Legal Framework and Objectives of the Cohesion Fund
The first prerequisite for the Cohesion Fund is consolidated in the Chapter XIV of the Economic and Social Cohesion of the Treaty on EU (the Treaty of Maastricht), effective as of 1st November 1993. As it is stated in the aforementioned Treaty and in the Council regulation No 1164/1994 establishing the Cohesion Fund, the main objective of the Cohesion Fund is to provide an instrument of financial support for strengthening the economic and social cohesion of the European Community.
The Fund provides financial contributions to investment projects that develop transport and environment infrastructure. The assistance is committed to the projects that are consistent with the long-term Lithuanian policy objectives and EU policy guidelines in transport and environment sectors. Therefore, the preliminary list of projects is negotiated in the Ministry of Environment and Ministry of Transport and Communication and must be accorded with the European Commission in advance. The decision to finance a project from the Cohesion Fund is taken by the European Commission when an application of a high quality and of full package is received.
Since the Cohesion Fund establishment till the EU enlargement in 2004, the Cohesion Fund used to be allocated to Spain, Ireland (till 1st January 2004), Greece and Portugal. In the period 2004 - 2006, the Cohesion Fund shall be also allocated to the new Member States: the Czech Republic, Estonia, Cyprus, Latvia, Poland, Lithuania, Malta, Slovakia, Slovenia and Hungary.
Budget
The size of individual allocations for each country is determined on the basis of the following criteria:
· the size of population of a country;
· the total area of the country;
· GDP per capita;
· socio-economical factors, e.g. the uneven transport infrastructure.
For the period 2000-2006, the total Cohesion Fund budget is EUR 18 billion euro at 1999 prices. The total allocation from the Cohesion Fund to Lithuania for the period 2000-2006 amounts to EUR 825,88 million euro.
Current situation
In November 2006, the European Commission has finalised the allocation of the Cohesion Fund assitance for the period of 2000-2006 for the projects. Currently, Lithuania implements 41 projects financed by the Cohesion Fund and ISPA. 12 projects are already completed.
The requirements for the Cohesion Fund projects:
· the value of projects should be over EUR 10 million;
· Cohesion Fund covers up to 80 - 85% of the project value;
· funds are allocated between environment and transport sectors in equal shares.
The Cohesion Fund part-finances projects, group of projects and project schemes in the environment and transport sectors as well as technical assistance measures and studies which contribute to the appraisal or evaluation, approval, monitoring and supervision of projects; technical and financial expertise of projects; preparation of tendering and technical documentation of projects.
The Main Cohesion Fund Management Institutions:
· Managing Authority - Ministry of Finance, EU Programme Management Department;
· Paying Authority - Ministry of Finance, National Fund Department;
· Intermediate Institution - Ministry of Transport and Communications and Ministry of Environment;
· Implementing Institution - Transport Investment Directorate under the Ministry of Transport and Communications for transport sector and Environmental Projects Management Agency under the Ministry of Environment for environment;
· Cohesion Fund Monitoring Committee - comprises of the representatives from the Managing and Paying Authorities, Intermediate, Implementing Institutions and other institutions directly concerned.
Finansų ministerija. Updated on 22 September 2008