Local and Combined Authorities across the UK are increasingly exploring regional funds to accelerate delivery of Net Zero goals. Bankers without Boundaries delivered an insight on Blended Finance Regional Funds for Net Zero, via our partnership as the Finance and Investment Technical Assistance Provider on IUK’s Net Zero Living Programme. It sets out how such funds can be designed and operated to mobilise capital at scale for local climate priorities.
The guidance not only outlines the mechanics of blended finance funds but also shares real-world case studies showing how this approach has been successfully applied in practice.
What is a Regional Net Zero Fund?
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. Its distinctive feature 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 sectors such as:
- Energy
- Transport
- Real estate
- Waste
- Agriculture
By blending public and private capital, these funds ensure that projects are not only adequately financed but also aligned with local policy objectives
How the Funds are Structured
The report explains that funds are typically organised around:
- A clear mandate – defining sectors, themes, and risk profiles.
- Capital deployment tools – grants, loans, bonds, and equity to finance businesses and projects.
- Governance arrangements – ensuring transparency and accountability.
- Operational management – management and administrative fees to sustain fund activity.
Local Authorities play a pivotal role, whether as convenors who bring stakeholders together or as active developers shaping the pipeline. Their leadership is essential to align interests and kick-start the fund development process.
Learning from Case Studies
The guidance highlights proven models such as the:
- London Energy Efficiency Fund.
- Mayor of London’s Energy Efficiency Fund.
- Green Growth West Fund.
These examples demonstrate how public cornerstones, specialist fund managers, and blended structures have successfully mobilised investment into regional pipelines.
Key Findings
The insights highlight three pre-conditions for viability:
- A cornerstone investor to anchor the fund.
- A credible fund manager with the right expertise.
- An investable pipeline of projects ready for capital.
In addition:
- Technical assistance and advisory support are essential to bridge the “valley of death” in project development.
- Case studies show that when these elements come together, regional funds can effectively unlock blended capital for Net Zero.
Call to Action
If you’re a Local Authority leader, policymaker, or investor, now is the time to explore whether a Regional Net Zero Fund could be the right approach for your area. By doing so, you can play a crucial role in mobilising capital, accelerating decarbonisation, and delivering a more sustainable future for your community. Read the full insight here: