Division 5.3 Financial Instruments

Funding, within the meaning of Article 17(4) of the LIFE Regulation, will be given to the following two pilot financial instruments for the purpose of achieving the general objectives set out in Article 3 of the LIFE Regulation:

• Natural Capital Financing Facility (NCFF) — a new financial instrument to be piloted under both sub-programmes in order to test and demonstrate innovative financing approaches for projects promoting the preservation of natural capital in the priority areas Nature and Biodiversity and Climate Change Adaptation.

• Private Financing for Energy Efficiency instrument (PF4EE) — a pilot financial instrument under the sub-programme Climate Action, testing a new approach to address the limited access to adequate and affordable commercial financing for energy efficiency investments targeted by national priorities.

The provisions on financial instruments under Regulation (EU, Euratom) No 966/2012 (hereinafter ‘Financial Regulation’), in particular Articles 139 and 140 thereof, are fulfilled as outlined in the following.

Financial instruments supporting projects may take any of the forms referred to in, and shall be implemented in accordance with Title VIII of Regulation (EU, Euratom) No 966/2012 and may be combined with each other and with grants funded under the Union budget.

According to Article 140(6) annual repayments, including capital repayments, guarantees released, and repayments of the principal of loans, shall constitute internal assigned revenue and shall be used for the same financial instrument for a period not exceeding the period for the commitment of appropriations plus two years.

In preparation of the Implementing Commission Decision on the adoption of the multiannual work programme for the years 2014-17, the ex-ante evaluations of the two financial instruments were submitted to the LIFE Committee and the Commission as information documents.

The Commission will undertake a mid-term evaluations no later than 30 June 2017 (Article 27 of the LIFE Regulation), and will in this context also provide feedback on the implementation of the financial instrument implemented in 2014-16. The required external evaluation report will assess the relevance and effectiveness of each financial instrument with respect to helping achieve LIFE policy objectives, their efficiency, their utility in addressing market deficiencies and sub-optimal investment situations, and the overall coherence of the financial instruments themselves, as well as providing recommendations for improvements.

The Commission will report at least on an annual basis to the LIFE Committee, while ad-hoc meetings can be called if the need arises. In the first two years of implementation the Commission will report at least three times (autumn 2014, spring 2015, and autumn 2015) to the LIFE Committee on the progress of the financial instruments.