Stuart Leslie, from the National Wealth Fund, kicked off by introducing his role. Formerly the UK Infrastructure Bank, the Fund was relaunched in October 2024 with £27.8 billion to support the UK’s transition to Net Zero and boost regional growth. Of that, £4 billion is ringfenced for local authorities, with a mix of lending and advisory support.

Its aim? To help councils access funding – and to help them choose the right kind of finance for the job.

Why look at local climate bonds?

The Fund’s work on local climate bonds wasn’t about promoting or dismissing them. Instead, they approached it as a product diagnostic:

• When are climate bonds a good fit for a local authority?
• What are the financial and non-financial benefits?
• How can councils assess whether they’re right for them?

They looked at how the product is working in practice, and where it adds most value – especially in terms of community engagement and visibility, which are harder to quantify but increasingly important.

Key features of the bonds

• So far, 15 councils have issued local climate bonds, raising between £300,000 and £1 million each.
• The bonds can be structured as peer-to-peer loans or bonds, and usually offer interest rates below the Public Works Loan Board (PWLB).
• Investors can choose to donate their interest to boost project impact.
• Currently, the only provider in the market is Abundance Investment, working alongside the Green Finance Institute (GFI).

The National Wealth Fund offers cheaper loans too – but with a £5 million minimum. Local climate bonds fill a different gap: they’re better suited to smaller, community-focused projects.

Stuart’s team ran two workshops in late 2024, with participants from West Berkshire, Southwark, Westminster, the University of Leeds, Abundance, and GFI.
The aim was to understand:

• Non-financial benefits (like trust and engagement).
• What makes a bond raise successful and suitable.
• How to help councils assess impact and iterate over time.

They began to shape a benefits framework to help councils work through the process – from setting objectives and launching a raise, to reviewing its success and applying lessons to the next one.

Insights from the workshops

• Cost still matters – bonds need to offer a competitive return to both investors and the council.
• There’s more admin involved than borrowing from PWLB – but the publicity, engagement, and accountability often outweigh the extra effort.
• Most projects funded this way would have gone ahead anyway – but the bond model can speed things up, generate political momentum, and give projects a stronger community mandate.
• The main benefits are social, not financial – but future raises could be designed to better capture evidence of impact.

They found that councils need to be clear on their objectives, make purposeful decisions around things like interest rates and project choice, and be ready to deliver projects quickly once the funds come in.

The benefits framework

Stuart shared a simple four-stage framework that councils can use:

1. Define objectives – what are you trying to achieve with a climate bond?
2. Design the raise – interest rates, timing, communication strategy, project selection.
3. Deliver the raise and deploy funds – with fast, visible impact.
4. Review and refine – build learning into future rounds.

This helps councils treat each raise as part of a longer-term programme, not just a one-off.

Stuart highlighted that some councils – like Southwark and West Berkshire – are already planning repeat raises, showing how this model can grow into a long-term funding and engagement tool. With more authorities getting involved, this work aims to help them get it right from the start.