
Article 1 

1. This Regulation establishes detailed modalities for financing conditions that may be used for the reimbursement of expenditure by the managing authority to beneficiaries under the financing which is not linked to costs of the relevant operations referred to in point (e) of the first subparagraph of Article 67(1) of Regulation (EU) No 1303/2013 and for their application.
2. The areas of expenditure that may be subject to financing which is not linked to costs shall be energy efficiency measures and energy from renewable sources as detailed in the Annex.
Article 2 
For the purpose of this Regulation, the following definitions apply:

((1)) ‘financing conditions’ means the conditions to be fulfilled for the reimbursement of expenditure under the financing which is not linked to costs, consisting of a series of intermediate and final financing conditions undertaken to contribute towards the fulfilment of a pre-defined objective;
((2)) ‘operation subject to reimbursement based on financing conditions’ means a single operation within the meaning of Article 2(9) of Regulation (EU) No 1303/2013, consisting of all the tasks implemented to fulfil intermediate and the final financing conditions.
Article 3 

1. Final financing conditions shall be determined in accordance with the Annex.
2. Modalities for the application of the financing conditions as regards the methodology for the establishment of the related pre-defined amount of expenditure to be reimbursed and the submission of information to the Commission for the set up of the operation subject to reimbursement based on financing conditions shall be determined in accordance with the Annex.
Article 4 

1. The costs calculated on the applicable basis to be included in a payment application in accordance with Article 131(2) of Regulation (EU) No 1303/2013 shall be the pre-defined amount corresponding to each fulfilled financing condition. That amount shall be included in payment applications together with the reference of the concerned operation, in accordance with the model for payment applications set out in Commission Implementing Regulation (EU) No 1011/2014.
2. The total eligible expenditure for an operation subject to reimbursement based on financing conditions shall not exceed the pre-defined amount of expenditure corresponding to the final financing condition calculated on the basis of the methodologies set out in the Annex.
Article 5 
This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.
This Regulation shall be binding in its entirety and directly applicable in all Member States.Done at Brussels, 15 February 2019.
For the Commission
The President
Jean-Claude JUNCKER
ANNEX
1. 
This Annex shall apply to energy efficiency investments and energy from renewable sources under thematic objective 4 for the ERDF and the Cohesion Fund.

2.  (1) The final financing condition for energy efficiency measures and for energy from renewable sources shall be energy efficiency achievement expressed in energy savings in kWh/year or tonnes of CO2 emissions reduction as described in the common output indicators in Annex I to Regulation (EU) No 1301/2013.
 (2) Energy savings in kWh/year or CO2 emissions reduction shall be defined on the basis of one of the calculation methods defined in Annex V(1)(a), (b) or (c) of Directive 2012/27/EU of the European Parliament and of the Council.

3.  (1) 

((a)) statistical data, other objective information or an expert judgement;
((b)) verified historical data related to energy efficiency measures and energy from renewable sources schemes.
 (2) The calculation method shall take account of reasonable assumptions regarding the trends and likely technological changes that may have implications on the costs of planned investments contributing to the fulfilment of the final financing condition during the envisaged timeline of implementation of the operation.

4. 
For the application of the financing conditions, the following shall apply:


((a)) the operation subject to reimbursement based on financing conditions is related to the realisation of progress in the implementation or the achievement of objectives of the programme;
((b)) the beneficiary of the operation subject to reimbursement based on financing conditions is either the managing authority or an intermediate body with the necessary arrangements ensuring separation of functions in accordance with Article 125(7) of Regulation (EU) No 1303/2013;
((c)) the operation subject to reimbursement based on financing conditions is implemented on the basis of a planned timeline for the completion of intermediate or final financing conditions;
((d)) the operation subject to reimbursement based on financing conditions is completed or fully implemented before the end of the eligibility period set out in Article 65(2) of Regulation (EU) No 1303/2013;
((e)) when determining intermediate financing conditions, corresponding amounts of expenditure are set out in advance;
((f)) the mechanism to measure and monitor the progress towards the fulfilment of the financing conditions allows the verification of the fulfilment of each financing condition;
((g)) the operation subject to reimbursement based on financing conditions is excluded from the population referred to in Article 28(3) of Delegated Regulation (EU) No 480/2014 for the purposes of sample of operations referred to in Article 127(1) of Regulation (EU) No 1303/2013.

5. 
Member States shall submit information to the Commission on the elements set out in points 2, 3 and 4 describing how the operation subject to reimbursement based on financing conditions shall function before the start of its implementation.
