Warrington Borough Council launches resident-funded green bond in bid to reach net-zero
Warrington Borough Council has launched a green bond that will see residents invest in the region's renewable energy and energy storage sectors, as it works to deliver a carbon-neutral town by 2030.
Developed by Abundance, the aim of the bond is to raise £1m to help finance the region’s growing solar and battery storage sectors. Residents will be encouraged to invest in the bond with a minimum of £5.
Warrington Borough Council is currently developing two industrial-scale solar farms and a 27MW battery storage facility in partnership with Gridserve. The facilities will generate more energy than the Council consumes annually, with any generation surplus to its requirements bring sold on the open market.
The bond, called a Community Municipal Investment (CMI), will help to fund the solar farm near Cirencester and its co-located battery storage facility. It has a five-year term and will pay investors 1.2% per year, on a twice-yearly basis.
Abundance claims the bond, which is also open to private investment firms and to those living outside of the local authority’s constituencies, has a lower risk profile than its wider portfolio.
Warrington Borough’s Council Leader Cllr Russ Bowden said the CMI “gives people a fantastic opportunity to make a positive contribution toward a carbon-neutral future while providing them with a financial return and deeper engagement” with the council.
“This is a really exciting project, which forms part of our ongoing programme to mitigate climate change and carbon emissions, protect council services, create employment opportunities and reduce fuel poverty,” he added.
Warrington Borough Council has halved its own emissions since 2009 and is now working towards a new climate strategy, headlined by a 2030 net-zero target.
Strengthening the (green) bond
Warrington Borough Council is the second local authority in England to launch a CMI, the first being West Berkshire Council. West Berkshire is using its CMI to finance the installation of onsite solar panels at council-owned buildings.
Abundance is hoping to roll out CMIs to all local authorities in England and has, to date, secured a pipeline of £40m of bonds. It has calculated that £3.4bn could be raised if all 343 of the nation’s councils launched a CMI. Its development work on the CMIs was completed in partnership with the University of Leeds.
Given that more than half of the UK’s local authorities had made climate emergency declarations pre-pandemic, with many setting net-zero targets ahead of 2050, it comes as little surprise that many are keen to enter the green bonds market.
The global issuance of sustainable and green bonds totalled a record $99.9bn (£75.5bn) in the second quarter of 2020, according to the latest analysis from Moody’s, with investors particularly keen to play their part in the green recovery movement. This initial boom in interest was driven by an uptick in issuance for social bonds and sustainability bonds, both of which finance people-centric projects. Moody’s is forecasting heightened interest in avoiding ESG risks for the months and years to come.