STEP funding and programmes

STEP is not a standalone funding programme. STEP pools resources from 11 EU funding programmes to support investment in strategic technologies and in people who can implement/manage those technologies. 

Support can also come from more than one EU funding programme. For instance, grants under the Innovation Fund could be combined with grants under cohesion funds. Facilitating such cumulative funding is one of the purposes of the STEP Seal. 

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Funding at EU level: grants, equity and STEP Seal

The European Commission (including its executive agencies) directly manages the following programmes supporting STEP objectives: the Digital Europe programme, the European Defence Fund (benefiting from a reinforcement of €1.5 in the STEP priority areas), the EU4Health programme, Horizon Europe, and the Innovation Fund. 

• These resources are often awarded as grants (i.e., they do not come with a repayment obligation) but could also take the form of equity facility (e.g. EIC under Horizon Europe). To receive such grants, you need to apply to the relevant calls for proposals at EU level. You can find them listed in the section Get funding.
• The evaluation of submitted proposals, the signing of the grant agreement, the monitoring of project implementation, the assessment of the results and the actual payments are carried out by the Commission including EU executive agencies.
• In addition, the European Commission awards a label of excellence to promising projects. The main goal of the STEP Seal is to help obtain alternative or additional funding from public and private sources beyond the EU programme under which the Seal was awarded. In addition to promotion on the STEP porta, the STEP Seals projects benefit from enhanced visibility toward investors on dedicated platforms such as Dealflow and the InvestEU Portal.

Key facts you need to know about STEP contributing programmes:

Additional forms of EU funding implemented at national level

A large part of the EU budget is managed jointly by the European Commission and EU Member States. 

The EU legal framework (STEP Regulation and Cohesion mid term review)  encourages Member States  to allocate part of their Cohesion policy funds including the Cohesion Fund,  the European Regional Development Fund, the European Social Fund+ and the Just Transition Fund as well as the Recovery and Resilience Facility, to actions supporting STEP objectives. Often these resources are in the form of grants (i.e. non-repayable) but could also take the form of procurements or financial instruments (e.g. equity, loans, and guarantees). 

Since EU countries manage these funds, they also manage the publication of information about available funding opportunities at national level.

• To get an overview of the STEP-relevant calls for proposals you can consult the section Get funding on the STEP Portal which will redirect you to the National single portals for more precise information on upcoming funding opportunities at national level, namely which regions are covered by funding calls, who can apply, the amount of funding allocated to a given call for proposals, and the relevant timelines.
• For the repayable forms of support (financial instruments) you should liaise with the local financial institutions. The exact financing conditions – the amount, duration, interest rates and fees – are determined by these financial institutions. To find the right contact points to financial intermediaries and/or implementing partners responsible for administering EU-backed financial instruments in your region please consult the Access to EU Finance portal

Specific rules applying to Cohesion policy funds

STEP offers financial incentives to direct cohesion policy funds towards investments in critical technologies. 

Co-financing

STEP offers a 100% co-financing rate for STEP priorities during the entire 2021–2027 programming period

Pre-financing

• A one-time 30% pre-financing option for Programme Amendments submitted by 31 March 2025.
• An exceptional one-off pre-financing of 20% to those programme amendments submitted by 31 December 2025.
  • If a programme reallocates ≥10% of total allocation to the new priorities (including STEP) or 7% for some special categories of programmes, by 31 December 2025, the whole programme unlocks for 2026:  Additional one-off prefinancing equal to 1.5% of total ERDF/CF/JTF support; or 9.5% if the programme covers regions bordering Russia or Ukraine. Extensions in the final date for eligibility of expenditure to 2030. Earlier reallocations to STEP priorities already adopted or in the pipeline also count towards the 10% threshold (no additional action is required by the MS in this case).  

Large enterprises

Support for productive investments in large enterprises is made possible for the first time in less developed and transition regions, as well as in more developed regions in Member States with a GDP per capita below the EU-27 average. With the Cohesion Policy Mid-term Review (MTR), the STEP incentives for large enterprises remain and are extended to other priorities such as IPCEIs, which may be relevant for STEP if in the STEP sectors.

Direct award

Direct award to projects with a STEP Seal is allowed under the European Regional Development Fund (ERDF) and the European Social Fund Plus (ESF+). With the Cohesion Policy MTR, direct support to STEP Seals and Important Projects of Common European Interest (IPCEI) are also introduced, including for the Just Transition Fund if in line with specific objectives and contributing to Just Transition Plans.

