LIFE facilitating sustainable energy investments in European cities

As climate change manifests in various ways across Europe, from flooding to droughts, wildfires, and loss of nature and biodiversity, local authorities are setting action plans to reduce energy consumption and greenhouse gas emissions. These plans are ambitious, but ambition can only take them so far; they often face financial constraints preventing their implementation. The five-year LIFE European City Facility (LIFE EUCF) is supporting municipalities, local authorities, and public entities transform their action plans into credible and mature investment ideas.

‘Designed by cities for cities’ is the strapline for LIFE EUCF. It was part of Horizon 2020 - the EU’s research and innovation funding programme from 2014 to 2020 – and LIFE Programme financing started in 2021. Since 2020, over 280 institutions have benefited across three regions – Nordic countries, and Western Europe (NC&WE); Central and Eastern Europe (CEE); and Southern Europe (SE) – after applying for the last five calls for funding. These calls have been organised every year since 2020, with two calls taking place in 2021.

Each city or group of cities has received a EUR 60 000 grant to develop their investment concepts, and in March this year, over 260 applied for the latest 6 th call. This call has EUR 4.5 million available across the three regions. The 75 chosen investment concepts are split into 30 for CEE countries, 19 for NC&WE, and 26 for SE. The 7 th call is anticipated to be held from October to November 2024.

The grant is not meant to directly finance investments, but services and activities to support the development of investment concepts. These include technical feasibility studies, market analyses, stakeholder analyses, legal, economic, and financial analyses, risk analyses and further supporting tasks. LIFE EUCF has four main objectives: provide hands-on locally rooted technical and financial expertise; build the capacity and knowledge of municipal staff; connect small and medium-sized municipalities funding streams; and encourage knowledge sharing and success stories to more than 10,000 local governments.

The investment concepts developed so far set high ambitions in terms of mobilised investments, with EUR 25.3 billion across the three regions over the last 4 calls since 2020. Concepts include renovation of buildings, district heating networks, integrating renewables into housing, community energy, lightweight solar photovoltaics (PV), multi-modal transport networks, sustainable mobility, electric vehicle infrastructure, and hydrogen production.

Sources of funding which will be explored include the private sector, EU-funded instruments such as the European Fund for Strategic Investments, the European Structural and Investment Funds, various Project Development Assistance facilities, such as the ELENA facility of the European Investment Bank or LIFE CET Project Development Assistance for sustainable energy investments, the Smart Cities Marketplace, and various national investment platforms. To support applicants across local levels and relevant national languages, a network of 29 Country Experts and national hubs are appointed in each eligible country as an extension of the EUCF team.

LIFE EUCF consists of a consortium of experts from Energy Cities, Climate Alliance, FEDARENE, Adelphi, ENVIROS, ICLEI (Local Governments for Sustainability), and GNE Finance.