The Head of Finance has submitted a report to consider the approval of a loan facility to the Low Carbon Hub (IPS) to facilitate the implementation of a number of renewable energy schemes.               

Officer Recommendations: That the City Executive Board AGREES

1.    That a fixed term loan facility for the Low Carbon Hub (IPS) be set up capped at £2.3 million on the basis that whenever monies are drawn down from the facility to fund individual renewable energy community projects. The sum drawn down will be repaid with 5% interest following a community share issue for that project, with the potential to revolve the facility to provide funding for other renewable projects in the pipeline.

2.    That the potential to revolve the loan facility to provide funding for other renewable projects in the pipeline is built into the agreement subject to the successful repayment of the initial and subsequent loans.

3.    That the Board delegates the authority to enter into an appropriate Loan Agreement with the Low Carbon Hub (IPS) to the Section 151 Officer and Monitoring Officer in consultation with the Chief Executive Officer.

The Head of Finance submitted a report (previously circulated, now appended) considering the approval of a loan facility to the Low Carbon Hub (IPS) to facilitate the implementation of a number of renewable energy schemes.

 Councillor Tanner presented the report to the Board and listed the following reasons why the £2.3M loan to Low Carbon Oxford was a good investment:

·         It would be good for the environment and would help reduce Oxfordshire’s carbon footprint. 

·         It would benefit businesses and schools within the city.

·         It was a good investment with a good rate of return.

The Head of Finance informed the Board that on average the Council could expect 0.89% return on investments, whilst the short term loan is offering 5% p.a (approx. £34,000) A fifth of the investment from the loan will go to Oxford City schools and businesses.

The risk of the share issue not returning the £2.3M is low, as the last time Low Carbon Oxford has a share issue they were oversubscribed. Regardless of this, a contract to safeguard the City’s investment is being drawn up.

The Council is working on the terms of the loan with the Low Carbon Hub and a written Heads of Terms is expected on Monday.

The City Executive Board resolved to AGREE:

1.    That a fixed term loan facility for the Low Carbon Hub (IPS) be set up capped at £2.3 million on the basis that whenever monies are drawn down from the facility to fund individual renewable energy community projects. The sum drawn down will be repaid with 5% interest following a community share issue for that project, with the potential to revolve the facility to provide funding for other renewable projects in the pipeline.

2.    That the potential to revolve the loan facility to provide funding for other renewable projects in the pipeline is built into the agreement subject to the successful repayment of the initial and subsequent loans.

3.    That the Board delegates the authority to enter into an appropriate Loan Agreement with the Low Carbon Hub (IPS) to the Section 151 Officer and Monitoring Officer in consultation with the Chief Executive Officer.