Swindon. Home to Nationwide Building Society, the UK’s first out of town hypermarket and the (in)famous ‘Swindon slugs’ who dethroned David Brent in The Office.
It’s also home to some rather enterprising councillors, who have launched a “ground-breaking” partnership with Abundance Investments, the renewable energy investment platform, to launch the UK’s first ever council solar bond.
The bond will pay an effective annual rate of return of 6% over its 20-year term to people investing as little as £5. It will fund construction of the £4.8mn Swindon community solar farm, with £3mn invested by the Council and £1.8mn raised from small investors. NB. You don’t have to be a Swindonian to invest.
All investors will be repaid their capital and return from the cash earned from a combination of electricity sold to the grid, and payments under the government’s Feed In Tariff scheme – crucially at the higher level (before recent cuts) – which provides an additional index-linked revenue for the project. An early bird bonus of 0.5% for the first five years will boost returns for those investing within the first six weeks after launch.
The Swindon Common Farm Solar CIC will be fully owned by the Council, which will be the sole shareholder. The Council has a commitment to build enough renewable energy capacity by 2020 to generate enough electricity each year to meet the needs of all homes in the area.
At a wider level, this initiative also creates a new model for local government looking for new sources of revenue to fund core services without increasing the burden on local taxpayers.
Bruce Davis, managing director of Abundance, said: “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.”
Councillor Dale Heenan, Swindon Borough Council cabinet member for transport and sustainability, said: “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.”
Construction of the 4.8MW solar farm is due to begin later this spring. It will generate enough electricity to supply the equivalent of 1200 typical homes and save around 2000 tonnes of carbon dioxide a year. The site will be managed to promote biodiversity, with the land around the panels remaining in agricultural use, with sheep grazing for part of the year.