Abundance, the UK’s ethical direct investment platform, has launched the UK’s first regulated ‘shared ownership’ service to enable renewable energy developers and communities to work together in financing projects.
This comes on the back of the UK’s Community Energy Strategy from the Department of Energy and Climate Change (DECC), stating that from 2015 it should be the norm for local communities to share in the ownership of their local renewable energy projects such as wind and solar developments.
As the UK’s largest direct investment platform for renewable energy, the new service includes community engagement, advice and funding, whereby Abundance supports developers to engage and mobilise communities, raising awareness of the opportunity to share the ownership of local renewable energy projects.
Since 2011, Abundance has worked with seven developers and over 1,600 investors to deliver £8 million for renewable energy projects in the UK. With each investment expected to return between 7-10% IRR, the organisation aims to work with least 20 communities across the UK next year.
Already regulated by the Financial Conduct Authority as an intermediary, from early 2015 the organisation will be regulated to provide the Corporate Finance advice community groups and developers need to determine the appropriate form of shared ownership schemes and to facilitate debt or equity investment into Community Groups such as CICs, Cooperatives or LLPs or direct investment into the renewable energy project itself.
Karl Harder, Joint Managing Director, Abundance said:
“Shared ownership is a turning point for energy generation in the UK. The worlds of finance and energy are evolving fast, enabling everyone to benefit from positive, low carbon investments. We are reducing the risk and cost of raising capital, creating a meaningful return for developers and investors, whilst building stakeholders in renewables crucial to support projects through planning and beyond.
“It’s win win for developers seeking new avenues for finance and local investors looking for ownership and a return from local renewable energy projects. With investments starting at £5, our aim is to see high quality renewable energy developments providing clean power and a return to anyone who wants to be involved in this new, positive economy.”
Supporting developments through the planning process, its online platform also enables project pledging, where developers can build a community of local supporters and work with this group throughout the planning process to increase the chance of a successful outcome.
Abundance can advise both developer and community group, develop the project investment offer, and then run the regulated investment opportunity, administering the investors as well as providing a secondary market to enable individuals to sell investments if they wish. From late 2015 Abundance is likely to be able to offer qualifying shared ownership investments within an ISA wrapper.
Investment in projects offered by Abundance is made through the purchase of Debentures – official IOUs that commit to pay returns on top of the original capital. Returns are likely to be paid twice yearly over the term of the project although investors wishing to cash in early can sell their holdings on to others via the Abundance website.
Capital is at risk and returns can be variable. Investments are long term and may not be readily realisable.