Europaudvalget 2018
KOM (2018) 0066
Offentligt
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EUROPEAN
COMMISSION
Brussels, 13.2.2018
SWD(2018) 44 final/2
PART 1/2
CORRIGENDUM
Corrects the date of the document on the cover page.
Concerns all languages.
COMMISSION STAFF WORKING DOCUMENT
Accompanying the document
Report from the Commission to the European Parliament, the Council, the European
Economic and Social Committee and the Committee of the Regions
on the mid-term evaluation of the Connecting Europe Facility (CEF)
{COM(2018) 66 final/2}
EN
EN
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Contents
1. Introduction
......................................................................................................................................... 5
2. Background to the intervention
........................................................................................................... 6
3. Evaluation Questions
......................................................................................................................... 14
4. Methodology
..................................................................................................................................... 14
5. Implementation state of play
............................................................................................................. 16
6. Answers to the evaluation questions
................................................................................................. 26
6.1. Relevance
....................................................................................................................................... 26
6.1.1. Relevance for EU priorities and sectoral needs
........................................................................... 27
6.1.2. Resources vs. objectives and potential EU impact ...................................................................... 33
6.1.3. Using the adequate support schemes to respond to market failures and policy challenges
......... 35
6.1.4. Specific equity instruments (EIs) for sectoral needs
................................................................... 38
6. 2. Coherence
...................................................................................................................................... 38
6.3. Effectiveness
.................................................................................................................................. 50
6.3.1. CEF's effectiveness in achieving policy objectives
..................................................................... 50
6.3.1.1. Progress towards the development of modern and high-performing trans-European networks
and more interconnected markets
.......................................................................................................... 51
6.3.1.2. Progress towards the achievement of the sustainable developments targets by 2020
.............. 59
6.3.2. CEF's effectiveness in achieving operational objectives
............................................................. 61
6.3.2.1. Ensuring and accelerating investment
...................................................................................... 61
6.3.2.2. Exploiting sectoral synergies
.................................................................................................... 68
6.3.3. Information, participation and monitoring
.................................................................................. 69
6.3.3.1. Information about the programme
............................................................................................ 69
6.3.3.2. Participation in the programme
................................................................................................ 71
6.3.3.3. Monitoring performance (indicators)
....................................................................................... 73
6.4. Efficiency
....................................................................................................................................... 75
6.4.1. Contributing to the achievement of the CEF objectives in an efficient manner
.......................... 76
6.4.2. Implementing and Managing CEF efficiently .............................................................................. 79
6.5. EU Added Value
............................................................................................................................ 86
7. Conclusions
....................................................................................................................................... 90
2
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Glossary
ACER – Agency for the Cooperation of Energy Regulators
AP – Annual Work Programme
BEMIP – Baltic Energy Market Integration Plan
BRIS – Business Registers Interconnection System
CAES – Compressed air energy storage
CAPEX – Capital expenditure
CBA – Cost–Benefit Analysis
CBCA – Cross–Border Cost Allocation
CCI – Connected Communities Initiative
CEBF – Connecting Europe Broadband Fund
CEF – Connecting Europe Facility
CEF DI – CEF Debt Instrument
CEF EI – CEF Equity Instrument
CIP–PSP – Competitive and Innovation Programme – Policy Support Programme
CNC – Core Network Corridors
CTF – Cleaner Transport Facility
DG CNECT – Directorate General for Communications Networks, Content & Technology
DG ENER – Directorate General for Energy
DG MOVE – Directorate General for Mobility and Transport
DSI – Digital Service Infrastructures
DSM – Digital Single Market
eCODE – electronic communications
eCODEX – e–Justice Communication via Online Data Exchange
EEPR – European Energy Programme for Recovery
EESSI – Electronic Exchange of Social Security Information
EFSI – European Fund for Strategic Investments
eHDSI – eHealth Digital Service Infrastructure
EIB – European Investment Bank
ERDF – European Regional Development Fund
ERTMS – European Rail Traffic Management System
eSENS - Electronic Simple European Networked Services
ESIF – European Structural and Investment Funds
ESPD – European Single Procurement Document
epSOS – Smart Open Services for European Patients
FIs – Financial instruments
GHG – Greenhouse gas
GIPL – Gas Interconnector Poland–Lithuania
GSG – Green Shipping Guarantee
HPC – High Performance Computing
IA – Impact Assessment
ICT PSP – ICT Policy Support Programme
INEA – Innovation and Networks Executive Agency
IPE – Investment Plan for Europe
ITS – Intelligent Transport Systems
KPIs – Key Performance Indicators
LGTT – Loan Guarantee for TEN–T
LNG – Liquefied natural gas
LSPs – Large scale pilots
MAP – Multiannual Work Programme
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MFF – Multiannual Financial Framework
ODR – Online Dispute Resolution
OPC – Open Public Consultation
PBCE – Project Bonds Credit Enhancement
PBI – Project Bond Initiative
PCI – Projects of Common Interest
PEPPOL – Pan–European Public Procurement Online
PSA – Programme Support Action
R&I – Research and Innovation
SDCE – Senior Debt Credit Enhancement
SESAR – Single European Sky ATM Research
SPOCS – Simple Procedures Online for Cross–border Services
STORK – Secure identiTy acrOss boRders linKed
TEN – Trans–European Network
TEN–E – Trans–European Energy Network
TEN–T – Trans–European Transport Network
TFEU – Treaty on the Functioning of the European Union
TOOP – The “Once–Only” Principle Project
TSO – Transmission System Operator
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1. Introduction
The Connecting Europe Facility
1
(CEF) is a common, centrally-managed funding programme
for transport, energy and telecommunications infrastructures, with an available budget of
EUR 30.4 billion for the years 2014 to 2020. This mid-term evaluation responds to the legal
requirement laid down in Article 27 of the Regulation:
“No later than 31 December 2017, the Commission, in cooperation with the Member States and
beneficiaries concerned, shall prepare an evaluation report to be presented to the European Parliament
and the Council by the Commission on the achievement of the objectives of all the measures (at the level of
results and impacts), the efficiency of the use of resources and the European added value of the CEF, with
a view to deciding on the renewal, modification or suspension of the measures The evaluation shall also
address the scope for simplification, the internal and external coherence of the measures, the continued
relevance of all objectives and their contribution to the Union priorities of smart, sustainable and inclusive
growth, including their impact on economic, social and territorial cohesion. The evaluation report shall
include an assessment of the economies of scale made by the Commission at a financial, technical and
human level when managing the CEF and, where applicable, of the total number of projects harnessing the
synergies between the sectors. That assessment shall also examine how to make financial instruments more
effective. The evaluation report shall take into account evaluation results concerning the long-term impact
of the predecessor measures.”
The evaluation addresses all forms of financial assistance under the CEF (grants, financial
instruments (FIs) and procurement), as well as accompanying measures such as Programme
Support Actions (PSAs). The evaluation also takes into account the independent full scale
evaluation of the pilot phase of Europe 2020 Project Bonds Initiative
2
established in 2013,
also known as the pilot phase of the Project Bonds Credit Enhancement (PBCE), aimed at
helping finance projects of EU added value and facilitating greater private sector involvement
in the long term capital market financing of projects in the trans-European Transport Network
(TEN-T), trans-European Energy Network (TEN-E) and in telecommunications.
The evaluation addresses the general performance of CEF (horizontal sub-sections within
each criterion) as well as the achievements within the sectors of transport, energy and
telecommunications (respective sectoral sub-sections). This is neither an evaluation of the
TEN policy for each sector (undertaken in the context of the respective policy areas) nor an
evaluation of the performance of the Innovation and Networks Executive Agency (INEA)
which is in charge of implementing the CEF grants. There is a separate legal obligation for an
evaluation of the Executive Agency
3
(responsible for the implementation of CEF, parts of
Horizon 2020 and transport legacy programmes), which has to be carried out 3 years after
INEA's establishment. This evaluation of INEA has commenced. The present evaluation
covers parts of INEA's processes and workflows as related to CEF management only – those
related to the common grant management cycle and simplification measures. Moreover, this
evaluation makes use of Key Performance Indicators (KPIs) specific to CEF management as
reported in the Annual Activity Reports of INEA.
As it is the case for a mid-term evaluation, it takes place when the programme has been
implemented only over a short period of time (3 and a half years, and 2 years in the case of
the CEF Debt Instrument), which means that most projects supported have not yet delivered
their results. This is particularly the case for large infrastructure works projects for which the
pathway to impact is neither immediate nor linear. This report relies on official monitoring
1
2
Regulation (EU) No 1316/2013 of the European Parliament and of the Council of 11 December 2013.
http://ec.europa.eu/dgs/economy_finance/evaluation/pdf/eval_pbi_pilot_phase_en.pdf.
3
Council Regulation 58/2003 laying down the statute for executive agencies to be entrusted with certain tasks in the management of
Community programmes, OJ L 11/2003 of 16.01.2003.
5
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data of projects supported by CEF, which indicates their state of implementation and degree
of advancement.
The period covered by this evaluation is from 1 January 2014 to 31 December 2016. Where
available, implementation data covering up until end August 2017 was also taken into
account. The findings presented in this Staff Working Document serve as a basis to decide on
the renewal, suspension or modification of the measures and aim at feeding into the
preparation of the post-2020 Multiannual Financial Framework (MFF). Further detail on the
process to prepare the evaluation is provided in Annex 1.
2. Background to the intervention
CEF was established as part of the
Europe 2020
strategy for a smart, sustainable and
inclusive growth and of the
European Union (EU)'s "20-20-20" objectives
in the area of
energy and climate policy. The programme supports the development of the TEN
in the
transport, energy and telecommunications sectors in line with Article 170-174 of the
Treaty on the Functioning of the European Union (TFEU)
and the better integration of
their respective infrastructure across EU Member States to improve cohesion in the internal
market as well as competitiveness in the global market. CEF was a new integrated instrument
for the 2014-2020 MFF, aimed to invest in EU infrastructure priorities in the three sectors
(projects of common interest (PCIs)).
As outlined in the Communication on the budget for 2020
4
, the Commission considered that
"while
the market can and should deliver the bulk of the necessary investments, there is a
need to
address market failure
– to fill persistent gaps, remove bottlenecks and ensure
adequate cross-border connections. However, experience shows that
national budgets will
never give sufficiently high priority to multi-country, cross-border investments
to equip the
Single Market with the infrastructure it needs. This is one more example of the added value of
the EU budget. It can secure funding for the pan-European projects that connect the centre
and the periphery to the benefit of all. Therefore, the Commission has decided to propose the
creation of a Connecting Europe Facility to accelerate the infrastructure development that
the EU needs.” In this context, the CEF was set up to offer "opportunities for
using
innovative financing tools
to speed up and secure greater investment than could be achieved
only through public funding."
Recital (2) of the CEF Regulation highlights that the "aim
of the creation of the Connecting
Europe Facility (CEF)
[…] is to accelerate investment in the field of trans-European
networks and to leverage funding from both the public and the private sectors, while
increasing legal certainty and respecting the principle of technological neutrality. The CEF
should enable
synergies
between the transport, telecommunications and energy sectors to be
harnessed to the full, thus enhancing the effectiveness of Union action and enabling
implementing costs to be optimised."
Article 5 of the CEF Regulation set out the
general objectives of the CEF,
which include
"contributing
to smart, sustainable and inclusive growth, in line with the Europe 2020
Strategy, by developing modern and high-performing trans-European networks", inter alia
by
"creating
an environment more conducive to private, public or public- private investment
through a
combination of financial instruments and Union direct support
where projects
4
Communication from the Commission to the European Parliament, the Council, the European economic and social Committee and the
Committee of the regions: A Budget for Europe 2020, European Commission, 29 June 2011.
6
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could benefit from such a combination of instruments and by appropriately exploiting
synergies across the sectors".
Figure 1: Needs, priorities and CEF support
Investments
needs in
transport,
energy, ICT
Priorities
defined in
the 3
sectorial
guidelines
EU
investment
priorities
Market
and
national
financing
EFSI**
EU co-
financed
projects
Market
failures
CEF
ESIF*
* ESIF: European Structural and Investment Funds - ** EFSI: European Fund for Strategic Investments
Figure 1 above illustrates where CEF support is targeted in the investment sphere. CEF
established
specific objectives
for each of the three sectors that support the respective
sectoral guidelines,
on development of the TEN-T
5
, the TEN-E
6
and trans-European
networks in the area of telecommunications infrastructure
7
. For
transport
these objectives
include removing bottlenecks, improving cross-border connections and interoperability of
transport as well as enabling a sustainable and safe transport system. For
energy,
these
objectives relate to promoting the integration and interoperability of the internal energy
market, enhancing Union security of energy supply and sustainability (inter alia by integrating
renewable energy and by developing smart energy networks and carbon dioxide networks).
For
telecoms,
the objectives are the completion and functioning of the internal market in
support of the competitiveness of the European economy, including SMEs, promoting trans-
European digital service infrastructures and connectivity, interoperability, and efficient flow
of private and public investments to stimulate the deployment and modernisation of
broadband networks
8
. The main component of a digital service infrastructure is the core
service platform which is a central hub at EU level to which national infrastructures link up
and thus create a link between different national infrastructures.
CEF and the sectoral guidelines together make up
a coherent set of measures
aimed at
boosting infrastructure investment across the EU, in line with wider EU policies objectives. In
5
Regulation (EU) No 13152013 of the European Parliament and of the Council of 11 December 2013 on Union guidelines for the
development of trans-European transport network and repealing Decision No 661/2010/EU
6
Regulation (EU) 347/2013 of the European Parliament and of the Council of 17 April 2013 on guidelines for trans-European energy
infrastructure and repealing Decision No 1364/2006/EC and amending Regulations (EC) No 713/2009, (EC) No 714/2009 and (EC) No
715/2009.
7
Regulation (EU) No 283/2014 of the European Parliament and of the Council of 11 March 2014 on guidelines for trans-European networks
in the area of telecommunications infrastructure and repealing Decision No 1336/97/EC.
8
Article 3 of Regulation (EU) No 283/2014.
7
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this respect, CEF is
directly linked to the respective sectoral guidelines,
on the basis of
which projects are selected to be eligible for CEF support, notably through their pre-
identification. This framework aims to smooth the process of project planning and
construction in Member States, thus improving the overall viability of such projects and
reducing the need for financial support.
The CEF Regulation defines the
actions eligible for financial assistance
for the different
sectors
9
. For
transport,
works and studies that implement the Core and Comprehensive
networks as well as horizontal priorities, which are listed in Annex I to the CEF Regulation,
such as the Motorways of the Sea, new technologies for the decarbonisation of transport,
Single European Sky and the European Rail Traffic Management System are eligible for
grants and/or financial instruments. For
energy,
actions that support the PCIs and meet the
criteria defined in the TEN-E Regulation are eligible for financial assistance in the form of
grants for works and studies, procurement and, financial instruments. For the
telecommunications
sector, CEF support takes the form of procurement for the core service
platforms, or grants to help link national infrastructures to core service platforms
10
; while
actions in the field of broadband networks can be financed by financial instruments.
In view of supporting the preparation and implementation of CEF projects, at the level of the
Member States, through the delivery of policy-specific studies or the enhancement of
knowledge including capacity building of specific beneficiaries, PSAs in three sectors have
been included in the sector-specific Work Programmes.
The CEF Regulation, in line with the objectives of the sectoral guidelines sets out the
Key
Performance Indicators
(thereafter the KPIs, or indicators) against which the defined
sectoral objectives are measured. The table of indicators is reported in Annex 4.
While the Commission had proposed a total amount of EUR 50 billion in 2011, the CEF
budget was set by the co-legislator at EUR 33 billion in 2013, which included a transfer of
EUR 11.3 billion from the Cohesion Fund to the cohesion envelope of the transport pillar of
CEF. The CEF budget was later reduced to
30.4 billion
11
, following the reallocation of funds
to finance the guarantee for the European Fund for Strategic Investments (EFSI
12
) in 2015
(see table 1). The majority of the CEF budget is being implemented through grants to co-
finance eligible projects, while the rest is set aside for use in the form of financial instruments
(FIs), public procurement and PSAs.
CEF is implemented via
Multiannual and Annual Work Programmes (MAP and AP)
which are adopted by the Commission following the vote of the Member States under the
examination procedure ('comitology'). They specify the priority areas for funding, the form of
assistance to be used, as well as the related budget breakdown. For grants, the co-funding
rates for studies amount to 50% of eligible costs while grants for works are allocated
according to specific criteria depending on the sector (between 10% and, in exceptional
9
Article 7 of Regulation (EU) No 1316/2013 establishing the Connecting Europe Facility.
The Guidelines identify upfront in Article 6 specific criteria for prioritising funding for DSIs. Top priority is given to building blocks
essential for, and with demonstrable prospects of being used in, the development, deployment and operation of other DSIs (eID &
eSignature, eDelivery, Automated Translation, Cybersecurity and eIvoicing); Second priority is given to other DSIs in support of Union law,
policies and programmes and, where possible, be based on existing building blocks. These are eProcurement, eHealth, Business Registry,
Other interoperable cross border online services such as eJustice, Online Dispute Resolution (ODR), Electronic Exchange of Social Security
Information (EESSI), Business Mobility and Open Data; Support to core service platforms takes priority over generic services; Well-
established DSIs, Europeana and Safer Internet for Children have priority for funding.
11
Not including assigned revenue (i.e. recovery orders)
12
https://ec.europa.eu/commission/priorities/jobs-growth-and-investment/investment-plan_en
10
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circumstances, 75%, while under the Cohesion envelope in the transport sector, these can go
up to 85%).
Operational and programme management tasks related to evaluations of the calls for
proposals as well as grant management are externalised to INEA
13
, while the European
Investment Bank (EIB), as the EU reference investment bank, acts as the legal entrusted entity
for implementing the FIs. The
intervention logic
in Annex 5 summarises the investment
needs, objectives and inputs leading to the impacts and the eventual contribution of the
programme to smart, sustainable and inclusive growth.
Predecessor Programmes under the MFF 2007-2013
14
Predecessor programmes to CEF under the previous MFF (2007-2013) differed from one
sector to another as well as in their comparison to CEF regarding budget, objectives,
intervention logic as well as implementation mode
15
. The highest degree of continuity in
terms of relative size, implementation mode and project pipeline can be found in the transport
sector: the actual size of the CEF-Transport budget (cohesion envelope excluded) represents a
51% increase of the budget allocated under TEN-T Programme and Marco Polo Programme
in the 2007-2013 period and the execution of the programme was delegated to an Executive
Agency (TEN-T Executive Agency, the forerunner of INEA). Multi-annual and annual work
programmes also already coexisted under the TEN-T Programme. Out of 604 actions
supported under CEF-Transport, 179 actions (29,6%) stem from projects (both studies and
works) which have been supported under the previous TEN-T Programme . This includes
important cross-border projects, a typical example being the Brenner Basis Tunnel, whose
studies and preparatory activities started with TEN-T Programme support while the main
works are supported by CEF.
The situation in the energy sector is different: The budgetary allocation for CEF-Energy
represents a step change compared to the one for the TEN-E Programme (35 times larger, not
taking into account the budget allocated to trans-European infrastructure projects by the
European Energy Programme for Recovery (EEPR), an ad-hoc instrument under the previous
MFF). This increase in budget allowed for co-financing works under CEF, whereas the
overwhelming majority of actions funded under the TEN-E programme were studies. In
addition, the execution of the TEN-E Programme was managed directly by Commission
services via annual work programmes. The TEN-E guidelines adopted in 2013 also
represented a complete overhaul of the former TEN-E policy by introducing prioritisation via
a unique list of projects of common interest (PCI), resulting in limited continuity regarding
the number of projects: Out of the 111 projects funded under TEN-E only a third (37) became
PCIs of which 15 have received grant support under CEF following the calls for proposals
2014-2016. A good example regarding continuity in funding related to the implementation of
a single project is the Gas Interconnector Poland-Lithuania (GIPL) which twice received
funding under TEN-E (in 2010 for feasibility studies and in 2013 for Environmental Impact
Assessment documentation) and then was granted co-financing under CEF in 2014 (for
preparatory works and construction- see box in section 6.3.1.1).
In the telecommunications sector, the Competitive and Innovation Programme – Policy
Support Programme (CIP-PSP) provided the means to launch large scale pilots (LSPs) which
13
14
The role of INEA is set out in Annex 8
Details on the predecessor programmes are provided in Annexes 9-11.
15
See also the section "Limitations – robustness of findings" on page 14
9
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developed and validated solutions with Member State Governments. Several LSPs supported
through CIP PSP have been integrated afterwards in CEF as Digital Service Infrastructures.
However, CIP PSP only covered the pilot phase of a number of initiatives, deployment
remaining outside its remit. CEF is the first funding programme targeting the full deployment,
operation and take up in Member States of cross border DSIs (see figure on page 44).
Therefore, in the telecom sector, although CIP-PSP funded services are currently supported
through CEF, it cannot be considered its predecessor since it covered a different phase in the
development of the services.
Compared to its predecessors, CEF introduced a series of improvements albeit at a varying
degree for the three sectors: a common management structure based on delegation to an
executive Agency (INEA), a common coordination committee of Member State
Representatives, grant agreements instead of grant decisions, common online tools for
submission of applications and grant management, better monitoring, diversified funding rates
closer to the investment needs as well as dedicated financial instruments with a common
portfolio sharing the risk across transport, energy and telecommunications projects.
Baseline
For the purpose of this evaluation, the baseline as set out in the
2011 Impact Assessment
(IA) which accompanied the Commission's proposal for the Regulation establishing the CEF
16
will be used. An Interim Evaluation of the TEN-E funding programme 2007-2013 was
conducted in 2010 while a Mid-term evaluation of the TEN-T Programme (2007-2013) was
conducted in 2011. Both evaluations were used as inputs to the IA. The IA baseline describes
a situation in which the predecessor programmes TEN-Transport and TEN-Energy, their
features (e.g. lower co-funding rates and in TEN-E grants mainly for studies) and their
significantly lower budgets for the two sectors (notably for TEN-E) would have continued
running throughout 2014-2020. It was found that the predecessor programmes insufficiently
catered for the specific needs and the heightened risks attached to projects with significant
cross-border dimension, category for which also significant delays were observed.
Table 1: Budget appropriations and other features for CEF and predecessor
programmes
Pre CEF (2007-2013)
situation
17
CEF proposal as in
2011 Impact
Assessment (IA)
EUR 31.7 billion for
transport
Including EUR 10
billion as the amount
ring-fenced in the
Cohesion Fund for
transport
infrastructures
CEF as it entered
into force in 2014
CEF finally
available, in current
prices
18
EUR 24. 05 billion for
transport
Including EUR 11.3
billion as the amount
ring-fenced in the
Cohesion Fund for
transport
infrastructures
(Another EUR 34
billion is available
Available
budget
EUR 8 billion for the
TEN-T Programme
EUR 43 billion in the
Cohesion Fund and
ERDF
EUR 450 million for
the Marco Polo
Programme
EUR 26. 25 billion for
transport
Including EUR 11.3
billion as the
amount ring-fenced
in the Cohesion
Fund for transport
infrastructures
16
17
http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52011SC1262&from=EN
This list comprises the main EU funding instruments - A more detailed breakdown of EU funding of infrastructures in the 2007-2013
Multiannual Financial Framework is provided in Annex 7.
18
Includes adjustments in final legal proposal and EFSI transfers.
10
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from Cohesion Fund
and ERDF)
EUR 155 million for
the TEN-E programme
EUR 2.365 billion -
EEPR programme
(eligibility restricted to
some TEN-E projects
as per EEPR
regulation)
EUR 1.6 billion in the
Cohesion Fund and
ERDF (broader
eligibility scope)
19
(Although not
considered
predecessor
programmes) EUR
730 million from CIP
ICT PSP for pilot
projects; EUR 2.7
billion from Cohesion
Fund and ERDF for
telephone
infrastructures
(including broadband
networks)
EUR 9.1 billion for
energy
EUR 5.85 billion for
energy
EUR 5.35 billion for
energy
(Another EUR 2.3
billion is available
from Cohesion Fund
and ERDF)
EUR 9.2 billion for
telecommunications
EUR 1.14 billion for
telecommunications
EUR 1.04 billion for
telecommunications
Total
CEF
Co-
funding
rates for
grants
TEN-T Programme:
- studies: up to 50%
- works: up to 30%;
Cohesion Fund and
ERDF:
-works: up to 85%
TEN-E Programme:
- studies: up to 50%
- works: up to 10%;
EEPR
- works and project
preparation: up to 50%
Cohesion Fund and
ERDF:
-works: up to
85%(reduced in case
of projects generating
revenues)
EUR 50 billion
For CEF Transport:
- studies, up to 50%
- works, up to 40%
(85% for projects
selected under the
Cohesion envelope)
For CEF Energy:
- studies and works,
up to 50%
(exceptionally up to
75% for works)
EUR 33.24 billion
EUR 30.44 billion
For CEF Transport:
- studies, up to 50%
- works, up to 40% (85% for projects selected
under the Cohesion envelope)
For CEF Energy:
- studies and works: up to 50% (exceptionally up
to 75% for works)
For CEF
telecommunications:
- broadband networks
actions: 20% of
19
For CEF telecommunications:
- actions in the field of generic services: up to75
%;
- horizontal actions incl. infrastructure mapping,
Priority on improving security of supply (not only transmission level); gas and electricity interconnections only in case of identified market
failure)
11
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eligible costs;
- generic services
Actions: up to 75%
rate of eligible costs;
- actions in the field
of applications: 50%
of the eligible costs.
twinning and technical assistance: 75 %.
- core service platforms (typically funded by
procurement); in exceptional cases, they may be
funded by a grant covering up to 100 % of
eligible costs.
All sectors can be topped up by 10% when
addressing the synergies between the sectors.
Table 1 lists funding available for telecommunications in the period 2007-2013; however, the
CEF Telecommunications programme substantially differs from previous programmes,
therefore they can't be considered as predecessor programmes. Cohesion spending was
available for broadband and digital service infrastructures in the MFF period 2007-2013, an
estimated EUR 2.7 billion funding was allocated to broadband infrastructure
20
. CEF DSIs
builds on solutions for digital service infrastructures developed within the CIP ICT PSP,
supporting their scale-up and deployment
21
. The CIP has supported broadband policy
initiatives through the funding of several studies and other measures
22
as well as a transfer of
EUR 20 million to the from the CIP 2013 budget to the European Investment Bank (EIB) for
the Europe 2020 Project Bonds Initiative, to fund projects for broadband infrastructure
23
. The
latter has resulted in the financing of the Axione project in France
24
. The level of support
under CIP for broadband deployments was therefore very limited, providing only direct
support to one project under the Project Bonds Initiative. The final available budget for CEF
was significantly lower (e.g. around 30%) than the values estimated in the Impact
Assessment.
In fact, the 2011 IA concluded that the predecessor instruments were overall insufficient to
"deliver on time complex cross-border transport infrastructure projects". In particular it was
noted that (a) the programmes in place were not delivering sufficient EU added value. The
funding did not help to remove bottlenecks and enable cross-border links to develop in a
satisfactory manner as these projects were not sufficiently prioritised; (b) The co-funding
rates were insufficient to catalyse the investment needed in projects of EU added value due to
the complexity and enhanced risk of such projects and; (c) The programmes in place were
unable to leverage sufficient private sector interest in the projects and did not sufficiently
focus on creating a conducive environment for such investors
25
.
Investment needs and market failures
In its 2011 IA, the Commission estimated the investment needs by 2020 as follows:
- in the
transport sector,
EUR 500 billion was estimated to be needed for the works
planned until 2020 on the trans-European transport networks, including EUR 215 billion
for the removal of the main bottlenecks on the transport "Core Network", and taking into
account the specific needs in Member States eligible for the Cohesion Fund;
20
21
Pending figures on actual funding (currently not available).
CEF differs therefore from CIP as it goes beyond R&I and is the first funding instrument to support the deployment, operation and take up
in MS of cross border DSIs.
22
For example, CIP ICT WP 2013: study on the Analysis of Broadband speed, other measures: Broadband coverage measurement,
Broadband retail prices, Follow up of Broadband mapping and portal.
23
See also CIP ICT WP 2013: transfer of EUR 20 Million from the CIP 2013 budget to the European Investment Bank (EIB) for the
Europe 2020 Project Bonds Initiative.
24
See also: Ad-hoc Audit of the pilot phase of the Europe 2020 Project Bond Initiative, December 2015.
http://ec.europa.eu/dgs/economy_finance/evaluation/pdf/eval_pbi_pilot_phase_en.pdf
25
The risks linked to such cross border projects were still listed among the top 3 challenges in the 2016 technical survey.
12
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-
-
in the
energy sector,
the investment needs to modernise and expand Europe's energy
infrastructure was estimated at EUR 200 billion until 2020 in electricity and gas
transmission and storage infrastructure (including for electricity interconnectors, internal
bottlenecks, electricity storage, market grids, gas interconnectors and CO2 transportation);
in the
telecoms sector,
a gap of between EUR 82 billion and EUR 168 billion was
identified.
The 2011 IA did not provide an overall estimate of how many projects would be at risk of not
being fully funded nor did it provide a quantification of the expected socio-economic impacts,
but it did describe in a qualitative way that many of the projects with EU added value lacked a
business case and that, without CEF to bring in new investment, bridging the financing gap
would be very challenging.
26
The estimations of the investment needs for the three sectors
were revised upwards when the CEF Regulation was adopted in 2013 (EUR 970 billion
27
).
While the bulk of this investment was expected to be delivered by the private sector, by public
investments at national level or via regulatory measures in the energy sector, the 2011 IA
identified "a need to address market failure – to fill persistent gaps, remove bottlenecks and
ensure adequate cross-border connections".
The most common market failures for infrastructure projects in the three sectors are:
costs occur at national/local level while benefits are realised at European scale ;
costs and benefits of projects involving several Member States are asymmetrically
distributed among them;
benefits are dependent on other investments in the network or entail a high first mover
risk;
socio-economic benefits cannot be (sufficiently) internalised (for instance security of
supply, contribution to modal shift);
public and private investors as an alternative to incumbent operators are perceived as
higher risk by private banks, which then charge higher interest, thus setting capital
constraints linked to the long-term nature of infrastructure projects (broadband);
uncertainty about the build-up of demand and, subsequently, revenue generation
(broadband);
lack of interoperability in cross-border public services (DSIs);
market size: some countries lack sufficient scale to be attractive to private operators,
and others are so large that regional fragmentation becomes an issue (DSIs); and
the value of some services is proportional to the number of users, thus it is necessary
to achieve a critical mass before having the possibility to attract private operators
(DSIs).
The CEF rationale
Within the investment priorities defined for the three sectors in their respective guidelines, the
general objective of CEF is to foster the implementation of projects contributing to the
completion of the TEN. It addresses the market failures, focuses on the projects of high
European added-value and helps leverage further investment from the private sector.
26
For the energy sector, the Impact Assessment of the revised TEN E Guidelines and the Impact Assessment on the Communication "
Energy Infrastructure priorities for 2020 and beyond" (COM (2010 677 final) identified an amount of EUR 100 billion being at risk,
including electricity interconnectors, off-shore grids, electricity storage and smart grids, gas interconnectors and CO2 transportation
27
See recital 3 of Regulation (EU) No 1316/2013.
13
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Moreover, the 2011 IA highlighted the potential added value of a common funding
framework for the three sectors, which would be fourfold:
-
A common framework would lead to the simplification of the EU legal framework
concerning TEN infrastructures funding. It would also ensure a coherent approach to EU
project financing across the three sectors.
