Communication from the Commission to the Council and the European Parliament - Financial assistance by the European Communities to the energy sector from 1995 to 1997
Date: 1998-04-22
Institutions: European Commission
Subjects: EU financial instrument, EU financing, EU policy, EU programme, energy policy

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 22.04.1998 
COM(1998) 244  final 

COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT 

FINANCIAL ASSISTANCE BY THE 

EUROPEAN COMMUNITIES TO THE 

ENERGY SECTOR FROM 1995 TO 1997 

FINANCIAL ASSISTANCE BY THE 

EUROPEAN COMMUNITIES TO THE ENERGY SECTOR FROM 1995 TO  1997 

CONTENTS 

1. 

2. 

INTRODUCTION 

SUMMARY 

-  Recapitulative table 

-  Grants 

-  Loans 

-  Guarantees 

-  Financial assistance to non-EU countries 

CHAPTER A : 

Financing of energy policy 

CHAPTERS: 

Trans-European  energy networks 

CHAPTER  C : 

Energy research  and  development 

CHAPTER  D : 

Structural funds 

CHAPTER  E: 

Financial instruments for  international 
cooperation 

CHAPTER  F: 

ECSC grants to the coal industry 

CHAPTER  G: 

Effi  loans 

CHAPTER  H; 

ECSC and Euratom loans 

CHAPTER  I; 

EEF guarantees 

2/24 

p.  3 

p.  4 

p.  7 

p.  9 

p. 10 

p. 14 

p. 16 

p. 18 

p. 20 

p. 22 

p. 24 

INTRODUCTION 

The European Communities have  substantial financial instruments to  support  measures to 
implement their common policies. 

By virtue of the strategic role played by energy in attainment  of several of its  fundamental 
objectives, particularly on economic growth, greater cohesion,  quality of life  and relations 
with  non-EU  countries,  the  European  Communities  have  been  and  still  are  drawing  on 
their financial instruments to promote action and projects in the energy sector. 

Hitherto  the  energy  policy  issues  emphasised  by  the  European  Union  and  shaping  its 
financial  support for the energy sector have been: 

-  management of external dependence and security of energy supplies; 

-  completion of the internal energy markets in order to increase  competitiveness; 

-  development  of energy networks across frontiers and in under-equipped regions; 

- 

the compatibility of energy and environmental objectives for sustainable  development; 

- 

the development  of energy technology and research. 

This Communication  on financial  assistance  for the period  1995  to  1997 is  a contribution 
to the efforts to foster  openness initiated by the  Communication  entitled  "An overall  view 
of energy policy  and actions"/0  It  also  contributes  to  the  discussions  in progress  on  the 
proposal  for  a  Council  Decision  adopting  a  "multiannual  framework  programme  for 
actions  in  the  energy  sector  (1998-2002)  and  connected  measures.(I) 
In  addition,  it 
highlights  the  importance  of  energy  in  the  assistance  provided  through  the  horizontal 
financial  instruments and funds. 

(,)  COM(97) 167 final of 23.4.1997. 
^  COM(97) 550 final of 18.11.1997. 

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SUMMARY 

1. 

This Communication  sets out  for information  purposes all the figures for  financial 
assistance  from  the  European  Communities  to  the  energy  sector  from  1995  to 
1997.  This assistance  can take  the  form  either  of  aid  (non-reimbursable  grants), 
Community contributions to projects  of Community interest, loans, or guarantees, 
and can come from the following  sources, depending on the case in point: 

-  financial  instruments specifically for the energy sector, for example the SAVE,(3) 
networks 

ALTENER,(4)  SYNERGY,(5) 
trans-European 
programmes/*0 and the ECSC grants to the coal industry; 

energy 

and 

-  financial  instruments specifically  for  other internal policies but including energy 
measures,  such  as the  JOULE-THERMIE  programme^  under  the framework 
research and development programme; 

-  general  financial  instruments  such  as  the  Structural  Funds  or  the  European 
Investment  Bank  with  a range  of activities including  support  foi  development 
work and investment in the energy sector; 

-  financial  instruments  specifically  for  international  cooperation  and  including 
energy measures, such as the PHARE(8) and TACIS(9) programmes or the EDF. 

2. 

The table below shows the amounts of financial assistance provided by the various 
instruments. 

FINANCIAL  INSTRUMENTS 

I.  GRANTS 

A.  Financing of energy policy 
B  Trans-European energy networks 
C.  Energy research and development 
D. Structural  Funds 
E.  Financial instruments for international 

cooperation 

(ECU million) 

