi-govern mental bodies that 
provide government-backed guarant ees to companies covering the 
risk of doing business,  in particular in developing countries and 
emerging markets, but also for project finance tr ansactions or 
corporate finance, incl uding bond finance. A recent example is the 
first European public solar project bond and the first ever project bond enhanced by SACE Export Credit Agency of Italy, 100% owned by the Ministry of Economy  and Finance. Total financing 
was divided into two classes of bonds  of equal amounts, with EIB as 
one underwriter and SACE cr edit enhancing the other.  
 122In 2010, PPPs were 
increasing in 
number again… For many countries, project financ e provides a logical means to 
deliver key infrastructure projects with a lifecycle approach as it limits pressure on both short-term  cash-flows and reduces the need 
to borrow heavily. Private financ e can be raised against public 
sector assets using different public-private partnership (PPP)  
structures.  
…with 112 
transactions closed. In 2010, 112 PPP transactions reache d financial close for an amount 
of EUR 18.3 billion167. In terms of number of operations, UK was 
the most active country followed by France, Germany and Spain. 6 deals reached financial close in Eastern Europe. In terms of value, Spain was the largest PPP country followed by UK, Portugal, France and Belgium. Non-transport s ectors presented more than half 
of the value of EUR 18.3  billion. In the first half of 2011 the number 
of transactions decreased
168 while the volume of transactions with 
EUR 9.7 billion remained at 2010 levels.  
EIB remains a key 
financier… Since 1990, EIB has progressively  broadened the geographic and 
sector spread of its PPP lending. A portfolio of 130 projects and 
investment of around EUR 30 billio n have been benefited from EIB 
lending. The annual signatures av erage above EUR 2 billion since 
2000, reaching EUR 3.4 billion EU in 2010 of which EUR 2.4 billion in the transport sector. EIB has generally concentrated on Europe’s largest and most strategic PPPs.  
… for the countries 
developing PPP programmes. The results of a survey169 in 2007 showed that only 4% of all public 
sector investments are PPPs. But many countries, including in the 
new Member States have starte d to develop new investment 
programmes and strategies togeth er with an increased use of 
PPPs170. For example following a new PPP decree in 2010, in April 
2011 the Romanian government decided that a number of infrastructure projects should be st ructured as PPPs and set out a list 
of transport projects (mainly highways and ring. roads), power 
plants and interconnectors, he alth, regional development and 
environment projects
171.  
Bank lending… In the last 10 years, private sector financing has amounted to an annual average of between EUR 40- 70 billion, of which 2/3 have 
been granted in the form of bank loans. Transport, energy
172 and 
telecommunication amount to less than half of these volumes. 
…has not taken up 
yet… Due to the liquidity and risk pr oblematic, banks reacted during the 
financial crisis with a radical s hortening of matur ities, increased 
pricing and collateral requirement s. Bank syndication markets dried 
                                                 
167 EPEC, Market Update 2010. 
168 EPEC, Market Update, First semester of 2011  
169 Siemens, public infrastructur es and private funding, 2007. 
170 For example the Romanian and Bulgarian national strategies for the development broadband in 2009-2015 
envisage the possibility to enter into PPPs to implement broadband networks and services. The Greek PPP programme in the area of broadband, which foresees the implementation of  an open access network spanning 50 
cities including Athens at a cost of EUR 2.1 billion is also intended to be tendered along PPP lines. 
171 Project examples are Sibiu-Pitesti highway, Bucharest ring road, AGRI interconnector, steam and hydro-
electric power plants, hospitals, etc. 
172Without oil and gas since the majority refers to exploration. 
 123 
… and with 
refinancing possibilities coming 
up,… up leading to a lesser number of  deals, now done under club 
structures with smaller ticket sizes. There are a large number loans on existing assets that were orig inated in 2006 a nd 2007 at high 
margins on a short term or 'miniperm' basis that are now coming up for refinancing. This will place an additional drain on the amount of debt available to finance the co nstruction of new infrastructure 
projects. 
… importance of 
capital market 
financing increasing… The importance of bond markets as a source of finance has 
increased during the economic slow down as companies diversified 
away from reliance on banks fo r funding and many governments 
increased borrowing. Europe’s corporate bond markets are less developed than in the US, however they are gaining importance as larger corporates look to divers ify their funding sources due to 
increased difficulties in obtaining finance from banks
173.  
… for corporate 
bonds … 
  
 
…but not on project 
bond markets. The corporate bond market remained strong in 2010 and thus 
continued to demonstrate its importance as effective capital raising and investment venue. The high- yield corporate bond market has 
grown rapidly, EUR 38 billion of high- yield bonds issued so far this 
year, already approachi ng 2010’s record issuance of EUR 51 billion. 
However, the evolution in recent months has again demonstrated the difficulties corporates have been facing to raise money on capital markets, and those having been successfully clos ed have been 
trading poorly in the after-market
174 with very few exemptions. As 
regards project bond issues, the markets in the EU have shown de facto no activity in 2010. 
Utilities make 
considerable investments.  To these sources of funding should be added a share of utilities' 
investments. European utilities typically invest EUR 60-70 billion 
per annum175. However, this includes all utilities, also in the water 
sector which finance themselves on a corporate finance basis, i.e. via general corporate bond issues, not specifying the use of the 
borrowed funds. 
Capital market 
investors invest also directly in equity 
or… In 2010, considerable amounts176 ofprivate sector money flowed 
into EU infrastructure assets, in pa rticular renewables, with some of 
Europe's largest pension funds ma king considerable allocations in 
equity. For example PensionDanmark invested together with PKA (labour market pensions of Denmark) EUR 800 million in an 
offshore wind farm. With skilled and experienced internal teams 
being implemented by the invest ors, the portion of direct 
investments in infrastructure by institutional investors is increasing worldwide. Calpers in USA is a good example. However, there are 
only very few examples of investors willing to invest directly in new projects as they prefer the less complex brownfield and secondary tranbsactions. Investors find primary investing complex and 
                                                
 
173 The CityUK, Bond markets, Financial markets series, July 2011. 
174 The Telegraph of 16 June: 'corporate bond markets hit by Greek default fears'. FT of 17 June 2011: 'corporate 
bond risk premiums soar'. 
175  Morgan Stanley research note November 2010 
176 IPE article: Building bubbleville? Of Emma Cusworth, 1 June 2011 
 124difficult, in terms of lack of early cash yield and the expertise 
needed to put a project together  that doe not always exist by 
investors. Finally, project bonds ne ed to compete with alternative 
assets such as real estate and commodities. 
…through 
infrastructure 
funds… The 2010 increase in infrastructure finance to around EUR 60 
billion appears to be partly due to the increase in the availability of 
equity. However, the majority of this flow was targeted towards secondary transactions, not new infrastructure. Despite of the 
financial crisis, infrastructure f unds have continued successfully 
their fund raising. Even though the recent figures do not yet achieve 
the 2007 fund raising levels, the management teams have succeeded in raising 16 new funds in 2010 with  a total target size of EUR 6 
billion. This brings the cumulative number of infrastructure equity 
funds actively raising capital to 47 with an overall investment 
capacity of around EUR 23 billion
177.  
Historical European Infrastructure Fundraising (Source: Preqin)
427131222
416
347
0,7 0,93,85,215,113,7
2,69
133,3
05101520253035404550
Pre 20042004
2005
2006
2007 2008
2009 2010
Q1 2011
Currently Raising
No.Funds Raised/Raising
Aggregate Capital
Raised/Raising ($bn)
 
…with 122 projects 
benefited from 
equity investments in 
2010 through these funds. The annual number of infrastructure deals completed by 
infrastructure fund managers in Europe in 2010 was of 122, a bit 
lower than the all time peak of 2009. The majority of equity 
investments made in infrastructure  targeted the renewables sector 
(35%), transport (33%) and energy sector (14%).  But, institutional 
investors in general have favoured  existing brownfield investments 
rather than new greenfield assets. Despite the slow start of 2011 (15 
deals in Q1), the infrastructure d eal flow should improve as the year 
continues.  
                                                 
177 $33 billion, exchange rate of June 2011. 
 125Figure below provides annual data  on deal flow since 2004.  
 
Annual Number of Deals Made by Unlisted Infrastructure Managers in Europe 
(Source: Preqin)
294363100115139
122
15
020406080100120140160
2004 2005 2006 2007 2008 2009 2010 Q1 2011
 
A niche market of 
specialised funds has 
been developed… 
… including credit 
enhancement funds… A few debt funds have been create d recently in Europe which will 
primarily aim to provide junior/sub ordinated debt for infrastructure 
projects across the globe, such as Harbourmaster178. In addition, 
Hadrian’s Wall179 with a target size of around EUR 1 billion will 
use a subordinated debt tranche to  enhance the rati ng of the project 
debt and sell it to capital market investors. As with all 
subordinated debt, the fund acts as  a first loss component of a 
transaction, and this helps to enhance the credit rating of the project by shielding the senior de bt and equity from a certain 
amount of revenue risk. It is a welcome measure demonstrating 
private sector innovation to addres s infrastructure financing needs 
in energy, education, health  and service sectors.  
…whereby the EIB is 
an active investor. The EIB is an active investor in European infrastructure funds. By 
the end of 2010 it had invested in 21 equity180 and debt or mixed 
funds181 for a total amount of co mmitments of EUR 683 million. 
These 21 funds have raised EUR 6. 4 billion and have a target of 
EUR 8.8 billion. These funds target in particular PPPs and 
                                                 
178 Harbourmaster Capital Management is seeking to raise EUR 2 billion infrastructure debt fund to invest in 
senior debt in Western Europe.  At this stage Harbou rmaster intends to structure the fund without credit 
enhancement at the fund level. This is a different proposition to the EIB/EC project bond initiative, which 
consists in credit enhancing each financing in order to gi ve investors access to more highly rated debt securities. 
It will also consider investing in project bonds but anticipates that it will take some time until project bonds will have sufficient market share to become attractive.
 
