Annexes to COM(2020)403 - InvestEU Programme - Main contents

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dossier	COM(2020)403 - InvestEU Programme.
document	COM(2020)403
date	March 24, 2021

ANNEX I

AMOUNTS OF EU GUARANTEE PER SPECIFIC OBJECTIVE

The indicative distribution referred to in the fourth subparagraph of Article 4(2) towards financial and investment operations shall be as follows:

(a)	up to EUR 9 887 682 891 for objectives referred to in point (a) of Article 3(2);

(b)	up to EUR 6 575 653 460 for objectives referred to in point (b) of Article 3(2);

(c)	up to EUR 6 906 732 440 for objectives referred to in point (c) of Article 3(2);

(d)	up to EUR 2 782 241 282 for objectives referred to in point (d) of Article 3(2).

ANNEX II

AREAS ELIGIBLE FOR FINANCING AND INVESTMENT OPERATIONS

The financing and investment operations may include strategic investment to support final recipients whose activities are of strategic importance to the Union, in particular in view of the green and digital transitions, of enhanced resilience and of strengthening strategic value chains. They may include important projects of common European interest. The financing and investment operations may fall under one or more of the following areas:

(1)

the development of the energy sector in accordance with the Energy Union priorities, including security of energy supply, clean energy transition and the commitments taken under the 2030 Agenda for Sustainable Development and the Paris Agreement, in particular through:

(a)	the expansion of the generation, supply or use of clean and sustainable renewable and safe and sustainable other zero and low-emission energy sources and solutions;

(b)	energy efficiency and energy savings (with a focus on reducing demand through demand side management and the refurbishment of buildings);

(c)	the development, smartening and modernisation of sustainable energy infrastructure, in particular storage technologies, electricity interconnections between Member States and smart grids, both at the transmission and distribution level;

(d)	the development of innovative zero- and low-emission heat supply systems and the combined production of electricity and heat;

(e)

the production and supply of sustainable synthetic fuels from renewable/carbon-neutral sources and other safe and sustainable zero- and low-emission sources, biofuels, biomass and alternative fuels, including fuels for all modes of transport, in accordance with the objectives of Directive (EU) 2018/2001;

(f)	infrastructure for carbon capture, and storage in industrial processes, bioenergy plants and manufacturing facilities towards the energy transition; and

(g)

critical infrastructure, whether physical or virtual, including infrastructure elements identified as critical as well as land and real estate crucial for the use of such critical infrastructure and the provision of goods and services instrumental to the operation and maintenance of the critical infrastructure.

(2)

the development of sustainable and safe transport infrastructures and mobility solutions, equipment and innovative technologies in accordance with Union transport priorities and the commitments taken under the Paris Agreement, in particular through:

(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 (1);

(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;

(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;

(h)

projects to maintain or upgrade existing transport infrastructure, including motorways on the TEN-T where necessary to upgrade, maintain or improve road safety, to develop Intelligent Transport Systems (ITS) services or to guarantee infrastructure integrity and standards, to develop safe parking areas and facilities, recharging and refuelling stations for alternative fuels; and

(i)	critical infrastructure including infrastructure elements identified as critical as well as land and real estate crucial for the use of such critical infrastructure and the provision of goods and services instrumental to the operation and maintenance of the critical infrastructure.

(3)

environment and resources, in particular with respect to:

(a)	water, including drinking water supply and sanitation, and network efficiency, leakage reduction, infrastructure for the collection and treatment of waste water, coastal infrastructure and other water-related green infrastructure;

(b)	waste management infrastructure;

(c)	projects and enterprises in the fields of environmental resource management and sustainable technologies;

(d)	the enhancement and restoration of ecosystems and their services including through the enhancement of nature and biodiversity by means of green and blue infrastructure projects;

(e)	sustainable urban, rural and coastal development;

(f)	climate change actions, climate adaptation and mitigation, including natural hazard disaster risk reduction;

(g)	projects and enterprises that implement the circular economy by integrating resource efficiency aspects in the production and product life cycle, including the sustainable supply of primary and secondary raw materials;

(h)	the decarbonisation of energy-intensive industries and the substantial reduction of emissions in such industries, including the demonstration of innovative low-emission technologies and their deployment;

(i)	the decarbonisation of the energy production and distribution chain by phasing out the use of coal and oil; and

(j)	projects that promote sustainable cultural heritage.

(4)

the development of digital connectivity infrastructure, whether physical or virtual, in particular through projects that support the deployment of very high capacity digital networks or 5G connectivity or that improve digital connectivity and access, particularly in rural areas and peripheral regions.

