Guidance for applicants to Facility for Investment Ready Nature in Scotland
The broad aims, and programme outcomes for the Facility for Investment Ready Nature in Scotland are on the FIRNS webpage.
For individual projects, there are a series of outcomes which we want projects to help achieve. There are four mandatory outcomes, which we expect all projects to contribute towards.
All supported projects must:
Support the restoration of nature and growth of natural capital backed by robust science-based methodologies
Enable or generate revenue and /or cost savings from ecosystem services in order to attract and repay private sector investment
Explore and demonstrate engagement with community interests in project design, and activities, supporting a just transition
Develop effective mechanisms to share benefits with communities, supporting a just transition
Supported projects will also achieve some or all of the following outcomes:
- Develop a project/business and investment model which can be scaled and replicated
- Create a transparent and inclusive governance structure.
- Capture and disseminate lessons learned and best practices.
- Secure legal contracts, selling high integrity ecosystem services and biodiversity uplifts, creating precedents and models for the market
- Increase confidence and capability to create market-ready/investable projects and/or improve market development.
- Create long term opportunities for development of local delivery capacity and reinforcement of supply chains
- Enable the aggregation of projects at a scale generating synergies in terms of financing and/or environmental/social outcomes
We encourage you to focus on achieving all of the mandatory outcomes. The overall number of additional outcomes you plan to achieve will depend on what you want to deliver. The number of outcomes you achieve should be proportionate to the size of grant you are requesting. We strongly encourage you not to claim more outcomes than you really think your project can deliver.
For eligibility, grant applicants may be:
- Constituted organisations, including registered charities and trusts, and constituted community groups
- Public bodies, including central government executive agencies, non-departmental public bodies, local authorities and national park authorities
- Private individuals and companies
- Academic institutions
- Community interest companies and community benefit companies
Where applications are received from partnerships or organisations working collaboratively, a lead applicant must be identified. If successful, the lead applicant will be required to accept the Terms and Conditions of the Funding Offer, provide overall project updates and claim funds on behalf of all project partners. We will ask you to tell us how the project will be managed in your project proposals.
What the grants can pay for (eligible and ineligible expenditure)
FIRNS grants are to support the development of proposals that aim to make natural capital restoration attractive to potential buyers of ecosystem services and, ultimately, private investment. All costs must be directly associated with developing the investment readiness proposal. When carried out, these must have the potential to deliver outcomes that meet all or most of the fund’s aims.
The grant can fund up to 100% of eligible costs.
Third sector organisations can apply for cost recovery of up to 20% of their organisational overheads (such as those related to day to day running costs, insurance, or routine accommodation) in respect of staff working on the project, in addition to salaries.
Specific costs that are eligible include:
- The salaries of staff working on the project.
- Training of staff working on the project to help them to better understanding of natural capital markets and the needs of potential investors.
- Specialist (commercial, legal, financial) consultancy and technical expertise to:
- Engage with communities in the design and implementation of proposals, including the costs of supporting communities and building their capacity to engage meaningfully
- Design and structure a business model that will produce revenue or cost savings
- Appraise revenue generation approaches (including some degree of market testing/research)
- Appraise potential investment and associated repayment terms
- Conduct financial modelling
- Guide structuring investment and raising capital
- Guide the establishment of suitable legal and other necessary structures to manage income generation, external investment, repayment processes and agreements
- Guide and conduct investor due diligence requirements
- Developing marketing and sales promotion strategies to allow you to confidently approach potential investors and successfully win external investment in your project
- Evaluation and impact measurement: eligible costs may include investments in creating theories of change, impact management, data collection, analysis, and reporting. This does not include the development of methodologies or baseline surveys.
- Consideration of how the revenue generating aspects of the proposal will be carried out and managed on an ongoing basis.
- The organisation or attendance/registration to promotion or demonstration events aimed at finding suitable investors.
- Activities required as a condition of the grant which contribute to sharing learning and expertise with the natural capital community of practice (we expect around 5 days including preparation and attendance).
- We will only fund activities such as baseline surveys, securing consents or market research if you can clearly show that these will make your proposal significantly more likely to succeed in attracting buyers and/or investors.
FIRNS is inviting applications for two distinct kinds of grants.
Development grants – these will assist project developers to prepare and make an application for a Market and Investment Readiness grant. These projects are likely to fall within steps 1 to 3 of the GFI toolkit.
Market and Investment Readiness grants – these projects are to help applicants to 1) advance their business and financial models to a level of maturity that is ready to meet demand from responsible buyers and investors in values-led, high-integrity natural capital-based markets or 2) create new natural capital market infrastructure such as codes, standards and aggregating mechanisms. These projects are likely to fall within steps 4 to 8 of the GFI toolkit.
All projects supported in the second round of FIRNS can run until 31 March 2025.
Development phase projects have a maximum (total combined) grant size of £100,000. Market and Investment Readiness have a maximum (total combined) grant size of £160,000. There is potential to increase the upper grant limit if the expected outcomes of the project are deemed worthwhile and good value by the FIRNS Working Group.
The grant cannot pay for:
- capital spending, such as physical works, buying or leasing land or equipment
- costs already covered through other funding
- costs incurred before you’re awarded the grant
- meeting your own legal obligations (except related to designing and structuring an investment model)
- paid-for lobbying, which means using the grant to fund lobbying (through an external firm or in-house staff) to influence Parliament, government or political activity, or trying to influence legislative or regulatory action
- using the grant to directly allow one part of government to challenge another on topics unrelated to the agreed purpose of the grant
- expenses, such as for gifts or entertaining, specifically aimed at influencing government policy or investors
- input VAT reclaimable by the grant recipient from HMRC
- fines, charges or dividends
- payments for activities of a political or wholly religious nature
- contingency – if you encounter unexpected costs, there will be a process in place to assess this
Fair Work First
Fair Work First - employer declaration form - to be completed by funding recipients to provide evidence of complying with the Fair Work First Policy. Completed declarations and related evidence should be sent to your NatureScot Funding Officer or [email protected] prior to any Funding Offer being issued.
Fair Work First - requirements of the Fair Work First Policy relating to the real Living Wage and channels for Effective Voice
Fair Work First is the Scottish Government's flagship policy for driving high quality and fair work across the labour market in Scotland. This is increasingly being implemented by applying fair work criteria to grants, other funding and contracts being awarded across the public sector, where relevant to do so.
We are introducing two elements of the Fair Work First policy for all new funding offers issued from 1 July 2023. These are: for employees to receive at least the Real Living Wage; and for workers to be provided with appropriate channels for effective voice.
Further information can be found in Fair Work First – Guidance for funding applicants.
In exceptional circumstances, if an applicant cannot afford the real Living Wage (rLW) there is potential to increase the grant to meet the rLW. Should you have any concerns regarding this, you should contact us at [email protected] or contact your Funding Officer at the earliest opportunity. We may consider measures to ensure the Fair Work First requirements remain proportionate and this will be considered by NatureScot on a case by case basis.
Funding recipients must provide evidence that they comply with the Fair Work First Policy by completing a Fair Work First – employer declaration form.