EU FUNDS CO-FINANCING CASTILLA Y LEON 2021-27

The operation will co-finance investment schemes supported by European Regional Development Fund (ERDF), the European Social Fund Plus (ESF+) and the Just Transition Fund (JTF) in the region of Castilla y Leon within the Spanish Partnership Agreement 2021-2027. Co-financing concerns the two regional Operational Programmes (OPs), notably the OP for growth and jobs supported by ERDF and the OP for social inclusion and employment supported by ESF+, as well as investments under the national OP of the JTF that take place in the region.

The co-financed ERDF and ESF+ investments will contribute to the following four EU Cohesion policy objectives: (1) A smarter Europe; (2) A greener Europe; (3) A more social Europe; and (4) A Europe closer to citizens. More specifically: - ERDF will support investments in research, development and innovation activities, ICT networks and applications, small and medium sized enterprises, human capital development (especially education and training infrastructure and programmes), climate change mitigation (e.g., through energy efficiency investment in public buildings and renewable energy production), environmental sustainability (e.g. by safeguarding drinking water supply). - ESF+ will support investments in education and training, lifelong learning, skills development and access to employment and entrepreneurship, to increase the economy's stock of human and social capital and thus reduce shortages of skilled labour. - JTF will support investments in the provinces of Palencia and León, two of the Spanish territories most challenged by the transition towards a climate-neutral EU economy by 2050. The project will enable its inhabitants to address the social, employment, economic and environmental impacts of the end of fossil-based activities.

The Project concerns priority investments of the operational programmes of the EU Cohesion Policy funds (CPFs), notably the European Regional Development Fund (ERDF), the European Social Fund Plus (ESF+), and the Just Transition Fund (JTF), in the Spanish Autonomous Community of Castilla y León (CACL). The Project fosters innovation and skills, digitalisation, competitiveness, clean energy production, environmental protection, better and more equal access to health services, and SME development. The investment programme is plan-led and well-embedded in the EU Cohesion policy architecture centring around the three general policy goals of a smarter, a greener, and a more social Europe, as well as the specific policy goal for the JTF of "enabling regions and people to address the social, employment, economic and environmental impacts of the transition towards the Union's 2030 targets for energy and climate and a climate-neutral economy of the Union by 2050, based on the Paris Agreement".

EIB support to the region's co-financing of the Cohesion Policy fund investments will help kick-start the implementation of the operational programmes. The Project addresses sub-optimal investment situations in many sectors. 85% of the resources of the ERDF will be devoted to the "Smarter and Greener Europe" objectives. Specifically, the Project will support research, development and innovation infrastructure and activities whose returns to society are known to be larger than the financial return to the innovative entities (SMEs, corporates, universities, and public research centres). The Project will also support investments in energy efficiency and in the production of heat and electricity from renewable sources, thereby lowering the negative externalities from CO2 emissions. It will further strengthen the region's stock of health care equipment and foster the digitalisation of health services. Moreover, the ERDF will support fixed investment fostering business development and internationalisation of SMEs, thereby easing financial constraints that arise from information asymmetries caused by the lack of track record for such companies and high screening costs for small investments.

The ESF+, in turn, will improve access to employment and activation measures for jobseekers, in particular young people, and promote equal access to, and completion of quality and inclusive education and training. By fostering the transition from school to work, the transition from unemployment back into work, and the development of digital skills, the Project will increase the economy's stock of human and social capital, reduce shortages of skilled labour and protect vulnerable persons from sliding into long-term unemployment.

In addition, the JTF will support investments in the provinces of Palencia and León, two of the Spanish territories most challenged by the transition towards a climate-neutral EU economy by 2050. The Project will enable its inhabitants and companies to address the social, employment, economic and environmental impacts of the recent closures of seven mining installations and four coal-fired power plants.

Finally, EIB's financing provides the client with competitive pricing, longer tenor than commercial lenders and flexible loan conditions, such as long grace and disbursement periods, which are better suited for the implementation of the Project. EIB's financing also supports CACL to achieve diversification of funding sources and contributes to the stability of their financing needs.

All in all, the Project will foster a balanced socioeconomic and territorial development of the region, in line with the Territorial Agenda 2030.

The promoter will be required to act in compliance with the relevant EU environmental legislation. The EIB's appraisal will focus on the promoter's environmental management capacity in applying the EU Strategic Environmental Assessment (SEA) Directive 2001/42/EC and Environmental Impact Assessment (EIA) Directive 2011/92/EU amended by the Directive 2014/52/EU, as relevant and transposed to the national legislation. In particular, the ERDF Operational Programme is subject to a SEA. Furthermore, some schemes thereunder may fall under Annex I or Annex II of the EIA Directive. The applicability of the Environmental Impact Assessment (EIA) Directive 2011/92/EU amended by the 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 ERDF Operational Programme might concern the construction or upgrade of small water and wastewater treatment infrastructure or the construction or upgrade of water distribution infrastructure. The EIB 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 ERDF Operational Programme might concern the new construction or refurbishment of buildings. The EIB 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 EIB will require the promoter to ensure that contracts for implementation of the project will be tendered in accordance with the applicable EU procurement legislation, Directives 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 EU Official Journal, as and where required.