Source: EURLEX
Language: en
Format: md

**Council of the**
**European Union**

**Interinstitutional File:**

**2020/0108(COD)**

**INFORMATION NOTE**

**Brussels, 10 March 2021**
**(OR. en)**

**6769/21**

**CODEC 319**
**ECOFIN 219**
**COMPET 155**
**RECH 87**
**ENER 63**
**TRANS 113**
**ENV 124**
**EDUC 74**
**EF 96**
**TELECOM 89**
**IA 33**
**FSTR 20**
**CADREFIN 119**
**PE 16**

From: General Secretariat of the Council

To: Permanent Representatives Committee/Council

Subject: Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND
OF THE COUNCIL establishing the InvestEU Programme

          - Outcome of the European Parliament's first reading

(Brussels, 8 to 11 March 2021)

**I.** **INTRODUCTION**

In accordance with the provisions of Article 294 of the TFEU and the Joint declaration on practical

arrangements for the codecision procedure **[1]**, a number of informal contacts have taken place

between the Council, the European Parliament and the Commission with a view to reaching an

agreement on this file at first reading.

**1** OJ C 145, 30.6.2007, p. 5.

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In this context, the co-rapporteurs, José Manuel Fernandes (EPP, PT) and Irene Tinagli (S&D, IT)

presented a compromise amendment (amendment number 37) to the abovementioned proposal for a

Regulation on behalf of the Committee on Budgets and the Committee on Economic and Monetary

Affairs. This amendment had been agreed during the informal contacts referred to above.

In addition, the ID political group tabled 15 amendments (amendments number 38, 39, 40, 42, 43,

44, 45, 46, 47, 48, 49, 50, 51, 52, 53).

**II.** **VOTE**

When it voted on 9 March 2021, the plenary adopted the compromise amendment (amendment

number 37) to the abovementioned proposal for a Regulation. No other amendments were adopted.

The Commission's proposal as thus amended constitutes the Parliament's first-reading position

which is contained in its legislative resolution as set out in the Annex hereto **[2]** .

The Parliament's position reflects what had been previously agreed between the institutions. The

Council should therefore be in a position to approve the Parliament's position.

The act would then be adopted in the wording which corresponds to the Parliament's position.

**2** The version of the Parliament's position in the legislative resolution has been marked up to
indicate the changes made by the amendments to the Commission's proposal. Additions to the
Commission's text are highlighted in _**bold and italics.**_ The symbol " ▌" indicates deleted text.

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**ANNEX**

**(9.3.2021)**

## **P9_TA(2021)0068** **InvestEU Programme ***I**

**European Parliament legislative resolution of 9 March 2021 on the proposal for a**
**regulation of the European Parliament and of the Council establishing the InvestEU**
**Programme (COM(2020)0403 – C9-0158/2020 – 2020/0108(COD))**

**(Ordinary legislative procedure: first reading)**

_The European Parliament_,

–
having regard to the Commission proposal to Parliament and the Council
(COM(2020)0403),

–
having regard to Article 294(2) and Article 173 and the third paragraph of Article 175
of the Treaty on the Functioning of the European Union, pursuant to which the
Commission submitted the proposal to Parliament (C9-0158/2020),

–
having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–
having regard to the opinion of the European Economic and Social Committee of 15
July 2020 **[1]**,

–
after consulting the Committee of the Regions,

–
having regard to the provisional agreement approved by the committees responsible
under Rule 74(4) of its Rules of Procedure and the undertaking given by the Council
representative by letter of 17 December 2020 to approve Parliament’s position, in
accordance with Article 294(4) of the Treaty on the Functioning of the European Union,

–
having regard to Rule 59 of its Rules of Procedure,

–
having regard to the joint deliberations of the Committee on Budgets and the Committee
on Economic and Monetary Affairs under Rule 58 of the Rules of Procedure,

–
[having regard to the opinions of the Committee on Environment, Public Health and](https://www.europarl.europa.eu/committees/en/envi)
[Food Safety, the Committee on Industry, Research and Energy](https://www.europarl.europa.eu/committees/en/envi) and the Committee on
[Transport and Tourism,](https://www.europarl.europa.eu/committees/en/tran)

– [having regard to the positions in the form of amendments of the Committee on Culture](https://www.europarl.europa.eu/committees/en/cult)
and Education [and of the Committee on Women’s Rights and Gender Equality,](https://www.europarl.europa.eu/committees/en/femm)

**1** OJ C 364, 28.10.2020, p. 139.

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–
having regard to the report of the Committee on Budgets and the Committee on
Economic and Monetary Affairs (A9-0203/2020),

1. Adopts its position at first reading hereinafter set out **[2]** ;

2. Calls on the Commission to refer the matter to Parliament again if it replaces,
substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the
national parliaments.

**2** This position replaces the amendments adopted on 13 November 2020 (Texts adopted,
P9_TA(2020)0306).

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**P9_TC1-COD(2020)0108**

**Position of the European Parliament adopted at first reading on 9 March 2021 with a view to**

**the adoption of Regulation (EU) 2021/… of the European Parliament and of the Council**

**establishing the InvestEU Programme** _**and amending**_ _**Regulation (EU) 2015/1017**_

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 173

and the third paragraph of Article 175 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee [5],

After consulting the Committee of the Regions,

Acting in accordance with the ordinary legislative procedure **[6]**,

**5** OJ C 364, 28.10.2020, p. 139.
**6** Position of the European Parliament of 9 March 2021.

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Whereas:

(1) The COVID-19 pandemic is a major shock to the global and Union economy _**and is**_

_**having a major social and economic impact across Member States and regions**_ . Due to

the necessary containment measures, economic activity in the Union dropped significantly.

The contraction in Union GDP in 2020 is expected to be around _**7,4**_ %, far deeper than

during the financial crisis in 2009. _**Investment activity has dropped significantly.**_

Vulnerabilities such as the over-reliance on non-diversified external supply sources _**and a**_

_**lack of critical infrastructure**_ need to be addressed _**, in particular for small and medium-**_

_**sized enterprises (SMEs), including micro-enterprises, for instance by diversifying and**_

_**strengthening strategic value chains,**_ to improve the Union’s emergency response as well

as the resilience of the entire economy, while maintaining its openness to competition and

trade in line with its rules _**. ▌**_ Even before the pandemic, while a recovery in investment-to

GDP ratios in the Union could be observed, it remained below what might be expected in a

strong recovery and was insufficient to compensate for years of underinvestment following

the 2009 crisis. More importantly, the current investment levels and forecasts do not cover

the Union’s needs for structural investment to restart and sustain long-term growth in the

face of technological change and global competitiveness, including for innovation, skills,

infrastructure, SMEs and the need to address key societal challenges such as sustainability

and population ageing. Consequently, in order to achieve the Union's policy objectives and

to support a swift, _**sustainable,**_ inclusive _**, lasting**_ and healthy economic recovery, support

is necessary to address market failures and suboptimal investment situations and to reduce

the investment gap in targeted sectors.

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(2) Evaluations have underlined that the variety of financial instruments delivered under the

2014-2020 Multiannual Financial Framework period has led to some overlaps in their

scope. That variety has also produced complexity for intermediaries and final recipients

who were confronted with different eligibility and reporting rules. The absence of

compatible rules also hampered the combination of several Union funds, although such

combinations would have been beneficial in order to support projects in need of different

types of funding. Therefore, a single fund, the InvestEU Fund _,_ which builds on the

experience of the European Fund for Strategic Investments (EFSI) set up under the

Investment Plan for Europe, should be set up in order to provide more efficiently

functioning support to final recipients by integrating and simplifying the financing offered

under a single budgetary guarantee scheme, thereby improving the impact of Union

support while reducing the cost to the Union payable from the budget.

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(3) In recent years, the Union has adopted ambitious strategies to complete the internal market

and to stimulate sustainable and inclusive growth and jobs. Such strategies include 'Europe

2020 – A strategy for smart, sustainable and inclusive growth' of 3 March 2010, 'Action

Plan on Building a Capital Markets Union' of 30 September 2015, 'Closing the loop – An

EU action plan for the Circular Economy' of 2 December 2015, 'A European Strategy for

Low-Emission Mobility' of 20 July 2016, 'Space Strategy for Europe' of 26 October 2016,

'Clean Energy for all Europeans' of 30 November 2016, ‘European Defence Action Plan’

of 30 November 2016, 'Launching the European Defence Fund' of 7 June 2017, the

Interinstitutional Proclamation on the European Pillar of Social Rights of 13 December

2017, 'A new European Agenda for Culture' of 22 May 2018, the ‘European Green Deal’

of 11 December 2019, the ‘European Green Deal Investment Plan’ of 14 January 2020, the

‘Strong Social Europe for Just Transitions’ of 14 January 2020, the strategy for ‘Shaping

Europe’s digital future’, ‘A European Strategy for Data’ and the White Paper ‘On Artificial

Intelligence - A European approach to excellence and trust’ of 19 February 2020, ‘A New

Industrial Strategy for Europe’ of 10 March 2020 and ‘SME Strategy for a sustainable and

digital Europe’ of 10 March 2020. The InvestEU Fund should exploit and reinforce

synergies between those mutually reinforcing strategies by providing support for

investment and access to financing. _**In addition, the Union has adopted Regulation (EU)**_

_**2020/852 of the European Parliament and of the Council**_ _**[7]**_ _**.**_

_**7**_ _**Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020**_
_**on the establishment of a framework to facilitate sustainable investment, and amending**_
_**Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).**_

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(4) At Union level, the European Semester of economic policy coordination is the framework

for identifying national reform priorities and monitoring their implementation. Member

States, where appropriate in cooperation with local and regional authorities, develop their

own national multiannual investment strategies in support of those reform priorities. Those

strategies should be presented alongside the yearly national reform programmes as a way

of outlining and coordinating priority investment projects that are to be supported by

national funding, Union funding, or both. Those strategies should also use Union funding

in a coherent manner and maximise the added value of the financial support to be received

in particular from the European structural and investment funds, the Recovery and

Resilience Facility established by Regulation (EU) 2021/241 of the European Parliament

and of the Council **[8]** and the InvestEU Programme.

**8** Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February
2021 establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17).

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(5) The InvestEU Fund should contribute to improving the competitiveness and socio

economic convergence and cohesion of the Union, including in the fields of innovation and

digitisation, to the efficient use of resources in accordance with the circular economy, to

the sustainability and inclusiveness of the Union's economic growth and to the social

resilience and integration of Union capital markets, including through solutions that

address the fragmentation of Union capital markets and that diversify sources of financing

for Union enterprises. To that end, the InvestEU Fund should support projects that are

technically and economically viable by providing a framework for the use of debt, risk

sharing and equity _**and quasi-equity**_ instruments backed up by a guarantee from the Union

budget and by financial contributions from implementing partners as relevant. The

InvestEU Fund should be demand-driven, while at the same time focused on providing

strategic, long-term benefits in relation to key areas of Union policy which would

otherwise not be funded or would be insufficiently funded, thereby contributing to meeting

the Union’s policy objectives. Support from the InvestEU Fund should cover a wide range

of sectors and regions, but should avoid excessive sectoral or geographical concentration

and should facilitate access _**to financing**_ of projects composed of partner entities in

multiple regions across the Union _**, including projects that foster the development of**_

_**networks, clusters and digital innovation hubs.**_

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(6) The cultural and creative sectors are key as well as fast growing sectors in the Union _**that**_

_**can play an important part in ensuring a sustainable recovery**_, generating both economic

and cultural value from intellectual property and individual creativity. However,

restrictions on social contacts put in place during the COVID-19 crisis _**have**_ had a

significant negative economic impact on those sectors. Moreover, the intangible nature of

assets in those sectors limits the access of SMEs and organisations from those sectors to

private financing which is essential to be able to invest, scale up and compete at an

international level. The InvestEU Programme should continue to facilitate access to

finance for SMEs and organisations from those sectors. The cultural and creative,

audiovisual and media sectors are essential for _**freedom of speech and**_ cultural diversity

and _**for building democratic and cohesive societies**_ in the digital age, and are an intrinsic

part of our sovereignty and autonomy. ▌ Investment in those sectors would determine their

_**competitiveness and their**_ long-term capacity to produce and distribute _**high-quality**_

content to wide audiences across national borders.

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(7) With a view to fostering sustainable and inclusive growth, investment and employment,

and thereby contributing to improved well-being, to fairer income distribution and to

greater economic, social and territorial cohesion in the Union, the InvestEU Fund should

support investments in tangible and intangible assets, including in cultural heritage.

Projects funded by the InvestEU Fund should meet Union environmental and social

standards, including standards on labour rights. Interventions through the InvestEU Fund

should complement Union support delivered through grants.

(8) The Union endorsed the objectives set out in the United Nations 2030 Agenda for

Sustainable Development (the “2030 Agenda”), its Sustainable Development Goals

(SDGs) and the Paris Agreement adopted under the United Nations Framework

Convention on Climate Change [9] (Paris Agreement) as well as the Sendai Framework for

Disaster Risk Reduction 2015-2030. To achieve those objectives, as well as the objectives

set out in the environmental policies of the Union, action pursuing sustainable

development needs to be significantly stepped up. Therefore, the principles of sustainable

development should feature prominently in the design of the InvestEU Fund.

**9** OJ L 282, 19.10.2016, p. 4.

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(9) The InvestEU Programme should contribute to building a sustainable finance system in the

Union which supports the reorientation of private capital towards sustainable investments

in accordance with the objectives set out in the communication of the Commission of 8

March 2018 entitled ‘Action Plan: Financing Sustainable Growth’ and the communication

of the Commission of 14 January 2020 on the European Green Deal Investment Plan.

(10) Reflecting the importance of tackling climate change in line with the Union's commitments

to implement the Paris Agreement, and the _**commitment to the United Nations**_

_**Sustainable Development Goals, as well as the objective of EU climate neutrality by 2050**_

_**and the Union’s new 2030 climate targets, actions under this Regulation should**_

_**contribute to the achievement of a target of 30 % of all MFF expenditure being spent on**_

_**mainstreaming climate objectives and the ambition of 7,5 % of the budget reflecting**_

_**biodiversity expenditures in 2024 and 10 % in 2026 and 2027,**_ _**w**_ _**hile considering the**_

_**existing overlaps between climate and biodiversity goals.**_ Actions under the InvestEU

Programme are expected to contribute _**at least**_ 30 % of the overall financial envelope of the

InvestEU Programme to climate objectives. ▌

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(11) The contribution of the InvestEU Fund to the achievement of the climate target will be

tracked through a Union climate tracking system to be developed by the Commission in

cooperation with potential implementing partners, appropriately using the criteria

established by Regulation (EU) 2020/852 for determining whether an economic activity is

environmentally sustainable. The InvestEU Programme should also contribute to the

implementation of other dimensions of the SDGs.

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(12) According to the 2018 Global Risks Report issued by the World Economic Forum, five of

the ten most critical risks threatening the global economy relate to the environment. Such

risks include the pollution of air, soil, inland waters and oceans, extreme weather events,

biodiversity losses and failures of climate-change mitigation and adaptation.

Environmental principles are strongly embedded in the Treaties and many of the Union's

policies. Therefore, the mainstreaming of environmental objectives should be promoted in

operations related to the InvestEU Fund. Environmental protection and the prevention and

management of related risks should be integrated in the preparation and implementation of

investments. The Union should also track its biodiversity-related and air pollution control

related expenditures in order to fulfil the reporting obligations under the Convention on

Biological Diversity [10] and under Directive (EU) 2016/2284 of the European Parliament

and of the Council [11] . Investment allocated to environmental sustainability objectives

should therefore be tracked using common methodologies that are consistent with

methodologies developed under other Union programmes that apply to climate,

biodiversity and air pollution management in order to allow the assessment of the

individual and combined impact of investments on the principal components of natural

capital, namely air, water, land and biodiversity.

**10** OJ L 309, 13.12.1993, p. 3.
**11** Directive (EU) 2016/2284 of the European Parliament and of the Council of 14 December
2016 on the reduction of national emissions of certain atmospheric pollutants, amending
Directive 2003/35/EC and repealing Directive 2001/81/EC (OJ L 344, 17.12.2016, p. 1).

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(13) Investment projects that receive substantial Union support, in particular in the area of

infrastructure, should be screened by the implementing partner to determine whether they

have an environmental, climate or social impact. Investment projects that have such an

impact should be subject to sustainability proofing in accordance with guidance that should

be developed by the Commission in close cooperation with potential implementing

partners under the InvestEU Programme. This guidance should appropriately use the

criteria established by Regulation (EU) 2020/852 for determining whether an economic

activity is environmentally sustainable _**, including the principle of ‘do no significant**_

_**harm’**_ _**,**_ and consistent with the guidance developed for other programmes of the Union.

Consistent with the principle of proportionality, such guidance should include adequate

provisions for avoiding undue administrative burdens, and projects below a certain size as

to be defined in the guidance should be excluded from the sustainability proofing. Where

an implementing partner concludes that no sustainability proofing is to be carried out, it

should provide a justification to the investment committee established for the InvestEU

Fund (the ‘Investment Committee’). Operations that are inconsistent with the achievement

of the climate objectives should not be eligible for support under this Regulation.

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(14) Low infrastructure investment rates in the Union during the financial crisis and again

during the COVID-19 crisis _**have**_ undermined the Union's ability to boost sustainable

growth, its _**efforts towards climate neutrality, its**_ competitiveness and convergence _**and**_

_**the creation of jobs**_ . _**This**_ also creates the risk of consolidating imbalances and _**divergences**_

_**and inequalities within and between Member States,**_ _**impacting on**_ _**long-term**_

development _**at Union, national or regional level**_ . Sizeable investments in Union

infrastructure, in particular with regard to interconnection and energy efficiency and to

creating a Single European Transport Area, are essential to meeting the Union's

sustainability targets, including the Union’s commitments towards the SDGs, and the 2030

energy and climate targets. Accordingly, support from the InvestEU Fund should target

investments in transport, energy, including energy efficiency and renewable energy sources

and other safe and sustainable low-emission energy sources, environmental infrastructure,

infrastructure related to climate action, maritime infrastructure and digital infrastructure _**,**_

_**including fast and ultra-fast broadband connectivity throughout the Union, to accelerate**_

_**the digital transformation of the Union economy**_ . The InvestEU Programme should

prioritise areas that are under-invested, and in which additional investment is required. To

maximise the impact and added value of Union financing support, it is appropriate to

promote a streamlined investment process that enables visibility of the project pipeline and

maximises synergies across relevant Union programmes in areas such as transport, energy

and digitisation. Bearing in mind threats to safety and security, investment projects

receiving Union support should include measures for infrastructure resilience, including

infrastructure maintenance and safety, and should take into account principles for the

protection of citizens in public spaces. This should be complementary to the efforts made

by other Union funds that provide support for security components of investments in

public spaces, transport, energy and other critical infrastructure, such as the European

Regional Development Fund.

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(15) Where appropriate, the InvestEU Programme should contribute to the objectives of

Directive (EU) 2018/2001 of the European Parliament and of the Council [12] and Regulation

(EU) 2018/1999 of the European Parliament and of the Council [13], as well as promote

energy efficiency in investment decisions.

(16) Genuine multimodality is an opportunity to create an efficient and environmentally

friendly transport network that uses the maximum potential of all means of transport and

generates synergy between them. The InvestEU Programme should support investments in

–
multimodal transport hubs, which in spite of their significant economic potential and

business cases – carry a significant risk for private investors. The InvestEU Programme

should also contribute to the development and deployment of Intelligent Transport Systems

(ITS). The InvestEU Programme should help to boost efforts to design and apply

technologies that help to improve the safety of vehicles and road infrastructure.

**12** Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December
2018 on the promotion of the use of energy from renewable sources (OJ L 328, 21.12.2018, p.
82).
**13** Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December
2018 on the Governance of the Energy Union and Climate Action, amending Regulations
(EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council,
Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and
2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC
and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament
and of the Council (OJ L 328, 21.12.2018, p. 1).

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(17) The InvestEU Programme should contribute to Union policies concerning seas and oceans

through the development of projects and enterprises in the area of the blue economy, and

the Sustainable Blue Economy Finance Principles. This may include interventions in the

area of maritime entrepreneurship and industry, an innovative and competitive maritime

industry, as well as renewable marine energy and circular economy.

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(18) Although the level of overall investment in the Union was increasing before the COVID

19 crisis, investment in higher-risk activities such as research and innovation was still

inadequate and is now expected to have suffered a significant hit as a result of the crisis.

_**Research and innovation have a crucial role to play in overcoming the crisis,**_

_**consolidating the resilience of the Union to tackle future challenges and creating the**_

_**necessary technologies to achieve Union policies and goals. The InvestEU Fund should**_

_**contribute to reaching the overall target of investing at least 3 % of Union GDP in**_

_**research and innovation. The achievement of that target would require Member States**_

_**and the private sector to proceed with their own reinforced investment actions in**_

_**research, development and innovation, to avoid underinvestment in research and**_

_**innovation, which**_ is damaging to the industrial and economic competitiveness of the

Union and the quality of life of its citizens. The InvestEU Fund should provide appropriate

financial products to cover different stages of the innovation cycle and a wide range of

stakeholders, in particular to allow the upscaling of and deployment of solutions at a

commercial scale in the Union in order to make such solutions competitive on world

markets and to promote Union excellence in sustainable technologies at a global level, in

synergy with Horizon Europe to be established by a Regulation of the European Parliament

–
and of the Council establishing Horizon Europe the Framework Programme for Research

and Innovation, laying down its rules for participation and dissemination, and repealing

Regulations (EU) No 1290/2013 and (EU) No 1291/2013 (the ‘Horizon Europe

Regulation’), including the European Innovation Council. In that regard, the experience

–
gained from the financial instruments, such as InnovFin EU Finance for Innovators,

deployed under Horizon 2020 to facilitate and accelerate access to finance for innovative

businesses should serve as a strong basis to deliver this targeted support.

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(19) Tourism _**, including the hospitality industry,**_ is an _**area of great importance**_ for the Union

economy and _**is currently experiencing**_ a particularly severe contraction as a result of _**the**_

COVID-19 pandemic. _**That contraction is particularly damaging for SMEs and family**_

_**businesses and has caused large-scale unemployment.**_ The InvestEU Programme should

contribute to strengthening _**the recovery,**_ long-term competitiveness _**and sustainability of**_

_**the sector, and its value chains,**_ by supporting operations promoting sustainable,

innovative and digital tourism _**including innovative measures to reduce the climate and**_

_**environmental footprint of the sector**_ .

