Structural funds, the resources of Cohesion Policy which includes 5 Funds, work together to support economic and social cohesion in the EU by correcting imbalances between its regions.
To facilitate synergies, a single rulebook now covers 7 EU funds implemented in partnership with Member States.
Investment priorities for 2021-2027
- Smarter Europe, through innovation, digitisation, economic transformation and support to small and medium-sized businesses
- Greener, carbon free Europe, implementing the Paris Agreement and investing in energy transition, renewables and the fight against climate change
- Connected Europe, with strategic transport and digital networks
- Social Europe, delivering on the European Pillar of Social Rights and supporting quality employment, education, skills, social inclusion and equal access to healthcare
- Europe closer to citizens, by supporting locally-led development strategies and sustainable urban development across the EU.
Regional development investments will strongly focus on objectives 1 and 2.
65% to 85% of ERDF and Cohesion Fund resources will be allocated to these priorities, depending on Member States’ relative wealth.
Managing authorities
A designated managing authority provides information on the programme, selects projects, and monitors implementation.
Allocation method
Cohesion Policy keeps on investing in all regions, still on the basis of 3 categories (less-developed; transition; more-developed).
The allocation method for the funds is still largely based on GDP per capita. New criteria are added (youth unemployment, low education level, climate change, and the reception and integration of migrants) to better reflect the reality on the ground. Outermost regions will continue to benefit from special EU support.
Urban dimension
Cohesion Policy further supports CLLD-locally-led development strategies and empowers local authorities in the management of the funds. The urban dimension of Cohesion Policy is strengthened, with 6% of the ERDF dedicated to sustainable urban development, and a new networking and capacity-building programme for urban authorities, the European Urban Initiative. See more under the European Urban Initiative tab.
News ESF+
ESF+ is the new instrument which is merging existing programmes: the ESF, the Youth Employment Initiative, the Fund for European Aid to the Most Deprived (FEAD) and the Employment and Social Innovation programme (EaSI).
The programme contributes to the five overall policy objectives (mentioned above) and it focuses on the challenges identified in the national reform programmes, in the European Semester as well as in the relevant CSRs, and take into account principles set out in the European Pillar of Social Rights.
Thematically, the following focus of ESF+ is pre-defined:
- at least 25% to the specific objectives for the social inclusion, including integration of migrants;
- at least 3% to the specific objective addressing material deprivation with co-financing rate at 90%;
- at least 12,5% to targeted actions for young people not in employment (NEET)
€87.3 billion of the ESF+ budget will be implemented under the shared management strand; thus application is possible at your national Managing Authorities.
Website of the ESF+
ESF+ Technical Assistance and EaSI calls for proposals will be published here.
Fewer controls
The Commission proposes lighter controls for programmes with good track record, with an increased reliance on national systems and the extension of the “single audit” principle, to avoid duplication of checks. Thus, simpler ways are available to claim payments using simplified cost options.
Link with EU Semester
CSRs will be taken into account twice over the budgetary period: in the beginning, for the design of Cohesion Policy programmes, and during the mid-term review.
A mid-term review will determine if changes in the programmes are needed for the last two years of the funding period, based on emerging priorities, performance of the programmes and the most recent CSRs.
To further set the right conditions for growth and job creation, new “enabling” conditions will help remove barriers to investments.
Easier transfer of resources
Within certain limits, transfers of resources will be possible within programmes without the need for a formal Commission approval. A specific provision makes it easier to mobilise EU funding as of day one in the event of a natural disaster.
Synergies for integration of migrants and other purposes
The single rulebook covering Cohesion Policy funds and the Asylum and Migration Fund will facilitate the setting up of local migrant integration strategies supported by EU resources used in synergy; the Asylum and Migration Fund will focus on migrants’ short-term needs upon arrival while Cohesion Policy will support their social and professional integration.
Outside of the single rulebook, synergies will be made easier with other EU instruments, like Horizon Europe, the LIFE programme or Erasmus+.
The regulation on Cohesion’s Action for Refugees in Europe (CARE)[1] amending the 2014-2020 legal framework governing the European Structural and Investment Funds (ESIF) and the Fund for European Aid for the Most Deprived (FEAD) was adopted by the Council.
The changes include exceptional flexibility to transfer resources between programmes financed by the European Regional Development Fund and the European Social Fund[2] to maximise the speed with which Member States can help people fleeing Ukraine:
- possibility of 100% EU co-financing for 2014-2020 Cohesion policy funding will be extended for the accounting year 2021-2022;
- possibility to use resources from either ERDF or the ESF for any type of measures to support people fleeing Ukraine;
- Member State spending on all actions helping people fleeing Ukraine will be eligible for EU support retroactively as of the start date of the Russian invasion;
- Pre-financing under the REACT-EU will be increased by €3.4 billion.
- Reporting and the programme notification adoption will be simplified.
All these measures are estimated to release almost €17 billion.
Start date for the new measures eligible for funding under CARE: 24 February 2022
[1] Ukraine: final adoption of CARE | European Social Fund Plus (europa.eu)
[2] https://ec.europa.eu/european-social-fund-plus/en/news/ukraine-new-cohesion-support
A financial instrument with a grant component to support energy efficiency (EEFI)
Developed by DG REGIO of the European Commission and the EIB (European Investment Bank), the EEFI is a financial instrument with a grant component to support energy efficiency. It offers the attractive combination of grants and financial instruments in the area of energy efficiency long requested by practitioners.
For whom?
The EEFI is providing potential models for Managing Authorities of Operational Programmes (under Structural Funds), which can be tailored to their specific needs.
As a financial instrument, the EEFI facilitates the more efficient use of public resources and brings in private investment.
The grant component will help better project preparation and encourage deeper renovations, while also improving affordability for low-income households who are suffering from energy poverty. Its flexibility, efficiency, and wide applicability enables the EEFI to effectively contribute to the goals of both Cohesion Policy and REPowerEU in all Member States.
Main focus
While its main focus is on energy efficiency, the EEFI also encourages the use of renewable energy sources whenever applicable – similarly to climate adaptation measures (earthquake proofing measures, rainwater retention), which are incentivized throughout the model.
Minimum energy standard
The works together should induce a reduction in primary energy demand of at least 20% compared to the situation prior to the investment in the renovation.
Structure of the EEFI
The EEFI is a combined loan and grant financial instrument to be managed by a financial intermediary on behalf of a managing authority (MA), acting either directly or through a holding fund. The EEFI will be made available within the framework of a programme co-financed by the ERDF or CF, as a part of priority under Policy Objective 2 a greener, low-carbon transitioning towards a net-zero carbon economy and resilient Europe.
Co-financing
The co-financing may be private or public. It shall not benefit from support under any other operations financed under the CPR nor another Union instrument.
The co-financing may be provided through national financing at programme level, by the financial intermediary and other investors or finance paid by third parties at project level.
The grant component may consist of 1 or more of the following elements:
- Technical support grant;
- Interest rate subsidy;
- Capital grant for households with low income (could be used to cover up to 100% of the costs of investments attributable to a given low-income household, with the loan used only for the other households);
- Capital rebate or capital grant linked to performance (based on expected energy savings).
The loans component should be used exclusively for:
- investments in tangible and intangible assets,
- other costs related to the renovation of the building not exceeding 30% of the total cost,
- working capital related to the eligible activities, without the need to provide justification, not exceeding 10%.
Loans to finance renovations should typically have a minimum maturity of 60 months.
Lending procedure
The funding agreement is signed between the Managing Authority or Holding Fund and the financial intermediary.
The financial intermediary is required to originate a portfolio of new eligible loans in addition to its current loan activities, as agreed in the funding agreement.
Eligible loans for final recipients (according to pre-defined eligibility criteria on a loan-by-loan and portfolio level) should be automatically included in the portfolio.
The identification, selection, due diligence, documentation and execution of the loans to final recipients should be performed by the financial intermediary in accordance with its standard procedures and relevant funding agreement.
Deadline of usage
31 December 2029
Full Publication: https://www.fi-compass.eu/sites/default/files/publications/energy-efficiency-model_0.pdf
An increased use of financial instruments
Grants can be efficiently complemented by financial instruments, which have a leverage effect. On a voluntary basis, Member States will be able to transfer a part of their Cohesion Policy resources to the new, centrally managed InvestEU fund, to access the guarantee provided by the EU budget. Combining grants and financial instruments is made easier and the new framework also includes special provisions to attract more private capital. See more under the InvestEU tab.
Database
Feel free to consult the Cohesion Policy database that has country/region specific data and excellent project examples. In 2021-27 the national data will be uploaded automatically, thus there is no need to wait for implementation reports to access data.