Project durability

What it means

Project durability is the period after the financial completion of a project supported by EU funds or another grant, during which the recipient must maintain its results. For investment projects it usually lasts five years, for small and medium-sized enterprises often three. The exact length and conditions are set out in the grant agreement.

During this period the company may not substantially change the project in a way that affects its nature, objectives or implementation conditions, transfer ownership of the supported assets without consent, or stop or relocate production outside the eligible region. It must also maintain the measurable indicators achieved, such as the number of jobs created.

The recipient submits annual monitoring reports showing that the project is working and indicators are met. The provider may carry out on-the-spot checks. If a breach of conditions is found, it may reclaim part or all of the aid.

How it works in practice

When deciding on a project, think about the whole durability period, not just implementation. A company planning to sell the business, move production or change activity in the coming years should consider whether the conditions will restrict its strategic decisions. A breach can cost more than the grant brought in.

Supported assets must be clearly marked in the records, and project documents are kept longer, usually for several years after durability ends. If an asset breaks down or becomes obsolete, it must be replaced with an equivalent one and the provider informed. In the accounts the grant continues to be released gradually in line with depreciation.

Measurable indicators should be set realistically in the application. If a company promises ten new jobs and has eight in year three, a financial correction proportional to the shortfall is likely. When circumstances change, it is better to request a contract amendment early than wait for an inspection to find it.

What to watch out for

The most common breaches are selling or leasing supported assets to a third party without consent, moving the activity to another site, falling short on jobs and late or incomplete monitoring reports. Many arise from ignorance, because once implementation ends the project is forgotten.

Be careful with company reorganisations. A merger, division, sale of the business or change of owner may count as a substantial change. Consult the provider before such a step and settle the conditions in the contract. Due diligence when buying a company should always check open obligations from projects still in their durability period.