New UK green energy bond announced

Ecotricity, a privately owned UK not for profit company (Ecotricity uses the term not-for-dividend because they invest all profits back into the company) in the green energy business has announced a second round of ‘ecobond’ financing that allows ordinary people to invest in the green energy revolution.

Last year’s first round of ecobonds, which allow small investors to participate in a basket of renewable energy projects, was heavily oversubscribed.  Ecobonds are fixed rate corporate bonds with an interest rate of 6%, increased to 6.5% for customers of Ecotricity. As corporate bonds, ecobonds are not guaranteed but are regulated by the UK Financial Services Authority.  Ecobonds can be purchased only by UK residents.

The recently announced second round is limited to £10 million with a minimum investment of £500. Once an individual applicant has been approved the Ecobonds can be purchased online using a debit card. Business purchasers must proceed by mailing a cheque.

GallonDaily applauds Ecotricity for this initiative. Some wind projects in Canada have been funded by community investment but it is not yet a common model. The benefits of the Ecotricity model include the basket of projects approach, which helps to mitigate risk, and the ease of investing, not too much more difficult than buying a travel ticket online. Hopefully a Canadian company will soon strive to overcome the regulatory hurdles and launch a similar initiative in Canada.

Lots of information about ecobonds can be found at http://www.ecotricity.co.uk/about-ecotricity/ecobonds

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