1. About the fund
The Natural Environment Investment Readiness Fund (NEIRF) supports the government’s goals in the:
- Environmental Improvement Plan
- Green Finance Strategy
- Nature Markets Framework
- Agricultural Transition Plan
It aims to stimulate private investment and market based mechanisms that improve and safeguard our domestic natural environment by helping nature projects get ready for investment.
The NEIRF is supporting the development of 86 projects across England as a result of 2 previous funding rounds. This third round is specifically to support farmers in accessing nature markets, as committed to by Department for Environment, Food and Rural Affairs (Defra) ministers.
The NEIRF is a competitive grants scheme providing grants of between £10,000 and £100,000 to support the development of nature projects in England that:
- help farmers achieve one or more natural environmental outcomes from the Environmental Improvement Plan
- have the ability to help farmers produce revenue from ecosystem services to attract and repay investment
- produce an investment model that can be scaled up and reproduced by farmers
Proposals should focus on generating revenue from ecosystem services alongside food production, rather than producing revenue through the sale of goods or commodities. Examples of ecosystem services that could produce revenue include:
- selling carbon units from woodland creation or peatland restoration, using the Woodland Carbon Code or Peatland Code
- selling biodiversity units from a habitat bank, using the Natural England biodiversity offsetting metric
- selling ‘catchment services’ (such as improved water quality and natural flood management benefits) resulting from natural environment improvements
We want to see a diversity of ecosystem service and investment models represented. We welcome proposals outside the examples above, ones which consider interactions between ecosystem services or focus on more specific or complex elements of existing codes or metrics. Proposals must be focussed on helping farmers to access revenue and investment through nature markets.
The grants are to help farmers to:
- get support from professional advisors to develop your project, address barriers to investment and present an attractive case for potential investors
- build capability to attract financial investment into natural environment projects
- develop a market for ecosystem services (such as investment or trading platforms, codes for verifying benefits, aggregator vehicles)
We will expect you to make the products and knowledge gained through the fund openly available for the benefit of others. This is to help the development of:
- the natural capital investment sector
- policy and regulation, including alignment with future government funding schemes
You can read about projects funded through the first 2 rounds of NEIRF in the news stories:
- 50 projects receive up to £100,000 to boost investment in nature, May 2022
- Innovative nature projects awarded funding to drive private investment, July 2021
The Green Finance Institute (GFI) has drawn on what’s been learned from previous NEIRF projects to develop an interactive, online farming toolkit for assessing nature market opportunities. It may be helpful to review previous projects and the GFI toolkit when planning your application.
You can apply for an NEIRF grant between 11 December 2023 and 16 February 2024.
The Environment Agency administers the scheme on behalf of the Defra group.
You can apply for a grant if you are a farmer or farmer-led group.
If you are a non-farming not for profit organisation, charity, non-governmental organisation (NGO), public body or business, you can only apply for a grant if one or both of the following apply:
- you can provide evidence that it will directly support farmers to access nature markets
- you have significant farmer representation in your partnership
You cannot apply for a grant if you are:
- not a farmer or not directly helping farmers to access nature markets
- a central government department or one of their executive agencies
- a non-departmental public body
But those organisations can be partners in bids. If so, you will need to show which staff are partners in a grant application.
You must prove that you’re eligible when you apply.
3. How much you can apply for
You can apply for a grant of between £10,000 and £100,000.
4. Application deadline
You can apply for a grant from 11 December 2023.
You must send all the information we need by midday (12pm) on 16 February 2024.
5. The geographical scope of NEIRF grants
The fund is for activities in England. It may fund activities to prepare projects where benefits apply across borders with Wales or Scotland – this will be based on the environmental benefits to England.
Projects must protect or enhance the domestic natural environment in line with one or more of the Environmental Improvement Plan goals in the context of the following natural capital asset types:
- peri-urban (areas of transition from rural to urban land uses))
- enclosed farmland
- mountain, moor and heathland
- freshwaters and wetlands
- coastal margins
- semi-natural grassland
Funded activities should be completed within one calendar year, but we may allow longer grant periods. Funded activities should not begin before you receive your grant award and must be completed by 31 March 2026.
