MADRID ERDF CO-FINANCING 2021-2027

Co-Financing of the European Regional Development Fund (ERDF) in the 2021-2027 EU programming period.

The project is expected to co-finance the regional Operational Programme (OP) of the European Regional Development Fund (ERDF) of the Autonomous Community of Madrid (CAM), developed within the framework of the Spanish Partnership Agreement for the 2021-2027 programming period.

The Project concerns priority investments of the regional operational programme (OP) of the European Regional Development Fund (ERDF) in the Spanish Autonomous Community of Madrid (CAM). The Project fosters innovation, digitalisation, environmental protection and climate action. Sound programming and programme management will ensure that the Project's benefit will spread throughout the region, thereby contributing to its balanced socioeconomic and territorial development. The investment programme is plan-led and well-embedded in the EU Cohesion policy architecture centring around the EU policy objectives of a smarter, a greener, and a more social Europe.

EIB support to the region's public co-financing of the ERDF investments will help kick-start the implementation of the investment schemes. The Project addresses market failures and sub-optimal investment situations in many sectors. Specifically, the Project will support the provision of infrastructure and activities related to research, development and innovation whose returns to society are known to be larger than the financial return to the investor. Moreover, it will enable digitalisation-driven efficiency gains in the provision of public services through investment in e-health and e-government applications. In addition, the rehabilitation of the region's water supply networks is expected to reduce wasteful leaks and to improve the quality and efficiency of water supply, thus generating environmental and public health benefits and helping to adapt to water scarcity events. Finally, the Project will also support energy efficiency renovations in public buildings and the production of energy from renewable sources, thereby lowering the negative externalities from greenhouse gas emissions.

EIB's participation will provide a financial benefit to CAM as it allows to distribute the cost of financing in the long term, resulting in a manageable annual debt service amount. The EIB will include flexible drawdown terms and conditions adjusted to the investment horizon of the Project, which are highly valued by public promoters and a key differentiating feature of EIB's financing.

As an autonomous community of Spain, CAM has to comply with national legislation that transposed the Directive 2011/92/EU, amended by the EIA Directive 2014/52/EU into the national environmental legislation. The Bank's appraisal will focus on the Promoter's environmental management capacity in applying the EU Strategic Environmental Assessment (SEA) Directive 2001/42/EC and Directive 2011/92/EU amended by the EIA Directive 2014/52/EU, as relevant. The ERDF is subject to a SEA. Some schemes in the Operational Programmes shall fall under Annex I or Annex II of the Environmental Impact Assessment (EIA) Directive. All schemes must be implemented in compliance with the EU environmental legislation. The applicability of Directive 2011/92/EU amended by the EIA Directive 2014/52/EU, the Habitats Directive 92/43/EEC and the Birds Directive 2009/147/EC will be reviewed at appraisal and during the allocation phase. Some schemes in the Operational Programmes might concern the construction or upgrade of small water and wastewater treatment infrastructure or the construction or upgrade of water distribution infrastructure. The Bank will assess the Promoter's compliance with the Water Framework Directive (WFD) 2000/60/EC and the Urban Waste Water Council Directive 91/271/EEC at appraisal and during the allocation phase. Some schemes in the Operational Programmes might concern the new construction or refurbishment of buildings. The Bank will assess the Promoter's compliance with the Energy performance of buildings directive (Directive EU/2018/844) at appraisal and during the allocation phase. Schemes under the ESF+ foster education, training and lifelong learning, and hence support implementation of the European Pillar of Social Rights.

The Bank will require the promoter to ensure that contracts for implementation of the project will be tendered in accordance with the applicable EU procurement legislation, Directive 2014/23/EU / 2014/24/EU / 2014/25/EU as well as Directive 92/13/EEC or Directive 89/665/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the Official Journal of the EU, as and where required.