NUTS and Structural Funds

The link between NUTS codes and EU structural funds is one of the most commercially significant aspects of the geographic classification for procurement professionals. EU Cohesion Policy, which directs investment to reduce economic disparities across European regions, allocates funding through the European Regional Development Fund (ERDF), the European Social Fund Plus (ESF+), the Cohesion Fund, and the Just Transition Fund. All of these allocations are determined at the NUTS Level 2 regional level, creating a direct connection between the geographic code on a procurement notice and the funding source behind the contract.

What is the NUTS and structural funds connection?

Regulation (EU) 2021/1060, the Common Provisions Regulation governing EU structural and investment funds for the 2021-2027 programming period, classifies NUTS Level 2 regions into three development categories based on GDP per capita relative to the EU average:

• Less developed regions: GDP per capita below 75% of the EU average. These regions receive the highest ERDF co-financing rates, up to 85% in some cases.
• Transition regions: GDP per capita between 75% and 100% of the EU average. An intermediate co-financing rate applies.
• More developed regions: GDP per capita above 100% of the EU average. A lower co-financing rate applies, typically 40-50%.

This classification is updated with each programming period (the current period runs 2021-2027) based on the latest Eurostat GDP statistics at the NUTS Level 2 level. A region that was "less developed" in 2014-2020 may graduate to "transition" status in 2021-2027 if its economy has grown relative to the EU average, changing both the co-financing rate and the total allocation it receives.

The Cohesion Fund provides additional investment in member states (not regions) whose Gross National Income per capita is below 90% of the EU average, covering transport infrastructure and environmental projects in the less wealthy member states. The Just Transition Fund, introduced for the 2021-2027 period, targets specific NUTS Level 3 areas heavily dependent on fossil fuels.

Why NUTS and structural funds matter for bidders

Understanding which NUTS Level 2 regions fall into which development category gives bidders commercially valuable intelligence about where large public investment programmes will be active throughout the programming period.

Higher co-financing rates mean larger budgets. In less-developed NUTS 2 regions, EU grants may cover 70-85% of project costs. This means national and regional authorities can procure more, or procure larger projects, than their own budgetary resources would permit. Regions like eastern Poland (PL81, PL82, PL84), Bulgaria (BG31-BG42), Romania (RO11-RO42), and parts of Greece (EL51-EL65) attract the highest co-financing rates and correspondingly large procurement pipelines in transport, environment, digital infrastructure, and social services.

Structural fund contracts have specific procurement conditions. Contracts co-financed by EU structural funds must comply with EU procurement directives (even for below-threshold contracts in some programme documents), and are subject to additional audit and verification requirements by the European Commission and national audit bodies. Suppliers performing these contracts should expect more rigorous contract management and documentation requirements than on purely nationally funded contracts.

Programming documents as a forward-looking pipeline. Each member state publishes Partnership Agreements and Operational Programmes at the start of each programming period, describing how EU structural fund allocations will be deployed by NUTS region and by thematic objective. Reading these documents gives a multi-year view of where major procurement activity will occur before individual tenders are published. Bidders entering a new regional market can identify priority sectors years ahead of actual notice publication.

Example

A civil engineering firm evaluating expansion into Central and Eastern Europe reviews the ERDF allocations for Poland's 2021-2027 programming period. Using the Eurostat regional development classification table, it identifies that the NUTS Level 2 regions of Podkarpackie (PL82) and Lubelskie (PL81) are less-developed regions with very high ERDF co-financing rates. The firm then reviews Poland's Operational Programme for Infrastructure and Environment, which describes a multi-billion euro programme of road, rail, and environmental infrastructure projects in those NUTS regions. Armed with this intelligence, the firm targets framework agreements with the Polish General Directorate for National Roads and Motorways for works in those regions, knowing the pipeline is backed by committed EU funding.

Frequently Asked Questions

Does EU structural fund co-financing automatically appear in TED notices?

Contract notices for co-financed projects must indicate the source of EU funding in the relevant notice field on TED. The eForms notice format includes a "Project financing" field where contracting authorities disclose whether the contract is partly or fully EU-funded and identifies the relevant fund. Filtering TED for EU-funded notices in a specific NUTS region is therefore possible, though not all authorities complete this field consistently.

Can a NUTS Level 2 region lose its "less developed" classification mid-programming period?

No. Regional classifications are set at the start of each seven-year programming period based on statistics covering the preceding years, and they remain fixed for the entire period. A region classified as "less developed" for 2021-2027 retains that status and its associated co-financing rates until 2027, regardless of how its economy performs during the period.

Do structural fund allocations affect contract values that appear in TED award notices?

Yes, indirectly. Contracts co-financed at 85% require national authorities to provide only 15% from domestic budgets, allowing authorities to commit to contract values that would be impossible on domestic resources alone. This can result in notably higher contract values in less-developed NUTS regions compared to equivalent contracts in more-developed regions funded entirely from national budgets.