Types of funding

There are different types of funding: grants, financial instruments (loans, guarantees and equity), subsidies, trust funds prizes and procurements (public contracts). The implementation rules for all types of funding are governed by the Financial Regulation.

Grants

Grants are direct financial contributions from the European Union budget awarded by way of a donation to third-party beneficiaries (usually non-profit-making organisations) engaged in activities that serve EU policies. This expenditure is mostly subject to centralised management by the European Commission, either directly by its own departments or indirectly through EU agencies, executive agencies or national agencies.

Grants represent a major part of the European Union's expenditure and fall into two broad categories:

  • grants that finance actions intended to help to achieve an objective that forms part of an EU policy
  • operating grants that finance the operating expenditure of a body pursuing an aim of general European interest or an objective that forms part of an EU policy

Grants are based on the costs actually incurred by the beneficiaries for carrying out the activities in question, and the results of the action remain the property of the beneficiaries.

Financial instruments

Financial instruments are measures of financial support provided on a complementary basis from the budget in order to address specific policy objectives of the European Union.

Such instruments may take the form of equity or quasi-equity investments, loans or guarantees, or other risk-sharing instruments, and may, where appropriate, be combined with grants. Financial instruments can achieve:

  • financial leverage - multiplying scarce budgetary resources by attracting private and public funds to support EU policy objectives
  • policy leverage - incentivising entrusted entities and financial intermediaries to pursue EU policy objectives through alignment of interest
  • institutional leverage - benefiting from the expertise of the actors involved in the implementation chain

In addition, these instruments, implemented in partnership with public and private institutions, address market failures in the provision of external financing (for example to small and medium sized enterprises, or SMEs) and avoid any crowding-out of private financing.

Trust funds

A trust fund is a pool funding mechanism, in which several donors jointly finance an action on the basis of commonly agreed objectives and reporting formats. Each EU trust fund has its own governing board, which decides on the use of the pooled resources. An EU trust fund acts collectively on behalf of the EU and all the contributors to its financing.

Information is available on existing EU trust funds and allocation of funds.

Prizes

A prize is a financial contribution given as a reward following a contest. Through prizes, the EU institutions

  • recognise outstanding work and achievements
  • induce investment - inducement prizes are intended to spur investment into a given direction and are mainly used by the Horizon Europe programme

Subsidies

Subsidies are a big part of the funding provided by the European Agriculture Fund for Rural Development (EAFRD), offering, among other things, direct cash payments to farmers so they can bolster their income. Subsidies also aim to reduce economic and social disparity in the EU's poorest regions. Through the EU's Cohesion Fund, subsidies are awarded to help pay for infrastructure projects and protect the environment.

Public procurement contracts

Public procurement is the purchase of services, supplies or works by a contracting authority (EU Institution or local administration in the Member State) via a public contract.

As a general rule, a public contract is clearly different from a grant:

  • in the case of a contract, the contracting authority obtains a product or service it needs in return for payment
  • in the case of a grant it makes a contribution either to a project carried out by an external organisation or direct to that organisation because its activities contribute to EU policy aims

If you are looking for public procurement contracts, please see tender opportunities

Find a project partner

Most EU-funded projects involve collaboration between organisations from different EU countries or associated countries. A number of search services are available for finding suitable partners.

Who can be a partner?

Any company, organisation or a non-governmental organisation can be a partner, regardless of where they are based, provided they are financially viable and qualified to perform the tasks specified in the project proposal.

However, there must be proof of the operational and financial viability to carry out project tasks within the proposal.

Partner searches

Each applicant is free to find their partners, but there are various partner search services that can help you find organisations wanting to participate in proposals, or publish your own offers of collaboration.

The Funding & Tenders Opportunities Portal covers programmes implemented under direct management. The partner search tool helps you find partners for your project among the many participants of past EU projects. You will be able to select an organisation based on their profile or their previous participation.

You can also find partners when responding to a procurement procedure as a consortium. More information on both is available under How to participate.

Depending on the funding programme concerned, national contact points also provide partner search services, offering detailed partner profiles and active partnership requests.

Information and services to help in finding partners exist on a range of subject, including: