Carbon Neutral Islands: financing roadmap

Risks

This section outlines the potential risks associated with the financing of the Carbon Neutral Islands project. These risks are identified by the Scottish Government as part of a broader risk management approach for the project.

Public Sector Fiscal Pressure

There is a risk that public sector fiscal pressure negatively impacts the funding available to the Carbon Neutral Islands project.

This risk can be mitigated in the long-term by focusing on revenue generating projects and the attraction of private sector investment to the project.

Inability to Deliver Projects In-Year

Annual funding cycles present a risk where projects are not able to be delivered within a financial year.

The Scottish Government aim to mitigate this risk by allocating funds to projects as early in the financial year as possible. This Roadmap, will support the development of a pipeline of projects to ensure islands are in a viable position to take advantage of funding when it becomes available

Lack of Investable Initiatives

Securing private sector investment requires significant project development toward investable opportunities. This means that there could be an overreliance on public funding.

This risk is best mitigated by prioritising those candidate projects which have the potential to create savings, generate revenue, or provide opportunity for business or social enterprise growth.

Extended Timeline to Develop Investible Initiatives

There is a risk that the long lead-in time required to develop investible initiatives results in a loss of project momentum, or a lack of investment in potentially higher impact initiatives.

This risk can be mitigated through the existence of this Financing Roadmap, and through allocation of time and resource to the development of higher-impact investable opportunities. It can also be mitigated by early engagement with all relevant stakeholders, to understand the development requirements and attractiveness of propositions.

Lack of Community Buy-In

Despite the project being coordinated and funded by the Scottish Government working closely with local anchor organisations, there is a risk that the project may lose community buy-in as it progresses over time.

This risk is mitigated through the employment and development of community development officers, by local anchor organisations supported by community steering groups. Each year, the Scottish Government allocates resource funding, via a Grant, to enable nominated local anchor organisations to employ community development officers to lead community engagement.

Administrative Challenges

The development of projects at a local level can be challenged by administrative processes on a local, regional or national scale.

This risk is mitigated through providing sufficient resource funding and also through supporting local partners to understand these challenges and work with stakeholders at all levels to overcome them.