
TITLE I
CHAPTER I
Article 1 

1. A framework programme for Community action in the field of competitiveness and innovation, paying particular attention to the needs of SMEs and covering the period from 1 January 2007 to 31 December 2013 (hereinafter referred to as the Framework Programme), is hereby established.
2. The Framework Programme shall contribute to the competitiveness and innovative capacity of the Community as an advanced knowledge society, with sustainable development based on robust economic growth and a highly competitive social market economy with a high level of protection and improvement of the quality of the environment.
3. The Framework Programme shall not cover research, technological development and demonstration activities carried out in accordance with Article 166 of the Treaty. It shall contribute to closing the gap between research and innovation and promote all forms of innovation.
Article 2 

1. The Framework Programme shall have the following objectives:
(a) to foster the competitiveness of enterprises, in particular of SMEs;
(b) to promote all forms of innovation including eco-innovation;
(c) to accelerate the development of a sustainable, competitive, innovative and inclusive information society;
(d) to promote energy efficiency and new and renewable energy sources in all sectors, including transport.
2. The objectives of the Framework Programme shall be pursued through the implementation of the following specific programmes as established in Title II (hereinafter referred to as the specific programmes):
(a) the Entrepreneurship and Innovation Programme;
(b) the Information and Communications Technologies (ICT) Policy Support Programme;
(c) the Intelligent Energy-Europe Programme.
Article 3 

1. The financial envelope for the implementing the Framework Programme shall be EUR 3 621 300 000.
2. An indicative budgetary breakdown for the specific programmes is set out in Annex I.
3. The budgetary authority shall authorise the available annual appropriations within the limits of the financial framework.
Article 4 
The Framework Programme shall be open to the participation of:

((a)) European Free Trade Association (EFTA) countries which are members of the European Economic Area (EEA), in accordance with the conditions laid down in the EEA Agreement;
((b)) accession countries and candidate countries benefiting from a pre-accession strategy, in accordance with the general principles and general terms and conditions for the participation of those countries in Community programmes established in the respective Framework Agreements and Association Council Decisions;
((c)) countries of the Western Balkans, in accordance with the provisions to be determined with those countries following the establishment of Framework Agreements concerning their participation in Community programmes;
((d)) other third countries, when Agreements and procedures so allow.
CHAPTER II
Article 5 

1. The Commission shall adopt annual work programmes for the specific programmes in accordance with the procedure referred to in Article 46(2), taking into account the need to adjust to future developments, in particular after the interim evaluation.The Commission shall ensure the implementation of annual work programmes and inform the European Parliament of their preparation and implementation comprehensively and without delay.
2. Amendments to the annual work programmes concerning budgetary allocations of more than EUR 1 million shall be adopted in accordance with the procedure referred to in Article 46(2).
Article 6 

1. The instruments outlined in Section 2 of Chapter I, Section 2 of Chapter II and Section 2 of Chapter III of Title II shall constitute a common toolbox for the Framework Programme. They may also be used to fulfil the objectives of each specific programme as specified in the relevant annual work programme. A comprehensive list of instruments shall be set out in detail in the user manual referred to in Article 47.
2. The funding granted shall fully comply with Community State aid rules and accompanying instruments. Community rules concerning public access to documents shall apply. The principles of transparency and gender mainstreaming shall be taken into account.
Article 7 
The financial envelope established under this Decision may also cover necessary expenditure related to preparatory action, monitoring, control, audit and evaluation directly necessary for the effective and efficient implementation of this Decision and for the achievement of its objectives.
Such action may, in particular, include studies, meetings, information activities, publications, expenditure on informatics tools, systems and networks for the exchange and processing of information, and any other expenditure on technical, scientific and administrative assistance and expertise to which the Commission may need to have recourse for the purposes of the implementation of this Decision.
Article 8 

1. The Commission shall regularly monitor the implementation of the Framework Programme and its specific programmes. It shall also examine synergies within the Framework Programme and with other complementary Community programmes and, where possible, synergies with national programmes co-funded by the Union. Where possible, it shall examine the gender dimension and the respect of the principle of non-discrimination in programme activities.The Commission shall draw up an annual implementation report for the Framework Programme and for each specific programme examining the supported activities in terms of financial implementation, results and, where possible, impact. The annual report on the Entrepreneurship and Innovation Programme shall clearly identify eco-innovation activities.
2. The Framework Programme and its specific programmes shall be subject to interim and final evaluations. Such evaluations shall examine issues such as relevance, coherence and synergies, effectiveness, efficiency, sustainability, utility and, where possible and appropriate, distribution of funding with regard to sectors. The final evaluation shall, in addition, examine the extent to which the Framework Programme as a whole, and each of its specific programmes, has achieved its objectives.Both interim and final evaluations shall adopt appropriate methodologies to measure the impact of the Framework Programme, and each of the specific programmes, against its objectives, including competitiveness, innovation, entrepreneurship, productivity growth, employment and environment.Such evaluations shall examine the quality of the services referred to in Article 21(2) provided by the network partners. The interim evaluations may also include ex post evaluation elements with regard to previous programmes.
3. The interim and final evaluations of the specific programmes and the necessary budgetary allocations shall be included in the respective annual work programmes.The annual work programmes shall define a set of measurable objectives for each specific action and develop appropriate evaluation criteria and a set of quantitative and qualitative indicators to measure effectiveness in delivering outcomes that will contribute to the achievement of the objectives of the Framework Programme as a whole and the objectives of the relevant specific programme.The interim and final evaluation of the Framework Programme and the necessary budgetary allocations shall be included in the annual work programme for the Entrepreneurship and Innovation Programme.
4. The interim evaluation of the Framework Programme shall be completed by 31 December 2009 and the final evaluation by 31 December 2011.The interim and final evaluations of the specific programmes shall be arranged in such a way that their results can be taken into account in the interim and final evaluation of the Framework Programme.
5. The Commission shall communicate the annual implementation reports, the results of the interim and final evaluations of the Framework Programme and of its specific programmes to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions.
Article 9 

