Common Position (EC) No 6/2007 of 22 March 2007 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council laying down general rules for the granting of Community financial aid in the field of the trans-European transport and energy networks
Date: 2007-03-22
Institutions: Council of the European Union
Subjects: EU aid, energy grid, financial aid, project evaluation, trans-European network, transport network

C 103E/26

EN

Official Journal of the European Union

8.5.2007

COMMON POSITION (EC) No 6/2007

adopted by the Council on 22 March 2007

with a view to adopting Regulation (EC) No …/2007 of the European Parliament and of the Council
of … laying down general rules for the granting of Community financial aid in the field of the
trans-European transport and energy networks

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EURO-
PEAN UNION,

(4)

(2007/C 103 E/03)

Having regard to the Treaty establishing the European Com-
munity, and in particular Article 156 thereof,

Having regard to the Commission proposal,

Having regard to the opinion of the European Economic and
Social Committee (1),

After consulting the Committee of the Regions,

Acting in accordance with the procedure provided for
Article 251 of the Treaty (2),

in

Whereas:

(1)

(2)

(3)

The European Council of 15 and 16 March 2002 held in
Barcelona underlined in its conclusions that strong and
integrated energy and transport networks are the corner-
stone of the European internal market and that better use
of the existing networks and the completion of missing
links will make it possible to increase effectiveness and
competitiveness and to guarantee an appropriate level of
quality and a reduction in saturation points and, there-
fore, better long-term viability. These needs fall within the
framework of the strategy adopted by the Heads of State
and Government at the European Council of 23 and
24 March 2000 held in Lisbon, which has been regularly
referred to since then.

The European Council of 12 and 13 December 2003
held in Brussels approved European action for growth,
calling on the Commission to redirect expenditure,
if
necessary, towards investments in physical capital, in par-
ticular investments in the infrastructure of the trans-Euro-
pean networks, the priority projects of which represent
essential elements to strengthen the cohesion of
the
internal market.

Delays in the completion of effective trans-European
connections, in particular cross-border sections, are likely
to seriously handicap the competitiveness of the Union,
the Member States and peripheral regions which would
not, or would no longer, be able to profit fully from the
beneficial effects of the internal market.

(1) OJ C 234, 22.9.2005, p. 69.
(2) Opinion of the European Parliament of 26 October 2005 (OJ C 272 E,
9.11.2006, p. 405), Council Common Position of 22 March 2007 and
Position of the European Parliament of … (not yet published in the
Official Journal).

In Decision No 1692/96/EC of the European Parliament
the Council of 23 July 1996 on Community
and of
guidelines for the development of
the trans-European
transport network (3), the cost of completing the trans-
European transport network between 2007 and 2020
was estimated at EUR 600 billion. The investments neces-
sary for the priority projects within the meaning of
Annex III
for almost
to that Decision alone account
EUR 160 billion for the period 2007-2013.

To achieve these goals, both the European Parliament and
the Council have put forward the need to strengthen and
adapt existing financial instruments through an increase
in the level of Community co-financing by providing for
the possibility of applying a higher Community co-finan-
cing rate, in particular for projects characterised by their
function, or by the
their transit
cross-border nature,
crossing of natural barriers.

In accordance with the Communication from the
Commission to the European Parliament and the Council
on the
transport
(NAIADES)’ and having regard to the sustainable nature
of inland waterways,
inland waterways projects should
receive special attention.

inland waterway

‘promotion of

In its Resolution of 8 June 2005 on policy challenges
the enlarged Union 2007-
and budgetary means of
2013 (4), the European Parliament underlined the stra-
tegic importance of transport networks for the comple-
tion of the internal market and for closer relations with
candidate, pre-candidate and ‘ring of friends’ countries.
it also expressed its willingness to examine
Moreover,
innovative financing instruments such as loan guarantees,
European concessions, European loans and an interest
relief fund.

(5)

(6)

(7)

(8) With the amounts allocated to the trans-European
networks in the transport and energy sectors (hereinafter
referred to as TEN-T and TEN-E respectively) in accord-
ance with the multiannual financial framework 2007-
2013, it is impossible to meet all the needs arising in
connection with the implementation of the priorities set
out in Decision No 1692/96/EC for TEN-T and Decision
No 1364/2006/EC (5) for TEN-E. In order to complement

(3) OJ L 228, 9.9.1996. Decision as last amended by Council Regulation

(EC) No 1791/2006/EC (OJ L 363, 20.12.2006, p. 1).

(4) OJ C 124 E, 25.5.2006, p. 373.
(5) Decision No 1364/2006/EC of the European Parliament and of the
Council of 6 September 2006 laying down guidelines for trans-Euro-
pean energy networks (OJ L 262, 22.9.2006, p. 1).

8.5.2007

EN

Official Journal of the European Union

C 103E/27

national sources of financing, both public and private, it
is therefore appropriate to focus these resources on
certain categories of projects which will provide the
greatest added value for the networks as a whole, in par-
ticular the cross-border sections,
including the motor-
ways of the sea, and projects aimed at removing bottle-
necks, such as natural barriers, so as to guarantee the
continuity of TEN-T and TEN-E infrastructure. In order to
facilitate the coordinated implementation of certain
projects, European Coordinators may be designated in
accordance with Article 17a of Decision No 1692/96/EC.

(9)

Taking into account that the remaining TEN-T investment
in priority projects is estimated at about EUR 250 billion
and that
the European financial reference amount of
EUR 8 013 million for transport for the period 2007-
2013 only represents a tiny part of the necessary budget
for completion of the priority projects, the Commission
should, with the help of European Coordinators where
appointed, carry out actions to support and coordinate
Member States' efforts to finance and complete the
planned TEN-T, in line with the timetable laid down. The
provisions
Commission
concerning European Coordinators referred to in Deci-
sion No 1692/96/EC. It should also study and intend to
solve, together with the Member States, the long-term
financial problem of building and operating the whole
the building period
TEN-T, bearing in mind that
comprises at least two seven-year budget periods and the
expected life of
least a
century.

the new infrastructure is at

implement

should

the

(10) Decision No 1364/2006/EC identifies

the objectives,
priorities for action and projects of common interest to
develop TEN-E,
including the priority projects, and
assigns appropriate priority to projects declared to be of
European interest. The investments necessary to make it
possible for all the Member States to take part fully in
the internal market and to complete interconnections
with neighbouring countries are about EUR 28 billion
between 2007 and 2013 for the priority projects alone.

(11)

(12)

The European Council of 12 and 13 December 2003
also called on the Commission to continue studying the
need to create a specific Community guarantee instru-
ment intended to cover certain post-construction risks in
the framework of TEN-T projects. With regard to energy,
to
the European Council called on the Commission,
redirect expenditure, if necessary, towards investments in
physical capital in order to stimulate growth.

Council Regulation (EC) No 2236/95 of 18 September
1995 laying down the rules for the granting of Com-
munity financial aid in the field of the trans-European
networks (1) already represents real progress, since it
permits a higher financing rate of 20 % for projects
declared as having priority. It nevertheless remains condi-
require
tional

implementation

rules which

on

(1) OJ L 228, 23.9.1995, p. 1. Regulation as last amended by Regulation
(EC) No 1159/2005 of the European Parliament and of the Council
(OJ L 191, 22.7.2005, p. 16).

simplification and an overall budget with limited
resources. It appears therefore necessary to complement
national public financing and private financing by
increasing Community aid in terms of both its amount
and the rates of assistance, with a view to strengthening
the leverage effect of the Community funds, thus making
it possible to carry out the priority projects selected.

rules for

By means of this Regulation, it is appropriate to establish
a programme determining the general
the
granting of Community financial aid in the field of
TEN-T and TEN-E. That programme, which must be
carried out in conformity with Community law, in par-
ticular as regards the environment, should contribute to
the reinforcement of
the internal market and have a
stimulating effect on the competitiveness of and growth
in the Community.

Community financial aid under the budget for the trans-
in addition to focusing on
European networks should,
the projects or parts of projects presenting the greatest
European added value, be such as to encourage the
players to accelerate the implementation of the priority
projects
and
1364/2006/EC. It should also make it possible to finance
the other European infrastructure projects of common
interest defined in those Decisions.

under Decisions Nos

1692/96/EC

Community financial aid is granted with the aim of
developing investment projects in TEN-T and TEN-E, of
providing firm financial commitments, of mobilising
institutional investors and of prompting the formation of
financing partnerships between the public and private
sectors. In the energy sector, the financial assistance is
mainly intended to help to overcome the financial obsta-
cles which can arise at the time of project preparation
and should be
and pre-construction development,
concentrated on the cross-border sections of priority
projects and on interconnections with neighbouring
countries.

signalling

In its Communication to the European Parliament and
the Council of 4 July 2005 on the deployment of the
the
European rail
Commission emphasised the importance of rapid and
coordinated migration to that system in order to ensure
the interoperability of the TEN-T. To this end, targeted
and temporary Community support is needed, both for
track-side equipment and for onboard equipment.

system ERTMS/ETCS,

For certain projects, the Member States concerned may
be represented by international organisations. For certain
projects, the Commission may entrust implementation to
joint undertakings within the meaning of Article 171 of
the Treaty. These special situations necessitate extending
the concept of beneficiary of the Community financial
contribution for the purposes of this Regulation.

(13)

(14)

(15)

(16)

(17)

C 103E/28

EN

Official Journal of the European Union

8.5.2007

(18)

(19)

(20)

(21)

(22)

To respond to the specific requirements of each project
and to increase the efficiency and value of the Com-
munity financial aid, this aid may take several forms:
grants for
studies and works, grants for availability
payments, interest rate rebates, loan guarantees or partici-
pation in risk capital funds. Regardless of its form, the
Community financial aid should be granted in accordance
with the provisions of Council Regulation (EC, Euratom)
No 1605/2002 of 25 June 2002 on the Financial Regu-
lation applicable to the general budget of the European
Communities (1) and its
implementing rules, except
where this Regulation explicitly departs from those rules.
The issuance of loan guarantees and participation in risk
capital funds should be based on market principles and
aim at self-financing in the longer term.

