A COMMUNITY in the Highlands is to be one of the first beneficiaries of a new crowdfunding platform being launched by ethical bank Triodos today.
The bank’s entire ethos is built on the crowdfunding model, with the cash its customers deposit in its accounts being used to lend to businesses that meet its ethical criteria.
Triodos Crowdfunding will operate slightly differently by allowing customers to actively pick the specific projects they want to put their cash towards.
There are currently five projects on the bank's crowdfunding site, ranging from a Bristol-based organic food business that is looking to raise £350,000 to a solar-energy farm in Somerset that hopes to raise £1.8 million.
They are structured as peer-to-peer loans, with the capital paid back over terms of varying lengths and each paying interest of between four and seven per cent.
The Highlands project, which is looking for a total investment of £1.7m to pay for a wind turbine in the remote community of Coigach, north of Ullapool, will go live in the coming weeks.
The community’s 500 kW turbine was installed last year and is expected to generate 2,020 MWh of electricity every year.
It is not clear yet how much interest will be paid to investors in the scheme or how long the investment term will be.
The bank’s managing director Bevis Watts said the platform would allow “everyday investors” to make a “positive choice to shape the world they want to live in”.
“In that sense money can be a hugely powerful form of democracy if invested directly into renewable energy, social housing, charities or social enterprises,” he said.
“Social investment needs to be more accessible to UK investors, who increasingly recognise the power of money to create change.
“We’ve been crowdfunding since before it became a well-known term. With the new Triodos Crowdfunding platform we’re recognising the huge potential of crowdfunding and responding to demand for Innovative Finance ISAs.
“Investors are looking for opportunities that allow them to support progressive companies, social enterprises and charities making a positive impact, while also receiving good long-term returns.”
Triodos, which was founded in the Netherlands in 1980, has a long history of supporting businesses and projects in Scotland, providing loans to 130 of them by 2016.
Among those it has provided finance for are the Hoprigshiels community windfarm, a project that was developed by Berwickshire Housing Association (BHA) as a means of funding new homes for social rental.
A joint venture between the housing association and charity Community Energy Scotland (CES), the three-turbine scheme supplies energy to the National Grid,.
It is expected to generate £20m of funding for BHA and £10m for CES over the next 25 years.
The former will use its income to build 500 new homes while the latter will use its share to fund its work helping other communities develop similar projects.
A similar scheme in the Outer Hebridean islands of Barra and Vattersay saw Triodos put up almost £2m in finance for a wind turbine that generates between £50,000 and £100,000 for the local community.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here