Communication from the Commission to the Council and the European Parliament - Financial assistance by the European Communities to the energy sector from 1995 to 1997
COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 22. 04. 1998 COM(1998) 244 final COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT FINANCIAL ASSISTANCE BY THE EUROPEAN COMMUNITIES TO THE ENERGY SECTOR FROM 1995 TO 1997 FINANCIAL ASSISTANCE BY THE EUROPEAN COMMUNITIES TO THE ENERGY SECTOR FROM 1995 TO 1997 CONTENTS 1. 2. INTRODUCTION SUMMARY - Recapitulative table - Grants - Loans - Guarantees - Financial assistance to non-EU countries CHAPTER A : Financing of energy policy CHAPTERS: Trans-European energy networks CHAPTER C : Energy research and development CHAPTER D : Structural funds CHAPTER E: Financial instruments for international cooperation CHAPTER F: ECSC grants to the coal industry CHAPTER G: Effi loans CHAPTER H; ECSC and Euratom loans CHAPTER I; EEF guarantees 2/24 p. 3 p. 4 p. 7 p. 9 p. 10 p. 14 p. 16 p. 18 p. 20 p. 22 p. 24 INTRODUCTION The European Communities have substantial financial instruments to support measures to implement their common policies. By virtue of the strategic role played by energy in attainment of several of its fundamental objectives, particularly on economic growth, greater cohesion, quality of life and relations with non-EU countries, the European Communities have been and still are drawing on their financial instruments to promote action and projects in the energy sector. Hitherto the energy policy issues emphasised by the European Union and shaping its financial support for the energy sector have been: - management of external dependence and security of energy supplies; - completion of the internal energy markets in order to increase competitiveness; - development of energy networks across frontiers and in under-equipped regions; - the compatibility of energy and environmental objectives for sustainable development; - the development of energy technology and research. This Communication on financial assistance for the period 1995 to 1997 is a contribution to the efforts to foster openness initiated by the Communication entitled "An overall view of energy policy and actions"/0 It also contributes to the discussions in progress on the proposal for a Council Decision adopting a "multiannual framework programme for actions in the energy sector (1998-2002) and connected measures. (I) In addition, it highlights the importance of energy in the assistance provided through the horizontal financial instruments and funds. (,) COM(97) 167 final of 23. 4. 1997. ^ COM(97) 550 final of 18. 11. 1997. 3/24 SUMMARY 1. This Communication sets out for information purposes all the figures for financial assistance from the European Communities to the energy sector from 1995 to 1997. This assistance can take the form either of aid (non-reimbursable grants), Community contributions to projects of Community interest, loans, or guarantees, and can come from the following sources, depending on the case in point: - financial instruments specifically for the energy sector, for example the SAVE,(3) networks ALTENER,(4) SYNERGY,(5) trans-European programmes/*0 and the ECSC grants to the coal industry; energy and - financial instruments specifically for other internal policies but including energy measures, such as the JOULE-THERMIE programme^ under the framework research and development programme; - general financial instruments such as the Structural Funds or the European Investment Bank with a range of activities including support foi development work and investment in the energy sector; - financial instruments specifically for international cooperation and including energy measures, such as the PHARE(8) and TACIS(9) programmes or the EDF. 2. The table below shows the amounts of financial assistance provided by the various instruments. FINANCIAL INSTRUMENTS I. GRANTS A. Financing of energy policy B Trans-European energy networks C. Energy research and development D. Structural Funds E. Financial instruments for international cooperation (ECU million) 1995 1848. 6 41. 7 12. 2 775. 