The information below is designed to give simple answers to some common questions.
In making any decision to invest you should rely only on the information set out in the Offer Document. It is important that you read and consider the Offer Document as a whole with care, ensuring particularly that you understand the risks and that you take financial and other advice as necessary.
Who are the main players in all this?
Energy4All Ltd is a company set up by the successful Baywind Energy Co-op in Cumbria to help other communities own a share in renewable energy projects. Energy4All negotiated the deal with NRG and has advised and supported the board of the Drumlin Co-op. Once Drumlin Co-op is up and running, Enery4All will provide management services to support its operation.
NRG Solutions was formed by Andrew McMurray formed and has provided technical electrical expertise on over 500MW of renewable projects in Ireland, as well as developing a portfolio of 250kW Wind turbine projects. NRG solutions will provide project management and monitoring services to Drumlin Wind Co op.
The Drumlin Wind Energy Co-operative Limited was created by Energy4All and is run by a board of directors from the N Ireland community and from Energy4All who have been appointed to launch the Share Offer. The current board of directors will serve for a term of two years, thereafter, directors of the Co-op will be elected by the members.
How does a Co-op work?
Co-ops are run on the basic principles of democracy, fairness and ethical behaviour.
Everyone who invests in the Drumlin Co-op becomes a member.
Each member has a single vote at General Meetings of the Co-op.
In other respects, the Co-op is like any business and seeks to run efficiently and profitably.
How much will the Co-op need to raise?
This depends on how much people choose to invest. If Drumlin Wind raises the Minimum Capital sum of £600,000 one wind turbine will be installed.
Capital of £1.1 million is sufficient to install two wind turbines, however the maximum that can be invested under the offer is £1.2 million.
What happens if the Co-op fails to raise the Maximum £1.2 million?
If less than £1.1 million is raised through this offer, the Board will decide at its discretion which site will be taken forward use and any excess over the amount of capital required for that site will be returned to Members in proportion to Members’ applications.
What happens if the Co-op fails to raise the Minimum £600,000?
Every Co-op launched so far by Energy4All has reached its target. If it happened, everyone who invested would get all their money back.
How much can I invest?
Shares are £1 each. There is a legal maximum of £20,000 per investor and for administrative reasons the Co-op has set a minimum investment of £250. The maximum holding of A & B Shares is £20,000. You apply by reading the Offer Document and completing the application form at the end of the Document or by downloading the application form. Joint applications are not possible.
EIS Tax Relief on Shares
The Drumlin Wind Energy Co-operative has received confirmation from HMRC that the A shares under the original offer in Drumlin Wind qualify for EIS tax relief. As two of the original wind turbines are now generating (and the others are expected to begin generating soon), members who are eligible under the scheme should receive 30% of the value of their investment back in the form of income tax relief. Since Drumlin is already trading, EIS Certificates should be issued in May 2014.
We are pleased to announce that HM Revenue and Customs has confirmed that the B shares under the new Share Offer by Drumlin qualify for relief under the Enterprise Investment scheme. As a B share investor in Drumlin Wind, you could be eligible to claim tax relief of 30 per cent of the cost of shares, to be set against your income tax liability.
Claiming EIS Tax relief
Drumlin Wind will send you an EIS3 form which you will then submit to HMRC. The tax relief can be claimed usually against your Self Assessment tax return for the tax year in which the shares were issued or an adjustment to any Self Assessment payment on account due. You will have to make the claim itself on your tax return when you get it. If you pay your income tax through PAYE you can request a change to your tax code. Claims to relief can be made up to five years after the first 31 January following the tax year in which the investment was made. For more information please visit www.hmrc.gov.uk/eis
Can I put in money for my children?
Yes, many parents (and grandparents) like to invest for their (under 18) children, but you cannot do this as a means of investing more than £20,000 in total for yourself. If a person applies for shares on behalf of a child nominee, EIS tax relief is not available. You are recommended to take financial and tax advice if you have any queries on this.
Will I get priority if the offer is over-subscribed?
First priority for people who are members of Drumlin Wind Energy Co-op
Second priority is residents of Northern Ireland
Third priority for employees and associates of Drumlin Wind, Energy4All and Members of Energy Prospects.
When does the Offer close?
The Offer is open from 3rd March 2014 to 30th April 2014, although it may be extended at the Board’s discretion.
The investment opportunity
The projected return for the first full accounting year to 31st March 2016 is 4.3% per annum (6.1% after EIs tax relief). Through a combination of increasing profits and returning capital to Members, the return rate increases over the 20 year life of the project. The average of the annual rates of return over 20 years is 8.6%. The table at page 17 of the Offer document gives a more detailed breakdown of the projected returns and return of capital. EIS tax relief increases the returns and assuming the tax relief is treated as a return on capital, the averaged return rate with EIS is 12.2%
Returns are entirely dependent on the profits earned by Drumlin Wind. The financial projections used in the Offer document are based on estimates and assumptions and the judgement of Energy4All about future performance, but actual outcomes could differ significantly from the projections shown.The projected return for the first full accounting year to 31st March 2016 is 4.3% per annum (6.1% after EIs tax relief). Through a combination of increasing profits and returning capital to Members, the return rate increases over the 20 year life of the project. The average of the annual rates of return over 20 years is 8.6%. The table at page 17 of the Offer document gives a more detailed breakdown of the projected returns and return of capital. EIS tax relief increases the returns and assuming the tax relief is treated as a return on capital, the averaged return rate with EIS is 12.2%
Returns are entirely dependent on the profits earned by Drumlin Wind. The financial projections used in the Offer document are based on estimates and assumptions and the judgement of Energy4All about future performance, but actual outcomes could differ significantly from the projections shown.
When will I get my first payment?
Payments must be approved by Co-op members at the AGM. The AGM will take place in September 2015 after the close of the Co-op’s financial year on 31st March. Therefore the first payments will probably be in October 2015 and regularly at annual intervals after that.
Will I get my money back?
Drumlin intends, if it has sufficient funds from income generated for working capital purposes, to redeem share capital starting in the year 2017, and in each subsequent financial year. Shares will be redeemed in proportion to Members’ shareholdings and at the par value of £1. Redemption of B Shares may start at a later date than the A Shares, to reflect the difference in timing of the respective projects. The effect of redeeming share capital is to increase the return for long term shareholders on the remaining capital invested in Drumlin. The intention is to redeem effectively all share capital within 21 years of the commissioning of the Additional Turbines.
Can I get my money out early?
Currently, members do not have the right to withdraw shares and no withdrawals will be permitted during the EIS period as this could prejudice the tax relief for all Co-op members. However, the board has the power to permit shares to be withdrawn at a later date and in accordance with any conditions the board may decide.
What happens if I die?
A member’s shares in the Co-op are treated just like any other asset if someone dies.
Will the Co-op get involved in other activities?
Drumlin Wind intends to pay £2,000 per Site per annum (inflation linked) each year to a fund to benefit the Northern Irish community and in particular to undertake primarily educational activities.
Ring 0845 3733612 for further information