Green energy projects are set to be boosted by the unveiling of a new fund targeting deprived locations in the UK.
A new fund to aid community-led project development has been launched by The Finance South East Group (FSE), and lead partner National Energy Foundation (NEF).
The Community Generation Fund is said by FSE to provide funding support to community energy generation projects that are seen to be able to deliver technical and financial viability as well as ‘social impact’.
An initial £1.25 million of finance is available for up to 75 per cent of pre-planning development costs through open-ended bridging loans, payable only if planning consent is achieved. According to FSE it is hoped the fund will swell in size to reach £15 million on the back of future investment.
Further capital injection worth 75 per cent of post-planning construction costs is to be distributed via term loans with flexible repayment arrangements.
Sally Goodsell, chief executive of The FSE Group, says, ‘This initiative will provide an innovative mechanism to resolve critical barriers… particularly within areas which do not have access to traditional funding or significant local investment capacity.’
According to a statement, all Feed-in-Tariff projects will be considered. The decision is a boost for such projects following the government’s announcement that it was cutting in half subsidies five months earlier than planned.
The UK-wide fund is said by FSE to be directed towards communities falling within the top 50 per cent ‘deprived locations’, as measured by the latest Indices of Deprivation.
FSE and NEF will undertake workshops during March, providing information and bidding opportunities.
Gabby Mallett, head of communities at NEF, adds, ‘Communities around the UK that want to progress their own renewable energy projects have long found that finance has proved to be a serious stumbling block.’
FSE has provided a reported £29 million of funding to enterprises over the last five years, enabling those to earn an additional £95 million in funding.