GFI boss urges UK councils to issue sustainability bonds

Former Lord Mayor Sir Roger Gifford says that other local authorities should learn from Swindon’s initiative for funding new solar park

More UK councils should issue bonds for green and sustainable infrastructure projects, says leading City finance guru Sir Roger Gifford.

The former Lord Mayor, now head of the City’s Green Finance Initiative (GFI), made his plea following the launch of Britain’s first-ever ‘Council Solar Bond’: a Swindon-based scheme through which the local authority is funding the development of a new solar park.

Currently under construction at Wroughton Airfield, the park will support Swindon Borough Council’s plans to meet a 2020 sustainable-power target of 200MW – enough for every home and business in the area.

Peer-to-peer lending platform Abundance has joined forces with the Council to manage the bonds side of the project, which launched on 24 February and raised £100,000 of its £1.8m goal in just 24 hours.

Following the launch, Gifford said that the scheme echoes similar efforts undertaken by US municipal authorities, and has much in common with a ‘green bond’ venture that funded sustainable amenities in Gothenburg. The latter initiative was managed by Swedish bank SEB, which has a UK division that Gifford manages in addition to his other duties.

Gifford pointed out that as soon as the Gothenburg project opened to the public, it was “flooded with calls from local people wanting to get involved”. Given that level of interest, and the initial rush for Swindon’s Solar Bond, he added, “I don’t see why that shouldn’t happen in Leeds, or Bradford, or wherever.”

Gifford stressed: “There is great potential for the UK to follow the Scandinavian or North American models. Mostly obviously for wind, but also for wave, solar and biofuel power. All those forms of renewable energy are perfect for this kind of climate-friendly financing.

“Waste management, water management, better water grids, better electricity grids, sustainable transport, sustainable housing – all of them are also excellent [prospects], as is air-pollution prevention.”

Upon the Solar Bond’s launch, Swindon councillor and cabinet member for transport and sustainability Dale Heenan said: “For years, companies have been trying to find ways to make investing more accessible and understandable.

“Swindon’s Solar Bonds provide an opportunity for people invest as little as £5 or more than £5,000, and enjoy better returns than their bank provides as they invest for their children’s future, their own retirement or just a rainy day.”

He added: “Our approach is democratic finance in action – and the combination of personal benefit, environmental issues and community involvement provides a topical way to catch imaginations, and help improve personal finance skills in a simple, easily understood way.”

Abundance MD Bruce Davis commented: “This first-ever Council Solar Bond is exciting and important, as it is further proof that ‘win win investment’ is not only possible, but can play a crucial role in providing the public with a better return, while creating innovative new ways for local community infrastructure to be improved without increasing costs to the taxpayer.

“This is great news for… councils across the UK trying to maintain and improve local services.”

Click here for previous coverage of the Green Finance Initiative.

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