At the same time, a common EU infrastructure fund and financial framework for
infrastructure would provide a coherent and transparent approach to EU funding that
would offer certainty and would thus have a huge potential to attract more private sector
financing. FIs would be available in a centralised and coordinated manner, attracting and
improving the effectiveness of the relationship with the private investors and the partner
financial institutions.
In addition, the increasing interdependency between economic infrastructure projects,
networks and sectors would enable the realisation of economies of scale. An integrated
EU infrastructure funding framework would allow exploiting cross-sector synergies at
project development and implementation level, enabling cost savings and/or more
efficient exploitation and higher returns.
A common framework would help draw on lessons learned and best practice sharing
across sectors, enabling thus an enhanced effectiveness and efficiency of EU financing in
all sectors.
-
-
-
3. Evaluation Questions
In accordance with the Commission's Better Regulation Guidelines, this mid-term evaluation
of CEF addresses a series of several evaluation questions, which are structured around five
evaluation criteria:
-
Relevance:
To what extent have the objectives and activities of CEF proved consistent
with the needs of the EU market to date, as set out in the Europe 2020 strategy and
relevant EU policy documents and market analysis in the 3 sectors, as well as with the
beneficiaries' needs? How can such consistency be improved?
Coherence:
How well does CEF fit with other EU/national policy objectives/
interventions?
Effectiveness:
What is the main outcome of CEF so far? To what extent do the outputs
and results of CEF correspond to the objectives? How effective has the use of financial
instruments been so far and how could the use of CEF financial instruments be made more
effective? To what extent has it been possible to leverage funding from the national public
and private sectors?
Efficiency:
Are the costs resulting from the implementation of CEF proportional to the
results to be achieved? How could the administration and management of the programme
be improved to enhance its efficiency? To what extent are the available budget,
instruments and governance model contributing to the achievement of the objectives?
EU added value:
What is the EU added-value of CEF compared to what was or could be
achieved by the private sector or by Member States at national and/or regional levels, and
how could it be maximised? Is there still a need to continue CEF funding at EU level? If
so, why?
-
-
-
-
4. Methodology
14
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The three Commission DGs responsible for CEF (Directorate General for Mobility and
Transport - DG MOVE, Directorate General for Energy - DG ENER and Directorate General
for Communications Networks, Content & Technology – DG CNECT) set out an evaluation
scope (presented in the introduction), timeline and methodology, as defined in the roadmap
adopted in 2016.
The evaluation started in December 2015 and was foreseen to be finalised by 31 December
2017. An inter-service group was established to oversee the evaluation. In November 2016,
the three DGs decided to shorten the general timetable by three months to ensure that the
conclusions of the evaluation can feed into the preparation of the next MFF-related proposals.
The Commission signed a contract with an external consultant to prepare a study providing
input for the present evaluation. Data sources used for this external study and for the analysis
undertaken by the Commission services include:
-
-
-
A review of relevant legislative documents and reports;
Monitoring data provided by INEA, EIB, and ACER
28
(for energy);
An Open Public Consultation (OPC), with two distinct surveys, a technical one and a
general one, accessible online for a period of 13 weeks between November 2016 and
February 2017, with 332 complete responses (out of which 24% were not from
beneficiaries of CEF);
A Targeted Stakeholder Consultation (128 detailed interviews);
Case studies.
-
-
Results of the stakeholder consultation can be found in Annex 2. Further detail on the
methodology is provided in Annex 3.
Limitations – robustness of findings
During the evaluation, the following limitations were identified:
- CEF is a funding framework which supplements the sectoral policy guidelines, therefore
contributing to the TEN policy alongside other policy tools at EU and national level (other
support is provided at EU or national level for related infrastructures, regulatory measures,
compliance or non-compliance of the projects with the market and technical rules, etc.).
Therefore it is clear that other factors also play a role in the full attainment of the general
and sectoral objectives as defined in Articles 3 and 4 of the CEF Regulation. A clear
attribution of the extent to which an individual factor contributed to a certain objective
cannot be made.
- Progress towards policy objectives could often not be quantified given the limited
availability of data owing to the early stage of programme implementation, as well as to
limitations concerning the lack of relevant, well-defined and robust key indicators relating
to policy aspects (see also 'Effectiveness' section). While the evaluation could show that
the money committed so far has been directed to priority areas for connectivity at EU
level, results will not be available until after the completion of actions supported by the
programme. Given the limited quantitative information, the evaluation also relies on
qualitative evidence stemming from stakeholders' inputs.
- Beneficiaries of CEF accounted for the majority of stakeholder inputs received during this
evaluation. It could be argued that responses from at least some of these beneficiaries may
be biased (e.g. in portraying CEF in a good light) due to them having a vested interest in
the continuation of the programme. Given the nature of the Programme, it has to be taken
28
Agency for the Cooperation of Energy Regulators
15
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-
into account however that those capable of responding to technical questions are for the
majority stakeholders involved in the programme.
As discussed previously, due to its innovative features, comparability between CEF and
predecessor programmes is different for the three sectors. The most comparable
predecessor programme regards the transport programme (TEN-T 2007-2013), whose
implementation is running until end 2017. It is expected that all actions supported under
TEN-T 2007-2013 will be closed by end 2017, allowing for the launch of the
ex post
evaluation
29
with a view to completion in 2018. Consequently, it was not possible to take
into account comprehensive evaluation results concerning the long term impact of
comparable predecessor measures.
The evaluation used a sample of completed and ongoing projects in the three sectors'
portfolios, which provided a basis for observing progress against general and specific
objectives; the EU funding awarded; the extent to which the new instrument ensured that
money went to the projects with the biggest need of a public intervention; whether adequate
co-funding rates were chosen; whether more non-public funding was enabled and whether the
allocation of EU money was more efficient than previously. This was complemented by the
results of a highly relevant and knowledgeable set of stakeholder responses, although a rather
small and not fully representative sample. Even though only a small share of the respondents
to the targeted and open public consultations did not belong to either project
promoters/beneficiaries or project managers (national or regional authorities), their input is
useful for assessing the effectiveness of the procedural arrangements set up by the CEF
Regulation
30
. The stakeholder input received for the present evaluation might on its own not
be representative enough in order to justify policy changes such as the decision to change or
not the eligibility or spending priorities due to the lack of representativeness. Also, given that
the vast majority of respondents have a vested interest in the programme as they benefit
financially from it their assessment of the effectiveness and usefulness of CEF might not be
completely neutral and has to be put in context. Nevertheless their input should be seen and
interpreted in light of the limitation mentioned above. Such information was complemented
with desk research covering the legal basis, relevant grant agreements for specific projects,
interviews with stakeholders, expert groups, the Commission and Member States, as well as
by taking into account the findings of the Open Public Consultation (OPC). Furthermore, the
main focus of the evaluation is on the programme's implementation progress and delivery
methods, i.e. on whether the conditions to fulfil its objectives are met, rather than on
measuring the achievements of the projects.
To conclude, the abovementioned limitations lead to a certain level of uncertainty in some
findings e.g. limited data does not allow for a straightforward assessment of effectiveness;
some of the findings based on stakeholder inputs may need to be put into perspective given
potential bias. It is estimated however that such limitations do not significantly undermine the
overall reliability of the analysis presented in this mid-term evaluation.
5. Implementation state of play
The CEF Programme has
three forms of assistance
that can be used to achieve its objectives:
grants, FIs, and public procurement. In addition, CEF supports PSAs, which are implemented
29
30
On the other hand, the stakeholder input received for the present evaluation might on its own not be representative enough in order to
justify bigger policy decisions such as the decision to change or not the eligibility or spending priorities due to the lack of representativeness.
Also, given that the vast majority of respondents have a vested interest in the programme as they benefit financially from it their assessment
of the effectiveness and usefulness of CEF might not be completely neutral and has to be put in context.
16
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by either grants or procurement with an objective of facilitating the implementation of CEF
either directly in the administrations of the Member States, or, when addressed to specific
groups of stakeholders, facilitating the implementation of specific policy fields, through better
stakeholders' coordination, exchanges of best practices, communication, sharing of
information and data.
Grants
Following the first three years of Calls, the CEF action portfolio has resulted in the selection
of 925 actions
31
and a corresponding actual CEF funding allocation total of EUR 23.1 billion:
EUR 21.3 billion in transport (out of which EUR 11.3 is under the cohesion envelope)
EUR 1.6 billion in energy
EUR 128 million in telecom
EUR 22 million in transport and energy synergy actions
This is expected to leverage up to EUR 45.3 billion
32
of total investment in the European
economy. Figure 2 provides a breakdown of CEF funding per sector. A breakdown of the
CEF allocation per country (both Member States and third Countries) per sector (including
general and cohesion envelopes in the transport sector) is provided in Annex 13.
Figure 2: Funding per sector
(number of projects)
CEF Transport
CEF Energy
CEF Telecom
CEF Synergy
€1.6 billion
(93)
€128 million
(221)
€22 million
(7)
€21.3 billion
(604)
These results indicate that
the awarding of CEF funding is very much on track,
strongly
influenced by the status of CEF Transport which accounts for approximately 80% of the total
CEF envelope. Most of the initial allocated funding to signed actions refers to work-related
actions or mixed actions (which combines works and studies) (93% in Transport, 83% in
Energy
33
) rather than only studies. The figure below illustrates the states of all actions to date.
Figure 3: Projects by Sector and Status
31
State-of-play by the end of August 2017: Actions under preparation have been included with the information of the Selection Decision
32 Calculated on the basis of the total costs of the supported actions
33
None in Telecom as no such distinction exists for the funded actions in that sector, considering its specificities compared to the two others.
17
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(CEF Funding in € million)
Transport
GA Preparation
Ongoing
Terminated
GA Preparation
Energy
Ongoing
Closed
Telecom
GA Preparation
Ongoing
Closed
GA Preparation
Ongoing
31 (10.8M)
5 (18.4M)
2 (3.6M)
11 (57.3M)
38 (29.5M)
152 (88.1M)
1 (0.0M)
2 (209.1M)
80 (1,322.7M)
152 (2,659.3M)
451 (18,681.9M)
The grants selected under the Multi-annual Work Programmes for CEF Transport and CEF
Energy are managed through annual instalments over the period 2014-2020. The legal
commitment is broken down into one or several budgetary commitments depending on the
progress of the action. The total budgetary commitment is therefore lower than the total
amount allocated via grant agreements (i.e. the total of the budgetary commitment represents
35% of the total amount of the grants allocated). So far, 14% of the total amount allocated to
the selected grants has been paid through pre-financings and interim payment accounts. This
information is broken down per sector in the table below.
Table 2: Summary financial information (EUR million)
34
CEF
budget
Sector
CEF
Transport
CEF Energy
CEF
Telecom
CEF Synergy
Total
Actual CEF
Funding
(% of budget)
21,341 (89%)
1,589 (30%)
128 (12%)
22
23,081
Effective budgetary
commitment
(% of Actual Funding)
6,924
(32%)
993
(63%)
103
(80%)
8.1
(37%)
8,028.2
(35%)
Effective
payment
(% of Actual
Funding)
3,037
(14%)
231
(15%)
42
(33%)
1.5
(7%)
3,312.4
(14%)
Synergy
24,050
5,350
1,041
*
At sectoral level, there is a clear distinction between the budgetary front-loading approach
adopted by the transport sector in comparison to the budgetary back-loading approach in the
34
Information as of end August 2017.
* The funding of the CEF synergy call came from both the Transport and Energy budgets.
18
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energy and telecoms sectors. This is notably explained by the fact that most of the projects
funded in the transport sector in the first two years of CEF were based on a solid project
pipeline stemming from the continuity of projects and studies formerly supported via the
TEN-T programme or by Cohesion Policy instruments and therefore ready to be implemented
during the initial period of the programme. For energy, the back loading approach is due to
the fact that the majority of PCIs, particularly in the electricity sector, are due to mature only
towards the end of the programming period, and only a limited number of gas projects were
mature at the start as they came about in response to the 2009 security of supply crisis. For
telecommunications, the back loading approach responded to the timeline needed to establish
the financial instruments for the broadband investment. As for the DSIs, the lower budget
allocation in the first two years of the programme suited the need to set-up the Core Service
Platforms.
Financial instruments (FIs)
The CEF Regulation
35
allows for implementing projects with FIs, using up to 8.4% of the
total CEF budget envelope. CEF FIs refer to the
CEF Debt Instrument
(CEF DI) and the
CEF Equity Instrument
(CEF EI). The management of the CEF DI was entrusted to the
EIB, on the basis of a Delegation Agreement effective from 22 July 2015.
The CEF DI portfolio also includes projects supported under legacy instruments: the Loan
Guarantee for TEN-T (LGTT) and the pilot phase of the Europe 2020 Project Bond Initiative
(PBI). In order to optimise the use of the EU budget contribution allocated to CEF, the first-
loss provisioning provided under the pilot phase of the PBI and the LGTT were merged with
CEF DI. Thus the portfolios of actions signed under PBI and LGTT effectively merged in
January 2016 into a single CEF DI portfolio, thereby providing the benefits of economies of
scale and diversification over the three CEF sectors.
With regard to the budget of the CEF dedicated to the implementation of the CEF DI,
transport committed EUR 140 million in 2014-2015, energy committed EUR 89.2 million in
2014-2015 and telecommunications committed EUR 17.5 million in 2014-2015. Under the
legacy FIs the Commission has contributed EUR 205 million to the LGTT; EUR 200 million
to the pilot phase of the PBI in the transport sector, EUR 10 million in the energy sector and
EUR 20 million in the information and communications technology sector.
The CEF DI has mainly been used in the transport sector to date (see box below). One
telecommunication
36
and one energy project
37
have also been supported under the predecessor
Project Bond Initiative and are part of the current CEF DI portfolio.
Portfolio of the
CEF DI in the transport sector
38
Potential CEF DI projects close to signature:
o
Projects to be supported under the pilot phase of the Green Shipping Guarantee
(GSG) Programme with an estimated total investment of EUR 3 billion; and
35
36
As amended by the Regulation (EU) No 2015/1017 establishing EFSI (decrease from 10% to 8.4%).
The Axione Infrastructure S.A.S’s project to deliver broadband network services in rural France. EUR 189.1million of total project costs
have been supported under the PBI.
37
The portfolio of projects in the energy sector supported by the EU contribution currently consists of one legacy project, transferred to CEF
DI, for operating and maintaining the transmission assets connecting the Greater Gabbard offshore wind farm to the UK grid. EUR 424.9
million of projects costs have been supported by the EU-EIB contribution.
38
Further detail provided in Annex 6
19
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o
Project for port development.
Legacy projects (transferred to CEF DI portfolio post-merger):
o
LGTT: 2 road projects: EIX Transversal C-25 PPP in Spain and A5 highway in
Germany, and a high speed rail-link between Tours and Bordeaux in France
(LGV Sud operational July 2017);
o
One road project from the LGTT portfolio has been refinanced and supported
by the CEF DI specific Senior Debt Credit Enhancement product: A8
Augsburg Ulm PPP in Germany for an total amount of capital costs of EUR
505 million;
o
the Port of Calais in France;
o
road projects: N25 PPP in Ireland, Passante di Mestre in Italy, A11 highway in
Belgium, A7 PPP in Germany
The
CEF EI
is not yet in use by any of the sectors. However, the preparation of the CEF EI in
the broadband sector is close to completion and the instrument is foreseen to be operational by
the end of 2017. The Commission committed EUR 100 million to the CEF EI in 2016 aimed
to provide a First Loss piece to an Equity Fund that will support Broadband investments in
under-served areas.
Public procurement
Besides grants and FIs, a public procurement instrument is also included and is managed by
the Commission. With a very limited budget (estimated as less than 1% of the total CEF
budget), procurement has been mainly used in the Telecom sector for the operation and
evolutive maintenance of the core service platforms (EUR 115 million allocated for 2014-
2016).
Transport
The initial distribution of the CEF-Transport envelope between the three forms of assistance
reserved a maximum of 89% for grants, a maximum of 1% for PSAs and a maximum of 10%
for FIs. Following the adoption of EFSI and the slower than expected uptake of the CEF DI,
in addition to the adoption of the Multi-Annual Work Programme for the Blending of
financial instruments with grants in early 2017, the bulk of the financial assistance is planned
to be implemented through grants, amounting to 97%, with the operational PSAs at 1.3% and
the FIs at 1.7%.
The total budget available under CEF Transport for
grants
in the 2014-2020 period is EUR
23.4 billion
39
(net of FIs and PSAs)
40
. 91% of this amount was already awarded following
three sets of calls for proposals. The split across transport modes and the amounts awarded are
illustrated in the figure below. In addition, EUR 1 billion has been allocated for the ongoing
call for proposals for grants to be blended with financial instruments ('Blending' Call). The
remaining budget (available for future calls in 2018-2020) is EUR 1 billion.
Figure 4: Projects by transport mode
39
40
Includes additional EUR 185 million revenues from predecessor programmes
As part of the MFF mid-term review, the Commission has proposed to top up the CEF Transport budget with EUR 400 million. A
commitment of EUR 50 million has been made for 2017.
20
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15.7
(236)
€ billion (Number of projects)
1.6
(48)
Rail
Inland Waterways
1.6
(128)
Road
1.4
(54)
Air
0.9
(76)
Maritime
0.3
(62)
Multimodal
It is important to note that the majority of CEF Transport funding was allocated to
sustainable modes of transport
such as railways and inland waterways (81%).The biggest
share of the co-funding is allocated to actions located on the
Core Network Corridors
(CNC)
or to other Core Network sections priorities, accounting together for EUR 16.9 billion
or 79.4%
41
of total co-funding from CEF in the transport sector as illustrated in the figure
below. Additionally, EUR 279.5 million is allocated to projects on the Core and
Comprehensive networks. With its remaining funding share, CEF-Transport has also
supported
SESAR and ERTMS,
with both receiving 6.4% and 5% respectively of the total
funding.
41
This amount refers to the call priorities: Corridors of the Core Network and Other Sections of the Core Network. However, other priorities
from funding objective 1 (ERTMS for instance) and from other funding objectives (Multimodal, Motorways of the Sea) may also contribute
to the Core Network.
21
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Figure 5: CEF Funding per Transport Priority
€ million
(Number of projects)
Core Network Corridors
Funding Objective 1
Other sections of the Core Network
Rail interoperability
ERTMS
Projects on Core and Comprehensive
Neighbouring countries
Funding Objective 2
Innovation
Safe and secure infrastructure
Freight Transport Services
Rail freight noise
SESAR
RIS
Funding Objective 3
ITS
Motorways of the Sea
Nodes of the Core Network
Multimodal
Other Telematic Applications
Better accessibility
0
932.4
(27)
46.6
(15)
1,067.3
(45)
279.5
(32)
12.0
(2)
413.8
(72)
35.6
(11)
24.8
(9)
33.8
(9)
1,358.5
(53)
33.1
(9)
406.5
(38)
385.9
(47)
173.8
(38)
94.7
(26)
31.1
(4)
1.4
(1)
4.000
8.000
12.000
16.000
16,010.4
(166)
Compared to the TEN-T programme, CEF-Transport has dedicated significant efforts to
Cohesion Member States
(over 50% of the budget available under CEF Transport)
42
, in
particular through the amount transferred from the Cohesion Fund, discharged through
national envelopes and dedicated calls for proposals. Cohesion Member States were allocated
through the 2014, 2015 and 2016 CEF Transport
43
calls a total of EUR 11.3 billion in funding
under the Cohesion envelope. This represents 100% of the cohesion envelope, which focuses
especially on cross-border rail (road projects being limited to 10% of the national envelope
amounts). Around EUR 350 million under the General Envelope has been allocated to
Cohesion Member States.
Finally, it should be noted that EUR 9.8 billion from the total CEF Transport budget is
allocated to 20 particularly important projects from an EU value added perspective, among
which 79% are rail projects, 55% are works projects and 62% are under the general envelope.
For TEN-T 2007-2013, the actual funding allocated to Cohesion Member States is €279 million in contrast to €11.6 billion under CEF
Transport.
43
The CEF Transport MS Committee approving the results of the 2016 Call will take place of 6/7/2017.
42
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The top six cross-border projects, which concern both works and studies, are Seine-Escaut
(enhancing inland waterways between Belgium and France), the Brenner Base Tunnel (rail
project involving Austria and Italy), the Fehmarn Belt (multimodal tunnel between Denmark
and Germany), Lyon-Torino (rail project involving France and Italy), Evora-Merida (rail
project involving Portugal and Spain) and Rail Baltica which improves East-West connections
between several cohesion countries (rail projects between Poland, Lithuania, Latvia and
Estonia)
44
.
In the period 2014-2020, the Commission has funded
PSAs
for an amount of
EUR 239
million
on a multi-annual basis, divided across the General envelope, and the Cohesion
envelope on the three CEF Transport Funding Objectives. PSAs were funded for an amount of
EUR 85 million under the first objective
45
, 12 million under the second objective
46
and 125
under the third objective
47
, while 17 million was reserved for Cohesion Member States where
the Commission has supported the administrations of the Member States or bodies under their
responsibility such as the railway infrastructure managers, who are in charge of preparing the
projects pipelines by enhancing their administrative capacity in terms of human and technical
capital to better prepare, manage and implement CEF projects particularly in Cohesion
Member States.
Energy
All actions have been awarded through
grants,
since no action has been supported by the
CEF DI (one project close to approval). The sections below therefore focus exclusively on
grant funding.
As stated, the total budget for CEF Energy from 2014 to 2020 is EUR 5.35 billion. In the
period under evaluation (2014-2016), EUR 1.6 billion of EU contribution is allocated to 93
CEF Energy actions through five calls for proposals, from a possible maximum allocated
budget of 2.2 billion. The split of these actions across energy sector and the relevant amounts
is displayed in the figure below. The total allocated amount following the first three years of
the programme represents 34% of the total CEF Energy envelope. Out of this, EUR 1 billion
has already been committed through the signature of grant agreements, and EUR 0.2 billion
has been paid. In the energy sector, 11 actions have already been completed, 80 are ongoing
and 2 are under preparation
48
.
Figure 6: Actions by energy sector
44
45
COM(2013)940 final.
'Removing bottlenecks and bridging missing links, enhancing rail interoperability, and, in particular, improving cross-border sections.'
46
'Ensuring sustainable and efficient transport systems in the long run, with a view to preparing for expected future transport flows, as well
as enabling all modes of transport to be decarbonised through transition to innovative low-carbon and energy-efficient transport technologies,
while optimising safety.'
47
'Optimising the integration and interconnection of transport modes and enhancing the interoperability of transport services, while ensuring
the accessibility of transport infrastructures.'
48
Stage of preparation of grant agreement between beneficiaries and INEA- situation as of end of August 2017
23
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1,018.5
(49)
€ million
(Number of actions)
530.1
(43)
40.5
(1)
Gas
Electricity
Smart grid
Works have attracted the most significant funding,
totalling EUR 1.3 billion, or 83% of
funds across 17 actions. However, a
higher number of projects providing for studies was
supported;
76 actions for studies were allocated EUR 0.3 billion. A variety of actions have
been supported for works and studies. For example, studies have varied from environmental
impact assessments to support the permitting process and seabed surveys for cables to the
technical specifications for the Baltic synchronous operation study. Works have varied from
new gas pipelines and reverse flow engineering to new electricity lines and hydro-pumped
electricity storage.
Not all CEF energy project proposals have been successful.
Some 160 have been
submitted so far and of these, 150 (94%) were deemed eligible for funding. However, only 96
(60%) were selected for funding. The rejection of funding proposals has been due to a variety
of factors (which are assessed at the proposal evaluation stage in accordance with the CEF
energy award criteria), including insufficient maturity of the proposed action, proposals that
do not demonstrate the need for EU financial assistance as they were deemed to be
commercially viable. Given the available budget and the flexibility to move resources across
the different calls over a budgetary year, budget restrictions were not a limiting factor.
CEF Energy has allocated funds to electricity, smart-grid and gas projects.
Gas projects have
so far received the major share of funding,
with EUR 1.02 billion or 64% of the currently
allocated funding, via 49 actions. The electricity sub-sector has had nearly as many actions
selected (43) although with a lower value of allocated funds, EUR 0.5 billion or 33% of the
total. In the 2016 second call, one action was selected for funding in the smart-grid thematic
area, and another action was selected, and later cancelled, in the 2014 CEF Energy call, with a
total of EUR 0.04 billion (3%) currently allocated. However, looking at the 74 PCIs supported
by CEF so far, 37 projects related to electricity have been supported (35 electricity lines, 1
storage project and 1 smart grids project) and 37 in gas
49
. Of these PCIs, 40 concern physical
cross-border infrastructure, while the rest concern infrastructure physically located in one
Member State but with a significant cross-border impact, in line with the policy requirements
of the TEN-E Regulation
50
.
A breakdown of the funding allocation by corridor
shows that the Baltic Energy Market
Interconnection Plan in gas has been allocated the largest share of funds, with EUR 0.51
billion or 32% of the total. This result is dominated by two multi-Member States works
actions, the Poland-Lithuania interconnection “GIPL” and the Estonia-Finland
49
50
There are no PCIs in the thematic area of CO
2
networks; as eligible projects are under preparation.
See Article 4 (c) of Regulation (EU) No 347/2013 on guidelines for trans-European energy infrastructure
24
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“Balticconnector”. The Southern gas corridor, the NSI East (gas) corridor and the BEMIP
Electricity corridors also feature prominently for funding, with the North Seas Offshore Grid
corridor not far behind. Concerning the number of actions (including studies), NSI East (gas)
corridor comes on top with 21 actions, followed by NSI East (electricity) and the North Seas
Offshore Grid corridors.
In the energy sector, programme support actions of a total amount of EUR 4.2 million have
been used to support studies commissioned via public procurement on the development of
TEN-E corridors.
Telecommunications
CEF Telecom was implemented in compliance with the methods of intervention set out by the
CEF Telecom Guidelines. Specifically, for the DSIs area,
grants
have been mainly used
to
support the deployment of generic services,
while the
implementation and/or
maintenance
of the
core service platforms
has been funded
through procurement.
The
only exception is represented by the core service platform of Europeana, which was supported
with grants in 2014 and 2015 and through procurement in 2016.
A total envelope of about
EUR 370 million,
corresponding to 37% of the total budget, has
been allocated within CEF Telecom over the 2014-2016 period: EUR 251 million in the DSIs
area (EUR 115 million for the core service platforms and EUR 136 million for the generic
services) and EUR 120 million in the broadband area.
Regarding the broadband area, the forms of financial support used to date include:
FI, specifically, Axione action has been supported under the Project Bond Initiative; and
EUR 100 million is foreseen to be invested in the Connecting Europe Broadband Fund
51
;
Grants, which have been used to set up a technical assistance facility in cooperation with
the World Bank.
EUR 40 million is intended to be redeployed for the WiFi4EU initiative, which has recently
reached political agreement by the co-legislators.
As regards the horizontal actions related to the DSIs area, these consist mainly of studies on
the deployment of CEF Telecom.
Through the 2014-2016 work programmes, CEF Telecom has provided funding for the
deployment of core service platforms and generic services of
15 DSIs
52
: EUR 115 million
have been allocated to the deployment of 14 core service platforms (eID, eSignature,
eInvoicing, eTranslation, Public Open Data, Europeana, Safer Internet, Cybersecurity,
eHealth, eProcurement, Business Registers Interconnection System (BRIS), Electronic
Exchange of Social Security Information (EESSI), Online Dispute Resolution (ODR) and
The Connecting Europe Broadband Fund (CEBF) is expected to generate significant investments (from EUR 1 – 1.7 billion (thereby
generating considerable leverage)) in 7 to 12 broadband projects each year from 2018 to 2021, with the aim aims to have invested in 20
countries by 2021 (See:
http://europa.eu/rapid/press-release_IP-16-4351_en.htm).
CEF support for other broadband initiatives (studies and
support measures) provide continuation for the broadband policy initiatives as well as targeted technical assistance for up to 15 projects in
collaboration with the World Bank under the Connected Communities Initiative (CCI) with the aim to establish a solid business case to
attract required funding.
52
The only exception is represented by the eJustice DSI, which is currently financed by CEF only for what concerns generic services and by
the Justice Programme for what is related to the core service platform.
51
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eDelivery
53
) and EUR 128.6 million have been awarded for 221 actions for generic services
54
.
A detailed breakdown is provided in the following figure.
Figure 7 : Projects by DSI building block and sector specific DSI
32.2
(58)
€ million
(Number of projects)
19.5
(22)
10.9
(14)
10.7
(16)
15.7
(30)
14.8
(23)
6.1
(6)
2.6
(9)
eDelivery
eInvoicing
eID and eSignature
5.5
(17)
3.6
(7)
3.1
(7)
2.1
(3)
Europeana
1.7
(8)
BRIS
0.1
(1)
ODR
Safer Internet
Public Open Data
Cyber Security
eTranslation
eHealth
EESSI
eProcurement
DSI Building Block
Sector Specific DSI
About 50% of the resources assigned to actions (including generic services and core service
platforms) have been allocated to Safer Internet, Europeana, EESSI, eIdentification and
eSignature. This is related to the approach adopted for the 2014 and 2015 work programmes,
which paid particular attention to the technical and operational maturity of the DSIs. Indeed,
Safer Internet and Europeana are classified by the Guidelines as “well-established” DSIs,
since they were in operation before the beginning of CEF Telecom.
6. Answers to the evaluation questions
6.1. Relevance
This section aims at addressing whether the original objectives and structure of the
intervention are still relevant for the current EU priorities and objectives, as well as how they
meet the sectors' and stakeholders' needs. It also addresses whether the forms of financial and
technical assistance are the most appropriate to address the objectives.
Main findings
- The CEF general and specific objectives contribute to
EU policy objectives, including its
developments under the current Commission and the new EU international
commitments concerning climate change
(Paris Climate Agreement). In the
telecommunication sector, however, the telecommunications guidelines limit the ability of the
programme to take full advantage of the latest technological developments (e.g. High
Performance Computing) and address the new priorities in the political agenda that have
subsequently emerged.
53
54
As regards eJustice DSI, CEF programme only provides support for the deployment of the generic services.
As regards the generic services, only results of the first call for proposals issued in 2016 are included.
26
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- Overall, the
common programme approach
can be considered relevant, notably in light of
the goals and challenges that are common to the three sectors.
- The
investment needs remain significant in all three sectors.
Given the
continued
existence of market failures
which has led to underinvestment in key infrastructure projects,
CEF remains relevant as an essential element of the EU investment strategy. The size of CEF
currently makes it possible to address only some of the identified market failures in all three
sectors. Therefore, potential exists for unlocking further public and private investment if
additional EU budget was made available to address more market failures.
- Considering the specific needs of the targeted sectors and the low bankability of related
projects, a
programme mainly based on well targeted grants
is appropriate.
- In addition, alternative sources of capital, such as those that can be accessed through
FIs
(CEF DI) and blending, remain relevant, especially for revenue-generating projects. Their
degree of relevance, however, varies across sectors.
- In the telecommunication sector, the important budget cuts during the final stages of CEF
negotiations implied a reduction in the scope of the programme for the DSIs, resulting for the
programme in only being able to partly address the needs of those Member States with
developed DSIs at national level. As far as broadband is concerned, given resource
limitations, support has been so far focused on technical assistance activities that can help
projects with a difficult business case to materialise, as well as on the development of
financial instruments.
