Success for island community after Charity Bank lends £500,000 for hydro scheme development
Green Energy Mull (GEM) is to complete construction of its first community hydroelectricity scheme after securing a loan from an ethical lender.
The community development organisation managed to secure a £500,000 loan from Charity Bank on top of £450,000 raised through a community share offer and £450,000 from Scottish Enterprise’s Renewable Energy Investment Fund.
The 400KW small-scale scheme, which is scheduled to open in spring 2015, is being built on the Allt Achadh na Moine burn in the Garmony Forest on the Isle of Mull, on a 40 year lease under Forestry Commission Scotland’s National Forest Land Scheme.
Expected to generate more than 1,000MWh of electricity annually, sufficient to power 280 homes, the scheme will reduce the island’s carbon footprint by 450 tonnes.
The Garmony Hydro Project is an impressive venture - Derek Mackay MSP
Conceived by Sustainable Mull & Iona and Mull and Iona Community Trust, the project received overwhelming majority support in a local community ballot.
This led to the formation of Green Energy Mull - a community benefit company.
Investors have equal voting powers irrespective of the size of their investment and all net profits will be invested in the local community through the charitable Waterfall Fund.
The management of GEM will remain in the control of the local community.
Moray Finch, chairman of GEM, said: “We are grateful for the work that Charity Bank has put in to make this important project happen.
“We are hoping to complete the project and commission the scheme early in 2015.
"Charity Bank – a social enterprise itself – was set up to finance social sector organisations like ours and has a long history of lending on the island.”
Derek Mackay MSP, islands minister, said: “The Garmony Hydro Project is an impressive venture – with the ability to power 280 homes once complete – and will be a real asset to the Isle of Mull. Through Green Energy Mull, it is estimated that over the first 20 years of the life of the project, the scheme will generate a turnover of over £5 million, with net proceeds of up to £2.4 million going into the Waterfall Fund for a variety of projects that will benefit the community.
He added: “Organisations like Green Energy Mull are an important part of defining our distinctive approach to Scotland’s future energy provision by providing vital learning across extremely challenging areas, such as adding value to local economies, matching local supply and demand, and addressing fuel poverty.”
Charity Bank has previously lent to the Mull Fishermens’ Association to restore its pier at Tobermory and Mull and Iona Community Trust to acquire premises for the former Mull Butcher’s Shop.
The bank is currently lending to the Hebridean Whale and Dolphin Trust, enabling it to make essential repairs to its visitor centre.