A new crowdfunding platform enables people to invest directly in equity or bonds issued by organisations delivering positive social and environmental impacts, including community benefit societies. Started by Triodos Bank, the platform is the first of its kind developed by a bank in the UK. It allows investments of £500 or more in established charities or businesses with a social and environmental contribution.
The platform was launched last month with three bond offers, with interest rates ranging from 5%-7%. Through the Innovative Finance Instant Savings Account (IFISA), individuals can also use some (or all) of their annual ISA investment allowance to lend funds through the growing Peer-to-Peer lending market, while receiving tax-free interest and capital gains.
One of the three bond offers is for Mendip Renewables, a project which aims to raise £1.8m by 31 March to take a 5MW operational solar farm in Somerset into community ownership. Investors can earn 5% interest per year, increasing in line with the annual retail price index, repayable over 17 years. The bencom owns and operates the 5 MW Whitelake Solar farm in Somerset. The solar farm has generated 10,000 MWh of renewable energy since becoming operational in December 2015.
The investment will also allow donations to a community benefit fund for local projects in the area. Mendip estimates that £1.4m of profit will be contributed to the community benefit scheme over the life of the project.
Dan Hird, head of Corporate Finance at Triodos Bank, said: “To tackle the big issues we face today we need to inspire investors to support progressive and pioneering businesses. We know the interest is there and, having seen the crowdfunding sector maturing in recent years, now feels like the perfect time to increase our presence in the ethical crowdfunding market. It aligns with our mission at Triodos Bank to make money work for positive social, environmental and cultural change.”
Jonathan Thompson, a director of Mendip Renewables, added: ” By supporting our solar scheme, investors not only enable us to create local, renewable energy, but can also be assured that their contribution is going directly to the individuals and organisations that need it most in our local community.
“Solar is a great, reliable technology, and our job is to make sure the solar farm continues to operate successfully for years to come, earning money to pay back investors and help the community.”