Source: EURLEX
Language: en
Format: md

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

**Interinstitutional File:**

**2020/0108(COD)**

**INFORMATION NOTE**

**Brussels, 26 November 2020**
**(OR. en)**

**12892/1/20**
**REV 1**

**CODEC 1143** **EDUC 408**
**ECOFIN 1069** **EF 297**
**CADREFIN 374** **TELECOM 218**
**COMPET 570** **IA 89**
**RECH 455** **FSTR 176**
**ENER 440** **CULT 70**
**TRANS 530** **AUDIO 47**
**ENV 724** **PE 82**

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 proceedings

(Brussels, 11 to 13 November 2020)

**I.** **INTRODUCTION**

The co-rapporteurs, José Manuel FERNANDES (EPP, PT) and Irene TINAGLI (S&D, IT),

presented a report consisting of 1 amendment (amendment 1) to the abovementioned proposal for a

Regulation on behalf of the the Committee on Budgets

In addition, the S&D Group tabled 1 amendment (amendment 2), the GUE/NGL Group tabled 6

amendments (amendment 3, 4, 5, 6, 7, 8), the ECR Group tabled 6 amendments (amendment 9, 10,

11, 12, 13, 14), and the Greens/EFA Group tabled 22 amendments (amendment 15, 16, 17, 18, 19,

20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36)

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**II.** **VOTE**

When it voted on 13 November 2020, the plenary adopted one amendment (amendment 1) to the

proposal for a Regulation. No other amendments were adopted. The amendments adopted are set

out in the annex.

At the end of the vote, the proposal was referred back to the Committee, pursuant to Rule 59(4) of

the European Parliament's Rules of Procedure, thereby not bringing the Parliament's first reading to

a close and opening the negotiations with the Council.

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**ANNEX**

**(13.11.2020)**

## **InvestEU Programme ***I**

**Amendments adopted by the European Parliament on 13 November 2020 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))** **[1]**

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

**1** The matter was referred back for interinstitutional negotiations to the committees responsible,
pursuant to Rule 59(4), fourth subparagraph (A9-0203/2020).

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**Amendment 1**

AMENDMENTS BY THE EUROPEAN PARLIAMENT **[*]**

to the Commission proposal

--------------------------------------------------------

**REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL**

**establishing the InvestEU Programme**

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 **[2]**,

Having regard to the opinion of the Committee of the Regions **[3]**,

Acting in accordance with the ordinary legislative procedure,

Whereas:

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

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

to the necessary containment measures, economic activity in the EU dropped significantly.

***** Amendments: new or amended text is highlighted in bold italics; deletions are indicated by
the symbol ▌.
**2**
OJ C […], […], p. […].
**3**
OJ C […], […], p. […].

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_**According to the Commission's Summer 2020 European Economic Forecast,**_ the

contraction in EU GDP in 2020 is expected to be around _**8,3%**_, _**deeper even than the**_

_**Commission's Spring 2020 European Economic Forecast and**_ far deeper than during the

financial crisis in 2009 _**, with the contraction in certain sectors being greater still**_ . The

outbreak of the pandemic has shown the interconnectivity of global supply chains and

exposed some vulnerabilities such as the over-reliance of strategic industries on non

diversified external supply sources _**and a lack of critical infrastructure**_ . Such

vulnerabilities need to be addressed, _**in particular for small and medium-sized**_

_**enterprises, including micro-enterprises,**_ to improve the Union’s emergency response as

well as the resilience of the entire economy, while maintaining its openness to fair

competition and fair trade in line with its rules. Investment activity is expected to have

dropped significantly. 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, small and medium-sized enterprises (SMEs) and the need to address key

societal challenges such as sustainability or population ageing. Consequently, in order to

achieve the Union's policy objectives _**, including the communications of the Commission**_

_**of 11 December 2019 on the European Green Deal and of 14 January 2020 on the**_

_**Sustainable Europe Investment Plan, of 10 March 2020 on a New Industrial Strategy for**_

_**Europe and of 10 March 2020 on an SME Strategy for a sustainable and digital Europe,**_

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

support is necessary to address market failures and sub-optimal investment situations and

to reduce the investment gap in targeted sectors.

(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

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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.

(3) In the last years, the Union has adopted ambitious strategies _**and texts**_ to complete the

Single Market and to stimulate sustainable and inclusive growth and jobs, such as '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, 'A new European

Agenda for Culture' of 22 May 2018, _**The Digital Education Action Plan 2021-**_

_**2027',**_ 'Clean Energy for all Europeans' of 30 November 2016, '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, ‘European Defence Action Plan’ of 30 November

2016, 'Launching the European Defence Fund' of 7 June 2017, 'Space Strategy for Europe'

of 26 October 2016, the Interinstitutional Proclamation on the European Pillar of Social

Rights of 13 December 2017, _**the 2050 long-term strategy ‘A Clean Planet for all’ of 28**_

_**November 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’, the ‘Data Strategy’

and the ‘Artificial Intelligence Communication’ of 19 February 2020, _**[Regulation**_

_**establishing the framework for achieving climate neutrality and**_

_**amending Regulation (EU) 2018/1999 (European Climate Law)],**_ ‘A New Industrial

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

Europe’ of 10 March 2020 _**, the EU Biodiversity Strategy for 2030 of 20 May 2020,**_

_**Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to**_

_**facilitate sustainable investment, and amending Regulation (EU) 2019/2088, the Energy**_

_**System Integration Strategy and the Hydrogen Strategy of 8 July 2020**_ . The InvestEU

Fund should exploit and reinforce synergies between those mutually reinforcing strategies

through providing support to investment and access to financing.

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

to identify national reform priorities and monitor 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

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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

notably from the European structural and investment funds, the Recovery and Resilience

Facility and the InvestEU Programme.

(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 the 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 _**(such as hybrid debt, subordinated debt**_

_**or convertible equity)**_ 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 it should focus on providing strategic, long-term

benefits in relation to key areas of Union policy which otherwise would not be funded or

would be insufficiently funded, thereby contributing to meeting policy objectives of the

Union. Support under the InvestEU Fund should cover a wide range of sectors and regions,

but should avoid excessive sectoral or geographical concentration and should facilitate ▌

projects composed of partner entities _**and projects that foster the development of**_

_**networks, clusters and digital innovation hubs**_ in ▌regions across the EU.

(6) The cultural and creative sectors are key and 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 _**and the organisation of events**_ put in place _**at the outset of**_ the Covid-19

crisis _**continue to evolve and have**_ had a significantly negative economic impact on these

sectors _**and those working in them, with potential long-term structural damage as**_

_**regards access to the Cultural and Creative Sectors Guarantee Facility established under**_

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_**Regulation (EU) No 1295/2013 of the European Parliament and of the Council**_ _**[4]**_ _**or**_

_**complex financial instruments**_ . Moreover, the intangible nature of the 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 the cultural and creative sectors. The cultural and creative, audiovisual

and media sectors are essential for our cultural diversity and _**for building democratic and**_

_**cohesive societies**_ in the digital age, and an intrinsic part of our sovereignty and autonomy,

and strategic investments in audiovisual and media content and technology will determine

the _**sectors’ competitiveness and their**_ long-term capacity to produce and distribute _**high-**_

_**quality**_ content to wide audiences across national borders _**, with respect for pluralism and**_

_**freedom of speech**_ .

(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 **[5]** ("Paris Agreement on Climate Change") as well as the

Sendai Framework for Disaster Risk Reduction 2015-2030. To achieve those objectives, as

well as those set out in the environmental policies of the Union, action pursuing

**4** _**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).**_

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

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

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

(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 _**communications**_ of the Commission of 8

March 2018 ‘Action Plan: Financing Sustainable Growth’ _**, of 10 March 2020 on**_ _**a New**_

_**Industrial Strategy for Europe, of 10 March 2020 on an SME Strategy for a sustainable**_

_**and digital Europe**_ and ▌ 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 on Climate Change and the SDGs, the InvestEU

Programme will contribute to mainstream climate actions and to the achievement of an

overall target of at _**least 30 %**_ of the Union budget expenditures supporting climate

objectives. Actions under the InvestEU Programme are expected to contribute _**at least**_ 30

% of the overall financial envelope of the InvestEU Programme to climate objectives.

Relevant actions will be identified during the InvestEU Programme's preparation and

implementation and reassessed in the context of the relevant evaluations and review

processes.

(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 on the establishment of a framework to facilitate sustainable

investment **[6]** ] for determining whether an economic activity is environmentally sustainable.

The InvestEU Programme should also contribute to the implementation of other

dimensions of the SDGs.

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

**6** COM(2018)0353.

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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 **[7]** and under Directive (EU) 2016/2284 of the European Parliament and

of the Council **[8]** . Investment allocated to environmentally 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 key components of natural capital, including air, water, land

and biodiversity.

(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 on establishment of a framework to facilitate

sustainable investment] for determining whether an economic activity is environmentally

sustainable 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 the 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. Operations that are inconsistent with the achievement of the climate

objectives should not be eligible for support under this Regulation.

**7** OJ L 309, 13.12.1993, p. 3.
**8** 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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(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, _**efforts towards climate neutrality,**_ competitiveness _**,**_ _**upward**_ convergence _**of living**_

_**conditions in the Union, and the creation of jobs**_ . It also creates risk of _**growing**_

_**divergences**_ _**and inequalities within and between Member States,**_ and impacts regions’

development long-term _**, affecting the convergence and cohesion of the Union, which is**_

_**visible in particular with regard to digital infrastructure. It is crucial to support fast and**_

_**ultra-fast broadband connectivity in all rural and urban regions of the Union, provide**_

_**support to digital start-ups and innovative SMEs to enable them to better compete and**_

_**scale up, and accelerate the digital transformation of the entire economy in order to**_

_**increase both long-term competitiveness and the resilience of the Union economy**_ .

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 into 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. 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 **[9]** and the

Governance Regulation **[10]**, 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.

(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.