6 500. 0 393. 2 1996 1393. 3 37. 8 8. 9 524. 1 500. 0 245. 0 1997 1414. 7 36. 8 24. 2 580. 1 500. 0 184. 8 TOTAL 4656. 6 116. 3 45. 3 1879. 8 1500. 0 823. 0 F. ECSC grants to the coal industry 125. 9 77. 5 88. 4 291. 8 n. LOANS G. EEB loans H. ECSC and Euratom loans HL GUARANTEES I. EIF guarantees 3100. 8 3083. 0 17. 8 4957. 2 4945. 0 12. 2 2171. 0 2090. 4 80. 6 11. 9 11. 9 270. 2 270. 2 3. 7 3. 7 10229. 0 10118. 4 110. 6 285. 8 285. 8 (3) (4) (5) (6) o <•> 96/737/EC: Council Decision of 16 December 1996 (OJ No L 335 of 24. 12. 1996). 93/500/EC: Council Decision of 13 September 1993 (OJ No L 235 of 18. 9. 1993). Council Regulation (EC) No 701/97 of 14 April 1997 (OJ No L 104 of 22. 4. 1997). Council Regulation (EC) No 2236/95 of 18 September 1995 (OJ No L 228 of 23. 9. 1995). 94/806/EC: Council Decision of 23 November 1994 (OJ No L 334 of 22. 12. 1994). Council Regulation (EEC) No 3906/89 of 18 December 1989 (OJ No L 375 of 23. 12. 1989). Council Regulation (EURATOM,EC) No 1279/96 of 25 June 1996 (OJ No L 165 of 4. 7. 1996). 4/24 3. 4. 5. 6. Community grants to the energy sector come from the general budget and from the ECSC budget. hi the general budget, the energy section of the R&D framework programme, including the JOULE-THERMIE programme and the Structural Funds, are the biggest headings of relevance to energy. The ECSC budget finances measures in the coal industry, in particular for the redeployment of workers, interest-rate subsidies for industrial restructuring and research programmes in the sector. Community grants and contributions to the energy sector totalled ECU 4 656. 6 million in the report period (1995-1997). Of this total, 93. 7 %, or ECU 4 364. 8 million, came from the general budget. Almost all the loans from the financial instruments of the European Communities to energy projects come from the European Investment Bank (EBB). Total lending of which over ECU 10 118. 4 million was from the EIB and ECU 110. 6 million from the ECSC. at ECU 10 229 million, period report stood the The financial instrument which can guarantee energy loans is the European Investment Fund (EIF). Over the report period, the EIF guaranteed a total of ECU 285. 8 million. The European Union also grants financial assistance to non-EU countries as part of its international cooperation policy. The table below summarises assistance given outside the European Union, as a proportion of all energy assistance. FINANCIAL INSTRUMENTS 1 TOTAL (ECU million) L Grants amount to non-EU countries proportion II. Loans amount to non-EU countries proportion III. Guarantees amount to non-EU countries proportion 4656. 6 823. 0 10229. 0 1986. 0 285. 8 182. 0 17. 7 % 19. 4 % 63. 7 % 5/24 7. Details of the breakdown of Community grants, loans and guarantees for energy from 1995 to 1997 from the different sources are given in the following nine chapters: A. B. C. D. E. F. G. H. I. Financing of energy policy Trans-European energy networks Energy research and development Structural Funds Financial instruments for international cooperation ECSC grants to the coal industry E1B loans ECSC and Euratom loans ELF guarantees 6/24 A. FINANCING OF ENERGY POLICY The following table shows the amounts committed from 1995 to 1997 for the various energy policy measures. PROGRAMMES / ACTIONS SAVE ALTENER SYNERGY Observatory Regional energy planningl Other measures TOTAL ; (in ECU million) 1995 7. 20 13. 17 13. 77 2. 06 5. 50 - 41. 70 1996 15. 00 10. 00 9. 00 1. 77 2. 00 37. 77 * 1997 17. 91 8. 92 6. 86 2. 15 - 0. 99 36. 83 The SAVE II programme, designed primarily to improve energy efficiency, was given an indicative budget of ECU 45 million for 1996-2000. In 1996 regional energy planning was made an integral part of the SAVE II programme, which was given the title "Regional and urban energy management". A total of ECU 5. 2 million was committed under this heading in 1996, and ECU 5. 7 million in 1997. The ALTENER programme to promote renewable energy sources has a budget of ECU 46. 4 million for 1993-1997. (l0) Programming was made an integral part of the SAVE II programme in 1996. 