Innovative Financial Instruments in EU Funding Schemes

Innovative financial instruments, in the context of the funding schemes of the European Union, are different from funding by way of direct subsidies. These financial instruments can be divided in two large groups: instruments offering risk capital and equity capital and debt instruments. The instruments help to engage resources from the private sector in projects which might be considered too risky without the said instruments and the implementation of which would be impossible or related to significantly higher expenses for the promoter of the project. As seen from Estonia’s perspective, up until now the use and impact of innovative financial instruments have generally met the expectations. In view of the diversity of areas and target groups of the innovative financial instruments planned within the framework of European Union’s Financial Framework 2014-2020, it may be presumed that several new instruments will be successfully implemented in Estonia.