Gibraltar has been allocated EU funding for a new seven-year period up to 2013. The Gibraltar European Regional Development Fund (ERDF) Competitiveness and Employment Programme has been designed to provide financial assistance and encourage the development of viable and sustainable projects which meet the conditions for EU Structural Funds Support.
The following questions and answers will help you to understand EU Funding.
What is EU Funding?
Structural Funds are allocated to European Union Member States in order to provide assistance for capital infrastructure projects and the expansion and diversification of business activity with particular reference to the creation of sustainable jobs.
Gibraltar obtains EU monies from the United Kingdom allocation.
How much money is available to Gibraltar?
Under the current ERDF Competitiveness and Employment Programme, Gibraltar’s allocation amounts to €5.8M.
Does the Government of Gibraltar contribute?
Yes. GOG will put into the Programme the equivalent of the EU’s contribution. Therefore, the monies available to spend amount to €11.6M.
Who can apply for this financial assistance?
Most organisations may apply, including those from the public sector and small-to-medium-sized enterprises (SMEs) ie. practically all the firms in Gibraltar, together with individuals intending to set up a business.
Are there any areas of activity which are not eligible for EU funding?
Yes. There are four areas of business activity which are not eligible. These are as follows;
- Financial services
- Mobile investments
What form does EU funding take?
The financial assistance provided by EU co-financing is exclusively in the form of grants.
How long does this Programme last?
Under the current EU Regulations, funding under this Programme is available between 2007-2013 with a further two years for project implementation and completion.
For what scope of actions can EU funds be used?
Amongst other things, EU funds can;
- Assist new businesses to start up
- Assist businesses to expand and diversify
- Assist projects of an innovative nature
- Encourage further and wider use of IT
- Assist in the regeneration of “urban” areas
- Assist in measures to enhance the environment
As regards SMEs, EU funds can contribute towards;
- Renovation works to premises
- The purchase of plant and equipment
- The payment of Import Duty and freight charges (where applicable)
- Rent Subsidy Scheme (for a maximum period of one year and only in the case of start-up businesses)
- The creation of a website
- The purchase of software and IT equipment
- The production of publicity material
- An advertising campaign
How much funding can a private sector project receive?
A private sector project can receive up to 30% of the total certified eligible project costs up to a maximum of €200,000 (c £145,000) over any three-year period. This upper limit is imposed by the European Union’s State Aid Rules.
How does one apply for EU funding?
In the first instance, one should contact the EU Funding Advisor, Ms Desiree Viagas, at the EU Programmes Secretariat on Tel. No. 20073255.
At the outset, what information does one need to supply?
Prior to being in a position to fill-in an application form for EU funding, applicants need to produce the following;
- A copy of the Company/Business Name registration
- A trade licence (if applicable)
- The Employment Service Registration
- A copy of the lease for the premises where the project is to be located
- Two quotations for each of the services and/or purchases which it is intended will form part of the project.
For projects whose total grant element ie. EU and GOG monies combined, exceed £20,000 the following is also required;
- A business plan or mission statement
- A two-year cash-flow projection
- A set of the Company’s latest audited accounts (if an established business)
Upon submission of the above-mentioned documentation and provided that the proposed activity is eligible for EU co-funding, the prospective applicant is in a position to fill-out an application form.
What is the approval procedure?
Prospective project applications are appraised, scored and evaluated by committees that have been constituted specifically for this purpose.
What factors are necessary to ensure a project’s approval?
To be successful, prospective EU co-funded projects must demonstrate that they will:-
- Not proceed, proceed at a slower pace or be less effective without EU funding support
- Provide good value for money
- Contribute to meeting the objectives of EU Structural Funds, with particular emphasis on the creation of sustainable employment
- Meet the more specific targets and requirements of the Operational Programme, which is the document that sets out the priorities for EU funding in Gibraltar.
Above all in order to be successful, the project’s intended activity MUST be eligible for EU funding.
How long does the approval process take?
Provided that the duly-completed application form is accompanied by all the required supporting documentation (as detailed above), the approval process should not take more than about four weeks. In the case of smaller projects ie. Those with a total grant element of less than £20,000 approval may be obtained within about two weeks.
Who approves projects?