(5)

research, development and innovation, in particular through:

(a)	research and innovation projects that contribute to the objectives of Horizon Europe, including research infrastructure and support to academia;

(b)	corporate projects, including training and promoting the creation of clusters and business networks;

(c)	demonstration projects and programmes, as well as deployment of related infrastructures, technologies and processes;

(d)	collaborative research and innovation projects involving academia, research and innovation organisations and industry; public-private partnerships and civil society organisations;

(e)	knowledge and technology transfer;

(f)	research in the field of key enabling technologies (KETs) and their industrial applications, including new and advanced materials; and

(g)

new effective and accessible healthcare products, including research, development, innovation and manufacturing of pharmaceuticals, medical devices, diagnostics and advanced therapy medicinal products and new antimicrobials, as well as innovative development processes that avoid using animal testing.

(6)

the development, deployment and scaling-up of digital technologies and services, especially digital technologies and services, including media, online service platforms and secure digital communication, that contribute to the objectives of the Digital Europe Programme, in particular through:

(a)	artificial intelligence;

(b)	quantum technology;

(c)	cybersecurity and network protection infrastructures;

(d)	the internet of things;

(e)	blockchain and other distributed ledger technologies;

(f)	advanced digital skills;

(g)	robotics and automatisation;

(h)	photonics;

(i)	other advanced digital technologies and services contributing to the digitisation of the Union industry and the integration of digital technologies, services and skills in the transport sector of the Union; and

(j)	recycling and manufacturing facilities for the production of information and communication technologies components and devices in the Union.

(7)

financial support to entities employing up to 499 employees, with a particular focus on SMEs, and small mid-cap companies, in particular through:

(a)	the provision of working capital and investment;

(b)	the provision of risk financing from seed to expansion stages to ensure their technological leadership in innovative and sustainable sectors including by enhancing their digitisation and innovation capacity, and their global competitiveness;

(c)	the provision of financing for the acquisition of a business by employees or participation in the ownership of a business by employees.

(8)	cultural and creative sectors, cultural heritage, media, the audio-visual sector, journalism and press, in particular through the development of new technologies, the use of digital technologies and technological management of intellectual property rights.

(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 (2);

(iii)

health and long-term care, including clinics, hospitals, primary care, home services and community-based care;

(e)	social innovation, including innovative social solutions and schemes aimed at promoting social impacts and outcomes in the areas referred to in points (a) to (d) and (f) to (j);

(f)	cultural activities with a social objective;

(g)	measures to promote gender equality;

(h)	the integration of vulnerable people, including third country nationals;

(i)	innovative health solutions, including e-health, health services and new care models;

(j)	the inclusion of and accessibility for persons with disabilities.

(13)

the development of the defence industry in order to contribute to the Union’s strategic autonomy, in particular through support for:

(a)	the Union’s defence industry supply chain, in particular through financial support to SMEs and mid-caps;

(b)	companies participating in disruptive innovation projects in the defence sector and closely related dual-use technologies;

(c)	the defence sector supply chain when participating in collaborative defence research and development projects, including those supported by the European Defence Fund;

(d)	infrastructure for defence research and training.

(14)

space, in particular in relation to the development of the space sector in line with the objectives of the Space Strategy for Europe:

(a)	to maximise the benefits for the Union society and economy;

(b)	to foster the competitiveness of space systems and technologies, addressing in particular vulnerability of supply chains;

(c)	to underpin space entrepreneurship, including downstream development;

(d)	to foster Union’s autonomy for safe and secure access to space, including dual use aspects.

(15)	seas and oceans, through the development of projects and enterprises in the area of the blue economy, and the Sustainable Blue Economy Finance Principles, in particular through maritime entrepreneurship and industry, renewable marine energy and circular economy.

(1) 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).

(2) 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.

ANNEX III

KEY PERFORMANCE AND MONITORING INDICATORS

1.

Volume of financing supported by the InvestEU Fund (broken down by policy window)

1.1	Volume of operations signed

1.2	Investment mobilised

1.3	Amount of private finance mobilised

1.4	Leverage and multiplier effect achieved

2.

Geographical coverage of financing supported by the InvestEU Fund (broken down by policy window, country and region at the common classification of territorial units for statistics (NUTS) 2 level)

2.1	Number of countries (Member States and third countries) covered by operations

2.2	Number of regions covered by operations

2.3	Volume of operations per country (Member State and third country) and per region

3.