(20) A significant effort is urgently needed to invest in and boost the digital transformation and

to distribute the benefits of it to all Union citizens and businesses. The strong policy

framework of the Digital Single Market Strategy should now be matched by investment of

a similar ambition, including in artificial intelligence in line with the Digital Europe

Programme to be established by a Regulation of the European Parliament and of the

Council establishing the Digital Europe Programme and repealing Decision (EU)

2015/2240.

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(21) SMEs represent over 99 % of businesses in the Union and their economic value is

significant and crucial. However, they face difficulties when accessing finance because of

their perceived high risk and lack of sufficient collateral. Additional challenges arise from

the need for SMEs and social economy enterprises to stay competitive by engaging in

digitisation, internationalisation, transformation in a logic of circular economy, innovation

activities and skilling up their workforce. _**SMEs have been particularly badly hit by the**_

_**COVID-19 crisis.**_ Moreover, SMEs and social economy enterprises have access to a more

limited set of financing sources than larger enterprises, because they typically do not issue

bonds, and have only limited access to stock exchanges and large institutional investors.

Innovative solutions such as the acquisition of a business or ownership stake in a business

by employees are also increasingly common for SMEs and social economy enterprises.

The difficulty in accessing finance is even greater for those SMEs whose activities focus

on intangible assets. SMEs in the Union rely heavily on banks and on debt financing in the

form of bank overdrafts, bank loans or leasing. Supporting SMEs that face the above

challenges by making it easier for them to gain access to finance and by providing more

diversified sources of funding is necessary to increase the ability of SMEs to finance their

creation, growth, innovation and sustainable development, ensure their competitiveness

and withstand economic shocks to make the economy and the financial system more

resilient during economic downturns and to maintain SMEs’ ability to create jobs and

social well-being. This Regulation is also complementary to the initiatives already

undertaken in the context of the Capital Markets Union. The InvestEU Fund should

therefore build on successful Union programmes, such as the Programme for the

Competitiveness of Enterprises and SMEs (COSME) _**;**_ _**provide support to digital start-ups**_

_**and innovative SMEs to enable them to better compete and scale up;**_ provide working

capital and investment throughout the life cycle of a company; provide financing for

leasing transactions; and provide an opportunity to focus on specific, more targeted

financial products. It should also maximise _**the**_ firepower of public/private fund vehicles,

such as the SME IPO (Initial Public Offering) Fund, seeking to support SMEs through

channelling more private and public equity ▌.

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(22) As set out in the Commission's Reflection paper on the social dimension of Europe of 26

April 2017, the Communication on European Pillar of Social Rights, the Union framework

for the UN Convention on the Rights of Persons with Disabilities and the Communication

on ‘Strong Social Europe for Just Transitions’ of 14 January 2020, building a more

inclusive and fair Union is a key priority for the Union to tackle inequality and foster social

inclusion policies in Europe. Inequality of opportunities affects in particular access to

education, training, culture, employment, health and social services. Investment in the

social, skills and human capital-related economy, as well as in the integration of vulnerable

populations in the society, can enhance economic opportunities, especially if coordinated

at Union level. _**The COVID-19 crisis has revealed a significant need for investment in**_

_**social infrastructure.**_ The InvestEU Fund should be used to support investment in

education and training, including the re-skilling and upskilling of workers, inter alia in

regions depending on a carbon intensive economy and affected by the structural transition

to a low-carbon economy. It should be used to support projects that generate positive social

impacts and enhance social inclusion by helping to increase employment across all regions,

in particular among the unskilled and long-term unemployed, and to improve the situation

with regard to gender equality, equal opportunities, non-discrimination, accessibility,

intergenerational solidarity, the health and social services sector, social housing,

homelessness, digital inclusiveness, community development, the role and place of young

people in society as well as vulnerable people, including third country nationals. The

InvestEU Programme should also support European culture and creativity that has a social

goal.

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_**(23)**_ _**The COVID-19 crisis has had a particularly serious impact on women, from both a**_

_**social and an economic perspective. Bearing that in mind, the InvestEU Programme**_

_**should contribute to the achievement of the Union’s policies on equality between women**_

_**and men, inter alia, by addressing the digital gap between them and by helping to**_

_**encourage female creativity and entrepreneurial potential.**_

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(24) To counter the negative effects of profound transformations of societies in the Union and

of the labour market in the coming decade, it is necessary to invest in human capital, social

infrastructure, microfinance, ethical and social enterprise finance and new social economy

business models, including social impact investment and social outcomes contracting. The

InvestEU Programme should strengthen nascent social market ecosystem to increase the

supply of and access to finance to micro- and social enterprises and social solidarity

institutions, in order to meet the demand of those who need it the most. The report of the

High-Level Task Force on Investing in Social Infrastructure in Europe of January 2018

entitled ‘Boosting Investment in Social Infrastructure in Europe’ has identified a total

investment gap of at least EUR 1,5 trillion in social infrastructure and services for the

period between 2018 and 2030, including education, training, health and housing. This

calls for support, including at the Union level. Therefore, the collective power of public,

commercial and philanthropic capital, as well as support from foundations and from

alternative types of finance providers such as ethical, social and sustainable actors, should

be harnessed to support the development of the social market value chain and a more

resilient Union.

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(25) In the economic crisis caused by the COVID-19 pandemic, market allocation of resources

is not fully efficient and perceived risk impairs private investment flow significantly.

Under such circumstances, the key feature of the InvestEU Fund of de-risking

economically viable projects to crowd in private finance is particularly valuable ▌, inter

alia in order to counteract the risk of an asymmetric recovery. The InvestEU Programme

should be able to provide crucial support to companies in the recovery phase _**, including**_

_**capital support for SMEs that were negatively affected by the COVID-19 crisis and were**_

_**not already in difficulty in State aid terms at the end of 2019,**_ and at the same time ensure

a strong focus of investors on the Union’s medium- and long-term policy priorities such as

the European Green Deal, the European Green Deal Investment Plan, the Strategy on

shaping Europe’s digital future _**, the New Industrial Strategy for Europe,**_ and the Strong

Social Europe for Just Transitions _**, taking account of the principle of ‘do no significant**_

_**harm’**_ . It should significantly increase the risk-taking capacity of the European Investment

Bank (EIB) Group and national promotional banks and institutions and other implementing

partners in support of economic recovery.

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(26) The deep contraction in Union GDP resulting from the COVID-19 crisis renders adverse

social effects inevitable. The COVID-19 pandemic has shown the need for strategic

vulnerabilities to be _**urgently and efficiently**_ addressed in order to improve the Union’s

emergency response as well as the resilience _**and sustainability**_ of the entire economy.

Only a resilient, _**sustainable,**_ inclusive and integrated Union economy can preserve the

_**integrity of the**_ internal market and the level playing field also to the benefit of the hardest

hit Member States _**and regions**_ .

(27) The InvestEU Fund should operate through _**four**_ policy windows that mirror the key Union

policy priorities, namely, sustainable infrastructure; research, innovation and digitisation;

SMEs; _**and**_ social investment and skills ▌.

(28) Although the SME policy window should primarily focus on benefitting SMEs, small mid
cap companies should also be eligible under it. Mid-cap companies should ▌ be eligible for

support under the other _**three**_ policy windows.

▌

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(29) _**As set out in the European Green Deal and the European Green Deal Investment Plan,**_

_**a Just Transition Mechanism is to be established in order to address the social,**_

_**economic and environmental consequences of reaching the Union’s 2030 climate target**_

_**and its target of achieving climate neutrality by 2050. That mechanism would be**_

_**composed of three pillars, namely a Just Transition Fund to be established by a**_

_**Regulation of the European Parliament and of the Council establishing the Just**_

_**Transition Fund (the ‘Just Transition Fund Regulation’) (pillar 1), a dedicated just**_

_**transition scheme under the InvestEU Programme (pillar 2) and a public sector loan**_

_**facility to be established by a Regulation of the European Parliament and of the Council**_

_**on the public sector loan facility under the Just Transition Mechanism**_ _**(the ‘Public**_

_**Sector Loan Facility Regulation for 2021-2027’) (pillar 3). That mechanism should**_

_**focus on the regions that are most affected by the transition given their dependence on**_

_**fossil fuels, including coal, peat and oil shale or greenhouse gas-intensive industrial**_

_**processes, and that have less capacity to finance the necessary investments. The just**_

_**transition scheme**_ should also provide support for financing to generate investment to the

benefit of just transition territories. _**The InvestEU Advisory Hub should provide for the**_

_**possibility for the respective territories to benefit from technical assistance.**_

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_**(30)**_ _**To implement pillar 2 under the Just Transition Mechanism, a dedicated just transition**_

_**scheme under the InvestEU Programme should be established horizontally across all**_

_**policy windows, supporting additional investment to benefit the territories identified in**_

_**territorial just transition plans, established in accordance with the Just Transition Fund**_

_**Regulation. That scheme should enable investments in a wide range of projects, in line**_

_**with the eligibility criteria of the InvestEU Programme. Projects in territories identified**_

_**in territorial just transition plans, or projects that benefit the transition of those**_

_**territories, even if they are not located in the territories themselves, may benefit from the**_

_**Scheme, but only when funding outside the just transition territories is key to the**_

_**transition in those territories.**_

_**(31)**_ _**It should be possible to support strategic investments, including important projects of**_

_**common European interest, under any policy window, particularly in view of the green**_

_**and digital transitions and the need to enhance competitiveness and resilience, promote**_

_**entrepreneurship and job creation and strengthen strategic value chains.**_

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(32) Each policy window should be composed of two compartments, that is to say an EU

compartment and a Member State compartment. The EU compartment should address

Union-wide or Member State specific market failures or suboptimal investment situations

in a proportionate manner. Operations supported should have a clear Union added value.

The Member State compartment should give Member States as well as regional authorities

via their Member State the possibility of contributing a share of their resources from the

funds under shared management to the provisioning for the EU guarantee and of using the

EU guarantee for financing or investment operations in order to address specific market

failures or suboptimal investment situations in their own territories, including in vulnerable

and remote areas such as the outermost regions of the Union, as to be set out in the

contribution agreement, in order to achieve objectives of the funds under shared

management. _**The Member State compartment should also give Member States the**_

_**possibility of contributing other additional amounts, including those made available**_

_**pursuant to Regulation (EU) 2021/241, to the provisioning for the EU guarantee and of**_

_**using the EU guarantee for financing or investment operations for the purposes laid**_

_**down in the contribution agreement, which should include, where relevant, the purposes**_

_**of measures under a recovery and resilience plan. This could, inter alia, allow for capital**_

_**support for SMEs that were negatively affected by the COVID-19 crisis and were not**_

_**already in difficulty in State aid terms at the end of 2019.**_ Operations supported by the

InvestEU Fund through either EU or Member State compartments should not duplicate or

crowd out private financing or distort competition in the internal market.

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(33) The Member State compartment should be specifically designed to allow the use of funds

under shared management _**or other additional amounts contributed by Member States,**_

_**including those made available pursuant to Regulation (EU) 2021/241**_ to provision a

guarantee issued by the Union. That possibility would increase the added value of the EU

guarantee by providing support under it to a wider range of final recipients and projects

and diversifying the means of achieving the objectives of the funds under shared

management _**or recovery and resilience plans**_, while ensuring a consistent risk

management of the contingent liabilities by implementing the EU guarantee under indirect

management. The Union should guarantee the financing and investment operations

provided for in the guarantee agreements concluded between the Commission and

implementing partners under the Member State compartment. The funds under shared

management _**or other additional amounts contributed by Member States, including those**_

_**made available pursuant to Regulation (EU) 2021/241,**_ should provide the provisioning

for the guarantee, following a provisioning rate determined by the Commission and set out

in the contribution agreement concluded with the Member State, based on the nature of the

operations and the resulting expected losses. The Member State would assume losses

above the expected losses by issuing a back-to-back guarantee in favour of the Union _**that**_

_**should remain in place as long as any financing and investment operations under that**_

_**Member State compartment are outstanding**_ . Such arrangements should be concluded in a

single contribution agreement with each Member State that voluntarily chooses such

option. The contribution agreement should encompass the one or more specific guarantee

agreements to be implemented within the Member State concerned on the basis of the rules

of the InvestEU Fund, and any regional ring-fencing. The setting out of the provisioning

rate on a case-by-case basis requires a derogation from Article 211(1) of Regulation (EU,

Euratom) 2018/1046 of the European Parliament and of the Council [14] (the ‘ Financial

**14** Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18

July 2018 on the financial rules applicable to the general budget of the Union, amending

Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No

1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014,

and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L

193, 30.7.2018, p. 1).

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Regulation ’ ). This set-up provides also a single set of rules for budgetary guarantees

supported by funds that are managed centrally or by funds under shared management,

which would facilitate their combination. _**The provisioning for an EU guarantee relating**_

_**to a Member State compartment underpinned by other additional amounts contributed**_

_**by Member States, including those made available pursuant to Regulation (EU)**_

_**2021/241, should constitute external assigned revenue.**_

(34) A partnership between the Commission and the EIB Group should be established, drawing

on the relative strengths of each partner to ensure maximum policy impact, deployment

efficiency, and appropriate budgetary and risk management oversight, which should

support effective and inclusive direct access to the EU guarantee.

(35) _**The**_ _**Union represented by**_ the Commission should be in a position to participate in _**a**_

capital _**increase**_ of the European Investment Fund (EIF) in order to allow _**the EIF**_ to

continue supporting the European economy and its recovery. _**The main aim of the**_

_**increase would be to allow the EIF to contribute to the implementation of the InvestEU**_

_**Programme.**_ The Union should be able to maintain its overall share in the EIF capital. A

sufficient financial envelope to this effect should be foreseen in the Multiannual Financial

Framework for 2021-2027. _**On 3 December 2020, the Board of Directors of the EIF**_

_**decided to propose to the shareholders an increase in the authorised capital of the EIF**_

_**that would result in a cash injection of EUR 1 250 000 000. The price of the new shares**_

_**is based on the net asset value formula agreed among the shareholders of the EIF and**_

_**consists of the paid-in part and the share premium. In accordance with Article 7 of the**_

_**EIF Statutes, for each subscribed share, 20 % of the nominal value must be paid in.**_

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(36) The Commission should seek the views of other potential implementing partners along

with the EIB Group on investment guidelines, the climate tracking system, the

sustainability proofing guidance documents and common methodologies, as appropriate,

with a view to ensuring inclusiveness and operationality until the governance bodies have

been set up, after which the involvement of implementing partners should take place within

the framework of the Advisory Board and the Steering Board of the InvestEU Programme.

(37) The InvestEU Fund should be open to contributions from third countries that are members

of the European Free Trade Association, acceding countries, candidates and potential

candidates, countries covered by the European Neighbourhood Policy and other countries,

in accordance with the conditions agreed between the Union and those countries _**, in**_

_**particular in view of the positive impact of such opening on the Member States'**_

_**economies**_ . This should allow continuing cooperating with the relevant countries, where

appropriate, in particular in the fields of research and innovation as well as SMEs.

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(38) This Regulation lays down a financial envelope for other measures of the InvestEU

Programme than the provisioning of the EU guarantee, which is to constitute the prime

reference amount, within the meaning of point 18 of the Interinstitutional Agreement of 16

December 2020 between the European Parliament, the Council of the European Union and

the European Commission on budgetary discipline, on cooperation in budgetary matters

and on sound financial management, as well as on new own resources, including a

roadmap towards the introduction of new own resources [15], for the European Parliament

and the Council during the annual budgetary procedure.

_**(39)**_ _**EUR 2 672 292 573 in current prices of the EU guarantee should be provisioned by**_

_**resources from the additional allocation provided in accordance with Article 5 of and**_

_**Annex II to Council Regulation (EU, Euratom) 2020/2093**_ _[16]_ _**corresponding to an**_

_**amount of EUR 1 000 000 000 in 2018 prices. An amount of EUR 63 800 000 in current**_

_**prices of the total allocation to the InvestEU Advisory Hub of EUR 430 000 000 in**_

_**current prices should be provided from that amount.**_

**15** OJ L 433 I, 22.12.2020, p. 28.
**16** _**Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the**_
_**multiannual financial framework for the years 2021 to 2027 (OJ L 433 I, 22.12.2020, p.**_
_**11).**_

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(40) The EU guarantee of EUR _**26 152 310 073**_ in current prices for the EU compartment is

expected to mobilise more than EUR _**372 000 000 000**_ of additional investment across the

Union and should be indicatively allocated between the policy windows. ▌

(41) On 18 April 2019, the Commission declared that _**“**_ without prejudice to the prerogatives of

the Council in the implementation of the Stability and Growth Pact (SGP), one-off

contributions by Member States, _**either**_ by a Member State or by national promotional

banks classified in the general government sector or acting on behalf of a Member State,

_**into**_ thematic or multi-country investment platforms should in principle qualify as one-off

measures within the meaning of Articles 5(1) and 9(1) of Council Regulation (EC) No

1466/97 [17] and Article 3(4) of Council Regulation (EC) No 1467/97 [18] . In addition, without

prejudice to the prerogatives of the Council in the implementation of the SGP, the

Commission _**will**_ consider to what extent the same treatment as for the EFSI in the context

of the Commission communication on flexibility can be applied to the InvestEU

Programme as the successor instrument to the EFSI with regard to one-off contributions

provided by Member States in cash to finance an additional amount of the EU guarantee

for the purposes of the Member State compartment. _**”.**_

**17** Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance
of budgetary positions and the surveillance and coordination of economic policies (OJ L 209,
2.8.1997, p. 1).
**18** Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the
implementation of the excessive deficit procedure (OJ L 209, 2.8.1997, p. 6).

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(42) The EU guarantee underpinning the InvestEU Fund should be implemented indirectly by

the Commission relying on implementing partners with outreach to financial

intermediaries, where applicable, and final recipients. The selection of the implementing

partners should be transparent and free from any conflict of interest. The Commission

should conclude a guarantee agreement allocating guarantee capacity from the InvestEU

Fund with each implementing partner to support its financing and investment operations

that meet the InvestEU Fund eligibility criteria and contribute to meeting its objectives.

The management of the risk related to the EU guarantee should not hamper direct access to

the EU guarantee by the implementing partners. Once the EU guarantee is granted under

the EU compartment to implementing partners, they should be fully responsible for the

whole investment process and the due diligence related to the financing and investment

operations. The InvestEU Fund should support projects that typically have a higher risk

profile than the projects supported by the normal operations of the implementing partners

and that could not have been carried out during the period in which the EU guarantee could

be used, or could not have been carried out to the same extent, by other public or private

sources without support from the InvestEU Fund. ▌

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(43) The InvestEU Fund should be provided with a governance structure, the function of which

should be commensurate with its sole purpose of ensuring the appropriate use of the EU

guarantee, in line with ensuring the political independence of investment decisions. That

governance structure should be composed of an Advisory Board, a Steering Board and a

fully independent Investment Committee. The overall composition of the governance

structure should strive to achieve gender balance. The governance structure should not

encroach upon or interfere with the decision-making of the EIB Group or other

implementing partners, and should not be a substitute for their respective governing bodies.

(44) An Advisory Board consisting of representatives of the implementing partners,

representatives of Member States, one expert appointed by the European Economic and

Social Committee and one expert appointed by the Committee of the Regions should be

established in order to exchange information and exchange views on the take-up of the

financial products deployed under the InvestEU Fund and to discuss evolving needs and

new products, including specific territorial market gaps.

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(45) In order to be able to constitute the Advisory Board from the start, the Commission should

appoint the representatives of the potential implementing partners for a temporary period

of one year. Thereafter, the implementing partners having signed guarantee agreements

would take over that responsibility.

(46) A Steering Board composed of representatives of the Commission, representatives of

implementing partners and one non-voting expert appointed by the European Parliament

should determine the strategic and operational guidance for the InvestEU Fund.

(47) The Commission should assess the compatibility of financing and investment operations

submitted by the implementing partners with all Union law and policies. The decisions on

financing and investment operations should ultimately be taken by an implementing

partner.

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(48) The Investment Committee composed of independent experts should reach a conclusion on

the granting of support from the EU guarantee to financing and investment operations

fulfilling the eligibility criteria of the InvestEU Fund, thereby providing external expertise

in investment assessments in relation to projects. The Investment Committee should have

different configurations to cover different policy areas and sectors in the best way possible.

▌

(49) An independent secretariat hosted by the Commission and answerable to the chairperson of

the Investment Committee should assist the Investment Committee.

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(50) In selecting implementing partners for the deployment of the InvestEU Fund, the

Commission should consider their ability to fulfil the objectives of the InvestEU Fund and

to contribute their own resources, in order to ensure adequate geographical coverage and

diversification, to crowd in private investors and to provide sufficient risk diversification

and solutions to address market failures and suboptimal investment situations. Given its

role under the Treaties, its capacity to operate in all Member States and the existing

experience under the current financial instruments and the EFSI, the EIB Group should

remain a privileged implementing partner under the InvestEU Fund's EU compartment. In

addition to the EIB Group, national promotional banks and institutions should be able to

offer a complementary financial product range, given that their experience and capabilities

at national and regional level could be beneficial for the maximisation of the impact of

public funds on the whole territory of the Union, and for ensuring a fair geographical

balance of projects. The InvestEU Programme should be implemented in such a way as to

promote a level playing field for smaller and younger promotional banks and institutions.

Moreover, it should be possible for other international financial institutions to become

implementing partners, in particular when they present a comparative advantage in terms

of specific expertise and experience in certain Member States and when they present a

Union majority of shareholding. It should also be possible for other entities fulfilling the

criteria laid down in the Financial Regulation to become implementing partners.

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(51) With a view to promoting improved geographic diversification, investment platforms may

be established to combine the efforts and expertise of implementing partners with other

national promotional banks and institutions that have limited experience in the use of

financial instruments. Such structures should be encouraged, including with available

support from the InvestEU Advisory Hub. It is appropriate to bring together co-investors,

public authorities, experts, education, training and research institutions, relevant social

partners and representatives of the civil society and other relevant actors at Union, at

national and regional levels to promote the use of investment platforms in relevant sectors.

