Regulation (EU) No 1233/2011 of the European Parliament and of the Council of 16 November 2011 on the application of certain guidelines in the field of officially supported export credits and repealing Council Decisions 2001/76/EC and 2001/77/EC

• c) A Participant shall, in accordance with Annex V, notify all other Participants at least ten calendar days before issuing any commitment with a credit value of greater than SDR 10 million if the support is provided in relation to:
• 1. Article 11 d) 3).
• 1. The application of a premium rate for a market benchmark transaction in accordance with the provisions of;
• — The third tiret of Article 21 c) 1) when participating as part of a syndicated loan package.
• — The second tiret of Article 21 c) 2), whereby the premium rate charged is lower than the corresponding premium determined by the TCMB model.
• — The third tiret of Article 21 c) 2), whereby a Participant classifies the obligor/guarantor as better than the best rating from an Accredited CRA; or if there is no rating from an Accredited CRA and a Participant classifies a transaction as CC2 or better, or a credit rating letter equivalent to AAA to A-, or equal to or more favourable than the best Accredited CRA rating of the sovereign in the obligor’s/guarantor’s domicile.
• 1. The application of a premium rate for a transaction subject to Country Risk Category 1-7 MPRs in accordance with Article 24 e) whereby the selected buyer risk category used to calculate the MPR for a transaction with a non-sovereign obligor/guarantor is:
• — lower than CC1 (i.e. CC0 or SOV+); or
• — better than the Accredited CRA rating.
• 1. The application of a premium rate in accordance with Article 27 d) for transactions with a non-sovereign obligor/guarantor, whereby the use of buyer risk credit enhancements results in the application of a CEF of greater than 0, or whenever BRCEs are used in a Market Benchmark transaction that result in pricing below the corresponding TCMB MPR.
• 1. A transaction that is subject to common line as stipulated in Article 59 c).

SECTION 3

PROCEDURES FOR TRADE-RELATED AID

45. PRIOR NOTIFICATION

• a) A Participant shall give prior notification in accordance with Annex V if it intends to provide official support for:
• — Trade-related untied aid with a value of SDR 2 million or more, and a concessionality level of less than 80 %;
• — Trade-related untied aid with a value of less than SDR 2 million and a grant element (as defined by the DAC) of less than 50 %;
• — Trade-related tied aid with a value of SDR 2 million or more and a concessionality level of less than 80 %; or
• — Trade-related tied aid with a value of less than SDR 2 million and a concessionality level of less than 50 %, except for the cases set out in Articles 35 a) and 35 b).
• — Tied aid in accordance with Article 35 d).

• b) Prior notification shall be made at the latest 30 working days before the bid closing or commitment date, whichever is the earlier.

• c) If the initiating Participant moderates or withdraws its intention to support the notified terms and conditions, it shall immediately inform all other Participants accordingly.

• d) The provision of this Article shall apply to tied aid that forms part of an associated financing package, as described in Article 31.

46. PROMPT NOTIFICATION

• a) A Participant shall promptly notify all other Participants, i.e. within two working days of the commitment, in accordance with Annex V, if it provides official support for tied aid with a value of either:
• — SDR 2 million or more and a concessionality level of 80 % or more; or
• — less than SDR 2 million and a concessionality level of 50 % or more except for the cases set out in Articles 34 a) and 34 b).

• b) A Participant shall also promptly notify all other Participants when an aid protocol, credit line or similar agreement is signed.

• c) Prior notification need not be given if a Participant intends to match financial terms and conditions that were subject to a prompt notification.

SECTION 4

CONSULTATION PROCEDURES FOR TIED AID

47. PURPOSE OF CONSULTATIONS

• a) A Participant seeking clarification about possible trade motivation for tied aid may request that a full Aid Quality Assessment (detailed in Annex XI) be supplied.

• b) Furthermore, a Participant may request consultations with other Participants, in accordance with Article 48. These include face-to-face consultations as outlined in Article 53 in order to discuss:
• — first, whether an aid offer meets the requirements of Articles 32 and 33; and
• — if necessary, whether an aid offer is justified even if the requirements of Articles 32 and 33 are not met.

48. SCOPE AND TIMING OF CONSULTATIONS

• a) During consultations, a Participant may request, among other items, the following information:
• — the assessment of a detailed feasibility study/project appraisal;
• — whether there is a competing offer with non-concessional or aid financing;
• — the expectation of the project generating or saving foreign currency;
• — whether there is cooperation with multilateral organisations such as the World Bank;
• — the presence of International Competitive Bidding (ICB), in particular if the donor country’s supplier is the lowest evaluated bid;
• — the environmental implications;
• — any private sector participation; and
• — the timing of the notifications (e.g. six months prior to bid closing or commitment date) of concessional or aid credits.

• b) The consultation shall be completed and the findings on both questions in Article 46 notified by the Secretariat to all Participants at least ten working days before the bid closing date or commitment date, whichever comes first. If there is disagreement among the consulting parties, the Secretariat shall invite other Participants to express their views within five working days. It shall report these views to the notifying Participant, which should reconsider going forward if there appears to be no substantial support for an aid offer.

49. OUTCOME OF CONSULTATIONS

• a) A donor that wishes to proceed with a project despite the lack of substantial support shall provide prior notification of its intentions to other Participants, no later than 60 calendar days after the completion of the Consultation, i.e. acceptance of the Chairman’s conclusion. The donor shall also write a letter to the Secretary-General of the OECD outlining the results of the consultations and explaining the overriding non-trade related national interest that forces this action. The Participants expect that such an occurrence will be unusual and infrequent.

• b) The donor shall immediately notify the Participants that it has sent a letter to the Secretary-General of the OECD, a copy of which shall be included with the notification. Neither the donor nor any other Participant shall make a tied aid commitment until ten working days after this notification to Participants has been issued. For projects for which competing commercial offers were identified during the consultation process, the aforementioned ten working-day period shall be extended to 15 days.

• c) The Secretariat shall monitor the progress and results of consultations.

SECTION 5

INFORMATION EXCHANGE FOR EXPORT CREDITS AND TRADE-RELATED AID

50. CONTACT POINTS

All communications shall be made between the designated contact points in each country by means of instant communication, e.g. electronic mail, and shall be treated in confidence.

51. SCOPE OF ENQUIRIES

• a) A Participant may ask another Participant about the attitude it takes with respect to a third country, an institution in a third country or a particular method of doing business.

• b) A Participant that has received an application for official support may address an enquiry to another Participant, giving the most favourable credit terms and conditions that the enquiring Participant would be willing to support.

• c) If an enquiry is made to more than one Participant, it shall contain a list of addressees.

• d) A copy of all enquiries shall be sent to the Secretariat.

52. SCOPE OF RESPONSES

• a) The Participant to which an enquiry is addressed shall respond within seven calendar days and provide as much information as possible. The reply shall include the best indication that the Participant can give of the decision it is likely to take. If necessary, the full reply shall follow as soon as possible. Copies shall be sent to the other addressees of the enquiry and to the Secretariat.