6.1.1. Relevance for EU priorities and sectoral needs
CEF was proposed by the Commission in 2011 and adopted at the end of 2013, in the context
of the Europe 2020 Strategy
55
, the EU’s ten-year jobs and growth strategy. In 2014 the new
European Commission came into office and its 10 priorities
56
provided an update and focus to
these goals. Of particular relevance to CEF and its sectors are the four priorities "A new boost
for jobs, growth and investment" a "Connected digital single market", "A resilient Energy
Union with a forward-looking climate change policy" and "Internal Market". The
Commission also proposed in 2014 an Investment Plan for Europe, one of whose three Pillars
is the European Fund for Strategic Investments (EFSI), which was launched in July 2015.
In 2015, the adoption of the Paris Agreement by the 21
st
session of the Conference of the
Parties (COP21) to the UN Framework Convention on Climate Change committed the EU and
its Member States to a reduction in domestic greenhouse gas (GHG) emissions of at least 40%
by 2030 and by 80% to 95% by 2050 compared with 1990 levels. The Commission is
currently assessing what this new more ambitious agreement implies for EU policies.
The CEF objectives as defined in Article 4 and 5 of the CEF Regulation continue to be in line
with the most recent EU policy orientations, in particular its internal market dimension. For
most respondents of the technical survey of the open consultation, CEF is fully or to a large
extent aligned with other EU policy objectives and initiatives in the fields of transport (73%
of respondents), energy (78%) and telecommunications (68%).
55
56
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:2020:FIN:EN:PDF
https://ec.europa.eu/priorities/publications/president-junckers-political-guidelines_en
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For
Transport,
the CEF objectives and priorities were based on the objectives set by the
TEN-T Regulation
and wider transport policy objectives as defined in the
2011 White Paper
"Roadmap to a Single European Transport Area – Towards a competitive and resource
efficient transport system"
57
. The programme is also aligned with the objectives set in the
European Strategy for low-emission mobility
58
adopted by the Commission in July 2016.
Indeed, connectivity within the EU and the transition to low emission mobility still depends
on the ability to swiftly deliver main infrastructure missing links and to remove important
bottlenecks for the most sustainable transport modes (rail, inland waterways, shorts sea
shipping) and alternative fuels.
Using a pan-European planning methodology, the TEN-T Regulation identifies a Europe-wide
‘Core Network’, which includes nine Core Network Corridors and serves the completion of
the internal market. The ambition behind the Core Network, to be achieved by 2030, is to
carry freight and passenger traffic with high efficiency and low emissions, facilitating
transport flows and therefore boosting competitiveness, jobs and growth in the EU. By
allocating the bulk of its envelope on the completion of missing links and removal of
bottlenecks on the Core Network (either through the creation of new infrastructure or the
substantial upgrading and rehabilitating of existing infrastructure), CEF represents a crucial
tool to achieve the TEN-T policy objectives. This is also confirmed by the fact that it
encourages more efficient and sustainable mobility services in multimodal combinations and
through the use of telematics applications such as SESAR and ERTMS.
The 2011 White Paper on transport has set the following targets to the TEN-T policy: 30% of
road freight carried over distances of more than 300km should shift to other modes by 2030,
and more than 50% by 2050; the length of existing high-speed rail network should triple by
2030 and by 2050 the majority of medium-distance passenger journeys should be undertaken
by rail; by 2050, all major Core Network airports should be connected to the rail network and
all seaports to the rail freight and where possible to the inland waterways system. By
allocating the bulk of its envelope to rail projects (75%) and by promoting intermodal
connections, CEF Transport is strongly contributing to these targets.
More recently, the Commission published a communication on A European Strategy for Low-
Emission Mobility, which notably aims to make the transport system more efficient, by
stimulating the use of digital technologies and further encouraging the shift to lower emission
transport modes, and to speed up the deployment of low-emission alternative energy for
transport, such as advanced biofuels, electricity, hydrogen and renewable synthetic fuels.
Being a programme that supports the development of telematics applications encouraging a
seamless and efficient mobility throughout Europe and new technologies aimed at
decarbonising transport, CEF remains very relevant to such a strategy.
For
Energy,
the CEF objectives and priorities were based on the objectives set by the
TEN-E
guidelines
and are strongly in line with at least three of the Priorities of the Juncker
Commission: “Energy Union and Climate”, thanks to CEF Energy’s emphasis on security of
supply, integration of renewable energies into the EU transmission networks and support on
the uptake of innovative technologies; “Internal Market”, by fostering the integration of
national energy markets by strengthening their physical interconnections; and “Jobs, Growth
57
58
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52011DC0144:EN:NOT
http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52016DC0501&from=en
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and Investment”, contributing to capital intensive investments through EU public funding,
activating public and private sector resources.
CEF Energy, supporting the TEN-E objectives to increase market integration and
competitiveness, to enhance security of supply and to contribute to sustainable energy goals
remain entirely relevant to the evolving EU policy framework as developed through the
Energy Union strategy and more broadly, the priorities for the 2014-2019 Commission
59
.
CEF Energy, supporting the TEN-E objectives directly mirror three of the five dimensions of
the Energy Union
60
and are furthermore supportive of the remaining two
61
. The second State
of the Energy Union report
62
noted that 'a resilient infrastructure is the backbone of the
Energy Union' and that important interconnection projects had been put into operation.
However, as stated, bottlenecks still exist and further interconnections are still needed to fully
integrate the market, ensure security of supply and to enable to EU to make optimal use of its
renewable resources.
Proposals from the Commission under the Energy Union in support of its objectives have also
embedded an appreciation for the role of infrastructure. For example, the LNG and gas
storage strategy highlighted the remaining gaps in internal market infrastructure and urged
that EU funds can help to make up for the weak commercial viability of liquefied natural gas
(LNG) terminals that are particularly important for security of supply.
The ambition that underpins the Clean Energy Package proposals
63
(in particular the target for
at least 27% renewable energy and 30% energy savings by 2030), which was further
reinforced by the EU's commitments under the Paris Climate Agreement, indicate that a step
change is needed in the transition to a low carbon economy. Much evidence, also in terms of
number of funded projects in the electricity and smart grids under CEF Energy (as discussed
under effectiveness), points to the requirement for a reinforced electricity grid in order to
absorb more variable power generation from renewable energy. This supports that due
consideration should be given to electricity projects as set out in recital 57 of the CEF
regulation. With regard to the expert interviews, 17 out of 30 energy experts that were asked
on how CEF is in line with the climate objectives felt that adjustments might be still needed in
CEF with a view to the 2030 targets. (Including a position paper from NGOs stating that CEF
should "strictly
refuse to finance fossil fuel based infrastructure and therefore only support
renewable based energy infrastructure")
The new Market Design legislative proposals
64
under the Clean Energy Package furthermore
highlight that without the ability to rely on increased flexibility and generation or demand
resources from other Member States, the costs of the energy transition for consumers would
increase significantly. In this respect the second horizontal objective of enabling the Union to
meet its sustainable development targets also remains very relevant as well as the flexibility
options included already in the specific objective of security of supply (storage).
59 Three of the 10 Juncker Commission priorities relate to the CEF objectives: energy union and climate; internal market; jobs, growth and
investment
60
Energy security, solidarity and trust; the internal energy market; decarbonisation of the economy.
61
Supporting energy efficiency via its sustainable energy focus and research, innovation and competitiveness through its availability of
support to innovative projects and funding diverse infrastructure studies.
62
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the
Committee of the Regions and the European Investment Bank, second report on the state of the energy union (COM(2017)53 final).
63
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the
Committee of the Regions and the European Investment Bank clean energy for all Europeans, com/2016/0860 final/2
64
Proposal for a directive of the European Parliament and of the Council on common rules for the internal market in electricity (recast),
COM/2016/0864 final/2 - 2016/0380 (COD)
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An important objective of CEF energy is to support innovation externalities, addressing the
limitations of the market to support projects of common interest that take on more technology
risk, in line with the fifth Energy Union dimension of 'Research, innovation and
competitiveness'. CEF Energy recognises the additional cost of deploying new technologies in
line with the TEN-E rules that incorporate innovation as a positive externality for (first of a
kind of) commercial application, thus it can lower the risk of private investments in promising
clean energy technologies, particularly in electricity transmission and innovative storage
projects. Its relevance to innovation policy and to new initiatives such as the Communication
on Accelerating Clean Energy Innovation
65
in the energy sector remains therefore confirmed.
For
Telecommunications,
the CEF objectives and priorities were based on the objectives set
by the
Telecommunications guidelines.
They aim at supporting economic growth through
improvements in the broadband and digital infrastructures and access to cross-border online
services for citizens and businesses. The objectives are consistent with evolving EU priorities
in the sector, particularly the
Digital Single Market
(DSM) and its related Strategy launched
in 2015
66
.
The DSM Strategy identifies the need to increase efforts to modernise the public
administration and achieve cross-border interoperability. Areas of intervention and sectors to
achieve the DSM covered by the CEF DSIs include e-Government
67
, cybersecurity and
eHealth as well as an initiative to build up the interconnection of business registers (BRIS).
Consistency with the DSM Strategy can also be observed for other DSIs like Safer Internet,
that contributes to improve online access for kids by enhancing safety, and also to create a
more inclusive society. The relevance of CEF in achieving an effective DSM is confirmed by
all of the interviewed stakeholders and by the large majority of the respondents to the
technical survey: 88% of them believe that CEF Telecommunications is fully or to a large
extent relevant to the achievement of the DSM.
The recently adopted DSM strategy mid-term review, among others, has highlighted the role
of CEF in supporting solutions like eHealth, cyber-security
68
, or the preparation of the
European Data Infrastructure to put in place an adequate High Performance Computing
(HPC) environment
69
. With respect to the new political priorities stemming from
technological developments identified by the DSM Strategy, CEF Telecommunications has
shown however a
limited degree of flexibility,
as it allows the inclusion of new DSIs only if
compliant with the criteria set by the Telecommunications Guidelines
70
, and of new activities
only if in support of the DSIs
71
. To this purpose, it is worth mentioning: rigidity in the
architecture of DSIs (art. 2.2.b), d) and e) of the Guidelines), the scope of the intervention in
the area of DSIs that does not include Data Infrastructures (arts. 4.1.a) and 6.1), limitation to
annual work programmes (art. 6.2), restrictions on the method of intervention (art 5). This
65
Communication from the Commission to the European parliament, the council, the European economic and social committee, the
committee of the regions, and the European investment bank- accelerating clean energy innovation (COM(2016)763 final).
66 COM (2015)192 Communication from the Commission of 6 May 2015 on A Digital Single Market for Europe.
The 2016 – 2020 e-Government Action Plan includes interoperability and cross-border connectivity among its underlying principles as
well as the use of the CEF DSIs among its actions (COM(2016) 179 final – Communication from the Commission to the European
Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – EU eGovernment Action Plan
2016-2020- Accelerating the digital transformation of government).
68
Member States are encouraged to make the most of the cooperation mechanisms set-up under the NIS Directive and supported by CEF to
improve the way in which they work together to prepare for a large-scale cyber-incident (Communication on Strengthening Europe's Cyber
Resilience System and Fostering a Competitive and Innovative Cybersecurity Industry).
69
In line with the European Cloud Initiative.
70
Article 6 sets out criteria for eligibility criteria and priorities for funding.
71
High Performance Computing (HPC) is considered essential on of the fundamental contributors to the Digital Single Market and a driver
for the digital economy. In 2012, the Commission adopted its HPC Strategy and, in 2016, within the European Cloud Initiative, launched the
HPC Initiative, aiming to create a European HPC and Big Data eco-system by 2023. It has been possible to include funding for supporting
the use of HPC within the CEF Telecommunications 2017 work programme, only because a strong link with the Public Open Data DSI has
been identified, otherwise it would not have been possible to support this activity. See section 6.3.1 of PWC report.
67
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lack of flexibility limits the potential of the programme to take full advantage of the latest
technological developments (e.g. High Performance Computing) and address the new
priorities in the political agenda that emerged after the adoption of the guidelines (e.g.
cybersecurity-related challenges, infrastructure and technology needs for the data economy).
There is an untapped potential of new technologies, which with a more flexible formulation of
the guidelines could be fully harnessed. These limits in reflecting technological change are
recognised by about 44% of respondents to the technical survey, whereas the need to update
the Guidelines to increase their flexibility has also been highlighted by over 55% of the
strategic stakeholders interviewed.
All the interviewed stakeholders and the large majority of participants (89%) in the technical
survey considered CEF Telecommunications relevant to achieve
improvements in daily life
for citizens, businesses and public administrations.
Indeed, although the Commission has
been supporting programmes to develop and promote interoperability between public
administrations since 1999, cross-border interoperability has not been fully achieved yet
72
. As
a result, cross-border online services are lagging behind services offered to country
nationals
73
. For instance, an estimated 2% of entrepreneurs starting a business in their own
countries face issues when trying to access the necessary online services (because these
services are not available), whereas one-quarter of foreign entrepreneurs encounter this
problem. Similarly, foreign start-ups suffer from lower availability/access to information on
services compared to their domestic counterparts (33% compared to 39% for national start-
ups); and using services cross-border is possible in 27% of cases compared to 46%.
As regards CEF Broadband, the recent Commission Communication on the European Gigabit
Society Strategy acknowledges the importance of Internet connectivity for a successful DSM
and for Europe's digital future. The continued focus on the deployment of very high capacity
broadband networks
74
remains a key priority. Despite the various funding instruments
available on the market, the Commission has identified a remaining investment gap of EUR
155 billion to reach the connectivity targets set in the Gigabit Society Strategy. Very high
capacity networks are currently underfunded while they are critical for the digital economy
and for many cross-sector innovations.
In view of the very limited budget remaining for CEF broadband, it was essential to maximise
leverage and to support projects able to deliver gigabit connectivity. No substantial demand
has been demonstrated for CEF DI for broadband, possibly in the context of the emergence of
EFSI. The addendum to the ex-ante assessment (see section 6.1.4) identified a clear lack of
equity for relatively small projects in broadband across EU Member States. In addition, the
WiFi4EU initiative, which has only recently reached political agreement by the European
Parliament, the Council and the Commission, aims to promote the benefits of the Gigabit
Society and stimulate demand for very high capacity networks. Finally, the technical
assistance for broadband projects has proven highly relevant, as shown by the Connected
72
Communication from the Commission to the European Parliament, the Council, the European Economic and social Committee and the
Committee of the Regions - European Interoperability Framework – Implementation Strategy COM(2017)134.
73
eGovernment Benchmark 2016. A turning point for eGovernment development in Europe?, Capgemini, IDC, Sogeti, and Politecnico di
Milano, 2016.
74
As defined in Article 2.2 of the Proposed Directive establishing the European Electronic Communications Code (COM(2016) 590 final/2
of 12.10.2016): " 'very high capacity network'
means an electronic communications network which either consists wholly of optical fibre
elements at least up to the distribution point at the serving location or which is capable of delivering under usual peak-time conditions
similar network performance in terms of available down- and uplink bandwidth, resilience, error-related parameters, and latency and its
variation. Network performance can be considered similar regardless of whether the end-user experience varies due to the inherently
different characteristics of the medium by which the network ultimately connects with the network termination point."
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Communities Initiative
75
, ran in cooperation with the World Bank and complementary to
similar support provided under the European Investment Advisory Hub.
The relevance of a common programme
The TFEU sets the basis for a common programme for transport, energy and
telecommunications networks by grouping the three in the same title ("Title XVI - Trans-
European Networks") with a clear mission of "setting-up of an area without internal
frontiers"
76
. The CEF Regulation together with the sectoral guidelines have built on this
approach and fulfilled the mandate of the Treaty by putting in place a common programme for
the three TENs. The rationale for such approach was based on the observation that the three
sectors are regulated by three different sectoral guidelines even though they face common
challenges.
The idea of a common programme is supported by a vast majority of respondents, both in the
general and technical survey (where respectively 78% and 65% of respondents agree or
strongly agree). In the general survey, the focus on multi-sectoral (transport, energy and
telecommunications) projects and potential synergies was considered either important or very
important for 79% of respondents. However, in both the technical and general surveys,
opinions are split on whether having one funding instrument for the three sectors is the most
appropriate approach. Also, most of the comments to this question suggest that respondents
considered it as "forward looking", rather than on the current set-up, as they expressed the
preference to keep e.g. separate calls and budget appropriations, which is currently the case.
This might be partly explained by the fact that most respondents from each sector have no
interaction with actions supported in the two other sectors and by the fact that the financing of
actions involving more than one sector has been very limited to date (critical factors limiting
the possibility for synergies in the current legal/budgetary framework are explained in section
6.3.2.2). On the other hand, the common programme approach allows for economies of scale
and simplification, mainly as regards the management of the programme (the grant element)
by a single executive agency (INEA) (see also section 6.4.2.). As stated previously, a separate
mid-term evaluation of INEA (incorporating its other functions such as those relating to
Horizon2020) is being undertaken.
75
120 broadband projects were submitted from 24 Member States. See:
https://ec.europa.eu/digital-single-market/en/news/connected-
communities-initiative.
76
Art. 170 TFEU
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Common challenges in transport, energy and telecommunications – Stakeholders' views
Stakeholders in their replies to the general survey pointed to the following common challenges
experienced by the three sectors:
"With
a view toward a single European transport, energy, or telecoms market, the challenge in all of these
sectors is the complexity arising from different national systems in place and their interconnection, and from the
interoperability needed to establish";
"They
have inherently common features that distinguish infrastructure from services that can operate across
that infrastructure. The common challenge is to avoid the service providers owning or funding the development
of that infrastructure to further their own gains, and to ensure that infrastructure is developed to meet the needs
of citizens and businesses. And to ensure competitive supply of world class services";
"Similar challenges are related to the need of coping with an EU-wide effective, competitive and sustainable
network development. On top of that, relevant synergies can be found in practical terms (e.g. supplying the
transport network with energy as well as IT infrastructure")";"With the trend in technology and market
development these three components are very linked";
"The three of them are core sectors for European economy and society. They make a key contribution to
economic development and social welfare at European level, even when they show large differences entailing a
differentiated treatment for each. Challenges are innovation, security and sustainability";
"Language barriers are significant inhibitors to successful international trading, co-operation and information
exchange".
6.1.2. Resources vs. objectives and potential EU impact
The investment needs in TEN exceed the resources available at national level and the
structural market failures indicated previously in the 'Background to the initiative' section still
exist. Therefore, even with a EUR 30.4 billion budget, the EU budget can only cover part of
those market failures.
In the
transport sector,
oversubscription rates for the calls show a very high demand for EU
grant support, with the budget available constantly falling short of the sector needs. More
recent estimations by the Commission, confirmed in the Core Network Corridor Coordinators
work plans, reveal that investments needs in the TEN-T Core Network amount to EUR 740
billion by 2030. As public budgets are still under considerable fiscal consolidation, the
implementation of CEF/TEN-T in 2014-2016 shows that financing support from Member
States and private sector continues to be crucial but insufficient, for projects with a European
dimension.
77
As regards
energy,
the 2011 IA foresaw that some EUR 200 billion of investments would be
required by 2020 in electricity and gas transmission infrastructure as well as smart grids,
electricity storage and CO
2
transport infrastructure by 2020 and of this, EUR 100 billion
would not be covered by the private sector and was at risk.
So far EUR 1.6 billion is allocated to projects, compared to EUR 2.2 billion available under
the multi-annual work programmes 2014-16. This represents around 34% of the total budget
across half of the MFF period. The total capital expenditure (CAPEX) leveraged by CEF so
far (EUR 3.5 billion) is a fraction of the EUR 100 billion estimated by the Impact Assessment
of the TEN-E Guidelines. As already indicated, CEF Energy spending has been back-loaded
to the second half of the MFF period due to the need to step change the pipeline of projects,
especially in the electricity sector, through the bi-annual adoption of the Union list of PCIs.
Current expectations by ACER in 2016
78
are for a 'project commissioning peak' of PCIs
77
78
Progress report on the implementation of the TEN-T in 2014 and 2015.
ACER, Consolidated report on the progress of electricity and gas projects of common interest for the year 2015 – rev 5/7/2016
33
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between 2018 and 2020 with, for example, 22 gas PCIs being commissioned in 2020 alone ;
furthermore, 89 PCIs out of the current 108 in the second PCI list are expected to be
commissioned for electricity by 2023. These figures currently do not take into account the
updates of the PCI Union List of 2017 and 2019 and do not count for additional projects in
smart grids or cross-border carbon dioxide networks which could become PCIs in these lists.
ACER estimates a total CAPEX of EUR 82 billion of investment for the list of PCIs by 2020,
for which CEF Energy support would clearly not be sufficient. It is therefore too early to
conclude on the amounts which CEF might cover as funding gap of regulatory mechanisms
until the end of the programme
79
.
57% of the 30 respondents to the technical survey reported that they considered budget
appropriations to be “fully relevant” or “very relevant” with respect to sectoral objectives, and
13% considered budget appropriations as “moderately relevant”.
Despite the difficulty to link together coherently different assessments, it can be
concluded that the remaining CEF energy budget remains relevant to the potential mature
demand and the remaining budget will not be sufficient to cover all the investment needs
foreseen by means of potential CBCAs decisions; particularly, it will not be able to meet the
increasing demand in funding for electricity and smart grids projects.
Furthermore according to current analysis based on the latest TYNDPs
80
, EUR
125 to 148
billion
is required for electricity TEN-E infrastructure and, EUR
90 billion
is required in gas
TEN-E infrastructure until 2030, in line with the increasing trend of investments needs in the
sector.
During the negotiation of the programme, the CEF
Telecommunications
budget was reduced
from the requested EUR 9.2 billion to EUR 1.14 billion. The cuts amounted to about 98% and
50% of the initial budget for broadband and DSIs respectively. Furthermore, in 2015 EUR
100 million were redeployed for the establishment of EFSI. These budget cuts resulted in
important changes in the logic of intervention and triggered reductions in the scope of the
Programme. Specifically, for the DSIs the reduction affected not only their number, but also a
layer of activities related to the deployment of digital infrastructures at Member State level
81
.
This is reflected in the geographic participation patterns of some DSIs, i.e. it is essentially
those Member States where deployment at national level had already taken place that are able
to apply for funding for generic services, as these typically cover only the connection of
existing infrastructures to a core service platform.
In the first years of implementation, this reduction in scope combined with the possibility to
shift budget from undersubscribed DSIs to other DSIs (for generic services), allowed the
available budget to partly address the needs of the Member States that had the capacity in
place. However, considering the increasing subscription rates in recent calls, further cuts in
budget would substantially hinder the capacity of the programme to deliver on its objectives.
For example, in the case of eHealth, the available budget has not been sufficient to fund all
79
Sources: CBCA: cross border cost allocation decision, see relevant ACER document entitled Overview of cross-border cost allocation
decisions - Status update as of January 2017.
The investment needs of projects that have received CBCA decisions (cross border cost allocation decision, see box..) between 2014 and 2016 amount to
approximately EUR 6 billion of CAPEX
.
80
Ten Year Network Development Plans (for gas and electricity)
81
In the original proposal for the CEF Telecommunications Guidelines, as well as within the sectorial impact assessment, the following
definition of generic services was included “Generic
services provide the functionality and content of digital service infrastructures. They
may be interconnected through a core service platform”.
Thus, the deployment of generic services could include support to the deployment
of digital infrastructures at national level, which enables MS to connect to the core service platform. After the negotiation phase, the
definition of generic services was changed, excluding the possibility to provide support for the deployment of DSI at MS level (i.e. the
current definition only relates to the connection of national infrastructures to core service platforms).
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the proposals above threshold
82
. Furthermore, strategic stakeholders have pointed out that the
envelope should be reconsidered in case the scope of CEF Telecommunications in the digital
sector was to be broadened. As to the budget allocated to the broadband area, its current size
is far from being proportionate to the existing challenge. Given resource limitations, support
has been so far focused on technical assistance activities that can help projects with a difficult
business case to materialise, as well as on the development of financial instruments (see
6.1.1). On the whole, resources available under CEF Telecommunications may most likely
not be commensurate to challenges in this area.
6.1.3. Using the adequate support schemes to respond to market failures
and policy challenges
As indicated in the previous sections, the purpose of CEF is to enable investments with high
EU socio-economic benefits but not being financially viable for the market due to market
failures. It thus addresses a specific investment situation with a gradation in term of type of
instrument and co-financing rate and in complementarity with other EU instruments.
Grants
As the large majority of CEF projects relate to cross-border projects with wider regional and
EU benefits but insufficient national funding or market-based financing,
grants
represent the
dominant support scheme.
This is the case in
transport,
for most of the cross-border projects on the trans-European
network and the horizontal priorities (notably ERTMS, SESAR, ITS and alternative fuels).
These investments will not be realised without grant support, in particular where the
costs are national/local and the benefits are tangible at European scale.
This is also the
case where the benefits cannot yet be internalised, notably through carbon-pricing. Moreover,
important categories of project promoters (such as many railway infrastructure managers)
have no possibility to raise debt and/or to generate revenues from single investment projects,
which does not allow them to benefit from financial instrument and make them dependent on
public support to invest. CEF has demonstrated the possibility to enable these investments and
to modulate the EU support in relation with the needs. Support ranged from 85% co-funding
grants for the cohesion envelope, to a modulation of co-funding grants (50-20%) depending
on the priority and the nature of the action. The analysis provided for by the Work Plans of
the Core Network Corridors
83
shows that, due to the results of CEF and in the case of a
continuation of the grant component of the programme, a very large majority of cross-border
projects can be finalised within the next decade.
Similarly,
energy
grants are needed for large scale infrastructure projects, notably for
strategic priorities such as for security of supply for which the underlying actions are not
considered as being bankable. In energy,
the allocated co-funding rates have been
sufficient to enable projects to move forward,
this being a clear improvement compared to
the predecessor programme where low co-funding rates had proven not to be effective as to
the advancement of projects. 90% of projects that received grants for works have now taken a
82
The 2015 work programme recognizes that indicative budget was substantially lower than the amount required by Member States in the
eHealth Network (i.e. EUR 7.5 million vs EUR 28.6 million). The interest of Member States has been confirmed in the calls for proposals
which was significantly oversubscribed and under which 140% of the available funds (EUR 10.6 million) was awarded. In the 2017 work
programme, the indicative budget for the deployment of generic services has been increased to EUR 9 million.
83
In line with Article 47 of the TEN-T Guidelines,
https://ec.europa.eu/transport/themes/infrastructure_en
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final investment decision or are under construction, while two projects have been already
completed. Stakeholders support that CEF has been crucial in covering the funding gaps
identified during the Cross-Border Cost Allocation (CBCA) process.
In
telecommunications,
the forms of financial assistance currently provided to support the
deployment of the DSIs can be considered adequate to respond to the market failures
identified in the digital sector. The private sector will not replace public investment for the
deployment of either the core-service platforms or generic services; additionally, Member
States have little incentive in investing in cross-border interoperability. The relevance of the
use of grants for supporting actions for generic services has been confirmed by about 80% of
the participants in the technical stakeholder survey and 90% of the interviewed stakeholders.
The need for financial support is confirmed by the preliminary results of the ongoing study to
assess the long-term sustainability of the
DSIs
84
. Potential for revenue generation has not
been identified for a number of DSIs (i.e. Europeana, Safer Internet, Public Open Data, ODR,
EESSI, eProcurement, Cybersecurity, eSignature) due to the nature of the services provided
(public service) and in some cases due to the limits set out by the relevant Regulations (e.g.
the ODR Regulation specifies the access to the ODR platform shall be free of charge
85
).
Similarly, for other DSIs it is difficult to extract revenues, either because they offer solutions
that are to be open source and publicly available (e.g. eDelivery) or because this is not
considered a realistic or desirable option (e.g. Health). Forms of financial assistance other
than funding, such as financial instruments, are not suitable for projects that do not generate
revenue.
Financial instruments
Despite being developed in different years and responding to different market needs, all
financial instruments established under CEF share the same purpose: increasing the
level of private investment in the CEF priorities.
To this extent, they are complementary to
the more common grant-type of support. Indeed, CEF grants mainly aim at supporting
projects where no business case exists for investors.
86
The CEF DI uses EU budget to provide
a guarantee to primarily EIB financing, through loans, guarantees, as well as support for
project bonds. This in turn allows the EIB to provide financing to riskier projects ), thus
crowding in other sources of private investment. As it will be explained in more detail in the
Effectiveness section below, EFSI has to a certain extent substituted itself to the CEF DI.
However,
there remains a niche for the CEF DI to target,
in particular by providing
specific financing products or tools, or aiming at the development of specific markets such as
alternative fuel.
In the
transport sector,
in relation to projects that have positive expected socio-economic
values, there exists a full spectrum of financing needs (in terms of the financial viability of the
investment): from financially viable projects based on the income stream generated by users
(e.g. bus leasing) to projects not generating revenues to cover investment and therefore being
highly dependent on public sector/government support (e.g. non-PPP rail infrastructure). CEF
DI support and legacy instruments are targeted at projects potentially suitable for private
finance e.g. maintenance of existing infrastructure, increase of capacity at ports and airports,
roads, the deployment of the most readily available alternative fuels.
84
85
Long-Term Sustainability of Digital Service Infrastructures, DG CNECT, in progress.
Article 5(2) of the Regulation (EU) No 524/2013 of the European Parliament and of the Council of 21 May 2013 on online dispute
resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Regulation on consumer ODR).
86
A peculiar case is represented by the blending of grants and EFSI/FIs or private finance, where grants are used to overcome financial
market deficiencies, supporting the use of more efficient instruments.
36
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The provision of grants to privately financed projects e.g. through the CEF Blending Call of
2017 (and a proportion of grants made under previous CEF calls) extends EU support to
privately financed projects. It is an appropriate support mechanism because many transport
projects are on the margins of financial viability, and support solely through EU-budget
financial instruments (as well as EFSI) would not be sufficient to deliver financial viability.
The blending approach still allows the bulk of the finance to be provided privately,
minimising overall public sector contribution, in line with the goals of the Investment Plan for
Europe (IPE). Further the use of the CEF budget contributes to the fulfilment of the TEN-T
priorities. Such an approach seems especially interesting for investment in shipping and port
industries, rail connections to airports, ERTMS and retrofitting of vehicle fleets for alternative
fuels. The CEF blending approach illustrates the flexibility and responsiveness of the CEF
programme to supporting private finance investment
In contrast to CEF grants, it is clear that the CEF DI in
energy
has not delivered so far and
evidence indicates that project promoters do not consider this form of support when looking at
the financing options available. This is likely less related to the amount of resources available
under that investment and more related to its ease of use or the competitiveness of the debt
market, and the impact of EFSI (which is explored in the sections on effectiveness and
coherence). For the above reasons, the Commission has decided not to commit budget for
CEF FI in the year 2016 for energy.
With regard to the
CEF EI,
a telecom-specific Connecting Europe Broadband Fund was only
recently put in place, and is foreseen to be operational at the end of 2017 (see section 6.1.4.).
For CEF Broadband both FIs and grants are relevant in covering the investment needs in very
high capacity networks, provided that the necessary flexibility is built into the programme. By
combining both forms of public financing in areas with overall commercial potential for very
high capacity networks – grants can be limited to the minimum necessary to build a business
case in unprofitable sub-areas, while maximising private sector involvement across wider
areas.
Procurement
With a very limited budget (estimated to less than 1% of the total CEF budget),
procurement
has been used so far to set-up and run the core service platforms of the DSIs in the Telecom
sector; for Energy and Transport, a small fraction of the total funding is channelled through
public procurement to fund programme support actions such as studies managed directly by
DG ENER and DG MOVE respectively.
Programme support actions (PSAs)
The use of PSAs has been quite limited given the scarce budget allocated in comparison to
grants and FIs. However,
PSAs have proven to be very helpful in smoothing the
implementation of the programme and helping it achieve its objectives.
