07 – Indirect Costs

This budget line includes current costs that cannot be attributed to a particular activity but are necessary for the progress of the Project. This includes all costs of a structural, administrative, technical, and logistical nature which are transversal to the functioning of the Beneficiary’s various activities and therefore cannot be charged directly to the Project.

Examples include – but are not limited to – maintenance costs, insurance costs, office equipment, costs related to services such as administrative and financial management, human resources, legal advice, etc.

However, the FNR will cover a fixed proportion of the Project funding, limited to a maximum of twenty-five percent (25%) of the direct eligible costs, without considering subcontracting. These indirect costs will be adjusted to the effective rate of the Party concerned, if less than twenty-five percent (25%).

In accordance with the principle prohibiting double financing (cf. section 2.3. in Section 2), a beneficiary receiving a financial subsidy or contribution from the State that is covering operating costs must be able to demonstrate cost separation, i.e. that the indirect costs charged to the FNR are not covered by the State grant or subsidy.

Indirect costs are not eligible for reimbursement if the Beneficiary is a public administration.

Annex 3 outlines the funding instruments that can benefit from the maximum coverage of twenty-five percent (25%) of indirect costs. The FNR reserves the right to modify this maximum rate of coverage.

How are indirect costs calculated?