Currently there is a lack of opportunity for the general community to invest in the installation of electricity generating solar panels on community facilities, as investment is currently restricted to a limited number of professional investors to fund large-scale renewable energy projects. The local clean energy association CLEANaS is developing a model in collaboration with local banks and credit unions to overcome these restrictions to community investment by utilising Green Bonds. There will be a free seminar about it on March 9 (cleanas.org.au).
Green Bonds provide an effective and scalable community energy financing mechanism that allows the community to invest in small-scale community energy projects. These are a form of low risk retail bonds with a fixed maturity date and earning a fixed rate of interest. Both financial institutions and councils can issue them to retail investors.
Money raised through the issue of Green Bonds is used for loans or leasing finance to organisations, such as community organisations, to fund investment in clean energy such as energy efficiency and renewable energy installations.
Green bonds fund projects that have positive environmental and/or climate benefits. An estimated $100 billion in green bonds were issued globally in 2015. In Australia, commercial banks and international development banks have issued Green Bonds.
Green bonds are compliant with the Climate Bond Initiative Standard. Under this international standard, bonds must be independently certified to verify the proceeds will be used in projects that meet certain criteria, developed by scientists and industry experts. Community renewable energy projects to install energy efficiency and renewable energy are a good fit for Climate Bond Initiative certification.