Meadow Blue Community Energy

Financial Performance

Please note that this offer is now closed (as of midnight on the 24th of November). This information is no longer updated and is for reference purposes only.

MBCE aims to raise £640,000 through this Share Offer which will be used to develop a 5MW Solar array at Merston Farm, near Chichester.

Project Development

The proposed solar project at Merston Farm has planning permission, FiT accreditation and grid connection secured and is ready for construction.

Total costs

The total costs to complete the project is £6.26 million, including construction, legal, technical and fund-raising costs and will be met by a combination of the equity fundraise, debt from Close Brothers and investment from West Sussex County Council (WSCC). A separate bond offer may also follow this share offer if insufficient funds are raised.

Loan Finance

MBCE has an agreed term sheet from Close Brothers, a leading UK merchant banking group, for a bank loan of £3,618,500 and MBCE is in advanced negotiations with West Sussex County Council for the balance required after this share offer (£2 million) to cover the total project costs. 

Key Assumptions

 The project benefits from the government backed Feed in Tariff for renewable electricity production. Once the solar farm is commissioned, MBCE will receive payments under the Feed-in Tariff (FIT) scheme at rates secured with Ofgem for 20 years (6.16p/kWh) and further income from the export of electricity to the National Grid.

  • The total cost to complete the project covered by this share offer is £6.26 million, including construction, legal, technical and fund-raising costs and will be met by a combination of the equity fundraise outlined in this share offer, debt from Close Brothers and investment from West Sussex County Council. A separate bond offer  may also follow this share offer if insufficient funds are raised.
  • The solar farm is expected to have an annual yield of 1,115 kWh/kWp.
  • The Retail Price Index (RPI) is 1% for the next two years, but after that averages  2.5% per annum (in line with the long term average). 
  • FIT income and all costs will increase by RPI each year. Income from electricity sales increases in line with accepted industry projections (less than RPI in the short term, and more than RPI in the long term).
  • Maximum degradation in solar panel performance is at 0.5% per year in line with normal industry expectations. 
  • The project is insured for risks and loss of income.

MBCE aim to pay members an annual return of 7%. Interest payments are calculated from the date of issue of the shares. MBCE has applied for advance assurance for the shares to be eligible under the Enterprise Investment Scheme (EIS) by HMRC.

Forecast income and costs

The table below shows the expected electricity output over the 25 year life of the project and the expected cash flows. All figures are in £'s.

Year 1-5 6-10 11-15 16-20 21-25 Total
FIT Revenue 1,721,761 2,003,849 2,211,183 2,439,969 139,657 8,516,419
Expert revenue 1,357,980 1,847,583 2,253,154 2,583,353 2,964,298 11,006,368
Total Revenue 3,079,741 3,851,432 4,464,337 5,023,322 3,103,955 19,522,787
Operating costs 835,437 946,460 1,020,522 1,057,058 1,195,964 5,055,441
Net Revenues 2,244,304 2,904,972 3,443,815 3,966,264 1,907,991 14,467,346
Loan Interest Payment 908,690 704,218 431,031 95,118 0 2,139,057
Loan Capital Payments 591,856 933,094 1,206,281 887,269 0 3,618,500
WSCC Interest Payments 404,001 478,869 341,765 67,935 0 1,292,570
WSCC Capital Payments 0 480,202 973,273 546,525 0 2,000,000
Member Interest Payments 178,629 216,496 180,862 76,391 0 652,378
Member Capital Payments 0 90,038 182,489 365,436 0 637,963
Taxation 0 0 0 0 0 0
Community Fund Payments 73,700 89,483 128,115 1,927,589 1,907,991 4,126,878
Closing Balance 87,428 0 0 0 0 0

Notes

  • Loan interest and capital payments refer to payments made to Close Brothers who are providing project finance.
  • WSCC interest and capital payments refer to payments made to West Sussex County Council who are considering investing in MBCE.
  • Member interest payments are based on 7 % of the member capital balance in each year. Therefore as member capital is repaid, member interest payments decline over time.
  • The financial projections outlined above and the assumptions on which they are based relate to the future and may therefore be affected by unforeseen events. Actual performance may not correspond to these projections.

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