• b) If an answer to an enquiry subsequently becomes invalid for any reason, because for example:
• — an application has been made, changed or withdrawn, or
• — other terms are being considered, a reply shall be made without delay and copied to all other addressees of the enquiry and to the Secretariat.

53. FACE-TO-FACE CONSULTATIONS

• a) A Participant shall agree within ten working days to requests for face-to-face consultations.

• b) A request for face-to-face consultations shall be made available to Participants and non-Participants. The consultations shall take place as soon as possible after the expiry of the ten working-day period.

• c) The Chairman of the Participants shall coordinate with the Secretariat on any necessary follow up action, e.g. a Common Line. The Secretariat shall promptly make available the outcome of the consultation.

54. PROCEDURES AND FORMAT OF COMMON LINES

• a) Common Line proposals are addressed only to the Secretariat. A proposal for a Common Line shall be sent to all Participants and, where tied aid is involved, all DAC contact points by the Secretariat. The identity of the initiator is not revealed on the Common Line Register on the electronic Bulletin Board maintained by the Secretariat on the OECD Network Environment. However, the Secretariat may orally reveal the identity of the initiator to a Participant or DAC member on demand. The Secretariat shall keep a record of such requests.

• b) The Common Line proposal shall be dated and shall be in the following format:
• — Reference number, followed by ‘Common Line’.
• — Name of the importing country and buyer.
• — Name or description of the project as precise as possible to clearly identify the project.
• — Terms and conditions foreseen by the initiating country.
• — Common Line proposal.
• — Nationality and names of known competing bidders.
• — Commercial and financial bid closing date and tender number to the extent it is known.
• — Other relevant information, including reasons for proposing the Common Line, availability of studies of the project and/or special circumstances.

• c) A Common Line proposal put forward in accordance with Article 32 b) 4) shall be addressed to the Secretariat and copied to other Participants. The Participant making the Common Line proposal shall provide a full explanation of the reasons why it considers that the classification of a country should differ from the procedure set out in Article 32 b).

• d) The Secretariat shall make publicly available the agreed Common Lines.

55. RESPONSES TO COMMON LINE PROPOSALS

• a) Responses shall be made within 20 calendar days, although the Participants are encouraged to respond to a Common Line proposal as quickly as possible.

• b) A response may be a request for additional information, acceptance, and rejection, a proposal for modification of the Common Line or an alternative Common Line proposal.

• c) A Participant that advises that it has no position because it has not been approached by an exporter, or by the authorities in the recipient country in case of aid for the project, shall be deemed to have accepted the Common Line proposal.

56. ACCEPTANCE OF COMMON LINES

• a) After a period of 20 calendar days, the Secretariat shall inform all Participants of the status of the Common Line proposal. If not all Participants have accepted the Common Line, but no Participant has rejected it, the proposal shall be left open for a further period of eight calendar days.

• b) After this further period, a Participant that has not explicitly rejected the Common Line proposal shall be deemed to have accepted the Common Line. Nevertheless, a Participant, including the initiating Participant, may make its acceptance of the Common Line conditional on the explicit acceptance by one or more Participants.

• c) If a Participant does not accept one or more elements of a Common Line it implicitly accepts all other elements of the Common Line. It is understood that such a partial acceptance may lead other Participants to change their attitude towards a proposed Common Line. All Participants are free to offer or match terms and conditions not covered by a Common Line.

• d) A Common Line that has not been accepted may be reconsidered using the procedures in Articles 54 and 55. In these circumstances, the Participants are not bound by their original decision.

57. DISAGREEMENT ON COMMON LINES

If the initiating Participant and a Participant which has proposed a modification or alternative cannot agree on a Common Line within the additional eight-calendar day period, this period can be extended by their mutual consent. The Secretariat shall inform all Participants of any such extension.

58. EFFECTIVE DATE OF COMMON LINE

The Secretariat shall inform all Participants either that the Common Line will go into effect or that it has been rejected; the Common Line will take effect three calendar days after this announcement. The Secretariat shall make available on the electronic bulletin board a permanently updated record of all Common Lines that have been agreed or are undecided.

59. VALIDITY OF COMMON LINES

• a) A Common Line, once agreed, shall be valid for a period of two years from its effective date, unless the Secretariat is informed that it is no longer of interest, and that this is accepted by all Participants. A Common Line concerning a specific transaction shall remain valid for a further two-year period if a Participant seeks an extension within 14 calendar days of the original date of expiry. Subsequent extensions of a Common Line concerning a specific transaction or any extension of a Common Line that is not related to a specific transaction may be agreed through the procedures set out in Articles 54 to 58. A Common Line agreed in accordance with Article 32 b) 4) shall be valid until World Bank data for the following year is available.

• b) The Secretariat shall monitor the status of Common Lines and shall keep the Participants informed accordingly, through the maintenance of the listing ‘The Status of Valid Common Lines’ on the electronic bulletin board. Accordingly, the Secretariat, inter alia, shall:
• — Add new Common Lines when these have been accepted by the Participants.
• — Update the expiry date when a Participant requests an extension.
• — Delete Common Lines that have expired.
• — Issue, on a quarterly basis, a list of Common Lines due to expire in the following quarter. A Participant providing official support under a Common Line related to the rules concerning export credits (i.e. that is not related to the rules concerning trade-related aid) shall give prior notification of each transaction supported according to Article 44.

SECTION 6

REVIEWS

60. REGULAR REVIEW OF THE ARRANGEMENT

• a) The Participants shall review regularly the functioning of the Arrangement. In the review, the Participants shall examine, inter alia, notification procedures, implementation and operation of the DDR system, rules and procedures on tied aid, questions of matching, prior commitments and possibilities of wider participation in the Arrangement.

• b) This review shall be based on information of the Participants’ experience and on their suggestions for improving the operation and efficacy of the Arrangement. The Participants shall take into account the objectives of the Arrangement and the prevailing economic and monetary situation. The information and suggestions that Participants wish to put forward for this review shall reach the Secretariat no later than 45 calendar days before the date of review.

61. REVIEW OF MINIMUM INTEREST RATES

The Participants shall undertake a comprehensive review of the CIRR provisions set out in Annex XII by no later than 15 July 2027.

62. REVIEW OF MINIMUM PREMIUM RATES AND RELATED ISSUES

The Participants shall regularly monitor and review all aspects of the premium rules and procedures. This shall include:

• a) The Country Risk Classification and Sovereign Risk Assessment Methodologies to review their validity in the light of experience;

• b) The level of the MPRs to ensure that they remain an accurate measure of credit risk, taking into account both the actual experience of institutions providing official export credits as well as private market information on the pricing of credit risk;

• c) The differentiations in the MPRs which take account of the differing quality of export credit products and percentage of cover provided; and

• d) The body of experience related to the use of country risk mitigation and buyer risk credit enhancements and the continued validity and appropriateness of their specific impact on the MPRs.

• e) A comprehensive review of all aspects of the premium rules of the Arrangement, with a special emphasis on the Market Benchmark Pricing Rules, shall take place no later than 31 December 2024.

