SYSTEMEU - Financial Support to Third Parties (FSTP) What is the aim? To support digital innovations in healthcare, energy and mobility as they progress from the prototype stage (TRL 6) to a market-ready system (TRL 8). Who can take part? Regions: Bavaria (DE), Norte Region (PT), Castile and León (ES), Romania (RO) and Tuzla (BiH) only. Consortia: 2–8 partners from at least 2–5 regions (depending on project size). Type: Triple Helix (academia, business, public authorities). Project sizes &

For information on the compliance with state aid rules, the participating regions in a proposal are advised to contact the national state-aid information points for advice tailored to the requirements of their intended projects.

In addition, the Commission makes available a platform for submitting questions on e-State Aid “Wiki platform”, where additional guidance can be obtained. This platform is however accessible to government experts only. For further information in this regard, the participating regions are invited to consult the dedicated contact points on state aid matters which are available in each Member State.

Yes. The call has no restrictions, as long as:

• the minimum eligibility requirements are met (note that local authorities are not covered in this criterion, only national/regional authorities);
• the 50% co-funding remaining budget can be covered.

Yes.

Yes. The co-funded action will have to ensure compliance with EU’s state aid rules. This means that the public contribution of joint interregional projects co-funded by the regions may by subject to specific conditions and certain limitations, for instance in terms of the amount that can be granted to recipients (third parties).

For a complete determination of the state aid conditions that would apply regions are advised to consult the dedicated contact points on state aid matters which are available in each Member State.

Yes. EIT KICs, as well as any other relevant legal entities that are established in Member States or Associated Countries or other legal entities that are established in Member States or Associated Countries or other Horizon Europe eligible countries can be beneficiaries, as long as they can provide the 50% co-funding required and the minimum eligibility conditions for the composition of the consortium are met.

Regions do not need to apply in the call for expression of interest in order to qualify as being eligible for the EIE calls. However, they are encouraged to apply to the call for expression of interest in order to benefit from the matchmaking process which will aim to facilitate interconnections among those regions who converge towards the same thematic/technological objectives.

Both the EIE and the I3 calls aim to accelerate the development and deployment of innovation, including deep tech innovation. This means that the proposals are not restricted only to deep tech innovation but could focus also on other innovation areas.

Yes. Regions as well as other entities could participate in more than one proposal. This could help regions, that are willing to work on addressing challenges in more than one of the five identified areas, to work on different projects.

In the case of the EIE, the Regional Innovation Scoreboard is taken as a reference and in the case of entities representing national authorities, the European Innovation Scoreboard is the reference.

The applicants must use as a reference the latest version of the documents mentioned above at the time of the call closure. Associated Countries which are not included in the European Innovation Scoreboard and are ranked below 25 on the latest Global Innovation Index are considered as ‘moderate’ or ‘emerging' innovators. In cases of Associated Countries not included in any of the previously mentioned references, the participation rank of the country in the Horizon Europe programme (H2020 country profile) will be taken as a reference and countries ranked below the average will be considered as ‘moderate’ or ‘emerging' innovators.

The eligibility condition of the Regional Innovation Valleys call under EIE states that “this action requires the participation, as beneficiaries, of at least five (5) national or regional authorities from at least five (5) different Member States or Associated Countries, of which at least two (2) are representing a 'moderate' or 'emerging' innovator region and at least one (1) is representing a 'strong' or 'innovation leader' innovator region”.

This is an eligibility condition on the minimum composition of the consortium. Therefore, if this criterion is fulfilled, any other relevant legal entities (i.e., any other innovation stakeholders such as clusters, associations, companies, hubs, etc.) that are established in Member States or Associated Countries or other countries eligible to receive funding (in line with the General Annex B to which eligibility conditions of this topic refer) could also be beneficiaries in the action, as long as they can provide the 50% co-funding required.

