Memorandwm Cyd-ddealltwriaeth: Defnyddio cyllid Llywodraeth y DU ar gyfer Ynni Lleol a Chymunedol yng Nghymru

1.1 The signatories to this Memorandum of Understanding (“MoU”) are:

• The Secretary of State for Energy Security and Net Zero, acting through the Department for Energy Security and Net Zero (“DESNZ”), and
• The Welsh Ministers (“WMs”).

1.2 For the purpose of this MoU, each shall be a “Participant” and, together, the “Participants”.

2.1 This MoU describes the understanding between both Participants for partnership working and the use of pre-agreed funding. The MoU is not legally binding or enforceable, and does not purport to create any legal rights or obligations whether between the Participants or otherwise.

2.2 The MoU sets out principles for collaborative working between DESNZ and WMs for investing up to £9.495 million in the Financial Year 2025-2026 to support community and local renewable energy projects in Wales. It sets out:

• Aims of the funding
• Funding Schedule
• The principles of collaborative working
• Management and governance

This MoU will commence from the date it is last signed by the Participants and will end on 30 November 2026. The Participants may choose to put a new arrangement in place from December 2026 onwards.

3.1 The aim of the funding is to support community and local renewable energy projects in Wales. “Community and local renewable energy” refers to renewable energy projects, either wholly community owned and/or controlled, or partially via shared ownership agreements, and the delivery of renewable energy projects involving local government and other organisations, including from the public, private, and community sectors. WMs commit to allocating the funding in line with this aim.

3.2 The funding aligns with the shared aspiration of both governments towards clean, secure home-grown energy, and with the aims of GBE. In respect of this MoU, DESNZ is acting on behalf of GBE while it is in its set-up phase.

4.1 The WMs will receive up to £2.88 million in capital funding from DESNZ through the Supplementary Estimates process to support community and local renewable energy projects in Wales in the 2025-2026 financial year. Up to a maximum of 15% (i.e. up to £432,000) of this funding will be available as RDEL to support the delivery of the CDEL funding as required. Any RDEL drawn down will be in lieu of CDEL and make up a portion of the £2.88 million.

4.2 In addition, the WMs will receive up to £6.615 million in capital funding, also via Supplementary Estimates, to support community and local energy projects in Wales in FY 2025-2026 (Phase 2).

4.3 The WMs will use the funding to support the aims outlined in 3.1 above. The Welsh Government will receive a Budget Cover Transfer from DESNZ as part of UK Supplementary Estimates of the full amount of up to £9.495 million. The Welsh Government will advise on the proportion it wishes to receive as RDEL and CDEL in accordance with paragraph 4.1.

4.4 Any funding not used in the Financial Year 2025/2026 will be reprofiled into Financial Year 2026/2027 via arrangements the Welsh Government has agreed with HM Treasury. WM will ensure that these projects are completed by 30 November 2026 and that all funding is spent on projects within the scope of paragraph 3.1. If the possibility of an underspend occurs, the WMs will inform DESNZ at the earliest possible juncture. Any re-deployment should involve DESNZ, be appropriate and related to the purpose of the budget transferred.

5.1 Both Participants will engage and communicate regularly with regards to the funding, to support the sharing of learning and ensure the funding meets the shared goals of both governments and GBE.

5.2 When planning any publicity relating to the funding, the Participants will inform each other of their intentions, make all reasonable efforts to coordinate such activity and ensure any signage and public communications relating to the collaboration reflect our shared goals and aspirations. Any work delivered through the collaboration should be easily recognisable as being funded or part funded by DESNZ and delivering on the goals of both the Welsh Government and DESNZ. Branding and signage relating to projects and activity funded, or part funded, by DESNZ should include the GBE logo.

6.1 The WMs will assume overall responsibility for allocation, distribution and administration of the funding in Wales. WMs will manage equalities considerations, fraud risk, and subsidy control, where appropriate. WM’s officials and DESNZ officials will hold regular meetings on progress and learning to inform future policy making, and to understand progress towards shared goals and aspirations as set out above. UK and Welsh Ministers may also touch on these issues as part of their regular engagement.

6.2. Both Participants are committed to the prevention and elimination of modern slavery within the supply chains of all activities supported by the funding. WMs will ensure that projects receiving funding have taken proportionate measures to prevent and eliminate modern slavery within their supply chains. Both Participants will take proactive steps to ensure that modern slavery risks are identified and addressed at the earliest possible stage, including before any funding is awarded or contracts are entered into.

7.1 WMs will share progress and learning throughout the delivery of the funding in order to both inform future policy making and to understand progress towards supporting community and local renewable energy projects in Wales. This will include the provision of non-personal data and evidence to support both current and future monitoring and evaluation activities undertaken by the DESNZ and/ or GBE. The Participants will look to develop a data sharing agreement to enable nonpersonal data to be shared between them, including to support the liaison and information sharing set out above.

8.1 Both Participants are committed to resolving disagreements relating to this MoU at the lowest appropriate level possible. If agreement on a matter cannot be reached, it should be escalated via normal official routes within the respective governments in line with established IGR principles.

9.1 Each Participant will provide to the other Participant any information in its possession that may be reasonably requested by the other Participant, subject to any confidentiality constraints, safeguards, and statutory rules on disclosure. Each Participant will consult the other Participant before making to any third party any significant disclosures of information under the Freedom of Information Act 2000 in relation to this MoU.