1995 
1848.6 
41.7 
12.2 
775.6 
500.0 
393.2 

1996 
1393.3 
37.8 
8.9 
524.1 
500.0 
245.0 

1997 
1414.7 
36.8 
24.2 
580.1 
500.0 
184.8 

TOTAL 
4656.6 
116.3 
45.3 
1879.8 
1500.0 
823.0 

F.  ECSC grants to the coal industry 

125.9 

77.5 

88.4 

291.8 

n. LOANS 

G. EEB loans 
H. ECSC and Euratom loans 

HL  GUARANTEES 
I.  EIF guarantees 

3100.8 
3083.0 
17.8 

4957.2 
4945.0 
12.2 

2171.0 
2090.4 
80.6 

11.9 
11.9 

270.2 
270.2 

3.7 
3.7 

10229.0 
10118.4 
110.6 

285.8 
285.8 

(3) 
(4) 
(5) 
(6) 
o 
<•> 

96/737/EC: Council Decision of 16 December 1996 (OJ No L 335 of 24.12.1996). 
93/500/EC: Council Decision of 13 September 1993 (OJ No L 235 of 18.9.1993). 
Council Regulation (EC) No 701/97 of 14 April 1997 (OJ No L 104 of 22.4.1997). 
Council Regulation (EC) No 2236/95 of 18 September 1995 (OJ No L 228 of 23.9.1995). 
94/806/EC: Council Decision of 23 November 1994 (OJ No L 334 of 22.12.1994). 
Council Regulation (EEC) No 3906/89 of 18 December 1989 (OJ No L 375 of 23.12.1989). 
Council Regulation (EURATOM,EC) No 1279/96 of 25 June 1996 (OJ No L 165 of 4.7.1996). 

4/24 

3. 

4. 

5. 

6. 

Community  grants to  the  energy  sector  come from the  general  budget  and from 
the ECSC budget. 
hi  the  general  budget,  the  energy  section  of  the  R&D  framework  programme, 
including  the  JOULE-THERMIE  programme  and  the  Structural  Funds,  are  the 
biggest headings of relevance to energy. 
The  ECSC  budget finances measures  in  the  coal  industry,  in  particular  for  the 
redeployment  of  workers,  interest-rate  subsidies  for  industrial  restructuring  and 
research programmes in the sector. 

Community  grants  and  contributions  to  the  energy  sector  totalled  ECU 4 656.6 
million  in  the  report  period  (1995-1997).  Of this total,  93.7  %,  or  ECU 4 364.8 
million, came from the general budget. 

Almost  all the loans from the financial instruments  of the European  Communities 
to energy projects come from the European Investment Bank (EBB).  Total lending 
of  which 
over 
ECU  10 118.4 million was from the EIB and ECU  110.6 million from the ECSC. 

at  ECU  10 229 million, 

period 

report 

stood 

the 

The  financial  instrument  which  can  guarantee  energy  loans  is  the  European 
Investment Fund (EIF). 
Over the report period, the EIF guaranteed a total of ECU  285.8 million. 

The European  Union  also grants financial assistance  to  non-EU  countries  as part 
of its international cooperation policy. 

The table  below  summarises  assistance  given  outside  the  European  Union,  as a 
proportion  of all energy assistance. 

FINANCIAL INSTRUMENTS 

1 

TOTAL 

(ECU million) 

L  Grants 

amount to non-EU countries 
proportion 

II.  Loans 

amount to non-EU countries 
proportion 

III.  Guarantees 

amount to non-EU countries 
proportion 

4656.6 
823.0 

10229.0 
1986.0 

285.8 
182.0 

17.7 % 

19.4 % 

63.7 % 

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7. 

Details  of the  breakdown  of  Community  grants,  loans  and guarantees  for  energy 
from  1995  to  1997  from  the  different  sources  are  given  in  the  following  nine 
chapters: 

A. 

B. 

C. 

D. 

E. 

F. 

G. 

H. 

I. 

Financing of energy policy 

Trans-European energy networks 

Energy research and development 

Structural Funds 

Financial instruments for international cooperation 

ECSC grants to the coal industry 

E1B loans 

ECSC and Euratom loans 

ELF guarantees 

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A. 

FINANCING OF ENERGY POLICY 

The  following  table  shows  the  amounts  committed  from  1995  to  1997  for  the 
various energy policy measures. 

PROGRAMMES / ACTIONS 

SAVE 
ALTENER 
SYNERGY 
Observatory 
Regional energy planningl 
Other measures 
TOTAL 

; 

(in ECU million) 

1995 
7.20 
13.17 
13.77 
2.06 
5.50 

-
41.70 

1996 
15.00 
10.00 
9.00 
1.77 

2.00 
37.77 

* 

1997 
17.91 
8.92 
6.86 
2.15 
-

0.99 
36.83 

The  SAVE  II programme,  designed  primarily  to  improve  energy  efficiency,  was 
given  an  indicative  budget  of  ECU 45  million  for  1996-2000.  In  1996  regional 
energy planning was made an integral part of the SAVE II programme, which was 
given  the  title  "Regional  and  urban  energy  management".  A  total  of 
ECU 5.2 million was committed under this heading in  1996, and ECU 5.7 million 
in 1997. 

The ALTENER programme to promote renewable energy sources has a budget of 
ECU 46.4 million for  1993-1997. 

(l0)  Programming was made an integral part of the SAVE II programme in 1996. 

7/24 

SYNERGY is an international cooperation programme concerned  exclusively with 
the  energy  sector  and,  more  specifically,  with  helping  non-EU  countries  to 
formulate  and implement their energy policies. 