(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 with the crisis. _**Research**_

_**and innovation will have a crucial role 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. That is why it is necessary to achieve**_

_**the target of investing at least 3 % of Union GDP in research and innovation, as agreed**_

_**by Member States as part of the Europe 2020 Strategy. The InvestEU Fund should help**_

**9** 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).
**10** 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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_**remedy inadequate levels of investment by substantially contributing to increasing public**_

_**and private investment in research and innovation in Member States, thereby helping to**_

_**reach the overall target of at least 3 % of Union GDP. The achievement of that target**_

_**would require Member States and the private sector to complement the InvestEU Fund**_

_**with their own and 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, 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.

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

Union economy and the sector _**is experiencing**_ a particularly severe contraction as a result

of _**the**_ COVID-19 pandemic _**and the restrictions on social contacts and closures of**_

_**borders put in place. That contraction is particularly damaging for SMEs and family**_

_**businesses and has caused large-scale unemployment affecting, in particular, women,**_

_**young people, seasonal workers and those in vulnerable situations, and heavy losses of**_

_**revenue for many businesses.**_ 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 environment**_

_**footprint of the sector, as it responds to the COVID-19 crisis**_ . _**The sustainable recovery of**_

_**tourism should contribute to the creation of numerous permanent, local, quality jobs,**_

_**allowing regions heavily dependent on tourism and with specific challenges related to**_

_**their economic development to attract investment that would not be possible without the**_

_**firepower of InvestEU Programme and its capacity to attract private investors as a result**_

_**of the EU guarantee and the crowding-in effect produced by it.**_

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(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.

(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, notably those in the services, manufacturing, construction, tourism,**_

_**cultural and creative sectors.**_ 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) and should

provide working capital and investment throughout the life cycle of a company, should

provide financing for leasing transactions and should provide an opportunity to focus on

specific, more targeted financial products. It should also maximise firepower of

public/private fund vehicles, such as the SME IPO (Initial Public Offering) Fund, seeking

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to support SMEs through channelling both more private and public equity in particular in

strategic companies.

(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 demonstrated that such investment helps build**_

_**societal resilience to crises and has revealed a significant need for investment in social**_

_**infrastructure and projects in the fields of social services, healthcare services, education,**_

_**care and social housing.**_ 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.

_**(22a)**_ _**The COVID-19 crisis has had a disproportionate impact on women, from both a social**_

_**and an economic perspective, including through job losses and the unpaid care burden**_

_**and a rise in domestic violence. Bearing that in mind, and taking fully into account**_

_**Article 8 of the Treaty, the InvestEU Programme should contribute to the achievement**_

_**of the Union’s policies on gender equality and the promotion and empowerment of**_

_**women, inter alia through addressing the gender digital gap, helping to encourage**_

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_**female creativity and entrepreneurial potential and supporting the development of care**_

_**infrastructure and infrastructure for victims of violence.**_

(23) 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 eco-system 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.

(24) 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 and should be

reinforced, inter alia in order to counteract the risk of an asymmetric recovery _**and reduce**_

_**the gaps between Member States**_ . The InvestEU Programme should be able to provide

crucial support to companies _**, especially SMEs,**_ in the recovery phase and at the same time

ensure a strong focus of investors on the Union’s medium- and long-term policy _**and**_

_**legislative**_ priorities such as the European Green Deal, the European Green Deal

Investment Plan, _**[the European Climate law],**_ the Strategy on shaping Europe’s digital

future _**, the New Industrial Strategy for Europe, Horizon Europe ambitions, the**_

_**Renovation Wave, the European Pillar of Social Rights,**_ 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

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support of _**projects that would otherwise become missed opportunities, thereby aiding**_

economic recovery.

(25) The Covid-19 pandemic is a major shock to the global and Union economy. The

contraction in EU GDP is expected to be far deeper than during the financial crisis in 2009

and adverse social effects will be inevitable. The outbreak of the 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 European economy

can preserve the _**integrity of the**_ Single Market and the level playing field also to the

benefit of the hardest-hit Member States _**and regions**_ .

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

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

SMEs; social investment and skills; strategic European investment _**; and solvency support**_ .

(27) Although the SME policy window should primarily focus on benefitting SMEs, small mid

cap companies should also be eligible under this policy window. Mid-cap companies

should also be eligible for support under the other _**five**_ policy windows.

(28) The primary focus of the strategic European investment window should be on support to

those final recipients established in a Member State and operating in the Union whose

activities are of strategic importance to the Union _**, in line with the priorities described in**_

_**the New Industrial Strategy for Europe, which aims for a globally competitive,**_ green and

digital _**Europe, with a development model based on industrial ecosystems. The window**_

_**should also enhance the competitiveness of the Union economy, including the need to**_

_**rebuild Member States' productive capacity and create future-oriented investments**_

_**promoting entrepreneurship and job creation,**_ and _**enhance**_ resilience _**, including by**_

_**decreasing dependence on vulnerable supply chains. Projects should bring Union added**_

_**value and should either be cross-border or generate real added value in more than one**_

_**Member State or region through spill-over effects. No support should flow directly into**_

_**the national budgets or substitute national budgetary expenditure, such as social**_

_**benefits.**_ Areas of _**strategic importance are as follows**_ (i) critical healthcare provision,

manufacturing and stockpiling of _**medicinal products, including vaccines, and their**_

_**intermediates, active pharmaceutical ingredients and raw materials;**_ medical devices _**,**_

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_**hospital**_ and medical _**equipment, such as ventilators, protective clothing and equipment,**_

_**diagnostic materials and tools; personal protective equipment, disinfectants and their**_

_**intermediary products and raw materials necessary for their production;**_ strengthening

_**the resilience of healthcare and**_ health _**systems in preparation for future**_ crisis response

capacity _**, including the performance of stress tests of national and regional healthcare**_

_**systems,**_ and of the civil protection system _**based on the principles of wide availability and**_

_**affordability of products vital in health emergencies**_ (ii) critical infrastructure, whether

physical _**,**_ _**analogue**_ or _**digital, including infrastructure elements and mobile assets**_

_**identified as critical in the fields of energy, transport, including public transport and**_

_**active mobility, logistics, environment, water, health, secure digital communication and**_

_**networks, 5G and very high-speed electronic communication networks, internet of**_

_**things, online service platforms, secure edge and cloud computing, data processing or**_

_**storage, payments and financial infrastructure, aerospace, security and defence,**_

_**communications, media, audio-visual, culture and creativity, education and training,**_

_**electoral infrastructure and sensitive facilities, public administration, security, housing,**_

_**as well as land and real estate crucial for the use of such critical infrastructure;**_ (iii)

provision of _**know-how,**_ goods _**, technologies**_ and services instrumental to the operation and

maintenance of such infrastructure _**and mobile assets**_ ; (iv) key enabling, transformative,

green and digital technologies and game-changing innovations where the investment is

strategically important for the _**Union**_ _**economy, and the sustainable and innovative**_

industrial future _**of the Union**_, including artificial intelligence, blockchain _**and distributed**_

_**ledger technologies**_, software, robotics, semiconductors, microprocessors, edge _**and**_ cloud

technologies, high-performance computing, cybersecurity, quantum technologies,

photonics, industrial biotechnology, _**technologies for safe, sustainable, smart and**_

_**automated mobility and logistics in all modes of transport,**_ renewable _**and other**_ energy

technologies _**which contribute to the achievement of climate neutrality by 2050**_, energy

storage technologies including _**sustainable**_ batteries, sustainable transport technologies,

clean hydrogen and fuel cell applications, decarbonisation technologies for industry, _**such**_

_**as the production of CO**_ _**2**_ _**free steel, and infrastructure for**_ carbon capture and storage _**in**_

_**industrial processes, bioenergy plants and manufacturing facilities towards the energy**_

_**transition**_, circular economy technologies _**and supply chains**_, biomedicine,

nanotechnologies, pharmaceuticals and advanced _**, renewable and circular**_ materials _**, space**_

_**systems and technologies including critical space components, as well as space-based**_

_**services and applications, and tourism**_ (v) _**recycling and**_ manufacturing facilities for mass

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production of nformation Communication and Technology components and devices in the

_**Union, including energy or raw materials, except if already covered by legislative**_

_**requirements, or food security, having regard to resource efficiency and circularity in**_

_**strategic value chains and strategic eco-systems**_ ; (vi) supply and stockpiling of critical

inputs to public actors, businesses or consumers in the Union; (vii) critical technologies _**,**_

inputs _**and applications**_ for the security of the Union and its Member States, such as

_**security and**_ defence and space sectors and cybersecurity, _**including 5G network security,**_

and dual use items as defined in point 1 of Article 2 of Council Regulation (EC) No

428/2009; _**(viia) investment and technical assistance to companies, in particular SMEs,**_

_**start-ups and family businesses to increase the resilience of their value chains and**_

_**business models, to foster entrepreneurial skills as well as supporting the conditions for**_

_**boosting entrepreneurship, including by developing networks of clusters and digital**_

_**innovation hubs, and technological and sustainable sectoral development (viib)**_ _**critical**_

_**early detection, and coordinated institutional and economic response capabilities in**_

_**order to react to the risk of crises, as well as advancing business and service continuity**_

_**solutions for essential public and private institutions and sectors (viic)**_ _**investment in**_

_**New Space activities, both upstream and downstream, in order to bring the most**_

_**promising technologies and applications to the market, thus ensuring the**_

_**competitiveness of the Union space industry (viid) strategic investment in renewable**_

_**energy and energy efficiency projects, including building renovation, with a high**_

_**potential to significantly contribute to meeting the targets set out in Directives (EU)**_

_**2018/2001, (EU) 2018/2002 and (EU) 2018/844 and to contribute to achieving a climate**_

_**neutral and energy efficient building sector as part of the European Green Deal as laid**_

_**out in the [renovation wave strategy], or actions under the Union Renewable energy**_

_**financing mechanism.**_ Final recipients should have their registered office in a Member

State and they should be active in the Union in the sense that they have substantial

activities in terms of staff, manufacturing, research and development or other business

activities in the Union. _**No final recipient should have a subsidiary that carries on**_

_**activities with no real economic substance in a country on the Union list of non-**_

_**cooperative jurisdictions for tax purposes.**_ Projects which contribute to diversification of

strategic supply chains in the Single Market through operations in multiple locations across

the _**Union**_ should be able to benefit.