Impact of financing supported by the InvestEU Fund

3.1	Number of jobs created or supported

3.2	Investment supporting climate objectives and, where applicable, broken down by policy window

3.3	Investment supporting digitisation

3.4	Investment supporting industrial transition

3.5	Investment supporting just transition

3.6

Strategic investment

—	Number and volume of operations contributing to the provision of critical infrastructure

—	Number and volume of operations contributing to investment in cybersecurity, space and defence

4.

Sustainable infrastructure

4.1	Energy: Additional renewable and other safe and sustainable zero and low-emission energy generation capacity installed (in megawatts (MW))

4.2	Energy: Number of households, number of public and commercial premises with improved energy consumption classification

4.3	Energy: Estimated energy savings generated by the projects (in kilowatt-hours (kWh))

4.4	Energy: Annual green-house gas emissions reduced/avoided in tonnes of CO2 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 digitisation of transport, in particular through the deployment of European Rail Traffic Management System (ERTMS), River Information System (RIS), Intelligent Transportation System (ITS), vessel traffic monitoring and information system (VTMIS)/e-maritime services and Single European Sky ATM Research (SESAR)

—	Number of alternative fuel supply points built or upgraded

—	Number of projects contributing to the safety of transport

4.8	Environment: Investment contributing to the implementation of plans and programmes required by the Union environmental acquis relating to air quality, water, waste and nature

5.

Research, innovation and digitisation

5.1	Contribution to the objective of 3 % of the Union’s gross domestic product (GDP) invested in research, development and innovation

5.2	Number of enterprises supported by size carrying out research and innovation projects

6.

SMEs

6.1	Number of enterprises supported by size (micro, small, medium-sized and small mid-cap companies)

6.2	Number of enterprises supported by stage (early, growth/expansion)

6.3	Number of enterprises supported by Member State and region at NUTS 2 level

6.4	Number of enterprises supported by sectors by statistical classification of economic activities in the European Union (NACE) code

6.5	Percentage of investment volume under the SME policy window directed towards SMEs

7.

Social investment and skills

7.1	Social infrastructure: Capacity and access to supported social infrastructure by sector: housing, education, health, other

7.2	Microfinance and social enterprise finance: Number of microfinance recipients and social enterprises supported

7.3	Skills: Number of individuals acquiring new skills or having their skills validated and certified: formal, education and training qualification

8.

InvestEU Advisory Hub

8.1	Number of engagements of the InvestEU Advisory Hub to provide advisory support, by sector and Member State

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) 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:

—	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 2006/971/EC of 19 December 2006 concerning the Specific Programme Cooperation implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013) (OJ L 400, 30.12.2006, p. 86)

—	Council Decision 2006/974/EC of 19 December 2006 on the Specific Programme: Capacities implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013) (OJ L 400, 30.12.2006, p. 299)

—

EaSI Guarantee Instrument: Regulation (EU) No 1296/2013 of the European Parliament and of the Council of 11 December 2013 on a European Union Programme for Employment and Social Innovation (“EaSI”) and amending Decision No 283/2010/EU establishing a European Progress Microfinance Facility for employment and social inclusion (OJ L 347, 20.12.2013, p. 238)

—

COSME Loan Guarantee Facility (COSME LGF): Regulation (EU) No 1287/2013 of the European Parliament and of the Council of 11 December 2013 establishing a Programme for the Competitiveness of Enterprises and small and medium-sized enterprises (COSME) (2014 - 2020) and repealing Decision No 1639/2006/EC (OJ L 347, 20.12.2013, p. 33)

—

InnovFin Debt:

—

—	Regulation (EU) No 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)

—	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)

—

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:

—

European Progress Microfinance Facility – Fonds commun de placement – fonds d’investissement spécialisé (EPMF FCP-FIS): Decision No 283/2010/EU of the European Parliament and of the Council of 25 March 2010 establishing a European Progress Microfinance Facility for employment and social inclusion (OJ L 87, 7.4.2010, p. 1)

—

Marguerite:

—	Regulation (EC) No 680/2007 of the European Parliament and of the Council of 20 June 2007 laying down general rules for the granting of Community financial aid in the field of the trans-European transport and energy networks (OJ L 162, 22.6.2007, p. 1)

—	Commission Decision C(2010)0941 of 25 February 2010 on European Union participation in the 2020 European Fund for Energy, Climate Change and Infrastructure (the Marguerite Fund)

—

European Energy Efficiency Fund (EEEF): Regulation (EU) No 1233/2010 of the European Parliament and of the Council of 15 December 2010 amending Regulation (EC) No 663/2009 establishing a programme to aid economic recovery by granting Community financial assistance to projects in the field of energy (OJ L 346, 30.12.2010, p. 5)

ANNEX V

MARKET FAILURES, SUBOPTIMAL INVESTMENT SITUATIONS, ADDITIONALITY AND EXCLUDED ACTIVITIES

A.

