‘Project finance loans’ are reported in FINREP templates F 05.01, row 0130, F 07.01, row 0310 and F 07.02, row 0310 (the latter for nGAAP reporters) in accordance with the instructions in Annex V, Part 2, paragraph 89, to the Commission Implementing Regulation (EU) 2021/451. According to paragraph 89 loans shall be classified on the basis of how they can be recovered. ‘Project finance loans’ shall include loans that meet the characteristics of specialised lending exposures as referred to in Article 147(8) CRR. However, it is not clear from this instructions whether the reported item ’project finance loans’ include all (four) types of ’specialised lending exposures’ (project finance, real estate finance/income producing real estate, object finance, commodity finance – as specified in paragraph 82 of Annex II to the Commission Implementing Regulation (EU) 2021/451 and in Article 1 of Commission Delegated Regulation (EU) 2021/598) or only ’project finance’. 

Q&A 2013_80 clarifies that the definition of ‘project finance loans’ in FINREP is not exactly the same as the definition used for ‘specialised lending exposures’ in Article 147(8) CRR. The answer indicates the following differences between the two definitions:

• object of financing;   Q&A narrows the scope of objects being financed, it refers to the definition provided by the International Project Finance Association and states that project finance loans relate to the financing of long-term infrastructure, industrial projects and public services (based upon a non-recourse or limited recourse financial structure where project debt and equity used to finance the project are paid back from the cash-flow generated by the project). Substantively identical definition was afterwards given in Article 1 of Commission Delegated Regulation (EU) 2021/598 for ‘project finance exposures’. 

• the debtor, which is not necessarily entity which was created specifically to finance or operate physical assets or is an economically comparable exposure (CRR, Article 147(8), point a)); and 

• the lender's degree of control over the assets and the income that the contractual arrangements generate (CRR, Article 147(8), point b)).

The content of EBA answer in Q&A 2013_80 has still not been incorporated into Annex V although Q&A was published already in February 2014. Additionally, by CRR3 the second subparagraph was added to Article 147(8) CRR, explaining that ‘specialised lending exposures’ shall be categorised as follows: ‘project finance’, ‘object finance’, ‘commodity finance’ and ‘income-producing real estate’. Given that Article 147(8) CRR is legal basis (reference) for reporting ‘project finance’ in FINREP, new subparagraph in this Article confirms that ‘project finance loans’ reported in FINREP templates include only one type of ‘specialised lending exposures’, i.e. project finance. 

In light of striving to maximum harmonization of definitions for FINREP and COREP purposes, we suggest to review Q&A 2013_80 and provide adequate clarification whether it is justified to keep the deviation from complying exactly with the conditions a) and b) of Article 147(8) of the CRR. Besides that, it is not clear what does “not complying exactly with the conditions a) and b) of Article 147(8) of the CRR” actually mean.