One pre-financing (upon entry into force of Grant Agreement) 160% x Total Budget for 1st year or period
Followed by interim payments calculated on last period cost times funding rate (as was in FP5).
Interest on pre-financing - the guidelines for FP6 were clear that bank interest earned by the coordinator on pre-financing monies is a receipt of the project. However under FP7 if the capital amount is less than 50,000 Euro (amount to be confirmed) the interest on it will not be regarded as income to minimise bureaucracy. However, interest earned by beneficiaries once the pre-financing has been transferred to them is never regarded as a receipt.
The pre-financing provided to the beneficiaries remains the property of the Commission until reimbursed. The pre-financing will be spent continuously from the moment it is transferred until the financial statement is accepted. On the other hand, the principle of co-financing also means that the beneficiaries should notionally draw from the pre-financing and from their own resources during each period.