(52) The EU guarantee under the Member State compartment should be allocated to any

implementing partner eligible in accordance with point (c) of Article 62(1) of the Financial

Regulation, including national or regional promotional banks or institutions, the EIB, the

EIF and other international financial institutions. When selecting implementing partners

under the Member State compartment, the Commission should take into account the

proposals made by each Member State, as reflected in the contribution agreement. In

accordance with Article 154 of the Financial Regulation, the Commission is to carry out an

assessment of the rules and procedures of the implementing partner to ascertain that they

provide a level of protection of the financial interest of the Union equivalent to the one

provided by the Commission.

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(53) Financing and investment operations should ultimately be decided by the implementing

partner in its own name, implemented in accordance with its internal rules, policies and

procedures, and accounted for in its own financial statements or, where applicable,

disclosed in the notes to the financial statements. Therefore, the Commission should

exclusively account for any financial liability arising from the EU guarantee and should

disclose the maximum guarantee amount, including all relevant information concerning the

guarantee provided.

(54) Where appropriate, the InvestEU Fund should allow for the smooth, seamless and efficient

blending of grants, financial instruments or both, funded by the Union budget or by other

funds, such as the EU Emissions Trading System (ETS) Innovation Fund with the EU

guarantee in situations where this is necessary to best underpin investments to address

particular market failures or suboptimal investment situations.

(55) Projects submitted by implementing partners for support under the InvestEU Programme,

which include blending support from the InvestEU Fund with support from other Union

programmes, should as a whole be consistent with the objectives and eligibility criteria of

the relevant other Union programmes. The use of the EU guarantee should be decided

under the InvestEU Programme.

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(56) The InvestEU Advisory Hub should support the development of a robust pipeline of

investment projects in each policy window through advisory initiatives that are

implemented by the EIB Group or other advisory partners, or are implemented directly by

the Commission. The InvestEU Advisory Hub should promote geographic diversification

with a view to contributing to the Union objectives of economic, social, and territorial

cohesion and reducing regional disparities. The InvestEU Advisory Hub should pay

particular attention to the aggregation of small-sized projects into larger portfolios. The

Commission, the EIB Group and the other advisory partners should cooperate closely with

a view to ensuring efficiency, synergies and effective geographic coverage of support

across the Union, taking into account the expertise and local capacity of local

implementing partners, as well as the European Investment Advisory Hub established

under Regulation (EU) 2015/1017 of the European Parliament and of the Council [19] . _**The**_

_**findings of the European Court of Auditors' Special Report No 12/2020 ‘The European**_

_**Investment Advisory Hub: Launched to boost investment in the EU, the Hub's impact**_

_**remains limited’**_ _**[20]**_ _**should be carefully considered in order to maximise the InvestEU**_

_**Advisory Hub's effectiveness and impact.**_ The InvestEU Advisory Hub should provide a

central entry point for project development assistance delivered under the InvestEU

Advisory Hub to public authorities and for project promoters.

**19** Regulation (EU) 2015/1017 of the European Parliament and of the Council of 25 June 2015
on the European Fund for Strategic Investments, the European Investment Advisory Hub and
the European Investment Project Portal and amending Regulations (EU) No 1291/2013 and

—
(EU) No 1316/2013 the European Fund for Strategic Investments (OJ L 169, 1.7.2015, p.
1).
**20** _**OJ C 170, 18.5.2020, p. 22.**_

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(57) The InvestEU Advisory Hub should be established by the Commission with the EIB Group

as the main partner, building on the experience acquired through the European Investment

Advisory Hub. The Commission should be responsible for the policy steer of the InvestEU

Advisory Hub and for the management of the central entry point. The EIB Group should

deliver advisory initiatives under the policy windows. In addition, the EIB Group should

provide operational services to the Commission, including by providing input to the

strategic and policy guidelines regarding advisory initiatives, mapping existing and

emerging advisory initiatives, assessing advisory needs and advising the Commission on

optimal ways to address these needs through existing or new advisory initiatives.

(58) In order to ensure a wide geographic outreach of the advisory services across the Union

and to successfully leverage local knowledge about the InvestEU Fund, a local presence of

the InvestEU Advisory Hub should be ensured, where needed, taking into account existing

support schemes and the presence of local partners, with a view to providing tangible,

proactive, tailor-made assistance on the ground. In order to facilitate the provision of

advisory support at local level and to ensure efficiency, synergies and effective geographic

coverage of support across the Union, the InvestEU Advisory Hub should cooperate with

national promotional banks and institutions, and should benefit from and make use of their

expertise.

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(59) The InvestEU Advisory Hub should provide advisory support to small-sized projects and

projects for start-ups, especially when start-ups seek to protect their research and

innovation investments by obtaining intellectual property titles, such as patents, taking into

account the existence of other services able to cover such actions and seeking synergies

with those services.

(60) In the context of the InvestEU Fund, there is a need to provide support for project

development and capacity building to develop the organisational capacities and market

development activities needed to originate quality projects. Such support should also target

financial intermediaries that are key to help _**SMEs**_ access financing and realise their full

potential. Moreover, the aim of the advisory support is to create the conditions for the

expansion of the potential number of eligible recipients in nascent market segments, in

particular where the small size of individual projects considerably raises the transaction

cost at the project level, such as for the social finance ecosystem, including philanthropic

organisations, or for the cultural and creative sectors. The capacity-building support should

be complementary and in addition to actions taken under other Union programmes that

cover specific policy areas. An effort should also be made to support the capacity building

of potential project promoters, in particular local organisations and authorities.

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(61) The InvestEU Portal should be established to provide for an easily accessible and user

friendly project database to promote visibility of investment projects searching for

financing with enhanced focus on the provision of a possible pipeline of investment

projects, compatible with Union law and policies, to the implementing partners.

(62) In accordance with Council Regulation (EU) 2020/2094 **[21]** and within the limits of

resources allocated therein, recovery and resilience measures under the InvestEU

Programme should be carried out to address the unprecedented impact of the COVID-19

crisis. Such additional resources should be used in such a way as to ensure compliance

with the time limits provided for in Regulation (EU) 2020/2094.

(63) Pursuant to paragraphs 22 and 23 of the Interinstitutional Agreement of 13 April 2016 on

Better Law-Making [22], the InvestEU Programme should be evaluated on the basis of

information collected in accordance with specific monitoring requirements, while avoiding

an administrative burden, in particular on Member States, and overregulation. Those

requirements, where appropriate, should include measurable indicators, as a basis for

evaluating the effects of the InvestEU Programme on the ground.

**21** Council Regulation (EU) 2020/2094 of 14 December 2020 establishing a European Union
Recovery Instrument to support the recovery in the aftermath of the COVID-19 crisis (OJ L
433I, 22.12.2020, p. 23).
**22** OJ L 123, 12.5.2016, p. 1.

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(64) A solid monitoring framework that is based on output, outcome and impact indicators

should be implemented to track progress towards the Union's objectives. In order to ensure

accountability to the Union's citizens, the Commission should report annually to the

European Parliament and the Council on the progress, impact and operations of the

InvestEU Programme.

(65) Horizontal financial rules adopted by the European Parliament and the Council on the basis

of Article 322 of the Treaty on the Functioning of the European Union (TFEU) apply to

this Regulation. Those rules are laid down in the Financial Regulation and determine in

particular the procedure for establishing and implementing the budget through grants,

procurement, prizes, indirect implementation, and provide for checks on the responsibility

of financial actors. Rules adopted on the basis of Article 322 TFEU also _**include**_ _**a general**_

_**regime of conditionality for**_ the protection of the _**Union**_ budget ▌.

(66) The Financial Regulation applies to the InvestEU Programme. It lays down rules on the

implementation of the Union budget, including the rules on budgetary guarantees.

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(67) In accordance with the Financial Regulation, Regulation (EU, Euratom) No 883/2013 of the

European Parliament and of the Council [23] and Council Regulations (EC, Euratom) No

2988/95 [24], (Euratom, EC) No 2185/96 [25] and (EU) 2017/1939 [26], the financial interests of

the Union are to be protected by means of proportionate measures, including measures

relating to the prevention, detection, correction and investigation of irregularities,

including fraud, to the recovery of funds lost, wrongly paid or incorrectly used, and, where

appropriate, to the imposition of administrative penalties. In particular, in accordance with

Regulations (Euratom, EC) No 2185/96 and (EU, Euratom) No 883/2013, the European

Anti-Fraud Office (OLAF) has the power to carry out administrative investigations,

including on-the-spot checks and inspections, with a view to establishing whether there has

been fraud, corruption or any other illegal activity affecting the financial interests of the

Union. The European Public Prosecutor's Office (EPPO) is empowered, in accordance with

Regulation (EU) 2017/1939, to investigate and prosecute criminal offences affecting the

financial interests of the Union as provided for in Directive (EU) 2017/1371 of the

European Parliament and of the Council [27] . In accordance with the Financial Regulation,

any person or entity receiving Union funds is to fully cooperate in the protection of the

financial interests of the Union, grant the necessary rights and access to the Commission,

OLAF, the Court of Auditors and, in respect of those Member States participating in

enhanced cooperation pursuant to Regulation (EU) 2017/1939, the EPPO, and ensure that

any third parties involved in the implementation of Union funds grant equivalent rights.

**23** Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11
September 2013 concerning investigations conducted by the European Anti-Fraud Office
(OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the
Council and Council Regulation (Euratom) No 1074/1999 (OJ L 248, 18.9.2013, p. 1).
**24** Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the
European Communities financial interests (OJ L 312, 23.12.1995, p. 1).
**25** 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 (OJ L 292, 15.11.1996,
p. 2).
**26** Council Regulation (EU) 2017/1939 of 12 October 2017 implementing enhanced cooperation
on the establishment of the European Public Prosecutor’s Office (‘the EPPO’) (OJ L 283,
31.10.2017, p. 1).
**27** Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on
the fight against fraud to the Union's financial interests by means of criminal law (OJ L 198,
28.7.2017, p. 29).

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(68) Third countries which are members of the European Economic Area (EEA) may

participate in Union programmes in the framework of the cooperation established under the

Agreement on the European Economic Area [28], which provides for the implementation of

the programmes on the basis of a decision adopted under that Agreement. Third countries

may also participate on the basis of other legal instruments. A specific provision should be

introduced in this Regulation requiring third countries to grant the necessary rights and

access required for the authorising officer responsible, OLAF and the Court of Auditors to

comprehensively exercise their respective competences.

(69) Pursuant to Council Decision 2013/755/EU **[29]**, individuals and entities established in

overseas countries or territories are eligible for funding subject to the rules and objectives

of the InvestEU Programme and possible arrangements applicable to the Member State to

which the relevant overseas country or territory is linked.

**28** OJ L 1, 3.1.1994, p. 3.
**29** Council Decision 2013/755/EU of 25 November 2013 on the association of the overseas
countries and territories with the European Union (Overseas Association Decision) (OJ L 344,
19.12.2013, p. 1).

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(70) In order to supplement the non-essential elements of this Regulation with investment

guidelines and with a scoreboard of indicators, to facilitate the prompt and flexible

adaptation of the performance indicators and to adjust the provisioning rate, the power to

adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in

respect of drawing-up investment guidelines for the financing and investment operations

under different policy windows, of the scoreboard, of the amendment of Annex III to this

Regulation to review or complement the indicators and of the adjustment of the

provisioning rate. In line with the principle of proportionality, such investment guidelines

should include adequate provisions to avoid undue administrative burden. It is of particular

importance that the Commission carry out appropriate consultations during its preparatory

work, including at expert level, and that those consultations be conducted in accordance

with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on

Better Law-Making. In particular, to ensure equal participation in the preparation of

delegated acts, the European Parliament and the Council receive all documents at the same

time as Member States' experts, and their experts systematically have access to meetings of

Commission expert groups dealing with the preparation of delegated acts.

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_**(71)**_ _**Financing and investment operations signed or entered into by an implementing partner**_

_**during the period from 1 January 2021 until the signature of their respective guarantee**_

_**agreements should be eligible for the EU guarantee provided that such operations are**_

_**indicated in the guarantee agreement, pass the policy check or receive a favourable opinion**_

_**within the framework of the procedure provided for in Article 19 of Protocol No 5 on the**_

_**Statute of the European Investment Bank annexed to the Treaty on European Union (TEU)**_

_**and the TFEU (the EIB Statute), and are in both cases approved by the Investment**_

_**Committee.**_

_**(72)**_ _**In order to optimise the use of budgetary resources, a combination of relevant portfolios of**_

_**financial instruments established under the 2014-2020 Multiannual Financial Framework**_

_**and the EU guarantee under Regulation (EU) 2015/1017 with the EU**_ _**guarantee under this**_

_**Regulation should be possible. The increased risk bearing capacity established by such**_

_**combination should enhance the efficiency of the EU guarantee under this Regulation and**_

_**allow for more support to final recipients. The modalities of the combination should be**_

_**defined in the guarantee agreement between the Commission and the EIB or the EIF. The**_

_**conditions of the combination should be consistent with the Agreement on the withdrawal of**_

_**the United Kingdom of Great Britain and Northern Ireland from the European Union and**_

_**the European Atomic Energy Community**_ _[30]_ _**.**_

**30** _**OL L 29, 31.1.2020, p. 7.**_

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(73) Since the objectives of this Regulation, namely to address Union-wide and Member State

specific market failures and suboptimal investment situations and provide for Union-wide

market testing of innovative financial products designed to address new or complex market

failures or suboptimal investment situations and of systems to spread such products, cannot

be sufficiently achieved by the Member States, but can rather be better achieved at Union

level, the Union may adopt measures, in accordance with the principle of subsidiarity as set

out in Article 5 TEU. In accordance with the principle of proportionality as set out in that

Article, this Regulation does not go beyond what is necessary in order to achieve those

objectives.

(74) In order to ensure continuity in providing support in the relevant policy area and to allow

implementation to start from the beginning of the multi-annual financial framework 2021

2027, this Regulation should enter into force as a matter of urgency and should apply, with

retroactive effect, from 1 January 2021,

HAVE ADOPTED THIS REGULATION:

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CHAPTER I

GENERAL PROVISIONS

Article 1

Subject matter

This Regulation establishes the InvestEU Fund, which shall provide for an EU guarantee to

support financing and investment operations carried out by the implementing partners that

contribute to objectives of the Union’s internal policies.

This Regulation also establishes an advisory support mechanism to provide support for the

development of investable projects and access to financing and to provide related capacity

building assistance (the ‘InvestEU Advisory Hub’). It further establishes a database

granting visibility to projects for which project promoters seek financing and which

provides investors with information about investment opportunities (the ‘InvestEU

Portal’).

This Regulation establishes the objectives of the InvestEU Programme, its budget and the

amount of the EU guarantee for the period 2021 to 2027, the forms of Union funding and

the rules for providing such funding.

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Article 2

Definitions

For the purposes of this Regulation, the following definitions apply:

(1) 'InvestEU Programme' means the InvestEU Fund, the InvestEU Advisory Hub, the

InvestEU Portal and blending operations, collectively;

(2) 'EU guarantee' means an overall irrevocable, unconditional and on demand budgetary

guarantee provided by the Union budget under which the budgetary guarantees in

accordance with Article 219(1) of the Financial Regulation take effect through the

entry into force of individual guarantee agreements with implementing partners;

(3) 'policy window' means a targeted area for support by the EU guarantee as laid down

in Article 8(1);

(4) 'compartment' means a part of the EU guarantee defined in terms of the origin of the

resources backing it;

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(5) 'blending operation' means an operation supported by the Union budget that

combines non-repayable forms of support, repayable forms of support, or both, from

the Union budget with repayable forms of support from development or other public

finance institutions, or from commercial finance institutions and investors; for the

purposes of this definition, Union programmes financed from sources other than the

Union budget, such as the EU ETS Innovation Fund, may be assimilated to Union

programmes financed by the Union budget;

(6) 'EIB Group' means the EIB, its subsidiaries and other entities established in

accordance with Article 28(1) of Protocol No 5 on the Statute of the European

Investment Bank annexed to the TEU and the TFEU (the EIB Statute);

(7) 'financial contribution' means a contribution from an implementing partner in the

form of own risk-taking capacity that is provided on a pari passu basis with the EU

guarantee or in another form that allows an efficient implementation of the InvestEU

Programme while ensuring appropriate alignment of interest;

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(8) 'contribution agreement' means a legal instrument whereby the Commission and one

or more Member States specify the conditions of the EU guarantee under the

Member State compartment, as laid down in Article 10;

(9) 'financial product' means a financial mechanism or arrangement under the terms of

which the implementing partner provides direct or intermediated financing to final

recipients using any of the types of financing referred to in Article 16;

(10) 'financing and investment operations' or ‘financing or investment operations’ means

operations to provide finance directly or indirectly to final recipients through

financial products, carried out by an implementing partner in its own name, provided

by the implementing partner in accordance with its internal rules, policies and

procedures and accounted for in the implementing partner's financial statements or,

where applicable, disclosed in the notes to those financial statements ;

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(11) 'funds under shared management' means funds that provide for the possibility of

allocating a portion of those funds to the provisioning for a budgetary guarantee

under the Member State compartment of the InvestEU Fund, namely the European

Regional Development Fund (ERDF) and the Cohesion Fund to be established by a

Regulation of the European Parliament and of the Council on the European Regional

Development Fund and on the Cohesion Fund for the years 2021-2027, the European

Social Fund Plus (ESF+) to be established by a Regulation of the European

Parliament and of the Council on the European Social Fund Plus (ESF+) (the ‘ESF+

Regulation for 2021-2027’), the European Maritime, Fisheries and Aquaculture Fund

(EMFAF) to be established by a Regulation of the European Parliament and of the

Council on the European Maritime, Fisheries and Aquaculture Fund and repealing

Regulation (EU) No 508/2014 and the European Agriculture Fund for Rural

Development (EAFRD) to be established by a Regulation of the European

Parliament and of the Council establishing rules on support for strategic plans to be

drawn up by Member States under the Common agricultural policy (CAP Strategic

Plans) and financed by the European Agricultural Guarantee Fund (EAGF) and by

the European Agricultural Fund for Rural Development (EAFRD) and repealing

Regulation (EU) No 1305/2013 of the European Parliament and of the Council and

Regulation (EU) No 1307/2013 of the European Parliament and of the Council (the

'CAP Strategic Plans Regulation');

(12) 'guarantee agreement' means a legal instrument whereby the Commission and an

implementing partner specify the conditions for proposing financing and investment

operations in order for them to be granted the benefit of the EU guarantee, for

providing the EU guarantee for those operations and for implementing them in

accordance with this Regulation;

(13) 'implementing partner' means an eligible counterpart such as a financial institution or

other financial intermediary with whom the Commission has concluded a guarantee

agreement;

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(14) ‘important project of common European interest’ means a project that fulfils all the

criteria laid down in the Commission Communication on Criteria for the analysis of

the compatibility with the internal market of State aid to promote the execution of

important projects of common European interest or any subsequent revision of that

Communication;

(15) 'advisory agreement’ means a legal instrument whereby the Commission and the

advisory partner specify the conditions for the implementation of the InvestEU

Advisory Hub;

(16) ‘advisory initiative’ means technical assistance and advisory services that support

investment, including capacity building activities, provided by advisory partners, by

external service providers contracted by the Commission, or by executive agencies;

(17) ‘advisory partner’ means an eligible counterpart such as a financial institution or

other entity with whom the Commission has concluded an advisory agreement for

the purpose of implementing one or more advisory initiatives, other than advisory

initiatives implemented through external service providers contracted by the

Commission or through executive agencies;

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                                                           (18) ‘investment platform’ means a special purpose vehicle, managed account, contract

based co-financing or risk-sharing arrangement or an arrangement established by any

other means by which entities channel a financial contribution in order to finance a

number of investment projects, and which may include:

(a) a national or sub-national platform that groups together several investment

projects on the territory of a given Member State;

(b) a cross-border, multi-country, regional or macro-regional platform that groups

together partners from several Member States, regions or third countries

interested in investment projects in a given geographic area;

(c) a thematic platform that groups together investment projects in a given sector;

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(19) 'microfinance' means microfinance as defined in the relevant provisions of the ESF+

Regulation for 2021-2027;

(20) 'national promotional bank or institution' means a legal entity that carries out

financial activities on a professional basis which has been given mandate by a

Member State or a Member State's entity at central, regional or local level to carry

out development or promotional activities;

(21) 'small and medium-sized enterprise' or 'SME' means a micro, small or medium-sized

enterprise within the meaning of the Annex to Commission Recommendation

2003/361/EC [31] ;

(22) 'small mid-cap company' means an entity that is not an SME and that employs up to

499 employees;

(23) 'social enterprise' means a social enterprise as defined in the relevant provisions of

the ESF+ Regulation for 2021-2027.

**31** Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of
micro, small and medium-sized enterprises (OJ L 124, 20.5.2003, p. 36).

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Article 3

Objectives of the InvestEU Programme

1. The general objective of the InvestEU Programme is to support the policy objectives of the

Union by means of financing and investment operations that contribute to:

(a) the competitiveness of the Union, including research, innovation and digitisation;

(b) growth and employment in the Union economy, the sustainability of the Union

economy and its environmental and climate dimension contributing to the

achievement of the SDGs and the objectives of the Paris Agreement and to the

creation of high-quality jobs;

(c) the social resilience, inclusiveness and innovativeness of the Union;

(d) the promotion of scientific and technological advances, of culture, education and

training;

(e) the integration of Union capital markets and the strengthening of the internal market,

including solutions to address the fragmentation of Union capital markets, diversify

sources of financing for Union enterprises and promote sustainable finance;

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(f) the promotion of economic, social and territorial cohesion; or

(g) the sustainable and inclusive recovery of the Union economy after the COVID-19

crisis, _**including by providing capital support for SMEs that were negatively**_

_**affected by the COVID-19 crisis and were not already in difficulty in State aid**_

_**terms at the end of 2019,**_ upholding and strengthening _**existing**_ strategic value chains

_**of tangible or intangible assets, developing new ones,**_ and maintaining and

reinforcing activities of strategic importance to the Union, _**including important**_

_**projects of common European interest**_ _,_ in relation to critical infrastructure, _**whether**_

_**physical or virtual,**_ transformative technologies, game-changing innovations and

inputs to businesses and consumers _**and supporting a sustainable transition**_ .

