European Regional Development Fund (ERDF)


The European Regional Development Fund (ERDF) is responsible for management of the EU funding which is dedicated to regional development. Establishment of this regional fund was proposed by the United Kingdom in 1972, one year before the country became the member state of the European Union. The UK’s proposal was accepted and the ERDF was to be set up by 1973, however, it was not established until 1975 due to the 1973 oil crisis. When established, it was given a budget of 1.4 billion European units of account (the precursor of the European Currency Unit and later the euro) although Britain suggested a much higher budget. But over years, the ERDF budget increased dramatically and according to the 2007-2013 regional funding period, the UK alone is entitled to over 3 billion euros for regional development projects.

The main objective of the ERDF is to support the projects and activities which reduce the economic disparity within the member states of the EU. It financially aids projects that stimulate economic development and increase employment in the poorest regions of the EU, help preserve the nature and environment in order to improve the quality of life as well as make the regions more attractive to tourists and investors, improve transport and basic infrastructure, increase the quality of education and a number of other projects which promote regional development and reduce the gap between the wealthiest and the poorest regions in the EU.

EU Flags

The priority of the ERDF are projects which stimulate the regional economic development, while grants are typically awarded to the governmental and regional agencies and departments such as local authorities and other public sector bodies. However, the European funding through the ERDF is also available to private sector as long as its projects meet the ERDF objectives. The European funds in the form of grants can thus also be awarded to small and medium-sized businesses, however, the grants must not be directly used for profit generation.

The projects which receive the European funding through the ERDF or any other EU department that manages the EU funding are not fully covered. In most cases, the projects which are awarded grants receive up to 50 percent of the project’s value but in some cases, the EU regional funds provide as much as 75 percent of the financial resources needed to complete the project.

To apply for the ERDF funds, it is recommendable to turn to the local or regional authorities for advice and information on the application process. In order to receive the European funding, the project must meet a number of criteria. The applicants must present the benefits of their project for economic development and regeneration, and that without the financial support of the ERDF, their project cannot be carried out. The ERDF or the Department for Transport, Local Government and the Regions which manages the ERDF in England goes through each application individually and awards grants to projects that are most likely to achieve the desired effect. Environmental effects the projects are typically considered as well before the final decision is made.