For the implementation of Community financial support
for large-scale projects phased over several years,
it is
advisable to allow a commitment from the Community
on a multiannual basis, differentiating by project financed
and by commitment appropriations authorised annually.
Only firm, attractive financial commitments binding on
the Community over the long term will make it possible
to reduce the uncertainties connected with the comple-
tion of these projects and to mobilise both public and
private investors. The projects included in the multi-
annual programme represent the highest priorities in the
development of TEN-T as referred to in Decision No 1692/
96/EC and require continuing Community action to
ensure their smooth and efficient completion.

It is appropriate to encourage public-private forms of
institutional or contractual, which
financing, whether
have proved to be effective, by means of legal guarantees
which are compatible with competition law and the
internal market, and to disseminate good practice among
the Member States.

(23)

(24)

(25)

(26)

The measures necessary for the implementation of this
Regulation should be
adopted in accordance with
Council Decision 1999/468/EC of 28 June 1999 laying
down the procedures for the exercise of implementing
powers conferred on the Commission (3).

In the light of developments in each component of
TEN-T and TEN-E and of their intrinsic characteristics,
and with a view to more effective management, it is advi-
sable to provide for several separate Regulations for the
fields covered to date by Regulation (EC) No 2236/95.

By means of this Regulation, general rules should be laid
down for the granting of Community financial aid in the
field of the TEN-T and TEN-E in accordance with Com-
munity law and policies concerning, in particular, compe-
tition,
sustainable
development, public procurement and the effective imple-
mentation of the Community policies on interoperability.

environmental protection, health,

Since the objective of this Regulation, namely the imple-
mentation of TEN-T and TEN-E, cannot be sufficiently
achieved by the Member States, and can, by reason of the
need for coordination of national measures, be better
achieved at Community level, the Community may adopt
measures, in accordance with the principle of subsidiarity
as set out in Article 5 of the Treaty. In accordance with
the principle of proportionality, as set out in that Article,
this Regulation does not go beyond what is necessary to
achieve that objective,

HAVE ADOPTED THIS REGULATION

CHAPTER 1

GENERAL PROVISIONS

Article 1

Subject matter

Close attention should be paid to the effective coordina-
tion of all Community measures having an impact on the
trans-European networks,
in particular financing from
the Structural Funds and from the Cohesion Fund and
the operations of the European Investment Bank (herein-
after referred to as the EIB).

This Regulation defines the conditions, methods and procedures
for granting Community financial aid to projects of common
interest in the field of the trans-European transport and energy
networks under Article 155(1) of the Treaty.

This Regulation lays down, for the entire duration of its
implementation, a financial envelope constituting the
prime reference amount, within the meaning of point 37
of
the Interinstitutional Agreement of 17 May 2006
between the European Parliament, the Council and the
Commission on budgetary discipline and sound financial
management (2), for the budgetary authority during the
annual budgetary procedure.

Article 2

Definitions

For the purposes of this Regulation:

1.

‘project of common interest’ means a project or a part of a
project identified as being of common interest for the Com-
munity in the field of transport in the framework of Deci-
sion No 1692/96/EC or in the field of energy in the frame-
work of Decision No 1364/2006/EC;

(1) OJ L 248, 16.9.2002, p. 1. Regulation as amended by Regulation (EC,

Euratom) No 1995/2006 (OJ L 390, 30.12.2006, p. 1).

(2) OJ C 139, 14.6.2006, p. 1.

(3) OJ L 184, 17.7.1999, p. 23. Decision as amended by Decision

2006/512/EC (OJ L 200, 22.7.2006, p. 11).

8.5.2007

EN

Official Journal of the European Union

C 103E/29

2.

3.

4.

5.

6.

7.

8.

9.

‘priority project’ in the field of transport means a project of
common interest located on an axis, or any other project,
listed in Annex III to Decision No 1692/96/EC or in the
field of energy a project of common interest considered to
be a priority for the Community in the framework of Deci-
sion No 1364/2006/EC;

‘project of European interest’ in the field of energy means a
mature project located on a priority axis referred to in Deci-
sion No 1364/2006/EC and which is of a cross-border
nature or which has a significant impact on cross-border
transmission capacity;

‘part of a project’ means any activity that is independent
financially, technically or over time and which contributes
to the completion of a project;

section’ means

sections
‘cross-border
referred to in Article 19b of Decision No 1692/96/EC and
cross-border sections which ensure, via a third country, the
continuity of a priority project between two Member States;

the cross-border

‘bottleneck’
in the field of transport means obstacles to
speed and/or capacity which make it impossible to guar-
antee the continuity of transport flows;

interna-
‘beneficiary’ means one or more Member States,
tional organisations or
joint undertakings, within the
meaning of Article 171 of the Treaty, or public or private
undertakings or bodies having complete responsibility for a
project and proposing to invest their own resources or
funds provided by third parties with a view to carrying out
a project;

‘studies’ means activities needed to prepare project imple-
mentation, including preparatory, feasibility, evaluation and
validation studies, and any other technical support measure,
including prior action to define and develop a project fully
and decide on its financing, such as reconnaissance of the
sites concerned and preparation of the financial package;

‘works’ means the purchase, supply and deployment of
components, systems and services,
the carrying out of
construction and installation works relating to a project,
the acceptance of
installations and the launching of a
project;

10.

