Two bonds give expected returns of 6% and 5.5% pa and are among UK’s first bonds launched to finance community energy projects
Mongoose Energy has announced that two of its affiliated community energy companies (bencoms) have raised over £2 million since the government closed its Enterprise Investment Scheme tax relief for community energy projects.
The bonds have been launched to bring two large-scale solar arrays into community ownership, a 4MWp array in Portworthy, Devon – 5 miles from Plymouth – and a 4.59MWp array at Puriton, Somerset – near the proposed Hinkley C nuclear plant site.
The bonds were launched by Bath and West Community Energy (BWCE) and Bristol Energy Cooperative (BEC) and respectively offer expected fixed-rate returns of 5.5% pa (6% to shareholder members of BWCE and local partners) and 6%.
BWCE’s bond launched in the run up to Christmas and closed early having hit its investment target of £1.682 million. BEC was the second to launch a bond offer and this has already attracted over £400,000 and closes on the 31st March.
Bristol Energy Cooperative director, Chris Speller, at the Puriton solar array. Click image to download high-res version.
Jan-Willem Bode of Mongoose Energy said: “BWCE continues to be a fantastic case study for the community energy sector, which delivered strong returns for investors in our cooperatives in 2015. The exceptional interest we’ve seen in the bonds highlights the strength of the sector and gives an extra incentive for people to back these local, renewable energy generation schemes that plough additional profits back into the community, financing projects that address issues like biodiversity and energy poverty.”
The bond offers have been independently approved as a financial promotion under the Financial Services and Markets Act 2000. Both bonds are run in association with the community energy firm Mongoose Energy and are available through the award winning positive investment and savings platform, Ethex.org.uk. Finances go to Bristol Energy Cooperative (to fund the Puriton array) and Bath and West Community Energy (to fund the Portworthy array).
Sarah Flood, acting CEO of Ethex said: “Ethex is pleased to see the continued investment in community energy projects to bring clean, green energy into community ownership.”
About the Bath & West Community Energy (BWCE) bond offer
BWCE closed on the 26th of January, 5 days ahead of its 31st January deadline having exceeded its £1,682,000 target.
This new site will take BWCE’s community-owned capacity to nearly 7.5MWp, enough to supply the electricity demands of approximately 2,000 typical UK homes. Surplus profits from the solar array will be reinvested into local communities. From its existing projects, BWCE has already distributed £65,000 via its independent community fund and paid its members the target interest rate on their investment for the last four years.
Bath and West Community Energy’s offer is a 2-year initial-term bond offer that gives expected returns of 5.5% per annum, with an additional 0.5% bonus for shareholder members of BWCE and local partners, and capital will be repaid after 2 years.
About the Bristol Energy Cooperative bond offer
BEC’s bond offer closes on the 31st March and has raised over £400,000. Those investing in the BEC bond offer before the 31st of January and the 29th of February will accrue interest from 1st of February and 1st of March respectively.
This purchase of the already-built Puriton site will take BEC’s community-owned capacity to 4.7 MWp, generating a predicted 4,700MWh per year of clean energy – saving more than 50,000 tonnes of CO2 over the array’s 25-year running life. BEC is additionally raising funds to purchase and build an array on an additional site near Avonmouth, which will take its capacity to 9.3MWp.
Bristol Energy Cooperative’s bond is a 3-year product that gives expected returns of 6% per annum, repaid after 3 years. Upon completion, investors have the option to cash in their bonds, extend it beyond 3 years at 5% per annum, or to convert into shares.
BEC has paid its members the target interest rate on their investment for the last three years. Surplus profits from the solar array will be reinvested into a community fund that local groups can apply to. BEC’s community fund payments from its existing schemes have helped fund free advice sessions on energy deals, bill management, and maximising energy savings.
The bond offer seeks to raise £2.662 million and has a minimum investment per applicant of £500. It is open to anyone over the age of 18.
The products offered by both BWCE and BEC are investment, not saving products. The bond offers have been independently approved as a financial promotion under the Financial Services and Markets Act 2000 and neither are covered by the FSCS.
Investment decisions must only be made on the basis of the bond offer document and not on information provided in this release. Your original investment capital may be at risk and any return on your investment depends on the success of the arrays at the individual sites and the businesses (BEC or BWCE) as a whole. You should read the offer document in full, including the risk factors set out in the offer document, and the terms and conditions regarding this offer at ethex.org.uk before investing. You should consider taking appropriate financial and other advice before making any investment decision.
The value of an investment may go up as well as down. Past performance is no guarantee of future performance. An investment in the bond offer carries risk and you may lose the whole value of your investment. Please consider this carefully in the context of the complete bond offer document and related information, and if needed, seek independent advice.