Project Partners
Cambridgeshire County Council, Cambridge City Council, South Cambridgeshire District Council, East Cambridgeshire District Council, Huntingdonshire District Council, Cambridgeshire & Peterborough Combined Authority
Excerpt
CANFFUND explores innovative financing mechanisms and whole-system approaches to overcome barriers in funding Cambridgeshire’s transition to net zero, focusing on energy and transport decarbonisation.
Overview
The Cambridgeshire Net Zero Financing Framework for Whole System Change (CANFFUND) project, funded by Innovate UK, aimed to develop a comprehensive financing framework to accelerate the county’s transition to net zero. The project focused on addressing financial barriers across multiple sectors and stakeholder groups, with a target of mobilising approximately £700 million annually in local climate investment.
Our scope included
- Analysing current financial flows in Cambridgeshire to identify opportunities for redirecting funds towards net zero objectives.
- Developing a mission-based approach aligned with Local Area Energy Planning (LAEP) to address specific financing needs in areas such as domestic retrofit, heat sources, transport, and local generation.
- Conducting extensive stakeholder engagement through workshops with public sector, investment sector, business sector, and consumer sector representatives.
- Identifying key barriers to financing net zero initiatives, including lack of upfront analysis funding, insufficient incentives, and skills gaps.
- Proposing innovative solutions such as a dual interest rate system, retrofit pipeline guarantees, and community energy funds.
Outcomes
Through delivery of this commission we outlined:
- Significant opportunities to redirect existing financial flows from fossil fuel-dependent systems to low-carbon alternatives.
- That a whole-system approach, addressing both supply and demand side challenges, is crucial for successful implementation.
- Each mission area (e.g., domestic retrofit, transport) required tailored financial approaches due to unique technical and financial characteristics.
- Community energy projects at village, neighbourhood, and street levels can build demand and open new financing opportunities.
- Skills development is crucial for both the supply and demand sides of zero carbon initiatives.
- A clear framework aligning central and local government ambitions is needed to improve investor confidence.
Potential Future Initiatives/ Innovations
- Create an upfront analysis and development fund to address critical barriers in early-stage project development.
- Implement a dual interest rate system to incentivise green lending and investment.
- Develop a retrofit pipeline guarantee to build supply chain confidence and skills.
- Establish a local pension delivery fund for sustainable infrastructure investments.
- Conduct investment-grade analysis for whole-county decarbonisation pathways.
- Develop a framework between central and local government to align net zero delivery and funding.
- Support community energy projects through skills development, financing, and procurement mechanisms.
By leveraging these comprehensive strategies and innovative financing mechanisms, CANNFUND could create a replicable and scalable model for financing net zero transitions that can be adopted by other local authorities across the UK.