179 Hadrian's wall will provide a guarantee of around 10% of project's value. 
180 Includes Marguerite with a target fund size of EU R 1.5 billion and EU investment of EUR 80 million.  
181 For example the recently launched European Energy Efficiency Fund (EEEF) with EU commitment of EUR 
125 million. 
 126renewable energy projects.  
7.2. Financing gap 
Business as usual case 
not possible…  The previous volumes seem to indicate that the infrastructure 
financing market is in approxi mate balance and able to fund 
"business as usual" investment. However, the step change in 
investment needs to meet the Europe 2020 objectives is well beyond "business as usual" and in itself requires a reconsideration 
of funding.  
… due to financing 
gap and… In order to address th e investments needs of the future years, 
Member States would need to increase funding levels by additional resources such as tax increases  or reprioritisation of budget 
allocations. If this can not be done, there is a mismatch, a financing gap, between the high up- front capital costs to construct 
or refurbish the infrastructure a nd the public funding resources.  
… a geographic 
mismatch. Financing structures facilitating pr ivate finance have been sporadic 
across the countries and likely to co ntinue as long as significant 
amounts of grants are available for economic infrastructure 
projects. Consequently, a geogr aphic mismatch between the 
Member States, in the Member States and their regions exists as 
regards the use of grant, bond, lo an and equity financing for 
infrastructure investments. 
Commercially viable 
projects … Private sector financing is onl y possible when the risk-reward 
structure is appropriate, i.e. when  there is confidence that the up-
front investment will be repaid over time by the funding stream, i.e. either by the users or by the public sector.  
… have difficult 
access to finance.  However, the risk that access to credit by the private sector could 
be crowded out by sovereign debt issuance remains together with 
the fact that access to debt (bonds  and loans) is particularly 
challenging in Member States with relatively high sovereign risk. 
Finally, the re-emergence of sovere ign credit risk as a factor in 
developed markets is a new featur e of the post-financial crisis 
world limiting the interest in proj ects in a number of countries. 
Good projects will not get financed on normal terms due to the contamination effect of  the sovereign crisis. 
Bank financing 
remains less 
constraint… 
 … but even with signs 
of recent 
improvement… Current concerns on the long-term bank debt markets remain about 
depth of markets, liquidity pre ssures and counter-party risks. 
Shorter lending terms, higher pri ces and reduced capacity by banks 
to lend to large trans actions (less syndicat ion through underwriting 
and more club deals182) may continue to persist in the future. There 
are some recent signs of improved underwriting potential by banks, but whether this means a r eal recovery, and at which pace, 
                                                
 
182 Under a syndicated transaction, one bank acts as an arranger which guarantees, i.e.  underwrites, the entire 
loan commitment to a project/company. It then syndicates the loan, i.e. asks other banks to subscribe to portions 
of the debt. If this cannot be done, the arranger has to absorb the difference. It can try to sell to the debt to investors. In the worst case, the arranger may be forced to  sell at a discount and, potentially, even take a loss. In 
a club transaction banks collectively arrange the debt to  a borrower and these arranger risks do not exist.  
 127 
…it is not well suited 
for long-term investments... remains to be seen. 
Therefore, bank lending might remain  the best solution to finance 
the construction phase of the pr ojects. However, bank financing 
might not be the most suitable a nd cost-effective for a long-term 
life-cycle approach. 
… to which 
uncertainties as 
regards regulatory environment need to 
be added… The vast bulk of project finance de bt is lent by Europe's leading 
banks, all of which under Basel I II are facing the prospect of 
needing to increase the amount of capital they set aside to support 
their activities, which is likely to lead to a tightening of liquidity. 
In addition, the regulatory framewor k will continue to evolve with 
Basel III and Solvency II implementation making it more demanding for smaller unrated corporates and those having a speculative credit rating to have access to bank loans. The current 
infrastructure projects coming to a refinancing stage in the next 
years might face considerable challe nges in this context. Finally, in 
Europe financial reporting and insolvency regimes seem to favour bank lenders. For example loan agreement covenants are not 
necessarily disclosed to bond hol ders and, bondholders and lenders 
do not have equal voting rights in the event of default.  
…also having an 
impact on bond markets. As regards the longer-term soluti on, another key challenge for the 
debt markets remains attracting institutional investors' capital through the issue of bonds by proj ect entities and companies or 
municipalities for the benefit of in frastructure projects. The trend 
to issue corporate bonds has cont inued during the crisis but at 
suboptimal levels
183 compared to the US, for example.  
Bond markets have been mainly open to large corporates of 
investment grade while a majority of those of a smaller size or which have a more speculative cred it rating (or no credit rating at 
all) continue to rely on bank le nding. The assessment of credit 
quality of corporate bond issuer s is particularly important. 
Investors, who may have only invested in government bonds 
previously, may need to streng then their understanding of how 
credit quality and risk affects corporate bond investments.  
The attempts to revive 
project bonds  markets 
remain a niche 
activity.  While pre-crisis institutional fi nancing was invested through 
project bonds  directly into infrastructu re projects with monoline 
credit enhancement market partic ipants will continue to try to 
create multi-investor debt funds or find structured products that 
can de-risk senior debt. However,  this activity is only a niche 
market. The problem is however th at project bonds are not ideally 
suited to greenfield projects which usually require funding on a 
number of milestone dates during the construction period. 
"Consequently project bonds are generally much better suited for 
refinancing a project once it is complete and ther e is a secure cash 
flow, or perhaps bundling together  a number of projects into a 
special purpose vehicle and securi tising the whole. Using the bond 
markets for these purposes would of course have the benefit of 
                                                 
183 TheCityUK, Bond Markets 2010, Financial market series, July 2011. 
 128freeing up liquidity more generally in the market ."184 
Infrastructure funds 
with high levels of 
fund raising and even… Whether equity infrastructure funds will continue to succeed in 
raising new money is uncertain in markets where the insatiable demand for all types of lower-risk  returns and inflation hedged 
assets provide a number of alterna tives to highly selective pension 
fund and other institutional inve stors. The current rise of 
infrastructure equity funds is largely based on the interest in secondary market and brownfield tr ansactions as these markets are 
expected to continue to expand. Th e steady yields of infrastructure 
equity funds have attracted inve stors, but in some cases these 
returns have been sourced from operating cash and capital
185 of the 
fund. Sustainability of these funds is questionable and perceived risks in the sector incl ude potential equity bubbles
186 due to the 
mismatch between supply and de mand. In addition, many of the 
new equity funds with first-time  investment teams have not yet 
proven their track record and thei r performance need to be seen. 
Finally, the current trends in  corporate unbundling (notably 
utilities), investment in renewabl e energy and priva tisation as well 
as refinancing will increase the range of alternative infrastructure 
investment possibilities thus reducing the probability of 
overheating. Deepening of the primary market for infrastructure 
assets, i.e. increased number of  greenfield transactions is 
conducive for further development of secondary markets. 
… some specialist 
funds are created, but a gap persists for the 
financing of EU 
infrastructure priorities. Specialist funds may arise while pension funds and sovereign 
wealth funds will increasingly take direct stakes in infrastructure projects and companies in partic ular in the old Member States. 
Specialist funds would help to crea te expertise in specific sectors 
and develop specialist teams. Howe ver, even these infrastructure 
funds do not necessarily focus on l ong-term investments but rather 
medium-term return opportunitie s, neither primary markets, 
greenfield projects the immature equity markets nor new Member 
States. 
Alternative business 
and financing models for infrastructure are 
required… The changes in the economic policy set-up of the EU and in the 
structure of the financial industry raise new challenges, which have 
an impact on the availability of private financing. Whilst private finance will continue to be availa ble to some extent, alternative 
financing models, which will replace or lessen the dependency on public sector grant financing, will be required to sustain long-term 
capital investment for infrastructure. For example, regulated infrastructure utilities have been less impacted in their capacity to 
issue bonds. Therefore, it should be  assessed whether the regulated 
                                                                                                                                                        
 
184 Norton Rose, Financing power for the future: How w ill the world’s power needs be project financed?, 
November 2010. 
185 Richard G. Little, Not the Macquarie Model: Using U. S. Sovereign Wealth to Renew America’s Civil 
Infrastructure, 26 January 2009. See also Lawrence, Mar tin and Stapledon, Geofrey P., Infrastructure Funds: 
Creative Use of Corporate Structure and Law - But in Whose Interests? (February 2008). University of 
Melbourne Legal Studies Research Paper No. 314.  
186 Standard and Poor's; the amazing growth of global infrastructure funds: Too good to be true?, in Ireland 
business news, 2006 
 129asset base model187 could be used for other type of infrastructure 
financing models, such as conces sions. Furthermore, the public 
sector needs to put more emphasis on a life-cycle approach in order to be able to drive down the overall costs of projects including operations, maintenance and eventual replacement, building up appropriate capital reserves.  
… while access to 
finance remains a key 
problem. Access to financing by companies and infrastructure projects is 
particularly challenging in the countries with relatively high 
sovereign risk and subsequent uncertainties as regards the 
economic/regulatory environment (cost of capital , reduction of 
agreed support under existing incen tive schemes, scaling down of 
public investment programmes, taxation, impact of sovereign 
rating on investor behaviour, etc) . In the context of sovereign 
crisis, one of the key threats associ ated with an indirect contagion 
of financial risks to enterprises and projects is not knowing where 
the final risk actually resides. This  has an impact on investor/banks 
behaviour as regards new financi ng/investments or reassessment of 
existing exposures. Finally, potentia l future liquidity shortages of 
financial institutions will have an impact on the availability of 
financing even for healthy corporates and projects. 
Markets are 
recovering…  To conclude, the markets show qu ite some development as regards 
recent move by a number of banks to provide longer maturity 
loans to projects and corporate bond markets, the lively discussions on the markets about the revival of project bonds and 
the fund raising activity by infrastr ucture equity and debt funds.  
… but uncertainties 
persist! However, the EU priority projects entail features and risks such as 
greenfield, new technologies, uncerta in business case as regards 
future revenue flows, regional aspects including the influence of the sovereign crisis and cross-bo rder impact making the project 
development and implementation demanding and less attractive for private sector financiers and inve stors. In additi on, in case of 
private sector financing, depending  on the sector, the project, the 
economic situation in the country or region as well as national regulations and the maturity of the financial/capital markets there can be a greater need for either de bt or equity support. Alike, as 
the risk-return profile of infrastr ucture projects change during the 
lifecycle (preparation and planni ng, construction and ramp-up 
operations and subsequent op erational period with more 
predictable revenue flow) diffe rent types of investors and 
financiers are needed. Both de bt and equity instruments are 
necessary in order to be able to promptly respond to cyclical 
adjustment needs.  
                                                                                                                                                        
