European Funding Programmes

There are several direct funding opportunities on European level supporting energy efficiency financing. They are provided in a form of grants from the European Commission or its executive agencies for projects with specific objectives. Regarding energy efficiency, following programmes are concerned:

  • Horizon 2020
  • Connecting Europe Facility (CEF)
  • LIFE
  • Territorial Cooperation (INTERREG)

Horizon 2020

Horizon 2020 is the biggest EU Research and Innovation programme ever with nearly €80 billion of funding available over 7 years (2014 to 2020) – in addition to the private investment that this money will attract. It promises more breakthroughs, discoveries and world-firsts by taking great ideas from the lab to the market.13

Horizon 2020 aims to achieve smart, sustainable and inclusive economic growth. H2020 is organised in thematic sections each dedicated to a specific challenge. Among these particularly relevant for energy efficiency increasing in municipalities and regions two so called Societal Challenges (SC) are available:

  • Horizon 2020 SC3 Energy
  • Horizon 2020 SC5 Environment

Actual calls for proposals are available on the link of actual H2020 calls.15

Horizon 2020 SC3 Energy

With the aim of the transition to a competitive energy system, there is a need to overcome several challenges, such as increasingly scarce resources, growing energy needs and climate change.

The Energy Challenge is structured around seven specific objectives and research areas:

  • Reducing energy consumption and carbon footprint
  • Low-cost, low-carbon electricity supply
  • Alternative fuels and mobile energy sources
  • A single, smart European electricity grid
  • New knowledge and technologies
  • Robust decision making and public engagement
  • Market uptake of energy and ICT innovation.

A budget of €5 931 million has been allocated to non-nuclear energy research for the period 2014-2020. Out of this figure, more than €200 million is earmarked to support European Institute of Innovation and Technology activities, subject to a mid-term review.14

Horizon 2020 SC5 Environment

Activities in this Challenge aim to increase European competitiveness, raw materials security and improve wellbeing. At the same time they strive to assure environmental integrity, resilience and sustainability with the aim of keeping average global warming below 2° C and enabling ecosystems and society to adapt to climate change and other environmental changes.

Innovation in these fields should provide opportunities for growth and jobs, as well as innovative options involving science, technology including of ICT, the economy, society, policy and governance.

Following activities are covered:

  • Climate Action - Informed decisions for a climate-resilient low-carbon society
  • Cultural Heritage - Engaging a new cultural heritage agenda for economic growth
  • Earth Observations - Crucial info on climate, energy, natural hazards and other societal challenge
  • Nature-Based Solutions - Providing viable solutions of natural ecosystems
  • Systemic Eco-Innovation - Generating and sharing economic and environmental benefits

Connecting Europe Facility (CEF)

The Connecting Europe Facility (CEF) is a key EU funding instrument to promote growth, jobs and competitiveness through targeted infrastructure investment at European level.

The Connecting Europe Facility (CEF) supports the development of high performing, sustainable and efficiently interconnected trans-European networks in the fields of transport, energy and digital services. In addition to grants, the CEF offers financial support to projects through innovative financial instruments such as guarantees and project bonds. The CEF is divided into three sectors:

  • Energy
  • Transport
  • Digital service infrastructures (DSIs) and broadband networks

CEF Energy is one of the three core sectors of CEF and is engineered to address both groups of factors behind the investment gap in the energy sector. Financial instruments, by bringing in new classes of investors and mitigating certain risks, will help project promoters to access the necessary financing for their projects. Grants to contribute to the construction costs will be applied to fill in the gaps in commercial viability of the projects that are particularly relevant for Europe.17


The LIFE programme is the EU’s funding instrument for the environment and climate action created in 1992. The current funding period 2014-2020 has a budget of €3.4 billion.

LIFE funds innovative projects that demonstrate new techniques and methods. These ‘traditional’ style projects are complemented by ‘integrated’ projects that combine LIFE funding with other sources of support to maximise their impact over a large area.

The LIFE programme is divided in two sub-programmes, one for environment (representing 75% of the overall financial envelope) and one for climate change (representing 25% of the envelope). Regarding energy efficiency the climate action sub-programme supports projects in the areas of renewable energies, energy efficiency, farming, land use, and peatland management.

It provides action grants for best practice, pilot and demonstration projects that contribute to the reduction of greenhouse gas emissions, the implementation and development of EU policy and law, best practices and solutions. The sub-programme also promotes knowledge sharing and integrated approaches, such as for climate change mitigation strategies and action plans at local.

Other supported areas are climate change adaptation, climate governance and information, integrated projects and technical assistance.18

Territorial Cooperation – INTERREG

European Territorial Cooperation generally known as Interreg is one of the two goals of cohesion policy and provides a framework for the implementation of joint actions and policy exchanges between national, regional and local actors from different EU Member States. The overarching objective of European Territorial Cooperation is to promote a harmonious economic, social and territorial development of the European Union as a whole. 19

Interreg covers three types of cooperation:

  • cross-border (Interreg A)
  • transnational (Interreg B)
  • interregional (Interreg Europe)

For the period 2014-2020 there are 60 cross border programmes, 15 transnational programmes and 4 interregional programmes.

Interreg A – cross border cooperation

This cooperation involves 28 EU countries + Norway and Switzerland, energy is one of the supported sectors and support is possible to get for both soft and hard measures of SECAP implementation. List of particular programmes is available online.20

Interreg B – transnational cooperation

Interreg B includes 15 different programmers focusing on macro-regional challenges which require an integrated approach. The scope of supported activities related to energy is similar to Interreg A - soft and hard measures of SECAP implementation.9

Calls details and projects features are decided under each funding programme.


Alpine Space


Atlantic Area


Baltic Sea Region

Caribbean area

Central Europe


Indian Ocean


Northern Periphery

North Sea

North West Europe

South West Europe

Interreg C – Interregional cooperation

Interregional cooperation known as Interreg C, works at pan-European level, covering all EU Member States and more. It builds networks to develop good practice and facilitate the exchange and transfer of experience by successful regions. It showcases what regions do well, to the benefit of those still investing.

INTERREG V C 2014-2020 covers 4 interregional cooperation programmes Interreg EUROPE, INTERACT, URBACT and ESPON. ERDF contribution: €500 million.53

Of the four programs mentioned above, Interreg Europe is the most useful for financing energy efficiency, so in this part of the document, mainly focused on this program.

Interreg Europe helps regional and local administration across Europe to develop and deliver better policy. By creating an environment and opportunities for sharing solutions, the fund aims to ensure that government investment, innovation and implementation efforts all lead to integrated and sustainable impact for people and place.

The fund supports projects around the following themes:

  • Research and Innovation
  • SME competitiveness
  • Low-carbon economy
  • Environment and resource efficiency21