UK-based Abundance Generation is a platform with an innovative spin on crowdfunding that focuses on renewable energy projects. In short, investors contribute as little as £5 in order to secure a portion of the long-term returns on a green energy installation. In practice, investors are buying debentures, which are essentially debt instruments.
A debenture is a document that either creates a debt or acknowledges it, and it is a debt without collateral. In corporate finance, the term is used for a medium- to long-term debt instrument used by large companies to borrow money. In some countries the term is used interchangeably with bond, loan stock or note.Source: Wikipedia
In short, these solar installations (which are already installed and running) will provide electricity that their host buildings agree to buy at a set price. This means the installations come at no cost to the owners of these 20 buildings. The installations get refinanced with the crowd’s money and the crowd shares in the profits generated from the energy produced. The return is 6.65% annually with early bird value adds of up to 0.3% available for early adopters.
The project length is 19 years and a portion of the original investment capital is paid back to the investor each year . Only investment income is subject to taxation. A £500 investment would net nearly £400 in returns over 19 years.
In our recent survey of the Abundance community, there was interest in fixed return Debentures as well as variable. In a first for Abundance, this project will offer a fixed return. As with a Variable Return Debenture, you can expect to receive a proportion of your original investment back each year, but unlike a Variable Return Debenture, you receive a fixed amount of interest income each period.
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