Target nearly reached in first local government green bond
There are two weeks left to participate in the UK’s first ever local government green bond with West Berkshire Council, which closes on Thursday 15 October.
Since its launch in July, using the innovative Community Municipal Investment (CMI) developed by ethical investment platform Abundance, the bond has already raised almost £800,000 of its £1million target to help the district build back greener after the pandemic.
West Berkshire is already reaping the benefits, with solar panels installed on five buildings across the district, including schools, leisure and care facilities and the council’s own offices. Pupils at Aldermaston primary and the Willink secondary schools are now enjoying the benefits of generating their own green electricity thanks to panels funded by the CMI and installed over the summer, saving money and saving carbon.
West Berkshire declared a Climate Emergency last year, following this up with an Environment Strategy with a target of making the district net zero by 2030. The green bond is one of the first deliverables of its strategy.
Ross Mackinnon, West Berkshire’s Executive Member for Finance said: “We’re delighted that the CMI has proved so popular and will go a long way to helping the Council achieve its environmental objectives. I’m very proud that West Berkshire is the first council in the UK to launch this innovative investment.”
Bruce Davis, co-founder and Managing Director, Abundance Investment, said: “We’re very pleased by the enthusiastic response we’ve seen from local people. West Berkshire’s green bond bucks the trend of low risk investments which have seen interest rates fall to all-time lows following the announcement of cuts to returns by National Savings and Investments. It offers investors the ability to lock in interest rates at 1.2% for 5 years as well as knowing their money is working hard to help the district reach Net Zero."
The speed of the uptake of the bond has also allowed the council to deploy funds to other schemes that help its Environment Strategy. These include funding projects with Berkshire, Buckinghamshire and Oxfordshire Wildlife Trust (BBOWT) to protect and enhance the natural environment in West Berkshire; updating the lighting on traffic signals to LED, and a scheme for cycleways to promote sustainable transport.
It has also allowed the council to deliver better value to its residents by reducing its overall cost of borrowing.
Ross Mackinnon added: “The bond has allowed us to reduce our borrowing costs by 0.5%, saving money for the council and for our residents while also bringing environmental benefits to the district.”
The West Berkshire CMI offers low risk returns of 1.2% per year over a 5-year term and with a minimum investment of just £5, is accessible for a broad range of investors. Its risk profile is comparable with government debt or National Savings & Investments.
The CMIs are arranged by Abundance, which is regulated by the Financial Conduct Authority, and has previously raised over £100 million for green and social infrastructure projects. To find out more and download an offer document, visit https://www.abundanceinvestment.com/west-berkshire .