Aug 31 2011

Recital 6 causes confusion at the EIB

From exchanges between at least one Member State and the EIB related to the EIB’s ongoing technical and financial due diligence assessment of NER300 proposals, it appears that the EIB expected project sponsors to ask for NER300 grants of exactly 50% of relevant costs. This is because Recital 6 of the Decision says, “[…] financing under this Decision should be fixed at 50 % of the relevant costs […]”. The EC is now being pressed to clarify whether Recital 6 should be applied strictly. Article 2(3), on which the Recital is based, appears to permit any funding request up to 50% of relevant costs by considering the action to take in a scenario where the NER300 funding request is less than 50% (“Where the total request for public funding is less than 50 % of the relevant costs, the total request for public funding shall be financed under this Decision.”).

It is not known how many in the EIB are labouring under the impression that Recital 6 must be applied strictly. Different (anonymous) desk officers within the EIB and within the private consultancies hired to assist it are responsible for different proposals and different parts of each proposal, with all correspondence passing through the address NER300«at»

  1.’s recommendation and commentary:

    The EIB should disregard Recital 6. Recitals are non-legislative notes explaining and summarising the legislation that follows in the Articles. They are written after the Articles have been written. Where there is an inconsistency, or implied inconsistency, the intent of the Article should take precedence.

    Recital 6 would not be the first case of an inconsistency coming to light in the text after the Decision was adopted by the Member States. Heavy edits to Recital 12 were made between the version adopted with the Member States on 2 Feb 2010 and the version published in the Official Journal over nine months later. The edits made the Recital consistent with changes to the Articles negotiated in that meeting.

    Finally, the logic of Recital 6 is wrong. If NER300 funding requests were fixed at 50% of relevant costs, the possibility for competition between consortia on the amount of money that they ask for would be eliminated. Instead the Member States, through (for example) their choice of hypothetical reference plant, would control the competition.