COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN COURT OF JUSTICE, THE COURT OF AUDITORS, THE EUROPEAN INVESTMENT BANK, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND TO THE COMMITTEE OF THE REGIONS  A growth package for integrated European infrastructures
Date: 2011-10-19
Institutions: European Commission
Subjects: EU investment, competitiveness, financing method, investment promotion, project of common interest, single market, trans-European network

EUROPEAN COMMISSION 

Brussels, 19.10.2011 
COM(2011) 676 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN COURT OF JUSTICE, THE 
COURT OF AUDITORS, THE EUROPEAN INVESTMENT BANK, THE 
EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND TO THE 
COMMITTEE OF THE REGIONS  

A growth package for integrated European infrastructures 

(Text with EEA relevance) 

 
 
 
 
  
 
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN COURT OF JUSTICE, THE 
COURT OF AUDITORS, THE EUROPEAN INVESTMENT BANK, THE 
EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND TO THE 
COMMITTEE OF THE REGIONS  

A growth package for integrated European infrastructures 

(Text with EEA relevance) 

1. 

INTRODUCTION AND SUMMARY 

In  the  past  decade,  infrastructure  spending  in  Europe  has  been,  on  average,  on  a  declining 
path. The economic and financial crisis has, however, brought renewed interest in the need for 
infrastructure  investment.  During  the  economic  crisis,  targeted  investments  in  infrastructure 
renewal or construction have been an important part of stimulus and recovery plans at EU and 
Member  State  levels,  as  a  way  of  supporting  aggregate  demand  while  ensuring  a  long  term 
return  from  money  spent.  Most  importantly,  the  crisis  has  shown  that  infrastructures  are 
crucial for Europe's economic future. 

A  truly  integrated  Single  Market,  as  the  Monti  Report  indicated1,  would  not  be  possible 
without  a  seamless  connection  between  all  its  component  parts.  Roads  and  other  transport 
connections,  electricity  and  gas  grids,  as  well  as  broadband  networks  are  vital  for  a 
functioning,  integrated  economic  area  and  for  its  social  and  territorial  cohesion.  Yet,  while 
regulatory  integration  advances  within  the  EU  and  markets  become  more  integrated,  most 
recently in the energy sector with the adoption and entry into force of the third liberalisation 
package, cross-border physical interconnection is lagging. Missing links exist, notably in the 
newer  Member  States,  creating  dividing  lines  between  the  centre  and  peripheries  of  the 
European Union and hampering the further development of intra-community exchanges or the 
growth of new economic sectors, such as e-commerce. 

New infrastructure needs also arise in connection with the implementation of the Europe 2020 
Strategy.  Fostering  Europe's  transformation  into  a  knowledge-intensive,  low-carbon  and 
highly competitive economy requires adequate modern and flexible energy, transport and ICT 
infrastructure  networks.  The  Commission  has  highlighted,  among  its  priorities  for  growth2, 
the  necessity  to  take  forward  the  transport,  energy  and  telecommunication  infrastructures 
needed for a truly integrated single market. It also called on Member States, in the context of 
a  reinforced  economic  governance,  to  continue  playing  their  role,  both  regulatory  and 
financial, in these crucial areas, despite the current economic crisis. 

1 

2 

"A  new  Strategy  for  the  Single  Market  at  the  service  of  Europe's  economy  and  society".  Report  by 
Mario Monti to the President of the European Commission, 9 May 2010, page 64-65 
Annual Growth Survey 2011, COM(2011)11 

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Overall  investment  needs  for  networks  of  European  importance  amount  to  about  EUR  1 
trillion  for  the  period  up  to  2020  in  the  three  sectors  mentioned  above3.  How  to  meet  this 
investment challenge is one of the big questions that the European Union has to face in the 
next  decade.  While  the  market,  through  appropriate  investment  and  pricing  mechanisms,  is 
expected  to  play  a  major  role  in  delivering  the  required  infrastructures,  without  public 
intervention, some of the necessary investments would not take place or will be delayed far 
beyond  2020.  This  is  why  the  Commission  today  is  proposing  an  infrastructure  package, 
composed of a new budgetary instrument, the Connecting Europe Facility, as well as revised 
guidelines for transport, energy and ICT. 

