This insight report outlines how local and combined authorities should consider regional funds as a route to accelerate Net Zero delivery. It outlines how such funds can be designed and operated to mobilise capital at scale for local climate priorities as well as providing case studies to show how it has been done in practice.
Experience Level:
IntermediatePart of: Net Zero Living
Local and combined authorities are increasingly considering regional funds as a route to accelerate Net Zero delivery. The ‘Blended Finance Regional Funds for Net Zero’ insight, developed under Innovate UK’s Net Zero Living programme, outlines how such funds can be designed and operated to mobilise capital at scale for local climate priorities as well as case studies to show how it has been done in practice.
A Regional Net Zero Fund is defined as a structured pool of capital deployed into projects within a specific geography, with Net Zero as its central purpose. The distinctive feature in this case is the use of blended finance, where public investment is strategically applied to attract additional private capital. This model increases the resources available for projects across different sectors such as energy, transport, real estate, waste, and agriculture, while ensuring alignment with local policy objectives.
The report explains how funds are typically structured. A clear mandate sets the sectors, themes, and risk profile. Capital can be deployed through a range of instruments, including grants, loans, bonds, and equity, allowing different counterparties such as businesses or projects to be financed. Governance arrangements ensure transparent decision making, while management and administrative fees cover operational costs. Local authorities may take different roles, from convenors to active developers, but their involvement is vital to align stakeholders and initiate the fund development process.
Illustrative case studies demonstrate the model in practice. The London Energy Efficiency Fund, the Mayor of London’s Energy Efficiency Fund, and the Green Growth West Fund show how public cornerstones, specialist fund managers, and blended structures have delivered investment into regional pipelines.
Contains public sector information licensed under the Open Government Licence v3.0. © Innovate UK. You may use this content (including commercially) under the Open Government Licence v3.0, provided you credit Innovate UK and include the licence link.
Designed to aid Local Authorities in developing robust, evidence-based plans to enable Net Zero.
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