Financial and advisory support for investments in interregional innovation projects for the development of value chains in less developed regions (Strand 2a)

Grant Purpose and Target

Core Objective

The core mission of this grant is to support interregional innovation investments that help bring mature innovations (TRL 6+) to a level ready for scale-up and commercialisation. It specifically aims to reduce Europe's innovation divide by reinforcing the integration of innovation actors from less developed and transition regions into European value chains, and by creating new value chains within these regions.

Funding Organization

The grant is funded under the European Regional Development Fund (ERDF) and managed by the European Innovation Council and SMEs Executive Agency (EISMEA).

Target Recipients

Eligible applicants are legal entities (public or private bodies) participating in a consortium. This includes a wide range of 'quadruple helix' actors such as:
* Companies (with a special focus on SMEs)
* Public bodies and public administrations
* Universities and research organizations
* Non-profit organizations
* Intermediaries like cluster organisations, development agencies, and business associations

Sector Focus

SECTOR-SPECIFIC. Proposals must address one of the following three thematic priorities:
* Digital transition: Including digital economy innovation (e.g., AI, cybersecurity, ICT uptake in SMEs) and digital transformation of public services.
* Green transition: Including decarbonisation, circularity, renewable energy, sustainable mobility, bioeconomy, and smart cities.
* Smart manufacturing: Including advanced materials, robotics, 3D/4D printing, and processes that improve resource efficiency and circularity.

Geographic Scope

Projects must be interregional, involving consortia from multiple EU regions. Applicants must be from EU Member States (including outermost regions and overseas countries and territories) or eligible non-EU countries associated with the I3 Instrument. A core requirement is a strong cohesion focus, with at least 50% of the total eligible costs to be incurred in less developed regions.

Key Filtering Criteria

• Project Stage: Projects must start with a minimum Technology Readiness Level (TRL) of 6.
• Project Scale: The requested grant amount should normally be between EUR 2 million and EUR 10 million.
• Consortium: A consortium of at least 3 independent entities from 3 different regions in 2 eligible countries is mandatory. The consortium must include at least one partner from a more developed region.
• Cohesion Requirement: At least 50% of eligible costs must be spent in less developed regions.

Financial Structure

Funding Range

• The requested EU grant amount should normally range between EUR 2 million and EUR 10 million per project. Proposals outside this range may be considered if duly justified.
• The total estimated budget for this call is EUR 24 million.

Co-financing

• The grant reimburses costs at different rates, requiring co-financing from the participants:
  • 70% for most eligible direct and indirect costs.
  • 100% for costs related to providing Financial Support to Third Parties (FSTP).
• This implies a co-financing requirement of 30% for the majority of project costs.

Eligible Costs

• Personnel Costs: Salaries, social security, and other statutory costs for employees, as well as unit costs for SME owners not receiving a salary.
• Subcontracting: Costs for services outsourced to third parties that are part of the action's tasks.
• Purchase Costs: Travel and subsistence, depreciation costs for equipment, and costs of other goods, works, and services (e.g., consumables).
• Financial Support to Third Parties (FSTP): Funds distributed to SMEs via open calls to complement the project's value chain. This is optional and cannot exceed 30% of the total eligible project costs. The maximum support for each third party is EUR 60,000.
• Indirect Costs: A flat rate of 7% of the total eligible direct costs (excluding subcontracting and FSTP in some cases) is applied to cover general overheads.

Ineligible Costs

• General Ineligible Costs: Costs such as return on capital, debt and interest payments, provisions for losses, currency exchange losses, and deductible VAT are not eligible.
• Activities Outside Scope: Costs for activities excluded by the ERDF Regulation or those that do not comply with the 'do no significant harm' (DNSH) principle.
• Specific Exclusions: Costs for creating separate project websites are not eligible. Costs for ex-novo (from scratch) prototyping are also excluded; the focus is on adapting existing prototypes.

Payment & Reporting

• Prefinancing: A pre-financing payment, normally 70% of the maximum grant amount, is paid to the coordinator at the start of the project (typically within 30 days of the grant agreement entering into force).
• Interim Payment: One interim payment will be made during the project's lifetime based on a periodic report.
• Final Payment (Payment of the Balance): The final payment is made after the submission and approval of the final project report. The total amount of payments cannot exceed the maximum grant amount.
• Certificate on Financial Statements (CFS): A CFS from an independent auditor is required at interim or final payment if a beneficiary's requested EU contribution to costs reaches or exceeds EUR 325,000.

