Regulation (EC) No 680/2007 of the European Parliament and of the Council of 20 June 2007 laying down general rules for the granting of Community financial aid in the field of the trans-European transport and energy networks
Date: 2007-06-20
Institutions: Council of the European Union, European Parliament
Subjects: EU aid, aid system, competitiveness, economic development, energy transport, financial aid, trans-European network, transport infrastructure, transport network

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I

(Acts adopted under the EC Treaty/Euratom Treaty whose publication is obligatory)

REGULATIONS

REGULATION (EC) No 680/2007 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

of 20 June 2007

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European Commu-
nity, 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)

it possible

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
effectiveness and
competitiveness and to guarantee an appropriate level of
quality and a reduction in saturation points and, therefore,
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.

to increase

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

investments

(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 (OJ C 103 E, 8.5.2007, p. 26) and Position of the
European Parliament of 23 May 2007 (not yet published in the
Official Journal).

(3) 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.

(4)

(5)

(6)

(7)

the development of

In Decision No 1692/96/EC of the European Parliament
the Council of 23 July 1996 on Community
and of
guidelines for
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 necessary
for the priority projects within the meaning of Annex III to
that Decision alone account for almost EUR 160 billion for
the period 2007 to 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-financing
rate, in particular for projects characterised by their cross-
border nature, their transit function, or by the crossing of
natural barriers.

In accordance with the Communication from the Commis-
sion to the European Parliament and the Council on the
‘promotion of inland waterway transport “NAIADES”’ and
having regard to the sustainable nature of inland water-
ways,
inland waterways projects should receive special
attention.

In its Resolution of 8 June 2005 on policy challenges and
budgetary means of the enlarged Union 2007 to 2013 (4),
the European Parliament underlined the strategic impor-
tance of transport networks for the completion of the
internal market and for closer relations with candidate, pre-
candidate and ‘ring of friends’ countries. Moreover, it also
expressed its willingness to examine innovative financing

(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.

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instruments such as loan guarantees, European concessions,
European loans and an interest relief fund.

‘TEN-T’

financial

respectively)

and ‘TEN-E’

(8) With the amounts allocated to the trans-European net-
works in the transport and energy sectors (hereinafter
referred to as
in
accordance with the multiannual
framework
it is impossible to meet all the needs
2007 to 2013,
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 (1)
In order to
complement 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
particular 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
certain
projects, European Coordinators may be designated in
accordance with Article 17a of Decision No 1692/96/EC.

coordinated implementation of

for TEN-E.

the

(9)

the European financial

Taking into account that the remaining TEN-T investment
in priority projects is estimated at about EUR 250 billion
and that
reference amount of
EUR 8 013 million for transport for the period 2007 to
2013 only represents a tiny part of the necessary budget for
completion of
the Commission
the priority projects,
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,
laid down. The
Commission should implement the provisions concerning
European Coordinators referred to in Decision 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 TEN-T, bearing in mind
that the building period comprises at least two seven-year
budget periods
the new
infrastructure is at least a century.

in line with the

expected life of

timetable

and 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 neighbour-
ing countries are about EUR 28 billion between 2007 and
2013 for the priority projects alone.

(11) 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 instrument intended
to cover certain post-construction risks in the framework of
TEN-T projects. With regard to energy,
the European
Council called on the Commission, to redirect expenditure,
if necessary, towards investments in physical capital
in
order to stimulate growth.

(12) Council Regulation (EC) No 2236/95 of 18 September
1995 laying down the rules for the granting of Community
financial aid in the field of the trans-European networks (2)
already represents real progress, since it permits a higher
financing rate of 20 % for projects declared as having
priority. It nevertheless remains conditional on implemen-
tation rules which require simplification and an overall
budget with limited resources.
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.

appears

It

(13) By means of this Regulation, it is appropriate to establish a
programme determining the general rules for 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 particular 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.

(14) Community financial aid under the budget for the trans-
European networks should, in addition to focusing on 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
under Decisions Nos 1692/96/EC and 1364/2006/EC. It
should also make it possible to finance the other European
infrastructure projects of common interest defined in those
Decisions.

(15) 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 obstacles
which can arise at the time of project preparation and pre-
construction development, and should be concentrated on
the cross-border sections of priority projects and on
interconnections with neighbouring countries.

(16)

signalling system ERTMS/ETCS,

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

(17) 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.

(1) Decision No 1364/2006/EC of the European Parliament and of the
Council of 6 September 2006 laying down guidelines for trans-
European energy networks (OJ L 262, 22.9.2006, p. 1).

(2) 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).

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(18) To respond to the specific requirements of each project and
to increase the efficiency and value of the Community
financial aid, this aid may take several forms: grants for
studies and works, grants for availability payments, interest
rate rebates, loan guarantees or participation 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 Regulation 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.

it

(19) For the implementation of Community financial support
for large-scale projects phased over several years,
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 completion of
these projects and to mobilise both public and private
investors. The projects
included in the multiannual
programme represent the highest priorities in the develop-
ment of TEN-T as referred to in Decision No 1692/96/EC
and require continuing Community action to ensure their
smooth and efficient completion.

