Crowding in private finance

The LIFE-2025-CET-PRIVAFIN grant is part of the EU's LIFE Programme aimed at increasing private finance for clean energy transition projects. This grant opportunity specifically targets innovative financing schemes to bolster investments in energy efficiency and renewable energy sources, contributing to the objectives of the European Green Deal and the REPowerEU Plan.

Eligible applicants include consortia consisting of at least three entities from three different EU member states, EEA countries, or EU candidate countries. Applicants could be NGOs, public entities, private sector stakeholders, or research institutes involved in energy transition projects.

The grant is categorized as a LIFE Action Grant, providing funding of up to €1.5 million per project, with a total budget of €7 million allocated for this call. The application process involves a single-stage submission, requiring applicants to propose innovative financing mechanisms which may include equity blending, local investment funds, guarantees, and energy service contracts. Proposals must also demonstrate a clear business case, financial viability, and a plan for replication beyond the targeted regions.

The funding rate for the grant can be as high as 95%, underscoring the emphasis on leveraging private finance to complement public funding. The project must be operational by the end of the funding period, and pilot testing of the proposed financing scheme during the project timeline is expected.

The overall goal is to mobilize significant private capital for sustainable energy investments while ensuring that such schemes are scalable and capable of addressing specific regional needs. Proposals will be evaluated based on their feasibility, expected impacts, and alignment with the overarching goals of the European climate strategy, including metrics on energy savings and greenhouse gas reductions.

Applicants are encouraged to establish financing schemes that demonstrate their innovative nature and operational readiness to finance investments in energy efficiency and renewable energy, contributing to a transition towards a clean energy economy.

This EU grant opportunity is part of the LIFE Clean Energy Transition (CET) call for proposals, specifically under the topic LIFE-2025-CET-PRIVAFIN: Crowding in private finance. It falls under the Programme for the Environment and Climate Action (LIFE) and offers LIFE Project Grants (LIFE-PJG) with a LIFE Action Grant Budget-Based [LIFE-AG] model grant agreement.

The call is currently open for submission with a single-stage deadline model. The opening date was April 24, 2025, and the deadline for submissions is September 23, 2025, at 17:00:00 Brussels time. The total budget allocated to this topic is 7,000,000 EUR.

The primary objective of this grant is to increase the amount of private finance allocated to energy efficiency and renewable energy sources through the establishment of innovative financing schemes. This aligns with the European Green Deal and the REPowerEU Plan, aiming to reduce EU dependence on fossil fuel imports. The call emphasizes maximizing the mobilization of private capital by using public funds as a catalyst and establishing an enabling regulatory framework, which is a core objective of the European Energy Efficiency Financing Coalition.

The scope of the proposals should focus on setting up innovative financing schemes that leverage private finance for investments in energy efficiency, potentially combined with renewables and energy storage. These schemes should be established in at least one eligible country under the LIFE program and be operational by the end of the project, demonstrating credible access to financing sources and a prospective pipeline of investments. Pilot testing of the financing scheme during the project timeframe is expected, with related investments potentially implemented after the project's completion.

Eligible financing schemes may include:

Equity and debt, potentially combined with non-reimbursable grants (“blending”), particularly for low-income households or SMEs.
Local or regional investment funds blending public grants and private finance, e.g., in the form of loans.
Guarantees, risk-sharing, insurance, or other de-risking instruments.
Energy services such as energy performance contracting, efficiency as a service, and variants thereof, if used to finance the investments.
On-bill, on-tax, and building-based financing, where the debt is attached to the energy meter or the building rather than the household or company.
Schemes complementing already existing local and regional technical assistance facilities, in particular integrated home renovation services, with a dedicated financing component.
Schemes targeting the secondary market, including refinancing mechanisms, specialized securitization vehicles, and green bond schemes.
Local investment structures, including citizen financing (e.g., crowdfunding) for energy efficiency.
Market-based instruments relevant for sustainable energy (e.g., carbon finance instruments, energy efficiency obligations, etc.).
Brokering, aggregation, or clearing houses, which facilitate matching of demand and supply of sustainable energy finance.

