Leeds City Council has initiated a competitive procurement process to appoint a development and funding partner for the Leeds City Centre Heat Network, a large-scale low-carbon district heating project under the UK government’s Advanced Zoning Programme.

The contract, valued at approximately GBP 4.09bn including VAT (EUR 4.8bn), will run for 50 years from March 2026 to February 2076.

The selected partner will enter into a development agreement with the council to undertake design and development activities during the initial phase.

If the project meets mandatory requirements and receives approval, the parties will form a joint venture governed by a shareholders’ agreement, with the council retaining a golden share.

The heat network will serve the designated zoning area in Leeds and may incorporate the existing Leeds PIPES network, which is currently owned and operated by the council and its wholly owned subsidiary.

The council may transfer Leeds PIPES to the new special purpose vehicle on a cash or equity basis following execution of the shareholders’ agreement.

The procurement will be conducted in five stages, beginning with a pre-qualification questionnaire and progressing through interim tenders, dialogue meetings, final tenders, and a preferred supplier stage.

The award decision is expected by February 2026, with contract signing scheduled for April 2026.

Evaluation criteria include technical quality (75%), price (15%), and social value (10%).

Advisory support for the procurement is being provided by Arup (engineering), Addleshaw Goddard (legal), Hermetica Black (technical), and Asteros Advisors (commercial).

*This story was originally published exclusively for NPM Europe subscribers.