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Grant financing

There are several EU subsidies for financing sustainable city projects in the programming period 2021-2027.

Year 2021 brought with it the new multi-annual financial framework (EU budget), but also the need to deal with the impact of global pandemic of COVID-19 and prepare the Continent for long-term economic and environmental challenges. Trillions of euros will be used to stimulate European economies, including cities.

For example, the European Regional Development Fund (ERDF), which finances e.g. operational programme Životní prostředí (Environment) or a Integrovaný regionální operační program (Integrated regional operational programme), must dedicate 6 % to sustainable urban development strategies.

Modernization Fund

The aim of the Modernization Fund is to support projects focused on:

  • production and use of energy from renewable resources,
  • energy efficiency,
  • support of facilities for storage and distribution of energy.

The support will have the form of subsidy with grant rate 30 – 80 %. The eligibility of applicants will be set out in each of the nine programmes. Municipalities and cities will be able to use e.g. TRANSGov programme supporting clean urban mobility, ENERGov programme for increasing energy efficiency, KOMUENER that supports community energy partnerships and LIGHTPUB that focuses on projects of public street lightning.

Projects financed through the structural funds will not be simultaneously financed from the Modernization Fund and vice versa. Only projects concerning facilities participating in EU ETS will be eligible for financing from the Modernization Fund.

Therefore, the funds from the Modernization Fund can be used, inter alia, in regions with narrow funding from the structural funds, for example the City of Prague, however, projects from regions affected by decline in coal extraction will be preferred. Sale of emission allowances will be used to finance the Fund. The amount of funds for the Czech Republic is around CZK 150 billion.

Operational Programme Environment

The aim of the operational programme Environment 2021–2027 is to protect and ensure quality living environment for the population of the Czech Republic, to aid the shift to circular economy and effective use of resources, mitigation of negative impact of human activity on environment and climate, mitigation of impact of climate change and assistance with solutions to environmental and climate issues on European and global level.

The Czech Republic will be receiving funding of around CZK 60 billion. The eligibility of applicants depends on particular aim, however, some of the future calls for projects should also be accessible to companies bigger than SMEs, specifically companies residing in Prague.

Integrated Regional Operational Programme

Integrated Regional Operational Programme 2021-2027 (IROP) follows up the previous 7-year operational programme. The main ambition of the programme is balanced regional development, improvement of infrastructure, improvement of public services and public administration and ensuring sustainable development of municipalities, cities and regions.

Around CZK 125 billion will be allocated to the programme, eligible applicants shall be public entities or non-governmental organizations. The amount of funding for projects will be between 40 to 85 % and will depend on respective regions.

Just Transition Fund (Operational Programme Just Transition)

The aim of this mechanism is to ensure just transition to climate-neutral economy. In the case of the Czech Republic the Fund is intended for just three regions – Karlovarský, Ústecký and Moravskoslezký region.

The Fund will be providing mainly grants. For example, it will support investments in transition to clean energy or energy efficiency. It will also help workers with development of skills and abilities to find their place in the labour market in the future, support SMEs and development and innovation.

To allocate the funds from the Just Transition Fund the Operational Programme Just Transition has been set up, which will be administered by the Ministry of Environment. The amount of finance available in this Programme will be around CZK 40 billion.

Recovery and Resiliency Facility

This instrument has been created with the intention to mitigate the economic and social impact of the pandemic of COVID-19 and strengthen the sustainability and resilience of EU economies, to prepare them for environmental challenges and digital transition.

The Czech Republic will receive around CZK 177 billion for subsidies (distributed according to state aid rules) and will have the option to borrow more than CZK 400 billion in the form of guaranteed loans. The Czech Republic has created National Recovery Plan – framework of particular investment for which it will be possible to receive funding.

70 % of the funding from the Facility will be possible to use for projects completely prepared till the end of 2022, the rest 30 % will be for projects prepared till the end of 2023.

The funding should be available throughout the Czech Republic, including Prague.

In the Czech Republic focus on grant financing

State Environmental Fund

State Environmental Fund is a state institution run by the Ministry of Environment, which from 1992 mediates investments in protection and improvement of environment in the Czech Republic. The Fund, through subsidies and loans, co-finances projects aiding to the improvement of water quality, air quality, waste management and protection of nature and land. It also support environmental education and enlightenment, use of renewable resources and energy saving.

Ministry of Environment

The Ministry of Environment is the central governmental institution and the highest supervisory institution in the matters of environment. It is the managing institution of the Operational Programme Environment 2021-2027 and Just Transition 2021-2027.

Českomoravská záruční a rozvojová banka

Českomoravská záruční a rozvojová banka, a.s. is the development bank of the Czech Republic. It helps, with regard to the economic policy of the Czech government, the development of SMEs, infrastructure and other sectors of economy requiring state aid.

Ministry for Regional Development

The Ministry for Regional Development is the central governmental institution managing the Integrated Regional Operational Programme 2021-2027.

Support from EU

European Investment Bank

European Investment Bank acts in the interest of the EU state members, who are its owners. It offers a number of financial investments and it will offer loans to achieve the goals of the Just Transition Mechanism.

European Commission

European Commission is the principal institution forming the strategy of EU. The Commission will be directly implementing the Recovery and Resiliency Facility.

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People

Ondřej Ptáček

Ondřej Ptáček

Principal PwC Expert on Grant Financing

Ondřej Štec

Ondřej Štec

PwC Expert on Grant Financing

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