He sees more room to extend the completion of some projects beyond 2026, through public business entities

MADRID, 12 Oct. (EUROPA PRESS) -

The Government negotiated with the European Commission, within the framework of the addendum to the Recovery, Transformation and Resilience Plan, to delay 2 milestones and 28 objectives planned in the original calendar for 2023, alleging in most cases external reasons to motivate their delay such as the disruption of supply chains or increased costs due to inflation.

This is clear from a report prepared by the Spanish consulting firm LLYC, in which it analyzes the recent approval by Brussels of the addendum to the Spanish Recovery Plan.

The most relevant aspect of this approval, according to the consultancy, is found in the flexibility demonstrated by Brussels with respect to several key programs related to hydrogen, the circular economy, electric vehicles and industrial decarbonization.

According to the text of the Aaenda, the relevant milestone regarding the disbursement schedule agreed with the Commission will be, in the case of projects financed by calls led by IDEA, Fundación Biodiversidad or ENISA, the granting of the aid and not the Project Completion.

It has been agreed to give more room to extend the completion of some projects financed with these funds beyond 2026, through public business entities, such as those mentioned above.

Until that year 2026, transfers to these entities and concessions will have had to be made, but not all projects have to have been completely completed by that date, originally set as the limit for the execution of the funds.

Spain thus obtains more time in very significant calls without being subject to a possible change in the Regulation of the Recovery and Resilience Mechanism that would require, where appropriate, approval from the 27 national parliaments.

Also noteworthy, according to LLYC, are the low ambition and lack of structural nature of the new reforms included in the Addendum. These are continuity reforms, many of them already underway, which will not imply major difficulties for their approval in the case of a scenario of continuity of the current government.

"The addendum, therefore, will not serve to deepen far-reaching reforms, such as the functioning of the Public Administration or the improvement of competition conditions in various market sectors in Spain," the consultancy firm noted.

In his opinion, it is a wise move to allocate non-refundable funds to reinforce the Perte, the instrument created ex-novo in the context of the Recovery Plan and that allows projects with a greater volume of investment, with defined strategic objectives.

However, the conditions for access to these projects should be simplified, so that the submission of proposals is encouraged, since we have already seen some calls that have not awarded all of their funds either due to lack of competition or due to excessive complexity of the procedure and requirements, which have led to a significant number of applications being left out.

Similarly, the reform of the Temporary Framework for State Aid can facilitate the notification of a greater number of projects in order to increase the allocations of the calls, particularly in projects related to the development and exploitation of renewable energies and energy storage, the decarbonization of industrial processes and the production of strategic technologies for zero emissions.

On the other hand, in relation to the governance mechanisms of the use of financial instruments, the addendum is limited to indicating that Spain must approve a regulatory mechanism that contains the description of the control systems in charge of the implementing partner or, where appropriate, of financial intermediaries, to account for the investment mobilized (a provision that will not apply to the EIB).

The text of the addendum specifies that the audit and control requirements must ensure the prevention, detection and correction of fraud, corruption and conflict of interest, as well as the verification of the eligibility of each operation before committing the financing and implementation of ex-post risk audits in accordance with an audit plan.

"We thus see that it is left in the hands of the Government of Spain to establish the formulas that establish the specific capacity that the financial sector will have to decide on the projects to support, with the Commission limiting itself to enunciating some general principles to follow", they have pointed out from the consultant.