Abundance launches green energy IFISA product ahead of other peer-to-peer lenders.
Abundance, an online investment platform for renewable energy projects, has launched one of the UK’s first Innovative Finance ISA (IFISA) products. The wrapper will allow investors to invest in renewable energy products tax-free, via the platform’s bonds.
Abundance’s first IFISA eligible campaign will fund a new solar farm on a Swindon Council-owned former landfill site at Chapel Farm in Blunsdon. The bond will offer an annual return of 6 per cent paid in twice yearly instalments, over a 20 year investment term. The minimum investment amount is just £5. These investments are also tradable, subject to liquidity in the marketplace.
The majority of the investment required by the Chapel Farm project will be provided by Swindon Borough Council, with private investors participating alongside. This is the second time that Abundance has hosted this kind of project with Swindon Borough Council, with the first proving extremely popular among investors.
Sajid Javid, Secretary of State for communities and local government, was full of praise for the new campaign: “This is an excellent example of a local council working with the private sector to provide local people with a means of investing in their local community and its infrastructure. I wish it every success.”
With the launch of its IFISA wrapper, Abundance gets out well ahead of the rest of the peer-to-peer lending pack. The vast majority of peer-to-peer platforms continue to await full authorisation from the FCA, and cannot apply for ISA manager status until they have it. Lending Works became the first P2PFA member to squeeze through the logjam a few weeks ago.
In regard to ISAs, Abundance has benefited from its regulatory status as an investment-based crowdfunder, rather than a loan-based entity. Co-founder Bruce Davis says that Abundance is in fact more heavily regulated than other P2P and crowdfunding platforms, due to the fact that all customers have to pass an appropriateness test, and all fundraises on the platform are for public limited companies.
Abundance’s investment product – a “bond”, in the eyes of the regulator – was officially ushered into the realm of the IFISA on 1 November, a move that was first mooted in the 2015 Autumn Statement.
“We want to turn investing in ISAs from something gathering dust in the forgotten corner of a bank or riding the roller coaster of global stock markets into something that makes a difference in the real world,” said Davis. “Investors’ money will be working harder than it would in the bank, boosting the UK’s green economy and sustainable infrastructure, and returns will be tax-free.”