Topic of the month

Financing solutions for local climate and energy plans

Financing climate action at the local level often poses major challenges for municipalities. Limited budgets, low creditworthiness or lack of technical capacities and personnel are among the problems municipalities are facing. Climate Alliance supports its members in this jungle of challenges. The Working Group on Financing facilitates an exchange with experts and municipal representatives on these very issues and advocates for solutions that are tailored to the needs of its members. We are also a driving force in numerous EU-funded projects that develop and provide solutions for financing climate and energy plans, such as SCORE or the European City Facility (EUCF).

The latter is now offering municipalities its support in the development of investment concepts for the second time. With funding of €60,000 complimented by further offers, the facility helps promote investments in sustainable energy projects. More than 250 applications from across Europe were handed in during the initial application phase in 2020 and this year, the first municipalities will receive support on the way to implementing their local climate and energy plans. SCORE, on the other hand, demonstrates the positive impact of citizen co-ownership of renewable energy and shows how this inclusive financing approach can be scaled up.

Examples of committed Climate Alliance members illustrate how these different types of support can be put into practice.

Cascais (PT) – Involving citizens
The Portuguese municipality has big plans. In order to achieve European climate goals by 2050, Cascais plans to produce 184 MW of solar energy through photo-voltaic systems based on a community-oriented approach. The project is estab-lishing local energy communities. As a follower city in the framework of SCORE, Cascais is using a financing model that provides for the joint financing and pur-chase of systems by cities, private households and other stakeholders. In Cascais, these energy communities should soon be able to supply most of their energy themselves – together with and supported by the municipality. EUCF’s financial support will enable feasibility studies to prepare this project – from analysing production potential and available technologies to developing one-stop-shops and benchmarking successful financing structures in support of large-scale solar communities. With decentralised energy production and consumption and an approach that strives towards self-sufficiency, the development of innovative smart grids is also being considered within SCORE. 

Rostock (DE) – From the idea to the investment concept
The goal was clear: Rostock is aiming to increase the share of renewable energies in the city and thus set a good example. Solar panels on public buildings should inspire both citizens and businesses to invest in renewable energy. Taking the step from idea to implementation, however, has been a challenge. How, for example, can current urban solar panel distribution and capacity best be analysed? How can the legal framework of the planned projects be defined? With the support of the EUCF, Rostock can now tackle this hurdle. As one of the facility’s first beneficiaries, the city will receive the funding amount of €60,000 to clarify open questions, mould its idea into a concept and thereby enable comprehensive investments. For Rostock, the simple application process, the pre-financing of 70% to allow for an easy project start and the freedom to decide how to use the funds were major benefits of EUCF’s support.

Such municipal examples show how financing solutions can help kick-start local climate and energy projects. Climate Alliance offers guidance in this complex field with a number of offers for its members. The next meeting of the Working Group on Financing will take place on 11 June. All interested Climate Alliance members are invited to participate.

Register now for the next meeting of the Working Group on Financing!

In addition, Climate Alliance is currently supporting the second European City Facility call for applications. Municipalities from across Europe can apply for the EUCF support by 30 May 2021 and thus bring their local climate action plans one step closer to successful implementation.

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written April 2021