Ethical crowd bonds platform Abundance has successfully completed its first institutional deal with charitable foundation Esmée Fairbairn and Unity Bank, investing more than £16m across a flow of UK local authorities and raising debt finance for local green projects.
The two major private investors have committed the funding to scale the green municipal investment market, also known as local climate bonds, opening new opportunities for local authorities to speed up their net-zero projects.
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It comes as local authorities are facing mounting challenges, with two thirds reporting that they are not confident they will meet their net-zero targets under current funding arrangements, according to the Local Government Association.
The funding mechanism, developed by Abundance Investment and supported by the Green Finance Institute (GFI), will allow local authorities to raise capital directly from private investors, including both citizens and institutions.
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Unity Bank has committed £15m to scale the market, while Esmée Fairbairn has committed a further £1m over the next two years to match the amounts raised from local residents into local authority green investments through Abundance’s platform. An initial £165,000 has already been allocated across three open local authority investments in Bristol, Hackney and Hammersmith & Fulham.
“Green Finance Institute is proud to have championed this approach to investing in councils, providing leadership in developing innovative financial solutions that meet the urgent funding needs of local authorities while engaging communities directly in the transition to net-zero,” said Miles Ashton, associate director, local green investment at the GFI.
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