2. The InvestEU Programme has the following specific objectives:

(a) supporting financing and investment operations related to sustainable infrastructure

in the areas referred to in point (a) of Article 8(1);

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(b) supporting financing and investment operations related to research, innovation and

digitisation, including support for the scaling up of innovative companies and the

rolling out of technologies to market, in the areas referred to in point (b) of Article

8(1);

(c) increasing the access to and the availability of finance for SMEs and for small mid

cap companies and to enhance the global competitiveness of such SMEs;

(d) increasing access to and the availability of microfinance and finance for social

enterprises, to support financing and investment operations related to social

investment, competences and skills, and to develop and consolidate social investment

markets, in the areas referred to in point (d) of Article 8(1) _**.**_

▌

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Article 4

Budget and amount of the EU guarantee

1. The EU guarantee for the purposes of the EU compartment referred to in point (a) of

Article 9(1) shall be EUR _**26 152 310 073**_ in current prices. It shall be provisioned at the

rate of _**40 %**_ . The amount referred to in point (a) of the first subparagraph of Article 35(3)

shall be also taken into account for contributing to the provisioning resulting from that

provisioning rate.

An additional amount of the EU guarantee may be provided for the purposes of the

Member State compartment referred to in point (b) of Article 9(1) of this Regulation,

subject to the allocation by Member States, pursuant to the provisions on the use of the

ERDF, the ESF+, the Cohesion Fund and the EMFAF delivered through the InvestEU

Programme laid down in a Regulation of the European Parliament and of the Council

laying down common provisions on the European Regional Development Fund, the

European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European

Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the

Asylum, Migration and Integration Fund, the Internal Security Fund and the instrument for

financial support for border management and visa (the 'Common Provisions Regulation for

2021-2027') and the provisions on the use of the EAFRD delivered through the InvestEU

Programme laid down in the CAP Strategic Plans Regulation, of the corresponding

amounts.

An additional amount of the EU guarantee may also be provided in the form of cash _**or**_

_**guarantee**_ by Member States for the purposes of the Member State compartment. _**The**_

amount _**provided in cash**_ shall constitute an external assigned revenue in accordance with

the second sentence of Article 21(5) of the Financial Regulation.

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The contributions from third countries referred to in Article 5 of this Regulation shall also

increase the EU guarantee referred to in the first subparagraph, providing a provisioning in

cash in full in accordance with Article 218(2) of the Financial Regulation.

2. An amount of EUR _**14 825 000 000**_ in current prices of the amount referred to in the first

subparagraph of paragraph 1 of this Article shall be allocated for operations implementing

measures referred to in Article 1 of Regulation (EU) 2020/2094 for the objectives referred

to in ▌ Article 3(2) of this Regulation.

An amount of EUR _**11 327 310 073**_ in current prices of the amount referred to in the first

subparagraph of paragraph 1 of this Article shall be allocated for the objectives referred to

in Article 3(2).

The amounts referred to in the first ▌ subparagraph of this paragraph shall only be

available as of the date referred to in Article 3(3) of Regulation (EU) 2020/2094.

The indicative distribution of the EU guarantee for the purposes of the EU compartment is

set out in Annex I to this Regulation. Where appropriate, the Commission may _**depart from**_

the amounts referred to in Annex I ▌ by up to 15 % for each objective referred to in points

(a) to (d) of Article 3(2). The Commission shall inform the European Parliament and the

Council of any such _**departure**_ .

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3. The financial envelope for the implementation of the measures provided in Chapters VI

and VII shall be EUR _**430 000 000**_ in current prices.

4. The amount referred to in paragraph 3 may also be used for technical and administrative

assistance for the implementation of the InvestEU Programme, such as preparatory,

monitoring, control, audit and evaluation activities, including for corporate information

technology systems.

Article 5

Third countries associated to the InvestEU Fund

The EU compartment of the InvestEU Fund referred to in point (a) of Article 9(1) of this Regulation

and each of the policy windows referred to in Article 8(1) of this Regulation ▌ may receive

contributions from the following third countries for the purpose of participation in certain financial

products pursuant to Article 218(2) of the Financial Regulation:

(a) _**members of the**_ European Free Trade Association (EFTA) ▌which are members of the

EEA, in accordance with the conditions laid down ▌in the Agreement on the European

Economic Area;

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(b) acceding countries, candidate countries and potential candidates, in accordance with the

general principles and general terms and conditions for _**the**_ participation _**of those countries**_

in Union programmes established in the respective framework agreements and Association

Council decisions or in similar agreements and in accordance with the specific conditions

laid down in agreements between the Union and _**those**_ countries;

(c) ▌ European Neighbourhood Policy countries, in accordance with the general principles

and general terms and conditions for the participation of those countries in Union

programmes established in the respective framework agreements and Association Council

decisions or in similar agreements and in accordance with the specific conditions laid

down in agreements between the Union and _**those**_ countries;

(d) _**other**_ third countries, in accordance with the conditions laid down in a specific agreement

covering the participation of the third country to any Union programme, provided that the

agreement:

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(i) ensures a fair balance as regards the contributions and benefits of the third country

participating in the Union programmes;

(ii) lays down the conditions of participation in the programmes, including the

calculation of financial contributions to individual programmes, and their

administrative costs;

(iii) does not confer on the third country _**any decision-making**_ power _**in respect of**_ the

Union programme;

(iv) guarantees the rights of the Union to ensure sound financial management and to

protect its financial interests.

The contributions referred to in point (d)(ii) of the first paragraph of this Article shall

constitute assigned revenues in accordance with Article 21(5) of the Financial Regulation.

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Article 6

Implementation and forms of Union funding

1. The EU guarantee shall be implemented in indirect management with bodies referred to in

points (c)(ii), (c)(iii), (c)(v) and (c)(vi) of Article 62(1) of the Financial Regulation. Other

forms of Union funding under this Regulation shall be implemented in direct or indirect

management in accordance with the Financial Regulation, including grants implemented in

accordance with Title VIII of the Financial Regulation and blending operations

implemented in accordance with this Article as smoothly as possible, in a manner that

ensures efficient and coherent support for Union policies.

2. Financing and investment operations covered by the EU guarantee which form part of the

blending operation combining support under this Regulation with support provided under

one or more other Union programmes or covered by the EU ETS Innovation Fund shall:

(a) be consistent with the policy objectives and comply with the eligibility criteria set

out in the rules of the Union programme under which the support is decided;

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(b) comply with this Regulation.

3. Blending operations that include a financial instrument that is fully financed by other

Union programmes or by the EU ETS Innovation Fund without the use of the EU

guarantee under this Regulation shall be consistent with the policy objectives and comply

with the eligibility criteria set out in the rules of the Union programme under which the

support is provided.

4. In accordance with paragraph 2 of this Article, the non-repayable forms of support and

financial instruments from the Union budget forming part of the blending operation

referred to in paragraphs 2 and 3 of this Article shall be decided under the rules of the

relevant Union programme and shall be implemented within the blending operation in

accordance with this Regulation and with Title X of the Financial Regulation.

The reporting relating to such blending operations shall also cover their consistency with

the policy objectives and eligibility criteria set out in the rules of the Union programme

under which the support is decided as well as their compliance with this Regulation.

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_**Article 7**_

_**Combination of portfolios**_

_**1.**_ _**Support from the EU guarantee under this Regulation, Union support provided through**_

_**the financial instruments established by the programmes in the programming period**_

_**2014-2020 and Union support from the EU guarantee established by Regulation (EU)**_

_**2015/1017 may be combined in financial products to be implemented by the EIB or the**_

_**EIF under this Regulation.**_

2. _**By way of derogation from Article 19(2) and the second subparagraph of Article 16(1),**_

_**the EU guarantee under this Regulation may also cover losses referred to in Article**_

_**19(2) in relation to the entire portfolio of financing and investment operations supported**_

_**by the financial products referred to in paragraph 1 of this Article.**_

_**Notwithstanding the objectives of the financial instruments referred to in paragraph 1,**_

_**the provisions made to cover the financial liabilities arising from financial instruments**_

_**referred to in paragraph 1 may be used to cover losses in relation to the entire portfolio**_

_**of financing and investment operations supported by the financial products referred to**_

_**in paragraph 1.**_

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_**3.**_ _**Losses, revenues and repayments from financial products as referred to in paragraph 1,**_

_**as well as potential recoveries, shall be attributed pro-rata between the financial**_

_**instruments and EU guarantees referred to in that paragraph providing the combined**_

_**Union support to that financial product.**_

_**4.**_ _**The terms and conditions of the financial products referred to in paragraph 1 of this**_

_**Article, including the respective pro-rata shares of losses, revenues, repayments and**_

_**recoveries, shall be set out in the guarantee agreement referred to in Article 17.**_

CHAPTER II

INVESTEU FUND

Article 8

Policy windows

1. The InvestEU Fund shall operate through the following _**four**_ policy windows that shall

address market failures or suboptimal investment situations within their specific scope:

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(a) a sustainable infrastructure policy window which comprises sustainable investment

in the areas of transport, including multimodal transport, road safety, including in

accordance with the Union objective of eliminating fatal road accidents and serious

injuries by 2050, the renewal and maintenance of rail and road infrastructure, energy,

in particular renewable energy, energy efficiency in accordance with the 2030 energy

framework, buildings renovation projects focused on energy savings and the

integration of buildings into a connected energy, storage, digital and transport

systems, improving interconnection levels, digital connectivity and access, including

in rural areas, supply and processing of raw materials, space, oceans, water,

including inland waterways, waste management in accordance with the waste

hierarchy and the circular economy, nature and other environment infrastructure,

cultural heritage, tourism, equipment, mobile assets and the deployment of

innovative technologies that contribute to the environmental or climate resilience or

social sustainability objectives of the Union and that meet the environmental or

social sustainability standards of the Union;

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(b) a research, innovation and digitisation policy window which comprises research,

product development and innovation activities, the transfer of technologies and

research results to the market to support market enablers and cooperation between

enterprises, the demonstration and deployment of innovative solutions and support

for the scaling up of innovative companies, as well as digitisation of Union industry;

(c) an SME policy window which comprises access to and the availability of finance

primarily for SMEs, including for innovative SMEs and SMEs operating in the

cultural and creative sectors, as well as for small mid-cap companies;

(d) a social investment and skills policy window, which comprises microfinance, social

enterprise finance, social economy and measures to promote gender equality, skills,

education, training and related services, social infrastructure, including health and

educational infrastructure and social and student housing, social innovation, health

and long-term care, inclusion and accessibility, cultural and creative activities with a

social goal, and the integration of vulnerable people, including third country

nationals _**.**_

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_**2.**_ _**A just transition scheme shall be established horizontally across all policy windows. That**_

_**scheme shall comprise investments that address social, economic and environmental**_

_**challenges deriving from the transition process towards the achievement of the Union’s**_

_**2030 climate target and its target of achieving climate neutrality by 2050, as well as**_

_**benefit territories identified in a just transition plan prepared by a Member State in**_

_**accordance with the relevant provisions of the Just Transition Fund Regulation.**_

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_**3.**_ _**All policy windows may include strategic investments including important projects of**_

_**common European interest**_ to support final recipients ▌whose activities are of strategic

importance to the Union, in particular in view of the green and digital transitions _**, of**_

enhanced resilience _**and of strengthening strategic value chains.**_

▌ In the case of _**strategic**_ investments in defence and space sectors and in cybersecurity, as

well as in specific types of projects with actual and direct security implications in critical

sectors, the _**investment guidelines adopted in accordance with paragraph 9 of this**_

_**Article (the ‘investment guidelines’)**_ _**shall set out limitations with respect to**_ final

recipients ▌ controlled by a third country or third country entities and _**final recipients**_

_**having**_ their executive management _**outside**_ the Union with a view to protecting the

security of the Union and its Member States. _**Those limitations shall be set out in line with**_

_**the principles concerning eligible entities set out in the relevant provisions of a**_

_**Regulation of the European Parliament and of the Council establishing the European**_

_**Defence Fund and repealing Regulation (EU) 2018/1092 and in the relevant provisions**_

_**of a Regulation of the European Parliament and of the Council establishing the Union**_

_**Space Programme and the European Union Agency for the Space Programme and**_

_**repealing Regulations (EU) No 912/2010, (EU) No 1285/2013, (EU) No 377/2014 and**_

_**Decision No 541/2014/EU.**_

_**The investment guidelines**_ shall set out any necessary requirements relating to the control

and executive management of final recipients for other areas ▌, and to the control of

.
intermediaries ▌, in the light of any applicable public order or security considerations

Taking account of those requirements, the Steering Board shall set out any necessary

additional requirements.

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4. Where a financing or investment operation proposed to the Investment Committee falls

under more than one policy window, it shall be attributed to the policy window under

which its main objective or the main objective of most of its sub-projects falls, unless the

investment guidelines provide otherwise.

5. Financing and investment operations shall be screened to determine whether they have an

environmental, climate or social impact. If those operations have such an impact they shall

be subject to climate, environmental and social sustainability proofing with a view to

minimising detrimental impacts and to maximising benefits to the climate, environment

and social dimensions. For that purpose, project promoters that request financing shall

provide adequate information based on the guidance referred to in paragraph 6. Projects

below a certain size specified in the guidance shall be excluded from the proofing. Projects

that are inconsistent with the climate objectives shall not be eligible for support under this

Regulation. In the event that the implementing partner concludes that no sustainability

proofing is to be carried out, it shall provide a justification to the Investment Committee.

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6. The Commission shall develop sustainability guidance that, in accordance with Union

environmental and social objectives and standards _**and, taking appropriate account of the**_

_**principle of ‘do no significant harm’**_ allows for:

(a) as regards adaptation, ensuring resilience to the potential adverse impacts of climate

change through a climate vulnerability and risk assessment, including through

relevant adaptation measures, and, as regards mitigation, integrating the cost of

greenhouse gas emissions and the positive effects of climate mitigation measures in

the cost-benefit analysis;

(b) accounting for the consolidated impact of projects in terms of the principal

components of natural capital, namely air, water, land and biodiversity;

(c) estimating the social impact of projects, including on gender equality, on the social

inclusion of certain areas or populations and on the economic development of areas

and sectors affected by structural challenges such as the need to decarbonise the

economy;

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(d) identifying projects that are inconsistent with the achievement of climate objectives;

(e) providing implementing partners with guidance for the purpose of the screening

provided for under paragraph 5.

7. Implementing partners shall provide the information necessary to allow the tracking of

investment that contributes to meeting the Union objectives on climate and environment,

on the basis of guidance to be provided by the Commission.

8. Implementing partners shall apply a target of at least 60 % of the investment under the

sustainable infrastructure policy window contributing to meeting the Union objectives on

climate and environment.

The Commission, together with implementing partners, shall seek to ensure that the part of

the EU guarantee used for the sustainable infrastructure policy window is distributed with

the aim of achieving a balance between the different areas referred to in point (a) of

paragraph 1.

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9. The Commission is empowered to adopt delegated acts in accordance with Article 34 in

order to supplement this Regulation by defining the investment guidelines for each of the

policy windows. _**The investment guidelines shall also set out the arrangements for the**_

_**implementation of the just transition scheme, as referred to in paragraph 2 of this**_

_**Article.**_ The investment guidelines shall be prepared in close dialogue with the EIB Group

and other potential implementing partners.

10. For _**strategic**_ financing and investment operations ▌in defence and space sectors and in

cybersecurity, the investment guidelines may set out limitations with respect to transfer

and licensing of intellectual property rights to critical technologies and technologies

instrumental to safeguarding the security of the Union and its Member States _**while**_

_**respecting Member State competence within export control**_ .

11. The Commission shall make the information on the application and interpretation of the

investment guidelines available to the implementing partners, the Investment Committee

and the advisory partners.

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Article 9

Compartments

1. The policy windows referred to in Article 8(1) shall consist of an EU compartment and a

Member State compartment. Those compartments shall address market failures or

suboptimal investment situations as follows:

(a) the EU compartment shall address any of the following situations:

(i) market failures or suboptimal investment situations related to Union policy

priorities;

(ii) Union-wide or Member State specific market failures or suboptimal investment

situations; or

(iii) market failures or suboptimal investment situations, which require the

development of innovative financial solutions and market structures, in

particular new or complex market failures or suboptimal investment situations;

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(b) the Member State compartment shall address specific market failures or suboptimal

investment situations in one or several regions or Member States to deliver the policy

objectives of the contributing funds under shared management or of the additional

amount provided by a Member State under the third subparagraph of Article 4(1), in

particular to strengthen economic, social and territorial cohesion in the Union by

addressing imbalances between its regions.

2. Where appropriate, the compartments referred to in paragraph 1 shall be used in a

complementary manner to support a given financing or investment operation, including by

combining support from both compartments.

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Article 10

Specific provisions applicable to the Member State compartment

1. Amounts allocated by a Member State on a voluntary basis pursuant to the provisions on

the use of the ERDF, the ESF+, the Cohesion Fund and the EMFAF delivered through the

InvestEU Programme laid down in the Common Provisions Regulation for 2021-2027 or

to the provisions on the use of the EAFRD delivered through the InvestEU Programme laid

down in the CAP Strategic Plans Regulation _**or amounts provided in cash in accordance**_

_**with the third subparagraph of Article 4(1) of this Regulation**_ shall be used for the

provisioning for the part of the EU guarantee under the Member State compartment

covering financing and investment operations in the Member State concerned or for the

possible contribution to the InvestEU Advisory Hub. Those amounts shall be used to

contribute to the achievement of the policy objectives specified in the Partnership

Agreement referred to in the provisions on the preparation and submission of the

Partnership Agreement laid down in the Common Provisions Regulation for 2021-2027, in

the programmes or in the CAP Strategic Plan which contribute to the InvestEU

Programme, in order _**to implement relevant measures set out in the recovery and**_

_**resilience plan established under Regulation (EU) 2021/241 or, in other cases, for the**_

_**purposes laid down in the contribution agreement, depending on the origin of the**_

_**amount contributed**_ .

▌

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2. The establishment of the part of the EU guarantee under the Member State compartment

shall be subject to the conclusion of a contribution agreement between a Member State and

the Commission.

The fourth subparagraph of this paragraph and paragraph 5 of this Article shall not apply to

the additional amount provided by a Member State under the third subparagraph of Article

4(1).

The provisions in this Article relating to amounts allocated pursuant to the provisions on

the use of the ERDF, the ESF+, the Cohesion Fund and the EMFAF delivered through the

InvestEU Programme laid down in the Common Provisions Regulation for 2021-2027or

to the provisions on the use of the EAFRD delivered through the InvestEU Programme laid

down in the CAP Strategic Plans Regulation are not applicable to a contribution agreement

concerning an additional amount by a Member State, referred to in the third subparagraph

of Article 4(1) of this Regulation.

The Member State and the Commission shall conclude a contribution agreement or an

amendment to it within four months following the Commission Decision approving the

Partnership Agreement pursuant to the provisions on the approval of the Partnership

Agreement laid down in the Common Provisions Regulation for 2021-2027or the CAP

Strategic Plan under the CAP Strategic Plans Regulation or simultaneously to the

Commission Decision amending a programme in accordance with the provisions on the use

of the ERDF, the ESF+, the Cohesion Fund and the EMFAF delivered through the

InvestEU Programme laid down in the Common Provisions Regulation for 2021-2027or a

CAP Strategic Plan in accordance with the provisions on the amendment to the CAP

Strategic Plan laid down in the CAP Strategic Plans Regulation.

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Two or more Member States may conclude a joint contribution agreement with the

Commission.

By way of derogation from Article 211(1) of the Financial Regulation, the provisioning

rate of the EU guarantee under the Member State compartment shall be set at 40 % and

may be adjusted downwards or upwards in each contribution agreement to take account of

the risks attached to the financial products intended to be used.

3. The contribution agreement shall at least contain the following elements:

(a) the overall amount of the part of the EU guarantee under the Member State

compartment pertaining to the Member State concerned, its provisioning rate, the

amount of the contribution from funds under shared management _**or provided in**_

_**accordance with the third subparagraph of Article 4(1)**_, the constitution phase of

the provisioning _**▌**_ and the amount of the resulting contingent liability to be covered

by a back-to-back guarantee provided by the Member State concerned;

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(b) the Member State strategy, consisting of the financial products and their minimum

leverage, the geographical coverage, including regional coverage if necessary, types

of projects, the investment period and, where applicable, the categories of final

recipients and of eligible intermediaries;

(c) the potential implementing partner or partners proposed in accordance with fourth

subparagraph of Article 15(1) and the obligation of the Commission to inform the

Member State concerned of the implementing partner or partners selected;

(d) any contribution from funds under shared management _**or from amounts provided in**_

_**accordance with the third subparagraph of Article 4(1)**_ to the InvestEU Advisory

Hub;

(e) the obligations to provide annual reports to the Member State, including reporting on

the relevant indicators related to the policy objectives covered in the Partnership

Agreement, programme _**,**_ CAP Strategic Plan _**or in the recovery and resilience plans**_

and referred to in the contribution agreement;

(f) provisions on the remuneration for the part of the EU guarantee under the Member

State compartment;

(g) any combination with resources under the EU compartment in accordance with

Article 9(2), including in a layered structure to achieve better risk coverage.

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4. The contribution agreements shall be implemented by the Commission through guarantee

agreements concluded with implementing partners in accordance with Article 17 and

advisory agreements concluded with advisory partners in accordance with the second

subparagraph of Article 25(1).

Where no guarantee agreement has been concluded within nine months from the

conclusion of the contribution agreement, the contribution agreement shall be terminated

or prolonged by mutual agreement. Where the amount of a contribution agreement has not

been fully committed under one or more guarantee agreements within nine months from

the conclusion of the contribution agreement, that amount shall be amended accordingly.

The unused amount of provisioning attributable to amounts allocated by Member States

pursuant to the provisions on the use of the ERDF, the ESF+, the Cohesion Fund and the

EMFAF delivered through the InvestEU Programme laid down in the Common Provisions

Regulation for 2021-2027 or to the provisions on the use of the EAFRD delivered through

the InvestEU Programme laid down in the CAP Strategic Plans Regulation shall be re-used

in accordance with those Regulations. The unused amount of provisioning attributable to

amounts allocated by a Member State under the third subparagraph of Article 4(1) of this

Regulation shall be paid back to the Member State.