The  breakdown  of  the  support  granted  from  1995  to  1997  in  the  main  world 
regions was as follows: 

Breakdown of SYNERGY funding  bv region 

General 
CEEC 
CIS 
Mediterranean 
Asia 
Latin America 
Africa 
Several regions 
TOTAL 

1995 
242 
4820 
2666 
2520 
1131 
1040 
-
573 
12992 

% 
1.9 
37.1 
20.5 
19.4 
8.7 
8.0 
-
4.4 
100.0 

1996 
634 
2146 
742 
1437 
1730 
1168 
224 
889 
8970 

% 
7.1 
23.9 
8.3 
16.0 
19.3 
13.0 
2.5 
9.9 
100.0 

(in 

'000 ECU) 

1997 
950 
622 
1266 
1079 
1047 
948 
209 
739 
6860 

% 
13.6 
8.5 
18.2 
15.5 
15.0 
13.3 
3.0 
10.6 
100.0 

Note :  The heading "Several  regions" concerns operations  in  the  Black  Sea area bringing together 

countries belonging mainly to the CEEC, CIS and Mediterranean regions. 

5. 

The European  Energy Observatory was set up in 1995 and is designed to: 

-  monitor  energy  markets,  trends,  developments  and  outlooks  in  terms  of  the 

supply, demand and prices of the various energy sources; 
-  evaluate and disseminate any information  on these areas; 
-  develop a Community method of analysis; 
-  establish  special  networks  on the  interaction  of the  energy  sector  with  all the 

other scientific, economic and social activities. 

Its allocation from 1995 to  1997 was ECU 5.98 million. 

6. 

7. 

Euratom funds  activities relating to the transport  of radioactive materials.  A total 
of  ECU 2 million  were  committed  in  1996  and  ECU 0.7 million  in  1997  (see 
"Other measures" in the Table in point A. 1.). 

On  18 November  1997  the  European  Commission  adopted  a  proposal  for  a 
Council  Decision  which  proposes  to  bring  together  in  a  single,  multiannual 
framework programme  all Community actions and programmes to  do with energy 
policy  in  the  years  1998  to  2002,  which  will  make  it  possible  to  improve  the 
transparency, effectiveness  and coordination of EU energy policy activities. 

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B. 

1. 

TRANS-EUROPEAN  ENERGY NETWORKS 

The TEN programme has been given an indicative budget  of ECU  112 million  for 
It  is  designed  to  help  establish  and  develop  trans-European  energy 
1995-99. 
networks, helping to interconnect national networks and make them interoperable, 
and  to  provide  access  to  these  networks  and  to  extend  them  outside  the 
Community. 

The programme  is intended  to  cover  some  of the  costs  of  conducting  economic 
and technical feasibility  studies, and preparatory studies and appraisals.  It can also 
provide interest  subsidies, reduce the  cost  of guaranteeing  a loan,  or  grant  direct 
subsidies, where such cases are properly justified. 

The measures covered by the report period  relate  exclusively to the joint  funding 
of studies on projects of common interest. 

2. 

The table below shows the amounts committed from 1995 to  1997 by sector : 

SECTOR 

Electricity 
Natural  gas 

TOTAL 

1995 
6.5 
5.7 

12.2 

1996 
3.7 
5.2 

8.9 

(in ECU million) 

1997 
9.2 
15.0 

24.2 

3. 

This next table gives a breakdown  of financial  support  according to the priorities 
for Community action on trans-European energy networks: 

the 

required 

PRIORITY 
Developing  electricity  interconnections  between  Member  States 
including 
to  establish 
internal  connections 
interconnections between Member  States 
Developing  electricity  interconnections  between  Member  States 
and non-EU countries in Europe and the Mediterranean 
Bringing  natural  gas  to  new parts  of Member  States  and  linking 
up isolated gas networks to the interconnected European networks 
Increasing  LNG  handling,  transmission  and  storage  capacity  to 
meet  demand  and  diversifying  natural  gas  sources  and 
transmission  routes 

(in ECU million) 

1995 
2.39 

1996 
0.72 

1997 
4.53 

4.09 

1.92 

3.76 

3.00 

0.97 

4.65 

0.58 

4.21 

14.44 

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C. 

ENERGY RESEARCH AND DEVELOPEMNT 

The  4th  Framework  Research  and  Technological  Development  Programme  for 
1994-98 funds  or part-funds  specific  energy  projects  from  an  available budget  of 
ECU 2 403 million in the following areas: 

-  Non-nuclear energy 

The "Non-nuclear energy" programme has a section for  research  (JOULE) and a 
section for demonstration projects (THERMIE). The budget is ECU  1  039 million. 

-  Nuclear  fission 

The programme on nuclear fission safety and safeguards has a budget of 
ECU  170.5 million and covers the following areas: 

•  exploring new approaches 
•  reactor  safety 
•  management and storage of radioactive waste and decommissioning 
•  effects  of radiation on man and the environment 
•  dealing with the consequences of past events. 

