Local energy initiative launches to help Scottish investors tackle fuel poverty

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Local energy initiative launches to help Scottish investors tackle fuel poverty

Bond and share offer opens offering East Lothian and Berwickshire the opportunity to invest in £3,045,000 fundraise 

Target of £1.9m in profits to be invested into tackling fuel poverty in Scotland over 25 years

Savvy investors in Scotland are today being encouraged to get in line to invest in two community-owned renewable energy projects set up by Our Community Energy to help tackle fuel poverty in Scotland. The projects, based in Pogbie, East Lothian, and Brockholes, Berwickshire, have today opened a waiting list for those who want to guarantee themselves an opportunity to invest in the £3,045,000 fundraise, launching on 29th March. Our Community Energy plans to share all of its surplus profits – a projected £1,900,000 over 25 years – with Our Power, a UK not-for-profit energy supplier set up to tackle fuel poverty.

The bond and equity offers, set up by Our Power and Mongoose Energy – the UK’s largest manager of community-owned renewable energy assets – are linked to inflation and, whilst the interest rates may rise and fall over 20 years, currently deliver returns of 6.6% and 8.1% respectively. Those who sign-up and invest in the bond offer before the first half of the target funds are raised will earn an additional 1% of interest in the first year. Please note that capital is at risk and returns are not guaranteed. As the offer also includes an Innovative Finance ISA option, investors still needing to use their ISA allowance can take advantage of it, or alternatively transfer their existing cash ISAs at any time.

The two wind farms will comprise fifteen wind turbines, three of which are already operational, and will be able to generate over 12MW of energy – enough to power 9,000 houses. They will also provide the added bonus of giving investors peace of mind and ‘feel-good factor’ that their money is being used entirely to deliver positive change in their community. All the funds raised will be used to acquire renewable energy generating assets, whilst the surplus profits will be used to help remove people from fuel poverty, with an intended minimum of £75,000 per year over 25 years being donated to the cause.

The launch coincides with a marked growth in investing to ‘do good’, not solely for profit. Research from Mongoose Energy shows that two thirds (60%) of consumers today would prefer their investment to make a positive impact on others. With more than a third of Scots (36%) admitting to living in fuel poverty already, and nearly three quarters (74%) seeing it as an issue to be dealt with urgently, the launch of the Pogbie and Brockholes wind farms are very timely.

Andrew Smith, Our Community Energy Acting Chair, commented: “Fuel poverty is a huge issue for Scotland and we’re proud to be launching such an important fundraising opportunity to directly tackle it. Investing with a social purpose is something close to the hearts of many Scots, and these bond and equity offers provide the chance to have a huge impact locally. These offers will help to support those who struggle to afford sufficiently heated homes, as well as providing financially savvy investors with an exciting new option which not only has a significant social impact, but a positive environmental one too.”

Mark Kenber, CEO of Mongoose Energy, commented: “With the end of the financial year looming, many people are still unsure of how to best invest their money. Our Community Energy not only gives savers the chance to earn competitive interest rates on their money, but also the opportunity to support the wider Scottish community.

“With the majority of Scots recognising the critical level that fuel poverty has reached, it is now more important than ever for investors to put their money into causes that work for the social good, not just their own.”

Further information on opportunities for investing in community-owned renewable energy can be found here.

Please note that investing in the projects promoted by Mongoose Energy puts your capital at risk and returns are not guaranteed. Please read the full risk warning on https://www.mongoosecrowd.co.uk/risk before deciding to invest.

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About Mongoose Energy

Mongoose Energy (www.mongoose.energy) works with community groups, project developers and investors to develop, finance and manage community-owned renewable energy installations. The organisation is majority-owned by the community energy groups it works with, and profits go back to the local communities that developments are located in.

Mongoose projects are funded through the crowdfunding platform Mongoose Crowd (www.mongoosecrowd.co.uk), where investors can see a range of offers for community-owned renewable energy developments across the UK.

Our Power

Our Power is a not-for-profit energy supplier, owned by social housing providers, community organisations and local authorities. Its aim is to make energy fairer for all members of society.

Our Power aims to reduce heat and fuel costs by passing benefits from the energy sector to our communities. It does this by not paying dividends to shareholders, by finding the most efficient ways to operate, by generating its own power and by reinvesting any profits to benefit customers and their communities.

About Our Community Energy

  • Three wind turbines are operational in Brockholes, generating up to 2.4MW
  • Pogbie will have 12 turbines in operation by the end of 2018, generating up to 9.7MW
  • The 12.1MW of energy that these sites will have the capacity to generate will be capable of powering 9,000 homes

Summary of bond offer (OUCE)

  • Issuer: Our Community Energy
  • Bondholders’ interest: The target interest rate is RPI + 2.5%. This is currently equivalent to 6.6% per year (based on current RPI of 4.1%). Interest is paid annually (returns are not guaranteed)
  • Incentive: Additional 1% interest on first year’s return for those investing before offer reaches 50% of target
  • Funding target: £1,200,000
  • Offer opens: 29th March, 2018, with the aim of closing by 31st May 2018
  • Term: 20 years
  • Minimum investment: £500
  • The target is to contribute at least £1.9m over a 25-year period to a community benefit fund, mentioned above (a minimum of £75,000 will be paid per year).

Summary of share offer (OUCE)

  • Issuer: Our Community Energy
  • Members’ interest: The target interest rate is 4% plus RPI. This is currently equivalent to 8.1% per year (based on current RPI of 4.1%). Interest is paid annually (returns are not guaranteed)
  • Incentive: Additional 1% interest on first year’s return for those investing before offer reaches 50% of target
  • Funding target: £1,845,000
  • Offer opens: 29th March, 2018, with the aim of closing by 31st May 2018
  • Term: 20 years
  • Minimum investment: £500
  • Maximum investment: £100,000
  • The target is to contribute at least £1.9m over a 25-year period to a community benefit fund, mentioned above (a minimum of £75,000 will be paid per year).

What is the Innovative Finance ISA?
The UK Government introduced the Innovative Finance ISA on 6th April 2016, to recognise the growing role that Peer-to-Peer lending is having in bringing investors and borrowers together outside of the mainstream baking sector. The ‘IFISA’ allows individuals to use some (or all) of their annual ISA investment allowance to lend funds through the growing Peer-to-Peer lending market, whilst receiving tax-free interest and capital gains.

The rates offered by Innovative Finance ISA providers are typically around double the rates offered by Cash ISA providers. This is possible for a number of reasons, with the main reason being that Peer-to-Peer lending cuts out the ‘middleman’ bank, allowing borrowers to pay less in interest but also allowing investors to receive more.

Mongoose Crowd offers eligible members the choice of opening an IFISA from within their account.

About the research
The research referenced in this release was commissioned by OnePoll, following a survey of a representative sample of 750 consumers living in Scotland, as well as a separate survey of a representative sample of 2,000 consumers living in the UK. Further details on this are available on request.