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(29) The strategic European investment window should also target suppliers established and

operating in the Union whose activities are of strategic importance to the Union and that

would need long term investment or are covered by the Foreign Direct Investment

Screening mechanism. In addition, important projects of common European interest should

in particular be able to benefit from the strategic European investment window. _**The**_

_**window should also support strategic collaboration between industry partners and**_

_**research players, thereby reinforcing synergies between InvestEU and Horizon Europe.**_

_**(29a)**_ _**The purpose of the solvency support window is to help companies to overcome this**_

_**difficult period so that they are in a position to carry the recovery, to safeguard**_

_**employment levels, and to counter-balance the expected distortions in the single market,**_

_**given that not all companies have the same level of access to market financing**_ _**and**_

_**certain Member States may not have sufficient budgetary means available to provide**_

_**adequate support to companies in need. The possibility of national solvency support**_

_**measures for companies may therefore differ substantially across Member States and**_

_**lead to an uneven playing field. Furthermore, as there is a considerable risk that the**_

_**impact of the COVID-19 outbreak will be long-lasting, such lack of capacity to help**_

_**viable companies can lead to systemic distortions, creating new disparities or cementing**_

_**existing ones. Given the strong interconnectedness of the Union economy, an economic**_

_**downturn in one part of the Union would have negative spill-over effects on cross-border**_

_**supply chains and the Union economy as a whole. Conversely, for the same reason,**_

_**support in one part of the Union would also have positive spill-over effects on cross-**_

_**border supply chains and the Union economy as a whole.**_

_**(29b)**_ _**In order to avoid abuse and maximize the effect on the real economy and on**_

_**employment, companies that benefit from EUR 30 million or more through the solvency**_

_**support window should be subject to temporary payout limitations, such as restrictions**_

_**on dividend payments, senior pay and share buy-backs during the period of the**_

_**guarantee.**_

(30) _**As proposed in the European Green Deal**_ _**and the European Green Deal Investment**_

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

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

_**and its target of achieving climate neutrality by 2050. That mechanism which is**_

_**composed of three pillars, namely a Just Transition Fund (pillar 1), a dedicated Just**_

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_**Transition Scheme under InvestEU (pillar 2) and a Public Sector Loan Facility (pillar**_

_**3), should focus on the regions that are most affected by the green transition and have**_

_**less capacity to finance the necessary investments. As such,**_ the InvestEU should also

provide support to financing to generate investment to the benefit of just transition regions

_**as well as the possibility for the respective regions to benefit from dedicated technical**_

_**assistance through the InvestEU Advisory Hub**_ .

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

_**Scheme under InvestEU should be established horizontally across all policy windows.**_

_**That scheme should provide funding to additional investment needs to support the**_

_**regions identified in the territorial just transitions plans, prepared by Member States,**_

_**and approved by the Commission, in accordance with Regulation [JTF Regulation].**_

(31) 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 sub-optimal 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 _**or contributions from recovery and resilience plans**_

_**under the Recovery and Resilience Facility**_ 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 sub-optimal 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 _**or of national recovery and resilience plans. In addition, recovery**_

_**and resilience plans under the Recovery and Resilience Facility might include**_

_**contributions to the Member States compartment**_ . _**Amongst other things, this could allow**_

_**support to be given for the solvency of companies established in the Member States**_

_**concerned.**_ 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.

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

under shared management _**or contributions from recovery and resilience plans under the**_

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_**Recovery and Resilience Facility**_ to provision a guarantee issued by the Union. That

possibility would increase the value added of the EU guarantee by providing support under

it to a wider range of financial recipients and projects and diversifying the means of

achieving the objectives of the funds under shared management _**or of national 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 the contributions**_

_**from recovery and resilience plans under the Recovery and Resilience Facility**_ 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. 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 **[11]** (the Financial Regulation).

This set-up provides also a single set of rules for budgetary guarantees supported by funds

that are managed centrally or by _**contributions from recovery and resilience plans under**_

_**the Recovery and Resilience Facility,**_ which would facilitate their combination.

(33) 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.

**11** 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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(34) In order to be able to channel support to the European economy through the European

Investment Fund (EIF), the Commission should be in a position to participate in one or

more possible capital increases of the EIF in order to allow it to continue supporting the

European economy and its recovery. The Union should be able to maintain its overall share

in the EIF capital, with due consideration of the financial implications. A sufficient

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

Framework for 2021-2027.

(35) 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.

(36) 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 laid down between the Union and those countries. This

should allow continuing cooperating with the relevant countries, where appropriate, in

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

(37) 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 [ _reference to be updated as appropriate_

_according to the new inter-institutional agreement:_ point 16 of the Proposal for an

Interinstitutional Agreement of 2 December 2013 between the European Parliament, the

Council and the Commission on budgetary discipline, on cooperation in budgetary matters

and on sound financial management as adopted by the said Institutions **[ 12]** ], for the

European Parliament and the Council during the annual budgetary procedure.

(38) The EU guarantee of EUR _**91 773 320 000**_ (current prices) at Union level is expected to

mobilise more than EUR _**1 200 000 000 000**_ of additional investment across the Union and

**12** COM(2018)0323 final.

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should be indicatively allocated between the policy windows. However, the strategic

European investment window should have a dedicated portion of the EU guarantee.

(39) On 18 April 2019, the Commission declared that _**"[w]ithout**_ 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 [13] and Article 3(4) of Council Regulation (EC) No 1467/97 [14] . 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. _**"**_

(40) 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 or 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

**13** 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).
**14** 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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# ANNEX GIP.2 EN

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 InvestEU support. However, specific conditions may apply to the

additionality criterion in relation to the financing and investment operations under the

strategic European investment window stemming from its objective.

(41) 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.

(42) 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.

(43) 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 this responsibility.

(44) 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.

(45) The Commission should assess the compatibility of investment and financing 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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(46) An Investment Committee composed of independent experts should conclude on the

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

fulfilling the eligibility criteria, 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.

(47) The Investment Committee should become responsible as of its constitution also for

granting the benefit of the EU guarantee for financing and investment operations under

Regulation (EU) 2015/1017 in order to avoid parallel similar structures assessing proposals

for the use of the EU guarantee.

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

the Investment Committee should assist the investment committee.

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

Commission should consider the counterparty's ability to fulfil the objectives of the

InvestEU Fund and to contribute its 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 sub-optimal

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 or

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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# ANNEX GIP.2 EN

(50) 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 or 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.

(51) 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

European Investment Fund 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.

(52) 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.

(53) 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 sub-optimal investment situations.

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

which include blending support under 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.

(55) 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 **[15]** . In

addition, 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.

(56) 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

**15** 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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# ANNEX GIP.2 EN

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

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

(57) 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 provide 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 or institutions, and should benefit from and make use of their

expertise.

(58) 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.

(59) 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**_ _**and other actors**_ access financing and

realise their full potential _**, and should include technical assistance**_ . 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.

(60) 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

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# ANNEX GIP.2 EN

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

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

(61) In accordance with Regulation [European Union Recovery Instrument] and within the

limits of resources allocated therein, recovery and resilience measures under ▌InvestEU

should be carried out to address the unprecedented impact of the Covid-19 crisis _**and to**_

_**strengthen the Union economy in the long term**_ . Such additional resources should be used

in such a way as to ensure compliance with the time limits provided for in Regulation

[EURI]. _**That requirement would be met by the conclusion of the relevant guarantee**_

_**agreements with the implementing partners by 31 December 2023.**_

(62) Pursuant to paragraphs 22 and 23 of the Interinstitutional agreement for Better Law

Making of 13 April 2016 **[16]**, there is a need to evaluate the InvestEU Programme on the

basis of information collected through specific monitoring requirements, while avoiding

overregulation and administrative burdens, in particular on Member States. These

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

evaluating the effects of the InvestEU Programme on the ground.

(63) 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.

(64) 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. These 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 concern the

protection of the Union's budget in case of generalised deficiencies as regards the rule of

law in the Member States, as the respect for the rule of law is an essential precondition for

sound financial management and effective EU funding.

**16** OJ L 123, 12.5.2016, p. 1.

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(65) 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.

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

European Parliament and of the Council **[17]**, Council Regulation (Euratom, EC) No

2988/95 **[18]** [,] Council Regulation (Euratom, EC) No 2185/96 **[19]** and Council Regulation (EU)

2017/1939 **[20]**, the financial interests of the Union are to be protected through proportionate

measures, including the prevention, detection, correction and investigation of irregularities,

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

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

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

European Anti-Fraud Office (OLAF) may 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. In accordance with Regulation (EU) 2017/1939, the European Public Prosecutor's

Office (“the EPPO”) may investigate and prosecute offences against the Union’s financial

interests as provided for in Directive (EU) 2017/1371 of the European Parliament and of

the Council **[21]** . In accordance with the Financial Regulation, any person or entity receiving

Union funds is to fully cooperate in the protection of the Union’s financial interests, to

grant the necessary rights and access to the Commission, OLAF, the EPPO in respect of

those Member States participating in enhanced cooperation pursuant to Regulation (EU)

2017/1939, and the European Court of Auditors and to ensure that any third parties

involved in the implementation of Union funds grant equivalent rights.

**17** 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 L248, 18.9.2013, p. 1).
**18** 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).
**19** 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).
**20** 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).
**21** 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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(67) 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

EEA agreement, which provides for the implementation of the programmes by a decision

under that agreement. Third countries may also participate on the basis of other legal

instruments. A specific provision should be introduced in this Regulation to grant the

necessary rights for and access to the authorising officer responsible, the OLAF as well as

the European Court of Auditors to comprehensively exert their respective competences.

