European Union Structural and Investment Funds

fourLINK Blog

European Union Structural and Investment Funds

28th February 2016

The role of the European Union is under a lot of scrutiny at the moment, and so in this blog we explore a positive aspect and explain what is required for an application for European Union Structural and Investment Funds (ESIF), for EU funding.

The basic contract between the Member State (MS) and the EU is the ‘Partnership agreement’ (PA). The action plan on how to instrumentals the PA is planned and decided through the document named the ‘Operational Programme’ (OP).

According to its legislative document, each EU country decides which national body is the Managing Authority (MA), and it is this appointed entity who are required to deliver the Structural Funds in accordance with both the legislative framework and the ‘Operational Programme’ documents that have been negotiated with the European Commission (EC). These OPs provide the basis for investment decisions made by the Managing Authority, and describe the scope of activity that can be financed, including the targets that must be met and against which performance will be monitored.

The 2014 – 2020 European Structural Funds investment programmes in any Member State aims to support the regional economic and labour market development. The OP are combined into a general investment programme strategy of the Member State. In this respect each Member State decides their investment policy into logical chapters, and can have one or more OP’s. In the following link one can find the latest list of OP’s for each Member State.

The conditions for setting the investment programs for each Member State was in general that all programme funds are expected to be ‘match-funded’, with different minimum contributions from other sources (both public and private) for each priority. The desire is always to provide ESIF at the minimum level required to deliver the objectives of the programmes, ensure added value, and avoid crowding out other investments. It is therefore expected that the overall investment (ESIF plus match-funding) to exceed the € amount (it is a different amount for each Member State - adopted in the OP); the different additional financial contribution might be expected dependent on the activity and delivery model adopted. The Member Countries are here in most cases counting on an extra 100% of activated finances from other instruments, other than European structural and investment funds (ESIF) that is on today’s date is in total €454,073,873,653 for the whole EU.

Non-repayable finance remains the main mechanism by which the Managing Authority invests EU funding, particularly given the structural weaknesses being targeted. There was in the OP preparation, however, a clear commitment from each Managing Authority to explore and put in place more innovative financial products where there is a clear opportunity and demand. This fine tuning analysis ends with the ex-ante assessment that have to be carried out on the provision of access to finance for institutional applicants, SMEs and other applicants.

So, how to participate in getting the EU funds and finances for your projects with ESIF funds? Each Member State defines the application procedure and the applications go to the Managing Authority of the country to be evaluated (though there are the so called Major projects that are more than €50 million worth). As the European Commission defined: “ ‘Major Projects’ are usually large-scale infrastructure projects in transport, environment and other sectors such as culture, education, energy or ICT. As they receive more than € 50 million in support through the ERDF and/or Cohesion Fund, they are subject to an assessment and a specific decision by the European Commission.”

The application procedure is specific for each Member State, however when estimating if one should go for funding from the ESIF, as part of the application process one needs to demonstrate the following:

- the ownership on the project:  land or/and premises or/and activities

- project technical documentation: project plans or/and project designs or/and Feasibility Studies together with Cost-benefit analysis, permits

-the available capacity to run the project: the employees or/and technical and legal preconditions to be able to prepare applications, to receive, conduct, implement funding and after funding in order to run the project accordingly.

The general conditions explained in the previous lines are the precondition for aligning each document and activity that is needed to be executed in the actions for applying for the ESIF. The application procedure looks complicated but is tuned this way to involve a large number of stakeholders that will in one or another way be connected to the success of the project and gain the beneficiary effects that it will bring.

Our team have worked through these stages on a number of projects and therefore are able to guide potential clients to success with EU funding.