In transport,
PSAs have helped to accelerate several administrative processes at Member State level and/or
lessen the burden through capacity building in Member States, while at the same representing
a crucial development tool in the framework of horizontal priorities. Further detail on PSAs is
provided in Section 5 Implementation state of play.
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6.1.4. Specific equity instruments (EIs) for sectoral needs
An ex-ante assessment on the potential use of an equity instrument under CEF was conducted
in November 2015 as an addendum to the 2014 ex-ante assessment on the potential use of FIs.
This
ex ante
assessment identified a clear market failure in the lack of available equity
financing, especially smaller infrastructure deployment actions or for operations involving
innovative technological solutions.
A
CEF EI for broadband
was developed under the Connecting Europe Broadband Fund
(CEBF), given that a lack of equity funds for relatively small projects had been identified
across Member States. The additional ex-ante assessment and the accompanying market
study, as well as the project portfolios presented by the companies which bid to become fund
managers, demonstrated a clear gap in the existing possibilities to fund broadband projects. In
particular, access to finance can be difficult for promoters of relatively small projects and/or
in Member States which are not beneficiaries of large ESIF support. The Fund is expected to
become operational in the first half of 2018 and an important portfolio pipeline has already
been demonstrated.
In the transport sector, while equity support needs in the
transport
market have been
identified in smaller markets, it was estimated that these were not sufficiently relevant to put
in place an EI at that stage. These needs relate to projects characterised by a strong new-
technology component, as the risk associated to such projects indeed hinders the possibility
for promoters to access alternative sources of financing such as banks or private investors.
The use of the EI in subsequent years of CEF implementation may therefore be considered for
riskier projects or for projects in immature markets.
A CEF
energy
EI is not relevant to the needs of the sector at this time. The specific objective
of the EI is to have the capacity to engage in equity finance as a last resort when the progress
of a PCI is at risk, e.g. due to construction delays. However, this instrument has not yet been
set up and according to the stakeholders’ feedback gathered (around a 60% of targeted
interviewees who referred to the CEF EI specifically), a CEF EI is not considered relevant
and necessary at the moment. The order of preference, in this case, is retained earnings, loans
from banks and IFIs and only then the bond markets. Equity is only used by a minority of
TSOs as many are restricted in their access to equity by the country's regulatory framework.
Even when it is permitted by the framework, there is often not a need for equity within TSOs.
The Marguerite Fund
87
, an independent European fund for energy, climate change and
infrastructure, is available to energy infrastructure projects throughout the period of CEF
implementation. Hence an additional CEF energy equity instrument would potentially overlap
with the function of the Marguerite Fund. Considering the complexity of putting the
instrument in place and the time for uptake by the market, there is no space for the EI in this
programming period.
6. 2. Coherence
This section aims at assessing the external complementarities between CEF and other
EU/national policies and interventions.
Main findings
87
http://www.marguerite.com/
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- CEF is generally complementary with
other EU financial interventions,
with CEF having
a clear stand-alone characteristic of promoting cross-border action and EU infrastructure
priorities, but some adjustments have been implemented over time at operational level.
- CEF and the
European Structural and Investment Funds (ESIF)
are both contributing to
the TEN objectives. While CEF has strongly focused on EU integration, particularly through
cross-border connections and interconnections, ESIF focuses on internal sections less covered
by CEF but essential for the development of the corridors in the Cohesion countries (transport
sector).
-
CEF is a catalyst for the
European Fund for Strategic Investments (EFSI)
as several
projects initiated in the context of the CEF DI fed into the EFSI pipeline. Moreover, projects
prepared with CEF support or supported in part with CEF grants for works start benefitting
from EFSI. However, the partial overlap between the scope of the CEF DI and EFSI called for
specific guidance by the CEF DI Steering Committee to ensure effective complementarity
between the two initiatives. The Blending Call for CEF Transport launched in 2017 aims also
at reinforcing this complementarity.
- There is complementarity with
Horizon 2020,
which supports the early stages of the
innovation chain while CEF enables the technological deployment throughout the
infrastructure.
- CEF intervention is also generally coherent with
actions undertaken by Member States,
which is ensured by programme design features and by a strong and continuous cooperation
between the Commission and national competent authorities.
Overall, CEF can be considered as coherent with other
EU interventions,
notably the ESIF,
Horizon 2020 and EFSI, as these financial support schemes have been designed to ensure
complementarity. The CEF proposal in 2011 aimed at bridging the gap between existing
programmes (predecessors of ESIF and Horizon 2020), which were unable to fulfil the
integration objectives alone.
Coherence with the European Structural and Investment Funds (ESIF)
Both CEF and ESIF contribute to achieving the TEN objectives. While ESIF focuses financial
support on the less-developed regions and the 15 Member States which are eligible for
Cohesion Fund support, CEF focuses on EU integration through cross-border connections and
interconnections, bottleneck removal and interoperability projects.
In
transport,
the CEF does not only support-cross border sections but also bottlenecks on
other sections of the Core Network. Such projects can be financed by the CEF and ESIF and,
in certain cases: different sections of the same project can be support by either instrument.
Coherence between CEF and ESIF, in particular for the Cohesion envelope, is ensured
through the Core Network corridor work plans and the ex-ante conditionality process, which
requires in particular that each Member State and/or region receiving cohesion policy support
under the Thematic Objective (Sustainable Transport) has a comprehensive transport plan in
place, which covers all modes of transport and both TEN-T and other transport infrastructure.
The Partnership Agreements, which the European Commission signs with Member States,
further help avoiding overlaps at national level. Internally, a Memorandum of Understanding
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was signed by DG MOVE and DG REGIO. This led to a close cooperation with joint
missions to cohesion countries, joint monitoring of implementation, close involvement of DG
REGIO in the selection of project proposals under the CEF Transport calls, coordination of
the project portfolio between CEF and ESIF.
As indicated before, most of the projects funded in the transport sector in the first two years of
CEF were based on a solid project pipeline stemming from the continuity of projects and
studies formerly supported via the TEN-T programme or by Cohesion Policy instruments and
therefore ready to be implemented during the initial period of the programme. As regards the
CEF Cohesion envelope, it should however be noted that the acceleration in the delivery of
funding, provoked by the 31 December 2016 deadline
88
for the national allocations as well as
by the use of dedicated technical assistance and calls, has encouraged Cohesion Member
States to speed up the preparation for mature (mainly rail) projects, in order to fully use their
allocations. It appears that such mechanism has led to the result that was targeted, focusing on
the most difficult cross-border projects and removal of bottlenecks in the rail transport and
inland waterways. This mechanism is now paving the way for a coordinated deployment of
CEF and ESIF along the national sections of the Core Network Corridors and the rest of the
TEN-T network.
In addition, over EUR 34 billion has been allocated in the period 2014-2020 under the
Cohesion Fund and ERDF for transport infrastructure and this investment has in many cases
supported the TEN-T Comprehensive network which aims to develop multimodal regional
accessibility for all EU regions. This helps to ensure the territorial cohesion of the EU and the
regions' access to the internal market while also benefitting from the cross border connectivity
and interoperability supported under CEF. ESIF also complements the Core Network, in
particular for non cross-border projects and for road projects.
Example box: complementarity of CEF transport and ESIF – three railway projects
Rail Baltica
In direct cooperation between CEF and ESIF, the projects along the E75 railway line between Warsaw and the
Lithuanian border are tackled in sequence with works close to completion from Warsaw to Sadowne with ESIF
support and with further works launched for the two subsequent sections from Sadowne to Bialystok to Elk with
support from CEF. Studies are ongoing from Elk to the Lithuanian border in coordination with the section
Lithuanian border to Kaunas, both to be launched for works towards the end of this MFF. Completion of the
entire Rail Baltica project is thereby foreseen for end 2025.
Dolnośląskie Voivodeship and Czempiń
The project, located on the Baltic-Adriatic Core Network Corridor in Poland, covers the modernisation works on
a 71 km section of an existing railway line from the Dolnośląskie Voivodeship to Czempiń. It is a part of a larger
project on the modernisation of this Corridor between Wrocław and Poznań to adjust its characteristics to TEN-T
requirements. The project receives EUR 226.5 million in CEF Transport funding under the 2014 calls.
Poznań and Piła
The regional project will consist of an upgrade of the 92 km of regional railway connecting Poznań with Piła, a
town located in the north of Wielkopolska (Greater Poland region). It will be co-funded from ERDF under the
2014-2020 Regional Operational Programme for Wielkopolska and will enable regional trains to run at 120
km/h. Signalling, safety and accessibility for people with reduced mobility will be improved as well. This project
is co-funded from the ERDF with approximately EUR 120 million.
88
Article 11 § 2 of the CEF Regulation ("Until 31December 2016, the selection of projects eligible for financing shall respect the national
allocation sunder the Cohesion Fund).
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The funding allocated, to these 2 projects, through ESIF will allow the population of the northern part of Greater
Poland (Wielkopolska) to gain a high quality connection with trans-European corridors crossing in Poznań.
Further benefits will derive from funding allocated through CEF Transport, namely that the connections from
Poznań to Wrocław (2014-PL-TMC-0180-W, mentioned above), Szczecin (2014-PL-TMC-0198-W) and
Warsaw (2014-PL-TMC-0185-W) will be upgraded thanks to CEF support.
In
energy,
CEF is the main EU instrument for energy infrastructure investments, and only
funds projects lying on the priority corridors identified in the TEN E Regulation, while ESIF
do not have the same legal basis constraints and have a strong focus on energy efficiency,
renewable energy, smart distribution grids and energy research and innovation. By design,
CEF energy supports cross-border infrastructure. In addition, the European Regional
Development Fund (ERDF), one of the ESIF, also supports investments in infrastructure for
smart gas and electricity storage and transmission systems, mainly in less developed regions,
in complementarity with CEF. The planned ERDF allocations differ between Member States,
reflecting differences in terms of total volume of funds available, national needs and
priorities. In the current MFF, EUR 3.4 billion is allocated under Cohesion policy for "smart
energy infrastructure", including EUR 1.1 billion for smart distribution grids and EUR 2.3
billion for infrastructure for smart electricity and gas distribution, storage and transmission
systems, the latter mainly in less developed regions (the "TEN-E" sector falls under the smart
energy infrastructure). Of those, the amount allocated to projects relevant for the "TEN- E
sector" is EUR 105 million in TEN-E electricity storage and transmission and EUR 468
million to TEN-E natural gas, thus representing only 16 % of the total allocation for smart
energy infrastructure, showing that a large share of the funds is allocated to infrastructure
investments at distribution level, while CEF is focusing on transmission level infrastructure.
At this stage, six Member States (BG, CZ, EL, LT, PL and RO) plan to use ERDF support for
large energy infrastructures. By comparison, under Cohesion policy, funds allocated to
renewable energy investments represent EUR 4.8 billion and for energy efficiency
investments represent EUR 16.7 billion. However, a full comparison of the "TEN-E sector"
projects supported by CEF and by the ERDF is at this stage not possible as a complete
overview is not available on the TEN –E projects supported by the ERDF in the current MFF.
Across the EU as a whole, cohesion policy investments in large energy infrastructures
represent only about 0.5% of the total cohesion policy allocations (the ERDF, the Cohesion
Fund and the European Social Fund) both in the MFF periods of 2007-2013 and 2014-2020.
Nevertheless, the share is higher in some Member States, around 2 %, reflecting national
needs and priorities. The ex-ante conditionality related to ERDF investments in large energy
infrastructures entails that comprehensive plans describing the national energy infrastructure
priorities, which fulfil certain criteria, must be in place – thus ensuring consistency with
relevant parts of internal energy market legislation and the PCI framework. Member States
and the Commission also need to ensure that ESIF support is planned in close cooperation
with the support provided from CEF, so as to ensure complementarity, avoid duplication and
provide for optimal linkage of different types of infrastructure at local, regional, national and
macro-regional levels, and across the Union. Furthermore CEF supports projects (which are
cross-border or have a significant cross-border impact) that lack commercial viability, but are
nonetheless important for security of supply and European integration. The geographical
spread of funding allocated via CEF is evidence of the good complementarity between the
ESIF and CEF Energy.
Similarly CEF energy takes into account benefits offered in other policy areas, such as
exemptions from certain market rules awarded to projects (e.g. exemptions on third party
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access); such projects are then not eligible for CEF funding in order to prevent over-
compensation.
Concerning the wider policy framework, CEF Energy is intrinsically coherent with other
measures of the TEN-E policy which streamlines the administrative process of bringing PCI
projects forward, providing an additional financial incentive to project promoters and Member
States to engage with and better harmonise the PCI process.
Example box: complementarity of CEF energy and ESIF – the LitPol Link project
Litpol link is a new 400 kV double-circuit AC electricity interconnection between Lithuania (Alytus, 51 Km)
and Poland (Elk 112 km) that connects for the first time - in an asynchronous mode - the Baltic States to Poland
and thus to the electricity network of continental Europe, creating preconditions for electricity trade and increase
of competition on energy prices, enhancing at the same time the security of electricity supply in LT and in the
northern part of PL. The project was identified then as a priority project in the Baltic Energy Market Integration
Plan (BEMIP) launched by President Barroso in 2008. In a first phase its
transmission capacity
is of 500 MW,
while a 2
nd
phase is planned to be commissioned by 2020, doubling the capacity to a total of 1000MW. The
overall investment cost
for the 1
st
stage of implementation was of approximately EUR 550 million.
The Commission contributed circa EUR 4.31 million under
TEN-E
programme to the performance of feasibility
and design
studies
on both sides of the border. Meanwhile, works on the PL side were granted a financial
assistance of approximately EUR 203.5 million under the
EU structural funds
(ERDF). In 2013,
the
Lithuanian part of LitPol Link
received a label of a Project of Common Interest. The project was finally
achieved once works on the LT side benefitted from a
CEF grant
of circa EUR 27.376 million and an
EIB loan
of EUR 55 million. Without the CEF intervention, the impact of the investment would have significantly
increased Lithuanian tariffs for network access. After the CEF grant, the project finished the construction phase
and went into operation in December 2015.
Concerning
CEF Telecommunications,
the possibility to create synergies between CEF and
ESIF in the DSIs area has been identified within the guidance document for enabling
synergies between ESIF, Horizon 2020 and other research, innovation and competitiveness-
related programmes of the EU.
89
Potential synergies identified include the opportunity to fund via ESIF the development by the
public sector of IT solutions that reuse CEF building block DSIs and that can become
interoperable with the rest of CEF DSIs. There is no overlap of activities between ESIF and
CEF Telecom in the adopted version of the programme. Member States and regional
authorities are responsible for the specific design and implementation of Operational
Programmes. CEF focuses on providing operational services which are ready to be deployed.
In particular, it finances services in the core layer of the DSIs, and the services for Member
States to connect to such core layers. Initially, CEF telecom was foreseen to cover also the
development of national infrastructures; however, this layer of the programme was dropped
during the negotiation phase. The available funds under ESIF Thematic Objective 2
(Enhancing access to, and use and quality of information and communication technologies)
and Thematic Objective 11 (Enhancing institutional capacity of public authorities and
stakeholders and efficient public administration) could be in theory allocated to the
development of national infrastructures in the poorer regions; nevertheless, it is not clear
whether the Ex Ante Conditionality on Digital Growth
90
and the related National strategic
frameworks for Digital Growth that underpin the investments in this area target the
deployment of Digital Service Infrastructures at national/regional level as identified in the
89
Enabling synergies between European Structural and Investment Funds, Horizon 2020 and other research, innovation and competitiveness
related Union programmes. Guidance for policy-makers and implementing bodies, Commission - DG REGIO, 2014.
90
Digital growth ExAC is requesting a strategic policy framework for digital growth to stimulate affordable, good quality and interoperable
ICT-enabled private and public services and increase uptake by citizens, including vulnerable groups, businesses and public administrations.
The framework should be based on evidence and set objectives that make possible to measure them against the DSM scoreboard indicators.
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CEF telecom guidelines. Therefore, in the current set-up of the programme there is potential
for complementarity between CEF and ESIF, but exploiting this potential is not
straightforward. Fully doing so may require an extended approach providing stronger support
to those Member States lagging behind in the development of their digital solutions at
national level, as well as conditionality measures requiring the use of CEF core service
platforms for national DSIs co-funded via ESIF so as to promote a more synergetic approach
across funding sources.
Taking as example the case of eIDAS, the figure below depicts the functioning of the eIDAS
solution in two Member States, indicating what is supported under CEF and what could be
possibly funded under ESIF.
Figure 8: eIDAS example
Service Provider’s Member State
Requires authentication of
the user to the eIDAS node
Grants access to the user
User’s Member State
Service provider
(SP)
User
Requests access to service
of the Service Provider
Authenticates using its
electronic identification
(Potentially) ESIF
National eID
infrastructure
Enables the electronic
identification of the user
Forwards the identity to the
eIDAS node
Provides the main features
of a specific digital identity
Attribute
provider
Forwards the authentication
request to the eIDAS node
of the citizen’s country
Forwards the confirmation
to the SP
eIDAS-Node
(Connector)
eIDAS-Node
(Proxy service)
Receives the request and
sends the confirmation of
the authentication
CEF
40% of respondents to the technical survey recognise a good level of complementarity
between the ERDF and CEF Telecommunications. However, interviews with strategic
stakeholders and Member States' representatives highlighted that, so far, coordination has not
been sought following a structured approach and is hindered by the fact that ESIF is managed
by different Managing Authorities at national and regional level. This set-up also renders
monitoring complementarity between interventions supported by ESIF and CEF in
telecommunications difficult.
As regards CEF Broadband, in the current programming period (2014-2020) the European
Structural and Investment Funds (ESIF) foresees about EUR 6 billion for investment in
broadband deployment (about EUR 5.1 billion under ERDF and about EUR 900.000 under
EAFRD). ESIF typically contributes to mainly public driven deployments in the form of
grants (and are less suitable to cover (cross-) border areas and the most remote and isolated
areas). Whereas ESIF typically support public driven deployments with no commercial
viability, even in the long run, the Connecting Europe Broadband Fund mainly targets market
driven initiatives (for promoters which due to the size or location of the projects do not have
access to private funding),. The WiFi4EU initiative is foreseen to finance WIFI access points,
while ESIF funding will be used to invest in backhaul networks linking the local authorities to
the wider broadband networks
Coherence with Horizon 2020
Horizon 2020
is dedicated to cutting-edge and innovative actions, whereas CEF’s eligible
actions include the technological development throughout the network. With its deep research
and development shape, Horizon 2020 can be seen as an instrument for providing financial
support to studies, assessments and preliminary tests and pilot projects, which can be then
tested and deployed in the framework of CEF. The fact that for transport and energy, both
43
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programmes – CEF and Horizon 2020 – are managed by the same Executive Agency – INEA
– ensures further coherence.
Example box: Alternative fuels and the innovation project
In the area of alternative fuel-powered and
electric vehicles, funding possibilities have
been significantly enhanced under CEF,
therefore a closer cooperation with Horizon
2020 is beneficial. Indeed, synergies
between the Horizon 2020 and the CEF
Transport programmes imply a wider range
of R&I and infrastructure development
projects covering the whole innovation line
from idea to the market.
The synergy between the Horizon 2020
(and the previous FP7, as in the case) and
CEF are very strong in the case of new
technologies, in particular with regards to
alternative fuels – are applied to transport.
The example below shows a project
financed as basic research under the
Horizon 2020 and deployed under CEF
through the 2014 and 2015 calls.
In
transport
for example, the role
played by Horizon 2020 can be interpreted as preparatory for the kind of investments financed
by CEF in alternative fuels along the infrastructure. Both programmes are consistent with the
EU ambition of promoting a greener mobility system.
CEF Energy is in clear coherence and is complementary with Horizon 2020.
CEF Energy
is focused on financing actions supporting the implementation of individual PCIs which, by
design, have a cross-border scope and wide EU added value,
Horizon 2020 is more focused
on innovative projects in energy research.
This is identified as a clear and positive synergy
between two programmes in the sense that projects funded by CEF Energy could benefit from
latest innovations in energy developed by projects funded with Horizon 2020 funds (e.g. in
storage technologies, for example).
91
Results of the general survey show that most
respondents described the complementarity between CEF and Horizon 2020 (the most
selected option was “fair” with 41%, for 20% it is "good", for 3% "excellent", whereas 28%
of respondents do not know). It should be recalled that innovation, as described in the
previous sections, is one of the three externalities that CEF can support, i.e. in the uptake of a
new technology, which must however always be considered in the remits of the
implementation of a specific PCI.
In the
telecommunications
sector, there is complementarity between the two programmes, as
Horizon 2020 supports research and innovation (R&I) activities, including pilot lines and
testing, that precede the deployment stage funded by CEF, whereas CEF provides support
only for deployment of mature solutions, and not for testing/piloting. The CEF Telecom
guidelines (recital 7) target CEF support to "sufficiently mature (projects) for deployment,
technically as well as operationally, as proven in particular through successful piloting".
While the technical maturity can be achieved through large scale pilots, the operational
maturity can be achieved through large scale full deployment pilots currently not funded by
any other EU programme in the digital sector. Horizon 2020 can be used to bring digital
91
Innovation is one of the three externalities taken into account in the selection process.
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solutions to Large Scale Pilot level as is e.g. the case in pilots in the IoT area (IoT Focus
Area) or in the planned Digitization Focus Area.
An example of such large scale pilots supported by H2020 is the TOOP project (see example
box). Most of the DSIs supported by CEF have clear connections with the Large Scale Pilots
(LSP) funded under CIP-PSP Innovation Programme in 2007-2013
92
. R&I activities in H2020
relevant for CEF are those funded in Societal Challenge 6 (Open government and ICT-
enabled public sector innovation
93
), as well as in LEIT ICT (Connected and Automated
Driving), Excellent Science and Research Infrastructures (HPC). The figure below represents
the different stages of development and adoption of solutions for DSIs, showing the coverage
of such phases in the previous and in the current programming period (pre-CEF and since the
launch of CEF).
Figure 9: Innovation cycle coverage for selected EU-level actions (telecommunications example)
Research
2007- 2013
Innovation
Deployment
Operation
FP7
2014 - 2020
CIP
PSP
and
ISA
H2020 and
ISA
2
H2020
CEF
CEF
Example box: H2020 TOOP project
The “Once-Only” Principle Project (TOOP) is an initiative of 50 organisations from the EU and Associated
Countries aiming to demonstrate the “once-only” principle on a cross-border scale reducing unnecessary burden
for businesses and public administrations.
TOOP aims to develop a GENeric Federated OOP architecture in line with the existing interoperability
frameworks (EIRA
94
and EIF) based on the
CEF DSIs, the building blocks consolidated by the e-Sens project
and possibly
new building blocks.
Three pilot areas are implemented:
1) Cross-border eServices for business mobility;
2) Updating Connected Company Data;
3) Online Ship and Crew Certificates.
In 2016 CEF programme also started cooperation with FIWARE (funded under FP7 and
continuing to be funded under Horizon 2020) with the aim for eDelivery to become integrated
92
Pan-European Public Procurement Online (PEPPOL), Se-cure identiTy acrOss borders linked (STORK), Smart Open Services for
European Patients (epSOS), e-Justice Communication via Online Data Exchange (eCODEX), Simple Procedures Online for Cross-border
Services (SPOCS), Electronic Simple European Networked Services (eSENS).
93
https://ec.europa.eu/digital-single-market/en/ict-enabled-public-sector-innovation-horizon-2020
94
European Interoperability Reference Architecture aiming to support public administrations in their work to provide interoperable European
public services to other public administrations, businesses and citizens.
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among the Generic Enablers of the FIWARE Platform
95
and also with the possibility of
integrating some of the Generic Enablers of FIWARE into the Building Blocks ecosystem.
In line with these results, technical survey results show that most respondents described
positively the relation between CEF and Horizon 2020 (full complementarity for 9%,
complementarity to a large extent for 34% and to some extent for 26% while 25% do not
know).
Coherence with the European Fund for Strategic Investments (EFSI)
EFSI is one of the three pillars of the Investment Plan for Europe that aims to relaunch
investment in Europe, including in the transport, energy and telecommunication sectors. It has
a wider scope than CEF FIs (and arguably less emphasis on projects of highest EU added
value) as it does not specifically focus on the TEN network or on infrastructure (for instance
several operations relate to the purchase of aircraft, trains, buses or on energy efficiency
programmes which cannot be supported by the CEF FIs). However, most operations eligible
under the CEF DI are also eligible under EFSI and several important energy and transport
projects initially envisaged for the CEF DI were eventually financed through EFSI
96
. The
approach taken for EFSI, whereby EU budget is used to provide a guarantee to the EIB or
other financial institutions financing is the same approach as was taken by the CEF transport
legacy financial instruments and the CEF FIs.
In transport,
CEF DI and EFSI have mobilised a comparable volume of investment so far (as
detailed in the Effectiveness section) but have addressed different market failures. The fact
that the CEF DI is delivered via products which were tested under the previous instruments
(LGTT and PBI – now part of the CEF DI portfolio) has meant that the CEF DI support took
the form of subordinated products in the case of a high proportion of projects. The successful
cooperation between the EIB and the Commission to design instruments addressing specific
market failures is illustrated for example in the case of the Green Shipping Guarantee (GSG)
Programme in transport. It should also be noted that thanks to its wide applicability, EFSI can
not only complement CEF FIs in their respective scope, but it can further increase the range of
support provided to transport promoters beyond the CEF priorities.
Example box: The Green Shipping Guarantee programme
One recent illustration of the complementarity between CEF and EFSI support is the Green Shipping Guarantee
(GSG) programme by which the Commission aims at supporting the shipping industry in meeting its EU legal
obligations in terms of sulphur emission limits. The GSG finances in particular the retrofitting of engines and
new constructions of environmentally clean vessels. To date, the Commission has approved the pilot phase of the
GSG using up to EUR 250 million of the CEF DI transport budget. The pilot phase, if successfully implemented,
can be deployed through the EFSI in a second stage and can lead to up to EUR 3 billion of final estimated
investments. The EIB has in turn signed banking guarantee agreements with commercial banks. To date, there
are no final recipients yet of such guarantees, however individual transactions are expected to be signed in 2017.
In
energy,
the overlap between the CEF DI and EFSI, which is delivered via similar debt
products for energy infrastructure, has led to a preferential use of EFSI. EFSI is for instance
supporting the Nordlink HVDC Project, as well as the Italy-France electricity interconnector.
PCIs that are commercially viable and not eligible for CEF grants for works can apply for
EFSI financing, increasing the support provided to promoters. Regular tripartite meetings are
96
Grand Contournement Ouest de Strasbourg (A355), A6 Wiesloch in transport and the Transgaz "BRUA" Gas Interconnection Project,
Italian-France electricity interconnector in energy.
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organised with project promoters, Commission services and EIB services. Moreover,
complementarities between CEF grants and EFSI could be further developed. For example, a
project that has received CEF grants could benefit from EFSI support via debt finance to
overcome the remaining investment gap.
In
telecommunications,
the European Fund for Strategic Investments (EFSI) has approved
EUR 1 billion for broadband related projects, triggering around EUR 3.2 billion of total EFSI
related investments to these broadband projects.
97
While EFSI supports commercially-driven
deployments with a clear business case (based principally on financial instruments in the form
of debt), the Connecting Europe Broadband Fund is designed to reach smaller scale (but
ambitious and replicable) projects in the broadband sector. Under the CEBF such projects can
benefit from funding (inter alia from EFSI and the CEF EI) they would otherwise not have
had access to (i.e. from other existing instruments, EIB or traditional private market
investors). Moreover, the funding available for networks investment is maximised by the
higher leverage created. Both ESIF and EFSI are necessary and complementary. In spite of an
improved regulatory environment and of the currently available funding instruments, "an
additional EUR 155 billion over and above a simple continuation of the trend of current
network investment and modernisation efforts of the connectivity providers"
98
is required to
reach the EU's connectivity targets in 2025. CEF therefore complements the existing EU
instruments. Beyond direct support to broadband deployment projects in the form of grants
and/or financial instruments, CEF also supports projects by providing Technical Assistance,
which is crucial to help project promoters establish a solid business case and attract the
required sources of financing.
In September 2015, the CEF DI Steering Committee adopted a set of Principles for CEF-EFSI
Relationship to ensure a better complementarity between the two instruments. It has thus been
agreed that:
The financing of infrastructure projects which fall within CEF eligibility criteria and are
also eligible under EFSI are discussed periodically by the CEF DI Steering Committee;
The CEF DI and possible future financial instruments under CEF concentrate on
innovative, demonstrator (for example using the CEF DI for the first time in a sector, or
mode, in a Member State) and pilot products and initiatives (equity/hybrid/new products),
taking into account the overall portfolio risk of such an approach;
The Steering Committee should discuss potential projects or schemes which would use
both funding sources (CEF and EFSI) for credit enhancement.
Furthermore, in July 2017, the CEF DI Steering Committee adopted a "Revised policy
guidance regarding complementarity of the CEF DI with EFSI" which complements the above
principles. It indicates that the CEF DI should target:
For the energy, transport and broadband sectors, projects not eligible under EFSI, in
particular because of their geographical location outside the EU;
For the transport sector:
(a) Projects falling under the Cleaner Transport Facility (CTF) umbrella, notably:
(i) cleaner public transport projects;
(ii) projects consisting of the deployment of alternative fuels infrastructure along the
Trans-European Networks-transport (TEN-T) corridors, such as electric charging
97
See also: Commission Staff Working Document on the Mid-Term Review on the implementation of the Digital Single Market
Strategy (COM(2017) 115 final)
98
Connectivity for a Competitive Digital Single Market - Towards a European Gigabit Society (COM(2016) 587)
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infrastructure, including through the use of high risk debt / pre-bankable risk financing
helping project promoters to overcome the high uncertainty faced during the ramp-up
phase for the demand in electric charging;
(b) Projects supporting TEN-T horizontal priorities such as SESAR and ERTMS
deployment and on ERTMS in particular, the retrofitting or upgrading of On-Board Units;
and
(c) Operations in support of projects or innovative companies pursuing projects fostering
the decarbonisation of transport, energy efficiency, or digital and technological innovation
in the transport sector.
In addition, for the 2017 Transport Blending Call a reallocation within CEF of EUR 1 billion
from the financial instruments budget lines to grants budget lines to be blended with EFSI or
other relevant instruments has been made.
The CEF FI budget has therefore been flexibly deployed to maintain support of privately
financed projects, aiming at (a) a better complementarity with EFSI and (b) increased grant
support in view of blending grants and financial instruments, as well as EFSI.
Coherence with other programmes
This section only concerns the telecommunications sector, for which coherence can be
assessed also with regard to ISA
99
programme, running from 2010 to 2015 (aimed at
developing cross-border and cross-sector digital solutions for public services). Actions
included in ISA’s 2015 Work Programme are relevant to 7 CEF DSIs, (i.e. eID and
eSignature, eDelivery, eInvoicing, Open Data, Automated Translation, eHealth and
eProcurement) and some of the ISA solutions were taken over by CEF.
100
Regarding the 2014-2020 programming period, CEF telecommunications can be considered
coherent also with ISA
2
. the two programmes, together with Horizon 2020, cover different
phases of the project development, i.e. Horizon 2020 covers the research & development
phase, ISA
2
supports the development and piloting phase, while CEF provide support in the
deployment and operation phase.
101
Strategic stakeholders interviewed also consider the three
programmes as complementary.
The analysis of the solutions developed under the ISA
2
programme highlights the
complementarity with CEF Telecommunications. Actions funded under the ISA
2
programme
contribute to develop interoperable solutions and specifications that can be reused within the
CEF DSIs. This is the case of eProcurement. ISA
2
programme currently supports the
development of eCertis and the European Single Procurement Document (ESPD). Generic
services related to these components have been funded under CEF Telecommunications in
2015 and 2016.