7/24 SYNERGY is an international cooperation programme concerned exclusively with the energy sector and, more specifically, with helping non-EU countries to formulate and implement their energy policies. The breakdown of the support granted from 1995 to 1997 in the main world regions was as follows: Breakdown of SYNERGY funding bv region General CEEC CIS Mediterranean Asia Latin America Africa Several regions TOTAL 1995 242 4820 2666 2520 1131 1040 - 573 12992 % 1. 9 37. 1 20. 5 19. 4 8. 7 8. 0 - 4. 4 100. 0 1996 634 2146 742 1437 1730 1168 224 889 8970 % 7. 1 23. 9 8. 3 16. 0 19. 3 13. 0 2. 5 9. 9 100. 0 (in '000 ECU) 1997 950 622 1266 1079 1047 948 209 739 6860 % 13. 6 8. 5 18. 2 15. 5 15. 0 13. 3 3. 0 10. 6 100. 0 Note : The heading "Several regions" concerns operations in the Black Sea area bringing together countries belonging mainly to the CEEC, CIS and Mediterranean regions. 5. The European Energy Observatory was set up in 1995 and is designed to: - monitor energy markets, trends, developments and outlooks in terms of the supply, demand and prices of the various energy sources; - evaluate and disseminate any information on these areas; - develop a Community method of analysis; - establish special networks on the interaction of the energy sector with all the other scientific, economic and social activities. Its allocation from 1995 to 1997 was ECU 5. 98 million. 6. 7. Euratom funds activities relating to the transport of radioactive materials. A total of ECU 2 million were committed in 1996 and ECU 0. 7 million in 1997 (see "Other measures" in the Table in point A. 1. ). On 18 November 1997 the European Commission adopted a proposal for a Council Decision which proposes to bring together in a single, multiannual framework programme all Community actions and programmes to do with energy policy in the years 1998 to 2002, which will make it possible to improve the transparency, effectiveness and coordination of EU energy policy activities. 8/24 B. 1. TRANS-EUROPEAN ENERGY NETWORKS The TEN programme has been given an indicative budget of ECU 112 million for It is designed to help establish and develop trans-European energy 1995-99. networks, helping to interconnect national networks and make them interoperable, and to provide access to these networks and to extend them outside the Community. The programme is intended to cover some of the costs of conducting economic and technical feasibility studies, and preparatory studies and appraisals. It can also provide interest subsidies, reduce the cost of guaranteeing a loan, or grant direct subsidies, where such cases are properly justified. The measures covered by the report period relate exclusively to the joint funding of studies on projects of common interest. 2. The table below shows the amounts committed from 1995 to 1997 by sector : SECTOR Electricity Natural gas TOTAL 1995 6. 5 5. 7 12. 2 1996 3. 7 5. 2 8. 9 (in ECU million) 1997 9. 2 15. 0 24. 2 3. This next table gives a breakdown of financial support according to the priorities for Community action on trans-European energy networks: the required PRIORITY Developing electricity interconnections between Member States including to establish internal connections interconnections between Member States Developing electricity interconnections between Member States and non-EU countries in Europe and the Mediterranean Bringing natural gas to new parts of Member States and linking up isolated gas networks to the interconnected European networks Increasing LNG handling, transmission and storage capacity to meet demand and diversifying natural gas sources and transmission routes (in ECU million) 1995 2. 39 1996 0. 72 1997 4. 53 4. 09 1. 92 3. 76 3. 00 0. 97 4. 65 0. 58 4. 21 14. 44 9/24 C. ENERGY RESEARCH AND DEVELOPEMNT The 4th Framework Research and Technological Development Programme for 1994-98 funds or part-funds specific energy projects from an available budget of ECU 2 403 million in the following areas: - Non-nuclear energy The "Non-nuclear energy" programme has a section for research (JOULE) and a section for demonstration projects (THERMIE). The budget is ECU 1 039 million. - Nuclear fission The programme on nuclear fission safety and safeguards has a budget of ECU 170. 