Bond takes advantage of renewable heat incentive and offers investors 7% interest over 7-year term
Rendesco, one of the UK's leading ground source heat pump installers, is raising £5.5 million through a 7% seven-year bond. The funds will finance the rollout of ground source heat pump installations which provide low carbon heating and hot water to retirement home residents in over 100 sites across the country. The bond is being promoted by Triodos Bank and can be accessed through its crowdfunding platform.
Almost 40% of the energy consumed in the UK is in the form of heat and its generation accounts for 20% of UK CO2 emissions. Renewable heat is a significantly under-utilised resource in the UK, amounting to only 1% of the UK's heat requirement. This is compared to an EU average of over 10%, with Sweden producing around half of its heat from renewables.
Julian Sowerbutts, Managing Director of Rendesco said, "Heat generation accounts for a substantial proportion of our CO2 emissions. It is our joint responsibility to protect our planet. Ground source heat pumps are a tried and tested renewable technology, which benefit the environment and make excellent commercial sense for our clients."
Cheltenham-based, Rendesco has successfully installed ground source systems in 21 new build retirement homes, with an additional 28 in progress. By December 2020 a further 51 sites are planned, funded through the Triodos bond offer, bank finance and investment from shareholders.
Rendesco finances the heat pump installations for its retirement developer clients and then achieves a return on this investment through payments from the government's non-domestic Renewable Heat Incentive (RHI) scheme, a 20-year inflation linked subsidy. The retirement homes receive a renewable heating system at no cost and the residents receive low cost heating and hot water.
The bonds can be held in an Innovative Finance ISA which means that investors get their interest paid tax-free. For a higher rate taxpayer, a bond paying 7% interest per year in an ISA is the equivalent to a bond paying 11.66% interest per year held outside an ISA. Bonds are also available to be held in a self-invested personal pension (SIPP). The minimum investment is £500.
The offer is also open to investors who want to hold bonds directly and receive interest after withholding of basic rate income tax.
Research from Triodos Bank reveals the growing appetite for crowdfunding among savers, particularly in the South West. A quarter of savers (26%) nationally think that crowdfunding is becoming an increasingly attractive option to invest, rising to a third (32%) in the South West - the second highest of all UK regions.
Triodos recently became the first bank to launch a crowdfunding platform. It offers a range of crowdfunding opportunities enabling people to invest directly in equity or bonds issued by organisations delivering positive social and environmental impacts. A third (36%) of savers in the UK say they would be more willing to trust a crowdfunding site if it was run by a bank or building society.
Triodos Bank already has an excellent track record in raising finance for social and environmental organisations and in the last 15 years has raised more than £130 million to fund over 50 impact projects. In 2003, Triodos successfully raised the first charity bond in the UK for Golden Lane Housing, one of the UK's leading supported housing landlords for people with a learning disability. In 2013, a further £10 million was raised including a refinancing of the 2003 bond where over 40 per cent of bondholders re-invested.
Dan Hird, Head of Corporate Finance at Triodos Bank, said: "To tackle the big issues we face today we need to inspire investors to support progressive and pioneering businesses. It aligns with our mission at Triodos Bank to make money work for positive social, environmental and cultural change."
For more information and to register interest and receive alerts each time a new offer goes live, visit the Triodos crowdfunding platform.
An investment in Rendesco bonds is not covered by the Financial Services Compensation Scheme. Rendesco's ability to pay the interest and repay the bonds is not guaranteed and is dependent on the continued success of its business model. Rendesco bonds are unquoted securities with a fixed repayment date and although the bonds are transferable, investors should be aware that they may not be able to access their capital during the life of the bond.
Notes to Editors
Rendesco published an offer document dated February 2018. Applications can only be made on the basis of, and subject to, the terms and conditions of the information contained in the offer document which includes the bond instrument and the terms and conditions of the Triodos Crowdfunding website. Rendesco Holding Ltd is a company registered in England (11171223). Registered address: 41 Rodney Road, Cheltenham, Gloucestershire.
 UK climate change commission
 Research conducted by Opinium Research on behalf of Triodos Bank, 9th to 12th February 2018, among 2,002 nationally representative UK adults (aged 18+).
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About the Renewable Heat Incentive Scheme
The RHI scheme was introduced by the UK government in November 2011 to encourage businesses and households to invest in systems which generate heat from renewable sources. The aim of the RHI is to increase heat generation from renewable sources to 12% of total UK heat demand, from its current position of 1%. The RHI supports a range of eligible renewable technologies including biomass boilers, solar thermal panels, heat pumps, biogas and combined heat and power (CHP) systems.
About Triodos Bank
Triodos Bank is a global pioneer in sustainable banking using the power of finance to invest in projects that are good for people and the planet. Triodos uses its €13.5 billion (2016) in assets to create social, environmental and cultural value in a transparent and sustainable way.
With UK operations based in Bristol, Triodos Bank has branches in the Netherlands, Belgium, Spain, Germany and an agency in France. Globally, Triodos Bank has microfinance projects in Central Asia and Eastern Europe, and is a founding member of the Global Alliance for Banking on Values (GABV), a worldwide network of 43 banks seeking to transform finance into a vehicle of positive influence.
Triodos Bank NV (incorporated under the laws of the Netherlands with limited liability, registered in England and Wales BR3012). Authorised by the Dutch Central Bank and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our regulation by the Financial Conduct Authority and Prudential Regulation Authority are available from us on request. Firm reference number 183366.
Investments offered on the crowdfunding platform are not readily realisable, which means that they may be difficult to sell and you may not get back the full amount invested. Investments are not covered by the Financial Services Compensation Scheme (FSCS) and your capital is at risk and returns are not guaranteed. Repayment of capital and interest or payment of dividends will be dependent on the success of the organisation's business model and past performance isn't a reliable indicator of future performance. You should always read the offer document in full before deciding whether or not to invest as it will cover risks specific to an individual investment. You can read more about the general risks associated with making these types of investments here. If you are unsure if any of these investments are right for you, you should contact an Independent Financial Adviser.