The European Council has adopted a Regulation establishing the Connecting Europe Facility (CEF), the future funding instrument for the trans-European networks (TE) in the fields of transport, energy and telecommunications. It determines the conditions, methods and procedures for the Union’s financial contribution to TEN projects, replacing the former legal basis.
In accordance with the next multi-annual financial framework (MFF), the overall CEF budget for 2014-2020 is EUR 33,242,259,000, EUR 5,850,075,000 of which are allocated to the energy sector. Additional investment from private and public sources may be leveraged through the use of innovative financial instruments such as project bonds, the Council points out.
The EU will contribute to the financing of projects at different rates depending on the sector and the type of action concerned. To be eligible for aid from the CEF, the projects must be in line with the requirements set out in the CEF regulation and in the sector-specific guidelines.
The guidelines for the energy sector have already been adopted and published in the EU’s Official Journal (Regulation 347/2013).
For Germany, Regulation 347/2013 identified the following trans-European energy infrastructure priority corridors and areas:
1. Priority Electricity Corridors
Northern Seas offshore grid (‘NSOG’)
- North-South electricity interconnections in Western Europe (‘NSI West Electricity’)
- North-South electricity interconnections in Central Eastern and South Eastern Europe (‘NSI East Electricity’)
- Baltic Energy Market Interconnection Plan in electricity (‘BEMIP Electricity’)
2. Priority Gas Corridors
- North-South gas interconnections in Western Europe (‘NSI West Gas’)
- North-South gas interconnections in Central Eastern and South Eastern Europe (‘NSI East Gas’)
- Southern Gas Corridor (‘SGC’)
- Baltic Energy Market Interconnection Plan in gas (‘BEMIP Gas’)
3. Priority Oil Corridor
- Oil supply connections in Central Eastern Europe (‘OSC’)
4. Priority Thematic Areas
- Smart grids deployment
- Electricity highways
- Cross-border carbon dioxide network
Based on this, on 14 October 2013 the European Commission adopted its list of 248 key energy infrastructure projects, labelled “projects of common interest” (PCI).
The contribution from the CEF to innovative financial instruments may not exceed 10% of the overall CEF budget. The project bond initiative will start progressively in 2014 and 2015, with full implementation depending on an independent evaluation of the initial phase. The ceiling for subordinated debt financing has been set at 30% of the total amount of senior debt.
As regards the energy sector, EU financial assistance is to be provided as a priority in the form of financial instruments, where appropriate, so as to enhance the multiplier effect of this aid, the Council stated. Furthermore, ending energy isolation, eliminating energy bottlenecks and completing the internal energy market will be priorities in the first two annual work programmes. The particular importance of electricity projects is also underscored.
The CEF’s overarching objective is to help create high-performing and environmentally sustainable interconnected networks across Europe, thereby contributing to economic growth and social and territorial cohesion within the Union.
Source: European Council