Specific rules applying to Recovery and Resilience Facility

Under the Recovery and Resilience Facility, Member States have the option to allocate up to 6% of their national envelope to STEP-relevant financial products under InvestEU. 

Furthermore, when revising their recovery and resilience plans, Member States should consider supporting as priority those projects that have been awarded the STEP Seal 

Key facts you need to know about STEP contributing programmes:

Mid-Term Cohesion Review benefits

The Mid-Term Review (MTR) of Cohesion Policy adopted on the 19 September 2025 modifies the European Regional Development Fund (ERDF), the Cohesion Fund (CF), the Just Transition Fund (JTF) and the European Social Fund + (ESF+) Regulations to further promote investments in defence and competitiveness, including by large enterprises. It offers a set of incentives to encourage Member States to carry out a meaningful reprogramming towards several priorities, including defence under STEP. 

Concretely, STEP maintains its 100% co-financing incentive and the opening for large enterprises, extending these to IPCEIs. The MTR removes the previous 20% maximum allocation limit for STEP and extends higher pre-financing possibilities for programmes including STEP priorities, granting a one-off pre-financing of 20% for submissions by 31/12/2025. 

Moreover, if by 31/12/2025 a programme reallocates at least 10% of its total allocation (or 7% for certain categories) to new priorities including STEP, the entire programme unlocks for 2026 an additional one-off pre-financing of 1.5% of total ERDF/CF/JTF support (or 9.5% for programmes covering regions bordering RU/UA) and an extension of expenditure eligibility until 2030. Allocations that have been implemented before the MTR are counted toward the above-mentioned 10% threshold automatically, with no need for further Member State action. A more flexible approach regarding the requirement of thematic concentration is also introduced, with more flexible rules for STEP and defence investments.

Repayable forms of funding

These include equity, loans, and guarantees that can be used for various types of investments. These are implemented in collaboration with public and private institutions (e.g. banks and equity funds). Such repayable forms of funding are demand-driven and based on a market logic. Before awarding funding, the financial institution in charge examines projects that fall within their geographic and activity scope. It also decides on the specific financing conditions, including the amount, duration, interest rates and fees.

The repayable support under InvestEU programme is channelled through Implementing Partners i.e. the European Investment Bank Group and other international financial institutions and national promotional banks and institutions, and the network of local financial intermediaries acting across the European Union.

InvestEU financial products deployed by implementing partners are covering different types of repayable support from debt, guarantees to equity for a very broad set of EU policy areas, technology readiness levels and stages of innovation, including investment in manufacturing and deployment of STEPs technologies. Examples of financial products available goes from senior, subordinated and venture debt to intermediate and direct equity  and guarantees to financial intermediaries.

The InvestEU Fund, part of the InvestEU programme, provides support to final recipients that are deemed economically and financially viable. All size of companies and projects, as well as a broad range of riskiness levels of operations, can be supported. The eligible final recipients can be natural or legal persons established in an EU country or in a third eligible country, including:

• Private entities such as special-purpose vehicles (SPV) or project companies, large corporates, midcap companies, including small midcap companies, start-ups and SMEs
• Public sector entities (territorial or not) and public-sector type entities
• Mixed entities, such as public–private partnership (PPPs) and private companies with a public purpose
• Non-for-profit organisations

How to apply for financing?

• Project promoters should apply directly to Implementing Partners to see on suitable financing solutions based on the financial products supported by the EU guarantee.
• Financial intermediaries should also consult the offering of implementing partners active in their regions proposing relevant products: it is up to them to select financial intermediaries through procedures such as calls for expressions of interest.
• Small mid-caps, SMEs, start-ups and social or micro-enterprises: should apply to their local commercial or public banks whose financial products are covered by the EU guarantee in their country or region. The local intermediary will inform them if a particular financing programme is covered by the InvestEU Fund.

Find your local intermediary on our Access to EU Finance website, which already lists intermediaries under current EU programmes and will successively list InvestEU financial intermediaries.

You can also wish to register to the InvestEU Portal that brings together investors and project promoters on a single EU-wide platform, by providing visibility and matchmaking opportunities for investment projects within the EU, Norway and Iceland. Project promoters can publish their project on the Portal to bring it to the attention of potential investors. Register your project and make it visible to an investor here.

For advisory support and technical assistance offered under InvestEU advisory hub you can apply through the Central Entry Point.

Key facts you need to know about STEP contributing programme