13 April 2023
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The European Regional Development Fund (ERDF) aims to strengthen economic, social and territorial cohesion in the European Union by correcting imbalances between its regions.

It is one of the financial instruments of the European Union’s Cohesion Policy. Together with the Cohesion Fund (CF), the European Social Fund Plus (ESF+) and the Just Transition Fund (JTF), these instruments contribute to achieving economic, social and territorial cohesion in the EU. Overall, the funds allocated for the Cohesion Policy for the 2021-2027 period amount to €392 billion.

Specifically, the ERDF wants to reduce economic, social and territorial disparities by providing funding to private and public bodies and supporting investments through dedicated national and regional programmes.

Which objectives are pursued by ERDF funds?

Contribution to Cohesion Policy objectives

The ERDF funds are allocated according to the following priorities to make Europe and its regions:

  • More competitive, smarter and innovative. Less developed regions must dedicate at least 25% of their support to this, while transition regions will allocate at least 40%. On the contrary, more developed regions must dedicate at least 85% to this objective and the following one.
  • Greener, low-carbon and resilient. All regions and Member States must concentrate at least 30% of their support on this goal.
  • More connected by enhancing mobility and digitalisation.
  • More social, supporting inclusive employment, education and skills, as well as equal access to healthcare and culture.
  • Closer to citizens, supporting locally-led development and sustainable urban development across the EU. All regions must dedicate at least 8% of their support to this, through local development partnerships.

Contribution to regional policy objectives

The ERDF can intervene in the following objectives of regional policy:

  • Convergence: modernization and diversification of economic structures, as well as safeguarding or creation of sustainable jobs.
  • Regional competitiveness and employment: fostering innovation and the knowledge economy, preventing environmental risks, and ensuring access to transport and telecommunications services of general economic interest.
  • European territorial cooperation: development of cross-border economic and social activities, establishment and development of transnational cooperation, and strengthening the effectiveness of regional policy through interregional promotion and cooperation.

How are ERDF funds managed and delivered?

The European Regional Development Fund (ERDF) finances programmes in shared responsibility between the European Commission and the national and regional authorities in Member States. This allows EU countries to address their specific territorial needs, choosing which projects to support while also being in charge of the programmes’ management.

The fund supports regional development through a variety of mechanisms:

  • Direct aid for investments made in companies, particularly SMEs, to create sustainable jobs.
  • Infrastructures linked to research and innovation, telecommunications, the environment, energy and transport.
  • Financial instruments such as venture capital funds or local development funds, to support regional and local development and encourage cooperation between cities and regions.
  • Measures to provide technical assistance.

Usually, the ERDF co-finances projects, covering a percentage of around 50%-85% of the eligible costs. The remaining expenses must be financed by the project beneficiaries or through other funding sources.

Almost €10 billion for Interreg under the ERDF

Interreg is one of the main instruments funded by the ERDF. Its aim is to support cooperation across borders to jointly face common challenges in health, the environment, research, education, transport, sustainable energy and more. In doing so, the almost 100 Interreg programmes across the borders contribute to the Cohesion Policy’s cooperation priorities.

With an allocation of almost €10 billion for the period 2021-2027, this instrument not only provides funding for projects between Member States, but also it is recently involving their outermost regions, the EU acceding countries and the neighbourhood countries.

Specifically, Interreg supports cross-border mobility, environmental protection, emergency services, skilled jobs and access to public services, as well as better cooperation governance and a safer, more secure Europe.

How are Interreg funds allocated?

Interreg funds for the period 2021-2027 are distributed in the following strands:

  • Cross-border cooperation along all EU land and maritime borders. With a budget of €6.7 billion, some of its programmes include Interreg SUDOE, POCTEP, POCTEFA and MAC.
  • Transnational cooperation, including macro-regional strategies and sea basins, with a budget of almost €1.5 billion and programmes such as InterregMED or Interreg Atlantic Area.
  • Interregional cooperation, which builds networks and lets leading regions share their successes and experience with other territories. It co-funds programmes like Interreg Europe, Interact, ESPON or URBACT.
  • Outermost Regions cooperation, which deepens relations between the EU’s remote regions and their neighbourhoods, such as the Indian Ocean, the Caribbean, Amazonia, Mozambique Channel and Madeira-Azores-Canaries.

Interreg also finances projects beyond EU borders, covering different areas:

  • Interreg NEXT: Eastern and Southern Neighbourhood partner countries.
  • Interreg Outermost Regions, which deepens relations between the EU’s remote regions and their neighbourhoods.
  • Interreg IPA, which fosters cooperation of Member States with Western Balkan countries and Turkey, and helps acceding countries to alleviate border obstacles.

FI Group has 20 years of experience and wants to accompany you on the new NextGenerationEU path. Our experts are at your disposal to analyse how your project fits into the NextGenerationEU European recovery fund and to take the next steps together with you. Contact us.

Marina Marcos

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