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Low Carbon Hub

Financial performance

The Low Carbon Hub is aiming to raise £1.5 million of investment in the Community Energy Fund in this round.

This investment will help the Hub:

• Grow their portfolio of solar PV projects
• Invest in existing solar PV portfolios by refinancing the short term loan from Oxford City Council.

Over the past three years, the Low Carbon Hub Group has significantly expanded its asset base, with over £8.3 million expended on generating assets.

How your investment works in practice

Low Carbon Hub is opening up the Community Energy Fund for investment until 10 June 2020.

• You can invest from £250 to a maximum of £100,000
• You start earning interest from the day your application for shares is formally accepted by the Board of Low Carbon Hub, this will most likely be in July 2020.
• Interest is calculated at the end of each financial year based on the performance of energy projects funded during that year.
• Interest is paid out to investors after the end of each financial year – this can be several months after year end.
• The full target interest rate of 5% is earned after the fourth anniversary of investment – to reward long-term commitment, investment held in the Community Energy Fund for more than four years will be eligible to receive the full target interest rate. For the first four years of investment the target interest rate is 4%.
• You are eligible to apply to withdraw your equity following the fourth anniversary of your investment.

Solar PV development

Project Leo

Project Local Energy Oxfordshire (LEO) aims to demonstrate how the electricity system of the future can work, and so to grow an evidence base that can inform how we manage the transition to a smarter electricity system. Decarbonisation, decentralisation, and digitalisation are all fundamentally changing the way we interact with energy and creating new opportunities and challenges.

In order to achieve this Low Carbon Hub will need a sufficiently large amount of renewable generation – an anchor load – to enable them to work at a scale that allows them to carry out meaningful trials and is financially viable. For this reason Low Carbon Hub are examining a number of potential sites for a ground mount solar farm. The forecast tables below show the indicative base case financial projection for a subsidy-free 8MW ground mount solar PV array.

Key financial table assumptions:

  • 30 year project
  • System degradation 0.4% a year
  • 100% of electricity exported
  • Total capital costs of £5.3 million
  • Debt to equity ratio 35:65
  • Debt interest rate 3.25% for 18 years
  • RPI at 3%
  • PPA starting price at £52//MWh

8MW Ground Mount solar - first five years forecast

8MW Ground Mount solar - first five years forecast

8MW Ground Mount solar - lifetime forecast

8MW Ground Mount solar - lifetime forecast

Low Carbon Hub liabilities

As of March 2019 Low Carbon Hub has short-term liabilities of £300,000 due this current financial year, which relate to a £200,000 loan from Resonance and £100,000 towards the fish pass. Since then they have taken out £327,984 from the short term revolving loan facility with Oxford City Council, part of which replaced the £200,000 loan from Resonance. A proportion of the monies raised through the opening of the Community Energy Fund for investment will be used to pay down this loan.

Its long term liabilities stand at £1,879,497 from Charity Bank, held in the wholly owned subsidiary Low Carbon Hub Sandford Hydro Limited. This loan is ring-fenced within Sandford Hydro Limited and therefore exposure is limited only to Sandford Hydro portfolio shareholders.

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