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5.12.19 12 22.6.2023 Matthias Portelli Matthias Portelli is EU Affairs intern at Malta Enterprise OPINION Opportunities for SMEs in the European Defence Fund THE European Defence Fund (EDF) promotes cooperation among companies and research actors of all sizes and covers all EU Member States and regions, in research and development of state-of-the-art and interop- erable defence technology and equipment. e EDF supports competi- tive and collaborative projects throughout the entire cycle of research and development to leverage a bigger impact on the European defence capability and industrial landscape. Furthermore, the EDF posi- tively encourages participation of small and medium-sized en- terprises (SMEs) in collabora- tive projects and fosters break- through innovative solutions. e EDF has an inbuild mech- anism that incentivise tradi- tional consortia to open up their supply chains to innova- tive SMEs. e fund plays a key role to enable SMEs to participate in defence supply chains and to widen cross-border industrial cooperation. It provides opportunities to companies of all sizes, to drive innovative solutions, foster an open internal market and thus also contributes to the Union's competitiveness. e fund spans beyond de- fence. It is an adequate tool also for a wide range of technolog- ical research and development which goes well beyond the traditional defensive and in- dustrial sectors an example be- ing cybersecurity and maritime surveillance . e Commission has recently launched the newly EDF 2023 Work Programme which will provide a total budget of €1.2 billion for defence RD&I. is covers 34 topics struc- tured along four thematic calls for proposal, as well as three bottom-up calls focused on disruptive technologies and SMEs. It targets defence tech- nologies and capabilities in line with the EU capability pri- orities commonly agreed by Member States. e EDF provides finan- cial support, mainly through grants, to collaborative R&D projects. e fund can support 100% of the total eligible costs of a research action. Furthermore, it can provide support to a development ac- tion which may vary between 20% and 100% of its total eli- gible costs depending on the activities covered (e.g. design, prototyping, testing, qualifi- cation, certification) and on a bonus system (involvement of SMEs and mid-caps). An increased funding rate is also offered to projects devel- oped in the context of the Per- manent Structured Coopera- tion (PESCO). e 2023 calls are expected to open for submission on the 15th June 2023 with a deadline for submission of 22 November 2023. Meanwhile, an information day and a networking event will take place on 28-29 June, 2023. SMEs who are interested to learn more on the funding opportunities and eligibility criteria are invited to email the national contact on euaffairs@ maltaenterprise.com TAILORED SUPPORT TO ENTIRE CYCLE OF R&D PROJECTS The Fund supports competitive and collaborative projects throughout the entire cycle of research and development for a bigger impact on the European defence capability and industrial landscape. The Fund finances up to 100% of the total eligible costs of awarded projects, in particular through grants, including up to 35% of possible bonuses. Research activities could be funded up to 100% while development activities have different funding rates complementing Member States' or industrial investments, between 20%-80% from prototyping to certification. However, the Fund does not cover the acquisition phase. In general only collaborative projects are eligible, with at least 3 participants from at least 3 different Member States or associated countries. For disruptive technologies, eligible projects should be composed at least from 2 participants from at least 2 Member States. Projects will be defined along priorities set with Member States aiming at contributing to the security and defence interests of the Union, in line with defence capability priorities agreed by Member States within the framework of the Common Security and Defence Policy and particularly in the context of the Capability Development Plan, and taking into account, where appropriate, priorities from other regional and international organisations (e.g. NATO). The Fund will incentivise the cross-border participation of SMEs by providing higher funding rates and favouring projects by consortia which include SMEs. 4-8% of the budget will be set aside to support innovative disruptive technologies for defence that will boost Europe's long-term technological leadership and contribute to high-end defence products. To ensure that EU resources are put to good use, development of common prototypes will be funded only where Member States intend to buy the final product or use the technology in a coordinated manner. No capability will be owned by the EU. Capability Research EU budget EU co-financing with Member States Financial toolbox €2.7 billion for 2021-2027 (Member States budget) €5.3 billion for 2021-2027 Development Research Acquisition European Defence Fund €8 billion for 2021-2027 The Fund supports competitive and collaborative projects throughout the entire cycle of research and development for a bigger impact on the European defence capability and industrial landscape. However, the Fund does not cover the acquisition phase

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