This is in line with Article 22(1) of the Horizon Europe Regulation that states: “Any legal entity, regardless of its place of establishment and including legal entities from non-associated third countries or international organisations, may participate in actions under the Programme. This can only happen if the conditions laid down in this Regulation have been met together with any conditions laid down in the work programme or call for proposals.” This is in addition to Article 23 (1) which sets out the right of any entity coming from a Member State or Associated Country to receive funding.

The 50% co-fund requirement applies to any type of beneficiary participating in the consortium.

No. In order to preserve fairness and transparency of the selection, eligibility conditions of the topics in the WP text are binding for everyone.

There are two ways for UA partners to participate in the proposal:

- to mobilise available funding through any European, national, regional and private funding that is available at the beneficiary level, or

- to find an agreement between the members of consortium that they will support UA by bearing the costs (in the amount of 50% of total costs).

A general indication in the letter of the source or sources of complementary funding for the consortium is sufficient, i.e., it is not necessary to identify the specific source for each applicant. The condition does not indicate that any particular source of complementary funding is excluded. Therefore, the complementary funding that would be associated with eligible costs of a Ukrainian beneficiary may originate from other consortium members/be provided at the level of the consortium and subject to their agreement.

The rules for participation are explained in the call text and clarifications are provided in FAQ: ec.europa.eu

As explained, if the minimum eligibility criterion of the call is fulfilled in relation to the consortium composition (participation of national/regional authorities), any other relevant legal entities (i.e., innovation stakeholders such as clusters, associations, companies, hubs, etc.) that are established in Member States or Associated Countries or other countries eligible to receive funding (see HE List of eligible countriesPDF) could also be beneficiaries in the action. This is as long as they can provide the 50% co-funding required. Other partners from Third countries not associated to HE (HE non-eligible countries) can participate as Associated Partners (not eligible for funding, bringing their own financing). See art. 9.1 of Annotated Grant AgreementPDF.

In the following call text, the target group is indicative and is not an eligibility criterion. The “associated partners” wording included in the call text (see below) only intended to highlight the need for “additional partners”, and is not linked with the definition of “associated partners” under HE (mentioned above).

Call text: “Target group(s): The topic is primarily focused on the regional aspects of innovation and targeted at national and/or regional innovation authorities. Other relevant entities should participate in the consortia as associated partners (such as research institutions, public authorities, universities, companies, clusters, innovation intermediaries, etc.)”.

The consortium must provide a letter of intent at the moment of submission of the proposal, indicating the source of the required 50% of complementary funding (e.g. national and/or regional funding, European funding, or private investments). According to the action text in the Work Programme (EIE WP), the eligibility condition can be satisfied by the submission of one letter of intent at the level of the consortium.

A general indication in the letter of the source or sources of complementary funding for the consortium is sufficient, i.e., it is not necessary to identify the specific source for each applicant. The condition does not indicate that any particular source of complementary funding is excluded.

In accordance with the General Annex B of the General Annexes, FSTP must always adhere to, inter alia, EU standards of equal treatment and conflict of interest. Like for beneficiaries, a proposal should also indicate how such potential issues would be avoided if participation of affiliated entities in FSTP calls is envisioned.

Yes. External sources of funding outside the consortium (e.g., private funding, sponsors, foundations) should be indicated in the Letter of intent as complementary funding without the requirement that the entities providing this funding participate in the project as beneficiaries (as they do not implement the project actions and do not declare eligible costs). However, the funding from “sources outside the consortium” must nevertheless be incurred by a beneficiary. Therefore, external funding must be channeled through a beneficiary and not directly to the recipients of the FSTP.

In accordance with the work programme, FSTP must be used to support interregional projects to be undertaken by research and innovation entities. However, this does not imply that participation in FSTP calls must be limited to certain regions/geographic locations. Applicants should provide a description of the use of financial support to third parties in accordance with the FSTP Annex.

No. The role of the coordinator can be assumed by any partner of the consortium that fulfils the relevant eligibility criteria. There is no specific requirement on the eligibility of the coordinator.