CEF telecommunications is also complemented by other European programmes that
contribute to support specific DSIs. Some DSIs such as eJustice and eProcurement receive
99
Interoperability solutions for public administrations, businesses and citizens.
Commission Staff Working Document SWD (2016) 279 - Final evaluation of the ISA programme Accompanying the document “Report
from the Commission to the European Parliament and Council on the results of the final evaluation of the ISA programme”.
101
https://ec.europa.eu/isa2/sites/isa/files/isa-2-conference/9-novaretti.pdf
100
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funding for the CSP from different budget lines (Justice Programme
102
and ISA
2
), thus
leaving CEF support only for the GS. In other cases like EESSI, BRIS and ODR DSIs,
additional support is provided from other budget lines (i.e. EaSI, Justice Programme and
Consumer Programme
103
respectively) for both GS and CSP, but targeting different activities
as eligible for funding.
Coherence with national interventions
Coherence with national interventions is ensured at several levels.
Firstly, the projects eligible under CEF correspond to those defined as priorities in the TEN
sectoral legal basis or through implementing acts (such as the list of Projects of Common
Interest for energy
104
). Member States and national stakeholders are fully involved in the
definition of these priorities through experts groups, committees and Council formations. This
allows for a bottom-up (starting from the operators level) and long-term planning of the
European infrastructure consistent with the national planning processes. As for the
Telecommunications sector, the Guidelines identify upfront the DSIs eligible for funding,
however without enabling a mechanism to revise them regularly.
Secondly, the possibility to provide significant EU support in the form of grants with
relatively high co-funding rates for cross-border projects enables to leverage resources which
would otherwise not have been invested in these projects. The implementation of CEF in
conjunction with clear EU priorities defined in the TEN-T regulation ensures the necessary
convergence of both EU and national resources on priorities delivering EU added value.
Thirdly, at project level, coherence is ensured by the involvement of Member States in the
implementation of the programme. Responsibilities of Member States include the approval of
the list of selected Actions via the examination procedure, the approval
105
of grant
applications and the certification
106
of reporting documents including cost statements.
The technical survey provides that for the three sectors covered by CEF, respondents very
positively rate such complementarity. For the transport sector, 92% of respondents consider
CEF is at least to some extent complementary with national interventions (fully for a 13% and
to a large extent for a 54%). For the energy sector, this percentage amounts to 89% (fully for
21% and to a large extent for 40%). For the telecommunications sector, this percentage
amount to 93% (fully for a 14% and to a large extent for a 30%). As the development of trans-
102
The Justice Programme, running from 2014 to 2020, aims to contribute to the development of a European area of justice, based on mutual
recognition and trust, in particular promoting judicial cooperation in civil and criminal matters (art. 3 of Regulation (EU) No 1382/2013 of
the European Parliament and of the Council of 17 December 2013 establishing a Justice Programme for the period 2014 to 2020.
103
The Consumer Programme 2014-2040 supports EU consumer policy. Particularly, it aims to ensure consumer protection, empower
consumers and give consumers a central role in the internal market (art. 2 of the Regulation (EU) No 254/2014 of the European Parliament
and of the Council of 26 February 2014 on a multiannual consumer programme for the years 2014-20 and repealing Decision No
1926/2006/EC).
104
The TEN E Regulation identifies twelve priority corridors and thematic areas in the field of cross border energy infrastructure that must
be implemented in the current coming decade to help the EU meet its short and longer term energy and climate objectives. To become a PCI,
a project must have a significant impact on energy markets and market integration in at least two EU countries, boost competition on energy
markets and help the EU's energy security by diversifying sources, increase competition on energy markets by offering alternatives to
consumers, and contribute to the EU's climate and energy goals by integrating renewables. The projects are assessed by so-called Regional
Groups that include representatives from EU Member States the Commission, transmission system operators and their European networks
organizations', regulatory authorities, as well as the Agency for the Cooperation of Energy Regulators (ACER). The first list of PCIs was
published in 2013 and the second in 2015. The list is updated every two years, and the next update will take place at the end of 2017.The
current list comprises 195 projects, of which 108 electricity, 77 gas, 7 oil and 3 smart grids projects.
105
Article 9 of CEF Regulation
106
Article 22 of CEF Regulation
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European networks in transport, energy, telecommunications is a shared competence between
the EU and its Member States, this is a positive observation.
As a tool to support the TEN-E policy, CEF Energy is coherent with actions taken by the
national administrations, national regulators to implement PCIs. By design, the allocation of
CEF Energy funding for projects of common interest is coherent with national and cross-
border cost allocation decisions of energy regulators.
BOX: the CBCA tool in the TEN-E Guidelines
The TEN-E Regulation introduced cross-border cost allocation (CBCA) as an improved regulatory tool to
facilitate the implementation of PCIs taking into account the distribution of costs and benefits across borders. For
PCIs, an assessment of market demand or of the expected effects on tariffs can indicate that the costs cannot be
expected to be recovered by the tariffs paid by the infrastructure users. The basis for the appropriate allocation of
costs is the analysis of costs and benefits of an infrastructure on the basis of a harmonised CBA methodology. As
a pre-condition on eligibility of CEF funding for grants for works, a CBCA decision from the national regulators
is needed. CEF funding can intervene when the project provides significant degrees of externalities in security of
supply, innovation, or solidarity or, which cannot be covered by market or tariffs, in line with the CBCA
decision So far, 24 CBCA have been adopted for a total investment amount of approximately EUR 5 billion
between 2014 and the end of 2016. Of those CBCAs, indicatively, the overall investment costs of the projects
amount to 5.4 billion Euros in gas, while it is less than 650 million Euros in electricity. There is an increasing in
the number of CBCAs in electricity projects from 2014 to 2016 indicating the growing maturity of projects in the
sector
107
.
In the DSI area, CEF is enhancing the impact and efficiency of the solutions developed at
Member State level by supporting cross-border interoperability.
CEF Broadband is a direct support to Member States' efforts to reach the 2025 strategic
connectivity objectives for a European Gigabit Society. In addition, it indirectly supports all
digital and digitally-related policies, such as the digitisation of industry, smart energy, smart
mobility, etc. which are essential components in the Digital Single Market Strategy of the
Commission. The Connecting Europe Broadband Fund makes funding available for
deployment, and the Wifi4EU initiative offers a foretaste of the European Gigabit Society
vision by providing citizens high speed connectivity and innovative e-services (e-government,
e-health, e-tourism etc.…) in the period ramping up at 2025.
6.3. Effectiveness
This section aims at assessing the progress in achieving CEF general and sectoral objectives,
both at policy and operational level, in terms of accelerating investment and exploiting
synergies between sectors. The analysis also looks at the level of information and
participation in the programme, as well as at the system in place to monitor its performance.
6.3.1. CEF's effectiveness in achieving policy objectives
Main findings
- CEF contributes to the Europe 2020 Strategy and to the
Juncker Commission's priorities,
notably on its internal market dimension, by helping develop modern and high-performing
networks throughout the EU in transport, energy and telecommunications.
107
Sources: ACER document entitled Overview of cross-border cost allocation decisions - Status update as of January 2017.
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- Based on current trends, CEF funding in projects in the transport and energy sectors are
expected to contribute to meeting the EU target of allocating
20% of the EU budget to
climate actions.
- In
transport,
CEF is supporting projects aimed at completing the Core and Comprehensive
networks, while promoting a safe, smart and decarbonised mobility system.
- In
energy,
CEF is effectively contributing to enhancing security of supply, ending energy
isolation, eliminating energy bottlenecks, completing the internal energy market and meeting
climate and energy targets.
- In
telecommunications,
CEF is helping to deploy the DSIs, allowing public
administrations, citizens and businesses to benefit from more comprehensive and efficient
cross-border online services. During the initial phase of implementation, effectiveness has
been hampered by the limited awareness of the new programme resulting in relatively low
participation. Communication activities have been improved since; however there is still need
to increase awareness of the programme. Although the budget for broadband was limited, it
has served to finance technical assistance activities in support of broadband projects with
difficult underlying business cases.
6.3.1.1. Progress towards the development of modern and high-
performing trans-European networks and more interconnected
markets
By improving the infrastructure in all three sectors covered by the programme, CEF as a
whole brings a key contribution to the first four priorities of the Juncker Commission: 'Jobs,
Growth and Investment'; 'Digital Single Market'; 'Energy Union and Climate' as well as
'Internal Market'.
The vast majority of respondents to the technical survey agreed, at least to some extent, that
CEF will effectively achieve the development of modern and high performing trans-European
networks in the areas of transport (99% of respondents), energy (97%) and
telecommunications (96%). Respectively, 33%, 38% and 21% of respondents fully agreed.
Transport
The first CEF Transport funding objective relating to
cross-border transport infrastructure
represents 86% of the funds currently allocated for transport (EUR 18.35 billion).
Within this first funding objective, the main focus is the
Core Network and its nine
corridors
(87% of total funding currently allocated in this objective), which must be
completed by 2030. This includes 20 key projects of particularly relevant EU dimension for
the completion of the TEN-T, such as Lyon-Torino (FR/IT), Seine-Escaut (FR/BE/NL) and
the Brenner Base Tunnel (IT/AT) as well as the Rail Baltica (FI/EE/LV/LT/PL).
Furthermore, under its third funding objective for transport, CEF contributes to fostering
smart solutions
across Europe as well as to an optimal
combination of transport modes.
Under the third funding objective, EUR 2.5 billion in CEF funding resulted in a total
investment of EUR 5.9 billion in 2014-2016, with Single European Sky ATM Research
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(SESAR), Motorways of the Sea and Intelligent Transport Systems (ITS) for road being the
main priority areas.
Based on projects selected during the 2014 and 2016 calls, it is expected that by 2020
transport modes will be better integrated by connecting 5 inland ports, 9 maritime ports and
by improving 7 rail-road terminals. This will be achieved through a total investment of EUR
287 million, of which CEF funding corresponding to EUR 91 million is currently allocated to
16 projects, roughly half of which are in Cohesion countries.
CEF has been particularly successful in supporting the development of the TEN-T in
Cohesion Member States through dedicated envelope, calls and financial assistance, as it will
be detailed in the Efficiency section.
Example box: European Railway Traffic Management System (ERTMS)
CEF grants have been crucial in supporting the development of ERTMS across the EU. EUR 1.1 billion are
currently allocated to 45 projects.
Through subsequent calls, the prioritisation of projects has been more focussed on supporting:
- cross-border infrastructure projects, which are crucial in order to catalyse implementation across Core Network
Corridors and facilitate operational implementation through Member States working together. CEF funding is
crucial here given that cross border sections are not necessarily a priority from a national perspective (e.g.
Design and equipment of ERTMS for six border crossing corridor sections as well as two gap closings on
German TEN Core Network Corridors - 2015-DE-TM-0363-W )
- retrofitting and upgrading of trains on board units: a key bottleneck to deployment is the fitting of the fleet to
use ERTMS. Some Railway Undertakings, in particular, international freight are particularly impacted by
ERTMS deployment and CEF support is crucial to support operation across several Member States
Example box: The Seine-Escaut Canal
This project was selected under the 2014 Call for Proposals and receives an EU grant contribution of EUR 980
million, out of a total cost of EUR 2.323 billion Its objective is to remove the waterway bottlenecks between
France and Belgium and to complete the missing links between the Seine and the Scheldt, within the 'Canal
Seine Nord; Seine Escaut' and 'Le Havre-Paris pre-identified sections of the North-Sea Mediterranean and
Atlantic Corridors. The project includes 9 studies and work activities to be implemented in France and Belgium.
Energy
Consistently with the original objectives set in the 2011 IA, CEF Energy is showing its ability
to overcome the problems highlighted in the predecessor programme (notably the limited co-
funding rate of TEN-E, and the impossibility to cover the externalities).
Portfolio analysis carried out on projects funded by CEF confirms that CEF Energy has been
acting to cover the gaps to a more integrated EU energy market through strengthening cross-
border connections, specifically aiming at ending energy isolation, eliminating energy
bottlenecks and completing the internal energy market.
It emerged from several interviews with project promoters that grants are necessary as "there
is no consumer underwriting for the (higher than usual) risks associated with the development
phase of such cross border projects; if a project was unable to make a positive final
investment decision, then costs incurred up to that point would not be met by consumers
through transmission tariffs. This could be a deterrent to investment and therefore access to
CEF Study Grant co-funding has been particularly important in stimulating development."
108
Several representatives of national authorities emphasised in the interviews also the fact that
108
Quote by a project promoter in the gas sector.
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small countries with dispersed population and/or more isolated location cannot build a
business case or recuperate via tariffs some of the investments necessary. Here grants for
works and/or agreements between neighbouring countries on the sharing of costs are
necessary in order to make them happen at all
109
.
In 2014 and 2015 the two Work programmes have given priorities to two out of three of the
sector specific objectives, namely the completion of the internal market and increasing
Security of Supply in line with Article 17 of the CEF Regulation. Consistent with its
objectives, CEF Energy has been operating to support projects carrying significant
externalities. It has contributed to increasing security of supply in Member States where this
issue is more pressing and to enhancing solidarity among Member States, notably in those
Member States that typically rely only on one supplier, by building energy networks where
missing links are more critical.
Taking into account the actions selected under the calls for proposals of the years 2014-2016
it can be said that CEF Energy, at least so far, is expected to have major relevance to the two
dimensions above, due to the combination of a need for secure hand and financial resource
scarcity at the other hand especially in Member States located along the EU Eastern borders,
from North to South. This is in line with the fact that gas projects have had more weight so far
in terms of funding with respect to electricity projects, in view of the fact that a number of gas
projects were more mature in the pipeline. Nevertheless, of the 37 electricity PCIs financed by
CEF, 34 contribute to the integration of renewable energy into the grid
110
, thereby showing in
the contribution to sustainability objectives.
It should also be underlined that intrinsically all projects contribute to improving the internal
energy market as PCIs once implemented will reinforce the networks and enhance cross
border capacity between Member States. Likewise a well interconnected internal market is
necessary to achieve a high level of security of supply and an effective integration of
renewables.
Overall, it is almost unanimously confirmed by the technical stakeholder consultation that
CEF Energy intervention is correctly addressing the three main objectives and providing the
needed resources to accelerate cross-border projects design and construction
111
.
Focus on security of supply is demonstrated by the geographical pattern of the funded projects
which are mostly coming from the EU Eastern borders, from North to South. Here, both gas
and electricity interconnection projects have been funded, showing the need for stronger links
with neighbouring Member States’ energy markets.
So far, CEF Energy has been committing a lower amount of budget to electricity actions,
although it is contributing to relevant initiatives and projects, among others the Northern Sea
offshore grid (both in the study and work phase), the studies for a new electrical
109
In this respect the grants can be considered relevant in order to promote also the objective of social cohesion (besides market integration)
which is one of the objectives enshrined in the treaty base of Trans-European networks).
110
Source: projects description as in ENTSO-E TYNDP 2016
111
With regards first sectorial objectives, to the question if CEF ENERGY is contributing increasing competitiveness by promoting the
further integration of the internal energy market and the interoperability of electricity and gas networks across borders and another question,
93% of respondents (out of 30 respondents) considered that CEF ENERGY is contributing to “a large extent” or “fully”; with respect to the
question whether that CEF ENERGY is contributing to the second sectorial objective, by enhancing the security of the Union’s energy
supply, 83% of respondents (out of 30 respondents) considered to “a large extent” or “fully”; with respect to the third sectorial objective,
contribution to sustainable development and protection of the environment A 73% of respondents (out of 30 respondents) considered that
CEF ENERGY is contributing, to “a large extent” or “fully.
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interconnection between Spain and France and for the HVDC German underground power
line “Suedlink” (see box).
Example box: Gas Interconnection Poland-Lithuania (GIPL)
One example from the gas sector in the Baltic region is the construction of the GIPL. GIPL is to be a first gas
pipeline connecting Lithuania and Poland and the first gas interconnector between the Eastern Baltic Sea region
and the Continental Europe. The project will integrate the gas systems of the Baltic Sea region into the internal
EU gas markets as part of the European Commission's efforts to ensure that no region in Europe remains
isolated.
It will thus end the long-lasting isolation of the Baltic States from the European internal gas
market, contributing to ending energy isolation; further diversifying gas sources, routes and counterparts
in a delicate political scenario.
It will have starting capacity from Poland to Lithuania: 2.4 billion cubic meters
a year and from Lithuania to Poland: 1.0 billion cubic meters a year. The total construction costs of the project
are EUR 464 million. GIPL currently receives co-financing under the Connecting Europe Facility (CEF) in the
form of: a grant for studies around EUR 10 million; a grant for works – around EUR 266 million. Without the
CEF grant for works, the countries would have incurred a disproportionate tariff increase for end-users. In
addition, in 2014 the three Baltic States, i.e. Estonia, Latvia and Lithuania, which are net beneficiaries of the
construction of the pipeline, agreed to financially support the construction of GIPL and to pay to Poland, net cost
–bearer, lump-sum payments of in total around EUR 85 million.
Example box: Balticconnector – the first gas interconnector between Finland and Estonia
Currently, Finland is largely dependent on gas flows from a single supplier. When completed, the
Balticconnector and the gas pipeline between Poland and Lithuania will allow Finland and the Baltic States
to
diversify their gas sources and routes, safeguarding them against possible supply disruptions in the future.
The Balticconnector pipeline will enable the transport of 7.2 million cubic metres of gas per day with flows
running in both directions. The project is expected to be completed in 2020. The CEF contribution of EUR 187
million, filling the commercial viability of the project both in Finland and in Estonia by helping to control a
disproportionate tariff increase for consumers, covers 75% of the construction costs.
Innovation, as the third sector in which market can fail due to relevant learning costs, has had
a minor weight in the project portfolio so far but it is catching up. By financing innovative
projects in electricity transmission and storage, it is expected that CEF Energy contributes to
the implementation of energy efficient solutions, although a tracking indicator for energy
efficiency is not included among the CEF sectoral indicators. Interesting projects are reported
below:
Example box: CEF as an instrument for innovation for renewable energies and electricity storage
Compressed air energy storage (CAES) Larne (UK) project: CEF awarded EUR 6.5 million (50% co-funding)
for preparatory studies including an Environmental Impact Assessment and Front-End Engineering Design, for
the project which aims to build a first of a kind compressed air electricity storage facility of 330 MW by creating
air storage caverns in bedded salt deposits.
The Suedlink project, (Germany, (CEF support EUR 40.3 million) is the first project of this kind on such a large
scale: 700 kilometres of high voltage cables due to be laid fully underground. The power line will create an
urgently needed link between the wind power generated in the north and the consumer centres in the south of
Germany.
The Sincro.Grid project (Slovenia and Croatia): CEF support EUR 40 million for works to enhance links
between the electricity grids of Slovenia and Croatia and boost the use of decentralised renewable energy in the
region, without building new overhead lines. The project will incorporate innovative elements such as the
construction of electricity storage systems and a virtual cross-border control centre for energy system operators
to manage the deployment of renewable energy. The project has been highlighted as a 'technologically advanced
smart grid project' in the World Energy Council's World Energy Trilemma Index 2016.
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Innovation can be an element also in the gas sector, as an example, the TENP project related
to the construction of an innovative industrial-scale deodorisation facility in order to remove
gas odorant, allowing imports to flow from Italy and France via Switzerland (CEF awarded
support for studies and EUR 17.3 million (50% co-funding) for works).
Finally, as presented in the previous section, it can be observed that CEF Energy is awarding
funds according to the PCIs pattern, in terms of project maturity and capital intensity. The
number of PCIs supported by CEF in the electricity sector (37) equals the number of gas-
related PCIs which have benefited from CEF Energy). As discussed in the relevance section,
evidence points out, and notably according to PCI monitoring exercises notably undertaken by
the Agency for the Cooperation of Energy Regulators (ACER)
112
, that the CEF budget in the
second half of the programme will be allocated to a large extent to electricity projects.
Example box: Black Sea Corridor – funding of electricity transmission line– cluster Bulgaria-Romania
In 2016 CEF funding of approx. EUR 29.9 million (50% of the construction costs) has been allocated to the
construction of a new 140 km electricity transmission line between Dobrudja and Burgas in Bulgaria, belongs to
the so-called 'Black Sea Corridor' project cluster: three electricity lines between Bulgaria and Romania, which
will reinforce the electricity transmission corridor along the Romanian and Bulgarian coast,
to integrate
renewables in the electricity market in view of the expected wind power from Greece and photovoltaic
energy from South Bulgaria.
In 2014 ESO EAD became the owner of the Bulgarian transmission grid as it was
unbundled from the National Electricity Company. The unbundling process and financial difficulties have been
reported as the major barriers which led to a delay of five years, putting on hold the project because of
organisational changes. Several factors caused the financial issues of the project. Firstly, the high cost of
construction led to a low rate of return. Secondly, in Bulgaria, half of the electricity market prices are still
regulated and an increase of infrastructure investment costs can not completely be forwarded to society.
Moreover the delay increased the costs and the financial gap. However, the financial barrier could be solved with
the granting of CEF funding first in 2014 for the study and in July 2016 for the construction. As an effect, the
expected year of commissioning has been anticipated from 2022 to 2021
113
.
Telecommunications
114
Available evidence suggests that CEF Telecommunications is
contributing to the
deployment of DSIs
that allow public administrations, citizens and businesses to benefit from
more comprehensive and efficient cross-border online services.
However, during the initial phase of implementation, effectiveness has been hampered by the
limited awareness of the programme (which was new and with no predecessors) resulting in
relatively low participation
115
and low absorption of the indicative Call budget in 2 calls
116
(out of 23). Communication activities have been improved since; however awareness of the
programme needs to be further increased. The recently approved communication strategy for
the CEF DSIs aims to address these issues. Other specific reasons affecting effectiveness have
been identified for some DSIs (see section 6.2.1.4 of PWC report):
- Technical standards for the DSIs not being ready when the call for proposals were
launched (e.g. for eInvoicing and the first call for proposals for generic services for eID);
112
See ACER's Consolidated Report on the progress of electricity and gas projects of Common Interest for the year 2016
113 Case study presented in the STUDY ON ELECTRICITY INFRASTRUCTURE DEVELOPMENTS IN CENTRAL AND SOUTH
EASTERN EUROPE", https://ec.europa.eu/energy/en/studies
114
NB: The results achieved by the CEF Telecommunications programme cannot be compared with the general targets set within the
Programme Statement. Indeed, the latter is based on the original intervention logic of the CEF Telecommunications programme and its
original envelope, which have subsequently been modified. An analysis of the progress of the CEF Telecommunications programme towards
the achievement of its sectorial objectives has however been carried out wherever possible. Regarding DSIs, given that most of the actions
for the deployment of generic services have been funded in 2015 and 2016, there is limited evidence regarding the achievement of intended
results.
115
80% of interviewed stakeholders mentioned low awareness among the main causes of the low participation in the calls for proposals.
116
As of 31/12/2016, award rates for ODR and Public Open Data were of 10% and 21% respectively. Source: PwC analysis on the CEF
INEA’s portfolio.
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-
MS not being ready for the calls for proposals (e.g. for ODR).
In line with article 6 of the Telecommunications Guidelines
117
,
priority
has been given to the
deployment of the core service platforms,
which are
“a
precondition for the establishment
of a digital service infrastructure"
118
.
Over the 2014-2016 period, the programme has supported all the DSIs included as PCIs in
Annex I of the Guidelines except for the service enabling the use of single contact points to
carry out administrative procedures across borders due to the lack of maturity. About EUR 95
million have been awarded to the deployment of 14 core service platforms (eID, eSignature,
eInvoicing, eTranslation, Public Open Data, Europeana, Safer Internet, Cybersecurity,
eHealth, eProcurement, BRIS, EESSI, ODR and eDelivery
119
) and about EUR 128.3 million
are currently allocated to 221 actions to deploy generic services
120
.
Thanks to these services, for instance, companies will have easier access to national
procurement procedures in other EU Member States. Moreover, citizens, patients and
healthcare professionals across the EU will benefit from improvements in prevention,
diagnosis and treatment enabled by digital technologies.
Example Box: eHealth Digital Service Infrastructure (eHDSI)
The eHealth Digital Service Infrastructure (eHDSI), facilitates continuity of care and patient safety for citizens
seeking cross-border healthcare, allowing health data to be exchanged across national borders, namely:
1. Patient Summaries: digital summaries of patients' medical status to make care abroad better and more
efficient, especially helpful in an emergency situation.
2. ePrescriptions: a digital drug prescription, which allows a patient to pick up medication in any of the
participating pharmacies abroad.
To date, 16 actions for generic services have been supported in 16 Member States. These have a common goal of
setting up the necessary infrastructure for the cross-border exchange of health data, in particular setting up a
dedicated national contact point for eHealth starting the provision of cross-border ePrescription/eDispensation
and/or Patient Summary services. The eHDSI enables the Member States to comply with the provisions of
Directive 2011/24/EU on the application of patients’ rights in cross-border healthcare. Interoperable and
interlinked eHealth services are key elements in the DSM Strategy, in order to boost competiveness and support
an inclusive digital society.
Evidence of effective implementation so far varies across DSIs. For example, whereas
implementation of the eDelivery core service platform is on schedule (minor delays have been
observed regarding the plan for Intellectual Property Right Management and some component
description documents)
121
and has so far achieved a good quality level
122
, implementation
progress and quality of services have so far been less satisfactory
123
in the case of core service
platforms for eID and eInvoicing. The most reused building blocks are eDelivery, eID and
eTranslation
124
.
Regarding generic services, an analysis of the countries where actions have been selected for
funding over the 2014-2016 period suggests that CEF Telecommunications has significantly
contributed to the availability of Safer Internet, eInvoicing, EESSI, eID and eSignature,
117
118
Article 6 of the CEF Telecommunications Guidelines specifies the eligibility criteria and priorities for funding.
Annex of the CEF Telecommunications Guidelines.
119
As regards eJustice DSI, CEF programme only provides support for the deployment of the generic services.
120
As regards the generic services, only results of the first call for proposals issued in 2016 are included.
121
Information about the progress of the DSIs reported on the CEF dashboard in the area Milestones of the eDelivery DSI.
122
Quality of the core service platform assessed in the CEF dashboard (the score for eDelivery is 77 out of 100). The assessment considers
the completeness, availability and understandibility of the descriptions of the services of the core service platform.
123
Data reported in the CEF dashboard are taken into consideration.
124
Data from CEF Dashboard.
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eProcurement, eTranslation, eHealth, eJustice and Cyber Security – which are to become
available in more than 15 Member States.
CEF Telecommunications is also helping increase the availability of building blocks
125
for
126
other DSIs and other European projects that do not receive CEF funding (e.g. EU-CEG ,
127 128
SIMSTAT ) . Examples include cross-border recognition and validation of eIdentification
and eSignature. CEF Telecommunications has also provided an essential incentive for
speeding up the implementation process and ensuring compliance with the Regulations and
Directives (see table below). As an example, the figure below shows CEF support to eIDAS
implementation.
Figure 10: CEF support to eIDAS implementation
Source: PwC (support study), adapted from Deloitte’s report for EU Commission: Connecting Europe Facility 2014-2020 – long term
sustainability of digital service infrastructures – D4 Third Interim Report
Table 3: Link between policy initiatives and DSIs
DSI
eID - eSignature
eDelivery
Electronic Exchange of Social
Information (EESSI)
Online Dispute Resolution (ODR)
eInvoicing
Cyber Security
eHealth
eProcurement
Legal basis
eIDAS Regulation (910/2014)
eIDAS Regulation
Security Regulations 883/2004 and 987/2009
ODR Regulation (524/2013)
Directive 2014/55/EU on electronic invoicing in public
procurement
The Network and Information Security (NIS) Directive (
2016/1148)
Directive on patients' rights in cross-border healthcare
(2011/24/EU)
New Public Procurement Directives 2014/25/EU, 2014/24/EU
and 2014/23/EU
125
Specifically, the reuse of building blocks in European projects not supported under the CEF Telecommunications programme is a proof of
the effectiveness of the solutions developed, which are indeed implemented in projects even if no funding is provided.
126
EU Common Entry Gate (EU-CEG) is an IT tool that can be used by manufacturers and importers of tobacco products, e-cigarettes and
refills containers for providing information on their products to the authorities in the MS. The Commission, in cooperation with the MS and
the industry stakeholders, developed the project.
127
Single Market STATistics (SIMSTAT) is a project to facilitate the exchange of micro-data (at enterprise level) on intra-EU exports of
goods between EU MS.
128
CEF dashboard.
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DSI
Business Registers Interconnection System
eTranslation
Public Open Data
Europeana
Safer Internet
Legal basis
Directive 2012/17/EU
n. a.
Commission communication on Open Data of December 2011
Commission’s recommendation of 27 October 2011
European Strategy for a Better Internet for Children (BIK)
Preliminary results from the portfolio analysis appear to be consistent with stakeholder views.
64% of respondents to the technical survey from the telecommunications sector
acknowledged the contribution of CEF Telecommunications to increasing DSI availability,
this view is shared by infrastructure managers, National Ministries and Regional/Local
Authorities, and other organisations (including one civil society organisation). In the same
vein, nearly three-quarters of respondents to the technical survey expected that CEF
Telecommunications will effectively contribute to increasing the availability of building
blocks.
Example box: eIDAS 2018
129
More and more Europeans are using electronic identification to access public and private online services in
their home country. But what happens when someone travels or moves to another European country?
The eIDAS regulation addresses the challenge of cross-border recognition of nationally issued eIDs,
enabling Europeans to access online public services across Europe seamlessly. By 29 September 2018,
online public services requiring electronic identification will have to accept the eID schemes which other
European countries have 'notified' for cross-border use.
CEF-funded eID DSI supports Member States and service providers in recognising foreign eIDs in a secure,
reliable and trusted way. The eIDAS 2018 Municipalities Project is an example of implementation of the
mutual recognition principle of European eIDs to access public services introduced by the eIDAS
regulation. The project empowers citizens from EU Member States and EEA countries to electronically
prove their identity with their nationally issued eID when seeking access to around 300 services in 81
municipalities across the Netherlands. The solution is currently available for Austrian, German and Belgian
eID holders, and should progressively be extended to other countries connecting to the eIDAS network.
Upgrades in software and infrastructure are underway to connect 200 additional municipalities and more
than 1500 services. By using the eID solution, the project is contributing to the achievement of the Digital
Single Market. Cross-border recognition of eID helps create a predictable regulatory environment to enable
secure and seamless electronic interactions between businesses, citizens and public authorities. The action is
at an advanced stage of implementation. Moreover, CEF funding enables the Netherlands and the associated
solution provider (which is a private company) to become frontrunners in the field of electronic
identification.
As regards CEF Broadband, and more in general the connectivity area, several actions are
worth mentioning. The WiFi4EU initiative is expected help in promoting and demonstrating
the benefits of the gigabit society to both citizens and local authorities. As the initiative has
only recently received political agreement by the co-legislators, it is too early to assess its
effectiveness. However, it is expected to serve 6,000-8,000 local authorities by 2020. The
Connecting Europe Broadband Fund, in turn, will promote and demonstrate investments in
innovative state-of-the-art technologies and business models, such as FTTH wholesale-only
networks in line with the proposed revised regulatory framework for electronic
communications (eCode). It is expected that between 7 and 20 projects will be financed every
year from 2017 to 2021 in up to 20 Member States. The Connected Communities Initiative
(CCI), launched in cooperation with the World Bank, aims to support cities and local
operators seeking advice for introducing fast broadband in their communities. At this stage it
129
Source: https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/2017/07/11/eIDAS+2018+Municipalities+Project
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can already be stated that the CCI has resulted in significant improvements to the conception
of the selected projects including in terms of their objectives and underlying business model
(against a background of a large demand for support
130
). Several of these projects have
subsequently already found investors.
