The EU Commission welcomes the adoption by the Council of the Regulation on the Public Sector Loan Facility, which completes the Just Transition Mechanism, a key part of the European Green Deal, ensuring that no one will be left behind in the EU effort to achieve climate neutrality by 2050. This allows Member States to finalise their programmes of economic and social support in the regions most challenged by climate transition.
The adoption follows the political agreement reached by the co-legislators in April 2021 and it marks the final step of the legislative procedure. It will provide support to territories identified in the Territorial Just Transition Plans. Overall, the Facility is expected to mobilise between €18 and €20 billion of public investments over the next 7 years.
Commissioner for Cohesion and Reforms, Elisa Ferreira said:
“This Facility complements our toolbox for helping regions and communities most affected by the transition to a climate-neutral economy. It will foster public investments, create jobs and promote economic diversification, prioritising those that have less capacity to deal with the costs of the transition. As such, it will help the EU as a whole to meet its climate goals.”
Vice-President of the European Investment Bank (EIB), Ricardo Mourinho Félix, said:
“The Just Transition Mechanism will play a crucial role in ensuring a fair green transition across the EU, in particular in those regions most dependent on fossil fuels and energy-intensive industries. The EIB, as the EU climate bank with a historic and statutory mission of fostering cohesion, will actively contribute to the Just Transition Mechanism. With today’s final adoption of the Regulation for the Public Sector Loan Facility, the EIB is ready to get to work with regional authorities to support their investments with shared social, economic and environmental benefits.”
The Facility specifically targets public entities, creating preferential lending conditions for projects that do not generate sufficient revenue to be financially viable. It consists of a combination of grants from the EU budget and loans provided by the EIB. The grant support will be added to the EIB loan and will reduce the financial burden for beneficiaries and increase the attractiveness of the investments concerned. Advisory support will be provided to beneficiaries through the advisory hub set up under InvestEU.
The first calls for proposals under the Facility should be launched in the second half of 2021. More information is available here.