With the market for community sharesgrowing, exciting opportunities and financing mechanisms are emerging that enable communities to engage with and invest in local enterprises that meet local needs and in the development or acquisition of assets that help to build more resilient and sustainable communities.
As example is Parity Trust’s £1million community share offer which is designed to offer investors both a financial and social return through the Trust’s provision of bridging finance, working capital or investment capital to local charities and social enterprises operating within the local community and to homeowners requiring essential improvements and adaptations. A recent project financed by the Parity Trust was the provision of affordable housing through a community land trust, thereby enabling locals to continue living in the area of their work and childhood, with the positive impact felt, not only by the new tenants and homeowners, but also their families, extended families and employers.
Indeed earlier this month, Wedmore Community Power Cooperative celebrated the official opening of a 1 Mega Watt solar power plant in Somerset, which aims to save around 450 tonnes of CO2 per year and which was financed through a successful community share issue raising £950,000. The Cooperative successfully engaged the local community through the capital raise and development, with the majority of shareholders located in the Wedmore area and the construction phase of the project providing employment to local people. Additionally the structure of the investment will enable the redistribution of some of the cooperative’s profits from the energy generated by the Plant back to the community in the form of grants to local organisations and charities.
Further support for the growth of the community share market has been created through the development of the Community Share Underwriting (CSU) Fund operated by Resonance, a leading social investment company. Launched in May 2012, the Fund helps to support community groups reaching their full funding targets by offering to “underwrite” the issue, with the Fund’s investment subsequently repaid from future community share issues once the project is operational and has a track record with which to attract additional investors. The Fund is currently discussing with potential investors for its second round of fundraising, aiming to raise a further £1-2 million to further support the development of community share issues in the UK.
These examples are part of the long-standing, but burgeoning, interest in community assets - an area that we have prioritised as one of our priority areas this year. We look forward to working with partners in this field to support the further development of this area.