Who may apply for funding and for what purpose?

• For what purposes may funding from the fund be granted?
• Scope of funding
• Conditions for applicants for funding
• Conditions for the projects to be funded
• Eligible costs

The purpose of the City of Porvoo’s Green Transition Fund is to support SMEs and the city in making a forward-looking, impactful green transition that creates new business opportunities. It is intended as an instrument that attracts to invent and promote innovative solutions and strengthen joint competitiveness.

It is not possible to pay direct business subsidies from the fund or to finance activities considered as existing or basic operations of the applicant. Thus, funding cannot be granted,
for example, directly for investments in equipment, machinery, or business premises, even when the aid is paid directly to companies. The funding also cannot be used to fund matters that
may be considered as part of the applicant’s existing or otherwise normal operating expenses, like costs of patents or responsibility reporting, even if they were related to the green transition.

Funding may be allocated, for example, to conduct studies and surveys necessary for green transition investment and innovation, wage costs, training expenses, or innovation costs,
green transition development projects or increasing skills to support the green transition.
The starting point is that the effectiveness of the projects funded also extends beyond the business activities of an individual operator or company. Please read information about the eligible costs of the fund carefully.

In the evaluation of projects, importance is attached not only to the potential green transition focused on the company’s own operations, but also, in particular, the carbon handprint, i.e.
how much the solutions offered by companies create opportunities for others to reduce their own climate impact. The goal is to take green leaps that have a genuine effect: not to maintain
outgoing solutions and technology. Promoting green transition may also be related to, for example, biological diversity.

Aids granted to businesses from the Green Transition Fund are covered by EU state aid rules and are generally granted as de minimis aid. You will find more information about de minimis aid on the Ministry of Economic Affairs and Employment website (in Finnish and Swedish):

The scope of the funding applied for and granted is, as a rule, EUR 10,000–300,000 per project, which is also the company-specific upper limit for de minimis aid per a three-year period under EU state aid rules. The applicants shall ensure that the total amount of their de minimis aids does not exceed the upper limit.

In exceptional cases, more aid may be granted if the project has significant social impact. This refers to projects of large scope with significant effects on green transition and competitiveness: they can, for example, innovate and create completely new opportunities with significant effects, have significant impacts on employment, national or international value, and/or they invest significant new operations in Porvoo, or have significant importance for implementing the city’s strategy. This is assessed by the fund’s Advisory Board and the Vitality Board makes decisions on funding. The procedure may also require budgetary changes.

The Green Transition Fund may grant total funding for projects or matching funds to external funding. As a rule, the applicant shall have an excess of at least 10 % of the total project budget and the fund’s share is determined in each particular case. When applying for the project, the applicant shall indicate the total eligible budget for the project, the contribution applied for from the fund and the applicant’s excess. The excess may be covered by self-financing or from other sources of funding. Thus, for example, a 30 % contribution may be applied for from the fund and the rest of the funding is covered by other funding channels and/or the applicant’s own money.

Applicants shall meet the following conditions of the Green Transition Fund: 

• companies (public limited company, commandite company, general partnership, sole trader) shall meet the definition of an SME, i.e. Micro, small, and medium-sized enterprises (regarding turnover and personnel). The applicant may be an individual company or a cluster of companies.

• associations (registered association) and the city may also apply for funding if the projects otherwise comply with the fund’s principles
• Educational institutions may apply for funding as part of groups of companies (for example, EU development projects). An educational institution also refers to research institutes like universities.
• The applicant shall be financially sound. A credit rating is used to assess solvency, which shall be at least A (Satisfactory) according to Suomen Asiakastieto Oy’s Rating Alfa credit rating. An applicant with a rating lower than A cannot be granted aid. If the applicant cannot provide the above-mentioned rating report on its financial situation, the applicant shall submit another corresponding generally accepted credit rating and financial report. The report shall unambiguously indicate the applicant’s credit rating. The credit rating shall be at least at the same level as rating A classified by Suomen Asiakastieto, and the applicant shall be able to demonstrate equivalence if necessary. As part of the application, each applicant shall submit a credit rating report that meets the criteria.
• Applicants are also required to have a certificate of tax debts and, if necessary, a certificate of entry into the preliminary tax withholding register, the VAT register, and the register of employers.
• The applicant has the ability and resources to implement the project in accordance with the fund’s policy.

The applicant/the recipient of the aid shall be able to implement the project both from the perspective of their own business (financial solidity, liquidity) and other operations (project management, implementation and management, risks and resources relating to the project, among other things). The recipient of the aid bears the risk of returning funding if the project is interrupted, is not implemented as intended, or does not meet the requirements of the funding.

The same applicant may get funding from the fund for the exact same purpose only once. Instead, it is possible to apply for funding for further projects.