The Government of Gibraltar, in its capacity as Implementing Authority for all EU co-funding programmes in Gibraltar approves or rejects project applications.
How are applicants notified of the project’s approval or rejection?
Applicants are initially informed of the Government’s decision by telephone, at which time, a mutually convenient appointment is arranged in the offices of the EU Programmes Secretariat. During the course of this meeting the successful applicant receives a copy of the Grant Offer Letter and the unsuccessful applicant is given the reasons why the application has been rejected.
What is the Grant Offer Letter?
This is the official document which sets out the terms and conditions of the grant offer. It also lists the project’s forecast “outputs”, which the successful applicant is committed to achieving, typically, upon completion of the project.
When can the project commence?
It is very important to note that the project can commence only after formal approval has been received. Any expenditure that may be incurred prior to this time is automatically rendered ineligible for grant support and so, cannot be considered as part of the project’s approved costs.
How can project payments be made?
It is a requirement that an “audit trial” must be established regarding all instances of “eligible expenditure” against which a claim for EU funding will be submitted. For the avoidance of doubt, an “audit trail” is one which permits reconciliation of the amounts claimed with the individual expenditure record and supporting documents. Due to this, cash transactions are NOT acceptable. Payments may only be effected by cheque, banker’s draft or telegraphic transfer and the corresponding evidence of payment must accompany the Claims Form and the invoices and receipts.
What is “eligible expenditure”?
Eligible expenditure is the approved project costs specified in the application form and the Grant Offer Letter.
How is the grant claimed?
The grant, or a part thereof, can only be claimed after the expenditure has been incurred and payment has been effected by the applicant.
What documentation needs to be produced in order to make a claim?
The duly-completed Claims Form needs to be accompanied by the following supporting documentation;
- Copy of cheque and/or counterfoil, banker’s draft or telegraphic transfer
- Bank statement
Without all the above, a claim is considered to be unreceivable and cannot be processed.
How many claims can be made?
Technically, whenever eligible expenditure is incurred and the supporting documents detailed above are in place, a claim can be made.
How long does it take for the grant to be paid?
Typically, the monies claimed are paid to the applicant within about four weeks of receipt of a “receivable” claim. The claim is prepared by the Treasury Department and paid to the Applicant by way of a cheque issued by them.
Is the project’s progress monitored and how are the checks carried out?
In Gibraltar there is 100% verification of claims. Therefore, each time that a claim is submitted, a visit is carried out to the project’s premises by an officer of the EU Programmes Secretariat in order to check on the project’s progress, verify the claim, if appropriate, and monitor the achievement of the forecast outputs.
What are “outputs”?
All EU co-funded projects must achieve specific targets or “outputs”. These are determined at the application stage and vary from project to project. Outputs must be quantifiable and achievable. The following are examples; the creation of a new business, the expansion of the business activities of an SME, the creation of full-time and/or part-time jobs and the safeguarding of jobs.
Is there a fixed time for the completion of a project?
Yes. All EU co-funded projects have a fixed start date and completion date. These are determined at the application stage by the applicant, subject to approval by the Implementing Authority.
What happens if a project cannot be completed on time?
Technically, all projects must be completed within the timeframe specified by the applicant on the application form. If it becomes apparent that the project completion date will not be met and an extension is necessary, the EU Programmes Secretariat must be informed in writing as soon as possible, and certainly before the completion date of the project. A request for an extension must be made, giving the reasons for the same. The EU Programmes Secretariat, in consultation with the Implementing Authority, will normally notify the applicant of its decision within one week of receipt of the formal request.
Can one apply for more than one project during the life of the Programme?
Yes, but provided that the preceding project was completed satisfactorily and that all the forecast outputs were achieved and that the maximum grant imposed by State Aid Rules (€200,000 in any three-year period) is not breached.
Are there any publicity requirements?
Yes, the European Union’s publicity requirements must be strictly observed. Upon completion of the project, the applicant is furnished with a commemorative plaque acknowledging the financial participation of the European Union in the project. This plaque must be placed in a prominent location in the applicant’s premises or site. Additionally, for a period of one year after completion of the project, all successful applicants must make due mention of the fact that the project has been co-funded by the EU. This includes interviews, articles and any promotional material relating to the project and/or the applicant.