The Community Energy Fund was developed in conjunction with Big Lottery and Community Energy Wales to provide the financial support required to advance community energy projects from initial feasibility through to installation.
Community energy has great potential to boost the sustainability of communities in Wales. Though the level of Feed In Tariffs (FITs) and Renewable Heat Incentive (RHI) has diminished markedly in the last year, community energy projects remain viable. We have two loan types available to support project development and installation.
Community energy projects can be challenging. Our loan funds have been designed in such a way as to offer assistance at every step. Contact us to learn more about how we can help – whatever the size or nature of your project.
Our Development Loans provide financial and professional support for the high risk phase of investigating the viability of a renewable energy project before planning permission can be secured. It is designed to take the risk out of developing a scheme, by operating on a no win no fee basis. The money we invest in your community energy project is only paid back when you raise the capital to install it. If the project does not go ahead, we absorb the loss. We call this solidarity finance – where successful schemes contribute to covering the costs of those that fail.
What We Offer
Up to £90,000 available
Support for pre-installation costs
Simple fee structures
No fee payable if project doesn’t progress
Our Installation Loans are designed to cover some, or all, of the installation costs of community energy projects in Wales. This could be a large wind turbine, or solar panels on the roof of a community centre, or simply a small loan to change all the lighting in you village hall to LEDs.
Each application is assessed upon its merits. We look at the level of risk on the loan, the length of payback on the installation and the affordability to the application. Our assessment includes payments from the Renewable Heat Incentive and Feed In Tariffs and any savings or additional income generation the community can make as a result of the loan.
What We Offer
Simple application process
Support for installation costs of schemes
Between 6% – 10% fixed APR
Ideal bridging finance solution ahead of community share offers
Application for loans is a two stage process.
The Stage One application form is designed to give us enough information to carry out an initial assessment of the viability of your community energy project. If that assessment is favourable, we will contact you to seek further information.
The assessment of applications is done by our Fund Managers, and by an independent assessment panel made up of directors of Community Energy Wales and other professionals in the community energy sector.
We endeavour to process all applications swiftly, though the timescale will be dependent upon the complexity of your project and the availability of the information we need to be able to assess it.
If our initial assessment of your project is unfavourable, we will provide you with feedback in order to help you improve the application or address areas where we feel your project is lacking.
We work with a wide range of partners and individuals within the community energy sector in Wales and will make sure that you are referred to people who can help you develop your scheme.
Our Fund Managers will apply the loan in direct payment for pieces of work that are required to advance your project to installation. As each piece of work is completed, we will re-assess the viability of your project and discuss our assessment with you before additional pieces of work are commissioned.
We add a flat rate fee of 25% to the development costs incurred. This is done to help offset the losses that are incurred where schemes do not progress to installation, and cannot therefore pay us back.
This fee reduces if you pay us back in under six months, but it does not increase regardless of the length of time it takes to raise the capital to install your scheme. If for any reason you cannot progress your scheme, you will not have to repay the Fund.
We have up to £90,000 available per application for pre-installation costs. Access to additional installation finance will be subject to a separate application process.
Each project will be judged on a case by case basis, taking into account the amount of capital we have available at any one time, the length of payback of the scheme and our assessment of risk.
It is not envisaged that we will be the senior lender on larger schemes with finance requirements in excess of £200,000, though we will consider loans in excess of this amount. Please get in touch to discuss.
Our installation loans are similar to a conventional loan and will be paid back over a set term at a fixed APR. Each application will be assessed upon its merits and against the level of risk and length of payback, but we would expect loans to be made available at between 6% and 10% APR.
This is comparable to interest rates available from the high street banks, but you will know that by borrowing from us, you are supporting a not for profit organisation that will re-invest, and go on re-investing, the money we receive back from you into other community based schemes in Wales.
Our application assessment process uses documentation that you will already have developed to tell us about the viability of your project, and your capacity to install and manage your scheme long term.
If your application is successful, your group will be asked to enter into a legally binding loan contract. In the case of installation loans, we may also seek to take out security against the asset you will be installing.
In all our loans we endeavour to make our due diligence procedures as ‘light touch’ as possible.