6. What the grant can pay for
The grants are to add to your own resources in the development of investment readiness proposals. All costs must be directly associated with developing the investment readiness proposal to be eligible for funding. When carried out, these must have the potential to provide activities that meet all the fund’s aims.
The grant can fund up to 100% of eligible costs.
Third sector organisations can apply to recover up to 20% of their staff costs (organisational overheads such as those related to day to day running costs, insurance, or routine accommodation). We will assess all applications for value for money.
6.1 Examples of activities eligible for funding
Internal organisational capacity
The salaries of staff developing the investment readiness proposals. You can only claim internal staff time at cost, keeping to the cost recovery eligibility rules already explained. You will need to provide evidence to show this.
Specialist consultancy and technical advice to design and structure an investment model that will produce revenue or cost savings
Examples of the types of activities we can fund include:
- commercial appraisal of revenue generation approaches
- commercial and legal appraisal of potential investment and associated repayment terms
- business and financial modelling
- technical support for structuring investment and raising capital
- legal and governance advice, particularly for setting up suitable legal and other necessary structures to manage income generation, external investment, repayment processes and agreements
- investor due diligence requirements
- developing marketing and sales promotion strategies to allow you to confidently approach potential investors and successfully win external investment in your project
- impact measurement and management
- considerations for how the revenue generating aspects of the proposal will be carried out and managed on an ongoing basis
We will only fund activities such as securing consents, baseline surveys or research if you can clearly show that these will make your proposal more likely to be invested in.
You will need to make sure your use of NEIRF grant money follows the UK’s current and new international obligations for subsidies. This includes compliance with the UK’s commitments:
- in the Subsidy Control Act 2022
- from its membership of the World Trade Organisation (WTO)
You will get more detail with your grant agreement if you are successful.
7. What the grant cannot pay for
You cannot get funding for:
- capital spending, such as physical works, buying or leasing land or equipment
- costs already covered through other funding
- costs incurred before you’re awarded the grant
- meeting your own legal obligations (except related to designing and structuring an investment model)
- paid-for lobbying, which means using the grant to fund lobbying (through an external firm or in-house staff) to influence Parliament, government or political activity, or trying to influence legislative or regulatory action
- using the grant to directly allow one part of government to challenge another on topics unrelated to the agreed purpose of the grant
- expenses, such as for gifts or entertaining, specifically aimed at influencing government policy
- input VAT reclaimable by the grant recipient from HMRC
- fines, charges or dividends
- payments for activities of a political or wholly religious nature
- contingency – if you encounter unexpected costs, there will be a process in place to assess this
8. How we will assess your application
There are 4 stages to the assessment process.
8.1 Stage 1 – screening
The Environment Agency will screen your application. It will identify if:
- you are eligible
- you have filled in and signed the application form
- you have included the supporting information that we need
- the proposal passes financial due diligence checks
- the proposal strategy aligns with the fund’s aims
If information is missing, you will have 10 working days from the date you are notified to send it to us.
8.2 Stage 2 – application assessment and scoring
Multidisciplinary experts across Defra, its arm’s length bodies and external advisors will then assess your application against the assessment criteria. The criteria are weighted by the contribution each one makes to the overall score.
We may ask you to send more technical information about your application.
The panel will then score the application.
Criterion A: The extent the application describes the environmental outcomes the proposed or resulting investment model will achieve for the government’s Environmental Improvement Plan. This will be given a 30% weighting. (Application form section 4.1.)
Criterion B: The extent the application describes the potential of the proposed model to produce revenue. This will be given a 30% weighting. (Application form section 4.2.)
Criterion C: The extent the application shows potential for innovation and learning. This will be given a 30% weighting. (Application form section 4.3.)
Criterion D: Funded activities must clearly present value for money – minimising costs, maximising resources, effective project management and plans for assessing success. This will be given a 10% weighting. (Application form sections 5 and 6.) This includes:
- a proportionate and effective budget, presenting good value
- necessary arrangements in place to deliver project goals
- effective and clear path towards intended outputs and outcomes
See examples of how to meet the assessment criteria in section 9.
