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)

2b.  The Union exposure to the risk-sharing instrument for project bonds, including management fees and other eligible costs, shall in no case exceed the amount of the Union contribution to the risk-sharing instrument for project bonds nor extend beyond the maturity of the underlying portfolio of credit enhancement facilities. There shall be no further liability on the general budget of the Union. The residual risk related to project bond operations shall always be borne by the EIB.

2c.  The main terms, conditions and procedures of the risk-sharing instrument for project bonds are laid down in Annex IIIa. The detailed terms and conditions for implementing the risk-sharing instrument for project bonds, including risk sharing, remuneration, monitoring and control, shall be laid down in a cooperation agreement between the Commission and the EIB. That cooperation agreement shall be approved by the Commission and the EIB according to their respective procedures.

2d.  In 2013, an amount of up to EUR 20 million may be used from the budget allocated for the pursuance of ICT and broadband policy in accordance with the rule set out in point (b) of Annex I. Given the limited duration of the pilot phase, the risk-sharing instrument for project bonds may reuse any revenues received before 31 December 2013 for new debt instruments and guarantees within the same risk-sharing facility and for projects fulfilling the same eligibility criteria in order to maximise the volume of investments supported. In the event that the risk-sharing instrument for project bonds is not extended into the next multiannual financial framework, any remaining funds shall be returned to the revenue side of the general budget of the Union.

2e.  In addition to the reporting requirements set out in point 49 of the Interinstitutional Agreement of 17 May 2006 on budgetary discipline and sound financial management, and without prejudice to any other regulatory reporting requirements, the Commission shall report to the European Parliament and the Council every six months during the pilot phase on the performance of the risk-sharing instrument for project bonds, including the financial terms and placement of any project bonds issued.

The Community contribution for the actions referred to in paragraph 1(b) shall be limited to the direct costs deemed necessary or appropriate for achieving the specific objectives of the action.

Support for thematic activities shall be granted towards the additional eligible costs of coordinating and implementing the network. The Community contribution may cover the additional eligible costs of those measures.

Subsection 2 Other provisions

Article 32

Applications

Applications for Community support for projects, best practice actions and thematic networks referred to in Article 31 shall include a financial plan listing all the components of the funding of the projects, including the financial support requested from the Community, and any other requests for support from other sources. Applicants making applications for other forms of Community support such as services or studies may also be required to provide information concerning the financial plan where appropriate.

Article 33

Policy analyses, development and coordination with participating countries

The following shall be undertaken in support of policy analyses, development and coordination with participating countries:

• (a)studies, data collection, surveys, and publications, based, where possible, on official statistics;

• (b)meetings of experts, including experts from public institutions, experts sent by SMEs and other interested parties, conferences and other events;

• (c)awareness-raising, networking and other relevant activities;

• (d)benchmarking of national performances and work on good practices, including their dissemination and implementation.

Article 34

Promotion, communication, information sharing and dissemination

• (a)promotion, dissemination, information and communication activities;

• (b)exchange of information, knowledge and experience, the staging of conferences, seminars, workshops or other meetings and the management of clustered activities.

Article 35

Projects of common interest: procurement based on technical specifications determined in coordination with Member States

Where it is necessary in order to achieve the objectives of the ICT Policy Support Programme, and where there is a clear common interest of Member States as concerns European-level deployment of products, services, core service components or building blocks, the Commission may establish projects of common interest comprising necessary technical and organisational tasks. Existing initiatives shall be taken into consideration in order to avoid the duplication of efforts.

The Commission shall, in coordination with the Member States, agree on common technical specifications and implementation schedules for such projects. On the basis of those common technical specifications and implementation schedules, the Commission shall issue calls for tender for implementation of the projects concerned. Such calls for tender shall be carried out solely by the Commission in accordance with Community procurement rules.