Proposals should consider the following elements:

Establish an innovative, operational financing scheme supporting investments in energy efficiency, potentially combined with renewables and energy storage, in at least 1 eligible country. Proposals can build on and/or upscale innovative financing schemes successfully tested previously.
Address the provision of finance as well as ensure the availability of demand in the form of a project pipeline complying with the requirements of the scheme, in particular at regional and national level.
Define the targeted region(s) and sector(s) and justify how the proposed scheme is innovative and complements available funding schemes.
Clearly demonstrate the business case and financial viability of the proposed scheme (including e.g. market analysis, investment sizes targeted, transaction and management costs, expected energy/cost savings and other returns, etc.).
Plan replication and/or rollout of the scheme envisaged beyond the region(s) targeted for the establishment, including the analysis of legal and market conditions for replication.
Demonstrate support of the targeted stakeholder groups and present in a detailed manner how they will be involved throughout the project.
Demonstrate the additionality of the proposed financing scheme compared to market practices.
Where relevant, demonstrate complementarity to available public funds, notably under the EU Cohesion funds in view of the preparation of the multiannual financial framework 2028-2034.
Applicants should explain how they build on existing funding programmes and initiatives relevant for the targeted region/sector, in particular related to one-stop shops and project development assistance.
Coordinate with and potentially participate in the national hubs of the European Energy Efficiency Financing Coalition, when relevant.

Proposals may be submitted by a single applicant or by applicants from a single eligible country. The Commission suggests that proposals request a contribution from the EU of up to EUR 1.5 million, although proposals requesting other amounts will also be considered.

Expected impacts should be clearly presented, demonstrating how the activities will contribute to topic-specific impacts. This includes a detailed analysis of the starting point, well-substantiated assumptions, and clear causality links between the results and the expected impact. Proposals should also demonstrate their contribution to delivering financing schemes that are operational and ready to finance investments, with credible access to financing sources and a prospective pipeline of investments.

Proposals should quantify their results and impacts using the following indicators:

Number of investment projects and volume of investments processed during the project (i.e., pilot testing phase) and expected to be financed by the financing scheme in the next 5 years.
Number of investors and project developers using the financing scheme.
Investments in sustainable energy (energy efficiency and renewable energy) triggered by the project (cumulative, in million Euro).
Average % of primary energy savings targeted by investment projects.

Additionally, proposals should quantify their impacts related to the following common indicators for the LIFE Clean Energy Transition sub-programme:

Primary energy savings triggered by the project in GWh/year.
Final energy savings triggered by the project in GWh/year.
Renewable energy generation triggered by the project (in GWh/year).
Reduction of greenhouse gas emissions (in tCO2-eq/year).

The funding rate for Other Action Grants (OAGs) is 95%.

Conditions for participation include:

Admissibility Conditions: The proposal page limit and layout are described in section 5 of the call document and Part B of the Application Form available in the Submission System.
Eligible Countries: Described in section 6 of the call document.
Other Eligible Conditions: Described in section 6 of the call document.
Financial and operational capacity and exclusion: Described in section 7 of the call document.
Evaluation and award: Submission and evaluation processes are described in section 8 of the call document and the Online Manual.
Evaluation and award: Award criteria, scoring, and thresholds are described in section 9 of the call document.
Evaluation and award: The indicative timeline for evaluation and grant agreement is described in section 4 of the call document.
Legal and financial set-up of the grants: Described in section 10 of the call document.

Relevant documents include the call document, application form templates (Standard application form (LIFE SAP and OAG), Detailed budget table (LIFE), Participant information (LIFE)), Model Grant Agreements (LIFE MGA), LIFE Multiannual Work Programme 2025-2027, LIFE Regulation 2021/783, EU Financial Regulation 2024/2509, Rules for Legal Entity Validation, LEAR Appointment and Financial Capacity Assessment, EU Grants AGA — Annotated Model Grant Agreement, Funding & Tenders Portal Online Manual, Funding & Tenders Portal Terms and Conditions, and Funding & Tenders Portal Privacy Statement.

