3rd June 2013
Australian firm CBD Energy has launched ‘EnergyBonds’ a four-year retail bond paying a fixed rate of 7.5% per annum in a bid to raise £7.5m to construct solar and wind farms in the UK writes Philip Scott.
The group, which operates in the renewable energy and energy-efficiency sectors is headed by Gerry McGowan and is currently is in the process of acquiring Westinghouse Solar Inc. where Robert F. Kennedy Jnr, is a director and shareholder.
McGowan says: “EnergyBonds represent an excellent opportunity to make a socially responsible investment in new green energy projects and to build a greener, cleaner future for all of us.
“We seek to raise up to £7.5 million with this first tranche of EnergyBonds, primarily to fund the development of utility-scale solar farms and wind farms within the UK, and to finance other overseas renewable energy projects within the group. We are well placed to identify and develop new opportunities in solar and wind and have already identified several sites available for development.”
Bond holders can redeem their investment after four years but must give six months’ notice in writing otherwise the term automatically rolls over for another 12 months.
The bonds carry a minimum subscription set at £500. Those wishing to apply online should visit www.energybonds.co.uk.
The offer period runs until Tuesday 2 July 2013. It will close earlier if the target £7.5m is reached. The bonds can be held in a self-invested personal pension (Sipp) but cannot be held within an ISA. They cannot be traded on the secondary market and are not covered by the Financial Services Compensation Scheme.
Commenting on the launch, Adrian Lowcock, senior investment manager at independent financial adviser, Hargreaves Lansdown, says: “The yield of 7.5% is going to be very appealing to in this climate however investors’ money is not protected against loss or by the FSCS. For a yield of 7.5%, I would expect there to be some risks, particularly in this climate of low interest rate returns. So investors need to take into account how solvent and profitable the company is.”
“The bond is issued by a subsidiary company, Energy Bonds plc, a wholly owned UK incorporated subsidiary of CBD Energy Limited. CBD is also acting as guarantor of the bonds so whilst the company is separate some steps have been taken to provide security. However investors need to look closely at what the guarantee actually means.
“UK Government policy on solar power has been unclear and has changed significantly in recent years. It is less clear what the policy will be going forward. So there are risks involved investing in solar projects, many of which rely on the feed-in tariffs to generate profits.”