Netherlands' Pilot Activities: Dutch 100CNSC Cities Pilot
Description of activities
The District Investment Platforms are aiming to close the financial gap to invest into natural gas-free districts, in different neighbourhoods of the seven Dutch cities. With their respective business cases, the seven cities will jointly reach out to the unusual suspects of alternative funding to leverage investments from pension funds, insurance companies, etc.
An investment platform to achieve gas-free districts (main vehicle of the pilot). District Investment Platforms in seven cities as a tool to kickstart the development and implementation of Climate Investment Plans to overcome the limited current 10% of investments.
Investments by cities are estimated at 10% – 20% of what is necessary in total, much of this 10% – 20% are uninteresting investments for private/institutional investors as the return on investment, for example for the amelioration of the public space, is not evident. This makes it essential to better align investments from individuals, companies, and governmental bodies in order to achieve the necessary volumes. Further, it will give a more accurate figure for climate investments to allow for better public and private budgeting beforehand.
Within District-based Investment Platforms, government, companies, residents and investors will co-create a joint district investment plan. The aim is to achieve consensus on the plan and start its implementation within the pilot duration.
How? Engaging citizens & public/private investors, financially restructure sectoral district level projects, and removing barriers of innovative financing models.
Objectives
The pilot will test how local public climate finance could maximise leverage from alternative/innovative financial sources to achieve natural gas-free districts in seven cities.
What are the challenges that cities would like to address with the pilot activities?
Challenges include:
- Financial barriers: low awareness about the benefits of such projects
- Households are reluctant or unable to finance the entire renovations
- The inadequacy of existing funds towards the target group of households
- The availability financial instruments are not enough and not suitable: it is a necessity to connect the property instead of the citizens themselves
- Integrated approach of the urban space
Are cities building upon or part of a previous and/or existing activity?
Amsterdam
The city of Amsterdam has developed an approach to incorporate the energy transition in local districts through an (internationally acclaimed) integral design method of public space (IOOR). The aim of the method is to combine energy transition, climate adaptation and the redesign of street profiles in an efficient and cost-effective way to prepare cities for a sustainable and resilient future. Amsterdam will implement the IOOR method and the data that got available via IOOR, in the District Investment Platform and will use these in their integrated investment agenda.
Eindhoven & Helmond
Eindhoven and Helmond have developed a checklist (with points of consideration) for every underground and transition topic to be able to work more integrally on climate actions.
Groningen
Groningen started using an integral approach, in which issues from the physical and the social domain are matched, for the task of making the district Vinkhuizen more sustainable. Groningen learned for that reason, social and physical issues should be tackled simultaneously. Groningen has worked on developing a fund for energy transition. The municipality of Groningen is developing their own wind and solar parks.
Rotterdam
In 2018, Rotterdam began making 6 pilot-districts natural gas-free, in consultation with housing corporations, and the city’s own climate agreement. The experience drawn from these pilots were used to coordinate with the central government on what is needed for making 85.000 houses natural gas free by 2030, as formalised in the Transition Vision Heat, in regard to the necessary laws and regulation and financing.
The Hague
The Hague has experience with revolving funds and innovative financing. The challenge is to unlock private investment and better understand how this innovative public revolving fund structure can be used as a leverage towards other financing solutions.
Utrecht
Utrecht’s study on investment scenario for the financing of the energy transition in 2022, targeting private investment barriers and public instruments to tackle these barriers. The pilot Investment Platform (IP) aims to involve more private investments taking into account these barriers. Utrecht has established a Coordination Table Energy Transition (coordinating body with the heating company, grid operator and housing associations), City Accord Natural Gas-Free (voluntary collaboration of private sector partners) and a Regional economic development agency (for innovation financing and investment capital) that will be involved in the setup of the Investment Platform.
Which emissions domains will the pilot activity address?
Systemic transformation – levers of change the pilot activities will exploit
Stakeholder types that cities would like to engage in the pilot activities
Transferable features of pilot activities to a Twin City/ies
- The result of this pilot is a District-based Investment Platform from multiple testing grounds and plurality of solutions, making possible the transferability of the platform. This helps cities to overcome structural barriers for mobilising private investments for climate change actions and helps align public and private investments. This creates an innovative way of working that advances systemic change.
This answer is not exhaustive and simply an indicative one.
Components of the transferable features
- After two years, as a first result, we want to deliver a toolbox for innovative financing backed up by the experiences during the pilot in setting up an investment platform.
- Establishment of Community of Practice (CoP). We will design, set up, support and synchronise a CoP covering all seven districts and bringing together national, regional and municipal levels. The goal of the CoP is to exchange ideas and experiences, co-learning and co-creating knowledge together. The objectives are to validate key outputs, foster the exchange of knowledge and to build a long-lasting community with stakeholders.
This answer is not exhaustive and simply an indicative one.
What do cities want to learn from Twin City/ies?
- It will be helpful if our Twin City can bring additional financing strategies /models or other innovative financial instruments to the table.
- Any Twin City can add innovative financial solutions into this feedback loop of mutual learning.
Cities are looking for Twin Cities that need to align public and private funds for climate change actions but need to adjust the platform to local regulatory context. They would appreciate being twinned with cities that are advanced in the Mission label, and their Investment Plan. Or that have experience in building the investment plan. Business model: cities that have the challenge with heat networks and renewable heating sources to the network.
This answer is not exhaustive and simply an indicative one.