Weak: Application is supported by a weak standard of evidence in several areas. It gives the fund concern about the ability of the applicant to achieve and support the fund’s aims.
Promising: Application is supported by a satisfactory standard of evidence in most areas, but a few areas lack detail or evidence. Gives the fund some concerns about the ability of the applicant to achieve and support the fund’s aims.
Strong: Application is comprehensive and supported by good standard of evidence. Gives the fund confidence in the ability of the applicant to achieve and support the fund’s aims. Meets the fund’s requirements.
Outstanding: Application is very comprehensive and supported by a high standard of evidence. Gives the fund a high level of confidence in the applicant’s ability to achieve and support the fund’s aims. May exceed the requirements in most respects.
8.3 Stage 3 – moderation and shortlisting
The assessment panel will carry out a moderation process. This is to make sure it has scored applications consistently.
The panel may challenge any of the information it receives or request more information from applicants to support any statements made.
The assessment panel will make a shortlist of applications. It may withdraw low scoring applications.
8.4 Stage 4 – NEIRF project board
The project board will consider shortlisted applications and how they align with the fund’s strategic aims. We aim to achieve a balanced set of projects from the applications received.
The project board will confirm which applications to fund.
We should contact all applicants about the outcome of their application by June 2024.
The fund aims to give feedback to unsuccessful applicants.
9. Examples of how to meet the assessment criteria
9.1 Environmental outcomes
Your application should explain how your investment model will lead to enhanced natural environmental outcomes, referring to the Environmental Improvement Plan its outcome indicator framework. Provide evidence for this.
The following are examples of outcomes.
Thriving plants and wildlife
- supporting or improving biodiversity
- supporting or improving pollinator status
- increasing favourable condition of protected sites
- restoring priority habitats and reducing degraded land
- supporting condition of marine habitats and sustainable use of the marine environment
- protecting threatened species
- increasing the percentage of production area under productive and sustainable agriculture and aquaculture
- creating water habitats
Such as supporting reduction of emissions from important air pollutants.
Clean and plentiful water
Such as enhancing the water environment and supporting water bodies to meet good status.
Managing exposure to chemicals and pesticides
Such as creating habitats for natural predators of plant pests.
Using resources from nature sustainably
Such as enhancing and protecting soil health.
Mitigating and adapting to climate change
- peatland restoration
- flood resilience
- tree planting
- managing climate change risks
Reduced risk of harm from environmental hazards
- natural flood management
- management of coastal habitats such as sand dune restoration
- wetland and peatland restoration
Such as tackling non-native species.
Enhancing beauty, heritage and engagement with the natural environment
Such as better outcomes in landscapes for nature and for people.
9.2 Financial outcomes
Your application should describe with evidence, for example:
- how the investment model will produce revenue or cost savings from ecosystem services, including who your buyers and sellers are
- how the revenue or cost savings produce a return for an investor
- the scale of investment your model is likely to attract, including evidence and timeframes
- if you have approached any investors
9.3 Project potential, innovation and learning
Your application should describe your plans for how to complete the project in a timely manner and the potential to gather, keep and share knowledge.
This should include:
- whether your approach has been tried or carried out elsewhere (if this is outside England, you should justify that you could reproduce this in England) – explain the degree of innovation and risk
- the potential for the model to be scaled or reproduced
- how the long term sustainability of the outputs and outcomes will be maintained
- the extent to which the proposal is innovative and an opportunity for testing new approaches
- the potential to share knowledge from your proposal with others
- if and how the proposal will address barriers to investment – regulatory, policy or financial barriers
9.4 Value for money
Your application must show how you will develop the investment model in the most cost effective way and continue to achieve value for money throughout.
The important factors in value for money are:
- how suitable quality inputs are bought at a minimised price
- how well inputs are converted into outputs
- how you will achieve your medium to long term objectives
You must show how you will:
- minimise costs
- get the best value from the resources you have
- use suitable and effective project management methods
- plan for assessing success
You must do this in the following ways.
