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January 2008/03
Policy development

Responses should be sent to HEFCE by 21 April 2008

Revolving green fund
Consultation on the aims and operation of a revolving green fund

This document sets out our plans for the development of a revolving green fund to help higher education institutions cut their 'greenhouse gas' emissions. Comments are invited on how the fund will operate and its aims.

To: Heads of HEFCE-funded higher education institutions
Of interest to those responsible for: Strategic management, estates, energy and environmental management
Reference: 2008/03
Publication date: January 2008
Enquiries to: Joanna Simpson
tel 0117 931 7411

Executive summary (read online)


Main report and Annex B

[ MS Word 344K | Zipped Word 221K | Adobe PDF 117K | Zipped Adobe PDF 96K ]

Annex A - response form

[ MS Word 66K | Zipped Word 9K ]

Executive summary


1.   This document sets out our plans for the development of a revolving green fund to help higher education institutions in England cut their 'greenhouse gas' emissions including carbon dioxide.

Key points

2.   Annual energy costs for the English higher education sector currently stand at around 250 million resulting in carbon dioxide (CO2) emissions of around 1.6 million tonnes1 . As the sector grows, these figures will also grow, unless action is taken. The UK government has set a goal to cut carbon dioxide emissions by at least 60 per cent by 2050. We believe that the higher education (HE) sector in England has the opportunity to take a lead in this area. The benefits from carbon management are not just environmental, higher education institutions (HEIs) can also save money and enhance their reputations.

3.   New funds will be available for three years from 2008-09 to provide repayable grants to HEIs to embark on projects that reduce greenhouse gas emissions. The proposed revolving green fund will be a partnership between HEFCE and Salix Finance with both parties intending to commit significant funds. The exact value of the fund will depend on the outcome of the Government's comprehensive spending review but we envisage it will total around 30-40 million over a three year period.

4.   Salix Finance is an independent, publicly funded company, set up in 2004, to accelerate public sector investment in energy saving technologies through invest to save schemes. Salix has public funding from the Carbon Trust and the Learning and Skills Council and is working across the public sector with Local Authorities, NHS Foundation Trusts, Higher and Further Education institutions and Central Government.

5.   We propose that the fund should aim to:

  • reduce the sector's greenhouse gas emissions, in particular carbon dioxide
  • achieve long-term financial savings from reduced energy consumption
  • increase the implementation of energy efficiency projects within the higher education sector
  • promote the sector's leading role in reducing greenhouse gas emissions through projects which transform an HEI's approach to reducing its emissions
  • work closely with Salix and in turn the Carbon Trust
  • use minimal accountability processes.

6.   We propose that the revolving green fund should have two strands:

  • an institutional small projects fund
  • a transformational fund.

7.   The institutional small projects fund will use Salix's traditional model (paragraphs 20-23) where institutions receive ring-fenced money from the fund.

8.   The transformational fund will be for HEIs to tackle larger projects which will transform an HEI's approach to managing its energy consumption and reducing its emissions. The transformational fund might consider applications in the region of £1-4 million per institution where those institutions will lead the way and act as beacons of good practice for others to appreciate what can be achieved in this area. Institutions may apply for one or more projects which aim to bring about transformational change, which may include adoption of technologies which are new in the UK or the higher education sector.

9.   Each grant that an HEI receives will be repayable from the financial savings it makes.

10.   This consultation also sets out our proposals for application, assessment and accountability arrangements for the fund.

Action required

11.   We would like your comments on the aims of the fund and how it will operate. Please send these on the response form published on the web with this document, by e-mail to Joanna Simpson at HEFCE,, by 21 April 2008.


1.   Estates Management Statistics.