2. 

COMMON CHALLENGES AND SECTORAL POLICY GUIDELINES 

In  the  three  sectors  of  transport,  energy  and  digital  infrastructures,  similar  challenges  and 
bottlenecks  can  be  observed,  requiring  similar  solutions.  Even  though  the  bulk  of 
infrastructure  investment  can  be  delivered  by  Member  States  and  markets  (with  regulatory 
measures), it is unlikely that the scope and speed of investment would allow the achievement 
of  Europe  2020  objectives.  EU  level  intervention,  through  grants  and  financial  instruments, 
will  focus  on  initiatives  that  eliminate  or  reduce  market  fragmentation,  increase  European 
security,  have  considerable  growth  enhancement  potential  and/or  socio-economic  benefits 
which  cannot  be  captured  or  monetised  at  project  level.  It  will  also  unlock  short  term 
employment in construction phases. 

Internal  synergies  for  management  of  the  Facility  are  also  significant:  common  agency  use 
will help achieve economies of scale. A high level of co-ordination at programme level will 
allow  to  realise  synergies  between  the  sectoral  works:  energy,  transport  and  broadband 
networks  may  share  common  facilities  (manholes,  ducts,  access  to  premises)  therefore  it 
makes  sense  to  encourage  a  coordinated  deployment  of  passive  network  elements  in  co-
operation with relevant national, regional and local authorities. 

TRANSPORT 

Despite  significant  investment,  the  European  Union  does  not  currently  have  a  network  of 
interconnected  cross-border  transport  infrastructure  that  is  sufficiently  interoperable  and 
resource-efficient. As highlighted in the Communication on a "Roadmap to a Single European 
Transport Area – Towards a competitive and resource efficient transport system"4, transport 
infrastructure is essential in order to guarantee  the  operation  of  the  single  market,  and  must 
promote  competitiveness  and  sustainable  growth.  In  addition  to  the  lack  of  coordination 
between  Member  States  in  the  areas  of  project  management,  planning  and  funding,  the 
absence  of  a  global  framework  for  funding  at  European  level  that  can  target  the  most 
significant bottlenecks and cross-border missing links in the single market is a major obstacle 
that must be tackled in the next multi-annual financial framework.  

The new TEN-T Guidelines will provide a policy framework where European infrastructure 
serves the establishment of the Single European transport area. The Guidelines also set out a 
regulatory  framework  with  standards  ensuring  efficiency  and  interoperability.  Furthermore, 

3 

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About EUR 500 billion in transport, EUR 200 billion in energy and EUR 270 billion for fast broadband 
infrastructures. 
COM(2011) 144 

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they  create  a  more  robust,  more  binding  planning  framework,  composed  of 
the 
Comprehensive  and  Core  Networks,  which  will  allow  European  efforts  by  Member  States, 
EU institutions and stakeholders, to concentrate on fostering the emergence by 2030 and 2050 
of a functional network of European infrastructure. 

The  comprehensive  network  constitutes  the  basic  layer  of  the  TEN-T.  It  consists  of  all 
existing  and  planned  infrastructure  meeting  the  requirements  of  the  Guidelines.  The 
comprehensive network is to be in place by 31 December 2050 at the latest. 

The core network overlays the comprehensive network and consists of its strategically most 
important  parts.  It  constitutes  the  backbone  of  the  multi-modal  mobility  network  Europe's 
citizens and businesses need. It concentrates on those components of TEN-T with the highest 
European  added  value:  cross  border  missing  links,  key  bottlenecks  and  multi-modal  nodes. 
The  core  network  is  to  be  in  place  by  31  December  2030  at  the  latest  and  will  be  financed 
through the Connecting Europe Facility. 

The TEN-T guidelines also aim at reinforcing implementation instruments around the concept 
of  core  network  corridors,  taking  due  account  of  the  rail  freight  corridors5.  These  corridors 
will  provide  the  framework  instrument  for  the  coordinated  implementation  of  the  core 
network. In terms of scope, the core network corridors will in principle cover three transport 
modes and cross at least three Member States. If possible, they should establish a connection 
with a maritime port. In terms of activities, the core network corridors will provide a platform 
for  capacity  management,  investments,  building  and  coordinating  multi-modal  transhipment 
facilities, and deploying interoperable traffic management systems. 

ENERGY 

Major  efforts  are  needed  to  modernise  and  expand  Europe's  energy  infrastructure  and  to 
interconnect  networks  across  borders  to  meet  the  Union's  core  energy  policy  objectives  of 
competitiveness, sustainability and security of supply. The Commission's Communication on 
energy  infrastructure  priorities  for  2020  and  beyond6,  adopted  on  17  November  2010, 
therefore called for a new EU energy infrastructure policy to coordinate and optimise network 
development  on  a  continental  scale.  It  confirmed  in  particular  the  necessity  to  overhaul  the 
existing  Trans-European  Networks  for  Energy  (TEN-E)  policy  and  financing  framework. 
Such  a  new  policy  is  crucial  to  ensure  that  solidarity  between  Member  States  will  become 
operational, that the internal energy market is completed and isolated regions are linked to the 
European  network,  that  alternative  supply  or  transit  routes  and  sources  of  energy  will 
materialise  and  that  renewables  will  develop  and  compete  with  traditional  sources,  as 
highlighted by the 4th of February 2011 European Council. 

The  new  guidelines  for  trans-European  energy  infrastructures  establish  rules  for  the  timely 
development and interoperability of trans-European energy networks. 

More  specifically,  they  aim  at  creating  the  best  conditions  for  developing  energy 
infrastructure projects that support the full integration of the internal energy market, including 
by ensuring that no Member State is isolated from the European network and contributes to 

5 

6 

Regulation  (EU)  No  913/2010  of  22  September  2010  of  the  European  Parliament  and  of  the  Council 
concerning a European rail network for competitive freight, OJ L 276, 20.10.2010, p. 22.  
COM(2010)677 

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sustainable development and protection of the environment by enabling the Union to achieve 
its  targets  of  a  20%7  reduction  of  greenhouse  gas  emissions,  20%  increase  in  energy 
efficiency  and  20%  share  of  renewable  energy  in  final  energy  consumption  by  2020,  while 
ensuring security of supply and solidarity among Member States. 

To this effect, the Guidelines identify, for the period up to 2020 and beyond, a limited number 
of trans-European priority corridors and areas covering electricity and gas networks as well as 
oil and carbon dioxide transport infrastructure, for which European action is most warranted. 
It then aims at implementing these priorities by: 

– 

– 

– 

streamlining  permit  granting  procedures  to  significantly  reduce  their  duration  for 
projects of common interest and increase public participation and acceptance for the 
implementation of such projects; 

facilitating the regulatory treatment of projects of common interest in electricity and 
gas  by  allocating  costs  across  borders  depending  on  the  benefits  provided  and 
ensuring allowed returns are in line with risks incurred; 

ensuring  implementation  of  projects  of  common  interest  by  providing  necessary 
market-based  and  direct  EU  financial  support.  In  this  latter  regard,  the  proposal 
provides  the  basis  for  eligibility  of  projects  for  EU  financial  assistance  under  the 
Connecting Europe Facility. 

DIGITAL INFRASTRUCTURES 

Investing  in  high  speed  connectivity  and  services  provided  by  (or  via)  modern  internet 
networks is investing in the future. Digital Infrastructures – both physical and service based – 
are  key  enablers  for  the  smart  growth  that  Europe  must  achieve  in  the  coming  ten  years  in 
order  to  ensure  its  ability  to  compete  internationally  and  generate  wealth  for  its  citizens. 
Indeed,  this  initiative  is  anchored  in  the  Europe  2020  Strategy  for  smart,  sustainable  and 
inclusive  growth,  which  put  digital  infrastructures  at  the  forefront  as  part  of  the  flagship 
initiative "Digital Agenda for Europe". It underlined the need to ensure the roll-out and take-
up  of  broadband  for  all,  at  increasing  speeds,  through  both  fixed  and  wireless  technologies, 
and to facilitate investment in the new very fast open and competitive internet networks that 
will be the arteries of a future economy.  