(68) Pursuant to Article 83 of the [Proposal for a Council Decision on the Association of the

Overseas Countries and Territories with the European Union including relations between

the European Union on the one hand, and Greenland and the Kingdom of Denmark on the

other ('Overseas Association Decision')] **[22]**, persons and entities established in the overseas

countries and territories (OCTs) are eligible for funding subject to the rules and objectives

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

which the relevant overseas country or territory is linked.

(69) 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 _**establishing indicators to be used by the Steering Board to determine the**_

_**Member States and sectors economically most hit by the COVID-19 pandemic and the**_

_**Member States where the possibility of State solvency support is more limited and the**_

_**methodology for the application of those indicators and**_ drawing-up the investment

guidelines for the financing and investment operations under different policy windows, the

scoreboard, the amendment of Annex III to this Regulation to review or complement the

indicators and 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 carries 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

**22** SEC(2018)310; SWD(2018)337.

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# ANNEX GIP.2 EN

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.

_**(69a)**_ _**It is necessary to ensure that InvestEU is implemented as promptly as possible after its**_

_**entry into force. It would therefore be appropriate to allow implementing partners to**_

_**submit financing and investment operations to the Commission before the Investment**_

_**Committee is up and running or before the conclusion of the relevant guarantee**_

_**agreement. In such cases, the Commission should be responsible for approving the**_

_**operations. It should also be possible to merge both financial instruments established by**_

_**programmes referred to in Annex IV to this Regulation and the EU guarantee**_

_**established by Regulation (EU) 2015/1017 with financial instruments under this**_

_**Regulation, if applicable and subject to a prior evaluation.**_

(70) The InvestEU Programme should address Union-wide and Member State specific market

failures and sub-optimal investment situations and should provide for Union-wide market

testing of innovative financial products and systems to spread them, for addressing new or

complex market failures. Therefore, action at Union level is warranted,

HAVE ADOPTED THIS REGULATION:

**CHAPTER I**

**GENERAL PROVISIONS**

_Article 1_

_Subject matter_

1. 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.

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2. 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’).

3. 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.

_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 7(1);

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

resources backing it;

(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

Emissions Trading System (ETS) Innovation Fund, may be assimilated to Union

programmes financed by the Union budget;

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# ANNEX GIP.2 EN

(6) 'EIB' means the European Investment Bank;

(7) '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 Treaty on European Union and the TFEU (the EIB Statute);

(8) '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;

(9) '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 9;

(10) '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 15;

(11) 'financing and/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 ;

(12) '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), the European Social Fund Plus (ESF+), the Cohesion Fund, the European

Maritime and Fisheries Fund (EMFF), the European Agriculture Fund for Rural

Development (EAFRD) and the [Just Transition Fund (JTF)] **[23]** ;

(13) 'guarantee agreement' means a legal instrument whereby the Commission and an

implementing partner specify the conditions for proposing financing or investment

**23** COM(2020)0022 final.

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# ANNEX GIP.2 EN

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 the

provisions of this Regulation;

(14) 'implementing partner' means an eligible counterpart such as a financial institution or other

financial intermediary with whom the Commission has concluded a guarantee agreement;

(15) ‘Important Project of Common European Interest’ means a project that fulfils all the

criteria laid down in 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 (OJ C 188, 20.6.2014, p. 4) or any subsequent

revision;

(16) 'InvestEU Advisory Hub' means the technical assistance defined in Article 24;

(17) 'advisory agreement’ means a legal instrument whereby the Commission and the advisory

partner specify the conditions for the implementation of the InvestEU Advisory Hub;

(18) ‘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;

(19) ‘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 by executive agencies;

(20) 'InvestEU Portal' means the database defined in Article 25;

(21) ‘investment guidelines’ means the guidelines established by a delegated act referred to in

Article 7(7);

(22) ‘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:

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# ANNEX GIP.2 EN

(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;

(23) 'microfinance' means microfinance as defined in Article [2(11)] of Regulation [[ESF+]

number];

(24) 'national promotional bank or institution' or 'NPBI' 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;

(25) '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 **[24]** [;]

(26) 'small mid-cap company' means an entity that is not an SME and that employs up to 499

employees;

_**(26a)**_ _**‘companies’ means, for the purposes of the solvency support window companies, project**_

_**companies, public-**_ private partnerships _**and other legal structures;**_

(27) 'social enterprise' means a social enterprise as defined in Article [2(15)] of Regulation

[[ESF+] _number_ ];

(28) 'third country' means a country that is not a Member State of the Union;

**24** 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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# ANNEX GIP.2 EN

_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 on Climate

Change 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 Single Market,

including solutions to address the fragmentation of Union capital markets, diversify

sources of financing for Union enterprises and promote sustainable finance;

(f) the promotion of economic, social and territorial cohesion; or

(g) the sustainable and inclusive recovery of the Union economy _**, and in particular of**_

_**SMEs,**_ after the crisis caused by the Covid-19 pandemic, upholding and

strengthening _**existing**_ strategic value chains _**of tangible or intangible assets, and**_

_**developing new such value chains,**_ and maintaining and reinforcing activities of

strategic importance to the Union in relation to critical infrastructure, _**whether**_

_**physical or virtual or based on intellectual property,**_ transformative technologies,

game-changing innovations and inputs to businesses and consumers _**, and supporting**_

_**a sustainable transition**_ _**in accordance with the Union’s 2030 and 2050 climate**_

_**targets and taking account of the principle of ‘do no significant harm’.**_

2. The InvestEU Programme has the following specific objectives:

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# ANNEX GIP.2 EN

(a) supporting financing and investment operations related to sustainable infrastructure

in the areas referred to in point (a) of Article 7(1);

(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

7(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 7(1);

(e) to support financing and investment operations in sectors referred to in point (e) of

Article 7(1) in order to maintain and reinforce the strategic autonomy _**and the**_

_**sustainability**_ of the Union and _**the inclusiveness and convergence**_ of its economy _**,**_

_**as well as to reinforce resilience to economic shocks**_ .

_**(ea) to support the solvency of companies established in a Member State and operating**_

_**in the Union.**_

_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 8(1) shall be EUR _**91 773 320 000**_ (current prices). It shall be provisioned at the

rate of _**40 %**_ . The amount referred to in point (a) of the first subparagraph of Article 34(3)

shall be also taken into account for contributing to the provisioning resulting from this

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 8(1), subject to the allocation by Member

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# ANNEX GIP.2 EN

States, pursuant to [Article 10(1)] of Regulation [[CPR] _number_ ] **[25]** _**,**_ ▌Article [75(1)] of

Regulation [[CAP Strategic Plan] _number_ ] **[26]**, _**and in accordance with the implementation of**_

_**the relevant measures in recovery and resilience plans under Regulation [Recovery and**_

_**Resilience Facility]**_, of the corresponding amounts.

An additional amount of the EU guarantee may also be provided in the form of cash by

Member States for the purposes of the Member State compartment. Such amount shall

constitute an external assigned revenue in accordance with the second sentence of Article

21(5) of the Financial Regulation.

The contributions from third countries referred to in Article 5 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 31 153 850 000 (current prices) of the amount referred to in the first

subparagraph of paragraph 1 shall be allocated for operations implementing measures

referred to in Article 2 of Regulation [EURI] for the objectives referred to in point (e) of

Article 3(2).

An amount of EUR _**19 850 000 000**_ (current prices) of the amount referred to in the first

subparagraph of paragraph 1 shall be allocated for operations implementing measures

referred to in Article 2 of Regulation [EURI] for the objectives referred to in point (a) _**and**_

_**(ea)**_ of Article 3(2).

An amount of EUR _**40 769 470 000**_ (current prices) of the amount referred to in the first

subparagraph of paragraph 1 shall be allocated for the objectives referred to in _**points (a) to**_

_**(d)**_ of Article 3(2).

The amounts referred to in the first and second subparagraph shall only be available as of

the date referred to in Article 4(3) of Regulation [EURI].

The indicative distribution of the EU guarantee for the purpose of the EU compartment is

set out in Annex I to this Regulation. Where appropriate, the Commission may _**depart from**_

**25**

**26**

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# ANNEX GIP.2 EN

the amounts referred to in Annex I ▌by up to 15 % for each objective. The Commission

shall inform the European Parliament and the Council of any such _**departure**_ .

3. The financial envelope for the implementation of the measures provided in Chapters VI

and VII shall be EUR _**824 733 000**_ (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.

_**4a.**_ _**Where the grants referred to in Article 3(2)(a) of Regulation [EURI], have not been used**_

_**in their entirety by 31 December 2023, or where the loans to Member States referred to**_

_**in Article 3(2)(b) of Regulation [EURI], have not been granted by 31 December 2023,**_

_**part of the unused amount or the unallocated headroom, up to a maximum amount of**_

_**EUR 16 000 000 000 (in current prices), shall be made available automatically to the**_

_**InvestEU Fund, for the provisioning of the EU guarantee for the period 2024-2027, in**_

_**accordance with Article X of Regulation [EURI]. The amount of the EU guarantee as**_

_**referred to in the first subparagraph of paragraph 1 of this Article and the distribution**_

_**of the EU guarantee set out in Annex I to this Regulation shall be adjusted upwards**_

_**accordingly.**_

_Article 5_

_Third countries associated to the InvestEU Fund_

The EU compartment of the InvestEU Fund referred to in point (a) of Article 8(1) and each of the

policy windows referred to in Article 7(1), except the strategic European investment window, 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) European Free Trade Association (EFTA) members which are members of the

European Economic Area (EEA), in accordance with the conditions laid down in the

Agreement on the European Economic Area;

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# ANNEX GIP.2 EN

(b) acceding countries, candidate countries and potential candidates, in accordance with

the general principles and general terms and conditions for their participation in

Union programmes established in the respective framework agreements and

Association Council decisions or similar agreements, and in accordance with the

specific conditions laid down in agreements between the Union and such third

countries;

(c) third countries covered by the European Neighbourhood Policy, 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 similar agreements, and in accordance with the

specific conditions laid down in agreements between the Union and such third

countries;

(d) 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:

(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 Union programmes, including

the calculation of financial contributions to individual programmes and their

administrative costs. These contributions shall constitute external assigned

revenues in accordance with the second sentence of Article 21(5) of the

Financial Regulation;

(iii) does not confer to the third country a decisional power on the Union

programme;

(iv) guarantees the rights of the Union to ensure sound financial management and

to protect its financial interests.

