More delays for repayment of Â£23m solar loan
Repayment of a Â£23 million loan owed to Peterborough City Council for the installation of solar panels has been delayed again as the authority waits on a new lender to step in.
The council has granted a two month extension to Empower Community Management LLP and housing associations inside and outside of the city for the loan to be repaid in full after being satisfied that a new investor has nearly signed on.
The loan was due to be repaid in full at the start of October 2017, but extensions have been granted since. It is now expected to be repaid next month once the new investor is in place.
The loan is linked to a pioneering scheme announced nearly four years ago to put solar panels on residents’ homes. The project came to an end in 2016 after the Government announced it was slashing solar panel tariffs, but the council believes it will still make £1.25 million from the scheme, with residents who received the panels benefiting by roughly £200 each year.
Leader of the council’s Liberal Democrat group Cllr Nick Sandford said: “The Empower scheme was quite an innovative one, but given the council’s current financial predicament I hope these schemes are not going to land us in any kind of problem.
“They seem to want to indulge in high finance which is okay up to a point as they need income, but they need to be careful.”
The council entered into an agreement with Empower in December 2014, before extending the scheme to Axiom Housing Association in Peterborough and social housing schemes outside the city.
A council spokesman said: “The loan, now at a value of £23 million, is at a commercial rate of interest and has been extended from its original refinance date of October 2017 to the end of November 2018 so that a suitable partner for its long term financing can be finalised.
“This is expected to be concluded during November 2018.” The council will gain interest from extending the repayment, and it will charge £10,000 for each monthly extension.
Asked if the council would lose its investment if a lender is not found, the spokesman said: “No, the council has full security over the assets, so will be able to step in and take control over the solar panels and the income arising from those panels.” He added: “Empower Community Management is a social enterprise.
“The intention has always been for the council to fund the installation of the panels, and once this was complete a long term investor would be sought to provide the long term finance.”
The solar scheme has now ended, but the new lender gets a share of income generated from panels in place. The PT has attempted to contact Empower for comment.