Concerns over repayment of Â£23m Peterborough City Council loan for solar panels
Concerns have been raised after Peterborough City Council was again left waiting for repayment of a Â£23 million loan it paid out for the installation of solar panels across the country.
The latest deadline to repay the hefty sum has once again been missed by social enterprise Empower Community Management LLP, which was expected to have paid the money back 14 month ago.
The council remains confident the loan will be returned in full, and insists taxpayers will not lose out as it can take over the profitable solar panel schemes should the money not be repaid.
But leader of the council’s Labour group Cllr Shaz Nawaz described the delayed repayment as a “huge cause for concern” as the council does not currently have the expertise in-house to run the projects.
The council’s latest deadline had been the end of November, but Empower has now been given another four month extension.
Cllr Nawaz said: “This should get alarm bells ringing. Clearly there is a problem somewhere, hence the loan has not been repaid.
“As things stand, if the loan is not repaid then the council can take charge of the assets. I’m yet to understand what the rate of return would be on such a deal. Furthermore, the council lacks expertise in running such a scheme.
“There would be considerable costs in recruiting and acquiring the additional skills required to run such an operation. Plus there would be more costs payable to consultants and advisers such as Pinsent Masons and Deloitte.”
From December 2014 the council loaned Empower money for solar panels to be placed on 7,763 housing association homes across the country, with 426 in Peterborough. It was expected Empower would find a buyer who would pay back the £23 million loan and take on the solar panel schemes, but this has yet to happen.
Cabinet member for resources Cllr David Seaton insisted a buyer has been lined up, while another option is for several investors to split the schemes between themselves before paying the council its money back. He also stated that he was “fully confident the money will come back in”.
He said he could not disclose how much money the solar panels are making due to “commercial confidentiality,” but that if the council did end up taking over the schemes it would recoup its money over a “number of years”.
Empower is currently paying interest on the loan on top of a £10,000 monthly fee to the council. Cllr Seaton said the council wants the loan back now so it can reinvest the money in new commercial projects. Empower declined to comment when contacted,