European Innovation Fund – Bulgarian companies can receive up to 4.5 million euros for low-carbon technology projects

The European Innovation Fund has announced a second call for businesses

The European Innovation Fund has opened the second – “small-scale” call for funding applications. It is one of the largest instruments for financing low-carbon technologies in Europe. Under this procedure, announced in March, projects with a high degree of maturity (technical and financial) will be supported, aimed at the implementation of innovative technological solutions and practices to strengthen decarbonisation in the European Union and support the transition to clean energy.

Who can apply?

Eligible candidates are legal entities – public and private, without category limitation: startups, small, medium and large enterprises, associations, international organisations, etc. The companies need to have the operational, technical and financial capacity to adequately meet the needs and requirements for the implementation of the project.

Depending on the specifics of each investment, the application can be carried out independently (only one beneficiary organisation) or in partnership – several organisations that share their expertise and work in cooperation for the project.

Which activities are eligible for funding?

The Innovation Fund supports a wide range of activities divided into different sub-categories, in general:

• Renewable energy technologies: wind, solar and geothermal energy, hydro/ocean energy, renewable heating/cooling, bioelectricity, biofuels;
• Carbon capture, storage and utilization;
• Innovations in energy and carbon-intensive industries: cement and lime, chemicals, glass, ceramics and building materials, hydrogen, iron and steel, non-ferrous metals, pulp and paper, refineries;
• Energy storage: “intra-day electricity storage” or another type of storage.

What type of expenses are eligible?

Eligible for financing is capital expenditures: construction, infrastructure and equipment, purchase of land, acquisition of intangible assets, etc. In contrast to most European programs, there are no limits on the size or percentage of individual types of expenditure.

The grant is up to 60% of the total capital expenditure. They can be between 2.5 million euros and 7.5 million euros per project.

What criteria should the project meet to be successful?

The final selection of the projects by the Funding Authority (European Executive Agency for Climate Infrastructure and the Environment (CINEA)) takes place on a competitive basis based on a complex set of criteria such as:

• Innovativeness: the extent to which the proposed technological solution is positively differentiated from the existing one on the market is assessed, as well as the degree of innovation on the scale “incremental (in stages, non-essential) – radical (completely changing processes/functioning models)”;
• Potential to prevent/reduce greenhouse emissions: the estimated amount of carbon dioxide (or its equivalent for other greenhouse gases) that will be saved, captured and/or utilized within the project is estimated;
• Potential for further development, increase in scale and field of application (in the same or other industries) of the chosen technology;
• Maturity, resource and financial efficiency of the project solution.

What level of preparation is required to apply?

The technical readiness for the implementation of the project is a key point of the selection process. It is important to know that already at the application stage, companies should have a completed feasibility study and a business plan, which are mandatory annexes to the project and are subject to evaluation.

While the feasibility study aims to establish and document how far the implementation of the project is justified from a technological point of view, taking into account factors such as maturity, efficiency, ecological footprint, interaction and synchronicity of processes, etc., the business plan focuses on perspective and profitability of the project in the medium and long term, as well as in its positioning about the operating factors of the market environment.

Support for improvement of failed projects

The Innovation Fund is one of the most complex financing programs, requiring good preparation and comprehensive research of the proposed technology and/or method to ensure the success of the investment. Due to the complexity and time-consuming nature of the process, the European Commission has provided an additional tool – Project Development Assistance (PDA) – from which applicants whose project is unsuccessful but has significant potential can benefit and receive a grant to improve the project in those aspects, which are assessed as underdeveloped.

Deadline for submitting project proposals

The application deadline is August 31, 2022. Projects are submitted electronically through the European Commission portal.. Successful projects will be announced in February 2023, and the conclusion of grant contracts is expected to happen in May next year.