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Low Carbon Hub

2021 Low Carbon Hub Community Energy Fund

£100 minimum

Risk factors

All investment and commercial activities carry risk, and investors should consider whether investing in the Low Carbon Hub is a suitable investment for them in light of their own personal circumstances.

It is important that you carefully read the Risks section of the offer document in order to have a full description of all the risks relevant to an investment into the Low Carbon Hub Community Energy Fund.

This offer is not covered by the Financial Services Compensation Scheme and Members do not have recourse to the Financial Ombudsman Service.

The Low Carbon Hub IPS Limited has signed up to the Community Shares Unit Code of Practice, giving investors in the Community Energy Fund a right of complaint to the Community Shares Unit.

Risks associated with your investment

  • This investment is not suitable for those who require a guaranteed income or ready access to capital.
  • Interest payments are not guaranteed.
  • Descriptions of possible returns are illustrative only. There are variable and uncertain factors associated with any energy project.
  • The investment is for a minimum period of at least four years and there is no guaranteed access to your capital after this period.
  • If the Society lacks sufficient cash then it may not be possible to withdraw your Shares. Withdrawal of share capital is entirely at the discretion of the Directors, and investors may not be able to withdraw their capital promptly in the event that projects fail.
  • Shares in the Low Carbon Hub IPS Limited are unquoted securities and may be considered to be riskier than quoted securities and shares. If the Society is unable to meet its debts and other liabilities, you could lose up to the whole amount held in Shares (but no more than that amount).
  • Shareholders have no entitlement to receive a share in any surplus of the Society's assets on dissolution following the repayment to members of the nominal value attributable to their Shares because the Society has a statutory asset lock in its Rules.

Low Carbon Hub have set a target interest rate based on its assumptions about the income earned from the projects it supports with the invested capital. Low Carbon Hub's ability to pay out the interest rate depends on the level of investment in the Fund, the surplus generated by the projects directly funded by the Fund and the overall financial health of the Low Carbon Hub IPS Limited.

Low Carbon Hub will take the following steps to mitigate the risk to it being able to pay the target interest rate:

  • Monitor the level of equity in the Fund to avoid over-capitalisation and return excess capital if necessary
  • When the Fund was in its early years, Low Carbon Hub only invested in projects that had a scheduled delivery date or were already completed.

The financial performance projections set out in this profile and the share offer document are based on assumptions which the Low Carbon Hub IPS Limited considers reasonable but are subject to variation and are not guaranteed. Investors may receive lower returns than those projected.

Risks associated with the business

Low Carbon Hub's predicted income is based on a number of assumptions built into its financial and business models. The actual income generated by projects may differ from that anticipated by its financial modelling. Factors affecting income include, but

are not limited to, the following:

  • Projects may be delayed or incur additional costs due to technical, financial or legal matters.
  • Installations given as security to Oxford City Council construction facility could be taken over by the City Council should Low Carbon Hub fail to repay the loan. This would not affect shareholders or their return because it would only relate to installations not funded by shareholders.
  • Costs associated with the management and maintenance of the project and debt servicing may increase beyond the rate of inflation currently allowed for within the Low Carbon Hub's financial modelling.
  • Other assumptions that built into the financial modelling relating to energy price inflation, RPI, proportion of electricity sold to host organisations and export levels, may prove to be inaccurate.
  • Changes to the government’s current timetable for the phase out of the Feed-in Tariff
  • Local weather conditions affecting the amounts of electricity generated from renewable energy projects.
  • Mechanical failure.

Risks to delivery of environmental and social benefit

The environmental and social benefits delivered by the project depend on the performance of the installations themselves and the performance of community projects supported by the Low Carbon Hub IPS Limited and CIC. In particular:

  • Carbon Dioxide reduction targets for the installations may not be met if green electricity generation or energy efficiency saving is lower than predicted.
  • Low Carbon Hub may not generate sufficient profits to be able to provide the level of financial and other support to community-led environmental and social projects.
  • Community-led projects supported by the Low Carbon Hub may not deliver the expected carbon and environmental savings.
Applied for to date, of
£1,500,000 target

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