Objects funded from the Green Transition Fund shall:

• promote the green transition in a way that genuinely has effectiveness and benefits relating to green transition extend beyond an individual operator
• increase competitiveness in a way that has effectiveness and benefits extending beyond an individual operator, and/or opens up new business opportunities
• be focused on operations in Porvoo, i.e. the project measures shall be targeted at the Porvoo area, even if the applicant company’s/party’s registered office is elsewhere 

 It is also required that: 

• the project is feasible and the project and the benefits it creates are in relation to the funding applied for
• project funding cannot be classified as a direct business subsidy (for example, investments in machinery, equipment, and premises)
• the project does not represent an existing or basic operation or solution, but creates added value
• The recipient of the funding shall have at least 10 % excess from the total budget of the project, i.e. at least 10 % of the total project costs remain the responsibility of the applicant. The excess may be covered by the applicant’s own funding and/or by funding received from other sources of funding. Any other sources of funding shall be specified on the application form.
• The excess applies to each applicant also in projects of several applicants. In projects of several applicants, the minimum 10 % excess per applicant applies to the costs related to each applicant. In projects of several applicants, costs, funding rate and excess rates may therefore vary from applicant to applicant. However, even then, each applicant shall bear at least 10 % of their own eligible costs.
• The company shall also allocate an excess when participating in projects coordinated by a development company and educational institutions, for which the main funding is applied for from elsewhere. In these projects, the project coordinator/main implementer is responsible for determining the excess in relation to the content of the project and the funding applied for already at the application stage (for example, participation fee or hours worked). The project coordinator/main implementer is also responsible for invoicing/realising the excess, reporting, and de minimis monitoring of participants.
• The project to be funded will begin at the latest within one year of the decision and will be completed within three years. The last projects to be funded must end by 30 May 2035, so that funding can be reported, processed, and paid for before the fund’s time of expiry.

As a general rule, it is possible to fund salary costs and costs for purchased services allocated to the project, i.e. costs that promote the green transition’s real objective. Other possible expenses shall be well justified from the perspective of the project objectives. The costs applied for from the fund shall relate in a significant way to a project promoting green transition. The costs are notified without VAT, to be covered by the applicant. The total budget of the project shall consist only of eligible costs.

Eligible costs include:

• wage costs, including employers’ contributions, allocated to the project in the project plan
• purchase services (for example studies and surveys) and other justified expenses in accordance with the project plan and fund rules
• audit of the project

Eligible costs do not include, for example, the following:

• travel and kilometre allowances and travel expenses, unless it is about a trip under the project plan specifically relating to the project, the costs of which have been specified in the project application
• office and renting expenses and other graduated and general expenses
• costs classified as direct business subsidies (for example, investments in equipment, premises, and machinery)
• costs classified as existing or basic operations

The recipient of the aid is obliged to demonstrate the eligibility of costs. To the extent that the recipient of the aid cannot demonstrate that the costs are eligible, no aid shall be paid.

Reasonable and necessary wage costs for work needed to conduct the project may be recognised as eligible wage costs, as well as costs based on law, collective bargaining agreement, or collective agreement, with the exception of an instalment equal to the cost impact agreed in the collective agreement, and other equivalent one-off collective agreement costs. Wages are eligible only to the extent that they do not exceed the amount of salary paid by the applicant entity/recipient entity in general for the corresponding task. Performance bonuses, fringe benefits, or bonuses are not eligible. The costs of organising occupational health care are also not included in the eligible costs.

Holiday pay and holiday bonus: Holiday pays and holiday bonuses earned during the project are eligible costs if they are directly relating to the wage costs of the staff working on the project and have been incurred during the project’s implementation period. Thus, holiday pay and holiday bonus may only be included in eligible wage costs if they are allocated to the project and have been earned within the framework of the project work. It is the responsibility of the recipient of the funding to demonstrate which part of the holiday pay and holiday bonus is included in the eligible costs.

Sick leave costs: Sick leave costs are not eligible costs.

Working hours monitoring: If the work to implement the project takes only part of a person’s working time, it is a prerequisite for supporting wage costs that an acceptable project-specific record of working hours has been kept showing the work conducted to implement the project. Records of working hours shall be undersigned or otherwise endorsed by the employee and employer. The records of working hours related to the project shall indicate the date, the number of hours per date worked for the project, the number of tasks performed on the project by date (a list is sufficient), and the total number of hours worked for the project during the payment period/project. An Excel table, showing the corresponding data, is also sufficient as a record of working hours.

Full-time employees shall also give an account of the most important content of the work conducted. An Excel table, for example, may be used as the method of recording, which shows the most important tasks at weekly level.

Funding will only be paid for the approved eligible costs implemented during the project corresponding to the project plan as set out in the funding decision. The costs shall be verified with supporting documents, and the recipient of the funding shall have separate project records. The recipient of the funding shall report and verify the realisation and correctness of costs through an external audit in connection with the final report. The costs of the audit may be included in the project application by ordering a price estimate from an auditor at the application stage. These costs are included in the costs of the project by adding the paid audit invoice to the costs of the project before submitting the final project report. The final report of the audit will be submitted to the fund in connection with the final report.

Any unused aid shall be paid back to the fund for further rounds, and the amount will be reported in connection with the final report.