Community investment schemes could help councils unlock cheaper finance for local energy and infrastructure projects, new research suggests.
The Green Finance Institute and University of Leeds say Community Municipal Investments (CMIs) is a credible and scalable alternative to traditional local authority borrowing.
The model allows councils to raise money directly from residents and other investors for projects including energy infrastructure, housing and regeneration.
Research shows 19 councils have raised more than £30 million through CMIs, securing borrowing costs an average of 29 basis points below the Public Works Loan Board benchmark after fees. The study found the model would have delivered savings on around 89% of borrowing days over the past decade.
Mark Davis, Professor of Economic Sociology at the University of Leeds, said: “CMIs provide councils and city-regions with access to locally rooted capital and strengthen civic engagement by keeping investment returns circulating within local economies.
“The evidence we’ve been able to gather and analyse through these two linked reports demonstrates both the financial and civic value of the Community Municipal Investment model.”
With current investment terms, CMIs could potentially meet the medium-term borrowing needs of up to 42% of councils that actively borrow, equivalent to around £2.3 billion annually.
The research estimates scaling the model could save the local government sector up to £76 million over the lifetime of the capital raised.
For energy projects, the approach could provide another route to funding while reducing councils’ reliance on central government-backed lending and market conditions.
It could also give residents a financial stake in projects delivered in their communities.
The research argues CMIs can strengthen financial resilience, broaden access to UK household savings and help rebuild links between councils and residents.
No new legislation is considered necessary to expand the model, with greater use by councils and a wider investor base identified as the key requirements for growth.
Copyright © 2026 Energy Live News LtdELN