The action of EIE allows the participation of any relevant innovation stakeholder from HE eligible countriesPDF, as beneficiary as long as:

• they can commit to contributing to the 50% co-fund rate;
• the required condition of at least five (5) national or regional authorities, from at least five (5) different Member States or Associated Countries, of which at least two (2) are representing a 'moderate' or 'emerging' innovator region and at least one (1) is representing a 'strong' or 'innovation leader' innovator region is fulfilled. Once this eligibility criterion is fulfilled, there is no other restriction on the type of partners or their role, and how and by whom the project will be coordinated. However, the partner composition may be evaluated during evaluations in terms of reaching maximum impact and other criteria. Please note it is also mentioned that: "The topic will support […] programmes of activities (action plans) to enable authorities in charge of public national, regional, or local innovation policies and programmes, with the participation of the private sector and research and innovation actors, to implement joint activities towards innovation development […]"

Any relevant innovation stakeholder, including SMEs/ RTOs could also be supported as third parties if the awarded consortium prepares joint open calls utilising financial support to third parties (FSTP) to implement interregional innovation projects.

The action allows for the participation of legal entities from European Union Members States or Horizon Europe Associated Countries as beneficiaries. Legal entities from Horizon Europe non-associated Third Countries could participate as associated partners.

No. Please note that the single 50% funding rate is set for all costs incurred during action, and it’s up to the consortium to decide how to distribute the funding between consortium members. It is the responsibility of the beneficiaries to determine how they will secure the remaining 50% of the funding from various sources.

There are no call restrictions on how the co-funding by the participating regions will be implemented. The eligibility condition of the call can be satisfied by the submission of one letter of intent at the level of the consortium. By extension, a general indication in the letter of the source or sources of complementary funding for the consortium is sufficient, i.e., it is not necessary to identify the specific source for each applicant.

Also, the EU funding is not tied to a particular beneficiary. In other words, the consortium has the flexibility to distribute the funding among the beneficiaries according to the rules outlined in the consortium agreement. That means the consortium can make a decision to allocate the funds differently than what is indicated by the maximum EU contribution specified in the Grant Agreement for individual beneficiaries.

The implementation modalities of FSTP should be defined and described by the applicants in a specific FSTP Annex to the proposal. Interregional arrangements can be further applied via a consortium agreement.

No.

Based on the Annotated Grant AgreementPDF (General > Article 5.3 Funding rate 3.): “EU grants are normally subject to ‘co-financing’ or ‘co-funding’, meaning that the EU granting authority does only provide a part of the funding of the action and the remaining parts must be financed from the beneficiary’s own resources, income generated by the action (e.g. by selling results), or financial or in-kind contributions from third parties (e.g. grants from national or private funding programmes).”

Therefore, a beneficiary can cover its complementary 50% co-funding obligation also through third parties to the grant agreement who make available some of their resources – against payment or for free - to the beneficiary without this being part of their normal economic activity (i.e., seconding personnel, contributing equipment, infrastructure or other assets, or other goods and services). Please note that third parties giving in-kind contributions do not implement any action tasks. They may not charge costs or contributions to the action, but the costs for the in-kind contributions are eligible and may be charged by the beneficiaries which use them, under the conditions set out in Article 6 and 9.2 of Model Grant Agreement.

There is a single funding rate for the whole action, set out at the level of 50% for all types of costs.

No. The FSTP own contribution cannot be considered as part of the project eligible costs as the Commission reimburses the costs of beneficiaries. Only the costs actually incurred by the beneficiaries can be reimbursed.

It is a decision to be agreed between the consortium and the Project Advisor managing the project in line with the grant agreement signed.

Grant Agreement amendment is possible with a potential new consortium member or task reshuffling.

For costs eligibility under HE projects, applicants are adviced to see: Annotated Model Grant Agreement (AGA) Art.6.2.D.1 & Art 9.4 refer to financial support to third parties ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS AND CONTRIBUTIONS < 6.2 Specific eligibility conditions for each budget category< D. Other cost categories

Yes. Operationally, FSTP is an integral part of the call and the proposals should:

• include provisions and modalities for the competitive selection and funding (joint open calls implemented via FSTP) of at least 3 interregional innovation projects
• allocate at least 50% of the total budget to these interregional projects (FSTP).

