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.