# Decision No 466/2014/EU of the European Parliament and of the Council of 16 April 2014 granting an EU guarantee to the European Investment Bank against losses under financing operations supporting investment projects outside the Union, Article 8: Coverage and terms of the EU guarantee

Extent: E+W+S+N.I.

1. For EIB financing operations, except those consisting of debt capital market instruments, entered into with a State, or guaranteed by a State, and for other EIB financing operations entered into with regional or local authorities, or public enterprises or institutions owned or controlled by a State, where such other EIB financing operations have an appropriate EIB credit risk assessment taking into account the credit risk situation of the country concerned, the EU guarantee shall cover all payments due to the EIB, but not received by it (‘Comprehensive Guarantee’).
The Comprehensive Guarantee shall also cover EIB financing operations under the private-sector lending mandate referred to in point (b) of Article 2(1), which on average shall have a higher risk profile than the portfolio covered under the Political Risk Guarantee referred to in paragraph 3 of this Article in pre-accession countries and beneficiaries and Neighbourhood and Partnership countries.
2. For the purposes of paragraph 1, Palestine is represented by the Palestinian Authority and Kosovo is represented by the Authorities of Kosovo.
3. For EIB financing operations other than those referred to in paragraph 1, the EU guarantee shall cover all payments due to the EIB but not received by it, where the non-receipt has been caused by the realisation of one of the following political risks (‘Political Risk Guarantee’):
(a) non-transfer of currency;
(b) expropriation;
(c) war or civil disturbance;
(d) denial of justice upon breach of contract.
4. For EIB financing operations consisting of debt capital market instruments, only the Political Risk Guarantee shall apply.
5. Financing agreements with individual promoters relating to EIB financing operations shall also include appropriate procurement, environmental, climate and social provisions in accordance with the EIB's own rules and procedures, including requirements to make the EU guarantee and EIB involvement visible to the end beneficiary.
6. The Commission and the EIB shall set out in the guarantee agreement referred to in Article 14 a clear and transparent allocation policy allowing the EIB to identify, within its external activity, the operations to be financed under this Decision in order to ensure the most effective use of the EU guarantee. The allocation policy shall be based on the creditworthiness of EIB financing operations as assessed by the EIB, the ceilings as defined in Annex I, the nature of the counterparty, whether a sovereign State or a sub-sovereign entity falling under paragraph 1 of this Article or a private entity, EIB risk-absorption capacity and other relevant criteria, including added value of the EU guarantee. The European Parliament and the Council shall receive the allocation policy in accordance with Article 14.
7. When the EU guarantee is called, the Union shall be subrogated to any relevant rights of the EIB in respect of any obligation in connection to its financing operations, in accordance with the guarantee agreement referred to in Article 14.

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Source: https://www.legislation.gov.uk/eudn/2014/466/article/8 (the official version)
Page: https://openlegislation.uk/eu-decision-2014-466/article-8
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.