Neilston Community Windfarm in East Renfrewshire, has been acquired by a renewable energy investment fund as part of an agreement that will see the creation of a new fund to invest in the long term development of the local area.
The four turbine 10 megawatt development, opened by the Nicola Sturgeon as Scottish Deputy First Minister in 2013, was 28% owned by Neilston Development Trust (NDT) and 72% owned by developers, Carbon Free.
The wind farm has been bought by the Renewables Infrastructure Group, which has a market-cap of £1 billion and which is also listed on the London stock exchange. With 710 MW of net electricity generating capacity, the group already owns 25 onshore wind farms and 28 solar power farms.
After repaying the loans taken out to fund NDT’s share of the windfarm and deducting legal costs, there will be a surplus of approximately £2 million. This will be used to start a charitable fund to support local facilities, services, jobs and community life in the Neilston area.
This sum is in addition to £400,000 already received by the trust over the last four years, which has contributed to the employment of staff and the provision of key services from the NDT’s ‘Bank’ community facility. The scale of the return reflects the strength of the investment model used by the Trust with substantially higher payments earmarked for the local community than would have been the case with traditional community benefit models.
Pauline Gallacher, Chairman of Neilston Development Trust – set up 10 years ago by local residents as a charity – said: “This agreement gives us guaranteed funding to invest in the future development of our community.
“The windfarm was not a risk-free investment but the high level of return over a short period is a tribute to those who supported the principle of a joint venture. We hope that this agreement will result in wider support for more community led investments in Neilston and elsewhere.”
NDT has highlighted a number of reasons why the offer from TRIG was particularly attractive. Gordon Keenan, Chief Officer explained: “Although the wind farm’s prospects are good, NDT found it difficult to manage the variations in income in light of the fixed interest loans we took out.
“This was caused by changes in oil and gas prices and the loss of certain subsidies. This extended the period before funds could be made available for community projects and grants. By selling our share of the project to a well-regarded and experienced investor, the funds are guaranteed and available, when needed, to support the sustainable development of the community.”
The windfarm will continue to contribute to Scotland’s green energy supply, generating 2.5 times the annual electricity requirement for Neilston.
The development trust is to hold a community meeting in Neilston to outline the plans for the new fund, which will be constituted as a registered charity.