Funding Europe's Infrastructure

The European Commission last week presented a € 50 billion plan to finance the infrastructure networks of the EU in the areas of transport, energy, and telecommunications.
This proposed new legislative package is called the Connecting Europe Facility (CEF) and will replace the current “Trans-European Network” infrastructure programmes (“TENs”) with the aim of improving the links between the three infrastructure sectors, ensuring greater coordination of funds, and reducing administrative overlaps.

Most importantly, the EU’s new financial instrument aims to attract considerable financial resources from the public and private sectors by increasing the credibility of infrastructure projects and lowering their risk profiles.

The Connecting Europe Facility & Legislative Package

The Commission identifies the Connecting Europe Facility as being, for the first time, a single framework for investing in EU infrastructure priorities in these three sectors. The CEF package is designed to achieve the following aims: 
• better mobilise public and private financial resources to complement EU funding for transport, energy and telecommunications; 
• ensure optimal selection, follow up and implementation of infrastructure projects;
• ensure cost-effective and timely implementation of key priority network infrastructure; and
• maximise inter-connection between the transport, energy and telecommunications sectors. 
The Connecting Europe Facility Regulation itself would aim to establish more flexible budget allocations and simplify procedures on common funding instruments, common award criteria and common conditions for financial assistance. The package as a whole consists of four legislative proposals and three non-legislative policy documents:
• Proposal for a Regulation establishing the Connecting Europe Facility
• Proposal for a Regulation on guidelines for the trans-European transport network
• Proposal for a Regulation on guidelines for trans-European energy infrastructure
• Proposal for a Regulation on guidelines for trans-European telecommunications networks
• Communication on a growth package for integrated European infrastructures
• Communication on a pilot for the Europe 2020 Project Bond Initiative
• Communication on a framework for the next generation of innovative financial instruments – the EU equity and debt platforms

Funding Transport

The Commission’s proposal for a transport network regulation would repeal and revise guidelines for the development of the TEN-T network. It would better integrate transport policy into TEN-T planning, connect different modes of transport and make use of existing transport systems. The guidelines would apply to transport infrastructure of the trans-European transport network, including railway, inland waterway, road, maritime and air.

The proposal also sets the framework for identifying transport projects and promotes projects with third and neighbouring countries. It also foresees specific requirements for the core network, such as availability of alternative fuels, full electrification and the development of rest areas for drivers on roads. The core network includes urban nodes, maritime ports and border crossing points to neighbouring countries.

In the proposal, core network corridors are considered as viable instruments for implementing the core network. The Commission proposes that these corridors would involve at least three transport modes across at least three Member States, with special emphasis for ports. The core network corridors would be based on modal integration, interoperability and a coordinated management of infrastructure.

European coordinators would facilitate the implementation of the corridors. The coordinators would cooperate with corridor platforms, to be established by the Member States concerned. It is foreseen that each corridor platform would create a multi-annual development plan, according to which the Commission would adopt implementing acts for each corridor.

In the context of the new Multi-annual Financial Framework for 2014-2020, the Commission proposes to allocate €21.7 billion for the Connecting Europe Facility to fund transport infrastructure, complemented by additional €10 billion from the Cohesion Fund.

Funding Energy Projects

The proposal for a Regulation on guidelines for trans-European energy (TEN-T) infrastructure follows up on the Blueprint for energy infrastructure priorities for 2020 and beyond. In this, the Commission indicated that an interconnected, reliable and modernised infrastructure is a prerequisite not only for the EU energy and climate policy goals, but also for the EU's economic strategy.

The proposal sets out rules to streamline approval and funding of energy infrastructure projects by revising the existing TEN-E policy, including the approach to identifying priority projects. The Commission proposes that energy infrastructure projects of common interest be approved by a single competent authority in the Member State concerned and that the permitting procedure not take more than three years. In addition, the proposal lays down rules to identify infrastructure projects of common interest.

The selection of projects of common interest would be carried out at two levels. Firstly, at regional level, where the project promoter would submit its proposal to the relevant regional group composed of Member States and regulators, and then at EU level, where the Commission would take the final decision on the list of projects. The Commission is expected to come forward with the first list of projects by 31 July 2013, and every two years thereafter.

The Commission proposal lays down the regime for infrastructure projects of common interest where the competent authority within each Member State will be responsible for coordinating the permit granting process of these infrastructure projects. These projects are eligible for EU funding. €9.1 billion has been earmarked for energy infrastructure under the Connecting Europe Facility for the period 2014 – 2020.

The 12 priority corridors for the development of energy infrastructure identified by the Commission include the Northern Seas offshore grid, the North-South electricity and gas interconnections and the Baltic Energy Market Interconnection Plan in gas and electricity.

Funding Telecoms

Another proposal presented by the Commission as part of the Connecting Europe Facility package concerns guidelines for trans-European telecommunications networks.  The Commission has set a target of deploying ultra-fast broadband networks (100 Mbps and above) in at least 50% of households and linking the EU’s peripheral regions to ensure broadband connectivity of 30 Mbps and above.

When identifying new projects, which would help complete the Single Market in the field of telecommunications, the Commission would take into account the following issues: 
• New technological and market developments
• Political priorities
• New opportunities for increasing synergy between different infrastructures
• Contribution in achieving objectives such as economic growth, competitiveness, interconnection and interoperability, fast and ultra-fast broadband network
• Technological maturity and readiness for deployment
• European added value

Projects identified include trans-European high-speed backbone connections for public administrations, cross-border delivery of eGovernment services based on interoperable electronic identification and authorisation across Europe (for instance, electronic procedures for setting up a business; for e-Justice, cross-border eHealth services, and cross-border procurement).

These projects aim to enable access to public sector information and multilingual services, including access to digital resources of European heritage, access to re-usable public sector information, as well as multilingual access to online services.  Common interest projects would also concern safety and security issues (safer internet and critical service infrastructures) and intelligent energy networks.

The Commission has proposed spending almost €9.2 billion on high-speed broadband networks and services from 2014 to 2020. It is foreseen that at least €7 billion would be allocated for investment in high speed broadband infrastructure, whereas the remaining Connecting Europe Facility funding would be available for public interest digital service infrastructure, including electronic identification, electronic procurement and electronic health records.

Next Steps

The legislative proposals have been sent to the European Parliament and the Council for examination. Discussions are expected to take place in the coming months, with final legislation expected 2012/2013.