Innovation Fund: Tailored support

Since 2020, the Innovation Fund has represented one of the world's largest financing programmes for the deployment of green and innovative technologies. Launched by the European Commission, it has a budget of EUR 40 billion for the period 2020-2030. It represents a key element of the European Union's strategy to combat climate change and promote sustainable growth.

It is a major financial instrument designed to support innovative projects that contribute to reducing greenhouse gas emissions and advancing Europe's transition to a low-carbon economy.

In many areas, beyond the sole scope of the innovation fund, initiatives are multiplying. "I have been following industrial policy for 25 years, and I can say that I have never seen so many initiatives launched simultaneously. This  represents a real paradigm shift," testified Tom Theves, Secretary General of the Ministry of the Economy, SMEs, Energy and Tourism, at the latest Innovation Fund Infoday organised by Luxinnovation at the end of January..

What does the Innovation Fund target?

At the beginning of December, a new call and two auctions for projects was launched on 3 December 2025, open to all types of companies. The dedicated budget envelope is EUR 5.2 billion, supporting projects with capital expenditure (capex) of at least EUR 2.5 million.

Priority sectors include:

• energy-intensive industries;
• renewable energy and energy storage solutions;
• carbon capture, utilisation and storage (CCUS);
• clean mobility;
• net-zero emission buildings.

Echo-Wave, the pioneer

In Luxembourg, only one project currently benefits from Innovation Fund support: Echo-Wave, led and coordinated by the Luxembourg company GPSS  (Green Power Storage Solutions). It involves the development of a park comprising a wind turbine, a 5.5-hectare site for an agricultural solar power plant (agrivoltaics), and 2,500 m² of production area for renewable hydrogen.

The funding received from the Innovation Fund amounts to nearly EUR 13 million, which complements the national support provided by the Ministry of the Economy. GPSS was also selected during the national pilot call for green hydrogen production.

An expected quantity of 2,900 tonnes of renewable hydrogen is planned to be produced during the first ten years of operation. The annual volume of renewable hydrogen production corresponds to more than 60% of Luxembourg's current hydrogen demand.

GPSS benefited from Luxinnovation's support throughout its journey. "From our very first steps in 2021, in a very early period of our company's financing, we already approached the agency to study the feasibility and develop our concept for an agricultural solar power plant adapted to the Luxembourg landscape, but also to the strategy and overall objectives of farmers," explains Philipp Fisch, Technical Director at GPSS.

It was only later, in discussions, that the opportunity for European funding emerged. During the work carried out by a national task force on the hydrogen question, other concrete co-financing possibilities via the Innovation Fund became apparent. "Given the maturity we had already acquired over two years, we were legitimate in positioning ourselves for this fund," recalls Mr Fisch. "We knew very well, at that point, where we wanted to develop our project (in Kehlen, editor's note), what assets we wanted to put in place, how we wanted to technically install and operate the plant, what we were going to develop and what we needed to develop."

An investment for the future

Luxinnovation's support was realised, firstly, through an in-depth analysis of the Innovation Fund's specifications and the various administrative obligations related to project submission. "At each stage of the application, we took stock and began the next stage, relying on the advice and feedback from Luxinnovation's teams."

Between December 2023 and April 2024, the date of file submission, the sessions were therefore intensive. "Even without having the guarantee that our project would be selected, we considered this whole process as an investment. It enabled us to position ourselves well in the face of the requirement for operational, financial and technical maturity that we had to demonstrate. This obviously also served us for other subsequent applications, particularly at the national level."

The two financing sources obtained are, moreover, perfectly complementary. "Whilst the Innovation Fund covers investment expenditure and eligible costs for three years, the national subsidy we received concerns operational expenditure over a period of 10 years."

The project is now in the financial closure phase and finalisation of contracts with all suppliers and service providers, as well as the preparation of various permits (environmental, construction, operation). The commissioning of the green hydrogen production site is expected by the end of 2027.

Luxinnovation, the national contact point

As the national contact point for the Innovation Fund, Luxinnovation offers:

• advice in the initial phase;
• continuous assistance throughout proposal development;
• answers to questions;
• examination of dossiers, including annexes.

The Echo-Wave project  is a textbook case. "First, we held initial meetings with GPSS even before the call was launched, and we advised on how to get started," explains Sanna Alaranta, Senior Adviser – European R&D and Innovation Support at Luxinnovation. "We then provided support by finding answers throughout the application process and during the preparation of the grant agreement. Finally, before submission, we examined the draft proposal, including the technical description and feasibility study. This successful participation in the highly competitive Innovation Fund represents an exceptional achievement for Luxembourg and the Greater Region."

* solar energy production on agricultural land