About the European City Facility

The EUCF is a European initiative to support municipalities/local authorities, their groupings, as well as local public entities aggregating municipalities/local authorities across Europe to develop investment concepts to accelerate investments in sustainable energy. In form of a EUR 60,000 grant, the EUCF finances services and activities to support the development of investment concepts, such as (technical) feasibility studies, market analyses, stakeholder analyses, legal, economic and financial analyses, risk analyses and further supporting tasks. The grant is not meant to directly finance investments. It is used to access services and develop an investment concept, which might become a door-opener for many follow-up investments (such as from ELENA, to PDAs to private investments).

Facing the gap

Municipalities, local authorities, their groupings and local public entities aggregating municipalities/local authorities have made great commitments to significantly reduce their energy consumption and greenhouse gas emissions. However, when trying to implement their ambitious climate and energy action plans, they often face financial constraints, as well as a lack of capacity to access the right financing. The EUCF steps in here and supports them to transform their climate and energy action plans into real investment in developing credible, robust and sufficiently mature investment concepts. Such concepts, which should include the identification of potential project pipelines, legal analyses, governance analyses, basic financing strategy, and roadmaps for implementation, are a prerequisite to accessing different sources of funding.

Bridging the gap

Municipalities, local authorities and their groupings as well as local public entities aggregating municipalities/local authorities have a huge potential to drive the energy transition in Europe. With tremendous potential to build comprehensive sustainable energy investment programmes, they can play a key role in pooling smaller projects into larger investment portfolios and in mobilizing significant financial resources for the energy transition. The EUCF will bridge the gap and unlock this local potential to enable municipalities/local authorities and local public entities aggregating municipalities/local authorities in Europe to develop relevant investment concepts.

The initiative bridges two fundamental barriers for sustainable energy investments at the local level:

• Lack of financial and legal capacity to transform local long-term energy and climate strategies (e.g. SEAPs, SECAPs etc.) into appropriate investment concepts.
• Lack of aggregation of fragmented smaller projects (for example in the building sector) and thus lack of attractiveness for the financial sector.

The ultimate objective is to build a substantial pipeline of sustainable energy investment projects across municipalities, local authorities and local public entities aggregating municipalities/local authorities in Europe. Delivering this will require organisational, technical and financial innovation, in particular to bridge the capacity and capability gap for small and medium-sized municipalities.  

The specific objectives of the EUCF are to:

• Provide hands-on locally rooted technical and financial expertise, inspired by ‘best in class’ European practice, to municipalities, local authorities and local public entities aggregating municipalities/local authorities to deliver credible and scalable investment projects, which should trigger public and private investment;
• Build the capacity of municipal staff to develop substantial project pipelines and provide them with tools, networking and knowledge transfer opportunities, which will facilitate and accelerate the IC implementation, including via innovative financing mechanisms and project aggregation.
• Facilitate access especially for small and medium-sized municipalities, to private finance, EU funding streams and similar facilities, such as the European Structural and Investment Funds, EU Project Development Assistance programmes and the European Investment Bank’s (EIB) European Local Energy Assistance) and advisory services such as the EIB Advisory Hub to realise and amplify the expected investments.
• Use the successful investment concepts and the knowledge of EUCF beneficiaries to reach out to more than 10,000 local governments, encourage replication and catalyse further action across European cities.