Triodos Bank has launched its own crowdfunding platform, offering a range of bonds and equities issued by organisations focusing on positive social and environmental impact.
The platform, www.triodoscrowdfunding.co.uk, is the first to be launched by a bank, and will allow investors to hold the investments in an Innovative Finance Isa (IFISA).
It will launch with bonds paying between 5 per cent and 7.5 per cent a year, including an investment in a community-owned solar farm.
People can invest as little as £500 in the bonds on the platform.
Triodos said the investments “have been extensively screened by Triodos for social and environmental impact, the viability of their business model and the credibility of the management team”.
Bevis Watts, managing director of Triodos Bank UK, said: “We’ve been crowdfunding since before it became a well-known term. With the new Triodos Crowdfunding platform we’re recognising the huge potential of crowdfunding and responding to demand for Innovative Finance ISAs.
"Investors are looking for opportunities that allow them to support progressive companies, social enterprises and charities making a positive impact, while also receiving good long-term returns."
The three current investments include Mendip Renewables, which pays 5 per cent a year, increasing in line with RPI inflation and repayable over 17 years. This project aims to take a 5MW operational solar farm in Somerset into community ownership. An estimated £1.4m of profit will be contributed to a community benefit scheme over the life of the project.
Investors can also back Thera Trust, which provides home for people with complex learning disabilities, which offers 5.5 per cent interest per year over a 6-year term.
The third investment is Rendesco, which is rasing £5.5m to develop green energy from ground source heat pumps and is paying 7 per cent interest per year over a 7-year term. The aim is to develop 100 sites, with a focus on retirement homes and providing low-carbon heating to keep the elderly warm.
John Ditchfield, an IFA from Castlefield and a specialist in ethical finance, welcomed the news.
“Triodos is a great brand, and has a lot of experience in this area."
However he cautioned that investors should do their homework before jumping in.
“The main question with crowdfunding is whether investors know what they are getting into, and it is my opinion that, in the main, they don’t.”
