Green Funding & Finance Finder

Provided funding can be a combination of private capital, public grants and subsidies, revenue-generating assets, and savings from energy efficiency.

Funding can support renewable energy installations, retrofit programmes, EV infrastructure, circular economy initiatives, and local climate resilience projects. Often includes technical assistance and community engagement support.

Some schemes require match funding or community fundraising. Local authority partnerships may unlock additional support.

Strand 1

• Total fund: £25m
• Min £100k, Max £1m
• At least 5% partnership funding from other sources

Stand 2

• Total fund: £60m
• Min £1m, Max £10m
• At least 10% partnership funding from other sources

Activities must start between 1 April 2026 and 1 July 2026. Activities must end no later than 31 March 2029

Activities must start no earlier than 1 April 2026 and no later than 1 July 2026. Activities must end no later than 31 March 2029

• For grants £50k to £500k, 5% of total project costs must come from other sources
  For grants between £500k to £5m, 10% of total project costs must come from other sources.

Activities must no start any earlier than 17 April 2026 and must be completed by 31 March 2029

There are three eligibility pathways:

Pathway 1: Households which reside within Indices of Multiple Deprivation (IMD), Income Deciles (ID), and/or 1-2 areas – a list of eligible postcodes is provided on gov.uk alongside this guidance.

Pathway 2: Households which can demonstrate receipt of a specified means-tested benefit or that they are eligible via route two of ECO Flex.

Pathway 3: Households with an annual gross income below £36,000 or the ‘after housing costs’ threshold in line with our published equivalisation tables (which are dependent on household composition). There is a cost cap of £15k per home for energy performance upgrades. £15k per home for low carbon heating. Cost caps can be averaged across a project and must be met by project closure.

Guidance was updated on 15^th June to reflect that landlords who have low-income tenants that meet the household eligibility criteria (i.e. Private Rented Sector), can now access grant funding.

There are currently four types of Green Bonds (additional types may emerge as the market develops and these will be incorporated in annual GBP updates):

• Standard Green Use of Proceeds Bond: a standard recourse-to-the-issuer debt obligation aligned with the GBP.
• Green Revenue Bond: a non-recourse-to-the-issuer debt obligation aligned with the GBP in which the credit exposure in the bond is to the pledged cash flows of the revenue streams, fees, taxes etc., and whose use of proceeds go to related or unrelated Green Project(s).
• Green Project Bond: a project bond for a single or multiple Green Project(s) for which the investor has direct exposure to the risk of the project(s) with or without potential recourse to the issuer, and that is aligned with the GBP.
• Green Securitised Bond: a bond collateralised by one or more specific Green Project(s), including but not limited to covered bonds, ABS, MBS, and other structures; and aligned with the GBP. The first source of repayment is generally the cash flows of the assets.

Unpublished

Clients should be open to third party ownership and be able to sign a long-term contract of 10+ years. Project sponsors are not required to secure any upfront finance, but rather pay for the support ‘as a service’ through regular payments over an agreed timeframe.

Unpublished

MEEF can fund up to 100% of the capital cost of a £0.5 million+ project and part fund large scale regeneration projects that will have low carbon credentials. Projects supported by MEEF should aim to deliver energy savings (kWh) from the Energy Conservation Measures (ECMs) of at least 20% and an annual CO₂ reduction of one tonne for every £7,000 of investment

The Fund offers loans with flexible terms at interest rates agreed on a project-by-project basis, at or below Public Works Loan Board (PWLB) prevailing rates. For organisations with access to PWLB, the GFF offers loans with flexible terms at interest rates of at least 20 basis points below the PWLB prevailing certainty rates.

Loans must be used for capital expenditure. Projects operational within three years will be prioritised. Projects must meet a set of gateway criteria related to carbon savings and climate impacts, that are described in the detailed guidance document.

Two types of loans (according to interest rate) are available: Fixed rate loans and variable rate loans.

Local authorities can apply directly at any time as long as they:

• demonstrate that the borrowing supports an eligible project
• specify the amount required
• specify the type and duration of the loan
• specify the concessionary rate that the borough wishes to use
• include a three-year capital plan.

Your Section 151 officer will need to confirm that borrowing does not include projects primarily undertaken to generate income.

Market leading interest rate (40 basis points lower than Public Works Loan Board in most cases) with no arrangement or commitment fees payable by the borrower.

Projects are prioritised based on their alignment with strategic objectives, the likelihood of their success and their ability to positively contribute to the intended outcomes. There is also consideration for the level of ambition of a project and whether it could offer innovative solutions that can be replicated by other local authorities.

In a third party delivery model, the Project Sponsor relinquishes control over the project’s delivery to a private sector third party. The private sector body takes on the responsibility of funding, constructing and operating the project. While this reduces the risk for the Project Sponsor, it also means the Project Sponsor has less direct control over the project outcomes and benefits less from the financial rewards of the project. This model can be beneficial if the Project Sponsor lacks the resources or expertise to undertake the project themselves.

When delivered via the Abundance Investment platform, LCBs are priced at least 20-30 basis points below Public Works Loan Board prevailing certainty rates for a five year term.

Community Municipal Investments (CMI) provide an opportunity to engage local communities while diversifying sources of funding. To deliver a CMI, councils can partner with Abundance. West Berkshire, Warrington, Islington, Camden, Cotswold, Telford & Wrekin, Westminster, Lewisham and Hammersmith & Fulham raised an average of between £0.3 – £5m with an investor return of 1.2% – 4.85%.

HNDU grant funding will fund 100% of the estimated eligible external costs of heat network development studies. There will be no match funding requirement in general as part of the application process; in specific circumstances the Department for Energy Security and Net Zero (DESNZ) reserves the right to specify a matched funding contribution. HNDU grant funding can also provide up to 100% of the cost of estimated externally procured project management support for public sector applicants and registered social landlords only.

Applicants will need to demonstrate that they have a need for this resource, and source indicative quotes from the market.

The Heat Networks Delivery Unit (HNDU) provides support to local authorities in England and Wales through the early stages of heat network development, including:

• techno-economic feasibility
• detailed project development.

HNDU support does not provide funding for commercialisation costs and costs associated with the construction, operation and maintenance of a heat network. The Unit’s popularity has meant further funding has been made available beyond the initial £288 million to support organisations in the public, private, and third sectors in England. The additional funding can be drawn down in financial years 2024/2025 through to 2027/2028.

A two-stage application process is now in place for Round 15 (1. Expression of Interest & 2. Detailed Assessment)

The fund covers:

• capital funding to support chargepoint delivery
• capability funding to ensure that local authorities have the staff and capability to plan and deliver charging infrastructure

The LEVI Fund has two main objectives:

• deliver a step-change in the deployment of local, primarily low power, on-street charging infrastructure across England
• accelerate the commercialisation of, and investment in, the local charging infrastructure sector.

Applicants must show that the majority of chargepoints will benefit residents who do not have off-street parking. This could include:

• residents using local authority supported car clubs
• commuting residents.

Projects can apply to HNES for either revenue grant funding or capital grant funding:

• Revenue grants are to fund procurement or mobilisation of external third-party support to carry out optimisation studies. These studies will assess heat network projects to identify causes of sub-optimal performance and recommend costed intervention or improvement measures. The funding can provide up to 100% of eligible project costs for these types of grant applications. HNES will typically fund between £15,000 and £24,000 (incl. non-recoverable VAT if requested in the application form) for each revenue (Optimisation Study) application, depending on the scale of each project for which the application is made.
• Capital grants are to fund part of the delivery (installation) of eligible intervention/improvement measures. The funding can provide up to (but not including) 50% of eligible project costs for capital grant applications. There is no lower limit for capital grant funding bids; however, grant requests over £1 million will be subject to additional Subsidy Control Act checks.
• Applications can be for up to, but not including, £10 million.

Applications are awarded funding on a competitive basis. This means that even if an application meets all the eligibility criteria and scores well, there is no guarantee of a funding award. Funding will be allocated to maximise benefits and will prioritise projects which:

• provide value for money
• address customer detriment (prioritising projects with higher proportions of ‘residential customers in need’)
• address network operational performance (efficiency/ losses)
• deliver carbon emissions savings.

The grant can be up to but not including 50% of the estimated eligible commercialisation and construction costs of the project.

The guidance stipulates that the majority of applications will be for projects that have already undertaken a techno-economic feasibility study and conducted off-taker engagement. The Fund expects an internally approved business case outlining how the project may be procured and financed at this stage.

There are two new routes to access funding under Wave 3: the Challenge Fund and Strategic Partnerships.

Wave 3 includes a cost cap of £7,500 of grant funding per home. This cap can be averaged across homes in an application (including across different consortium members).

There is a £7,500 grant funding cost cap for low carbon heating measures in homes off the gas grid. Up to 10% of homes in an application can access a £20,000 grant fund per home to install low carbon heating measures if they are on the gas grid.

There is a requirement for minimum 50% co-funding for these options.

The Wave 3 delivery window is to run until 30th September 2028. Project grant funding spend must be aligned to the WH:SHF spend profile of 40% in FY25/26, 40% in FY26/27 and 20% in FY27/28.

Wave 3 Challenge Fund applications must include a minimum of 100 eligible social housing properties at EPC band D-G per application. Small social housing landlords (those who own or manage fewer than 1,000 homes) can apply with fewer than 100 homes. Strategic partnership applicants will be expected to propose projects of significant scale, which retrofit thousands of homes.