Members' Research Service By / December 23, 2020

The public sector loan facility under the Just Transition Mechanism [EU Legislation in Progress][Policy Podcast]

The public sector loan facility is the third pillar of the Just Transition Mechanism (JTM), along with the Just Transition Fund and just transition scheme under Invest EU.

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Written by Sidonia Mazur and Christiaan Van Lierop (2nd edition, updated on 22.11.2021),

The public sector loan facility (PSLF) is the third pillar of the Just Transition Mechanism (JTM), along with the Just Transition Fund and just transition scheme under Invest EU. The facility consists of a grant and a loan component. With the contribution of €1.525 billion for the grant component from the Union budget (including assigned revenues) and EIB lending of €10 billion from its own resources, the aim is for the public sector loan facility to mobilise between €25 and 30 billion in public investment over the 2021-2027 period. Funding will be available to all Member States, while focusing on the regions with the biggest transition challenges. In the European Parliament, the Committee on Budgets (BUDG) and the Committee on Economic and Monetary Affairs (ECON) had joint responsibility for this file. Their report was adopted at a joint sitting of the two committees on 16 October 2020. The provisional agreement on the proposal reached after trilogue negotiations with the Council was confirmed in plenary session of the Parliament on 24 June 2021. The Council adoption followed on 13 July, the Regulation was then signed on 14 July and published in the Official Journal on 30 July 2021.

Complete version

Proposal for a regulation on the public sector loan facility under the Just Transition Mechanism
Committees responsible: Committee on Budgets (BUDG) and Committee on Economic and Monetary Affairs (ECON) jointly under Rule 58 COM(2020) 453
28.5.2020
Rapporteurs: Henrike Hahn (Greens/EFA, Germany) and Johan Van Overtveldt (ECR, Belgium) 2020/0100(COD)
Shadow rapporteurs: José Manuel Fernandes, Frances Fitzgerald (EPP)
Marek Belka, Eero Heinäluoma (S&D)
Clotilde Armand, Linea Søgaard-Lidell (Renew)
Gunnar Beck, Hélène Laporte (ID)
Alexandra Geese (Greens/EFA)
Eugen Jurzyca (ECR)
Petros Kokkalis, José Gusmão (GUE/NGL)
Ordinary legislative procedure (COD) (Parliament and Council on equal footing – formerly ‘co-decision’)
Procedure completed: Regulation (EU) 2021/1229
OJ L 274, 30.7.2021, pp. 1-19.

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