 
187 Under Regulatory Asset Base an investment in an income generating regulated asset will be financed via a 
long-term borrowing. The investment is effectively guaranteed through the assets ' revenue stream and the 
regulatory framework. Risk has been passed to the users through the price they have to pay (for example for 
water, electricity). 
 1308. FUTURE FINANCIAL INSTRUMENTS FOR INFRASTRUCTURE  
Priority projects 
require EU 
instruments… Meeting the demand for increased investment over the next decade 
and the financial constraints many governments face for the foreseeable future provide a pe rfect opportunity for increased 
private sector financing to deliver much needed economic infrastructure investment in transport, energy and ICT. The number of EU priority projects in an individual country and their 
potential cross-border nature are however such that an EU level 
intervention is more appropriate than a scheme at national level. 
Both debt and equity instruments ar e necessary in order to be able 
to promptly respond to cyclical adjustment needs. 
 
8.1. Objectives 
…to attract private 
sector financing…  The objective of the infrastructure instruments is to attract private 
sector financing to help Europe  to unleash its potential in the 
moment of a crucial transformation and the shift towards a resource efficient and low carbon economy.  
…and to accelerate 
implementation of EU policy. The toolbox of instruments should set the base for a long-term stable 
investment framework and to act as  a catalyst and stimulator. They 
are particularly valuable when  policies require a speed of 
implementation but uncertainties fo r projects are above average in 
an economic environment where in vestments decisions are largely 
made by the private sector. 
Financial 
instruments stimulate demand 
for finance and 
supply of finance. The financial instruments can stimul ate infrastructure financing in 
two ways: affecting primarily the demand188 for investment finance 
or the supply of finance189. The financial instruments for 
infrastructure assessed in this  paper should mainly be used  
(4) when long-term tenors of fina ncing can not be provided by 
the private sector,  
(5) as a risk mitigation measure to steer the flow of private funds 
to political priority sectors or projects, 
(6) to facilitate risk taking by the financial sector, 
(7) to stimulate market developments such as the revival of 
capital market financing for infrastructure, 
(8) to stimulate project, corporate and equity financing in less 
developed markets. 
                                                 
188 For example interest rate subsidies combined with loans are used when private finance is as such not the main 
problem, but rates of return on investment are insufficient to motivate private investors and project promoters.  
189 For example injections of public money in private equity funds to develop risk capital markets. 
 131 The financial instruments will assist infrastructure projects190 in  
(a) Providing them or facilitating access to equity and/or debt 
finance (loans and bonds), 
(b) Reducing possibly their ove rall cost of capital, 
(c) Expanding financing tenors and grace periods to better match 
project cash flows, 
(d) Facilitate project structuring th rough standard equity and debt 
instruments which are well-known to all market participants. 
  
8.2. Principles 
The instruments 
need to be 
sustainable… The goal of these instruments for infrastructure shall not be their 
profitability or revenu e generation potential but sustainability: 
While grants under the facility  will be extended without any 
expectation of direct monetary retu rn, the capital used for equity and 
risk-sharing is expected to return to the EU, potentially with a profit 
to remunerate for the risk taken. The aim of the instruments is thus to preserve the value of the EU  budget assets while focusing on 
maximisation of multiplier effects of the budget. 
… and not create 
contingent liabilities for the EU budget,… Financial instruments for infrastructure are based on EU budget 
contributions. They do not generate contingent liabilities for the EU budget. "All of the co-financed instruments involve allocations to 
programmes which are capped in  size and so none of these 
instruments pose a risk to the budget beyond that which is initially committed. Even in those cases in which the financial instrument involves a form of guarantee there remains no liability beyond that 
which was originally committed during the design of the instruments."
191  
The EU budget covers the contri bution to the IFI and also 
management costs and other expens es, such as costs of external 
audits. 
…be applicable 
across EU policies… Financial instruments192 for infrastructure target policy objectives 
across the flagships and across Europe 2020 priorities, avoiding unnecessary multiplication of instruments of a similar nature or with similar target beneficiaries and pr oject structures. Geographical and 
sectoral diversification resulting fr om a cross-flagship approach will 
help attract investors to Europe  2020 priority areas by reducing 
overall portfolio risk.  
…in EU27… As regards geographic coverage, in  accordance with  the priorities 
                                                 
190 Companies carrying out an infrastructure projects as part of normal operational business (such as TSOs) or 
special purpose entities set up to carry out only the infr astructure projects (financing, construction, operation 
after completion).   
191 Study of the budgetary Control Committee of the European Parliament, 'The implications of EIB and EBRD 
co-financing on the EU budget', March 2011. 
192 EU measures of financial support provided from the budget of the Union in order to address a specific policy 
objective by way of loans, equity or quasi-equity investments or participations, guarantees or other risk-sharing 
instruments, possibly combined with grants. 
 132set by the sectoral policies, the financial instruments will target 
EU27 and the relevant third countries.  
… while maximising 
impact. This will maximise the impact and visibility of such instruments, 
reduce the administrative burden on be neficiaries and intermediaries 
and results in simplification al so from the viewpoint of the 
Commission.  
A range of 
instruments 
required… Therefore, a toolbox of instruments is required which is adaptable to 
the uneven development of the fina ncial markets and differing needs 
of the sectors, projects and regi ons. For example, the demand for a 
risk-sharing instrument to attr act bank lending can be higher in 
some countries whereas a risk-sharing instrument to obtain capital market financing though bond issues might be more appropriate in 
others. 
… to be managed by 
the EIB and the 
IFIs. Financial instruments are demand driven and market based schemes 
which will be implemented by the EIB and the International Financial Institutions (IFIs) or national institutions. They have the professional expertise and know ho w to manage the programmes. 
But they need to be willing and capable of sharing a portion of the 
financial risks with the Commission for equity and debt instruments. 
To be effective the 
instruments need a sizeable volume… The volume of financial instru ments compared to the overall 
budgetary envelope should be bala nced to the current market 
financing volumes and absorption capacity as well as the capacity to manage significant resources by an IFI including the possibilities of an IFI to share the risks with the Commission. The volume will also 
largely depend on the type of proj ects included under the Facility 
(physical networks only or also  projects incl uding technologies 
which require different financing structures due to their risks). 
Therefore, a precise quantification is difficult at this stage due to the limited availability of financing projections of eligible projects that are expected to be supported an d would involve private sector 
participation. Only the projects in the transport sector are clearly identified, those in energy and ICT need to be further developed and assessed in accordance with the priority corridors and network 
development. 
… while not 
distorting the private 
financial sector… Which ever instrument is used, equ ity or debt, it is important not to 
substitute or distort the private financial sector  and to foresee 
appropriate exit provisions. Instruments which are not fully commercial can distort a market, and crowd out the private sector, if 
not properly targeted at revealed  market imperfections, and can 
restrain the long term development of private sector investments in 
infrastructure. On the other ha nd, financial instruments may 
stimulate difficult markets situati ons and create o pportunities for the 
private sector in the future, as well as helping the infrastructure projects through difficult economic  times. Finally, the managing 
institutions such as the EIB and the IFIs need to have the absorption capacity and resources to implement the instruments. 
… and be visible. Given that infrastructure financing involves multiple partners sometimes at various stages, there may also be implications for the 
 133 visibility of the use of the EU  budget. Working through partners 
such as equity funds who are ulti mately responsible for the equity 
participations, can make the EU’s role increasingly opaque. On the 
other hand, infrastructure project s are usually beneficiaries of 
important financing partners incl uding the public sector who all 
have the interest to request pr omotional measures and visible 
promotion of public support.  
A risk-sharing and 
an equity instrument 
do not solve the problems alone – 
technical assistance 
needed… 
 
…together with 
intense promotion of the instruments. Finally, project development capac ity, experience and know how by 
the local, regional and national authorities is key and will require additional support through techni cal assistance schemes. In 
particular at regional level the authorities often lack resources and expertise to develop and implemen t complex infrastructure projects 
which require well organised procurement including technical and financial specifications and ne gotiations with a range of 
stakeholders, also outside of the country borders.  
Finally, financial instruments need to be adequately promoted in 
order to be recognised by all stakeh olders already at an early stage. 
  