5 million and covers the following areas: • exploring new approaches • reactor safety • management and storage of radioactive waste and decommissioning • effects of radiation on man and the environment • dealing with the consequences of past events. - Controlled thermonuclear fusion This programme, which incorporates all the research into mastering fusion energy carried out in the Member States, has a budget of ECU 846 million and covers the following areas: • "Next Steps", particularly as regards the International Thermonuclear Experimental Reactor (ITER) • Joint European Torus (JET) • conceptual improvements long-term technology. • 10/24 2. The purpose of the THERMIE programme is to support demonstration projects, and also strategy, dissemination and measures to encourage small businesses. 2. 1. The objectives of THERMIE are: to improve energy efficiency in terms of supply and demand; to promote more extensive use of renewable energy sources; - - - to encourage cleaner and more efficient use of coal and other solid fuels; - to optimise the use of oil and gas in the EU. 2. 2. THERMIE is in two sections: THERMIE - A: financial support for shared-cost demonstration projects to use new energy technologies in the following areas: • rational use of energy; • renewable energy sources; • fossil fuels. THERMIE- B: financial support for other activities in the following areas: • development and implementation of an energy RTD strategy; • dissemination of energy technologies; • concerted action and cooperation networks; • preparatory, flanking and support measures; • measures providing incentives to encourage and facilitate the participation of small and medium-sized enterprises in RTD activities. 2. 3. The THERMIE programme also provides support in non-EU countries. Accordingly, from 1995 to 1997 it provided 106 B-type schemes (associated measures) with support totalling ECU 10. 2 million. 2. 4. The table below shows the breakdown of THERMIE appropriations committed between 1995 and 1997. THERMIE • Demonstration (A) * Associated measures (B) • Miscellaneous TOTAL 1995 110. 5 29. 0 1. 3 140. 8 (in ECU million) 1996 113. 3 17. 7 - 131. 0 1997 148. 1 10. 1 1. 5 159. 7 11/24 The purpose of JOULE is to encourage research and technological development in the area of clean and efficient energy technologies in order to contribute to energy safety and sustainable development. JOULE comprises technical fields relating to: - RTD energy strategy and the analysis of the relationships between energy, the environment and the economy; the rational use of energy; - - renewable energies; - solid fuels. The amounts committed under the JOULE programme were ECU 183. 7 rnillion in 1995, ECU 42. 8 million in 1996 and ECU 132. 7 million in 1997. 4. Community RTD activities concerning FUSION energy are focused on the long-term objective of the joint construction of reactors and electrical power plant prototypes which meet society's needs, such as safety of operation, respect for the environment and economic viability. These activities are mainly pursued as part of the shared-cost actions with organisations in the Member States (Associations), under the auspices of the JET (Joint European Torus) Joint Enterprise and as part of multilateral agreements. Specific activities concerning fusion technology are also carried out at the Joint Research Centre (JRC). The following table shows the breakdown of the Community contribution to financing provided between 1995 and 1997. Associations JET JRC Others TOTAL (in ECU million) 1995 1996 88. 0 65. 3 10. 8 28. 3 192. 4 89. 7 58. 6 10. 1 37. 4 195. 8 1997 (estimate) 107. 4 65. 2 40. 9 223. 1 12/24 The following table gives details of research and development expenditure in the energy sector from 1995 to 1997. COMMITMENTS A. Direct action (JRC) 1. Nuclear fission (reactor safety, radioactive waste management, fissile materials, nuclear fuels) 2. Thermonuclear fusion 3. Non-nuclear energies (solar energy, RUE) 4. Energy policy support (DG XVllf 5. Supplementary programme (operation of the HFR reactor) /IK ' B. Shared-cost projects 1. Nuclear fission and radioactive waste, storage of (management decommissioning of nuclear power stations, Teleman, nuclear fission safety) 2. Thermonuclear fusion1 ' (general programme and participation in JET) 1995 108. 1 63. 8 11. 4. 14. 4 18. 5 667. 5 71. 9 (in ECU million) 1996 83. 6 63. 2 10. 3 3. 8 6. 3 1997 88. 1 62. 8 12. 3 4. 8 8. 2 440. 5 68. 6 492. 0 12. 7 270. 8 198. 3 186. 9 3. Non-nuclear energy sources (renewable energy sources, RUE): TOTAL A + B - JOULE - THERMIE 184. 0 140. 8 775. 6 42. 8 130. 8 524. 1 132. 7 159. 7 580. 1 Apart from the energy programmes, other programmes in the 4th Framework Programme include measures with an energy component, like the ESPRIT programme and INCO (RTD cooperation programmes with non-member countries and international organisations which finance activities in the energy sector, particularly with the countries of central and eastern Europe and with developing countries). (11) From 1996 JRC support for energy policy is part of nuclear fission. (12) Including the undertaking of pluriannual contracts. 13/24 D. STRUCTURAL FUNDS The Structural Funds (ERDF, ESF, EAGGF, etc. ) are actively involved in financing several programmes intended to solve the energy problems of the less-favoured regions via the Community support frameworks (CSFs) and Community initiatives. Most of the assistance from the Structural Funds in the energy sector is directed towards Objective 1 regions. In all the CSFs for the regions whose development is lagging behind (Objective 1), the Community is cofinancing energy projects with a view to improving the basic infrastructure. The Community's contribution is made primarily through the ERDF. The table below gives the breakdown by country of the grants to Objective 1 regions in the period covered by the Structural Funds (1995-1999). Since the way that the Structural Funds are organised makes it difficult to single out and indicate the annual grants to the energy sector, the grants have been broken down into equal annual instalments. Community grants from the Structural Funds to the energy sector in Objective 1 regions MEMBER STATE. , _ _ , _ , _ _ „ _ _ _ _ _. __ Austria France Greece Ireland Italy Portugal Spain United Kingdom TOTAL Period 1994-1999 (1994 prices) 4 8 1065 70 392 566 704 190 2999 (in ECU million) Annual average | [ 0. 7 1. 3 177. 5 11. 7 65. 4 94. 3 117. 3 31. 7 500. 0 The figures shown in the table above include the amounts granted under the CSFs for 1994-1999 and by the Community initiatives (chiefly INTERREGII). 14/24 The REGEN section of the Community's INTERREG II initiative has been granted a budget of ECU 500 million for 1994-1999 for completion of energy networks, particularly: - transmission of Russian gas from the Bulgarian frontier to Athens and reception, treatment and transmission of liquefied gas from Algeria; - continuation of the work on the introduction of natural gas to Portugal; - completion of the systems for interconnection, reception and transmission of natural gas between Spain and Portugal; - continuation of the scheme for interconnection of the electricity grids between Greece and Italy. The table below shows the breakdown by country of the financial support from the REGEN section of the Community's INTERREG II initiative in 1994-99 (amounts included in the breakdown by Member State in the previous table). COUNTRY Greece Italy Portugal Spain TOTAL I I (in million ECU) INTERREG U (REGEN) 1994 - 1999 200 80 140 80 500 4. Overall, Community assistance provided for by the support frameworks for regions whose development is lagging behind and by Community-initiated programmes amounts to ECU 2 999 million for 1994-99, or 2. 7% of the total contribution by the Structural Funds to Objective 1 regions and 4. 3% of the ERDF. 15/24 E. FINANCIAL INSTRUMENTS FOR INTERNATIONAL COOPERATION PHARE The PHARE programme is intended to help to bring Central and Eastern European countries up to European development standards and to establish closer political and economic relations between these countries and the European Union in the framework of European agreements and pre-accession strategy. The PHARE programme also covers energy infrastructure and nuclear safeguards. The following table gives an idea of the amounts spent on energy between 1995 and 1997: SECTOR Nuclear Non-nuclear TOTAL - All energy TACIS (in ECU million) 1995 27 75 102 1996 6 42 48 1997 13. 