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Where a guarantee agreement has not been duly implemented within the period specified

in the provisions on the use of the ERDF, the ESF+, the Cohesion Fund and the EMFAF

delivered through the InvestEU Programme laid down in the Common Provisions

Regulation for 2021-2027 or in the provisions on the use of the EAFRD delivered through

the InvestEU Programme laid down in the CAP Strategic Plans Regulation, _**or, in the case**_

_**of a guarantee agreement related to amounts provided in accordance with the third**_

_**subparagraph of Article 4(1) of this Regulation, in the relevant contribution agreement,**_

the contribution agreement shall be amended. The unused amount of provisioning

attributable to amounts allocated by Member States pursuant to the provisions on the use of

the ERDF, the ESF+, the Cohesion Fund and the EMFAF delivered through the InvestEU

Programme laid down in the Common Provisions Regulation for 2021-2027 or to the

provisions on the use of the EAFRD delivered through the InvestEU Programme laid down

in the CAP Strategic Plans Regulation shall be re-used in accordance with those

Regulations. The unused amount of provisioning attributable to amounts allocated by a

Member State under the third subparagraph of Article 4(1) of this Regulation shall be paid

back to the Member State.

5. The following rules shall apply to the provisioning for the part of the EU guarantee under

the Member State compartment established by a contribution agreement:

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(a) after the constitution phase referred to in point (a) of paragraph 3 of this Article, any

annual surplus of provisions, calculated by comparing the amount of provisions

required by the provisioning rate set in the contribution agreement and the actual

amount of provisions, shall be re-used pursuant to the provisions on the use of the

ERDF, the ESF+, the Cohesion Fund and the EMFAF delivered through the

InvestEU Programme laid down in the Common Provisions Regulation for 2021

2027 and to the provisions on the use of the EAFRD delivered through the InvestEU

Programme laid down in the CAP Strategic Plans Regulation;

(b) by way of derogation from Article 213(4) of the Financial Regulation, after the

constitution phase referred to in point (a) of paragraph 3 of this Article, the

provisioning shall not give rise to annual replenishments during the availability of

that part of the EU guarantee under the Member State compartment;

(c) the Commission shall immediately inform the Member State where the level of

provisions for that part of the EU guarantee falls below 20 % of the initial

provisioning as a result of calls on that part of the EU guarantee under the Member

State compartment;

(d) if the level of provisions for that part of the EU guarantee under the Member State

compartment reaches 10 % of the initial provisioning, the Member State concerned

shall provide up to 5 % of the initial provisioning to the common provisioning fund

referred to in Article 212 of the Financial Regulation upon request by the

Commission.

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_**6.**_ _**In relation to amounts referred to in the third subparagraph of Article 4(1), the**_

_**management of the annual surpluses and replenishments after the constitution phase**_

_**shall be defined in the contribution agreement.**_

CHAPTER III

PARTNERSHIP BETWEEN THE COMMISSION AND THE EIB GROUP

Article 11

Scope of the partnership

1. The Commission and the EIB Group shall form a partnership under this Regulation with

the objective of supporting the implementation of the InvestEU Programme and fostering

consistency, inclusivity, additionality, and efficient deployment. In accordance with this

Regulation and as further specified in the agreements referred to in paragraph 3, the EIB

Group:

(a) shall implement the portion of the EU guarantee specified in Article 13(4);

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(b) shall support the implementation of the EU compartment of the InvestEU Fund, and,

where applicable, the Member State compartment, in particular by:

(i) contributing, together with potential implementing partners, to the investment

guidelines in accordance with Article 8(9), contributing to the design of the

Scoreboard in accordance with Article 22 and contributing to other documents

that set out the operational guidance of the InvestEU Fund;

(ii) defining, together with the Commission and potential implementing partners,

the risk methodology and risk mapping system that relate to the financing and

investment operations of the implementing partners in order to allow such

operations to be assessed on a common rating scale;

(iii) at the request of the Commission and in agreement with the potential

implementing partner concerned, carrying out an assessment of the systems of

that potential implementing partner and providing targeted technical advice on

those systems, where and to the extent required by the conclusions of the audit

of the pillar assessment in view of the implementation of the financial products

envisaged by that potential implementing partner;

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(iv) providing a non-binding opinion on the banking-related aspects, in particular

on the financial risk and financial terms related to the portion of the EU

guarantee to be allocated to the implementing partner, other than to the EIB

Group, as defined in the guarantee agreement to be concluded with that

implementing partner;

(v) carrying out simulations and projections of the financial risk and remuneration

of the aggregate portfolio on the basis of assumptions agreed with the

Commission;

(vi) measuring the financial risk of the aggregate portfolio and providing financial

reports on the aggregate portfolio; and

(vii) providing restructuring and recovery services as set out in the agreement

referred to in point (b) of paragraph 3 of this Article to the Commission at the

request of the Commission and in agreement with the implementing partner in

accordance with point (g) of Article 17(2) where that implementing partner is

no longer responsible for pursuing restructuring and recovery activities under

the relevant guarantee agreement;

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(c) may provide capacity building as referred to in point (h) of Article 25(2) to a national

promotional bank or institution and other services, in relation to the implementation

of financial products supported by the EU guarantee if requested by that national

promotional bank or institution;

(d) shall, in relation to the InvestEU Advisory Hub:

(i) be allocated an amount of up to EUR _**300 000 000**_ for the advisory initiatives

referred to in Article 25 and operational tasks referred to in point (ii) of this

point out of the financial envelope referred to in Article 4(3);

(ii) advise the Commission and perform operational tasks set out in the agreement

referred to in point (c) of paragraph 3, by:

–
providing support to the Commission in the design, the establishment and

operation of the InvestEU Advisory Hub;

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–
providing an assessment of requests for advisory support that the

Commission does not consider to fall under existing advisory initiatives,

with a view to supporting the allocation decision of the Commission in

relation to advisory requests received under the central point of entry

defined in point (a) of Article 25(2);

–
providing support to national promotional banks and institutions by

providing capacity building referred to in point (h) of Article 25(2) in

relation to the development of their advisory capabilities to enable them

to participate in advisory initiatives, at the request of such banks or

institutions;

–
at the request of the Commission and of a potential advisory partner, and

subject to the agreement of the EIB Group, concluding on behalf of the

Commission an agreement with the advisory partner for the delivery of

advisory initiatives.

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The EIB Group shall ensure that its tasks as referred to in point (d)(ii) of the first

subparagraph are conducted entirely independently from its role as an advisory partner.

As appropriate, the Commission shall engage with the implementing partner on the basis of

the findings of the opinion of the EIB Group referred to in point (b)(iv) of the first

subparagraph. The Commission shall inform the EIB Group of the outcome of its decision

making.

2. The banking-related information transmitted to the EIB Group by the Commission in

accordance with points (b)(ii), (b)(iv), (b)(v) and (b)(vi) of the first subparagraph of

paragraph 1 shall be limited to information strictly necessary for the EIB Group to fulfil its

obligations under those points. The Commission, in close dialogue with the EIB Group and

potential implementing partners, shall define the nature and scope of that banking-related

information, taking into account the requirements for the sound financial management of

the EU guarantee, the legitimate interests of the implementing partner regarding

commercially sensitive information and the needs of the EIB Group in meeting its

obligations under those points.

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3. The terms of the partnership shall be laid down in agreements, including:

(a) on the granting and implementation of the portion of the EU guarantee specified in

Article 13(4):

(i) a guarantee agreement between the Commission and the EIB Group; or

(ii) separate guarantee agreements between the Commission and the EIB and its

subsidiaries or other entities established in accordance with Article 28(1) of the

EIB Statute, as applicable;

(b) an agreement between the Commission and the EIB Group in relation to points (b)

and (c) of the first subparagraph of paragraph 1;

(c) an agreement between the Commission and the EIB Group in relation to the

InvestEU Advisory Hub;

(d) service agreements between the EIB Group and national promotional banks and

institutions concerning capacity building and other services provided under point (c)

of the first subparagraph of paragraph 1.

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4. Without prejudice to Articles 18(3) and 25(4) of this Regulation, the costs incurred by the

EIB Group in the performance of tasks referred to in points (b) and (c) of the first

subparagraph of paragraph 1 of this Article shall be in accordance with the terms of the

agreement referred to in point (b) of paragraph 3 of this Article and may be covered from

the repayments or revenues attributable to the EU guarantee, or from the provisioning, in

accordance with Article 211(4) and (5) of the Financial Regulation, or may be charged to

the financial envelope referred to in Article 4(3) of this Regulation, upon justification of

those costs by the EIB Group, subject to an overall cap of EUR _**7 000 000**_ .

5. The costs incurred by the EIB Group for the performance of the operational tasks referred

to in point (d)(ii) of the first subparagraph of paragraph 1 shall be fully covered by and

paid from the amount referred to in point (d)(i) of the first subparagraph of paragraph 1,

upon justification of those costs by the EIB Group, subject to an overall cap of EUR

_**10 000 000**_ .

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Article 12

Conflicts of interest

1. Within the framework of the partnership as referred to in Article 11, the EIB Group shall

take all necessary measures and precautions to avoid conflicts of interest with other

implementing partners, including by putting in place a dedicated and independent team for

the tasks referred to in points (b)(iii) to (vi) of the first subparagraph of Article 11(1). That

team shall be subject to strict confidentiality rules, which shall continue to apply to

members of the team after they have left the team.

2. The EIB Group and other implementing partners shall inform the Commission without

delay of any situation that constitutes a conflict of interest or is likely to lead to a conflict

of interest. In the event of doubt, the Commission shall determine whether a conflict of

interest exists and shall inform the EIB Group of its conclusion. In the event of a conflict

of interest, the EIB Group shall take appropriate measures. The EIB Group shall inform the

Steering Board of those measures and their results.

3. The EIB Group shall take the necessary precautions to avoid situations in which a conflict

of interest could arise in the implementation of the InvestEU Advisory Hub, in particular in

relation to its operational tasks in its role of supporting the Commission as referred to in

point (d)(ii) of the first subparagraph of Article 11(1). In the event of a conflict of interest,

the EIB Group shall take appropriate measures.

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CHAPTER IV

EU GUARANTEE

Article 13

EU guarantee

1. The EU guarantee shall be granted as an irrevocable, unconditional and on demand

guarantee to the implementing partners in accordance with Article 219(1) of the Financial

Regulation and implemented in indirect management in accordance with Title X of that

Regulation.

2. The remuneration for the EU guarantee shall be linked to the characteristics and risk

profile of the financial products, taking into account the nature of the underlying financing

and investment operations and the fulfilment of the policy objectives targeted by the

financial products.

Where duly justified by the nature of the policy objectives targeted by the financial product

and the need for the financial products to be affordable to the targeted final recipients, the

cost of the financing provided to the final recipient may be reduced or the terms of that

financing may be improved, by reducing the remuneration for the EU guarantee, or, where

necessary, by covering the outstanding administrative costs borne by the implementing

partner through the Union budget, in particular:

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(a) where stressed financial market conditions would prevent the realisation of a

financing or investment operation under market-based pricing; or

(b) where necessary to catalyse financing and investment operations in sectors or areas

experiencing a significant market failure or suboptimal investment situation or to

facilitate the establishment of investment platforms.

The reduction of the remuneration for the EU guarantee or the coverage of the outstanding

administrative costs borne by the implementing partner, referred to in the second

subparagraph, may only be done to the extent that it does not significantly impact the

provisioning for the EU guarantee.

The reduction of the remuneration for the EU guarantee shall fully benefit final recipients.

3. The condition set out in Article 219(4) of the Financial Regulation shall apply to each

implementing partner on a portfolio basis.

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4. 75 % of the EU guarantee under the EU compartment as referred to in _**the**_ first

subparagraph of Article 4(1), amounting to EUR _**19 614 232 554**_, shall be granted to the

EIB Group. The EIB Group shall provide an aggregate financial contribution amounting to

EUR _**4 903 558 139**_ . That contribution shall be provided in a manner and form that

facilitates the implementation of the InvestEU Fund and the achievement of the objectives

set out in Article 15(2).

5. The remaining 25 % of the EU guarantee under the EU compartment shall be granted to

other implementing partners, which shall also provide a financial contribution to be

determined in the guarantee agreements.

6. Best efforts shall be made to ensure that, at the end of the investment period, a wide range

of sectors and regions are covered and excessive sectoral or geographical concentration is

avoided. Those efforts shall include incentives for smaller or less sophisticated national

promotional banks and institutions that have a comparative advantage due to their local

presence, knowledge and investment competencies. The Commission shall develop a

coherent approach to support those efforts.

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7. Support under the EU guarantee referred to in the first _**subparagraph**_ of Article 4(2) of this

Regulation shall be granted under the conditions set out in Article 3(6) of Regulation (EU)

2020/2094. In other cases, support under the EU guarantee may be granted for financing

and investment operations covered by this Regulation for an investment period ending on

31 December 2027.

Contracts between the implementing partner and the final recipient or the financial

intermediary or other entity referred to in point (a) of Article 16(1) under the EU guarantee

referred to in the first _**subparagraph**_ of Article 4(2) shall be signed at the latest one year

after the approval of the relevant financing or investment operation by the implementing

partner. In other cases, contracts between the implementing partner and the final recipient

or the financial intermediary or other entity referred to in point (a) of Article 16(1) shall be

signed by 31 December 2028.

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Article 14

Eligible financing and investment operations

1. The InvestEU Fund shall only support financing and investment operations that:

(a) comply with the conditions set out in points (a) to (e) of Article 209(2) of the

Financial Regulation, in particular regarding market failures, suboptimal investment

situations and additionality as set out in points (a) and (b) of Article 209(2) of the

Financial Regulation and in Annex V to this Regulation and, where appropriate,

maximising private investment in accordance with point (d) of Article 209(2) of the

Financial Regulation;

(b) contribute to the Union policy objectives and fall within the scope of the areas

eligible for financing and investment operations under the appropriate policy window

in accordance with Annex II to this Regulation;

(c) do not provide financial support to the excluded activities set out in Section B of

Annex V to this Regulation; and

(d) are consistent with the investment guidelines.

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2. In addition to projects situated in the Union, or in an overseas country or territory linked to

a Member State as set out in Annex II to the TFEU, the InvestEU Fund may support the

following projects and operations through financing and investment operations ▌:

(a) projects involving entities located or established in one or more Member States that

extend to one or more third countries, including acceding countries, candidate

countries and potential candidates, countries falling within the scope of the European

Neighbourhood Policy, the EEA or the EFTA, to an overseas country or territory as

set out in Annex II to the TFEU, or to an associated third country, regardless of

whether there is a partner in those third countries or overseas countries or territories;

(b) financing and investment operations in third countries as referred to in Article 5

which have contributed to a specific financial product.

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3. The InvestEU Fund may support financing and investment operations that provide finance

to final recipients which are legal entities established in any of the following countries or

territories:

(a) a Member State or an overseas country or territory linked to a Member State as set

out in Annex II to the TFEU;

(b) a third country associated to the InvestEU Programme in accordance with Article 5;

(c) a third country referred to in point (a) of paragraph 2, where applicable;

(d) other third countries, where necessary for the financing of a project in a country or

territory referred to in points (a), (b) or (c).

▌

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Article 15

Selection of implementing partners other than the EIB Group

1. The Commission shall select implementing partners other than the EIB Group in

accordance with Article 154 of the Financial Regulation.

Implementing partners may form a group. An implementing partner may be a member of

one or more groups.

For the EU compartment, the eligible counterparties shall have expressed their interest in

relation to the portion of the EU guarantee referred to in Article 13(5).

For the Member State compartment, the Member State concerned may propose one or

more counterparties as implementing partners from among those counterparties that have

expressed their interest. The Member State concerned may also propose the EIB Group as

an implementing partner and, at its own expense, may contract the EIB Group to provide

the services listed in Article 11.

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Where the Member State concerned does not propose an implementing partner, the

Commission shall proceed in accordance with the third subparagraph of this paragraph and

shall select as implementing partners eligible counterparties that are able to cover the

financing and investment operations in the geographical areas concerned.

2. When selecting implementing partners, the Commission shall ensure that the portfolio of

financial products under the InvestEU Fund meets the following objectives:

(a) maximising the coverage of the objectives laid down in Article 3;

(b) maximising the impact of the EU guarantee through the own resources committed by

the implementing partner;

(c) maximising, where appropriate, private investment;

(d) promoting innovative financial and risk solutions to address market failures and

suboptimal investment situations;

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(e) achieving geographical diversification via gradual allocation of the EU guarantee,

and to allow for the financing of smaller projects;

(f) providing sufficient risk diversification.

3. When selecting the implementing partners, the Commission shall also take into account:

(a) the possible cost and remuneration to the Union budget;

(b) the capacity of the implementing partner to implement thoroughly the requirements

of Article 155(2) and (3) of the Financial Regulation related to tax avoidance, tax

fraud, tax evasion, money laundering, terrorism financing and non-cooperative

jurisdictions.

4. National promotional banks and institutions may be selected as implementing partners,

provided that they fulfil the requirements laid down in this Article.

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Article 16

Eligible types of financing

1. The EU guarantee may be used towards risk coverage for the following types of financing

provided by the implementing partners:

(a) loans, guarantees, counter-guarantees, capital market instruments, any other form of

funding or credit enhancement, including subordinated debt, or equity or quasi

equity investments, provided directly or indirectly through financial intermediaries,

funds, investment platforms or other vehicles to be channelled to final recipients;

(b) funding or guarantees by an implementing partner to another financial institution

enabling the latter to undertake financing referred to in point (a).

In order to be covered by the EU guarantee, the financing referred to in points (a) and (b)

of the first subparagraph of this paragraph shall be granted, acquired or issued for the

benefit of financing and investment operations referred to in Article 14(1), where the

financing by the implementing partner was granted in accordance with a financing

agreement or transaction signed or entered into by the implementing partner after the

signature of the guarantee agreement and that has not expired or been cancelled.

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2. Financing and investment operations through funds or other intermediate structures shall

be supported by the EU guarantee in accordance with provisions to be laid down in the

investment guidelines, even if such structures invest a minority of their invested amounts

outside the Union and in third countries referred to Article 14(2) or invest a minority of

their invested amounts into assets other than those eligible under this Regulation.

▌

Article 17

Guarantee agreements

1. The Commission shall conclude a guarantee agreement with each implementing partner on

the granting of the EU guarantee up to an amount to be determined by the Commission.

In the event that implementing partners form a group a single guarantee agreement shall be

concluded between the Commission and each implementing partner within the group or

with one implementing partner on behalf of the group.

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2. The guarantee agreement shall contain:

(a) the amount and the terms of the financial contribution which is to be provided by the

implementing partner;

(b) the terms of the funding or the guarantees which are to be provided by the

implementing partner to another legal entity participating in the implementation,

whenever that is the case;

(c) detailed rules on the provision of the EU guarantee in accordance with Article 19,

including on the coverage of portfolios of specific types of instruments and the

respective events that trigger possible calls on the EU guarantee;

(d) the remuneration for risk-taking that is to be allocated in proportion to the respective

share of the risk-taking of the Union and of the implementing partner or as reduced

in duly justified cases pursuant to Article 13(2);

(e) the payment conditions;

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(f) the commitment of the implementing partner to accept the decisions by the

Commission and the Investment Committee as regards the use of the EU guarantee

for the benefit of a proposed financing or investment operation, without prejudice to

the decision-making of the implementing partner in respect of the proposed financing

or investment operation without the EU guarantee;

(g) provisions and procedures relating to the recovery of claims that is to be entrusted to

the implementing partner;

(h) financial and operational reporting and monitoring of the financing and investment

operations under the EU guarantee;

(i) key performance indicators, in particular as regards the use of the EU guarantee, the

fulfilment of the objectives and criteria laid down in Articles 3, 8 and 14, and the

mobilisation of private capital;

(j) where applicable, provisions and procedures relating to blending operations;

(k) other relevant provisions in compliance with the requirements of Article 155(2) and

Title X of the Financial Regulation;

(l) the existence of adequate mechanisms for addressing the potential concerns of

private investors.

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3. A guarantee agreement shall also provide that remuneration attributable to the Union from

financing and investment operations covered by this Regulation is to be provided after the

deduction of payments due upon calls on the EU guarantee.

4. In addition, a guarantee agreement shall provide that any amount due to the implementing

partner that relates to the EU guarantee shall be deducted from the overall amount of

remuneration, revenues and repayments due by the implementing partner to the Union

from financing and investment operations covered by this Regulation. Where that amount

is not sufficient to cover the amount due to the implementing partner in accordance with

Article 18(3), the outstanding amount shall be drawn from the provisioning for the EU

guarantee.

5. Where the guarantee agreement is concluded under the Member State compartment, it may

provide for the participation of representatives from the Member State or the regions

concerned in the monitoring of the implementation of that guarantee agreement.

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Article 18

Requirements for the use of the EU guarantee

1. The granting of the EU guarantee shall be subject to the entry into force of the guarantee

agreement with the relevant implementing partner.

2. Financing and investment operations shall be covered by the EU guarantee only where

they fulfil the criteria laid down in this Regulation and in the relevant investment

guidelines, and where the Investment Committee has concluded that those operations fulfil

the requirements for benefiting from the EU guarantee. The implementing partners shall

remain responsible for ensuring that the financing and investment operations comply with

this Regulation and the relevant investment guidelines.

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3. No administrative costs or fees related to the implementation of financing and investment

operations under the EU guarantee shall be due to the implementing partner by the

Commission unless the nature of the policy objectives targeted by the financial product to

be implemented and the affordability for the targeted final recipients or the type of

financing provided allow the implementing partner to duly justify to the Commission the

need for an exception. The coverage of such costs by the Union budget shall be limited to

the amount strictly required to implement the relevant financing and investment operations,

and shall be provided only to the extent to which the costs are not covered by revenues

received by the implementing partners from the financing and investment operations

concerned. The fee arrangements shall be laid down in the guarantee agreement and shall

comply with Article 17(4) of this Regulation and with point (g) of Article 209(2) of the

Financial Regulation.

4. In addition, the implementing partner may use the EU guarantee to meet the relevant share

of any recovery costs in accordance with Article 17(4), unless those costs have been

deducted from recovery proceeds.

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Article 19

Coverage and terms of the EU guarantee

1. Remuneration for risk-taking shall be allocated between the Union and an implementing

partner in proportion to their respective share of the risk-taking with respect to a portfolio

of financing and investment operations or, where relevant, with respect to individual

financing and investment operations. The remuneration for the EU guarantee may be

reduced in duly justified cases referred to in Article 13(2).