Market failures, suboptimal investment situations and additionality

In accordance with Article 209 of the Financial Regulation, the EU guarantee shall address market failures or suboptimal investment situations (point (a) of Article 209(2) of the Financial Regulation) and shall achieve additionality by preventing the replacement of potential support and investment from other public or private sources (point (b) of Article 209(2) of the Financial Regulation).

In order to comply with points (a) and (b) of Article 209(2) of the Financial Regulation, the financing and investment operations benefitting from the EU guarantee shall fulfil the following requirements laid down in points 1 and 2:

Market failures and suboptimal investment situations

To address market failures or suboptimal investment situations as referred to in point (a) of Article 209(2) of the Financial Regulation, the investments targeted by the financing and investment operations shall include one of following features:

(a)	Have the nature of a public good for which the operator or company cannot capture sufficient financial benefits (such as education and skills, healthcare and accessibility, security and defence, and infrastructure available at no or negligible cost).

(b)	Externalities which the operator or company generally fails to internalise, such as R&D investment, energy efficiency, climate or environmental protection.

(c)	Information asymmetries, in particular in the case of SMEs and small mid-cap companies, including higher risk levels related to early stage firms, firms with mainly intangible assets or insufficient collateral, or firms focusing on higher risk activities.

(d)	Cross-border infrastructure projects and related services or funds that invest on a cross-border basis to address the fragmentation of the internal market and to enhance coordination within the internal market.

(e)

Exposure to higher levels of risks in certain sectors, countries or regions beyond levels that private financial actors are able or willing to accept, including where the investment would not have been undertaken or would not have been undertaken to the same extent because of its novelty or because of risks associated with innovation or unproven technology.

(f)	New or complex market failures or suboptimal investment situations in accordance with point (a)(iii) of Article 9(1) of this Regulation.

Additionality

Financing and investment operations shall fulfil both aspects of additionality as referred to in point (b) of Article 209(2) of the Financial Regulation. That means that the operations would not have been carried out or would not have been carried out to the same extent by other public or private sources without support from the InvestEU Fund. For the purposes of this Regulation, those operations shall be understood as financing and investment operations having to meet the following two criteria:

(1)

to be considered additional to the private sources referred to in point (b) of Article 209(2) of the Financial Regulation, the InvestEU Fund shall support the financing and investment operations of the implementing partners by targeting investments which, due to their characteristics (public good nature, externalities, information asymmetries, socio-economic cohesion considerations or other), are unable to generate sufficient market-level financial returns or are perceived to be too risky (compared to the risk levels that the relevant private entities are willing to accept). Because of those characteristics, such financing and investment operations cannot access market financing at reasonable conditions in terms of pricing, collateral requirements, the type of finance, the tenor of financing provided or other conditions, and would not be undertaken in the Union at all or to the same extent without public support;

(2)

to be considered additional to existing support from other public sources referred to in point (b) of Article 209(2) of the Financial Regulation the InvestEU Fund shall only support financing and investment operations for which the following conditions apply:

(a)	the financing and investment operations would not have been carried out or would not have been carried out to the same extent by the implementing partner without support from the InvestEU Fund; and

(b)

the financing and investment operations would not have been carried out or would not have been carried out to the same extent in the Union under other existing public instruments, such as shared management financial instruments that operate at regional or national level, although the complementary use of InvestEU Fund and other public sources has to be possible, in particular where Union added value can be achieved and where the use of public sources to achieve policy objectives in an efficient manner can be optimised.

To demonstrate that the financing and investment operations benefitting from the EU guarantee are additional to the existing market and to existing other public support, the implementing partners shall provide information that demonstrates the presence of at least one of the following features:

(a)	support through subordinated positions in relation to other public or private lenders or within the funding structure;

(b)	support through equity and quasi-equity or through debt with long tenors, pricing, collateral requirements or other conditions not sufficiently available on the market or from other public sources;

(c)	support to operations that carry a higher risk profile than the risk generally accepted by the implementing partner’s own standard activities or support to implementing partners in exceeding own capacity to support such operations;

(d)	participation in risk-sharing mechanisms targeting policy areas that exposes the implementing partner to higher risk levels compared to the levels generally accepted by the implementing partner or that private financial actors are able or willing to accept;

(e)

support that catalyses or crowds in additional private or public financing and is complementary to other private and commercial sources, in particular from traditionally risk-averse investor classes or institutional investors, as a result of the signalling effect of the support from the InvestEU Fund;

(f)	support through financial products not available or not offered to a sufficient level in the targeted countries or regions due to missing, underdeveloped or incomplete markets.

