Proposal for a Council Decision on the conclusion of the Agreement between the European Community and the Government of Malaysia on certain aspects of air services
Date: 2006-10-25
Institutions: European Commission
Subjects: EU relations, Malaysia, air transport, common transport policy, ratification of an agreement

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 6.10.2006 
COM(2006) 583 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

Mobilising public and private finance towards global access to climate-friendly, 
affordable and secure energy services: The Global Energy Efficiency and Renewable 
Energy Fund 

{SEC(2006) 1224} 
{SEC(2006) 1225} 

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1. 

SUSTAINABLE  DEVELOPMENT  -  THE  GLOBAL  ENVIRONMENTAL  CHALLENGE  FOR 
THE ENERGY SECTOR 

Since the early 1990's, most parts of the world are enjoying an unprecedented phase 
of economic growth. Since 1994, global oil consumption has increased by 20%, and 
is  projected  by  the  International  Energy  Agency  (IEA)  to  grow  by  1.6%  per  year.1 
According to the IEA, world energy demand is set to increase by more than 60% by 
2030. Meeting this demand requires an estimated investment in the energy sector of 
USD  16  trillion  over  the  next  25  years.  The  business-as-usual  investment  scenario 
would  not  only  create  a  significant  financing  challenge,  it  would  not  lead  to  a 
sustainable future, in particular in terms of:  

•  Greenhouse gas emissions: It would allow CO2 emissions from the energy sector 
to rise by 62% by 2030 compared to 2002, while EU Heads of States at the Spring 
Council  in  2005  have  called  for  a  global  cut  of  greenhouse  gas  emissions  of  at 
least  15%,  perhaps  as  much  as  50%  by  2050  compared  to  1990.  G8  Leaders  in 
2005 also decided to act with resolve and agreed on the Gleneagles Plan of Action 
on Climate Change, Clean Energy and Sustainable Development. The transition to 
cleaner energy is to be financed through enhanced collaborative efforts of public 
and  private  sector  investment  frameworks  involving  the  World  Bank  and  other 
multilateral finance institutions. 

•  Air quality: Rapid urbanization in emerging economies has resulted in high levels 
of air pollution in many cities with adverse effects on human health. For example, 
according  to  the  World  Bank,  China  is  likely  to  experience  590.000  premature 
deaths  due  to  urban  air  pollution  arising  from  the  transportation  and  power 
sectors. Rehabilitation of inefficient power plants and buildings and increased use 
of near zero emission technologies are required to reverse these trends. 

•  Poverty and  sustainable management of natural  resources: An estimated 1.4 
billion  people  in  developing  countries  would  still  remain  without  access  to 
modern energy in 2030, and the 2.4 billion people using traditional biomass in an 
unsustainable way for cooking and heating purposes would not decline in number. 
According to the IEA, the additional investment to achieve 100% electrification is 
estimated at USD 655 billion. This is an enormous challenge for regions that are 
already struggling to raise capital. 

•  Energy security: More than 60% of the increase in energy consumption would be 
in the form of oil and gas. This would further increase the import dependency of 
all  major  importing  regions.  For  example,  the  EU's  dependency  on  oil  and  gas 
imports  would  increase  to  93%  and  81%  in  2030  compared  to  79%  and  49%, 
respectively,  in  2004.  Thus,  the  Commission  recently  proposed  to  aim  for  a 
minimum level of the overall EU energy mix to come from secure and sustainable 
use  of  low-carbon  sources.  China,  presently  being  largely  self-sufficient,  would 
have  to  import  27%  of  its  gas  demand  in  2030.  Oil  and  gas  supplies  from  the 
Middle East and North African Region would increase to 44%. 

1 

IEA 2004. World Energy Outlook. 

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Clearly,  the  need  to  ensure  sustainable  development,  i.e.  simultaneously  win  the 
battle  against  climate  change,  eradicate  energy  poverty,  and  secure  global  energy 
supplies,  calls  for  profound  changes  in  the  way  energy  services  are  delivered  and 
energy sources are used. 