However, applicants should consider that this is a point of evaluation and not an eligibility criterion.

So, as long as this call requirement is met (i.e. “at least 50% of the total budget should be allocated to these interregional projects”), there is no restriction on whether this should be applied per beneficiary (partner region).

Therefore, depending on the proposal’s objectives in line with the call, there may be regions that are participating only to the collaborative activities (CSA-type of actions). For those regions that are not planning to co-fund interregional projects (FSTP), their related regional stakeholders (third parties) will not be eligible.

This may be the case, provided certain conditions are fulfilled. Regions are advised to consider the options provided by GBER. For example, Article 25 of the GBER concerning aid for research and development projects permits financing from public sources for up to 100% of eligible costs for fundamental research, 50% for industrial research and 25% for experimental development. The aid intensities for industrial research and experimental development may be further increased if certain conditions are met, such as effective collaboration between participants, when, among others, at least one participant is an SME or between companies belonging at least two Member States (or in a Member State and an EEA country) or between companies and one or more “research and knowledge dissemination organisations” i.e. research institutes or universities, or if the results of the project are widely disseminated through conferences, publication, open access repositories, or free or open source software.

Regions could also check, for example with the national state aid information points, whether there are already approved aid schemes at national level whose conditions will permit that aid can be given to support the projects selected in the joint interregional innovation calls.

The participating regions in a proposal will need to decide on the maximum amount to be granted to each third party, considering that the maximum amount allowed by the call is EUR 600 000. As the current ceiling of the de minimis aid is EUR 200 000, per project, per company over a period of three years, an amount that exceeds this ceiling will not be in line with de minimis aid rules.

As rules on cumulative funding may vary from one country to another, if you consider using the “cumulative funding” synergy mechanism to combine ERDF funding and Horizon Europe funding (EIE) please contact the Managing Authority of the respective ERDF programme following the "Notice on Synergies between Horizon Europe and ERDF programmes (2022/C 421/03)”.

In principle, yes, the applicants can use the RRF funds to co-fund the Regional Innovation Valleys call.

With respect to the prevention of double funding specifically, the Member State is required to clearly separate estimated costs supported by the RRF, to reflect which part of the measure is expected to be covered by the RRF and which is to be covered by the EIE part of Horizon Europe. The Member States can refer to the guidance note “Double funding under the Recovery and Resilience Facility” of February 2023 or also contact EC-RECOVER@ec.europa.eu if they have any specific questions.

Finally, the above is based on the understanding that the RIVs do not have mandatory national co-financing rates the coverage of which is not allowed by the RRF (page 42 of the RRF GuidancePDF).

The scope of the topic states that: “Proposals should allocate at least 50% of the action plan’s total budget to these interregional innovation projects.” The concept of an “action plan” broadly corresponds to a project (and its activities) to be funded by the action. On this basis, the reference to the action plan’s total budget in the scope should be interpreted as the proposal total budget, and, in particular, the total estimated eligible costs.

Yes, provided it complies with the Common Provisions Regulation (CPR).

This is covered by the new legislation 2021-2027, CPR and Horizon Europe (HE).

The relevant articles are CPR Article 73(2)(4), HE Article 15, also General Block Exception Regulation (GBER) Article 25c.

Applicants are advised to consult the synergies EC notice.

There are no formal requirements to provide information in relation to potential state aid issues under the rules of the call at hand. However, consortia are advised to do an evaluation of whether the proposal is in line with state aid rules, and whether potential state aid issues may emerge (see point 6 below on getting advice on state aid issues).

In any case, consortia should ensure that the proposal includes information on implementation conditions, in particular that the proposal comply with the 6 mandatory elements of the Horizon Europe Model grant agreement (art 6.2.D.1).PDF (this information should be included in the separate FSTP Annex of PART B of the proposal).