In addition to these findings, the technical survey also shows that a very large majority of
respondents in the transport, energy and telecommunication sectors (94%, 97% and 86%
respectively) expect that CEF will improve the EU's competitiveness on global markets at
least to some extent. Finally, 88% of respondents consider that economic, social and territorial
cohesion will be strengthened as a result of CEF intervention at least to some extent (14%
fully and 38% to a large extent).
6.3.1.2. Progress towards the achievement of the sustainable
developments targets by 2020
One of the CEF general objectives is to support the Union’s sustainable development targets,
including the reduction of greenhouse gas (GHG) emissions, increases in energy efficiency,
and raising the share of renewable energy. Overall, the Commission has committed to
directing 20% of the EU budget spending on climate-related actions.
While the contribution of CEF-supported actions to the specific targets is not possible to
measure at this mid-term evaluation stage, the 2015 Programme Statement does lay out a
methodology for estimating the contribution of different categories of spending against this
goal. An analysis of such contribution was performed under the mid-term review of the 2014-
2020 MFF
131
, showing that CEF effectively and significantly contributed to it, with a share of
commitment appropriations estimated at an average of more than 5% of the Total Climate
Change finance in the EU Budget for the three last years. This average rises to 35% when
considering the CEF contribution into the Competitiveness for Growth and Jobs heading of
the EU Budget.
This seems to be backed by the results of the technical survey, where 85% of respondents
agree at least to some extent that CEF will effectively reduce greenhouse gas emissions and
increase energy efficiency and renewable energy use.
At the sectoral level, transport and energy are the two sectors whose contribution to climate
action objectives can be estimated at present.
In
transport,
CEF contributes to the decarbonisation of the European economy by enabling
the modal shift to environment-friendly transport modes, in particular rail and inland
waterways (roughly 81% of the total amount of funding currently allocated). At the same
time, EUR 414 million is currently allocated to innovation and new technologies projects for
sustainable transport. This includes in particular about 2,800 additional alternative fuel supply
points for road transport by 2020. EUR 140 million has been earmarked for such priorities in
the 2017 Blending Call.
Example box: The LNG Motion project
130
The call for expression of interest to the Member States resulted in the identification of 120 projects that seek to invest in broadband from
24 Member States.
131
http://ec.europa.eu/budget/mff/figures/index_en.cfm#com_2016_603
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This project was selected under the 2015 Call for Proposals and receives an EU grant contribution of EUR 27.8
million out of a total cost of EUR 55.5 million (50% co-funding rate). Its first objective is to increase the
Liquefied Natural Gas (LNG) availability along the TEN-T Core Network covering France, Belgium, the
Netherlands, Germany, Poland, Spain, Italy, Hungary and Romania, mainly for road transport. Its second
objective is to study the commercial, operational, technical and environmental aspects of LNG for trucks, in a
real-life trial, and to share parts of these data amongst stakeholders. Finally, the project will support the
minimisation of CHG, CO
2
, NOX and PM emissions.
In
energy,
evidences contribute to express a positive judgement on CEF’s contribution to
climate actions on climate spending, according to the Commission
132
the 40% of the CEF
allocations to the energy sector are assumed to contribute to mainstreaming of the climate
action at programme level. Electricity projects, contribute to CO
2
emissions reduction by
increasing grid capacity to integrate energy produced from renewable sources (34 out of 37
electricity PCIs having received co-financing under CEF do so, see p.52). Gas infrastructure
projects shall contribute through increasing gas shares in the energy mix of the involved
countries, potentially lowering provisions costs and making electricity production from gas-
powered plants and space heating more competitive, compared to coal or oil. Also in the
stakeholder interviews it was stated clearly that contribution to CO2 emission reduction is of
an indirect nature, as it depends on other factors. Therefore, even though for CO
2
reductions
the transmission grid is an important enabling factor, the emissions are in the end determined
by the energy mix, which depends among other factors such as on the prices of the ETS'
emission allowances, national support schemes, effective energy measures, etc.
Even though the CO
2
emissions indicator can only be an ex-post indicator, an estimation of
the CO2 emissions prevented by the completion of electricity project of common interest can
be done. On the basis of network models performed in the context of the ENTSO-E TYNDP
2016, the estimated contribution of electricity projects funded by CEF Energy is a CO
2
emission reduction of 5000 kt/year, which represents around 47% of expected total CO
2
emissions prevented if all projects of common interest of the second Union list were to be
implemented.
Although a specific earmarking to projects supporting sustainability objectives has not been
done in the first years of CEF programme, so far, the electricity and smart grids sector has
been allocated approx. 30% of the total CEF budget, with evidence pointing out that more
projects in the electricity sector will come to maturity in the second half of the programme, as
discussed in the previous sections (the 30% figure does not cover the gas sector as outlined
below). As discussed in section 6.3.1.1, of the 37 electricity PCIs financed by CEF, 34
contribute to the integration of renewable energy into the grid
133
, thereby demonstrating the
contribution to sustainability objectives. Therefore, evidence shows that CEF budget is
contributing to support actions with a potential strong impact towards mitigation of climate
change.
Concerning
telecommunications,
although contributions to the reduction of the CO
2
emissions can be expected from projects implementing digital solutions, no methodology is
currently applied in the context of CEF to estimate such reductions. An ex-ante estimation of
the share of the investment contributing to climate-related policy goals is carried out for
projects funded by ESIF
134
. However this framework is tailored to ESIF-specific categories of
132
133
DB2018 PS CEF BB 20170213a.
Source: projects description as in ENTSO-E TYNDP 2016
134
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32014R0215.
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intervention and is not adapted to the specific features of projects covered under CEF
Telecommunications.
6.3.2. CEF's effectiveness in achieving operational objectives
Main findings
- CEF is demonstrating its ability to
trigger additional investments
in projects that under
normal conditions would not have been sufficiently supported at Member State level or by the
market.
- The
grant
component provided funding commitment in a clear legal context, securing
additional sources of financing and contributing to the coordinated deployment of European
programmes.
- The
CEF DI,
building on the experience gained with the LGTT and the pilot phase of the
PBI, pioneered the use of
FIs,
but there has been a substitution effect when EFSI was created.
- There is
potential for further developing FIs
and making them more effective. In addition,
an equity instrument is currently being developed under CEF broadband for which significant
demand is expected.
- Blending
of EU grants and private sector finance has been used successfully in a few cases
and is now being tested at a larger scale through the transport 2017 Blending Call.
- The objective of CEF to promote
synergies at project level
has not been achieved so far
mainly due to the rigidity of the legal/budgetary framework as regards the eligibility of
projects and the eligibility of costs. It is also important to note that opportunities to exploit
potential synergies and address common challenges among the three sectors is expected to
increase in the future in light of technological developments.
6.3.2.1. Ensuring and accelerating investment
Grants
The EU funding has had a clear acceleration effect on many of the projects supported in the
transport, energy and telecommunications sectors by
providing funding commitments in a
clear legal context,
which is specifically important for the complex cross-border projects
requiring cooperation of several Member States and their implementing entities, coordination
of funding commitments, permitting and building procedures and of preparatory activities
such as public hearings, or environmental impact assessments (the last three specifically
applying to transport and energy sectors). This is also almost unanimously supported by the
respondents to the technical survey: CEF is considered to stimulate the acceleration of
investment at least to some extent, with 78% of respondents considering that this is fully or to
a large extent the case in the transport sector, 85% in energy and 63% in telecommunications.
As presented in the Implementation section, CEF currently allocates to
transport
projects
EUR 21.3 billion resulting from the calls for proposals launched in 2014-2016 and dedicated
to priorities defined in both the Annual and Multi Annual Work Programmes, which has
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triggered total investments of EUR 41.6 billion. The funding has served to support key
European transport infrastructures, in terms of cross-border transport connections contributing
to building an effective Single Market, increasing the sustainability of transport
infrastructures by focusing on rail infrastructure and environmentally friendly modes of
transport and finally supporting the digitalisation and the new generation of technologies.
Public investments in infrastructures, which typically have lifecycles spanning 30-50 years
and beyond (e.g. railways and ports) could not have been kicked off without national and
European public funding being secured. In that respect, EU funding commitments have been
crucial in securing additional sources of financing, including from the banking and private
investors sides. The capacity of CEF to foster development of cross-border projects was
confirmed by the stakeholders in the technical survey, a large majority of which (88-94%)
responded that this is the case fully or to a large extent, for the three sectors. The example
below illustrates that some cross-border projects would not have been realised without a
major EU contribution.
Example box: The Brenner Base Tunnel
The Brenner Base Tunnel forms the heart of the Scandinavian-Mediterranean corridor, connecting the regions
and ports in the Scandinavian countries, Benelux and Germany with their counterparts in the Mediterranean. The
Brenner Base Tunnel will remove one of the key rail bottlenecks in the EU. Passenger and freight transport will
benefit from reduced travel times and more efficient connections. The Brenner Base Tunnel is expected to shift
50% of the heavy traffic from road to rail. In the long run, it is expected to change the modal share from today’s
30% transport of goods by rail and 70 % by road to 70% by rail and 30 % by road. The slope of the railway line
will be reduced from 27 ‰ to 6.7 ‰ in Austria and 4 ‰ in Italy. The length of the rail stretch between Innsbruck
(Austria) and Fortezza (Italy) will be reduced from 75 km to 55 km. The project received EU grants for
feasibility studies under the TEN-T programme. In-depth analysis in cooperation with the Member States
concerned, the EIB and the private sector in 2006-2007 demonstrated the difficulties for realising the project
with private financing due to the duration of the works and the financing required. It received a CEF grant of 1.2
billion for works during the period 2014-2019.
The EU grant funding has contributed to the coordinated deployment of the key European
flagship programmes. Examples include the SESAR or ERTMS, clearly require a coordinated
implementation of investments across countries and across stakeholders to bring the systemic
benefits of performance, safety, interoperability. Had such Programmes been financed without
a coordinated European approach, they would result in either no economies of scale from
investments and no system-wide benefits, or no investments at all, as the stakeholders would
have preferred to wait for others to make the first move.
In
energy,
evidence of the accelerating effect of CEF support can be found analysing the
progress of implementation of PCIs which received CEF support. Following the call 2014, 28
actions for grants for studies on 27 PCIs were funded; of those PCIs, 20 are being
implemented on time
135
, in most instances by entering the permit granting process after
completing earlier project development stages while on average over the same period of time
in the electricity sector two thirds of PCIs and almost all gas PCIs (except for 5) are reported
to be behind, being either delayed or rescheduled. During the two-year period from February
2015 to January 2017, approximately only one-third of the PCIs managed to maintain their
135
Source: ACER Consolidated report for PCI progress, 2016 and ACER report update for PCI progress in 2017. . It should be noted that,
according to ACER assessment, rescheduling occurs mostly in planning phase (thus relevant for studies) and results in general postponement
of project implementation by around 2-4 years on average. Other reasons than financing delays affect the PCI implementation, however,
notably permitting issues, public consultation and public opposition
2) Difficulties related to the EIA, 3) Public consultation and opposition and, 4) Financial difficulties
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original time schedule. The remaining two-thirds of the projects were delayed or rescheduled
at least once during this two-year period.
Only a third of the 111 projects from the previous programme received PCI status in the
current TEN-E and only 15 of those PCI received CEF funding in the period 2014-2016. With
the above numbers, the predecessor programme is considered to have catalysed the results
achieved by the CEF programme by financing, albeit with overall limited funding volumes,
studies actions for PCIs which were generally at early stages of maturity during the previous
programming period. This shows that support of CEF helped to keep the project at the
expected pace, which is especially important in the study phases of the projects with long
maturity period. A case study on the Spain-France electricity interconnection project
136
shows
that CEF contribution is providing the needed resources to accelerate cross-border projects
design. Other findings also support evidence that access to CEF grants for works and for
studies is indeed perceived as main benefit by project promoters
137
The acceleration effect is tangible also for grants for works: on a total of 11 projects which
received grants for works in the calls 2014-2015, following the grant decision 2 projects are
already completed and 7 went for final investment decision and are under construction, with
construction to be completed between 2017 and 2019. One interviewed gas promoter pointed
to the fact that whilst CEF could accelerate projects inter alia through better visibility on
national priority lists, the administrative burden from other aspects such as CBCA might
outweigh this accelerating effect (this is discussed under section efficiency). Another project
promoter that is privately financed and not via tariffs states that CEF grants can allow such
companies to build a business case when tariffs are not an option.
Grants for blending
In order to leverage additional private sector investment, DG MOVE and INEA launched a
CEF Blending Call in February 2017 based on the redeployment of EUR 1 billion of CEF
budget reserved for FIs towards grants for the purpose of blending with private financing.
This was the first occasion where grant support available in a CEF transport call was
conditional on the use of private financing (be it EIB including EFSI, national promotional
banks or private lenders). Support through FIs alone has not always proved to be sufficient for
the projects needed to complete the TEN-T. A targeted grant in these cases has enabled the
financial case to be established and it is expected that, by doing so, the delivery of financing
by the EIB or the private sector will be made easier. In practice, the beneficiaries will receive
the grants they applied for only if combined with EIB financing (including EFSI) and/or
national promotional bank and private financing.
While not explicitly foreseen in the objectives and forms of financing of the programme, the
blending approach had already been spontaneously applied in the case of Port de Calais, Port
of Dublin and the Green Shipping Guarantee Programme reflecting a certain programme
flexibility/capacity to evolve. The concept of blending, in the case of Port of Calais project, is
different from that of the blending call.
138
It however demonstrates how grants and financial
instruments can join supporting projects being developed.
136
Studies for a new Atlantic electrical interconnection between Spain and France, source PwC
Survey conducted in the NSI East Electricity corridor project promoters in the NSI East region indeed confirming that CEF is addressing
the financial barrier for PCIs (STUDY ON ELECTRICITY INFRASTRUCTURE DEVELOPMENTS IN CENTRAL AND SOUTH
EASTERN EUROPE", https://ec.europa.eu/energy/en/studies)
137
138
E.g. the awarding of CEF grants was not subordinated to conditions like the submission of a letter of support for one or several public or
private financial institution.
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Example box: the Port of Calais and the blending approach
The Port of Calais is located on the North Sea-Mediterranean Core Network Corridor. The existent
infrastructure cannot cope with the traffic growth on the Dover-Calais route and the increased size of
vessels. The project includes the construction of new infrastructure and equipment to improve the port’s
long-term capacity. While this project is economically viable, a grant supports the project to be financially
viable. Out of a total investment cost of EUR 862.5 million, CEF provided funding support for
approximately EUR 82 million in grant form. A EUR 50.6 million CEF DI support through the Project Bond
Credit Enhancement enabled EUR 504 million 40 year-bond being issued by the Port of Calais to finance
the project.
Financial instruments
The CEF predecessor FIs, the LGTT and the PBI, were structured in such a way as to enhance
the risk absorption capacity of the EIB, by providing a buffer in the form of a first loss piece
from the EU budget. As also confirmed by the findings of the respective evaluations
139
,
among the key achievements of these two instruments in terms of leveraging the EU budget
contribution are the following: securing the overall financial commitments to projects via the
EU-EIB support, and attracting additional financing of commercial banks.
With regard to the three CEF sectors, the pilot phase of the PBI has achieved the following
results:
- 5 projects in Transport sector supporting project costs of EUR 3.5 billion were signed
between 2014 and 2016
,
- 1 project in energy sector (EUR 424.9 million project costs)
,
- 1 ICT project (EUR 189.1 million project costs).
Overall, the Project Bond Initiative was useful in facilitating the development of the project
bond market and raised the interest of institutional investors in the financing of EU
infrastructure projects
140
. With regard to projects additional to the ones initially part of LGTT
and Project Bond portfolios, and which have been signed under the CEF DI, the achievements
cannot be yet fully measured at the time of this evaluation.
In line with the findings of the evaluation of the Europe 2020 Project Bond Initiative, it
should be noted that the LGTT and PBI were specific tools designed in particular for use
following the financial crisis. As the financial markets have improved, their applicability
today is to an extent diminished. However, this does not mean that they have lost their utility.
Were there to be another tightening of credit or other stresses on private finance, such tools
would again be more relevant and would likely be in significant demand.
The CEF DI represents an evolution of the LGTT and PBI. It shares the same aim (i.e. to
tackle capital market deficiencies fostering private investment in transport infrastructure, as
well as energy and broadband). It however provides the scope for wider support, compared to
the legacy instruments (which are incorporated into the CEF DI) for example via financing
solutions such as the Senior Debt Credit Enhancement (SDCE), a product initially developed
under the LGTT to cover more project risks and for a longer period.
Further, a major upgrade, compared to the legacy instruments, is represented by the CEF DI
portfolio approach, which enabled pooling together transport, energy and telecommunication
139
Ex-post evaluation of the loan guarantee instrument for. Trans-European Transport Network projects (LGTT)
and
Ex-post evaluation
report on the pilot phase of the Europe 2020 Project Bond Initiative (PBI)
140
As indicated in COM SWD (2016) 60 final
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projects into one portfolio. Risk diversification is thus increased, enabling increased support
compared to what a sector-specific instrument could provide.
Among respondents to the technical survey, 87% agree that CEF will effectively create an
environment that attracts private financing to infrastructure projects at least to some extent
(while 27% agree it will happen to a large extent and 10% fully). Respondents consider that
the CEF DI contributes at least to some extent to overcoming deficiencies of the European
debt capital markets (40% while 54% do not know), create additional risk capacity in the
entrusted entities (42% while 53% do not know) and to facilitate financing for project
companies (48% while 47% do not know). For the role that the EI has had on overcoming the
deficiencies of European capital markets, a 38% of respondents agree this had happened at
least to some extent (while 54% do not know).
Following the launch of EFSI in 2015, as mentioned earlier, there has been a substitution
effect with the CEF DI. This situation can be explained by the combination of several factors:
the overlap in eligibility between EFSI and CEF, the greater flexibility given to EFSI
compared to CEF regarding the terms and conditions of financing that can be offered, and the
high political priority to deliver tangible results for the EFSI.
Leverage of the CEF Debt Financial Instruments
Leverage triggered by the CEF DI in the CEF Regulation is expected to be in the range from 6
to 15. The achieved leverage is quantified as the aggregate of the amounts raised to finance
the projects supported by the CEF DI, divided by the aggregate amount of the EU
Contribution committed to the instrument to date. As at 31 December 2016, the achieved
leverage
141
effect amounted to approximately 20.1 (Total project costs EUR 13.9 billion/ EU
Contribution committed EUR 688.6 million). This high leverage is reflective of the
subordinated nature of many of the projects in the CEF DI portfolio.
Transport
In total, the amount of investment mobilized by CEF-DI including the legacy instruments
amounts at EUR 13.3 billion, out of which the project costs supported by the projects signed
from 2014 to 2016 amount at 4.5 billion. While EFSI has broader eligibility and therefore also
invested in mobile equipment (e.g. rolling stock) and equity funds, which explains the larger
amount of investment mobilized, one can draw the conclusion that CEF-DI (and legacy
instruments) were performing rather similarly than EFSI once comparing projects within the
same scope of TEN-T.
Energy
The CEF DI to be managed by the EIB was set up for the period 2014-2015 with a total
allocation of EUR 89.2 million. However, to date no actions have been concluded by the
instrument. No subsequent commitment to the CEF FIs has been foreseen for the years 2016-
2020.
141
The calculation of the leverage achieved excludes the amount of the project costs that are expected to be supported under the framework
agreement signed in November 2016 as part of the Green Shipping Guarantee programme. This is because at end 2016 there was no
individual transaction signed by the partner financial institution with a final beneficiary. Furthermore, the leverage is calculated on the basis
of the total amounts committed from the EU budget to the instrument (including EU contribution committed to PBI and LGTT instruments),
which is higher than the EU budget contribution actually paid to the EIB upon signature of projects under the CEF DI.
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A number of factors have contributed to the underutilisation of CEF DI, including: the short
pipeline of bankable CEF eligible projects available at the time CEF DI went into operation,
the terms and conditions of financing laid out by the CEF Regulation
1
; and the subsequent
creation, political priority for, and better terms and conditions offered by the EFSI instrument,
which led to the shift of the CEF Energy pipeline to EFSI. More than 60% of project
promoters in the targeted survey reported that they had not considered the CEF DI when
pursuing debt to finance their projects. This was largely due to the competitive range of debt
and equity options already available to them (including from banks and funds with which they
have well established relationships) due to their sound Regulated Asset Base model for
project finance
142
.
Given the lack of uptake of CEF DI and the subsequent establishment of the EFSI instrument
and the preparation for the extension of EFSI (EFSI 2.0) no further funds were allocated to the
CEF DI in 2016. A number of projects that had been pre-selected for the CEF DI pipeline
were transferred to the EFSI. The BRUA - “Development on Romanian territory of the
National Gas Transmission System on the Bulgaria-Romania-Hungary-Austria direction”,
which received CEF grants for works of EUR 179 million on the basis of significant
externalities on security of supply, was added to this pipeline and has since accessed EFSI
financing of EUR 100 million.
The case of BRUA demonstrates the important potential of blending different funding
instruments. Blended financing structures are foreseen for Projects of Common Interest such
as CAES, BRUA, Krk LNG, Klaipeda-Kursenai pipeline at the initiative of the project
promoters, showing that CEF grants can play the role of enabler and attract other private
investors and furthermore that CEF’s objectives can be pursued obtaining higher leverage
effects through such blended financial solutions. At least two projects (CAES and KrK LNG)
funded by CEF Energy attracted equity investment. In total, 17 PCIs in energy have received
EIB loans
143
(including three EFSI products), of which 6 have combined loans with grants for
studies and or grants for works.
These examples show that for projects with a limited funding gap in particular, bankability
conditions can be reached by a limited contribution from grants with financial instruments to
help project cash flows to remunerate both equity and loan requirements. A combination of
CEF grants plus EFSI can be envisaged at different phases of project implementation (e.g.
studies to accelerate project implementation, and works).
Telecommunications
EFSI can support projects in the digital-related areas. However, given that FIs cannot be used
to support the deployment of the DSIs, notably due to the methods of intervention set out
under Article 5 of the CEF Telecommunications Guidelines as well as to the limited potential
for revenue generation (see section 6.1.3), the establishment of EFSI did not increase
available funding for DSIs. Conversely, EUR 100 million (8.8% of the overall CEF
Telecommunications budget) were transferred from the budget available for DSIs to EFSI.
Strategic stakeholders highlighted that, as this transfer of resources had an impact on the
142
Several representatives of project promoters and national authorities stated in the interviews that there was so far a preference to use long
standing lending arrangements with the EIB or other financial institutions rather than the new CEF offer as "borrowing
at company level" or
"arrangements through the parent company" were "more attractive than seeking funding at project level".
Other experts interviewed also
emphasised the fact that using a financial instrument instead of a grant results in capital costs implying a higher tariff – which is obviously
more difficult to impose in countries with smaller population size.
143
Reference: status monitoring of PCIs , internal DG ENER table, status October 2016.
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budget of CEF Telecommunications in the DSIs area for 2016-2017, it accentuated the back-
loading profile of the programme. In the broadband area, EFSI did replace the CEF DI in the
sense that EFSI financed broadband-related actions that CEF Telecommunications was not
able to finance anymore as most of its budget planned for the CEF DI was already committed.
Regarding the CEF EI, EFSI enabled the creation of the Connecting Europe Broadband Fund
(CEBF). Under the CEBF, a contribution of EUR 100 million, combined with a EUR 100
million support from EFSI, is expected to generate investments between 1 and 1.7 billion
EUR in high capacity networks in under-served areas. The fund is expected to become
operational in the first half of 2018 and to respond to a clearly identified gap in the financial
markets. It should be noted that in the case of the CEBF, the use of CEF and EFSI funding
have been mutually reinforcing in creating a first investment platform under the IPE: EFSI
will significantly expand the leverage of the fund and thus the number of broadband projects
that can be supported, while CEF will help EFSI funding reach smaller, local operators, which
encounter difficulties to find financing on the market.
Overall leverage
Overall, as presented in the Background section, the leverage effect triggered by CEF was
expected to be as high as 26.5
144
, a factor based on the observed LGTT performance, which
would have triggered investment of EUR 192 billion in the three sectors, an amount much
closer to the EUR 1,000 billion needed. Based on the observed results to date, it is unlikely
that CEF will trigger the forecasted EUR 191.92 billion in infrastructure investment.
This estimate did not, however, take into account that the main share of CEF was not handed
out via FIs but via grants for works and studies – for which leverage effects tend to be much
lower. Annex III of the 2011 IA in fact gives 5-10 as the target for leverage for both equity
and debt instruments. Leverage as defined for the CEF instrument included leverage through
all funding sources, not only private funding.
In addition, what could not be anticipated at the time of drafting of the IA was the setting up
of the Investment Plan for Europe in 2014, including the EFSI initiative launched in 2015,
which altered the original assumptions of the IA not only with regard to available EU funding
for infrastructure projects (EUR 2.8 billion transferred from CEF to EFSI guarantee fund), but
also had an effect on the leverage estimations as the products delivered via EFSI support were
set up faster and Concretely, this meant that some of the estimated impacts occurred rather
under the heading of EFSI than under CEF. However, both financing mechanisms suffer from
a relatively weak project pipeline.
How to increase effectiveness of Financial Instruments?
Successful use of Financial Instruments depends on a clear strategy and on a set of criteria to
determine which tools are most appropriate for market needs, beneficiaries and the desired
objectives. It also requires time for the development of specific tools and for the market to
adopt them. Based on the experience to date, there is
potential for further developing
financial instruments under CEF and making them more effective. This
includes:
On the "supply" side
144
Annex II of the 2011 IA.
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a comprehensive identification of the sector specific needs, which according to the
analysis presented above vary substantially due to the wide range of beneficiaries;
the further development and marketing of specific products to address market failures,
which can lead to proposing highly customised products to enable bankability of
infrastructure projects at competitive and predictable costs;
adapt existing instruments to changing market conditions, as it has been done with the
LGTT which evolved into the SDCE (see page 65);
avoid overlaps between instruments through policy guidance on the complementarity
of financial instruments focussing on eligibility criteria (this will be necessary when it
comes to ensuring the complementarity between an extended EFSI and CEF DI);
create a blending facility (as proposed by the European Commission in its 'Omnibus'
proposal
145
and currently under negotiation), making access to financial instruments
easier for promoters by de-risking project finance and attracting investors.
On the "demand" side
Make available – by respecting the different needs of companies/procuring authorities
in accordance with their investment portfolio – advisory services/technical assistance
either as (short-term) financial engineering support or in the form of (long-term)
capacity building for financial engineering
146
.
6.3.2.2. Exploiting sectoral synergies
The CEF Regulation defines "synergies between sectors" as the "existence,
across at least two
of the transport, telecommunications and energy sectors, of similar or complementary actions
that may enable costs or results to be optimised through the pooling of financial, technical or
human resources".
Examples of potential project level synergies between the transport, energy and
telecommunications sectors, as listed in the Regulation, include smart energy grids, electric
mobility, intelligent and sustainable transport systems, and joint rights of way or
infrastructure coupling. Given technological advances, it is assumed that synergies among the
sectors to address common challenges and policy goals (e.g. decarbonisation) will increase in
the future (for instance as regards Cooperative, Connected and Automated Mobility,
alternative fuels and "smartening of the grid").
The CEF Regulation defines two modalities to co-finance actions covering several sectors
(grants):
-
the adoption of multi-sectoral call for proposals ("with
the financial amounts allocated for
each sector being weighted according to each sector's relative involvement in the eligible
costs of the actions selected for financing")
147
;
the possibility to increase the funding rates defined for each sector by up to 10 percentage
points for actions with synergies between at least two of the sectors (with the
corresponding additional financial amount being covered by the main sector concerned).
-
145
146
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52016PC0605
According to findings of the study "Cost-Effective Financing Structures for Mature Projects of Common Interest (PCIs) in Energy"
Roland Berger, 2017
147
Article 17(7) of the Regulation No 1316/2013 establishing the Connecting Europe Facility
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However, the provisions on synergy do not affect the provisions regarding eligibility of cost
in each of the three sectors, notably as regards the geographical location of the action and the
type of assets eligible, which have to be met cumulatively. This has appeared to be a very
severe limitation to effectively co-finance actions covering several sectors. For instance, in
the case of electric mobility, the energy components are relating to distribution networks (not
eligible under CEF Energy) and most actions are not geographically located both on the TEN-
T Network and on an energy Project of Common Interest.
There is thus a clear inconsistency in the legal framework between the objectives defined for
promoting synergies among sectors and the possibility to implement them in practice through
multi-sectoral calls. This largely explained why only one synergy call (transport-energy) was
launched to date with very modest results (only 7 actions
148
were selected for a grant amount
of EUR 22 million while the available budget was EUR 40 million).
As regards the possibility to increase the funding rate by up to 10 percentage points for
actions with synergies, it has only been used in one case of a transport action with energy
elements
149
. The reasons for this provision not being significantly used mainly lies with the
budgetary constraints of the programme. In fact, in a situation of large call oversubscription
(transport) or limited budget over the period (telecom), sectoral policy objectives have been
given priority. Looking to the future, it seems important to promote synergies in a manner that
does not lead to a budgetary trade-off with sectoral policy objectives.
This analysis was confirmed by many stakeholders who acknowledge the strong untapped
potential for project-level synergies but indicate that the obstacles in exploiting synergies
between sectors hamper the implementation of CEF at least to some extent (69%). This
suggests that the exploitation of synergies needs to be improved, especially since they are
perceived as important for addressing CEF objectives by 83% of respondents. Other
interviewees also made the point that the pre-identified areas in transport and energy naturally
limit the range of synergies that are possible and that more synergies could be achieved if
investment at distribution level or hybrid projects (combining generation and transmission)
were eligible.
6.3.3. Information, participation and monitoring
Main findings
- The relevant participants according to policy objectives are being reached by the
programme, notably thanks to an effective communication strategy. However, more
improvements could be made, for example, in engagement with the wider public.
- Although a number of KPIs exist at sectoral level, they do not allow to systematically
monitor and evaluate CEF's contribution to the policy objectives, particularly to the
overarching policy objectives.
6.3.3.1. Information about the programme
148
149
Detailed in Annex 12
HEKLA – Helsingborg & Klaipeda LNG Infrastructure Facility Deployment
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The open consultation demonstrated that the majority of stakeholders felt that communication
of CEF and dissemination of programme results has been effective with 74% having a
positive view on the activities undertaken concerning awareness raising and promotion of the
programme (although it should be said that there is a certain bias in this result, as obviously
only those who were informed about CEF at some stage were also the ones that contributed to
the consultation). The parent DGs and INEA in particular have played a decisive role in this
regard.
INEA organises a dedicated Information Day for each CEF call. For example, for the 2016
CEF Transport Call, an Info Day took place on 25 October 2016 in Brussels. The event
addressed the priorities of the call and practical application aspects. Besides press releases,
INEA also promotes the benefits and key results of the CEF programme through publications
which are made available on its website, together with details on the various work programme
and calls.
The Commission also undertakes many actions to disseminate information to stakeholders. In
transport, DG MOVE organises Core Network Corridor Fora, which are biannual meetings
providing an opportunity for the European Coordinators to inform stakeholders as to the latest
developments on the Work Plan. TEN-T Days conferences are also organised each year to
inform about the funding opportunities available under CEF, together with Regional
Investment Conferences, which target Cohesion Member States. The last was organised in
Sofia in March 2017 and gathered around 500 participants. In addition, workshops and
information days are held locally for national administrations and potential project promoters
in Member States. Dedicated workshops are also designed to accompany project promoters in
the implementation phase and address issues related to the regulatory framework (permitting,
public procurement, public consultations etc.)