Heads  of  States  agreed  at  the  2002  World  Summit  for  Sustainable  Development 
(WSSD) to urgently and significantly increase the share of renewable energy in the 
global energy mix.  At the  WSSD, the EU established the Johannesburg  Renewable 
Energy  Coalition  (JREC)2  and  the  EU  Energy  Initiative  (EUEI)  to  ensure  that  the 
commitments  contained  in  the  Johannesburg  Plan  of  Implementation  would  not 
remain hollow words. 

Renewable energy investments, and similarly, investments in energy efficiency, are 
typical public goods that produce substantial local and global benefits such as zero or 
low greenhouse gas and pollutant emissions. They help improving energy security by 
exploiting locally available energy such as wind, solar, geothermal heat or biomass. 
Increased penetration of efficient and renewable energy technologies will reduce the 
environmental  and  health  impacts  of  fossil  fuel  consumption  and  equally  soften 
tensions  on  the  energy  markets.  They  also  promote  local  employment  and  income 
generation,  e.g.  through  the  provision  of  energy  for  productive  use,  in  particular  in 
remote areas where grid extensions are uneconomic.  

Taking the ‘public goods’ benefits fully into account often makes renewable energy 
and  energy  efficiency  projects  economically  attractive,  particularly  in  developing 
countries where power production is usually less efficient and more polluting than in 
industrialised  countries  with  advanced  environmental  legislation.  According  to  the 
IEA's  alternative  energy  scenarios,  increased  reliance  on  energy  efficiency  and 
renewable energy could reduce the growth of global energy demand from over 60% 
to  50%,  and  those  of  global  emissions  from  62%  to  46%.  Reduced  future  demand 
could lead to a 15% reduction in oil prices. This would still not resolve the issues set 
out above, but it would be a significant step in the right direction. The Commission 
estimated  that  in  the  long-term,  energy  efficiency  improvements  and  renewable 
energy  can  deliver  cost-efficiently  up 
the  emission  reductions 
(SEC(2005)180). 

to  2/3  of 

As a result of the broad range of public benefits,  policy frameworks are improving 
and  renewable  energy  and  energy  efficiency  are  now  an  integral  part  of  the  core 
energy and development investment agenda. Today they can provide, in a sustainable 
way,  provide  affordable  electric  power  and  non-electric  energy  supplies  for  local 
business and transport, in particular where grid connection is uneconomic. Off-grid 
and  mini-grids  can  ensure  adequate  and  economical  energy  in  remote  areas.  A  full 
range  of  technological  solutions  to  serve  enterprise  and  household  needs  can  be 
offered which is particularly relevant for developing countries.  

Despite  these  advantages,  if  current  trends  would  persist,  the  IEA  predicts  that  the 
share  of  renewable  energy  would  remain  more  or  less  constant  in  2030.  The  more 

2 

JREC  membership  has  grown  since  2002  from  66  to  90  Governments  that  are  committed  to 
significantly  increase  the  share  of  renewable  energies  through  co-operation  based  on  targets  and 
timetables to guide investments. The EC co-chairs the Coalition together with Morocco and hosts the 
Secretariat.  

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than  USD  16  trillion  that  will  have  to  be  invested  until  2030  provide  therefore  a 
unique opportunity to build a global sustainable energy sector that cannot be missed. 
No  doubt,  the  bulk  of  future  investment  into  the  global  energy  sector  will  have  to 
come  from  private  sources.  The  challenge  for  public  policy  is  to  create  the  right 
incentives  and  enabling  environment  ensuring  that  private  investment  will  finance 
access to energy services that are environmentally sound, affordable and secure.  

This  Communication  explores  current  barriers  for  private  sector  participation, 
particularly  in  developing  countries,  in  the  deployment  of  renewable  energy  and 
energy efficiency technologies. It proposes a concrete and innovative Public Private 
Partnership called the Global Energy Efficiency and Renewable Energy Fund to 
mobilize private investments for the benefit of developing countries and economies 
in transition. 

