Co-financing : Definition and principles
European funds are never used alone to support a project. In order to obtain a European subsidy, the project leader must seek other public (State, regional council, departmental council) or private co-financers, or provide a share of self-financing to cover all expenses. This is known as the co-financing principle. This approach aims to maximize the efficient use of public funds by ensuring the financial commitment of beneficiaries.
The key principles of co-financing :
- Cost sharing: Project costs are shared between the various funding sources, including the project owner. European funds are complementary and are adjusted according to the co-financing rate of other funding sources.
- Commitment and responsibility: The project owner’s financial contribution demonstrates his or her commitment and responsibility to the success of the project.
- Maximizing resources: By combining public and private funds, co-financing makes it possible to mobilize more resources for larger-scale projects.
- Leverage effect: The contribution of public funds attracts additional financing, increasing the overall impact of the project.
How does co-financing work ?
The co-financing process involves several stages, from project design to implementation and follow-up.
The key stages are as follows :
- Project design: This involves clearly defining the project, its objectives and estimated costs.
- Identifying sources of funding: This involves researching subsidy programs and other potential sources of funding that coincide with the project being carried out by the promoter.
- Financial package: The project manager must determine the share of funding to be provided by the project manager and draw up an overall financing plan.
- Submission of application: The project manager prepares and submits a funding application to the relevant management authorities, including the co-financing plan.
- Mobilization of funds: The managing authorities of the different funds provide the necessary funding and secure the project sponsor’s own contribution.
- Implementation and monitoring: The project is implemented according to plan. The project manager will continue to ensure regular monitoring to guarantee compliance with funding conditions.
The co-financing rate :
The co-financing rate for European funds varies according to several factors, including fund type, project type and region. For example, in the case of the European Structural Funds (FESI), the co-financing rate for the European Regional Development Fund (ERDF) and the European Social Fund (ESF+) varies according to the category of region in which the project falls.
- ERDF :
- In the most developed regions: co-financing of up to 50%.
- In transitional regions: co-financing up to 60% (but some calls for projects mention up to 70%, so there may be variations)
- In less-developed regions: up to 85% co-financing
- ESF+ :
- In the most developed regions: co-financing up to 40
- In transitional regions: co-financing up to 60
- In less-developed regions: up to 85% co-financing
Conclusion
By sharing costs and risks, co-financing makes it possible to carry out projects that contribute to meeting European policies (cohesion policy, sectoral policies, etc.).
