The rationale behind
On our journey towards a successful implementation of the Paris Agreement and the EU’s strategic vision for carbon neutrality by 2050, we need to mobilise a significant amount of finance and private investments.
Municipalities, local authorities and their groupings have a tremendous potential for building substantial pipelines of investment projects across Europe and they also play a key role in aggregating smaller projects into sizeable packages.
Despite this potential and their great commitments to significantly reduce their energy consumption and greenhouse gas emissions, municipalities, local authorities and their groupings face financial constraints, as well as a lack of capacity to access the right financing when trying to realise their ambitious climate and energy plans.
Overcoming financial barriers
European local authorities and their groupings have made great commitments to significantly reduce their energy consumption and greenhouse gas emissions. However, when trying to realize their ambitious climate and energy roadmaps, they often face financial constraints, as well as a lack of capacity to access the right financing.
Europe´s sustainable energy transition is driven by its municipalities, local authorities and their groupings. With tremendous potential to build comprehensive sustainable energy investment programmes, they play a key role in pooling smaller projects into larger investment portfolios and in mobilizing significant financial resources for the energy transition. The EUCF will bridge the gap and unlock the local potential to enable municipalities in Europe to develop relevant investment concepts.
The EUCF addresses these two fundamental barriers to fill this gap:
- Limited financial and legal capacity of local authorities to transform their long-term energy and climate strategies (e.g. SEAPs, SECAPs etc.) into appropriate investment concepts.
- Lack of aggregation of fragmented smaller projects (for example in the building sector) and thus lack of attractiveness for the financial sector.
How does the EUCF help overcoming barriers?
Limited human resources and capacities:
- Simple and fast-track application process
- Strong technical and financial expertise and support in local language
- Easy access to pool of EU experts, investors, financiers and other key actors
- Benchmarks and standardised investment packages
Lack of experience in using innovative financial instruments and developing ‘bankable’ sustainable energy projects and investment packages:
- Capacity building on blending of funds, innovative financing schemes, procurement, climate mainstreaming in municipal budgets, etc.
- Communities of practice, access to experienced experts
- Financial support to develop investment concepts and to prepare sustainable energy projects for financing
Reluctance to invest in project preparation:
- Financial support for pre-feasibility studies, in-house and external expertise
The lack of experience with developing investment packages and pooling sustainable energy projects:
- Capacity building on prioritisation of investments
- Supporting multi-level governance approach at the pre-application stage