63. REVIEW OF OFFICIAL SUPPORT FOR LOCAL COSTS

The Participants shall review the provisions on local costs support by no later than 20 April 2024.

64. REVIEW OF REPAYMENT PROFILES AND TERMS

The Secretariat shall undertake a biennial comprehensive report on the repayment profiles and repayment terms for export credits supported by Participants according to Chapter II, Annex I and Annex II, based on prior notifications and ex post reporting. The report shall comprise a statistical and qualitative analysis of the use of repayment profile flexibilities and of the length repayment terms supported. Should the report indicate that more than 30 % of Arrangement transactions supported under Chapter II, Annex I and Annex II used duly justified flexibilities, a mandatory review of the repayment structure parameters will be undertaken by the Participants.

ANNEX I

SECTOR UNDERSTANDING ON EXPORT CREDITS FOR CLIMATE CHANGE

The purpose of this Sector Understanding is to provide adequate financial terms and conditions to projects in selected sectors identified including under international initiatives as significantly contributing to climate change mitigation, including environmentally sustainable energy, greenhouse gas (GHG) emissions’ reduction and high energy efficiency projects, climate change adaptation, as well as water projects. The Participants to this Sector Understanding agree that the financial terms and conditions of the Sector Understanding, which complements the Arrangement, shall be implemented in a way that is consistent with the Purpose of the Arrangement.

CHAPTER I

SCOPE OF THE SECTOR UNDERSTANDING

1. SCOPE OF APPLICATION FOR PROJECTS IN CLIMATE CHANGE MITIGATION SECTORS ELIGIBLE FOR SUPPORT UNDER APPENDIX I

• a) This Sector Understanding sets out the financial terms and conditions that apply to officially supported export credits relating to contracts in the eligible sectors listed and defined in Appendix I of this Sector Understanding, provided that their impacts are addressed, like all officially supported export credits, in accordance with the 2012 Recommendation of the Council on Common Approaches on Officially Supported Export Credits and Environmental and Social Due Diligence. This list of sectors and, when applicable, the corresponding technology-neutral performance criteria used to define a project’s eligibility, may be modified over time in accordance with the review provisions set out in Article 8 of this Sector Understanding.

• b) Such contracts shall relate to the export of complete projects or parts thereof, comprising all components, equipment, materials and services (including the training of personnel) directly required for the construction and commissioning of an identifiable project, providing that:
• 1. The project results in low to zero carbon emissions, or CO2 equivalent, and/or in high energy efficiency;
• 1. The project should be designed to meet, as a minimum, the performance standards as set out in Appendix I; and
• 1. The terms and conditions provided shall be extended only to address specific financial disadvantages encountered by a project, and shall be based on the individual financial needs and specific market conditions of each project.

• c) The terms and conditions that apply for the sectors listed in Project Class A of Appendix I are limited to:
• 1. The export of complete environmentally sustainable energy power plants or parts thereof, comprising all components, equipment, materials and services (including the training of personnel) directly required for the construction and commissioning of such plants.
• 1. The modernisation of existing environmentally sustainable energy power plants in cases where the economic life of the plant is likely to be extended by at least the repayment period to be awarded. If this criterion is not met, the terms of Chapter II of the Arrangement apply.

• d) The terms and conditions that apply for the sectors listed in Project Class A of Appendix I do not apply to items located outside the power plant site boundary for which the buyer is usually responsible, in particular, water supply not directly linked to the power production plant, costs associated with land development, roads, construction villages, power lines and switchyard, as well as costs arising in the buyer’s country from official approval procedures (e.g. site permits, construction permit), except:
• 1. To the extent to which the items fall under Appendix I or II.
• 1. In cases where the buyer of the switchyard is the same as the buyer of the power plant and the contract is concluded in relation to the original switchyard for that plant, the terms and conditions for the original switchyard shall not exceed those for the plant; and
• 1. The terms and conditions for sub-stations, transformers and transmission lines with a minimum voltage threshold of 60kV located outside the power plant site boundary shall not be more generous than those for the power plant.

• e) Participants may propose to provide the financial terms and conditions set out in this Sector Understanding for climate change mitigation projects that are not currently in Appendix I or otherwise do not meet the eligibility criteria in Appendix I. These projects will be considered on a case-by-case basis according to the procedure outlined in Article 54-59 of the Arrangement. Participants will favourably consider proposals that are aligned with shared climate objectives and the purpose of this Sector Understanding.

2. SCOPE OF APPLICATION FOR CLIMATE CHANGE ADAPTATION PROJECTS ELIGIBLE FOR SUPPORT UNDER APPENDIX II

• a) This Sector Understanding sets out the financial terms and conditions that apply to officially supported export credits relating to contracts or projects that meet the criteria set out in Appendix II of this Sector Understanding.

• b) Such contracts shall relate to the export of complete projects or parts thereof, comprising all components, equipment, materials and services (including the training of personnel) directly required for the execution and commissioning of an identifiable project, providing that:
• 1. The conditions set out in Appendix II are met; and
• 1. The terms and conditions provided shall be extended only to address specific financial disadvantages encountered by a project, and shall be based on the individual financial needs and specific market conditions of each project.

• c) This Sector Understanding also applies to the modernisation of existing projects, to take into consideration adaptation concerns, in cases where the economic life of the project is likely to be extended by at least the repayment period to be awarded. If this criterion is not met, the terms of the Arrangement apply.

3. SCOPE OF APPLICATION FOR WATER PROJECTS

This Sector Understanding sets out the financial terms and conditions that apply to officially supported export credits relating to contracts for the export of complete projects or parts thereof related to the supply of water for human use and wastewater treatment facilities:

• a) Infrastructure for the supply of drinking water to municipalities, including to households and small businesses, i.e. water purification for the purpose of obtaining drinking water and distribution network (including leakage control).

• b) Wastewater collection and treatment facilities, i.e. collection and treatment of household and industrial wastewater and sewage, including processes for the re-use or recycling of water and the treatment of sludge directly associated with these activities.

• c) The modernisation of such facilities in cases where the economic life of the plant is likely to be extended by at least the repayment period to be awarded. If this criterion is not met, the provisions of the Arrangement apply.

CHAPTER II

PROVISIONS FOR EXPORT CREDITS

4. MAXIMUM REPAYMENT TERMS

• a) The maximum repayment term for climate change mitigation transactions eligible to be supported under Article 1 of this Sector Understanding is set out in Appendix I.

• b) The maximum repayment term for climate change adaptation transactions eligible to be supported under Article 2 of this Understanding and according to the eligibility criteria in Appendix II is 22 years.

• c) The maximum repayment term for water transactions eligible to be supported under Article 3 of this Understanding is 22 years.

5. REPAYMENT OF PRINCIPAL AND PAYMENT OF INTEREST

• a) The principal sum of an export credit shall normally be repaid in equal and regular instalments or, when appropriate (e.g. when support is provided for lease transactions or for the export of stand-alone machinery or equipment), equal repayments of principal and interest combined.

• b) Principal shall be paid no less frequently than annually and the first instalment of principal shall be made no later than one year after the starting point of credit.

