2006/1016/EC: Council Decision of 19 December 2006 granting a Community guarantee to the European Investment Bank against losses under loans and loan guarantees for projects outside the Community

1 The Community shall grant the European Investment Bank (the ‘EIB’) a global guarantee (the ‘Community guarantee’) in respect of payments not received by the EIB, but due to it, in respect of loans and loan guarantees for EIB eligible investment projects carried out in countries covered by this Decision, where the loan financing or guarantee has been granted according to a signed agreement which has neither expired nor been cancelled (‘EIB Financing Operations’) and has been granted in accordance with the EIB’s own rules and procedures and in support of the relevant external policy objectives of the European Union.

2 The Community guarantee shall be restricted to 65 % of the aggregate amount of credits disbursed and guarantees provided under EIB Financing Operations, less amounts reimbursed, plus all related sums.

3 The maximum ceiling of the EIB Financing Operations throughout the period referred to in paragraph 6, less amounts cancelled, shall not exceed EUR 27800 million. This maximum ceiling shall be broken down into two parts: (a) a basic ceiling of a fixed maximum amount of EUR 25800 million, including its regional distribution defined in paragraph 4, to cover the entire period referred to in paragraph 6; (b) an optional mandate of EUR 2000 million. The activation in whole or in part of this optional amount and its regional distribution will be decided by the Council in accordance with the procedure foreseen in Article 181a(2) of the Treaty. The decision will be based on the outcome of the mid-term review set out in Article 9.

4 The basic ceiling referred to in paragraph 3(a) shall be broken down into the following binding regional ceilings: (a) Pre-Accession countries: EUR 8700 million; (b) Neighbourhood and Partnership countries: EUR 12400 million; broken down into the following indicative sub-ceilings: (i) Mediterranean: EUR 8700 million; (ii) Eastern Europe, Southern Caucasus and Russia: EUR 3700 million; (c) Asia and Latin America: EUR 3800 million; broken down into the following indicative sub-ceilings: (i) Latin America: EUR 2800 million; (ii) Asia: EUR 1000 million; (d) Republic of South Africa: EUR 900 million.

5 Within the regional ceilings, the governing bodies of the EIB may decide to reallocate an amount of up to 10 % of the regional ceiling between sub-ceilings.

6 The Community guarantee shall cover EIB Financing Operations signed during the period beginning on 1 February 2007 and ending on 31 December 2013.

7 If, on expiry of the period referred to in paragraph 6, the Council has not adopted a decision granting a new Community Guarantee to the EIB for its Financing Operations outside the Community, that period shall be automatically extended by six months.

1 The list of countries eligible or potentially eligible for EIB financing under Community guarantee is laid down in Annex I.

2 For countries listed in Annex I and marked with ‘*’ and for other countries not listed in Annex I, the eligibility of such country for EIB financing under Community guarantee shall be decided by the Council on a case by case basis in accordance with the procedure provided for in Article 181a(2) of the Treaty.

3 The Community guarantee shall only cover EIB Financing Operations carried out in countries having concluded a framework agreement with the EIB establishing the legal conditions under which such EIB Financing Operations are to be carried out.

4 In the event of serious concerns over the political or economic situation in a specific country, the Council may decide to suspend new EIB financing under Community guarantee in that country in accordance with the procedure provided for in Article 181a(2) of the Treaty.

5 The Community guarantee shall not cover EIB Financing Operations in a specific country when the agreement concerning such EIB Financing Operations has been signed after that country’s accession to the EU.

1 The consistency of EIB external actions with the external policy objectives of the European Union shall be strengthened with a view to maximising synergies of EIB financing and budgetary resources of the European Union, notably through regular and systematic dialogue and early consultation on: (a) strategic documents prepared by the Commission, such as country and regional strategy papers, action plans and pre-accession documents; (b) the EIB’s strategic planning documents and project pipelines; (c) other policy and operational aspects.

2 The cooperation shall be carried out on a regionally differentiated basis, taking into consideration the EIB’s role as well as the policies of the European Union in each region.

