The deadline for the Canary Islands to execute 100 million euros in decarbonisation projects expires on July 31. The island's business associations fear that if it is not completed on time, the money will return to Madrid and be lost for the islands.
The deadline to execute 100 million euros in decarbonisation aid in the Canary Islands expires on July 31, and the island's business associations have raised their voices to request an extension. They fear that if an extension is not achieved, those funds will return to the central Government and never return to the archipelago. The warning comes at a time when Brussels has approved the milestones met by Spain, leaving the final decision in the hands of the Executive.
The president of CEOE-Tenerife, Pedro Alfonso, has been emphatic: "We do not have a guarantee that it will return to the Canary Islands." In the business environment, it is taken for granted that once the money leaves the islands, it will not be redirected to local projects. "We hope they reconsider and that the Canary Islands do not miss the sustainability train for the umpteenth time," Alfonso added.
The situation has arisen because the decarbonisation projects, although awarded, have not been able to complete the works on time. According to the business associations, the delays are due to the complexity of the procedures and tight deadlines. However, the money is already assigned to specific initiatives, which, in the opinion of the businesspeople, should be sufficient to justify its permanence in the islands.
The president of the Canary Confederation of Entrepreneurs, Pedro Ortega, has pointed out that "the funds from the Recovery and Resilience Mechanism (RRM) do not set time limits for project execution." Ortega questions why the central Government does not apply the same criteria to the autonomous communities that Brussels applies to Spain. "If it is enough for Spain that the projects are awarded to justify the funds, it should also be enough for the autonomous communities," he argued.
The deadline of July 31 is due to Spain having to present to the European Commission, one month later, the justification for every euro received. Until a few weeks ago, there were fears that the 100 million would have to be returned to Brussels. However, the Minister of Economy, Carlos Cuerpo, has communicated that the European Commission has congratulated Spain for meeting the milestones and objectives, and that it is not necessary to return a single euro. This means that if the money returns to Madrid, the central Government could reallocate it for other purposes without Brussels claiming it.
Decarbonisation is one of the commitments made by Spain to the European Union to access the Next Generation funds, aimed at reviving the economy after the pandemic. The Canary Islands have received a significant portion of those funds, but now risk losing them if an extension is not granted.
The Canary Islands' Minister of Ecological Transition and Energy, Mariano Hernández Zapata, stated last week that if the state Executive sets a new deadline at the end of this year, 70% of the projects could be executed. Pedro Ortega, for his part, believes that the percentage could be even higher: "I say more," he maintained.
The business associations insist that the projects exist and are underway, so it is not a lack of planning, but rather overly tight deadlines. "The projects exist," Pedro Alfonso reiterated. "Therefore, if the money is allocated, no matter how much the works are not completed on time, the objectives and milestones have been reached."
The loss of these funds would have a direct impact on small and medium-sized enterprises in the Canary Islands, which are the main executors of the decarbonisation projects. Furthermore, it would hinder the energy transition in the islands, which rely heavily on fossil fuels for their electricity supply.
So far, there has been no official response from the central Government to the request for an extension. The final decision rests with the Ministry of Finance, which must assess whether to grant an extension of the deadline or, on the contrary, reclaim the money. Meanwhile, the Canary Islands' business associations maintain their pressure to ensure that the funds do not leave the archipelago.
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