8.3. Risk-sharing instrument 
A financing partner 
(EIB or other IFI) takes the risk on its 
balance sheet while 
EU shares a limited portion of the risk… The EU would be a risk-sharing pa rtner to the EIB or to an IFI 
which would be ready to take the risk of the projects on its balance sheet. The EU would share a porti on of these the risk and pay for 
this purpose a capital co ntribution to the EIB or an IFI. For its risk-
taking the EU would expect to receive a remuneration.  
The key role of the Commission and the EIB/IFI will be to absorb 
risks of a project and thus attract more private sector financing in 
the projects.  
…alike to existing 
programmes. The risk-sharing instrument will use risk-sharing arrangements on a 
portfolio basis between the Commission and an IFI and would build on experiences gained for exam ple under the Loan Guarantee 
Instrument for TEN-Transport projects (LGTT), the Risk Sharing Finance Facility (RSFF) and the Europe 2020 Project Bond Initiative currently under development.  
Risk-sharing 
instruments assist 
the speedy 
implementation of complex projects 
and … When the EU is faced with a combination of a speedy 
implementation of projects (combined with the further improvements with regulations an d administrative procedures), 
higher than above average uncerta inties for example due to the 
cross-border nature of projects, a nd the projects still have prospects 
of solid revenues in long-term, a risk sharing instrument is well suitable as a financing instrument. 
…facilitate access to 
finance... An EU wide infrastruc ture risk-sharing scheme  will facilitate project 
companies and corporates to have access to debt financing. The joint 
support by EU and the IFI will enhance the credit rating of the senior debt of the project which ma kes it more attractive for senior 
lenders or institutional investors. 
 134… for bankable 
projects. In addition to the policy eligibil ity and compliance with EU rules 
and regulations, the main conditi on for financing will be the 
bankability of the transactions based on the economic and financial 
viability of a project or of a corporate, which will be assessed by the EIB/IFI.  
Both project bond 
and bank lending 
would be targeted… The debt can be issued in the form of bonds by the project company 
or a corporate under the Europe 2020 Project Bond Initiative193. 
Alternatively, the debt can be prov ided as bank lending to finance 
an infrastructure project.  
…in order to 
respond in a flexible 
manner to different stage of markets and 
project needs.  The flexible approach as regards th e type of debt financing to be 
targeted (capital market financing or bank lending) makes the instrument receptive to the multiple  financing structures applied in 
the EU for the financing of infrastructure investments, the size and sector of the projects and the stage of development of project 
finance and capital markets in the Member States including the choice of procurement approaches. 
This will allow a 
phased approach 
following the 
development of 
financing markets while being able to 
support a prompt 
implementation of projects. As the risk-sharing instrument for loans (LGTT; Loan Guarantee 
instrument for TEN-T) already ex ists and is well known to the 
relevant stakeholders194, it is expected that in the initial years the 
risk-sharing instrument for loans w ill have a speedier take-up. This 
will also be due to the national regulations as regards procurement law and the (non) possibilities of bond finance being effectively 
included in the bidding process. Ho wever, together with the revival 
of capital market financing th rough bond issues by companies 
including increased competition be tween the providers of financing 
(banks and institutional investors) , the risk-sharing instrument for 
bonds has the potential to b ecome equally important.  
But a pilot phase of 
Europe 2020 Project Bond Initiative 
needed. Nevertheless, with a pilot phase  the Europe 2020 Project Bond 
Initiative be launched during this MFF, a speedier acceptance by the 
markets for the post-2013 instrument  could certainly be warranted. 
With a multiplier 
effect of up to 20 
and EU budget of 
EUR 5-10bn the instrument would 
attract  
EUR 125-250bn 
senior debt...  
  
…to cover part of 
the EUR 870bn estimated investment 
until 2020... 
 The development of an appropriate  risk sharing method will take 
into account the level of multiplie r effect as a high multiplier is 
considered a main performance criterion for financial instruments. A low risk sharing percentage woul d increase the leverage of the 
private finance per guaranteed amount , but it would also reduce off-
take. The expected multiplier effect of  this risk sharing instrument is 
up to 20 (EU funds as a share of the total financing attracted to a 
project). To reach critical mass,  EUR 5 to 10 billion of EU budget 
for a seven year period would seem  to be appropriate considering 
the depth of the debt markets and number of the projects to be supported and the investment needs. It would have the potential to target approximately EUR 125-250 b illion of senior debt which is 
already a considerable amount of the estimated investment needs of around EUR 870 billion under the Faci lity. However, the framework 
                                                
 
193 The Europe 2020 Project Bond Initiative is subject to an impact assessment and Commission proposal, 
therefore further details on the initiative are not reflected in this paper.  
194 Such as banks, financial advisors, public au thorities, project promoters and equity providers. 
 135 
…provided that the 
framework conditions are right. conditions, such as Member Stat es' acceptance of and support for 
private finance solutions of infrastructure projects, regulatory environment such as sect or regulation (ie energy, 
telecommunications) and financial re gulation,  the ability of the EIB 
and IFIs to co-finance and mana ge the financial instruments, 
economic environment, private sector acceptance, etc are key constraints for the development and implementation of financial 
instruments aiming at a full roll-out in EU27.  
 
8.4. Equity instrument 
An equity fund-of-
fund… 
  
…with co-
investment by the EIB… 
 An EU wide infrastructure equity instrument could take the form of 
a fund-of-fund scheme investing in in frastructure funds that in turn 
invest equity or quasi-equity in infrastructure projects and companies including public-private-partnerships in the transport, energy and broadband sectors. While it is more difficult to arrange 
co-investment with direct invest ors, a fund-of-fund would allow for 
a standardised investment approach  for infrastructure projects. Its 
objective would be to facilitate in frastructure projects' access to 
equity capital and strengthen the ca pital base of these companies in 
order to better attract debt fi nancing. The fund-of-fund scheme 
could be managed by the EIB or an  IFI which would be invited to 
co-invest alongside the Commission in  order to align interest with 
EU as manager of the EU funds.  
…and potentially by 
the Member States… It might be difficult to attract othe r participants in such a scheme 
due to the expected high risk a nd reward structure of equity 
investments, due to the sheer volumes required for these participations and due to the policy restrictions several public sector 
financial institutions need to respect. Nevertheless, as Member States could the possibility to co-invest in such a fund, the setting up of a dedicated investment vehicl e managed by the EIB could be 
considered. 
… would help very 
complex projects to have access to equity 
finance and to 
develop equity 
markets… The equity scheme would comple ment the toolbox of financing 
options available for the EU and wo uld help to furt her develop the 
EU wide infrastructure risk cap ital markets without a distorting 
impact. The equity funds should to a certain extent target market 
gaps such as greenfield infrastruc ture and projects of a cross-border 
nature as well as new Member Stat es where the equity capital and 
project finance markets are not yet well developed. However, the 
ability of such an instrument to address financing gaps related to projects of EU interest needs to be carefully assessed.  
With EU budget of 
EUR 3-5bn  EUR 3 billion to EUR 5 billion over a seven year period provided 
by the EU budget could be appropria te with higher annual amounts 
in the beginning of the period in or der to kick start an investment 
programme in a number of infrastruc ture equity funds right from the 
start of the MFF period. The multiplie r effect of such  a fund-of-fund 
structure could amount to 6 (EU co mmitment to a risk capital fund 
compared to its target size).  
 1369. GOVERNANCE AND MANAGEMENT  
Focus on priorities, 
clear goals and 
transparent policy benchmarks will 
help IFIs to select 
the projects. In the context of a strong governance framework, the Europe 2020 
strategy calls for a clear focus, clear goals and transparent benchmarks for assessing progress. These criteria should be applied 
mutatis mutandis for the future financial instruments for infrastructure. In the context of the MFF, the Commission identified a list of eligible projects, corri dors and networks wh ich will benefit 
from the Connecting Europe Facilit y and also from the equity and 
risk-sharing instruments.  
IFIs have to be 
willing to use their balance sheet for the 
risk-sharing, have 
the professional expertise and be 
committed to support 
EU policy goals.  The main criteria to identify suit able IFIs are their willingness to 
assume the risk of projects w ith the support of the Commission, 
their experience in the target sectors and markets including their current financing products and their capacity to implement an 
instrument as well as any rest rictions laid down in their 
constituencies. The institutions need to have appropriate risk management systems and legal in house expertise. For example, for the risk-sharing instrument the IFI must be willing and capable to build up a portfolio, to cover the risk of this portfolio on its balance sheet and to manage and monitor th is for the whole duration of the 
instrument. These criteria are well respected by the EIB. 
IFIs would select 
and approve projects while... The projects, companies or equity  funds will need to apply for 
financing under the normal rules of the managing IFIs. 
The IFIs would then approve projects based on the policy criteria set 
by the Commission and report to  the Commission on these 
operations.  
…a strategic 
committee will 
overview the 
implementation and propose corrective 
action, if need be. A strategic steering committee comprising representatives of 
MOVE, ENER, INFSO, REGIO, ECFIN and the IFIs will supervise 
the implementation of the instruments.  
The performance of the implementation would need to be redefined 
regularly, in order to adjust the mix of equity/debt and technical 
assistance programmes more quick ly to changes imposed by the 
overall demand and market circum stances. The strategic steering 
committee with a secretariat in EC FIN should report periodically to 
the advisory board of the debt and equity platforms.   
10. LEGAL BASE  
FR defines the 
instruments which are 
different from grants…  The future standard requirement s applicable to all financial 
instruments will lay on a more rigorous regulatory framework which seems to add administrative burden at first insight, but once available aims at facilitating and simplifying the design of the instruments by the policy DGs: 
                                                
 
195 See also  SEC(2010) 639, Commission Staff Working Document concerning modifications linked to the 
revision of the Financial Regulation prefiguring the proposal for a Delegated Commission Regulation amending 
the detailed rules of implementation of the Financial Regulation and the Commission Communication of 19 
October 2011 'A framework for the second generation of innovative financial instruments'. 
 137The proposed provisions of the Financial Regulation (FR) on 
financial instruments will lay the groundwork on the implementation of the EU budget on  which to build the foreseen 
equity and debt platforms
195.  
The Regulation on the 
Facility will determine 
the eligibility criteria and list the main  
inancial instruments 
potentially to be implemented. As the rules on budget implementati on are determined in the FR 
and its Implementing Rules, th e Connecting Europe Facility 
should preferably provide a lis t of the instruments to be 
implemented.  
After the adoption of 
the Regulation, Commission 
Delegated Act will 
implement the instruments.  Thereafter, following a detailed ex-ante assessment of needs and 
expected impacts of the instrument s, the launch of the instruments 
and their technical and financia l modalities will be ruled by a 
Commission Delegated Act once th e Connecting Europe Facility 
has been adopted by the Council and Parliament.  
 138ANNEX 5 
 
Policy measures alternatives 
 
As a complement to the impact assessment, this annex aims at providing the detailed 
background to the alternative poli cy options set out in the impact  assessment with regard to 
the development of the common op erational rules for the Connecting Europe Facility (CEF).  
For each type of the scenario, the impact assess ment proposes a number of alternatives in the 
policy options for the organisa tional rules of CEF. These po licy alternatives  have been 
submitted to a detailed analysis of the scope  for harmonization on the basis of the ex-post 
evaluations and public consultations during th e TEN revision process for the three sectors196.  
The scope for harmonization under CEF (min imum/maximum harmonization) has been 
assessed with regard to the policy objectives, th e criteria for the eval uation of proposals, the 
co-financing rates for grants , the organisation of calls and allocation of funds, the 
management of the funds (financial instrument s and grants) and the monitoring and control.  
 
