District Heating Pre-Construction Fund

In line with the government's District Heating Steering Group Report recommendation to provide financial support for district heating, the Minister for Climate, Energy and the Environment Darragh O'Brien has approved the allocation of €5 million to support Pre-Construction costs for efficient district heating projects in Ireland. The funding will come from the Climate Action Fund (CAF).

District heating is a pivotal technology to help Ireland reach its climate ambitions, while also improving our energy security and affordability. Deployment of district heating at scale, particularly in densely populated areas with readymade heat sources located nearby, is a key government objective under the Climate Action Plan. It is also a key component in meeting the 'Built Environment' Sectoral Emissions Ceiling.

Support for the Pre-Construction costs for efficient district heating projects is pilot scheme being introduced, to ensure efficient district heating projects are in position to avail of future capital funding when available. Projects must be an efficient heating and cooling network and use a minimum share of 75% from renewable energy, 75% from waste heat, or 75% of a combination of both, to supply heat to the network.

The fund will aim to grow the district heat market and overcome the market failures in early stages of development, that exist in the decarbonisation of heating in Ireland. This support will bring industry to the next step and underpin the future development of district heating networks.

The aim of the District Heating Pre-Construction Fund is to:

• Increase the volume of efficient district heating schemes progressing through early stages of project development, including planning, design and commercialisation, ensuring readiness for future construction support
• Build national capability and supply chain for district heating development at scale
• Collect data, insights and learnings for future policy, investment and deployment of district heating networks

The target audience of the fund will be Project Sponsors looking to develop efficient district heating projects in Ireland. The fund is open to all public and private sector applicants who meet the eligibility criteria and are legal entities (such as companies or organisations), as individuals cannot apply to the fund.

It is anticipated that the fund will support up to 50% of eligible costs to a maximum level of support of €1 million and must comply with rules of state aid. Further details can be found in the Pre-Construction Terms and Conditions below.

Through the Sustainable Energy Authority of Ireland (SEAI) website, the Department of Climate, Energy and the Environment opened an Expression of Interest (EoI) for interested parties to be considered for the fund.

This EoI constitutes the first stage of a two-stage application process for the Pre-Construction Fund. The Expression of Interest stage is now closed and only applicants who registered on the SEAI website before 12 December 2025 will be eligible to progress to the next phase of the fund.

The EoI was used to finalise the fund Terms and Conditions (T&Cs) and to filter applications that may not be mature enough yet or suitable for the fund.

Following completion of the Expression of Interest phase, the department and SEAI are inviting successful applicants to the next phase of the process. Ricardo have been procured to manage the application process for Phase 2. An evaluation committee consisting of appropriate representatives will select the successful projects for Pre-Construction support.

The Application Form below asks applicants to provide information and supporting documentation to help the committee to evaluate projects on five main criteria:

1. Sustainability and strategic alignment
2. Readiness
3. Deliverability
4. Viability
5. Value for money

The department wishes to fund a portfolio of projects under the Scheme. The Scheme is designed to support the demonstration of projects - if there are 3 or 4 projects of similar design and technology, not all will get support even if they score higher for deliverability and have lower risk factors. Minimum eligibility criteria and the evaluation process is outlined in the application form.

To note, only applicants who have been successful through the expression of interest stage can apply for Phase 2 of the scheme. Applicants have now been invited to Phase 2.