WARRINGTON Borough Council is set to generate millions in vital funds for the authority after investing £20m in an innovative solar farm deal.
The council has teamed up with and Newham and Thurrock Councils to purchase bonds in Swindon Solar Park.
The council has invested £20m in a five year fixed bond from the council’s cash balances (which come from council tax, business rates etc), which are kept in reserve to cover council spending commitments.
The council says that by investing some of these reserves, the council’s cash can make interest, rather than simply sitting there. It is an innovative way of generating additional income, and any returns or profits the council makes can be spent on protecting essential services.
The environmentally-friendly deal – agreed with owners Rockfire Capital – makes Warrington, Newham and Thurrock among the first councils in the UK to invest in ‘clean tech’ bonds.
It forms part of Warrington’s ‘invest to save’ programme, finding innovative ways to generate income in the tough economic climate. The deal is expected to deliver £500,000 in returns every year for Warrington Council, which can be ploughed back into council services.
It will also see Warrington taking a leading role among local authorities in investing in technology which protects the environment.
Russ Bowden
The council’s executive board member for corporate finance, Cllr Russ Bowden, said: “In such difficult times for local authorities, it’s more important than ever that we find new ways of generating income. That means taking a more creative, commercial approach in our day-to-day business.
“I’m really proud of how we are doing things differently in Warrington and this deal is a great example of that. This investment in renewable energy gives us the opportunity to give our own finances a real boost. It’s an innovative way of bringing in vital funds which we can use to protect essential council services.”
Rockfire Capital is a specialist investment management company which has acquired Swindon Solar Park, one of the UK’s largest operational solar PV projects.
Developed by British Solar Renewables, the park has been built on a former RAF airfield now owned by the Science Museum Group, around 6km south of Swindon.
The 172-acre site comprises 231,660 solar panels and has a capacity of 60.9 MW, making the project one of the largest solar assets in the UK. It will generate close to 60 GWh of electricity per annum, enough to supply over 15,400 homes, and save around 35 tonnes of carbon dioxide a year.
Swindon Solar Park has also been constructed to provide additional environmental benefits, including enhancements to habitat and biodiversity for wildlife at the site. Native plants will colonise and thrive, bringing with them many other animals to become a buzzing, colourful haven for a number of under-threat species.
Liam Kavanagh, Rockfire Founder and CEO said: “We have long been advocates of renewable energy and offer a range of ways for both institutions and individuals to invest in the sector.
“Renewable energy assets not only offer investors attractive and reliable yields, but are also a way for them to invest in something which positively impacts the environment.”
8 Comments
How much has been invested?
According to the WG report £20 million.
The info which we were waiting for from the council has been added to the story now. Took a while to get the questions answered.
The council have allegedly just bought New Town House at a cost no doubt of many many millions and now they are splashing out on this scheme as well as borrowing 2 million pounds to build a “travellers” caravan site… I thought they were supposed to be cash strapped???
If they have bought New Town House then does that mean the council wont need there new 103,000? sq. ft. office and administrative facility that they are planning to build withing the new Time Square development and that better use can be made of the new proposed building? I’m sure I remember reading that they said the new building was to save money as they pay large rent to be in New Town House. Wont need to pay rent if they own it now 😉 Of course they may have bought it so they can knock it down…fingers crossed !!
WBC bought New Town House some time ago. It was cheaper overall to buy the building than to pay rent and also potentially risk needing to extend that rental if the new offices were delayed. It gives WBC control of that site in terms of redevelopment. The purchase was through capital borrowing, not the revenue budget that pays for services. The cost in terms of interest plus principal repayment makes it ‘invest to save’, i.e. it costs less overall.
Any travellers site would also be funded through the capital programme. The cost of borrowing (and more importantly, tackling the issue) needs to be weighed up against what we already spend reacting to it by chasing groups around Warrington and through the courts, along with cleaning up sites afterwards. I don’t think there will be much in it by the end.
Getting onto the solar farm bit, again this isn’t cash lying around. The Council has cash in the bank that is earmarked for spending and there is a treasury management strategy (it is on the WBC website) that seeks to make some gain on that money in the short term before it is spent. This scheme gives a decent return for 5+ years, with any future bond sale reflecting the uplifted value of the site. This is £500k/y that can go into providing services – or avoiding simply making more cuts in response to Government funding cuts.
Russ… if the council can borrow via capital borrowing channels to fund a travellers site, why can’t they borrow to fund buildings to house the homeless? Is it because the travellers are more of a pain in the backside than the homeless and so by intimidating the council, are able to bully you into submitting to their demands? Maybe if the homeless in our town were as disruptive they might stand a chance of getting some help too?
As for the bit about buying NTH just in case the new swanky offices were delayed, are you really saying that you have borrowed potentially hundreds of millions of pounds against a possibility of a building delay and that the Barclay Brothers wouldn’t have extended the lease in the short term in case such an event? surely it would have been in the landlords best interest to keep the rent coming in allbeit short term rather than then trying to lease out a vast office space all in one go
….And how is this investment going? How much return has it generated (no pun intended) and has the bond now been repaid or is it still ‘invested?
Oh… travellers site. We are still awaiting that. Rumour has it that the labour majority North has decided (surprisingly) to put this in the south even though the North does not have a site … but will not announce until after the GE to protect the Labour candidate! Is this true?