Abundance Launches First “Council Solar Bond”

By Guglielmo de Stefano on Wednesday 24 February 2016

Alternative Lending

Investors to coinvest alongside local council on construction of Swindon solar farm.


Peer-to-peer investment platform Abundance today announced the launch of a new bond offering by the name of ‘Council Solar Bond’. The Bond will fund the construction of the Swindon community solar farm - fully owned by the Council, who will be the sole shareholder.    


Looking at the offer documents, sixty-five per cent of the profits from the project will go towards local community initiatives, with the remaining 35% to investors and the Council.


In addition to the financial benefits, the solar farm – which will have a capacity of 5 megawatts (MW) – will help Swindon in its aim to install 200MW of renewable capacity by 2020. A total of 140MW has already been built or is being planned.


The Bond – structured like all Abundance’s offers as a debenture-  is expected to pay an effective rate of return of 6% over its 20-year term although it's worth noting that Abundance does offer a matched deals secondary market for those who want to exist their investors before the full term. Investors can as little as £5 and they will be repaid their capital and return from a combination of electricity sold to the grid and payments under the Government’s Feed In Tariff scheme. An early bird bonus of 0.5% for the first 5 years is expected to boost returns for those investing within 6 weeks from the launch.


Bruce Davis, Managing Director of Abundance, commented:


“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.”    


This initiative represents a big win both for small investors and for Swindon Borough Council. Investors can put in as little as £5 or more than £5,000, and enjoy better returns than their bank provides. The Council benefits from a new source of revenue without increasing the burden on local taxpayers.


Councillor Dale Heenan, Swindon Borough Council Cabinet Member for Transport and Sustainability added:


“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."


The financial details of the proposed project are being finalised, but people can already express their interest by visiting www.abundanceinvestment.com/swindon. If approved, the investment offer is expected to be formally launched next month.

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