The European Regional Development Fund / Cohesion Fund
Supporting cohesion in the European Union
The European Regional Development Fund (ERDF) aims to strengthen economic, social and territorial cohesion in the European Union by correcting imbalances between its regions. In the 2021-2027 programming period, it enables investments in a smarter, greener, more connected and more social Europe that is closer to its citizens. It is complemented by the Cohesion Fund (CF) which supports investment in 15 Member States in transport, the environment, energy efficiency and renewable energy.
The new ERDF/CF Regulation (Regulation EU 2021/1058) entered into force on 1 July 2021.
In the 2021-2027 period, cohesion policy will support, through its investments, the following five policy objectives (POs):
- PO1: a Smarter Europe, through innovation, digitisation, economic transformation and support to small and medium-sized businesses.
- PO2: a Greener, carbon free Europe, implementing the Paris Agreement and investing in energy transition, renewables and the fight against climate change.
- PO3: a more Connected Europe, with strategic transport and digital networks.
- PO4: a more Social Europe, delivering on the European Pillar of Social Rights and supporting quality employment, education, skills, social inclusion and equal access to healthcare.
- PO5: a Europe closer to citizens, by supporting locally-led development strategies and sustainable urban development across the EU.
The majority of the investment will target the first two POs and will also continue to promote job creation in small and medium enterprises, provide support to the health sector, improve preparedness related to unexpected emergencies, and fully develop the economic potential of tourism and culture sectors.
With the inclusion of an additional EUR 47.5 billion from the Next Generation EU fund, the EU has allocated more than EUR 370 billion to its economic, social and territorial cohesion policies for the 2021-2027 period. With the enhanced flexibility for use of financial instruments under the new Common Provisions Regulation (Regulation EU 2021/1060), including in combination with grants, it is expected that Member States will increasingly use guarantee, loan and equity investments for the implementation of their Operational Programmes.
The package of Cohesion Policy legislation also includes the new regulation on the Just Transition Fund (Regulation EU 2021/1056) which is part of the European Green Deal and the first pillar of the Just Transition Mechanism (JTM). It aims to alleviate the social and economic costs resulting from the transition towards a climate-neutral economy, through a wide range of activities directed mainly at diversifying the economic activity and helping people adapt in a changing labour market.
Financial instruments for innovation in La Réunion
The ‘La Financière Région Réunion’ (FRR) fund of funds has been set up in the La Réunion region of France with resources from the European Regional Development Fund (ERDF) with a mandate to implement and manage two financial instruments to support small and medium sized enterprises (SMEs), including micro-enterprises.
Watch this video to discover how the initiative helped Engineering and 3D printing micro-enterprise, AGONOV, grow their company and FinTech SME, HUB2, improve interoperability between mobile money wallets across Africa.
Interview with Slovak Investment Holding
Slovak Investment Holding was set up by the Slovak government to enable local expertise to be developed in relation to the design and implementation of financial instruments using EU shared management funds. The creation of the Fund of Funds manager has secured this objective and SIH now manages almost all of the ESIF financial instruments in the Member State.
As well as acting as the Holding Fund manager, selecting and managing financial intermediaries delivering financial instruments, SIH has directly invested by way of loan, equity and quasi-equity investments in final recipients in sectors as diverse as transport, social economy, cultural and creative industry and energy efficiency.
Interview with Adam Ďurica
Thanks to ERDF financial instruments, Slovakia-based Zero Gravity Capital supports businesses from their earliest stages to their expansion phase. As well as financing, they organise key European venture capital & start-up conferences and provide software development resources as well as co-working spaces and transaction advisory services. Zero Gravity looks for start-ups with a great team, talent, disruptive technologies, and drive.