Luxembourg's Ministry of the Economy has announced the extension of the aid scheme to stimulate investment in the COVID-19 era and an increase in the maximum amount of aid granted per company to €1.8 million.
The Economy Ministry put in place investment aid for companies suffering the impact of the COVID-19 crisis in the context of the government's “Neistart” recovery plan. This instrument aims to encourage companies to carry out, despite the current crisis situation, economic development, digitalisation or environmental protection projects with financial aid of up to 50% of eligible costs. The aid scheme makes it possible to grant much higher amounts of investment aid than in normal times, particularly for projects relating to the development of the circular economy.
Initially scheduled to expire on 30 June 2021, this investment aid will be extended until the end of the year. On Friday 2 April 2021, the Government Council adopted the bill providing for this extension.
The aid scheme is aimed at companies which suffered a significant drop in turnover during the crisis and provides for three types of aid:
- investment aid for development projects up to 30% of the cost of the project (depending on the size of the company), with a 20% increase in aid for projects falling within the scope of the circular economy;
- investment aid for process and organisational innovation projects up to 50% of the project cost;
- investment aid for energy efficiency projects or projects exceeding standards up to 50% of the cost of the project.
The maximum amount of aid granted per company has increased from €800,000 to €1,800,000.
Luxembourg's Minister of the Economy, Franz Fayot, commented: “This aid scheme encourages companies to make investments to improve their competitiveness and produce more sustainably, despite the investment climate currently deteriorated by the COVID-19 crisis. 207 requests for aid of this type have already been favourably advised by my services, for a total aid amount of €62 million. The extension of this assistance until the end of the year will therefore allow continued support for business investment in these difficult times".