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On 6 December EU Commissioner for Regional Policy Johannes Hahn met with Michael Moore, the British Secretary of State for Scotland to discuss the future cohesion policy for 2014-2020 with a special focus on Scotland.

Scotland is a part of the United Kingdom and occupies the northern third of the island of Great Britain. It shares a border with England to the south and is bounded by the North Sea to the east, the Atlantic Ocean to the north and west, and the North Channel and Irish Sea to the southwest. In addition to the mainland, Scotland constitutes over 790 islands including the Northern Isles and the Hebrides. It has a surface area of around 78,400 km2 and a population of 5,3 m. Its capital is Edinburgh.

In 2009, the GDP per capita for Scotland was 8% higher than the EU-average, but there are disparities within the region: Lowlands and Uplands of Scotland have a GDP per capita 22% higher than EU average while Highlands and Islands of Scotland are 16% below the EU average.

What are Scotland’s priorities?

The Scottish Government is targeting efforts at boosting public sector capital investment, improving access to finance and encouraging new private investment, enhancing economic security to support confidence across the Scottish economy and taking direct action to tackle unemployment. Other major policy initiatives which have an impact on Structural Funds include the Digital Strategy, setting out plans for achieving world class infrastructure by 2020.

Scotland is committed to using regional policy funding to advance European policy objectives as set out in the Europe 2020 strategy. Investments are made in a wide range of activities like venture capital, urban regeneration, business growth, renewables, rural development and youth employment. The investments include strong focus on renewable energy and the low carbon economy, Research &Development, investment in human capital and enhancing digital connectivity.

How does EU regional policy contribute?

In Scotland, Structural Funds are the significant source of European Union funding for economic development. The 2007 - 2013 Structural Funds Programmes are well underway with hundreds of projects across Scotland already benefiting from this key funding. The resources being made available are allowing to focus Structural Funds on Scottish priorities and strategies and to assist the economy during difficult times.

Scotland benefits from two EU regional policy programmes: Highlands and Islands of Scotland convergence programme and the Lowlands and Uplands of Scotland competitiveness programme:

The programme for the Lowlands and Uplands of Scotland with an ERDF contribution of EUR 376 million covers Eastern, Western and Southern Scotland. The programme combines a strategic focus on research, innovation and enterprise development with geographical targeting of deprived areas in urban and rural areas. Ample resources have been allocated to financial engineering instruments both for investment in Small and Medium-Sized Entreprises and in urban regeneration projects.

The programme for the Highlands and Islands region with an ERDF contribution of EUR 124 million is focused on enhancing business competitiveness and innovation and the key drivers of sustainable growth (including research and higher education) and on assisting peripheral and fragile areas.

Scotland also has access to regional policy funding for cross-border projects in the framework of the territorial cooperation programme with Ireland and Northern Ireland (ERDF contribution of EUR 192 million).

Project examples

  • Scottish European Green Energy Centre: ERDF contribution £1.3m

    The Scottish European Green Energy Centre (SEGEC) provides a focal point for organisations in Europe developing low-carbon energy projects and activities. SEGEC engages with institutions, networks and technology platforms, influencing the future policy agenda and identifying niche opportunities for collaboration across different industry sectors.

    SEGEC’s principal remit is to facilitate innovative, collaborative, low-carbon, infrastructure projects which deliver real benefits for Scotland, the UK and Europe. Due to the collaborative nature of the projects that it supports, SEGEC works to secure investments from a range of public grants and private sector funds, including EU funding streams that have been allocated to support market and technology development. Working with partners in Scotland, the UK and Europe, SEGEC maximises the potential to contribute to the European Energy and Emissions targets for 2020 and beyond.

  • Venture capital and co-investment funds: ERDF contribution £74.4m

    Important ERDF resources have been allocated to venture capital and co-investment funds. In April 2009, the Scottish Government also decided to set up the Scottish Investment Bank (SIB) that will deliver a new ERDF supported loan fund and, at a later stage, would bring together most existing ERDF co-financed funds under one umbrella.

    Currently about £74.4m of ERDF has been allocated across five venture capital and co-investment funds. The funds continue to report significant demand for investment finance both debt and equity. The provision of risk capital has shown itself to be a sustainable financial instrument for supporting the creation and growth of the SME base in Scotland and thereby for building and maintaining the regional economy. There is scope for providing a range of different enterprise finance instruments, addressing gaps at different stages in enterprise formation and development.

  • Scotland's Hydrogen Office: ERDF contribution £0.6m

    The Hydrogen Office, which forms part of Fife's flagship Energy Park, is expected to become one of Europe's leading locations for innovation and development of renewable technology. It is a state-of-the-art demonstration and research facility powered by hydrogen fuel cell technology. The Office houses a novel hydrogen production system that captures surplus energy from a wind turbine, storing it as hydrogen when the wind isn't blowing and then using a high efficiency hydrogen fuel cell to generate electricity from this stored energy when required. The hydrogen and fuel cell system was developed by the Pure Energy Centre in Unst.

    With a renewable resource unparalleled in Europe, the technology is recognised to have significant potential to further leverage Scotland's renewable energy reserves. Environmentally, it will help to reduce carbon footprint by promoting cost effective energy saving measures, supporting the development and adoption of cleaner and more efficient technologies. It will also have a positive impact on Scotland's economy since it will boost the development of green jobs by serving as an international demonstration centre for renewable and hydrogen energy technology.

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