Scotland’s Public Sector Heat Decarbonisation Fund Phase 2 – Applications Open 29 April

Scotland’s public sector buildings account for around 2.5% of the country’s greenhouse gas emissions. To help end Scotland’s contribution to climate change by 2045, the Government is intent on reducing emissions from 23,000 public sector buildings and is thus providing the Public Sector Heat Decarbonisation Fund, managed by Salix Finance.

Grants of up to £2.5 million are available for local authorities, universities and arms-length external organisations to progress whole building approach projects that decarbonise heating systems and improve the overall energy performance of their buildings. 

Projects must take place in FY 2025/26, with projects starting from late August 2025/early September 2025 and completed with money spent by 31 March 2026. 

Applicants must contribute 20% of the total eligible project costs.

Grants are to be used for capital costs incurred up to 31 March 2026, including:

• Purchase of physical assets and materials.
• Costs of project build, installation, construction and commissioning.
• Project management support solely for the capital aspect of the projects, eg, external consultancy and management fees.
• Enabling and ancillary works directly linked to the core clean heating system/capital asset being installed.
• Non reclaimable VAT for eligible capital costs.

There will be one funding round in financial year 2025/2026. Organisations can only submit one application which can include multiple buildings, measures and/or projects.

Applications will follow a single assessment approach. The guidance notes and all other relevant documents for Phase 2 are now available on the Salix Finance website.

Salix will hold free one-hour webinars on 3 April at 2pm; 9 April at 11am; 16 April at 2pm; 1 May at 11am and 22 May at 11am.