Includes how major projects are financed and gives examples where relevant. Explains activities of the multilateral development banks in and other aid-funded projects where procurement is open to U.S. bidders.
Last Published: 8/2/2019

EU financial assistance programs provide a wide array of grants, loans, loan guarantees and co-financing for feasibility studies and projects in a number of key sectors (e.g., environmental, transportation, energy, telecommunications, tourism, public health).  A number of centralized financing programs are also generating procurement and other opportunities directly with EU institutions. The EU supports economic development projects within its Member States, as well as EU-wide "economic integration" projects that cross both internal and external EU borders.  In addition, the EU provides assistance to candidate and neighbor countries.
 
The EU provides project financing through grants from the EU budget and loans from the European Investment Bank. Grants from the EU Structural and Investment Funds program are distributed through the Member States’ national and regional authorities.  Projects in non-EU countries are managed through the Directorate-Generals Enlargement, Development and Cooperation (EuropeAid), Humanitarian Aid and Civil Protection (ECHO).

EU Structural and Investment Funds (ESIF)

EU Structural Funds, including the European Regional Development and the European Social Fund, were created in 1975 with the aim to mitigate economic and social differences between the regions of the European Union.  New budgets are approved every seven years for all Member States. The budgets and the allocation of funding between the different priorities (social, economic or environmental) are based on the conclusions of the “Partnership Agreements” (PAs) which are negotiated between the European Commission and the member state national authorities.  For the period of 2014 – 2020, the EU has earmarked 352 billion euros for regional development and cohesion policy projects. For information on approved programs that will result in future project proposals.
 
For projects financed through ESIF, member state regional managing authorities are the key decision-makers. They assess the needs of their country, investigate projects, evaluate bids, and award contracts. To become familiar with available financial support programs in the Member States, it is advisable for would-be contractors to develop a sound understanding of the country’s cohesion policy indicators.
 
Tenders issued by Member States’ public contracting authorities for projects supported by EU grants are subject to EU public procurement legislation. All ESIF projects are co-financed by national authorities and many may also qualify for a loan from the European Investment Bank and EU research funds under Horizon 2020, in addition to private sector contribution. For more information on these programs, please see the market research section on the website of the U.S. Mission to the EU: Market Intelligence

The Cohesion Fund

The Cohesion Fund is another instrument of the EU’s regional policy.  Its 63 billion euro (2014-2020) budget is used to finance projects in two areas:
 
Trans-European transport projects including transport infrastructure, and environment, including areas related to sustainable development and energy for projects with environmental benefits.
 
The fund supports projects in Member States whose Gross National Income (GNI) per inhabitant is less than 90 % of the EU average, such as Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, and Slovenia.
 
These projects are, in principle, co-financed by national authorities, the European Investment Bank, and the private sector:
 
Key Link: The Cohesion Fund

Other EU Grants for Member States

Other sets of sector-specific grants such as Horizon 2020 offer assistance to EU Member States in the fields of science, technology, communications, energy, security, environmental protection, education, training and research. Tenders related to these grants are posted on the websites of the European Commission and the relevant Member State authorities.  Participation is usually restricted to EU-based firms or tied to EU content. Information pertaining to each of these programs can be found at: EU Funding and Tenders

External Assistance Grants

“Development and Cooperation – EuropeAid” is the Directorate–General (DG) responsible for implementing EU development policies through programs and projects across the world.  Its website offers extensive information on the range of grant programs, the kind of projects that are eligible, as well as manuals to help interested parties understand the relevant contract law. However, participation in these calls for tender is reserved for enterprises located in the EU Member States or in the beneficiary countries and requires that the products used to respond to these projects are manufactured in the EU or in the aid recipient country.  Consultants of U.S. nationality employed by a European firm are allowed to participate.  European subsidiaries of U.S. firms are eligible to participate in these calls for tender.
 
For more information: International Cooperation and Development

The European Neighborhood Instrument (ENI) provides assistance to countries that are the Southern Mediterranean and Eastern neighbors of the EU. ENI is the follow-up to the European Neighborhood Policy program (ENPI) covering the countries of Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, the occupied Palestinian territory, Syria, Tunisia and Ukraine.  The ENI budget is 15.4 billion euros for 2014-2020.  Additional information can be found at: EU External Action
 
Instrument for Pre-accession Assistance II (IPA II) is an EU program for pre-accession countries that provides support for political and economic reforms, preparing the beneficiaries for the rights and obligations that come with EU membership and that are linked to the adoption of the acquis communautaire (the body of European Union law that must be adopted by candidate countries as a precondition to accession).  These programs are intended to help build up the administrative and institutional capacities of these countries and to finance investments designed to aid them in complying with EU law. IPA II runs from 2014 to 2020 and finances projects in: Albania, Bosnia and Herzegovina, the former Yugoslav Republic of Macedonia, Kosovo, Montenegro, Serbia, and Turkey. The budget of IPA II for 2014-2020 is 11.7 billion euros.
 