The implementing partner shall have appropriate exposure at its own risk to financing and

investment operations supported by the EU guarantee, unless exceptionally the policy

objectives targeted by the financial product to be implemented are of such nature that the

implementing partner could not reasonably contribute its own risk-bearing capacity to it.

2. The EU guarantee shall cover:

(a) for debt products referred to in point (a) of Article 16(1):

(i) the principal and all interest and amounts due to the implementing partner but

not received by it in accordance with the terms of the financing operations

prior to the event of default;

(ii) restructuring losses;

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(iii) losses arising from fluctuations of currencies other than the euro in markets

where possibilities for long-term hedging are limited;

(b) for equity or quasi-equity investments referred to in point (a) of Article 16(1): the

amounts invested and the associated funding costs and losses arising from

fluctuations of currencies other than the euro;

(c) for funding or guarantees by an implementing partner to another financial institution

in accordance with point (b) of Article 16(1): the amounts used and their associated

funding costs.

For the purposes of point (a)(i) of the first subparagraph, for subordinated debt a deferral,

reduction or required exit shall be considered to be an event of default.

3. Where the Union makes a payment to the implementing partner as the result of a call on

the EU guarantee, the Union shall be subrogated into the relevant rights of the

implementing partner relating to any of its financing or investment operations covered by

the EU guarantee, to the extent that those rights continue to exist.

The implementing partner shall pursue the recovery of claims for the subrogated amounts

on behalf of the Union and shall reimburse the Union from the amounts recovered.

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CHAPTER V

GOVERNANCE

Article 20

Advisory Board

1. The Commission and the Steering Board established pursuant to Article 21 shall be

advised by an advisory board (the ‘Advisory Board’).

2. The Advisory Board shall strive to ensure gender balance and shall comprise:

(a) one representative of each implementing partner;

(b) one representative of each Member State;

(c) one expert appointed by the European Economic and Social Committee;

(d) one expert appointed by the Committee of the Regions.

3. The Advisory Board shall be chaired by a representative of the Commission. The

representative of the EIB Group shall be the vice-chair.

The Advisory Board shall meet regularly, at least twice a year, at the request of the

Chairperson.

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4. The Advisory Board shall:

(a) provide advice to the Commission and the Steering Board on the design of financial

products to be deployed under this Regulation;

(b) provide advice to the Commission and the Steering Board about market

developments, market conditions, market failures and suboptimal investment

situations;

(c) exchange views on market developments and share best practices.

5. The Commission shall nominate the first Advisory Board members representing the

implementing partners other than the EIB Group after consultation of potential

implementing partners. Their term is limited to one year.

6. Meetings of representatives of the Member States in a separate format shall also be

organised at least twice a year and chaired by the Commission.

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7. The Advisory Board and the meetings of the representatives of the Member States referred

to in paragraph 6 may issue recommendations to the Steering Board for its consideration

regarding the implementation and operation of the InvestEU Programme.

8. Detailed minutes of the meetings of the Advisory Board shall be made public as soon as

possible after they have been approved by the Advisory Board.

The Commission shall establish the operating rules and procedures for the Advisory Board

and shall manage the secretariat of the Advisory Board. All relevant documentation and

information shall be made available to the Advisory Board to enable it to exercise its tasks.

9. The national promotional banks and institutions represented on the Advisory Board shall

select from among themselves the representatives of the implementing partners other than

the EIB Group in the Steering Board established pursuant to Article 21. The national

promotional banks and institutions shall aim to achieve a balanced representation in the

Steering Board in terms of size and geographical location. The representatives selected

shall represent the agreed common position of all implementing partners other than the

EIB Group.

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Article 21

Steering Board

1. A steering board for the InvestEU Programme (the ‘Steering Board’) shall be established.

It shall be composed of four representatives of the Commission, three representatives of

the EIB Group and two representatives of the implementing partners other than the EIB

Group and one expert appointed as a non-voting member by the European Parliament. The

expert appointed as a non-voting member by the European Parliament shall not seek or

take instructions from Union institutions, bodies, offices or agencies, from any Member

State government or from any other public or private body and shall act with full

independence. That expert shall perform his or her duties impartially and in the interest of

the InvestEU Programme.

Members of the Steering Board shall be appointed for a term of four years, renewable

once, with the exception of the representatives of the implementing partners other than the

EIB Group, who shall be appointed for a term of two years.

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2. The Steering Board shall select a Chairperson from among the Commission representatives

for a term of four years, renewable once. The Chairperson shall report biannually to the

representatives of the Member States on the Advisory Board on the implementation and

operation of the InvestEU Programme.

Detailed minutes of Steering Board meetings shall be published as soon as they have been

approved by the Steering Board.

3. The Steering Board shall:

(a) provide strategic and operational guidance for the implementing partners, including

guidance on the design of financial products and on other operating policies and

procedures necessary for the operation of the InvestEU Fund;

(b) adopt the risk methodological framework developed by the Commission in

cooperation with the EIB Group and the other implementing partners;

(c) oversee the implementation of the InvestEU Programme;

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(d) be consulted, reflecting the views of all its member, on the shortlist of candidates for

the Investment Committee before their selection in accordance with Article 24(2);

(e) adopt the rules of procedure of the secretariat to the Investment Committee referred

to in Article 24(4).

(f) adopt the rules applicable to the operations with investment platforms.

4. The Steering Board shall use a consensual approach in its discussions, therefore taking the

utmost possible account of the positions of all members. If the members cannot _**converge**_

_**in their positions**_, decisions of the Steering Board _**are taken**_ by qualified majority of its

voting members, consisting of at least seven votes.

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Article 22

Scoreboard

1. A scoreboard of indicators (the ‘Scoreboard’) shall be established to ensure that the

Investment Committee is able to carry out an independent, transparent and harmonised

assessment of requests for the use of the EU guarantee for financing and investment

operations proposed by implementing partners.

2. Implementing partners shall fill out the Scoreboard for their proposals for financing and

investment operations.

3. The Scoreboard shall cover the following elements:

(a) a description of the proposed financing or investment operation;

(b) how the proposed financing or investment operation contributes to EU policy

objectives;

(c) a description of additionality;

(d) a description of the market failure or suboptimal investment situation;

(e) the financial and technical contribution by the implementing partner;

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(f) the impact of the investment;

(g) the financial profile of the financing or investment operation;

(h) complementary indicators.

4. The Commission is empowered to adopt delegated acts in accordance with Article 34 in

order to supplement this Regulation by establishing additional elements of the Scoreboard,

including detailed rules for the Scoreboard to be used by the implementing partners.

Article 23

Policy check

1. The Commission shall conduct a check to confirm that the financing and investment

operations proposed by the implementing partners other than the EIB comply with Union

law and policies.

2. EIB financing and investment operations that fall within the scope of this Regulation shall

not be covered by the EU guarantee where the Commission delivers an unfavourable

opinion within the framework of the procedure provided for in Article 19 of the EIB

Statute.

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Article 24

Investment Committee

1. A fully independent investment committee shall be established for the InvestEU Fund (the

‘Investment Committee’). The Investment Committee shall:

(a) examine the proposals for financing and investment operations submitted by

implementing partners for coverage under the EU guarantee that have passed the

policy check referred to in Article 23(1) of this Regulation or that have received a

favourable opinion within the framework of the procedure provided for in Article 19

of the EIB Statute;

(b) verify the compliance of the proposals referred to in point (a) with this Regulation

and the relevant investment guidelines; and

(c) check whether the financing and investment operations that would benefit from the

support under the EU guarantee comply with all relevant requirements.

When performing the tasks referred to in the first subparagraph of this paragraph, the

Investment Committee shall give particular attention to the additionality requirements set

out in point (b) of Article 209(2) of the Financial Regulation and in Annex V to this

Regulation and to the requirement to crowd in private investment set out in point (d) of

Article 209(2) of the Financial Regulation.

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2. The Investment Committee shall meet in _**four**_ different configurations, corresponding to

the _**four**_ policy windows referred to in Article 8(1).

Each configuration of the Investment Committee shall be composed of six remunerated

external experts. The experts shall be selected and shall be appointed by the Commission,

at the recommendation of the Steering Board. The experts shall be appointed for a term of

up to four years, renewable once. They shall be remunerated by the Union. The

Commission, at the recommendation of the Steering Board, may decide to renew the term

of office of an incumbent member of the Investment Committee without following the

procedure laid down in this paragraph.

The experts shall have a high level of relevant market experience in project structuring and

financing or financing of SMEs or corporates.

The composition of the Investment Committee shall ensure that it has a wide knowledge of

the sectors covered by the policy windows referred to in Article 8(1) and a wide

knowledge of the geographic markets in the Union, and shall ensure that the Investment

Committee as a whole is gender-balanced.

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_**Four**_ members of the Investment Committee shall be permanent members of each of the

_**four**_ configurations of the Investment Committee. At least one of the permanent members

shall have expertise in sustainable investment. In addition, each of the _**four**_ configurations

shall have two experts with experience in investment in sectors covered by the

corresponding policy window. The Steering Board shall assign the Investment Committee

members to the appropriate configuration or configurations. The Investment Committee

shall elect a chairperson from among its permanent members.

3. When participating in the activities of the Investment Committee, its members shall

perform their duties impartially and in the sole interest of the InvestEU Fund. They shall

not seek or take instructions from the implementing partners, the institutions of the Union,

the Member States, or any other public or private body.

The curricula vitae and declarations of interest of each member of the Investment

Committee shall be made public and kept up to date. Each member of the Investment

Committee shall without delay communicate to the Commission and the Steering Board all

information needed to confirm the absence of any conflict of interest on an ongoing basis.

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The Steering Board may recommend to the Commission that it remove a member from his

or her functions if that member does not comply with the requirements laid down in this

paragraph or for other duly justified reasons.

4. When acting in accordance with this Article, the Investment Committee shall be assisted

by a secretariat. The secretariat shall be independent and answerable to the chairperson of

the Investment Committee. The secretariat shall be administratively located in the

Commission. The rules of procedure of the secretariat shall ensure the confidentiality of

exchanges of information and documents between implementing partners and the

respective governing bodies. The EIB Group may submit its proposals for financing and

investment operations directly to the Investment Committee and shall notify them to the

secretariat.

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The documentation to be provided by the implementing partners shall comprise a

standardised request form, the Scoreboard referred to in Article 22 and any other document

the Investment Committee considers relevant, in particular a description of the character of

the market failure or suboptimal investment situation and how it will be alleviated by the

financing or investment operation, as well as a reliable assessment of the operation that

demonstrates the additionality of the financing or investment operation. The secretariat

shall check the completeness of the documentation provided by implementing partners

other than the EIB Group. The Investment Committee may seek clarifications from the

implementing partner concerned in relation to a proposal for an investment or financing

operation, including by requesting the direct presence of a representative of the

implementing partner concerned during the discussion of the aforementioned operation.

Any project assessment conducted by an implementing partner shall not be binding on the

Investment Committee for the purposes of granting a financing or investment operation

coverage by the EU guarantee.

The Investment Committee shall use the Scoreboard referred to in Article 22 in its

assessment and verification of the proposed financial and investment operations.

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5. Conclusions of the Investment Committee shall be adopted by simple majority of all

members, provided that such simple majority includes at least one of the non-permanent

members of the configuration relating to the policy window under which the proposal is

made. In the event of a draw, the chair of the Investment Committee shall have the casting

vote.

Conclusions of the Investment Committee approving the coverage of the EU guarantee for

a financing or investment operation shall be publicly accessible and shall include the

rationale for the approval and information on the operation, in particular its description, the

identity of the promoters or financial intermediaries, and the objectives of the operation.

The conclusions shall also refer to the global assessment stemming from the Scoreboard.

The relevant Scoreboard shall be made publicly accessible after the signature of the

financing or investment operation or sub-project, if applicable.

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Information to be made publicly accessible under the second and third subparagraphs shall

not contain commercially sensitive information or personal data that are not to be disclosed

under the Union data protection rules. Commercially sensitive parts of the conclusions of

the Investment Committee shall be forwarded by the Commission to the European

Parliament and to the Council upon request subject to strict confidentiality requirements.

Twice a year, the Investment Committee shall submit to the European Parliament and to

the Council a list of all conclusions of the Investment Committee in the preceding six

months, as well as the published Scoreboards relating thereto. That submission shall

include any decisions rejecting the use of the EU guarantee. Those decisions shall be

subject to strict confidentiality requirements.

Conclusions of the Investment Committee shall be made available in a timely manner to

the implementing partner concerned by the secretariat of the Investment Committee.

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The secretariat of the Investment Committee shall record all information related to

proposals for financing and investment operations provided to the Investment Committee

and the conclusions of the Investment Committee on those proposals in a central

repository.

6. Where the Investment Committee is requested to approve the use of the EU guarantee for a

financing or investment operation that is a facility, programme or structure which has

underlying sub-projects, that approval shall comprise those underlying sub-projects unless

the Investment Committee decides to retain the right to approve them separately. The

Investment Committee shall not have the right to separately approve sub-projects of a size

below EUR 3 000 000.

7. Where it deems it necessary, the Investment Committee may bring to the Commission any

operational issue relating to the application or interpretation of the investment guidelines.

▌

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CHAPTER VI

INVESTEU ADVISORY HUB

Article 25

InvestEU Advisory Hub

1. The Commission shall establish the InvestEU Advisory Hub. The InvestEU Advisory Hub

shall provide advisory support for the identification, preparation, development, structuring,

procuring and implementation of investment projects, and for enhancing the capacity of

project promoters and financial intermediaries to implement financing and investment

operations. Such support may cover any stage of the life-cycle of a project or financing of

a supported entity.

The Commission shall conclude advisory agreements with the EIB Group and other

potential advisory partners and task them with the provision of advisory support as referred

to in the first subparagraph of this paragraph and of the services referred to in paragraph 2.

The Commission may also implement advisory initiatives, including through contracting

external service providers. The Commission shall establish a central entry point to the

InvestEU Advisory Hub and shall allocate requests for advisory support to be dealt under

the appropriate advisory initiative. The Commission, the EIB Group and the other advisory

partners shall cooperate closely with a view to ensuring efficiency, synergies and effective

geographic coverage of support across the Union, while taking due account of existing

structures and work.

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Advisory initiatives shall be available as a component under each policy window referred

to in Article 8(1), covering sectors under that window. In addition, advisory initiatives

shall be available under a cross-sectoral component.

2. The InvestEU Advisory Hub shall in particular:

(a) provide a central point of entry, managed and hosted by the Commission, for project

development assistance under the InvestEU Advisory Hub for public authorities and

for project promoters;

(b) disseminate to public authorities and project promoters all available additional

information regarding the investment guidelines, including information on their

application or on the interpretation provided by the Commission;

(c) where appropriate, assist project promoters in developing their projects so that they

fulfil the objectives set out in Articles 3 and 8 and the eligibility criteria set out in

Article 14, and facilitate the development of _**among others**_ important projects of

common European interest and aggregators for small-sized projects, including

through investment platforms as referred to in point (f) of this paragraph, provided

that such assistance does not prejudge the conclusions of the Investment Committee

with respect to the coverage of the EU guarantee with respect to such projects;

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(d) support actions and leverage local knowledge to facilitate the use of InvestEU Fund

support across the Union and contribute actively where possible to the objective of

the sectorial and geographical diversification of the InvestEU Fund by supporting

implementing partners in originating and developing potential financing and

investment operations;

(e) facilitate the establishment of collaborative platforms for peer-to-peer exchanges and

the sharing of data, knowhow and best practices to support project pipeline and

sector development;

(f) provide proactive advisory support with respect to the establishment of investment

platforms, including cross-border and macro-regional investment platforms and

investment platforms that bundle small and medium-sized projects in one or more

Member States by theme or by region;

(g) support the use of blending with grants or financial instruments funded by the Union

budget or by other sources in order to strengthen synergies and complementarities

between Union instruments and to maximise the leverage and impact of the InvestEU

Programme;

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(h) support capacity building actions to develop organisational capacities, skills and

processes and to accelerate the investment readiness of organisations in order for

public authorities and project promoters to build investment project pipelines,

develop financing mechanisms and investment platforms and to manage projects and

for financial intermediaries to implement financing and investment operations for the

benefit of entities that face difficulties in obtaining access to finance, including

through support for developing risk assessment capacity or sector specific

knowledge;

(i) providing advisory support for start-ups, especially when they seek to protect their

research and innovation investments by obtaining intellectual property titles, such as

patents.

3. The InvestEU Advisory Hub shall be available to public and private project promoters,

including SMEs and start-ups, to public authorities, to national promotional banks and

institutions, and to financial and non-financial intermediaries.

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4. The Commission shall conclude an advisory agreement with each advisory partner on the

implementation of one or more advisory initiatives. The InvestEU Advisory Hub may

charge fees for the services referred to in paragraph 2 to cover part of the costs for

providing those services, except for services provided to public project promoters or non

profit institutions, which shall be free of charge where justified. Fees charged to SMEs for

those services referred to in paragraph 2 shall be capped at one third of the cost of

providing those services.

5. In order to carry out the activities referred to in paragraph 1 and to facilitate the provision

of advisory support, the InvestEU Advisory Hub shall build upon the expertise of the

Commission, the EIB Group and the other advisory partners.

6. Each advisory initiative shall incorporate a cost-sharing mechanism between the

Commission and the advisory partner, except where the Commission agrees to cover all

costs of the advisory initiative in a duly justified case where the specificities of the

advisory initiative so require and the coherent and equitable treatment of advisory partners

concerned is ensured.

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7. The InvestEU Advisory Hub shall have local presence where necessary. Local presence

shall be established in particular in Member States or regions that face difficulties in

developing projects under the InvestEU Fund. The InvestEU Advisory Hub shall assist in

the transfer of knowledge to the regional and local level with a view to building up

regional and local capacity and expertise to be able to provide advisory support referred to

in paragraph 1, including support to implement and accommodate small-sized projects.

8. In order to provide the advisory support referred in paragraph 1 and to facilitate the

provision of that advisory support at local level, the InvestEU Advisory Hub shall

cooperate where possible with and take advantage of the expertise of national promotional

banks and institutions. Where appropriate, cooperation agreements with national

promotional banks and institutions shall be concluded under the InvestEU Advisory Hub,

with at least one national promotional bank or institution per Member State.

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9. The implementing partners shall, as appropriate, propose to project promoters applying for

financing, including in particular small-sized projects, that they request the InvestEU

Advisory Hub support for their projects, where appropriate, in order to enhance the

preparation of their projects and to allow for the assessment of the possibility of bundling

projects.

Where relevant, the implementing partners and advisory partners shall also inform the

project promoters of the possibility of listing their projects on the InvestEU Portal referred

to in Article 26.

CHAPTER VII

INVESTEU PORTAL

Article 26

InvestEU Portal

1. The Commission shall establish the InvestEU Portal. The InvestEU Portal shall be an

easily accessible and user-friendly project database that provides relevant information for

each project.

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2. The InvestEU Portal shall provide a channel for project promoters to make projects for

which they are seeking finance visible to investors. The inclusion of projects in the

InvestEU Portal shall be without prejudice to decisions on the final projects selected for

support under this Regulation or under any other Union instrument, or to decisions for

public funding. Only projects that are compatible with Union law and policies shall be

listed on the InvestEU Portal.

3. The Commission shall transmit projects that are compatible with Union law and policies to

the relevant implementing partners. Where appropriate and where an advisory initiative

exists, the Commission shall also transmit such projects to the InvestEU Advisory Hub.

4. Implementing partners shall examine projects falling within their geographic and activity

scope.

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CHAPTER VIII

ACCOUNTABILITY, MONITORING AND REPORTING, EVALUATION AND CONTROL

Article 27

Accountability

1. At the request of the European Parliament or of the Council, the Chairperson of the

Steering Board shall report on the performance of the InvestEU Fund to the requesting

institution, including by participating in a hearing before the European Parliament.

2. The Chairperson of the Steering Board shall reply orally or in writing to questions

addressed to the InvestEU Fund by the European Parliament or by the Council within five

weeks of their receipt.

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Article 28

Monitoring and reporting

1. Indicators to report on the progress of the InvestEU Programme towards the achievement

of the general and specific objectives laid down in Article 3 are set out in Annex III.

2. The performance reporting system shall ensure that data for monitoring the implementation

and the results of the InvestEU Programme are collected efficiently, effectively and in a

timely manner, and that those data allow for adequate risk and guarantee portfolio

monitoring. To that end, proportionate reporting requirements shall be imposed on the

implementing partners, the advisory partners and other recipients of Union funds, as

appropriate.

3. The Commission shall report on the implementation of the InvestEU Programme in

accordance with Articles 241 and 250 of the Financial Regulation. In accordance with

Article 41(5) of the Financial Regulation, the annual report shall provide information on

the level of implementation of the Programme with respect to its objectives and

performance indicators. For that purpose, each implementing partner shall provide on an

annual basis the information necessary to allow the Commission to comply with its

reporting obligations, including information on the operation of the EU guarantee.

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4. Every six months, each implementing partner shall submit a report to the Commission on

the financing and investment operations covered by this Regulation, broken down by EU

compartment and Member State compartment, as appropriate. Each implementing partner

shall also submit information on the Member State compartment to the Member State

whose compartment it implements. The report shall include an assessment of compliance

with the requirements on the use of the EU guarantee and with the key performance

indicators laid down in Annex III to this Regulation. The report shall also include

operational, statistical, financial and accounting data on each financing or investment

operation and an estimation of expected cash flows, at the level of compartment, policy

window and the InvestEU Fund. Once a year, the report from the EIB Group and, where

appropriate, from other implementing partners, shall also include information on barriers to

investment encountered when carrying out financing and investment operations covered by

this Regulation. The reports shall contain the information the implementing partners have

to provide under point (a) of Article 155(1) of the Financial Regulation.

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5. To ensure the effective assessment of the progress of the InvestEU Programme towards the

achievement of its objectives, the Commission is empowered to adopt delegated acts, in

accordance with Article 34, to amend Annex III with regard to the indicators where

considered necessary as well as to supplement this Regulation with provisions on the

establishment of a monitoring and evaluation framework.

Article 29

Evaluation

1. Evaluations of the InvestEU Programme shall be carried out so that they feed into the

decision-making process in a timely manner.