2. 

BARRIERS  FOR  MOBILISING  SUFFICIENT  PRIVATE  SECTOR  FINANCE  FOR  ENERGY 
EFFICIENCY AND RENEWABLE ENERGY INVESTMENTS 

The IEA estimates in its baseline scenario that USD 241 billion is required for global 
investment into renewable energy generation by 20103. The associated need for risk 
capital  in  developing  countries  and  transition  economies  alone  is  estimated  at  over 
USD 10 billion (EUR 9 billion). Roughly 70% and 40% of investment in electricity 
generation  in  South  America  and  in  Asia,  respectively,  is  projected  to  be  in  the 
renewables sector. 4 With improving policy frameworks private investors are getting 
increasingly interested. 

There  are  some  positive  developments  as  regards  financing  renewables  and  energy 
efficiency. The EIB and other international investors have recognized the increasing 
profitability of renewable energy projects and have recently set ambitious renewable 
energy and energy efficiency portfolio targets. The EIB, for instance, has set itself a 
target  of  investing  50%  of  its  annual  EU  energy  lending  portfolio  in  renewable 
energy  projects.  In  April  2005,  the  OECD  Working  Party  on  Export  Credits  and 
Credit Guarantees, extended the minimum allowable repayment term for renewable 
energy  investments  to  15  instead  of  10  or  12  years.  Moreover,  with  the  entry  into 
force  of  the  Kyoto  Protocol  and  the  establishment  of  a  carbon  price,  the 
environmental  benefits  of  zero  or  low  carbon  technology  projects  are  now 
remunerated.  In  developing  countries,  such  projects  can  now  receive  emission 
reduction  credits  under  the  Protocol’s  Clean  Development  Mechanism.  Over  the 
coming years, carbon finance will provide additional finance for these projects.  

However,  despite  encouraging  and  new  prospects  and  robust  technology  track 
records,  renewable  energy  projects  and  businesses  continue  to  face  significant 
difficulty  raising  sufficient  finance  for  investment.  The  problem  is  complex  but 
mainly concentrated in the area of risk capital which provides important collateral for 
lenders. Some of the key reasons causing this financial gridlock are: 

3 
4 

IEA 2003. World Energy Investment Outlook. 
Impax Capital Corp. Ltd 2004. The Patient Capital Initiative Feasibility Study.  

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•  Initial  capital  costs  of  renewable  energy  technologies  are  3–7  times  higher  than 
for  conventional  fossil  fuel  generation.  While  these  costs  are  compensated  by 
much  lower  and  less  volatile  running  costs  compared  to  fossil  fuel  based 
technologies, private sector investors still regard the longer repayment periods as 
too risky and therefore unattractive. 

•  Outside  the  OECD  region,  private  equity  investors  are  looking  for  additional 
reassurances. Even reasonable returns in the range of 6 to 14% remain inadequate 
to match various risks in many developing countries. 

•  Renewable  energy  technologies  are  very  suitable  for  small  and  medium  sized 
investment projects. However, this leads to significantly higher transaction costs 
compared to large scale fossil fuel power plants, and therefore this has been less 
interesting  for  conventional  risk  capital  providers.  Where  international  finance 
institutions  or  the  private  sector  has  risk  capital  on  offer,  it  is  for  large  scale 
investments with terms that are not suitable for small businesses or projects of less 
than EUR 5-10 million total capital. 