2 12. 6 25. 8 TACIS is the programme to assist the New Independent States and Mongolia with economic improvement and recovery. TACIS includes action in the energy sector and on nuclear safeguards. The following table shows the breakdown of amounts spent on energy between 1995 and 1997: SECTOR Nuclear Non-nuclear TOTAL - All energy 1995 96(,5) 42 138 1996 117. 5 46 163. 5 (in ECU million) 1997 68. 0 45. 6 113. 6 MEDITERRANEAN COUNTRIES - MEDA The MEDA programme (1995-1999)( } covers measures to accompany economic and social structural reform in the non-EU Mediterranean countries. One of the aims of MEDA is cooperation on energy and networks. C3) (. 4) Includes ECU 37. 5 million for the G7 action. Council Regulation (EC) No 1488/96 of 23 July 1996 (OJ No L 189 of 30. 7. 1996). 16/24 Action is taken either under bilateral protocols between the Community and individual Mediterranean countries or as part of the wider financial cooperation for schemes involving more than one country in the region. In 1995 and 1996, the amounts allocated for the energy sector were ECU 1 and 0. 2 million respectively. 4. EUROPEAN DEVELOPMENT FUND (ACP COUNTRIES) Under the EDF, ECU 127. 7 million were allocated to the energy sector in 1995, ECU 21. 5 million in 1996 and ECU 32. 7 million in 1997. These amounts were used mainly to finance hydroelectric projects or to rehabilitate infrastructures. 5 DEVELOPING COUNTRIES IN ASIA AND LATIN AMERICA Council Regulation No 443/92( } of 25 February 1992 provides for financial and technical assistance to, and economic cooperation with, the developing countries in Asia and Latin America. The energy sector is one of the priorities of the programme. The following amounts were allocated for energy in 1995 and 1996. The amounts shown for developing countries in Asia(,r,) are indicative (currently between ECU 8 and 10 million a year). The Commission published a communication in 1996 on a Europe-Asia cooperation strategy for energy and a specific programme for energy cooperation with Latin America has been set up. Developing countries in Asia Developing countries in Latin America TOTAL (in ECU million) 1995 7. 5 17. 0 24. 5 1996 7. 5 4. 3 11. 8 1997 5. 0 7. 7 12. 7 6. SUMMARY FOR INTERNATIONAL COOPERATION INSTRUMENTS The following table summarises the amounts granted for the energy sector from the instruments of international cooperation. (in ECU million) FINANCIAL INSTRUMENT PHARE TACIS MEDITERRANEAN COUNTRIES Developing countries (Asia and Latin America) EDF (ACP countries) TOTAL 1995 102. 0 138. 0 1. 0 24. 5 127. 7 393. 2 1996 48. 0 163. 5 0. 2 11. 8 21. 5 245. 0 1997 25. 8 113. 6 - 12. 7 32. 7 184. 8 {!5) OJ No L 52 of 27. 2. 1992. °6) COM(96) 308 final, 18 July 1996. 17/24 F. 1. ECSC GRANTS TO THE COAL INDUSTRY The ECSC finances measures from its operational budget concerning, in particular, the redeployment of workers, interest-rate subsidies for industrial restructuring, the financing of research programmes in the coal and steel industries, and social measures. 2. EU grants to the coal industry fall into two broad categories: - redeployment aid - support for research. The following tables show the development of the various types of ECSC grants to the coal industry during the period 1993-97 and the distribution between Member States from 1995 to 1997(,7). Breakdown of ECSC grants to the coal industry Redeployment aid - traditional aid - social measures Support for research - projects - dissemination TOTAL 1993 120. 3 70. 3 50. 0 51. 8 51. 2 0. 6 Î72. 1 1994 117. 2 77. 2 40. 0 17. 0 16. 9 0. 1 134. 2 1995 104. 3 64. 3 40. 0 21. 6 21. 4 0. 2 125. 9 Distribution of redeployment aid fey Member State (in ECU million) 1996 46. 5 23. 3 23. 2 31. 0 30. 7 0. 3 77. 5 1997 59. 8 30. 8 29. 0 29. 0 28. 7 88. 8 (inE CU million) es Social measur 1996 1. 4 4. 6 13. 4 - 3. 