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To facilitate investments in renewable energy projects and support a greater uptake of renewable energy sources across the EU, the European Commission has established a new EU financing mechanism. The objective of this mechanism is to promote closer cooperation on renewable energy projects amongst EU Member States for a more cost-efficient achievement of both individual and collective renewable energy targets.


The mechanism is based in the Clean energy for all Europeans package and complies with the targets of the European Green Deal. Furthermore, in the context of the EU’s Recovery and Resilience Facility EU Member States can use the mechanism as an instrument to implement their recovery and resilience plans.

Tender and selection of projects

The financial contributions that enter the financing mechanism scheme will support new renewable energy projects in all EU countries that are willing to host such projects. Projects will be supported via competitive tenders for grants. The grants cover either the installation of a renewable-production facility with certain capacity (investment support), or the actual production of renewable energy (operating support). The size of the grant is determined by the outcome of the tender procedure, where only the most competitive projects will be selected and receive support, corresponding to their bid in the tender. The mechanism can support all technologies that are referred to as renewable energy pursuant to the Renewables Directive (EU) 2018/2001 and are applicable across the electricity, heating and cooling and transport sector.

Role of the private sector

There are two options for private entities to participate in the mechanism:

As a private investor making a payment to the mechanism. This payment is not linked to a financial return yet can form part of the sustainability and decarbonisation portfolio of the company and diversifies its investment agenda. Such financial contributions will count to the EU binding target of at least 32% of renewable energy. In addition, subject to the hosting EU country’s rules, private contributors can request the guarantees of origins for the energy production that corresponds to their contribution.

As a project developer competing for support in the tender that will be published by the European Commission. Successful participants will conclude a grant award agreement and will turn the financial support into new renewable projects across the EU which will contribute to the national targets for renewables in both contributing and hosting countries.

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