1. Objectives and multi-level criteria for evalu ation of proposals to ensure high EU added-
value 
In the new context of the Europe 2020 Stra tegy, common challenges are sought to be 
addressed at EU level with common policy ob jectives across the different policy areas. 
Networks are considered of vital importance to  facilitate smart, sustainable and inclusive 
growth, to build an integrated single market a nd allow the EU to meet the energy and climate 
objectives. At the same time, the new Commissi on approach to EU budget implementation, as 
set out in the Budget Review and MFF Comm unications, set common principles for the 
design of the financial programmes that will support the achievement of these objectives. 
From this perspective, a minimal harmonisati on, i.e. distinct objec tives across the three 
sectors would appear not to be coherent with the CEF policy initiative objectives as identified 
in section 3 of the IA report. Rather, in the light of the latter objectives, the CEF would need 
to establish overarching common objectives , aiming at the acceleration of network 
deployment, at leveraging private and public in vestment and enhancing the effectiveness of 
EU support and at contributing to social, ec onomic and territorial cohesion objectives.  
At the same time, under these common objectives, every sector has set specific objectives on 
the basis of specific sectoral strategies,197 in the context of establishing the TEN Guidelines. . 
Today, the TEN programmes support the developm ent and the implementation of projects on 
the basis of the policy objectives identified and the priority corridors in accordance with the 
respective TEN-T and TEN-E Guidelines198. The revision of the TEN frameworks indicates 
that this overall approach would be maintained also in the future, with the e-TEN also joining 
                                                 
196 Since the alternatives to be assessed in the variable  harmonisation scenario are identical with those in the 
minimal and maximal scenarios respectiv ely, the assessment of their coheren ce, effectiveness and efficiency in 
supporting the attainment of the policy objectives set out in  section 3 of the IA report was conducted only for the 
first four alternatives outlined above. 
197The Energy Strategy 2011-2020, the Digital Agenda and the White Paper on the future transport policy, 
respectively. 
198 The Regulation for the granting of financial aid for TEN projects in the fields of energy and transport 
specifies that such aid shall be given to projects in relation to their contribution to the objectives and priorities defined in the relevant respective policy framework legislation, i.e. the TEN-T and TEN-E Guidelines 
respectively. 
 139in.199 Indeed, as specified in the EU Treaty, th e Union "may [only] support projects of 
common interest supported by Member States, wh ich are identified in the framework of the 
guidelines…"200 Hence, in other words, a maximal harmonisation with regard to the CEF 
objectives across the three sectors would not constitute a viable option either.   
With regard to the evaluation criteria, a set of common multi-level aw ard criteria could be 
envisaged. These should ideally include the assessment of the costs and benefits, the 
evaluation of the financial package and the s timulating effect of Union support on public and 
private funding as well as the maturity a nd the financial obstacles of the project. 
However, as the sectors are planned, financed  and regulated in a di fferent way, maximum 
harmonization to the level of streamlining of  policy objectives or setting common funding 
criteria would however run counter the goals of an effective implementation of the CEF 
policy objective.  Only in seeking to exploit th e best potential of each sector would the CEF 
operating rules enable the new facility  to achieve its overall objectives. 
 
2. Co-financing rates for grant allocations 
Today, the financial regulations provide distinct co-f inancing rates for grants allocated to 
TENs in transport and energy respectively. Th e levels of co-financing rates reflect the 
intention of the legislator to focus suppor t on sectoral policy pr iorities. The ex-post 
evaluations and public consulta tions however have shown that , while some levels of co-
financing rates were appropria te to effectively and effici ently support TEN development, 
while others needed revision.  
In particular, and in the light of the CEF objective to optimise the use of EU funds to 
accelerate TENs implementation, fine-tuning co-fin ancing rates in order to support sector 
priorities as identified in the process of revision of the TEN-T and TEN-E Guidelines and, respectively, of drafting the first e-TEN Guidelines, is necessary.  
There is one type of action for which the co -funding rate level should be common to all 
sectors that is the ar ea of support to studies, except for programme support actions. The same 
principle applies for actions implementing projects  with cross-sector synergies i.e. those that 
aim at more efficient use of resources (optimis ing the delivery of infras tructres from various 
sectors) risking the potentially higher complexity of project pr eparation and implementation. 
In all the above cases, the increased co-financing is justified by the fact that such projects are 
facing higher risks whic h may impact their financial viability. 
However, for all other support instruments it shoul d be noted that the level of co-funding rates 
has been the result of efforts over time to adjust  them to most adequately address the need to 
stimulate the development of those projects cri tical for an effective and efficient TENs, but 
for which the complexity levels (due to factors such as natural barriers , need of cross-border 
cooperation, levels of investment) make th em difficult to kick -start without public 
intervention and, in this  case, EU level interven tion. At the same time, attention needs to be 
taken in setting these levels in order to avoi d market distortions and crowding out of private 
or other public investment as well as  to render EU support most effective. 
In the field of transport, ex-post evaluati ons and stakeholder cons ultations have made 
apparent that EU policy so far has been succe ssful in promoting TEN-T development, but the 
efficiency of the network remains well subop timal due to enduring bottlenecks and missing 
                                                
 
199 Draft legislation proposing e-TEN Guidelines is currently being developed by the Commission. 
200 TFEU, Art. 171, paragraph 1, third indent. 
 140cross-border links, as well as lack of inte roperability, particular ly on the rail network. 201 This 
is partly due to the fact that levels of co-funding rates for these type of projects were most of 
the time not appropriate. Thus, in  the case of projects with cro ss-border sections, which have 
proven most complex to implement, the long dur ation of projects, spanning several financial 
frameworks, renders an initial co -financing rate of 30% to be reduced, in actual terms, in 
average to 21%, and in some cases to even 5%  to 10%; while projects alleviating bottlenecks 
have not been given any special rate, benef itting of the general co-funding level of 20%.202 
Revised differentiated co-funding rates, depend ing on the type of action supported, reflecting 
lessons learned and in line with the identifi ed TEN-T policy prioriti es, as proposed, drawing 
on expert and stakeholder recommendations, in th e table below, could therefore constitute the 
most appropriate means for the CEF to most eff ectively and efficiently achieve its objectives 
in the TEN-T area. 
Assessment of current co-funding 
rates Recommendations for revised co-funding rates 
Studies:  
- up to 50% of eligible costs: proven 
adequate  
Priority projects:  
- up to 20% of eligible costs of works: 
generally proven adequate, but not always sufficient for efficient implementation (cases such as bottlenecks)  
- if cross-border, up to 30% of eligible costs 
of works: generally proven inadequate 
Other projects of common interest:  
- up to 10% of eligible costs of works: 
generally adequate 
European Rail Traffic Management 
System (ERTMS):  
- up to 50% of eligible costs of both studies 
and works: generally proven adequate 
Road, air, inland waterway traffic 
management systems:  
- up to 20%: generally proven adequate Studies:  
- current up to 50% co-funding rated can be maintained 
Priority projects : 
- a category no longer valid as no longer provided in 
the revised (future) TEN-T Guidelines 
Infrastructural works on the core network: 
- maintain the current general rate of up to 20% of 
eligible costs of works;  
- should be higher for addressing bottlenecks – e.g. up 
to 30% of eligible costs of works;  
- for cross-border actions, the current insufficient max 
30% should be raised, to up to 40% of eligible costs of works; 
- for multimodal platforms,  the general rate of up to 
20% could prove appropriate 
Traffic management systems (for all modes but 
rail): 
- maintain the current general rate of up to 20% of 
eligible costs of works 
 ERTMS:  
- maintain the current up to 50% rate of eligible costs 
of works 
Freight transport services:  - the general rate of up to 20% of eligible costs of 
works could prove appropriate 
 