• c) Interest shall be paid no less frequently than every six months and the first payment of interest shall be made no later than six months after the starting point of credit. In the case of annual repayments of principal, interest shall be paid no less frequently than every 12 months and the first payment of interest shall be made no later than 12 months after the starting point of credit.

• d) Interest due after the starting point of credit shall not be capitalised.

• e) When duly justified by an imbalance between the timing of the funds available to the obligor and the debt service profile possible according to the parameters set out in paragraphs a) and b) above, export credits supported under this Understanding may be provided within the following constraints:
• 1. For transactions eligible to be supported under this understanding that are subject to a maximum repayment term of 15 years and transactions supported under project class B Type 1:
• — No single repayment of principal or series of principal payments within a six-month period shall exceed 30 % of the principal sum of the credit.
• — The first repayment of principal shall be made no later than 24 months after the starting point of credit.
• — The maximum weighted average life of the repayment period is the greater of 65 % of the repayment term of the transaction or six years.
• 1. For all other transactions eligible to be supported under this understanding:
• — No single repayment of principal or series of principal payments within a six-month period shall exceed 35 % of the principal sum of the credit.
• — The first repayment of principal shall be made no later than 36 months after the starting point of credit.
• — The maximum weighted average life of the repayment period is the greater of 70 % of the repayment term of the transaction or six years.

CHAPTER III

PROCEDURES

6. PRIOR NOTIFICATION

• a) A Participant intending to provide support in accordance with the provisions of this Sector Understanding, shall give prior notification at least ten calendar days before issuing any commitment with a credit value of more than SDR ten million, in accordance with:
• 1. Article 44 of the Arrangement if the support is extended pursuant to Article 1 or 3 of this Sector Understanding;
• 1. Article 43 of the Arrangement if the support is extended pursuant to Article 2 of this Sector Understanding.

• b) Such notifications shall include an enhanced description of the project in order to demonstrate how the project complies with the criteria for support, as set out in Article 1 or 2 of this Sector Understanding.

• c) For projects supported in conformity with Appendix I of this Sector Understanding, such notification shall include information on the technical or performance standards that are being applied, and, where available, the expected emissions reductions.

• d) For projects supported in conformity with Appendix II of this Sector Understanding, such notification shall include the outcome of any independent third-party review, if applicable.

• e) For transactions that have been supported under Article 5 e) above, Participants shall, inter alia, provide:
• 1. detailed information on the repayment profile supported and an explanation of the reasons why there is an imbalance between the timing of funds available to the obligor and the debt service profile available if supported according to Articles 5 a) and 5 b), and
• 1. for transactions with a repayment profile that does not match the free cash flow, a detailed and adequate justification of the repayment profile supported.

• f) A Participant shall inform all other Participants of its final decision following a discussion, to facilitate the review of the body of experience.

CHAPTER IV

MONITORING AND REVIEW

7. FUTURE WORK

The Participants agree to examine the following issues:

• a) Net zero energy buildings.

• b) Fuel cell projects.

• c) Clean gaseous and liquid fuels.

• d) Review and inclusion of future international standards for low emissions manufacturing (for example, by the IEA).

8. MONITORING AND REVIEW

• a) The Secretariat shall report annually on the implementation of this Sector Understanding. This report will document the outcomes of any discussion procedure under Article 43 of the Arrangement. It will include a summary for public release.

• b) The Participants shall regularly review the scope and other provisions of this Sector Understanding. For added certainty, a review will take place by the end of 2028 or once 150 CCSU transactions have taken place after 15 July 2023, whichever happens first. This review will be based on the body of experience developed from the notification process (including information on technical or performance standards applied and, where available, emissions reductions achieved), the most recent reports on climate science, and an assessment of market conditions for climate-related technologies.

• c) If a Participant is concerned that a provision or provisions in this Sector Understanding are no longer operating consistently with the purpose of the Arrangement, as set out in Article 1 (Purpose) of the Arrangement, that Participant can request the matter be considered at the next scheduled meeting of the Participants and should provide evidence of their concern.

• d) Appendix I of this Sector Understanding shall be reviewed at regular intervals, including upon the request of a Participant, with the view to assessing whether any Project Class and/or Type should be added to, or removed from, or whether any thresholds should be changed in, that Appendix. Proposals for new Project Classes and/or Types shall be supported by information on how projects within such a Class/Type should fulfil the criteria set out in Article 1 of this Sector Understanding.

Appendix I

ELIGIBILITY CRITERIA FOR CLIMATE CHANGE MITIGATION PROJECTS

The definitions or standards referenced below are intended to promote a common understanding among Participants regarding the implementation of this Sector Understanding for the corresponding project types. They do not prejudice other climate-related definitions or standards that already exist or are under development or are to be developed.