1. The Commission shall ensure that, when actions financed under this Decision are implemented, the financial interests of the Community are protected by the application of measures to prevent fraud, corruption and any other illegal activities, by effective checks and by the recovery of amounts unduly paid and, if irregularities are detected, by effective, proportional and dissuasive penalties, in accordance with Regulation (EC, Euratom) No 2988/95, Regulation (Euratom, EC) No 2185/96, and Regulation (EC) No 1073/1999.
2. For the Community actions financed under this Decision, Regulation (EC, Euratom) No 2988/95 and Regulation (Euratom, EC) No 2185/96 shall apply to any infringement of a provision of Community law, including infringements of a contractual obligation stipulated on the basis of the Framework Programme, resulting from an act or omission by an economic operator, which has, or would have, the effect of prejudicing the general budget of the European Union or budgets managed by it, by an unjustified item of expenditure.
3. All implementing measures resulting from this Decision shall provide, in particular, for supervision and financial control by the Commission or any representative authorised by it, and by audits by the European Court of Auditors, if necessary on-the-spot audits.
TITLE II
CHAPTER I
Section 1
Article 10 

1. The Entrepreneurship and Innovation Programme in support of enterprise, particularly SMEs, entrepreneurship, innovation, including eco-innovation and industrial competitiveness is hereby established.
2. The Entrepreneurship and Innovation Programme shall provide for action to support, improve, encourage and promote:
(a) access to finance for the start-up and growth of SMEs and investment in innovation activities;
(b) the creation of an environment favourable to SME cooperation, particularly in the field of cross-border cooperation;
(c) all forms of innovation in enterprises;
(d) eco-innovation;
(e) entrepreneurship and innovation culture;
(f) enterprise and innovation-related economic and administrative reform.
Article 11 
Action in relation to access to finance for the start-up and growth of SMEs and for investment in innovation activities, including eco-innovation, may include:

((a)) increasing the investment volumes of risk capital funds and investment vehicles promoted by business angels;
((b)) providing leverage to SME debt financing instruments;
((c)) improving the financial environment for, and the investment readiness of, SMEs.
Article 12 
Action in relation to SME cooperation may include:

((a)) fostering services in support of SMEs;
((b)) contributing to measures helping and encouraging SMEs to cooperate with other enterprises and other innovation actors across borders, including SME involvement in the field of European and international standardisation;
((c)) promoting and facilitating international business cooperation, including at regional level and through SME networks favouring the coordination and development of their economic and industrial activities.
Article 13 
Action in relation to innovation may include:

((a)) fostering sector-specific innovation, clusters, innovation networks, public-private innovation partnerships and cooperation with relevant international organisations, and the use of innovation management;
((b)) supporting national and regional programmes for business innovation;
((c)) supporting the take-up of innovative technologies and concepts and the innovative application of existing technologies and concepts;
((d)) supporting services for trans-national knowledge and technology transfer and for the protection and management of intellectual and industrial property;
((e)) developing and exploring new types of innovation services;
((f)) fostering technology and knowledge through data archiving and transfer.
Article 14 
Action in relation to eco-innovation may include:

((a)) supporting the take-up of environmental technologies and eco-innovative activities;
((b)) co-investment in risk capital funds that provide equity, inter alia, for companies investing in eco-innovation in accordance with the procedure laid down in Annex II;
((c)) fostering eco-innovation networks and clusters and public-private partnerships in eco-innovation, developing innovative business services, and facilitating or promoting eco-innovation;
((d)) promoting new and integrated approaches to eco-innovation in fields such as environmental management and the environmentally friendly design of products, processes and services, taking into account their whole life cycle.
Article 15 
Action in relation to entrepreneurship and innovation culture may include:

((a)) encouraging entrepreneurial mindsets, skills and culture, and the balancing of entrepreneurial risk and reward, in particular for women and young people;
((b)) encouraging a business environment favourable to innovation, enterprise development and growth;
((c)) supporting policy development and cooperation between actors, including trans-national cooperation of national and regional programme managers, in particular with a view to fostering the SME-friendliness of programmes and measures;
((d)) encouraging the creation and transfer of enterprises.
Article 16 
Action in relation to enterprise and innovation-related economic and administrative reform may include:

((a)) collecting data, analysing and monitoring performance, and developing and coordinating policy;
((b)) contributing to the definition and promotion of competitiveness strategies related to industry and service sectors;
((c)) supporting mutual learning for excellence in national, regional and local administrations.
Section 2
Article 17 

1. Community financial instruments shall be operated with the aim of facilitating access to finance for SMEs in certain phases of their life cycle: seed, start-up, expansion and business transfer. Investments made by SMEs in activities such as technological development, innovation, including eco-innovation, and technology transfer and the cross-border expansion of their business activities shall be included in the scope of the relevant instruments.
2. The instruments referred to in paragraph 1 shall be the following:
(a) the High Growth and Innovative SME Facility (GIF);
(b) the SME Guarantee (SMEG) Facility;
(c) the Capacity Building Scheme (CBS).
3. Implementation arrangements concerning the different instruments are laid down in Annex II.
Article 18 

