Solar farm Business Model
It is intended for each of the two solarfarms to be funded by up to 20 impact investors (i.e. 40 investors in total) by way of two $180,000 loans to Lismore City Council.
Council has approved the loan subject to full subscription of the Investment share offers by the community companies. Each loan will be used to procure and construct the solarfarm, with any surplus funds (noting that the actual cost for each project is still subject to a public tender process) can be applied to other projects under Council’s 2023 Renewable Energy Master Plan.
Council will repay the investors with interest to the community companies for a period of seven years followed by a ‘bullet’ repayment of capital in full.
Two proprietary companies have been established as investment vehicles, one for each 100kW solarfarm. Each community company will raise the capital for the loans through a private impact investment share offer.
Simplicity is the key to this business model and loan-based structure being used. So too is transparency of the financial and legal arrangements: for both the prospective investors and for Lismore City Council.
The financial backing of Lismore City Council, the use of Class A solar power equipment with long-term maintenance agreements, make these impact investments sound and low risk.
Disclaimer: Lismore City Council (Council) is not in a financial partnership or joint venture with Starfish Initiatives, the Farming the Sun collaboration, or any other associated entity or organisation. Council’s role in this initiative is as borrower of funds and as the entity that owns and constructs the solar farms. Council does not guarantee the appropriateness of any investment in this initiative. The material provided by Council about the initiative is general in nature and does not constitute financial advice. If you are considering investing in this initiative, you should obtain advice from a suitably qualified advisor. You should obtain and review a Product Disclosure Statement or Prospectus before making any decision to invest.
Frequently Asked Questions
Q. How will the successful shareholders be selected?
Eligibility for investment is defined in Section 12.3 of the Offer Information Statement, and section 12 more generally.
It is important to reiterate that these investment offers are open to anyone who meets these criteria.
There are a few important considerations which will be taken into account in selecting the shareholders for each community company and solarfarm, particularly the need to raise the total amount of required funds as well as the goal of having a strong level of local investment. Currently, approximately 45% of genuinely interest potential investors are in the Lismore Government area. Nonetheless, it is important to reiterate that the investment offers are open to anyone who meets the criteria.
Q. The target financial return (Section 7.5 of the Offer Information Statement) is different from what was initially indicated at the Project Launch. Why has this changed?
The target financial return is directly connected with the rate of interest being paid by Lismore City Council on the solarfarm loans (refer to Section 7.2 for details).
At the time of the project launch, the loan was still under negotiation. Since that time, interest rates have continued to soften and the terms of the loan were renegotiated to be competitive.
This change in turn affected a small reduction in the target financial return as detailed in Section 7.5 of the Offer Information Statement.
Q. What are Franking credits? How are they calculated? How do they impact my investment?
Q. Can two or more individual investors make one application?
Section 12 of the Offer Information Statement outlines the options for applicants.
A company or legal partnership will count as one applicant whereas a joint application, such as husband and wife, will count as two applicants towards our maximum of 20 shareholders.
This is a relevant consideration for the final shareholder selection as we neehttp://farmingthesun.net/wp-admin/post.php?post=570&action=editd to achieve an average investment of $9,000 per applicant/shareholder to raise the required $180,000.
Q. Can I sell my shares?
Refer to Section 9.4 of the Offer Investment Statement.
Q. What happens at the end of 7 years?
Refer to Section 7.6 of the Offer Investment Statement.
Q. Can I refer or pass on the Investment Offer Document to other people?
These two investments are ‘private offers’ from a legal point of view. As such, this means that the investments are only open to those parties who have signed onto the Investor Pledge to confirm their interest in finding out more. To be clear, it cannot be communicated to the public-at-large.
Having said this, we would welcome any interested family, friends or work colleagues you may have being referred to Susanna Carpi | Community Coordinator | 0401 956 710 | firstname.lastname@example.org to be added to the Investor Pledge and sent the investment details.
Q. I am interested in finding out more about becoming a director in the company company. What do I need to know?
Shareholders will be invited and entitled to nominate for directorship roles at the at the initial General Meeting, which is to be held around 5 weeks after shareholders are appointed.
As detailed at Section 9.3, these voluntary directors will be responsible for the governance and administration Of the company. Given the simplicity of the business model, it is expected that the requirements will be minimal and supported by Starfish Initiatives where appropriate.
Our vision is that the Directors see themselves taking on, or building upon, a leadership role in renewable energy and aim to leverage the significant public profile of these projects to further build community capacity and engagement throughout Lismore and beyond.