Originally published on Business Green
Green crowd-funding continues to gain momentum and Central Union and Trillion Fund both celebrate latest milestones
The UK's green crowd-funding sector is celebrating this week as both Central Union Partners and Trillion Fund reported they had passed new fund-raising milestones.
Central Union, a consultancy that acts as a broker for renewable energy and property projects seeking peer-to-peer funding, revealed that it has now provided more than £10m of debt financing to wind energy projects over the past 12 months.
The company said it has now helped finance 20 wind farm projects with developers seeking sums that range from £300,000 to £2m.
"Crowd-funding in the renewable sector has become extremely popular," said Richard Martin, partner at Central Union. "It provides individual investors with access to projects which would otherwise be too big to take on while also enabling them to endorse green technology and make a return."
He added that peer-to-peer financing was helping to fill a gap in the market that had left some renewable energy developers struggling to raise the necessary funds for viable projects. "From a developer perspective, frustration at the lack of traditional bank finance available to fund projects has made peer-to-peer lending not only a popular alternative, but a faster one," he said. "At Central Union Partners we are typically able to determine whether a project is viable and then raise a loan within four weeks – and sometimes less."
He also hinted that the recent surge in interest in renewable energy crowd-funding was likely to continue. "We are thrilled to have surpassed £10m of debt finance to the wind energy market and look forward to building on our success to unlock finance for even more renewables projects," he said.
Meanwhile, crowd-funding specialist Trillion Fund confirmed this week that its latest offer from E2Energy, a joint venture between community wind energy firms Endurance and Earthmill, had raised more than £500,000 in the past week.
Launched on 18 June as the first £1.25m tranche of a total planned £5m investment round, the E2Energy offer allows people using the Trillion platform to lend as little as £50 to the wind farm projects with the promise of a 7.25 per cent rate of return, although early lenders received a 7.5 per cent bonus rate.
"Wind profits do not have to be just for wealthy landowners – they can go to everyone," said Julia Groves, managing director of Trillion Fund, at the launch of the crowd-funding offer. "And we are all ultimately paying for feed-in tariffs, so we might as well be making a return from them too. Renewable energy projects offer unique, asset-backed returns, because they generate a steady, relatively predictable income flow from the feed-in tariff they receive and the electricity they send to the grid. There is also some inflation-proofing as the tariff rises in line with the retail price index."
With typical returns on offer of over seven per cent it is little wonder the green crowd-funding and peer-to-peer trend is gathering ever more momentum.