The  purpose  of  the  guidelines  is  to  establish  the  objectives  and  priorities  envisaged  for 
broadband networks and digital service infrastructures in the field of telecommunications. The 
guidelines  further  identify  projects  of  common  interest  for  the  deployment  of  broadband 
networks and digital service infrastructures (eg eHealth, eIdentity, eProcurement etc). These 
projects will help to address the issues identified as important blockages for the development 
of  a  Digital  Single  Market,  including  e.g.  the  lack  of  broadband  investment  in  Europe 
compared  to  our  main  competitors  which  leaves  growth  potential  and  societal  benefits 
untapped;  the  need  to  increase  competitive  pressure  in  the  area  of  modern  broadband 
networks  and  the  need  to  develop  adequate  strategies  to  publicly  support  the  rollout  of 
broadband  networks  in  areas  where  there  is  no  business  case.  For  the  digital  services,  the 
blockages  mainly  concern  the  absence  of  technical  interoperability  making  essential  on-line 
public  services  stop  at  the  border.  There  are  no  natural  owners  of  European  interoperable 

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30% if conditions are right. 

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service infrastructures and neither single Member States, nor private investors would ensure 
service deployment within interoperable frameworks. The EU added value is thus high. 

The CEF for Digital infrastructures will support, with a mix of grants and innovative financial 
instruments, investments in networks capable of achieving the targets of the Digital Agenda 
for  Europe  flagship  initiative  of  universal  coverage  at  30Mbps;  or  having  at  least  50%  of 
households subscribing to speeds above 100Mbps. A balanced portfolio of 30 and 100 Mbps 
projects  will  be  created  and  due  account  will  be  taken  of  Member  States'  investment  needs 
which are indicatively assessed to be up to 270 billion €. 

For  the  digital  service  infrastructure,  interoperable  frameworks  are  financed  through  direct 
grant  schemes  and  include  e.g.  trans-European  high-speed  backbone  connections  for  public 
administrations,  cross–border  delivery  of  eGovernment  services  based  on  interoperable 
identification  and  authentication  (enabling  e-procurement  and  e-Justice  as  well  as  eHealth 
services);  digital  resources  of  European  heritage;  safety  and  security  (safer  internet  and 
critical service infrastructures) and smart energy services.  

These  projects  shall  contribute  to  improving  the  competitiveness  of  the  European  economy 
including  small  and  medium  sized  enterprises  (SMEs),  promote  the  interconnection  and 
interoperability  of  national  networks  as  well  as  access  to  such  networks  and  support  the 
development  of  a  Digital  Single  Market.  In  order  to  be  able  to  adapt  to  changing  political 
priorities,  technological  developments  or  the  situation  in  the  relevant  markets,  it  will  be 
possible to identify new projects of common interest in the course of the implementation of 
these guidelines. 

3. 

CONNECTING  EUROPE  FACILITY  (CEF)  –A  COMMON  INFRASTRUCTURE  FUNDING 
INSTRUMENT 

Building  on  the  experiences  and  lessons  learned  under  the  existing  TEN  policy  framework, 
the  Commission  is  now  proposing  a  new  "European  infrastructure  package"  (EIP)  based  on 
the "Connecting Europe Facility" which will be the common financing instrument for trans-
European networks, creates the framework within which the sector-specific policy guidelines 
presented  above  will  apply.  As  some  of  the  infrastructure  projects  of  Union  interest  might 
need  to  pass  through  pre-accession,  neighbourhood  and  other  third  countries,  the  CEF  may 
support where appropriate projects of common interest in order to connect the trans-European 
networks with infrastructure networks of these countries. 

The aim of the CEF is to streamline and facilitate EU support to infrastructures by optimising 
the portfolio of instruments available, standardising the operational rules for using them, and 
capitalise  on  possible  synergies  across  the  three  sectors.  This  coordinated  approach  will  not 
only ensure the largest possible EU added value, but will also simplify procedures and reduce 
collective costs. 