PROJECT CLASS	DEFINITION	RATIONALE	STANDARDS USED OR SUNSET TIMELINE	MAXIMUM REPAYMENT TERM
PROJECT CLASS A: Environmentally sustainable energy production	PROJECT CLASS A: Environmentally sustainable energy production	PROJECT CLASS A: Environmentally sustainable energy production	PROJECT CLASS A: Environmentally sustainable energy production	PROJECT CLASS A: Environmentally sustainable energy production
TYPE 1: Renewable Energy	Complete plants or parts thereof, and the modernisation of existing plants, in the below sectors: a) Wind energy. b) Geothermal energy. c) Tidal and tidal stream power. d) Wave power. e) Osmotic power. f) Solar photovoltaic power. g) Solar thermal energy. h) Ocean thermal energy. i) Bioenergy: all sustainable landfill gas, sewage treatment plant gas, biogas energy or fuel derived from biomass energy installations. ‘Biomass’ shall mean the biodegradable fraction of products, waste and residues from agriculture (including vegetal and animal substances), forestry and related industries, as well as the biodegradable fraction of industrial and municipal waste. j) Hydro power. k) Energy efficiency in Renewable Energies projects.			22 years
TYPE 2: Electricity Production from Clean Hydrogen	Construction of electricity generation facilities that produce electricity using exclusively clean hydrogen.		For clean hydrogen standards, see PROJECT CLASS F, TYPE 1.	See repayment terms of Project Class F, Type 1
PROJECT CLASS	DEFINITION	RATIONALE	STANDARDS USED OR SUNSET TIMELINE	MAXIMUM REPAYMENT TERM
---	---	---	---	---
PROJECT CLASS B: Remediation projects in fossil fuel plants, fossil fuel substitution	PROJECT CLASS B: Remediation projects in fossil fuel plants, fossil fuel substitution	PROJECT CLASS B: Remediation projects in fossil fuel plants, fossil fuel substitution	PROJECT CLASS B: Remediation projects in fossil fuel plants, fossil fuel substitution	PROJECT CLASS B: Remediation projects in fossil fuel plants, fossil fuel substitution
TYPE 1: Fossil Fuel Power Plants with Operational Carbon Capture and Storage (CCS)*	A process consisting of the separation of CO2 stream from the emissions produced by fossil fuel generation sources, transport to a storage site, for the purposes of environmentally safe and permanent geological storage of CO2 or use as an input or feedstock to create products or services.	To achieve low carbon emission levels for fossil fuel power sources.	Carbon intensity shall achieve a level equal to or less than 350 metric ton CO2 per GWh vented to atmosphere [^E0019]; or In the case of all projects, a capture and storage rate that would reduce the plant’s carbon emissions by 65 % or greater; or The capture rate has to be at least 85 % of CO2 emitted by the equipment included in the application for officially supported export credits. The 85 % is to apply at normal operating conditions.	18 years
TYPE 2: Waste to Energy*	Unit dedicated to generating energy by thermal treatment (including gasification) of mixed stream solid waste.	To offset GHG emissions from the use of conventional power and by reducing future GHG such as methane that would normally emanate from the waste.	In the case of a steam cycle, a boiler (or steam generator) energy conversion efficiency of at least 75 % based on low heating value (LHV). [^E0020] In the case of gasification, a gasifier efficiency of at least 65 % LHV. [^E0021]	15 years
TYPE 3: Hybrid Power Plants*	A power plant that generates electric power from both a renewable energy source and a fossil fuel source.	To meet the requirement of plant availability, a fossil fuel generating source is required for those periods when power from the renewable energy source is not available or sufficient. The fossil fuel source enables the usage of renewable energy in the hybrid plant, thereby achieving a significant carbon reduction compared with standard fossil fuel plant.	Model 1: Two separate generation sources: one Renewable Energy and one fossil fuel. Project shall be designed such that at least 50 % of its projected total annual energy output originates from the plant’s renewable energy source. Model 2: Single generation source using the combination of renewable and fossil fuel. The project shall be designed such that at least 75 % of the useful energy produced is derived from the renewable source.	15 years
Note: ***  In an effort to respond to the climate imperative, Participants have focused their effort on expanding the scope of the CCSU to include new project classes. Participants commit to reviewing these project classes, which have not been examined since 2012, as soon as possible but no later than March 2024.	Note: ***  In an effort to respond to the climate imperative, Participants have focused their effort on expanding the scope of the CCSU to include new project classes. Participants commit to reviewing these project classes, which have not been examined since 2012, as soon as possible but no later than March 2024.	Note: ***  In an effort to respond to the climate imperative, Participants have focused their effort on expanding the scope of the CCSU to include new project classes. Participants commit to reviewing these project classes, which have not been examined since 2012, as soon as possible but no later than March 2024.	Note: ***  In an effort to respond to the climate imperative, Participants have focused their effort on expanding the scope of the CCSU to include new project classes. Participants commit to reviewing these project classes, which have not been examined since 2012, as soon as possible but no later than March 2024.	Note: ***  In an effort to respond to the climate imperative, Participants have focused their effort on expanding the scope of the CCSU to include new project classes. Participants commit to reviewing these project classes, which have not been examined since 2012, as soon as possible but no later than March 2024.

In the case of a plant fuelled by natural gas, significantly lower carbon intensity is expected to be achieved.

Boiler (or steam generator) energy conversion efficiency = (Net heat exported by the steam/heat or calorific value [LHV] provided by the fuel) (x 100 %).

Gasifier efficiency = (Calorific value of gas per kg of fuel used/average net calorific value (LHV) of 1 kg of fuel) (x 100 %).

PROJECT CLASS	DEFINITION	RATIONALE	STANDARDS USED OR SUNSET TIMELINE	MAXIMUM REPAYMENT TERM
PROJECT CLASS C: Energy efficiency	PROJECT CLASS C: Energy efficiency	PROJECT CLASS C: Energy efficiency	PROJECT CLASS C: Energy efficiency	PROJECT CLASS C: Energy efficiency
TYPE 1: Combined Heat & Power projects*	Simultaneous generation of multiple forms of energy (electrical, mechanical and thermal) in a single integrated system. Output of the CHP plant shall include electric or mechanical energy and heat for commercial industrial and/or residential use.	Up to two thirds of the primary energy used to generate electricity in conventional thermal power plants is lost in the form of heat. Combined heat and power (CHP) generation can therefore be an effective GHG mitigation option. CHP is possible with all heat machines and fuels (including biomass and solar thermal) from a few kW-rated to 1000MW steam-condensing power plants. [^E0022]	Overall efficiency of at least 75 % based on low heating value (LHV). [^E0023]	15 years
TYPE 2: District heating and/or cooling*	Network which carries/distributes thermal energy from energy producing unit to end use.	To improve the efficiency of heating of districts by building piping networks for steam and/or hot water with substantial thermal efficiency, both by minimising losses of piping and converters, and by increasing the amount of utilisation of waste heat. District cooling is an integrative technology that can make significant contributions to reducing emissions of carbon dioxide and air pollution and to increasing energy security e.g. via substitution of individual air conditioners.	The district piping thermal conductivity shall be less than 80 % of the relevant thermal conductivity required by the European standard EN253:2009 (to be reviewed when this standard is updated).	15 years
TYPE 3: Smart Grids*	Integrated, technologically advanced electricity networks with improved dynamic capabilities to monitor and control the input and output of all their constituent technical components (such as power generation, Network Management Solutions, High Voltage Direct Current (HVDC) converters and systems, Flexible Alternating Current Transmission Systems (FACTS), Special Power Systems (SPS), transmission, distribution, storage, Smart Grid Power Electronics Solutions, consumption reduction, metering, distributed energy resources). ICT according to internationally agreed industry standards such as NIST-SGIP and ETSI-CEN-Cenelec.	To enable network operators, transmission and distribution system operators, grid users, storage owners, metering operators, applications and service providers or power exchange platform operators to create economical, environmentally-friendly, balanced and sustainable power systems with reduced transmission losses and optimized levels of supply quality, safety, grid stability, reliability, renewable power collection and cost-efficiency by supporting supply contracts involving predominantly export of state-of-the-art, innovative technologies and services.	Standards 1, 2 (a or b) and 3 shall be met. 1. The total cost of the project includes at least 20 % for eligible information and communication technology (ICT) upgrades. 2a.  An estimated minimum 10 % reduction in the amount of CO2 emissions from fossil fuel will result from the project or application, or 2b.  Demonstrated significant CO2 emission reductions will be enabled through either: — reductions in energy losses within the electricity grid served by the Smart Grid application or project by at least 5 %; or — reductions in aggregate electricity consumption by loads served by the Smart Grid application or project by at least 5 %; or — intermittent feed-in of renewable energies, including from subordinate voltage levels, representing at least an additional 10 % of the total energy fed into the grid where the smart grid technologies are applied. 3. Prior to authorization, an independent, qualified third party will review the project and prepare a report that describes the characteristics of the proposed Smart Grid application or project and verifies whether the project or application will meet standards 1 and 2 (a or b). For projects using the 2b standard, estimated C02 emissions reductions enabled by the project will be included in the report. Such report will be shared with Participants prior to any authorization of financial support and authorization will be conditional on the report positively verifying that standards 1 and 2 (a or b) will be met by the proposed Smart Grid project or application. Standards will be measured by comparing the estimated emissions or energy use from an Area Served by the Grid if the proposed Smart Grid technologies are applied to emissions or energy use of that same area if the proposed Smart Grid technologies were not applied.	15 years
Note: ***  In an effort to respond to the climate imperative, Participants have focused their effort on expanding the scope of the CCSU to include new project classes. Participants commit to reviewing these project classes, which have not been examined since 2012, as soon as possible but no later than March 2024.	Note: ***  In an effort to respond to the climate imperative, Participants have focused their effort on expanding the scope of the CCSU to include new project classes. Participants commit to reviewing these project classes, which have not been examined since 2012, as soon as possible but no later than March 2024.	Note: ***  In an effort to respond to the climate imperative, Participants have focused their effort on expanding the scope of the CCSU to include new project classes. Participants commit to reviewing these project classes, which have not been examined since 2012, as soon as possible but no later than March 2024.	Note: ***  In an effort to respond to the climate imperative, Participants have focused their effort on expanding the scope of the CCSU to include new project classes. Participants commit to reviewing these project classes, which have not been examined since 2012, as soon as possible but no later than March 2024.	Note: ***  In an effort to respond to the climate imperative, Participants have focused their effort on expanding the scope of the CCSU to include new project classes. Participants commit to reviewing these project classes, which have not been examined since 2012, as soon as possible but no later than March 2024.