-  Controlled thermonuclear  fusion 

This programme, which incorporates  all the research into mastering fusion  energy 
carried out in the Member States, has a budget of ECU 846 million and covers the 
following areas: 

•  "Next  Steps",  particularly  as  regards  the  International  Thermonuclear 

Experimental Reactor (ITER) 

•  Joint European Torus (JET) 
•  conceptual improvements 
long-term technology. 
• 

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2. 

The purpose  of the  THERMIE  programme  is to  support  demonstration  projects, 
and also strategy, dissemination and measures to encourage small businesses. 

2.1.  The objectives of THERMIE are: 

to improve energy efficiency  in terms of supply and demand; 
to promote more extensive use of renewable energy sources; 

- 
- 
-  to encourage cleaner and more efficient  use of coal and other solid fuels; 
- 

to optimise the use of oil and gas in the EU. 

2.2.  THERMIE is in two sections: 

THERMIE  -  A: financial support  for  shared-cost  demonstration  projects  to  use 
new energy technologies in the following areas: 

•  rational use of energy; 
•  renewable energy sources; 
•  fossil fuels. 

THERMIE- B: financial support for other activities in the following areas: 

•  development and implementation of an energy RTD strategy; 
•  dissemination of energy technologies; 
•  concerted action and cooperation networks; 
•  preparatory, flanking and support measures; 
•  measures providing incentives to encourage and facilitate the participation 

of small and medium-sized enterprises in RTD activities. 

2.3.  The  THERMIE  programme  also  provides  support 

in  non-EU  countries. 
Accordingly,  from  1995  to  1997  it  provided  106  B-type  schemes  (associated 
measures) with support totalling ECU  10.2 million. 

2.4.  The  table  below  shows  the  breakdown  of  THERMIE  appropriations  committed 

between  1995 and 1997. 

THERMIE 

•  Demonstration (A) 
*  Associated measures (B) 
•  Miscellaneous 
TOTAL 

1995 
110.5 
29.0 
1.3 
140.8 

(in ECU million) 

1996 
113.3 
17.7 
-
131.0 

1997 
148.1 
10.1 
1.5 
159.7 

11/24 

The purpose of JOULE is to encourage research  and technological development in 
the area of clean and efficient  energy technologies in order to  contribute to  energy 
safety and sustainable development. 

JOULE comprises technical fields relating to: 

-  RTD energy  strategy  and the  analysis of the relationships between  energy, the 

environment  and the economy; 
the rational use of energy; 

- 
-  renewable energies; 
-  solid fuels. 

The amounts committed under the JOULE programme were ECU  183.7 rnillion in 
1995, ECU 42.8 million in  1996 and ECU  132.7 million in 1997. 

4. 

Community  RTD  activities  concerning  FUSION  energy  are  focused  on  the 
long-term objective of the joint  construction  of reactors and electrical power plant 
prototypes which meet society's needs, such as safety  of operation, respect  for the 
environment  and economic viability. These activities are mainly pursued  as part  of 
the  shared-cost  actions  with  organisations  in  the  Member  States  (Associations), 
under the auspices of the JET (Joint European  Torus) Joint Enterprise  and as part 
of  multilateral  agreements.  Specific  activities  concerning  fusion  technology  are 
also carried out at the Joint Research Centre (JRC). The following table shows the 
breakdown  of  the  Community  contribution  to financing provided  between  1995 
and 1997. 

Associations 
JET 
JRC 
Others 
TOTAL 

(in ECU million) 

1995 

1996 

88.0 
65.3 
10.8 
28.3 
192.4 

89.7 
58.6 
10.1 
37.4 
195.8 

1997 
(estimate) 
107.4 
65.2 

40.9 
223.1 

12/24 

The  following  table  gives  details  of  research  and  development  expenditure  in  the 
energy sector from 1995 to  1997. 

COMMITMENTS 

A.  Direct action (JRC) 
1.  Nuclear fission 

(reactor  safety,  radioactive  waste  management,  fissile 
materials, nuclear  fuels) 

2.  Thermonuclear  fusion 
3.  Non-nuclear energies (solar energy, RUE) 

4.  Energy policy support (DG XVllf 
5. 

Supplementary programme (operation of the HFR reactor) 

/IK 
' 

B.  Shared-cost  projects 
1.  Nuclear fission 

and 

radioactive  waste, 
storage  of 
(management 
decommissioning  of  nuclear  power  stations,  Teleman, 
nuclear fission  safety) 
2.  Thermonuclear fusion1  ' 

(general programme and participation in JET) 

1995 
108.1 
63.8 

11.4 

.  14.4 
18.5 

667.5 
71.9 

(in ECU million) 

1996 
83.6 
63.2 

10.3 
3.8 

6.3 

1997 
88.1 
62.8 

12.3 
4.8 

8.2 

440.5 
68.6 

492.0 
12.7 

270.8 

198.3 

186.9 

3.  Non-nuclear energy sources 

(renewable energy sources, RUE): 

TOTAL A + B 

- JOULE 
- THERMIE 

184.0 
140.8 

775.6 

42.8 
130.8 

524.1 

132.7 
159.7 

580.1 

Apart  from  the  energy  programmes,  other  programmes  in  the  4th  Framework 
Programme  include  measures  with  an  energy  component,  like  the  ESPRIT 
programme and INCO (RTD cooperation programmes with non-member  countries 
and  international  organisations  which  finance  activities  in  the  energy  sector, 
particularly with  the  countries  of  central  and  eastern  Europe  and with  developing 
countries). 

