East Kintyre Renewable Energy Group (EKREG) is leading the way in Scotland to enable Community Councils to work in partnership and deliver MULTI COMMUNITY SHARED OWNERSHIP IN RENEWABLE ENERGY PROJECTS (SOREP).
EKREG Ltd has been successful in having their new set of Model Rules approved and registered by The Financial Conduct Authority (FCA). These Model Rules are designed to support local communities in achieving shared ownership of renewable energy projects and thereby furthering community development, education and regeneration within the participating community council areas.
EKREG Ltd hope their new set of rules will be adopted by other community groups who seek to work together to invest in shared ownership of consented renewable energy developments to generate the benefits outlined.
Introduction & Background
The 2019 Scottish Government Good Practice Principles for Shared Ownership of Onshore Renewable Energy Developments expects Community Councils participating in Community Shared Ownership (CSO) of Windfarms to use the funds generated to deliver their Local Development Plan’s Legacy Projects. Consequently, Community Councils participating in multi- community council CSO have expressed the desire to have the funds generated by the Communities’ CSO investment vehicle split equally between the participating community councils in order that each community is in charge of its own destiny and has line of sight on delivering its Legacy Projects.
In response to such a request from Kintyre Community Councils, EKREG Ltd drew up model rules for a Community Benefit Society (CBS) which would allow this split. EKREG Ltd took the Community Shares Scotland Hybrid model rules which, via a deed of covenant, pays the surplus generated by the CBS to a specified Development Trust and modified the model rules to accommodate the payment of surpluses to more than one Charity organisation.
In summary, the basics for the Multi-Community SOREP are:
There are two types of members in the CBS: i) holders of Contributor shares and ii) holders of Community Anchor shares.
Individuals & organisations are allowed to hold Contributor shares, which are withdrawable and not transferable and give the holder the right to stand for election in the CBS and the right to vote.
An Anchor Member is an organisation that must fulfil a number of criteria, namely; be an OSCR registered charity, be nominated by one of the community councils participating in the renewable energy project; have a charitable purpose focused on local community development. Each Anchor Member is issued a Community Anchor Share and is expected to fund the delivery of its respective local community’s development plan. Each Community Council may only have one Anchor Member organisation at any given time.
The Deed of Covenant detailing the payment of surpluses from the CBS is made between the CBS and each of the Anchor Member organisations.
Voting remains one member, one vote. However, for extraordinary resolutions (which would fundamentally change the CBS model) voting is one member, one vote by each class of share – Contributor shares and Community Anchor Shares, and requires 75% or more of votes in each class of share to be in favour of such a resolution. This ensures that the Anchor Members as key anchor organisations within their respective communities have the ability to block changes that would fundamentally alter the nature of the society.
EKREG Ltd thank Local Energy Scotland & The Energy Savings Trust for a grant that enabled them to finance the registration of their new Multi-Community Model Rules.
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