Section 3 Annual work programme

Article 36

Annual work programme

The annual work programme shall set out in detail, and in line with the objectives set out in Article 26:

• (a)measures needed for its implementation;

• (b)priorities;

• (c)qualitative and quantitative objectives;

• (d)appropriate evaluation criteria and qualitative and quantitative indicators for analysing effectiveness in delivering outcomes that will contribute to the achievement of the objectives of the specific programmes and the Framework Programme as a whole;

• (e)operational timetables;

• (f)the rules for participation;

• (g)the criteria for the selection and evaluation of the measures.

CHAPTER III The Intelligent Energy-Europe Programme

Section 1 Objectives and fields of action

Article 37

Establishment and objectives

• (a)to foster energy efficiency and the rational use of energy resources;

• (b)to promote new and renewable energy sources and to support energy diversification;

• (c)to promote energy efficiency and the use of new and renewable energy sources in transport.

Article 38

Operational objectives

In operational terms the Intelligent Energy — Europe Programme shall aim to:

• (a)provide the elements necessary for the improvement of sustainability, the development of the potential of cities and regions, as well as for the preparation of the legislative measures needed to attain the related strategic objectives; develop the means and instruments to follow up, monitor and evaluate the impact of the measures adopted by the Community and its Member States in the fields addressed by that programme;

• (b)boost investment across Member States in new and best performing technologies in the fields of energy efficiency, renewable energy sources and energy diversification, including in transport, by bridging the gap between the successful demonstration of innovative technologies and their effective, broad market uptake in order to attain leverage of public and private sector investment, promote key strategic technologies, bring down costs, increase market experience and contribute to reducing the financial risks and other perceived risks and barriers that hinder this type of investment;

• (c)remove the non-technological barriers to efficient and intelligent patterns of energy production and consumption by promoting institutional capacity building at, inter alia, local and regional level, by raising awareness, notably through the educational system, by encouraging exchanges of experience and know-how among the main players concerned, business and citizens in general and by stimulating the spread of best practices and best available technologies, notably by means of their promotion at Community level.

Article 39

Energy efficiency and rational use of resources (SAVE)

Action to foster energy efficiency and the rational use of energy resources may include:

• (a)improvement of energy efficiency and the rational use of energy, in particular in the building and industry sectors, with the exception of actions covered by Article 41;

• (b)supporting the preparation of legislative measures and their application.

Article 40

New and renewable resources (Altener)

Action to promote new and renewable energy resources may include:

• (a)promoting new and renewable energy sources for centralised and decentralised production of electricity, heat and cooling, and thus supporting the diversification of energy sources, with the exception of actions covered by Article 41;

• (b)integrating new and renewable energy sources into the local environment and the energy systems;

• (c)supporting the preparation of legislative measures and their application.

Article 41

Energy in transport (STEER)

Action to promote energy efficiency and the use of new and renewable energy sources in transport may include:

• (a)supporting initiatives relating to all energy aspects of transport, and the diversification of fuels;

• (b)promoting renewable fuels and energy efficiency in transport;

• (c)supporting the preparation of legislative measures and their application.

Article 42

Integrated initiatives

Action to combine several of the specific fields referred to in Articles 39, 40 and 41, or relating to certain Community priorities, may include:

• (a)integrating energy efficiency and renewable energy sources in several sectors of the economy;

• (b)combining various instruments, tools and actors within the same action or project.

Section 2 Implementation

Article 43

Promotion and dissemination projects

The following shall be supported:

• (a)strategic studies on the basis of shared analysis and regular monitoring of market developments and energy trends for the preparation of future legislative measures or for the review of existing legislation, including with regard to the functioning of the internal energy market, for the implementation of the medium and long-term strategy in the energy field to promote sustainable development, as well as for the preparation of long-term voluntary commitments with industry and other stake-holders and for the development of standards, labelling and certification systems, where appropriate also in cooperation with third countries and international organisations;

• (b)creation, enlargement or reorganisation of structures and instruments for sustainable energy development, including local and regional energy management, and the development of adequate financial products and market instruments, building on experience from past and present networks;

• (c)promotion of sustainable energy systems and equipment in order to further accelerate their penetration of the market and stimulate investment to facilitate the transition from the demonstration to the marketing of more efficient technologies, awareness campaigns and the creation of institutional capabilities;

• (d)development of information, education and training structures, the utilisation of results, the promotion and dissemination of know-how and best practices involving all consumers, dissemination of results of the actions and projects and cooperation with the Member States through operational networks;

• (e)monitoring of the implementation and the impact of Community legislative and support measures.

Article 44

Market replication projects

The Community shall provide support to projects concerned with the market replication of innovative techniques, processes, products or practices of Community relevance, which have already been technically demonstrated with success. These shall be designed to promote broader utilisation of such techniques, processes, products or practices within the participating countries and facilitate their market uptake.

Section 3 Annual work programme

Article 45

Annual work programme

The annual work programme shall set out in detail, and in line with the objectives set out in Article 37:

• (a)measures needed for its implementation;

• (b)priorities;

• (c)qualitative and quantitative objectives;

• (d)appropriate evaluation criteria and qualitative and quantitative indicators to analyse effectiveness in delivering outcomes that will contribute to the achievement of the objectives of the specific programmes and the Framework Programme as a whole;

• (e)operational timetables;

• (f)the rules for participation;

• (g)the criteria for the selection and evaluation of the measures.

TITLE III GENERAL AND FINAL PROVISIONS

Article 46

Committees

• (a)the Committee for the Entrepreneurship and Innovation Programme, called the EIP Management Committee (EIPC);

• (b)the Committee for the ICT Policy Support Programme, called the ICT Management Committee (ICTC);

• (c)the Committee for the Intelligent Energy Europe Programme, called the IEE Management Committee (IEEC).

Full coordination and cooperation across the whole Framework Programme, including strategic management, and coherent overall implementation, shall be ensured by the Commission, assisted by the EIPC, in close collaboration with the ICTC and the IEEC.

The period laid down in Article 4(3) of Decision 1999/468/EC shall be set at three months.

Article 47

User manual

Article 48

Strategic Advisory Board on Competitiveness and Innovation

The Commission shall be advised by a Strategic Advisory Board on Competitiveness and Innovation composed of representatives of industry and business associations, including those representing SMEs, and other experts. Their expertise should be related to the sectors and issues addressed by the Framework Programme, including financing, ICT, energy and eco-innovation.

Article 49

Repeal

Decision 96/413/EC is hereby repealed.

Article 50

Transitional measures

The implementation measures in pursuance of the objective set out in Article 27(b) shall be carried out under Decision No 456/2005/EC until 31 December 2008.

Thereafter, the actions initiated under Decision No 456/2005/EC on or before that date shall be administered in accordance with that Decision, except that the Committee established by that Decision shall be replaced by the ICTC established by Article 46(1)(b) of this Decision.

For services referred to in Article 21(2)(a), the Commission may, until 31 December 2007, continue operating the Euro Info Centre Network and concluding annual specific grant agreements with its members, funded under this Framework Programme, and maintain the operational arrangements of the multiannual programme for enterprise and entrepreneurship established by Decision 2000/819/EC.

Article 51

Entry into force

This Decision shall enter into force on the 20th day following its publication in the Official Journal of the European Union.

ANNEX I

Indicative budgetary breakdown

The indicative budgetary allocations for the specific programmes shall be the following:

• (a)60 % of the overall budget for the pursuance of the Entrepreneurship and Innovation Programme, of which approximately one fifth shall be allocated to promoting eco-innovation;

• (b)20 % of the overall budget for the pursuance of the ICT Policy Support Programme;

• (c)20 % of the overall budget for the pursuance of the Intelligent Energy — Europe Programme.

ANNEX II

Implementation arrangements for the Community financial instruments for SMEs referred to in Article 17

1. ARRANGEMENTS COMMON TO ALL COMMUNITY FINANCIAL INSTRUMENTS FOR SMES

A. Budget

The budgetary allocation shall cover the full cost of each instrument, including payment obligations towards financial intermediaries such as losses from guarantees, management fees for the EIF and the international financial institutions managing the Union's resources, as well as any other eligible costs or expenses.

The transfer of resources between instruments shall be kept flexible in order to respond to new developments and changing market conditions during the Framework Programme.

B. Trust accounts

Separate Trust accounts shall be set up by the EIF and the relevant international financial institutions to hold the budgetary funds relating to each instrument. Such accounts may be interest-bearing. Interest received on or before 31 December 2013 may be added to the resources and can be used for the purpose of the respective instrument.

Payments made by the trustee to honour payment obligations towards financial intermediaries shall be debited from the corresponding Trust account. Amounts to be paid back by the trustee to the general budget of the European Union, the trustee's management fees and other eligible costs and expenses shall be debited from the Trust account in accordance with the terms set out in the agreements between the Commission and the trustee. The Trust account shall be credited with receipts originating from the Commission, interest and, depending on the instrument, with the proceeds of realised investments (GIF) or with commitment and guarantee fees as well as other receivables (SMEG Facility).

After 31 December 2013, any balances on the Trust accounts, other than funds committed and not yet debited and funds reasonably required to cover eligible costs and expenses, shall be returned to the general budget of the European Union.

C. Fees

An appropriate fee policy shall apply to the operation of the instruments. The fees shall be established by the Commission in line with market practices and shall take into account:

• —the overall duration of the respective instrument and the corresponding monitoring requirements which extend beyond the budgetary commitment period,

• —the eligible countries,

• —the degree of novelty and complexity of the instrument,

• —the associated number of activities such as market research, identification of and negotiations with intermediaries, structuring of deals, closing, monitoring and reporting.

D. Visibility and awareness-raising

Each intermediary shall provide an appropriate level of visibility and transparency to the support given by the Community, including adequate information on the financial opportunities made available by the Framework Programme.

It shall be ensured that the final beneficiaries are adequately informed of the available financing opportunities.

2. IMPLEMENTATION OF THE GIF

A. Introduction

Fiduciary, management and monitoring aspects shall be agreed between the Commission and the EIF. The Commission shall apply specific guidelines on treasury management.

B. Intermediaries

GIF1 and GIF2 shall target commercially oriented intermediaries managed by independent teams combining the appropriate mix of skills and experience. The intermediaries shall be selected in conformity with best business and market practices in a transparent and non-discriminatory manner, avoiding any conflict of interest with the aim of working through a wide range of specialised funds or similar structures.

C. Eligibility criteria

GIF shall be complementary to the own-resource based activities of the EIB Group including the EIF by adopting an investment policy involving a higher risk profile, both as regards intermediary funds and their investment policies.

GIF1

GIF1 shall invest in intermediary venture capital funds and other investment vehicles investing in SMEs up to 10 years old, typically starting from pre-A (seed) and A (early stage) rounds and providing follow-on investment where appropriate. The usual maximum aggregate investment in an intermediary venture capital fund shall be 25 % of the total capital held by the relevant fund, or up to 50 % for new funds likely to have a particularly strong catalytic role in the development of venture capital markets for a specific technology or in a specific region as well as business angels' investment vehicles. The maximum aggregate investment in an intermediary venture capital fund shall be 50 % in those cases where the fund's investment focus is on SMEs active in eco-innovation. At least 50 % of the capital invested in any fund shall be provided by investors operating in circumstances corresponding to normal market conditions (under the ‘market economy investor principle’), irrespective of the legal nature and ownership structure of the investors providing that part of the capital. No commitment in a single fund shall exceed EUR 30 million. GIF1 may co-invest with EIF own resources or resources under the EIB mandate or other resources managed by the EIF.

GIF2

GIF2 shall invest in intermediary risk capital funds investing in SMEs, typically in B and C (expansion) rounds. The usual maximum aggregate investment in an intermediary risk capital fund shall be 15 % of the total capital held by the relevant fund, or up to 25 % for:

• —new funds likely to have a particularly strong catalytic role in the development of risk capital markets for a specific technology or in a specific region,

• —funds the main investment focus of which is on SMEs active in eco-innovation,

• —funds set up by first time management teams.

In the case of co-investment of GIF2 resources with EIF own resources or resources under the EIB mandate or other resources managed by the EIF, the maximum GIF2 contribution shall be 15 %. At least 50 % of the capital invested in any fund shall be provided by investors operating in circumstances corresponding to normal market conditions (under the market economy investor principle), irrespective of the legal nature and ownership structure of the investors providing that part of the capital. No commitment in a single fund shall exceed EUR 30 million.

D. Investment pari passu

The investment made under the GIF in an intermediary fund shall rank pari passu with the private investors.

E. Cornerstone role

For new funds likely to have a particularly strong catalytic role in the development of venture capital markets for a specific technology or in a specific region, EIF may play the role of a cornerstone investor.

F. Transparency of conditions

EIF shall ensure that terms and conditions of financing under GIF1 and GIF2 are transparent and comprehensible.

G. Life of the GIF

The GIF shall be a long-term facility which will usually take five- to 12-year positions in intermediary funds. In any case, life of investments under the GIF shall not exceed 19 years from the time of signature of the delegation agreement between the Commission and the EIF. Suitable exit strategies shall need to be defined in the agreements between the EIF and the intermediaries.

H. Realisation of investments

As most of the investments to be made under the GIF shall be in unquoted, illiquid entities, the realisation of those investments shall be based on the distribution of the proceeds received by the intermediary from the sale of their investments in SMEs.

I. Reinvestment of proceeds from realised investments

Proceeds, including dividends and reimbursements received by the EIF before 31 December 2013, shall be added to the resources of the GIF and used for the purpose of the GIF.

3. IMPLEMENTATION OF THE SMEG FACILITY

A. Introduction

Fiduciary, management and monitoring aspects shall be agreed between the Commission and the EIF and shall be in line with normal commercial practices. The Commission shall apply specific guidelines on treasury management.

B. Intermediaries

Intermediaries shall be chosen from among the guarantee schemes already operating or which may be established in the eligible countries, including mutual guarantee organisations, and any other appropriate financial institution. Selection procedures shall be transparent and non-discriminatory, avoiding any conflict of interest.

Intermediaries shall be selected in conformity with best market practice with regard to the effect on:

• —the volume of financing (debt, equity or quasi equity) made available to SMEs, and/or

• —SMEs' access to finance, and/or

• —risk-taking in SME financing by the intermediary concerned.

C. Eligibility

The financial criteria governing the eligibility under the SMEG Facility shall be determined for each intermediary on the basis of their activities, with the aim of reaching as many SMEs as possible. These rules shall reflect market conditions and practices in the relevant territory.

Financing for the acquisition of tangible and intangible assets, including innovation activities, technological development and the acquisition of licenses shall be eligible.

Criteria relating to the fourth SMEG window, (d) securitisation of SME debt financing portfolios, shall include individual and multi-seller transactions as well as multi-country transactions. Eligibility shall be based on best market practices, in particular regarding the credit quality and risk diversification of the securitised portfolio.

D. Terms of the guarantees

The guarantees issued by the EIF on behalf of the Commission under the (a) debt financing, (b) microcredit, and (c) equity or quasi-equity windows of the SMEG Facility shall cover a part of the risk taken by the financial intermediary in a financing portfolio of individual transactions. The fourth window of the SMEG Facility, (d) securitisation, shall involve sharing the risk of certain securitised tranches which are senior to the first loss piece or leaving the risk of a significant part of the first loss piece to the originator and sharing the risk of the remaining part.

The guarantees given by the EIF relating to the (a) debt financing, (b) microcredit, (c) equity or quasi equity windows of the SMEG Facility shall usually rank pari passu with the guarantees or, where appropriate, with the financing given by the intermediary.

The EIF may charge to a financial intermediary a fee calculated on amounts committed but not used according to an agreed schedule (commitment fees) as well as guarantee fees. It may also charge fees related to individual securitisation transactions.

E. EIF's capped maximum cumulative losses

The cost of the SMEG Facility to the general budget of the European Union shall be capped so that it does not, under any circumstances, exceed the budgetary allocation made available to the EIF under this SMEG Facility. There shall be no contingent liability on the budget.

The EIF's obligation to pay its share of the intermediary's losses shall continue until the cumulative amount of payments made to cover losses from a specific financing portfolio, reduced where appropriate by the cumulative amount of corresponding loss recoveries, reaches a pre-agreed amount, after which the EIF's guarantee shall be automatically cancelled.

F. Loss recoveries and other revenue payable to the Trust account

Any loss recoveries received from a given intermediary shall be credited to the Trust account and shall be taken into account in the calculation of the EIF's capped maximum cumulative losses towards the intermediary. Any other revenues, such as commitment fees and guarantee fees, shall be credited to the Trust account and, if received before 31 December 2013, shall be added to the resources of the SMEG Facility.

G. Duration of the SMEG Facility

Individual SME guarantees may have a maturity of up to 10 years.

4. IMPLEMENTATION OF THE CBS

A. Introduction

Implementation details for the Seed Capital action and the Partnership Action, including fiduciary, management and monitoring aspects, shall be subject to an agreement between the Commission and the EIF or the relevant international financial institutions.

Intermediaries shall be selected in conformity with best market practices.

Selection procedures for the provision of technical assistance shall be transparent and non-discriminatory, avoiding any conflict of interest.

B. Seed Capital Action

The Seed Capital Action shall be operated on a trust basis. The budgetary allocation shall cover the full cost of the action, including its management fees and any other eligible costs or expenses. The grants provided shall support investment funds which include seed capital in their global investment programme, by covering part of the resulting management costs.

C. Partnership Action

The Partnership Action shall be operated through the EIF or relevant international financial institutions. It shall cover technical assistance, management fees and other eligible costs supporting capacity building.

5. EVALUATION

The external evaluations shall be carried out by independent experts, taking account of the impact of the Growth and Employment Initiative established under 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 ([^E0027]) and of the multiannual programme for enterprise and entrepreneurship, and in particular for SMEs. The external evaluations shall assess the impact of the Community financial instruments for SMEs and provide a qualitative and quantitative analysis of achieved results, in particular, by assessing the leverage effect and cost-benefit of each instrument. The evaluation reports shall present statistical data for the Union as a whole and for the individual Member States and the other participating countries including:

• —for the GIF, the number of SMEs reached and the number of jobs created,

• —the rate of return to investors,

• —for the SMEG Facility, the number and value of loans provided by the financial intermediaries to SMEs, the number of SMEs reached and the number and value of loans defaulted,

• —for the Seed Capital Action, the number of organisations supported and the volume of seed capital investments,

• —for the Partnership Action, the number of intermediaries supported and SMEs reached,

• —any specific outputs relating to eco-innovation.

Appropriate visibility shall be given to the results and lessons learned from the reports of the external evaluators and to the sharing of best practices among stakeholders.

ANNEX III

Details of the services in support of business and innovation referred to in Article 21

• (a)Information, feedback, business cooperation and internationalisation services —disseminating information relating to the functioning and opportunities of the internal market for goods and services, including signposting to tender opportunities, —promoting pro-actively Community initiatives, policies and programmes that are relevant for SMEs and providing information to SMEs on the application procedures for such programmes, —operating tools to measure the impact of existing legislation on SMEs, —contributing to the carrying-out of impact assessment studies of the Commission, —operating other appropriate means to engage SMEs in the European policy-making process, —assisting SMEs to develop cross-border activities and international networks, —supporting SMEs to find relevant partners from the private or public sectors through appropriate tools.

• (b)Services for innovation and for the transfer of both technology and knowledge —disseminating information and raising awareness regarding innovation-related policies, legislation, and support programmes, —engaging in the dissemination and exploitation of research results, —providing brokerage services for technology and knowledge transfer, and for partnership building between all kinds of innovation actors, —stimulating the capacity of firms, especially SMEs to innovate, —facilitating linkage to other innovation services including intellectual property-related services.

• (c)Services encouraging the participation of SMEs in the Seventh Framework RTD Programme —raising awareness among SMEs regarding the Seventh Framework RTD Programme, —helping SMEs to identify their research and technological development needs and to find relevant partners, —assisting SMEs in the preparation and coordination of project proposals for participation in the Seventh Framework RTD Programme.

ANNEX IIIa

Main terms, conditions and procedures of the risk-sharing instrument for project bonds referred to in Article 31(2c)

The EIB shall be a risk-sharing partner and shall manage the Union contribution to the risk-sharing instrument for project bonds on behalf of the Union. More detailed terms and conditions for implementing that instrument, including its monitoring and control, shall be laid down in a cooperation agreement between the Commission and the EIB, taking into account the provisions laid down in this Annex.

(a) The EIB facility

• 1.The risk-sharing instrument for project bonds will be designed for each eligible project as a subordinated facility, in the form of a debt instrument or a contingent (guarantee) facility or both, in order to facilitate the issue of a project bond.

• 2.Should the EIB be or become a creditor to a project, the EIB’s rights under the risk-sharing instrument for project bonds shall rank behind the debt service of the senior debt and ahead of equity and any financing related to equity.

• 3.The facility shall not exceed 20 % of the total amount of the senior debt issued.

(b) Budget

ICT:

2013: Up to EUR 20 million.

The request for transfer of the sums above shall be issued by 31 December 2012 and shall be supported by a forecast of the need for the scheduled Union contribution.

If necessary, that forecast may serve as the basis for a demand-based reduction of the 2013 amount which shall be decided in accordance with the procedure referred to in Article 46(2).

(c) Fiduciary account

• 1.The EIB shall set up a fiduciary account to hold the Union contribution and revenues resulting from the Union contribution.

• 2.Given the limited duration of the pilot phase, the interest earned on the fiduciary accounts and other revenues resulting from the Union contribution, such as guarantee premiums, interest and risk margins on sums disbursed by the EIB, shall be added to the resources of the fiduciary account. However, the Commission may decide, in accordance with the procedure referred to in Article 46(2), that they are to be returned to the CIP ICT budget line.

(d) Use of the Union contribution

The Union contribution shall be used by the EIB:

• 1.towards risk provisioning on a first-loss basis for the subordinated facilities of the eligible project portfolio, in accordance with the relevant rules of the EIB and a risk assessment performed by the EIB under its applicable policies;

• 2.to cover any non-project-related eligible costs associated with the establishment and administration of the risk-sharing instrument for project bonds, including its evaluation.

(e) Risk and revenue sharing

The risk-sharing pattern resulting from point (d) shall be reflected in an appropriate sharing between the Union and the EIB of the risk remuneration charged by the EIB to its counterpart in respect of each facility within the project portfolio.

(f) Pricing

The pricing of the project bond facilities is based upon the risk remuneration in accordance with relevant standard rules and criteria of the EIB.

(g) Application procedure

Applications for risk coverage under the risk-sharing instrument for project bonds shall be addressed to the EIB in accordance with the EIB’s standard application procedure.

(h) Approval procedure

The EIB shall carry out risk, financial, technical and legal due diligence and shall decide upon the use of the risk-sharing instrument for project bonds and select the appropriate type of subordinated facility in accordance with its standard rules and criteria, notably EIB Credit Risk Policy Guidelines, and the EIB’s selection criteria in the social, environmental and climate field.

(i) Duration

• 1.The Union contribution to the risk-sharing instrument for project bonds shall be committed no later than 31 December 2013. The actual approval of project bond facilities by the EIB’s Board of Directors shall be finalised by 31 December 2014.

• 2.In the event of termination of the risk-sharing instrument for project bonds during the current multiannual financial framework, any balances on the fiduciary account, other than funds committed and funds needed to cover other eligible costs and expenses, shall be returned to the CIP ICT budget line.

• 3.Funds allocated to the risk-sharing instrument for project bonds shall be reimbursed to the relevant fiduciary account as facilities expire or are repaid, provided risk coverage remains sufficient.

(j) Reporting

Annual reporting methods on the implementation of the risk-sharing instrument for project bonds shall be agreed between the Commission and the EIB.

In addition, the Commission shall, with the support of the EIB, report on implementation every six months to the European Parliament and the Council, starting six months after the signature of the cooperation agreement referred to in Article 31(2c).

(k) Monitoring, control and evaluation

The Commission shall monitor the implementation of the instrument, including through on-the-spot controls as appropriate, and shall perform verification and controls in line with Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities ([^E0028]).

The EIB shall manage subordinated facilities in accordance with EIB’s own rules and procedures, including appropriate audit, control and monitoring measures. Furthermore, the EIB’s Board of Directors, on which the Commission and Member States are represented, shall approve each subordinated facility and monitor that the EIB is managed in accordance with its Statute and with the general directives laid down by its Board of Governors.

The Commission and the EIB shall submit an interim report on the functioning of the pilot risk-sharing instrument for project bonds to the European Parliament and the Council in the second half of 2013 with a view to optimising the design of that instrument.

A full-scale independent evaluation shall be undertaken in 2015 after approval of the final project bond operations. It shall cover, inter alia, the value added, additionality compared to other Union or Member State instruments and other existing forms of long-term debt financing, the achieved multiplier effect, an assessment of the risks involved as well as the creation or correction of distortive effects, if any. The evaluation shall also cover the impact on projects’ financial viability, volume, terms and costs of bond issuance, the effect on the wider bond markets as well as controlling creditor and procurement aspects. It shall also provide, if possible, a cost comparison with alternative means of project finance including bank loans. During the pilot phase, each selected project shall be assessed.

[^E0001]: OJ C 65, 17.3.2006, p. 22.

[^E0002]: OJ C 115, 16.5.2006, p. 17.

[^E0003]: Opinion of the European Parliament of 1 June 2006 (not yet published in the Official Journal) and Council Decision of 12 October 2006.

[^E0004]: OJ L 124, 20.5.2003, p. 36.

[^E0005]: OJ L 167, 6.7.1996, p. 55.

[^E0006]: OJ L 183, 11.7.1997, p. 12. Decision as amended by Decision No 1376/2002/EC (OJ L 200, 30.7.2002, p. 1).

[^E0007]: OJ L 192, 28.7.2000, p. 1. Regulation as last amended by Regulation (EC) No 1682/2004 (OJ L 308, 5.10.2004, p. 1).

[^E0008]: OJ L 333, 29.12.2000, p. 84. Decision as last amended by Decision No 1776/2005/EC of the European Parliament and of the Council (OJ L 289, 3.11.2005, p. 14).

[^E0009]: OJ L 14, 18.1.2001, p. 32.

[^E0010]: OJ L 176, 15.7.2003, p. 29. Decision as amended by Decision No 787/2004/EC (OJ L 138, 30.4.2004, p. 12).

[^E0011]: OJ L 336, 23.12.2003, p. 1. Decision as last amended by Decision No 2113/2005/EC (OJ L 344, 27.12.2005, p. 34).

[^E0012]: Not yet published in the Official Journal.

[^E0013]: OJ C 139, 14.6.2006, p. 1.

[^E0014]: OJ L 312, 23.12.1995, p. 1.

[^E0015]: OJ L 292, 15.11.1996, p. 2.

[^E0016]: OJ L 136, 31.5.1999, p. 1.

[^E0017]: OJ L 77, 27.3.1996, p. 20.

[^E0018]: OJ L 167, 22.6.2001, p. 10.

[^E0019]: OJ L 345, 31.12.2003, p. 90.

[^E0020]: OJ L 283, 27.10.2001, p. 33. Directive as amended by the 2003 Act of Accession.

[^E0021]: OJ L 1, 4.1.2003, p. 65.

[^E0022]: OJ L 123, 17.5.2003, p. 42.

[^E0023]: OJ L 52, 21.2.2004, p. 50.

[^E0024]: OJ L 11, 16.1.2003, p. 1.

[^E0025]: OJ L 184, 17.7.1999, p. 23. Decision as amended by Decision 2006/512/EC (OJ L 200, 22.7.2006, p. 11).

[^E0026]: OJ L 79, 24.3.2005, p. 1.

[^E0027]: OJ L 155, 29.5.1998, p. 43.

[^E0028]: OJ L 248, 16.9.2002, p. 1.