IPCC Fourth Assessment Report: Climate Change 2007, http://www.ipcc.ch/publications_and_data/ ar4/wg3/en/ch4s4-3-5.html.

The total system efficiency (Image omitted; see official sourceo) of a CHP system is the sum of the net useful power output (WE) and net useful thermal outputs (ΣQTH) divided by the total fuel input (QFUEL), as shown below:

Image omitted; see official source

PROJECT CLASS	DEFINITION	RATIONALE	STANDARDS USED OR SUNSET TIMELINE	MAXIMUM REPAYMENT TERM
PROJECT CLASS D: Carbon capture, utilisation, and storage (CCUS) projects	PROJECT CLASS D: Carbon capture, utilisation, and storage (CCUS) projects	PROJECT CLASS D: Carbon capture, utilisation, and storage (CCUS) projects	PROJECT CLASS D: Carbon capture, utilisation, and storage (CCUS) projects	PROJECT CLASS D: Carbon capture, utilisation, and storage (CCUS) projects
	Construction and operation of facilities that are dedicated to either: — Capturing CO2 from emissions sources that would otherwise be released into the atmosphere, or capturing CO2 from the ambient air; — Preparing the captured CO2 for transportation (via pipeline, rail, road, or ship), which includes preparation of captured CO2 to transportation specification (e.g., compression); — Transporting the captured CO2 to the end use point; or, — Permanently storing captured CO2.	To significantly reduce carbon emissions from existing sources.	At a minimum, ambient air capture facilities must capture the CO2 equivalent of their own operational emissions. Dedicated geological storage complies with ISO 27914:2017. Eligible utilisation of the captured and/or transported CO2 is covered under Clean Liquid and Gaseous Fuels (PROJECT CLASS J) and Low-Emission Manufacturing (PROJECT CLASS G). Utilization of CO2 for fossil fuel related activities such as enhanced oil recovery is not eligible. Appropriate leak detection systems and monitoring plans are in place for transportation and storage of CO2, with regular reports verified by the national authorities or an independent third party.	22 years
PROJECT CLASS	DEFINITION	RATIONALE	STANDARDS USED OR SUNSET TIMELINE	MAXIMUM REPAYMENT TERM
---	---	---	---	---
PROJECT CLASS E: Transmission, distribution, and storage of energy	PROJECT CLASS E: Transmission, distribution, and storage of energy	PROJECT CLASS E: Transmission, distribution, and storage of energy	PROJECT CLASS E: Transmission, distribution, and storage of energy	PROJECT CLASS E: Transmission, distribution, and storage of energy
TYPE 1: Energy Management, Transmission, and Distribution	Construction and/or expansion of grid-scale energy storage facilities (e.g., chemical, thermal, mechanical, and electrochemical). Construction and expansion of infrastructure that transports low carbon electricity, including direct connections to low carbon sources and networks sections where the electricity mix meets the standards. Installation of smart-meters and other technologies that improve grid efficiency.	To facilitate long-term, cost-effective decarbonization of power systems.	Projects related to low-carbon electricity are eligible where low-carbon electricity comprises more than 60 % of the newly installed generation capacity over the trailing 5-year period. Low-carbon electricity refers to any power source listed in Project Class A of this Appendix, or where GHG emissions from the electricity produced is below the threshold value of 133 gCO2e/kWh. Given that the electrification in the low and lower middle-income countries is critical to decarbonization, the above standard shall not apply for projects in these countries until 5 years after the effective date of this Agreement, unless Participants agree otherwise. Such projects are subject to Article 43. Construction and expansion of infrastructure projects that transports electricity are eligible so long as they are not directly connecting fossil fuel power plants to the grid. Grid efficiency project documents must credibly demonstrate that energy efficiency is the primary purpose of the project.	22 years
TYPE 2: Battery Production and Recycling	Construction of facilities that manufacture rechargeable batteries, battery packs, and battery cells with climate-mitigating end uses (e.g., for utility, transport, and industrial applications). Recycling of end-of-life batteries.	To increase output of climate-mitigating batteries and facilitate the cost-effective decarbonization of high-emission activities.	Project description in notification to include description of the end use of the battery.	22 years
PROJECT CLASS	DEFINITION	RATIONALE	STANDARDS USED OR SUNSET TIMELINE	MAXIMUM REPAYMENT TERM
---	---	---	---	---
PROJECT CLASS F: Clean hydrogen and ammonia	PROJECT CLASS F: Clean hydrogen and ammonia	PROJECT CLASS F: Clean hydrogen and ammonia	PROJECT CLASS F: Clean hydrogen and ammonia	PROJECT CLASS F: Clean hydrogen and ammonia
TYPE 1: Clean Hydrogen Production	Construction of facilities dedicated to clean hydrogen production.	To facilitate the decarbonization of high-emission sectors.	Clean hydrogen projects are eligible where: i. Hydrogen has well-to-gate emissions (from feedstock production until hydrogen shipment) that are less than 3 kg CO2e per 1 kg of H2 (tier 1); ii. Hydrogen has well-to-gate emissions (from feedstock production until hydrogen shipment) that are less than 4 kg CO2e per 1 kg of H2 (tier 2).	Tier 1: 22 years Tier 2: 18 years
TYPE 2: Clean Ammonia Production	Construction of facilities dedicated to clean ammonia production.	To facilitate the decarbonization of high-emission sectors.	Clean ammonia is ammonia produced from clean hydrogen according to the standards defined in this Appendix or that is recovered from wastewater. The thresholds for clean ammonia correspond to the thresholds for clean hydrogen used in its production. There are no thresholds for clean ammonia recovered from wastewater,	Tier 1 and clean ammonia recovered from wastewater: 22 years Tier 2; 18 years
TYPE 3: Transmission, Distribution, and Storage of Hydrogen	Construction of storage, transmission, and distribution facilities that are connected to clean hydrogen production plants or are expected to be connected to such plants within five years. Conversion of existing gas facilities into 100 % hydrogen facilities. Repurposing of gas networks that enables the integration of hydrogen.	To develop the infrastructure needed to transmit, distribute, and store clean hydrogen, recognizing that clean hydrogen will use the same transmission, distribution, and storage facilities as other hydrogen, and further recognizing that clean hydrogen uptake necessitates the development of infrastructure for use by all hydrogen types.	Where applicable, refer to clean hydrogen standards in PROJECT CLASS F, TYPE 1.	22 years
PROJECT CLASS	DEFINITION	RATIONALE	STANDARDS USED OR SUNSET TIMELINE	MAXIMUM REPAYMENT TERM
---	---	---	---	---
PROJECT CLASS G: Low emissions manufacturing [^E0024]	PROJECT CLASS G: Low emissions manufacturing [^E0024]	PROJECT CLASS G: Low emissions manufacturing [^E0024]	PROJECT CLASS G: Low emissions manufacturing [^E0024]	PROJECT CLASS G: Low emissions manufacturing [^E0024]
	Low emissions manufacturing including construction, expansion, or retrofitting of complete manufacturing plants and part thereof, supplies of equipment, and directly associated infrastructure and services. Illustrative list: a) Ferrous and non-ferrous metals b) Cement c) Chemicals (incl. fertilizer, ammonia) d) Pulp & Paper	To incentivize manufacturers to move toward sustainable practices in hard-to-abate sectors with the aim, particularly in manufacturing sectors experiencing global oversupply, to support the substitution of GHG intensive technologies with technologies significantly contributing to climate change mitigation.	Prior to consensus on appropriate standards at the future review by the Participants, Participants must use the common line procedures outlined in Articles 54-59 of the Arrangement to submit a proposal for a low-emissions manufacturing project. The proposal shall include the GHG intensity of the production of the manufactured product, calculated in compliance with the GHG Reporting Protocol, taking into account Scope 1 and 2 emissions. The proposal shall present a rationale for why this level qualifies as low emissions. This information must be supported by documents which will be filed with the proposal. For projects relating to contracts of a value of at least SDR 20 million, there shall be an independent third-party review conducted on the project, either separately or conducted in concert with the preparation of the project documents. This above-mentioned documentation shall be published in standardized form on the OECD website at the date of the first draw-down (take inspiration from the ECG project Class A project transparency).	22 years

