Revision of EU Cohesion Policy paves the way for new investments

With this mid-term review, the regulations governing the European Regional Development Fund (ERDF), the Cohesion Fund, the Just Transition Fund (JTF) and the European Social Fund+ (ESF+) have been amended. 

Key priorities and eligible areas

The new guidelines open the door to investments in areas that were previously overlooked, namely:

• Defence and security, including the possibility of financing dual-use infrastructure or military mobility needs. 
• Affordable housing, covering social housing or housing for middle-income families — a concrete response to the housing crisis in many Member States. 
• Energy transition and decarbonisation, with support for modern energy infrastructure, promoting environmental sustainability. 
• Water resilience and water management, as well as modern urban infrastructure, access to water, and adaptation to environmental and climate challenges. 

Flexibility and incentives for Member States

To encourage the adoption of these new priorities, the approved package provides for:

• Greater flexibility in eligibility criteria and use of funds. 
• Pre-financing bonus and up to 100% of EU eligibility for programmes that dedicate at least 15% of the allocation to the new priority areas — accelerating the launch and implementation of projects.
• The possibility of reprogramming funds earmarked for 2026–2027, paving the way for investments in the short term.

Impact on Member States and regions (e.g. Portugal)

For countries such as Portugal — one of the largest beneficiaries of cohesion funds — the review represents a significant opportunity. With the reform, it will be possible to channel funds into affordable housing, energy and water infrastructure, urban regeneration, and even initiatives related to defence or civil security, depending on eligibility. 

From an economic and social perspective, these changes can help address pressing needs: reducing the affordable housing deficit, promoting energy transition, modernising infrastructure and increasing the resilience of regions — especially the most fragile ones.

What changes now?

• Member States will be invited to reprogramme part of their 2021–2027 cohesion funds to align with the new priorities. 
• New funding programmes could emerge as early as 2026, covering areas previously outside the main focus of cohesion. 
• For potential beneficiaries — municipalities, companies, the social sector, associations, investors — this represents a window of opportunity to apply for funding for housing, infrastructure, energy, and even defence/civil security projects, provided they meet the criteria.

Conclusion

With the mid-term review of the EU Cohesion Policy, the Union is adapting its financial instruments to the new reality: climate crises, geopolitical challenges, housing crisis, urgency of the energy transition. The shift in priorities opens up new funding opportunities — more flexible, more comprehensive and better aligned with the current needs of Europe and Member States.

For those who follow finance, economics, regional development or seek European funding for specific projects, this is an important moment: the balance between tradition (social and territorial cohesion) and renewal (defence, energy, housing) may mark a new phase of investment and modernisation.