Eligibility Requirements

Formal Criteria

• Consortium Composition: The consortium must consist of a minimum of 3 independent legal entities established in at least 3 different regions in at least 2 different eligible countries.
• Regional Diversity: The consortium must include at least one partner entity from a more developed region. The classification of regions can be checked on the European Commission's regional policy map.
• Cohesion Focus: A minimum of 50% of the total eligible costs of the project must be incurred in less developed regions by beneficiaries and/or third parties receiving financial support.
• Coordinator Role: The project coordinator must be a public body, a non-profit organisation, or an entity entrusted by a government to implement innovation actions for SMEs (e.g., cluster organisation, public-private partnership, development agency).
• S3 Alignment: The project must be aligned with the national and/or regional Smart Specialisation Strategies (S3) of the participating regions. A signed S3 Compliance Declaration from the coordinator is a mandatory part of the application.

Organizational Status

• Eligible Entities: Applicants must be legally established entities, including public bodies, private companies (SMEs, large enterprises), non-profits, international organisations, universities, and research organisations.
• SME Investment Target: A minimum of 70% of the total direct eligible costs must be allocated to investments in companies, with a stated focus on SMEs. This can be through direct participation of SMEs as beneficiaries or via Financial Support to Third Parties (FSTP).
• Legal Registration: All beneficiaries and affiliated entities must be registered in the EU Participant Register and validated by the Central Validation Service before the grant agreement is signed.

Technical Expertise

• Project Maturity: Proposed projects must start at a minimum Technology Readiness Level (TRL) 6. This implies that the core technology is already demonstrated in a relevant environment.
• Consortium Expertise: The consortium as a whole must possess the necessary know-how, qualifications, and resources to successfully implement the project. This is assessed under the 'Quality' award criterion.

Exclusion Criteria

• Standard EU Exclusions: Applicants in situations of bankruptcy, grave professional misconduct, fraud, corruption, or in breach of tax or social security obligations are ineligible.
• EU Restrictive Measures: Entities subject to EU restrictive measures or specific conditionality measures (such as certain Hungarian public interest trusts) are not eligible to participate in a funded role.
• Do No Significant Harm (DNSH): Activities that significantly harm environmental objectives as defined in the EU Taxonomy Regulation are not eligible for funding.

Application Practical Information

Deadlines

• Call Opening: 22 May 2025
• Submission Deadline: 13 November 2025, 17:00:00 Brussels time (CET)
• Evaluation Period: November 2025 – April 2026
• Information on Results: By May 2026
• Grant Agreement Signature: By August 2026

Required Documents

The proposal must be submitted electronically and must include:
* Application Form Part A: Contains administrative information, filled in directly online.
* Application Form Part B: The technical description of the project. A template must be downloaded from the submission system and uploaded as a PDF file (max 70 pages).
* Application Form Part C: Contains additional project data, filled in directly online.
* Mandatory Annexes:
* A Detailed budget table using the provided template.
* An S3 Compliance Declaration, signed by the coordinator, confirming the project's alignment with the Smart Specialisation Strategies of the participating regions.

Application Process

• Proposals must be submitted electronically via the EU Funding & Tenders Portal.
• All participants (beneficiaries, affiliated entities) must have a 9-digit Participant Identification Code (PIC) obtained by registering in the Participant Register.
• The submission is a single-stage process. The application must be complete at the time of submission.

Support

• The grant provides financial support for project activities and advisory support, such as coaching, mentoring, or matchmaking activities.
• Applicants are encouraged to engage with the I3 Support Facility (I3SF) for technical, policy, and investment advice.
• For questions regarding the call, the designated contact is: [email protected].

Post-Award Obligations

• Project Duration: Projects are expected to last between 18 and 36 months.
• Reporting: Beneficiaries must submit periodic reports to request payments. Continuous reporting on deliverables and milestones is also required via the portal.
• Mandatory Deliverables: All projects must produce several key deliverables, including:
  • A Data Management Plan.
  • A full Dissemination and Exploitation Plan.
  • An annual report on engagement with regional managing authorities.
  • A final business and investment plan.

Evaluation Criteria

Proposals are scored out of a maximum of 25 points and must pass both individual and overall thresholds to be considered for funding.