(20)

It
is appropriate to encourage public-private forms of
financing, whether institutional or contractual, which 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.

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

(22) 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.

(23) 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
implementing powers
the exercise of
conferred on the Commission (3).

for

(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, 27.7.2006, p. 11).

(24)

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 advisable to
provide for several separate Regulations for the fields
covered to date by Regulation (EC) No 2236/95.

(25) By means of this Regulation, general rules should be laid
down for the granting of Community financial aid in the
the TEN-T and TEN-E in accordance with
field of
in particular,
Community law and policies concerning,
competition, environmental protection, health, sustainable
development, public procurement and the effective imple-
mentation of the Community policies on interoperability.

(26) Since

the objective of

this Regulation, namely the
implementation 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 I

GENERAL PROVISIONS

Article 1

Subject matter

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.

Article 2

Definitions

For the purposes of this Regulation:

1.

2.

3.

‘project of common interest’ means a project or a part of a
project identified as being of common interest for the
Community in the field of transport in the framework of
Decision No 1692/96/EC or in the field of energy in the
framework of Decision No 1364/2006/EC,

‘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
Decision 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
Decision No 1364/2006/EC and which is of a cross-border
nature or which has a significant impact on cross-border
transmission capacity;

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4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

‘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

‘cross-border
the cross-border sections
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;

‘bottleneck’
speed and/or capacity which make it
guarantee the continuity of transport flows;

in the field of transport means obstacles to
impossible to

‘beneficiary’ means one or more Member States,
inter-
national 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;

activities needed to prepare project
‘studies’ means
implementation, including preparatory, feasibility, evalua-
tion and validation studies, and any other technical support
measure, including prior action to define and develop a
project
such as
reconnaissance of the sites concerned and preparation of
the financial package;

fully and decide on its

financing,

‘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;

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

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

‘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
the project. The loan guarantee
operating period of
instrument
is used only for projects whose financial
viability is based, in whole or in part, on revenues, tolls
or other income paid by or on behalf of the users or
beneficiaries;

‘availability payment schemes’ means financing schemes for
infrastructure projects, built and operated by a private
investor who receives periodic payments after the con-
struction phase for the infrastructure service provided. The
payment level depends on the degree of attainment of the
contractually-agreed performance levels. Availability pay-
ments 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.

CHAPTER II

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

Article 3

Eligibility of projects and applications for Community
financial aid

1. Only projects of common interest shall be eligible to 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.

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

contribution to the project

3. Transport-related projects involving a cross-border section
or a part of such a section shall be eligible to receive Community
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 under-
takings or bodies.

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

Article 5

Selection of projects

1.
Projects of common interest shall be awarded Community
financial aid in relation to their contribution to the objectives
and priorities defined in the framework of Decisions Nos 1692/
96/EC and 1364/2006/EC.

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

2.
the following projects:

(a)

priority projects;

(b)

(c)

projects to eliminate bottlenecks,
framework of priority projects;

in particular

in the

projects submitted or supported jointly by at least two
Member States, in particular those involving cross-border
sections;

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projects contributing to the continuity of the network and
the optimisation of its capacity;

Article 6

(d)

(e)

(f)

(g)

(h)

projects contributing to the improvement of the quality of
inter alia
service offered on TEN-T and which promote,
through action relating to infrastructure, the safety and
security of users and ensure interoperability between
national networks;

projects relating to the development and deployment of
traffic management systems in rail, road, air, maritime,
inland waterway and coastal
transport which ensure
interoperability between national networks;

projects contributing to the completion of the internal
market; and

projects contributing to the re-balancing of
modes in favour of
ones, such as inland waterways.

transport
the most environmentally-friendly

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

3.
projects of European interest that contribute to:

(a)

(b)

(c)

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

the optimisation of the capacity of the network and the
completion of the internal energy market,
in particular
projects concerning cross-border sections;

the security of energy supply, diversification of sources of
energy supplies and,
interconnections with
in particular,
third countries;

(d)

the connection of renewable energy resources; and

Forms and methods of Community financial aid

1. Community financial aid for projects of common interest
can take one or more of the following forms:

(a)

grants for studies or works;

(b)

(c)

(d)

in the field of transport, grants for works in the framework
of availability payment schemes;

interest rate rebates on loans given by the EIB or other
public or private financial institutions;

a financial contribution to the provisioning and capital
allocation 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 justified 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,
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 instru-
ment are laid down in the Annex;

including management

(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
networks.

(f)

a financial contribution to the project-related activities of
joint undertakings.

