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GRW · Case study

GRW funding for a new production plant.

Practical example based on real projects · anonymised, figures rounded · Last updated:

For a company planning a new plant, the location can change the funding. GRW gives a non-repayable investment grant to companies that invest in designated structurally weak regions and create permanent jobs. A clean-tech manufacturer used it to build a new plant, and the regional grant carried a large part of the capital cost.

€2.5M
grant
~25%
funding rate
€10M
eligible base
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At a glance

The case in figures

ProgrammeGRWRegional investment grant
Amount€2.5MNon-repayable investment grant
Project typeConstruction of a new establishment
Eligible base~€10M
Funding rate~25%
SectorClean-tech · Manufacturing
The project

What GRW funded here

A growing manufacturer of clean-tech components needs additional production capacity as demand rises. It decides to build a new plant and chooses a site in a structurally weak region that lies inside a GRW assisted area, where the regional grant materially changes the business case for the location.

What GRW funds

How the programme works

The Joint Task for Improving Regional Economic Structure (Gemeinschaftsaufgabe Verbesserung der regionalen Wirtschaftsstruktur, GRW) is Germany's central instrument of regional structural policy, run jointly by the federal government and the states. Unlike R&D programmes, it funds investment: a non-repayable grant to companies that invest in a designated GRW assisted area and create or secure permanent jobs. Rates depend on the assisted area and company size, commonly 10 to 35 percent of eligible investment costs and up to 45 percent on the Czech or Polish border, with small companies receiving more than medium-sized ones.

The conditions are strict. The grant must be applied for before the investment starts, that is before any binding supply or works contract. The investment must be completed within 36 months, and the funded assets must remain in the assisted establishment for at least five years. GRW is administered by the responsible state development bank, and there is no legal entitlement to the grant.

How it worked

From scope to grant

GRW supports exactly this kind of decision. The grant covers the acquisition and construction costs of the fixed assets of the new establishment, the building, the plant and the machinery. As the construction of a new establishment, the investment meets the regional effect automatically as long as the company's other jobs in the municipality are kept; the number of new permanent jobs works through the cap of at most €1m eligible investment cost per new job. The company files the application before signing any binding supply or works contract, because GRW cannot fund an investment that has already started. On an eligible investment of around €10 million and a rate of 25 percent, the maximum for a medium-sized company in this C assisted area, the grant comes to about €2.5 million. The company commits to the job-creation targets that underpin the grant and to keeping jobs and assets in place for five years.

The result

A €2.5M GRW grant.

The grant offsets a large part of a major capital outlay and makes the chosen location and the timing of the expansion viable. The region gains employment and value creation; the company gains a competitive site, financed in part by a non-repayable grant.

Investment grant · ~25% of eligible costs
Investment grantClean-tech · Manufacturing.
~€10M eligible baseThe base the grant is calculated on.
Non-repayable grantNot repaid as long as you keep the jobs and assets for five years.
Key takeaways

What this means for you

Where a new site or a major capacity expansion can be located in a structurally weak region, GRW can fund a substantial share of the capital investment. The single most common mistake is signing contracts or ordering machines before applying, which forfeits the grant entirely, so the decision to apply has to come before the investment is committed.

More on GRW: The guide GRW funding: regions, rates and application explains the programme step by step. How we support your project is covered under GRW consulting.

FAQ

GRW, in short

The questions we hear most about the programme. Short answer first, detail after.

Investment in fixed assets, buildings, plant and machinery, for job-creating investment in structurally weak regions. It is investment support, not R&D funding.

A non-repayable grant of commonly 10 to 35 percent of eligible investment costs, up to 45 percent on the Czech or Polish border, depending on the assisted area and company size. In D-areas SMEs receive 10 to 20 percent, large companies only de minimis aid.

Before the investment starts, that is before any binding contract. The investment must be completed within 36 months, and funded assets must stay in the assisted establishment for at least five years.

The responsible state development bank. There is no legal entitlement to the grant.

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