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Public financing models

Public financing options that may be suitable for funding depot charging infrastructure include:

  • Public Works Loan Board (PWLB).
  • UK Infrastructure Bank.
  • Community Municipal Investments.

Further information on each of these financing models is provided below.

Where capital budgets are limited, public finance can often be one of the most cost-effective ways of funding depot charging infrastructure. However, organisations should consider whether they have sufficient borrowing capacity and resources to cover the wider costs associated with delivering and operating the infrastructure, including project management, specialist skills, maintenance and ongoing asset management.

In some cases, these additional costs may reduce the viability of a publicly financed approach. Shared charging arrangements can help address some of these challenges by spreading costs across multiple organisations and improving utilisation of charging infrastructure.

The financing models described below are primarily aimed at local authorities. Public sector bodies that do not have borrowing powers may wish to work in partnership with local authorities to access shared charging infrastructure. This approach can provide mutual

  • The Public Works Loan Board (PWLB) provides loans to local authorities to fund capital projects. The PWLB is a statutory body operated by the UK Debt Management Office on behalf of HM Treasury.

    During 2023/24, the PWLB provided more than £11 billion in loans to local authorities, with over £2 billion lent to local authorities in Scotland.

    Two types of loan are available:

    • Fixed-rate loans with repayment periods of up to 50 years.
    • Variable-rate loans with repayment periods of up to 10 years.

    Although borrowing costs have increased following rises in Bank of England interest rates, the PWLB remains a relatively flexible and cost-effective source of finance for local authority capital projects, including charging infrastructure

  • The UK Infrastructure Bank (UKIB) was established by the UK Government in 2021. It has a mandate to provide up to £4 billion of lending to UK local authorities and focuses on infrastructure projects across five priority sectors, including clean energy and transport.

    In September 2023, UKIB reduced its lending rate for local authorities to gilts plus 40 basis points (bps), making it 40 bps lower than the Public Works Loan Board (PWLB) Certainty Rate.

    UKIB lending is available for projects with a minimum value of £5 million. This makes it particularly suitable for large-scale infrastructure projects or collaborative programmes involving multiple public sector bodies. Loan terms of up to 50 years are available.

    In August 2024, UKIB announced a £17 million loan facility for West Suffolk Council to support a range of net zero projects, including electric vehicle fleet upgrades. The portfolio approach allows multiple smaller projects to be financed through a single larger loan facility, helping organisations access UKIB’s lower borrowing costs.

    For local authorities considering major depot charging infrastructure projects, or those working in partnership with other public sector organisations, borrowing through UKIB may be an attractive option. It is currently one of the lowest-cost sources of public sector borrowing available for infrastructure investment.

  • Community Municipal Investments (CMIs) allow local authorities to raise funding directly from the public through crowdfunding platforms such as Abundance. These investments are typically offered as local climate bonds, enabling residents and organisations to invest in projects that support local net zero ambitions.

    West Berkshire Council became the first local authority to use Abundance’s local climate bond model in 2020. Hammersmith & Fulham Council subsequently launched a first round of local climate bonds in 2023 and a second round in 2024. These bonds have generally been priced below Public Works Loan Board (PWLB) borrowing rates, typically by around 20 to 30 basis points, and have a minimum investment term of five years.

    Although no Scottish local authorities have yet used local climate bonds, experience in England and Wales has demonstrated that they can be an effective way of financing local climate and infrastructure projects.

    Community Municipal Investments may be particularly suitable for smaller or rural local authorities that are less likely to require large-scale funding facilities such as those offered by the UK Infrastructure Bank. They can also help strengthen community engagement by giving local people a direct opportunity to invest in projects that deliver environmental and social benefits within their area.

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8.0. Financing depot charging infrastructure
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8.2. Private financing models