ERDF-ESF CO-FINANCING EXTREMADURA 2021-2027

Promoter – Financial Intermediary

COMUNIDAD AUTONOMA DE EXTREMADURA

Location

• Spain

Description

The operation will co-finance investment schemes supported by the European Regional Development Fund (ERDF) and European Social Funds (ESF) in Extremadura.

Additionality and Impact

The Project concerns priority investments of the operational programmes of the EU Cohesion Policy funds, notably the European Regional Development Fund (ERDF) and the European Social Fund Plus (ESF+) in the Spanish Autonomous Community of Extremadura, an EIB Cohesion Priority region. The Project fosters a balanced socioeconomic and territorial development of the region, in line with the Territorial Agenda 2030. It will therefore contribute to the EU's policy objective of economic and social cohesion, including the KPI on supporting Less Developed regions. The investment programme is plan-led and well-embedded in the EU Cohesion policy architecture centring around the four policy goals of a smarter, a greener, a more connected and a more social Europe.

EIB support to the region's co-financing of the Cohesion Policy fund investments will help kick-start the implementation of the operational programmes. The Project addresses sub-optimal investment situations in many sectors as without support from the EU and the EIB, the region would fall behind the Spanish average in terms of per-capita endowment with vital infrastructure. Specifically, the ERDF will support the construction and rehabilitation of education and healthcare infrastructure and it will support the provision of infrastructure and activities related to research, development and innovation whose returns to society are known to be larger than the financial return to the investor. It will also support investments in energy efficiency and in the production of heat and electricity from renewable sources, thereby lowering the negative externalities from CO2 emissions and reducing energy bills for households.

Moreover, the ERDF will support fixed investment fostering business development and internationalisation of SMEs. This will ease financial constraints that arise from information asymmetries caused by the lack of track record for such companies and high screening costs for small investments.

The ESF+, in turn, will support education, training, lifelong learning and skills development, which will increase the economy's stock of human and social capital, reduce shortages of skilled labour and protect vulnerable persons from sliding into long-term unemployment.

Finally, EIB's financing provides the client with competitive pricing, longer tenor than commercial lenders and flexible loan conditions, such as long grace and disbursement periods, which are therefore better adapted to the implementation of the Project. EIB's financing also supports Extremadura in achieving diversification of funding sources and contributes to the stability of their financing needs.

Objectives

The aim is to co-finance investments made by the regional government of Extremadura in the period 2021-2027 under two regional Operational Programmes (OPs): - the OP for investment in growth and employment supported by ERDF; - the OP for Social Inclusion and Employment supported by ESF+. Both programmes are implemented under the Spanish Partnership Agreement for the 2021-2027 programming period.

Sector(s)

• Solid waste - Water supply; sewerage, waste management and remediation activities
• Water, sewerage - Water supply; sewerage, waste management and remediation activities
• Composite infrastructure - Construction
• Transport - Transportation and storage
• Telecom - Information and communication
• Services - Professional, scientific and technical activities
• Services - Public administration and defence; compulsory social security
• Education - Education
• Health - Human health and social work activities
• Services - Arts, entertainment and recreation
• Credit lines - Credit lines
• Energy - Electricity, gas, steam and air conditioning supply

Proposed EIB finance (Approximate amount)

EUR 225 million

Total cost (Approximate amount)

EUR 1668 million

Environmental aspects

As an autonomous community of Spain, Extremadura has to comply with national legislation that transposed Directive 2011/92/EU amended by the Environmental Impact Assessment (EIA) Directive 2014/52/EU into the national environmental legislation. The EIB's appraisal will focus on the promoter's environmental management capacity in applying the EU Strategic Environmental Assessment (SEA) Directive 2001/42/EC and Directive 2011/92/EU amended by the EIA Directive 2014/52/EU, as relevant. The ERDF is subject to a SEA. Some schemes in the Operational Programmes shall fall under Annex I or Annex II of the EIA Directive. All schemes must be implemented in compliance with the EU environmental legislation. The applicability of Directive 2011/92/EU amended by the EIA Directive 2014/52/EU, the Habitats Directive 92/43/EEC and the Birds Directive 2009/147/EC will be reviewed at appraisal and during the allocation phase. Some schemes in the Operational Programmes might concern the construction or upgrade of small water and wastewater treatment infrastructure or the construction or upgrade of water distribution infrastructure. The promoter's compliance with the Water Framework Directive (WFD) 2000/60/EC and the Urban Waste Water Council Directive 91/271/EEC will be assessed at appraisal and during the allocation phase. Some schemes in the Operational Programmes might concern the new construction or refurbishment of buildings. The promoter's compliance with the Energy performance of buildings directive (Directive EU/2018/844) will also be assessed at appraisal and during the allocation phase. Schemes under the ESF+ foster education, training and lifelong learning, thus supporting the implementation of the European Pillar of Social Rights.

Procurement

The promoter has to ensure that contracts for the project implementation are tendered in accordance with the applicable EU procurement legislation, Directives 2014/23/EU, 2014/24/EU and 2014/25/EU, as well as Directive 92/13/EEC or Directive 89/665/EEC, as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.

Status

Signed - 6/11/2023