Financial Instruments in Cohesion Policy: Commission staff working document
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Financial instruments can play an important role in the achievement of cohesion policy objectives. Their purpose is to enable public sector resources to be used in a more efficient way by drawing upon commercial practices and actors and by stimulating the participation of private sector capital. Types of support provided through financial instruments include equity, loans, loan guarantees, micro-finance and other forms of revolving assistance. The final recipients include SMEs and other recipients of public funding, such as urban development and energy efficiency/renewable energy projects, and even individual citizens. Financial instruments can be set up indirectly through holding funds, or through direct contributions to equity funds, loan funds and guarantee fund mechanisms. Please see annex II for a graphic illustration.