The European Commission's Directorate-General for Regional and Urban Policy (DG REGIO) and the European Investment Bank (EIB) organized the fi-compass thematic workshop 'ERDF financial instruments for innovation - Exploring new models combining equity and loans with grants', on Tuesday, 30 September 2025, in Berlin, Germany, in cooperation with Investitions bank Berlin (IBB), the promotional bank of the Federal State of Berlin.
The design of the financial instruments and choice of financial products should be determined early on in the implementation through the ex-ante assessment. These funds can be used to support development by investing in businesses, research and development, infrastructure, employment and training, agriculture, forestry and fisheries development, with the overall objective to improve the quality of life of EU citizens. The planned use of financial instruments to support specific objectives shall be identified in the programme of the relevant EU shared management Fund prepared by the Member State and approved by the Commission.
Equity and loans with grants combined model
The Berlin workshop explored two new innovation-focused ERDF model financial instruments that combine equity and loans with grants to support the EU’s broader innovation and competitiveness agenda, which will be published by DG REGIO and fi-compass ahead of the workshop:
- Innovation equity financial instrument combined with grant;
- Innovation loan financial instrument combined with grant.
Engaging panel discussions addressed:
- the current challenges faced by innovative start-ups;
- discussion on key practical implementation topics combined with grant components (technical support subsidy and capital grant), State aid implications, how the EIC Seal of Excellence can be linked to ERDF financial instruments;
- featured first-hand insightsfrom Berlin's successful ERDF VC and loan financial instruments.
This workshop brought together managing authorities, national promotional banks and institutions (NPBIs), equity fund managers and other bodies implementing financial instruments for innovation that had the opportunity to engage in discussions with European Commission representatives and the EIB Group to optimise the use of financial instruments to support innovation. As the EU works to strengthen its competitiveness and economic resilience, ERDF financial instruments for innovation play a key role in mobilising both public and private resources effectively. Financial instruments co-funded by the EU shared management funds are a sustainable way to invest since they support a broad range of development objectives to the benefit of a wide range of recipients, with the potential for funds to be reused for further investments.
Shared management funds
Financial instruments are a form of support where EU shared management funds are delivered via a structure through which financial products are provided to final recipients. They provide an alternative to grant programmes and are suitable wherever the investment is likely to lead to financial returns or savings which can be used to repay the investments. In shared management, both the European Commission and national authorities in Member States, such as ministries and public institutions, run a particular programme. With Member States actively implementing financial instruments under the 2021-2027 European Regional Development Fund (ERDF) and the next programming period approaching, the promotion of the use of equity instruments emerges clearly as the way forward in the current context.