Green Heat Network Fund (GHNF) Supplementary Contract

The Green Heat Network Fund (GHNF) is a capital scheme that provides grant funding to developers of zero and low carbon heat networks in England. Launched in March 2022, the GHNF is being implemented by a third-party delivery partner. The GHNF has been allocated funding up to 2027-28 and currently intended to run 9 application rounds, with the 9th round due to close in early 2025 The current delivery partner contract will end in June 2028.

DESNZ requires a delivery partner, that will be contracted under a Supplementary contract, to continue to compliantly deploy additional GHNF funding, should it become available , from FY 2025/26 or later. In doing so, this Supplementary contract would enable an increased volume of GHNF capital funding to be deployed to additional projects over the next 2-4 financial years. It is important to note that there is currently no additional funding secured.

The Supplementary contract will also provide continued Monitoring and Reporting (M&R) services to several heat network capital schemes from FY 2025/26. These schemes include: GHNF Transition Scheme, GHNF, Heat Network Investment Project - HNIP (GHNF predecessor), and HNIP Pilot.

The Supplementary contract is expected to include (i) the above-mentioned M&R function as well as (ii) the following services, subject to additional capital funding being secured:

• Comprehensive assessment of heat network projects applying to the GHNF (incl. commercial, techno-economic, financial background checks, and deliverability assessment)
• Administration of GHNF application windows and Investment Committees
• Leading on business development activities (inc. relationship management and stakeholder engagement, communications and marketing)
• Project contracting and grant administration
• End-to-end project management for the scheme
• Project change management function (drawing on technical, legal, and engineering skills/knowledge relevant to the heat networks sector)

The Supplementary contract will support delivery of the GHNF, as such the anticipated high-level requirements are as follows:

• Scheme mobilisation
• Knowledge transfer
• Acceptance of GHNF processes
• Application and assessment period
• Business development management
• Application and assessment windows (including Investment Committee membership and Secretariat duties)
• Contracting of projects
• Management of funding
• Monitoring and Reporting (M&R)
• M&R of projects funded by GHNF under the scope of the Supplementary contract
• Management of project change requests submitted by projects funded by GHNF under the Supplementary contract.
• Supporting and informing an independent evaluation of the GHNF
• Exit management

Under the Supplementary contract, M&R services will also be required for existing projects funded by HNIP and HNIP Pilot and for existing projects funded by GHNF and GHNF Transition Scheme.

See below in Section 2.2.4) Description of the procurement.