‘project cost’ means the total cost borne by a beneficiary of
studies or works directly related to and necessary for
carrying out a project;

11.

‘eligible cost’ means the part of the project cost taken into
consideration by the Commission for the calculation of
Community financial aid;

12.

‘loan guarantee instrument’ means a guarantee issued by
the EIB in favour of a stand-by liquidity facility provided to
projects of common interest in the field of transport. It
covers the debt service risks due to demand shortfalls and
the resulting unforeseen loss of revenue during the initial
operating period of the project. The loan guarantee instru-
ment is used only for projects whose financial viability is

in whole or in part, on revenues, tolls or other

based,
income paid by or on behalf of the users or beneficiaries;

13.

‘availability payment schemes’ means financing schemes for
infrastructure projects, built and operated by a private
investor who receives periodic payments after the construc-
tion phase for
the infrastructure service provided. The
payment level depends on the degree of attainment of the
contractually-agreed
Availability
performance
payments are made throughout the duration of a contract
between the authority awarding the contract and the
project promoter and serve to cover
the construction,
financing, maintenance and operational costs.

levels.

CHAPTER II

ELIGIBLE PROJECTS, FORMS AND METHODS OF FINANCIAL
AID, COMBINATION OF FINANCING

Article 3

Eligibility of projects and applications for Community
financial aid

Only projects of common interest shall be eligible to

1.
receive Community financial aid under this Regulation.

The eligibility of applications for Community financial aid for
such projects is conditional on compliance with Community
law.

In the field of

2.
transport only, eligibility shall also be
subject to a commitment by the applicant for Community finan-
cial aid and, where appropriate, by the Member States
concerned,
to make a financial contribution to the project
submitted, mobilising private funds if necessary.

Transport-related projects involving a cross-border section
3.
or a part of such a section shall be eligible to receive Com-
munity financial aid if there is a written agreement between the
Member States concerned or between the Member States and
third countries concerned relating to the completion of
the
cross-border section. Exceptionally, when a project is necessary
to link to the network of a neighbouring Member State or a
third country but does not actually cross the border, the written
agreement referred to above shall not be required.

Article 4

Submission of applications for Community financial aid

Applications for Community financial aid shall be submitted to
the Commission by one or more Member States or, with the
agreement of the Member States concerned, by international
organisations, joint undertakings, or public or private undertak-
ings or bodies.

The methods for submitting applications for financial aid shall
be established in accordance with Article 9(1).

C 103E/30

EN

Official Journal of the European Union

8.5.2007

Article 5

A decision to grant Community financial aid shall take

4.
into account, inter alia:

Selection of projects

(a) the maturity of the project;

1.
Projects of common interest shall be awarded Community
financial aid in relation to their contribution to the objectives
and priorities
framework of Decisions
in the
defined
No 1692/96/EC and No 1364/2006/EC.

In the field of transport, special attention shall be given to

2.
the following projects:

(b) the stimulating effect of Community intervention on public

and private funding;

(c) the soundness of the financial package;

(d) socio-economic effects;

(e) environmental consequences;

(a) priority projects;

(f) the need to overcome financial obstacles; and

(b) projects to eliminate bottlenecks, in particular in the frame-

work of priority projects;

(g) the complexity of the project, for example that which arises

from the need to cross a natural barrier.

(c) projects submitted or supported jointly by at

two
in particular those involving cross-border

least

Member States,
sections;

Article 6

(d) projects contributing to the continuity of the network and

the optimisation of its capacity;

Forms and methods of Community financial aid

(e) projects contributing to the improvement of the quality of
inter alia
the safety and
interoperability between

service offered on TEN-T and which promote,
through action relating to infrastructure,
security of users
national networks;

and ensure

(f) projects relating to the development and deployment of
traffic management systems in rail, road, air, maritime,
inland waterway and coastal transport which ensure intero-
perability between national networks;

(g) projects contributing to the completion of

the internal

market; and

(h) projects contributing to the re-balancing of transport modes
in favour of the most environmentally-friendly ones, such as
inland waterways.

In the field of energy, particular attention shall be given to

3.
projects of European interest that contribute to:

(a) the development of

to strengthen
economic and social cohesion by reducing the isolation of
the less-favoured and island regions of the Community;

the network so as

(b) the optimisation of the capacity of the network and the
in particular

the internal energy market,

completion of
projects concerning cross-border sections;

(c) the security of energy supply, diversification of sources of
interconnections with

in particular,

energy supplies and,
third countries;

(d) the connection of renewable energy resources; and

Community financial aid for projects of common interest

1.
can take one or more of the following forms:

(a) grants for studies or works;

(b) in the field of transport, grants for works in the framework

of availability payment schemes;

(c) interest rate rebates on loans given by the EIB or other

public or private financial institutions;

(d) a financial contribution to the provisioning and capital allo-
cation for guarantees to be issued by the EIB on its own
resources under the loan guarantee instrument. The duration
of such guarantees may not exceed five years after the date
the project goes into operation. Exceptionally, in duly justi-
fied cases, a guarantee may be granted for up to seven years.
The contribution from the general budget of the European
Union to the loan guarantee instrument may not exceed
EUR 500 million. The EIB shall contribute an equal amount.
The Community exposure to the loan guarantee instrument,
including management fees and other eligible costs, shall be
limited to the amount of the Community contribution to
the loan guarantee instrument and there shall be no further
liability on the general budget of the European Union. The
residual risk inherent in all operations shall be borne by the
EIB. The main terms, conditions and procedures of the loan
guarantee instrument are laid down in the Annex;

(e) risk capital participation for investment funds or compar-
able
financial undertakings with a priority focus on
providing risk capital for trans-European network projects
and involving substantial private sector investment; such
risk-capital participation shall not exceed 1 % of
the
budgetary resources set out in Article 18;

(e) the safety, reliability and interoperability of interconnected

(f) a financial contribution to the project-related activities of

networks.

joint undertakings.

8.5.2007

EN

Official Journal of the European Union

C 103E/31

The amount of Community financial aid granted in the
2.
forms referred to in paragraph 1(a), (b), (c) and (f) shall take
account of the criteria laid down in Article 5 and shall not
exceed the following rates:

(a) studies: 50 % of the eligible cost, irrespective of the project

of common interest concerned;

CHAPTER III

PROGRAMMING, IMPLEMENTATION AND CONTROL

Article 8

Multiannual and annual work programmes

(b) works:

(i) priority projects in the field of transport:

— a maximum of 20 % of the eligible cost;

— a maximum of 30 % of the eligible cost for cross-
border sections, provided that the Member States
concerned have given the Commission all necessary
guarantees regarding the financial viability of the
project and the timetable for carrying it out;

(ii) projects in the field of energy: a maximum of 10 % of

the eligible cost;

(iii) projects in the field of transport other than priority
projects: a maximum of 10 % of the eligible cost;

(c) the European Rail Traffic Management System (ERTMS):

(i) track-side equipment: a maximum of 50 % of

the

eligible cost of studies and works;

(ii) on-board equipment:

— a maximum of 50 % of the eligible cost of devel-
oping and making prototypes for the installation of
ERTMS on existing rolling stock, provided that the
prototype is certified in at least two Member States;

— a maximum of 50 % of the eligible cost of series
equipment for the installation of ERTMS on rolling
in the
stock; however,
framework of
a
maximum amount of aid per traction unit;

the Commission shall set
the multiannual programme

(d) road, air,

inland waterway, maritime traffic and coastal
traffic management systems: a maximum of 20 % of the
eligible cost of works.

Acting in accordance with the procedure referred to in
3.
Article 15(2),
implementation
the Commission shall adopt
measures for the instruments referred to in paragraph 1(c) and
(e) of this Article.

1.
Acting in accordance with the procedure referred to in
Article 15(2), the Commission shall apply the criteria laid down
in Article 5 and the objectives and priorities defined in the
framework of Decisions No 1692/96/EC and No 1364/2006/EC
when establishing multiannual and annual work programmes.

A multiannual work programme in the field of transport
2.
shall apply to priority projects and to road, air, rail,
inland
waterway and coastal and maritime traffic management systems.
The amount of the financial envelope shall lie within a range of
80 % — 85 % of the budgetary resources referred to in Article
18 reserved for transport.

The annual work programme in the field of transport
3.
shall apply the criteria for the granting of
financial aid to
projects of common interest not included in the multiannual
programme.

4.
The annual work programme in the field of energy shall
apply the criteria for the granting of financial aid to projects of
common interest.

5.
The multiannual work programme shall be reviewed at
least at mid-term and, if necessary, revised in accordance with
the procedure referred to in Article 15(2).

Article 9

Granting of Community financial aid

1.
Following every call for proposals based on the multi-
annual or annual work programmes referred to in Article 8(1),
the Commission, acting in accordance with the procedure
referred to in Article 15(2), shall decide on the amount of finan-
cial aid to be granted to the projects or parts of projects
selected. The Commission shall specify the conditions and
methods for their implementation.

2.
The beneficiaries and the Member States concerned shall
be informed by the Commission of any financial aid to be
granted.

Article 7

Other financial aid and instruments

Article 10

Financial provisions

EIB operations shall be compatible with the granting of

1.
financial aid under this Regulation.

2.
The Commission shall coordinate and ensure the coher-
ence of projects co-financed in the framework of this Regulation
with related actions benefiting from other Community contribu-
tions and financial instruments as well as EIB operations.

1.
Budgetary commitments may be divided into annual
instalments. Each year the Commission shall commit the annual
instalments taking into account the state of progress of the
projects or project phases receiving financial aid, the estimated
needs and the budget available.

The indicative timetable for the commitment of the individual
annual instalments shall be communicated to the beneficiaries
and the Member States concerned.

C 103E/32

EN

Official Journal of the European Union

8.5.2007

Community aid may cover only project-related expendi-
2.
ture incurred by the beneficiaries or by third parties responsible
for the implementation of a project.

Expenditure shall be eligible from the date on which an applica-
tion for aid is lodged. Expenditure resulting from projects
included in the multiannual programme may be eligible as from
1 January of the current year, starting from 1 January 2007.

VAT shall not be an eligible cost, except for non-refundable
VAT.

Payments shall be made in the form of pre-financing,
instalments,

3.
where appropriate divided into several payment
intermediate payments and payment of the balance.

