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Harborough Solar One

Harborough Solar One Project 2 - 2018 Withdrawable Shares - OFFER CLOSED

All investments and commercial activities carry risk. Therefore shareholders should consider carefully whether Harborough Energy withdrawable shares are a suitable investment for them in light of their own personal circumstances, take appropriate advice and make their own risk assessment.

Supporting the community purpose of Harborough Energy should be the primary motivation for investment and investment in the Society should be seen as a long-term social and environmental investment.

An investment in Harborough Energy is an investment in a trading business and is not a loan or deposit. Depending on the personal circumstances of the shareholder and the proportion of assets they are considering investing, it may be inappropriate to invest savings in Harborough Energy.

In addition to the usual risks associated with investment in any business, the following risks should be carefully considered before investing. Although the Directors will seek to minimise these risks they could result in a negative affect on the operating results and cash flow of the Society and may affect the ability to pay interest and return the original investment. The risks outlined below are not exhaustive and there may be other risks of which the Directors are not aware.

This share offer is not covered by the Financial Ombudsman Service or the Financial Services Compensation Scheme.

General investment risks

  • Adverse changes in the marketplace (e.g. changes to governmental or European regulations or changes to prices or other market conditions) could adversely affect the Society’s viability and financial performance.
  • Changes in laws, regulations, government policy or applicable UK tax arrangements (including any changes to bases of taxation, tax relief and rates of tax) may affect the Society and the attractiveness of an investment in the Society. 
  • The Society’s business may be affected adversely by changes in economic, political, administrative or other regulatory forces.

Risks relating to the legal structure of Harborough Energy

  • The target share interest rate may not be achieved if the Society does not achieve the financial performance forecasted at the time of the Offer. However, the intention is to pay the target share interest rate subject to the conditions set out in the Rules.
  • Shares can only be withdrawn in accordance with the Rules and the ability to withdraw shares can be suspended at the sole discretion of the Board (even if a notice of withdrawal has already been submitted to the Society). If the Society lacks sufficient cash to enable Shares to be withdrawn when desired, withdrawal may be delayed, or not possible. Investment in the Shares should be seen as a long term proposition.
  • Successful applicants will become Members of the Society and thereby own the Society. If the Society is unable to meet its debts and other liabilities, Members could lose up to the whole amount held in Shares (but no more than that amount).
  • Investments in Community Benefit Societies are not like deposits at a bank. Neither the Financial Services Compensation Scheme, which applies to bank accounts, nor the Financial Ombudsman Service apply, nor is the Society subject to prudential supervision by the FCA.

Risks associated with the business and the offer

  • The planned installations may take longer than presently estimated which could delay the Society’s ability to pay Share Interest.
  • If the Minimum Amount is not reached then the Board may return all shareholding monies received. There will be no deduction of issue costs.
  • The target maximum to be raised through the Share Offer may not be reached meaning the full project cannot be completed.

Energy and renewable energy industry risks

  • Installation costs may be higher than expected. 
  • Future electricity prices may differ from the assumptions used in the financial projections.
  • Solar PV panel performance projections are based on methodologies commonly used by the industry, but long-term changes to weather patterns and/or equipment underperformance may result in lower levels of electricity generation and therefore income.
  • Abnormal short-term weather conditions could affect expected levels of electricity generation and therefore income, although overall patterns outside anticipated parameters are unlikely.
  • Although modern solar PV panels are reliable, technical failure can interrupt the generation of electricity or the distribution network and lead to unexpected costs. Manufacturer warranties and guarantees, and regular servicing, provide some protection.
  • Changes to the regulatory regimen - The Feed in Tariff is guaranteed for 20 years under primary legislation. The Feed in Tariff is due to cease from March 2019. This project assumes that the system will be commissioned before the current subsidies cease. Current levels of deployment would suggest that significant changes to the subsidy are unlikely.

Financial Projections

  • Financial projections - The Directors have commissioned financial advisors to assist in the production of financial projections and provided them with the relevant assumptions upon which the projections are based.  Actual results, performance or achievements may differ from those expected due to known or unknown risks, uncertainties and other important factors.
  • Inflation - Feed-in Tariff payments are set by the UK Government and increase each year in line with the Retail Prices Index inflation. If long-term inflation is higher than the RPI assumption used in the base case projections, then the income received from Feed-in Tariff payments will increase, but so will costs. As both income and costs are linked to inflation in this way, the overall effect on investors of changes to assumed inflation are believed to be modest.
  • Electricity prices - The level of income that will be received from the sale of electricity by Harborough Energy will be subject to changes in the electricity market and may go up or down.
  • Feed-in Tariff - Depending on the size of the solar PV array and timing of obtaining Pre-accreditation for each site, the tariff received may be lower than anticipated in the Financial Model.
  • The Society’s business may be affected adversely by changes in economic, political, administrative or other regulatory forces.

Other Risks

  • Contingency arrangements - A failure to raise the maximum investment for the project will require the Board to scale back the installation or reconsider its viability – a decision on this will be taken once the share offer closes. If the project is not viable your capital will be returned.
  • Theft and Damage - The installations may become damaged through vandalism or may be stolen. Harborough Solar One will take out insurance cover to compensate for any potential losses should this occur. The solar array will also be secured with a fence and locked gate as stipulated by our insurance company.
  • Costs associated with the management and maintenance of the project and debt servicing may increase beyond the rate of inflation currently allowed for within our financial modelling.
  • Other assumptions that have been built into financial modelling relating to energy price inflation, RPI, proportion of electricity sold to host organisations and export levels, may prove to be inaccurate.
  • Local weather conditions affecting the amounts of electricity generated from renewable energy projects.
  • Mechanical failure - This will be addressed through warranty and insurance secured by the Society.
  • Change in circumstance of the host organisation. Should NBJ (London) Ltd seek to terminate the license agreement that it holds with the Society then NBJ shall pay to the society a lump sum to compensate for loss of income and community benefit.

Offer Closed

 As of the 16th October 2018 this offer is closed

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