4. A decision to grant Community financial aid shall take into
account, inter alia:

(a)

the maturity of the project;

(b)

the stimulating effect of Community intervention on public
and private funding;

2. The amount of Community financial aid granted in the
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;

(c)

the soundness of the financial package;

(d)

socio-economic effects;

(e)

environmental consequences;

(f)

the need to overcome financial obstacles; and

(g)

the complexity of the project, for example that which arises
from the need to cross a natural barrier.

(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;

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(ii)

projects in the field of energy: a maximum of 10 % of
the eligible cost;

80 to 85 % of the budgetary resources referred to in Article 18
reserved for transport.

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

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

(c)

the European Rail Traffic Management System (ERTMS):

(i)

track-side equipment: a maximum of 50 % of the
eligible cost of studies and works;

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.

(ii)

on-board equipment:

— a maximum of 50 % of

the eligible cost of
developing and making prototypes
the
installation of ERTMS on existing rolling stock,
provided that the prototype is certified in at least
two Member States,

for

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

(d)

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

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

Article 7

Other financial aid and instruments

EIB operations shall be compatible with the granting of

1.
financial aid under this Regulation.

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

CHAPTER III

PROGRAMMING, IMPLEMENTATION AND CONTROL

Article 8

Multiannual and annual work programmes

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 Nos 1692/96/EC and 1364/2006/EC
when establishing multiannual and annual work programmes.

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 multiannual
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 financial 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 10

Financial provisions

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.

2. Community aid may cover only project-related expenditure
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
application 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, where
inter-

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

instalments,

2. A multiannual work programme in the field of transport
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

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

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

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

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 partnership
contract. Further pre-financing payments may be made upon
certification by the Member States of the progress of the project.

the project upon verification that

Payment of the balance shall be made after the start of the
operational phase of
the
infrastructure 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 their responsibility, the Member States
shall make every effort to implement the projects of common
interest which receive Community financial aid granted under
this Regulation.

2. The Member States shall undertake the technical monitoring
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 participation of the
Commission during on-the-spot checks.

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

Article 12

Compatibility with Community law and Community
policies

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.

Article 13

Cancellation, reduction, suspension and discontinuance of
aid

1. After appropriate examination and after having informed
the beneficiaries and Member States concerned in order that they
may present
the
Commission:

their observations within a given time,

(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)

(ii)

in the event of an irregularity committed in the
implementation of the project or part of a project
with regard to the provisions of Community law; and

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

(c) may, taking account of all relevant factors, request the
reimbursement 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.

2. The Commission may recover all or part of the sums already
paid:

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

discontinuation or reduction of
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

1. The European Anti-Fraud Office (OLAF) may undertake 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).

2. The conditions governing the granting of Community
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.

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

L 162/8

EN

Official Journal of the European Union

22.6.2007

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.

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
1. The financial envelope for
Regulation
be
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.

the implementation of
period 2007 to 2013 shall

the

for

4. The EIB shall designate a representative to the committee
who shall not take part in the voting.

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

Article 16

Evaluation

Article 19

Revision clause

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
information and assistance required to undertake an evaluation
of such projects.

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 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.

the Treaty,

Article 17

Information and publicity

Article 20

Entry into force

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.

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

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.

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

Done at Strasbourg, 20 June 2007.

For the European Parliament

The President

H.-G. PÖTTERING

For the Council

The President

G. GLOSER

22.6.2007

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Official Journal of the European Union

L 162/9

Main terms, conditions and procedures of the loan guarantee instrument referred to in Article 6(1)(d)

ANNEX

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

Trust account

Use of the Community
contribution

Risk sharing

EUR 10 million
EUR 35 million
EUR 60 million
EUR 80 million
EUR 105 million
EUR 110 million
EUR 100 million

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
guarantee instrument shall be made available to the EIB in accordance with the
following schedule:
2007
2008
2009
2010
2011
2012
2013
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 scheduled Community
the need for
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).

2.

1.

2.

3.

The EIB shall set up a trust account to hold the Community contribution and
revenues resulting from the Community contribution.
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.
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 reimbursed.

The EIB shall use the Community contribution:
— to carry out, for each eligible project, the expected loss provisioning and capital
allocation,
the EIB and a risk
assessment performed by the EIB under its applicable structured finance facility
policy,

in accordance with the relevant rules of

— 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.

1.

2.

3.

4.

The Community contribution shall be used by the EIB to carry out, for each
eligible project, the expected loss provisioning and capital allocation.
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.
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.
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 instrument operation.

L 162/10

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Official Journal of the European Union

22.6.2007

The EIB guarantee

Pricing

LOAN GUARANTEE INSTRUMENT FOR TEN-TRANSPORT PROJECTS

1.

2.

3.

4.

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.

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.

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.

The stand-by liquidity facility should not exceed 20 % of the total amount of
the senior debt committed at financial close.

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

Duration of the loan guarantee
instrument

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

the loan guarantee instrument
including,

1.

2.

3.

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.

In the event of termination of the loan guarantee instrument during the
current financial framework any balances on the trust account, other than
funds 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.

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,
whichever is earlier.

Reporting

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