Finally, it is to be noted that specific information can be required on national level if this is necessary to ensure State aid compliance.

Applicants should provide information on the FSTP implementation modalities via a specific Annex to the proposal. Applicants should clearly detail the objectives and the results to be obtained via the FSTP and contain some specifications (including max amount, criteria for calculating the amount, types of activities, persons/type of persons, criteria for FSTP, measures to avoid potential conflicts of interest or unequal treatment of applicants, and other info requested as per template). The call is not providing information/restriction on how detailed this info should be. Info is expected to be complete in line with the requirements of the legal base to allow evaluators to have a clear understanding on the requirements and implementation conditions of FSTP. Of course, if needed, more info is expected to be provided in the open call text later on during the project implementation. Applicants are advised to check: Horizon Europe Model Grand Agreement (Art.6.2.D.1 and 9.4) General Annexes to the Horizon Europe WP 2023-2024 (Section B. Eligibility)

Based on the call, for the interregional projects, cooperation is expected between research and innovation actors from the participating regions. There are no call restrictions on how the implementation of the co-funding by the participating regions will be implemented. The implementation modalities should be defined and described by the applicants in a specific FSTP Annex to the proposal. Interregional arrangements can be further applied via a consortium agreement. Funding from an ERDF programme can only be provided for the benefit of entities from the programme area (given region or Member State, depending on the territorial coverage of the programme).

Own contributions of recipients coming from private sources are not considered as state aid. It is actually a good practice that the participating regions in a proposal seek the possibility of attracting private financial contributions, to complement the awarded public funding.

There is no specific definition of national and regional authorities in Horizon Europe, and in general the definition of such authorities depends on the national administrative arrangements. For the purposes of the minimum eligibility requirements under the Regional Innovation Valleys call:

“National authority” means a public authority at the level of government, including those at regional and local levels, as well as Member State organisations within the meaning of Article 2(42) of the Financial Regulation. Based on Article 2(42) of the Financial Regulation: ‘Member State organisation’ means an entity established in a Member State as a public law body, or as a body governed by private law entrusted with a public service mission and provided with adequate financial guarantees from the Member State.

“Regional authority” is a governing body or administrative entity that operates at a subnational level within a geographic region. For the purposes of assessing whether a regional authority represents a 'moderate', 'emerging', 'strong' or 'innovation leader' region, the Regional Innovation Scoreboard (RIS) is the reference.

Recipients of financial support to third parties must normally be third parties to the agreement. Beneficiaries are not allowed to provide financial support under the grant agreement to themselves or their affiliated entities.

Yes. In line with the New European Innovation Agenda, which indicates that EUR 100 million from the Horizon Europe budget would be committed for the establishment of the regional innovation valleys, there will be more calls in the upcoming Horizon Europe Work Programmes to commit the additional EUR 40 million.

Deep tech is technology that is based on cutting-edge scientific advances and discoveries and is characterised by the need to stay at the technological forefront by constant interaction with new ideas and results from the lab. Deep tech is distinct from ‘high tech’ which tends to refer only to R&D intensity.

No. Getting funds for preparation of joint action plans via “preparatory CSA” topics does not automatically imply getting financing for their implementation via a COFUND topic.

Due to the short time span between the calls, it will not be possible for the applicants of the 2023 preparatory CSA call to submit proposals for the 2023 COFUND call, but only later in future Work Programmes. However, successful projects of 2021 preparatory CSA call can participate in the COFUND call with the necessary call requirements and adjustments of objectives and consortia.

• HE-EIE-2021-CONNECT-01-01 and HORIZON-EIE-2023-CONNECT-01-02 topics (CSA) aimed at funding the preparation of joint action plans, i.e. actions that will allow applicants to explore areas and methods of cooperation, as well as formalising and co-designing these action plans.
• The current and the HE-EIE-2022-CONNECT-02-01 topic (COFUND) will finance the implementation of multi-annual joint action plans that are mature, where applicants already know what they want to achieve (areas of cooperation, activities, etc.)