The communication activities at the Commission side on CEF energy relate primarily to the
TEN-E policy and CEF is therefore part of a broader communication strategy and exercise.
Actions to disseminate information on CEF include therefore relevant stakeholders meetings
of the TEN-E regional groups, (with further distribution of CEF-related information in the
institutional TEN-E Transparency Platform), and a high level "Energy Infrastructure Forum"
which is annually held in Copenhagen, where progress in European energy infrastructure
policy is discussed with stakeholders. CEF information days at the opening of calls for
proposals are regularly held.
In telecommunications, information days and webinars, such as those dedicated to eDelivery
and eID, are organised periodically. Stakeholder engagement activities are carried out at the
DSI level, including stakeholder days and stakeholder platforms. A dedicated Stakeholder
Management Office has also been set up for the building blocks. Dedicated information days
have been organised in those Member States who have requested it (e.g. Portugal).
Initiatives such as the 'EUInvest Campaign' which have been launched across the European
Commission and the EIB have also given further visibility to CEF projects.
There is also a contractual obligation for beneficiaries to make the fact that the project has
received EU funding visible e.g. with signage displays.
The stakeholder consultation found that further improvements could be made in the
communication of CEF in the following areas:
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Some stakeholders stated that they did not receive sufficient feedback regarding proposals
which failed during the selection process and sought more information about how
proposals are evaluated in order to be able to improve their proposals.
According to some stakeholders, smaller project promoters and stakeholders were not
sufficiently aware of the existence of CEF and it was felt that the promotion of CEF
towards the general public has not been effective enough to raise a wider awareness about
CEF across the EU. CEF has significant potential to demonstrate the added value of the
EU at large to the general public, although it is important to note the role of Member
States and beneficiaries in this regard.
It was felt that further efforts to promote the role of CEF in climate policy could also be
undertaken. Stakeholders from several sectors spoke to the need to improve
communication among institutions in order to share best practices and promote synergies.
In telecommunications, stakeholders point to the need to improve communication with
potential beneficiaries at local level and the general public (notably about the programme's
objectives and potential benefits) as well as communication between operational
stakeholders (e.g. beneficiaries of the generic services for eID reported difficulties in
knowing the level of implementation of eIDAS nodes) including dissemination of results
and best practices. The latter could help create synergies among the DSIs and promote the
reuse the building blocks. More effective actions to reach out to targeted stakeholders are
all the more crucial since lack of awareness has been identified as one of the causes for
low participation. A number of the stakeholders consulted highlighted that it would be
beneficial to increase communication activities at local level, with the support of Member
States. The Commission has recently adopted a communication strategy in this domain
150
.
6.3.3.2. Participation in the programme
The results of the stakeholder consultation and the portfolio analysis demonstrate that CEF
has reached relevant participants according to CEF policy objectives in all three sectors.
Nonetheless geographical patterns can be found across the projects selected and funded under
CEF. These are discussed next.
Transport
CEF Transport reached most of the relevant participants it was supposed to reach according
with its general and specific objectives: infrastructure manager of rail networks, IWW,
seaports, inland ports and airports; public promoter for the development of cross-borders
projects; and public authorities and private operators (although the more consistent share of
funding aims at overcoming the market failures of the public sector, in particular the
infrastructure managers given the characteristics of the funded projects).
Nevertheless, CEF Transport is primarily intended to give support to those ambits of the
transport sector more in need of the intervention of a centrally managed fund, i.e. where the
market fails to finance the necessary infrastructures. In particular, interventions in the rail
sector represent the most relevant category.
According to the technical survey results, which include responses from a various set of
private and public actors involved in the transport sector, the vast majority of the respondents
150
Communication activities for CEF Digital Service Infrastructures - Communications Strategy.
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felt involved in the programme. Out of a total pool of 75 respondents, 27 stated to be fully
involved, 29 to a large extent and only 19 to a lower extent.
In this sector, a geographically balanced coverage of beneficiaries has been ensured. The first
three sets of CEF transport calls allocated EUR 16 billion to the corridors of the Core
Network priority. Between 2014 and the first half of 2017, over EUR 15.7 billion has been
allocated to rail projects. These examples highlight three key features of the distribution of
CEF funding for transport.
A network approach - the Core Network, to be implemented through the Core Network
Corridors, has been defined according to the concentration of trans-national traffic flows
for both freight and passengers, focussing on its core nodes and socioeconomic centres.
A focus on Cohesion countries – the Cohesion envelope amounts to over 50% of total
CEF transport funding with higher funding rates reflecting both the higher need of the
Cohesion Member States for transport infrastructure and their lower capacity of tackling
the issue with their own resources.
An emphasis on rail - interventions in the rail sector promote a more sustainable transport
network.
However, participation of third countries, which CEF transport tries to improve, did not
increase significantly from predecessor programmes. A reason for this situation may be that
the co-funding rates are not attractive enough, as third countries often cannot fund the rest of
the project cost.
Energy
Relevant participants, who are in a position to implement PCI projects, have benefitted
from CEF Energy.
From the project portfolio analysis and interviews with relevant
stakeholders, it can be stated that a diverse range of actors typically involved in energy
transmission and storage infrastructures design and construction have been reached by CEF
Energy. Analyses show responses to calls for proposals have come from Transmission System
Operators (TSOs) and other infrastructures operators (Joint Ventures; Special Purpose
Vehicles created by a single TSO; Storage project companies; Public authorities
151
).
The major beneficiaries have been established TSOs, with 30 out of 87 TSOs in Europe
having benefitted from CEF. However evidence show cases of private endeavours now mostly
asking for resources for studies and, in two cases, for works. Promoters of merchant lines and
private operators interested in investing in electricity or storage facility are also in the list of
CEF beneficiaries, similarly for gas transmission pipeline operators.
In line with the expectations set out in the TEN-E impact assessment, geographically
speaking, the bulk of funding awarded to date for grants for works has gone to Cohesion
countries, showing their need for funding cross-border interconnections.
CEF funding
allocation for eligible gas projects is consistent with the security of supply objectives of
the programme, having allocated significant funding to Member States and regions that
have been identified as vulnerable.
This focus on peripheral areas indicates that security of
supply and integration of the market have featured strongly in CEF funding allocations so far.
The geographical spread of CEF grant awards for works is certainly relevant to the
achievement of these objectives.
151
The analysis has been carried out based on PwC’s reclassification of the beneficiaries included in the INEA’s database.
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Telecommunications
The analysis of the CEF Telecommunications portfolio
152
shows that, if taken together, public
national and local authorities, universities and research institutes account for almost 70% of
the total number of funding recipients for actions aimed at deploying generic services, and
NGOs account for 12%. Private sector companies (including SMEs), in turn, represent about
19% of the beneficiaries. This pattern owes to the nature of the DSIs, which foresee the
systematic involvement of public authorities (e.g. beneficiaries of generic services for EESSI
are national social security institutions; for Cybersecurity, national and governmental
computer security teams -CERTs/CSIRTs-; for eProcurement, contracting authorities)
153
.
Private sector participation has so far been higher in DSIs targeting private companies as
solution providers, (e.g. eInvoicing). According to some of the stakeholders consulted,
however, other DSIs such as eID and eDelivery would benefit from more extensive private
sector involvement, notably in the form of quicker deployment and market uptake. In the
same vein, half of participants in the technical consultation identified lack of private sector
involvement as hindering implementation.
Beneficiaries from all EU Member States (together with Iceland and Norway) have received
funding from CEF Telecommunications. About 50% of awarded funding so far has gone to
beneficiaries located in eight Member States (United Kingdom, Germany, Italy, the
Netherlands, Denmark, France, Greece and Finland). This is partly explained by the fact that
many of these were more heavily involved in projects which piloted the solutions used to
implement the DSIs, also known as Large Scale Pilots (LSPs
154
). Indeed, stakeholder
interviews indicate that LSPs and the CIP–PSP programme had enabled the creation of a
community of practice that has subsisted under CEF Telecommunications (about 20% of
LSPs participants have been subsequently involved in CEF Telecommunications
155
). The
strong participation rates in calls for proposals for Safer Internet generic services from the
very first year of the programme likewise suggests the existence of a well-established
community of practice in this area.
6.3.3.3. Monitoring performance (indicators)
It has become apparent during this mid-term evaluation that the CEF Regulation lacks
relevant, well-defined and robust key performance indicators (KPIs) that would allow the
proper
ex post
monitoring of the performance of the programme against set policy objectives
(targets), which are also missing.
The CEF monitoring system appears to be a mere mirroring of the programme's main
objectives into indicators that does not necessarily take into consideration their usefulness,
applicability and the cost or relevance of collecting complex impact indicators. Although
some differences exist between sectors, common shortcomings can be found, which risk
hampering the monitoring of the progress made and therefore the improvement of the delivery
mechanism.
The analysis has been carried out based on PwC’s reclassification of the beneficiaries included in the INEA’s database. Indeed, the level
of details presented in the database was not sufficient for the analysis. Additionally, within the database, beneficiaries were classified based
on the eligibility criteria of the calls for proposals, not mapping the correspondence with the categories of stakeholders targeted for each DSI.
153
The complete list of category of beneficiaries per each DSI is reported in Appendix 7.
154
Large Scale Pilots funded under the ICT Policy Support Programme (ICT PSP) of the Competitiveness and Innovations Framework
Programme (CIP), running in the 2007- 2013 programming period.
155
The analysis has been performed by verifying whether the beneficiaries of the LSPs were included among the beneficiaries of the CEF
Telecommunications programme of the calls for proposals issued from 2014 to early 2016.
152
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Moreover, as CEF-funded infrastructure projects are often of a large scale and take years to
get off the ground, their impact is usually not immediately measurable by the indicators. For
some KPIs (e.g. number of new or improved cross-border connections), only projections are
available at the time grant agreements are signed, and the data can only be confirmed after
successful closure of the actions, which can take several years.
The set of indicators
focuses on these longer-term effects,
which are by nature more difficult
to monitor and document, since a certain amount of time is necessary for them to be realised.
As such, they do not provide useful information in a timely manner to improve and correct the
implementation of CEF if necessary.
In
transport,
many of the CEF article 4 indicators refer to the entire TEN-T network, to the
financing of which CEF only contributes (along with various other actors, including Member
States, structural funds and the private sector). Therefore, these indicators (and targets) should
not be considered a good measurement of the success of CEF as it gives the impression that
CEF is underperforming. These indicators aim at measuring progress in developing the TEN-
T with a longer term perspective. Moreover, some KPIs, such as reduction in road accidents,
are only indirectly and partially linked to CEF-funded projects. The indicators should
therefore be better aligned with the scope of CEF. It should also be noted that the CEF
indicators are less specific than the very precise TEN-T indicators. Some alignment is most
likely needed.
Regarding the
climate-related indicators,
the limitations of the indicators related to the
monitoring of the programme in terms of CO2 contribution reduction (in line with what
discussed in the previous section) must be taken into account, as a CO2 reductions are based
on planning-related information on projects but can be verified only ex-post (ex-ante
assessment for instance). In addition,
those indicators are not always measurable.
The indicators set out for CEF
Energy
are mainly
ex post
ones, focussed on the final impacts
of the programme. CEF progress towards objectives can be measured, however, by some of
the KPIs provided by the CEF Regulation in Article 4 for specific sectoral objectives which,
in aggregation, can help accounting on general objectives. Out of the 15 sectoral indicators, 7
are considered suitable to be used as monitoring indicators, as indicated by the Commission in
the budgetary Programme Statements. These are linked to objective 4.3 (a)-(i), (ii), (iii);
increasing competitiveness by promoting the further integration of the internal energy market
and interoperability of electricity and gas networks across borders, 4.3 (b) (i), (ii), (v), (b)
enhancing Union security of energy supply;) contributing to sustainable development and
protection of the environment, 4.3.(c) (iv). In some cases the link between the CEF KPIs and
the programme results is straightforward. For example, thanks to the commissioning of the
strategic Klaipeda-Kursenai Gas Transmission Pipeline which got CEF funding for works in
the order of EUR 27.6 million, since 2015 Lithuania fulfils since 2015 the N-1 standard in
supply with natural gas providing access to an additional source of natural gas (LNG)
(indicator 4.3 b (v).
Other indicators cannot be easily applied to monitor the programme, as they ask for more in-
depth analysis and data series to appreciate the real impact of a given cross-border connection
(either gas or electricity) on energy markets, which does not only depend on the additional
link established between two or more countries and also not solely on the CEF support, but
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rather is a result of additional regulatory and non-regulatory instruments working in
conjunction.
To have proper monitoring tools in hand, a more suitable set of KPIs for CEF Energy could
be developed. For this reason, physical and technical indicators, in particular showing
additional transmission capacity (e.g. the grid transfer capacity of the project at the border of
that Member State with one or several other Member States) could be elaborated.
The indicators against which the achievement of the specific objectives of the
Telecommunications
Guidelines is to be measured are considered useful to monitor the
deployment of the DSIs across Europe, but they don't provide a target value.
The progress towards the achievement of the objectives of CEF Telecommunications and the
performance of the DSIs are currently tracked within the CEF Dashboard
156
. However, data
only covers the core service platform of almost all of DSIs (except for Europeana and Safer
Internet).
The percentage of citizens and businesses using DSIs and the availability of the DSIs cross-
border are not monitored. Data collection should rely on Member States, however this is
hindered by the lack of obligation falling on the Member States to provide this information
and the fact that not all Member States are willing to share it. As reported by implementing
stakeholders, DIGIT is analysing the best tools to collect and present the information. The
analysis of the case studies revealed that specific indicators on the use of DSIs have been
defined at action level (e.g. as regards eID the number of public and private service providers
linked to the node and the number of citizens using the node in & out), however they are not
currently publicly presented.
6.4. Efficiency
This section aims to consider the outputs and impacts of CEF in relation to the inputs of the
programme such as budget and resources. There are two main aspects to the analysis, firstly
whether the realisation of the CEF goals is being undertaken in an efficient manner and
secondly examining whether the processes in place for implementing and managing CEF are
operating efficiently
Main findings
- In the transport and energy sectors, the mechanism for selecting grants efficiently discards
projects unable to demonstrate the need for financial assistance. In energy, the cross border
cross allocation decision provides a sound rationale to establish the need for public funding in
grants for works. While for transport the assessment of the funding gap based on CBA
methodologies has improved over the period, it could still be reinforced. Efficient budget
planning goes in line with the increasing amount of mature PCIs in the energy PCI list.
- In the telecommunications sector, the budget cuts resulted in important changes in the logic
of intervention and triggered reductions in the scope of the Programme. In the first years of
the implementation, this reduction in scope combined with the possibility to shift budget from
undersubscribed DSIs to other DSIs (for generic services), allowed the available budget to
156
https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/Monitoring+dashboard.
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partly address the needs of the Member States that had the capacity in place. Given the limited
envelope allocated to the broadband area vis-à-vis the size of the challenge, it was necessary
to implement it in an innovative way, generating an important leverage effect, in order to
make an impact on the market.
- The CEF provision of more suitable co-funding rates in comparison with predecessor
programmes allows for CEF's progress in achieving its objectives.
- The flexible nature of budget programming over time has allowed for efficient expenditure
in each sector. In the Telecommunication sector, however, the adoption of annual work
programmes does not enable the planning of long-term financing for the actions and creates
administrative burden as regards the management of the programme.
- The management and governance of CEF is proving to be efficient and well-functioning
with INEA playing a key role in this regard. Moreover, the delegation of the management of
grants to INEA allows for economies of scale and limits administrative costs for the
Commission and Member States. Simplifications have been implemented to INEA processes
compared to its forerunner, the TEN-T Executive Agency. In the Telecommunication sector,
there is room for improving coordination among the DSIs, given the number of bodies taking
part in the management and implementation of the programme. A separate comprehensive
evaluation of INEA is currently being undertaken.
- From the beneficiaries’ point of view, administrative costs related to the application and
grant agreement requirements, are not imposing a burden on project promoters and are
deemed to be overall proportionate to the financial support provided. However, legal and
administrative requirements for approval and implementation of actions were found to impose
disproportionate costs on smaller actions for which simplified forms of support could be
better adapted (this was particularly true for the Telecom sector where the average grant size
was just EUR 1 million)
- Cooperation between Commission Services and Member State authorities is positive, going
beyond the formal legal requirements of the CEF Committee.
- For a policy-driven instrument with specific sectoral objectives and considering that CEF
addresses complex projects with a cross-border or an EU-wide interoperability dimension,
direct management has ensured high absorption and sound budgetary execution.
- In the transport sector, the possibility to quickly re-use credits not consumed by certain
actions for the benefit of other actions is critical to encouraging efficient implementation
amongst beneficiaries.
6.4.1. Contributing to the achievement of the CEF objectives in an
efficient manner
During the first 3 years of CEF implementation, EUR 23.1 billion of grants were directed to
projects. The main share of funding is currently allocated to transport actions under Funding
Objective 1 addressing bottlenecks and cross-border missing links either on the TEN-T Core
Network Corridors or along TEN-T Core Network sections (around 79% or EUR 16.9
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billion
157
). In the case of energy, EUR 1.6 billion funding has concentrated on security of
supply, ending energy isolation, elimination of bottlenecks, with an increasing commitment in
supporting PCIs having technological innovation. In telecommunications, funding focused on
deployment of DSIs and technical assistance activities in support of broadband projects in the
order of EUR 0.3 billion.
Almost all of the survey respondents (95%) expressed the opinion that the limited EU budget
poses a challenge to the implementation of the CEF Programme. As discussed previously,
CEF calls have been significantly oversubscribed and therefore illustrate that the available
budget is limiting the achievement of the CEF's objectives. Nevertheless, CEF has been
efficient in providing funding for tackling bottlenecks, ensuring cross-border connectivity and
enhancing interoperability. 71 % of respondents to the general survey were generally positive
about the efficiency of the allocation of funds in Work Programmes and per priority.
The efficient implementation of CEF is aided by the capacity to give more appropriate co-
funding rates when compared to its predecessor programmes. Different co-funding rates for
different priorities allow for more intensive EU support to projects with the highest EU added
value such as cross-border projects. At the same time the co-funding rates have been designed
and applied in a flexible manner, in order to prevent overfunding in the programme.
The front-loading approach for budgetary spending in Transport was designed to provide for
continuity with the former TEN-T programme which included some of the same infrastructure
projects. The approach also responded to the economic downturn, by contributing to job
creation. The back-loading approach for spending in Energy is due to the maturity of projects
to be reached in the second phase of the programme.
All energy projects and the vast majority of transport projects are multi-annual by nature and
the calls are designed accordingly. This approach was initiated under the previous financing
period 2007 – 2013 and along with the pre-identified list of projects provides legal certainty to
project promoters. For a small number of transport projects, an annual programme is more
appropriate.
In the telecom area, unlike the two other sectors, the programme has been implemented
exclusively through annual work programmes. While this has helped ensure flexibility, annual
programming can also be considered a source of uncertainty for potential beneficiaries as well
as of administrative burden from a management standpoint.
Transport
Heavy calls oversubscription has enabled a very competitive process based on the relevance,
maturity and quality of applications. Only the best proposals demonstrating the highest EU
added-value are retained, while the importance and quality of the Cost-Benefit-Analysis
(CBA) submitted by applicants has improved call after call. This strict selection also allows
not to dilute the EU support and to keep co-financing rates sufficiently high to have a real
impact and to reflect better the policy priorities
158
.
157
This amount refers to the call priorities: Corridors of the Core Network and Other Sections of the Core Network. However, other priorities
from funding objective 1 (ERTMS for instance) and from other funding objectives (Multimodal, Motorways of the Sea) may also contribute
to the Core Network.
158
During the 2007-2013 period, the co-financing rates did not trigger the investment needed in TEN-T as they did not reflect the risk and
complexity of projects as well as their embedded financing gap. For example, the 2011 IA stated that in case of cross-border projects “which
have proven most complex to implement, the long duration of projects, spanning several financial frameworks, renders an initial co-financing
rate of 30% to be reduced, in actual terms, in average to 21%, and in some cases to even 5% to 10%; while projects alleviating bottlenecks
have not been given any special rate, benefitting of the general co-funding level of 20%”.
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The co-funding rate of the Cohesion envelope is that of the Cohesion Fund, i.e. up to 85%.
This reflects the lower financial capacity of Cohesion Member States to invest in their
transport infrastructure. The approach consisting of reserved national allocations per Cohesion
Member States in the first 3 years of the programme has worked well in accelerating
investment in such Member States, in coordination with ESIF funds
As previously mentioned, programme support actions have been instrumental in achieving the
transport policy aims, especially those aimed at providing technical assistance to Cohesion
Member State administrations.
Efficiency was reinforced by the ability to quickly re-use money underspent by certain actions
for financing other actions through the direct management of the programme. In practice, the
monitoring done by INEA allows to identify delays and/or cost reduction (for instance
resulting from the tendering processes) and to amend the grant agreements in a very
responsive manner in order to free the corresponding budgetary commitments and re-inject
them into new calls. In 2016, more than EUR 600 million were re-injected thanks to this pro-
active grant management or "use it or lose" principle.
Energy
Consistently with the 2011 IA, CEF Energy has overcome a number of problems that had
been previously identified, such as the inadequacy of co-funding rates of the TEN-E
Programme. The funding gap rule is extensively applied by the European Commission in its
selection decision with a sound rationale, (i.e. on the basis of the individual cost benefit
analysis, business plans and cross border cost allocation decision for each project application
for grants for works), what makes the process of funding allocation efficient. The funding
rates applied so far in the programme for grants for works vary between 20% and 75% (the
maximum funding rate), with an average funding rate of 47.1%, compared to an average
funding rate of 10% in the predecessor programme.
In relative terms, a comparison of CEF’s funding rates with ESIF’s could be carried out as a
benchmarking exercise
159
. In this case, comparing the CEF’s average funding rate with the
Cohesion Fund (84%-85%) and ESIF’s maximum ones (75%), CEF’s support can be
considered adequate to its objectives.
Moreover, the programme's ability to discard projects which do not show evidence of
commercial non-viability has already been mentioned. Consequently not all the project
applications for CEF grants for works were successful. Across 3 years of CEF Calls, 14 out of
33 CEF applications for grants for works were rejected as the project application didn't show
the need for CEF financial assistance or need for public funding. This discretion of CEF is
important in ensuring value for money and shows that CEF co-financing is only awarded
when there is a proven need of financial assistance.
159
Source: PwC report.
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Telecommunications
In contrast with the other two sectors, the programme has been implemented exclusively
through
annual work programmes
articulated in different calls for proposals and tender.
Their adoption presents some advantages in terms of flexibility, however it does not facilitate
long-term planning and creates burden at central level. The document has to be revised and
approved by the different DSI owners, and the whole process, which has to be repeated
annually, requires almost one year. Additionally, strategic stakeholders highlighted that
annual work programmes create political and legal uncertainties; i.e. it is not possible to know
in advance whether the DSIs will be supported in the following year and if the budget will be
adequate to the activities planned. The necessity of long-term financing is particularly
important regarding the core service platforms. A possible solution to address the shortcoming
stemming from the exclusive use of annual work programmes could be to have multi annual
work programmes that would allow yearly amendments if further adjustments are needed.
Overall the application process is deemed efficient by the beneficiaries: over 75% of
respondents to the technical survey confirmed this statement as well as most of the
operational stakeholders interviewed. Specifically, about 60% of interviewed stakeholders
reported no issues during the preparation of the application form. This may be explained by
the fact that the actions are related to deployment of existing DSIs and the process is thus not
particularly complex. However evidence stemming from the case studies suggests that the
timing of some calls was not always optimal
160
.
Regarding the co-funding rates currently applied (i.e. from 50% up to 75%
161
) they have been
deemed adequate to the actions supported by a vast majority of stakeholders (80%).
Moreover, they can be considered overall in line with the co-financing granted for similar
projects across EU. A comparison between the co-financing rates applied under CEF
Telecommunications and those applied by the Structural funds under TO 2 “Enhancing access
to and use and quality of information and communication technologies” reveals that almost
85%
162
of Operational Programmes across Europe granted to the Thematic objective 2 a co-
financing rate higher than 50% (which is the minimum applied in calls for proposals for the
CEF Telecommunications programme), thus confirming the adequacy of the current co-
financing rates
163
.
As regards the relationship between the budget dedicated to broadband projects under CEF
and the results achieved so far, it can be argued that the limited funds available are being used
very efficiently, namely for project preparation, demand stimulation and for demonstration
projects, which are all expected to generate more deployment on the medium term. More
importantly, a significant leverage effect is expected under the CEBF, maximising the impact
of the CEF funding on actual broadband deployments as well as creating the confidence of the
financial markets in future proof connectivity projects.
6.4.2. Implementing and Managing CEF efficiently
160
Calls for proposals for specific DSIs were launched when technical standards were not ready (e.g. for eInvoicing and the first call for
proposals for generic services for eID).
161
As established under Article 10 of the CEF Regulation.
162
PwC elaboration on data provided by Dg REGIO http://ec.europa.eu/regional_policy/en/policy/evaluations/data-for-research/
163
The limits of this comparison have to be considered. The Thematic objective covers many different activities from the deployment of
broadband networks to the improvement of accessibility, use and quality of ICT through digital literacy, e-learning, e-inclusion, e-skills and
entrepreneurial skills. Additionally, the co-financing rate of the Operational Programmes depends also on the category of the regions (e.g.
more
or less developed regions).
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The targeted delivery of CEF under direct management by the parent DGs and their executive
agency INEA has proved efficient for the implementation of the programme. While DG
MOVE worked with INEA's forerunner, the TEN-T Executive Agency on TEN-T grants
during the 2007-2013 period, INEA now manages the grant component for all sectors
164
. The
three parent DGs of CEF work together cooperatively and are all members of the INEA
Steering Committee. As stated previously, a mid-term evaluation of INEA is being
undertaken separately.
The advantages of direct management for CEF
As CEF is an instrument with specific sectoral objectives relating to the development
of the Trans-European networks, direct management allows for a stronger policy
steering as regards the priorities, the selection of projects and their implementation;
As most CEF supported projects have a cross-border or an EU-wide interoperability
dimension, direct management allows for exerting an independent coordination at EU
level. Such coordination is exerted by the Commission (CEF DGs and INEA
interacting directly with the project promoters);
For transport and energy, large infrastructure projects entail complex planning,
permitting, environmental and procurement procedures with recurrent issues across
the EU. Direct management has allowed project management expertise at INEA to be
built up allowing for the monitoring of projects and the handling of these matters in an
efficient and consistent manner while ensuring a close control as regards compliance
with EU standards;
For telecommunications, most supported actions should demonstrate their connectivity
and interoperability with the Digital Service Infrastructure platforms set at EU level.
Direct management allows for coordination and consistent technical validation
procedures.
For the three sectors, direct management allows for a fast delivery of EU support (see
INEA's KPIs below). As an example, in transport, the EUR 11 billion Cohesion
envelope under direct management through CEF was entirely allocated by mid-2017
and all corresponding grant agreements are expected to be signed before end 2017.
The "use it or lose it" principal, a key feature of direct management, helps Member
States prioritise as well as to adhere to commitments. Nevertheless, the possibility to
recycle the commitments in cases where projects are not performing as foreseen
increases the efficiency of CEF.
Project promoters and Member States are positively engaged with INEA with the application
and selection process managed by INEA generally perceived as efficient with 76% of
respondents to the technical survey agreeing so. INEA is also considered to be very
responsive to the needs of Member States and project promoters. Of all submitted proposals
between 2014 and 2016, 97% were deemed admissible, and 94% were deemed eligible for
funding, demonstrating a high level of understanding for the application process amongst
project promoters.
164 A cost benefit analysis of INEA's new additional tasks was undertaken in 2013: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52013SC0493%2801%29
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There are many benefits to using an Executive Agency for the implementation of CEF. Gains
in efficiency have been introduced through the externalised management of the grant cycle via
a unified system (discussed further in Annex 8). In addition, annual Action Status Reports
from beneficiaries allow for closer monitoring of grants. Furthermore, there is increased cost
effectiveness given the ratio between human resources employed and the amounts granted.
INEA also acts as a central contact point for beneficiaries.
INEA has built up a strong team of project managers able to follow technically and financially
the actions supported by CEF. As illustrated in the table below, in 2016, INEA's Key
Performance Indicators were at an outstanding level, continuing the positive trends from
previous years.
Table 4: Key Performance Indicators for INEA
Indicator
Rate of execution of payment appropriation
Time to inform applicants after call closure
Time to grant after call closure
Net time to pay for pre-financing
Net time to pay for interim/final payments
2016 Result
100%
141 days (better than target of 184 days)
249 days (better than target of 276 days)
11 days (limit 30 days)
51 days (limit 90 days)
The quality of projects – completeness and clarity of the proposal, description of the planned
activities, coherence between objectives, activities and planned resources, soundness of the
project management process – is one of the main criteria for selecting the projects under CEF
and is a key to the success of the programme, with additional sector-specific criteria, and
notably referring to an assessment of the need for public funding. The competitive selection,
process of projects run by INEA and illustrated in the figure below has proved effective and
has been crucial for the successful implementation of the programme. With the competitive
bidding through calls for proposals, maximum incentives are created for project promoters to
prepare and implement effectively high quality projects.
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Figure 11 : A competitive selection process
Requested/Recommended Funding and number of proposals per sector
CEF Transport (€ billion)
70
60
50
40
30
20
10
0
52.5
(1,419)
37.5
(920)
22.4
(623)
21.3
(604)
5
4
3
2
1
0
Eligible
proposals
Recommended
proposals
(external
evaluation)
Selected
proposals
(internal
evaluation)
Signed Grant
Agreements*
Eligible
proposals
Recommended
proposals
(external
evaluation)
Selected
proposals
(internal
evaluation)
Signed Grant
Agreements*
3.6
(151)
2.3
(102)
1.7
(96)
1.6
(93)
CEF Energy (€ billion)
CEF Synergy (€ million)
50
45
40
35
30
25
20
15
10
5
0
250
34.2
(9)
23.9
(7)
22.1
(7)
22.1
(7)
200
150
100
50
0
Eligible
proposals
Recommended
proposals
(external
evaluation)
Selected
proposals
(internal
evaluation)
Signed Grant
Agreements*
CEF Telecom (€ million)
158.4
(274)
132.4
(225)
130.6
(224)
129.
(221)
Eligible
proposals
Recommended
proposals
(external
evaluation)
Selected
proposals
(internal
evaluation)
Signed Grant
Agreements*
*Includes grant agreements under preparation
Stakeholders have generally found the frequency and timing of CEF calls for proposals to be
efficient with 71% of respondents to the technical survey in agreement. Furthermore, the
majority of stakeholders (67% replied that this is at least to some extent the case, with 22%
stating they did not know) also agreed that the
common management of the three sectors
under CEF is conducive to economies of scale for the Commission
(in terms of project
appraisal and management), although frequently pointed out in the answers that it is important
to cover each sector specific needs. As highlighted in the 2011 IA, promoting synergies
among sectors was another reason of creating one-single programme approach for the three
sectors. From interviews, it was generally recognised that at implementing level potential
synergies have been addressed as a result of combining three different sectors managed by
one single structure, this is perceived as a factor that has led to reduce the managing costs of
the programme for the Commission and Member States.