2 0. 6 23. 2 1997 - 7. 0 13. 7 - 7. 5 0. 8 29. 0 Belgium France Germany Portugal Spain United Kingdom EU TOTAL d Traditional ai ) 1996 1. 4 - 18. 6 0. 1 2. 6 0. 6 23. 3 1995 1. 0 1. 8 31. 2 0. 4 7. 2 22. 7 64. 3 1997 - 3. 6 20. 6 - 5. 8 0. 8 30. 8 1995 1. 6 1. 8 19. 0 0. 2 9. 6 7. 8 40. 0 C7) Source: ECSC Financial Reports. 18/24 As regards coal research, 29 projects were chosen for financial support in 1995, 23 in 5996 and 31 in {997. Hie projects are designed primarily to ensure proper protection for the environment and to make the public aware of the importance of coal as an energy source, to improve the competitive position of coal and to use the Community's resources rationally. The breakdown of funding between the various research themes is as follows: Mining technology: - excavation systems - firedamp, ventilation, climate - coal-winning techniques - mine infrastructure - mine management Use of coal: - preparation of coal - uses in metallurgy - coal conversion - coal burning and gasification Dissemination TOTAL (in ECU million) 1995 5. 2 2. 3 2. 7 0. 2 16. 2 1. 8 1. 9 1. 4 11. 1 0. 2 21. 6 1996 11. 0 1. 6 2. 1 0. 6 0. 9 5. 8 19. 7 3. 2 5. 5 1. 6 9. 4 0. 3 31. 00 1997 1 10. 0 4. 7 0. 5 2. 7 1. 2 0. 8 18. 7 4. 2 3. 4 11. 2 0. 3 29. 0 19/24 G. EIB LOANS The task of the European Investment Bank is to help with the integration, balanced development and economic and social cohesion of the Member States. To this end, the EIB directs large volumes of funds to finance investment projects designed to achieve Union objectives, including energy objectives. The table below shows trends in EIB funding (. 8) EIB loans Energy funding % of EIB activity 1993 2576 15. 4% 1994 3384 20. 4 % 1995 3083 17. 3 % 1996 4945 25. 0 % 1997 2090 10. 0 % (ECU million) The loans from 1995 to 1997 were granted mainly for • » » • • production of oil and gas, and generation of electricity, particularly by hydroelectric plants or combined plants using natural gas; transmission and distribution of electricity and natural gas; natural gas and electricity transmission networks, including four priority TEN projects; the construction of combined heat and power plants burning waste; the construction of lignite-powered thermal plants. (18) Source: EEB Annual Reports. 20/24 The following table gives a breakdown by sector of activity. Production • Conventional power stations • Hydroelectric power stations • Heat production « Oil and gas production © Solid fuels « Geothermal and alternative sources Transport, storage, reprocessing • Electricity • Natural gas, oil Distribution • Electricity • Natural gas • Heat TOTAL (in ECU million) 1995 1842. 2 609. 8 292. 1 363. 4 582. 7 0. 2 966. 3 154. 4 811. 9 268. 6 68. 9 190. 8 8. 9 3083. 1 1996 2722. 0 2181. 0 31. 7 302. 2 176. 9 30. 2 1693. 3 305. 5 1387. 8 529. 6 271. 4 203. 9 54. 3 4944. 9 1997 1100. 5 556. 2 189. 4 96. 1 182. 4 76. 4 370. 8 87. 5 283. 3 619. 1 282. 5 148. 4 188. 2 2090. 4 In 1995, the EIB spent ECU 522 million on trans-European electricity and gas transmission networks; the figures for 1996 and 1997 were ECU 695 million and ECU 300 million respectively. The three lines of Community energy policy are the eligibility criteria for the EIB in this field: development of indigenous resources, diversification of imports and more rational use of energy. Completion of the internal market also involves focusing on interconnection of gas and electricity networks both within the Community and outside. In 1995, 30 % of investments were for the development of indigenous resources, 26 % for diversification of imports, and 44 % for the rational management and use of energy. The percentages for 1996 were 17 %, 49 % and 34 % and, for 1997, 21 %, 19 % and 60 % respectively. 