When competing for scarce private equity finance, these facts put renewable energy 
at a distinct disadvantage resulting in a general lack of equity finance in the sector. 
The World Bank recently came to a similar conclusion that 'even with an improved 
regulatory  environment  and  the  use  of  policy  risk  mitigation  instruments,  the 
challenge  of  financing  incremental  costs  and  reducing  technology  risks  will  be 
significant'5.  However,  the  high  potential  of  renewables  and  energy  efficiency 
projects to generate a multitude of environmental and socio-economic public goods, 
both locally and globally, merits public support to solve this financing gridlock and 
to  provide  public  incentives  to  international  and  domestic  private  investors. 
Governments  will  have  to  work  hand  in  hand  with  the  private  sector  in  order  to 
overcome the outstanding financial barriers.  

3. 

INNOVATIVE  PUBLIC-PRIVATE  PARTNERSHIP:  THE  GLOBAL  ENERGY 

AN 
EFFICIENCY AND RENEWABLE ENERGY FUND 

For these reasons, this Communication proposes to set up a concrete and innovative 
Public Private Partnership, called the Global Energy Efficiency and Renewable 
Energy  Fund  (GEEREF),  to  mobilize  private  investments,  in  particular  in 
developing  countries  and  emerging  economies,  in  the  context  of  international 
programmes  to  promote  sustainable  development.  The  proposed  partnership  will 
complement  ongoing  efforts  for  improving  the  policy  framework,  thus  accelerating 
sustainable  development  through  faster  deployment  of  efficient  and  renewable 
energy technologies. 

The  proposal  draws  on  the  Patient  Capital  Initiative  launched  by  the  European 
Commission  in  2004  in  the  context  of  the  JREC.  The  scope  of  that  initiative  was 
guided  by  the  debates  at  the  WSSD  and  the  2003  international  high-level  JREC 
conference  held  in  Brussels.  The  proposal  builds  on  a  2004  feasibility  study  that 
assessed  various  options  for  designing  a  new  targeted  public-private  financing 

5 

World Bank. 2006. Clean Energy and Development: Towards an Investment Framework.  

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partnership.  The  feasibility  study  benefited  from  comments  and  suggestions  of  a 
variety  of  stakeholders,  inter  alia,  the  EIB  Group,  the  World  Bank's  International 
Finance  Corporation  (IFC),  the  EBRD,  KfW,  UNEP,  UNDP,  the  EU  Energy 
Initiative and various other partnerships. 

Moreover,  the  proposal  builds  on  the  recently  published  Green  Paper  "A  European 
Strategy for Sustainable, Competitive and Secure Energy"6 in which the Commission 
sets out an integrated approach to tackling the sustainable development challenges in 
the energy sector, in particular related to climate change, including through increased 
demonstration  and  deployment  of  energy  efficient  and  renewable  energy 
technologies.  Subsequently,  the  March  2006  European  Council  called  for  ensuring 
adequate support from Community instruments to such sustainable energy solutions. 
In  the  context  of  dialogues  with  third  countries,  the  EU  is  also  to  assume  a  more 
proactive  approach 
through  promoting 
in  ensuring  sustainable  development 
renewables, low emission technologies and energy efficiency to help the global fight 
against  climate  change,  and  enhance  the  implementation  of  the  Kyoto  Protocol 
mechanisms. This proposal is furthermore building on the “Principles for integrating 
energy interventions into development co-operation” recently adopted by the Council 
(Development)7, the Renewed EU Sustainable Development Strategy8, and the Joint 
Paper by the Commission and the High Representative of CFSP "An External Policy 
to  Serve  Europe's  Energy  Interests"9  all  of  which  reiterate  the  importance  of 
promoting clean energy solutions to address the global climate change, poverty and 
sustainable development challenge. 

