Set up by the EU and managed by the Executive Agency for Competitiveness and Innovation (EACI), the IEE is the EU's means of funding action to improve market conditions so as to encourage the use of renewable energy sources and improve energy efficiency. 

The IEE funds: project which aim to have a significant impact on the market, including areas such as knowledge transfer between areas of the EU, assisting different organizations in gaining a better understanding of each other, building confidence and understanding of the market.
The IEE does not fund: research, technology development, and hardware investments, or isolated single actions at national level.

By mid-2008 the IEE had was involved in over 400 projects and had supported the establishment of 60 new regional energy agencies.