Release of European Commission semi-annual funding plan: Commission to issue EUR 65 billion in long-term EU-Bonds in the second half of 2024
On 24 June 2024, the European Commission issued its semi-annual funding plan for the period July and end-December 2024. The Commission intends to issue up to EUR 65 billion in EU-Bonds between July and end-December 2024, complemented by short-term funding.
Issuances will be executed under a unified funding approach, whereby the Commission issues single branded EU-Bonds, and internally allocates the proceeds according to the needs of the various policy programmes funded through bond issuances. The Commission issued close to EUR 75 billion worth of issuances in the first half of the year. The funding plans for the second half of the year will bring the 2024 total EU issuances to up to EUR 140 billion (+ EUR 20 billion compared to the 2023 funding target).
Proceeds from EU-Bonds will finance disbursements under the NextGenerationEU and other policy programmes such as the Ukraine Facility, the Reform and Growth Facility for the Western Balkans and Macro Financial Assistance programmes. The Commission will continue to finance the green component of the Recovery and Resilience Facility (RRF) through its NextGenerationEU Green Bonds, which currently stands at EUR 60 billion. Issuances will remain firmly anchored to climate-relevant expenditures reported by Member States, in accordance with the NextGenerationEU Green Bond Framework.
It can be noted that the Commission borrows on international capital markets on behalf of the EU and disburses the funds to Member States and third countries under various borrowing programmes. EU borrowing is guaranteed by the EU budget, and contributions to the EU budget are an unconditional legal obligation of all Member States under the EU Treaties. In addition to EU-Bonds issuance, the Commission engages in short-term liquidity management operations to even upcoming funding needs. The EU’s total debt outstanding now stands at EUR 536 billion, of which around EUR 22 billion in the form of EU-Bills.
European Council approves agreements on the EEA and Norwegian Financial Mechanisms for 2021-2028
On 25 June 2024, the EEA and Norwegian Financial Mechanisms for 2021-2028 set out the contribution of the EEA EFTA states — Iceland, Liechtenstein, and Norway — to reducing the economic and social disparities in the European Economic Area.
The two financial mechanisms will together provide a financial contribution of EUR 3.268 billion to economic and social cohesion in the European Economic Area from May 2021 to April 2028. Within this amount are country specific allocations to Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia, based on the distribution key for the Cohesion Fund.
The funding will be made available to promote three overall thematic priorities: 1) European green transition, 2) Democracy, rule of law and human rights and 3) Social inclusion and resilience
The European Commission signs EUR 1.4 billion of new guarantee and grant agreements to support Ukraine’s recovery and attract private sector investments
During the Ukraine Recovery Conference on 11-12 June 2024 in Berlin, European Commission President Ursula von der Leyen announced the signature of EUR 1.4 billion in new guarantee and grant agreements to support Ukraine’s recovery and reconstruction, as part of the Ukraine Facility’s Investment Framework.
These are the first agreements signed with international and bilateral public financial institutions under the Ukraine Investment Framework, the investment arm of the EU’s Ukraine Facility to support Ukraine amid the conflict and towards EU membership.
These agreements are composed of EUR 1 billion of loan guarantees and EUR 400 million of blended finance grants, will benefit private companies, including small and medium-sized enterprises, municipalities and Ukrainian state-owned enterprises.
The full list of programmes, which aim to unlock EUR 6 billion in investments, includes:
- Initiatives in Support of Ukraine’s Private Sector – to enhance access to finance for small and medium-sized enterprises, including to war-affected companies. The EU is providing EUR 190 million in guarantees and EUR 10 million investment grants via the European Investment Bank (EIB) Group;
- Better Futures Programme, Resilience, Reconstruction, and Regeneration of Ukraine – to accelerate and scale-up investments in renewable energy such as wind power projects, battery energy storage systems, transport, digital sector, and industrial investments. including steel production, construction materials and processing. The EU will provide EUR 350 million in guarantees and EUR 17.5 million in technical assistance via the International Finance Corporation (IFC).
- Financial Inclusion Recovery Programme – to enhance access to finance for small and medium-sized enterprises and invest in their production capacity. The EU is providing EUR 140 million in guarantees, EUR 30 million in investment grants and EUR 7 million in technical assistance via the European Bank for Reconstruction and Development (EBRD).
- Hi-Bar Programme – to mobilise finance to accelerate the net zero transition in the energy sector. The EU is providing EUR 150 million in guarantees and EUR 7.5 million in technical assistance via the EBRD.
- Municipal, Infrastructure and Industrial Resilience Programme – focused on emergency support and future reconstruction efforts across sectors, including industry, energy, municipal infrastructure. The EU is providing EUR 150 million in guarantees, EUR 25 million in investment grants, and EUR 7.5 million in technical assistance via the EBRD.
- Promoting Green Lending via the Green for Growth Fund – to enhance access to financing for mid-caps and small and medium-sized enterprises, green and circular economy businesses, climate adaptation, energy efficiency and green transition. The EU is providing first loss capital of EUR 45 million, EUR 7 million in investment grants and EUR 3 million in technical assistance via the Kreditanstalt für Wiederaufbau (KfW), the German Development bank.
- EU4Business, Lending to Micro and Small Enterprises via the EFSE Fund – to support the restoration and relocation of war-affected companies, micro and early-stage entrepreneurship, businesses in de-occupied/front-line regions, and the adaption of agricultural business. The EU is providing first loss capital of EUR 45 million, EUR 9 million in investment grants and EUR 1 million in technical assistance via the KfW.
- Reconstruction and Rehabilitation of Electricity Transmission Infrastructure Programme – to strengthen the resilience of electricity transmission by investing in sustainable repairs and rehabilitation of electricity infrastructure as well as restoring access to electricity supply for critical infrastructures. The EU will provide EUR 100 million investment grants via the KfW.
- Support for Ukrainian MSMEs Programme – to enhance access to finance for micro, small and medium-sized enterprises focusing on war-affected companies to help them to restore their business, including in de-occupied and front-line regions. The EU is providing EUR 20 million in guarantees via Bank Gospodarstwa Krajowego (BGK).
- Municipal Infrastructure Development Programme to support water and sanitation investments, rehabilitation of water supply and sewage infrastructure in the City of Chernivtsi. The EU is providing EUR 17.75 million in investment grants and EUR 2 million in technical assistance via the KfW.
- Immediate Ukraine Extension of JASPERS (Joint Assistance to Support Projects in European Regions) – to provide capacity-building to prepare and implement large-scale infrastructure projects and advisory services for the Ukraine’s reconstruction. The EU is providing EUR 10 million in technical assistance via the EIB.
- Ukraine Recovery and Reconstruction Guarantee Facility – to provide war insurance for movable assets, such as in-land cargo transport. The EU is providing EUR 50 million in guarantees via the EBRD to cover the risk of a fund which will in turn extend insurance coverage. Other donors will provide an additional EUR 60 million in guarantee commitments.
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Social Europe Academy Advanced Funding Training for Members
Eurodiaconia will be holding the two-part Advanced Funding Training for Members on 20 and 27 September 2024, 13:30 CEST. The training will cover: Results chain, the logical framework and budget. Registration will open soon. Please save the date!