A proportionate and cost effective budget, presenting good value
You must include accurate grant costs in your application. You must show that grant costs are reasonable by including evidence. All grant costs need to be available for audit.
This should include:
- an overview of costs you intend to claim, including comparisons of costs of similar works where possible
- details of estimated grant costs (including day rates) for advisory or consultancy services you have used or plan to use, so the model can produce income or attract investment
- details of any grant costs you will incur in developing internal organisational capacity and expertise, so the model can produce income or attract investment
- salary costs, including day rates
Measuring, monitoring and evaluation of costs
Your grant costs must be clear and justified. You should make the most of other sources of funding and resources for the project.
The grant must help you achieve outputs or outcomes that would not otherwise be possible. You must show how other sources of government funding are used for any complementary activities – this must not duplicate NEIRF activities.
You must show that your procurement process:
- is open and transparent
- shows value for money
- awards the best value bid
- is competitive and goes out to tender (where applicable)
Efficiency in being prepared to go ahead and put necessary arrangements in place to achieve the NEIRF proposal
Your application should describe the extent to which you are ready to achieve your proposal and that necessary arrangements are in place to support this.
We need to know if you have a history of comparable work and that you’ve identified the necessary resources, including stakeholder and beneficiary engagement.
You should describe the following with evidence.
Support from others
Describe what support you will have from stakeholders that are important for your proposal to continue and the beneficiaries who will pay for the ecosystem services produced.
The application assessment panel will consider your description of:
- what engagement work you have already completed and how this will continue during the development and implementation of the proposal
- the role of partner organisations and stakeholders involved in your application
- which stakeholders are happy for the proposal to be developed
- which stakeholders are supporting your application
Details of potential investors will help your application when we assess it.
Include other preparations you have made, for example:
- what permissions, consents, designs and other plans or agreements you have in place, are working towards, or will be necessary for environmental works to begin
- what sites are available for you to test your model on and agreements from landowners, land managers and farmers
- any work you have done to identify and work with external consultants or technical experts who can help make your proposal capable of producing revenue
- investigation of what legal agreements and new funding structures you need
- dependencies, if any, the investment model would have with other public funding and upcoming legislation, such as to reduce or remove risk in private sector investment
Effective and clear path towards achieving intended NEIRF outputs and outcomes
We will assess your application on whether you have effective plans in place to manage and achieve the proposal.
Include the following in your plan:
- details which show that you will achieve the investment case to time and budget
- the proposed management and governance arrangements, including risk and dependency management
- the proposed financial management arrangements
- the proposed resources – including how you will develop and maintain capabilities and capacity
Include a project plan in your supporting information.
9.5 Monitoring, reporting and evaluation
You should show how the benefits from your project will meet the fund’s aims – with clear plans for measuring, monitoring and evaluation.
We expect to see a realistic and costed plan for evaluation in your application. For example, how your proposal:
- achieves its goals for development or building capacity and capability
- will continue to run and meet longer term environmental and financial outcomes (later stages after investment such as implementation and monitoring are not within the scope of the grant)
- will go beyond meeting your regulatory obligations
If your application is successful
You must take part in evaluation of the fund for 24 months beyond the completion of the investment case. You will get more detail on this if we offer you a grant.
As part of the grant agreement, we will expect you to:
- report on progress made achieving outputs halfway through the grant period (a midpoint report)
- meet with us to talk about the midpoint report
- produce an end of grant report including the details of the design and structure of the proposed investment or business model
- meet with us to talk about the end of grant report
- support evaluation activities and development of project case studies
- produce at least one publicly shareable report or case study to support your dissemination objectives
The end of grant report must include details such as:
- how your model is ready to be invested in and carried out, plus plans for ongoing work or management
- details of how you overcame barriers and why certain approaches did not work
- details of any innovative methods, techniques and approaches you developed
- lessons learned from your project
10. Prepare supporting information and evidence
You must send some supporting documentation with your application so we can complete eligibility and due diligence checks. If you do not include the mandatory items your application may be ineligible.
