16 July 2020
Council could crowdfund green investments
Green Party councillors on Norwich City Council have called for the council to investigate the possibility of launching a crowdfunding campaign for green investments that would also put money back into the local economy.
What are known as “Community Municipal Bonds” give people a chance to invest as little as £5 in schemes such as local solar power, battery storage, and energy efficiency in buildings. A share of the income generated from those schemes would then be paid back to investors and to the council. [1]
Although crowdfunding is commonly thought of as donation-based, investment-based crowdfunding, where people contribute in the expectation of a return, is the largest alternative source of finance in the UK. [2] Other councils including Swindon, West Berkshire and Warrington have issued Community Municipal Bonds in this way to raise money for solar farms. [3] Swindon has raised more than £4.3m through investment-based crowdfunding for two solar farms that now power more than 1,200 homes and provide a return on investment of 5-6% annually. [4]
Community Municipal Bonds offer an alternative source of finance for councils which have hitherto taken out loans from the public sector bank or from commercial banks. Norwich City Council has borrowed more than £60m since 2018 to invest in commercial properties such as a Travelodge in Harlow and a cold store in Corby, a strategy which Greens have criticised for being highly risky and not delivering social or environmental benefits to Norwich itself. Whereas interest on conventional loans tends to leave the local economy, a higher proportion of the returns from Community Municipal Bonds stays in the area – up to 40% in Swindon’s case. [5]
Green Party councillors have repeatedly called for the council to invest in renewable energy and suggested the Community Municipal Bond scheme in several recent council meetings. The Labour Cabinet Member for Resources Paul Kendrick has now agreed to meet Green councillors to discuss the proposal.
Green Party councillor Jamie Osborn said, “The combined effect of Government cuts and now covid has pushed councils to the brink of bankruptcy, at the same time as they need to step up to the demands of the climate emergency and rising inequality. This proposal would raise local money for local projects like providing solar power while also providing jobs and a financial return to the local economy. I hope that the Labour cabinet will take on the idea instead of investing riskily in properties where the interest only goes out of the local area.”
Further information:
Councillor Jamie Osborn 07975 881585 jajo.osborn@gmail.com
Notes:
The Green Party Group on Norwich City Council forms the council’s main opposition and consists of eight councillors.
2) ibid.
3) https://www.warrington.gov.uk/news/green-community-investment-plans-approved and https://info.westberks.gov.uk/index.aspx?articleid=37060
5) https://socialres.eu/case_studies/abundance-swindon-common-farm-solar/
