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  • Funding for innovation projects

    Innovation projects can be funded through both grants and loans. On this webpage, we have collected useful information about the criteria for innovation grants from Innovation Norway.

    Norwegian version. 

    We offer funding to enterprises whose growth strategy is based on innovation. Our grants for innovation projects are intended to strengthen the enterprise’s competitiveness and trigger the potential for sustainable growth. The overarching goal is lasting value creation in Norway.

     

    Who can apply?

    The target group for funding comprises innovative enterprises with international growth potential, for whom the planned innovation project is considered an important success factor. 

    The enterprise must comply with the principles for corporate responsibility.

    The enterprise must demonstrate its capability of implementing the project and commercialising the results. The enterprise’s network, internal competence, and financial resources are important.  The project must have firm foundations in the enterprise’s strategy, with full buy-in by the management team and the board.

    Projects eligible for funding

    The purpose of an innovation project is to develop or significantly improve a new product, production process or service. Research and development activities must be at the core of the project. The costs eligible for funding depend on the nature of the project and the size of the enterprise.

    Innovation grants are relevant for projects that are expected to have a significant impact, both for the enterprise and for society. This means that the project:

    • will support the enterprise’s long-term ambitions and strategies
    • will equip the enterprise to address global challenges and market opportunities   
    • will result in commercial and socio-economic profitability 
    • will trigger the potential for sustainable growth  
    • will have international potential and strengthen the enterprise’s international competitiveness
    • will have a substantial market, and its value proposition can be demonstrated by the enterprise
    • will result in solutions/technologies that can be commercialised and have the potential to spread in existing markets or new areas of application

    The project must also involve an international level of innovation. This means that:

    • a good description can be provided of the project’s innovativeness compared with the best solution available on the international market
    • the project involves significant project risk (technical risk)
    • it will be possible to secure intellectual property rights to the solution and that no existing rights, including patents, laws or contracts, will hinder its commercialisation.
    • the project’s technology readiness level is TRL 5-7, or in exceptional cases TRL 4 and 8. Projects that as a whole are at TRL 4, and a long way from market, will be referred to the Research Council of Norway.

    Only costs related to the project and additional to the enterprise’s ordinary operations are eligible for funding. Normal overheads and other operating costs are not eligible.

    General business development involving little risk and a low level of innovation is not eligible.

    Contribution from Innovation Norway

    Grants provided by Innovation Norway must comply with the State aid regulations. Under the regulations, it is not permitted to provide more State aid than is required to realise the project

    Written applications to Innovation Norway must be submitted before the project or activity commences. If appropriate, the innovation process can be divided up into multiple phases/applications.

    Occasionally, grants may be combined with loans. In order to obtain an innovation loan from Innovation Norway, the enterprise must demonstrate long-term financial viability.

    The enterprise’s investors and corporate banks are also expected to contribute funding to the innovation project. The proportion of public funding (combination of grants and loans) will normally not exceed 50%. The enterprise’s share of funding may consist of working capital, newly raised equity, subordinate loans or bank loans.

    Eligible activities

    The activities eligible for funding through grants primarily include activities defined as research and development, however allowing for supporting activities when relevant:

    Consulting services

    When carrying out an innovation project, there may be a need to bring in expertise within various areas. Some enterprises will need a strategy process to define their direction going forward and anchor a planned innovation project in their overall business ambitions.  The enterprise may engage experts from research environments, hire in highly qualified personnel from other enterprises or make use of consultants.  The costs associated with consulting services may be eligible for funding.

    Research and development

    Obtaining funding for research and development requires an international level of innovation. Innovation Norway’s funding is targeted at the ‘experimental development’ level of research and development.

    For a technology innovation project, the research and development activities will often comprise several phases, from exploring ideas and hypotheses, determining principles and concept testing, to building a prototype or full-scale demonstration model. All development costs are eligible for inclusion, although feasibility studies for research and development must be carried out by the enterprise at its own cost before applying to Innovation Norway for the main project.

    Implementation of research and development results

    Sometimes the project may trigger additional activities in order to implement its results within the enterprise, and some of these, including training, may be eligible for funding.

    Only process and organisational innovations that entail a substantial boost for the enterprise will be eligible for funding. Ordinary routine improvements, capacity increases, productivity improvements, streamlining, etc. will not be eligible for funding.

    The following activities are not eligible for funding:

    Aid cannot be provided for normal overheads and other operating costs. Only costs related to the project, and additional to the enterprise’s ordinary operations, can be included. Ordinary marketing and sales activities cannot be funded, irrespective of whether the market is national or international.

    The State aid rules prohibit aid for ‘export-related activities’. The prohibition includes aid that 1) is directly linked to the quantities exported; 2) favours domestic over imported goods; 3) is intended for the establishment and operation of distribution networks in other countries; or 4) is intended for current costs linked to export activities.

    Eligible cost?

    For certain purposes, various cost items may be included in the eligible basis for aid.

    It is especially important to note that internal hours/the enterprise’s personnel costs are eligible for inclusion in approved cost estimates for some purposes. 

    • In limited liability companies (‘AS’), an hourly rate of 1.2 thousandths of gross annual pay, up to a maximum of NOK 700 per hour and 1,850 hours per year, can be applied. This hourly rate also covers all overhead costs, such as social costs, rent and depreciation costs related to instruments, machinery, tools, equipment and premises, financial costs, ICT costs, travel costs, pension costs, insurance, office costs and supplies, etc.

    For other purposes, only external costs (excluding VAT) will be eligible. This is regulated by the State aid rules.

    Assessment

    To ensure that applications are processed rapidly and efficiently, the application template must be completed in full.

    The purpose of these grants is to strengthen the enterprise’s competitiveness and contribute to greater profitability and growth. We require a concise description of how the project under consideration will achieve this.

    Grants for innovation projects are contingent on the project providing positive socio-economic benefits.

    Applications for funding from Innovation Norway must include a true project description that describes specific activities in the project organised into work packages.

    All applications must be accompanied by:

    • An operating budget for 3 years beyond the project period
    • A liquidity budget for the project period

    Common provisions for State aid

    Grants from the Environmental Technology Scheme must comply with the State aid rules. This means:

    The aid awarded cannot exceed the aid intensity specified for the justifying purpose of the aid. All forms of aid must be included in the calculation of aid. The aid is calculated as a percentage of the project costs, i.e. the cost items that are eligible for inclusion in the calculation basis.  When aid is granted for the same project from several sources of public funding with different purposes, the total amount of public support measures for the aided activity or project shall be taken into account, regardless of whether that support is financed from local, regional, national or Community sources.

    In the vast majority of cases, the aid must have an incentive effect, i.e. a triggering effect. The requirement for an incentive effect is addressed by the application being submitted before the project starts.

    The State aid rules prohibit providing aid for certain ‘export-related activities’.

    Aid cannot be provided to enterprises that are ‘in difficulty’.

    Aid cannot be provided if the recipient of the aid is being prosecuted for an outstanding recovery order to repay unlawful State aid following a decision by the ESA.

    More detailed information about these provisions in the State aid rules can be found here.