For intermediated financing and investment operations, in particular for SME support, additionality shall be verified at the level of the intermediary rather than at the level of the final recipient. Additionality shall be deemed to exist when InvestEU Fund supports a financial intermediary in setting up a new portfolio with a higher level of risk or increasing the volume of activities that are already highly risky as compared with the risk levels that private and public financial actors are currently able or willing to accept in the targeted countries or regions.

The EU guarantee shall not be granted for supporting refinancing operations (such as replacing existing loan agreements or other forms of financial support for projects which have already partially or fully materialised), except in specific exceptional and well justified circumstances in which it is demonstrated that the operation under the EU guarantee will enable a new investment in an eligible area for financing and investment operations under Annex II of an amount, additional to customary volume of activity by the implementing partner or financial intermediary, at least equivalent to the amount of the operation that fulfils the eligibility criteria set out in this Regulation. Such refinancing operations shall respect the requirements set out in Section A of this Annex regarding market failure, suboptimal investment situations and additionality.

B.

Excluded activities

The InvestEU Fund shall not support:

(1)	activities which limit individual rights and freedoms or that violate human rights

(2)	in the area of defence activities, the use, development, or production of products and technologies that are prohibited by applicable international law

(3)	tobacco-related products and activities (production, distribution, processing and trade)

(4)

activities excluded from financing pursuant to the relevant provisions of the Horizon Europe Regulation: research on human cloning for reproductive purposes; activities intended to modify the genetic heritage of human beings which could make such changes heritable; and activities to create human embryos solely for the purpose of research or for the purpose of stem cell procurement, including by means of somatic cell nuclear transfer

(5)	gambling (production-, construction-, distribution-, processing-, trade- or software-related activities)

(6)	sex trade and related infrastructure, services and media

(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 (1) cannot be guaranteed

(8)

real estate development activity, such as an activity with a sole purpose of renovating and re-leasing or re-selling existing buildings as well as building new projects; however, activities in the real estate sector that are related to the specific objectives of the InvestEU Programme as specified in Article 3(2) and to the areas eligible for financing and investment operations under Annex II, such as investments in energy efficiency projects or social housing, shall be eligible

(9)	financial activities such as purchasing or trading in financial instruments. In particular, interventions targeting buy-out intended for asset stripping or replacement capital intended for asset stripping shall be excluded

(10)	activities forbidden by applicable national legislation

(11)	the decommissioning, operation, adaptation or construction of nuclear power stations

(12)

investments related to mining or to the extraction, processing, distribution, storage or combustion of solid fossil fuels and oil, as well as investments related to the extraction of gas. This exclusion does not apply to:

(a)	projects where there is no viable alternative technology;

(b)	projects related to pollution prevention and control;

(c)	projects equipped with carbon capture and storage or carbon capture and utilisation installations; industrial or research projects that lead to substantial reductions of greenhouse gas emissions as compared with the applicable EU Emission Trading System benchmarks

(13)

investments in facilities for the disposal of waste in landfill. This exclusion does not apply to investments in:

(a)	on-site landfill facilities that are an ancillary element of an industrial or mining investment project and where it has been demonstrated that landfilling is the only viable option to treat the industrial or mining waste produced by the activity concerned itself;

(b)	existing landfill facilities to ensure the utilisation of landfill gas and to promote landfill mining and the reprocessing of mining waste

(14)	investments in mechanical biological treatment (MBT) plants. This exclusion does not apply to investments to retrofit existing MBT plants for waste-to-energy purposes or recycling operations of separated waste such as composting and anaerobic digestion

(15)

investments in incinerators for the treatment of waste. This exclusion does not apply to investments in:

(a)	plants exclusively dedicated to treating non-recyclable hazardous waste;

(b)	existing plants, where the investment is for the purpose of increasing energy efficiency, capturing exhaust gases for storage or use or recovering materials from incineration ashes, provided such investments do not result in an increase of the plants’ waste processing capacity.

The implementing partners shall remain responsible for ensuring compliance of financing and investment operations with the exclusion criteria set out in this Annex at signature of the relevant agreement, for monitoring such compliance during the implementation of the project and for undertaking appropriate remedial actions where relevant.

(1) OJ L 222, 24.8.1999, p. 31.