UK's first council solar bonds sell out a month early
The UK's first-ever council solar bonds have sold out a month early, raising £1.8m.
The bonds, issued by Swindon Borough Council and peer-to-peer lending platform Abundance, were sold directly to the public for a minimum £5 investment to fund Swindon Community Solar Farm.
The council is co-investing £3m to build the 5MW solar farm on publicly owned land at Common Farm, Wroughton.
During the three-month offer period, the bonds attracted an average daily investment of £18,000, with one-third coming from the local area. They offer an effective rate of return of six per cent over their 20-year term.
Construction work has already started on the solar farm and it is due to be completed by the end of June.
It will be managed by a community interest company wholly owned by the council. Sixty-five per cent of distributable profits will go towards funding local community initiatives, with the remaining 35 per cent going to the council.
Revenues will be raised from selling the electricity generated, as well as support from the Feed-in Tariff subsidy. The solar farm was pre-accredited for FiTs before changes were made to the scheme at the start of the year.
Bruce Davis, managing director of Abundance, said: "The success of this investment offer has really set a standard for local authorities looking to fund green infrastructure. We've had lots of inquiries from other councils interested in following Swindon's pioneering lead.
"Energy is one area where local authorities have the power to make a difference, engaging and enabling their residents to take positive action and invest in a more sustainable future. We'd also like to see them going beyond solar and fund other infrastructure projects this way."
The solar farm of the council's plan to install 200MW of renewable energy capacity by 2020, the enough to meet the equivalent energy demands of every home in the borough.
Cllr Dale Heenand, cabinet member for transport and sustainability, said: "We took a bold decision to create this community solar farm by offering the first council bond direct to the general public in over 100 years. It was a calculated risk to raise £1.8mn this way, but we knew there was an appetite from residents to invest in something with genuine environmental and community benefits. The fact that we've hit the target four weeks early proves how successful this project has been.
"All councils need to find new and innovative ways to fund the vital work that they do for their communities, and Swindon now has a template which other local authorities can follow. Embracing renewables will help Swindon Borough Council raise £1m more in business rates and rent by 2020, which means £1m more every year which can be spent on important local services."