(11)  From 1996 JRC support for energy policy is part of nuclear  fission. 
(12)  Including the undertaking of pluriannual contracts. 

13/24 

D. 

STRUCTURAL  FUNDS 

The  Structural  Funds  (ERDF,  ESF,  EAGGF,  etc.)  are  actively  involved  in 
financing  several  programmes  intended  to  solve  the  energy  problems  of  the 
less-favoured  regions  via  the  Community  support  frameworks  (CSFs)  and 
Community initiatives. 

Most  of the  assistance from the  Structural  Funds  in the  energy  sector  is  directed 
towards Objective  1 regions. 
In all the CSFs for the regions whose  development  is lagging behind (Objective  1), 
the  Community  is  cofinancing  energy projects with  a view  to  improving  the  basic 
infrastructure.  The  Community's  contribution  is  made  primarily  through  the 
ERDF.  The  table  below  gives  the  breakdown  by  country  of  the  grants  to 
Objective  1  regions  in  the  period  covered  by  the  Structural  Funds  (1995-1999). 
Since  the  way  that  the  Structural  Funds  are  organised  makes  it  difficult  to  single 
out  and  indicate  the  annual  grants  to  the  energy  sector,  the  grants  have  been 
broken down into equal annual instalments. 

Community  grants from  the Structural  Funds 
to  the energy  sector  in Objective  1 regions 

MEMBER STATE 
. , _ _ , _ , _ _ „ _ _ _ _ _ . __ 
Austria 
France 
Greece 
Ireland 
Italy 
Portugal 
Spain 
United Kingdom 

TOTAL 

Period 1994-1999 
(1994 prices) 
4 
8 
1065 
70 
392 
566 
704 
190 

2999 

(in ECU million) 

Annual average 

| 
[ 

0.7 
1.3 
177.5 
11.7 
65.4 
94.3 
117.3 
31.7 

500.0 

The  figures  shown  in the table  above  include  the  amounts  granted  under the  CSFs 
for  1994-1999 and by the Community initiatives (chiefly  INTERREGII). 

14/24 

The REGEN  section  of the Community's INTERREG  II initiative has been granted 
a  budget  of  ECU 500 million  for  1994-1999  for  completion  of  energy  networks, 
particularly: 

- 

transmission  of  Russian  gas  from  the  Bulgarian  frontier  to  Athens  and 
reception, treatment and transmission of liquefied gas from Algeria; 

-  continuation of the work on the introduction of natural gas to Portugal; 

-  completion  of  the  systems  for  interconnection,  reception  and  transmission  of 

natural gas between Spain and Portugal; 

-  continuation  of the scheme for  interconnection  of the electricity grids between 

Greece and Italy. 

The table below shows the breakdown by country of the financial support from the 
REGEN  section  of the Community's INTERREG II initiative in  1994-99  (amounts 
included in the breakdown by Member State in the previous table). 

COUNTRY 

Greece 
Italy 
Portugal 
Spain 
TOTAL 

I 

I 

(in million ECU) 

INTERREG U (REGEN) 
1994 - 1999 

200 
80 
140 
80 
500 

4.  Overall, Community assistance provided for by the support frameworks for  regions 
whose  development  is  lagging  behind  and  by  Community-initiated  programmes 
amounts to ECU 2 999 million for  1994-99, or 2.7% of the total contribution by the 
Structural Funds to Objective  1  regions and 4.3% of the ERDF. 

15/24 

E. 

FINANCIAL INSTRUMENTS  FOR INTERNATIONAL  COOPERATION 

PHARE 

The PHARE programme is intended to help to bring Central and Eastern  European 
countries  up  to  European  development  standards  and  to  establish  closer  political 
and  economic  relations  between  these  countries  and  the  European  Union  in  the 
framework  of European agreements and pre-accession strategy. 

The PHARE  programme  also  covers energy infrastructure  and nuclear  safeguards. 
The following table gives an idea of the amounts spent on energy between  1995 and 
1997: 

SECTOR 

Nuclear 
Non-nuclear 
TOTAL - All energy 

TACIS 

(in ECU million) 

1995 

27 
75 
102 

1996 

6 
42 
48 

1997 

13.2 
12.6 
25.8 

TACIS is the programme to  assist the New Independent  States and Mongolia  with 
economic improvement and recovery. 
TACIS includes action in the energy sector and on nuclear  safeguards. 

The  following  table  shows  the  breakdown  of  amounts  spent  on  energy  between 
1995 and 1997: 

SECTOR 

Nuclear 
Non-nuclear 
TOTAL - All energy 

1995 
96(,5) 
42 
138 

1996 

117.5 
46 
163.5 

(in ECU million) 

1997 

68.0 
45.6 
113.6 

MEDITERRANEAN COUNTRIES - MEDA 
The  MEDA  programme  (1995-1999)(  } covers  measures  to  accompany  economic 
and  social  structural  reform  in  the  non-EU  Mediterranean  countries.  One  of  the 
aims of MEDA is cooperation on energy and networks. 

