May 16 2017

Member States close to accepting EC’s proposal for reallocation of awards

After eight months of discussions, EC and Member States are close to agreeing an amendment to the NER300 Decision that would allow money that had been awarded to failed projects to be reallocated. It contains the following elements:

Cash for the “Innovfin Facility”

The EC proposes that, “as a priority” the money goes here. A memo accompanying the draft shows that the EIB Group and EC intend the “EDP Innovfin” facility specifically to receive the money. This particular facility “is designed to support first-of-a-kind renewable energy demonstration projects, via 95% first-loss risk coverage of EIB financing for selected projects.” The memo lists five ways in which EDP Innovfin’s rules need to be changed to bring it into line with NER300’s scope. This alignment exercise is planned for June.

Cash for “CEF Debt”

“CEF Debt” is an instrument within the Cleaner Transport Facility (set up in Dec 2016) that provides loans and guarantees. Extra money will “support the demonstration and roll out of innovative renewable energy technologies in the transport sector, which is a key priority for low-carbon innovation,” says the EC.


The memo says that undisbursed NER300 money could contribute to project development assistance “for projects falling under the NER300 scope”. It goes on, “PDA would (among other services) cover the costs related to the preparation of:

  • Technical preparatory studies;
  • Business plans;
  • Front-end engineering studies;
  • Training courses for relevant personnel;
  • Development of procurement documents until projects’ launch.”

But this rather limited interpretation of grants didn’t satisfy the Member States. To try to win them round, shortly before the CCC meeting, the EC added a recital to its text saying, “Considering the specific situation of highly innovative low-carbon projects, a part of financing should be provided in the form of grants.” The vehicle for providing these grants is not specified (and is very unlikely to be described in the amendment to be adopted on 19 May) but one source said it might be a new instrument created within Horizon 2020 that blends loans and grants.

Why no decision already?

The Climate Change Committee had been meant to vote through the amendment to the Decision on 27 April. This is was “essential”, the EC said, “to allow for related Innovfin Delegation agreement amendment in June 2017 and CEF Debt Delegation agreement amendment in the second half of 2017.” But the EC and Member States felt they needed more time to consider some last-minute ideas, so they decided not to risk a vote that day. To meet the June deadline, an extraordinary CCC meeting has been called for 19 May where NER300 is the only topic on the agenda.

Member States’ concerns

“first and faster”

The memo had talked of both EDP Innovfin and CEF Debt being available on a “first-come, first-served basis” but the latest version of the amendment would give “first and faster consideration” to NER300 projects “under the first or second call for proposals that have reached final investment decisions and are under implementation”. This has been pushed by a few Member States and is resisted by others.

the funding of transport projects

The Cleaner Transport Facility can fund a greater variety of transport-related projects than NER300, where support was only available for the production of biofuels. In the last eight months, the EC has suggested that the NER300 contribution to CEF Debt could fund the roll-out of “rapid-charging stations for electric vehicles along major motorways” or “alternatively fuelled buses, such as with electric and hydrogen fuel cells”. Now in this (fourth) memo it settles on “renewable energy-related e-mobility and innovative charging infrastructure in transport” as the focus. But some Member States are nervous: NER300 can only fund transport projects to the extent that they concern innovative renewable energy technology. This is hard-wired into NER300’s rules. They wonder whether, if it can’t be ensured that the infrastructure only delivers renewable electricity to the vehicles, the problem might again arise that NER300 money remains unused.


One Member State wanted the EC to explain how the Climate Change Committee could intervene in the repurposed NER300. “It is foreseen to consult the CCC,” it wrote, “but it is not clear how the Commission will proceed according with the outcome of that consultation.”


Another Member State proposed several edits for clarification, including one that would ensure that the publicity drive around the expanded EIB facilities reaches a fresh audience, not just people already connected to NER300.

  1.’s comment

    On the second paragraph of page 10, the memo insinuates that a guarantee is a grant. Nice try, Commission, but the Member States won’t fall for it. Project Development Assistance, however, is a kind of grant. If covering the cost of Front-End Engineering Design (FEED) studies is in the scope of PDA, and PDA covers a high share of the FEED costs, this will take substantial sums out of the Innovfin kitty. A FEED for a plant costing hundreds of millions is tens of millions.