This grant opportunity seeks to stimulate innovative financing schemes that can mobilize private capital for energy efficiency and renewable energy projects. It encourages applicants to develop sustainable, scalable, and replicable financing models that contribute to the EU's energy and climate targets. By leveraging public funds and fostering partnerships between financial institutions and energy service providers, the call aims to bridge the investment gap and accelerate the transition to a clean energy economy. The focus is on creating schemes that are not only financially viable but also address the specific needs of various sectors, including buildings, SMEs, and district heating, ensuring broad and impactful results.

Eligible Applicant Types: The eligible applicant types include private sector stakeholders, local and regional authorities, and other types of actors. Proposals may be submitted by a single applicant or by applicants from a single eligible country.

Funding Type: The funding type is a grant, specifically a LIFE Project Grant (LIFE-PJG) under the LIFE Clean Energy Transition (LIFE-2025-CET) call. It is also described as an Other Action Grant (OAG). The Model Grant Agreement (MGA) type is LIFE Action Grant Budget-Based [LIFE-AG].

Consortium Requirement: Proposals may be submitted by a single applicant or by applicants from a single eligible country, so either a single applicant or a consortium from a single country is acceptable.

Beneficiary Scope (Geographic Eligibility): The financing scheme should be established in at least 1 eligible country under the LIFE programme. The eligible countries are described in section 6 of the call document.

Target Sector: The target sectors are energy efficiency and renewable energy sources. This includes investments in buildings, SMEs, district heating, and other relevant sectors. Specific areas mentioned are energy efficiency, renewable energy, energy storage, sustainable energy, and building renovation.

Mentioned Countries: No specific countries are mentioned, but the opportunity is open to eligible countries under the LIFE programme, implying EU member states and potentially other countries associated with the LIFE programme.

Project Stage: The project stage is development and demonstration. The financing scheme should be operational by the end of the project, and proposals are expected to pilot test the financing scheme during the project time.

Funding Amount: The Commission considers that proposals requesting a contribution from the EU of up to EUR 1.5 million would allow the specific objectives to be addressed appropriately. However, this does not preclude submission and selection of proposals requesting other amounts. The total budget for the LIFE-2025-CET-PRIVAFIN topic is EUR 7,000,000.

Application Type: The application type is an open call, with a single-stage submission process.

Nature of Support: Beneficiaries will receive money in the form of a grant.

Application Stages: The application process is a single-stage process.

Success Rates: The funding rate is 95% for Other Action Grants (OAGs).

Co-funding Requirement: While not explicitly stated, the objective of the grant is to leverage private finance, implying that co-funding from private sources is a key element of the proposed financing schemes.

Summary: This opportunity, LIFE-2025-CET-PRIVAFIN, is a call for proposals under the LIFE Clean Energy Transition program. It aims to increase private finance for energy efficiency and renewable energy by establishing innovative financing schemes. Eligible applicants include private sector stakeholders, local and regional authorities, and other relevant actors from countries eligible under the LIFE programme. The funding mechanism is a LIFE Project Grant, with the EU contribution up to EUR 1.5 million per project. The call encourages proposals that set up operational financing schemes, such as equity and debt blending, local investment funds, guarantees, energy performance contracting, and citizen financing. These schemes should support investments in energy efficiency, renewables, and energy storage. The proposals should demonstrate a clear business case, financial viability, and potential for replication, and should involve relevant stakeholders. The application process is a single-stage submission, with a high funding rate of 95%. The overall goal is to mobilize private capital for sustainable energy investments, contributing to the European Green Deal and REPowerEU Plan objectives. The call emphasizes the importance of innovative financing mechanisms to bridge the gap between public funding and private investment in energy efficiency and renewables projects.