For Cofund calls, an Annual Work Programme (AWP) document is mandatory, together with the application (as annex to Part B) to be uploaded in the Submission System. The 1st work programme is a key part of the proposal; the work programmes for subsequent years are regular deliverables for the implementation of the project.

The AWPs provide a detailed description of activities for the initial and each successive twelve-month period of the project, as the action develops in line with the objectives and description of work provided in part B of the proposal. It must include both activities that are planned to be carried out and completed along with activities that are simply initiated during the relevant twelve-month period.

Depending on the detail of part B of the proposal, it is not excluded that sections of this annex may overlap with part B.

In the case of the EIE, the interregional projects are expected to be similar to Horizon Europe Innovation Actions (IA) namely TRL 6-8. They should focus on the development and/or deployment of technologies and innovations, including breakthrough and disruptive, through cooperation between research and innovation actors from the participating regions.

For the EIE call, partner regions (beneficiaries) may decide, for example, to:

• Mobilise further public funding by launching open calls targeting additional regions (not only those participating in the proposal);
• Mobilise further private funding by lowering the funding rate to end-beneficiaries of the FSTP (e.g. to 70%)

The call is challenge-based and indicates five (5) thematic areas, focusing on reducing reliance on the fossil fuels, increasing global food security, mastering the digital transformation (including cybersecurity), improving healthcare, and achieving circularity.

Applicants are encouraged to prepare proposals focused and targeted towards one thematic area, since the proposal will be evaluated on the basis of its coherence, structure and clearly articulated objectives. However, depending on the challenge to be tackled, proposals may cover more than one thematic area.

Characteristics of recipients of financial support to third parties are:

• They do not sign the Grant Agreement (and are therefore not beneficiaries).
• They do not perform action tasks, but the financial support given to them is part of an action task specified in the description of the action.
• They receive financial support from the grant (sub-grant), to be declared as financial support to a third parties cost, by a beneficiary.

The beneficiary remains responsible for the granting authority for the proper use of the funding by the recipients. They must, moreover, ensure that they comply with certain obligations specified in the grant agreement.

The EIE call text indicates the following:

• The interregional projects have to absorb at least 50% of the action plan’s total budget, which is equal to the total eligible costs.
• The maximum amount of FSTP to be granted to an individual third party is EUR 600,000. This refers to the total participation of the individual third party in all interregional innovation projects of a proposal (grant).

The consortium has the full responsibility for the preparation and publication of joint calls, including the call implementation modalities and provisions, in line with the legal requirements for the FSTP implementation, i.e.

• Financial Regulation - Art 204 (2018/1046 - 18 July 2018)
• General Annexes to the Horizon Europe WP 2023-2024PDF (B. Eligibility)
• Horizon Europe Model Grand AgreementPDF (Art.6.2.D.1 & Art 9.4 )

The expected number of projects funded under the EIE Work Programme for the 2023-2024 period is 6, each one receiving funding between EUR 8 and 12 million. Each project will have to include the provisions and modalities for the competitive selection and funding of at least 3 interregional innovation projects, allocating at least 50% of the total eligible costs to them.

The topic does not define any optimal size of the consortia, only the minimum eligibility criteria. The call conditions do not specify the maximum consortium size. The applicants are only required to comply with the minimum eligibility requirements.

Contrary to Horizon Europe which is managed by the Commission itself, ERDF programmes are implemented in the shared management mode by the Managing Authorities in the Member States or regions. The latter are responsible for selection of projects based on the priorities established in their ERDF programmes. If in line with the programme priorities, Managing Authorities may launch calls for support of the EIE Regional Innovation Valleys call and provide funding from the ERDF programme following the selection in the call, in line with the rules for cumulative funding stipulated in the CPR Art. 63(9) and HE Regulation Article 15. Applicants are advised to consult the Notice on synergies between Horizon Europe and ERDF programmes (OJ C 421/7 of 4.11.2022) (EC Notice on synergies) and in particular the chapter on cumulative funding on p.18 that sets out the details of implementation and reporting.