3 An EIB Financing Operation will not be included under the cover of the Community guarantee in case the Commission delivers a negative opinion on such operation within the framework of the procedure provided for in Article 21 of the Statutes of the EIB.

4 The consistency of EIB Financing Operations with the external policy objectives of the European Union shall be monitored in accordance with Article 6.

1 EIB Financing Operations shall increasingly be carried out, where appropriate, in cooperation between and/or by means of cofinancing by the EIB and other IFIs, or European bilateral institutions, in order to maximise synergies, cooperation and efficiency and to ensure reasonable sharing of risks and coherent project and sector conditionality.

2 This cooperation shall be facilitated by coordination, carried out notably in the context of Memoranda of Understanding, where appropriate, between the Commission, the EIB and the main IFIs and European bilateral institutions operating in the different regions.

3 The cooperation with IFIs and other donors shall be assessed at the mid-term review set out in Article 9.

1 For EIB Financing Operations entered into with a State, or guaranteed by a State, and for other EIB Financing Operations entered into with regional or local authorities or government-owned and/or government-controlled public enterprises or institutions, where such other EIB Financing Operations have an appropriate EIB credit risk assessment taking into account the credit risk situation of the country concerned, the Community guarantee shall cover all payments not received by the EIB, but due to it (the ‘Comprehensive Guarantee’). For the purposes of this Article and Article 6(4), the notion of State includes the West Bank and Gaza Strip, as represented by the Palestinian Authority, and Kosovo, as represented by the UN Interim Administration Mission.

2 For EIB Financing Operations other than those indicated in paragraph 1, the Community guarantee shall cover all payments not received by the EIB, but due to it, where the non-receipt has been caused by the realisation of one of the following political risks (the ‘Political Risk Guarantee’): (a) non-transfer of currency; (b) expropriation; (c) war or civil disturbance; (d) denial of justice upon breach of contract.

1 The Commission shall report annually to the European Parliament and the Council on the EIB Financing Operations carried out under this Decision. The report shall include an assessment of impact and effectiveness of EIB Financing Operations at project, sector, country and regional level as well as the contribution of the EIB Financing Operations to the fulfilment of the external policy objectives of the European Union, taking into account the operational objectives of the EIB. It shall also include an assessment of the extent of cooperation between the EIB and the Commission and between the EIB and other IFIs and bilateral donors.

2 For the purposes of paragraph 1, the EIB shall provide the Commission with yearly reports of EIB Financing Operations carried out under this Decision and of the fulfilment of the external policy objectives of the European Union, including cooperation with other IFIs.

3 The EIB shall provide the Commission with statistical, financial and accounting data on each of the EIB Financing Operations as necessary to fulfil its reporting duties or requests by the European Court of Auditors as well as with an auditor’s certificate on the outstanding amounts of the EIB Financing Operations.

4 For the purposes of the Commission’s accounting and reporting of the risks covered by the Comprehensive Guarantee, the EIB shall provide the Commission with the EIB’s risk assessment and grading information concerning EIB Financing Operations with borrowers or guaranteed obligors other than States.

5 The EIB shall provide the information referred to in paragraphs 2, 3 and 4 at its own expense.

1 If the Commission makes any payment under the Community guarantee, the EIB shall, in the name and on behalf of the Commission, pursue the recovery of claims for the amounts paid.

2 The EIB and the Commission shall enter into an agreement laying down the detailed provisions and procedures relating to recovery of claims no later than the date of conclusion of the agreement referred to in Article 8.

The EIB and the Commission shall enter into a guarantee agreement laying down the detailed provisions and procedures relating to the Community guarantee.

1 The Commission shall present to the European Parliament and the Council a mid-term report on the application of this Decision by 30 June 2010, accompanied, as appropriate, by a proposal for its amendment, drawing upon an external evaluation whose terms of reference are specified in Annex II of this Decision.

2 The Commission shall present a final report on the application of this Decision by 31 July 2013.

This Decision shall take effect on the third day following its publication in the Official Journal of the European Union.