                                                 
201 See the Impact Assessment Report accompanying the proposal for the re vision of the TEN-T Guidelines. 
202 See Annex 2 for the summary of findings and recommendations in Steer Davies Gleeves, "Final Report" and 
TEN-T Review Expert Group 5, "Final Report", as well as Annex 1 for the summary of stakeholder consultation 
on the Green Paper "TEN-T: A policy review" (20 09), answers to set of questions no. (2).  
 141The table above shows how the general co-funding rate of 20% has been devised and explains 
the reasons why a higher rate  for those types of projects whose development has proven 
generally more demanding was applied.203 For studies, a 50% rate is  necessary due to the high 
uncertainty of the ulterior commercial utility of the outcome of these projects. As far as 
ERTMS is concerned, the co-funding rate of up to 50% of eligible costs of works is justified 
by the importance of the development of the syst em for an efficient exploitation of the rail 
TEN-T, in an area where the limited presence of private actors a nd the national monopolies 
make it difficult the development of an Eur opean traffic management system without a 
significant EU level intervention.  
In the field of transport, the CEF will manage  also funds allocated from the Cohesion Fund 
for TEN-T projects, specifically ring-fenced for the eligible Member States. In order to avoid 
creating an unwanted competition between the Cohesion Fund and CEF, the co-funding rates 
for projects eligible for the C ohesion Fund funds within the CE F should be aligned with those 
proposed in the revised financ ial regulation concerning the management of the Cohesion 
Fund, respectively rates that can go up to ma ximum 75%. Else, funds under the CEF will not 
be tapped but until after those available unde r the Cohesion Fund have been committed, 
certain projects in new Member States, where th e extent of TEN-T development is still well 
under that in the other Member States, would be delayed.  
In the field of energy, co-finan cing rates for supporting project  construction under the current 
regime of the TEN-E programme were only up to  10% contribution to the cost of works. A 
higher co-financing rate should be proposed  following the experi ence with the TEN-E 
programme and the European Energy Program me for Recovery (EEPR). The 10% support 
rate has often proven insufficient to trigger certain infrastructure  projects that market alone 
cannot take up. On the other hand, in the case of EEPR where up to 50% co-financing rate 
was allowed for electricity and gas interconnectors, a substantia l acceleration of investment 
programmes has been recorded. However, for so me projects which are essential for Europe's 
security of supply but lack commercial viabilit y, higher co-financing ra tes will be needed to 
make them happen. Projects of common interest could receive up to 50 % contribution to the 
cost of works or studies. For projects that are particularly important for the regional or EU-
wide security of supply and the solidarity of the Union or those that are applying innovative 
technology and solutions the cofinancing rate c ould be increased to a maximum of 80 % to 
ensure timely implementation.  
In the area of ICT, co-funding rates should in principle be applicable  either to broadband 
networks and digital service infrastructure. Ho wever, grants are expected to be mostly 
required in the latter area of intervention. The actual level of aid for the individual project 
would depend on the size of rural areas included as well as other factors such as level of 
income or potential revenue generation, as in broadband economic vi ability depends very 
much on penetration within a short timeframe. In any event, co-financing rates for broadband 
networks should not exceed 50%, in order not to crowd out potential private investment. 
 The threshold is supported by empirical observati on of what happened so far with financing 
of broadband under the structural funds and thei r compliance with state aid rules. Until now 
most of the projects examined under state aid rules have received a cl ose to or above 70-80% 
funding
204.  
                                                 
203 See also Steer Davies Gleeve, 2011, p.11.  
204 With some exceptions as in the case of Cornwall: http://ec.europa.eu/eu_law/state_aids/comp-2009/n461-
09.pdf  
 
 142Co-financing rates in the area of digital service infrastructure should be higher for the core 
layers, reflecting their supreme European valu e and decrease for the generic service and 
application layer. Co-financing rates in the ar ea of ICT for grants shouldl not exceed the 
following rates: 
o actions in the field of broadband networks 50%  
o core service platforms: 100 % of the eligible cost  
o actions in the field of generic services: 75 % of the eligible costs 
o actions in the field of applicati ons 50 % of the eligible costs  
Core service platforms are typically funded by pr ocurement. In exceptional cases, they could 
be funded by an operating grant covering 100% of eligible costs.   
The amount of Union financial aid in the form  of grants for support actions and studies, 
including infrastructu re mapping and technical assistance  should not exceed 75% of the 
eligible costs. 
Returning to the question of common or diffe rentiated levels of co-funding rates, the 
arguments above have made appare nt that revised differentiated ra tes, both per sector and per 
type of projects, reflecting sectoral policy pr iorities, would constitute the most appropriate 
choice in this particular area  of policy measures, if the CEF is to most effectively and 
efficiently achieve its goal of  accelerating TENs development.  
 3. Innovative financial instruments   
A detailed discussion of options concerning in novative financial instruments is provided in 
Annex 4. 
 
Implementation measures 4. Procedural rules for th e organisation of calls  
Today, the allocation of funds for TEN-T and TEN-E projects is made  essentially through 
calls for proposals or application, while the sele ction and disbursing procedures exhibit some 
differences for each sector in accordance with the current financial regulations. Annual calls 
are common to both sectors. For the future, the benefits of the alternatives of  annual and/or 
multi-annual calls or joint calls should be assessed.  
In the field of TEN-T, allocati on of funds for Priority Project s, as identified in the TEN-T 
Guidelines, is made via a multi-annual work programme (MAP), covering 80 to 85% of overall financial envelope, and spanning the entire financial framework (2007-2013). Funding 
for other projects of common interest is made  via annual calls, within the limits of the 
remaining financial envelope. The full life cy cle of grants, within both the MAP and the 
annual work programmes, is centrally mana ged by the TEN-T Executive Agency (TEN-T 
EA), which organises the calls for proposals, eval uates the project applic ations, on the basis of 
which the Commission takes its funding allocation decisions, and monitors and evaluates the 
projects' implementation.  
The decision to allocate a majo rity of funds to Priority Proj ects, in a single MAP, is grounded, 
on the one hand, on the importance/priority of th e identified projects and, on the other hand, 
on the need to secure a stabilit y of perspective for the devel opment of these projects, which 
 143often span the seven years of the EU MFF.205 A mid-term review has been provided, that has 
allowed the possibility to take stock of the programme's performance, identify success factors 
and aspects that might be revised, as well as the reallocation of funds depending on the progress, or not, made in the implem entation of the respective projects.
 206  
In the field of TEN-E today annual programming  is the default programme management given 
the small budget envelopes. Give n the long lead time for energy in frastructure investment, the 
MAP could prove as a useful instrument to r eassure project promoters and investors with a 
long-term commitment of the Union support. As the project identificati on exercise will be 
carried out every two years, the combined use of annual and MAP could be explored. 
In the field of ICT, there is currently no specific support tool for deploying broadband 
networks on a pan-European scale. Future Union financial support for broadband networks 
would be provided to individual companies, sp ecial purpose vehicles a nd consortia involving, 
but not limited to, telecom companies, equipmen t suppliers, other utility companies (water, 
sewage, energy, transport), or construction companies which ma y find synergies in combined 
infrastructure investment and wh ich may invest either alone or in partnership with regional 
and local authorities, including municipalities, who will most likely establish concessions for 
managing wholesale services of broadband infr astructures. Funding would be managed by the 
Commission together with International Fina ncial Institutions. An annual work programme 
should be put in place to define in  greater detail the call planning.  
For digital service infrastruct ures, Union financial support w ould be granted to consortia 
involving: 
• The industry at large: systems builders,  content suppliers, service operators, 
Social Networking Sites, mobile and broadband operators, device manufacturers, businesses re-using and exploiting open data/public sector information. In all areas, a large involv ement of SMEs, in particular innovative 
SMEs in the ICT and creative indus tries sectors could be expected. 
• Member States public bodies and EU institutions as data providers and re-
users. In the particular case of Safe r internet, it would also involve the 
Ministries of Justice, Internal  Affairs, Education, alongside NGOs. 
                                                
 
205 Up to 2006, the project selection was made by means of yearly calls, covering an implementation of 2 to 3 
years. This proved however insufficient, since most TEN -T infrastructural projects have a much longer lead 
period, and the insecurity of the financial perspectiv e after the elapsing of the 2 or three years was not 
particularly attractive for project promoters. By contrast, "the [M AP] Programme is succes sful at providing 
political certainty to project promoters within the curren t funding available, owing to the strong political and 
financial support signalled by becoming a chosen TEN-T project" (Steer Davies Gleave, 2011, p. 57).  
206 Thus, it was found that about 37% of projects would finish in time, 20% with a delay of less than 12 months 
and 40% with a delay of more than 12 months. However, since in a majority of cases the delays were found to be justified by problems usually encountered in infrastruct ure building, the Commission decided that the duration of 
the projects affected could be prolonged up to end of 2015 (cut-off date), while projects that did not start in the 
two years following the funding decision adoption by the Commission, would be cancelled. The funds withdrawn would be re-injected into the programme. Among the key success factors were identified the project 
maturity and good project management. Conversely, insuff icient maturity of projects (either due to technical 
design or the financing plan) was identified as one of the main characteristics of the projects displaying the largest delays of facing cancellation. It was also found that criteria for fund awarding such as quality and impact 
had to be better defined in the future. The need to revise reporting mechanisms has also been identified, in order 
to ensure regular reporting on risk and risk management (see Assessment of TEN-T Programme Implementation, TEN-T EA, 2011; see also Mid-term evaluation of th e TEN-T Programme (2007-201 3), Steer Davies Gleave, 
2011; MAP Project Portofolio Review, TEN-T EA, 2010). 
 144Financing for digital service infrastructure will be disbursed primarily through grants. 
Management of the full life cycle of grants, in cluding the annual work programmes, would be 
centrally managed, organising the calls for proposals and evaluati ng the project applications.  
The conclusion following the mid-term review of the TEN-T programme implementation is 
that the MAP framework has been succe ssful in focusing funding on TEN-T policy 
priorities.207 At the same time, the structured, tr ansparent and comprehensive procedures 
managed by the TEN-T EA thr ough the calls of proposals have also been acknowledged as a 
successful formula for facilita ting the targeting of TEN-T f unding to EU transport policy 
priorities.208  In other words, the MAP has been  a successful formula for the TEN-T 
programme implementation, which should be ma intained and improved, based on lessons 
learned.209  
The experience with the MAP in the TEN-T Programme might suggest that it could be 
generalised also to the other two fields. 
However, precisely due to the di stinct sectoral policy prioritie s, MAPs – if adopted - would 
need to remain distinct in terms of scope and share of the total envel ope defined therein. This 
would be required in order to en sure the effectiveness and efficiency of the CEF in attaining 
its objective of accelerating TENs implementation. Ne vertheless, in order to remain consistent 
with the objective of maximising the explo itation of synergies between the sectors, 
particularly in areas such as smart energy gr ids, intelligent transport systems, or electro-
mobility, MAPs could be coordinated. Another ar ea of synergies might lie in the realm of 
procedures, for organising the calls of proposals, communicat ion with project promoters, 
disbursement of allocated funds, both w ithin the MAP and the annual programmes 
framework, where an exchange between th e three Commission services on successful 
practices and lessons learned could lead to the es tablishment of a best pr actice standard shared 
by all fields. At the same time, insofar as a nnual calls constitute a framework common to all 
fields, organising common annual calls could be envisaged at least for calls managed by the 
Commission executive agency. 
Concluding, the basic disbursement of the funds  through annual calls, the organisation of joint 
calls and the cooperation and coordination of  the multiannual work programmes, where such 
an approach is chosen, would allow the CEF to explore synergies between the sectors and 
should provide for the useful degree of harm onization with a view to the CEF objectives.  
 