C3) 
(.4) 

Includes ECU 37.5 million for the G7 action. 
Council Regulation (EC) No 1488/96 of 23 July 1996 (OJ No L 189 of 30.7.1996). 

16/24 

Action  is  taken  either  under  bilateral  protocols  between  the  Community  and 
individual  Mediterranean  countries  or as part  of the wider financial cooperation  for 
schemes  involving  more  than  one  country  in  the  region.  In  1995  and  1996,  the 
amounts allocated for the energy sector were  ECU  1 and 0.2  million respectively. 

4. 

EUROPEAN  DEVELOPMENT  FUND (ACP  COUNTRIES) 

Under  the  EDF,  ECU  127.7  million  were  allocated  to  the  energy  sector  in  1995, 
ECU  21.5  million  in  1996 and ECU  32.7  million in  1997.  These  amounts were used 
mainly to finance hydroelectric projects or to rehabilitate infrastructures. 

5 

DEVELOPING  COUNTRIES  IN ASIA  AND  LATIN  AMERICA 

Council  Regulation  No  443/92(  }  of  25  February  1992  provides  for  financial  and 
technical  assistance to,  and economic  cooperation  with, the  developing  countries in 
Asia  and  Latin  America.  The  energy  sector  is  one  of  the  priorities  of  the 
programme. 

The  following  amounts  were  allocated  for  energy  in  1995  and  1996.  The  amounts 
shown  for  developing  countries in Asia(,r,)  are  indicative  (currently  between  ECU 8 
and  10  million  a year).  The  Commission  published  a  communication  in  1996  on  a 
Europe-Asia  cooperation  strategy  for  energy  and  a  specific  programme  for  energy 
cooperation with Latin America has been set up. 

Developing countries in Asia 
Developing countries in Latin America 
TOTAL 

(in ECU million) 

1995 
7.5 
17.0 
24.5 

1996 
7.5 
4.3 
11.8 

1997 
5.0 
7.7 
12.7 

6. 

SUMMARY FOR INTERNATIONAL COOPERATION  INSTRUMENTS 

The following  table  summarises the amounts granted for the energy  sector from the 
instruments of international cooperation. 

(in ECU million) 

FINANCIAL INSTRUMENT 

PHARE 
TACIS 
MEDITERRANEAN  COUNTRIES 
Developing countries (Asia and Latin  America) 
EDF (ACP countries) 
TOTAL 

1995 
102.0 
138.0 
1.0 
24.5 
127.7 
393.2 

1996 
48.0 
163.5 
0.2 
11.8 
21.5 
245.0 

1997 
25.8 
113.6 
-
12.7 
32.7 
184.8 

{!5)  OJ No L 52 of 27.2.1992. 
°6)  COM(96) 308 final, 18 July 1996. 

17/24 

F. 

1. 

ECSC  GRANTS  TO  THE  COAL  INDUSTRY 

The  ECSC  finances  measures  from  its  operational  budget  concerning,  in  particular, 
the  redeployment  of  workers,  interest-rate  subsidies  for  industrial  restructuring,  the 
financing  of  research  programmes  in  the  coal  and  steel  industries,  and  social 
measures. 

2. 

EU grants to  the  coal industry fall into two broad  categories: 

- 

redeployment  aid 

- 

support  for  research. 

The  following  tables  show  the  development  of the  various  types  of  ECSC  grants 
to  the  coal  industry  during  the  period  1993-97  and  the  distribution  between 
Member  States  from  1995 to  1997(,7). 

Breakdown  of  ECSC  grants  to the  coal  industry 

Redeployment aid 
- 
traditional aid 
-  social measures 

Support for  research 
-  projects 
-  dissemination 
TOTAL 

1993 
120.3 
70.3 
50.0 

51.8 
51.2 
0.6 
Î72.1 

1994 
117.2 
77.2 
40.0 

17.0 
16.9 
0.1 
134.2 

1995 
104.3 
64.3 
40.0 

21.6 
21.4 
0.2 
125.9 

Distribution  of redeployment  aid fey Member  State 

(in ECU million) 

1996 
46.5 
23.3 
23.2 

31.0 
30.7 
0.3 

77.5 

1997 

59.8 
30.8 
29.0 

29.0 
28.7 

88.8 

(inE 

CU million) 

es 

Social measur 
1996 
1.4 
4.6 
13.4 
-
3.2 
0.6 
23.2 

1997 
-
7.0 
13.7 
-
7.5 
0.8 
29.0 

Belgium 
France 
Germany 
Portugal 
Spain 
United Kingdom 
EU TOTAL 

d 

Traditional ai 
)  1996 
1.4 
-
18.6 
0.1 
2.6 
0.6 
23.3 

1995 
1.0 
1.8 
31.2 
0.4 
7.2 
22.7 
64.3 

1997 
-
3.6 
20.6 
-
5.8 
0.8 
30.8 

1995 
1.6 
1.8 
19.0 
0.2 
9.6 
7.8 
40.0 

C7)  Source: ECSC Financial Reports. 

