Members of the Isle of Wight council executive will be considering a proposal on Tuesday evening to use £1.7m of monies received from ASDA as either an investment or loan for a new solar farm.
The idea is to establish a community energy scheme that will also give Isle of Wight residents the opportunity to invest and receive “an attractive return on their investment”.
Facilitating the investment
The project will be owned and managed by a ‘community benefit society’ and will invite investment from members of the local community. Mongoose Energy, who are responsible for at least twelve community-owned renewable energy projects across the country, will be facilitating the investment.
The paper claims the two year fixed-term loan of £1.7m would generate income to the council of £238,000, with the loan being repaid in full at the end of the two years.
It goes on to state that as the proposal requires technical and financial due diligence of a specialised nature, the council has commissioned its own due diligence and will benefit from the due diligence undertaken by Close Brothers, which is the senior debt provider.
Profits used for social benefit
It goes on to explain,
“Mongoose Energy has set up Wight Community Energy (WCE), a mutual company with limited liability, operated for the benefit of the community.
“All profits earned by WCE will be used for local social and environmental benefit, such as reducing fuel poverty, improving management of natural resources and maintaining public spaces.
“Directors of WCE include local independent directors and representatives of Mongoose Energy, with local investors having a controlling interest.”
Hillard: “Huge benefits for the Island”
Cllr Hillard told OnTheWight,
“Due to repeated government cuts to council funding we have a shortage of revenue funding – the money to pay for on-going bills, such as wages and services.
“However, due to the sale of a piece of land to ASDA the council has some capital money which can only be used for one-off purchases.
“To try and ease the financial situation, myself and colleagues have been trying to come up with ways to generate revenue (or make savings) by investing this capital money.
“Investing in the community energy project has two huge benefits for the Island:
- Firstly, the council will get a 6% (plus fees) on any investment to spend on services and after two years we get the £1.7 million back to spend on other things.
- Secondly, this project will fund community projects across the Island to a value of approx. £2.7 million over twenty five years which is a great opportunity for our residents.
“It’s a win-win situation with low risk because the feed-in tariff has already been secured from government, as has a power purchase agreement for the electricity generated.”
The recommendation
Officers are recommending the Executive approve options 2 and 4
- Option 2 – It is recommended that the council agrees a two-year fixed-term loan of £1.7 million to Wight Community Energy subject to final due diligence and approval by Full Council.
- Option 4 – It is also recommended that the council approves an investment of up to £300,000 for the purchase of unsold community shares should the community share offer be under-subscribed
The report
More detail can be found in the paper below. Click on the full screen icon to see larger version.
Image: togawanderings under CC BY 2.0
