The European Commission has presented a proposal for a public sector loan facility under the Just Transition Mechanism aimed at supporting transition towards a climate-neutral economy.
The facility, worth over €1.5bn, will be implemented with the involvement of the European Investment Bank (EIB) and will encourage investments that support the transition towards a climate-neutral economy by public sector authorities to help decarbonise coal- and carbon-intensive regions.
Investment areas will include energy and transport infrastructure, district heating networks, public transport, energy efficiency measures, social infrastructure, and other projects that can directly benefit the communities in the affected regions and reduce the socio-economic costs of the transition towards a climate-neutral Europe by 2050.
The facility will include €1.5bn in grants from the EU budget and up to €10bn in loans from the EIB’s own sources.
It will mobilise €25-30bn of investments to help territories and regions most affected by the transition to a climate-neutral economy, prioritising those that have less capacity to deal with the costs of the transition.
The facility will be accessible to all Member States, initially based on national envelopes, through calls for proposals that meet the certain criteria.
These are projects that benefit territories identified in an approved territorial Just Transition plan, projects receiving an EIB loan under the facility and projects that do not generate sufficient market revenue streams.
The territorial Just Transition plans are currently being prepared by the Member States and will be approved by the European Commission.
They will provide the framework for support from the three pillars of the Just Transition Mechanism.
These are a Just Transition Fund which will provide grants, a special scheme under InvestEU to bring in private investment, and the public sector loan facility now being proposed.
The Commission is providing technical support for the development of their territorial just transition plans to all 18 Member States that requested it.
Cohesion and reforms commissioner Elisa Ferreira said: “While we are focused on steering us through the crisis provoked by the coronavirus pandemic, we must not forget the damage that climate change is inflicting on our planet.
“As President von der Leyen also said, there is no vaccine against climate change. But we need to make sure the transition towards a climate-neutral economy happens in a fair way. Today’s proposal is an essential tool in ensuring this fairness, complementing the efforts of Cohesion policy in supporting regions and citizens most vulnerable to adjustments towards a climate-neutral Union.”