A recent report for the European Parliament
165
demonstrated that the cost of the
administration of CEF by INEA, which covers 90% of the aggregate spending plan of the
programme, is low when compared with other EU programmes. While comparison with the
165
"The cost of each euro from the EU budget to implement EU policies in different Member States: Mastering implementation costs of
European grants", European Parliament, Oct. 2016.
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other programmes is difficult, this study highlighted that the cost to create EUR 100 of value
is estimated to be just EUR 0.05. Furthermore, the administrative costs of CEF are obliged by
the Art.5 point 2(b) of the CEF Regulation (EU) 1316/2013 to be capped up to 1% of the
whole financial envelope.
INEA has implemented various administrative
simplification
measures largely based on the
TEN-T Executive Agency's experiences during the 2007 and 2013 programming period.
These measures include the introduction of electronic communication tools for beneficiaries
as well as the replacement of grant decisions by grant agreements which require less
involvement from the Commission and the Member States. The use of e-communication tools
to manage the current programme goes that far that, as one interviewed project promoter in
the field of energy put it – "the
only paper-based procedure is the grant agreement".
Even
though it was not possible to arrive at a meaningful quantification of the cost savings for the
involved authorities in Member States, statements from experts (several national authorities
and one TSO representative) confirmed that the new procedural set up for CEF as of 2013
reduced the regulatory burden for Member States.
Article 22 of the CEF Regulation stipulates that Member States shall undertake the technical
monitoring and financial control of the actions in close cooperation with the Commission and
shall certify the expenditures incurred in the projects. This is efficiently implemented in the
context of the reporting exercise for CEF beneficiaries to INEA. A good example is the
reporting of energy project promoters to ACER and to authorities competent for permit
granting which in turn report to the TEN-E Regional Groups.
Project promoters are obliged to submit a considerable amount of information as part of the
proposal evaluation process. Mixed views were received during the consultation (technical
survey) on the administrative burden with 48% finding it efficient, but 37% considering it to
be somewhat to completely inefficient. This is most likely for smaller projects where this
amount of information can be perceived as onerous but interviewed stakeholders generally
viewed the process as fair and proportional to the level of support on offer.
There is evidence that CEF properly supported the main project promoters through technical
assistance in order to manage and implement projects as best as possible. This feedback can
be linked to the response received in the general survey about the technical assistance which
was judged “very important” by 44% of respondents and “important” by 29%.
Finally, the CEF Committee as set out in Article 25 meets regularly and contributes positively
to the implementation of the programme by providing valuable input to the Work
Programmes and by endorsing the selected proposals.
Transport
DG MOVE has engaged significantly with Member States and project promoters in order to
secure the efficient implementation of CEF in the transport sector. The majority of
stakeholders interviewed highlighted the proactive approach of DG MOVE in organising a
series of practical workshops in Member States for the various calls as a very positive
initiative.
Cohesion Member States have in particular benefited from the technical assistance provided
through CEF Programme Support Actions in the transport sector, as well as technical
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assistance support from Cohesion policy programmes. Given the complexity of large
infrastructure projects, technical assistance including in the form of the expertise of JASPERS
has permitted Member States to develop and strengthen their administrative capacity in the
form of support for developing a pipeline of quality and mature projects. This assistance has
improved the technical capabilities of promoters in those Member States and led to proposals
being submitted to INEA of sufficient quality.
The step-by-step approach whereby there have been several multiannual work programmes
and related calls in order to leave time to Member States to prepare the most difficult projects
has ensured that Member States have been able to have a sufficient number of mature and
high quality projects eligible for selection. Additionally, the Commission together with the
EIB (more recently through their EIAH) have promoted the use of financial instruments with
transport representing 15.9% of the 270 project-specific requests to the EIAH by the end of
January 2017.
Some stakeholders called for additional evaluation criteria to more clearly identify the added
value of projects, to be used as selection criteria. These criteria could be identified on the base
of the key findings analysis of “wider elements” that the European Coordinators are currently
performing for the drafting of the next Work Plans of the CNCs. They also will serve as a
basis for identifying the new pre-identified sections and mainly refer to:
Impact on jobs and growth composed of (a) total direct, indirect and induced jobs, and (b)
induced growth (total value in M EUR);
Mitigation of climate change (curbing GHG emissions), this impact should be included in
the cost benefit analysis;
Adaptation to Climate change.
166
As an additional point, some stakeholders claimed that indirect costs should be taken into
consideration as well, as they represent a relevant share of the total cost. The former 7% quota
of reimbursement foreseen in TEN-T 2007 2013 was not entirely sufficient. Nonetheless
having removed it represents a major backwards step in the view of some stakeholders.
Energy
There is appreciation of CEF Energy’s operations, about INEA’s efficiency and the capacity
of the entire governance mechanism (including the Commission DG) to create awareness of
the available opportunities. Besides, the technical survey also provides evidence that the
application and selection process managed by INEA is well handled, with a 23% of
respondents agreeing to “very efficiently" and 50% respond “somewhat efficiently” (out of 30
respondents).
A distinction should be made between applications for grants for studies, and applications for
grants for works. In order to be considered for grants for works, applications for CEF funding
must submit a project specific cost benefit analysis (CBA) showing proof of significant
externalities, proof of not being commercially viable (according to business plans and other
investors' assessment) and a valid CBCA decision
167
.
166
167
A proper methodology has been developed by the Commission (http://ec.europa.eu/clima/publications/docs/major_projects_en.pdf)
This latter is not applicable for smart-grids PCIs applying for CEF
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Some stakeholders
168
referred to the CBCA process itself as burdensome and/or prolonging
the application process (e.g. ENTSO-E in their position paper). However it is very interesting
to add that out of the eleven experts that discussed this question in greater detail only two felt
that the CBCA requirements are disproportionate. All the others argued along the line that
"while
the CBCA requirements are burdensome, the CBCA is also the best tool in the PCI
process to oblige Member States to go beyond national thinking"
(a national authority).
Around a quarter of those interviewed on the issue also felt that there are no concerns as
regards the administrative burden for project promoters. Whilst the present evaluation does
not contain a quantitative assessment of the costs of complying with the CBCA criterion
169
,
the issue can be discussed on a qualitative basis. The requirement to have a decision on
CBCA when applying for CEF can lead to long application times, and to costs related to the
provision of proof and documents; however there is an element of proportionality in that a
CBCA is only necessary for applications for grants for work, not for grants for studies where
the amounts at stake are generally significantly smaller and the implementation times shorter.
Secondly, grants for works have ranged so far from approximately EUR 30 to 295 million so
that the costs of the process for the promoter can be considered proportionate if one factors in
that the CBCA decision is the main element of the CEF selection and approval process for
grants for works, and that this process ensures that only projects delivering high European
added value which cannot be financed by the market or where regulatory measures are
insufficient are selected (by obliging first all actors concerned to agree on investment costs
and benefits). To conclude, as CBCA is one of the pre-conditions to ensure that CEF funding
is well spent on projects which are not commercially viable but which provide significant
societal benefits, these costs can be considered justified.
The alignment of CBA approaches for gas and electricity sectors at a European level, (as by
the TEN-E Regulation art. 11), is a novelty applicable to CEF with respect to the predecessor
programme, and it is seen by stakeholders as key to facilitate CBCA decisions, bilateral
agreements and applications for CEF support, although stakeholders also pointed out some
shortcomings and the need to improve the CBA and CBCA process
170
. This is currently being
assessed in the update and improvement of the CBA methodology as envisaged by the TEN-E
Regulation.
Telecommunications
The implementation and management of CEF Telecommunications differs from the other
sectors, as it is sustained by a very complex network of bodies
171
. For instance, five different
DGs have been identified as DSI owners and are involved,
inter alia,
in the co-management
of the budget and in the implementation of the programme. This fragmentation together with a
sharing of responsibilities within DG CNECT makes coordination a challenging task. This
role falls over a currently undersized programme management office. Efforts to enhance
168
5 submissions to the technical survey out of the 7 that rated the administrative cost performance of CEF energy as very poor and that
submitted free comments on this issue).
169
The evidence that was collected as part of the underlying study did not allow for a full quantification of CBCA costs.
170
Prior to the adoption of the TEN-E Regulation 347/2013, different methodological issues and different analytical approaches in cross
border projects, potentially leading to divergent socio-economic evaluation, slowed down bilateral agreements in cross border project. The
TEN-E Regulation establishes for the first time a harmonised EU wide methodology for the treatment of cost benefit analysis for the gas and
electricity projects. The ongoing process of update and improvement of CBA methodology by ENTSO-E and ENTSOg as per Article 11 of
the TEN E Regulation is expected to further improve procedural aspects linked to CBA and CBCAs (as highlighted by ACER in an official
communication) as well as to improve issues such as assessment of projects benefits (as highlighted by ENTSOe in their response to the
public consultation ), in both gas and electricity sectors
171
DG CNECT, DSI owners in different EC services, CEF Telecommunications Committee, CEF Telecommunications Expert Group,
National Contact Points, INEA, operational boards for each DSI, expert group per DSI, Architecture Management Board, CEF Project &
Architecture Office, Stakeholders Management Office).
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cooperation and alignment among the different DSIs are put in place, like for instance
organisation of workshops involving the different DSIs. However, many strategic
stakeholders highlighted the need for enhancing coordination among DSIs.
All the Member States' representatives consulted considered the envisaged governance
structure as effective in facilitating the cooperation among the Commission and Member
States, and positive feedback has been received by the majority of operational stakeholders
interviewed regarding the relationship with INEA during the application and evaluation
process. The DSI expert groups are effectively providing relevant support in the
implementation of the programme. The effectiveness of the governance structure in the
building blocks is demonstrated by the positive results achieved in their reuse. Coordination
among the building blocks is ensured by the CEF Project Architecture Office.
A vast majority of stakeholders (80%), beneficiaries and operational stakeholders in
particular, have highlighted the significant burden related to the requirement to have the
actions and costs approved by Member States
172
. These requirements represent a
disproportionate burden for actions in the DSIs area, which are usually characterised by a
limited size compared to the other CEF sectors. Furthermore, operational stakeholders (60%)
consider that a simplification of bureaucracy would facilitate private sector and SMEs’
participation in the programme. The lump-sum mechanism, used in the first year of
implementation to support actions for generic services for eID and eSignature, has enabled to
reduce the administrative burden, as reported by interviewed beneficiaries.
Due to the early implementation phase of CEF Broadband, at this stage it is not possible to
quantify the administrative costs of the programme versus the results achieved.
6.5. EU Added Value
This section aims to evaluate the additional impact that CEF has achieved compared to the
impact of interventions which could be undertaken by Member States alone.
Main findings
- Considering the sectors’ extensive needs for funding and the results achieved so far, CEF is
bringing a significant
EU added-value,
as compared to what could be achieved by Member
States alone.
- In terms of
design,
the added value resides in the fact that CEF focuses on EU integration
projects, notably through their pre-identification.
- CEF contributes to
accelerate the funding and realisation of cross-border connections
and interoperable services
that may not have been financed without it.
- EU level action (including regulatory cooperation) allows CEF to
overcome limitations in
information and cooperation
among Member States which can hamper such complex but
crucial projects.
172
In line with the requirements of articles 9 and 22 of the CEF Regulation, national contact points are involved in the approval of proposals
to be submitted (art. 9) and in the technical monitoring and financial control of actions (art. 22).
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The Reflection Paper on the Future of EU Finances
173
of 28 June 2017 provides reference
criteria to assess the added-value of EU programmes. Of these criteria, it is clear from the
analysis throughout this evaluation that CEF is particularly relevant for the 'Treaty objectives
and obligations', 'public goods with a European dimension' and 'benefits of EU integration'.
Furthermore, the Reflection paper specifies that:
"
There is […] a clear value added when action at European level goes further than national
efforts could. This includes […], transnational infrastructure, such as energy interconnectors
(e.g. between Malta and Italy), digital networks, research infrastructure or tunnels (e.g. the
Brenner Base railway tunnel in the Alps between Austria and Italy) benefit citizens and
companies across the EU."
The CEF 2011 IA highlighted that, while the market can and should deliver the bulk of the
necessary investments, there is a need to address some imperfections in the market in order to
remove bottlenecks and ensure adequate cross-border connections. Cross-border projects
typically face the following issues: multiple decision makers, misalignment of objectives, as
well as technical, administrative and regulatory barriers – and as a result of this - carry higher
financial risks. These issues relate to projects on which private investors are not willing to
focus due to their lower direct economic effect compared to purely national projects, and
therefore not likely to be implemented without being driven forward by means of EU level
action.
The interviews provided in all sectors and the portfolio analysis, complemented by the
analysis of other EU and Member States programmes, confirm that CEF is providing EU
added value by addressing the identified market failures in the three sectors, and that in many
cases the projects would have not been able to secure other forms of public and private
funding or financing. In the technical survey, 74% of respondents find the overall EU added
value of the CEF programme somewhat or substantially higher than what could be achieved
by Member States alone or by the market (51% in the general survey).
Transport
CEF provides significant EU added value by funding projects (particularly cross-border
projects) that might otherwise not have been completed. The scale of the problems being
tackled specifically require EU action since they are by nature EU-dimensional, and can be
more efficiently resolved at Union level, leading to overall greater benefits, more accelerated
implementation and reduction of costs if Member States act together. CEF Transport has
made a strategic view on infrastructure planning at European level possible. The programme
stimulates cooperation between project promoters on both sides of the border, assisting in
setting up common implementation schedules and common technical aspects. CEF brings
visibility to local or regional projects which are also showcases of the EU on the ground and
demonstrate a clear tangible benefit of EU policy in action.
One study
174
shows that the cost of non-completion of the TEN-T Core Network to the full,
range between EUR 2,940-3,380 billion losses of accumulated GDP, and between EUR 10.4-
11.9 million job-years not created. Public budgets are still under considerable fiscal
consolidation, while the implementation of CEF/TEN-T in 2014-2016 show that financing
173
174
Reflection Paper on the Future of EU Finances (COM(2017) 358 of 28 June 2017)
https://ec.europa.eu/transport/sites/transport/files/themes/infrastructure/studies/doc/2015-06-fraunhofer-cost-of-non-completion-of-the-
ten-t.pdf
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support from Member States and private sector continues to be crucial but insufficient for
projects with European dimension.
Furthermore, the European Coordinators, appointed specifically to animate the Core Network
Corridor, closely work with Member States and all relevant stakeholders to identify the most
critical issues and the most relevant projects for the completion of the corridors. They produce
a work plan for each corridor which includes an analysis and a list of the most important
projects, sufficiently mature and delivering added value. This work to develop the TEN-T
project pipeline directly feeds in the CEF calls for proposals and encourages the selection of
high quality projects.
CEF has encouraged the building of a transparent, credible and stable pipeline of projects,
which is important for the broadening the sources of funding (private and public investors)
and for concentrating resources on projects where investment is most needed. The annex I of
the CEF Regulation which comprises pre-identified priorities and projects resulting from the
EU co-decision process provides legal certainty, and allows for planning at EU level, while
promoting the horizontal priorities and specific sections of the network/projects. In addition,
CEF complements and supports priorities at regional or national level.
CEF has been identified as having a significant EU added value by stakeholders in the
transport sector. It is appreciated for its capacity to facilitate the development of cross-border
infrastructure and cooperation, in particular by infrastructure operators in the general survey.
Representatives of national authorities welcomed that CEF enables strategic infrastructure
planning at a European level. CEF is seen as promoting transnational cooperation and
enabling large investment decisions, which would have otherwise not been feasible, by
bringing together project promoters, national regulatory authorities, governments etc.
Furthermore, representatives of both the private and public sector appreciated CEF as a more
efficient financial instrument compared to national or regional programmes, and as bringing
greater visibility to smaller projects.
Energy
CEF Energy is seen by the stakeholders as a key instrument supporting transnational
cooperation and generating economies of scale and playing a key role in supporting cross-
border energy infrastructure. Nearly a 70% of interviewees recognised the added-value of
CEF Energy. Besides, according to the perception of 40% of stakeholders interviewed, CEF
Energy is seen as an important instrument supporting transnational cooperation (this extends
beyond the CEF Regulation and also includes the provisions in the TEN-E Regulation),
recognizing that grants are the key advantage compared with other support schemes,
especially in filling the market failure (projects not commercially viable) and accelerating the
implementation of interconnection projects, thus solving the most commonly challenges for
energy infrastructure development, namely obstacles and risks of delays with cross-border
projects.
Several experts stated that CEF – with its unique focus on supranational priorities - provides
funding for which there would otherwise not necessarily be alternatives in national budgets.
Interview partners in particular from Eastern Member States also often described the projects
funded under security of supply as a common EU effort where all Member States share in
solidarity the costs, for example on the Baltic States resulting from the synchronization with
the Western grid.
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In addition most of the targeted stakeholders (24 out of 30 or 80%) rated the overall added-
value of CEF as a somewhat higher or substantially higher because is:
A faster and more efficient instrument compared to the national/regional programmes for
trans-European infrastructure networks and Smart and sustainable Economic growth;
A strong catalyst to bring together project promoters, National Regulatory Authorities and
Government ministry representatives to solve issues to enable cross-border infrastructure
projects to be realised;
A support for cross-border projects whose commercial viability is not immediately
perceived or demonstrated.
There is unanimous emphasis on grants as making the difference in promoting the cooperation
between countries to develop energy interconnection projects of common interest that
otherwise would not happen. Several stakeholders interviewed (project promoters and
national authorities) also explained the usefulness of EU grants in order to make cross-border
projects happen that are located in countries with smaller population sizes or more remote
location where tariffs would not be able to cover the investment needs. The case of
Balticconnector is a key example of one project that would not have been funded in a national
context. In contrast, for the CEF DI, the analysis provided in the effectiveness section shows
that other financing sources are available to project promoters where they can rely on either
suitable regulated remuneration mechanisms or project revenues.
Telecommunications
CEF Telecommunications has facilitated and helped coordinate efforts at Member State level
for the development of standards, and the deployment and use of interoperable, cross-border
DSIs. In the case of some DSIs, like EESSI or ODR, their deployment is required by EU
Regulations and Directives, and CEF Telecommunications provided an essential incentive for
speeding up this process and ensure compliance. Other CEF-supported DSIs like
Cybersecurity enable mechanisms to be used by Member States on a voluntary basis, by
promoting actions that without CEF would have not been carried out. DSIs like eDelivery
allow public administrations to exchange electronic data and documents with other public
administrations, businesses and citizens, in an interoperable, secure, reliable and trusted way.
Doing so helps save taxpayers' money and reduce administrative burden. 63% and 84% of
respondents to the technical survey declared that they expect the programme to contribute
fully or to a large extent to, respectively, mobilising investments in TEN for
telecommunications and bridging interconnection gaps in the telecommunications sector
compared to what could have been achieved without CEF. Regarding the funding provided
under CEF, interviewed stakeholders largely agreed that the actions would have not been
carried out without CEF contribution. In the same vein, stakeholder consultation results
suggest that, notably due to budget constraints at Member State level, DSI deployment would
have been either significantly delayed or abandoned in the absence of CEF funding.
Example Box: Core Service Platform for Online Dispute Resolution Digital Service Infrastructure (ODR)
ODR DSI aims to enable European citizens and business to resolve online disputes related to cross-border
purchases. The CSP was launched at the beginning of 2016.
This DSI responds to Regulation No 524/2013 on consumer ODR that sets the rules for the establishment of an
EU-wide ODR platform for out-of-court disputes between consumers and traders. ODR is also supporting the
compliance with Directive 2013/11/EU on consumer Alternative Dispute Resolution. The solution is based on an
online platform at EU level that enables consumers to fill in the online complaint form in any EU official
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language and submit it. The complaint is then forwarded to the relevant trader who proposes a national
alternative dispute resolution (ADR) entity to the consumer. Once both parties agreed on the ADR to handle the
dispute, the platform transfers automatically the complaint to the ADR that will reach an outcome in 90 days.
The ODR platform is currently using the eID (for identification and registration procedures) and eTranslation
(for multilingual services to all users) building blocks and is committed to analyse the reuse of eDelivery and
eSignature building blocks respectively. The activities funded under CEF played a crucial role in ensuring the
deployment of the platform. Overall, since February 2016, approximately 27,000 complaints have been
registered on the platform.
All interviewed stakeholders and over 96% of respondents to the technical survey agreed that
CEF Telecommunications has fostered transnational cooperation. Interviews with operational
stakeholders also suggest that the programme was successful in promoting interoperability
and cooperation, including at national level (as stated by 20% of operational stakeholders). In
some Member States, different, non-interoperable solutions are in place (e.g. eProcurement in
Italy). In these cases, the deployment of interoperable solutions compliant with European
standards enables to overcome also regional borders. Furthermore, the availability of standard
solutions brought about by CEF Telecommunications has been reported by a number of
interviewed stakeholders as having significantly contributed to the implementation of the
actions.
An additional valuable contribution of CEF Telecommunications has to do with the
availability of reusable building blocks. First of all, building blocks are reused within the
DSIs funded under CEF and the related generic services. This can be considered a positive
result of the coordination among the DSIs assembled under the same programme.
Furthermore, CEF building blocks are reused in projects beyond CEF Telecommunications
and in different domains, including agriculture, justice, employment and social rights, science
and technology, transport and environment, education, external relations and investors
175
. The
possibility of reusing these solutions can be considered to favour the creation of economies of
scale and minimise implementation delays for complex projects. However, these benefits have
not been quantified yet.
7. Conclusions
Relevance
CEF is stimulating the development of modern and high-performing trans-European networks
(TENs) throughout the European Union in transport, energy and telecommunications,
contributing to the Europe 2020 Strategy. It is also promoting the Commission's priorities
relating to 'Jobs, growth and investment', 'internal market', 'Energy Union and climate', and
'Digital single market', thereby strengthening the three sectors' global competitiveness. In
addition, CEF provides a substantial share of EU funding in the area of transport and energy
projects with a strong component of de-carbonisation of the European economy, thereby
contributing to the EU's emission reduction targets under the scope of Paris Climate
Agreement.
Given the common goals and challenges amongst the three sectors, the common programme
approach is relevant. More specifically, the programme steers both public and private
financing towards EU policy objectives, thereby enabling key investments to take place where
market failures exist, such as where the costs of the action are borne at national/local level
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Information available on the CEF Telecommunications dashboard:
https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/Reuse+by+domains
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while the benefits of the action are tangible at European scale. CEF therefore is an essential
element of the EU investment strategy.
Investment needs remain significant in all three sectors. The size of CEF currently makes it
possible to address only some of the identified market failures in all three sectors. Therefore,
potential exists for unlocking further public and private investment if additional EU budget
was made available to address more market failures. Grants are necessary to support a
significant number of projects which provide EU added value, either because the projects are
not bankable, not commercially viable and/or because they are promoted by public or semi-
public entities for which the use FIs is not an option. The relevance of alternative sources of
capital varies across sectors. FIs or indeed the blending of grants with other forms of
financing (notably private sector and public banks) remains relevant in some cases, in
particular for revenue generating projects.
The original Commission proposal for CEF in 2011 contained a total budget of EUR 50
billion (31.7 for transport, 9.1 for energy and 9.2 for telecom). The cuts that followed during
the negotiation phase reduced the total funding to 33.24 billion; with the telecom sector
experiencing the most severe reduction (8 billion, with final allocated funding of 1.04 billion).
For telecommunications, this implied a reduction in the scope of the programme for the DSIs
and for broadband to focus the support on technical assistance activities for projects with a
difficult business case and on the development of financial instruments. Moreover, the limited
degree of flexibility set by the Programme restrains its ability to address new political
priorities induced by technological developments in transport and telecommunications (e.g.
High Performance Computing).
Coherence
Transport, energy and telecommunications infrastructure is supported to various degrees by a
number of EU financing instruments, including CEF, ESIF, Horizon 2020 and EFSI. As
CEF's prime focus is on investment in cross-border infrastructure, the European-wide
interconnected systems and the deployment of innovative technologies, CEF is for the most
part complementary with other EU financial interventions
CEF and the ESIF both contribute to the TEN objectives with ESIF concentrating on internal
sections less covered by CEF but for instance in the transport sector essential for the
development of the corridors in the Cohesion countries. For the first time, a share of the
cohesion budget (EUR 11.3 billion - transport) was executed under direct management within
the CEF framework. This has proved successful as 100% of the envelope was allocated
during the first half of the programme period, almost exclusively on sustainable transport
modes.
While some projects which were prepared or facilitated in their early stages with CEF support
then receiving EFSI support showed some complementarity of the programmes, for a large
part of projects substitution of CEF by EFSI was observed. Therefore, the complementarity of
the CEF DI with EFSI needs to be further reinforced, on the basis of the 'Revised policy
guidance regarding complementarity of the CEF DI with EFSI' adopted in July 2017 by the
CEF DI Steering Committee. The 2017 CEF Transport Blending Call has also been designed
to strengthen the complementarity.
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CEF and Horizon 2020 work in complementarity with each other, with Horizon 2020
focusing on the research and development phase and CEF supporting the deployment of the
technology in the TENs. Finally, good cooperation between the European Commission and
the Member States as well as the design of the CEF programme ensures coherence with
actions carried out by Member States and national competent authorities.
Effectiveness
In its first 3 years, the programme is on track, although it is much too early to measure results
given that the programme is at the early stage of implementation. The assessment of
effectiveness thus focusses on an assessment of implementation with a view of steering
funding to the most relevant projects that are expected to deliver tangible results in the future.
In its first three years, CEF has already allocated over 80% of its grant budget, with focus on
projects with high EU added value. In the transport sector, during the first 3 years of the
programme EUR 21.3 billion worth of grants were allocated to projects. The main share of
funding was awarded to transport actions addressing bottlenecks and cross-border missing
links either on the TEN-T Core Network Corridors or along TEN-T Core Network sections
(around 79% or EUR 16.9 billion
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). In the case of energy, EUR 1.6 billion funding was
concentrated on security of supply, ending energy isolation, elimination of bottlenecks, with
an increasing commitment in projects in the electricity sector contributing to the integration of
renewable energies into the grid and showing innovation as an externality. In
telecommunications, EUR 251 million have been allocated in the Work Programmes to date
to the deployment of 15 DSIs allowing public administrations, citizens and businesses to
benefit from more comprehensive and efficient cross-border online services. EUR 121 million
have been committed to broadband-related projects.
CEF is funding actions in all Member States supporting almost exclusively projects with a
cross border dimension. Most funding is awarded to projects bridging missing links and
removing bottlenecks to ensure the good functioning of the EU internal market in transport,
energy and telecommunication. CEF is also instrumental for the deployment of EU-wide new
systems in the field of traffic management and safety (e.g. SESAR for aviation, ERTMS for
railways), of innovative electricity lines and cross-border smart grids in energy and for the
roll-out of interconnected Digital Services (e-Health, e-Procurement, e-Identification and e-
Signature, etc.…). Many of these projects will see realisation under the current programme;
others could be completed under the next MFF, allowing to see a real TENs grid emerge in
the three sectors, contributing to the Europe 2020 Strategy as well as to the Juncker
Commission's priorities. Furthermore, CEF allocations in the sectors of transport and energy
significantly contribute towards the EU's target of 20% of the total EU budget to be dedicated
to climate action related spending.
The completion of the TEN defined in the EU policy priorities require massive investments,
part of which depend on continued EU support as under normal conditions they would not be
sufficiently supported at Member State level or by the market.
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This amount refers to the call priorities: Corridors of the Core Network and Other Sections of the Core Network. However, other priorities
from funding objective 1 (ERTMS for instance) and from other funding objectives (Multimodal, Motorways of the Sea) may also contribute
to the Core Network.
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CEF has continued to use and develop innovative financial instruments. However, their
deployment has been limited and below the expectations raised in the CEF Regulation
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. In
some cases this has been due to the new possibilities offered by EFSI. There is potential for
further developing financial instruments under CEF and making them more effective. A better
developed transport, broadband and energy project pipeline and further emphasis on blending
grants with financial instruments, as has been encouraged in the 2017 Transport Blending
Call, could help to use them at a larger scale.
A greater flexibility of the instrument would prove advantageous, both as regards the sectors
and the priorities within each sector. The objective of CEF to promote synergies at project
level has not been achieved so far mainly due to the rigidity of the legal/budgetary framework
as regards eligibility rules for both projects and costs. In light of technological developments
synergies among the three sectors, e.g. Connected Cooperative and Automated Mobility,
alternative fuels, "smartening" of the grid are expected to increase in the future.
The relevant participants are being reached by the programme, however communication to the
wider public on CEF activities could be improved. Even though a number of KPIs exist at
sectoral level, most projects are not at a mature enough state of development for the KPIs to
be applicable. Furthermore, performance indicators relating to overarching policy objectives
are not sufficiently developed to measure the impacts of CEF.
Efficiency
The direct management of CEF has proven efficient, with a competitive selection process of
projects, paving the way for result-driven and coordinated implementation of CEF as a whole.
Direct management of CEF has ensured fast allocation of support and sound budgetary
execution. Cooperation between the Commission, INEA and the Member State authorities is
positive and forward-looking. Furthermore, more suitable co-funding rates in comparison
with predecessor programmes as well as the flexible nature of budget programming has
assisted CEF's progress in achieving its objectives while allowing for efficient expenditure.
While a separate evaluation will be completed in 2018, stakeholders agreed that the executive
agency INEA has been successful in the financial management of CEF and budget
optimisation. As a result of INEA, economies of scale have been produced in addition to
simplifications and consequently administrative costs for the Commission and Member States
have been limited. Administrative costs for beneficiaries related to the application and grant
agreement requirements have been deemed to be overall proportionate to the financial support
provided. A key strength of CEF relates to the ability to quickly re-use money underspent by
certain actions for financing other actions and this has already been successfully implemented
by INEA.
In the telecommunication sector, there is room for improving coordination among the DSIs
while legal and administrative requirements for approval and implementation of actions may
impose disproportionate costs for smaller actions for which simplified forms of support could
be better adapted. Additionally, for the telecommunications sector, whilst annual Work
Programmes present advantages in terms of flexibility, they hamper long-term planning of
actions and are inefficient from an operational perspective, given the long adoption cycle and
related effort.
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EU added value
Given the significant investment needs, CEF allows for the provision of high EU added-value
to infrastructure development in the transport, energy and telecommunications sectors,
targeting public goods of European dimension that would not be realised at national, regional
or local level without EU support.
Achieving well-interconnected, interoperable and efficiently managed transport, energy and
digital infrastructures in Europe requires strong governance. This ability to plan and invest in
a coordinated long-term approach at EU level strengthens the EU added value of CEF. In
addition, pre-identification of projects, a key feature of the programme design, significantly
increased the EU added value of CEF.
In the telecommunications sector, CEF has facilitated coordination among Member States to
develop standards and enable cross-border services. Member States have developed solutions
that make public services available online, however their benefits are confined by national
borders. CEF has played a key role in enhancing their outcome by making such solutions
interoperable for the benefit of citizens, businesses and public administration across Europe.
In some cases CEF has also played an important role in supporting Member States to speed up
compliance with the legal obligation to ensure cross border communication or it has enabled
voluntary cooperation where cross border interoperability is not an obligation (e.g. in
cybersecurity). Moreover, basic solutions supported by CEF funding (the so-called building
blocks) are creating economies of scale by being extensively reused in more complex digital
services, including beyond the remit of CEF, in areas such as agriculture environment and
education.
CEF is steering investments where the EU added-value is highest: on cross-border projects
and European-wide interoperable systems and services. In addition, EU level action has
assisted in overcoming obstacles that are normally associated with such complex projects that
are vital for Europe's sustainable growth and competitiveness which depends on efficient
connectivity both within and to the rest of the world.
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