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Peer2Peer Finance News | September 18, 2019

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P2P investors can now back Green Deal loans on Abundance

P2P investors can now back Green Deal loans on Abundance
Marc Shoffman

THE COMPANY that bought the government’s Green Deal assets is now raising £5m via the Abundance platform.

The Green Deal was launched in 2013 to provide finance to property owners looking to install energy-efficiency measures. But the government pulled the plug on funding in 2015, saying uptake had been lower than expected.

The Green Deal Finance Company (GDFC), which owns the loan book and assets, was bought by City investors Greenstone Finance in January, who are using a peer-to-peer lending platform to raise funds.

Still trading as the GDFC, investors on the ethical P2P platform Abundance can invest a minimum of £5 in a three-year bond paying 12 per cent a year.

The bond can also be included in the Abundance Innovative Finance ISA (IFISA).

Read more: Abundance receives £10m boost from IFISA

Investors will receive 70 per cent of the return paid twice a year and the remaining 30 per cent will be rolled up and earn interest itself over the three years. This part of the return will be paid to the investor, along with their original capital, at the end of the term.

The project was uploaded to the site in the middle of last week but only publicised over the weekend. It had raised just over £1m by Saturday, with much of the money coming from IFISA accounts being held in cash on the platform until new projects were launched.

The money will be used to invest in improved marketing and communications, sign up more installers, improve the customer journey and improve the website.

Read more: Abundance offers 2 per cent cash sweetener

Bruce Davis (pictured), co-founder of Abundance, said the majority of projects to date offer more modest returns at lower risk and over longer terms, but this bond shows a commitment to a variety of investment durations and risk and reward levels.

“Improving the energy efficiency of the UK’s housing stock comes top of the energy hierarchy, making a real difference to the UK’s contribution to mitigating global climate change,” Davis said.

“This is a great opportunity for people to invest in an entrepreneurial company looking to transform this sector.

“We want to satisfy a wider range of our customers’ investment needs, while always sticking to the win-win proposition.”

Kilian Pender, chief executive of Greenstone Finance, said this fund raise would speed up the rollout of the service.

“The Green Deal was established by the government to give homeowners an opportunity to invest in their homes and make them more comfortable to live in, whilst also making them more energy efficient,” Pender said.

“Our latest fund raise through Abundance gives a broader set of retail investors the opportunity to invest in the GDFC, allowing us to accelerate the roll-out of the business and make a greater positive impact on the environment sooner.”

Read more: Abundance investors benefit from new IFISA rules