Main characteristics
Financial instruments are a specialized form of support with funds from European funds under shared management and the national budget, as well as with additional funds attracted from the private sector. They can be debt instruments (loans, loan guarantees) or equity/quasi-equity investments.
Financial instruments aim to make more efficient use of public resources than grant aid. (For example, loans granted can be reused for new investments after they have been repaid).
They provide financial support to target groups of final recipients (enterprises or the public sector) for the implementation of economically viable projects. In this way, they contribute to overcoming identified market failures, have a financially disciplining effect, and help achieve the EU's strategic objectives and policies.
Equity investment is a form of financing in which an investor (usually through a fund) invests funds in a company in exchange for ownership (share) of it. Instead of being returned with interest as a loan, these funds are recovered when the investor sells their share – usually after development and increase in the value of the business.
