Helping local authorities work with investors on the energy transition

Through Innovate UK’s Net Zero Living Programme, places have been adopting innovative approaches to help them move faster from project planning to delivery, turning ideas into investable propositions. Throughout the programme, City Science and the financial advisory firm BwB have acted as expert partners, providing support on finance and investment.

To conclude our month focused on local net zero planning and attracting investment, Lucy Champ of City Science reflects on her experiences helping local authorities to engage with investors, including a dedicated engagement event.

For further insights, take a look at our paper, Investing in Places, and listen to the podcast with investor Louise Wilson from Abundance and Christine Zhou from BwB.

The Challenge

The UK needs more than £1 trillion of additional investment to meet its climate commitments by 2050 (UKRI/PwC). The public purse alone will not be able to deliver this, so engaging with investors is crucial. It is essential to bridge the gap between local places and investors to ensure that finance can flow into developing net zero places.

Talking with investors

Early in 2025, Innovate UK, City Science and BwB ran an investor engagement event to give local authorities taking part in the Net Zero Living Programme the opportunity to present to investors and receive feedback on their projects.

The aim was to bridge the gap between local authorities’ understanding of what makes a project investable and investors’ expectations. This opportunity also enabled local authorities to gain experience in creating investable, bankable projects and in understanding the investor perspective.

We felt it was important for places to receive direct feedback from investors. By gaining a better understanding of investors’ needs, places can deliver projects that both meet local priorities and stimulate investment in low-carbon initiatives.

The session was not only an opportunity to present to investors; it was also a chance to learn how to do so effectively, with help from BwB.

BwB supported each of the six places in delivering presentations detailing their projects and their financial figures, and ensuring they included an ‘at-scale’ opportunity.

Conveying the bigger picture

The ideal of creating an at-scale opportunity was where the greatest development occurred during the day. Places undertaking innovation projects often focus on specific locations or pilot sites, but investors want to consider the bigger picture. They typically have minimum spend requirements, and to make the due diligence process financially viable, investments must be of a certain size. Therefore, demonstrating an at-scale opportunity is essential.

Working alongside the expert partners, each place developed detailed slides highlighting their project, financial and social returns, and attributes such as key consumers and future demand.

A diversity of projects

The projects presented varied widely, from renewable energy to heat-as-a-service models to large-scale infrastructure initiatives such as heat networks. They included:

• Gwynedd County Borough Council: Developing a heat and power community energy services company by integrating a heat pump with a hydroelectric plant.
• Blackpool City Council: Establishing a data centre with immersion cooling, capturing waste heat for a district heating network.
• Rossendale Borough Council (the Net Zero Terrace Streets project): Retrofitting terraced housing with shared ground-loop heat pumps and solar PV provided via a community interest company. The initial pilot covers 10 homes, with a UK-wide scaling opportunity driven by energy efficiency and carbon credit sales.
• Warrington Borough Council: Social housing development to repurpose brownfield sites for 146 affordable, energy-efficient units.

Investor feedback

The investors attending on the day were diverse, ranging from Amber Infrastructure to the National Wealth Fund, to Phoenix Group. Because of this, the places represented were split into two rooms, so that they could talk with investors whose interests best aligned with the technologies and assets being presented.

The session allowed places and investors to share thoughts, offer advice, and network. The presentations were well received and attracted the interest of several investors, opening future discussions.

Some key areas of advice offered by investors were;

• Ensure that risk is reduced by assessing any long-term contracts, such as power purchase agreements and evaluating real-world prices.
• Ensure that asset ownership is clear when creating contractual retrofit models, again to reduce finance risk and owner liability.
• Small scale procurement can be harder to source than large scale procurement when analysing costs.

Alongside constructive feedback, investors were complimentary. One investor attending from a commercial bank highlighted that certain projects were more developed than other local authority projects that come across his desk.

To conclude

While this session was an exciting start to bridging the gap between places and investors, there are more exciting opportunities to come. The DESNZ-funded Local Net Zero Accelerator Programme is also working to bridge the gap through strategic partnerships, and the National Wealth Fund is building its advisory services to now offer strategic partnerships as well. Through offering support and advisory services to increase local authority capacity and ability, we can build momentum and help to bridge the £1 trillion gap to net zero.

Related content

Our investment podcast delves further into these exciting opportunities. Host Poppy Maltby of Regen discusses with Louise Wilson from Abundance Investment and Christine Zhou from Bankers without Boundaries how local authorities can engage successfully with investors.

Our insights paper, Investing in Places, draws together further key insights and project case studies, discussing how places are strengthening local net zero planning, building better investment pipelines and mobilising finance.