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European Islands Facility - Unlock financing for energy transitions and supporting islands to develop investment concepts

Proposals are expected to set up and run a 'European Islands Facility' which offers expertise and/or financial support and services to islands:

  • The Islands Facility should offer expertise and/or financial support to develop, within a limited period of time, innovative cost-effective investment concepts based on (or the development of – if they do not yet exist) a transition plan and a coherent set of projects that will lead to a decarbonised, efficient and resilient island energy system using local energy flows and resources;
  • The Islands Facility should be able to provide, inter-alia: translation of ambitions into a holistic energy transition plan, assistance in modelling of the energy transition on the island(s), a clear identification of the individual potential project pipeline(s), legal analysis and support, a description of how the investments will be financed and, if relevant, how the financing will be mobilised locally, advice on available funds and a design of the process to launch the investments. It can also cover the support for information and engagement actions among the islands inhabitants in the view of ensuring their acceptance, projects participation and co-ownership, also mobilising local financing;
  • The Islands Facility should develop in-house expertise to coordinate, support the implementation and critically evaluate the outcomes on the above-mentioned issues, i.e. preparation of energy transition plans, modelling of the energy transition on the islands, identification and financing of project pipelines, legal analysis, so that it will create synergies between requests for assistance from different islands;
  • Besides the technical assistance, the Islands Facility will maintain a public, searchable portal with the energy transition plans and project proposals that it has supported and developed, share and spread knowledge and best practices based on a sound and inclusive outreach strategy, with the aim to engage as many islands as possible in the energy transition;
  • Proposals should foresee to provide support to third parties ('support scheme') as described in part K of the General Annexes of the Work Programme. At least 30%, and up to 70%, of the budget should be directly allocated for spending to island cities, municipalities or their groupings;
  • Proposals should demonstrate that they are deeply rooted in the ecosystem of island communities, of sustainable energy planners and project initiators, and of the financing community of energy efficiency and energy system transformations;
  • Proposals should include a strategy to include contributions from 3rd parties to its funding such as local, regional or national authorities (while maintaining autonomy in its activities), and a strategy to continue its work after the granted budget is finished;
  • Proposals should demonstrate that they are able to mobilise a critical mass of islands and set up the support scheme of the Islands Facility in accordance with H2020 standards;
  • Proposals have to foresee services to underpin European added value and earmark appropriate resources (at least 30%, and up to 70%, of the requested EU contribution) to make experts available directly to the islands, provide the necessary quality control over the experts' outputs, and ensure that the results are used by other islands;
  • Proposals should demonstrate how they are able to select and prioritise islands for support under this facility, based on the following requirements: in order to qualify for support through the Islands Facility, islands must demonstrate proof of political commitment, an ambitious scale of potential investment and level of energy savings relevant to the island, investment sector targeted and type of financial solution envisaged, governance to develop the investment concept, a plan for long-term capacity building within the public administration, a plan on how they will include citizens and other stakeholders, and a commitment for monitoring for 2 years;
  • Proposals should include a task to establish links and synergies with R&I projects selected under LC-SC3-ES-4-2018-2020: Decarbonising energy systems of geographical Islands under the BRIDGE initiative.

The Commission considers that proposals requesting a contribution from the EU of 10 million EUR would allow this specific challenge to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.

Mobilising investment in energy efficiency and renewables is key for Europe's energy transition. In 2017 the European Commission and 14 EU Member States signed a political declaration to launch the new 'Clean Energy for EU Islands' initiative. Its aim is to help islands reduce their dependency on energy imports by making better use of their own renewable energy sources and embracing more modern, socially inclusive and innovative energy systems.

Europe's more than 2200 inhabited islands can be considered living-labs which can deliver a pipeline of energy investment projects across Europe. Energy transitions on islands often benefit from low opportunity costs due to the existing high prices of conventional liquid fuels in contrast to the variety of renewable sources they may have available.

However, despite tremendous potential, too few islands in Europe succeed in developing and scaling up investment packages. A high degree of organisational, technical and financial innovation is needed to reach significant scale. A key gap is the lack of capacity for islands to transform their overall long-term ambitions into a credible set of plan(s) and project outlines, i.e. investment concepts, that serve as the basis for concrete projects. In particular, local initiatives and/or public authorities on islands have limited resources to access the analytic, financial and legal expertise needed to collect additional data and develop an investment programme of scale i.e. pooling projects and/or developing financing strategies which demonstrate sufficient maturity to enable access to different sources of finance often mobilised locally on the island.

In order for islands to be microcosms of economic, social and environmental transformations they may often require assistance in designing coherent set of projects and selecting the most cost-effective option from the life-cycle perspective, aggregating smaller projects into island-size packages and in mobilising the significant amount of finance needed for a full energy transition. This may also include communication and engagement actions among island inhabitants to identify acceptable projects, which also can lead to projects co-ownership and mobilisation of local financing.

The investment concepts would allow a large number of islands and regions to access the various innovative financing streams which are being structured (e.g. PDA, ESIF Financial Instruments, National Investment Platforms), to increase the absorption rates of EFSI and to access private finance.

Proposals are expected to demonstrate the impacts listed below using quantified indicators and targets wherever possible:

  • Demonstration and documentation of increased leveraging of finance into energy transition investments by public authorities;
  • Overall, for every million Euro of Horizon 2020 support the action should trigger energy transition investments worth at least EUR 10 million;
  • Number of investment concepts delivered, and number of concepts that turned into tangible investments after the provided support;
  • Number of public authority staff with increased capacity for developing investible energy transition projects;
  • Innovation uptake by potential replicators;
  • Primary energy savings, GHG reductions, renewable energy production and investments in sustainable energy triggered by participating public authorities after the support of the action (respectively in GWh/year and in million EUR of investments).