"Promoting the better use and supply
                  of energy to counter climate change"

Widespread investment is required in renewable energy generation infrastructure to enable the UK to move towards its carbon reduction targets. Such a transition requires a motivating force behind it – something or someone with the initiative to get things started, the passion to drive it forward and the determination to see it through to a successful conclusion.

We see communities across the UK as critical change agents for this transformation.  Our vision is for community-led renewable energy projects providing visible and tangible projects around which communities can congregate, form collaborations and work together to achieve.  Furthermore such projects will provide an environmental, social and financial legacy for future generations.

We know first-hand that demand exists nationwide for them to take on this challenge but it is curtailed by lack of capital together with the necessary support and mentoring.

To address this barrier, the FSE Group and The National Energy Foundation are working to launch the Community Generation Fund, a national-scale initiative which will provide a catalyst for business and local community infrastructure projects.

The Community Generation Fund will be a £15million, 10-year Fund, aiming to provide funding to circa 100 projects nationwide.

It is estimated that these projects will create over 30,000MWh per annum of ‘Green Energy’, equal to the energy needs of around 8,000 UK households and equating to a saving of 13 million tCO2 per annum.

FSE Group "FSE" is a not-for-profit entity and an FSA-authorised Fund Management group which administers institutional & angel equity, mezzanine loan and bespoke commercialisation support schemes. FSE specialises in developing and operating creative fund structures, and is uniquely positioned to help growth businesses achieve their potential through direct investment, together with a range of professional support and advice.

The Fund will provide funding at pre and post planning-consent stage, via a 2-tier structure:

1. Feasibility Loan:

Typically the most significant barrier to community led projects is lack of capital in the pre-planning/feasibility stage, which often results in a project never getting off the ground. 
This part of the loan will provide funding for various environmental, technical and other studies as well as design refinements required to achieve final planning consents/licenses.
It will be a contingently repayable bridging loan, funding 50-75% of the pre-planning feasibility costs :
If the project does not proceed, the loan will fall away. If the project succeeds with planning consent, the loan is repayable (plus exit/success premium)

2. Construction Loan

This part of the loan will provide funding for the construction/commissioning costs of projects that will result in a long-term operational renewable-energy generating, or carbon-emission reducing, entity. 

It will be a long-term “mezzanine” loan funding 50-75% of the funding gap between bank debt and total construction costs (including the feasibility loan repayment)

The Fund will periodically refinance these loans to 3rd parties, enabling the cash in the Fund to be applied to more new community projects.

Funding will only be provided to projects where primary economic ownership of the project remains with the community, so that in turn, surplus cashflows can be reinvested in the community.

Discussions are currently underway with interested investors into the Fund, which is likely to include charitable foundations as well as private sector corporate groups which are dedicated to supporting  reduction in UK carbon emissions and to engaging with local communities.

For more information on the fund,  please email communities@nef.org.uk.