€31 Billion of local investment in the energy transition: a funding model that works 

The numbers are out! And they are impressive. The European Cities Facility has just released data from its newly released Impact Dashboard: the first 330 municipalities benefitting from its support are planning a combined €31 billion in sustainable energy investments. Even more striking, €1.2 billion has already been secured. This sends a clear signal: small, strategic EU grants can unlock massive investments in the energy transition at local level. 

Supported by CINEA (the European Climate, Infrastructure and Environment Executive Agency) under Horizon 2020 and the LIFE Programme, and coordinated by Energy Cities, EUCF helps municipalities develop investment-ready concepts in areas such as building renovation, district heating, renewable energy and sustainable mobility. 

As discussions around the next EU Budget intensify, these results make a compelling case: cascade funding mechanisms like EUCF should not only continue but be strengthened and expanded under the next Multiannual Financial Framework (MFF). 

From €25 million to €31 Billion; a proven leverage effect 

EUCF has distributed approximately €25 million in support to over 400 municipalities and local public entities. With this €60,000 each city has developed a robust Investment Concept designed to translate its climate and energy plan into a bankable project. 

Out of 400 beneficiaries, 330 have completed their Investment Concepts, 140 have already submitted monitoring reports and €1.2 billion in investments has been secured within just one year of completion. 

This is only the beginning. As more cities progress through the monitoring phase, the volume of confirmed investments is expected to grow.  

Find out more here and explore the Impact dashboard here. 

Empowering local authorities to convert ambition into investment is key 

The programme addresses a persistent gap: many cities have climate and energy plans but lack the technical and financial capacity to structure projects that can attract funding. By focusing on early-stage project development, EUCF helps bridge the space between local ambition and actual investment. 

As negotiations on the next EU long term budget progress, the success of EUCF sends a clear message: programmes designed around the real needs of local communities can unlock substantial private investment, strengthen regional economies and enhance Europe’s overall competitiveness. 

Yet current proposals for the next MFF reveal important gaps. No clear territorial approach is proposed within the Competitiveness Fund or Horizon Europe, even though local economic development is often a regional or local responsibility. Cities may apply to specific calls, but are not recognised as key beneficiaries and facilitators of competitiveness in a region across the EU budget proposal. 

At the same time, local governments are not embedded in the governance structure of the European Competitiveness Fund. This is a missed opportunity. Ensuring that funds are well targeted and effectively spent requires genuine co-design of the work programmes with local and regional authorities, who are closest to citizens and investment needs. 

Also, the future scale and priorities of the LIFE Programme remain uncertain, as being split across national plans, the EU facility and the Competitiveness Fund could weaken it significantly. Its biodiversity and environment component is particularly at risk.  

In contrast, initiatives such as the EUCF demonstrate what works. Equipping local authorities with the tools to design robust investment strategies and identify bankable projects is fundamental to building resilient and competitive territories. This is also the approach of the investment component of the Climate City Contract developed by the cities of the Mission climate neutral and smart cities.  

Strengthening cascade funding in the next EU Budget 

They also highlight the added value of cascade funding mechanisms, which have proven to be more accessible and less administratively burdensome. Such approaches enable smaller and medium-sized municipalities to participate fully in the energy transition. 

In this context, instruments like the European City Facility play a practical role in making the energy transition happen on the ground, particularly by helping smaller and medium-sized municipalities move from plans to bankable projects.  

As the EU shapes its next budget, these successful tools must be strengthened and scaled up. Every local authority in Europe should be equipped with a clear strategy to finance and unlock the investments needed to build resilience across their communities