The optional items we ask for provide evidence to support your application. Without this supporting information your application may not score as highly.
You must send copies, scans or photographs – not originals. You should label documents clearly before sending them with your application.
The mandatory supporting information we need is as follows.
10.1 Evidence of organisation type
- charity registration number
- company number
- public body terms of reference
- HMRC registration
- partnership agreement
- proof of status as a legal entity
10.2 Evidence of procurement processes
For example, an organisation procurement policy that shows the process is open, transparent, competitive and awards the most economical bid.
10.3 Financial and management accounts
This should be at least one of the following:
- business accounts for the most recent 3 years of trading
- the most recent tax return (for new businesses without 3 years of business accounts)
- a statement of income and expenses from your accountant (if you’re self-employed or a new business)
10.4 Independent accountant’s letter
If you intend to claim VAT as part of your project costs then you will need to submit a letter from an independent accountant.
You are only eligible to claim VAT if irrecoverable VAT is in the proposal costs. The letter should state if your organisation is VAT registered and VAT costs on the grant costs are irrecoverable. Without this evidence, you will not be able to claim VAT as part of your grant.
10.5 Authority to use electronic signatures
If you have used electronic signatures for your declaration, you should include emails from the signatory’s organisational email account confirming they authorise the submission of the application form.
10.6 Written support for the project
For example, letters or emails of support from the buyers and sellers of the environmental benefits, and potential investors.
10.7 Evidence of clear project delivery plan
For example, a Gantt chart.
10.8 Proof of costs
- your breakdown of costs including internal salary cost calculations (based on employee gross salary, employer national insurance and pension contributions) and day rates for staff and contractors
- comparisons of proposed costs with similar works to show project costs represent market value
- 3 comparable quotes – you must use the cheapest quote unless you can justify why a higher quote gives better value for money
- the reason for using a single award where you did not use a tender process
- other related evidence to show the costs are reasonable
11. How to apply
The details you give will form part of your grant agreement if you’re successful.
11.1 Fill in the application form
- fill in all the form fields that apply to you
- include your supporting information
You must not alter the form or add additional pages. We may reject forms that have been altered.
11.2 Sign your declaration
Someone of suitable authority within your organisation must sign your declaration.
To sign your declaration, either:
- print the declaration page, sign it in black ink, then email a scan or photograph of the signed page with your application
- send an electronic signature (such as an image file) along with an email from the signatory’s organisational email account confirming they allow the submission of the application form
11.3 Send your application
Email your completed application form and all your supporting information to NEIRF@environment-agency.gov.uk by midday (12pm) on 16 February 2024.
Applications sent after the deadline will not be considered. Send your application in good time before the deadline to avoid any delays in forms being received.
We will confirm that we have received your application by email within 5 working days. We will send this to the email address given in your application form.
We will contact you by email if there’s missing information. You will have 10 working days from the date of the email to send this. If we do not receive the missing information, we will reject your application.
12. If your application is successful
We will send you a grant agreement to consider. You will get:
- a grant offer letter
- your terms and conditions
- any relevant updates about your application
You then must check your grant agreement. It sets out the terms and conditions of your grant offer and any specific conditions that apply, including:
- the start and end date of your agreement
- the amount of your grant
- your payment schedule
- expected outputs
- the evidence you must give to justify payment claims, such as timesheets, invoices and reports
- what will happen if you do not meet the terms and conditions of your grant
You, or someone from your organisation authorised to enter into a grant agreement, must accept or reject the offer, sign the agreement in line with the instructions in the grant offer letter and return it to us within 10 working days. If the agreement holder will not be signing claims and variations, please add an assigned person to the delegated signatories section.
We may withdraw or reduce your grant offer if your project changes or costs increase.
13. Fund community
The NEIRF runs a SharePoint website that contains more information about the scheme. It’s also a way for the fund to share answers to common questions.
Email NEIRF@environment-agency.gov.uk if you would like access.
14. Complaints about the service
You can complain if you’re unhappy with the level of service or the way you have been treated. Use the Environment Agency’s complaints procedure.