5. Monitoring instruments  
The current TEN-T/TEN-E Financial Regulation provides that "the Commission and the 
Member States, assisted by the beneficiaries, may  undertake an evaluation of the methods of 
                                                 
207 Over 60% of the funding allocated concern cross-border projects, and about 30% EU wide projects, while 
overall the Priority Projects represent 81% of the total fina ncial envelope allocated. Overall, to date, more than 
90% of the programme's funds have been allocated. 
208 See European Court of Auditors, Sp ecial Report No. 8, 2010. Stakeholde rs have also highlighted the clear 
project eligibility rules as a positive aspect of TEN-T programme implementation (see Annex, summary of stakeholder consultation on the Green Paper "TEN-T: a policy review", answers to set of question no. (3). 
209 Among the key success factors were identified the project maturity and g ood project management. 
Conversely, insufficient maturity of projects (either due to technical design or the financing plan) was identified 
as one of the main character istics of the projects displaying the largest delays of facing cancellation. It was also 
found that criteria for fund awarding such as quality and impact had to be better defined in the future. The need 
to revise reporting mechanisms has also been identified, in order to ensure regular reporting on risk and risk 
management. (see TEN-T EA, "Assessment of TEN-T Prog ramme Implementation"; also Steer Davies Gleave, 
"Final Report" and TEN-T EA, "MAP  Project Portofolio Review"). 
 145carrying out projects as well as the impact of  their implementation, to assess whether 
objectives, including those relatin g to environmental protection, have been attained.  The 
Commission may  request a beneficiary Member State to provide a specific evaluation of 
projects financed or, where appropriate, to pr ovide it with the info rmation and assistance 
required to undertake an eval uation of such projects."  
The framework leaves room for variation with  regard to monitoring practices: on the one 
hand, it leaves at the choice of the Commission  and/or Member States to undertake or not 
project monitoring and, on the othe r hand, at the choice of bene ficiaries/Member States how 
to organise and provide the information. Yet, as  pointed out in the problem definition section 
of the IA report, more rigorous monitoring practices, including thro ugh the definition of 
standardised indicators, focusi ng on outputs, are necessary.  
Given the common objectives that  would need to be pursued within the CEF in the three 
sectors, common monitoring instru ments providing for an evaluation of the impact of the CEF 
on the Europe 2020 objectives could be envi saged, starting from relevant Europe 2020 
Strategy indicators. Another set of common indi cators could be envisaged in order to allow 
the Commission to assess the impact of Unio n aid provided under CEF, separately for the 
financial instruments and the grants, in each of the three sectors. This will allow evaluating 
comprehensively their contribution to  the key objectives of the CEF.  
In addition to the continuous monitoring by the Commission and othe r implementing bodies, 
an independent evaluation of general CEF fr amework should be carried out at mid-term, 
taking into consideration the timing and advan cement of programming as well as ex-post, a 
certain number of years after the end of the programming period. The eval uations will assess 
the intervention's relevance, efficiency, eff ectiveness, and preliminary impact. Specific 
emphasis should be given to the leverage eff ect of the Union aid by comparing past and 
present investment levels, the annual value of EU funds engaged compar ed to the total value 
of beneficiary, and the timeliness of the funds disbursement.  
As the three sectors are different in the way th ey are financed and regulated, there should be 
ample room for the Commission to ensure the pr oject monitoring with regard to the progress 
towards the sector specific obj ectives. They should, however, have in common the "focus on 
results" principle put forwar d by the Commission for the EU  budget in the next MFF.  
For example, in the field of energy, the monitori ng of the CEF leverage effect should be based 
on energy specific indicators a ssessing, such as: the share of  actions that entered the 
construction phase; the number of  actions contributi ng to the EU’s ener gy and climate policy 
objectives effectively enabled; the number of actions contribut ing to the integration of the 
internal energy market and the interoperability of  the network effectively enabled; the number 
of actions contributing to dive rsification, enhancing the regi onal or EU-wide security of 
supply and solidarity among Member States effectively enabled.  
In transport, it should focus on the achievemen t of priorities as se t under the revised TEN-T 
Guidelines, such as: number of new cross- border connections a nd removed bottlenecks 
effectively enabled with CEF suppor t via grants and/or financial instruments, or travel time, 
cost savings and increased safety (in terms of accidents reductions) registered on major 
transport routes where action con cerning specific sections has be nefitted of CEF grant and/or 
financial instruments support. 
In the field of ICT infrastructure and digita l services, the performance indicators should 
ascertain whether the objectives of the Digita l Agenda for Europe (DAE) are being achieved: 
such as (non-exhaustive list): high speed broadband c overage, to be checked against the DAE 
targets of access to 30 Mbs for all citizens by 2020; high speed broadband uptake, to be 
 146checked against the DAE target of 50% of c itizens having  subscriptions for above 100 Mbs 
by 2020; implementation, availability and uptake of digital service infrastructures, as identified in e-TEN Guidelines.  
In addition, in the field of energy, on the ba sis of the guidelines, the Commission will be 
expected to closely assess the progress achieved by each
 project of common interest with 
regard to the implementation of the 12 priority corridors and areas. This will be monitored on 
the basis of regular reports from project prom oters, Member States' authorities and national 
regulators. The Commission is to report under the guideline s on the progress achieved. The 
Commission would ensure monitoring and eval uation via an implementation report on a bi-
annual basis, a mid-term evaluation in 2017 and a final evaluation. In addition, the Commission proposes to set up a transparency platform allowi ng the general public to follow 
the advancement of individual projects of  common interest in the field of energy. 
In the field of transport, the mid-term evaluation of the implementation of the TEN-T 
programme has concluded that the monitoring pr ocedures developed have been successful in 
ensuring project accountability of  project promoters. The proce ss is undertaken primarily with 
the support of the TEN-T EA. Me mber States are required to  undertake technical monitoring 
and financial control of projects in close co operation with the Commission, and need to 
provide the Commission with a description of the control, management and monitoring 
systems set up to ensure that projects are su ccessfully completed. In addition, in MAP type 
projects, payments are dependent on the ade quate completion of project milestones to the 
targets that were submitted at the time of th e funding decision (i.e. the "use or lose it 
principle". Under the CEF, the current proc edures could be maintained, though further 
developed, with a better definiti on of monitoring indicators, part icularly with regard to the 
"use or loose it" principle,
210 and other types of project incentives could render project 
implementation even more effective.211 
In ICT and digital infrastructure, further speci fic indicators could be  developed, drawing on 
the experience gathered under the current pr ogrammes that DG INFSO is managing, notably 
in the field of pilots deployment, a number  of main indicators could be proposed. The 
Commission could regularly present a progress report on CEF broadband networks and digital 
service infrastructures investment, which w ill be submitted the European Parliament, the 
Council, the European Economic and Social Committee and the Committee of the Regions.  
 
6. Management structure 
Today, the management of the EU financial support for TENs development and 
implementation is managed centrally, in th e field of energy, within the specialised 
Commission service (DG ENER), while in trans port, the management of the implementation 
of the TEN-T Programme, while still centrally  managed, has been delegated, starting with 
2007, to the TEN-T EA. With regard to additio nal funds (outside TENs) available for TEN 
infrastructure projects to Me mber States eligible for Cohesion Funds support, the 
management of these funds is shared be tween the Commission (DG REGIO) and the 
government of the Member State concerned.  In the case of both TEN-E and TEN-T, the 
Commission is assisted by a Committee on financ ial issues, and in the case of TEN-T by 
European Coordinators, tasked  with facilitating and mon itoring the implementation of 
particularly complex projects. For TEN-T, the Commission has also developed, in the context 
                                                 
210 In the past, proposals were not requiring a clear definition of the outputs leading to difficulties in interpreting 
if milestones were met. 
211 See assessment and recommendations in Steer Davies Gleeve. 
 147of the Open Method of Coordina tion, the TENtec information system, a platform to collect, 
store, and provide information Open Method of  Coordination (OMC) platform to collect and 
store continuously technical- an d financial data for the entir e TEN-T network per section, 
accompanied by dynamic Geographical Information System (GIS) to both Members States and to the public at large.  For TEN-E, a GIS has also been developed. 
In the field of transport, the management of  the TEN-T programme by means of an executive 
agency, established at the recommenda tions of the Court of Auditors,
212 has been 
unanimously acknowledged as successful.213 The governance of the programme as compared 
to previous years has improved, due mainly to mo re rigorous calls for pr oposals, as well as to 
Agency's capacity to offer management assistance  to project promoters.  It has also provided 
more control over how the public money is sp ent, thanks to a tightly managed payment 
procedure. Consequently, there is a general support for the activity of the TEN-T EA and the 
extension of its mandate.214  
In addition, another argument in  favour of extending the TEN-T EA mandate is constituted by 
the important savings in administ rative costs it incurs. A Cost-Benefit Analysis that compared 
two strategic options for the management of the TEN-T programme from 2007/2008 until 
2013 with a phasing out period until 2015 – "in house option", i.e., continued management within the Commission's specialised service versus  "executive agency option" – arrived at the 
conclusion that an estimated €9.88 million cost sa vings would be registered if the TEN-T EA 
exercised full responsibility for the entire ma nagement of the TEN-T project cycle, due 
mainly to the external staff cost structur e and a combination of qualitative improvements.
215   
Similarly, the European Coordinators have b een found to have adequately assisted the 
Commission to the delivery of the projects selected. Their role ha s proven an effective 
mechanism to address political sensitivities inhe rent in cross-border projects as well as 
provide visible coordination enhancement.216 Equally, the TENtec has proven of great support 
to the work of the Commission as well as to the Member States, as it supports the evaluation 
of projects proposals and progress in implementa tion on the basis of the eSubmitted data, as 
well the editorial preparation of the individual decisions of each project selected by the EC, 
delivering project decisions printed in a format (legiswrite) ready for publication.  
By contrast, with regard to the funds alloca ted to TEN-T within the Cohesion Fund, ex-post 
evaluations have concluded that  their management under the sh ared structure has been less 
efficient that in the case of the centrally managed TEN-T. As the overall responsibility for 
choosing the projects remains at national level, at the beginni ng of the financial period and 
without the possibility of revi sion until the end of the period, the end result has been "an 
unclear prioritisation of projec ts and dissemination of funds."217 A logical conclusion would 
                                                 
