Public Sector Loan Facility: Local Governments get consulted for the Just Transition
The Public Sector Loan Facility is indeed the third pillar of the Just Transition Mechanism and, together with the Just Transition Fund and the InvestEU scheme, aims to support the EU's climate transition process in a way that leaves no one behind.
The EU consultation on the Public Sector Loan Facility
The Just Transition Mechanism (JTM) aims to ensure that the EU's transition to a climate-neutral economy happens fairly, leaving no one behind. As part of the EU Green Deal, the Just Transition Mechanism is tasked with providing financial resources to support territories towards the Union's 2030 climate target and the goal of climate neutrality by 2050, focusing especially on those most dependent on fossil fuels and at risk of bearing the brunt of the transition.
The JTM has three pillars. The first is the Just Transition Fund (JTF), a tool endowed with €17.5 billion aimed at mitigating the socio-economic costs arising from the transition to a climate-neutral economy, by supporting the diversification and modernization of the local economy of territories most dependent on fossil fuels, encouraging investments in the green transition, and mitigating the negative impacts of this process on the labor market.
The Fund operates in the territories covered by the Territorial Just Transition Plans, financing investments in digitalization, the creation of new businesses and startups, the spread of renewable energies and emission reductions, the recovery of industrial sites, as well as worker training and retraining.
The second pillar is the InvestEU scheme for just transition. Through the financial products proposed by InvestEU's implementing partners, covering all four strategic windows of the program – SMEs; Sustainable Infrastructure; Research, Innovation and Digitalization; Social Investments and Skills – the scheme supports investments addressing the social, economic, and environmental challenges linked to the target territories' path to climate neutrality.
Finally, the Public Sector Loan Facility (PSLF) supports public sector investments related to development needs arising from the social, economic, and environmental challenges due to the transition to the EU's climate goals, as identified in the Plans approved by the European Commission, in synergy with the European Investment Bank. Beneficiaries of the instrument receive a grant from CINEA, on behalf of the European Commission's DG Regio, from a budget of €1.5 billion, combined with an EIB loan, from a budget of €10 billion.
The objective of the public consultation launched by DG Regio, as part of the broader mid-term evaluation process of the Public Sector Loan Facility, is to verify the implementation status of the PSLF and gather stakeholder views and suggestions that could be used to improve its effectiveness.
The questionnaire takes about 10-15 minutes to complete and can be filled out in English, German, Spanish, Italian, Polish, and French until September 6, 2024.