Heart of England Community Energy completes £16.3million refinance
Updated: Nov 20, 2019
The Directors of Heart of England Community Energy ltd are very pleased to announce we have completed a £16.3million refinance. We have replaced the short-term loans from Close Brothers and Social and Sustainable Capital (SASC) with new long-term lower cost loans from Triodos Bank UK and SASC. The transaction was managed by CfR CIC.
The transaction was undertaken to secure long-term, lower-cost finance for our solar projects, with reduced loan repayments allowing more money to be used to support community projects. The total package of £16.3 million combines senior loans of around £12 million from Triodos Bank UK with junior loans from SASC of around £4.3 million. SASC provided capital to fund the community acquisition of the solar farm in 2016. A community bond offer will be launched next year to raise around £1.5million to repay some of the SASC junior debt and complete the long-term finance package.
Heart of England Community Energy uses profits from the solar farm to support a fuel poverty advice service run by local charity Act on Energy and a community grant fund. The community grant fund has so far provided funding to Harbury e-Wheels, a Warwickshire-based community transport charity, and SolarAid, a charity working in Africa to provide solar lights.
Heart of England Community Energy Chairman: "I am delighted that we have reached a new stage of maturity for Heart of England Community Energy. Together with our partners we have been able to secure more favourable financing that will allow us to contribute more to our community fund."
CfR Director Jake Burnyeat said: “CfR and the Heart of England Community Energy board are very pleased to have reached this milestone. The loans from Triodos Bank and Social and Sustainable Capital provide a long-term lower cost finance solution which will help increase surplus income generated by the community solar farm to support local projects. It is also important that the funders share our values. Look out for the community bond offer which will launch next year and give an opportunity for people from the local and wider community to get involved!”
Philip Bazin, Environment Team Manager at Triodos Bank UK, said: “This transaction proves that community energy schemes can be delivered and financed at scale. It also demonstrates our expertise at financing solar projects co-located with batteries, and at combining different tranches of finance. Such schemes have multiple positive impacts, not only do they help the clean energy transition, but their profits also benefit local people. By driving down the cost of finance, we have helped Heart of England solar to operate more profitably and increase its financial contribution to the community.”
Krishna Chokshi, Investment Manager at SASC, said: “We are delighted to renew our investment in HECE, whose performance has significantly exceeded our expectations since coming into community ownership two years ago. This is a great community-owned project with an outstanding local board of trustees who are overseeing its governance and performance. HECE is providing real financial benefits for individuals and families living in fuel poverty in the region through the distribution of community benefit. Work done by HECE unlocks significant additional grants for fuel efficiency, leveraging in as much as seven times the amount of funding generated by the project.”
“Community energy projects like this are essential as communities look to provider greener energy solutions and surpluses for the benefit of their local area. It is fantastic to see social investment providing finance that is enabling projects like this to thrive.”
Legal counsels on the transaction were TLT, CMS, Michelmores and Lux Nova. Technical due diligence on the transaction was provided by Green Cat Renewables. The solar farm was built by Anesco who provide ongoing service and maintenance services. The co-located batteries are owned and operated by Zenobe.
About Communities for Renewables CIC
Communities for Renewables (CfR) CIC is a mission-led community interest company which helps communities to set up local energy enterprises and works with them to develop, finance and manage their own renewable energy generation. CfR has managed the development and financing of around £56million of community solar projects and manages 50MW of community solar projects for 7 different community energy enterprises, including Heart of England Community Energy.
About Social and Sustainable Capital
SASC provides simple finance for extraordinary charities and social enterprises. We believe greater access to the right kind of investment makes charities and social enterprises better able to tackle society's most pressing challenges. Our funds provide flexible capital to enable social sector organisations to grow their social impact, improving the lives of disadvantaged people across the UK. SASC is a social enterprise.
About Triodos Bank
Founded in 1980, Triodos Bank has become a frontrunner in sustainable banking
globally. As an independent bank that promotes responsible and transparent banking, it does not see any conflict between a focus on people and the planet and a good financial return. Instead it believes that they reinforce each other in the long-term.
Triodos Bank has banking activities in the Netherlands, Belgium, the UK, Spain, Germany and France as well as Investment Management activities based in the Netherlands and active globally. Triodos Bank co-founded the Global Alliance for Banking on Values (GABV), a network of 54 sustainable banks. Together these banks want to grow sustainable banking and its impact on the real economy substantially.