in force 2025-01-01 MODIFIED+493 −414§
Amended by Regulation (EU) 2024/1623 32024R1623 · Regulation (EU) 2024/2987 32024R2987 · Regulation (EU) 2024/2795 32024R2795
applies from: unknown (the text changed beyond its dates, so no date that moved can be read as the application date)
dates added to the text: 2025-01-01
Point (a) of paragraph 1 previously described the exposure as belonging to the corporate exposure class or the specialised lending exposures class, but now instead identifies it by cross-reference to the exposure class in Article 112, point (g), or the exposure classes in Article 147(2), point (c)(i), (ii) or (iii), both excluding exposures in default.
Point (f) is reworded from referring to "the re-financing risk of the exposure" to "the obligor's refinancing risk," with the internal cross-reference to paragraph 2 restyled without substantive change to the entities listed.
Point (o) is rewritten and its six numbered sub-points on individual environmental objectives are removed; it now states that for exposures originated after 1 January 2025 the obligor must have carried out an assessment that the financed assets contribute positively to one or more environmental objectives in Article 9 of Regulation (EU) 2020/852 without significantly harming the other objectives in that Article, or that the assets do not significantly harm any of those objectives.
Cited: Art. 501a, v1 · Art. 501a, v2
text before / after
02013R0575-20240709 → 02013R0575-20250101
Article 501a
Adjustment to own funds requirements for credit risk for exposures to entities that operate or finance physical structures or facilities, systems and networks that provide or support essential public services
1. Own funds requirements for credit risk calculated in accordance with Title II of Part III shall be multiplied by a factor of 0,75, provided that the exposure complies with all the following criteria:
(a) the exposure is included either in assigned to the corporate exposure class referred to in Article 112, point (g), or to any of the exposure classes referred to in the specialised lending exposures class, Article 147(2), point (c)(i), (ii) or (iii), with the exclusion of exposures in default;
(b) the exposure is to an entity which was created specifically to finance or operate physical structures or facilities, systems and networks that provide or support essential public services;
(c) the source of repayment of the obligation is represented for not less than two thirds of its amount by the income generated by the assets being financed, rather than the independent capacity of a broader commercial enterprise, or by subsidies, grants or funding provided by one or more of the entities listed in points (b)(i) and (b)(ii) of paragraph 2;
(d) the obligor can meet its financial obligations even under severely stressed conditions that are relevant for the risk of the project;
(e) the cash flows that the obligor generates are predictable and cover all future loan repayments during the duration of the loan;
(f) the re-financing obligor’s refinancing risk of the exposure is low or adequately mitigated, taking into account any subsidies, grants or funding provided by one or more of the entities listed in paragraph 2, points (b)(i) and (b)(ii) of paragraph 2; (ii);
(g) the contractual arrangements provide lenders with a high degree of protection including the following:
(i) where the revenues of the obligor are not funded by payments from a large number of users, the contractual arrangements shall include provisions that effectively … 346 unchanged words … constructor and adequate contract provisions for liquidated damages;
(k) where operating risks are material, they are properly managed;
(l) the obligor uses tested technology and design;
(m) all necessary permits and authorisations have been obtained;
(n) the obligor uses derivatives only for risk-mitigation purposes;
(o) for exposures originated after 1 January 2025 the obligor has carried out an assessment whether that the assets being financed contribute positively to one or more of the following environmental objectives:
(i) climate change mitigation;
(ii) climate change adaptation;
(iii) sustainable use objectives set out in Article 9 of Regulation (EU) 2020/852 and protection do not significantly harm the other objectives set out in that Article, or that the assets being financed do not significantly harm any of water and marine resources;
(iv) transition to a circular economy, waste prevention and recycling;
(v) pollution prevention and control;
(vi) protection of healthy ecosystems. the environmental objectives set out in that Article.
2. For the purposes of point (e) of paragraph 1, the cash flows generated shall not be considered predictable unless a substantial part of the revenues satisfies the following conditions:
(a) one of the following criteria is met:
(i) the revenues are … 344 unchanged words … of entities referred to in point (b) of paragraph 1 over a full economic cycle;
(c) the consistency of own funds requirements laid down in this Regulation with the outcomes of the analysis under points (a) and (b) of this paragraph.