How it works

Beneficiary Member States will work in close cooperation with the European Investment Bank (EIB), with the European Commission (EC) and the Investment Committee set up for the fund.

Key steps in the financing process

1. Select

Member States select the investments they wish to submit for Modernisation Fund support.

Direct applications by project proponents cannot be sent to the EIB, the Investment Commitee or the EC.

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2. Submit

Member States submit the proposed investments to the EIB, the Investment Committee and the EC at any time of the year.

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3. Assess

The EIB confirms if the investment is a priority investment.

For non-priority investments, the EIB conducts a technical and financial due diligence assessment.

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4. Decide

The EC takes a disbursement decision once an investment is confirmed as priority by the EIB, or recommended for financing by the Investment Committee as non-priority.

Following the IC meetings there will be two disbursement decisions per year, covering investments in all beneficiary Member States.

5. Disburse

The EIB transfers the resources to the beneficiary Member States in accordance with the disbursement decision within 30 days.

6. Monetise and asset management

The EIB acts as the auctioneer for the sale of EU allowances and receives the proceeds of each auction, on behalf of the beneficiary Member States.

Additionally, it manages the proceeds in a single portfolio according to mutually agreed asset management guidelines and fully transfers the revenues to the Member States.

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Size of the Modernisation Fund

The Modernisation Fund is funded from

 

  • revenues from the auctioning of 2% of the total allowances for 2021-30 under the EU Emissions Trading System (EU ETS)
  • additional allowances transferred to the Modernisation Fund by beneficiary Member States – five opted to do so (Croatia, Czech Republic, Lithuania, Romania and Slovakia).

EUA – carbon market price

Daily settle price (in €) of one lot of 1000 Carbon Emission Allowances (EUA), with each EUA being an entitlement to emit one tonne of carbon dioxide

Allowances per beneficiary Member State

Totals for the period 2021-2030

Share of the Modernisation Fund* Number of allowances Transfers from Article 10(2)(b)** Transfers from Article 10c** Transfers totals*** Total

Bulgaria
5.84% 16 095 825 0 0 0 16 095 825
Czech Republic
15.59% 42 968 135 38 722 276 111 462 281 150 184 557 193 152 692

Estonia
2.78% 7 662 054 0 0 0 7 662 054

Croatia
3.14% 8 654 262 0 5 978 852 5 978 852 14 633 114

Latvia
1.44% 3 968 834 0 0 0 3 968 834

Lithuania
2.57% 7 083 265 0 8 696 818 8 696 818 15 780 083

Hungary
7.12% 19 623 677 0 0 0 19 623 677

Poland
43.41% 119 643 793 0 0 0 119 643 793

Romania
11.98% 33 018 490 81 673 875 86 073 704 167 747 579 200 766 069

Slovakia
6.13% 16 895 104 1 783 231 33 228 414 35 011 645 51 906 749
100% 275 613 439 122 179 383 245 440 068 367 619 451 643 232 890

*Share as per Annex IIb of the ETS Directive
**Articles of the ETS Directive
***Transfers from Article 10(2)(b) (solidarity) and Article 10c

How it works