18/24 

As regards coal research,  29 projects were chosen for financial support in  1995, 23 
in  5996 and 31 in  {997. 

Hie projects are designed primarily to ensure proper protection  for the environment 
and  to  make  the  public  aware  of the  importance  of  coal  as  an  energy  source,  to 
improve  the  competitive  position  of  coal  and  to  use  the  Community's  resources 
rationally. 

The breakdown of funding between the various research themes is as follows: 

Mining technology: 
-  excavation systems 
-  firedamp,  ventilation, climate 
-  coal-winning techniques 
-  mine  infrastructure 
-  mine management 

Use of coal: 
-  preparation of coal 
-  uses in metallurgy 
-  coal conversion 
-  coal burning and  gasification 

Dissemination 

TOTAL 

(in ECU million) 

1995 
5.2 
2.3 
2.7 

0.2 

16.2 
1.8 
1.9 
1.4 
11.1 

0.2 

21.6 

1996 
11.0 
1.6 
2.1 
0.6 
0.9 
5.8 

19.7 
3.2 
5.5 
1.6 
9.4 

0.3 

31.00 

1997  1 
10.0 
4.7 
0.5 
2.7 
1.2 
0.8 

18.7 
4.2 
3.4 

11.2 

0.3 

29.0 

19/24 

G. 

EIB LOANS 

The task of the European  Investment  Bank is to help with the integration, balanced 
development  and economic and social cohesion  of the Member  States.  To this end, 
the  EIB  directs  large volumes  of funds  to finance investment  projects  designed  to 
achieve Union objectives, including energy objectives. 

The table below shows trends in EIB  funding (.8) 

EIB loans 

Energy funding 
% of EIB activity 

1993 

2576 
15.4% 

1994 

3384 
20.4 % 

1995 

3083 
17.3 % 

1996 

4945 
25.0 % 

1997 

2090 
10.0 % 

(ECU million) 

The loans from 1995 to  1997 were granted mainly for 

• 

» 
» 

• 
• 

production  of  oil  and  gas,  and  generation  of  electricity,  particularly  by 
hydroelectric plants or combined plants using natural gas; 
transmission and distribution of electricity and natural gas; 
natural  gas  and  electricity transmission  networks,  including  four  priority 
TEN projects; 
the construction of combined heat and power plants burning waste; 
the construction of lignite-powered thermal plants. 

(18)  Source:  EEB Annual Reports. 

20/24 

The following table gives a breakdown by sector of activity. 

Production 

•  Conventional power  stations 
•  Hydroelectric power  stations 
•  Heat  production 
«  Oil and gas  production 
©  Solid  fuels 
«  Geothermal  and  alternative  sources 

Transport,  storage,  reprocessing 

•  Electricity 
•  Natural gas, oil 

Distribution 

•  Electricity 
•  Natural  gas 
•  Heat 

TOTAL 

(in ECU million) 

1995 

1842.2 
609.8 
292.1 
363.4 
582.7 
0.2 

966.3 
154.4 
811.9 

268.6 
68.9 
190.8 
8.9 
3083.1 

1996 

2722.0 
2181.0 
31.7 
302.2 
176.9 

30.2 

1693.3 
305.5 
1387.8 

529.6 
271.4 
203.9 
54.3 
4944.9 

1997 

1100.5 
556.2 
189.4 
96.1 
182.4 

76.4 

370.8 
87.5 
283.3 

619.1 
282.5 
148.4 
188.2 
2090.4 

In  1995,  the  EIB  spent  ECU 522 million  on  trans-European  electricity  and  gas 
transmission  networks; the figures for  1996  and  1997  were  ECU 695 million  and 
ECU 300 million respectively. 

The three lines of Community energy policy are the eligibility criteria for the EIB in 
this field: development of indigenous resources, diversification of imports and more 
rational use of energy.  Completion of the internal market also involves focusing on 
interconnection  of  gas  and  electricity  networks  both  within  the  Community  and 
outside. 

In  1995,  30 %  of investments  were  for the  development  of indigenous resources, 
26 % for diversification  of imports, and 44 % for the rational management  and use 
of energy. 

The percentages for  1996 were  17 %, 49 %  and 34 %  and, for  1997, 21  %,  19  % 
and 60 % respectively. 

21/24 

The  breakdown  of  EIB  energy  loans  in  the  Community  by  Member  State  is  as 
follows: 

EIB loans 
COUNTRY 

Austria 
Belgium 
Denmark 
Finland 
France 
Germany 
Greece 
Ireland 
Italy 
Luxembourg 
Netherlands 
Portugal 
Spain 
Sweden 
UK 
Other( > 
TOTAL 

(ECU million) 

Energy sector 

1996 
26 
7 
15 
-
3 
924 
379 
-
1637 
-
140 
489 
539 
111 
674 
-

4945 

1997 
212 
-
84 
45 
17 
489 
126 
-
351 
-
30 
30 
169 
80 
349 
109 

2090 

1995 
-
34 
84 
-
4 
626 
36 
-
625 
-
-
134 
315 
111 
636 
479 

3083 

EIB  funding  outside  the  Community  as  part  of  the  Union's  cooperation  and 
development policy with non-member countries accounted in  1995 for ECU  2 805 
million,  of  which  ECU 689  million  was  for  the  energy  sector  and,  in  1996,  for 
ECU 2 294 million, of which ECU 704 million was for the energy sector.  In 1997, 
these figures were ECU 3 144 million and ECU 593 million respectively. 

