Next generation eu funds: oportunities for industrial regeneration

If humanity has been able to demonstrate anything in recent times, it is that great opportunities are born out of great crises. The COVID-19 pandemic has hit the global socio-economic industrial sector.

It has been two years of continuous challenges in which this sector has been seriously affected and has resulted in the search for different alternatives to keep companies afloat.

From this, the European Union has created a package of recovery aid funds, which it has called Next Generation EU. In total there are 750,000,000 euros that are being used immediately from 2021 and will continue until 2023.

Of this amount, 140,000,000,000 euros correspond to Spain, which are being distributed as follows: 72,700,000,000 euros in grants and 63,300,000,000 euros in loans.

Many doubts arise at company level as to whether or not we are eligible for the granting of this aid or whether the funding obtained should be returned. It is for this reason that we have created this article to clarify what type of companies or sectors can access with their proposals and projects. And what are the requirements to obtain them.

How will these funds be distributed?

Previously, we broke down the figures in which the funds granted to our country will be distributed. But to manage this aid effectively, the Government of Spain has created the Recovery, Transformation and Resilience Plan Spain Can in order to channel the funds sent.

This has as a global objective to modernize the economy for a green, digital, and more inclusive future, so that 72.700.000 euros of subsidies will be allocated through 4 fundamental pillars, which are:

  • Ecological transition.
  • Digitization.
  • Gender equality.
  • Social and territorial inclusion.

It is a crucial time for companies to work on medium- and long-term models supported by aid or subsidies that boost employment growth. In addition, strengthen economic and social resilience.

How are companies eligible for funding?

If you are an entrepreneur and you want to know if your company is eligible for the Next Generation EU Funds you should know that, since mid-2021, the different administrations call for public tenders, grants and grants through:

  • Calls: They are published by the different ministries, state public companies, autonomous communities and some municipalities among which currently stand out those convened by the Ministry of Economic Affairs and Digital Transformation.

The projects most valued would be those selected for the use of the funds, regardless of the sector to which they belong.

  • PERTE: The Strategic Projects for Economic Recovery and Transformation, better known as PERTE, is a public-private partnership aimed at the alliance between administrations, companies and research centres to ensure that aid goes where it is needed.

These projects are approved by the Council of Ministers on the basis of criteria, objectives and transparency. Any company can apply for projects that are part of the PERTE in force to date, which are:

  • PERTE for the development of the electric and connected vehicle.
  • PERTE for cutting-edge health.
  • PERTE renewable energy, renewable hydrogen and storage.
  • PERTE Agri-food.
  • PERTE New economy of language.
  • PERTE Circular economy.
  • PERTE Aerospace.
  • PERTE water cycle digitization.
  • PERTE Social Care Economics. (Announced)
  • PERTE of semiconductors. (Announced)
  • Expression of Interest (MDI): It is a novel tool in Spain but commonly used by the European Commission whose objective is to guarantee the effectiveness of the Plan to ensure the development of projects and proposals.

      Its main objective is to adapt subsidies and aid to strengthen the business fabric.

      Among the expressions of interest are the proposals for the Artificial Intelligence Chairs Program, the identification of tractor projects that modernize the Spanish industry or innovative and solvent projects in the deployment of 5G and 6G technologies.

      Tractor projects aim to mobilise the economy to boost a particular sector with long-term effects and to create an industrial value chain in a cooperative way.

      Calls, PERTE and Expressions of Interest (MDI) are open to projects from all types of companies, whether they are large business groups or small and medium-sized industries, whose objectives are focused on productivity, training and employment.

      Applications to qualify for aid will be made through bodies such as, AEI, CDTI, among others, which are known to manage R&D&I grants to boost projects of domestic companies.

      Robotics and European funds.

      As we have already seen, part of the European Recovery Funds in Spain will be used for digital transformation, emphasizing 5 groups: 5G and 6G technology, cybersecurity, the cloud, artificial intelligence and robotics applied to the industrial sector.

      For the latter, it is essential that this sector is able to generate strategies that generate training and employment in a sustainable manner and with a direct focus on the transformation of the Spanish economy.

      It will be possible to develop new economic models with future trends that can increase competitiveness by opening new opportunities for the modernization of the sector.

      What are the eligibility requirements for funding?

      Companies wishing to apply for Recovery, Transformation and Resilience Plan funds must meet a number of requirements, including:

      Contribute to the environment and digitization.
      To promote gender equality.
      Comply with specific requirements implemented by the EU.
      Comply with the requirements of the General Grants Act.

      Although the funds are intended for the sectors most affected by the crisis generated by the COVID-19 pandemic, such as tourism, culture, transport and hospitality, no sector is excluded from the proposal.

      The General Subsidies Act is required to be aware of tax and social security obligations, not to have been sanctioned for obtaining other subsidies, not to have been declared in crisis, insolvent or in insolvency, among others.

      Companies that have received aid in the last two financial years will have to be assessed on the basis of other criteria for obtaining aid from European funds.

      Small and medium-sized industry, the main beneficiaries.

      The SMEs will be the main beneficiaries of the Next Generation EU Funds because they are fundamental in the Spanish industrial fabric, and therefore contribute to the reconstruction and transformation of the country’s economic model.

      Therefore, the Recovery, Transformation and Resilience Plans Spain Can, which covers both calls, PERTE or MDI, are aimed at this type of companies because they have suffered a greater impact on the economic and social crisis generated by the pandemic of COVID-19.

      Similarly, tractor projects will also benefit from this aid in order to support the growth of sectors as diverse as health, tourism, education and public administrations in the medium and long term.

      On the other hand, self-employed people are also considered to be SMEs provided they meet the criteria laid down for them, such as having fewer than 250 employees and financial amounts and pursuing economic activity.

      Should funds be returned by companies?

      Spain, along with Italy, are the first countries to receive the Next Generation EU Aid Funds, among other reasons, for both those who lived the worst situation at the root of the COVID-19 pandemic in Europe during the first wave.

      Of the euros that correspond to Spain, 72.700.000.000 are destined to grants in lost fund, so they should not be returned, however, these will not cover 100% of the project, if not a percentage that will be evaluated according to criteria established by the aid or by the call, and therefore, the company must finance the rest of the project with own funds or bank financing.

      In conclusion, the Recovery, Transformation and Resilience Aid Funds are intended for innovation projects of any sector, with a wide impact on productivity, employment, sustainability and territory.

      Likewise, the proposals should contribute to boost the economy to address the damage suffered at the socio-economic level generated by the coronavirus crisis, with a view to the medium and long term.

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