Types of funding

The European Union provides the following types of funding:

  • Grants
  • Subsidies
  • Loans
  • Guarantees
  • Equity
  • Monetary Prizes
  • Public procurement contracts


Grants represent the main form of financial aid from the EU budget, given as donations to companies that undertake activities aligned with EU policy goals (e.g. R&D, Innovation, Green Energy, Digitalization etc.).

The European Commission manages grants mainly through its own departments.


Subsidies are managed by national or regional authorities, such as ministries and municipalities.

In the context of EU funding, shared management implies that the European Commission and the respective national authorities jointly handle a funding program. Approximately 75% of EU programs operate under this model.

In this structure, national, regional, and local authorities in the EU member states select and manage the projects they fund.

The European Commission collaborates with the state authorities to ensure effective completion of projects and efficient use of funds.

Loans and Guarantees (Financial Instruments)

Financial instruments represent an additional form of financial support from the EU budget, designed to fulfill specific EU policy goals.

These instruments may include loans (leverage), guarantees, equity and quasi-equity investments. The financial instruments can be used alongside grants.

The objectives of financial instruments are:

  • Financial leverage - amplifying limited budget resources by drawing both private and public investments towards EU policy goals.
  • Policy leverage - motivating both governments and companies to align with EU policy goals.
  • Institutional leverage - utilizing the expertise of various stakeholders in the implementation process.

Monetary Prizes

Prizes in the EU context are financial awards given to the winners of competitions.

The European Union uses prizes to:

  • acknowledge exceptional achievements and work.
  • stimulate investment – prizes encourage investment in specific areas, such as R&D and Innovation (e.g. Horizon Europe Program)

Public procurement contracts

Public procurement involves acquiring services, supplies, or works by an EU Institution or local authority in a Member State through a public contract (tender).