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2. By 30 September 2024, the Commission shall submit to the European Parliament and to

the Council an independent interim evaluation report on the InvestEU Programme, in

particular on the use of the EU guarantee, on the fulfilment of the EIB Group's obligations

under points (b) and (c) of the first subparagraph of Article 11(1), on the allocation of the

EU guarantee provided for in Article 13(4) and (5), on the implementation of the InvestEU

Advisory Hub, on the budgetary allocation provided for in point (d)(i) of the first

subparagraph of Article 11(1), and on Article 8(8). The evaluation shall in particular

demonstrate how the inclusion of the implementing partners and advisory partners in the

implementation of the InvestEU Programme has contributed to the reaching of InvestEU

Programme targets as well as EU policy goals, especially with regard to added value and

the geographical and sectoral balance of the supported financing and investment

operations. The evaluation shall also assess the application of sustainability proofing

pursuant to Article 8(5) and the focus on SMEs reached under the SME policy window

referred to in point (c) of Article 8(1).

3. At the end of the implementation of the InvestEU Programme, but no later than 31

December 2031, the Commission shall submit to the European Parliament and to the

Council an independent final evaluation report on the InvestEU Programme, in particular

on the use of the EU guarantee.

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4. The Commission shall communicate the conclusions of the evaluations, accompanied by

its observations, to the European Parliament, to the Council, to the European Economic

and Social Committee and to the Committee of the Regions.

5. The implementing partners and advisory partners shall contribute to and provide the

Commission with the information necessary to perform the evaluations referred to in

paragraphs 2 and 3.

6. In accordance with Article 211(1) of the Financial Regulation, every three years the

Commission shall include in the annual report referred to in Article 250 of the Financial

Regulation a review of the adequacy of the provisioning rate laid down in Article 4(1) of

this Regulation with respect to the actual risk profile of the financing and investment

operations covered by the EU guarantee. The Commission is empowered to adopt

delegated acts in accordance with Article 34 of this Regulation in order to amend this

Regulation by adjusting the provisioning rate laid down in Article 4(1) of this Regulation

by up to 15 % on the basis of that review.

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Article 30

Audits

Audits of the use of the Union funding carried out by persons or entities, including by persons or

entities other than those mandated by Union institutions or bodies, shall form the basis of the

overall assurance pursuant to Article 127 of the Financial Regulation.

Article 31

Protection of the financial interests of the Union

Where a third country participates in the InvestEU Programme by means of a decision adopted

pursuant to an international agreement or on the basis of any other legal instrument, the third

country shall grant the necessary rights and access required for the authorising officer responsible,

OLAF and the Court of Auditors to comprehensively exercise their respective competences. In the

case of OLAF, such rights shall include the right to carry out investigations, including on-the-spot

checks and inspections, as provided for in Regulation (EU, Euratom) No 883/2013.

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CHAPTER IX

TRANSPARENCY AND VISIBILITY

Article 32

Information, communication and publicity

1. Implementing partners and advisory partners shall acknowledge the origin and ensure the

visibility of the Union funding, in particular when promoting the actions and their results,

by providing coherent, effective and proportionate targeted information to multiple

audiences, including the media and the public.

The application of the requirements under the first subparagraph to projects in defence and

space sectors and in _**cybersecurity**_ shall be subject to respect for any confidentiality or

secrecy obligations.

2. The implementing partners and advisory partners shall inform the final recipients,

including SMEs, of the existence of support under the InvestEU Programme, or oblige

other financial intermediaries to inform such final recipients of that support, by making

that information clearly visible in the relevant agreement providing support under the

InvestEU Programme, particularly in the case of SMEs, in order to increase public

awareness and improve visibility.

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3. The Commission shall implement information and communication actions relating to the

InvestEU Programme, to actions taken pursuant to the InvestEU Programme and to the

results obtained. Financial resources allocated to the InvestEU Programme shall also

contribute to the corporate communication of the political priorities of the Union, insofar

as those priorities are related to the objectives referred to in Article 3.

_**CHAPTER X**_

_**PARTICIPATION OF THE EUROPEAN UNION IN THE CAPITAL INCREASE OF THE**_

_**EUROPEAN INVESTMENT FUND**_

Article 33

Participation in a capital increase of the EIF

_**In addition to its shareholding in**_ the _**EIF at 3 December 2020,**_ _**the Union shall subscribe for up**_

_**to 853 shares in**_ _**the**_ _**EIF,**_ _**each of a nominal value of EUR 1 000 000,**_ so that its relative share in

the capital remains at _**a**_ level _**equivalent to that on 3 December 2020**_ . The subscription of the shares

and the payment of up to EUR _**375 000 000**_ _**for**_ the paid-in part of the shares _**and for the share**_

_**premium**_ shall be carried out in accordance with ▌ terms and conditions that shall be approved by

the General Meeting of the _**EIF and before 31 December 2021**_ . _**The resulting subscribed but not**_

_**paid-in part of the shares acquired under this Article shall not exceed EUR 682 400 000.**_

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_**CHAPTER XI**_

_**TRANSITIONAL AND FINAL PROVISIONS**_

Article 34

Exercise of the delegation

1. The power to adopt delegated acts is conferred on the Commission subject to the

conditions laid down in this Article. Where delegated acts concern activities to be carried

out by or involving the EIB Group and other implementing partners, the Commission shall

consult with the EIB Group and other potential implementing partners before preparing

those delegated acts.

2. The power to adopt delegated acts referred to in Articles 8(9), 22(4), 28(5) and 29(6) shall

be conferred on the Commission until 31 December 2028. The Commission shall draw up

a report in respect of the delegation of power not later than nine months before that date.

The delegation of power shall be tacitly extended for periods of an identical duration,

unless the European Parliament or the Council opposes such extension not later than three

months before the end of each period.

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3. The delegation of power referred to in Articles 8(9), 22(4), 28(5) and 29(6) may be

revoked at any time by the European Parliament or by the Council. A decision to revoke

shall put an end to the delegation of the power specified in that decision. It shall take effect

the day following the publication of the decision in the _Official Journal of the European_

_Union_ or at a later date specified therein. It shall not affect the validity of any delegated

acts already in force.

4. Before adopting a delegated act, the Commission shall consult experts designated by each

Member State in accordance with the principles laid down in the Interinstitutional

Agreement of 13 April 2016 on Better Law-Making.

5. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the

European Parliament and to the Council.

6. A delegated act adopted pursuant to Articles 8(9), 22(4), 28(5) and 29(6) shall enter into

force only if no objection has been expressed either by the European Parliament or the

Council within a period of two months of notification of that act to the European

Parliament and the Council or if, before the expiry of that period, the European Parliament

and the Council have both informed the Commission that they will not object. That period

shall be extended by two months at the initiative of the European Parliament or of the

Council.

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Article 35

Transitional provisions

1. By _**way of**_ derogation _**from**_ the first and _**fourth**_ subparagraphs of Article 209(3) of the

Financial Regulation, _**any**_ revenues, repayments and recoveries from financial instruments

established by programmes referred to in Annex IV to this Regulation may be used for the

provisioning of the EU guarantee under this Regulation, taking into account the relevant

provisions concerning the budget laid down in the Public Sector Loan Facility Regulation

for 2021-2027.

2. By _**way of**_ derogation _**from**_ point (a) of Article 213(4) of the Financial Regulation, any

surplus of provisions for the EU guarantee established by Regulation (EU) 2015/1017 may

be used for the provisioning of the EU guarantee under this Regulation, taking into account

the relevant provisions concerning the budget laid down in the Public Sector Loan Facility

Regulation for 2021-2027.

3. The amount of EUR _**6 074 000 000**_ in current prices referred to in point (c) of Article 2(2)

of Regulation (EU) 2020/2094 shall be used:

(a) for the provisioning of the EU guarantee under this Regulation with an amount of

EUR _**5 930 000 000**_ in current prices, in addition to the resources mentioned in the

first subparagraph of Article 211(4) of the Financial Regulation;

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(b) for the implementation of the measures provided in Chapters _**VI**_ and _**VII**_ of this

Regulation and the measures referred to in the second sentence of Article 1(3) of

Regulation (EU) 2020/2094, subject to Article 3(4) and (8) of that Regulation, with

an amount of EUR _**142 500 000**_ in current prices.

That amount shall constitute an external assigned revenue in accordance with Article 21(5)

of the Financial Regulation.

_**4.**_ _**By way of derogation from the second subparagraph of Article 16(1) of this Regulation,**_

_**financing and investment operations signed or entered into by an implementing partner**_

_**during the period from 1 January 2021 until the signature of their respective guarantee**_

_**agreements may be covered by the EU guarantee provided that those operations are**_

_**indicated in the guarantee agreement, pass the policy check referred to in Article 23(1)**_

_**of this Regulation or receive a favourable opinion within the framework of the**_

_**procedure provided for in Article 19 of the EIB Statute and are in both cases approved**_

_**by the Investment Committee in accordance with Article 24 of this Regulation.**_

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_**Article 36**_

_**Amendment of Regulation (EU) 2015/1017**_

_**The following article is inserted in Regulation (EU) 2015/1017:**_

_**“Article 11a**_

_**Combination of EFSI portfolio with other portfolios**_

_**By way of derogation from Article 11(6) of this Regulation and the second subparagraph of**_

_**Article 10(2) of this Regulation, the EU guarantee may cover losses referred to in Article 11(6) of**_

_**this Regulation in relation to the entire portfolio of financing and investment operations**_

_**supported by the financial products referred to in Article 7(1) of Regulation (EU) 2021/... of the**_

_**European Parliament and of the Council**_ _**[*]**_ _[+]_ _**.**_

_**_____________**_

_*****_ _**Regulation (EU) 2021/.... of the European Parliament and of the Council of ...**_

_**establishing the InvestEU Programme and amending**_ _**Regulation (EU) 2015/1017 (OJ L …).”.**_

**+** OJ: Please insert in the text the number of this Regulation and insert the number, date and
OJ reference of this Regulation in the footnote.

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Article 37

Entry into force

This Regulation shall enter into force on the day of its publication in the _Official Journal of the_

_European Union_ .

It shall apply from 1 January 2021.

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

Done at ...,

_For the European Parliament_ _For the Council_

_The President_ _The President_

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_**ANNEX I**_

_**Amounts of EU guarantee per specific objective**_

The indicative distribution referred to in the _**fourth**_ subparagraph of Article 4(2) towards financial

and investment operations shall be as follows:

(a) up to EUR _**9 887 682 891**_ for objectives referred to in point (a) of Article 3(2);

(b) up to EUR _**6 575 653 460**_ for objectives referred to in point (b) of Article 3(2);

(c) up to EUR _**6 906 732 440**_ for objectives referred to in point (c) of Article 3(2);

(d) up to EUR _**2 782 241 282**_ for objectives referred to in point (d) of Article 3(2) _**.**_

▌

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_**ANNEX II**_

_**Areas eligible for financing and investment operations**_

The financing and investment operations _**may include**_ strategic ▌investment _**to support final**_

_**recipients whose activities are of strategic importance to the Union, in particular in view of the**_

_**green and digital transitions, of enhanced resilience and of strengthening stategic value chains.**_

They may ▌ include important projects of common European interest. _**The financing and**_

_**investment operations may fall under one or more of the following areas:**_

(1) the development of the energy sector in accordance with the Energy Union priorities,

including security of energy supply, clean energy transition and the commitments taken under

the 2030 Agenda for Sustainable Development and the Paris Agreement, in particular

through:

(a) the expansion of the generation, supply or use of clean and sustainable renewable and

safe and sustainable other zero and low-emission energy sources and solutions;

(b) energy efficiency and energy savings (with a focus on reducing demand through

demand side management and the refurbishment of buildings);

(c) the development, smartening and modernisation of sustainable energy infrastructure, in

particular storage technologies, electricity interconnections between Member States and

smart grids, both at the transmission and distribution level;

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(d) the development of innovative zero- and low-emission heat supply systems and the

combined production of electricity and heat;

(e) the production and supply of sustainable synthetic fuels from renewable/carbon-neutral

sources and other safe and sustainable zero- and low-emission sources, biofuels,

biomass and alternative fuels, including fuels for all modes of transport, in accordance

with the objectives of Directive (EU) 2018/2001; ▌

(f) infrastructure for carbon capture, and storage in industrial processes, bioenergy plants

and manufacturing facilities towards the energy transition _**; and**_

_**(g)**_ _**critical infrastructure, whether physical or virtual, including infrastructure elements**_

_**identified as critical as well as land and real estate crucial for the use of such critical**_

_**infrastructure and the provision of goods and services instrumental to the operation**_

_**and maintenance of the critical infrastructure.**_

(2) the development of sustainable and safe transport infrastructures and mobility solutions,

equipment and innovative technologies in accordance with Union transport priorities and the

commitments taken under the Paris Agreement, in particular through:

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(a) projects that support the development of the trans-European transport network (TEN-T)

infrastructure, including infrastructure maintenance and safety, the urban nodes of TEN

T, maritime and inland ports, airports, multimodal terminals and the connection of such

multimodal terminals to the TEN-T networks, and the telematic applications referred to

in Regulation (EU) No 1315/2013 of the European Parliament and of the Council [32] ;

(b) TEN-T infrastructure projects that make provision for the use of at least two different

modes of transport, in particular multimodal freight terminals and passenger transport

hubs;

(c) smart and sustainable urban mobility projects that target low-emission urban transport

modes, including inland waterway solutions and innovative mobility solutions, non

discriminatory accessibility, reduced air pollution and noise, energy consumption,

networks of smart cities, maintenance, and increasing safety levels and decreasing the

frequency of accidents, including for cyclists and pedestrians);

**32** Regulation (EU) No 1315/2013 of the European Parliament and of the Council of 11
December 2013 on Union guidelines for the development of the trans-European transport
network and repealing Decision No 661/2010/EU (OJ L 348, 20.12.2013, p. 1).

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(d) supporting the renewal and retrofitting of transport mobile assets with the view of

deploying low and zero-emission mobility solutions, including through the use of

alternative fuels in vehicles of all transport modes;

(e) railway infrastructure, other rail projects, inland waterway infrastructure, mass transit

projects and maritime ports and motorways of the sea;

(f) alternative fuel infrastructure for all modes of transport, including electric charging

infrastructure;

(g) other smart and sustainable mobility projects that target:

(i) road safety;

(ii) accessibility;

(iii) emission reduction; or

(iv) the development and deployment of new transport technologies and services such

as services that relate to connected and autonomous modes of transport or

integrated ticketing; ▌

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(h) projects to maintain or upgrade existing transport infrastructure, including motorways

on the TEN-T where necessary to upgrade, maintain or improve road safety, to develop

Intelligent Transport Systems (ITS) services or to guarantee infrastructure integrity and

standards, to develop safe parking areas and facilities, recharging and refuelling stations

for alternative fuels _**; and**_

_**(i)**_ _**critical infrastructure including infrastructure elements identified as critical as well**_

_**as land and real estate crucial for the use of such critical infrastructure and the**_

_**provision of goods and services instrumental to the operation and maintenance of the**_

_**critical infrastructure**_ .

(3) environment and resources, in particular with respect to:

(a) water, including drinking water supply and sanitation, and network efficiency, leakage

reduction, infrastructure for the collection and treatment of waste water, coastal

infrastructure and other water-related green infrastructure;

(b) waste management infrastructure;

(c) projects and enterprises in the fields of environmental resource management and

sustainable technologies;

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(d) the enhancement and restoration of ecosystems and their services including through the

enhancement of nature and biodiversity by means of green and blue infrastructure

projects;

(e) sustainable urban, rural and coastal development;

(f) climate change actions, climate adaptation and mitigation, including natural hazard

disaster risk reduction;

(g) projects and enterprises that implement the circular economy by integrating resource

efficiency aspects in the production and product life-cycle, including the sustainable

supply of primary and secondary raw materials;

(h) the decarbonisation of energy-intensive industries and the substantial reduction of

emissions in such industries, including the demonstration of innovative low-emission

technologies and their deployment;

(i) the decarbonisation of the energy production and distribution chain by phasing out the

use of coal and oil; and

(j) projects that promote sustainable cultural heritage.

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(4) the development of digital connectivity infrastructure, _**whether physical or virtual,**_ in

particular through projects that support the deployment of very high capacity digital networks

or 5G connectivity or that improve digital connectivity and access, particularly in rural areas

and peripheral regions.

(5) research, development and innovation, in particular through:

(a) research and innovation projects that contribute to the objectives of Horizon Europe,

including research infrastructure and support to academia;

(b) corporate projects, including training and promoting the creation of clusters and

business networks;

(c) demonstration projects and programmes, as well as deployment of related

infrastructures, technologies and processes;

(d) collaborative research and innovation projects involving academia, research and

innovation organisations and industry; public-private partnerships and civil society

organisations;

(e) knowledge and technology transfer;

(f) research in the field of key enabling technologies (KETs) and their industrial

applications, including new and advanced materials; and

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(g) new effective and accessible healthcare products, including _**research, development,**_

_**innovation and manufacturing of**_ pharmaceuticals, medical devices, diagnostics and

advanced therapy medicinal products and new antimicrobials, as well as innovative

development processes that avoid using animal testing.

(6) the development, deployment and scaling-up of digital technologies and services, especially

digital technologies and services, _**including media, online service platforms and secure**_

_**digital communication,**_ that contribute to the objectives of the Digital Europe Programme, in

particular through:

(a) artificial intelligence;

(b) quantum technology;

(c) cybersecurity and network protection infrastructures;

(d) the internet of things;

(e) blockchain and other distributed ledger technologies;

(f) advanced digital skills;

(g) robotics and automatisation;

(h) photonics; ▌

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(i) other advanced digital technologies and services contributing to the digitisation of the

Union industry and the integration of digital technologies, services and skills in the

transport sector of the Union _**; and**_

_**(j)**_ _**recycling and manufacturing facilities for the production of information and**_

_**communication technologies components and devices in the Union**_ .

(7) financial support to entities employing up to 499 employees, with a particular focus on SMEs,

and small mid-cap companies, in particular through:

(a) the provision of working capital and investment;

(b) the provision of risk financing from seed to expansion stages to ensure their

technological leadership in innovative and sustainable sectors including by enhancing

their digitisation and innovation capacity, and their global competitiveness;

(c) the provision of financing for the acquisition of a business by employees or

participation in the ownership of a business by employees.

(8) cultural and creative sectors, cultural heritage, media, the audio-visual sector, journalism and

press, in particular through the development of new technologies, the use of digital

technologies and technological management of intellectual property rights.

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(9) tourism.

(10) the rehabilitation of industrial sites (including contaminated sites) and the restoration of such

sites for sustainable use.

(11) sustainable agriculture, forestry, fishery, aquaculture and other elements of the wider

sustainable bioeconomy.

(12) social investments, including those supporting the implementation of the European Pillar of

Social Rights, in particular through:

(a) microfinance, ethical, social enterprise finance and social economy;

(b) demand for and the supply of skills;

(c) education, training and related services, including for adults;

(d) social infrastructure, in particular:

(i) inclusive education and training, including early childhood education and care,

and related educational infrastructure and facilities, alternative childcare, student

housing and digital equipment, that are accessible for all;

(ii) affordable social housing [33] ;

(iii) health and long-term care, including clinics, hospitals, primary care, home

services and community-based care;

**33** Affordable social housing is to be understood as aimed at disadvantaged persons or socially
less advantaged groups, who due to solvency constraints live in severe housing deprivation or
are unable to obtain housing at market conditions.

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(e) social innovation, including innovative social solutions and schemes aimed at

promoting social impacts and outcomes in the areas referred to in points (a) to (d) and

(f) to (j);

(f) cultural activities with a social objective;

(g) measures to promote gender equality;

(h) the integration of vulnerable people, including third country nationals;

(i) innovative health solutions, including e-health, health services and new care models;

(j) the inclusion of and accessibility for persons with disabilities.

(13) the development of the defence industry in order to contribute to the Union's strategic

autonomy, in particular through support for:

(a) the Union’s defence industry supply chain, in particular through financial support to

SMEs and mid-caps;

(b) companies participating in disruptive innovation projects in the defence sector and

closely related dual-use technologies;

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(c) the defence sector supply chain when participating in collaborative defence research and

development projects, including those supported by the European Defence Fund;

(d) infrastructure for defence research and training.

(14) space, in particular in relation to the development of the space sector in line with the

objectives of the Space Strategy for Europe:

(a) to maximise the benefits for the Union society and economy;

(b) to foster the competitiveness of space systems and technologies, addressing in particular

vulnerability of supply chains;

(c) to underpin space entrepreneurship, including downstream development;

(d) to foster Union's autonomy for safe and secure access to space, including dual use

aspects.

(15) seas and oceans, through the development of projects and enterprises in the area of the blue

economy, and the Sustainable Blue Economy Finance Principles, in particular through

maritime entrepreneurship and industry, renewable marine energy and circular economy.

