Establishing a Smart Local Energy Fund

The Assignment

Ambition North Wales (“ANW”) is a public-private partnership focused on fostering economic growth and job creation in the North Wales region.

The partnership secured a final Growth Deal for funding in 2020, which is a collaborative effort between the UK government, the Welsh government, and local authorities in the North Wales region. The approach is to build on the region’s strengths to boost productivity and assist in tackling long-term challenges and economic barriers to promote growth in a scalable, inclusive, and sustainable way, in line with the Wellbeing of Future Generations (Wales) Act 2015.

The Growth Deal also seeks to promote the development of clean energy infrastructure and initiatives, such as wind, solar, and hydroelectric power. This will help to reduce the region’s reliance on fossil fuels and lower its carbon footprint, as well as create new job opportunities to take advantage of a rapidly changing global economy. As part of growth deal funding, ANW sought to establish a £25m Smart Local Energy investment fund to support the growth of the clean energy sector in the region.

The Role

We are working closely with ANW on their initiative to establish a Smart Local Energy investment fund. Initially, 31ten were commissioned to support the development of an HMT ‘5 case’ outline business case (“OBC”), along with an Investment Strategy and a Fund Management Plan, to outline how the fund will be operationalised and managed.

We supported ANW in defining a set of objectives and principles for the Fund through a series of workshops.  We used this same approach to also determine the range of options to be considered, the decision-making criteria to be used to evaluate them, and the critical success factors that were to form part of the consideration.

To support the financial case of the OBC, we developed a bespoke financial model to demonstrate the affordability of the Fund, with functionality to complete sensitivity analysis to reflect changing economic conditions.

Additionally, we designed a Fund Management Plan to provide a guide to operationalising and managing the investment fund, while also ensuring that the fund would realise its intended benefits and attract investors interested in the green energy sector in the region. Off the back of this document, we were re-engaged by ANW to conduct market engagement to test the investment strategy with potential fund advisors, as well as procurement support to ensure an appropriate partner could be sought.

Alongside the OBC and Fund Management Plan we prepared a draft Investment Strategy setting out the key criteria and priorities for investment as a key document as part of investment decision making.

Key Outcomes

31ten has supported ANW in successfully securing agreement to proceed to final approval for establishing the Smart Local Energy Fund via the Business Case process and for approval of funding to undertake a procurement exercise to secure external Fund Management and services to set up and manage the fund going forward.

31ten are now providing support to ANW through the process of producing the final business case (FBC) for the fund, as well as acting as a Commercial Advisor during the mobilisation of the fund.