The next opportunity to support the development and deployment of network infrastructure will be available until February 20th 2024 as part of the digital component of the Connecting Europe Facility program, also known as CEF Digital.
It will be possible to obtain co-financing for the implementation of ultra-fast, secure, and sustainable digital infrastructure in the areas of gigabit networks and 5G, performance and resilience of backbone digital infrastructure, and digitization of transport and energy networks.
Support for the development and implementation of network infrastructure under CEF Digital
The European way for a digital decade adopted in 2021 by the European Commision sets an additional goal of covering all populated areas with a 5G network by 2030. EU investment in 5G research and standards is essential to support traffic volumes expected by 2025. It will also help to boost network and internet architecture in new areas such as machine-to-machine (M2M) communications and the Internet of Things (IoT). A relevant support in this area for the telecommunications industry is the Connecting Europe Facility - CEF Digital. The digital part of the instrument is to reinforce and accelerate public and private investments in digital communication infrastructure throughout the financial perspective in 2021–2027.
Scope and conditions
Co-financing will be possible to obtain within 3 thematic areas:
1) 5G coverage along transport corridors (roads, rail, waterways)
The area supports coverage with 5G systems of all major European transport routes based on TEN-T corridors (Trans-European Transport Network). The priority of this action will be to support investments with a higher level of funding rate on cross-border sections of a member state with at least one member state or associated country, e.g. in the case of cross-border investments including remote areas (overseas territories).
Applicants will be able to apply for co-financing of investment activities in the field of infrastructure and preparatory, including studies, related to project costs covering the following categories:
- Implementation of 5G communication infrastructure along transport corridors
- passive network elements including the execution or commissioning of construction works in the field of, e.g., ducts, dark fibers, 5G radio stations, towers, masts and/or pylons (including personnel costs, purchase costs, subcontracting),
- implementation and installation of active network elements, e.g., antennas, storage and computing capabilities, such as network controllers, routers, switches, exchanges, edge MEC/node, etc. (including personnel costs, purchase costs, subcontracting),
- implementation and installation of specific trackside devices (e.g., road, rail) for CAM applications, such as sensors, cameras, etc. for traffic monitoring purposes, including connected roadside units (including personnel costs, purchase costs, subcontracting).
- Feasibility studies within preparatory works
- Projects may include network planning, including technical aspects of network architecture planning, cost-benefit analysis, business models. Planning may concern works assumed in the application, as well as refer to subsequent implementation projects of 5G systems enabling the development of connected and automated mobility.
- Funds allocated to the area amount to €100 million. The costs incurred by entrepreneurs will be reimbursed according to the financing rates specified in the grant agreement (up to 50% for feasibility study costs, up to 70% for investment activity costs in the most remote regions (so-called outermost regions - EU overseas territories such as Martinique, Mayotte, Guadeloupe, French Guiana, Saint-Martin, Madeira, Azores, Canary Islands), up to 30% for investments in other EU regions and 50% in case of indicating a strong cross-border dimension, i.e. with high potential for achieving cross-border benefits.
2) 5G and Edge Cloud for Smart Communities
As part of the call, it will be possible to finance personnel costs, purchase costs, subcontracting, and investment activities within individual categories:
- an investment aimed at supplementing or modernizing backhaul and access networks connecting objects, where the project supported by 5G will be implemented, with public electronic communication networks (approximately max 10% of total eligible costs)
- edge processing infrastructure, including hardware and software.
- construction of infrastructure for the provision of 5G and edge services communication.
- elements of mobile or stationary devices, such as antenna equipment, transceiver devices, and connected sensors.
- licenses and software for 5G communication, as well as edge nodes.
Financing costs within the area amount €51 million. The maximum level of co-financing for all projects and for all cost categories covered by the action is 75%. The end users of the investment results should be public authorities or entities providing services in the general economic interest.
3) Backbone connectivity for Digital Global Gateways (submarine cables, satellite ground infrastructure)
The action will support the implementation of new and significant improvements to communication routes mainly through submarine cables, in order to improve the performance and resilience of communication networks on islands and in coastal regions, as well as in remote territories with limited population density, and also between the EU and third countries. This is crucial for increasing the performance and resilience of EU digital networks, in line with the EU Global Gateway strategy.
The budget of the area is €90 millions, and the level of co-financing depends on the cost category and amounts to up to 70% for investment activity costs in the most remote regions, up to 50% for feasibility studies and up to 30% in other EU regions, including Poland (50% in case of indicating a strong cross-border dimension). Eligible cost categories include, among others, personnel costs, purchase costs, subcontracting.
Eligible parties
Both public and private entities (including joint ventures) will be able to participate in the call. One of the conditions imposed by the call regulations is the obligation to have a headquarters in EU countries, including overseas countries or territories. The call also provides for the possibility of cross-border and international cooperation. Depending on the thematic area, the application must be submitted by a consortium or by one applicant. We particularly encourage mobile network operators, tower companies, backhaul telecommunications operators, road operators, railway infrastructure managers (area 1), original equipment manufacturers (OEMs), e.g. mobility service providers, to participate in the call.
In total, within the entire action, over €240 million of co-financing is available for beneficiaries. Investments will be financed in difficult areas where market forces alone would not be able to provide 5G services of the required quality.
Projects will not be able to generate profit (i.e. surplus of revenues + EU grants over costs). Profit-oriented organizations will have to declare their revenues, and if they show a profit, it will be deducted from the final grant amount.
PwC Comment
The CEF Digital calls offer the opportunity to obtain support at the level of even 75% co-financing with a substantial budget of €240 million, in our opinion, it is an attractive opportunity for TELCOM market investors. We encourage entities qualifying for support to consider applying for the above-mentioned grant. The recruitment ends on 20th February, so this is a very good time to start preparing for the application.
If you are interested in the CEF Digital calls, we invite you to contact our specialists who will explain the application rules in detail and help verify the eligibility of planned undertakings.
Autorzy:
