IN-PLAN PRACTICE
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Mobilising resources and financing is a core success factor for integrated energy, climate and spatial planning. In municipal and regional contexts, resources should be understood broadly: they include human resources (staff time and expertise), institutional capacity (mandates, governance structures), knowledge and data (GIS, baseline assessments, monitoring), and financial resources for implementation and operation.
A common challenge in municipalities and regions is that financing is often seen as a one-time task that ends once a plan is approved. Integrated planning needs continuous financing throughout the entire process – from planning to implementation and long-term operation. It is therefore useful to distinguish between different types of financing needs:
To structure different expenditure types, it is helpful to think of the accounting terms of Operational Expenditure (OPEX) and Capital Expenditure (CAPEX):
Capital Expenditure refers to investments in long-term tangible or intangible assets that generate benefits over several years. Capital Expenditures are typically required to implement measures identified through integrated plans, for example in mobility, public space, energy or climate adaptation.
Operational Expenditure refers to recurring costs required for the daily functioning of infrastructure. These costs are critical for maintaining coordination, quality and continuity over time. In integrated planning, operational expenditures are often a bottleneck, as maintenance and monitoring require stable and predictable capacity.
Operational and capital investments are complementary. Without capital expenditures, integrated plans cannot translate into tangible change. Without operational expenditures, investments risk being inefficient or poorly coordinated.
Municipalities and regions increasingly encounter financial constraints when mobilizing financing for integrated planning and implementation:
In addition to pure financial constraints, municipalities and regions face several organizational and governance-related challenges when mobilizing resources:
There are different types of places to look for resources for implementation and operation:
In practice, municipalities often achieve the best results by combining several ways of mobilising resources.
Early coordination with finance departments is a critical governance improvement for the successful implementation of integrated planning approaches. Financial departments play a key role in shaping budget structures and long-term financial planning. If they are involved only at a late stage, integrated measures may be perceived as additional costs rather than as strategic investments. To ensure effective coordination with internal finance departments, political commitment to integrated planning needs to be established from the outset of the process.
Permanent budget lines: Establishing permanent budget lines for integrated planning is a key step towards moving from project-based approaches to structural implementation. Annual earmarked budgets can finance recurring coordination tasks, facilitation processes, data management and monitoring activities that are essential for integrated planning but are often difficult to fund through project calls alone. In parallel, the creation of permanent staff positions or competence centres helps to institutionalise knowledge, responsibilities and coordination capacity within municipal or regional administrations.
Life-cycle assessments (LCA): In practice, municipalities often succeed in mobilising funding for the planning process and the implementation, but struggle with the long-term operation and maintenance. A life-cycle perspective helps to prevent implementation gaps by clarifying, already at the planning stage, how monitoring, maintenance and governance will be financed once investments are made.
Life‑cycle assessments (LCA) and life‑cycle cost assessments (LCCA) are key tools for integrated planning, as they support decisions beyond upfront investment costs and highlight long-term financial and operational implications. While municipalities often secure funding for planning and initial implementation, they frequently struggle to finance long-term operation, maintenance, monitoring, and governance. To support this approach, several tools and methodologies are available to local and regional authorities.
For further information see The European Commission’s guidance on life-cycle costing in public procurement and OpenLCA, an open-source software tools for environmental and cost-based life-cycle assessments
Internal capacity building for the mobilisation of external funding.
To support municipalities and regions in building internal capacities for identifying, preparing and mobilising external funding, dedicated support and learning resources are available.
The EU-funded PROSPECT+ project supports local and regional authorities in financing their sustainable energy and climate plans. The project offers training, peer learning and practical guidance for the capacity building of local and regional authorities seeking to strengthen their skills in accessing innovative financing mechanisms, EU funding and other external funding sources.
For further information see Home | PROSPECT+
Joint planning and implementation of cross-municipal measures
If adjacent municipalities plan and implement climate, energy and mobility measures across municipal boundaries efficiency and effectiveness can be increased significantly. Many infrastructure systems extend across administrative borders and therefore benefit from coordinated approaches. Such cooperation may focus on shared networks, such as cycling corridors or public transport lines that connect multiple municipalities and are jointly financed. In other cases, municipalities can jointly develop and operate shared facilities. Examples include solar energy production fields, wind parks, recycling centres or inter-municipal bus terminals. By pooling demand and resources, municipalities can reduce costs, achieve economies of scale and improve service quality.
Joint special purpose associations
Joint special purpose associations pool staff and budgets across neighbouring municipalities to achieve scale and continuity. Instead of relying on temporary project cooperation, these structures provide a stable organisational framework for integrated planning and implementation. Such entities can take various forms, including joint planning departments, regional climate or energy agencies, or legally established special purpose associations.
Shared procurement and shared services
The procurement of external planning, participation formats or monitoring tools would be costly or inefficient to procure individually. By aggregating demand, municipalities can reduce unit costs, increase bargaining power and access higher-quality services. Beyond cost savings, shared procurement also promotes harmonisation and interoperability across municipalities. Using common tools, data standards and methodologies supports coordinated implementation and makes it easier to align measures across administrative boundaries. For example, several municipalities may jointly commission a regional climate risk assessment, a shared GIS-based monitoring platform, or professional facilitation for participatory planning processes.
Budget reallocation and reprioritisation
Shifting existing budget lines towards integrated priorities (often time-consuming, but robust once established).
Earmarking local revenues
Using revenues from local instruments to support integrated objectives, for example
Regional subsidy programmes
Bundling climate, spatial and innovation objectives at regional level. For municipalities, regional subsidy programmes can offer more flexible funding conditions, lower administrative thresholds and better alignment with functional territories. Typical areas of support include integrated mobility solutions, climate adaptation measures, urban regeneration, energy transition projects and digital planning tools.
Capacity building
Activities that strengthen the ability of municipalities and regional authorities to design, manage and implement integrated planning processes and measures. This includes developing skills, organisational structures, governance arrangements and learning processes that enable long-term transformation
National climate, innovation and urban development programmes play a central role in enabling municipalities and regions to implement integrated planning approaches. In many EU Member States, such programmes explicitly combine financial support with advisory services, learning formats and institutional development.
European funding programmes offer valuable opportunities to access financial support for sustainable development, innovation, and cross-border collaboration and knowledge transfer. Successfully tapping into these resources requires the targeted identification of funding instruments that align with specific project goals. This, in turn, demands a solid understanding of each programme’s funding logic, eligibility criteria, application procedures, and funding cycles.
European funding programmes can support integrated planning processes, pilot projects, and implementation, depending on their design. Technical assistance instruments are particularly valuable for project preparation and investment readiness. Most territorial development funding is accessed through national or regional managing authorities and requires alignment with the respective operational programmes. Direct EU programmes such as EUI, Horizon Europe, or LIFE demand stronger consortium-building and co-design but enable innovation and transnational learning. Strategically combining multiple instruments can help bridge the gap between planning and implementation, especially when paired with local co-financing and integrated project approaches.
These funds are principally aimed at territorial development and cohesion and are managed in shared responsibility between the European Commission and Member States. Local and regional authorities can apply for funding through their national or regional Managing Authorities, which publish calls under the Operational Programmes (OPs).
European Regional Development Fund (ERDF)
Purpose: Strengthen regional economic, social and territorial cohesion by correcting disparities across EU regions. Support includes sustainable urban development and locally-led development initiatives. The ERDF supports both investment in infrastructure and integrated, cross-sectoral strategies aligned with local development priorities.
For further information see: Official ERDF programme page
Interreg – European Territorial Cooperation
Purpose: Support cross-border, transnational and interregional cooperation between local and regional authorities to address common challenges and exchange good practices. Local authorities often act as lead partners or partners in cross-border consortia addressing climate, mobility, digitalisation and social cohesion.
For further information see: INTERREG portal and programme details
Some EU programmes operate under direct management by the European Commission or its executive agencies and are open to local and regional authorities:
European Urban Initiative (EUI)
Purpose: Support sustainable urban development through innovative solutions, capacity building and knowledge sharing. EUI features dedicated calls for pilot implementations, governance experiments and integrated urban transitions that align with local planning strategies.
For further information see: EU Urban Initiative details & calls
Horizon Europe
Purpose: EU’s flagship research & innovation programme. Local and regional authorities can participate in mission-oriented and collaborative research projects on integrated planning, governance innovation, smart cities, climate adaptation and energy transitions. Often Horizon Europe calls require consortia of public and private partners; local authorities can lead or join.
For further information see: European Commission funding database
LIFE Programme
Purpose: EU’s funding instrument for environmental and climate action. It supports pilot, demonstration and capacity building projects directly aligned with European Green Deal objectives. Municipalities can participate independently or as project partners, especially for climate adaptation and nature-based solutions.
For further information see: LIFE programme page
Crowd-investment models mobilise financial contributions from many individuals or local actors to support specific projects or investments. For municipalities and regions, crowd-investment can complement public funding by strengthening local ownership, increasing visibility and sharing financial responsibility for selected measures. Crowdfunding involves many small, non-repayable contributions from local stakeholders to finance specific pilot actions, such as urban greening projects, small-scale renewable energy installations or community spaces. Other forms of crowd-investment include community bonds, citizen shares or cooperative investment models, where contributors receive a financial return or other benefits. In practice, crowd-investment instruments work best as complementary financing tools as they are rarely suitable for financing core integrated planning processes.
Involvement of citizen in maintenance and monitoring
The involvement of citizens in maintenance and monitoring activities can complement municipal resources and strengthen the long-term effectiveness of integrated planning measures. Measures related to public space, green infrastructure and neighbourhood-level interventions can benefit from active citizen participation. A common approach is the involvement of residents as caretakers of green spaces, for example through urban gardening initiatives, neighbourhood greening projects or adopt-a-tree schemes. In addition, digital and web-based applications can support citizen involvement in monitoring processes. For example, citizens may use apps or online platforms to report issues such as littering, damaged infrastructure or water stress in green areas.
Co-financing with private landowners and developers
Co-financing arrangements are most effective when responsibilities, costs and benefits can be clearly defined and contractually agreeed. Such approaches allow municipalities to leverage private investment for public objectives, for example by linking development rights to contributions towards climate-resilient infrastructure, green spaces, mobility solutions or energy measures. Urban development contracts can be used for this purpose. They are a proven tool and enable local authorities to require developers to make financial or in-kind contributions to infrastructure, public space and climate-related measures that are necessary as a result of new developments.
Public-Private-Partnership models
PPPs are long-term contracts between a private party and a government entity for providing a public asset or service. In such agreements, the private sector provides upfront financing and takes on significant risks and management responsibilities, with remuneration linked to performance. The private party’s role can include design, construction, operation, and maintenance of the asset or service. Institutional PPPs are a joint venture between the city and private entities to carry out development. Ownership shares determine the level of influence; both parties usually contribute capital. This model allows the public sector to retain certain control rights while benefiting from private financing and expertise (Akademie für Raumforschung und Landesplanung, 2018). Contract-based PPPs: The public authority outsources planning, construction, financing, and operation of an asset to a private partner for a defined period. Lease model: The private sector builds a facility (e.g. a public building) and the public authority leases it for a set period. Ownership may be transferred at the end.
PPPs offer several potential benefits for municipalities. They provide access to private capital and the expertise of private companies, including technical and management know-how, which can enhance efficiency. PPPs can reduce the financial and administrative burden on public authorities and enable faster implementation through leaner processes and a decoupling of decision-making from political cycles. Market-oriented thinking introduced by private partners may also foster stronger customer focus and innovation. Unlike full privatization, PPPs allow the public sector to retain strategic control through ownership, contractual arrangements, or oversight mechanisms.
However, there are notable downsides: Long-term contracts can create dependence on a single partner, changing contractors later is difficult (Akademie für Raumforschung und Landesplanung, 2018). PPPs are complex to procure and manage, involving high transaction costs (legal, advisory, tendering). They may reduce democratic control if private stakeholders hold a big share of decision-making power. Most problematic, PPPs are sometimes used to shift debt off public books. While not visible as public debt, long-term payment obligations act like hidden loans. Thus, PPPs should not be pursued solely for budget optics (Plank, 2017).
Green bonds
Green bonds are debt securities that public actors use to raise capital for environmental and climate projects. Investors provide money that is repaid over a fixed period – usually with interest. The key difference from conventional bonds is that the proceeds may only be used for clearly defined “green” projects. In practice, integrated plans serve as a basis to identify measures that require upfront investment. These measures are then bundled into an investment package with a defined maturity period (e.g. 10–20 years) and offered to investors such as institutional investors, sustainable investment funds, banks or pension funds.
With the European Green Bond Standard, the EU aims to establish a clear and credible benchmark for green bonds. The standard is voluntary and builds on the detailed criteria of the EU Taxonomy to define what qualifies as a green economic activity, thereby increasing transparency and investor confidence. (European Commission, 2025)
The Climate City Capital Hub supports cities in securing financing for sustainable urban development and climate neutrality. It provides technical assistance, tools, and resources for project development and investment readiness, partnering with the European Investment Bank to promote climate adaptation, decarbonization, and public-private funding collaboration.
For further information see Climate City Capital Hub.
The EU Covenant of Mayors provides a dedicated Funding and Financing Guide to support local and regional authorities in identifying suitable funding opportunities for the implementation of climate and energy actions. The guide is specifically designed for municipalities that are developing or implementing Sustainable Energy and Climate Action Plans (SECAPs) and other integrated climate strategies.
For further information see Financing opportunities | EU Covenant of Mayors
The following examples illustrate how municipalities combine different financing and resource mobilisation approaches in practice.
In June 2020, Križevci, Croatia launched a crowd-investing initiative for solar roofs, led by ZEZ and partners. The project raised €54,000 through crowdfunding, installed solar panels, and promoted renewable energy. It strengthened community engagement, overcame legislative challenges, and established the local energy cooperative, KLIK, for future sustainability projects.
For further information see Crowd investing for solar roofs in Križevci.
HafenCity is one of Europe’s largest inner-city urban development areas. Through urban development contracts and land transfer contracts, private developers were required to contribute to climate mitigation and climate adaptation measures that go beyond individual building plots: They contributed to elevated building structures for flood protection and flood-resilient ground floors. Buildings were required to meet high energy efficiency standards and had to connect to district heating systems. In the underground car parks of private buildings, car-sharing system were set up for all residents and employees of HafenCity. (HafenCity Hamburg GmbH, 2026)
For further information see Urban development – HafenCity.