After 30 June 2024, this project type shall be discontinued unless Participants agree otherwise. At the same time, Participants will review international standards developed by then and decide whether they will incorporate them in this entry.

PROJECT CLASS	DEFINITION	RATIONALE	STANDARDS USED OR SUNSET TIMELINE	MAXIMUM REPAYMENT TERM
PROJECT CLASS H: Zero and low emissions transport	PROJECT CLASS H: Zero and low emissions transport	PROJECT CLASS H: Zero and low emissions transport	PROJECT CLASS H: Zero and low emissions transport	PROJECT CLASS H: Zero and low emissions transport
TYPE 1: Zero emissions transport and enabling infrastructure [^E0025]	Zero direct emissions fleets including vehicles for road, track-bound transportation systems, [^E0026] and water transport and associated infrastructure essential to operating such vehicles. [^E0027]	The transition to zero direct tailpipe emissions fleets is key in achieving climate change mitigation.	Direct tailpipe CO2 emissions of the moving assets are zero. Zero-emission vehicles include electric vehicles and fuel cell vehicles. Freight transport, including vehicles, train, wagons or vessels and infrastructure essential to operating such vehicles must not be dedicated to the transport or storage of fossil fuels. For associated infrastructure, project notification shall include description of the link between zero emissions vehicles and the infrastructure, including how it is essential to operating such vehicles. In order to obtain repayment terms longer than 18 years for vessels, Participants must use the common line procedures outlined in Articles 54-59 of the Arrangement. The proposal must justify why longer repayment terms are needed. The maximum repayment terms shall not exceed 22 years.	22 years for all transport and enabling infrastructure save vessels 18 years for vessels
TYPE 2: Low emissions rail and enabling infrastructure	Low emissions rail transport, including bi-mode electro-diesel trains and hybrid locomotives and associated infrastructure essential to operating such vehicles.	To incentivize hybrid and low emissions rail transport where its usage will achieve significant emissions reductions and contribute to climate change mitigation.	In the case of bi-mode trains, trains, passenger coaches and wagons have zero direct tailpipe CO2 emission when operated on a track with necessary infrastructure and use a conventional engine where such infrastructure is not available (bi-mode trains).	20 years
TYPE 3: Low emissions heavy-duty transport and enabling infrastructure	Plug-in hybrid vehicles (PHEV) for industrial or freight applications and associated infrastructure essential to operating such vehicles. Hybrid electric vehicles (HEV) for industrial or freight applications.	To incentivize hybrid and low emissions vehicles where their usage will achieve significant emissions reductions and contribute to climate change mitigation.	For PHEV, the vehicle has zero direct tailpipe CO2 emissions when operated using an electric motor and otherwise uses a conventional engine. For HEV, the vehicle achieves 35 % reduction in direct tailpipe CO2 emissions or 35 % increase in energy efficiency compared to corresponding conventional vehicles in the newest model year.	20 years for PHEV 18 years for HEV
TYPE 4: Low emissions water transport	Transactions falling under this project class remain subject to the terms and conditions of Chapter II pending the outcome of further discussions by the Participants regarding the specific criteria, standards and definitions to be applied.	Transactions falling under this project class remain subject to the terms and conditions of Chapter II pending the outcome of further discussions by the Participants regarding the specific criteria, standards and definitions to be applied.	Transactions falling under this project class remain subject to the terms and conditions of Chapter II pending the outcome of further discussions by the Participants regarding the specific criteria, standards and definitions to be applied.	Transactions falling under this project class remain subject to the terms and conditions of Chapter II pending the outcome of further discussions by the Participants regarding the specific criteria, standards and definitions to be applied.
PROJECT CLASS I: Clean Energy Minerals and Ores [^E0028]	PROJECT CLASS I: Clean Energy Minerals and Ores [^E0028]	PROJECT CLASS I: Clean Energy Minerals and Ores [^E0028]	PROJECT CLASS I: Clean Energy Minerals and Ores [^E0028]	PROJECT CLASS I: Clean Energy Minerals and Ores [^E0028]
	Construction of facilities involved in the land-based extraction, recycling, processing, and/or refining (including metallisation) of ores or minerals where the product resulting from these processes form part of the supply chain for eligible projects (or eligible parts thereof) under Appendix I, Class A – Type 1: Renewable Energy; Class E – Type 2: Battery Production and Recycling. Illustrative List: — Copper — Cobalt — Nickel — Lithium — Rare Earth Element (REEs) — Chromium — Zinc — Platinum Group Metals (PGMs) — Aluminium	To ensure a stable and affordable supply of materials in the supply chain for eligible projects or parts thereof) under this Appendix that are key to achieving climate change mitigation.	Prior to the development of appropriate standards that Participants will review as part of their future work, Participants will use the common line procedures outlined in Articles 54-59 of the Arrangement to submit a proposal for a clean energy minerals and ores project. This information will be supported by documents which will be filed with the proposal. For projects for extraction, processing and refining of ores or minerals, the proposal shall include the GHG intensity of the output product, calculated in compliance with the GHG Reporting Protocol, taking into account scope 1 and 2 emissions. It shall also include information on what measures have been taken to reduce emissions. For extraction projects, the proposal will include a disclosure of the economic life of the mineral reserve, estimated in accordance with internationally recognized and accepted guidelines in the mining industry and related rationale for the tenor applied. The proposal will further include a description demonstrating evidence that: — a significant proportion of offtake from the facility will form part of the supply chain for eligible projects (or eligible parts thereof) under Appendix I, Class A – Type 1: Renewable Energy; Class E – Type 2: Battery Production and Recycling; or — there is in place a legally enforceable undertaking requiring that a significant proportion of offtake will be used as part of the supply chain for eligible projects (or eligible parts thereof) under Appendix I, Class A – Type 1: Renewable Energy; Class E – Type 2: Battery Production and Recycling; or — the project clearly contributes to the increased supply of minerals or ores that are internationally recognised as essential components to renewable energy, including eligible projects (or eligible parts thereof) under Appendix I, Class A - Type 1: Renewable Energy; Class E -Type 2 Battery Production and Recycling, and where total demand for such minerals or ores is predicted to rise significantly over the next two decades in a scenario that meets Paris Agreement goals. If the Participants accept the proposal, the project will be reported in standardized form on the OECD website at the date of first draw-down.	22 years
PROJECT CLASS J: Production of clean liquid and gaseous fuels	PROJECT CLASS J: Production of clean liquid and gaseous fuels	PROJECT CLASS J: Production of clean liquid and gaseous fuels	PROJECT CLASS J: Production of clean liquid and gaseous fuels	PROJECT CLASS J: Production of clean liquid and gaseous fuels
	Transactions falling under this project class remain subject to the terms and conditions of Chapter II pending the outcome of further discussions by the Participants regarding the specific criteria, standards and definitions to be applied.	Transactions falling under this project class remain subject to the terms and conditions of Chapter II pending the outcome of further discussions by the Participants regarding the specific criteria, standards and definitions to be applied.	Transactions falling under this project class remain subject to the terms and conditions of Chapter II pending the outcome of further discussions by the Participants regarding the specific criteria, standards and definitions to be applied.	Transactions falling under this project class remain subject to the terms and conditions of Chapter II pending the outcome of further discussions by the Participants regarding the specific criteria, standards and definitions to be applied.