For more information, check the European Commission's Instrument for Pre-accession Assistance page. 
 
The Connecting Europe Facility (CEF) is an EU financing mechanism that uses the EC budget as well as the Cohesion Funds to finance projects in three key areas: energy, transport and telecom. It was created by Regulation 1316/2013 on December 11, 2013.
 
Along with the European Fund for Strategic Investments (EFSI), CEF is expected to play a role in bridging the investment gap in Europe, which is one of the Commission's top priorities. In all three main categories the focus is on creating better conditions for growth and jobs. Annual and multi-annual work programs specify the priorities and the total amount of financial support allocated for these priorities in a given year.
 
Only actions contributing to projects of common interest in accordance with Regulations 1315/2013, No 347/2013 and a Regulation on guidelines for trans-European networks in the area of telecommunications infrastructure, as well as program support actions, are eligible for support.
 
Projects supported through the CEF mechanism focus on the following:

  • cleaner transport modes,

  • high speed broadband connections, and

  • the use of renewable energy (in line with the Europe 2020 Strategy), integration of the internal energy market, reduction of the EU's energy dependency and ensuring security of supply.  

The total budget of the CEF for the period 2014 to 2020 is set at €30.44 billion. This amount is distributed between the main priority areas as follows:

  1. transport sector: €24.05 billion;

  2. telecommunications sector: €1billion;

  3. energy sector: €5.35 billion 

Please see: Connecting European Facility

Loans from the European Investment Bank

Headquartered in Luxembourg, the European Investment Bank (EIB) is the financing arm of the European Union.  Since its creation in 1958, the EIB has been a key player in building Europe.  As a non-profit banking institution, the EIB assesses reviews and monitors projects, and offers cost-competitive, long-term lending.  Best known for its project financial and economic analysis, the EIB makes loans to both private and public borrowers for projects supporting four key areas: innovation and skills, access to finance for smaller businesses, climate and environment, and infrastructure.
 
While the EIB mostly funds projects within the EU, it lends outside the EU as well (e.g., in Southeastern Europe, Africa, Latin America, and Pacific and Caribbean states). In 2016, the EIB loaned 76 billion euros for projects. The EIB also plays a key role in supporting EU enlargement with loans used to finance improvements in infrastructure, research, and industrial manufacturing to help those countries prepare for eventual EU membership.
 
The EIB presents attractive financing options for projects that contribute to the European objectives cited above, as EIB lending rates are lower than most other commercial rates.
 
Projects financed by the EIB must contribute to the socio-economic objectives set out by the EU, such as fostering the development of less favored regions, improving European transport and environment infrastructure, supporting the activities of SMEs, assisting urban renewal and the development of a low-carbon economy, and generally promoting growth and competitiveness in the EU. The EIB website displays lists of projects to be considered for approval.

Multilateral Development Banks

World Bank

With 189 member countries, the World Bank is an international financial institution that provides loans to countries of the world for capital programs.

European Bank for Reconstruction and Development (EBRD)

The European Bank for Reconstruction and Development (EBRD) was founded in 1991 to create a new post-Cold War era in central and eastern Europe, furthering progress towards ‘market-oriented economies and the promotion of private and entrepreneurial initiative’. 

U.S. Commercial Service Liaison Offices at the Multilateral Development Banks (European Bank for Reconstruction and Development, World Bank)

The Commercial Service maintains Commercial Liaison Offices in each of the main Multilateral Development Banks, including the European Bank for Reconstruction and Development and the World Bank. These institutions lend billions of dollars in developing countries on projects aimed at accelerating economic growth and social development by reducing poverty and inequality, improving health and education, and advancing infrastructure development. The Commercial Liaison Offices help American businesses learn how to get involved in bank-funded projects, and advocate on behalf of American bidders. Learn more by contacting the Commercial Liaison Offices to the European Bank for Reconstruction and Development and the World Bank.

 

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