Potential stumbling block for Just Transition projects
Doubt has emerged over the viability of a series of planned projects across the Midlands, which are set to benefit from grant allocations from the Just Transition Fund.
In late November last, some 47 projects across the region, with a significant chunk in Offaly, were listed for grant aid of over €100,000 each from a €27.8m allocation through the Government's Just Transition fund.
However, it has now emerged that the Department of Environment, Climate Action and Communications is assessing whether 25 of these projects are in breach of EU State Aid rules and how that impacts funding allocations.
It has sought extra financial information from these projects. The Department insisted that the outcome of this assessment will determine the final grant awards to individual projects from the Just Transition Fund.
It said: “No decisions have been made in relation to reduction in funding, and the department is working to ensure that the maximum aid allowable under EU law is delivered to ensure a just transition is delivered in the Midlands region.”
It’s understood there is the possibility that the funding allocations may be reduced and also a larger matching allocation from the groups developing the projects be required.
A Department spokesperson also said that the Department is proceeding to finalise funding agreements with the other 22 provisionally approved projects in November 2020.
“Some projects promoted by community groups may have been unaware of the state aid rules and the department sought throughout the process to ensure that the limitations of state aid were known, although it is clear now that this was insufficient for some projects. The department held a webinar on Tuesday.
“Queries have been raised with the department and the department is answering these questions directly and preparing a frequently asked questions. Document in addition to the potential of one to one calls.”
One source indicated that it had been envisaged that many of the projects would require up to 15% matching funds, which could include local authority assistance and monies from other State agencies, alongside 85% Just Transition funding. However, in some cases, it’s believed that matching funding levels of some 40% could now be required, a major fundraising challenge for community and voluntary groups that leaves questions marks over the viability of some projects.
Offaly Deputy Barry Cowen said he was aware of the issue and was seeking further clarification on the precise situation. He said if the situation arose that there were funding shortfalls for projects, he would be seeking the Government to allocate the ESB’s €5m allocation to the Just Transition Fund to be used to plug any funding gaps.