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Green financial investment bond offers 9% return– but there is a threat

Green-minded individuals with a hunger for danger are being targeted by a new financial investment paying an appealing 9% interest a year.

This five-year green bond, introduced this week by the crowdfunding platform Abundance Financial investment, looks for to raise ₤ 4m for a personal business called Iduna to fund the setup of 50 new electrical car charging points in Greater Manchester, supplied in partnership with Transportation for Greater Manchester.

Nevertheless, this is very different to putting your cash into a cost savings account. With a 9% return, the financier’s capital is plainly at risk– eventually, if things went wrong, you might lose some or all of your money. So this is most likely not for the faint-hearted.

The minimum investment is ₤ 5, and those who put their money in will be purchasing tradeable debentures, which resemble IOUs issued by companies. However, debentures are not covered by the Financial Providers Payment Scheme or the Financial Ombudsman Service.

According to the offer file, somebody investing ₤ 1,000 now would remain in line to get an overall of ₤ 1,499 at maturity in June 2026, made up of their initial ₤ 1,000 capital and ₤ 499 of investment earnings.

Greater Manchester has a method to be carbon neutral by 2038, and the earnings of the financial investment will fund public charging points that will work on 100% renewable electricity supplied by Octopus Energy.

Abundance states those who sign up to the plan will be assisting to fund Greater Manchester’s “green transport transformation”. The investment offer will be backed by profits from electrical energy sales and advertising at the websites, it adds.

These debentures are secured, in contrast to some other Abundance financial investments that are unsecured. Nevertheless, the offer file includes 5 pages on the threats involved, and states: “Every financier in the debentures must know that by investing … she or he runs the risk of losing the entire or part of its investment in case of our [Iduna’s] liquidation or insolvency. Security does not provide debenture financiers with certainty of a partial or full healing of their investments.”

Some will take the view that a safer bet would be an ethical fund investing in many different business.

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