The first call for projects associated with the EU's Just Transition public sector loan facility is expected this year after the presidency of the European Council, currently occupied by Portugal, and the European Parliament yesterday reached a provisional agreement on the program.
The fund would allocate €1.5 billion of grants from EU resources, tied to a total loan package of €10 billion, to be made available by the European Investment Bank. The money will be for public sector institutions in the regions of the bloc most likely to suffer from the move away from fossil fuel power generation.
The council, which is composed of representatives of member state governments, and the parliament will now need to ratify the deal agreed yesterday, with legislation for the public sector loan facility set to follow “in the coming weeks,” the EU announced yesterday. Provided member states have completed just transition plans approved by the European Commission, they will be eligible to apply for grant and loan funding, with the first call for projects slated for the autumn.
The parliament yesterday raised the generosity of the public sector loan facility by negotiating that the less-developed regions of the EU – previously defined as having less than 75% of the bloc's average per-capita GDP – will be able to receive 25% of their funding in the form of grants, up from the 20% previously suggested. More developed regions will be eligible for 15% grant support.
The deal agreed yesterday also extends the period during which the new funding stream will be fenced off for just transition regions, by a year, until the end of 2025. After that point, any remaining funds will be made available for bidding by EU member states without regard to their just transition eligibility.
The EU hopes the €11.5 billion package will generate €25-30 billion of investment in the energy transition.