E3G worked with UK100, Pollination, Catapult Energy Systems and UK Cities Climate Investment Commission to support the UK Infrastructure Bank’s development of its Local Authority Advisory Service.
The Bank will play a central role in accelerating the rate of net-zero investment across the UK and addressing the capacity and funding constraints faced by Local Authorities. Building the Advisory Function as quickly as possible, and working closely with other providers of finance and guidance, will be critical to maximising the Bank’s overall impact.
Recommendations for the Bank when building the Advisory Service
- Work with BEIS and Net Zero Hubs to develop funding solutions and aggregate place-based approaches to Net Zero investment that build local development capacity.
- Consider its role in project development as a provider of finance, and mirror actions played by other leading public investment and development banks.
- Shape its Local Authority financing capacity to ensure this complements existing Local Authority financing resources to encourage NZ investment.
- Work with sources of government patient capital and private sector providers of capital to develop financing solutions
- Use its industry knowledge, public sector standing and financing expertise to develop solutions that address the risk aversion of Local Authorities.
- Share its market knowledge to inform future policy and regulation development, and to help ensure that government policy and investment remain consistent over time.
- Use its market experience and its central position in providing finance and advice for net-zero investment to share best practices with Local Authorities.
What is required from the Bank’s Advisory Service
- Critical friend support. The Bank’s advisory service should act as the central body convening project proposals from Local Authorities in the UK and the place where market projects go to gain advisory information, guidance and financing advice.
- Understanding long term project financing. The advisory service should develop knowledge of project finance requirements to allocate capital, provide financing expertise and help shape business model solutions to attract private investment.
- Invest in complex/multi-vector projects to enable the development of market-leading net-zero technologies, risks and solutions.
- Support for initiating and getting projects off the ground through complementing the work of other government initiatives and issuing public calls for proposals from LAs.
- Providing capital for investment in projects that open heat, waste, and natural markets.
- Support new governance structures and business model insight to allow novel businesses to establish bankable net-zero projects.
- Help Local Authorities commercialise their investments to generate revenue streams compatible with their public sector obligations, and develop expertise to secure the ‘best value’ outcomes for Local Authority partnerships.
- Make the case to Government regarding Local Authority capacity needed to develop and deliver net-zero investment.
- Work with Net Zero Hubs to ensure optimal deployment and use of public sector resources to accelerate net-zero investment.
- Share best practices for supporting Local Authority investment in net-zero projects.
Read the Letter to Mr. John Flint, CEO of UK Infrastructure Bank here.
Read the briefing in full here.
