Isle of Raasay launches community share offer to fund two hydro schemes
Plans are underway to develop two hydro schemes on the Isle of Raasay with the launch of a £650,000 community share offer, which goes live today (Tuesday 12 January 2021).
Supported by Community Shares Scotland, the offer will see the creation of two community owned hydro-electric generation schemes which will contribute to supporting the local population and environment. The schemes will harness the combined potential of Inverarish Burn Hydro and the Mine Burn Hydro, generating, on average, 520,000kWh of electricity each year, translating to annual savings of 127 tonnes CO2 emissions.
Situated between the Applecross peninsula and the Isle of Skye in the Inner Hebrides, the Isle of Raasay is home to 170 people. In September 2020, the community set up Raasay Community Renewables Ltd (RCR), a Community Benefit Society to develop sustainable energy infrastructure projects.
Led by a young Board of Directors, Raasay Community Renewables sees the hydro schemes as the future to both environmentally sustainable power for the island as well as long term financial resilience, funding community projects which will improve the lives of the island’s residents
Ross Gillies from Raasay Community Renewables said; “We have raised over £300,000 in grants to support the build and we need a further £650,000 to bring the project to completion. The community share offer is a fantastic opportunity to invest in social and environmental causes and see a financial return for your support in the years to come.”
The benefits which the project will bring could be quite transformational for Raasay. A Community Benefit Fund is being set up to distribute a proportion of the income generated to members of the community, supporting local organisations and causes. The focus will be on ensuring that the funds are distributed in a way that meets the community’s needs, wants and priorities, particularly with regard to supporting environmentally beneficial projects.”
The minimum investment for Community Contributor Members (individuals who live in the Raasay postcode area) is £125 and for Contributor Members, it is £375. The maximum investment is £65,000. The aim is to pay interest at 4%, with the first payment made in 2024.
More information about the Raasay Community Hydro share offer, which closes on 23 February, can be found here.
Kate Forbes, MSP for Skye, Lochaber and Badenoch, said: “A community hydro scheme has been a long time in the making for Raasay, and it was great to see the work starting on forestry. I know there is a lot of work to do – not least in raising funding – but it’s exciting to see this progress. I hope there will be widespread interest and the community will be able to reach their funding target in time.”
Community Shares Scotland, an initiative set up with funding from the Scottish Government and the National Lottery Community Fund to support the raising of money through community shares, has supported in the region of 400 community groups since the programme launched in 2014.
The organisation has launched 41 community share offers over the past six years, totalling over £13m worth of investment from over 12,000 community members, which has been match funded by £24m from other sources.
During the past year, Community Shares Scotland has experienced its busiest ever period, launching eight share offers during 2020 and is projected to launch a similar number of schemes during 2021.
Morven Lyon, Programme Manager at Community Shares Scotland, said: “Since our inception, Community Shares Scotland has supported the launch of eight community-owned hydro schemes, raising a total £4.7 million from at least 1659 shareholders. Raasay Community Hydro is a great example of the focus which the Scottish Government is placing on a ‘green recovery’ following the Covid-19 pandemic. Projects such as these are very well suited to the community share model, which taps into an appetite for socially conscious projects and investment models which deliver a renewed sense of community control and local identity.”
Community share offers make social investment more accessible. 56% of people investing in a community share offer earn £35,000 or less and shares can be from as little as £10 each
For every £1 invested by an individual in a community share offer in Scotland, at least £2 of additional funding has been leveraged through grants, loans and institutional investment. They are also highly resilient, with The Plunkett Foundation - a UK-wide network of rural community businesses - reporting a long-term survival rate of over 96% among its seven hundred members.