Recovery & Resilience Facility (RRF)
European fund financing projects in the fields of climate, energy, and digital transition
Contents
What is the Recovery & Resilience Facility (RRF)?
The Recovery & Resilience Facility (RRF), which entered into force in February 2021, is the centrepiece of NextGenerationEU, the EU’s economic recovery plan in response to the COVID-19 pandemic. It is therefore, in essence, a temporary instrument, which will terminate at the end of 2026.
The RRF is a large-scale fund of €724 billion that the European Commission has set up by borrowing on the capital markets, and which it allocates to Member States to finance reforms and investments that strengthen their resilience and boost their climate, energy and digital transitions, in line with the priorities of the European Union.
The Recovery & Resilience Facility aims in particular to finance projects that contribute to the 2022 REPowerEU plan, which seeks to free the European Union from imported fossil fuels. It includes grants to Member States worth €338 billion and loans worth €386 billion.
Offshore wind turbines under a grey winter sky. Photo by Jon Flobrant on Unsplash
How are RRF funds allocated to Member States?
RRF allocation is based on a principle of solidarity, focusing on the countries hardest hit by COVID-19. Hence, Italy, Spain, Poland, Portugal, Romania, Greece and Croatia are among the main beneficiaries of the initial funding allocated in 2021-2022, as shown by the map available on the European Commission’s website.
To receive support, Member States presented national recovery and resilience plans to the European Commission, outlining the reforms and investments they will implement by 2026, with clearly defined milestones and targets. The Commission only pays the amounts due to each country once it has reached the agreed milestones and targets.
National plans must devote at least 37% of their budget to green measures and 20% to digital measures. Bruegel has collected and analysed all data relating to national recovery and resilience plans.
What are the six pillars of the Recovery & Resilience Facility?
The Recovery & Resilience Facility is structured around six pillars:
- Green transition
- Digital transformation
- Smart, sustainable and inclusive growth
- Social and territorial cohesion
- Health, economic, social and institutional resilience
- Policies for the next generation
Pillar 1 (Green transition) accounts for a large share of the requests formulated in national plans (43%), followed by Pillar 3 (Smart, sustainable and inclusive growth, 29%) and Pillar 2 (Digital transformation, 25%).
The map accessible here provides examples of reforms and investments supported by the RRF in the different EU Member States, by pillar.
How can companies benefit from RRF funding?
For companies wishing to benefit from public funding, the Recovery & Resilience Facility is relatively transparent. For example, the support a company obtains following a national call for projects may come from the RRF (more precisely, this takes the form of a reimbursement by the European Commission to the State of the funding granted).
However, one regulatory point deserves attention: the final allocation of Recovery & Resilience Facility funds (i.e. the financing of the projects themselves) is decided by the Member States, and therefore falls within the scope of European State aid rules. Notification to the European Commission under competition rules is therefore required for significant funding amounts (typically above €30 million).
Furthermore, companies receiving State aid financed by the RRF cannot receive additional support under other Union programmes and instruments covering the same costs (e.g. the Innovation Fund or the Connecting Europe Facility).
How does european economics support its clients with the Recovery & Resilience Facility?
european economics mobilises its unique expertise in State aid for clients who wish to apply for State aid financed by the RRF.
We support them in carrying out project engineering to maximise funding opportunities and minimise the risk of failure, in preparing funding applications, and throughout the notification procedure to the European Commission until approval is obtained, an area in which european economics has a 100% success rate.
