The Luxembourg Cabinet today approved a €30 million aid scheme linked to the development and production of products contributing to the fight against COVID-19 (coronavirus).

As part of the economic stabilisation programme, the Cabinet approved Economy Minister Franz Fayot's proposal for an aid scheme to support both industrial research projects and experimental development as well as investment projects enabling the production and development of products helping to combat the health crisis linked to coronavirus.

Research and development (R&D) projects which can benefit from said aid could include research and development on medical devices or hospital equipment such as ventilators, protective equipment or disinfectants as well as process innovations allowing more efficient manufacturing of the necessary products.

The aid offers to support up to 80% of the costs of an industrial research and experimental development project or even up to 100% in the case of a fundamental research project. If the R&D project is carried out within the framework of a cross-border collaboration with another company or a research organisation, the aid amount can be increased by 15%, never exceeding 100% of the costs.

As for investment projects eligible for a subsidy, these include those related to the production of products relevant to the fight against COVID-19, medical devices, hospital and medical equipment (protective clothing and equipment, ventilation devices, diagnostic tools, disinfectants, etc.). Such an investment project may receive aid worth up to 80% of the investment costs. The aid amount can be increased by 15% if the investment project is fully completed within two months.

As part of this investment aid, the company may also request a guarantee to cover any losses linked to this investment. The amount of the guarantee depends on the duration of production maintenance, although this is limited to 30% of the loss and to an absolute amount of €500,000.

For the two types of support, namely aid for research projects and aid for investment linked to the production of relevant products, a total budget of €30 million is foreseen.

Luxembourg's Minister of the Economy, Franz Fayot, commented: “This aid scheme complements the panoply of aid to companies put in place as part of the economic stabilisation programme. With this new regime, we particularly encourage production companies and those active in R&D to mobilise in the fight against COVID-19”.