Green-minded individuals with an appetite for risk are being targeted by a new investment paying an eye-catching 9% interest a year.
This five-year green bond, launched this week by the crowdfunding platform Abundance Investment, seeks to raise £4m for a private company called Iduna to finance the installation of 50 new electric vehicle charging points in Greater Manchester, provided in partnership with Transport for Greater Manchester.
However, this is very different to putting your money into a savings account. With a 9% return, the investor’s capital is clearly at risk – ultimately, if things went wrong, you could lose some or all of your money. So this is probably not for the faint-hearted.
The minimum investment is £5, and those who put their money in will be buying tradeable debentures, which are like IOUs issued by companies. However, debentures are not covered by the Financial Services Compensation Scheme or the Financial Ombudsman Service.
According to the offer document, someone investing £1,000 now would be in line to receive a total of £1,499 at maturity in June 2026, made up of their original £1,000 capital and £499 of investment income.
Greater Manchester has a strategy to be carbon neutral by 2038, and the proceeds of the investment will fund public charging points that will run on 100% renewable electricity supplied by Octopus Energy.
Abundance says those who sign up to the scheme will be helping to fund Greater Manchester’s “green transport revolution”. The investment offer will be backed by revenues from electricity sales and advertising at the sites, it adds.
These debentures are secured, in contrast to some other Abundance investments that are unsecured. However, the offer document includes five pages on the risks involved, and states: “Every investor in the debentures should be aware that by investing … he or she risks losing the entire or part of its investment in the event of our [Iduna’s] liquidation or insolvency. Security does not provide debenture investors with certainty of a partial or full recovery of their investments.”
Some will take the view that a safer bet would be an ethical fund investing in many different companies.
