TRILLION FUND - Demand for green bonds is soaring The first Certified Climate Bond in the UK is oversubscribed by £600,000.
The £4 million, Big60Million bond scheme sold mini bonds at £60 over nine weeks, with a 7 per cent fixed annual gross return on investment, according to Solar Power Portal. The proceeds of the bond will be used to refinance the development of a solar farm.
Returns will be paid annually, for five years, and after the first five years bondholders will be offered reinvestment for a further 20-year bond.
The bond closed on September 30 and the scheme is expected to issue further tranches in the near future.
The bond’s proceeds will be used to help develop and construct the 3.8MWp Willersey Solar Farm in Gloucestershire that was connected to grid in March this year.
Big60Million Solar Bonds were verified by Bureau Veritas as being compliant with the Climate Bonds Standard.
The standard, which sets requirements for both environmental (assets’ contribution to a low-carbon economy) and financial (use of proceeds, traceability) credentials of the bond, allows investors to easily prioritise climate and green bonds, providing assurance that the funds are being used to deliver climate change solutions.
The mini bond is an unlisted corporate bond for UK investors, companies and self-invested personal pension schemes.
It is accredited to receive a government subsidy of 1.6 Renewable Obligation Certificates (ROCs) for every MWh generated for the next 20-years and together with electricity, the project generates steady cash flows which are used to service the bond repayments.
The assets and revenues of Willersey Solar Farm have been pledged to bondholders as security. The security is held by Rockfire Security Trustee Limited.
As well as producing clean energy, the solar farm is being turned into a nature sanctuary.
Big60Million works with partners such as Flowerscapes and the British Beekeepers Association to plant acres of wild flowers that support pollinating insects, and several animal habitats such as bee hives, bird boxes, bat boxes, and hedgehog boxes are already in-place.
Big60Million is also working with local schools and community groups to help with the wildlife enhancements and educational programmes.
Toddington Harper, Big60Million UK Chief Executive Officer, said: “The appeal of Big60Million Solar Farms goes far further than just money in peoples’ pockets which can be used to offset electricity costs.
“The projects also benefit the environment, as well as local communities through engagement with school groups, supporting local bee keepers and also using the site for organic community growing schemes.
Sean Kidney, Chief Executive Officer of the Climate Bonds Initiative, said: “Big60Million Solar Bonds are a 100 per cent blue chip climate investment, directly contributing to the transition to a low carbon economy.
“A climate bond allows investors to earn money while helping to address climate change – doing well while doing good.
“Big60Million Solar Bonds met and exceeded all aspects of the Climate Bonds Standard, so we’re proud to provide Climate Bond certification, backed by investors and NGOs (non-governmental organisations) around the world.
“Certification helps investors to easily identify and prioritise their investments in recognition of the bond’s impact in helping deliver climate change solutions.”
SOURCE: Trillion Fund