• Overall Pass Score: 17.5 out of 25

Scoring Factors

1. Relevance (Maximum Score: 10 points; Minimum Pass Score: 5 points)

   • Strategic Fit: How well the proposal matches the objectives of the I3 Instrument and the specific call, particularly regarding the integration of less developed regions into EU value chains and fostering innovation within them.
   • Innovation Ambition: The relevance, novelty, and ambition of the proposed innovation (product, process, etc.) for the chosen thematic area (Digital, Green, or Smart Manufacturing).
   • Addressing Regional Needs: How the project addresses the specific needs and challenges of the regions involved, including outermost regions or those facing unique challenges like brain drain.

2. Quality (Maximum Score: 5 points; Minimum Pass Score: 2.5 points)

   • Consortium & Team: The quality and composition of the consortium and project teams, demonstrating the necessary expertise and cooperative mechanisms.
   • Methodology: The technical quality, logical structure, and suitability of the proposed methodology for implementing the project and achieving its objectives.
   • Feasibility: The feasibility of the project plan, including the timetable, risk management strategy, and monitoring and evaluation methods.

3. Cost Effectiveness (Maximum Score: 5 points; Minimum Pass Score: 2.5 points)

   • Value for Money: Whether the budget is sufficient, appropriate, and represents the best value for money for proper implementation.
   • Budget Appropriateness: The overall cost-effectiveness of the project in achieving its proposed results and objectives.

4. Impact (Maximum Score: 5 points; Minimum Pass Score: 2.5 points)

   • Cohesion Impact: The project's contribution to improving economic, social, and territorial cohesion.
   • Long-Term Impact: The long-term effects on value chains and target groups, including the potential for replication and up-scaling in less developed regions.
   • Sustainability: The strategy for ensuring the sustainability of results after EU funding ends, and the plan for dissemination and exploitation of project outcomes.
   • Environmental Impact: Where relevant, the project's environmental impact will also be considered.

Cross-cutting Themes

In case of a tie between proposals with the same score, the following aspects will be used for prioritization:
* Thematic Diversity: Prioritizing proposals that cover a theme not addressed by higher-ranked projects.
* Gender Balance: The gender balance among key personnel and the presence of gender equality plans in participating organisations can be considered.
* Geographical Diversity: The number of Member States represented in the proposal that are not already funded in higher-ranked projects.

Compliance and Special Requirements

Regulatory Compliance

• Do No Significant Harm (DNSH): Projects must comply with the DNSH principle, meaning they cannot support activities that do significant harm to EU environmental objectives.
• Data Protection: All activities must be compliant with the General Data Protection Regulation (GDPR) and other applicable data protection laws.
• Ethical Standards: The project must be carried out in line with the highest ethical standards and respect basic EU values, as outlined in the Model Grant Agreement.

IP Policy

• Ownership: The results of the project are owned by the beneficiaries that generate them.
• Licence to EU: The granting authority receives a royalty-free, non-exclusive, and irrevocable license to use non-sensitive project information and deliverables for policy, communication, and dissemination purposes.
• Open Science: Beneficiaries are required to support an open science approach. This involves creating a Data Management Plan (DMP) to specify which project data will be made open ('as open as possible, as closed as necessary') and which will remain private for commercialisation or other reasons.

Unique Aspects

• Smart Specialisation (S3) Alignment: A core requirement is the project's alignment with the relevant national or regional S3. This must be confirmed via a formal declaration from the coordinator.
• Cohesion and Regional Integration: The project's structure and budget must reflect a strong focus on reducing the innovation divide. This is enforced through two key rules:
  1. At least 50% of the total eligible costs must be incurred in less developed regions.
  2. At least 70% of the total direct eligible costs must be allocated to investments in companies, with a particular focus on SMEs.
• Consortium Agreement: Beneficiaries are required to have a consortium agreement in place to govern their internal arrangements, such as IPR management, decision-making, and financial distribution.
• Engagement with Regional Authorities: Projects must demonstrate active involvement of ERDF managing authorities and S3 competent bodies from the participating regions throughout the project's lifecycle.

Industry-Specific Rules

• While the call does not list specific industry rules, projects operating within the Digital Transition, Green Transition, or Smart Manufacturing themes must adhere to all relevant sector-specific regulations. For example, projects in cybersecurity must comply with relevant EU digital regulations, and projects in the green transition must align with environmental standards and policies like the EU Green Deal.