To  this  end,  the  CEF  proposal  develops  a  common  financing  framework  for  all  sectors, 
including co-ordinated annual work programmes, a common Committee, flexibility between 
sectoral budgets, increased performance indicators and conditionalities and the shared use of 
infrastructure specific financial instruments. 

CEF funds will be centrally managed, either directly by Commission staff with the support, as 
needed, of an executive agency or through a partnership between the Commission and one or 

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more  financial  institutions.  Solutions  for  the  operational  management  of  the  various 
instruments under the CEF will be proposed within the appropriate legal framework, building 
on the experience gained with the TEN-T Executive Agency and the existing cooperation with 
the European Investment Bank. 

The Facility will be coordinated with the other interventions coming from the EU budget such 
as ''Horizon 2020'' and the Cohesion and Structural Funds.  

As  regards  the  coordination  with  Horizon  2020,  it  will  ensure  complementarities  while 
avoiding  potential  overlaps.  The  coordination  between  the  CEF  and  Horizon  2020  will 
guarantee that the research and innovation chain leading to deployment in infrastructure is not 
interrupted.  It  is  particularly  critical  at  a  time  when  significant  technological  advances  in 
transport,  energy  and  ICT  will  be  needed  to  help  the  EU  meet  its  ambitious  Europe  2020 
Strategy's objectives. 

As  regards  the  relation  with  the  Cohesion  and  Structural  Funds,  the  cohesion  policy's 
Common Strategic Framework as well as Partnership Contracts with Member States will be 
closely coordinated with the policy frameworks in the transport, energy and ICT sectors. The 
respective sector-specific guidelines will rely on the Cohesion and Structural Funds to deliver 
the  local  and  regional  infrastructures  and  their  linkages  to  the  priority  EU  infrastructures, 
connecting all citizens throughout the EU.  

The Connecting Europe Facility will have a budget of EUR 50 billion8 for the period 2014-
2020,  of  which  EUR  10  billion  are  earmarked  in  the  Cohesion  Fund  for  transport 
infrastructure.. While the Facility will be a centrally managed instrument, the greatest possible 
priority  will  be  given  to  respect  the  national  allocation  under  the  Cohesion  Fund  when 
allocating  the  EUR  10  billion.  These  EUR  10  billion  will  be  reserved  for  Member  states 
eligible for the Cohesion Fund, and co-financing rates from the EU budget will be set at the 
same level as the Cohesion Fund. 

CEF 

• 

• 

• 

Energy 

Transport  

Telecommunications/Digital 

Amounts  earmarked  in  Cohesion  Fund  for  transport 
infrastructures 

Total 

EUR 40 billion 

EUR 9.1 billion 

EUR 21.7 billion 

EUR 9.2 billion 

EUR 10 billion 

EUR 50 billion 

4. 

FINANCIAL INSTRUMENTS WITHIN THE CEF – MAXIMISING EU IMPACT 

While  EU  governments  spend  on  average  1%  of  GDP  on  infrastructure  investments9,  they 
have increasingly encouraged the private sector to finance infrastructure investment. This has 

8 
9 

All figures in constant 2011 prices 
Between  ½  and  2%,  see  Alegre  et  al,  EIB  Papers  Volume  13/1  (2008).  The  main  bias  affecting  the 
estimate is the classification of the investment of commercially operating companies as private even if 
they are owned by the public sector. 

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been  done  either  on  a  purely  private  sector  basis  through  privatisation,  through  concessions 
or, more recently, using the public-private partnership (PPP) model as a basis.  

However,  the  current  flow  of  private  finance  is  not  sufficient  to  address  the  significant 
investment needs of infrastructure sectors. Moreover, private finance is not readily available 
at maturities and conditions which would reflect in an appropriate manner the economic life-
cycle  of  commercially  viable  long-dated  infrastructure  projects.  Therefore,  equity  and  debt 
instruments are needed aiming to reduce specific barriers that prevent accessibility to equity 
and  debt  finance  to  projects  of  key  Union  interest,  i.e.  those  under  the  Connecting  Europe 
Facility.  

The  objective  of  the  infrastructure  instruments  is  to  attract  private  sector  financing  to  help 
Europe to unleash its potential in the moment of a crucial transformation and the shift towards 
a  resource  efficient  and  low  carbon  economy.  These  instruments  play  an  increasingly 
important  role  towards  reaching  Union's  strategic  goals  by  ensuring  that  the  financing 
necessary for the implementation of projects with potential to stimulate economic growth can 
be raised. Financial instruments have particular added value when EU policies require a high 
speed  of  implementation,  but  uncertainties  for  projects  and  financial  markets  are  above 
average, as in the current economic environment. Furthermore, financial instruments create a 
multiplier effect for the EU budget by facilitating and attracting private financing for projects 
of EU interest and thus maximise the impact of the EU budget. 

The toolbox of instruments should set the base for a long-term stable investment framework 
and act as a catalyst and stimulator. The Connecting Europe Facility seeks to fill this by two 
types of main instruments:  

• 

• 

Equity  participations  in  equity  funds  which  provide  risk  capital  to  actions 
contributing to projects of common interest; 

Loans  and/or  guarantees  to  projects  of  common  interest  facilitated  by  risk-
sharing  instruments,  including  enhancement  mechanisms  for  long-term  bank 
lending and for project bonds issued by project companies; 

These instruments will target policy objectives across Europe 2020 priorities and will cover 
the  three  policy  areas  of  transport,  energy  and  digital  infrastructures  in  order  to  avoid 
unnecessary  multiplication  of  instruments  of  a  similar  nature  or  with  similar  target 
beneficiaries and project structures. The intervention logic envisaged is for the Commission to 
work closely with relevant international financial institutions such as the European Investment 
Bank. 

However, the long-term planning, construction and operational time horizon of infrastructure 
projects also needs a long-term preparation to implement financial instruments. This is why, 
simultaneously to the Connecting Europe Facility proposal, the Commission is proposing to 
launch  a  pilot  phase  of  the  Europe  2020  Project  Bond  Initiative  already  under  the  current 
financial framework. A functioning project bond market, which at the moment hardly exists in 
Europe, can bring together infrastructure projects and long-term, risk averse investors such as 
pension funds and insurance companies. The pilot phase will pave the way for a fully fledged 
risk sharing instrument for loan and project bond financing of infrastructure projects once the 
Connecting Europe Facility enters into force. 

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5. 

A STEP CHANGE IN INFRASTRUCTURE FINANCING IN EUROPE 

The costs for Europe of not investing sufficiently in its future networks could be very high. 
The  growing  interdependence  of  European  economies  and  the  changing  direction  of  trade 
flows  are  putting  existing  infrastructure  systems  under  strain,  while  new  business 
opportunities  or  citizens'  needs  demand  modern,  smart  and  flexible  networks.  The  Europe 
2020  goals,  such  as  promoting  the  transition  to a  low-carbon  resource  efficient  economy  or 
shaping  a  digital  economy  cannot  be  realistically  achieved  unless  their  infrastructure 
implications are adequately addressed.  

The EU has traditionally played an important role in stimulating Member States and markets 
to invest in infrastructure of European interest and with wide socio-economic benefits through 
its  policy  supporting  the  development  of  trans-European  Networks.  Today,  the  strategic 
importance of modernising and upgrading the stock of physical infrastructure in Europe and 
the scale of the investment challenge associated to it require a step change in the way the EU 
identify, support and implement cross-border infrastructure networks.  

The proposal for an integrated multi-sectoral Connecting Europe Facility, complemented by 
specific guidelines for the transport, energy and telecommunication sectors, aims at setting up 
the  right  conditions  to  boost  infrastructure  development,  leverage  funding  from  private 
sources  at  a  time  in  which  public  budgets  are  severely  constrained,  and  help  revitalise  the 
interest of long term specialised investors for investing in Europe, thus contributing to growth 
and  job  creation.  Together  with  the  new  approach  to  the  use  of  innovative  financing 
instruments  and  the  launch  of  a  pilot  project  on  Europe  project  bonds,  this  package  of 
proposals  is  designed  to  deliver  the  change  of  pace  Europe  requires  to  stand  up  to  the 
infrastructure challenge.  

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