In  the  wake  of  limited  public  sector  finance,  the  need  to  establish  an  innovative 
instrument  maximising  the  leverage  of  public  funds  is  a  priority.  In  the  latest 
Communication  setting  out  the  scope  and  priorities  for  the  future  Thematic 
Programme  on  Environment,  and  the  Management  of  Natural  Resources,  including 
Energy,  the  Commission  expressly  stated  that  “innovative  and  flexible  funding 
mechanisms  are  urgently  required".10  This  is  also  a  key  message  contained  in  the 
June 2006 Inter-Institutional Agreement stating that "The institutions agree that the 
introduction of co-financing mechanisms is necessary to reinforce the leverage effect 
of the EU budget by increasing the funding incentive. They agree to encourage the 
development of appropriate multi-annual financial instruments acting as catalysts for 
public and private investors".11 

Enhancing private sector access to risk capital through the public provision of patient 
capital seems to be the most promising avenue because it offers various ways of risk 
sharing. The public could: 

•  accept lower returns on a case by case basis depending for instance on the actual 
risks  to  be  covered,  and  thereby  lift  returns  for  the  private  sector  towards 
commercial thresholds; 

6 
7 
8 
9 

10 

11 

COM(2006) 105 of 8 March 2006. 
Council Doc. 8358/06 of 11 April 2006. 
Council Doc. 10117/06 of 9 June 2006. 
This paper was presented to the European Council of 15-16 June 2006.  
COM(2006) 20 of 25.1.2006, and COM(2005) 324 of 3.8.2005.  
OJ, C139 dd. 14.6.2006 pp.1-17 Paragraph 49.  

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•  accept longer  investment or  repayment periods  ('first  in  – last  out') to  match the 

high upfront investments with the low operating and maintenance costs; 

•  take  on  higher  transaction  costs  to  allow  targeting  small  and  medium  scale 
businesses  and  serve  the  needs  for  a  broad  range  of  business  support  services, 
seed and growth capital. 

4. 

PUTTING THE INNOVATIVE PUBLIC-PRIVATE PARTNERSHIP INTO PRACTICE 

The  objective  is  to  mobilize  public  and  private  finance  that  can  help  solve  the 
financing  grid-lock  for  economic  renewable  energy  and  energy  efficiency  projects 
and businesses, especially focusing on the risk capital gap. This could include scaling 
up of successful pilot schemes. International finance institutions like the EIB, EBRD 
and the World Bank, private sector investors, and other financial intermediaries have 
already started to join hands with the Commission to set up the GEEREF. Initial co-
investment possibilities were identified by the EIB (targeting in particular the Africa, 
Caribbean  and  Pacific  and  the  Mediterranean  regions)  and  by  the  EBRD  (for  a 
regional fund covering the non-EU Eastern European markets). 

How would it look like? 

The GEEREF will be set up as a global public-private partnership taking the form of 
body established under private law with a public sector mission.12 This will be done 
in close partnership with an International Finance Institutions such as the EIB and the 
EBRD. It will offer new risk sharing and co-funding options for various commercial 
and  non-commercial  investors  with  a  global  investment  mandate.  It  will  allow 
engaging professional fund managers on a self-sustaining basis, acting in accordance 
with  a  specific  mandate  established  by  donors  and  investors.  High-quality 
monitoring, reporting and control features will be established.  

Rather  than  providing  finance  directly  to  the  target  groups,  GEEREF  will  actively 
engage  in  the  creation  and  funding  of  regional  sub-funds  or  in  scaling  up  similar 
existing initiatives. This will accommodate specificities of different regional markets 
bringing  in  international  financial  institutions,  local  expertise  in  addition  to 
scientific-based  knowledge  and  to  leverage  additional  private  sector  funding. 
Engagement  in  any  sub-fund  will  be  subject  to  the  compatibility  of  its  investment 
strategy  with  that  of  the  GEEREF,  its  sound  management  and  implementation 
capacity and the provision of a minimum proportion of commercial co-funding. 

Who will be supported? 

The  GEEREF  will  support  renewable  energy  and  energy  efficiency  project 
developers and SMEs. The focus will be on projects below EUR 10 million as these 
as  mostly  ignored  by  commercial  investors  and  IFIs.  In  addition  to  utility-based 
include  manufacturing  and  assembly  businesses, 
projects, 
consumer, SME, and micro-finance intermediaries.  

investments  will 

12 

Compatible with the relevant provisions in Art. 54 (2) of the Financial Regulations. 