21/24 The breakdown of EIB energy loans in the Community by Member State is as follows: EIB loans COUNTRY Austria Belgium Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherlands Portugal Spain Sweden UK Other( > TOTAL (ECU million) Energy sector 1996 26 7 15 - 3 924 379 - 1637 - 140 489 539 111 674 - 4945 1997 212 - 84 45 17 489 126 - 351 - 30 30 169 80 349 109 2090 1995 - 34 84 - 4 626 36 - 625 - - 134 315 111 636 479 3083 EIB funding outside the Community as part of the Union's cooperation and development policy with non-member countries accounted in 1995 for ECU 2 805 million, of which ECU 689 million was for the energy sector and, in 1996, for ECU 2 294 million, of which ECU 704 million was for the energy sector. In 1997, these figures were ECU 3 144 million and ECU 593 million respectively. Energy sector loans were primarily for the construction and modernisation of power plants, the extension of electricity transmission and distribution capacity and the development of oil resources. Funding outside the European Union Energy sector COUNTRY ACP countries South Africa Mediterranean Central and Eastern Europe Latin America Asia Overseas departments and territories TOTAL 1995 108 - 149 290 18 125 - 689 1996 109 56 174 363 - - 2 704 (ECU million) 1997 35 45 346 70 - 93 4 593 (19) Other projects of European interest outside EU territory. 22/24 H. ECSC AND EURATOM LOANS 1. ECSC LOANS 1. 1. In 1995, the total amount of loans paid out by the ECSC (ECU 402. 8 million) was 40. 2 % down on 1994. The total paid out in 1996 (ECU 279. 7 million) was also markedly lower than the 1995 total. In 1997, on the other hand, the total amount of loans paid out by the ECSC (ECU 541. 2 million) was much higher than that of 1996. This increase can be accounted for by the fact that 1997, and specifically the first half of that year, was the last period for initiating the payment of ECSC loans, except for certain exceptional cases. Indeed, it is possible that the guidelines adopted by the Commission on changes to ECSC borrowing and lending activities by the year 2002, when the initial ECSC Treaty expires, may have had a (last) persuasive effect on potential borrowers, since they can no longer expect to receive long-term loans, i. e. loans which mature after 2002, except for some major infrastructure projects of European interest, for which it is possible to obtain a government guarantee. 1. 2. In 1995 and 1996 two loans for ECU 17. 8rnillion and ECU 12. 2 million were In 1997 a loan of ECU 80. 6 million was issued to Spain for the coal industry. granted to finance the Portuguese natural gas network. The table below summarises ECSC loans for 1995-1997 (20) 1995 402. 8 17. 8 4. 42 % 1996 279. 7 12. 2 4. 36 % 17. 8 12. 2 (ECU million) 1997 541. 2 80. 6 14. 89 % 80. 6 Total ECSC loans Total energy Energy's share (%) Repartition - Coal industry (Art. 54 § 1) - Power stations - Other 2. EURATOM LOANS There has been no lending operation since 1988 owing to the poor cyclical situation of the sector. Council Decision 94/179/EURATOM( } of 21 March 1994 authorises the Commission to grant loans the purpose of which is to improve the efficiency and safety of nuclear installations in Central and Eastern Europe and in the former Soviet Union. No loans have so far been granted, but certain projects have been identified and preparatory work for those operations is under way. ,2U (20) Source: ECSC Financial Reports. OJ No L 84 of 29. 3. 1994. 23/24 I. EIF GUARANTEES The European Investment Fund (EIF), which is a public/private partnership set up in June 1994, grants long-term financial guarantees to support large infrastructure projects, including the trans-European energy networks, involving small firms. The main aim of the EIF in the energy sector is to help involve private capital in TEN projects. Since it was set up and by the end of 1997, the EIF had signed guarantees for a total of ECU 2 165 million, of which 23. 8% is in the energy sector (TEN). The table below gives a breakdown of guarantees granted in 1995, 1996 and 1997 by sector. (22) SECTOR Trans-European infrastructure networks: of which energy: - intheEU - outside the EU SMEs TOTAL 1995 116. 5 11. 9 11. 9 - 116. 5 1996 582. 1 270. 2 88. 2 182. 0 251. 3 833. 4 (ECU million) 1997 335. 2 3. 7 3. 7 364. 8 700. 0 * * * (22) Source: EIF Annual Reports. 24/24 ISSN 0254-1475 COM(98) 244 final DOCUMENTS EN 09 12 15 Catalogue number : CB-CO-98-265-EN-C ISBN 92-78-35275-6 Office for Official Publications of the European Communities L-2985 Luxembourg