Goji, a specialist Direct Lending investment manager and platform, has partnered with Prestige-Prime group (Prestige), a specialist alternative investment lender, to launch an ISA-eligible Renewables Lending Bond.
This will provide financial advisers and wealth managers with an opportunity to earn a steady return from a portfolio of UK renewable infrastructure projects.
The Goji-managed Renewables Lending Bond provides a low-risk, fixed-impact investment that protects against volatility and can add diversification to a client’s portfolio through exposure to Direct Lending.
Over the last decade UK renewable developers and operators have experienced difficulty in obtaining loans as banks have exited the credit finance market following the financial crisis. This has created a gap for private investment to fund alternative energy sources such as solar, wind and biomass. Energy security is high on the government’s agenda, with various long-term tax incentives and subsidies in place to support investment, and lending to this sector is now being filled by specialist, nimble and non-traditional Direct Lenders, such as Prestige.
Goji’s Renewables Lending Bond gives investors the opportunity to help finance these projects, by working in partnership with Prestige, through an ISA qualifying investment.
The bond will aim to provide a yield of between 5.5 per cent pa and 6.5 per cent pa over a three and five year investment term respectively, Interest payments will be supported by government subsidies such as Feed-in-Tariffs, while loans are originated by Prestige’s expert credit team which has a 15 year track record in renewables financing.
In terms of diversification, the bond will cover over 40 renewables projects, across different sub-sectors (wind, solar, biomass) meaning repayments will be supported by a range of revenue generating sources.
The Bond is eligible for inclusion within an Innovative Finance ISA or SIPP and Prestige will cover up to 20 per cent of first losses.
“The availability of dedicated credit for renewable energy sources is already having a positive impact on the UK’s environment and energy security,” says Craig Reeves, Founder of Prestige. “But the UK still lags behind Europe in the establishment and financing of renewable energy projects, so there is plenty of room for expansion. Investing through the Renewables Bond offers investors an attractive opportunity to bridge this gap whilst providing attractive, steady, socially-responsible returns that back UK businesses.”
Financing energy generation projects is additionally attractive because they are secured against UK land and assets, with support from government subsidies and long term revenue contracts. Government support is also strong as it faces pressure to meet green energy and zero waste targets in 2020 and 2030 respectively.
Jake Wombwell-Povey, CEO, Goji, adds: “Renewables infrastructure and socially responsible investing continue to rise in prominence. Goji’s Renewables Lending Bond offers financial advisers and their clients the opportunity to diversify their portfolios and earn attractive returns on heavily secured projects that are managed by a major player in the renewables financing market – all without the exposure to market volatility that comes with traditional fixed income.”
Founded 10 years ago, Prestige has raised over US1.5 billion for its UK-focused asset-based lending – credit funds. It specialises in lending to small and medium-sized companies in the rural sector, including project finance for alternative energy and other environmentally-friendly infrastructure projects.
