Responsible Finance press release
Robert Owen Community Banking Fund named as Winner, Social & Community Impact in 2016 at the Citi Microentrepreneurship Awards
When a Welsh community wanted to raise £1m to fund the development of a hydro-electric energy scheme, they turned not to a bank but to a “responsible finance” provider, the Robert Owen Community Banking Fund.
And thanks to the Fund, the village of Abergwyngregyn was able to set up Ynni Anafon, a hydro-electricity generating scheme which will generate nearly 1000 MWh of clean electricity each year – and return £50,000 per year to the local community.
Now the “responsible finance” provider that manages the ‘Community Energy Fund’ this week scooped a £15,000 prize in the Citi Microentrepreneurship Awards for the “social and community impact” it delivers.
Since April 2014 Robert Owen Community Banking has enabled the building of two hydro-electric energy schemes; and has supported a dozen more including three wind turbine projects with equipment on order and construction finance secured – a “big step forward for community energy in Wales where before now few schemes had managed to get built” according to Fund Manager, Neil Lewis.
The Community Energy Fund team have been offering technical advice and financial mentoring to the community groups they support through a panel of renewable energy experts from across Wales, which has given communities the confidence, as well as the capital, to get their energy schemes off the ground – schemes that will generate large annual income streams to tackle local fuel poverty, increase energy efficiency and reduce carbon emissions in some of the most deprived areas in Wales.
Originally capitalised by a Big Lottery ‘Sustainable Steps’ grant, the Fund uses an innovative “mezzanine finance” model to purchase work and fund the various permissions required by community energy groups to create viable projects.
Neil Lewis adds, “By turning the Big Lottery grant into a revolving loan fund, we are investing returned money into additional schemes, and using a proportion as loan guarantees to secure additional investment finance that will help us invest further in the installation costs of schemes that we have helped to develop.”
Having already supported over 45 community groups – and made loans of over £400,000 with a further £300,000 under consideration (at time of writing), the Community Energy Fund is set to do more to help other projects like Abergwyngregyn’s Ynni Anafon hydro-electric scheme come to fruition.
Mick Brown, chief executive of the Robert Owen Community Banking Fund said, “One of the most important things about winning is the credibility this gives us. It’ll help to get more recognition from Welsh Government and enable us to speak with more authority – and gives us more confidence. We’ve designed really innovate finance solutions to solve a real problem and that enables new social businesses to get investment ready. Wiithout our fund, many renewable energy schemes in Wales would not yet be up and running.”
Ynni Anafon initially borrowed £15,000 from the Community Energy Fund. This was used to develop a community share offer through which people could invest in, and become members of, a “society for community benefit” set up to raise part of the £1m that the scheme needed for installation. The £456,000 this community share offer raised paid for the scheme’s turbine and allowed construction to begin – and the Community Energy Fund then stepped in with an additional £150,000 bridging loan to complete the scheme.
Completion and repayment of The Community Energy Fund was a great milestone:
“Many thanks for all your help and support. We couldn’t have done it without Robert Owen Community Banking,” commented Gavin Gatehouse, a director of Ynni Anafon.
Neil Lewis adds, “Whilst the economic advantages of community owned renewable energy were well proven, what was lacking in communities was the confidence and opportunity to take up finance. Robert Owen Community Banking has worked hard to help groups overcome these challenges, and we are continuing to develop relationships with larger lenders, with a view to giving them greater confidence in their dealings with the voluntary sector, and reducing the costs of due diligence imposed upon schemes we support.”