1. The GIF shall be operated by the European Investment Fund (EIF) on behalf of the Commission.The GIF shall carry out the following tasks:
(a) contributing to the establishment and financing of SMEs and the reduction of the equity and risk capital market gap, which prevents SMEs from exploiting their growth potential, with a view to improving the European venture capital market;
(b) supporting innovative SMEs with high growth potential, in particular those undertaking research, development and other innovation activities.
2. The GIF shall consist of two windows, as follows:
— the first window, ‘GIF1’, shall cover early stage (seed and start-up) investments. It shall invest in specialised venture capital funds such as early stage funds, funds operating regionally, funds focused on specific sectors, technologies or research and technological development and funds linked to incubators, which shall in turn provide capital to SMEs. It may also co-invest in funds and investment vehicles promoted by business angels,
— the second window, ‘GIF2’, shall cover expansion stage investments and shall invest in specialised risk capital funds, which in turn shall provide quasi-equity or equity for innovative SMEs with high growth potential in their expansion phase. GIF2 investments shall avoid buy-out or replacement capital intended for asset stripping.GIF may invest in intermediaries by working, where appropriate, with national or regional schemes aimed at developing small business investment companies.In addition to the funding provided by GIF, the majority of the capital invested in any fund shall be provided by investors operating in circumstances corresponding to the market economy investor principle, irrespective of the legal nature and ownership structure of those investors.
Article 19 

1. The SMEG Facility shall be operated by the EIF on behalf of the Commission.The SMEG Facility shall carry out the following tasks:
(a) providing counter-guarantees or, where appropriate, co-guarantees for guarantee schemes operating in the eligible countries;
(b) providing direct guarantees for any other appropriate financial intermediary.
2. The SMEG Facility shall consist of four windows, as follows:
— the first window, (a) debt financing via loans or leasing, shall reduce the particular difficulties SMEs face in accessing finance either due to the perceived higher risk associated with investments in certain knowledge-related activities such as technological development, innovation and technology transfer or due to the lack of sufficient collateral,
— the second window, (b) microcredit financing, shall encourage financial institutions to play a greater role in the provision of loans of a smaller amount which would normally involve proportionately higher unit handling costs for borrowers with insufficient collateral. In addition to guarantees or counter-guarantees, financial intermediaries may receive grants to partially offset the high administrative costs inherent in microcredit financing,
— the third window, (c) guarantees for equity or quasi-equity investments in SMEs, shall include investments which provide seed capital and/or capital in the start-up phase, as well as mezzanine financing, in order to reduce the particular difficulties which SMEs face because of their weak financial structure and those arising from business transfers,
— the fourth window, (d) securitisation of SME debt finance portfolios, shall mobilise additional debt financing for SMEs under appropriate risk-sharing arrangements with the targeted institutions. Support for those transactions shall be conditional upon an undertaking by the originating institutions to grant a significant part of the resulting liquidity of the mobilised capital for new SME lending in a reasonable period of time. The amount of this new debt financing shall be calculated in relation to the amount of the guaranteed portfolio risk and shall be negotiated, together with the period of time, individually with each originating institution.
Article 20 

1. The CBS shall be operated with international financial institutions, including the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the EIF and the Council of Europe Development Bank (CEB).The CBS shall carry out the following tasks:
(a) improving the investment and technology expertise of funds and other financial intermediaries investing in innovative SMEs or SMEs with growth potential;
(b) stimulating the supply of credit to SMEs by enhancing the credit appraisal procedures for SME lending.
2. The CBS shall consist of the Seed Capital Action and the Partnership Action.The Seed Capital Action shall provide grants to stimulate the supply of venture capital for innovative SMEs and other SMEs with growth potential, including those in the traditional economy, through support for seed and start-up funds or similar organisations. Support may also be provided for the long-term recruitment of additional staff with specific investment or technology expertise.The Partnership Action shall provide grants to financial intermediaries to cover the cost of technical assistance to improve their credit appraisal procedures for SME debt financing, in order to stimulate the supply of finance to SMEs in countries with low banking intermediation.For the purpose of the Partnership Action ‘low intermediation’ shall relate to banking in countries where domestic credit as a percentage of Gross Domestic Product is significantly below the Community average according to relevant data established by the European Central Bank or the International Monetary Fund.The Partnership Action shall accompany the credit lines or the risk-sharing provided by international financial institutions to partner banks or financial institutions from the eligible countries. A significant part of the action shall relate to improving banks' and other financial institutions' capacity to assess the commercial viability of projects with a significant eco-innovation component.
Article 21 

1. Services in support of business and innovation, in particular for SMEs, shall be encouraged.
2. Taking into account the established experience and skills of existing European business support networks, financial support may be granted to network partners to provide, in particular:
(a) information, feedback, business cooperation and internationalisation services;
(b) services for innovation and for the transfer of both technology and knowledge;
(c) services encouraging the participation of SMEs in the Seventh Framework RTD Programme.
Details concerning such services are laid down in Annex III.
3. The Commission shall select network partners through calls for proposals in relation to the various services referred to in paragraph 2. Following those calls for proposals the Commission may establish a framework partnership agreement with selected network partners specifying the type of activities to be offered, the procedure for awarding grants to them and the general rights and obligations of each party. The framework partnership may cover the duration of the programme.
4. In addition to the services referred to in paragraph 2, the Commission may provide financial support for the implementation of other activities within the scope of the Framework Programme following calls for proposals which may be restricted to the network partners. Such services shall ensure that interested parties and potential applicants may obtain comprehensive assistance relating to the possibilities for support under the Framework Programme.
5. The Commission shall support the network partners by making available the appropriate coordination and operational support. Organisations established in countries which are not participating in the Framework Programme may be permitted to benefit from that coordination and operational support.
6. The Commission shall ensure that network partners cooperate with each other and, in the event that a network partner is unable to address an enquiry directly, it shall refer the enquiry to a competent network partner.
Article 22 
The Community shall provide support to projects concerned with the first applications or market replication of innovative or eco-innovative techniques, products or practices of Community relevance, which have already been technically demonstrated with success but which, owing to residual risk, have not yet significantly penetrated the market. These shall be designed to promote broader utilisation of such techniques, products or practices within the participating countries and facilitate their market uptake.
Article 23 
The following may be undertaken in support of policy analyses, development and coordination with participating countries:

((a)) studies, data collection, surveys and publications, based where possible on official statistics;
((b)) twinnings and meetings of experts, including experts from public institutions, experts sent by SMEs and other interested parties, conferences and other events;
((c)) awareness raising, networking and other relevant activities;
((d)) benchmarking of national and regional performances, and work on good practices, including their dissemination and implementation.
Article 24 
The Commission shall regularly undertake the following:

((a)) analysis and monitoring of competitiveness and sectoral issues, including for the Commission's annual report on the competitiveness of European industry;
((b)) preparation of impact assessments of Community measures of particular relevance for the competitiveness of enterprises and their publication with a view to identifying areas of existing legislation requiring simplification or the need for new legislative measures to make innovation more attractive in the Community;
((c)) evaluation of specific aspects or specific implementation measures in relation to the Entrepreneurship and Innovation Programme;
((d)) dissemination of appropriate information in relation to the Entrepreneurship and Innovation Programme.
Section 3
Article 25 
The annual work programme shall set out in detail, and in line with the objectives set out in Article 10:

((a)) measures needed for its implementation;
((b)) priorities;
((c)) qualitative and quantitative objectives;
((d)) appropriate evaluation criteria and qualitative and quantitative indicators for analysing effectiveness in delivering outcomes that will contribute to the achievement of the objectives of the specific programmes and the Framework Programme as a whole;
((e)) operational timetables;
((f)) the rules for participation;
((g)) the criteria for the selection and evaluation of the measures.
The annual work programme shall clearly identify measures promoting eco-innovation.
Activities under Article 24 shall not be covered by the annual work programme.
CHAPTER II
Section 1
Article 26 

1. The ICT Policy Support Programme in support of ICT policy is hereby established.
2. The ICT Policy Support Programme shall provide for the following actions:
(a) development of the Single European information space and strengthening of the internal market for ICT products and services and ICT-based products and services;
(b) stimulation of innovation through the wider adoption of and investment in ICT;
(c) development of an inclusive information society and more efficient and effective services in areas of public interest, and improvement of quality of life.
3. The actions referred to in paragraph 2 shall be carried out with a particular emphasis on the promotion and awareness-raising of the opportunities and benefits of ICT for citizens, public authorities and businesses, in particular SMEs.
Article 27 
Action in relation to the single European information space shall aim to:

((a)) ensure seamless access to ICT-based services and establish appropriate framework conditions for the rapid, appropriate and effective convergence of digital communications and services, incorporating, inter alia, interoperability, the use of open standards, and security and trust aspects;
((b)) improve the conditions for the development of digital content, taking into account multilingualism and cultural diversity;
((c)) monitor the European information society, through data collection and analysis of the development, availability and use of digital communication services, including the growth of internet, access to and take-up of broadband as well as developments of content and services.
Article 28 
Action in relation to innovation through the wider adoption of and investment in ICT shall aim to:

((a)) promote innovation in processes, services and products enabled by ICT, in particular in SMEs and public services, taking into account the necessary skills requirements;
((b)) facilitate public and private interaction as well as partnerships for accelerating innovation and investments in ICT;
((c)) promote and raise awareness of the opportunities and benefits of ICT and its new applications for citizens and businesses, including enhancing confidence in and openness to new ICT, and stimulating debate at the European level on emerging ICT trends and developments.
Article 29 
Actions in relation to the development of an inclusive information society and more efficient and effective services in areas of public interest, and the improvement of quality of life shall aim to:

((a)) widen ICT, including digital content, accessibility and digital literacy;
((b)) reinforce trust and confidence as well as support of ICT use, addressing, in particular, privacy concerns;
((c)) improve the quality, efficiency, availability and accessibility of electronic services in areas of public interest and for ICT-enabled participation, including, where appropriate, interoperable pan-European or cross-border public services as well as the development of common interest building blocks and the sharing of good practices.
Section 2
Subsection 1
Article 30 
The ICT Policy Support Programme may be implemented by projects, best practice actions and thematic networks, including actions for wide-scale testing and demonstration of innovative public services with a pan-European dimension.
Projects, best practice actions and thematic networks shall aim to stimulate the deployment and best use of innovative ICT-based solutions, in particular for services in areas of public interest and for SMEs. Community support shall also facilitate the coordination and the implementation of actions for developing the information society across the Member States.
Article 31 

1. The following shall be supported:
(a) projects including implementation, pilot and market replication projects;
(b) best practice actions to spread knowledge and share experience across the Community;
(c) thematic networks bringing together a variety of stakeholders around a given objective so as to facilitate coordination activities and the transfer of knowledge.
2. The projects shall aim to promote innovation, technology transfer and the dissemination of new technologies that are ready for market uptake.The Community may award a grant to contribute to the budget of the projects referred to in paragraph 1(a).
3. The best practice actions shall be conducted in clusters addressing specific themes and linked through thematic networks.The Community contribution for the actions referred to in paragraph 1(b) shall be limited to the direct costs deemed necessary or appropriate for achieving the specific objectives of the action.
4. The thematic networks may be linked to best practice actions.Support for thematic activities shall be granted towards the additional eligible costs of coordinating and implementing the network. The Community contribution may cover the additional eligible costs of those measures.
Subsection 2
Article 32 
Applications for Community support for projects, best practice actions and thematic networks referred to in Article 31 shall include a financial plan listing all the components of the funding of the projects, including the financial support requested from the Community, and any other requests for support from other sources. Applicants making applications for other forms of Community support such as services or studies may also be required to provide information concerning the financial plan where appropriate.
Article 33 
The following shall be undertaken in support of policy analyses, development and coordination with participating countries:

((a)) studies, data collection, surveys, and publications, based, where possible, on official statistics;
((b)) meetings of experts, including experts from public institutions, experts sent by SMEs and other interested parties, conferences and other events;
((c)) awareness-raising, networking and other relevant activities;
((d)) benchmarking of national performances and work on good practices, including their dissemination and implementation.
Article 34 

1. The following shall be undertaken in support of the implementation of the ICT Policy Support Programme or the preparation of future activities:
(a) promotion, dissemination, information and communication activities;
(b) exchange of information, knowledge and experience, the staging of conferences, seminars, workshops or other meetings and the management of clustered activities.
2. Measures devoted to the commercialisation of products, processes or services, marketing activities and sales promotion shall not be eligible for support.
Article 35 
Where it is necessary in order to achieve the objectives of the ICT Policy Support Programme, and where there is a clear common interest of Member States as concerns European-level deployment of products, services, core service components or building blocks, the Commission may establish projects of common interest comprising necessary technical and organisational tasks. Existing initiatives shall be taken into consideration in order to avoid the duplication of efforts.
The Commission shall, in coordination with the Member States, agree on common technical specifications and implementation schedules for such projects. On the basis of those common technical specifications and implementation schedules, the Commission shall issue calls for tender for implementation of the projects concerned. Such calls for tender shall be carried out solely by the Commission in accordance with Community procurement rules.
Section 3
Article 36 
The annual work programme shall set out in detail, and in line with the objectives set out in Article 26:

((a)) measures needed for its implementation;
((b)) priorities;
((c)) qualitative and quantitative objectives;
((d)) appropriate evaluation criteria and qualitative and quantitative indicators for analysing effectiveness in delivering outcomes that will contribute to the achievement of the objectives of the specific programmes and the Framework Programme as a whole;
((e)) operational timetables;
((f)) the rules for participation;
((g)) the criteria for the selection and evaluation of the measures.
CHAPTER III
Section 1
Article 37 

1. The Intelligent Energy — Europe Programme in support of energy efficiency, renewable energy sources and energy diversification is hereby established. The programme shall contribute to ensuring secure, sustainable energy for Europe, while enhancing European competitiveness.
2. The Intelligent Energy — Europe Programme shall provide for action, in particular:
(a) to foster energy efficiency and the rational use of energy resources;
(b) to promote new and renewable energy sources and to support energy diversification;
(c) to promote energy efficiency and the use of new and renewable energy sources in transport.
Article 38 
In operational terms the Intelligent Energy — Europe Programme shall aim to:

((a)) provide the elements necessary for the improvement of sustainability, the development of the potential of cities and regions, as well as for the preparation of the legislative measures needed to attain the related strategic objectives; develop the means and instruments to follow up, monitor and evaluate the impact of the measures adopted by the Community and its Member States in the fields addressed by that programme;
((b)) boost investment across Member States in new and best performing technologies in the fields of energy efficiency, renewable energy sources and energy diversification, including in transport, by bridging the gap between the successful demonstration of innovative technologies and their effective, broad market uptake in order to attain leverage of public and private sector investment, promote key strategic technologies, bring down costs, increase market experience and contribute to reducing the financial risks and other perceived risks and barriers that hinder this type of investment;
((c)) remove the non-technological barriers to efficient and intelligent patterns of energy production and consumption by promoting institutional capacity building at, inter alia, local and regional level, by raising awareness, notably through the educational system, by encouraging exchanges of experience and know-how among the main players concerned, business and citizens in general and by stimulating the spread of best practices and best available technologies, notably by means of their promotion at Community level.
Article 39 
Action to foster energy efficiency and the rational use of energy resources may include:

((a)) improvement of energy efficiency and the rational use of energy, in particular in the building and industry sectors, with the exception of actions covered by Article 41;
((b)) supporting the preparation of legislative measures and their application.
Article 40 
Action to promote new and renewable energy resources may include:

((a)) promoting new and renewable energy sources for centralised and decentralised production of electricity, heat and cooling, and thus supporting the diversification of energy sources, with the exception of actions covered by Article 41;
((b)) integrating new and renewable energy sources into the local environment and the energy systems;
((c)) supporting the preparation of legislative measures and their application.
Article 41 
Action to promote energy efficiency and the use of new and renewable energy sources in transport may include:

((a)) supporting initiatives relating to all energy aspects of transport, and the diversification of fuels;
((b)) promoting renewable fuels and energy efficiency in transport;
((c)) supporting the preparation of legislative measures and their application.
Article 42 
Action to combine several of the specific fields referred to in Articles 39, 40 and 41, or relating to certain Community priorities, may include:

((a)) integrating energy efficiency and renewable energy sources in several sectors of the economy;
((b)) combining various instruments, tools and actors within the same action or project.
Section 2
Article 43 
The following shall be supported:

((a)) strategic studies on the basis of shared analysis and regular monitoring of market developments and energy trends for the preparation of future legislative measures or for the review of existing legislation, including with regard to the functioning of the internal energy market, for the implementation of the medium and long-term strategy in the energy field to promote sustainable development, as well as for the preparation of long-term voluntary commitments with industry and other stake-holders and for the development of standards, labelling and certification systems, where appropriate also in cooperation with third countries and international organisations;
((b)) creation, enlargement or reorganisation of structures and instruments for sustainable energy development, including local and regional energy management, and the development of adequate financial products and market instruments, building on experience from past and present networks;
((c)) promotion of sustainable energy systems and equipment in order to further accelerate their penetration of the market and stimulate investment to facilitate the transition from the demonstration to the marketing of more efficient technologies, awareness campaigns and the creation of institutional capabilities;
((d)) development of information, education and training structures, the utilisation of results, the promotion and dissemination of know-how and best practices involving all consumers, dissemination of results of the actions and projects and cooperation with the Member States through operational networks;
((e)) monitoring of the implementation and the impact of Community legislative and support measures.
Article 44 
The Community shall provide support to projects concerned with the market replication of innovative techniques, processes, products or practices of Community relevance, which have already been technically demonstrated with success. These shall be designed to promote broader utilisation of such techniques, processes, products or practices within the participating countries and facilitate their market uptake.
Section 3
Article 45 
The annual work programme shall set out in detail, and in line with the objectives set out in Article 37:

((a)) measures needed for its implementation;
((b)) priorities;
((c)) qualitative and quantitative objectives;
((d)) appropriate evaluation criteria and qualitative and quantitative indicators to analyse effectiveness in delivering outcomes that will contribute to the achievement of the objectives of the specific programmes and the Framework Programme as a whole;
((e)) operational timetables;
((f)) the rules for participation;
((g)) the criteria for the selection and evaluation of the measures.
TITLE III
Article 46 

1. The Commission shall be assisted by the following Committees:
(a) the Committee for the Entrepreneurship and Innovation Programme, called the EIP Management Committee (EIPC);
(b) the Committee for the ICT Policy Support Programme, called the ICT Management Committee (ICTC);
(c) the Committee for the Intelligent Energy Europe Programme, called the IEE Management Committee (IEEC).
Full coordination and cooperation across the whole Framework Programme, including strategic management, and coherent overall implementation, shall be ensured by the Commission, assisted by the EIPC, in close collaboration with the ICTC and the IEEC.
2. For the committees referred to in paragraph 1, Articles 4 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.The period laid down in Article 4(3) of Decision 1999/468/EC shall be set at three months.
3. The Committees referred to in paragraph 1 shall adopt their rules of procedure.
Article 47 

1. After the entry into force of the Framework Programme, the Commission shall publish a readable and user-friendly user manual establishing a clear, simple and transparent framework of general principles for the participation of beneficiaries in the Framework Programme. The user manual shall, in particular, facilitate the participation of SMEs.
2. The Commission shall ensure that the time between the submission of applications and the notification of evaluation results is as short as possible. The evaluation result shall be sent out within a reasonable time.
Article 48 
The Commission shall be advised by a Strategic Advisory Board on Competitiveness and Innovation composed of representatives of industry and business associations, including those representing SMEs, and other experts. Their expertise should be related to the sectors and issues addressed by the Framework Programme, including financing, ICT, energy and eco-innovation.
Article 49 
Decision 96/413/EC is hereby repealed.
Article 50 
The implementation measures in pursuance of the objective set out in Article 27(b) shall be carried out under Decision No 456/2005/EC until 31 December 2008.
Thereafter, the actions initiated under Decision No 456/2005/EC on or before that date shall be administered in accordance with that Decision, except that the Committee established by that Decision shall be replaced by the ICTC established by Article 46(1)(b) of this Decision.
For services referred to in Article 21(2)(a), the Commission may, until 31 December 2007, continue operating the Euro Info Centre Network and concluding annual specific grant agreements with its members, funded under this Framework Programme, and maintain the operational arrangements of the multiannual programme for enterprise and entrepreneurship established by Decision 2000/819/EC.
Article 51 
This Decision shall enter into force on the 20th day following its publication in the Official Journal of the European Union.
Done at Strasbourg, 24 October 2006.
For the European Parliament
The President
J. BORRELL FONTELLES
For the Council
The President
P. LEHTOMÄKI
ANNEX I

The indicative budgetary allocations for the specific programmes shall be the following:

((a)) 60 % of the overall budget for the pursuance of the Entrepreneurship and Innovation Programme, of which approximately one fifth shall be allocated to promoting eco-innovation;
((b)) 20 % of the overall budget for the pursuance of the ICT Policy Support Programme;
((c)) 20 % of the overall budget for the pursuance of the Intelligent Energy — Europe Programme.

ANNEX II
1.  A. 
The budgetary allocation shall cover the full cost of each instrument, including payment obligations towards financial intermediaries such as losses from guarantees, management fees for the EIF and the international financial institutions managing the Union's resources, as well as any other eligible costs or expenses.

The transfer of resources between instruments shall be kept flexible in order to respond to new developments and changing market conditions during the Framework Programme.
 B. 
Separate Trust accounts shall be set up by the EIF and the relevant international financial institutions to hold the budgetary funds relating to each instrument. Such accounts may be interest-bearing. Interest received on or before 31 December 2013 may be added to the resources and can be used for the purpose of the respective instrument.

