Bond investing in green projects

Oh Aye?

Holders of “mini-bonds” issued by Future Renewables Eco, a wind farm investment company, are braced to lose more than half their investments after it collapsed into administration on Sept 17.

It owned 10 wind turbines across Britain and was funded by 750 bondholders who ploughed £24m into the company between 2015 and 2017.

There might be the occasional problem with investing, via bonds, in renewables projects. As I’ve been telling the Sage for a decade now. Where’s the risk equity?

You know, not all projects actually work. So, there needs to be someone carrying the risk of the adventure. That’s what equity is. And if folks are investing through bonds, but there’s no risk capital there, then the bonds are carrying that risk, aren’t they?

But of course equity is that bastard capitalism and we shouldn’t have anyone investing their pensions with that sort of protection, should we?

7 thoughts on “Bond investing in green projects”

  1. The whole things sounds suspect. Bonds offering “up to 9.5%”? *Alarm bells*

    I am not a fan of wind power due to the hideousness of the devices, but I suspect the problem here is a dodgy company, not that green stuff is a poor investment (which it still might be).

    There seems to have been a mysterious £2m loan to another company. Another warning sign.

  2. Is wind power a good bet? Global wind speeds have been trending downwards for several decades. According to the IPCC’s AR6, global mean land wind speed (excluding Australia) showed a fall of 0.063 metres per second per decade between 1979 and 2018.

    Global wind speeds have been trending downwards for several decades (which runs contrary to the alarmist claim that we face a future of ever-stronger storms). Danish wind energy specialist Orsted recently issued a profits warning partly as a result of lower-than-expected wind speeds.

    Moreover, research at Germany’s Max Planck Institute has concluded that existing wind turbines themselves could play a serious role in lessening the wind power available to be extracted by future wind farms.The study found that a turbine in an area covered with wind farms could be expected to generate only 20 per cent of the energy that an isolated turbine would produce.

  3. “global mean land wind speed (excluding Australia) showed a fall of 0.063 metres per second per decade”
    0.063m/sec is around the speed of a strolling tortoise.

  4. Where does the risk go? That’s my question about the property sector with development & BTL’s financed by bank loans. On past evidence, it’s the taxpayer.

  5. Bonds are not immune to risk. In theory a government has nearly unlimited equity (from the power to tax) yet there is still a very active bond market with fluctuating prices.

  6. The whole things sounds suspect. Bonds offering “up to 9.5%”? *Alarm bells*

    Surprised not to see Local Authorities piling in

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