_Article 6_

_Implementation and forms of Union funding_

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# ANNEX GIP.2 EN

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;

(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 Article 6(2), 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 the consistency of them

with the policy objectives and eligibility criteria set out in the rules of the Union

programme under which the support is decided as well on the compliance of them with this

Regulation.

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# ANNEX GIP.2 EN

**CHAPTER II**

**InvestEU Fund**

_Article 7_

_Policy windows_

1. The InvestEU Fund shall operate through the following _**six**_ policy windows that shall

address market failures or sub-optimal investment situations within their specific scope:

(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;

(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;

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# ANNEX GIP.2 EN

(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;

(e) a strategic European investment policy window which comprises strategic _**, future-**_

_**oriented**_ investment to support final recipients _**, including SMEs and start-ups,**_ that

are established in a Member State and that operate in the Union, and whose activities

are of strategic importance to the Union, in particular in view of the _**climate**_ and

digital transitions _**, in accordance with the priorities described in the New Industrial**_

_**Strategy for Europe,**_ _**which aims for a globally competitive, green and digital**_

_**Europe, with a development model based on industrial ecosystems and the Union**_

_**climate neutrality goal, [as enshrined in the European climate law] and the 2030**_

_**target. The window shall support projects that enhance the competitiveness of the**_

_**Union’s economy, rebuild productive capacity, decrease dependence on vulnerable**_

_**supply chains, and promote entrepreneurship, job creation, and**_ enhanced

resilience, in one of the following areas:

i) critical healthcare provision, manufacturing and stockpiling of _**medicinal**_

_**products, including vaccines, and their intermediates, active pharmaceutical**_

_**ingredients and raw materials;**_ medical devices _**; hospital**_ and _**medical**_

_**equipment, such as ventilators, protective clothing and equipment,**_

_**diagnostic materials and tools; personal protective equipment; disinfectants**_

_**and their intermediary products and raw materials necessary for their**_

_**production;**_ strengthening _**the resilience of healthcare and**_ health _**systems in**_

_**preparation for future**_ crisis response capacity _**, including the performance of**_

_**stress tests of national and regional healthcare systems,**_ and of the civil

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protection system; _**based on the principle of availability and affordability of**_

_**products vital in health emergencies;**_

ii) critical infrastructure, whether physical _**,**_ _**analogue or digital**_ **,** including

infrastructure elements _**and mobile assets**_ identified as critical in the fields of

energy, transport, _**including public transport and active mobility,**_ _**logistics,**_

environment _**, water**_, health, secure digital communication _**and networks,**_ 5G

_**and very high-speed electronic communication networks**_, internet of things,

online service platforms, secure _**edge and**_ cloud computing, data processing or

storage, payments and financial infrastructure, aerospace, _**security and**_

defence, communications, media, _**audio-visual, culture and creativity,**_

education and training, electoral infrastructure and sensitive facilities, _**public**_

_**administration, security, housing,**_ as well as land and real estate crucial for

the use of such critical infrastructure;

iii) the provision of _**know-how,**_ goods _**, technologies**_ and services instrumental to

the operation and maintenance of the critical infrastructure _**and mobile assets**_

under point ii);

iv) key enabling, transformative, green and digital technologies and game

changing innovations where the investment is strategically important for the

_**Union economy, and the sustainable and innovative**_ industrial future _**of the**_

_**Union**_, including _**reindustrialisation, having regard to the principle of just**_

_**transition and broad societal benefits, including**_

(a) artificial intelligence, blockchain _**and distributed ledger technologies**_,

software, robotics, semiconductors, microprocessors, edge cloud

technologies, high-performance computing, cybersecurity, quantum

technologies, photonics, industrial biotechnology _**, technologies for safe,**_

_**sustainable, smart and automated mobility and logistics in all modes of**_

_**transport,**_

(b) renewable _**and other**_ energy technologies _**which contribute to the**_

_**achievement of climate neutrality by 2050**_, energy storage technologies

including _**sustainable**_ batteries, sustainable transport technologies, clean

hydrogen and fuel cell applications, decarbonisation technologies for

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industry, _**infrastructure for**_ carbon capture and storage _**in industrial**_

_**processes, bioenergy plants and manufacturing facilities towards the**_

_**energy transition**_, circular economy technologies _**and supply chains**_,

_**(ba) space systems and technologies including critical space components, as**_

_**well as space-based services and applications,**_

(c) biomedicine, nanotechnologies, _**biotechnologies**_, pharmaceuticals and

advanced _**, renewable and circular**_ materials;

_**(ca) tourism;**_

v) _**recycling and**_ manufacturing facilities for mass production of Information

Communication and Technology components and devices in the _**Union**_ ;

vi) supply and stockpiling of critical inputs to public actors, businesses or

consumers in the _**Union**_, including energy or raw materials _**,**_ _**except if already**_

_**covered by legislative requirements,**_ or food security, having regard to

resource efficiency and circularity in strategic value chains _**and strategic eco-**_

_**systems**_ ;

vii) critical technologies _**,**_ inputs _**and applications**_ for the security of the Union and

its Member States, such as _**security and**_ defence and space sectors and

cybersecurity, and dual use items as defined in point 1 of Article 2 of Council

Regulation (EC) No 428/2009 _**and related legislation**_ . _**Moreover, final**_

_**recipients shall not export defence-related technology to third countries that**_

_**threaten the territorial integrity of the Member States, systematically violate**_

_**international law or undermine regional or global security and stability**_ ;

_**(viia)**_ _**investment and technical assistance to companies, in particular SMEs, start-**_

_**ups, family businesses and communities to increase the resilience of their**_

_**value chains and business models, to foster entrepreneurial skills as well as**_

_**supporting the conditions for boosting entrepreneurship, including by**_

_**developing networks of clusters and digital innovation hubs, and**_

_**technological and sustainable sectoral development;**_

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_**(viib)**_ _**critical early detection, and coordinated institutional and economic response**_

_**capabilities in order to react to the risk of crises, as well as advancing**_

_**business and service continuity solutions for essential public and private**_

_**institutions and sectors;**_

_**(viic)**_ _**investment in New Space activities, both upstream and downstream, in order**_

_**to bring the most promising technologies and applications to the market,**_

_**thus ensuring the competitiveness of the Union space industry;**_

_**(viid)**_ _**strategic investment in renewable energy and energy efficiency projects,**_

_**including building renovation, with a high potential to significantly**_

_**contribute to meeting the targets set out in Directives (EU) 2018/2001, (EU)**_

_**2018/2002 and (EU) 2018/844 and to contribute to achieving a climate**_

_**neutral and energy efficient building sector as part of the European Green**_

_**Deal as laid out in the [renovation wave strategy], or actions under the**_

_**Union Renewable energy financing mechanism, eligible under the InvestEU**_

_**programme.**_

In addition, _**final recipients that receive funding under this window**_ shall not

be controlled by a third country or third country entities and shall have their

executive management in the Union with a view to protect the security of the

Union and its Member States.

The Steering Board shall set any necessary requirements relating to the control

and executive management of final recipients for other areas under the

strategic European investment window, and to the control of intermediaries

under that window, in the light of any applicable public order or security

considerations.

_**(ea) a solvency support window, which comprises solvency support for companies that**_

_**were not already in difficulty in State aid terms at the end of 2019, but since then**_

_**have faced significant solvency risks due to the COVID-19 crisis, or for companies**_

_**created on or before 31 December 2020 that have acquired or are managing either**_

_**the assets or branches of a company that was already in difficulty in State aid**_

_**terms at the end of 2019, provided that their management is not the same as the**_

_**management of the company in difficulty in State aid terms.**_

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_**The solvency support window shall be open to all Member States and to the areas**_

_**referred to in Annex II. The majority of InvestEU financing under the solvency**_

_**support window shall be used to support:**_

_**(a)**_ _**eligible companies in Member States and sectors economically most hit by**_

_**the Covid-19 crisis;**_

_**(b)**_ _**eligible companies in Member States where the possibility of State solvency**_

_**support is more limited.**_

_**The Commission shall establish, by delegated acts in accordance with Article 33, both the**_

_**indicators to be used by the Steering Board to determine the Member States and sectors**_

_**economically most hit by the COVID-19 crisis and the Member States where the possibility**_

_**of State solvency support is more limited, and the methodology for the application of those**_

_**indicators.**_

_**Companies receiving support under the solvency support window shall comply, to the extent**_

_**possible, with minimum high-level social and environmental safeguards in line with**_

_**guidance provided by the Steering Board. Such guidance shall include adequate provisions**_

_**for avoiding undue administrative burdens, taking into account the size of companies and**_

_**including lighter provisions for SMEs. Such companies shall be encouraged to put in place**_

_**green transition plans, advance in their digital transformation and safeguard employment.**_

_**Technical assistance shall be available to assist companies for the purpose of these**_

_**transitions.**_

_**Implementing partners and financial intermediaries under the solvency support window**_

_**shall be established in a Member State and operate in the Union. The Steering Board shall**_

_**set any necessary requirements relating to the control of those intermediaries in the light of**_

_**any applicable public order or security considerations.**_

_**1a.**_ _**A Just Transition Scheme, the second pillar of the Just Transition Mechanism, shall be**_

_**established horizontally across all policy windows. This scheme shall comprise**_

_**investments which 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.**_

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2. Where a financing or investment operation proposed to the Investment Committee referred

to in Article 23 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.

3. 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 4. 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 case the implementing partner concludes that no sustainability proofing is to

be carried out, it shall provide a justification to the Investment Committee.