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Which regions will be covered?  

The GEEREF will support regional sub-funds for Sub-Saharan Africa, Caribbean and 
Pacific  Island  States  (ACP  region),  the  countries  of  the  European  Neighbourhood 
(including  North-Africa  and  non-EU  Eastern  Europe  including  Russia),  Latin 
America,  and  Asia  (including  Central  Asia  and  the  Middle  East).13  The  new 
Development  Cooperation  Instrument  (DCI)  will  provide  the  legal  basis  and  the 
GEEREF  will  be  incorporated  into  the  Thematic  Programme  for  Environment  and 
Sustainable Management of Natural Resources, including Energy (ENRTP) set out in 
that  Instrument.14  Funding  will  be  market-driven  whilst  priority  will  be  given  to 
investments  in  those  countries  or  regions  with  renewable  energy  and  energy 
efficiency policies that are conducive to private sector engagement. There will be a 
special emphasis on serving the needs of ACP countries.  

What type of support will be provided? 

The major part of the Fund will be used to provide risk capital to different types of 
renewable energy and energy efficiency investment projects. Capital will be provided 
at affordable "patient" terms whereby the degree of patience will reflect the degree of 
local  and  global  benefits  offered  by  the  sub-funds  and  their  underlying  projects. 
GEEREF participation will range from between 25 to 50% for medium to high risk 
operations  to  15%  for  low  risk  operations.  In  addition,  the  Fund  will  include 
dedicated technical assistance funds. These will amount to 10-20% of the total fund 
size depending on the actual needs for capacity building which is likely to be greater 
in less developed economies. Through this feature, local and international technical 
expertise  can  be  employed  to  improve  project  proposals  and  business  plans  in 
parallel with developing the investment pipeline. Both actual provision of risk capital 
and  technical  assistance  will  make  the  Fund  a  'one  stop  shop'  which  will  reduce 
transaction costs and improve overall performance of the Fund. 

Which types of technologies will be supported? 

The  investment  scope  will  include  a  broad  mix  of  project  types,  and  energy 
efficiency  and  renewable  energy  technologies.  Given  the  focus  on  developing 
countries  and  transition  economies,  the  emphasis  will  be  placed  on  deploying 
environmentally sound technologies with a proven technical track record, also taking 
account  of  science-based  knowledge  resulting  from  such  programmes  as  the 
Community  Framework  Programmes.  Experience  and  projections  show  that  small 
hydro and biomass comprise a large part of investment prospects, with on-shore wind 
also  offering  significant  potential.  Photovoltaics  may  remain  costly  for  the  lowest 
income countries. Renewable energy is to likely dominate the investment portfolio. 
Energy efficiency projects will qualify in particular where similar financing barriers 
need to be resolved. Co-firing (e.g. coal and bagasse), energy service companies, and 
other  small  and  medium  scale  clean  and  efficient  energy  solutions  will  also  be 
eligible.  

13 

14 

As  regards  countries  covered  by  the  Pre-Accession  Instrument,  supplementary  funding  from  other 
Instruments should be secured. 
Council Doc 134/06 DEVGEN dd. 20.7.2006. 

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What is the envisaged size of the Fund? 

The minimum funding target for the GEEREF is set at EUR 100 million. This target 
is  both  necessary  to  have  a  meaningful  impact  at  the  global  level  and  sufficient  to 
establish a public-private partnership that will be self-sustaining over time. 

Assuming  that  a  first  financial  close  in  the  order  of  EUR  100  million  would  be 
achieved, additional capital of at least EUR 300 million up to EUR 1 billion could be 
mobilised  through  the  sub-fund  structure  and  at  the  project  and  SME  level. 
Considering the prospects to recycle and reinvest the initial public funds, this figure 
could grow over the coming years. Fund leverage could be up to a factor 10. This is 
considerably higher than for conventional grant-based schemes that ask for 50-70% 
co-funding.15  It  is  envisaged  that  up  to  €50  million  Euro  co-financing  may  be 
obtained  from  the  Investment  Facility  under  the  9th  European  Development  Fund 
managed  by  the  EIB  to  develop  activities  in  ACP  regions.  This  novel  instrument 
could serve as a positive example that could be replicated, including by other public 
and private investors. 

