Crowdfunding platform Triodos Crowdfunding has raised over £7 million for five organisations aiming to deliver a positive impact.
The platform allows people to invest directly in equity or bonds issued by charities or businesses specialising in solar power, hydro power and green energy around the UK. The minimum investment needed is £100, interest rates per year range from 5-7 per cent and bonds can be eligible for tax free interest through the Innovative Finance ISA. The length of the bond ranges from 6-17 years.
Tax break for social projects
The latest offer to be completed was a £1.8 million bond for Mendip Renewables, which will take an operational solar farm in Somerset into community ownership. Investors will earn 5 per cent interest per year, increasing in line with the annual retail price index, repayable over 17 years. An estimated £1.4 million of profit will be contributed to a community benefit scheme over the life of the project. Four bond offers are currently live on the platform.
Other projects that have raised investment are a hydro power refinancing scheme Dart Renewables, which raised 1.8 million with a ten year bond which pays 5 per cent per year in interest and housing charity group Thera Trust which has raised 2.9 million.
Dan Hird, head of corporate finance at Triodos Bank said, ‘Since launching the crowdfunding platform, we have seen significant interest among investors looking to support pioneering, sustainable organisations and businesses. The range of projects that have already been or are near to being funded is evidence of the potential of crowdfunding to prompt positive social, environmental and cultural change.’
Bonds are low risk investments that tend to give you a better return on your money that a traditional savings account. In November 2017, an industry-led review found that the impact investment market, which is worth £150 billion, needed more support from the UK government. In April, the government increased tax breaks for those wanting to invest in social projects.
Further reading on crowdfunding