District Heating Pre-Construction Fund
€5 million has been allocated by Government to support pre-construction activity for efficient district heating in Ireland. The fund is open to public and private sector applicants.
Background
Government policy has identified a key role for district heating in achieving a clean, cost effective and fair transition to net zero future. Large-scale investment is essential to grow this market, incentivising development and deployment towards national targets as outlined in the Climate Action Plan.
The Department of Climate, Energy and the Environment (DCEE) has recently approved the allocation of €5 million to support pre-construction activity for efficient district heating in Ireland. This fund, provided from the Climate Action Fund (CAF) and administered by DCEE, is intended to incentivise detailed development of schemes in advance of future capital funding.
Aims of the fund
The aim of the District Heating Pre-construction Fund is to:
- Increase the volume of efficient district heating schemes progressing through early stages of project development, including planning, design and commercialisation, ensuring readiness for future construction support.
- Build national capability and supply chain for district heating development at scale.
- Collect data, insights and learnings for future policy, investment and deployment of district heating networks.
Who can apply
The Fund will be open to Project Sponsors looking to develop DH projects in Ireland, including public and private sector applicants who meet the eligibility criteria and are legal entities (such as companies or organisations).
Scope of support
It is anticipated that the fund will support up to 50% of eligible costs to a maximum level of support of €1 million and must comply with rules of state aid.
It is envisaged that fund will support projects which have undertaken early stages of project development (up to and including preliminary business case - clearly present a preferred option and approach to delivery, with evidence of outline design on which costings, economic and financial appraisals are based1 ) and ready to proceed to detailed project development.
Typical pre-construction costs may include, but are not limited to, activities such as developing the business case and procurement strategy, refining the technical and financial design of the scheme, securing planning approvals, and preparing for contracting and procurement.
Minimum eligibility criteria
Below is an overview of gated metrics for the fund.
| Gate | Rationale |
|---|---|
Efficient District Heating
| Projects must be an efficient heating and cooling network and use a minimum share of 75% from renewable energy, 75% from waste heat, or 75% of a combination of both, to supply heat to the network2. |
| Annual Customer Demand | Minimum end customer heat demand of 4 GWh/yr. (On a case by case basis smaller schemes will be considered for example scheme in rural networks off the gas grid.) |
| Subsidy request | Grant award requested will be up to a maximum of 50% of the pre-construction costs (to a maximum of €1 million for this stage). |
| Positive NPV | Projects must demonstrate a positive NPV over 40 years. (with allowance for future capital grant support- assume up to 50%3) |
| Deliverability | Demonstrate project is deliverable. |
Any project having met these key requirements will be eligible to proceed to the next stage, which involves submitting a full application. Once applications have been received projects will be subject to further assessment against a set of final criteria which are currently under development. Once assessment is complete the final decision will be undertaken by an evaluation committee.
Expression of Interest form
DCEE has opened an Expression of Interest (EoI) for interested parties to be considered for the fund and will remain open until the 12th December 2025.
This EoI constitutes the first stage of a two-stage application process for the Pre-Construction Fund. It will be used to finalise the fund Terms & Conditions (T&Cs) and to filter applications, helping to avoid administrative burden from schemes that may not be mature enough yet or suitable for the fund. Where a scheme meets the requirements below, it will receive an application form and the T&Cs when these become available.
Register your interest (opens in a new tab)Fund timeline
As the fund will be intended to build a pipeline of construction ready schemes before 2030 it is anticipated this fund will have a relatively short lifespan and only operate in the years 2026/2027/2028 with aim that all claims for payment will be made by 1st of June 2028.
Next steps
Once EoI is closed, all successful applicants will be invited to complete a scheme application form and brought forward for assessment. If you have any further queries please contact [email protected].
- 1 Infrastructure Guidelines
- 2 Directive (EU) 2023/1791
- 3 This is a provisional assumption to enable workings to be provided. The actual rate of funding would be contingent on the development of a future capital grant scheme and determined on a project-by-project basis