What is the expected benefit?  

Once  fully  invested  and  leveraged,  GEEREF  could  bring  almost  1  Gigawatt  of 
environmentally  sound  energy  capacity  to  developing  country  markets.  This  could 
serve  1-3  million  people  with  sustainable  energy  services,  substituting  1-2  million 
tonnes  of  CO2  equivalents  per  year.  GEEREF  will  also  broaden  the  range  of 
instruments  to  effectively  support  the  development  and  transfer  of  environmentally 
sound  technologies  between  developed  and  developing  countries.  It  will  strengthen 
the Community's capacity to implement the above mentioned strategies and thematic 
programmes  and  to  generate  synergies  with  European  Technology  Platforms,  Joint 
Technology  Initiatives,  and  Climate  Change  and  Energy  Partnerships,  e.g.  with 
Russia,  China  and  India  The  promotion  of  clean  energy  solutions  will  generate 
substantial benefits in terms of improved indoor and ambient air quality and promote 
the creation of local enterprises, employment and income development.  

5. 

CONCLUSIONS AND NEXT STEPS 

The proposed Global Energy Efficiency and Renewable Energy Fund as outlined in 
this  Communication  is  a  novel  public-private  partnership  complementing  available 
Community  financing  instruments.  It  is  specifically  designed  to  boost  the 
Community's  capability  to  support  the  implementation  of  its  partner  countries' 
sustainable  development  and  poverty  eradication  programs,  and  accelerate  the 
transfer, development and deployment of environmentally sound technologies. It will 
facilitate efficient co-operation amongst donors and commercial investors, including 
international finance institutions, and ultimately accelerate the global market uptake 
of  sustainable,  secure,  and  affordable  energy  technologies  and  the  services  they 
deliver. It provides a strong response to the urgent need for innovative public-private 
financing solutions called for by the European Institutions. 

15 

For  detailed  calculations,  Section  6  of  the  impact  assessment  in  support  of  this  Communication 
(SEC(2006) 1224).  

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The European Commission welcomes the initial expression of interest from the EIB 
and  EBRD  to  co-finance  this  initiative.  It  invites  the  Council  and  European 
Parliament  to  provide  its  political  support  to  this  novel  initiative  so  that  interested 
public and private stakeholders can firm up their expressions of interest.  

Considering  the  risks  involved,  the  European  Commission  acknowledges  that  a 
significant  contribution  from  the  Community  budget  is  essential  to  kick-start  the 
initiative  and  trigger  substantial  private  co-funding.  .  The  European  Commission 
proposes  to  contribute  up  to  EUR  80  million  covering  the  period  2007-2010  to  the 
GEEREF within the context of the Thematic Programme on the Environment and the 
Management of Natural Resources, including Energy. A first contribution of EUR 15 
million  is  proposed  to  be  made  in  2007.  GEEREF  will  be  structured  to  ensure  that 
these contributions can be reported in the annual development assistance committee 
(DAC) co-operation report. The necessary human resources for this initiative will be 
covered from existing resources, where necessary through internal redeployment. 

The Commission also invites Member States, EEA Members, and other finance and 
corporate institutions to join this novel global initiative.  

Considering  that  this  is  a  novel  approach,  the  European  Commission  Services  will 
continue  to  develop  the  detailed  implementing  arrangement  together  with  the  fund 
management team, the EIB and the EBRD, and others that express a formal interest 
in  co-financing  this  initiative.  Member  States  and  the  European  Parliament  will  be 
kept fully informed on the development of this initiative. 

EN 

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   EN