Co-financing

Definition

Co-financing (cofinanciering) is the share of a subsidised project's costs that a company must fund itself, alongside the subsidy it receives. Almost no Dutch subsidy scheme covers 100% of project costs; instead, each scheme sets a subsidy rate — for example 60% for SLIM or 35% for a MIT feasibility project — and the remaining share is the applicant's own contribution. This design serves two purposes: it keeps the applicant financially invested in the project's success, and it helps schemes stay within the state aid limits that cap the aid intensity — the percentage of costs that may be publicly funded — for a given category of aid. Co-financing does not have to come entirely from the company's own cash reserves; depending on the scheme, it can also take the form of financing arranged through a bank, an investor, or, in project consortia, contributions and co-financing letters from partner organisations. When budgeting a subsidy application, it is worth calculating the co-financing requirement early, since underestimating it is a common reason why otherwise well-prepared applications run into funding problems later in the project. Because the required percentage varies by scheme and sometimes by activity within a scheme, always check the specific subsidy rate that applies before assuming a standard co-financing share.

Frequently asked questions

What is co-financing in a subsidy application?

Co-financing is the share of project costs a company funds itself, because most subsidy schemes only reimburse a set percentage, such as 60% under SLIM or 35% under a MIT feasibility project.

Does co-financing always have to be cash from the company itself?

Not necessarily — depending on the scheme, co-financing can also come from bank financing, an investor, or, in project consortia, contributions from partner organisations.

Why does the required co-financing percentage vary between subsidies?

The percentage depends on the subsidy rate set for that scheme and category of aid, which is shaped partly by state aid rules that cap how much of the cost may be publicly funded.