From energy funds to match-funding: innovative ways of financing the energy transition at the local level

EU funds are not the only instrument available for cities

With the next budget of the European Union on the way, Energy Cities’ policy intelligence is directing much of its focus on how this budget will allocate more funding for the energy transition. But let’s not forget that EU funds, however important, are not the only instrument cities have to finance their green development. Recently, I came across some interesting cases of cities taking the matter into their own hands. Call it foresight. Call it being forced by necessity. It doesn’t matter: alternative funding is their plan B to make their projects a reality!

You may have heard the news this month: the Mayor of London has launched a £500 million energy efficiency fund (MEEF). The money is meant to support small businesses’ and public-sector organisations’ investment in reducing their bills and cutting carbon emissions. The MEEF is currently the largest public-private energy efficiency fund in Europe. The city partnered with several banks to offer investment for low carbon projects which will help London to become a zero-carbon city by 2050.

Another great example of a city fund is provided by the Dutch Province of Zeeland. The “Zeeland Climate Fund” is financed through CO2 compensations from local companies and organizations. The fund seeks to offset CO2 emissions in the area by supporting projects that have an added value for the community and the regional economy. Participants can fully or partially compensate their own CO2 emissions through the fund by contributing €25 per ton of CO2 emitted. Thanks to the fund, solar panels have been installed on the roofs of municipal schools. This allows cities to improve the sustainability of public buildings and local companies to take a further step towards climate neutrality!

Learn more about this fund on the Renewable Networking Platform website!

Crowdinvesting: putting your money where your mouth is!

Crowdinvesting for renewable energy has become quite common in the last few years. The model is quite similar to crowdfunding: individuals are asked to finance a particular project with a small amount of money but, instead of simply making a donation, they receive a stake in the project and hopefully a financial return. Many platforms exist to manage such projects and communicate with citizen- investors. Crowdinvesting is also thriving these days as it is easier to obtain a good return on investment due to the decreasing costs of renewables.

Krizevci is a small city in Croatia located near the capital, Zagreb. It was the first Croatian city to host a crowdinvestment campaign. Green Energy Cooperative (ZEZ) launched this initiative in cooperation with the city administration and other local partners. They used the micro-loan crowdfunding model to involve the citizens in the sustainable development of the city and install a PV solar plant on the rooftop of the local Development Centre and Technology Park.

The campaign was held at the beginning of June this year. In just 10 days, ZEZ collected around €31,000: enough for the purchase of the necessary equipment and the installation. The average investment was €500 per citizen, and the lowest just €130. The cooperative is paying investors back with a 4.5% fixed interest for the next 10 years, thanks to the income generated by the power production of the solar plant. A nice way for locals to make the most of their savings while contributing to the development of their community! 

Read more about this success story on the Renewable Networking Platform website

From participatory budgeting to match-funding: “Conjuntament!”

Participatory budgeting is a decision-making process through which citizens discuss and deliberate about the use of public resources. It provides residents with the possibility to actually decide which projects the government will fund based on their needs. The city of Barcelona already has experience in this field but recently has decided to go a step further in citizen participation. Last year, in partnership with the platform Goteo and the organisation Barcelona Activa, they launched “Conjuntament” (Catalan for “in cooperation”), a match-funding initiative to finance social projects proposed by citizens.

Through match-funding, the beneficiaries of a grant raise a certain percentage of the money they require, and the grant-providing body generally doubles the amount raised. With “Conjuntament”, which kicked off in March, the city of Barcelona mixed participatory budgeting with crowdfunding: citizens submitted their ideas for the city and if their project was selected, they had to crowdfund part of it. The Goteo Foundation made available a match-funding pool of €94,000 to multiply the donations received.

P2P knowledge transfer

When political will and active communities meet, a lot can be accomplished! In an era of dwindling public budgets, “plan B” stories are popping up all over Europe. Looking at what’s happening in other regions or cities and learning how they mobilise the resources they need can be an important first step toward bridging the gap and changing the local energy system.

That’s exactly what the EU-funded project PROSPECT is about: peer-to-peer learning for regional and local authorities in order to finance and implement their sustainable energy and climate action plans. The programme builds upon successful innovative financing schemes implemented in cities and regions in the European Union, in the hope of inspiring and supporting others to launch their own.

PROSPECT is currently looking for mentors, i.e. experienced cities, for its second learning cycle!

Cities will be able to share their knowledge and exchange during webinars, study visits and workshops. Mentee registration will begin on 3 September 2018. Visit the project website and discover how to take part in the programme.


Publication date

July 26, 2018