Transcript The Connecting Europe Facility: Financing the TEN-T

The Connecting
Europe Facility
Financing the TEN-T
infrastructure
Stephan Ouaki
European Commission
DG Mobility and Transport
Head of Unit B4 – Connecting Europe,
Infrastructure investments strategies
Valencia – 24 October 2012
Transport
Connecting Europe Facility
One instrument – three sectors
Connecting Europe Facility
Transport
Guidelines
Energy
Guidelines
Financing framework
2014-2020
The "European Infrastructure Package"
(European Commission proposal, October 2011)
Transport
Sectoral policy
Telecom
frameworks
Guidelines (setting priorities for
2020, 2030, 2050)
.
.
Revision of the TEN-T Guidelines
Revised TEN-T map – two layers approach
»
Comprehensive network will cover entire EU, accessibility for all citizens and
businesses
»
Core network: a selection of the most important parts of the network to be
realised as a priority until 2030
Clear technical requirements and standards with clear
implementation deadlines
.
.
»
2030 (core network) and 2050 (comprehensive network)
Telematic applications for a fully interoperable network
»
ERTMS, SESAR, ITS, RIS, VTMIS
Core network corridors as a means for reinforced
coordination of TEN-T infrastructure development
»
10 core network corridors
Transport
Today: still a patchwork….
Priority Projects (PP) design
PP's state of implementation 2012
Transport
By 2030: the network
The TEN-T
core network
(rail freight)
Transport
Core network Corridors
Governance structures for coordinated implementation
Corridor Work Plan
- coherent, demand-driven project implementation;
- efficient infrastructure use
•Deployment of interoperable traffic management systems
•Removal of physical, technical, operational and administrative barriers
between and within modes
•Coordination of infrastructure planning and exploitation: efficient multimodal
transport and services
•Improving administrative and technical capacity
« European coordinators » in a pivotal role
•Development and implementation (investment planning, costs estimation,
timeline, measures for deployment of new technologies)
Transport
10
Transport
core network
corridors
European transport system
Investment needs
• €1.5 trillion of investment needs by 2030
• TEN-T alone: €500 billion by 2020
• TEN-T Core Network: €250 billion by 2020
• Estimate based on discussions with MS on
their project portfolio
Transport
Connecting Europe Facility
Budget (EC MFF proposal June 2011)
€31.7 billion (transport funds)
 €19.7bn: grant component (estimate)
 With an estimated average co-funding rate of 20% could generate €98.5bn
 €2bn: innovative financial instruments (estimate of market take-up)
 With an estimate leverage of up to 15 or 20 could generate total investments of
€30bn to €40bn
 €10bn to be transferred from the Cohesion Fund (grants)
 To be allocated exclusively to projects in Cohesion Fund eligible Member States
 With an estimated average co-funding rate of 85% could generate €11.5bn
€140bn to €150bn: total amount of investments that could be generated
Transport
CEF transport budget
allocation
• 80 – 85 % of for
pre-identified
projects listed in
CEF Annex
•
•
•
horizontal priorities,
sections on 10 core
network corridors,
other important core
network sections
• 15 – 20 % for other
projects on the core
and comprehensive
networks
Transport
CEF funds: Centralised management
Project selection and resources allocation (EC)
!!but NOT the organisation of public procurement and
awarding of contracts
Same criteria for project proposals coming from all
Member States (quality, maturity, EU added value)
Concentration on projects with high EU added
value (cross-border missing links, boosting
multimodality, ensuring interoperability of networks
across borders and modes)
Increased efficiency of EU budget spending
(competition, "use-it-or lose-it" principle)
Transport
CEF grants (1): Centralised management
procedures
Work programmes (multiannual & annual)
Calls for projects
Info Days (TEN-T EA + EC)
Application (paperless via TENtec; TEN-T EA support)
Selection (external experts + TEN-T EA + EC)
Funding Decisions for selected projects (EC)
Monitoring of project implementation (TEN-T EA +
EC)
"Use it or lose it"
€10 bn Cohesion Fund: exclusively dedicated WP and
calls, more favourable co-funding rates (≈ CF rates)
Transport
CEF grants (3): Co-funding rates
All Member
States
Member States
eligible for Cohesion
Fund
(a) Studies (all)
(b)Works on
50%
80-85%
Rail
Cross border
Bottleneck
Other projects of common interest
Inland waterways
Cross border
Bottleneck
Other projects of common interest
Inland transport connections to ports and airports (rail and road)
40%
30%
20%
40%
30%
20%
20%
80-85%
80-85%
80-85%
80-85%
80-85%
80-85%
80-85%
Development of ports
Development of multi-modal platforms
Reduce rail freight noise by retrofitting of existing rolling stock
Freight transport services
Secure parkings on road core network
Motorways of the sea
20%
20%
20%
20%
20%
20%
30% (Council
proposal)
50%
80-85%
80-85%
20%
20%
20%
20%
30% (Council proposal)
20%
none
(Council
proposed 10%)
80-85%
80-85%
20%
20%
Types of Projects
Traffic management systems
ERTMS (rail) (+ RIS & VTMIS – Council
proposal)
Other modes
Cross border road sections
New technologies and innovation for all modes of transport (Council
proposal)
Transport
80-85%
CEF financial instruments (1): forms
2 types of financial instruments:
 Equity
 Risk-sharing instruments to provide loans and/or guarantees (such
as LGTT or Project Bonds)
 Implementation by financial partners, such as EIB, in accordance with
Financial Regulation
 Combination of innovative financial instruments (e.g. Project bonds)
and EU direct support (i.e. grants) to optimise the impact of financing
 Possibility for MS (directly or through Structural Funds), other EU
funds and/or investors to top up the CEF financial instruments
Transport
CEF financial instruments (2): implementation
Working with a financial partner such as EIB
 Details of instruments set up in cooperation agreement with financial
partner
 Budgetary transfer to the financial partner decided every year based
on expected project pipeline and needs
 Work programme but no calls
project promoters
contact the financial partner directly
 Financial partner decides on economic and financial viability of
project to be supported (first come first serve basis, but efforts
should be made to ensure sectoral and gradual geographical
diversification)
Project bonds: Lessons learned from LGTT and RSFF
 EIB should be the partner for Project bonds
 Other financial institutions are not excluded
Transport
Role of Regional and Local
Authorities
 Support for:
 preparation of project pipeline (including as part of Cohesion Policy
National Operational Programmes)
 planning and coordination of project implementation with other TEN-T
projects (particularly on core network corridors /"Corridor platforms")
 synergy exploitation planning (energy, broadband works)
 mobilisation of project promoters
 acceleration of work permits granting
 environmental impact studies
 communication with the local communities impacted
 If also project promoters/beneficiaries
 + adequate planning/commitment of budgetary resources
Transport
Europe 2020 Project Bond Initiative: A pilot
phase in 2012-2013
 Project bonds to be an integral part of the CEF 2014-2020
 Past experience (especially LGTT) shows time lag for banks and project
sponsors to incorporate complex new ideas into their financing structures
 In the case of project bonds also have to allow investors (pension funds,
insurers) time to analyse and adapt asset allocation
 Pilot phase in order to start this phase now rather than in 2014
 Funded by reallocating up to EUR 200 million from TEN-T, up to EUR 10
million from TEN-E and up to EUR 20 million from CIP ICT budget lines
 Aim to support 5-10 projects in transport, energy and/or ICT
Transport
Project bonds: how does it
work?
 Project Company will divide its
debt into two layers:
Project
Bonds
Target rating
minimum A-
A Senior tranche, which will be
issued as Project Bonds and
placed with institutional investors
(insurance companies, pension
funds, etc.)

A (smaller) Subordinated tranche,
which would be underwritten by
the Commission and the EIB, in a
funded (loan) or unfunded
(guarantee) form.
Bond Issue and
underwriting
Project Bond
Investor
SPV
Project
Costs

EIB Sub-debt
Equity &
Quasiequity
up to 20% of
total Bond
issue
A mechanism to “credit enhance” senior debt
and thus attract capital market investors

Subordinated debt maximum 20% of
total debt

EIB and EU to receive a fee and/or
credit margin
European Investment Bank
Transport
Structural funds: complementary
EU financial support for transport infrastructure
development
Cohesion Fund (CF)
• €34 billion (out of which €10 billion within CEF) for transport
infrastructure in eligible Member States
• TEN-T sections (both core and comprehensive)
• Up to 85% of eligible costs
European Regional Development Fund (ERDF/FESR)
• A part of total ERDF €170 billion to be dedicated to transport
infrastructure
• TEN-T sections (both core and comprehensive)
• Connecting secondary and tertiary nodes to TEN-T
infrastructure
• Less developed regions: up to 85% of eligible costs
• Transition regions: up to 75% of eligible costs
Transport
Connecting Europe Facility Regulation
State of play

19 October 2011 – Commission proposal

7 June 2012 – TTE Council (Transport) adopted a Partial General Approach



supportive of the CEF approach;

limited number of outstanding issues: amounts (discussed in MFF context), €10 bn to be transferred from the Cohesion
Fund, and financial instruments (mostly to align to general Financial Regulation)
18-19 July 2012 – CoR Opinion (Mr Zagar)

Generally supportive (constructive amendment on the €10bn)

A number of requests for differential treatment of certain categories of regions
10 October 2012 – EP REGI Committee Opinion


12 October 2012 – EP BUDG Committee MFF 2014-2020 Report


Clear strong support for providing high CEF budget (€50 bn EC proposal or more)
27 November 2012 – EP TRAN Committee to adopt Reports on CEF (and TEN-T Guidelines)


Generally supportive (amendments on €10 bn to be voted on 26 Nov)
Expected general strong support to Commission's proposals
end November 2012 – European Council expected to adopt political orientation for EU budget MFF 20142020

Budget for CEF will be determined

January 2013 – Expected EP first reading on CEF (and TEN-T Guidelines)

First half 2013 – trialogues EP, EC, Council

Mid 2013/end 2013 – Expected adoption of CEF (and TEN-T Guidelines) Regulation
Transport
Thank you for your kind attention!
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Transport