EIB to help cut heating bills by unlocking Ireland’s District Heating Future

This article is published in association with European Investment Bank.

• New initiative to enable Irish cities to scale up district heating based on European best practice
• District heating investment can cut domestic energy costs and reduce carbon emissions
• Dublin and Cork pioneering Climate Neutral and Smart Cities initiative in Ireland

The European Investment Bank (EIB) today announced new technical and financial advisory support to help Ireland develop district heating systems that will reduce energy costs, cut emissions, and strengthen local economies.

District heating networks distribute heat from centralized facilities, using renewable or waste heat sources, to multiple buildings through insulated pipelines. District heating networks combine different heat sources—from surplus industrial heat to renewable geothermal, solar, or biomass—to provide more stable and predictable operational costs. By balancing low-grade and renewable inputs, systems maintain flexibility in sourcing cheaper or excess energy, and can shield connected households from market volatility.

Modern district heating systems can lower household and community energy costs significantly compared to individual heating systems.

The announcement was made in Malahide by Darragh O’Brien TD, Minister for Climate, Energy and the Environment, EIB Vice President Ioannis Tsakiris, alongside, and William Walsh, Chief Executive Officer of the Sustainable Energy Authority of Ireland (SEAI).

The new EIB Advisory engagement will help towns across Ireland to become climate neutral by preparing viable district heating investments. As part of Ireland’s national strategy to decarbonise heating, this initiative aims to tackle current challenges by facilitating the effective implementation of district heating policy, identifying suitable district heating delivery models, strengthening institutional capacity and support of a pilot project in a Climate Neutral City.

Dublin and Cork are the Irish cities to be part of the Europe wide Climate Neutral and Smart Cities Mission.

Minister Darragh O’Brien TD said: “District heating has huge potential for Ireland’s clean energy transition. Through this collaboration with the EIB and SEAI’s Centre of Excellence, we will prepare a strong pipeline of community-based projects that not only reduce our carbon footprint but deliver tangible cost savings for Irish families and employers. This initiative will also support local job creation and skills development in the renewable energy sector, strengthening communities across the country. By investing in sustainable heating infrastructure today, we are laying the foundation for a more resilient, energy-secure Ireland for future generations.

EIB Vice President Ioannis Tsakiris added “The EIB is proud to bring its European experience in sustainable energy systems to Ireland. District heating can cut emissions, reduce fuel poverty, and make local communities more resilient. With this agreement, the EIB, thanks to resources provide by European Commission Climate Neutral and Smart Cities Mission, our advisory support will help the Mission Cities as pioneers move from ambition to action, preparing real investments that support households and businesses while contributing to national climate targets. With the right planning and partnerships, Ireland can quickly catch up to European leaders in district heating. This advisory engagement will provide the roadmap for investment that keeps energy affordable, supports local economies, and delivers lasting climate action.”

William Walsh, CEO of SEAI, said “District heating generates heat from centralised renewable energy sources, including waste heat from big energy users, and pipes it into people’s homes and buildings. It works really well in other countries, but it’s not something we are overly familiar with here in Ireland. That needs to change. We’ve made significant progress decarbonising our electricity, but heat remains a big challenge, and district heating is crucial to meeting that challenge. There’s huge opportunity here in Ireland, which the district heating industry is ready to engage with. SEAI is really excited to work with the European Investment Bank and benefit from the EIB’s vast expertise and knowledge of best practice across other European countries.”

The support will be delivered through the EIB’s Advisory facilities in coordination with the European Commission Climate Neutral and Smart Cities Mission, under the InvestEU Advisory Hub. It builds on recent advisory roles that helped unlock major investment in Irish housing, retrofitting, and public sector decarbonisation, this new engagement will establish a pathway toward large-scale district heating deployment.

The EIB is working with the European Commission Climate Neutral and Smart Cities Mission to support Mission Labelled cities to transforming their ambitious investment plans into a pipeline of projects. The Mission aligns with EU priorities, including the European Green Deal and with the EIB’s role as the EU climate bank.

Why District Heating Matters Now

Heating accounts for more than one-third of Ireland’s energy-related emissions, and more than 80% of households still rely on fossil fuels. District heating—common across Nordic and central European countries—offers a proven way to decarbonise heating by using renewable, waste, and low-carbon heat sources. At present, Ireland’s networks supply less than 1% of national heat demand, highlighting a major opportunity for growth.

District heating can lower household energy bills, create local jobs, reuse waste heat from industry and data centres, and make communities more resilient against global energy price shocks. Research supported by SEAI and Ireland’s Climate Council shows that well-planned district heating schemes return strong economic and environmental benefits when matched to urban regeneration and retrofit programmes.

This new initiative follows the EIB’s long advisory relationship with Ireland, including support under ELENA for Galway City Council’s climate programme, Dublin energy efficiency partnerships, and local authority retrofit projects. The work also builds on the EIB’s Climate Bank Roadmap, which prioritises energy efficiency, renewable heating, and affordable local energy solutions for European citizens and businesses.

Alignment with Government and SEAI Strategy

The announcement complements Budget 2026, which allocates €1.1 billion to accelerate Ireland’s energy transition, including €558 million for SEAI programmes focused on heat decarbonisation. It also supports implementation of the forthcoming Heat Bill, as well as the work of SEAI’s District Heating Centre of Excellence, which will coordinate national efforts in this area. The advisory engagement ensures that Ireland’s plans align with European Union criteria and best practice in sustainable heat development.

Background information

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. The EIB finances investments in eight core priorities that support EU policy objectives: climate action and the environment, digitalisation and technological innovation, security and defence, cohesion, agriculture and the bioeconomy, social infrastructure, a stronger Europe in a more peaceful and prosperous world and Europe’s capital markets union.   

The EIB Group, which also includes the European Investment Fund (EIF), signed nearly €89 billion in new financing for over 900 high-impact projects in 2024, boosting Europe’s competitiveness and security.    

Approximately half of the EIB’s financing within the EU targets cohesion regions, where per-capita income is below the EU average, while almost 60% of annual EIB Group investments support climate action and environmental sustainability. 

High-quality, up-to-date photos of the organisation’s headquarters for media use are available here.  

About InvestEU

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. Through advisory support offered to project developers, the InvestEU Advisory Hub improves the quality of investment projects and their alignment with the EU long term policy goals.

About Climate Neutral and Smart Cities Mission

The EU Mission for Climate-Neutral and Smart Cities, under Horizon Europe, contributes to Europe’s clean and digital transition, aligning with the European Green Deal, the Policy Agenda for Cities, and the Clean Industrial Deal. 

The Cities Mission will involve local authorities, citizens, businesses, investors as well as regional and national authorities to

1.     Deliver climate-neutral and smart cities by 2030 with over 100 having reached mission label milestone 

2.     Ensure that these cities act as experimentation and innovation hubs to enable all European cities to follow suit by 2050