4. The Commission shall develop sustainability guidance that, in accordance with Union

environmental and social objectives and standards, allows to:

(a) as regards adaptation, ensure 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, integrate the cost of

greenhouse gas emissions and the positive effects of climate mitigation measures in

the cost-benefit analysis;

(b) account for the consolidated impact of projects in terms of the principal components

of the natural capital relating to air, water, land and biodiversity;

(c) estimate 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;

(d) identify projects that are inconsistent with the achievement of climate objectives;

(e) provide implementing partners with guidance for the purpose of the screening

provided for under paragraph 3.

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5. 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.

6. 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.

7. The Commission is empowered to adopt delegated acts in accordance with Article 33 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 1a.**_ The

investment guidelines shall be prepared in close dialogue with the EIB Group and other

potential implementing partners.

8. For financing and investment operations under the strategic European investment window

in _**security and**_ 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.

9. 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.

_Article 8_

_Compartments_

1. The policy windows referred to in Article 7(1) shall consist of an EU compartment and a

Member State compartment. Those compartments shall address market failures or sub

optimal investment situations as follows:

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(a) the EU compartment shall address any of the following situations:

(i) market failures or sub-optimal investment situations related to Union policy

priorities;

(ii) Union-wide or Member State specific market failures or sub-optimal

investment situations; or

(iii) market failures or sub-optimal investment situations, which require the

development of innovative financial solutions and market structures, in

particular new or complex market failures or sub-optimal investment

situations;

(b) the Member State compartment shall address specific market failures or sub-optimal

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.

_Article 9_

_Specific provisions applicable to the Member State compartment_

1. Amounts allocated by a Member State on a voluntary basis under Article [10(1)] of

Regulation [[CPR] number] or Article [75(1)] of Regulation [[CAP Strategic Plan]

number] _**or in accordance with the implementation of the relevant measures in the**_

_**recovery and resilience plans established under Regulation [Recovery and Resilience**_

_**Facility]**_ 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 from funds under shared management _**or**_

_**from contributions made in accordance with the implementation of the relevant**_

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_**measures in the recovery and resilience plans established under Regulation [RRF]**_ 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 Article 7 of

Regulation [[CPR] number], in the programmes or in the CAP Strategic Plan _**or in the**_

_**recovery and resilience plan of the Member State concerned,**_ which contribute to

InvestEU.

An additional amount allocated by a Member State under the third subparagraph of Article

4(1) shall be used for the provisioning for the part of the EU guarantee under the Member

State compartment.

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 under Article 10(1) of Regulation

[CPR number] or Article 75(1) of Regulation [CAP Strategic Plan] _**or in accordance with the**_

_**implementation of the relevant measures in the recovery and resilience plans drawn up**_

_**under Regulation [RRF]**_ 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).

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 Article 9(4) of Regulation [CPR] or the CAP Strategic

Plan under Regulation [CAP] or _**a recovery and resilience plan established under Regulation**_

_**[RRF] or**_ simultaneously to the Commission Decision amending a programme according to

Article 10 of Regulation [CPR] or a CAP Strategic Plan according to Article 107 of

Regulation [CAP] _**or a recovery and resilience plan in accordance with Article 18 of**_

_**Regulation [RRF]**_ .

Two or more Member States may conclude a joint contribution agreement with the

Commission.

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By 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, its provisioning rate, the amount of the

contribution from funds under shared management _**or contributions from recovery**_

_**and resilience plans as established under Regulation [RRF]**_, the constitution phase

of the provisioning in accordance with an annual financial plan and the amount of the

resulting contingent liability to be covered by a back-to-back guarantee provided by

the Member State concerned;

(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 14(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 contributions from**_

_**recovery and resilience plans established under Regulation [RRF]**_ 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 or CAP Strategic Plan _**or the recovery and resilience plan**_

and referred to in the contribution agreement;

(f) provisions on the remuneration for the part of the EU guarantee under the Member

State compartment;

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(g) any combination with resources under the EU compartment in accordance with

Article 8(2), including in a layered structure to achieve better risk coverage.

4. The contribution agreements shall be implemented by the Commission through guarantee

agreements concluded with implementing partners in accordance with Article 16 and

advisory agreements concluded with advisory partners in accordance with the second

subparagraph of Article 24(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 under Article [10(1) of

Regulation [[CPR]] or Article [75(1)] of Regulation [[CAP]] _**or in accordance with the**_

_**implementation of the relevant measures in the recovery and resilience plans drawn up**_

_**under Regulation [RRF]**_ shall be re-used in accordance with [Article 10(5)] of Regulation

[[CPR] number] and Article [75(5)] of Regulation [[CAP Strategic Plan] number _**] and Article**_

_**[X] of Regulation [RRF**_ ]. 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.

Where a guarantee agreement has not been duly implemented within a period specified in

Article [10(6)] of Regulation [[CPR] number] or in Article [75(6)] of Regulation [[CAP

Strategic Plan] number _**] or in Article [X] of Regulation [RRF**_ ], the contribution agreement

shall be amended. The unused amount of provisioning attributable to amounts allocated by

Member States under Article [10(1) of Regulation [[CPR]] or Article [75(1)] of Regulation

[[CAP]] _**or Article [X] of Regulation [RRF]**_ shall be re-used in accordance with [Article

10(6)] of Regulation [[CPR] number] and Article [75(6)] of Regulation [[CAP Strategic Plan]

number _**] and Article [X] of Regulation [RRF**_ ]. 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 [Article 10(7)] of the [CPR] and to

Article [75(7)] of the [[CAP Strategic Plan] _number]_ _**and to Article [X] of**_

_**Regulation [RRF]**_ .

(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.

**CHAPTER III**

**PARTNERSHIP BETWEEN THE COMMISSION AND THE EIB GROUP**

_Article 10_

_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 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:

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(a) shall implement the portion of the EU guarantee specified in Article 12(4);

(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 7(7), contributing to the design of the

scoreboard in accordance with Article 21 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;

(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 to the Commission at the request of the

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Commission and in agreement with the implementing partner in accordance

with point (g) of Article 16(2) where that implementing partner is no longer

responsible for pursuing restructuring and recovery activities under the relevant

guarantee agreement;

(c) may provide capacity building as referred to in point (h) of Article 24(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 525 000 000 for the advisory initiatives

referred to in Article 24 and operational tasks referred to in point (ii) of this

point (d) 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;

–
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 24(2);

–
providing support to national promotional banks or institutions by

providing capacity building referred to in point (h) of Article 24(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

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Commission an agreement with the advisory partner for the delivery of

advisory initiatives.

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 of this paragraph. 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 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.

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 12(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 paragraph 1;

(c) an agreement between the Commission and the EIB Group in relation to the

InvestEU Advisory Hub;

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(d) service agreements between the EIB Group and national promotional banks and

institutions concerning capacity building and other services provided under point (c)

of paragraph 1.

4. Without prejudice to Articles 17(3) and 24(4) of this Regulation, the costs incurred by the

EIB Group in the performance of tasks referred to in points (b) and (c) 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 10 000 000.

5. The costs incurred by the EIB Group for the performance of the operational tasks referred

to in point (d)(ii) of paragraph 1 shall be fully covered by and paid from the amount

referred to in point (d)(i) of paragraph 1, upon justification of those costs by the EIB

Group, subject to an overall cap of EUR 15 000 000.

_Article 11_

_Conflicts of interest_

1. Within the framework of the partnership as referred to in Article 10, 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 Article 10(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 case 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 Steering Board shall be

informed of those measures and their results.

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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 Article 10(1). In the event of a conflict of interest, the EIB Group shall take

appropriate measures.

**CHAPTER IV**

**EU GUARANTEE**

_Article 12_

_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 adjusting 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:

(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 sub-optimal investment situation or to

facilitate the establishment of investment platforms,

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_**(ba) for the solvency support window, in the Member States and sectors economically**_

_**most hit and the Member States where the possibility of State solvency support is**_

_**more limited,**_

to the extent that the reduction of the remuneration for the EU guarantee or the coverage of

the outstanding administrative costs borne by the implementing partner 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.

4. 75 % of the EU guarantee under the EU compartment as referred to in _**the**_ first

subparagraph of Article 4(1), amounting to EUR _**68 829 990 000**_, shall be granted to the

EIB Group. The EIB Group shall provide an aggregate financial contribution amounting to

EUR _**11 494 608 330**_ . _**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 14(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 NPBIs that

have a comparative advantage due to their local presence, knowledge and investment

competencies. The Commission shall develop a coherent approach to support these efforts.

7. Support of the EU guarantee referred to in the first and second subparagraphs of Article

4(2) _**may**_ be granted _**for financing and investment operations to be carried out by an**_

_**implementing partner**_ _**provided that the Commission has concluded a guarantee**_

_**agreement with that implementing partner by 31 December 2023, thereby meeting**_ the

conditions set out in Article 4(6) of Regulation [EURI]. In other cases, support of the EU

guarantee may be granted for financing and investment operations covered by this

Regulation for an investment period ending on 31 December 2027.

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Contracts ▌between the implementing partner and the final recipient or the financial

intermediary or other entity referred to in point (a) of Article 15(1) shall be signed by 31

December 2028.

_Article 13_

_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, sub-optimal 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 point B of Annex

V to this Regulation; and

(d) are consistent with the investment guidelines.

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 under other

windows than the strategic European investment window _**or the solvency support window:**_

(a) projects involving entities located or established in one or more Member States that

extend to one or more third countries, including acceding States, 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;

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(b) financing and investment operations in third countries as referred to in Article 5

which have contributed to a specific financial product.

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).

Notwithstanding the first subparagraph, under the strategic European investment window final

recipients and intermediaries shall be legal entities fulfilling the requirements laid down in the

introductory sentence and the second subparagraph, and in accordance with the third

subparagraph, of point (e) of Article 7(1).

