FIRNS - Contacts and Resources

Latest news release

Ministerial announcement news release - Friday 17 February 2023

Webinars/Workshops

Launch webinar hosted by the Scottish Nature Finance Pioneers: 
28 February 2023 

Registration Link

‘Introduction to Investment Readiness’ webinar hosted by the Green Finance Institute
21 March 2023

Registration Link

Community Engagement and Benefits webinar hosted Green Finance Institute
4 April 2023

Registration link

The Investment Readiness Toolkit is an online and interactive framework that takes nature-based project developers and enterprises along the eight milestones of a path to Investment Readiness, providing key considerations and case studies.

Agenda

• Welcome and Introduction
• Launch announcement by Mairi McAllan MSP, Minister for Environment and Land Reform
• What is FIRNS & how will it work? 
• Working in partnership  
• Q&A
• FIRNS webinar series 
• Next steps
   

Clark: One wouldn’t want to be prescriptive about the types of community engagement that will come out of these projects, which we are expecting to be innovative and an early stage. What we’ll want to see is.

• how good is the planning to support whatever community engagement you wish to undertake in your project,
• are you putting enough resource to manage that well and to make sure you are accessing different parts of the community who might not have their voices heard as easily as others.

In our experience, the choice of community groups you wish to engage with, and the related planning work, are bespoke to the area you are working in and to the project. For some projects, it might be a particular agricultural community, or land managers, or young people – it very much depends on what your project is and what it needs to make sure it has traction and can be delivered effectively, and also that the benefits that your project creates have a legacy after your work is complete, because you’ve engaged with the community effectively. Given the nature of the projects we expect to see, I imagine we’ll see more about building the mechanisms, resources, and starting the initial community engagement activities, rather than necessarily the doing and implementation of these activities at this point.

Uttley: The answer in principle is yes. FIRNS is intended to fund particular activities around enabling project developers to access new sources of finance and funding for natural capital and biodiversity. The criteria is that it would have to be new work being funded, even if it is expanding a project, and it has to be that particular type of work on bringing in new sources of finance, not on the ground work. Having an existing foundation of work could be really helpful.

Uttley: As above, there is no reason in principle that FIRNS funding can’t be added into a project that is already receiving NRF funding, as long as it is funding new work and not duplicating. If you’re unsure as to what that constitutes, please get in touch at [email protected] and we can help to provide some clarity.

It is all new funding and separate to the Nature Restoration Fund.

Uttley: £1.5m available in the first round of FIRNS. We’ve not put in a minimum application amount in the guidance. There may be some projects that we feel are just too small, though there isn’t a rigid threshold for that.

Uttley: We know there is some work being supported by the NEIRF on additional codes and standards, such as saltmarshes and hedgerows. We don’t have a fixed view on this, so where there is a gap, then clearly projects would be welcome. Where there is a desire to take a different approach to that which is already there, or to develop existing approaches further, we would be open to applications on this. We are in the phase of innovation in these markets, and we don’t expect everyone to get everything right the first time and there is room for activity in parallel. However, anyone wanting to develop a code that treads on the toes of codes and standards that are already there, we would want to see evidence that this is being managed appropriately, that activities are thought through and connections are being made with existing bodies of work, so we’re not supporting chaos!

IRNS ran in the summer of 2022 and was delivered by Esmee Fairbairn in collaboration with NatureScot and the Heritage Fund – it now has seven projects that will run for another 12 months potentially. FIRNS builds on IRNS, though there is no direct relationship.

Uttley: All of these figures are correct, but correct for the NatureScot delivered element, so you can double these potentially when considering NLHF’s component.

Clark: We are running these as two separate grant programmes, but have spent a huge amount of time behind the scenes to align timelines and profiling budgets together, so we’re able to support around this important policy area at pace. Projects submitting Expression of Interest (EoI) forms will receive feedback from both NLHF and NatureScot at the same time. We will assess on a similar timetable so that grants are released from both organisations at the same time to support each project. Critically, you shouldn’t apply for funding for two different projects, it is one single project and we will split the funding between our organisations based on the content of the project.

The EoIs will be helpful for giving you feedback and guidance on this process as well and how your project might align with the two grant schemes. We’ve specifically designed this process to be smooth and aligned to best support projects.

Sime: This is a similar system as to the grant scheme that NLHF has already run with Historic Environment Scotland, so there is experience elsewhere in this sector of running this parallel process, and FIRNS stands on the shoulders of that. To emphasize again, for those projects that submit EoI forms, we are primed and ready to help smooth the navigation of this process.

Uttley: Yes. There is quite a lot of detail on the website as to what is eligible, and in fact one of the main functions of the FIRNS is to provide access to that specialist advice, as we know this can be expensive to bring in.

Uttley: Yes. We talk a lot about transforming land use but we equally need to intervene in the marine environment. It is true that market approaches in the marine environment are further behind. Also we have Scottish Marine Environmental Enhancement Fund (SMEEF) and we want to build on that, so please do come forward with applications on the marine environment.

Clark: We’re expecting to see all types of projects come forward, but the key thing is that these achieve the Responsible Investment principles. From the perspective of the NLHF, as long as there are strong community engagement mechanisms built into the project, and it delivers benefits to local communities and the environment, we’d be happy to see applications on these.