Vessels shall be excluded from this project type as from three years after its entry into force, unless Participants agree otherwise.

The specific types of track-bound transportation systems that are eligible for support according to the terms and conditions of this Appendix are: 1) Any type of rail transportation system. 2) Trolleybus transportation systems. 3) Cable car transportation systems. Cable car transportation systems associated with recreational activities such as skiing are not eligible for support under this Appendix.

Illustrative list for associated infrastructure: control (signalling and other IT) systems, electrification, tracks, overhead wires and cables, pylons, battery charging infrastructure, hydrogen refuelling infrastructure, and related construction work.

[^E0028]: (⁴)

After 30 June 2024, this project class shall be discontinued unless Participants agree otherwise. At the same time, Participants will review international standards developed by then and decide whether they will incorporate them in this entry. A Participant may submit a proposal under this Project Class up until 30 June 2025, provided that Participant notifies other Participants by 30 June 2024 that they are preparing to bring forward a specific proposal.

Appendix II

ELIGIBILITY CRITERIA FOR CLIMATE CHANGE ADAPTATION PROJECTS

A project is eligible for the maximum financial terms and conditions set out in this Sector Understanding if:

• a) The project reduces the location-specific context of vulnerability to climate change. This reduction is explicitly indicated and explained in the project documents through an explicit statement of intent to address the identified climate vulnerability and an analysis that articulates a clear and direct link between the climate vulnerability context and the specific project adaptation activities that address the climate vulnerability. Those specific project activities define the share of the project that directly addresses climate change vulnerability. If climate change adaptation is an objective of specific project activities, only those activities are eligible. If climate change adaptation is an objective of the full project, or it is not technically feasible to disaggregate between adaptation and non-adaptation project activities, then the full project is considered to directly address climate change vulnerabilities and is eligible.

• b) For projects relating to contracts of a value of at least SDR 20 million, there is an independent third-party review conducted on the project, either separately or conducted in concert with the preparation of the project documents. The review is publicly available, such as published on the project website or the website of the relevant public body. The review shall verify the rationale established in paragraph a. above. Additionally, for projects relating to contracts where it is not technically feasible to disaggregate among climate change adaptation and non-adaptation project activities, the review shall verify the technical infeasibility of disaggregating project components.

- c) The useful life of the project exceeds the repayment term.

ANNEX II

SECTOR UNDERSTANDING ON EXPORT CREDITS FOR NUCLEAR POWER PLANTS

CHAPTER I

SCOPE OF THE SECTOR UNDERSTANDING

• a) This Sector Understanding sets out the provisions which apply to officially supported export credits relating to contracts for:
• 1. The export of complete nuclear power plants or parts thereof, comprising all components, equipment, materials and services, including the training of personnel directly required for the construction and commissioning of such plants.
• 1. The modernisation of existing nuclear power plants.
• 1. The supply of nuclear fuel and enrichment.
• 1. The provision of spent fuel management.

- b) This Sector Understanding does not apply to:

• 1. Items located outside the nuclear power plant site boundary for which the buyer is usually responsible, in particular costs associated with land development, roads, construction village, power lines, switchyard ([^E0029]) and water supply, as well as costs arising in the buyer’s country from official approval procedures (e.g. site permit, construction permit, fuel loading permit).
• 1. Sub-stations, transformers and transmission lines located outside the nuclear power plant site boundary.
• 1. Official support provided for the decommissioning of a nuclear power plant.

CHAPTER II

PROVISIONS FOR EXPORT CREDITS

• a) The maximum repayment term for goods and services covered by Article 1 a) 1) of this Sector Understanding is 22 years.

• b) The maximum repayment term for goods and services covered by Article 1 a) 2) of this Sector Understanding, where both the overall value of the modernisation is at or above SDR 80 million and the economic life of the plant is likely to be extended by at least the repayment period to be awarded is 22 years. The maximum repayment term for all other transactions covered by Article 1 a) 2) of this Sector Understanding is 15 years.

• c) The maximum repayment term for the initial fuel load is four years from delivery. The maximum repayment term for subsequent reloads of nuclear fuel is two years from delivery.

• d) The maximum repayment term for spent fuel disposal is two years.

- e) The maximum repayment term for enrichment and spent fuel management is five years.