The Member States shall undertake the technical moni-
2.
toring and financial control of projects in close cooperation
with the Commission and shall certify the reality and the
conformity of the expenditure incurred in respect of projects or
parts of projects. The Member States may request the participa-
tion of the Commission during on-the-spot checks.

The Member States shall inform the Commission of the
3.
measures taken under paragraph 2 and,
in particular, shall
supply a description of the control, management and moni-
toring systems set up to ensure that projects are successfully
completed.

Article 12

The payment methods shall be defined in such a way as to take
implementation of
into account in particular the multiannual
infrastructure projects.

Compatibility with Community law and Community poli-
cies

The pre-financing, or where appropriate the first
thereof, shall be paid when the financial aid is granted.

instalment

Any intermediate payments shall be made on the basis of
payment applications, subject to compliance with Article 13.

Projects financed under this Regulation shall be carried out in
conformity with Community law and shall take into account
any relevant Community policies, in particular those relating to
competition, the protection of the environment, health, sustain-
able development, public procurement and interoperability.

Payment of the balance shall be made after acceptance of the
final report concerning the project submitted by the beneficiary
and certified by the Member States concerned. The final report
shall detail in particular all the expenditure actually incurred.

4.
In the case of availability payment schemes, the first pre-
financing payment shall be made within a period of up to three
years following the granting of Community financial aid upon
certification by the Member States of the start of the project
and upon submission of the respective public-private partner-
ship contract. Further pre-financing payments may be made
upon certification by the Member States of the progress of the
project.

Payment of the balance shall be made after the start of the
operational phase of the project upon verification that the infra-
structure has been delivered, certification by the Member States
that the expenses claimed have actually been incurred and proof
of a total amount of availability payments equalling the amount
of the Community financial aid.

Where no payment of the availability payment is due because of
a failure to deliver the infrastructure, the Commission shall
recover the pre-financing payments it has made.

Article 11

Member States responsibilities

1. Within the sphere of
the Member
States shall make every effort to implement the projects of
common interest which receive Community financial aid
granted under this Regulation.

their responsibility,

Article 13

Cancellation, reduction, suspension and discontinuance of
aid

After appropriate examination and after having informed
1.
the beneficiaries and Member States concerned in order that
they may present their observations within a given time, the
Commission:

(a) shall cancel, except

in duly justified cases,

financial aid
granted for projects or parts of projects which have not
been started in the two years following the start date of the
project established in the conditions governing the granting
of aid;

(b) may suspend, reduce or discontinue the financial aid:

(i) in the event of an irregularity committed in the imple-
mentation of the project or part of a project with regard
to the provisions of Community law; and

(ii) in the event of failure to comply with the conditions
in particular if a major
governing the financial aid,
change affecting the nature of a project or procedures
for implementation has been made without the approval
of the Commission;

(c) may, taking account of all relevant factors, request the reim-
bursement of the financial aid granted if, within four years
of the finishing date established in the conditions governing
the granting of aid, the implementation of the project or
part of a project receiving the financial aid has not been
completed.

8.5.2007

EN

Official Journal of the European Union

C 103E/33

The Commission may recover all or part of the sums

2.
already paid:

(a) where this is necessary, notably following cancellation,
the financial aid or a
reduction of

discontinuation or
request for reimbursement of financial aid; or

(b) in the event of cumulation of Community aid for a part of a

project.

Article 14

Protection of the Community's financial interests

The European Anti-Fraud Office (OLAF) may undertake
1.
on-the-spot site controls and checks in accordance with Council
Regulation (Euratom, EC) No 2185/96 of 11 November 1996
concerning on-the-spot checks and inspections carried out by
the Commission in order to protect the European Communities'
financial interests against fraud and other irregularities (1).

The conditions governing the granting of Community
2.
financial aid may,
in particular, provide for monitoring and
financial checks to be undertaken by the Commission or any
representative authorised by it, and for audits to be undertaken
by the Court of Auditors, where appropriate on the spot.

3.
The Member State concerned and the Commission shall
immediately exchange all relevant information concerning the
results of the checks undertaken.

CHAPTER IV

FINAL PROVISIONS

Article 15

Committee procedure

1.

The Commission shall be assisted by a committee.

2. Where reference is made to this paragraph, Articles 5 and
7 of Decision 1999/468/EC shall apply, having regard to the
provisions of Article 8 thereof.

3.

The Committee shall adopt its rules of procedure.

The EIB shall designate a representative to the committee

4.
who shall not take part in the voting.

Article 16

Evaluation

1.
The Commission and the Member States, assisted by the
beneficiaries, may undertake an evaluation of the methods of
carrying out projects as well as the impact of their implementa-
tion, in order to assess whether the objectives, including those
relating to environmental protection, have been attained.

2.
The Commission may request a beneficiary Member State
to provide a specific evaluation of projects financed under this
Regulation or, where appropriate, to supply it with the informa-
tion and assistance required to undertake an evaluation of such
projects.

(1) OJ L 292, 15.11.1996, p. 2.

Article 17

Information and publicity

1.
Every two years the Commission shall submit a report to
the European Parliament, the Council, the European Economic
and Social Committee and the Committee of the Regions on the
activities undertaken under this Regulation. The report shall
contain an evaluation of the results achieved with Community
financial aid in the different fields of application with regard to
the original objectives, as well as a chapter on the substance and
implementation of
the current multiannual programme. The
report shall also contain information on the sources of funding
for each project.

2.
The Member States concerned and, where appropriate,
beneficiaries shall ensure that suitable publicity is given to aid
granted under this Regulation in order to inform the public of
the role of
the
projects.

the Community in the implementation of

Article 18

Budgetary resources

this
The financial envelope for the implementation of
1.
Regulation
be
shall
period
EUR 8 168 000 000, of which EUR 8 013 000 000 shall be
for TEN-T and EUR 155 000 000 shall be for TEN-E.

2007-2013

the

for

2.
The annual appropriations shall be authorised by the
budgetary authority within the limits of the multiannual finan-
cial framework.

Article 19

Revision clause

Before the end of 2010, the Commission shall submit to the
European Parliament and to the Council a general report on the
experience gained with the mechanisms provided for by this
Regulation for the granting of Community financial aid.

Acting in accordance with the procedure provided for in the
first subparagraph of Article 156 of the Treaty, the European
Parliament and the Council shall decide if, and under what
conditions, the mechanisms provided for by this Regulation are
to be maintained or amended beyond the period referred to in
Article 18 of this Regulation.

Article 20

Entry into force

This Regulation shall enter into force on the 20th day following
that of its publication in the Official
the European
Union.

Journal of

It shall apply as from 1 January 2007.

Actions underway in the field of transport and energy on the
date of application of
this Regulation shall continue to be
subject to Regulation (EC) No 2236/95 in the version in force
on 31 December 2006.

C 103E/34

EN

Official Journal of the European Union

8.5.2007

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament

The President

…

For the Council

The President

…

8.5.2007

EN

Official Journal of the European Union

C 103E/35

ANNEX

MAIN TERMS, CONDITIONS AND PROCEDURES OF THE LOAN GUARANTEE INSTRUMENT REFERRED TO
IN ARTICLE 6(1)(D)

The EIB shall be a risk-sharing partner and shall manage the Community contribution to the loan guarantee instrument
on behalf of the Community. More detailed terms and conditions for implementing the loan guarantee instrument,
including its monitoring and control, shall be laid down in a cooperation agreement between the Commission and the
EIB, taking into account the provisions laid down in this Annex.

LOAN GUARANTEE INSTRUMENT FOR TEN-TRANSPORT PROJECTS

Community contribution

1. Without prejudice to the adjustment procedure from 2010 onwards as set out in
paragraph 2, the contribution from the general budget of the EU to the loan guar-
antee instrument shall be made available to the EIB in accordance with the
following schedule:

2007

2008

2009

2010

2011

2012

2013

EUR 10 million;

EUR 35 million;

EUR 60 million;

EUR 80 million;

EUR 105 million;

EUR 110 million;

EUR 100 million.

2. In years 2007 to 2009 the Commission shall pay EIB the annual amounts as
scheduled above. From 2010 onwards EIB shall request the transfer of sums up to
the cumulated amount indicated in the schedule to the trust account. The request
shall be issued by 31 December of the preceding year and shall be supported by a
forecast of the need for the scheduled Community contribution. This forecast shall
serve as the basis for a demand-based adjustment of the annual payments indicated
above, which shall be decided in accordance with the procedure referred to in
Article 15(2).

Trust account

1. The EIB shall set up a trust account to hold the Community contribution and

revenues resulting from the Community contribution.

2. The interest earned on the trust account and other revenues resulting from the
Community contribution, such as guarantee premiums, interest and risk margins
on sums disbursed by the EIB, shall be added to the resources of the trust account,
unless the Commission decides, in accordance with the procedure referred to in
Article 15(2), that they are to be returned to the TEN-T budget line.

3. Sums drawn for capital allocation shall be reimbursed to the trust account after the
amounts disbursed by the EIB under the loan guarantee instrument are fully reim-
bursed.

Use of the Community contribu-
tion

The EIB shall use the Community contribution:

— to carry out, for each eligible project, the expected loss provisioning and capital
allocation, in accordance with the relevant rules of the EIB and a risk assessment
performed by the EIB under its applicable structured finance facility policy;

— to cover any non-project-related eligible cost associated with the establishment and
administration of the loan guarantee instrument. These costs shall be defined in
the management agreement between the Commission and the EIB.

C 103E/36

EN

Official Journal of the European Union

8.5.2007

LOAN GUARANTEE INSTRUMENT FOR TEN-TRANSPORT PROJECTS

Risk sharing

1. The Community contribution shall be used by the EIB to carry out, for each eligible

project, the expected loss provisioning and capital allocation.

2. The expected loss provisioning shall cover the expected loss of a project. The part
of the Community contribution covering the statistically expected loss provisioning
for each eligible operation shall be paid from the trust account to the EIB, thus
covering a percentage of the risk. This percentage shall be variable and depend on
the risk grading of the operation as well as its maturity.

3. The capital allocation shall cover the unexpected loss of a project. The part of the
Community contribution corresponding to the
capital allocation shall be
earmarked in the trust account for each underlying operation. This amount may be
claimed by the EIB in the event of the call of the guarantee issued by EIB under
loan guarantee instrument, thus covering an additional percentage of its risk.

