Ethical P2P investment platform Abundance has launched a three-year bond issued by GDFC Services, part of The Green Deal Finance Company (GDFC) Group, which will pay 12 per cent a year.
It is eligible for inclusion in the Abundance Innovative Finance ISA, to make the returns tax free.
The GDFC is looking to raise up to GBP5 million to accelerate the roll out of new initiatives and make significant improvements to the Green Deal proposition and its impact on cutting the UK’s carbon emissions.
Since its launch five years ago, Abundance has championed the notion of “democratic finance” as a way to directly fund green economy projects, such as renewable energy generation, whilst giving greater control to ordinary investors. People choose exactly which projects to put their money in, how much they want to invest, from a minimum of just GBP5, for the potential to enjoy bank-beating financial returns tax-free through an ISA.
In January, Greenstone Finance and Aurium Capital Markets acquired the business and assets of the GDFC. The business has since carried out extensive consultations with its customers and the industry to identify the key improvements needed to accelerate the company’s roll-out and increase its positive impact on reducing Britain’s carbon emissions. The money raised with this bond will go directly towards implementing those improvements.
The GDFC’s aim is to become the leading platform for UK consumers in the home energy efficiency space and transform the sector through the investment and application of smart technologies, and a focus on high levels of customer service.
Bruce Davis, co-founder and joint managing director at Abundance, says: “We’re very pleased that the GDFC has chosen to raise funds through an Abundance-arranged bond offer. Both companies are focused on the win-win scenario of enabling ordinary people to do something positive for the environment while benefitting financially. Improving the energy efficiency of the UK’s housing stock comes top of the energy hierarchy, making a real difference to the UK’s contribution to mitigating global climate change. This is a great opportunity for people to invest in an entrepreneurial company looking to transform this sector.
“As the majority of our projects to date offer more modest returns at lower risk and over longer terms, this three-year bond paying 12 per cent pa shows our commitment to providing our customers with a variety of investment durations and risk/reward levels to choose from. We want to satisfy a wider range of our customers’ investment needs, while always sticking to the win-win proposition.”
Kilian Pender, CEO of the GDFC and founder and CEO of Greenstone Finance, says: “The Green Deal was established by the government to give homeowners an opportunity to invest in their homes and make them more comfortable to live in, whilst also making them more energy efficient. Our latest fund raise through Abundance gives a broader set of retail investors the opportunity to invest in the GDFC, allowing us to accelerate the roll-out of the business and make a greater positive impact on the environment sooner.”
Nick Hurd, Climate and Industry Minister (prior to the election being called), says: “People living in more energy efficient homes can have lower bills and warmer homes, while producing fewer carbon emissions. This is why the government has committed to improving the insulation of more than one million homes over this parliament. It’s encouraging to see private sector firms working to deliver energy efficiency to consumers through the Green Deal framework.”
The GDFC Bond will earn 12 per cent interest pa over its three-year term. Seventy per cent of that return will be paid twice yearly each year of the term, and the remaining 30 per cent will be rolled up and earn interest itself over the 3 years. This part of the return will be paid to the investor, along with their original capital, at the end of the term.
Like all other projects offered by Abundance, the minimum investment is just GBP5, and holdings can be sold before the full term has elapsed via the secondary market on the Abundance website at no additional cost.