The first challenge for the public authority in charge of an investment project is often already in the project planning. Evidence from successful blended projects suggests that it is of particular importance to consider the grant element and the timetable for the grant application from the very beginning of the project planning to ensure success. The project has to be included in the relevant Operational Programme under the National Strategic Reference Framework and the implementation has to respect the disbursement periods of the budgetary programme. Given the requirements of the grant rules, countries which have been successful in blending EU grants and PPPs have tended to treat the project as principally grant funded, but co-financed by a PPP, rather than trying to fit a grant into an already designed PPP structure. The grant application is the less flexible component and therefore needs to be at the core of the planning.
The EU Structural Funds have been designed to co-finance capital investments within a restricted period from the time of their programming (under the relevant Operational Programme) or, in case of major projects over EUR 50 million, their approval. This period is usually two years (although it may be three years in certain circumstances). This is sometimes known as the N+2 rule. If the deadline applicable to the N+2 (or N+3) rule cannot be met, this may result in a loss of part or even of all of the grant funding. For the current EU budgetary period, grants need to be fully disbursed by 31/12/2015. Given the long planning, procurement, documentation and financing periods necessary to procure a PPP, it is a major challenge to ensure grant disbursements within the deadlines. EU rules permit that grant funding be approved after a project is already implemented or under implementation, but this carries a different risk that the public and private sectors must commit themselves to the project before it is known whether the Commission will approve the project and confirm its funding. Legally, the timing of approval is not relevant for major projects. Projects can be commenced before formal grant approval, with the grant used to refinance later. Many beneficiaries start implementing major projects before approval, and many Member States encourage and support them in doing so. After the latest amendment to regulation 1083/2006, major projects can even receive payments from the Commission before its decision to confirm co-financing.