4. The risk-sharing pattern resulting from the above mechanism shall be reflected in
an appropriate sharing between the trust account and the EIB of the risk margin
charged by the EIB to its counterpart under the underlying loan guarantee instru-
ment operation.

The EIB guarantee

1. The loan guarantee instrument shall consist of an EIB guarantee for a stand-by
liquidity facility to be provided to an eligible project in terms consistent with the
loan guarantee instrument.

2. If the stand-by liquidity facility providers are entitled to call the EIB guarantee
under the terms of the loan guarantee instrument, the EIB shall pay out all sums
due to the stand-by liquidity facility providers and become creditor to the project.

3. Once the EIB has become creditor to a project, the 'EIB's rights under the loan
guarantee instrument shall rank behind the debt service of the senior credit facility
and ahead of equity and related financings.

4. The stand-by liquidity facility should not exceed 20 % of the total amount of the

senior debt committed at financial close.

Pricing

The pricing of guarantees under the loan guarantee instrument, based upon the risk
margin and the coverage of all administrative project-related costs of the guarantee
instrument, shall be determined in accordance with relevant usual rules and criteria of
the EIB.

Application procedure

Applications for risk coverage under the loan guarantee instrument shall be addressed
to the EIB in accordance with the EIB's standard application procedure.

Approval procedure

The EIB shall carry out risk, financial, technical and legal due diligence and shall
decide the issuance of a guarantee under the loan guarantee instrument in accordance
with its usual rules and criteria, including, inter alia, the quality of individual proposals,
the creditworthiness of the borrowers, acceptable terms and conditions and market
demand.

8.5.2007

EN

Official Journal of the European Union

C 103E/37

LOAN GUARANTEE INSTRUMENT FOR TEN-TRANSPORT PROJECTS

Duration of the loan guarantee
instrument

1. The Community contribution to the loan guarantee instrument shall be committed
at latest by 31 December 2013. The actual approval of guarantees is to be finalised
by 31 December 2014.

2. In the event of termination of the loan guarantee instrument during the current
financial
than funds
framework any balances on the trust account, other
committed and funds needed to cover other eligible costs and expenses, shall be
returned to the TEN-T budget line. If the loan guarantee instrument is not extended
into the next financial framework, any remaining funds shall be returned to the
revenue side of the general budget of the EU.

3. Funds allocated to the loan guarantee instrument may be called upon until the last
guarantee expires or until the last subordinated debt has been reimbursed, which-
ever is earlier.

Reporting

Annual reporting methods on the implementation of the loan guarantee instrument
shall be agreed between the Commission and the EIB.

C 103E/38

EN

Official Journal of the European Union

8.5.2007

STATEMENT OF THE COUNCIL'S REASONS

I. INTRODUCTION

On 20 July 2004 the Commission sent a proposal for a Regulation of the European Parliament and the
Council laying down general rules for the granting of Community financial aid in the field of trans-Euro-
pean transport and energy networks and amending Council Regulation (EC) No 2236/95.

The European Parliament adopted its first reading opinion on 26 October 2005.

The European Economic and Social Committee delivered its opinion on 22 September 2005.

As the budgetary resources set out in the Commission initial proposal exceeded the amounts agreed in
the financial framework 2007-2013 on TENs, the Commission gave a modified proposal on 24 May
2006 (COM(2006) 245 final). The modified proposal took into account the main amendments proposed
by the EP in its first reading.

The Presidency negotiated informally with the European Parliament rapporteur in order to reach an
agreement on a Common Position that could be accepted by the Parliament without amendments.

On 6 December 2006 The President of the Budgets Committee at the European Parliament, Mr LEWAN-
DOWSKI, wrote a letter (16218/06) to the President of the Coreper, informing of the agreement of its
committee on the Presidency compromise as set out in document 12777/2/06 REV 2. If the text of the
Common Position is adopted accordingly, Mr LEWANDOWSKI informed of his intention to recommend
the Plenary session of the Parliament to approve it without amendments.

On 11 December 2006 the Council reached a political agreement on the Presidency compromise as set
out in document 12777/2/06/ REV 2. The Commission issued a declaration to be included in the
minutes of the Council when the Common Position will be adopted.

II. OBJECTIVE

This Regulation strengthens and adapts existing financial instruments through an increase in the level of
Community co-financing by providing for the possibility of applying a higher Community co-financing
rate, in particular for projects characterised by cross-border nature, their transit function, or by the
crossing of natural barriers. The regulation should allow a better use of the existing networks, a removal
of bottlenecks and the completion of missing links that will make possible to increase effectiveness and
competitiveness and to guarantee an appropriate level of quality and reduction of saturation points and,
therefore, better long-term viability.

III. ANALYSIS OF THE COMMON POSITION

1. General observations

The Common Position was agreed on the basis of informal tripartite negotiations, following a series
of meetings between the Presidency in office, the rapporteur and the representatives of the Commis-
sion.

IV. CONCLUSIONS

The Council considers that, as a whole, the Common Position is in line with the fundamental objectives
of the Commission's amended proposal and considers that a good compromise has been reached with
the European Parliament in the course of the informal negotiations.