212 Special Report No. 6/2005 on the Trans-European network for transport, Court of Auditors, 2005, OJ C 94/1-
36.  
213 Steer Davies Gleeves; Co urt of Auditors, 2010. 
214 All the Member States consulted in  the context of the study "Update of  the Cost-Benefit Assessment of the 
Externalisation of the Management of Community Financ ial Support to the TEN-T Networks", conducted by an 
external consultancy group at the request of the Commis sion, have expressed their support for the Agency and 
the extension of its mandate. The conclusion of the "Final Report" of the above mentioned study also concluded that the mandate of the TEN-T EA be  extended (see COWI, "Final Report"). During the process of consultation 
on the Green Paper "TEN-T: A policy Review", the rail industry proposed TEN-T EA as a platform for best 
practice. (see Annex 1, summary of stakeholder consultations, Green Paper, answer to the set of questions no. (4)) 
215 COWI/ECORYS, "Final Report", pp. 70-75. 
216 See assessment in Steer Davies Gleeves. See also results  of stakeholder consultation on 2009 Green Paper, as 
summarised in Annex 1, responses to set of questions no. (4). 
217 Ibid, p. 13. 
 148be that, for the Cohesion Fund funds allocated to TEN-T under the CEF, according to the 
Commission proposal in its M FF Communication, centralised ma nagement by means of the 
Agency and, for those with a cross-border di mension, with the support of the European 
Coordinators, would constitute a better alternative.  
In the field of ICT, broadband network infras tructure funding is an entirely new concept. 
Synergies with the structural funds could take  place mainly through combination of financial 
instruments and grants funded by the Structural Funds. In practice, that could mean that a 
consortium co-financed by the Commission thro ugh financial instruments might have among 
its member a local authority which is benefiting  from Structural Funds' financing for that 
project.  
In the field of energy, it will also be essential to  ensure that the availa bility of the Union aid 
for concrete projects is clos ely coordinated with the effec tive use of other instruments 
proposed under in the domain of regulatory and permit granting.  
Overall, when considering funding management under the CEF, in all three fields concerned, 
it needs to be ensured,  first and foremost, that effec tive programming, efficient financial 
management and control, project monito ring and evaluation of progress towards 
implementation of projects of common interest need to be ensured. The experience with the 
TEN-T EA and the European coordinators woul d recommend them as a management formula 
to be potentially used in the future. This c oncept could be also extended to the other two 
sectors, as far as grant management is concerned.218 Indeed, as the Commission has already 
acknowledged in the MFF Communi cation, in its management of grants under CEF, the 
Commission should be assisted by an executive agency.  
Two alternatives could be suggested: the establ ishment of sector agencies or amending the 
mandate of the current TEN-T EA in order to encompass support for grant management also in the areas of TEN-E and digital infras tructures or the centralized management. 
Separate agencies for each sector would have the advantage of higher specialisation in the 
implementation of projects. This would also be justified if they became charged with 
additional, sector specific  activities, going beyond grant management. While separate 
agencies would require administrative costs,  an enlarged TEN-T EA could provide the 
advantage of a single institutional structure, at potentially lower costs, for the management of 
grants.  
However, the more complex structure of the CE F, combining financial instruments, grants 
and cohesion funds (in the field of transport) , would require a more centralized management 
to be developed within the Co mmission or in separate implem enting bodies. There is a clear 
need to ensure that the Union aid, both financial instruments and grants, will be managed in a coordinated manner and funds are spent in the most cost-efficient and tailor-made way in 
relation to the project needs, in  close cooperation with the EIB a nd the project promoters. This 
centralized approach will ensure that the availab ility of the Union aid fo r concrete projects is 
closely coordinated with the effective use of  other measures proposed, e.g. such as the 
regulatory and permit granting proposed in the fi eld of energy. Such a management across the 
sectors and instruments could be ensured by the set up of a new dedicated CEF agency.  
With regard to European Coordinators, thei r role in supporting TENs implementation has 
been acknowledged, as highlighted earlier, in both the area of TEN-T and TEN-E.  However, 
appointing common Coordinators mi ght only make sense in cases of cross-sectoral projects 
with a cross-border dimension involving the same Member Stat es. Else, the highly specific 
                                                
 
218 With regard to the management of financial instruments, see discussion in Annex 4. 
 149characteristics of the individual projects in th e different sectors would make it impossible for 
the Coordinators to effectively carry out their ma ndate. In any case, even in the context of the 
TEN-T, European Coordinators have generally been  appointed for a single Priority Project.  
Finally, the good experience so far with the implementation of the TENtec system219 
recommends it to be extended also to the other se ctors. In the case of TEN-E in particular, the 
development of the GIS is already underway. Possible synergies coul d therefore be sought 
with common project tools already under way, such as Jessica, Jaspers or GIS mapping. 
                                                 
219 The system has become operational only in the past year, and it is still being developed.  
 150ANNEX 6 
 
GLOSSARY 
Action  means any activity that is necessary to imp lement a project of common interest and of 
mutual interest and is independent financially, technically or over time. 
Bottleneck  (transport) means a physical barreer that  leads to a system break affecting the 
continuity of long-distance flows. Such a bottl encek can be absorbed by new infrastructure 
such as bridges or tunnels that  address problems as for example gradiants, curve radii, gauge. 
The need to enlarge existing infrstructure shall not be consider ed as a bottleneck. 
Broadband networks  (ICT) means wired and wireless (i ncluding satellite) access networks, 
ancillary infrastructure and core  networks capable of deliveri ng very high speed connectivity. 
Core Network (transport)  consists of those parts of the wider/comprehensive TEN-T network 
which are of the highest strate gic importance for the achievement  of the objectives concerning 
the development of the trans-European network.  
Cross-border section  means the sections, which ensure the continuity of a project of 
common interest between at least two Member  States or between a Member State and a 
neighbouring country. 
Digital service infrastructures  (ICT) mean services providing interoperable services in the 
public interest, i.e. having an enabling charac ter for businesses, citizens, and governments, 
delivered electronically, typi cally over the Internet. 
Debt instruments  refer to financial mechanisms that  facilitate the le nding of money to 
infrastructure companies, under the form of lo ans or guaranties for in stance. For instance, The 
Equity instruments  hereby refer to funds that aim at provi ding equity or quasi equity to (i.e. 
investing in) companies which own or operate in frastructure. An example is the Marguerite 
Fund, a pan-European equity fund which aims to act as a catalyst for infrastructure 
investments implementing key EU policies in th e areas of climate change, energy security, 
and trans-European networks. It is part of  the European Economic Recovery Plan.  
(Innovative) Financial instruments220 are financial mechanisms that aim at attracting and 
facilitating private sector finance in the projec ts. They can be of Equity or Debt nature. 
Financial instruments can be used in the fr amework of Public–private partnership (PPP). 
European added value of projects means the value of spill-over effects to non-investing 
countries and regions. Cross-bord er projects typically have hi gh spill-over effects, but lower 
direct economic effects compared to purely nation al projects and therefor e are not likely to be 
implemented without EU support. 
The Loan Guarantee Instrument  for TEN-T projects (LGTT)  is also a debt instrument set 
up and developed jointly by the EC and the EIB in 2008. It is designed to facilitate greater 
participation of the private sector in financing TEN-T infrastructure by significantly improving the risk profile of lenders by taking th e revenue ramp-up risk in the early years of 
TENs projects. 
Project Bonds  are also a type of Debt instrume nt. With the Europe 2020 Project Bond 
Initiative, bonds would be issued by proj ect companies and the European Union budget 
                                                
 
220 See also Annex 4 for more details. 
 151together with EIB financing woul d be used to improve the credit quality of  the bonds in order 
to attract funding in particular from private in vestors on the capital market such as pension 
funds and insurers. They should not be mixed up with Eurobonds, which are discussed in the 
context of the debate on the Pub lic Debts of EU member States. 
Public–private partnerships  describe a government servi ce or private business venture 
which is funded and operated th rough a partnership of government and one or more private 
sector companies. PPP involve a contract betw een a public sector authority and a private 
party, in which the private part y provides a public service or project and assumes substantial 
financial, technical and opera tional risk in the project 
The Risk Sharing Finance Facility  (RSFF) of the European Commission and the European 
Investment Bank is also an innovative scheme to improve access to debt financing for private companies or public institutions promoting activi ties in the field of research, development and 
innovation. RSFF is built on the principle of cr edit risk sharing between the European 
Community and the EIB and extends therefore th e ability of the Bank to provide loans or 
guarantees for investment with a hi gher risk and reward profile. 
Structured Finance Facility (SFF) is a Fund of the European Investment Bank (EIB) for 
loans with a capital guarantee a llowing financing to projects th rough instruments that have a 
riskier risk profile than the ones normally accepted by the bank.
  
Studies means activities needed to prepare project implementation, such as preparatory, 
feasibility, evaluation, testing an d validation studies, including in the form  of software, and 
any other technical support measure, including prior action to define and develop a project 
and decide on its financing, such as reconnaissa nce of the sites concerned and preparation of 
the financial package. 
Works  means the purchase, supply and deployment of components, systems and services 
including software, the carryi ng out of development and cons truction and installation works 
relating to a project, the accep tance of installations and the launching of a project.