Consumers who are environmentally conscious and tired of low savings rates are targeted by a variety of green investments paying up to 8% interest per year.
However, those considering signing up should be prepared to accept some risk for their money. It’s much riskier than a bank or mortgage company savings account.
The investments include a program that allows people to invest money in businesses that provide African families with access to clean, affordable solar power, and another involving a business that has found a way to grow tomatoes “more green ”in the UK.
Energize Africa enables people to invest in bonds issued by solar companies, enabling them to provide ‘life-changing’ solar home systems to low-income families in countries like Kenya, Tanzania and the Democratic Republic of the. Congo.
For new investors, Energize Africa currently guarantees investments of up to £ 100.
Launched in 2017, Energize Africa is the result of a merger between Ethex, a UK-based ethical investment platform, and Lendahand, a Netherlands-based crowdfunding platform.
This involves placing your money in bonds (mostly unsecured, although some are guaranteed) that are not listed on a public market. The minimum investment is £ 50.
At the time of writing, several projects on the Energize Africa website were open for investment or about to go live. There is a 30 month bond from a solar company called Oolu, based in Senegal, with an expected interest rate of 7% per annum. Oolu aims to raise just over £ 112,000 and says the money will help him provide solar home systems to 432 families in Burkina Faso.
Meanwhile, a company called Sollatek in Kenya is offering a two-year bond with an expected interest rate of 5% per annum. He says he aims to raise £ 40,000, so he can make 200 solar home systems available to families in rural Kenya.
At the time of writing, a two-year bond with an expected interest rate of 6% was also still open to investors, which aims to raise £ 500,000. It was started by a Kenya-based agricultural supply chain company called iProcure.
Lisa Ashford, Managing Director of Energize Africa and Ethex, said: “We have certainly seen an increase in the number of people investing on our two platforms since the start of the pandemic. There are several factors at play, including low interest rates, but we’ve seen a lot of new clients who want to support initiatives that can have a direct benefit to their community or a positive impact on the environment. The recent UN report on the climate and events such as the forest fires in Greece put this into perspective. “
The guarantee offered to new investors will reassure some, even if beyond this guarantee, your capital is at risk and returns are not guaranteed.
In the worst case scenario, in the event of a disaster, crisis or bankruptcy, you could lose all or part of your capital and be unable to seek redress from the UK Financial Services Compensation Scheme or file a complaint with the Financial Ombudsman Service . .
At the same time, individuals concerned about the environmental cost of food production are being targeted with a new investment offering 8% interest per year.
The offer is an opportunity to invest money in Sterling Suffolk, a company that builds and operates carbon capture greenhouses that grow ‘greener’ tomatoes.
The investment was launched by the crowdfunding platform Abundance Investment, and the aim is to raise up to £ 6.75million.
In the UK we consume over 500,000 tonnes of fresh tomatoes each year, but only grow 20% here. We depend on imports all year round, which comes at a high environmental cost.
The UK imports most of its tomatoes from countries like the Netherlands which operate gas-heated greenhouses, or places like Spain which have lower heating needs but have other major environmental impacts, including transport and water consumption.
Based in Bramford, near Ipswich, Sterling Suffolk is tackling this problem head-on. Its semi-enclosed greenhouses are the first of their kind in the UK and use 25% less energy per tonne of tomatoes than other conventional greenhouses while capturing and reusing at least 75% of CO2 generated by heating, a spokesperson said.
The minimum investment is £ 5, and those who invest will buy marketable bonds, which look like IOUs issued by companies. However, debentures are not covered by FSCS or FOS and, again, there is a risk that you will not get back the money you invested or make no return on your investment.
The 8% quoted yield assumes you hold the debentures to maturity in October 2032.
According to the offering document, a person now investing £ 1,000 would be able to receive a total of £ 1,555 at maturity, i.e. their original principal plus £ 555 in interest income.
These bonds are guaranteed, unlike other Abundance investments which are unsecured, and can be sold free of charge to other investors through the Abundance Marketplace.