This article appears in the summer issue of MyGreenPod.com Magazine, distributed with the Guardian on 14 July 2017. Click here to read the full digital issue online.
Mongoose Crowd, the UK’s first dedicated community energy crowdfunding platform, has launched its first green energy bond offers – meaning UK investors can for the first time buy community energy bonds in a tax-free Individual Savings Account (ISA) wrapper.
The two initial bonds, which total over £2m, will help to refi nance solar projects near Bath and Bristol, enabling the community to develop other local clean energy projects.
The first offer is from Bath & West Community Energy (BWCE), an established community business set up in 2010 that’s now one of the country’s leading community energy enterprises and a founding shareholder in Mongoose Energy.
BWCE’s bond offer has been highly anticipated because of its eligibility for the new tax-free Innovative Finance ISA (IFISA). The solar projects BWCE is looking to re-finance were built in December 2011 with a loan from SSE; they’re successful projects that have already exceeded expectations.
Interest on the SSE loan is set to rise this year, so re-financing will increase the surplus available for community benefit schemes and offer an opportunity to widen participation by replacing commercial debt with people-powered investment. Raising funds now will also provide BWCE with a small fund to invest in new renewable energy projects as they are developed.
‘We are very excited about being able to off er the UK’s first ISA-eligible community energy bond on Mongoose Crowd’, says Peter Capener, executive director of BWCE. ‘The commitment and enthusiastic support from our members and bondholders has been the foundation for our success to date. We hope that even more people will want to get involved in helping us build a powerful community response to our energy needs that makes sound sense for people’s pockets – and for the planet.’
The second bond offer launched on Mongoose Crowd is from Bristol Energy Cooperative (BEC). The bonds, also eligible for the IFISA, will be used to fund the first ever community-owned battery storage project to incorporate the latest Tesla battery technology. Additional funds will be used to reduce current borrowing costs and to repay short-term loans.
‘As well as repaying previous loans, our new crowdfund will deliver our ambitions for increased generation of community-owned energy’, says Andy O’Brien, director of BEC. ‘We are also developing a number of innovative new energy schemes, including the installation of a 100kW Tesla battery at a new sustainable housing site. Back in 2016, people were responsive to the opportunity to increase community-owned energy assets; our new bond off er provides another chance to join us as we continue our energy revolution for all.’
Mongoose Crowd was launched in June 2017 to connect individual investors with community energy projects that target better financial returns, lower environmental impacts and positive social dividends.
Until recently, Mongoose Energy raised money for community projects on third-party platforms; its chief executive, Mark Kenber, believes that hosting a crowdfunding platform will enable the company to innovate and grow by offering more investors a wider portfolio of projects to invest in, and target returns that are expected to beat the interest a typical savings account will offer.
‘Mongoose Crowd gives people more power over their own savings while they also do their bit for their local communities’, Mark says. ‘Our new crowdfunding platform is making investments in clean community energy easier, more profitable and more democratic. Investing cash in community energy projects also drives valuable local jobs and benefits. Bath and Bristol have pioneered innovations in community energy; Mongoose is proud to be supporting their continued growth, and that of the community energy sector overall.’
It’s hoped Mongoose Crowd will attract small investors who are frustrated by low interest rates on savings, volatility in equity markets and current financial market uncertainty. It will fund a variety of community energy projects including solar, wind, hydro, battery installations and innovations in smart energy.
Community renewable energy projects are increasingly competitive without subsidies, although existing projects still benefit from inflation-linked, long-term government subsidies such as Feed-in Tariffs (FiTs) and Renewables Obligation Certificates (ROCs) that complement the sale of energy to the grid. Consequently, this type of asset investment offers long-term, inflation-linked returns. Mongoose Crowd Ltd is an appointed representative of Share In Ltd, which is authorised and regulated by the Financial Conduct Authority, which is why these investment opportunities are eligible for the Innovative Finance ISA.
Mongoose Energy was created to change the way energy is generated, bought and sold in the UK, and to create financial, social and environmental benefits for local communities and consumers. The company works with community groups, commercial project developers and investors to identify, develop, finance, build and manage profitable community-owned renewable energy installations (solar, wind and hydro) and is majority-owned by the community energy groups it works with.
As part of its mission to increase community ownership of renewable generation assets, Mongoose has financed the UK’s largest portfolio of split-ownership solar farms, through which commercial developers have been able to partner with community energy groups to develop larger sites. These include Braydon Manor in Wiltshire, the UK’s first split-ownership solar farm, and Orchard in Kent, the UK’s largest community-owned solar site.
Since 2015, Mongoose Energy has raised more than £70m in capital to fi nance the construction and management of 60MW of community-owned solar PV projects, generating enough renewable electricity to power over 18,000 homes. Typically, investors have received a 4.5-7% return on their investment, depending on the performance of their project.
Over their 20-year lifetime, the projects in the portfolio are projected to deliver millions back to local community benefit societies, where they’ll be used to create local jobs for local people, improve biodiversity, reduce energy costs in local community buildings like schools and help people out of energy poverty.
Click here for more about Mongoose Crowd and its community energy investment opportunities.
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