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It’s not rocket science: finding, applying for and receiving EU funding

A smarter, greener, more social Europe. That’s the goal of dozens of funding opportunities arising from the European Structural and Investment Funds (ESI Funds). Too complicated, too confusing? Not at all. It’s actually less time-consuming searching for the right EU funding instruments than you might think. Our author Tim Müßle explains how this works, using the example of the geothermal scheme in Schwerin.

For years, the city of Schwerin has been sitting on a treasure that is only now being unearthed: hot water flows through the rock strata a good 1,300 metres below the state capital of Mecklenburg-Western Pomerania. The heat warms this brine to 56 degrees Celsius. Given the fact that the district heating network is already well developed, that’s heat the entire city can really make good use of. Stadtwerke Schwerin, Schwerin’s municipal utility company, estimates that around 15 per cent of heating needs can be met with this geothermal energy.

Almost ten million euros for geothermal scheme in Schwerin

Stadtwerke Schwerin expects to save about 7,500 tonnes of carbon dioxide annually. But geothermal energy is expensive. To ensure its financing, this is where EU funding comes into play, more precisely: funds from the European Regional Development Fund (ERDF), which is one of several ESI funds. Climate protection goals are explicitly among the objectives of many of these EU funding instruments. 

The municipal utility will receive 9.2 million euros from the EU fund for its geothermal scheme. Christian Pegel, then Energy Minister of Mecklenburg-Western Pomerania, handed over the corresponding grant notifications to the municipal utility in December 2015. Drilling began in 2018, and in September 2022 the construction of the geothermal plant reached another milestone – the delivery of high-performance heat pumps. This will enable the municipal utility to produce green district heating on demand and in an environmentally friendly way.

EU funding is often key for major projects

One of the keys to this future technology is support from EU funds. But EU funds in particular have a reputation for being labour-intensive when it comes to selecting suitable instruments and also when submitting applications. The trick used by the municipal utilities: They worked together with the Mecklenburg-Western Pomerania State Funding Institute (LFI) when submitting their application.

This is the central funding service provider for the Federal State of Mecklenburg-Western Pomerania and thus the first point of contact for funding instruments from the European Structural and Investment Funds. It should be noted that in Germany funding instruments are basically implemented by the federal states. Anyone who wants to apply for EU funding therefore does not turn to an EU agency, but to their federal state – or to the agency that has been commissioned by the federal state to do this. Funding focuses on economic, housing and urban development aspects, as well as on the environment, energy and agriculture.

How do I find the right funding instrument?

In the case of Mecklenburg-Western Pomerania, finding the right funding instrument is easy: the State Funding Institute maintains a database of all possible and current funding programmes, which can be found on the institute’s website under “Förderfinder” (Funding Finder). Municipal employees can, for example, simply select “Municipalities” and then choose a funding purpose, such as “Use of renewable energies”.

The database automatically displays the eligible funding instruments, including funds from the European Regional Development Fund (ERDF). Its website automatically displays factsheets, application forms, funding request forms and the like. Other federal states keep the information differently, as the states can decide for themselves as to which authority is responsible for EU funds.

How do I submit the application correctly?

Simply download the application documents, fill them out and send them in: you can make it that easy for yourself, but your chances of receiving funding increase if you are accommodating to the responsible authorities. It’s not only important that the project being funded actually fits the guidelines for the respective funding instrument, this fit must also be clearly and unambiguously presented to the funding institution.

According to the Mecklenburg-Western Pomerania State Funding Institute, the chances of success increase if you draw on the help of colleagues or consultants who have already successfully applied for EU funding. Otherwise you risk investing too much unnecessary work in a project. The State Funding Institute (LFI) says that possible options here include involving engineering consultancy firms or the manufacturers of the corresponding plants and infrastructure.

The institute’s own staff will also be happy to help you fill out the form, for example at an appointment on site to discuss an entire project together. It may then become evident – as was the case with Stadtwerke Schwerin’s geothermal energy scheme – as to which components of the project are eligible for funding and which are not.

What happens after the application is submitted?

“Once the funds have been applied for, the application for funding is reviewed by the LFI,” says Nils Schalke, group manager for financial accounting at Stadtwerke Schwerin. The application contains, for example, the estimated investment costs as well as the period in which the asset being invested in is expected to be produced. And: “If the project is confirmed as eligible for funding, you receive a corresponding grant notification. This is then followed by the construction phase,” Schalke explains.

Grants do not generally flow automatically; recipients need to keep applying for them in stages. Payments need to be verified, for example with invoices or by proving payment from your own accounting system. This can be done online at the LFI.

That doesn’t sound so complicated. So why is it often said that EU funding is so confusing?

“EU funding is usually mapped via federal states,” says Dr Peter-Christian Zinn. He is an astrophysicist and Managing Director at Industrial Analytics Lab, a company from Bochum in North Rhine-Westphalia that advises companies on all aspects of digitalisation. “We often apply for such funding together with companies,” says Zinn, “and the funding institutes in the federal states have emerged as good first points of contact. The best thing is to work with someone who’s already done it before.”

The perceived confusion often results from the sheer abundance of possible funding instruments and the many responsible authorities. Each federal state often regulates responsibilities a little differently, depending on the project, applicant or fund. The European Union’s funding, grants and subsidies webpage provides an initial overview for anyone interested.

To simplify the search, many federal states have set up websites similar to the one provided by the Mecklenburg-Western Pomerania State Funding Institute with its Funding Finder. This is especially true for the current 2021-2027 funding period. During this period, Mecklenburg-Western Pomerania, for example, will receive 1.258 billion euros in funding from the ERDF and the European Social Fund+ (ESF+).

In Schwerin, EU funding has helped bring the dream of climate-friendly heating a step closer to reality. The geothermal plant is scheduled to begin operating as early as 2023. Together with the municipal utility’s own biogas plant, 20 per cent of the district heating for the state capital of Mecklenburg-Western Pomerania can then be generated from renewable sources.

 

Tim Müßle has a degree in journalism and works as a freelance journalist for various media.

Would you like to clarify detailed issues with experts or build up basic knowledge about the ESI funds? Our seminar New Financial Control and Audit | Requirements 2021-27  on the ESI funds enables you to do both.