September 24, 2014
On the money
Ask any community group that has been through the long, and all too often, painful journey of developing a renewable energy project and they will willingly show you the scars sustained as they climbed one hurdle after another. If it’s not the planning process or negotiating the grid connection, it can be any one or more of several other factors. And above all of these, sits the killer question of where the finance will come from. Which is why it’s so significant that the UK’s largest, 100% community owned wind farm has just reached financial close.
24/09/14
Britain’s largest 100% community owned wind farm has reached financial close with a funding package from Santander Bank UK, Scottish Enterprise, Social Investment Scotland and the Big Lottery.
The wind farm is being built by Point and Sandwick Development Trust at Beinn Ghrideag outside the town of Stornoway on the Isle of Lewis.
The total funding package is £14.6m, 90% of which is funded by borrowing at commercial rates. The funders are as follows:
Santander Bank – £10.4m loan
Scottish Enterprise REIF fund – £2.2m loan
Social Investment Scotland – £600,000 loan
The Big Lottery – £900,000 grant
Social Investment Scotland – £500,000 grant
Construction has now commenced on the 9MW wind farm and it is expected to be operational by February 2015. It will generate enough energy for over 6,000 homes.
The wind farm’s gross turnover is estimated at around £3m pa.It will return 100% profit to the community development fund. Over 25 years, this is estimated to be around £50m net.
Point and Sandwick Development Manager Calum MacDonald said: “This is a breakthrough project for community energy both in terms of its size and its financing structure. It will transform the prospects of some of the remotest and most marginal communities in Britain.
“We are very grateful for the fantastic support we have received from our technical and legal advisors, SgurrEnergy and HBJ Gateley, and from our key funding partners, Santander Bank, Scottish Enterprise REIF fund, Social Investment Scotland and the Big Lottery.
“We are also grateful for the early seed funding and vital support we received from Community Energy Scotland.”
“We hope that our success will encourage other communities in Britain to think big. With the right support from Government and from the private sector, there is really no limit as to what can be achieved by community enterprises in the renewables sector.”