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Innovative financing mechanisms

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European Countries

Innovative financing mechanisms

Green infrastructure financing can be integrated into urban regeneration and development through public procurement, regulation and mechanisms that link investment to environmental outcomes.

Editorial Team

Integrating green infrastructure into buildings, public spaces and regeneration projects requires both mobilising investment and securing maintenance resources. The publication examines a range of public, private and blended instruments that cities can select according to the type and scale of intervention and their financial capacity, covering everything from trees and parks to green roofs, sustainable drainage systems (SuDS) and urban regeneration projects.

Business Improvement Districts generate ring-fenced revenue through mandatory contributions from businesses within a defined area. They are particularly suitable for visible local interventions and their maintenance, such as street trees, pocket parks, rain gardens, and SuDS, although they depend on business support and the district's economic health.

Performance-based maintenance contracts do not provide new funding, but instead seek to make better use of existing municipal budgets. They link payments to measurable indicators — such as tree survival rates, vegetation coverage or stormwater retention capacity — and can be applied to parks, green roofs and other climate adaptation infrastructure.

Green public procurement allows explicit green infrastructure and nature-based solutions requirements to be incorporated into tenders and contracts. Rather than creating an additional source of finance, it directs existing public investment towards environmental and lifecycle outcomes, including parks, public spaces, green roofs and SuDS.

To ensure long-term maintenance, the guide considers endowment funds, which reserve or invest capital to finance the future maintenance and renewal of parks and other green assets. It also presents revolving maintenance funds, which are periodically replenished through revenues, savings or recurring contributions.

Revolving funds and repayable grants provide initial capital that is repaid and reused for new projects. Among other applications, the publication links them to major regeneration projects, drainage systems, and urban retrofits or energy-efficient public buildings incorporating green infrastructure elements, provided there is sufficient capacity to generate savings or revenue or to make repayments.

06/05/2026

Innovative Financing Mechanisms.pdf

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