Example of Subsidy contract

The Subsidy Contract will be concluded between the Lead Partner (LP) – who represents the project in general – and the Managing Authority (MA) after project approval. It is the formal basis for project implementation and related ERDF funding.

The current version is availaible here (PDF, 104 KB) and can be very useful for potential Lead Partners to estimate their tasks and obligations as Lead Partner in an INTERREG III B CADSES project.

At this place it may be useful to remind if the Lead Partner is a private institution, it will have to present securities as customary for banking practice, such as a deficiency guarantee from a bank or a public body. The formal basis is the PC (1.2.1 Lead Partner principle), which stipulates: "Lead partners under private law have to provide sufficient guarantees equal to the amount of ERDF funds they are claiming for the whole project." The subsidy contract to be signed will include a similar clause.

There are the following options to provide the requested guarantees:

• Bank Guarantee: The LPs have to provide a bank guarantee, lasting until 31 December 2012 and covering the full amount of ERDF funding of the whole project . It has to be presented, at the latest, on the submission of the first payment claim.
• An Acceptance of Liability: The LP presents a "Letter of Acceptance of Liability" made out by a public authority. The issuing public authority has to assume the liability of the LP for the ERDF subsidy contract between LP and MA. 
• Private entities, which can be classified, as public equivalent bodies, do not have to present the above-mentioned securities. The LP has to present a certificate, which declares him being a "public equivalent body" according to the "Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contract" (amended by EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE 97/52/EC of 13 October 1997). This document is available here (Word, 27KB).