Uttley: It is not a scenario we envisaged in FIRNS planning, and it might be a little outside the routes to new finance and funding that we’re looking to encourage, but I wouldn’t say no. I think it also comes down to how innovative it is and how the nature restoration or ecosystem service provision sits alongside the community renewable project and how they fit together. This is probably the critical element. Once again, we’d be happy to have a conversation on this through [email protected].

Uttley: This is a very live issue. The route to addressing it will be through SG and UKG policy along with measures included in carbon codes, especially the Woodland Carbon Code, the Peatland Code and other new UK carbon codes.

Herko: Ben Hart from Highlands Rewilding has been championing the idea of a 'Sellers Charter' - i.e. a common ethical charter for producers to follow. If you are interested, please join Scottish Nature Finance Pioneers/contact me at [email protected], as we are convening some exploratory discussions around this idea.

Uttley: No, we don't expect projects to have made links with investors before starting.

Uttley: You’re welcome to apply again in the second round if unsuccessful. At the moment, FIRNS is envisaged to run over two years and two rounds. We will provide constructive feedback to all unsuccessful projects, and we hope that this will be useful in a) deciding whether to apply again and b) improving your second application.

Sime: There will be two separate reporting systems as these are two separate grant programmes, but we are working to smooth this process as much as possible so that the same information can be used in the applications and in the reporting requirements, making it as comfortable and painless for grant recipients as possible.

Sime: When it comes to the applications (as opposed to the EoI forms), there will be two applications to submit for the NatureScot and NLHF grants. However, as with reporting, we are working together to make sure the application forms are as similar to each other as possible and information can be easily reused. This is because we have the same outcomes that we’re looking to achieve. It’s not that NatureScot doesn’t care about communities and NLHF doesn’t care about nature restoration – overall the FIRNS is one scheme with mandatory outcomes for all projects that relate to both components.

Uttley: Match funding from other sources is not mandatory. Between NLHF and NatureScot, we can cover up to 100% of costs, and expect to do so in many cases. However, if there is other funding in the mix then that improves value for money, so I wouldn’t discourage people from looking for other sources of funding.

Dowen: Building on this, one of the reasons that the Scottish Government has worked so collaboratively with NLHF is to help applicants with the fact that match funding is often sought in grant schemes, and to increase the scale and breadth of activities that can be funded. We want FIRNS to support progress towards natural capital improvements and the Just Transition.

 Introduction to Investment readiness Webinar Video Recording

[Uttley]: BNG is a term that should be reserved for England. Yes, there are provisions in NPF4 but it is much less prescriptive. The detail is in Policy 3 on page 38.

[Avery]: The GFI Investment Readiness Toolkit has gathered a few examples of contract templates that project developers, including Palladium, have kindly shared. Please see the useful links section of Milestone 8: Establishing Legal Contracts and Closing.

As the market develops and project developers share further learnings, the GFI hopes to collect more contract templates for consideration. The FIRNS is coming with a Community of Practice, where conversations about legal contracts, templates and clauses will also be supported.

[Uttley]: The further along in landholder engagement you are, the stronger your application will be perceived. However, we are not expecting projects to have achieved formal agreements before applying, and we expect many projects to be at the start of this journey, especially if they are applying for Development Grants.

To give your application and project the best chance of success please evidence current levels of commitment, who you have talked to about what, and what your plans are for engaging landholders,.

[Gibson]: One of the things that the Finance Earth team has found useful is having options – multiple potential sites – engaged to show that you can still proceed with the project even if conversations with your preferred landholders falls through.

[Uttley]: Timing of Round 2 has not been set yet. But we hope to be able to offer Round 2 grants in March/April 2024 with a 12-month run-time. We may need to find a way to fast-track R1 Development Phase projects into Round 2.

[Avery]: This is entirely dependent on the project you are building and its financial model – security may not be needed or even up-front investment altogether.

[Gibson / Gegg]: We would recommend thinking about this question at the later stages of project development, and first capturing an accurate picture of the costs and revenue streams over the lifetime of the project. At this point, you can identify any investment gaps and negative cashflows and the conversation will naturally turn to how this gap can be met.

[Uttley]: In principle yes, especially for habitats that don’t have existing pathways for carbon credits available.

Where there is potential overlap with existing mechanisms (noting where various NEIRF projects are developing carbon codes for different habitats), it will be important to demonstrate where the added value is of this new pathway. The market is still at a very early stage of development, and there is room for innovation, but showing that you’ve considered others’ work will help your application.

[Gegg]: The two carbon codes (Woodland Carbon Code and the Peatland Code) contain ‘unit buffers’ that take c.20% of units from all projects registered with the Codes and pools them into a single reserve – so that if there are fires or natural hazards that destroy the habitats, the buyers can still draw from this pool and receive what they paid for. This is in the case of natural hazards, though if there is damage relating to landholder or project developer negligence, the rules are different and there is a financial penalty built in.

Kita now offers insurance for buyers of carbon credits as well: https://www.kita.earth/

[Gegg]: The revenues for a particular ecosystem service can be broken down into three

• The yield or amount of ecosystem service uplift – such as tonnes of CO₂e sequestered through woodland creation over 30 years.
• How much you want to sell, versus how much you’d like to reserve.
• How much you are charging for each unit of the ecosystem service.