The Research, Industry and Energy Committee of the European Parliament has backed the proposal to reallocate more than 146 million Euro to finance energy saving, energy efficiency and renewable energy projects. Once endorsed by the Council, these funds which were not part of the European Energy Recovery Plan, will be available for regional and local authorities since 1 January 2011.

According to the agreement reached by the European Parliament and the Council the European Energy Recovery Plan (EERP), launched in 2009 in order to boost economic recovery by funding energy projects. Under this new agreement the original Regulation will be amended in order to include the possibility to fund these type or projects which were not part of the original instrument and now have a relevant position within the Energy 2020 strategy recently presented by the European Commission.

This reconsideration will be the legal base to allocate the 146.34 million Euro of unused EU funds to finance energy saving, energy efficiency and renewable energy projects and avoid them to go back to national budgets. This fund will focus chiefly on helping local and regional authorities to pay for such projects, which must be economically and financially viable, so as to refund the investment in due course. They will be available from 1 January 2011 and must be allocated by 31 March 2014.

Clean and efficiency renewable projects to be funded under EERP

• Renovations of public and private buildings to improve energy efficiency or switching to renewable energy.
• The construction of renewables-based heat-and-power installations, with distribution networks, and their integration into electricity grids.
• Clean urban public transport solutions, particularly electric and hydrogen vehicles.
• Local infrastructure, including efficient street lighting, electricity storage, smart metering and smart grids.

Contributions from the fund could take the form of loans, guarantees, equity or other financial products. Up to 15% of the funding may be used to provide technical assistance to public authorities to help set up the projects. Geographical balance is to be an important criterion in the selection of projects.

Legislation still has to be formally approved by the Council before the end of the year. Due to the urgent need to address the economic crisis, it should enter into force immediately on publication.