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.
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 in the range of about 10 to 35 percent of eligible investment costs, 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.
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, provided the investment creates a defined number of permanent jobs. 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 EUR 10 million and a rate of roughly 30 percent for a company of this size in this assisted area, the non-repayable grant comes to about EUR 3.0 million. The company commits to the job-creation targets that underpin the grant and to keeping the assets in place for five years.
A €3.0M 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 · ~30% of eligible costsWhere 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.
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 roughly 10 to 35 percent of eligible investment costs, depending on the assisted area and company size; small companies receive more than medium-sized ones.
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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