May 16, 2012
Community sector must increase its share
When Scottish Government’s renewables plan set the community sector a target of 500mw of installed capacity, much was made of the potential income that this could bring for communities. It turns out ‘community and locally owned’ can also mean local businesses, farmers and estate owners, local authorities and other public sector bodies. At present communities are only getting a small slice of the cake. But there’s still time (and support) for communities to increase their share. The new CARES Fund was launched last month.
16/05/12
Monday 30 April 2012, Community Energy Scotland
CARES loans have new strands and new guidelines – can they help you advance your plans?
Speaking at the Scottish Highland Renewable Energy Conference in Inverness on Thursday 26 April 2012, Mr Ewing restated his Government’s priority to give help to developers of smaller scale renewable energy projects. Local community groups and rural businesses such as farmers and estate owners are to be encouraged to develop their plans for wind, hydro and other renewable energy technologies, seek consents and work-up business plans.
Community Energy Scotland will be responsible for delivering these Scottish Government funds in the year ahead. The loans will be provided for the Scottish Government by the Energy Saving Trust. The main focus of the funds is to reduce the barriers to community or local rural business entrepreneurs who want to test and develop additional renewable energy generation projects. Even if there is no dedicated strand to assist a project, prospective developers should still advise Community Energy Scotland of what they require to overcome obstacles to progress.
There are now a number of CARES strands to help different types of development. All have detailed terms and conditions to which applicants should refer, and there is a competitive application system.
CARES LOANS Rural Businesses 2012/2013
This strand is for rural businesses, typically farming businesses who want to put a renewable energy generation project on land they own or can lease, CARES LOANS will cover up to 95% of PRE DEVELOPMENT costs such as Environmental Impact Assessments and technical feasibility. The maximum loan per entity is £150,000. Applicants must contribute a minimum of 5% and must fund any recoverable VAT. Credit checks are undertaken, but security is not required. Interest is charged at 10% per annum from drawdown of each instalment. If the project is prevented from proceeding for an insurmountable reason, the loan drawn down to that point can be written-off. If the project proceeds, the developer must make an annual payment of at least £10,000 per megawatt of installed capacity to a local community organisation – for 20 years. The community group will use the funds for community development purposes. Loans are to be drawn down during the current financial year and the financial year 2013/14 – last date for drawdown 20 March 2014. These loans are repayable at financial close – when the capital stage of the project is financed. The first stage of the process is to register your interest with Community Energy Scotland.
CARES LOANS Communities 2012/13
This strand is for community groups and charitable bodies to take forward plans for renewable energy generation schemes on land they own or can lease. CARES LOANS will cover up to 95% of PRE DEVELOPMENT costs such as Environmental Impact Assessments and technical feasibility. The maximum loan per entity is £150,000. Applicants must contribute a minimum of 5% and must fund any recoverable VAT. Credit checks are undertaken, but security is not required. Interest is charged at 10% per annum from the date of each drawdown. If the project is prevented from proceeding for an insurmountable reason, the loan drawn down to that point can be written-off. All proceeds of the generation business after costs must be applied to a community development plan. Loans are to be drawn down during the current financial year and the financial year 2013/14 – last date for drawdown 20 March 2014. These loans are repayable at financial close – when the capital stage of the project is financed. The first stage of the process is to register your interest with Community Energy Scotland.
CARES LOANS Cluster Developments
There is an allocation of loan funds to assist innovate clusters of groups, individuals or firms working together towards substantial locally-owned renewable energy projects. If your group has a proposal, and needs loan funds to develop it, please contact CES.
CARES INFRASTRUCTURE GRANT – Community Only
There is a limited allocation of funds for innovative infrastructure costs associated with making community connections to the grid possible. Businesses are not eligible. Generation plant is excluded. Contact CES for more details.
CARES LOANS – Longer term funding – Community Only
There is a limited allocation of funds to community projects which require a loan, generally after planning consent has been obtained, to meet the costs of reaching financial close. These loans (max £250k per entity) are at 8% interest, have no write-off facility and are repayable over ten years, with the option of no repayments during years 1, 2 and 3. The purpose of these loans is to meet a gap between commercial borrowing and project costs. Contact CES if you are interested.
The over-riding message is that if you have a plan to harness renewable energy – whether for the benefit of your own rural business or your community, loan funds from CARES could reduce your risks and allow you to participate in Scotland’s renewable energy future.