Energy sector loans were primarily for the construction and modernisation of power 
plants,  the  extension  of  electricity  transmission  and  distribution  capacity  and the 
development of oil resources. 

Funding outside the European Union 
Energy sector 

COUNTRY 

ACP  countries 
South  Africa 
Mediterranean 
Central  and Eastern  Europe 
Latin  America 
Asia 
Overseas  departments  and  territories 

TOTAL 

1995 
108 
-
149 
290 
18 
125 
-
689 

1996 
109 
56 
174 
363 
-
-
2 

704 

(ECU million) 

1997 
35 
45 
346 
70 
-
93 
4 

593 

(19)  Other projects of European  interest outside EU territory. 

22/24 

H. 

ECSC AND EURATOM LOANS 

1.  ECSC LOANS 

1.1.  In  1995, the total amount  of loans paid  out by the ECSC (ECU 402.8 million) was 
40.2  % down  on  1994.  The total paid  out  in  1996 (ECU  279.7  million) was  also 
markedly lower than the  1995 total.  In 1997, on the other hand, the total amount of 
loans  paid  out  by  the  ECSC  (ECU 541.2 million)  was  much  higher  than  that  of 
1996. 
This increase  can  be  accounted  for  by the  fact  that  1997,  and  specifically  the first 
half  of  that  year,  was  the  last  period  for  initiating  the  payment  of  ECSC  loans, 
except for certain exceptional cases. 
Indeed,  it is possible that the guidelines adopted  by the Commission  on  changes to 
ECSC  borrowing  and  lending  activities  by  the  year  2002,  when  the  initial  ECSC 
Treaty expires, may have had a (last) persuasive effect  on potential borrowers, since 
they can no longer expect to  receive long-term loans, i.e.  loans which  mature  after 
2002, except for  some major  infrastructure projects  of European interest, for which 
it is possible to obtain a government guarantee. 

1.2.  In  1995  and  1996  two  loans  for  ECU  17.8rnillion  and  ECU  12.2  million  were 
In  1997  a  loan  of  ECU 80.6 million  was 

issued  to  Spain  for  the  coal  industry. 
granted to finance the Portuguese natural gas network. 
The table below summarises ECSC loans for  1995-1997 (20) 

1995 
402.8 
17.8 
4.42 % 

1996 

279.7 
12.2 
4.36 % 

17.8 

12.2 

(ECU million) 

1997 
541.2 
80.6 
14.89 % 

80.6 

Total ECSC loans 
Total energy 
Energy's share (%) 

Repartition 
-  Coal industry (Art. 54 § 1) 
-  Power stations 
-  Other 

2. 

EURATOM  LOANS 

There has been no lending operation since 1988 owing to the poor cyclical situation 
of the sector. 
Council Decision 94/179/EURATOM(  } of 21 March  1994 authorises the Commission to 
grant  loans  the  purpose  of  which  is  to  improve  the  efficiency  and  safety  of  nuclear 
installations in Central and Eastern Europe and in the former Soviet Union.  No loans have 
so far been granted, but certain projects have been identified and preparatory work for those 
operations is under way. 

,2U 

(20)  Source: ECSC Financial Reports. 
OJ No L 84 of 29.3.1994. 

23/24 

I. 

EIF GUARANTEES 

The European Investment Fund (EIF), which is a public/private partnership  set up in 
June  1994,  grants  long-term  financial  guarantees  to  support  large  infrastructure 
projects,  including the trans-European  energy networks, involving small  firms.  The 
main  aim of the EIF in the  energy  sector  is to  help  involve private  capital in TEN 
projects. 

Since it was set up and by the end of 1997, the EIF had signed guarantees for a total 
of ECU 2 165 million, of which 23.8% is in the energy sector (TEN). 

The table below gives a breakdown  of guarantees granted  in  1995,  1996 and  1997 
by sector.(22) 

SECTOR 

Trans-European infrastructure networks: 

of which energy: 
- 
intheEU 
-  outside the EU 

SMEs 
TOTAL 

1995 
116.5 

11.9 
11.9 

-
116.5 

1996 
582.1 

270.2 
88.2 
182.0 
251.3 
833.4 

(ECU million) 

1997 
335.2 

3.7 
3.7 

364.8 
700.0 

*  *  * 

(22)  Source: EIF Annual Reports. 

24/24 

ISSN 0254-1475 

COM(98) 244 final 

DOCUMENTS 

EN 

09  12  15 

Catalogue  number  :  CB-CO-98-265-EN-C 

ISBN  92-78-35275-6 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg