EU FUNDS GALICIA CO-FINANCING 2021-2027

The framework loan will support the Spanish Autonomous Community of Galicia in co-financing selected projects under European Regional Development Fund (ERDF), the European Social Fund plus (ESF+) as well as the Just Transition Fund (JTF) during the 2021-2027 EU programming period within the Spanish Partnership Agreement 2021-2027.

The main scope is to co-finance eligible sub-projects to be carried out by public-sector authorities. Some of such projects might be implemented by public enterprises or small and medium sized enterprises (SMEs). The use of financial instruments in the ERDF is currently foreseen under the specific objectives 1.1 "Developing and enhancing research and innovation capacities and the uptake of advanced technologies" and 1.3 "Enhancing sustainable growth and competitiveness of SMEs and job creation in SMEs" of the ERDF as well as in the JTF to support industrial diversification projects in the province of A Coruña.

The Project concerns priority investments under the programmes of the EU Cohesion Policy funds (CPFs), notably the European Regional Development Fund (ERDF), the European Social Fund Plus (ESF+), and the Just Transition Fund (JTF), in the Spanish Autonomous Community of Galicia (CAG). The Project fosters innovation and skills, digitalisation, competitiveness, energy efficiency, clean energy production, environmental protection, better and more equal access to education and health services, and SME development. The investment programme is plan-led and well-embedded in the EU Cohesion policy architecture centring around the four general policy goals of a smarter, a greener, a more connected and a more social Europe. Investments under the JTF pursue the specific policy goal of "enabling regions and people to address the social, employment, economic and environmental impacts of the transition towards the Union's 2030 targets for energy and climate and a climate-neutral economy of the Union by 2050, based on the Paris Agreement", which in case of Galicia concerns the province of A Coruña. As a whole, the Project will foster a balanced socioeconomic and territorial development of the region, in line with the Territorial Agenda 2030.

EIB support to the region's co-financing of the Cohesion Policy fund investments will help kick-start the implementation of the CPF programmes. The Project addresses sub-optimal investment situations in many sectors. 85% of the resources of the ERDF will be devoted to the "Smarter and Greener Europe" objectives. Specifically, the Project will support research, development and innovation infrastructure and activities whose returns to society are known to be larger than the financial return to the innovative entities. The Project 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.

Investment under the ESF+ will improve access to employment and activation measures for jobseekers, in particular young people, and promote equal access to, and completion of quality and inclusive education and training.

Finally, EIB long-term financing at affordable rates with flexible conditions, such as grace and disbursement periods aligned to project implementation will allow CAG to distribute financial costs in a longer period, increasing the average life of its debt. EIB financing will provide funding stability in a period of peak investment activity for CAG and will have a positive signalling effect to its co-financiers (commercial banks, capital markets and other IFIs, notably CEB), given the Bank's strong expertise in supporting EU co-financing projects. EIB technical expertise and/or advisory services were not sought by CAG.

The project promoter will be required to act in compliance with the relevant EU 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 Environmental Impact Assessment (EIA) Directive 2011/92/EU amended by the Directive 2014/52/EU, as relevant and transposed to the national legislation. In particular, the ERDF Operational Programme is subject to a SEA. Furthermore, some schemes thereunder may fall under Annex I or Annex II of the EIA Directive. The applicability of the Environmental Impact Assessment (EIA) Directive 2011/92/EU amended by the 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. Where needed, EIAs must take into account the possible cumulative effects with other investment schemes. In particular, for those schemes likely to affect Natura 2000 sites, the EIA has to include the appropriate assessment under Article 6(3) of the Habitats Directive, which has to be made on the basis of the site-specific conservation objectives as defined by the competent authority and reflected in their decision. Some schemes in the ERDF Operational Programme might concern the construction or upgrade of small water and wastewater treatment infrastructure or the construction or upgrade of water distribution infrastructure. The Bank will review the Promoter's compliance with the Water Framework Directive (WFD) 2000/60/EC and the Urban Waste Water Council Directive 91/271/EEC at appraisal and during the allocation phase. Schemes under the ESF+ support implementation of the European Pillar of Social Rights. In addition, the schemes under the JTF will support inter alia retraining, upskilling and job counselling measures in the province of A Coruña.

The promoter has to ensure that contracts for implementation of the project will be tendered in accordance with the applicable EU procurement legislation, Directive 2014/23/EU / 2014/24/EU / 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.