_**Notwithstanding the first subparagraph, only companies established in a Member State and**_

_**operating in the Union may be supported by financing and investment operations under the**_

_**solvency support window.**_

_**Notwithstanding the first subparagraph, under the solvency support window, final**_

_**recipients of EUR 30 million or more shall not make dividend payments, non-mandatory**_

_**coupon payments or buy back shares. The remuneration of any member of the**_

_**management of a beneficiary that receives financing of EUR 30 million or more under the**_

_**solvency support window shall not go beyond the fixed part of that members’ remuneration**_

_**on 31 December 2019. For a person becoming a member of the management on or after the**_

_**granting of InvestEU financing under the solvency support window, the applicable limit**_

_**shall be the lowest fixed remuneration of any member of the management on 31 December**_

_**2019. Bonuses or other variable or comparable remuneration elements shall not be paid**_

_**under any circumstances.**_

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_Article 14_

_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 12(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 10.

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 sub

optimal investment situations;

(e) achieving geographical diversification via gradual allocation of the EU guarantee,

and to allow for the financing of smaller projects;

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(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 or institutions may be selected as implementing partners,

provided that they fulfil the requirements laid down in this Article.

_Article 15_

_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 or investment operations referred to in Article 13(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.

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

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investment guidelines, even if such structures invest a minority of their invested amounts

outside the Union and in third countries referred to Article 13(2) or invest a minority of

their invested amounts into assets other than those eligible under this Regulation.

The investment guidelines may set out further limitations as regards the proportion of

amounts invested outside the Union in financing and investment operations through funds

or other intermediate structures under the strategic European investment window,

including potential clauses on exit from such investments.

_**2a.**_ _**Eligible instruments under the solvency support window, via implementing partners,**_

_**shall result in the provision of equity or quasi-equity to companies, as referred to in**_

_**Article 3(2), point (ea). Hybrid instruments may be used if such instruments fulfil the**_

_**purpose of the window.**_

_Article 16_

_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.

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 18,

including on the coverage of portfolios of specific types of instruments and the

respective events that trigger possible calls on the EU guarantee;

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(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 adjusted

in duly justified cases pursuant to Article 12(2);

(e) the payment conditions;

(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 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, 7 and 13, 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.

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

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is not sufficient to cover the amount due to the implementing partner in accordance with

Article 17(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.

_Article 17_

_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.

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 16(4) 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 16(4), unless those costs have been

deducted from recovery proceeds.

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_Article 18_

_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 12(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 15(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;

(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 15(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 15(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.

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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.

**CHAPTER V**

**GOVERNANCE**

_Article 19_

_Advisory Board_

1. The Commission and the Steering Board established pursuant to Article 20 shall be

advised by an 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.

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;

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(b) provide advice to the Commission and the Steering Board about market

developments, market conditions, market failures and sub-optimal 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.

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 NPBIs 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 referred to in Article 20(1). The NPBIs 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.

_Article 20_

_Steering Board_

1. A Steering Board shall be established for the InvestEU Programme. 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

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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 Fund.

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.

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;

(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 23(2);

(e) adopt the rules of procedure of the secretariat to the Investment Committee referred

to in Article 23(4).

(f) adopt the rules applicable to the operations with investment platforms;

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_**(fa) determine the Member States and sectors economically most hit by the COVID-19**_

_**crisis and the Member States where the possibility of State solvency support is**_

_**more limited, on the basis of the indicators established by the Commission**_

_**pursuant to Article 7(1)(ea).**_

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 reach a

consensus, decisions of the Steering Board shall be adopted by qualified majority of its

voting members, consisting of at least seven votes.

_Article 21_

_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 or 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 and investment operation;

(b) how the proposed operation contributes to EU policy objectives;

(c) a description of additionality;

(d) description of the market failure or sub-optimal investment situation;

(e) the financial and technical contribution by the implementing partner;

(f) the impact of the investment ;

(g) the financial profile of the financing or investment operation;

(h) complementary indicators.

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4. The Commission is empowered to adopt delegated acts in accordance with Article 33 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 22_

_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. In the case of EIB financing and investment operations within the scope of this Regulation,

such operations 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.

_Article 23_

_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 22(1) or that have received a favourable opinion

within the framework of the procedure provided for in Article 19 of the EIB Statute;

(b) verify their compliance with this Regulation and the relevant investment guidelines;

(c) give particular attention to the additionality requirement 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; and

(d) check whether the financing and investment operations that would benefit from the

support of the EU guarantee comply with all relevant requirements.

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2. The Investment Committee shall meet in _**six**_ different configurations, corresponding to the

_**six**_ policy windows referred to in Article 7(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 7(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.

_**Four**_ members of the Investment Committee shall be permanent members of each of the

_**six**_ configurations of the Investment Committee. At least one of the permanent members

shall have expertise in sustainable investment. In addition, each of the _**six**_ 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 constantly updated. 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.

The documentation to be provided by the implementing partners shall comprise a

standardised request form, the Scoreboard referred to in Article 21 and any other document

the Investment Committee considers relevant, in particular a description of the character of

the market failure or sub-optimal 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 21 in its

assessment and verification of the proposed financial and investment operations.

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 case of a draw, the chair of the Investment Committee shall have the casting vote.

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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.

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 and 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.

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.

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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.

8. From the date of its constitution, the Investment Committee shall also be in charge of

approving the use of the EU guarantee under Regulation (EU) 2015/1017 for the remainder

of the investment period under that Regulation. They shall be assessed in accordance with

.
the criteria laid down in that Regulation. ▌ Article 22 shall not apply to such submissions

**CHAPTER VI**

**InvestEU Advisory Hub**

_Article 24_

_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 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.

Advisory initiatives shall be available as a component under each policy window referred

to in Article 7(1), covering sectors under that window. In addition, advisory initiatives

shall be available under a cross-sectoral component.

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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 7 and the eligibility criteria set out in

Article 13, and facilitate the development of 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;

(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;

_**(ia) providing support to financing and investment operations under the solvency**_

_**support window by covering costs, advisory services and technical and**_

_**administrative assistance to set-up and manage investment platforms and having a**_

_**special focus on Member States with less developed equity markets. The technical**_

_**assistance shall also be available to support the green and digital transformation of**_

_**companies financed under this window.**_

3. The InvestEU Advisory Hub shall be available to public and private project promoters,

including SMEs and start-ups, to public authorities and to national promotional banks or

institutions, financial and non-financial intermediaries.

4. The Commission shall conclude an advisory agreement with each advisory partner on the

implementation of one or more advisory initiatives. Fees may be charged 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 achieve the objective 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.

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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.

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 or institutions. Where appropriate, cooperation agreements with national

promotional banks or institutions shall be concluded under the InvestEU Advisory Hub,

with at least one national promotional bank or institution per Member State.

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 25.

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**CHAPTER VII**

**InvestEU Portal**

_Article 25_

_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.

2. The InvestEU Portal shall provide a channel for project promoters to bring 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, under any other instrument of the Union, or to decisions for

public funding.

3. Only projects that are compatible with Union law and policies shall be listed on the

InvestEU Portal.

4. The Commission shall transmit projects that meet the conditions set out in paragraph 3 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.

5. 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 26_

_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.

_Article 27_

_Monitoring and reporting_

1. Indicators for reporting on the progress of the InvestEU Programme towards the

achievement of the general and specific objectives set out in Article 3 are set in Annex III.

2. The performance reporting system shall ensure that data for monitoring implementation

and results are collected in an efficient, effective and 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 partners 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 and 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.

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 33 in order to amend this Regulation by reviewing or

complementing the indicators set in Annex III where considered necessary and the

provisions on the establishment of a monitoring and evaluation framework.

_Article 28_

_Evaluation_

1. Evaluations of the InvestEU Programme shall be carried out so that they feed into the

decision-making process in a timely manner.

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 Article 10(1), on the allocation of the EU guarantee provided

for in Article 12(4) and (5), on the implementation of the InvestEU Advisory Hub, on the

budgetary allocation provided for in point (d)(i) of Article 10(1), and on Article 7(6). 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

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the reaching of InvestEU Programme targets as well as EU policy goals, especially with

regard to value added, geographical and sectoral balance of the supported financing and

investment operations. The evaluation shall also assess the application of sustainability

proofing pursuant to Article 7(3) and the focus on SMEs reached under the SME policy

window referred to in point (c) of Article 7(1).

3. At the end of the implementation of the InvestEU Programme, but no later than four years

after the end of the period specified in Article 1(3), 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.

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 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 33 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.

_Article 29_

_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.

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_Article 30_

_Protection of the financial interests of the Union_

Where a third country participates in the InvestEU Programme by a decision under an international

agreement or by virtue of any other legal instrument, the third country shall grant the necessary

rights and access required for the authorising officer responsible, the European Anti-Fraud Office

(OLAF), the European Court of Auditors to comprehensively exert 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, provided for in Regulation (EU, Euratom) No 883/2013 of the

European Parliament and of the Council concerning investigations conducted by the European Anti

Fraud Office (OLAF).

**CHAPTER IX**

**TRANSPARENCY AND VISIBILITY**

_Article 31_

_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 targeted information to multiple audiences, including

the media and the public.

The application of the requirements under the first subparagraph to projects in the defence

and space sectors 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 InvestEU Programme support, or oblige other

financial intermediaries to inform such final recipients of that support, by making that

information clearly visible in the relevant agreement providing InvestEU Programme

support, 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 and its actions and results. 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**

**TRANSITIONAL AND FINAL PROVISIONS**

_Article 32_

_Participation in a capital increase of the European Investment Fund_

The Union shall subscribe shares in forthcoming capital increases of the European Investment Fund

so that its relative share in the capital remains at current level. The subscription of the shares and

the payment of up to EUR 900 000 000 of the paid-in part of the shares shall be carried out in

accordance with the terms and conditions that shall be approved by the General Meeting of the

Fund.

_Article 33_

_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 _**7(1)(ea) and**_ (7), 21(4), 27(5) and

28(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 the end of the five-year period. 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 _**7(1)(ea) and**_ (7), 21(4), 27(5) and 28(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 _**7(1)(ea) and**_ (7), 21(4), 27(5) and 28(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.

_Article 34_

_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 _**shall**_ be used for the

provisioning of the EU guarantee under this Regulation ▌.

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 _**shall**_

be used for the provisioning of the EU guarantee under this Regulation ▌.

