You are here: Home - Investing - Getting Started - News -

UK’s first ‘Council Solar Bond’ launched

0
Written by:
24/02/2016
A bond has been launched to fund the construction of the Swindon community solar farm, offering small investors returns of 6%.

 

 

The UK’s first-ever ‘Council Solar Bond’ has been introduced today by peer-to-peer (P2P) investment platform Abundance and Swindon Borough Council.

The bond will pay investors a 6% return over a 20-year term paid in cash twice yearly, and those who invest within six weeks of today’s launch will receive an additional ‘early bird’ bonus of 0.5% for the first five years. The minimum investment is £5. The rates on offer will certainly attract the attention of savers looking to beat the paltry returns currently available from banks and building societies, which look unlikely to improve in the foreseeable future.

The bond aims to raise £1.8m in capital, which, combined with a further £3m from Swindon Council, will finance the build of the solar farm. The fact that bondholders’ money will be invested alongside Council funds may further improve its appeal by bringing added security to the deal.

Investor returns will be generated from the proceeds of selling the electricity to the grid, and payments under the Feed In Tariff Scheme, which provides additional index-linked revenue for the project. The scheme was subject to swingeing cuts in January, but Abundance asserts that it it has secured a rate of payment which preceded last months’ reductions.

Construction of the solar farm is due to begin in Spring this year and on completion it will generate enough electricity to supply the equivalent of 1,200 typical homes and save around 2000 tonnes of carbon dioxide a year.

Bruce Davis, managing director of Abundance, said: “This first ever Council Solar Bond is exciting and important as it is further proof that ‘win win investment’ is not only possible, but can play a crucial role in providing the public with a better return, while creating innovative new ways for local community infrastructure to be improved without increasing costs to the taxpayer.  This is great news for people struggling to live off their savings or wanting to invest for their future without stock market risks, and to councils across the UK trying to maintain and improve local services.”

Councillor Dale Heenan, Swindon Borough Council cabinet member for transport and sustainability added: “For years, companies have been trying to find ways to make investing more accessible and understandable. Swindon’s solar bonds provide an opportunity for people invest as little as £5 or more than £5,000, and enjoy better returns than their bank provides as they invest for their children’s future, their own retirement or just a rainy day.

“Our approach is democratic finance in action, and the combination of personal benefit, environment issues and community involvement provides a topical way to catch imaginations, and help improve personal finance skills in a simple, easily understood way.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Royal Mail fined £1.6m for delivery failures and overcharging customers

Royal Mail has been fined £1.5m for failing to meet first-class delivery targets and a further £100,000 for ov...
Royal Mail fined £1.6m for delivery failures and overcharging customers

Government urged to hand out £500 shopping vouchers

A £30bn high street voucher scheme could kick-start Britain’s recovery, according to the Resolution Foundation...
Government urged to hand out £500 shopping vouchers

Lloyds and Nationwide rapped over PPI breaches

The competition regulator has shamed Lloyds and Nationwide for breaching PPI orders yet again.
Lloyds and Nationwide rapped over PPI breaches

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week

Read previous post:
Further pension reform dubbed ‘daylight robbery’

The government’s plans for further tax reforms to the pension system could amount to ‘daylight robbery’, according to one UK...

Close