Payments made by the trustee to honour payment obligations towards financial intermediaries shall be debited from the corresponding Trust account. Amounts to be paid back by the trustee to the general budget of the European Union, the trustee's management fees and other eligible costs and expenses shall be debited from the Trust account in accordance with the terms set out in the agreements between the Commission and the trustee. The Trust account shall be credited with receipts originating from the Commission, interest and, depending on the instrument, with the proceeds of realised investments (GIF) or with commitment and guarantee fees as well as other receivables (SMEG Facility).

After 31 December 2013, any balances on the Trust accounts, other than funds committed and not yet debited and funds reasonably required to cover eligible costs and expenses, shall be returned to the general budget of the European Union.
 C. 
An appropriate fee policy shall apply to the operation of the instruments. The fees shall be established by the Commission in line with market practices and shall take into account:


— the overall duration of the respective instrument and the corresponding monitoring requirements which extend beyond the budgetary commitment period,
— the eligible countries,
— the degree of novelty and complexity of the instrument,
— the associated number of activities such as market research, identification of and negotiations with intermediaries, structuring of deals, closing, monitoring and reporting.
 D. 
Each intermediary shall provide an appropriate level of visibility and transparency to the support given by the Community, including adequate information on the financial opportunities made available by the Framework Programme.

It shall be ensured that the final beneficiaries are adequately informed of the available financing opportunities.

2.  A. 
Fiduciary, management and monitoring aspects shall be agreed between the Commission and the EIF. The Commission shall apply specific guidelines on treasury management.
 B. 
GIF1 and GIF2 shall target commercially oriented intermediaries managed by independent teams combining the appropriate mix of skills and experience. The intermediaries shall be selected in conformity with best business and market practices in a transparent and non-discriminatory manner, avoiding any conflict of interest with the aim of working through a wide range of specialised funds or similar structures.
 C. 
GIF shall be complementary to the own-resource based activities of the EIB Group including the EIF by adopting an investment policy involving a higher risk profile, both as regards intermediary funds and their investment policies.

GIF1 shall invest in intermediary venture capital funds and other investment vehicles investing in SMEs up to 10 years old, typically starting from pre-A (seed) and A (early stage) rounds and providing follow-on investment where appropriate. The usual maximum aggregate investment in an intermediary venture capital fund shall be 25 % of the total capital held by the relevant fund, or up to 50 % for new funds likely to have a particularly strong catalytic role in the development of venture capital markets for a specific technology or in a specific region as well as business angels' investment vehicles. The maximum aggregate investment in an intermediary venture capital fund shall be 50 % in those cases where the fund's investment focus is on SMEs active in eco-innovation. At least 50 % of the capital invested in any fund shall be provided by investors operating in circumstances corresponding to normal market conditions (under the ‘market economy investor principle’), irrespective of the legal nature and ownership structure of the investors providing that part of the capital. No commitment in a single fund shall exceed EUR 30 million. GIF1 may co-invest with EIF own resources or resources under the EIB mandate or other resources managed by the EIF.

GIF2 shall invest in intermediary risk capital funds investing in SMEs, typically in B and C (expansion) rounds. The usual maximum aggregate investment in an intermediary risk capital fund shall be 15 % of the total capital held by the relevant fund, or up to 25 % for:


— new funds likely to have a particularly strong catalytic role in the development of risk capital markets for a specific technology or in a specific region,
— funds the main investment focus of which is on SMEs active in eco-innovation,
— funds set up by first time management teams.

In the case of co-investment of GIF2 resources with EIF own resources or resources under the EIB mandate or other resources managed by the EIF, the maximum GIF2 contribution shall be 15 %. At least 50 % of the capital invested in any fund shall be provided by investors operating in circumstances corresponding to normal market conditions (under the market economy investor principle), irrespective of the legal nature and ownership structure of the investors providing that part of the capital. No commitment in a single fund shall exceed EUR 30 million.
 D. 
The investment made under the GIF in an intermediary fund shall rank pari passu with the private investors.
 E. 
For new funds likely to have a particularly strong catalytic role in the development of venture capital markets for a specific technology or in a specific region, EIF may play the role of a cornerstone investor.
 F. 
EIF shall ensure that terms and conditions of financing under GIF1 and GIF2 are transparent and comprehensible.
 G. 
The GIF shall be a long-term facility which will usually take five- to 12-year positions in intermediary funds. In any case, life of investments under the GIF shall not exceed 19 years from the time of signature of the delegation agreement between the Commission and the EIF. Suitable exit strategies shall need to be defined in the agreements between the EIF and the intermediaries.
 H. 
As most of the investments to be made under the GIF shall be in unquoted, illiquid entities, the realisation of those investments shall be based on the distribution of the proceeds received by the intermediary from the sale of their investments in SMEs.
 I. 
Proceeds, including dividends and reimbursements received by the EIF before 31 December 2013, shall be added to the resources of the GIF and used for the purpose of the GIF.

3.  A. 
Fiduciary, management and monitoring aspects shall be agreed between the Commission and the EIF and shall be in line with normal commercial practices. The Commission shall apply specific guidelines on treasury management.
 B. 
Intermediaries shall be chosen from among the guarantee schemes already operating or which may be established in the eligible countries, including mutual guarantee organisations, and any other appropriate financial institution. Selection procedures shall be transparent and non-discriminatory, avoiding any conflict of interest.

Intermediaries shall be selected in conformity with best market practice with regard to the effect on:


— the volume of financing (debt, equity or quasi equity) made available to SMEs, and/or
— SMEs' access to finance, and/or
— risk-taking in SME financing by the intermediary concerned.
 C. 
The financial criteria governing the eligibility under the SMEG Facility shall be determined for each intermediary on the basis of their activities, with the aim of reaching as many SMEs as possible. These rules shall reflect market conditions and practices in the relevant territory.

Financing for the acquisition of tangible and intangible assets, including innovation activities, technological development and the acquisition of licenses shall be eligible.

Criteria relating to the fourth SMEG window, (d) securitisation of SME debt financing portfolios, shall include individual and multi-seller transactions as well as multi-country transactions. Eligibility shall be based on best market practices, in particular regarding the credit quality and risk diversification of the securitised portfolio.
 D. 
The guarantees issued by the EIF on behalf of the Commission under the (a) debt financing, (b) microcredit, and (c) equity or quasi-equity windows of the SMEG Facility shall cover a part of the risk taken by the financial intermediary in a financing portfolio of individual transactions. The fourth window of the SMEG Facility, (d) securitisation, shall involve sharing the risk of certain securitised tranches which are senior to the first loss piece or leaving the risk of a significant part of the first loss piece to the originator and sharing the risk of the remaining part.

The guarantees given by the EIF relating to the (a) debt financing, (b) microcredit, (c) equity or quasi equity windows of the SMEG Facility shall usually rank pari passu with the guarantees or, where appropriate, with the financing given by the intermediary.

The EIF may charge to a financial intermediary a fee calculated on amounts committed but not used according to an agreed schedule (commitment fees) as well as guarantee fees. It may also charge fees related to individual securitisation transactions.
 E. 
The cost of the SMEG Facility to the general budget of the European Union shall be capped so that it does not, under any circumstances, exceed the budgetary allocation made available to the EIF under this SMEG Facility. There shall be no contingent liability on the budget.

The EIF's obligation to pay its share of the intermediary's losses shall continue until the cumulative amount of payments made to cover losses from a specific financing portfolio, reduced where appropriate by the cumulative amount of corresponding loss recoveries, reaches a pre-agreed amount, after which the EIF's guarantee shall be automatically cancelled.
 F. 
Any loss recoveries received from a given intermediary shall be credited to the Trust account and shall be taken into account in the calculation of the EIF's capped maximum cumulative losses towards the intermediary. Any other revenues, such as commitment fees and guarantee fees, shall be credited to the Trust account and, if received before 31 December 2013, shall be added to the resources of the SMEG Facility.
 G. 
Individual SME guarantees may have a maturity of up to 10 years.

4.  A. 
Implementation details for the Seed Capital action and the Partnership Action, including fiduciary, management and monitoring aspects, shall be subject to an agreement between the Commission and the EIF or the relevant international financial institutions.

Intermediaries shall be selected in conformity with best market practices.

Selection procedures for the provision of technical assistance shall be transparent and non-discriminatory, avoiding any conflict of interest.
 B. 
The Seed Capital Action shall be operated on a trust basis. The budgetary allocation shall cover the full cost of the action, including its management fees and any other eligible costs or expenses. The grants provided shall support investment funds which include seed capital in their global investment programme, by covering part of the resulting management costs.
 C. 
The Partnership Action shall be operated through the EIF or relevant international financial institutions. It shall cover technical assistance, management fees and other eligible costs supporting capacity building.

5. 
The external evaluations shall be carried out by independent experts, taking account of the impact of the Growth and Employment Initiative established under Council Decision 98/347/EC of 19 May 1998 on measures of financial assistance for innovative and job-creating small and medium-sized enterprises (SMEs) — the growth and employment initiative and of the multiannual programme for enterprise and entrepreneurship, and in particular for SMEs. The external evaluations shall assess the impact of the Community financial instruments for SMEs and provide a qualitative and quantitative analysis of achieved results, in particular, by assessing the leverage effect and cost-benefit of each instrument. The evaluation reports shall present statistical data for the Union as a whole and for the individual Member States and the other participating countries including:


— for the GIF, the number of SMEs reached and the number of jobs created,
— the rate of return to investors,
— for the SMEG Facility, the number and value of loans provided by the financial intermediaries to SMEs, the number of SMEs reached and the number and value of loans defaulted,
— for the Seed Capital Action, the number of organisations supported and the volume of seed capital investments,
— for the Partnership Action, the number of intermediaries supported and SMEs reached,
— any specific outputs relating to eco-innovation.

Appropriate visibility shall be given to the results and lessons learned from the reports of the external evaluators and to the sharing of best practices among stakeholders.

ANNEX III


((a)) Information, feedback, business cooperation and internationalisation services

— disseminating information relating to the functioning and opportunities of the internal market for goods and services, including signposting to tender opportunities,
— promoting pro-actively Community initiatives, policies and programmes that are relevant for SMEs and providing information to SMEs on the application procedures for such programmes,
— operating tools to measure the impact of existing legislation on SMEs,
— contributing to the carrying-out of impact assessment studies of the Commission,
— operating other appropriate means to engage SMEs in the European policy-making process,
— assisting SMEs to develop cross-border activities and international networks,
— supporting SMEs to find relevant partners from the private or public sectors through appropriate tools.
((b)) Services for innovation and for the transfer of both technology and knowledge

— disseminating information and raising awareness regarding innovation-related policies, legislation, and support programmes,
— engaging in the dissemination and exploitation of research results,
— providing brokerage services for technology and knowledge transfer, and for partnership building between all kinds of innovation actors,
— stimulating the capacity of firms, especially SMEs to innovate,
— facilitating linkage to other innovation services including intellectual property-related services.
((c)) Services encouraging the participation of SMEs in the Seventh Framework RTD Programme

— raising awareness among SMEs regarding the Seventh Framework RTD Programme,
— helping SMEs to identify their research and technological development needs and to find relevant partners,
— assisting SMEs in the preparation and coordination of project proposals for participation in the Seventh Framework RTD Programme.