3. The amount of EUR _**XXX**_ (current prices) referred to in point (i) of Article 3(2)(c) of

Regulation [EURI] shall be used:

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(a) for the provisioning of the EU guarantee under this Regulation with an amount of

EUR _**XXX**_ (current prices), in addition to the resources mentioned in the first

subparagraph of Article 211(4) of the Financial Regulation,

(b) for the implementation of the measures provided in Chapters V and VI and the

measures referred to in the second sentence of Article 2(2) of Regulation [EURI],

subject to Article 4(4) and (8) of that Regulation, with an amount of EUR 200 440

000 (current prices).

This amount shall constitute an external assigned revenue in accordance with Article 21(5)

of the Financial Regulation.

_**3a.**_ _**The implementing partners may submit to the Commission financing and investment**_

_**operations approved by them during the period from the conclusion of the relevant**_

_**guarantee agreement and the first appointment of all the members of the Investment**_

_**Committee.**_

_**3b.**_ _**The Commission shall assess the operations referred to in paragraph 3a and shall decide**_

_**whether to grant them coverage under the EU guarantee.**_

_**3c.**_ _**The implementing partners may submit to the Commission financing and investment**_

_**operations approved by them during the period from ... [date of entry into force of this**_

_**Regulation] until the conclusion of the relevant guarantee agreement.**_

_**3d.**_ _**The Commission shall assess the operations referred to in paragraph 3c and shall decide**_

_**whether to grant them coverage under the EU guarantee. In the event of positive**_

_**decision by the Commission, such coverage shall take effect on the date of conclusion of**_

_**the relevant guarantee agreements, after which the implementing partners may sign the**_

_**financing and investment operations.**_

_**3e.**_ _**All financial instruments established by programmes referred to in Annex IV to this**_

_**Regulation and the EU guarantee established by Regulation (EU) 2015/1017 may, if**_

_**applicable and subject to a prior evaluation, be merged with those under this Regulation.**_

_**3f.**_ _**By way of derogation from the second and third subparagraphs of Article 209(3) of the**_

_**Financial Regulation, revenues and repayments from the financial instruments**_

_**established by programmes referred to in Annex IV to this Regulation and the budgetary**_

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_**guarantee established under Regulation (EU) 2015/1017, which have been merged with**_

_**the EU guarantee established by this Regulation in accordance with paragraph 3e of this**_

_**Article, shall constitute, respectively, internal assigned revenue within the meaning of**_

_**Article 21(5) of the Financial Regulation for the EU guarantee established by this**_

_**Regulation and repayments for the EU guarantee established by this Regulation.**_

_Article 35_

_Entry into force_

This Regulation shall enter into force on the twentieth day following that 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 Brussels,

_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 fifth subparagraph of Article 4(2) towards financial and

investment operations shall be as follows:

(a) up to EUR 20 051 970 000 for objectives referred to in point (a) of Article 3(2);

(b) up to EUR _**11 250 000 000**_ for objectives referred to in point (b) of Article 3(2);

(c) up to EUR _**12 500 000 000**_ for objectives referred to in point (c) of Article 3(2);

(d) up to EUR _**5 567 500 000**_ for objectives referred to in point (d) of Article 3(2);

(e) up to EUR 31 153 850 000 for objectives referred to in point (e) of Article 3(2).

_**(ea) up to EUR 11 250 000 000 for objectives referred to in point (ea) of Article 3(2).**_

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**ANNEX II**

**Areas eligible for financing and investment operations**

The financing and investment operations under other windows than the strategic European

investment window may fall under one or more of the following areas:

The financing and investment operations under the strategic European investment window shall fall

under the areas laid down in point (e) of Article 7(1). They may in particular include Important

Projects of Common European Interest.

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 on Climate

Change, 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, but not only transmission and distribution level, storage technologies,

electricity interconnection between Member States and smart grids;

(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

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accordance with the objectives of Directive 2018/2001 of the European Parliament

and of the Council **[27]** ; and

(f) infrastructure for carbon capture, and storage in industrial processes, bioenergy

plants and manufacturing facilities towards the energy transition.

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 on Climate Change, in particular

through:

(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 **[28]** ;

(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);

(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;

**27** 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).
**28** 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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(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; and

(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.

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;

(d) the enhancement and restoration of eco systems and their services including through

the enhancement of nature and biodiversity by means of green and blue infrastructure

projects;

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(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.

4. The development of digital connectivity infrastructure, in particular through projects that

support the deployment of very high capacity digital networks, 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;

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(f) research in the field of key enabling technologies (KETs) and their industrial

applications, including new and advanced materials; and

(g) new effective and accessible healthcare products, including pharmaceuticals, medical

devices, diagnostics and advanced therapy medicinal products, new antimicrobials

and innovative development process that avoid using animal testing.

6. The development, deployment and scaling-up of digital technologies and services,

especially digital technologies and services 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; and

(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.

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 technological

leadership in innovative and sustainable sectors, including enhancing their

digitisation and innovation capacity and to ensure their global competitiveness;

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(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 but not only the development of new technologies, the use

of digital technologies and technological management of intellectual property rights.

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; **[29]**

(iii) health and long-term care, including clinics, hospitals, primary care, home

services and community-based care;

**29** 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 point 12;

(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;

(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 Space

Strategy objectives:

(a) to maximize 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.

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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 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

3. Impact of financing through 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 digitalisation

3.4. Investment supporting industrial transition

4. Sustainable infrastructure

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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

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 digitalisation 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

5. Research, innovation and digitisation

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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

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. Strategic European investment

8.1 Number and volume of operations contributing to the provision of critical infrastructure,

broken down by physical _**and virtual**_ infrastructure and the associated goods and services, where

applicable

8.2 Additional Capacity of critical infrastructure, broken down by areas, where applicable

8.3 Number and volume of operations contributing to the _**research and**_ development of critical

technologies and inputs for the security of the Union and its Member States, and dual use items

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8.4 Number of enterprises supported by size developing and manufacturing critical technologies

and inputs for the security of the Union and its Member States, and dual use items

_**8.4a**_ _**Number of clusters and Digital Innovation Hubs supported for the creation of synergies**_

_**between companies**_

8.5 Number and volume of operations contributing to the supply, manufacturing and stockpiling of

critical inputs, _**unless within the limits of existing legal requirements,**_ including critical healthcare

provisions

8.6 Additional critical inputs, including critical healthcare provisions, supported for supply,

manufacturing and stockpiling, by type, where applicable

8.7 Number and volume of operations supporting key enabling and digital technologies that are

strategically important for the Union’s industrial future

_**8.7a**_ _**Number and volume of operations to help companies, especially SMEs, to digitalise their**_

_**businesses and increase the resilience of their value chains and business models**_

_**8.7b**_ _**Number of start-ups that have been supported by the InvestEU Fund, number and volume**_

_**of operations to promote entrepreneurship**_

_**8.7c**_ _**Number and volume of operations contributing to the reduction of greenhouse gas**_

_**emissions in accordance with the Union climate targets**_

_**8.7d**_ _**Number of engagements of the European Investment Advisory Hubs in regions and**_

_**Member States with so far limited track record in project initiation and development and in**_

_**under-invested industrial sectors that have not benefitted from the Union's investment**_

_**instruments in the past**_

_**8.7e**_ _**Increase of volume of private equity and venture capital investments in related projects**_

_**8.7f**_ _**Regional and national breadth that indicates that Member States and regions that have**_

_**benefitted are spread evenly across the Union's territory and there is no concentration of**_

_**benefits to a limited number of Member States or regions.**_

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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

-  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)

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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)

-  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)

-  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:

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-  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)

-  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 No 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 No 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)

-  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

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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)

–
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)

-  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)

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-  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)

-  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)

D. Dedicated Investment Vehicles:

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-  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 of 25.2.2010 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, sub** **optimal investment situations, additionality and excluded activities**

A. Market failures, sub-optimal investment situations and additionality

In accordance with Article 209 of the Financial Regulation, the EU guarantee shall address

market failures or sub-optimal investment situations (point (a) of Article 209(2)) 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)).

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 below:

1. Market failures and sub-optimal investment situations

To address market failures or sub-optimal 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).

(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 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.

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(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.

(f) In the case of support to financing and investment operations under the strategic

European investment window, the investment would not have been undertaken or would

not have been undertaken to the same extent through market financing by entities

established and operating in the Union because of difficulties in internalising the

benefits provided to the European strategic interest.

(g) New or complex market failures or sub-optimal investment situations in accordance

with point (a)(iii) of Article 8(1) of this Regulation.

2. Additionality

Financing and investment operations shall fulfil both aspects of additionality as referred to

point (b) of in Article 209(2) of the Financial Regulation. This 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 the InvestEU Fund support. For the purposes of this Regulation,

these 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

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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.

(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 or investment operations would not have been carried out or would

not have been carried out to the same extent by the implementing partner without

the InvestEU Fund support; and

(b) the financing or 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 and other

public sources has to be possible, in particular where Union value added can be

achieved and where the use of public sources to achieve policy objectives in an

efficient manner can be optimised.

(3) Financing and investment operations under the strategic European investment window

may also be considered additional whenever these operations would not have been

carried out, or not to the same extent, by other private and public entities established

and operating in the Union without the InvestEU Fund support.

To demonstrate that the financing and investment operations benefitting from the EU guarantee

are additional to the existing market and other public support, the implementing partners shall

provide information that demonstrates at least one of the following features:

(a) Support provided through subordinated positions in relation to other public or private

lenders or within the funding structure

(b) Support provided 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

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(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/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 provided under the InvestEU Fund

(f) Support provided 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, notably for SME support, the

additionality shall be verified at the level of the intermediary rather than at the level of the final

recipient. Additionality is 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, sub-optimal 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 Article [X] of the [Horizon Europe]

Regulation **[30]** : 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

(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 **[31]** 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

**30** Article 14 of the Proposal for 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
2018/0224(COD).
**31** OJ L 222, 24.8.1999, p. 31.

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(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:

(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 concerned activity 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

(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;

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(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, for monitoring

this compliance during the implementation of the project and for undertaking appropriate remedial

actions where relevant.

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