Financial instruments represent an efficient way of deploying both EU and/or national resources in pursuit growth strategic objectives. Financial instruments provide support for investments and funding in general by way of loans, guarantees, equity and other risk-bearing mechanisms, possibly combined with technical support, interest rate subsidies etc.
The aim of the financial instruments is to help mobilise additional public or private co-investments as well as, to reutilize existing EU funds, in order to address market gaps; compared to the traditional way of providing grant support. Their delivery structures entail additional expertise and know-how, which help to increase the efficiency and effectiveness of public resource allocation. Moreover, these instruments provide a variety of incentives to better performance, including greater financial discipline at the level of supported projects.
Financial instruments are used for materializing investments for European Structural and Investment Funds (ESIF), under which their relative importance has increased over time and between consequent programming periods, as well as for providing funding with the support of other EU and/or national resources. The deployment of financial instruments under most of the main EU Competitive Programmes (e.g. Horizon 2020, LIFE, COSME, EaSI, Erasmus+) is indicative of their enhanced role. In complement with other mechanisms under these Programmes, the financial instruments contribute to the achievement of EU policies’ objectives by addressing the financing needs and gaps identified in the respective areas (e.g. R&I, Environment, SMEs, Education etc.)
Cypriot Small and Medium Enterprises (SMEs) as well as other entities may have access to finance, available under financial instruments, either through local financial intermediaries or by directly applying to competent bodies at EU level (such as the European Investment Bank (EIB) Group which manages most of these tools supported by EU funding – funding mechanisms under the management of both the European Investment Bank (EIB) and the European Investment Fund (EIF) fall under the scope of EIB group operations). In certain cases, Cypriot entities may have access to funding available by intermediaries operating in other Member States.
All available instruments are under the following categories:
European Commission (EC): http://ec.europa.eu/regional_policy/en/funding/financial-instruments/
National Managing Authority for ESIF: www.structuralfunds.org.cy
European Investment Bank (EIB): www.eib.org/products/lending/index.htm
European Investment Fund (EIF): www.eif.org/what_we_do/index.htm
European Bank for Reconstruction and Development (EBRD): www.ebrd.com/ebrd-in-cyprus.html