In this paper an overview is given of the financing of co-operatives which supply households locally or regionally with heating from the energy production using biomass. Financial needs, debt and equity financing and potential solutions for the financing problem in case of larger grids, heat production or the installation
and operation of biogas plants are analyzed. Four solutions are discussed: 1.) the separation of the project into independent segments, 2.) the use of mezzanine financing instruments, 3.) the transfer of equity financing activities into a separate firm, and 4.) partnerships between private participants and the municipality.