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_**ANNEX III**_

**Key performance** _**and monitoring**_ **indicators**

1. Volume of financing supported by the InvestEU Fund (broken down by policy window)

1.1 Volume of operations signed

1.2 Investment mobilised

1.3 Amount of private finance mobilised

1.4 Leverage and multiplier effect achieved

2. Geographical coverage of financing supported by the InvestEU Fund (broken down by policy

window, country and region at the common classification of territorial units for statistics

(NUTS) 2 level)

2.1 Number of countries (Member States and third countries) covered by operations

2.2 Number of regions covered by operations

2.3 Volume of operations per country (Member State and third country) and per region

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3. Impact of financing supported by the InvestEU Fund

3.1 Number of jobs created or supported

3.2 Investment supporting climate objectives and, where applicable, broken down by policy

window

3.3 Investment supporting digitisation

3.4 Investment supporting industrial transition

_**3.5**_ _**Investment supporting just transition**_

_**3.6**_ _**Strategic investment**_

_**–**_
_**Number and volume of operations contributing to the provision of critical**_

_**infrastructure**_

_**–**_
_**Number and volume of operations contributing to investment in cybersecurity,**_

_**space and defence**_

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4. Sustainable infrastructure

4.1 Energy: Additional renewable and other safe and sustainable zero and low-emission

energy generation capacity installed (in megawatts (MW))

4.2 Energy: Number of households, number of public and commercial premises with

improved energy consumption classification

4.3 Energy: Estimated energy savings generated by the projects (in kilowatt-hours (kWh))

4.4 Energy: Annual green-house gas emissions reduced/avoided in tonnes of CO 2 equivalent

4.5 Energy: Volume of investment in the development, smartening and modernisation of

sustainable energy infrastructure

4.6 Digital: Additional households, enterprises or public buildings with broadband access of

at least 100 Mbps upgradable to gigabit speed, or number of WIFI-hotspots created

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4.7 Transport: Investment mobilised, in particular in TEN-T

–
Number of cross-border and missing links projects (including projects relating to

urban nodes, regional cross-border rail connections, multimodal platforms,

maritime ports, inland ports, connections to airports and rail-road terminals of the

TEN-T core and comprehensive network)

–
Number of projects contributing to the digitisation of transport, in particular

through the deployment of European Rail Traffic Management System (ERTMS),

River Information System (RIS), Intelligent Transportation System (ITS), vessel

traffic monitoring and information system (VTMIS)/e-maritime services and

Single European Sky ATM Research (SESAR)

–
Number of alternative fuel supply points built or upgraded

–
Number of projects contributing to the safety of transport

4.8 Environment: Investment contributing to the implementation of plans and programmes

required by the Union environmental acquis relating to air quality, water, waste and

nature

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5. Research, innovation and digitisation

5.1 Contribution to the objective of 3 % of the Union's gross domestic product (GDP)

invested in research, development and innovation

5.2 Number of enterprises supported by size carrying out research and innovation projects

6. SMEs

6.1 Number of enterprises supported by size (micro, small, medium-sized and small mid

cap companies)

6.2 Number of enterprises supported by stage (early, growth/expansion)

6.3 Number of enterprises supported by Member State and region at NUTS 2 level

6.4 Number of enterprises supported by sectors by statistical classification of economic

activities in the European Union (NACE) code

6.5 Percentage of investment volume under the SME policy window directed towards

SMEs

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7. Social investment and skills

7.1 Social infrastructure: Capacity and access to supported social infrastructure by sector:

housing, education, health, other

7.2 Microfinance and social enterprise finance: Number of microfinance recipients and

social enterprises supported

7.3 Skills: Number of individuals acquiring new skills or having their skills validated and

certified: formal, education and training qualification

8. _**InvestEU Advisory Hub**_

_**8.1**_ _**Number of engagements of the InvestEU Advisory Hub to provide advisory support,**_

_**by sector and Member State**_

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**ANNEX IV**

**–**
**The InvestEU Programme** **predecessor instruments**

A. Equity instruments:

-  European Technology Facility (ETF98): Council Decision 98/347/EC of 19 May 1998 on

measures of financial assistance for innovative and job-creating small and medium-sized

enterprises (SMEs) - the growth and employment initiative (OJ L 155, 29.5.1998, p. 43)

-  Technology Transfer Pilot project (TTP): Commission decision adopting a complementary

financing decision concerning the financing of actions of the activity “Internal market of

goods and sectoral policies” of the Directorate-General Enterprises & Industry for 2007 and

adopting the framework decision concerning the financing of the preparatory action “The EU

assuming its role in a globalised world” and of four pilot projects “Erasmus young

entrepreneurs”, “Measures to promote cooperation and partnerships between micro and

SMEs”, “Technological Transfer” and “European Destinations of excellence” of the

Directorate-General Enterprises & Industry for 2007

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-  European Technology Facility (ETF01): Council Decision 2000/819/EC of 20 December

2000 on a multiannual programme for enterprise and entrepreneurship, and in particular for

small and medium-sized enterprises (SMEs) (2001-2005) (OJ L 333, 29.12.2000, p. 84)

-  Competitiveness and Innovation Programme High Growth and Innovative SME Facility (CIP

GIF): Decision No 1639/2006/EC of the European Parliament and of the Council of 24

October 2006 establishing a Competitiveness and Innovation Framework Programme (2007 to

2013) (OJ L 310, 9.11.2006, p. 15)

-  Connecting Europe Facility (CEF): Regulation (EU) No 1316/2013 of the European

Parliament and of the Council of 11 December 2013 establishing the Connecting Europe

Facility, amending Regulation (EU) No 913/2010 and repealing Regulations (EC) No

680/2007 and (EC) No 67/2010 (OJ L 348, 20.12.2013, p. 129) as amended by Regulation

(EU) 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the

European Fund for Strategic Investments, the European Investment Advisory Hub and the

European Investment Project Portal and amending Regulations (EU) No 1291/2013 and (EU)

No 1316/2013 — the European Fund for Strategic Investments (OJ L 169, 1.7.2015, p. 1)

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-  COSME Equity Facility for Growth (COSME EFG): Regulation (EU) No 1287/2013 of the

European Parliament and of the Council of 11 December 2013 establishing a Programme for

the Competitiveness of Enterprises and small and medium-sized enterprises (COSME) (2014 

2020) and repealing Decision No 1639/2006/EC (OJ L 347, 20.12.2013, p. 33)

-  InnovFin Equity:

–
Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11

December 2013 establishing Horizon 2020 - the Framework Programme for Research

and Innovation (2014-2020) and repealing Decision No 1982/2006/EC (OJ L 347,

20.12.2013, p. 104);

–
Regulation (EU) No 1290/2013 of the European Parliament and of the Council of 11

December 2013 laying down the rules for participation and dissemination in “Horizon

2020 - the Framework Programme for Research and Innovation (2014-2020)” and

repealing Regulation (EC) No 1906/2006 (OJ L 347, 20.12.2013, p. 81);

–
Council Decision 2013/743/EU of 3 December 2013 establishing the specific

programme implementing Horizon 2020 - the Framework Programme for Research and

Innovation (2014-2020) and repealing Decisions 2006/971/EC, 2006/972/EC,

2006/973/EC, 2006/974/EC and 2006/975/EC (OJ L 347, 20.12.2013, p. 965)

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-  EaSI Capacity Building Investments Window: Regulation (EU) No 1296/2013 of the

European Parliament and of the Council of 11 December 2013 on a European Union

Programme for Employment and Social Innovation (“EaSI”) and amending Decision No

283/2010/EU establishing a European Progress Microfinance Facility for employment and

social inclusion (OJ L 347, 20.12.2013, p. 238)

B. Guarantee instruments:

-  SME Guarantee Facility '98 (SMEG98): Council Decision 98/347/EC of 19 May 1998 on

measures of financial assistance for innovative and job-creating small and medium-sized

enterprises (SMEs) - the growth and employment initiative (OJ L 155, 29.5.1998, p. 43).

-  SME Guarantee Facility '01 (SMEG01): Council Decision 2000/819/EC of 20 December

2000 on a multiannual programme for enterprise and entrepreneurship, and in particular for

small and medium-sized enterprises (SMEs) (2001-2005) (OJ L 333, 29.12.2000, p. 84)

-  Competitiveness and Innovation Programme SME Guarantee Facility '07 (CIP SMEG07 **)** :

Decision No 1639/2006/EC of the European Parliament and of the Council of 24 October

2006 establishing a Competitiveness and Innovation Framework Programme (2007 to 2013)

(OJ L 310, 9.11.2006, p. 15)

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-  European Progress Microfinance Facility – Guarantee (EPMF-G): Decision No 283/2010/EU

of the European Parliament and of the Council of 25 March 2010 establishing a European

Progress Microfinance Facility for employment and social inclusion (OJ L 87, 7.4.2010, p. 1)

-  Risk Sharing Finance Facility Risk-Sharing Instrument (RSI) **:**

–
Decision No 1982/2006/EC of the European Parliament and of the Council of 18

December 2006 concerning the Seventh Framework Programme of the European

Community for research, technological development and demonstration activities

(2007-2013) Statements by the Commission (OJ L 412, 30.12.2006, p. 1)

–
Council Decision 2006/971/EC of 19 December 2006 concerning the Specific

Programme Cooperation implementing the Seventh Framework Programme of the

European Community for research, technological development and demonstration

activities (2007 to 2013) (OJ L 400, 30.12.2006, p. 86)

–
Council Decision 2006/974/EC of 19 December 2006 on the Specific Programme:

Capacities implementing the Seventh Framework Programme of the European

Community for research, technological development and demonstration activities (2007

to 2013) (OJ L 400, 30.12.2006, p. 299)

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-  EaSI Guarantee Instrument: Regulation (EU) No 1296/2013 of the European Parliament and

of the Council of 11 December 2013 on a European Union Programme for Employment and

Social Innovation (“EaSI”) and amending Decision No 283/2010/EU establishing a European

Progress Microfinance Facility for employment and social inclusion (OJ L 347, 20.12.2013, p.

238)

-  COSME Loan Guarantee Facility (COSME LGF) **:** Regulation (EU) No 1287/2013 of the

European Parliament and of the Council of 11 December 2013 establishing a Programme for

the Competitiveness of Enterprises and small and medium-sized enterprises (COSME) (2014 

2020) and repealing Decision No 1639/2006/EC (OJ L 347, 20.12.2013, p. 33)

-  InnovFin Debt:

–
Regulation (EU) No 1290/2013 of the European Parliament and of the Council of 11

December 2013 laying down the rules for participation and dissemination in “Horizon

2020 - the Framework Programme for Research and Innovation (2014-2020)” and

repealing Regulation (EC) No 1906/2006 (OJ L 347, 20.12.2013, p. 81)

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–
Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11

December 2013 establishing Horizon 2020 - the Framework Programme for Research

and Innovation (2014-2020) and repealing Decision No 1982/2006/EC (OJ L 347,

20.12.2013, p. 104)

–
Council Decision 2013/743/EU of 3 December 2013 establishing the specific

programme implementing Horizon 2020 - the Framework Programme for Research and

Innovation (2014-2020) and repealing Decisions 2006/971/EC, 2006/972/EC,

2006/973/EC, 2006/974/EC and 2006/975/EC (OJ L 347, 20.12.2013, p. 965)

-  Cultural and Creative Sectors Guarantee Facility (CCS GF): Regulation (EU) No 1295/2013

of the European Parliament and of the Council of 11 December 2013 establishing the Creative

Europe Programme (2014 to 2020) and repealing Decisions No 1718/2006/EC, No

1855/2006/EC and No 1041/2009/EC (OJ L 347, 20.12.2013, p. 221)

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-  Student Loan Guarantee Facility (SLGF): Regulation (EU) No 1288/2013 of the European

Parliament and of the Council of 11 December 2013 establishing 'Erasmus+': the Union

programme for education, training, youth and sport and repealing Decisions No

1719/2006/EC, No 1720/2006/EC and No 1298/2008/EC (OJ L 347, 20.12.2013, p. 50)

-  Private Finance for Energy Efficiency (PF4EE): Regulation (EU) No 1293/2013 of the

European Parliament and of the Council of 11 December 2013 on the establishment of a

Programme for the Environment and Climate Action (LIFE) and repealing Regulation (EC)

No 614/2007 (OJ L 347, 20.12.2013, p. 185)

C. Risk-sharing instruments:

-  Risk Sharing Finance Facility (RSFF): Decision No 1982/2006/EC of the European

Parliament and of the Council of 18 December 2006 concerning the Seventh Framework

Programme of the European Community for research, technological development and

demonstration activities (2007-2013) Statements by the Commission (OJ L 412, 30.12.2006,

p. 1)

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-  InnovFin:

–
Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11

December 2013 establishing Horizon 2020 - the Framework Programme for Research

and Innovation (2014-2020) and repealing Decision No 1982/2006/EC (OJ L 347,

20.12.2013, p. 104)

–
Regulation (EU) No 1290/2013 of the European Parliament and of the Council of 11

December 2013 laying down the rules for participation and dissemination in “Horizon

2020 - the Framework Programme for Research and Innovation (2014-2020)” and

repealing Regulation (EC) No 1906/2006 (OJ L 347, 20.12.2013, p. 81)

-  Connecting Europe Facility Debt Instrument (CEF DI): Regulation (EU) No 1316/2013 of the

European Parliament and of the Council of 11 December 2013 establishing the Connecting

Europe Facility, amending Regulation (EU) No 913/2010 and repealing Regulations (EC) No

680/2007 and (EC) No 67/2010 **(** OJ L 348, 20.12.2013, p. 129)

-  Natural Capital Financing Facility (NCFF): Regulation (EU) No 1293/2013 of the European

Parliament and of the Council of 11 December 2013 on the establishment of a Programme for

the Environment and Climate Action (LIFE) and repealing Regulation (EC) No 614/2007 (OJ

L 347, 20.12.2013, p. 185)

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D. Dedicated investment vehicles:

-  European Progress Microfinance Facility – Fonds commun de placement – fonds

d'investissement spécialisé (EPMF FCP-FIS): Decision No 283/2010/EU of the European

Parliament and of the Council of 25 March 2010 establishing a European Progress

Microfinance Facility for employment and social inclusion (OJ L 87, 7.4.2010, p. 1)

-  Marguerite:

–
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 (OJ L 162, 22.6.2007, p. 1)

–
Commission Decision C(2010)0941 of 25 February 2010 on European Union

participation in the 2020 European Fund for Energy, Climate Change and Infrastructure

(the Marguerite Fund)

-  European Energy Efficiency Fund (EEEF): Regulation (EU) No 1233/2010 of the European

Parliament and of the Council of 15 December 2010 amending Regulation (EC) No 663/2009

establishing a programme to aid economic recovery by granting Community financial

assistance to projects in the field of energy (OJ L 346, 30.12.2010, p. 5)

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**ANNEX V**

**Market failures, suboptimal investment situations, additionality and excluded activities**

A. Market failures, suboptimal investment situations and additionality

In accordance with Article 209 of the Financial Regulation, the EU guarantee shall address market

failures or suboptimal investment situations (point (a) of Article 209(2) of the Financial Regulation)

and shall achieve additionality by preventing the replacement of potential support and investment

from other public or private sources (point (b) of Article 209(2) of the Financial Regulation).

In order to comply with points (a) and (b) of Article 209(2) of the Financial Regulation, the

financing and investment operations benefitting from the EU guarantee shall fulfil the following

requirements laid down in points 1 and 2:

1. Market failures and suboptimal investment situations

To address market failures or suboptimal investment situations as referred to in point (a) of Article

209(2) of the Financial Regulation, the investments targeted by the financing and investment

operations shall include one of following features:

(a) Have the nature of a public good for which the operator or company cannot capture sufficient

financial benefits (such as education and skills, healthcare and accessibility, security and

defence, and infrastructure available at no or negligible cost).

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(b) Externalities which the operator or company generally fails to internalise, such as R&D

investment, energy efficiency, climate or environmental protection.

(c) Information asymmetries, in particular in the case of SMEs and small mid-cap companies,

including higher risk levels related to early stage firms, firms with mainly intangible assets or

insufficient collateral, or firms focusing on higher risk activities.

(d) Cross-border infrastructure projects and related services or funds that invest on a cross-border

basis to address the fragmentation of the internal market and to enhance coordination within

the internal market.

(e) Exposure to higher levels of risks in certain sectors, countries or regions beyond levels that

private financial actors are able or willing to accept, including where the investment would

not have been undertaken or would not have been undertaken to the same extent because of its

novelty or because of risks associated with innovation or unproven technology.

▌

(g) New or complex market failures or suboptimal investment situations in accordance with point

(a)(iii) of Article 9(1) of this Regulation.

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2. Additionality

Financing and investment operations shall fulfil both aspects of additionality as referred to in point

(b) of Article 209(2) of the Financial Regulation. That means that the operations would not have

been carried out or would not have been carried out to the same extent by other public or private

sources without support from the InvestEU Fund. For the purposes of this Regulation, those

operations shall be understood as financing and investment operations having to meet the following

two criteria:

(1) to be considered additional to the private sources referred to in point (b) of Article 209(2) of

the Financial Regulation, the InvestEU Fund shall support the financing and investment

operations of the implementing partners by targeting investments which, due to their

characteristics (public good nature, externalities, information asymmetries, socio-economic

cohesion considerations or other), are unable to generate sufficient market-level financial

returns or are perceived to be too risky (compared to the risk levels that the relevant private

entities are willing to accept). Because of those characteristics, such financing and investment

operations cannot access market financing at reasonable conditions in terms of pricing,

collateral requirements, the type of finance, the tenor of financing provided or other

conditions, and would not be undertaken in the Union at all or to the same extent without

public support;

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(2) to be considered additional to existing support from other public sources referred to in point

(b) of Article 209(2) of the Financial Regulation the InvestEU Fund shall only support

financing and investment operations for which the following conditions apply:

(a) the financing and investment operations would not have been carried out or would not

have been carried out to the same extent by the implementing partner without support

from the InvestEU Fund; and

(b) the financing and investment operations would not have been carried out or would not

have been carried out to the same extent in the Union under other existing public

instruments, such as shared management financial instruments that operate at regional

or national level, although the complementary use of InvestEU Fund and other public

sources has to be possible, in particular where Union added value can be achieved and

where the use of public sources to achieve policy objectives in an efficient manner can

be optimised.

▌

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To demonstrate that the financing and investment operations benefitting from the EU guarantee are

additional to the existing market and to existing other public support, the implementing partners

shall provide information that demonstrates the presence of at least one of the following features:

(a) support through subordinated positions in relation to other public or private lenders or within

the funding structure;

(b) support through equity and quasi-equity or through debt with long tenors, pricing, collateral

requirements or other conditions not sufficiently available on the market or from other public

sources;

(c) support to operations that carry a higher risk profile than the risk generally accepted by the

implementing partner's own standard activities or support to implementing partners in

exceeding own capacity to support such operations;

(d) participation in risk-sharing mechanisms targeting policy areas that exposes the implementing

partner to higher risk levels compared to the levels generally accepted by the implementing

partner or that private financial actors are able or willing to accept;

(e) support that catalyses or crowds in additional private or public financing and is

complementary to other private and commercial sources, in particular from traditionally risk

averse investor classes or institutional investors, as a result of the signalling effect of the

support from the InvestEU Fund;

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(f) support through financial products not available or not offered to a sufficient level in the

targeted countries or regions due to missing, underdeveloped or incomplete markets.

For intermediated financing and investment operations, in particular for SME support, additionality

shall be verified at the level of the intermediary rather than at the level of the final recipient.

Additionality shall be deemed to exist when InvestEU Fund supports a financial intermediary in

setting up a new portfolio with a higher level of risk or increasing the volume of activities that are

already highly risky as compared with the risk levels that private and public financial actors are

currently able or willing to accept in the targeted countries or regions.

The EU guarantee shall not be granted for supporting refinancing operations (such as replacing

existing loan agreements or other forms of financial support for projects which have already

partially or fully materialised), except in specific exceptional and well justified circumstances in

which it is demonstrated that the operation under the EU guarantee will enable a new investment in

an eligible area for financing and investment operations under Annex II of an amount, additional to

customary volume of activity by the implementing partner or financial intermediary, at least

equivalent to the amount of the operation that fulfils the eligibility criteria set out in this Regulation.

Such refinancing operations shall respect the requirements set out in Section A of this Annex

regarding market failure, suboptimal investment situations and additionality.

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B. Excluded activities

The InvestEU Fund shall not support:

(1) activities which limit individual rights and freedoms or that violate human rights

(2) in the area of defence activities, the use, development, or production of products and

technologies that are prohibited by applicable international law

(3) tobacco-related products and activities (production, distribution, processing and trade)

(4) activities excluded from financing pursuant to the relevant provisions of the Horizon Europe

Regulation: research on human cloning for reproductive purposes; activities intended to

modify the genetic heritage of human beings which could make such changes heritable; and

activities to create human embryos solely for the purpose of research or for the purpose of

stem cell procurement, including by means of somatic cell nuclear transfer

(5) gambling (production-, construction-, distribution-, processing-, trade- or software-related

activities)

(6) sex trade and related infrastructure, services and media

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(7) activities involving live animals for experimental and scientific purposes insofar as

compliance with the European Convention for the Protection of Vertebrate Animals used for

Experimental and other Scientific Purposes [34] cannot be guaranteed

(8) real estate development activity, such as an activity with a sole purpose of renovating and re

leasing or re-selling existing buildings as well as building new projects; however, activities in

the real estate sector that are related to the specific objectives of the InvestEU Programme as

specified in Article 3(2) and to the areas eligible for financing and investment operations

under Annex II, such as investments in energy efficiency projects or social housing, shall be

eligible

(9) financial activities such as purchasing or trading in financial instruments. In particular,

interventions targeting buy-out intended for asset stripping or replacement capital intended for

asset stripping shall be excluded

(10) activities forbidden by applicable national legislation

(11) the decommissioning, operation, adaptation or construction of nuclear power stations

(12) investments related to mining or to the extraction, processing, distribution, storage or

combustion of solid fossil fuels and oil, as well as investments related to the extraction of gas.

This exclusion does not apply to:

**34** OJ L 222, 24.8.1999, p. 31.

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(a) projects where there is no viable alternative technology;

(b) projects related to pollution prevention and control;

(c) projects equipped with carbon capture and storage or carbon capture and utilisation

installations; industrial or research projects that lead to substantial reductions of

greenhouse gas emissions as compared with the applicable EU Emission Trading

System benchmarks

(13) investments in facilities for the disposal of waste in landfill. This exclusion does not apply to

investments in:

(a) on-site landfill facilities that are an ancillary element of an industrial or mining

investment project and where it has been demonstrated that landfilling is the only viable

option to treat the industrial or mining waste produced by the activity concerned itself;

(b) existing landfill facilities to ensure the utilisation of landfill gas and to promote landfill

mining and the reprocessing of mining waste

(14) investments in mechanical biological treatment (MBT) plants. This exclusion does not apply

to investments to retrofit existing MBT plants for waste-to-energy purposes or recycling

operations of separated waste such as composting and anaerobic digestion

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(15) investments in incinerators for the treatment of waste. This exclusion does not apply to

investments in:

(a) plants exclusively dedicated to treating non-recyclable hazardous waste;

(b) existing plants, where the investment is for the purpose of increasing energy efficiency,

capturing exhaust gases for storage or use or recovering materials from incineration

ashes, provided such investments do not result in an increase of the plants' waste

processing capacity.

The implementing partners shall remain responsible for ensuring compliance of financing and

investment operations with the exclusion criteria set out in this Annex at signature of the relevant

agreement, for monitoring such compliance during the implementation of the project and for

undertaking appropriate remedial actions where relevant.

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